Mr D -and- Ms D

[2001] FamCA 1688

[2000] FamCA 1668 JFDOGRAM

FAMILY LAW ACT 1975

IN THE FULL COURT OF

THE FAMILY COURT OF AUSTRALIA

AT SYDNEY

Appeal No. EA 10L of 2000
File No. SY 9383 of 1998

IN THE MATTER OF:

Mr D

Appellant/Husband

- and -

Ms D

Respondent/Wife

REASONS FOR JUDGMENT

BEFORE:                 Kay, Coleman and Penny JJ
HEARD:                   7^th day of November 2000
JUDGMENT:          20^th day of December 2000

APPEARANCES:    Mr. Trench of Counsel, (instructed by David H Cohen & Co) appeared on behalf of the appellant husband.

Mrs. O’Connor of Counsel, (instructed by Turner Whelan), appeared on behalf of the respondent wife.

Catchwords: Disqualification/ adjournment – ‘functus officio’ – allegations of overstatement of expenses

1. By application filed 2 August 2000 Mr D (“the husband”) sought leave to appeal against orders made by Cohen J on 4 July 2000.  Ms D (“the wife”) opposed the granting of leave to appeal and, if leave were granted, sought that the husband’s appeal be dismissed. 

1. The orders made by Cohen J on 4 July 2000, which are relevant for present purposes, provided:

“2.That I disqualify myself from further hearing of this matter except in relation to the orders now to be made.

4.That the husband pay within 1 month costs in the sum of $5,000.00 thrown away by today’s adjournment such payments to be from the share of the parties’ property provided to him pursuant to s.79 of the Family Law Act 1975.

5.That the husband shall do all things and execute all documents necessary to enable the parties to borrow and to borrow sufficient funds from the Westpac Banking Corporation Limited for the purpose of meeting all mortgage payments on the premises at [G] until such time as final orders pursuant to s.79 of the Family Law Act 1975 are made. In the event that the husband fails within 14 days of a request from the wife to take any step needed for such borrowing the wife is hereby appointed as his attorney for the purpose of taking that step.”

BACKGROUND FACTS

1. On 3 July 2000, proceedings between the parties pursuant to Part VIII of the Family Law Act were listed for hearing before the trial Judge.  Having proceeded for a short period on that day, the trial was adjourned until the following day in order that the husband could inform the Australian Taxation Office (“the ATO”) of his claims that the parties, and a corporation, X Company Pty Limited, in which the parties had interests, had overstated expenses for tax purposes over a period of years.  On 4 July 2000, the husband tendered a copy of a letter which he had provided to the ATO after the proceedings were adjourned the previous day, such letter containing details of his allegations in relation to the overstatement of expenses, together with other allegations relating to the wife’s solicitors and counsel.  Having regard to the contents of the letter, the trial Judge adjourned the proceedings and disqualified himself from further hearing the case.  The trial Judge then made the costs and restraining orders against which the husband seeks leave to appeal.  The husband seeks that he be granted leave to appeal, and that the costs order of 4 July 2000 be set aside. For reasons which we do not need to detail, counsel for the wife did not seek the continuation of Order 5.  In those circumstances it is necessary only to consider the application for leave to appeal against the costs order, and, if leave be granted, the appeal itself.

THE TRIAL JUDGE’S JUDGMENT

1. The trial Judge recorded that the husband sought an adjournment of the hearing of the Part VIII proceedings on the grounds that “The parties circumstances will change” by virtue of the husband having “...recently discovered that both he, the wife and a company which the wife claims that he has the only real interest in, [X] Company Pty Limited, have persistently overstated their expenses for tax purposes for the last 10 years.”

1. His Honour concluded that there was “...a real prospect that the parties’ financial circumstances will change significantly as a result of the husband having informed the Australian Taxation Office (ATO) of the overstatements.”  Reference was made to the husband’s letter to the ATO informing it of the details of the husband’s claims, such letter having become Exhibit A.  Having seen Exhibit A, his Honour was satisfied that the husband had “...specifically informed the ATO of details and therefore it is likely that there will be a change in the parties’ financial affairs which is sufficiently substantial to warrant an adjournment being granted.  A judge would not be in a position to know what is available for division between the parties until amended tax assessments are made.” 

1. Also contained in Exhibit A were allegations “...that the wife’s solicitors.......and her barrister.......have been defrauding the Commonwealth of tax in that they have received cash payments from clients and did not declare these in their personal and partnership returns.”  His Honour concluded that the husband was “...likely to have maliciously sent this letter in order to interfere with the firm’s and the barrister’s day-to-day affairs in order to either punish them for acting for the wife or interfere with their ability to have the carriage of the case.”  The trial Judge concluded that he would “...have to disqualify myself in view of having read this letter.  That is something I propose to do.” 

1. The wife applied for an order for “...costs thrown away by the grant of the adjournment.”  Costs were assessed at $5,000 for the two-day hearing which was adjourned on the basis of “...the husband’s last minute disclosure to the ATO” which would cause a “..substantial degree” of change to the “...documentary basis” of the wife’s case.

1. In relation to the costs application, the trial Judge made reference to the husband having been able to have informed the ATO of the matters referred to in Exhibit A “...much earlier;  as much as 10 years earlier in some instances.”  His Honour concluded that “The matter only required adjournment because he waited so long to disclose the facts to the ATO.  He has also been in the wrong in tendering the letter which he sent to the ATO accusing the wife’s barrister and solicitor of tax fraud which caused me to have to disqualify myself.” 

1. In relation to “...other factors under s.117 of the Family Law Act 1975” his Honour recorded that “...it is sufficient to say that I have considered all of the elements required to be considered under that section and conclude that the husband can well and truly afford to pay the costs. Even on his case, the parties have approximately $1m to divide between them.” The trial Judge concluded that “...costs ought to be awarded against the husband because of his behaviour and conduct both in the late manipulation of circumstances which have created this adjournment and in tendering the letter which has caused me to have to disqualify myself.” The trial Judge proceeded to give reasons making the injunctive order in relation to the mortgage over the matrimonial home. In view of the matters referred to earlier in relation to Order 5, it is unnecessary to refer to those parts of his Honour’s judgment.

THE GROUNDS OF APPEAL

1. The draft Notice of Appeal on behalf of the husband, dated 21 July 2000, raised four Grounds, three of which were argued before us. 

1. The law governing the application for leave to appeal is settled and does not need to be restated in this application.  In Waugh v Waugh [2000] FamCA 1183, the Full Court noted:

   “23.     The principles governing the grant of leave to appeal from an interlocutory judgment or order, particularly one relating to a matter of practice and procedure (as this is:  Minister for the Army v. Parbury Henty and Co Pty Ltd (1945) 70 CLR 459 and 489) are well known, and were not in issue before us in these proceedings. In order to succeed in such an application the applicant (in this case the husband) must satisfy this Court that there has been an error of principle by the trial Judge and/or that the orders which he made worked a substantial injustice to him: Adam P. Brown Male Fashions Pty Ltd v Phillip Morris Inc (1981) 148 CLR 170; Rutherford & Rutherford (1991) FLC 92-255.

   24.      Although there has been some debate about whether the twin criteria, of error of principle and substantial injustice, should be applied disjunctively or conjunctively (see Adam P. Brown (supra) at 177 and Rutherford (supra) at 78,715), the High Court (per Gibbs CJ, Aiken, Wilson and Brennan JJ) in Adam P. Brown (supra) at 177, said:-

   ‘For ourselves we believe it may be unnecessary and indeed unwise to lay down rigid and exhaustive criteria.  The circumstances of different cases are infinitely various.’

   Then, after citing with approval the statement by Sir Frederick Jordan in In re the Will of F.B. Gilbert (dec.) (1946) 46 SR(NSW) 318 at 323, and referring to Brambles Holdings Ltd v Trade Practices Commission (1979) 28 ALR 191 at 193 and Dougherty v Chandler (1946) 46 SR(NSW) 370 at 374, they concluded:

   ‘It is safe to say that the question of injustice flowing from the order appealed from will generally be a relevant and necessary consideration.’

   25.      Since, on either view, the question whether leave to appeal should be granted is closely linked to the merits of the proposed appeal, and since we heard argument upon the merits of the proposed appeal with the argument on the application for leave, it is appropriate that before further addressing the issue of leave we should address the merits of the proposed appeal.  Obviously, if it is without merit, the application should be refused.  Conversely, if it has merit, the application should be granted unless the merit is confined to the trial Judge’s exercise of discretion (involving no error of principle) and/or the orders made work no substantial injustice to the husband.”

1. The course adopted by the Full Court in Waugh v Waugh has been followed in this application.  We propose to determine the application in the same manner as the Full Court did in Waugh.

PROPOSED GROUND 1

1. Ground 1 provided:

“1.That His Honour erred in making Orders following his decision to disqualify himself from further hearing of the matter.”

1. It was submitted on behalf of the husband that (Outline of Submissions on behalf of the Appellant page 1):

“...once his Honour had determined that it was appropriate to disqualify himself from the further hearing of the case, then he is prevented from determining any other matter in the proceedings, which involves the exercise of a discretion.  This would mean procedurally that he could only make an order of a non-contentious nature which would give rise to directions made so that some other judge might determine the issues and proceedings between the parties.”

1. Whilst, in his Outline of Submissions asserting that the Judge having determined “...that he should disqualify himself from the further hearing of the case.......should [our emphasis] not make any order which involves the exercise of discretion” (Outline of Submissions on behalf of the Appellant page 7), counsel for the husband asserted in his address that there was no question of a discretion being able to be exercised and that the Judge “...cannot hear” any more of the case.  It was submitted that “...a Judge becomes ‘functus officio’ having determined that he should disqualify himself.” (Outline of Submissions on behalf of the Appellant page 7). 

1. It was submitted on behalf of the wife that (Amended Outline of Submissions on behalf of the Respondent/Wife page 2):

“It cannot be the law that if a judge disqualifies himself or herself from further hearing a case, then no order for costs can be made by that judge.  If it were otherwise, then a litigant could, e.g. ensure a hearing which is not going as well as he or she wanted, be aborted by reason of some action on that litigant’s part, with no penalty as to costs.”

1. If, as was submitted by counsel for the husband, the trial Judge became functus officio upon announcing his decision to disqualify himself, then neither the costs order nor the order for injunction made by him subsequent to that determination could validly have been made.  If on the other hand his Honour was not functus officio, it is necessary to consider the other proposed Grounds of Appeal in relation to the costs order made by the trial Judge. 

1. The CCH Macquarie Concise Dictionary of Modern Law (Sydney: CCH, 1988) defines the term “functus officio” as follows:

“Functus Officio:  having discharged his duty.  The phrase is used of an agent or official who, having performed his function, has no further authority in a matter.”

1. Further, The Australian Digest, Chapter Eleven, Part G – Estoppel, Division 3 - Intra Vires Estoppels notes:

   “The validity of a decision to revoke an earlier decision turns on the question of whether the decision-maker is functus officio once the decision is made.  It does not turn on the applicability or otherwise of estoppel. (see Minister for Immigration & Ethnic Affairs v Kurtovic (1990) 21 FCR 193 [92 ALR 93] (FC), Gummow J at 211). It is a question of statutory interpretation whether a particular power is only exercisable once and for all, or may be exercised from time to time. There is an ‘inconvenient common law doctrine ... that a power conferred by statute was exhausted by its first exercise’ (see Minister for Immigration & Ethnic Affairs v Kurtovic (1990) 21 FCR 193 [92 ALR 93] (FC), Gummow J at 211, quoting from 27 Halsbury's Laws of England (1 ed, London: Butt), 131) which has been reversed in some jurisdictions where it is provided that a power conferred by statute may be exercised from time to time as the circumstances require unless the contrary intention appears. (see Acts Interpretation Act 1901 (Cth), s 33(1); Acts Interpretation Act 1954 (Qld), s 23). A number of cases have held that the exercise of a particular statutory power is final and irrevocable, particularly where the effect of the decision is to confer some right on a person. (see Re 56 Denton Rd Twickenham [1953] 1 Ch 51 [[1952] 2 All ER 799, [1952] 2 TLR 676], Vaisey J at 56-57; Brickworks Ltd v Warringah Shire Council (1963) 108 CLR 568 [37 ALJR 69], Windeyer J at 577; Export Development Grants Board v EMI (Australia) Ltd (1985) 9 FCR 269 [61 ALR 115], the Full Court at 276. See also the local government cases referred to in Re Isherwood [1991] 1 Qd R 13, Lee J at 19). If, as a matter of statutory interpretation, a decision is revocable the no-fettering principle applies and detrimental reliance on the original decision does not raise an estoppel preventing revocation. (see New South Wales Trotting Club Ltd v Glebe Municipal Council (1937) 37 SR (NSW) 288; Rootkin v Kent County Council [1981] 1 WLR 1186 [[1981] 2 All ER 227] (CA); Minister for Immigration & Ethnic Affairs v Kurtovic (1990) 21 FCR 193 [92 ALR 93] (FC); Re Isherwood [1991] 1 Qd R 13. McDonald P, `Contradictory government action: estoppel of statutory authorities' (1979) 17 Osgoode Hall LJ 161 argues that the Canadian cases establish the contrary position, that detrimental reliance raises an estoppel which prevents a decision being revoked).”

1. The only decision under the Family Law Act, in relation to the doctrine of functus officio to which we have been referred, is the decision of Kazimierczak & Koch (1987) FLC 91-849 in which it was argued that “...because the judgment [of the Court] had been perfected by being drawn up and signed by the Registrar.......the court was functus officio and that no new order could be made for costs thereafter in the proceedings.” (page 76,418).  The Full Court held that (page 76,418):

“ Whatever may be the rule in other courts, the question of costs in the Family Court is regulated by sec. 117 of the Act. Since the power to award costs is derived from the statute any limitation as to the exercise of that power must be found within the statute itself.

Proceedings for an order for costs fall within para. (f) of the definition of ‘matrimonial cause’ in sec. 4(1), that is to say, they must be proceedings ‘in relation to ... completed proceedings’.  It may be that an application for costs is so remote in time from the original proceedings that it can no longer be described as relating to the proceedings which have been completed, but this is hardly the situation in the present case.  It appears that the new r. 18 has been specifically inserted to impose a time limit to prevent applications for costs being made long after the conclusion of proceedings.”

1. If the making of final orders in proceedings under Part VIII does not exhaust the powers of the Court to make orders under s.117, as was held in Kazimierczak & Koch (supra) it is difficult to see how adjourning such proceedings without making any orders could do so.  No decision was made by the trial Judge altering the interests of parties to a marriage in relation to the assets of either of them.  Nothing done by his Honour exhausted the Court’s powers under Part VIII or derogated from those powers.  The Part VIII proceedings remained a “matrimonial cause” which was pending (Section 4(1)(ca) Family Law Act).  The costs application was a “matrimonial cause” (Section 4(1)(f)) which remained pending, and able to be determined, on either an interlocutory or final basis (Section 117(2)).  Nothing in the authorities, to which we have referred, precludes so concluding.  This construction of the relevant sections of the Family Law Act is supported by Section 15AA of the Acts Interpretation Act 1901 which provides that:

“15_AA   (1)       In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.”

1. The construction asserted on behalf of the husband would, as was submitted on behalf of the wife, produce a manifestly absurd or unconscionable result, and have the potential to defeat the objects and purposes of the legislation insofar as it is intended that where circumstances justify doing so, an order for costs can be made in pending or completed proceedings under the Act.

1. In the absence of a clear legislative provision that the trial Judge could not hear an application for costs, we are not persuaded that he was precluded from doing so.  It is necessary to consider whether the trial Judge erred in exercising his discretion to make a costs order.

GROUND 3

1. Ground 3 provided:

“3.That His Honour erred in making a costs order in the absence of proper evidence.

1. Counsel for the husband made a number of submissions in writing, essentially, asserting that the husband ‘was not dealt with by the Court in accordance with the principles of Johnson v Johnson (1997) FLC 92-764 (Outline of Submissions on behalf of the Appellant page 3). It was ‘submitted that such failure amounted to procedural unfairness so far as the husband was concerned’ (Outline of Submissions on behalf of the appellant page 10).

1. Counsel for the husband relied upon a passage from Judicial Ethics in Australia, The Hon Justice Thomas AM, 2^nd edition, Chapter 5 at page 51:

“In this area, ethical obligations of judges substantially overlap obligations imposed by the common law.  The law on this question is founded on the ethically based wisdom that no one should be judge in his or her own cause.  If there is a situation where the parties or the public might entertain a reasonable apprehension that a judge might not bring an impartial and unprejudiced mind to the deciding of a case, the judge should refuse to hear the matter.  This is sometimes referred to as recusal.  The judge should not sit if in the judge’s view there is ‘any real possibility’ that a reasonable apprehension of that kind might result.  In that event, the common law makes no bones about it:  the judge must not sit.  That, however, is a very broad test and the difficulty is to identify the various types of situation to which it applies.  In the same breath the High Court counsels us not to disqualify ourselves too readily.”

1. Counsel for the husband submitted that the trial Judge erred in that, having raised with the husband “...why an order for costs.......should not be made.”, the trial Judge “...should have directed the husband’s attention to Section 117 of the Family Law Act.  He should have directed the Husband to the area of information which should normally be provided to the Court by way of submission or evidence in support or in opposition to a costs application.” (Outline of Submissions on behalf of the Appellant pages 7 & 8).  Counsel cited the decision of the Full Court in Johnson & Johnson (supra) in support of this contention. 

1. In Minogue v Human Rights and Equal Opportunity Commission (1999) 84 FCR 438 at 445-446, the Full Court of the Federal Court said:

“         The general principles governing the role of the judge in civil proceedings involving an unrepresented litigant have been stated in Rajski v Scitec Corporation Pty Ltd, (unreported, Court of Appeal, NSW, Full Court, No CA 146 of 1986, 16 June 1986.)  Samuels JA said this (at 14):

‘In my view, the advice and assistance which a litigant in person ought to receive from the court should be limited to that which is necessary to diminish, so far as this is possible, the disadvantage which he or she will ordinarily suffer when faced by a lawyer, and to prevent destruction from the traps which our adversary procedure offers to the unwary and untutored.  But the court should be astute to see that it does not extend its auxiliary role so as to confer upon a litigant in person a positive advantage over the represented opponent. ...At all events, the absence of legal representation on one side ought not to induce a court to deprive the other side of one jot of its lawful entitlement. ...An unrepresented party is as much subject to the rules as any other litigant.  The court must be patient in explaining them and may be lenient in the standard of compliance which it exacts.  But it must see that the rules are obeyed, subject to any proper exceptions.  To do otherwise, or to regard a litigant in person as enjoying a privileged status, would be quite unfair to the represented opponent.’

Mahoney JA made the following observation (at 27):

‘Where a party appears in person, he will ordinarily be at a disadvantage.  That does not mean that the court will give to the other party less than he is entitled to.  Nor will it confer upon the party in person advantages which, if he were represented, he would not have.  But the court will, I think, be careful to examine what is put to it by a party in person to ensure that he has not, because of the lack of legal skill, failed to claim rights or to put forward arguments which otherwise he might have done.’

These comments have been referred to with approval in subsequent cases:  see Johnson v Johnson (1997) 139 FLR 384 at 406 (Fam Ct/FC) (and cases cited there); Morton v Vouris (1996) 21 ACSR 497 at 513-514, per Sackville J.”

1. In Stead v. State Government Insurance Commission (1986) 161 CLR 141, Mason, Wilson, Brennan, Deane and Dawson JJ noted at 145-146:

   “         The general principle applicable in the present circumstances was well expressed by the English Court of Appeal (Denning, Romer and Parker L.JJ.) in Jones  v National Coal Board [1957] 2 Q.B. 55, at p. 67, in these terms:

   ‘There is one thing to which everyone in this country is entitled, and that is a fair trial at which he can put his case properly before the judge. ... No cause is lost until the judge has found it so;  and he cannot find it without a fair trial, nor can we affirm it.’

   That general principle is, however, subject to an important qualification which Bollen J. plainly had in mind in identifying the practical question as being:  Would further information possibly have made any difference?  That qualification is that an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial.  An order for a new trial in such a case would be a futility. 

   For this reason not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial.  By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial. 

   Where, however, the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, especially when the issue is whether the evidence of a particular witness should be accepted, it is more difficult for a court of appeal to conclude that compliance with the requirements of natural justice could have made no difference.  True it is that an appeal to the Full Court from a judgment or order of a judge is by way of rehearing and that on hearing such an appeal the Full Court has all the powers and duties of the primary judge, including the power to draw inferences of fact:  Supreme Court Rules, O. 58, rr. 6 and 14.  However, when the Full Court is invited by a respondent to exercise these powers in order to arrive at a conclusion that a new trial, sought to remedy a denial of natural justice relevant to a finding of fact, could make no difference to the result already reached, it should proceed with caution.  It is no easy task for a court of appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact.  And this difficulty is magnified when the issue concerns the acceptance or rejection of the testimony of a witness at the trial.”

1. It was thus submitted that, the combination of the absence of material before him to found a costs order, together with the trial Judge’s failure to provide the husband with the opportunity to know and be heard in relation to relevant issues, constituted a miscarriage of justice and/or error of law such as warranted the intervention of this Court.

1. On behalf of the wife it was submitted in relation to Johnson the trial Judge had done “...all that that decision requires to be done” (Amended Outline of Submissions on behalf of the Respondent/Wife page 2) and that the trial Judge “...gave the husband plenty of opportunity to put his case about costs.”  It was further submitted that the trial Judge “...had before him the information necessary to comply with that section [s.117].”  (Amended Outline of Submissions on behalf of the Respondent/Wife page 2). 

1. The trial Judge said to the husband “...you better tell me why I shouldn’t make an order for costs against you and don’t bother telling me any rubbish that’s unbelievable.”  The husband then proceeded to make submissions, many of which were not relevant to the costs issue.  The husband then referred to his financial circumstances.  The husband conceded that the equity in the former matrimonial home was $800,000.  Before us it has sensibly been conceded that inability to pay costs was not an argument available to the husband, either before the trial Judge or before this Court.  The husband made further submissions, most of which were not relevant to the proceedings before the trial Judge.  The husband having completed his submissions, the trial Judge asked “Is there anything else you want to say, Mr [D]?”.  The husband did not suggest that there was any more which he wished to say.  The trial Judge then proceeded to make the costs order complained of.

1. Whilst it is true that the trial Judge did not refer the husband to the provisions of s.117, we are not persuaded that the failure to do so, in the circumstances of this case, calls for the intervention of this Court. A reading of the transcript on 3 and 4 July 2000 makes clear the basis upon which the proceedings were being adjourned. It is apparent from the trial Judge’s reasons why his Honour was adjourning the proceedings. There was, by virtue of the husband having, only the previous day, provided the ATO with specific details of his claims in relation to overstated expenses of himself, the wife and the corporation, X Company Pty Limited, the likelihood of a change in the parties financial affairs. As the trial Judge recorded, “A judge would not be in a position to know what is available for division between the parties until amended tax assessments are made.” It is evident from the transcript that the husband could, at least three months earlier, have made his claims to the ATO.

1. By virtue of the contents of the husband’s letter to the ATO (which became Exhibit A), the trial Judge felt that he had no option than to disqualify himself from hearing the proceedings.  Even if the trial Judge was in error in disqualifying himself, there can be no suggestion that the proceedings were not properly adjourned by virtue of the husband’s late raising of the alleged overstatement of expenses and possible consequences of his having done so.  Before us, there has been no suggestion that the trial Judge erred in adjourning the hearing.  Further, there has been no suggestion before us that the adjournment was necessitated other than by the husband’s late referring of his claims to the ATO. 

1. Whilst the trial Judge may have been incorrect in suggesting that the husband could have referred the matters to the ATO as much as ten years earlier, the evidence leaves no doubt that the husband could have raised the overstatements with the ATO at least three months before he in fact did so.  The transcript at Appeal Book 19 notes:

   “MRS O’CONNOR:  Your Honour, some irregularities that my friend – the

   husband refers to arose out of – when the matter was listed last before his

   Honour Chisholm J, the wife had been seeking for some months or for some –

   more than, about 12 months, documents from the husband in relation to a

   5         company in which he is not a shareholder, his parents who live [overseas] are

   the shareholders, the sole shareholders and he is a director.  The morning of
   the hearing the husband was then represented by Ms Snelling, Lois Snelling,

   produced a big box of documents, put them on the bar table and said to me

   about 5 to 10, You’ve been asking for these documents, here they are.  I then

   10indicated to his Honour Chisholm J that I would like time to work out

   what to do next.  The wife’s accountant, Mr [M] came in, had a look

   at some of the documents and said he would like to do an audit of these

   documents.  Since that time he has put on a ---

   15       HIS HONOUR:         When was that?

   MRS O’CONNOR:    That would be in March.  In April, he put in a further

   report which was served on the husband, indicating that there are indeed some

   irregularities in the balance sheets of the company, 1996/97, ‘97/98 and ‘98/99

   20       and that was served on Mr [D] in May, your Honour, very early in

   May of this year.  It’s---”

1. The case had no sooner been called on before the husband asked for an adjournment “...on the basis that I have spoken with the Australian Taxation Office inspectors and they are waiting for my call so they could come in and then go through the accounts and all the returns for the last 10 years, and after that whatever is left over, we can then fight over.”  There was further discussion in relation to the possible implications of the husband’s disclosures to the ATO, during which the husband reiterated on a number of occasions that he was applying for an adjournment.  The husband volunteered to get into the witness box.  He then gave evidence that he had “...spoken with Australian Taxation officers and inspectors in Newcastle last week and they told me they are ready to come in and go through the details, bank books, statements and everything and after what I have told them, they said would involve great length of time and they’re waiting for my call.” 

1. The husband denied in cross-examination that his decision to “...go and see the Taxation Office, came about as a result of a report” from an accountant retained on behalf of the wife, “...that was served on you in May of this year?”  The husband did not deny that he had been served with the report in May.  The husband was asked “...why did you leave it until last week to go and see the Taxation Commissioner?”, to which the husband replied “Because I couldn’t see them at call, I had to ring and make an appointment”.  The husband then volunteered that the ATO could “...come at my convenience.”.  The husband further revealed that, in his discussions with the ATO, he “...did not give any name,” and “...did not give my name”.  At the time the husband gave evidence on 3 July, he had given no identifying information to the ATO nor otherwise committed himself to any course of conduct with the ATO. 

1. As was mentioned during the course of the hearing of the application before us, the trial Judge, in effect, “...called the husband’s bluff” by giving him “...an extra day” in which, if he chose to do so, the husband could make “...arrangements by, with the tax department, giving your name and appointing a time”, failing which the case would not be adjourned further.  The husband attended Court on 4 July and informed the trial Judge that “...I have voluntarily went to Chatswood taxation department and then I was told to go to the regional office in Newcastle, which I did, and after discussing with the interpretation department and the assessment officer I was given this letter which I would like to tender.”  The documentation, to which the husband referred, apparently, although none of it has been before us, included a letter from the Australian Taxation Office of 3 July 2000 and “...a bundle of letters provided by the husband to the Tax Office.” 

1. From reading the transcript of proceedings on 3 and 4 July, it is apparent that the husband was, on the first day, seeking to obtain an adjournment of the proceedings in reliance upon disclosures which he had not at that time made to the ATO in any way that bound him. The trial Judge made clear that the husband had the choice to proceed the next day, or, if he wished to rely upon his claims in relation to overstatement of expenses, take positive steps in that regard. In our view, the husband clearly understood what was occurring, albeit he may not have anticipated that the trial Judge would “...call his bluff” in the way in which he did. The husband had known for months of the material which he claimed to be raising with the ATO. His conscious decision to do nothing in relation to that until, and as a consequence of what then occurred, on the first day of the hearing, revealed his awareness of the proceedings in which he was involved and a tactical decision which he clearly made in relation to the conduct of the proceedings. Against that background, and where the husband’s actions so clearly gave rise to the necessity to adjourn the proceedings, in our view there was no necessity for the trial Judge to refer specifically to any provision of s.117(2). Realistically, it was transparently obvious that the husband’s conduct in relation to the proceedings placed him at risk as to costs. Nothing to which we have been referred persuades us that the husband did not fully understand what was occurring and the implications of his actions in relation to the ATO. As the authorities to which we have referred make clear, the obligation to inform unrepresented litigants is not absolute and unconditional. In the circumstances of this case we are not persuaded that any relevant failure to inform has been established. Nor are we satisfied that, in the particular circumstances of this case, any breach of the requirements of natural justice or procedural fairness occurred. Nor are we persuaded that any further, or more specific, reference to the provisions of s.117 of the Act was required of the trial Judge, either during the hearing, or in his reasons for judgment.  To the extent, if any, that the husband was denied natural justice or procedural fairness, we do not accept that anything would be changed.  As the High Court made clear in Stead’s case (supra), an appellant does not advance his cause if the result would have been no different if the appellant had received the further information complained of in this case.  On the undisputed facts, the husband was always likely to be ordered to pay the costs of the aborted trial.  We have been directed to nothing which his further knowledge of would have rendered a different outcome likely.

1. Whilst counsel for the husband did not expressly complain about the quantum of costs assessed by the trial Judge, the husband’s proposed Ground does raise a challenge to the trial Judge having, without entertaining debate in that regard, determined the quantum of costs payable by the husband.  In our view, the trial Judge did err in not inviting the husband to make submissions in relation to the quantum of costs to be ordered.  Whilst it may well be that, on taxation, the husband will be liable to pay a higher figure than the trial Judge awarded for costs, in our view the trial Judge’s order for costs in the sum of $5,000 should be set aside and, in lieu thereof, an order made that the husband pay the wife’s costs as agreed or taxed. 

GROUND 4

1. Ground 4 provided:

   “4.That His Honour erred in conducting the proceedings in a manner which did not take into consideration the fact that the husband was unrepresented and without applying the principles set out in Johnson v Johnson (1997) FLC 92/764.”

1. Given that the injunctive order will, by consent, be set aside, the submissions raised in support of this Ground have relevance only to the costs order.  In dealing with the previous proposed Ground of Appeal we have dealt with those submissions and it is unnecessary to make further reference to them.

CONCLUSION

1. In the circumstances, leave to appeal should be granted, and Order 5 set aside by consent.  Order 4 should be varied by deleting the reference to the sum of $5,000 and inserting in lieu thereof “as agreed or taxed on a party and party basis.”.

COSTS OF THE APPEAL

1. It was submitted on behalf of the husband that, if the appeal succeeded, the wife should pay the husband’s costs of the appeal.  Alternatively, it was submitted that if the appeal succeeded the husband should have a certificate under the Federal Proceedings (Costs) legislation.  As was apparent from the time submissions of counsel for the wife (dated 2 November) were served, the wife was not seeking to retain the benefit of Order 5 of the trial Judge’s orders.  Success in relation to that issue does not assist the husband either in relation to an order for costs against the wife or, if such order be refused, a certificate.  To the extent that the husband has been successful in relation to the form of the order for costs, that was not a specific Ground of Appeal.  Moreover, as we have observed, the husband may well be ordered on taxation to pay more than the trial Judge ordered.  The husband brought about the necessity for the appeal by his raising late in the piece with the ATO, the issues regarding overstatement of expenses.  In our view, in the circumstances, the husband was always going to be liable for costs of the aborted trial on 3 and 4 July 2000.  What occurred on 3 and 4 July was in no way the fault of the wife and nothing in the wife’s conduct would, in our view, warrant the making of an order for costs against her.  Given that the proceedings before this Court arose by virtue of the husband’s actions before the trial Judge, we are disinclined to exercise the discretion to issue a certificate in his favour.  As was conceded, the husband does not dispute that he has the capacity to meet an order for costs.  In our view the husband should pay the costs of the appeal and we will so order.

The Orders of the Court are accordingly as follows:

1. That leave to appeal be granted.

1. That By Consent Order 5 of the Orders made 4 July 2000 be set aside.

1. That Order 4 of the Orders made 4 July 2000 be varied by deleting the reference to the sum of $5,000 and inserting in lieu thereof “as agreed or taxed on a party and party basis.”

1. That the husband pay the wife’s costs of the appeal as agreed or taxed on a party and party basis.

I certify that the preceding
44 paragraphs
are a true copy of the reasons
for judgment delivered by this
Honourable Full Court.

Associate