Pilcher and Pilcher

[2017] FCCA 2545

FEDERAL CIRCUIT COURT OF AUSTRALIA

PILCHER & PILCHER [2017] FCCA 2545

Catchwords:
FAMILY LAW – Property settlement – whether the wife ought be allowed to adduce further evidence as to the value of the former matrimonial home 6 months after the trial and in circumstances where the Court is currently engaged in writing its judgment.

Legislation:

Family Law Act 1975 (Cth), s.79

Cases cited:

Stephens & Stephens and Anor (Enforcement) (2009) FLC 93-425

Bemert & Swallow (2010) FLC 93-441
Australian Securities and Investments Commission v Rich (2006) 235 ALR 587
Summit & Summit and Ors (Re Opening) [2009] FamCA 365
Sabell & Medhurst [2011] FamCA 446
EB v CT (No.2) [2008] QSC 306

Applicant: MS PILCHER

Respondent: MR PILCHER

File Number: MLC 4567 of 2015

Judgment of: Judge Small

Hearing date: 10 October 2017

Date of Last Submission: 10 October 2017

Delivered at: Melbourne

Delivered on: 13 October 2017

REPRESENTATION

Counsel for the Applicant: Mr Williams

Solicitors for the Applicant: Pearsons Lawyers

Counsel for the Respondent: Dr Ingleby

Solicitors for the Respondent: Clancy & Triado

ORDERS

1. The Application in a Case of the wife filed 8 September 2017 is hereby dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Pilcher & Pilcher is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 4567 of 2015

MS PILCHER

Applicant

And

MS PILCHER

Respondent

REASONS FOR JUDGMENT

Introduction

1. The substantive proceedings in this case are for property settlement arising from the breakdown in the marriage between Ms Pilcher (formerly Pilcher) (“the wife”) and Mr Pilcher (“the husband”).

2. These Reasons relate to the determination of the wife’s Application in a Case filed 8 September 2017 in which she seeks that she be permitted to adduce further evidence in that case in the intervening period between the end of the final hearing and the delivery of the Court’s judgment.

Background

1. Ms Pilcher was born on (omitted) 1958 and is currently 59 years old.

2. Mr Pilcher was born on (omitted) 1953 in (country omitted) and is currently almost 64 years old.

3. The parties commenced living together in (omitted) 1999 and married on (omitted) 2006. They temporarily separated between July and November 2010. On 23 February 2015 the parties separated on a final basis under the same roof. Mr Pilcher vacated the matrimonial home (“the property”) due to an Intervention Order to which he consented without admissions on 24 August 2015.

Procedural History

1. The Final Hearing of the property dispute between the parties was heard on 7, 8 and 9 March 2017 and at the conclusion of submissions on 9 March 2017 I reserved my decision.

2. The workload of the Court is such that, because of a backlog of cases awaiting judgment, I was unable to complete my judgment in the substantive proceedings (“the judgment”) before the current proceedings were issued on 8 September 2017. My writing of the judgment was, of course, immediately suspended upon my Chambers becoming aware of the current proceedings. At that time, I estimate that the first draft of the judgment was between one-half and two-thirds complete.

3. On 8 September 2017, the wife filed an Application in a Case seeking the following orders:

   1.That all times be abridged to enable this Application to be listed, heard and determined with priority.

   2.That Judgment in these proceedings be stayed pending further evidence.

   3.That the Applicant Wife have leave to adduce further evidence.

   4.That the parties re-engage Mr S of (omitted) Valuations as single expert witness to prepare a further and up to date valuation of the former matrimonial home property at Property A.

   5.That the parties pay the costs of the single expert witness equally.

   6.Such further and/or other orders and directions as are deemed appropriate or necessary in the circumstances.

4. That Application was accompanied by an affidavit sworn by Mr Joseph Schepis, who is a Principal in the law firm which represents the wife in these proceedings.  It is Mr Schepis’ evidence that he has the conduct of these proceedings on behalf the wife.

5. The husband filed a Response to an Application in a Case on 5 October 2017 accompanied by an affidavit sworn by the husband on the same date.

6. In that Response, the husband sought simply that the Application in a Case filed 8 September 2017 be dismissed and that the applicant pay his costs of and incidental to that Application.

7. The matter was listed for hearing on 10 October 2017 and, after hearing submissions from both counsel, I informed the parties that I would deliver judgment at 2:15 p.m. on Friday 13 October 2017.

8. On 13 October 2017 I made orders dismissing the wife’s Application in a Case and advised the parties that I would release my Reasons for Judgment shortly.

9. These are those Reasons.

Issues and Evidence

1. The single issue in these proceedings is whether I should allow the applicant wife to adduce further evidence before completing my judgment in the substantive proceedings.

2. In his affidavit sworn 6 September and filed 8 September 2017, Mr J sets out the history of the proceedings before deposing that he is “instructed by (his) client” that in the intervening months between the trial and the filing of this Application, “the price of real estate in the Property A area has increased significantly due to high demand in that area.”

3. He then annexes copies of two market appraisals of the property provided at the request of the wife by two real estate agents in the local area.

4. At trial, the value of the former matrimonial home was agreed at $1,350,000, that agreement being based on an updated sworn valuation report provided by Mr S, a Certified Practising Valuer and Director of (omitted) Valuations and Advisory Services.

5. It is Mr Schepis’ evidence, supported by the annexures to his affidavit, that the first market appraisal states that the estimated value of the property is $1,600,000-$1,700,000 as at 1 September 2017, and that the other estimates that the property is worth $1,600,000-$1,650,000.

6. Mr Schepis deposes, and there is no dispute about this issue, that in the substantive proceedings both parties seek that the wife transfer her interest in the former matrimonial home to the husband, and that he pay her a cash payment by way of final property settlement.

7. Mr Schepis claims that if the valuation of $1,350,000 forms the basis of the property settlement which is the subject of the judgment, “there could be a miscarriage of justice for the Applicant Wife given the reliance upon an inaccurate property pool”.

8. In his affidavit sworn and filed on 5 October 2017, the husband sets out the history of the valuations obtained in relation to the property, and points out that the wife had given no indication on 9 March 2017 of any intention to challenge Mr S’s valuation of $1,350,000, despite the fact that I had made it clear to the parties on that day that it was most unlikely that judgment would be handed down within six months given the workload of the court.

9. It is Mr Pilcher’s evidence that he was not informed of the wife’s intention to obtain the market appraisals annexed to Mr Schepis’ affidavit and that he was unaware of them until the current application and its supporting affidavit were served upon him.

10. He deposes that if I were to grant the wife’s application to adduce further evidence, there would inevitably be further delay in the delivery of my final judgment. That circumstance, he says, “would be a great prejudice to me in circumstances where I have and continue to make significant financial contributions to the relationship post separation, and where I have expended significant funds in legal fees. I have also been unable to live in the Property A property for the majority of the past two years.”

11. Mr Pilcher refers to the interim order made by the Court on 9 March 2017 which provides for him to meet all payments in relation to the parties’ (omitted) account secured by the title to the former matrimonial home, and states that he has been complying with that order. He points out that he has been prevented from living in the property since the wife obtained an Intervention Order against him in August 2015. While that order has since expired, he is subject to an Undertaking in very similar terms which will not expire until 21 November 2017.

12. In the meantime, Ms Pilcher has been living in the property.

13. If Ms Pilcher were to be successful in these proceedings, Mr Pilcher would be obliged to continue to meet the (omitted) payments of $1162 per month until final judgment, which would inevitably be delayed further by a hearing adducing further evidence about the value of the former matrimonial home.

14. It is Mr Pilcher’s evidence that he has already spent the sum of $153,707.74 in legal fees in the litigation between him and his former wife. No doubt the wife has spent similar amounts, although her counsel informed the Court on 10 October 2017 that she has no funds and has not been able to pay her fees.

The Law

1. In submissions, Mr Williams, on behalf of the wife, referred me indirectly to the decision of the Full Court of the Family Court of Australia in the matter of Stephens & Stephens and Anor (Enforcement) (2009) FLC 93-425 (“Stephens”), which was a matter relating to an application to adduce further evidence in an appeal after the Court’s decision had been reserved, that judgment being quoted by another Full Court in the matter of Bemert and Swallow (2010) FLC 93-441.

2. In Stephens, their Honours referred to the decision of Austin J in the Supreme Court of New South Wales in the matter of Australian Securities and Investments Commission v Rich (2006) 235 ALR 587 and said:

   273.We observe that in Australian Securities and Investments Commission v Rich (2006) 235 ALR 587  Austin J set out at 593 what he described as a “useful statement of relevant discretionary factors” to the exercise of discretion to permit a beginning party in a civil penalty proceeding to adduce further evidence after it had closed its case. The factors included:

   ·    the nature of the proceeding;

   ·    whether the occasion for calling further evidence ought reasonably to have been foreseen;

   ·    the importance of the issue on which the further evidence is sought to be adduced;

   ·    the degree of relevance and probative value of the further evidence;

   ·    the prejudice to the other party;

   ·    the public interest in the timely conclusion of litigation;

   ·    the explanation offered for not having called the evidence.

3. Mr Williams took the Court through these factors, submitting that his client “is not an expert in relation to property. She is a person who could not foresee whether the property market would go up, go down or vary in the future at the time and the evidence was closed.”

4. I do not accept that submission. The parties had obtained two sworn valuations of the property during the proceedings, and the property had risen in value between those two valuations being undertaken. It was absolutely foreseeable that the property’s value would continue to rise, especially in circumstances where on Mr Williams’ own submission “everybody in this courtroom knows that the Melbourne property market is extremely volatile” and where I had advised the parties at the end of the trial that judgment was unlikely to be delivered within a period of six months.

5. Mr William says that the value of the property is at the core of these proceedings, and therefore the necessity for an updated valuation is both very important and very relevant. I agree with the first of those propositions, save to say that the value of the property at the time of trial is at the core of these proceedings.

6. I asked Mr Williams multiple times during his submissions why I should depart from the Court’s usual practice of considering the value of property at the time of trial, and I must say that upon reviewing the transcript of the hearing on 10 October 2017,  I do not appear to have received a cogent response to that question.

7. He addressed the court in terms of the potential “unjust enrichment” to the husband if I did not allow further evidence of the value of the property to be adduced, and to the fact that there has been “a legitimate change in circumstances” since the trial.

8. He submitted that there was no prejudice to the husband if I were to grant his client’s application, because if his client were wrong, and a sworn valuation did not disclose a significant rise in the property’s value, she would open herself to a costs order. I do not accept that argument. Mr Pilcher is currently paying all the outgoings on the property and would be significantly prejudiced by further delay in the judgment being delivered, particularly in circumstances where he does not have the benefit of living at the property. In circumstances where both parties seek orders that the husband retain the property in the final settlement, that prejudice is significant.

9. Mr Williams conceded that the evidence before the court in relation to the rise in the property’s value was hearsay, in that it consists of two market appraisals annexed to the affidavit of his instructor who deposes to what the wife had told him. He proposed that if I were to allow further evidence to be adduced it would be possible to obtain a further updated report from Mr S within “3 to 5 days”, and he invited me to stand the matter down so that counsel for the husband could contact Mr S to confirm that fact.

10. In circumstances where the “evidence” provided is not admissible in proceedings because of its hearsay nature, I cannot find that that “evidence” has any significant probative value.

11. In relation to the issue of “the public interest in the timely conclusion of litigation”, Mr Williams submitted that because I had told the parties that I thought the substantive judgment had been between one-half and two-thirds completed when I was forced to suspend its writing because of his client’s application, then the conclusion of the litigation was “very close, right at the end”.

12. As I pointed out to him, if I make the orders sought in his client’s Application in a Case, there will be further delays to the completion of that judgment, which I do not believe would be in the public interest in terms of the timely conclusion to the litigation.

13. Mr Williams denied that his client was trying to take advantage of this Court’s extremely burdensome workload, which is the cause of the delay so far in delivering judgment in the substantive proceedings.

14. I put to Mr Williams that had the Court’s workload not been so burdensome, and I had been able to deliver judgment within a month or so of the trial, any rise in the value of the property since the trial would simply be seen as a windfall to the parties (in circumstances where I order the sale of the property) or to the husband (in circumstances where I order that the husband retain the property and make a cash payment to the wife). The following exchange then took place:

    Mr Williams: Well that’s exactly the point, is that this is not about winners, and justice is not about winners.

    Her Honour: It is sometimes about windfalls.

15. Dr Ingleby, for the wife, submitted that as the current application is to adduce further evidence in the trial of the matter, rather than during an appeal, the correct authority upon which I should base my considerations is that of Murphy J in the matter of Summit & Summit and Ors (Re Opening) [2009] FamCA 365 (“Summit”) and that of Rose J in Sabell & Medhurst [2011] FamCA 446 which essentially confirmed the authority of the principles set out in Summit.

16. In Summit, the facts were very similar to those in this case, save that the argument for seeking to adduce further evidence was based on a reduction rather than a rise in the value of certain real properties.

17. In that case Murphy J set out the following under the heading “What are the Applicable Principles?”:

    14. In a case involving an application for settlement of property, it can broadly be said that common law principles govern applications to re-open in this court. (see eg Gelley & Gelley (1992) FLC 92-290 and the cases there discussed ).

    15. Those principles make it clear that the granting of leave to re-open is discretionary. That discretion is guided by the interests of justice. The essential question is, is the court more able to do justice in the facts and circumstances of the particular case if the application is granted. (See eg Smith and NSW Bar Association (1992) 176 CLR 256; Urban Transport Authority v NSEISER (1992) 28 NSWLR 471 at 478 and EB v CT (No 2) [2008] QSC 306)

    16.    In cases where reasons for judgment have not been delivered, the High Court has held that the primary consideration should be embarrassment or prejudice to the other side[1].

    [1] Emphasis added. I note that in this case I have already found that there would be prejudice to "the other side" if I were to grant the wife's application.

18. His Honour then referred in much more detail to the decision of Applegarth J in the Supreme Court of Queensland in EB v CT (No.2) [2008] QSC 306.

19. That case was heard under the State law then applicable to de facto property disputes and Applegarth J said, in relation to the relevant authorities:

    [5] Reference by the High Court to prejudice to the other party, and the guiding principle of the interests of justice, require account to be taken of the strain that litigation imposes on personal litigant[2]. The prejudice caused by delay in the delivery of an expected judgment at the end of stressful litigation can not always be measured in terms of money or cured by an order for costs. The interests of justice is served by finality in litigation, particularly where prolonged litigation imposes a strain on personal litigants.

    [2] Sic as quoted in Summit.

20. Later in his judgment, Applegarth J said the following:

    [7] […] the relevant issue is the value of the parties’ property at the date of the hearing. The interests of justice do not require the admission of the evidence to determine that issue. It is contrary to the interests of justice to reopen the evidence to enable the value of the assets to be re-assessed at dates after the respondent’s case has closed and after the hearing was concluded.

21. In that case, Applegarth J rejected the application to adduce further evidence and considered that the value of the parties’ property should be determined as at the date of the final hearing. Murphy J quoted that passage and decision with approval in Summit, saying:

    21. […] That principle is applicable, generally speaking, to applications for settlement of property pursuant to s 79 of the Family Law Act 1975.

    […]

    23. Without expressing any view of what the position might have been in respect of the then relevant Queensland legislation, it is necessary, I think, to be a little more circumspect about the position in respect of s 79 applications under the Family Law Act. It has been said for example (albeit in a different context) that: “…. in addition to the date of the hearing, the value of property at other dates may be important.” (Australian Family Law, Lexis Nexis, Vol 1, [79.113]). That is because, primarily, the nature of contributions can change. Thus, the issue at trial may be broader than simply the value of property at the date of the hearing.

    24. That said, it is equally true to say that the date of the hearing is almost inevitably an important date to the ascertainment of the value of s 79 property and very frequently – as was the case here – used as the relevant date for the purpose of ascertaining the value of “the property of the parties or either of them” within the meaning of s 79.

22. I note that in this case, the nature of the contributions of these parties to their property has not changed since the trial.

23. Later in his judgment, Murphy J made the following observation:

    54. To the extent that value is determined at the date of hearing (or any other relevant date) for the purposes of s 79 applications, it is, axiomatically, arbitrary in the sense that it involves the assumption of values at a particular snapshot in time.

    […]

    58. The increasing complexity of matters confronting the courts, when merged with a judge’s desire to write a considered judgment, sometimes results, regrettably, in a delay between trial and judgment. As Campbell J said in King Investments Solutions Pty Ltd v Hussein and Another (2005) 64 NSWLR 441 at [164]: “… [the realities of] the case listing procedures of the court force judges to write reasons in whatever odd corners of time are left over from their other duties…”.

    59. Often, that delay might encompass the occurrence of the sorts of exigencies just referred to. That will not, usually, result in a case being re-opened. Finality in litigation is a powerful component of the interests of justice.

1. I note that in Summit, the evidence of the change in the value of the property was provided by way of a sworn valuation. That is not the case here. On the facts in Summit, Murphy J said the following:

   68. It is in my judgment not sufficient, in that respect, to adduce, without more evidence that valuer A says that the property is now valued at $x whereas valuer B said, eight months previously that they were valued at $y, particularly where there is no question that $y was (previously) accepted as their value […].

2. In reply, Mr Williams asserted that his client’s application referred to “only one very limited material fact, which is the value of the property, nothing more. It’s a number […]”.

3. I pointed out to Mr Williams that if I were to grant his client’s application, and the sworn updated valuation provided by Mr S stated that the value of the property had indeed risen over the months between the end of the trial and the filing of the wife’s application, it may not be the case that my judgment would involve only the value of the property, as it may well invite issues of whether the husband is able to retain the property in the final settlement. In other words, the implications relate to considerably more than a simple number.

Conclusion

1. After considering all the above matters, I cannot find that it is in the interests of justice to exercise my discretion and allow the wife to adduce further evidence in this matter. I will therefore dismiss her Application in a Case filed 8 September 2017.

I certify that the preceding fifty five (55) paragraphs are a true copy of the reasons for judgment of Judge Small

Date:  20 October 2017