Probert and Probert & Ors

[2019] FamCAFC 67

FAMILY COURT OF AUSTRALIA

PROBERT & PROBERT AND ORS [2019] FamCAFC 67

FAMILY LAW – APPLICATION IN AN APPEAL – REINSTATEMENT OF THE APPEAL – Where the husband failed to file appeal books in compliance with procedural orders and his appeal was deemed abandoned – Where there was an adequate explanation proffered for the failure to comply with orders – Where the appeal is devoid of all merit and it would be futile to allow it to proceed – Application dismissed.

FAMILY LAW – CROSS-APPEAL – Where two of the three grounds of appeal were misconceived in that the errors alleged were not in fact errors made by the Magistrate – Where matters raised by the cross-appellants in challenging findings made by the Magistrate were not put to the Magistrate and thus it is not open to raise these matters on appeal – Where the Magistrate took into account the matters complained of by the cross-appellants and no error is demonstrated – Where there is no merit in any of the grounds of appeal – Cross-appeal dismissed.

FAMILY LAW – APPLICATION IN AN APPEAL – LEAVE TO ADDUCE FURTHER EVIDENCE IN THE CROSS APPEAL – Where it is not demonstrated how the admission of this further evidence would render the orders under appeal “erroneous” or “lead to a different result” – Application dismissed.

FAMILY LAW – COSTS – Where the husband did not seek costs in the event that the cross-appeal was dismissed – No order as to costs.

Family Law Act 1975 (Cth) s 93A(2)
Family Law Rules 2004 (Cth) r 22.44

Batey-Elton & Elton [2009] FamCAFC 101
Bemert & Swallow (2010) FLC 93-441; [2010] FamCAFC 100
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 76
Gallo v Dawson (1990) 93 ALR 479; [1990] HCA 30
Jackamarra v Krakouer (1998) 195 CLR 516; [1998] HCA 27
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Rand & Rand [2009] FamCAFC 88

APPELLANT/ FIRST CROSS-RESPONDENT: Mr Probert

FIRST RESPONDENT/

SECOND CROSS-RESPONDENT:

Ms Probert

SECOND RESPONDENTS/

CROSS-APPELLANTS:

Ms Turner &
Mr Turner

FILE NUMBER: PTW 872 of 2014

APPEAL NUMBER: WEA 17 of 2018

DATE DELIVERED: 24 April 2019

PLACE DELIVERED: Adelaide

PLACE HEARD: Perth

JUDGMENT OF: Strickland, Ainslie‑Wallace &
Austin JJ

HEARING DATE: 27 September 2018

LOWER COURT JURISDICTION: Magistrates Court of Western Australia

LOWER COURT JUDGMENT DATE: 29 March 2018

LOWER COURT MNC: [2018] FCWAM 54

REPRESENTATION

THE APPELLANT/FIRST CROSS RESPONDENT: In person

COUNSEL FOR THE FIRST RESPONDENT/SECOND CROSS RESPONDENT: Ms King

SOLICITOR FOR THE FIRST RESPONDENT: Genuine Legal

THE SECOND RESPONDENT/CROSS-APPELLANTS: In person

Orders

Order made on 27 September 2018

1. The Application in an Appeal filed by the appellant/first cross respondent on 4 September 2018 be dismissed.

…

Orders made on 24 April 2019

1. The Application in an Appeal filed by the cross-appellants on 21 May 2018 be dismissed.

2. The cross-appeal be dismissed.

3. There be no order as to costs.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Probert & Probert and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH

Appeal Number: WEA 17 of 2018
File Number: PTW 872 of 2014

Mr Probert

Appellant/First Cross-Respondent

And

Ms Probert

First Respondent/Second Cross-Respondent

And

Ms Turner & Mr Turner

Second Respondents/Cross-Appellants

REASONS FOR JUDGMENT

1. On 24 April 2018, Mr Probert (“the husband”) and Ms Turner and Mr Turner (“the cross-appellants”) filed Notices of Appeal against final property settlement orders made by Magistrate Andrews on 29 March 2018 in proceedings between Ms Probert (“the wife”), the husband, and the cross-appellants. The Notice of Appeal filed by the cross-appellants has been treated as a Notice of Cross-Appeal.

2. In summary, the Magistrate made orders providing for the property owned by the husband situated at B Street, Suburb D (“the D property’) to be sold and for the disbursement of the proceeds of sale. Following the payment of the costs associated with the sale and the discharge of any secured debts over the D property, the cross-appellants are to receive $58,983.61 together with interest thereon in satisfaction of monies loaned by them to the husband, the wife is to receive 10 per cent of the remaining proceeds of sale together with a further sum of $30,000, and the husband is to receive the balance.

3. The husband appeals against all orders made by the Magistrate, and the cross‑appellants appeal against orders 6(c), 11 and 13. Orders 6(c) and 11 provide for the payment of the said amount of $58,983.61 together with interest thereon to the cross-appellants, and order 13 provides for their application to be otherwise dismissed.

4. On 16 July 2018, procedural orders were made providing for the parties to prepare the appeal and the cross-appeal for hearing. Those orders required the husband to file the appeal books on or before 20 August 2018. The husband failed to comply with that order and the appeal was deemed abandoned.

5. On 4 September 2018, the husband filed an Application in an Appeal seeking to reinstate the appeal. On 14 September 2018, that application was adjourned to be heard by this Full Court.

6. By their Response to an Application in an Appeal filed on 25 September 2018 together with a supporting affidavit, the cross-appellants oppose the reinstatement of the husband’s appeal and seek dismissal of his application. The wife opposes both the reinstatement of the appeal and the cross-appeal, however, she has not filed any documents with respect to the reinstatement application, the appeal or the cross-appeal. The wife’s solicitor appeared at the hearing before us, but she did not seek leave to make oral submissions.

7. After hearing the oral submissions of the husband and the cross-appellants we made an order dismissing the husband’s Application in an Appeal seeking reinstatement of the appeal, and we indicated that we would deliver our reasons for that order when we delivered our reasons in relation to the cross-appeal. The following are our reasons for dismissing the application for reinstatement of the appeal.

Application in an Appeal filed by the husband on 4 September 2018

1. The application seeking reinstatement of the appeal is supported by an affidavit of the husband also filed on 4 September 2018.

2. As referred to above, the application is opposed by the cross-appellants and by the wife.

The applicable principles

1. Rule 22.44 of the Family Law Rules 2004 (Cth) provides for an application to reinstate an appeal taken to be abandoned. However, unlike its predecessor (r 22.57) this rule does not provide any specified criteria that may be taken into account in the exercise of the discretion by the court to either grant or refuse an application. That is consistent with the Full Court decision of Bemert & Swallow (2010) FLC 93-441 where their Honours concluded at [154]:

   … in our view, the discretion to reinstate an abandoned appeal is at large and no attempt should be made to limit the exercise of the discretion nor identify in any prescribed way the matters that should be taken into account …

2. That said, the Full Court still found that the principles applicable to the determination of an application for an extension of time, as set out for example in the oft-quoted extract from the judgment of McHugh J in Gallo v Dawson (1990) 93 ALR 479, can apply equally to an application to reinstate an appeal. McHugh J said this at 480-481:

   The grant of an extension of time under this rule is not automatic.  The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice.  The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes, at 263-4; Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201. It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice.

3. That approach has been followed by the Full Court in cases such as Rand & Rand [2009] FamCAFC 88 and Batey-Elton & Elton [2009] FamCAFC 101.

4. Thus, it is necessary to consider whether the application of the rules of court work an injustice, and in addressing that there are a number of factors which are relevant, such as the explanation of the failure to comply with the orders of the court, the prospects of success of the appeal, and the consequences for the parties of the granting or refusal of the application. These are all factors that arise here.

5. It is also important to note that there is a difference between when an appeal has not been filed within time and when an extension of time is sought, and where an appeal has been commenced within time but a procedural step has not been complied with. In the latter case, which is the position here, ordinarily the appellant should be able to pursue the appeal unless the appeal is so devoid of merit that it would be futile to allow it to proceed (Jackamarra v Krakouer (1998) 195 CLR 516).

6. Turning to a consideration of the relevant factors.

The explanation for the failure to comply with the order for the filing of the Appeal Books

1. In summary, the appellant’s explanation set out in his affidavit is as follows:

   a)His age of 73 years, and his alleged poor state of health.

   b)His time being split between a number of court cases allegedly running at the same time, and his need to care for his pets.

   c)His alleged lack of support.

   d)The alleged lack of suitable physical surroundings and the alleged poor circumstances in which he is living.

   e)Lack of knowledge of the law.

   f)Lack of funds.

   g)Inability to type.

2. We say “alleged” in relation to a number of these matters because the husband did not provide any corroborative evidence, including any medical report. However, there is no challenge by the cross-appellants in their response to the husband’s claims in relation to his state of health. They do challenge though his alleged lack of time and ability to prepare and file his appeal books in accordance with the order made. For example, they point out that he had time to commence fresh proceedings in the Magistrates Court, and prepare, file and serve documents in that matter, and that he had access to computers, photocopiers and all relevant documents.

3. Despite having some reservations about his priorities, and whether he gave appropriate attention to the preparation of the appeal books, we are prepared to accept that the husband has provided an adequate explanation in what we have summarised above for his failure to comply with the order of the Appeal Registrar.

4. Indeed, although there were a number of deficiencies in the documents, he was able to provide to the court his appeal books and summary of argument by 10 September 2018, approximately 21 days after the appeal books were due.

The merits of the appeal

1. As referred to above, in cases such as this, the question to be asked is whether the appeal is devoid of merit such that it would be futile to allow it to proceed.

2. Ordinarily, when considering an application to reinstate an appeal, the court has only limited information to assess the merits of the appeal; typically only the reasons for judgment of the primary judge or Magistrate and the Notice of the Appeal filed by the appellant. However, here, in addition, we have the benefit of the husband’s appeal books and his written summary of argument that he would want to rely on if the appeal is reinstated.

3. In his Notice of Appeal the husband unnecessarily sought leave to appeal, and thus we propose to ignore that. However, his grounds of appeal are as follows:

   1. I will be appealing the complete appeal because of the fact that the Magistrate made certain findings and didn’t take them into account when giving her final orders .

   2. The magistrate has used her words to write many things that are not true , and the truth is contained in my affidavit of which I am devestated by the fact she finds my Affidavit to be a pack of lies .

   3. The Magistrate  Has not taken into account the harm done to myself that was caused by the Applicants lawyers at the Applicants instructions and the amount of losses I have incured because of this serious action.

   4. The magistrate has also not taken into account the extreme harm that was caused to me by the second Respondents and the extending of a caveat when the document used to apply the caveat has now rightfully been found INVALD & UNENFORCEABLE
   This harm caused me to has been going on for over 12 months now and as in my Affidavit is causing me to loose close to $200.00per day while it is going on  Where I stated over 12 months ago that the Document “ Acknowledgement & Charge” was invalid and Unenforcebale and is also stated in my affidavit .

   5. The Magistrate has left the caveat in place preventing me from refinancing the property I have been in for 27 years and the two persons that  have done the Most EXTREME HARM TO ME are now getting rewarded for causing such harm to me as in my Affidavit .

   6. Should I fail to get the Right results here I will be taking the Second Respondents back to the Supreme Court as this case is not closed , and they have been causing me so much harm because of their Stubbourness for over 12 months now .

   7. I now have an order from the Mortgagee to be out of my Property from … the Supreme Court ,  Where I have to be out by … 2018 because of the caveat from the Second Respondents  .

   8. There needs to be a stay in the Orders of Magistrate Andrews till this appeal has been heard .

   9. There is also an urgency for this appeal because of the Supreme Court orders .

   (As per the original)

4. As can be seen, these grounds of appeal are incompetent, many are not legitimate grounds of appeal, and they fail to raise or identify appealable errors by the Magistrate.

5. Unfortunately, that position is not remedied in his written summary of argument. That document is incomprehensible and fails to address the grounds of appeal or clarify them in any sensible or meaningful way.

6. Given that, we gave the husband the opportunity during the hearing to say why his appeal would succeed if this Court allowed it to proceed.

7. In response, the most he was able to put was a repeat of the claim that the cross-appellants had caused him harm by their conduct in, for example, lodging a caveat on the D property. He suggested though that the Magistrate did not take into account his evidence because she did not spend much time in reading his affidavit, and she did not accept his evidence. In short, his position was that her Honour should have accepted what was in his affidavit and made the orders that he sought. However, as we have explained to the husband that does not sound in appealable error by the Magistrate.

8. Having carefully read and considered the reasons for judgment of the Magistrate we cannot discern any appealable error on her part consistent with any issue raised by the husband. Those reasons demonstrate that her Honour was well aware of the husband’s complaints about the conduct of the cross-appellants, and of the effect of their caveat, but her Honour preferred the evidence of the cross-appellants to that of the husband, and no error in that regard has been established.

9. The starting point when considering the merits of this appeal is that the Magistrate made the right decision, and the husband’s task was to demonstrate what, if any error, her Honour made in reaching that decision. Unfortunately, the husband has not been able to do that in his Notice of Appeal, his written summary of argument or his oral submissions.

10. In the circumstances, we find that the appeal is devoid of all merit and it would be futile to allow the appeal to proceed.

11. That finding obviates the need to consider the consequences of refusing or granting the application, and is the basis for the order that we made at the hearing dismissing the Application in an Appeal seeking reinstatement of the Appeal.

The cross-appeal

1. On 21 May 2018 the cross-appellants filed an Application in an Appeal seeking leave to introduce further evidence in the cross-appeal, and that application will be dealt with below. 

2. On 12 June 2018, orders were made staying the orders of the Magistrate made on 29 March 2018 and, in the event that the D property was sold, that the net proceeds be held in an account in the joint names of all parties.

3. At the hearing of the cross-appeal, the parties informed the court that the D property had been sold for $726,000 with settlement due in October 2018. The parties also informed the court that, out of the proceeds of sale, approximately $475,000 is to be paid to the mortgagee, a private lender (which includes the costs of sale), as well as about $11,000 to be paid in satisfaction of outstanding rates.

Factual and procedural background

1. The husband was born in 1945 and was 72 years of age at the time of the hearing before the Magistrate. The wife was born in 1954 and was 63 years of age at that time. The cross-appellants are the husband’s daughter and son-in-law.

2. The husband and the wife met online in 2006 and commenced a relationship in June of that year. At the time, the wife was living overseas and the husband was living at the D property which he had owned since 1991.

3. The wife moved to Western Australia to live with the husband in February 2007. They married in 2007, separated in September 2013 and divorced in 2014.

4. At the beginning of the relationship, the husband was a contractor and handyman and earned a modest living. The wife worked briefly and throughout the relationship received a pension from an overseas Government of $400 to $500 every few months. The husband was the main income earner and controlled the finances.

5. During the relationship, the husband and the wife began breeding and showing pets which produced a small income. Both the husband and the wife were involved in home duties and in the care of pets.

6. The husband and the wife lived a modest lifestyle.

7. The husband’s income decreased towards the end of the relationship due to a lack of work and his failing health. The financial circumstances of the husband and the wife became strained, and the husband’s debt level increased.

1. Between March and June 2013, the cross-appellants advanced sums of money to the husband. They borrowed $50,000 to fund those advances and provided their home as security. At the time of the trial, $45,789 remained owing on that debt. The advances were used by the husband to reduce his debt; he reduced his overdraft and credit card debt to zero and was no longer in arrears on his mortgage.

2. These advances were the subject of the dispute between the husband, the wife and the cross-appellants at trial, as was the extent of the wife’s knowledge of the advances and the husband’s indebtedness.

3. A document drafted by the cross-appellants and entitled “Acknowledgement and Charge” dated 3 June 2013 and signed by the husband is said to be evidence that the advances were a loan. The document recorded that the husband owed the cross-appellants $60,000.

4. That document also provided that interest on the balance outstanding of that sum, and all future sums, comprises a lump sum payment of an amount equal to 20 per cent of the market value of the D property at the date of repayment less the set sum. This clause took into account further work undertaken by the cross-appellants, and the incurring of further expense by them in assisting the husband to subdivide the property.

5. After the parties separated in September 2013, the husband remained living at the D property.

6. In late 2014 the wife lodged a caveat on the title to the D property, and commenced proceedings in the Supreme Court of Western Australia (“the Supreme Court”) for the recovery of the value of a pet retained by the husband. The existence of this caveat stalled the husband and the cross-appellants’ plans to refinance and subdivide the D property. The Supreme Court proceedings were eventually stayed whilst the family law proceedings were on foot.

7. By 2015 the husband’s financial position again began to deteriorate. He was over his credit limit and he was unable to meet the mortgage repayments on the D property. The F Bank commenced legal action against the husband to recover the mortgage debt.

8. In August 2015 the husband entered into a short-term finance arrangement in order to discharge the debt to the F Bank. A significant penalty was to apply if the principal was not repaid by the end of December 2015. The husband defaulted on his repayments and the financier commenced legal action to recover that debt.

9. On 8 September 2015, the wife filed an application for property settlement in the Family Court of Western Australia.

10. In September 2016 the husband paid out the debt to the financier by way of a further loan obtained from a private lender. That loan was secured against the D property. The loan carried a penalty interest if not repaid by February 2017. At the time of trial, the principal debt had not been repaid and the penalty interest was being incurred; foreclosure of the D property was imminent.

11. In around early 2017 the husband began discussions with his son, with a view to him discharging the husband’s debts, and in return, the son would obtain an interest in the D property. When the cross-appellants became aware of the son’s involvement, and with no proposal for them to be repaid, they lodged a caveat against the D property to secure their interest as per the Acknowledgement and Charge.

12. In early 2017 the cross-appellants commenced proceedings in the Supreme Court seeking an extension of that caveat.

13. The Supreme Court proceedings were adjourned by consent and the caveat remained in place whilst the parties attended mediation.

14. In April 2017 a compromise agreement was reached between the husband and the cross-appellants with respect to the Supreme Court proceedings as evidenced by a handwritten document entitled “Heads of Agreement”. In that document the husband acknowledged that he owed the cross-appellants $130,000 and he would pay them $60,000 by 11 November 2017, then sell the D property within two years and pay them $70,000. In return the cross‑appellants would remove the caveat.

15. Subsequent to signing the Heads of Agreement, the cross-appellants instructed their solicitors to prepare a “Deed of Settlement and Release” which they believed reflected those terms. That document was forwarded to the solicitors engaged by the husband. There were parts of the Deed of Settlement and Release that differed from the Heads of Agreement and the husband sought some amendments. Negotiations eventually broke down between the husband and the cross-appellants, and in late 2017 the husband recommenced the Supreme Court proceedings seeking the removal of the caveat as well as compensation for harm suffered as a result of the caveat remaining in place.

16. A Supreme Court Justice delivered judgment in late 2017 and made orders dismissing the claim for compensation and extending the caveat, as well as making an order for costs against the husband to be taxed if not agreed. The husband’s appeal against that decision was dismissed.

17. The cross-appellants were joined as parties to the family law proceedings in August 2017.

18. Before the Magistrate the cross-appellants sought orders that the husband pay to them the sum of $170,690, being $130,000 in accordance with the Heads of Agreement, together with interest at six per cent, and $39,000 being their legal fees in relation to the Supreme Court proceedings. In default of payment they sought that the D property be sold.

19. Pausing there, we note that there was no challenge to the Magistrate having jurisdiction to hear and determine this claim by the cross-appellants.

20. Her Honour found that the Heads of Agreement was unenforceable against the husband, and went on to find that the Acknowledgement and Charge was invalid and not an enforceable contract.

21. Her Honour then found that the cross-appellants should receive the total of the funds they actually advanced to the husband, namely $58,983.61, and that in relation to the costs, because they had not been assessed, her Honour gave liberty to the cross-appellants to apply for an order that they receive from the proceeds of sale the amount of their taxed costs in the Supreme Court proceedings.

Discussion

1. There are three grounds of appeal relied on by the cross-appellants, however Grounds 1 and 2 would seem to raise the same complaint, and can be dealt with together, while Ground 3 is in the alternative.

Ground 1

The learned Magistrate erred in fact and in law when setting aside a charging clause as unconscionable by not taking into consideration the evidence that the transaction was more than the Acknowledgement and Charge. In that the transaction required the [cross-appellants] to, at the [cross-appellants’] cost, cause the [husband’s] land to be subdivided for the purpose of the subdivided vacant portion of the [husband’s] land being sold to pay the monies agreed. To be paid to the [cross appellants] and made a charge over the [husband’s] land by the charging document with the surplus monies from that sale being for the benefit of the [husband]. Which the total transaction was prevented from being completed by reason of the [wife’s] caveat.

Ground 2

The learned Magistrate erred in fact and in law that the charging document was the totality of the transaction when in fact it was only a component of it. As the [husband’s] property had to be subdivided at the [cross-appellants’] cost with the subdivided vacant portion being sold for the purpose of providing funds to both the [cross-appellants] and the [husband].

1. These grounds are misconceived.

2. The “charging clause” in Ground 1 would seem to be a reference to the clause in the Acknowledgement and Charge document that provided as follows:

   [The husband pay to the cross-appellants] interest on the balance outstanding from time to time of the Outstanding Sum and all future sums of money (if any) due from us to you for whatsoever reason at the rate specified in item 4 of the Schedule. The interest will be paid to you upon repayment of the Outstanding Sum.

   And item 4 read as follows:

   Interest shall be calculated as follows:

   a lump sum payment of an amount equal to twenty per cent (20%) of the market value of the property mentioned at ITEM 6 [the D property] as at the date of repayment less the outstanding sum.

3. However, her Honour did not find that that clause was unconscionable and should be set aside. Her Honour found that there was unconscionable conduct by the cross-appellants “which led to [the husband] entering into the Acknowledgement and Charge” at [121], and as a result concluded at [123] that “the Acknowledgement and Charge [was] invalid and not an enforceable contract”.

4. Her Honour made that finding of unconscionable conduct for the following reasons:

   121…

   ·At the time of entering into the agreement in June 2013 [the husband] was in dire financial circumstances. The mortgagee was threatening foreclosure on the [D] property, his home of 20 years. He had significant outstanding credit card debt and little income. He seemed to have little other alternative to borrowing from the [cross-appellants] to bail himself out of debt and prevent foreclosure. He was vulnerable in this regard;

   ·Lurking in the background to him entering this agreement with the [cross-appellants] was the presence of a faltering relationship with [the wife]. They separated only weeks later and had been living together in very strained circumstances, according to all accounts. This I consider is also likely to have made [the husband] vulnerable to making poor decisions;

   ·The interest clause agreed upon by [the husband], as evidenced in the Acknowledgement and Charge was, obviously, disproportionate to the debt evidenced in the same document. The interest clause agreed upon appears to create a right for the [cross-appellants] to claim interest immediately. Their evidence was the property was worth upwards of $1.2 million in June 2013 and therefore what they could claim in interest, that is 20 per cent of the value of the property on its sale, was blatantly unfair, yet [the husband] still entered into the agreement;

   ·The parties agreed upon the interest clause in the Acknowledgment (sic) and Charge taking into account the [cross-appellants] would be likely to undertake further work at the [D] property as well as incur further cost to carry out work needed to subdivide, but as interest was owed immediately or, as the parties seem to think, after three months, I find that interest rate still to be excessive;

   ·I do not accept the [cross-appellants] told [the husband] he did not have to read the Acknowledgement and Charge. I do accept they had a law student friend draw up the document, on their instructions and not with any direct input from [the husband]. [The husband] merely went along with what the [cross-appellants] had prepared to achieve his goal of retaining the property;

   ·Before he signed the Acknowledgement and Charge [the husband] did not get any legal advice, let alone independent legal advice; and

   ·Even though the [cross-appellants] and [the husband] were on good terms at the time of entering into this agreement, I find the [cross-appellants] unconscientiously took advantage of [the husband]. [The husband] was not under duress from the [cross-appellants] and they thought they were helping him out but also making an investment in their future. I find they took advantage of [the husband’s] situation as they were aware he had little ability to borrow, they were aware his marriage was coming to an end, and they were aware he desperately wanted to keep the [D] property at all costs, as he does now. They were aware of the disproportionate advantage they were receiving at the time from the interest clause agreed upon. They acknowledge they thought the [D] property to be worth at least $1.2 million at the time.

5. Her Honour then said:

   122I reach the finding regarding unconscionable conduct knowing that [the husband], some years later, had encouraged the [cross-appellants] to lodge a caveat to protect their interest in the D property created by the Acknowledgement and Charge when a different mortgagee was threatening foreclosure. [The husband] continued to be in the same vulnerable position, of his own making, as he was when he entered into the Acknowledgment (sic) and Charge.

6. The cross-appellants look to challenge these findings by the Magistrate, but none of what they now put in submissions to this Court was put to the Magistrate, and thus it is not open to the cross-appellants to raise these matters on appeal (Metwally v University of Wollongong (1985) 60 ALR 68).

7. In any event, in the orders sought, it was not the terms of the Acknowledgement and Charge that the cross-appellants were looking to enforce before her Honour; it was the Heads of Agreement. That is the document wherein the husband acknowledged and agreed that he was indebted to the cross-appellants in the sum of $130,000. There was no finding of unconscionability though in relation to that document or any of its terms. Her Honour found that the Heads of Agreement did not create a binding contract because it was subject to the execution of a deed formalising the terms of the agreement by all the parties, and that did not occur. Thus, the Heads of Agreement were not enforceable against the husband, and the cross-appellants do not challenge that finding on appeal.

8. As we say, it was the Heads of Agreement which the cross-appellants were looking to enforce given the orders sought by them before her Honour, but nevertheless, her Honour went on to consider the enforceability of the Acknowledgement and Charge document, and as referred to above, it was this document her Honour found to be tainted by unconscionable conduct on the part of the cross-appellants.

9. Given that, we make two further comments about this ground of appeal.

10. First, in the grounds and in the outline of argument filed in support of the cross-appeal, the cross-appellants appear to suggest that her Honour erred by not taking into account the fact that the Acknowledgement and Charge was only part of the transaction between them and the husband, and that transaction entailed the subdivision of the property at D and money being spent, and work done by the cross-appellants in that regard. However, her Honour was plainly aware of those matters, and indeed as can be seen that was referred to at [121] when setting out her Honour’s findings as to unconscionability.

11. Thus, there is no error here by the Magistrate.

12. Secondly, in their written summary of argument the cross-appellants suggest that in the proceedings in the Supreme Court of Western Australia, the Judge found the Acknowledgement and Charge “had substance and validity” and gave “rise to an equitable interest in the land”. Seemingly, the purpose of this submission was to suggest error by the Magistrate not accepting this, and instead finding the document unenforceable.

13. However, that is not what the Supreme Court Justice found. Her Honour was dealing with an application by the cross-appellants to extend the caveat that they had lodged on the title to D. Her Honour granted an extension saying that she was satisfied that the cross-appellants had established “a serious question to be tried that the Acknowledgement and Charge gives rise to an equitable interest in the land which can be protected by caveat and that the balance of convenience presently supports the maintenance of the status quo”. Her Honour only decided that the cross-appellants had an arguable case against the husband; not that they had a winning case. The orders the Supreme Court were made pending a proper trial of the dispute between them, which they were given by the Magistrate.

14. Thus, it was entirely open to the Magistrate to proceed as she did, and there is no error here by her Honour.  

15. We find no merit in Ground 1.

16. Turning to Ground 2, which complains that her Honour found that the “charging document”, namely the Acknowledgement and Charge, comprised the entirety of the transaction when it was only a part thereof.

17. It is unclear how that complaint sounds in appealable error by the Magistrate. However, from the outline of argument relied on by the cross-appellants, it seems that the point sought to be made is in effect the same as is in Ground 1, namely that given the wider transaction beyond just the Acknowledgement and Charge, her Honour was in error in finding that the interest clause in that document provided a “disproportionate advantage” to the cross-appellants.

18. The difficulty with this submission is that her Honour did not make a finding that the Acknowledgement and Charge comprised the entirety of the transaction. As we have indicated, her Honour was well aware of the proposal to subdivide the property and sell the vacant portion, and that the cross-appellants were to undertake work and incur expense in that regard. Indeed, her Honour recorded that at various places in her reasons for judgment, for example, at [60], [66], [70], [72], [75] and [121].

19. Moreover, as referred to above, her Honour addressed the question of a disproportionate benefit at [121], and despite accepting that the interest clause “[took] into account [the cross-appellants] would be likely to undertake further work at the D property as well as incur further cost to carry out work needed to subdivide”, her Honour found “the interest rate still to be excessive”.

20. It has not been demonstrated that her Honour erred in that finding, but in any event, that was just one aspect of the unconscionable conduct that her Honour found on the part of the cross-appellants which led to the husband entering into the Acknowledgement and Charge. To repeat, her Honour did not find that the interest clause per se was unconscionable.

21. Thus, explained in that light, this ground has no merit either.

Ground 3

Alternatively, the learned Magistrate erred in fact and law when compensating the [cross-appellants], for unjust enrichment to the [husband] by not including interests and repayments, the [husband] otherwise would have had to pay, in having had the benefit of the [cross-appellants’] money for 5 years.

1. Her Honour ordered that the cross-appellants receive the sum of $58,983.61 from the proceeds of sale of the D property. That was the amount that the cross‑appellants had established as being the total amount of money actually advanced by them to the husband. Her Honour set out these amounts at [56] as follows:

   ·March 2013:  $10,300 (by three payments of $300, $1,500 and $8,500);

   ·April 2013:  $700;

   ·June 2013:  $41,479.71 (by making a number of payments directly from the H Bank account of Ms Turner);

   ·April 2016:  $5000 (for [the husband’s] legal fees); and

   ·May 2016:  $1,503.90 (for legal fees in relation to the preparation and lodgement and removal of caveat, on [the husband’s] request).

   ·Total:  $58,983.61

2. Before us, the cross-appellants challenged the accuracy of one of the amounts, namely the amount of $41,479.71 said to be advanced in June 2013. The cross-appellants submitted that at that time they took out a loan of $50,000 secured over their property and they advanced that to the husband.

3. However, the evidence before the court did not demonstrate that. Her Honour was aware of the loan of $50,000 (see [58]), but it seems that that money was paid into an H Bank account in the name of one of the cross-appellants, and that from there a total of $41,479.71 was advanced to the husband. That is clear from the statement of that account which was tendered and marked as Exhibit 12. Indeed, that method of advancing money to the husband was confirmed in the cross-appellants’ own summary of argument. They do suggest though that cash monies were provided in addition, but there was no evidence put before her Honour to demonstrate that that was done, and how much was involved, and more importantly, it was conceded by the cross-appellants before us that this was not put to her Honour in submissions.

1. Thus, we can find no error by the Magistrate in including the amount of $41,479.41 rather than the amount of $50,000.

2. In any event, that is not what this ground of appeal is directed to. What is complained of is that her Honour limited her order to the actual amount advanced and did not include for example, the interest and repayments that the cross‑appellants have had to pay as a result of those advances.

3. Her Honour of course was aware of these claims by the cross-appellants, but nevertheless made the order that she did. Indeed, it is instructive to set out in full the reasons that her Honour gave in relation to this issue as follows:

   124[The husband] acknowledges monies have been advanced to him by the [cross-appellants].

   125The onus is on the [cross-appellants] to prove how much is owed to them by [the husband] and on what basis they should be repaid given my findings the Acknowledgment and Charge and the Heads of Agreement are not enforceable.

   126I refer to the decision of the High Court in Pavey & Matthews v Paul (1987) 162 CLR 221 which involved a claim based on unjust enrichment arising from the respondent’s acceptance of benefits received from the appellant’s performance of an unenforceable contract. At 256 in his judgment Deane J said this:

   The quasi-contractual obligation to pay fair and just compensation for a benefit which has been accepted will only arise in a case where there is no applicable genuine agreement or where such an agreement is frustrated, avoided or unenforceable. In such case it is the very fact that there is no genuine agreement or that genuine agreement is frustrated, avoided or unenforceable that provides the occasion for, and part of the circumstances giving rise to the imposition by the law of the obligation to make restitution.

   127There is no enforceable contract in this case and yet [the husband] has had the benefit of funds advanced to him. In those circumstances I find restitution to the [cross-appellants] of the amount advanced to them by [the husband] as the basis for their claim against him. I find the [cross-appellants] should receive back from [the husband] the funds they advanced to him which they have proved to be $58,983.61.

   128[The husband] has at various times acknowledged in his evidence in proceedings between him and [the wife] that he owes the [cross-appellants] varying amounts including $75,000, $80,000 and $170,000. He also entered into the Acknowledgement and Charge indicating he owed them $60,000 as at June 2013 and the Heads of Agreement acknowledging he owed them $130,000 as at April 2017. As I have found there not to be any enforceable contract between the [cross-appellants] and [the husband], these facts are only of some evidentiary value and I have taken them into account when reaching my conclusion regarding restitution to the [cross-appellants].

   129I understand the [cross-appellants] sought a greater sum than the $58,983.61. The [cross-appellants’] evidence indicates this sum represented the total of the amounts of money they have proved was provided to [the husband] as loans and for which they expected repayment. The amount does not include interest on loans they have incurred to provide funds to [the husband].

4. Thus, what is being discussed is the benefit that the husband has received in the form of an unjust enrichment. The husband has received the amounts that have been advanced to him, and that is what needs to be returned to the cross‑appellants.

5. In the circumstances, we find there is no merit in this ground of appeal.

The application to lead further evidence

1. Section 93A(2) of the Family Law Act 1975 (Cth) provides that in an appeal the Full Court can, in its discretion, receive further evidence upon questions of fact. In CDJ v VAJ (1998) 197 CLR 172, the High Court discussed the circumstances in which an appellate court may exercise its discretion to admit further evidence. McHugh, Gummow and Callinan JJ said as follows:

   109.One consideration in construing s 93A(2) is its remedial nature. Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. …

   …

   111.…Nor can the availability of further evidence relevant to the issues in the appeal be treated as equivalent to a ground of appeal, proof of which prima facie entitles the appellant to a new trial. The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial.

2. The evidence sought to be adduced here relates to the proposed subdivision and subsequent sale of a portion of the D property, and also comprises two of the affidavits filed by the husband in the proceedings before the Supreme Court. This evidence is said to establish that there was a wider transaction between the husband and the cross-appellants than that set out in the Acknowledgement and Charge, and to show the entirety of that transaction. However, as referred to above, her Honour was well aware of these circumstances, and specifically referred in her reasons for judgment to the fact that the cross-appellants were to incur further cost and undertake further work at the D property in order to bring about the subdivision and subsequent sale of the vacant portion of that property. Thus, it has not been demonstrated how the admission of this further evidence would render the orders under appeal “erroneous” or “lead to a different result”.

3. In these circumstances the application must be dismissed.

Conclusion

1. Given that we have found no merit in the grounds of appeal, the cross-appeal must be dismissed.

Costs

1. At the conclusion of the hearing we sought submissions as to the question of costs depending on the result of the cross-appeal.

2. In the event that the cross-appeal was dismissed, the husband did not seek any order for costs, given that he did not have any legal costs or disbursements.

3. Thus, there will be no order as to costs.

I certify that the preceding ninety-eight (98) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Ainslie-Wallace and Austin JJ) delivered on 24 April 2019.

Associate: 

Date:  24 April 2019