Rimac and Rimac
[2019] FamCAFC 11
•30 January 2019
FAMILY COURT OF AUSTRALIA
| RIMAC & RIMAC | [2019] FamCAFC 11 |
| FAMILY LAW – APPLICATION IN AN APPEAL – Extension of time – Application for extension of time to appeal against an order dismissing an interim financial application seeking an account for rent – Where leave to appeal is necessary if an extension is granted – Explanation for the delay – Merits of the proposed appeal – Where the issues raised in the applicant’s financial application are more appropriate to be heard at a final hearing rather than an interim hearing – Application dismissed. |
| Family Law Act 1975 (Cth) ss 78, 79 Protected Estates Act 1983 (NSW) |
| Bahonko v Sterjov (2008) 166 FCR 415; [2008] FCAFC 30 Forgeard v Shanahan (1994) 35 NSWLR 206; Gallo v Dawson (1990) 93 ALR 479; [1990] HCA 30 Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34 Rimac & Rimac [2018] FamCA 951 Ryan v Dries [2002] NSWCA 3 |
| APPLICANT: | Mr Rimac |
| RESPONDENT: | Ms Rimac |
| FILE NUMBER: | SYC | 1540 | of | 2014 |
| APPEAL NUMBER: | EA | 150 | of | 2018 |
| DATE DELIVERED: | 30 January 2019 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Aldridge J |
| HEARING DATE: | 17 December 2018 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 8 October 2018 |
| LOWER COURT MNC: | [2018] FamCA 951 |
REPRESENTATION
| APPLICANT: | In person (with the assistance of his carer and an interpreter) |
| COUNSEL FOR THE RESPONDENT: | Mr Taylor |
| SOLICITOR FOR THE RESPONDENT: | Hughes & Taylor |
Orders
The Application in an Appeal filed on 19 November 2018 is dismissed.
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 Rimac & Rimac 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 APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 150 of 2018
File Number: SYC 1540 of 2014
| Mr Rimac |
Applicant
And
| Ms Rimac |
Respondent
REASONS FOR JUDGMENT
Introduction
By an Application in an Appeal filed on 19 November 2018, Mr Rimac (“the applicant”) seeks an extension of time in which to appeal against orders of a judge of the Family Court of Australia made on 8 October 2018.
The applicant and Ms Rimac (“the respondent”) have been involved in property proceedings in the Family Court since 2015.
On 13 July 2018 the applicant filed an Application in a Case seeking the following orders:
1.That within 7 days of the date of these Orders the parties do all things and sign all documents necessary to jointly execute a New Exclusive Management Agency Agreement with [Suburb F] Real Estate in respect of the property located at and know as [D Street, Suburb B] (“the Property”).
2.That the rental income received from the Property be paid equally to the parties after payment of agent’s commission, expenses related to the maintenance of that part of the Property that is subject to tenancy, and outgoings related to that party of the property that is subject to tenancy
3.That within 7 days of these Orders the Respondent Wife pay to the Applicant Husband one half of the rental income received by the Wife from the Property during the period from 2 January 2004 to the date of these orders plus interest rate as prescribed by the Rule 17.03 of the Family Law Rules 2004 (Cth) .
4.That the Respondent Wife pay the Applicant Husband’s costs of and incidental to Application in a Case proceedings.
(As per the original)
On 8 October 2018 that application was dismissed with costs.
Background
Before turning to the application itself, it is necessary to give some relevant background. The following is taken from the affidavits before the primary judge and appears to be largely uncontroversial.
The parties met in 1999 or 2000. At that time, the respondent owned a property at D Street, Suburb B. In early 2000, a relationship between the parties commenced and at some stage during that year the applicant moved in to live with the respondent at the Suburb B property.
The parties were married in early 2001.
In mid-2001, the respondent transferred one half of her interest in the Suburb B property to the applicant for consideration of $1. At about the same time, she obtained a mortgage over the property in the sum of $113,000, which she says she used to repay the existing mortgage ($44,000) and to discharge a debt to her former husband and a debt to friends.
In October 2003, the parties purchased a property at Town H for the sum of $280,000. At the time, a joint loan was obtained in the sum of $350,000. Those funds were applied to the purchase of the Town H property as well as discharging the existing mortgage over the Suburb B property.
The applicant asserts that the parties separated in December 2003. The respondent disputes that, saying that separation occurred in 2011.
Be that as it may, in early 2004, the parties were involved in a serious motor vehicle accident. Both parties were significantly injured. The applicant suffered a severe traumatic head injury.
In mid-2004, the applicant was released from a rehabilitation centre and until March 2011 was cared for by the respondent. The nature and quality of that care is the subject of great dispute.
In 2006, the applicant settled his proceedings for personal injury in the District Court of New South Wales. He received compensation of $3,750,000, costs of funds management of $639,860 and agreed costs of $150,000. A management order was made under the Protected Estates Act 1983 (NSW) and the Protective Commissioner (later called the NSW Trustee & Guardian) was appointed as the applicant’s financial manager.
In May 2007, the respondent purchased a property at Town M for the sum of $240,000. The property was rented out and the rent applied to the mortgage of $35,000.
In July 2007, the respondent purchased a further property at Town M in the sum of $225,000 with a mortgage of $140,000. A property at Town J was purchased by the respondent in 2009 in the sum of $320,000 with a mortgage in the sum of $321,000.
In March 2011, the applicant informed the respondent that he no longer wished to live with her and she was no longer to be his carer.
In late 2014, after a three day hearing earlier that year, a judge of the Supreme Court revoked the management order. The respondent’s evidence, in the form of a Statement from the NSW Trustee & Guardian, was that at the time of the order, the applicant had assets of $4,470,132.05, which included $600,000 for his half share of the Suburb B property.
The respondent has since sold the two properties at Town M and purchased properties at Town E and Town J instead.
In late 2006 the NSW Trustee & Guardian purchased a property at P Street, Town J in the sole name of the applicant. There is no evidence that it has been sold although the primary judge’s reasons suggest that it may have been. The applicant does not record it as an asset in his Financial Statement but, inconsistently, does not record it in the section describing property recently disposed of by him.
Thus, according to the Financial Statements of both parties, at the time of the hearing of the Application in a Case, the applicant and the respondent were joint owners in equal shares of the Suburb B and Town H properties, the applicant was possibly the sole owner of the property at P Street, Town J and the respondent owned a property at Town E and a further property at Town J.
The other assets held by the applicant at the time of the hearing are not so easy to identify. According to his Financial Statement, the applicant had approximately $100,000 in a bank account, $20,000 in a lawyer’s trust account and an entitlement under a loan agreement with his nephew for $2.245 million.
According to the Financial Statement, the original advance to the nephew was of $1.5 million and was to enable the nephew to acquire land to build a block of units. Further advances have since been made.
This obviously leaves unexplained what has happened to the balance of the funds received by the applicant from the NSW Trustee & Guardian. When I raised this with the applicant, I was informed that the initial advance to the nephew was in fact $1.8 million and that a further advance of $500,000 had been made, but that two repayments of $50,000 had been received. The applicant also informed me that he gave $1.5 million to the nephew so as to protect it from the respondent.
The conduct of the application
The applicant was represented by a solicitor and counsel before the primary judge. He has, however, prepared the Application in an Appeal himself with the assistance of his carer, his brother Mr C Rimac.
The matter first came before me on 22 November 2018. On that occasion, the solicitor acting for the respondent objected to Mr C Rimac appearing for and speaking for the applicant, principally on the ground that Mr C Rimac was likely to be a witness in the final property proceedings. This was because Mr C Rimac would presumably give evidence as to the quality of care provided by the respondent (he is one of the people apparently responsible for the applicant ceasing to live with the respondent in 2011) and because it is his son who has received the loan from the applicant.
It quickly became apparent to me that, without intending any disrespect Mr C Rimac, he did not understand the issues in the application and was not capable of properly articulating the case on behalf of the applicant. I also spoke directly to the applicant, with the assistance of an interpreter. Unfortunately, he was of less assistance than his brother.
I took it upon myself to adjourn the proceedings and urged the applicant to obtain some legal advice so that his case could be properly presented. I informed him that I did not consider that his brother was capable of doing so. I also drew their attention to the draft Notice of Appeal that had been prepared, to which I shall return, and informed them that it needed considerable attention because, as I saw it, it did not identify any error on the part of the primary judge.
The matter came before me again on 17 December 2018. Two extensive affidavits had been filed, one by the applicant and one by Mr C Rimac. Those affidavits consist almost entirely of evidence as to the history of the relationship between the parties and their allegations that the applicant has been tricked by the respondent and that she has stolen his money. They had little relevance to the present application.
No attempt had been made to amend the draft Notice of Appeal.
I remained concerned about the applicant’s capacity to conduct the proceedings. However, given the Supreme Court decision of December 2014, I did not take the matter further. Both the applicant and Mr C Rimac made submissions.
The application
The applicant wishes to appeal against orders made in an interim application in a property matter. As such, he needs leave to appeal in the event an extension is granted.
Although the categories in which leave to appeal will be granted are never closed, commonly the Court will look to see whether, in all of the circumstances, the decision is attended by sufficient doubt to warrant it being reconsidered by the Full Court and whether substantial injustice would result if leave were refused (Medlow & Medlow (2016) FLC 93-692 at [57]).
The principles to be applied in an application for an extension of time in which to lodge an appeal are set out in Gallo v Dawson (1990) 93 ALR 479 at 480–481, where McHugh J said:
…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. As the Judicial Committee of the Privy Council pointed out in Ratnam v Cumarasamy [1965] 1 WLR 8 at 12; [1964] 3 All ER 933 at 935:
“The rules of court must prima facie be obeyed, and in order to justify a court in extending the time during which some step in procedure requires to be taken there must be some material upon which the court can exercise its discretion.”
The hearing of such an application therefore involves the exercise of discretion so as to enable the court to do justice between the parties. In doing so, the court will consider the history and conduct of the proceedings, their nature, the consequences for the parties of the grant or refusal of leave and the merits of the appeal.
Explanation for the delay
The first matter to consider is whether there has been any adequate explanation for the delay. The applicant asserts that he instructed a solicitor to lodge an appeal shortly after 8 October 2018. However, on 1 November 2018, a Thursday, his solicitor informed him that she would not lodge the appeal. He says by Monday, 5 November 2018, he was then out of time to file a Notice of Appeal. That is not correct and one could have been filed on 5 November 2018. Nonetheless, given the difficulties that the applicant faces, I am prepared to accept this as an adequate explanation of the delay.
His Application in an Appeal was filed reasonably promptly thereafter.
The merits of the proposed appeal
It is necessary to consider the merits of the proposed appeal.
The primary judge noted that although the application before her was framed as seeking a declaration under s 78 of the Family Law Act 1975 (Cth) (“the Act”), it was, in fact, an application for an account for half the rent of the Suburb B property. It was not in dispute that the Suburb B property consists of a house and a granny flat, both of which had been rented out for some time, and that the rent has been received by the respondent. She asserted that that rent was her main source of income.
The primary judge raised concerns as to the applicant’s financial position. His evidence did not properly explain the advance to the nephew or the fate of all of the funds received from the NSW Trustee & Guardian (approximately $1 million).
Her Honour ultimately was of the view that “there is no basis upon which the Court would deal with this matter on an interim basis” (Rimac & Rimac [2018] FamCA 951 at [4]).
A claim for an account between co-owners in respect of rent is not at all straight-forward. In Forgeard v Shanahan (1994) 35 NSWLR 206 at 222 (“Forgeard”), the Court of Appeal by majority (per Meagher JA with Mahoney JA agreeing, Kirby P dissenting) held that a co-owner out of occupation can seek an account for rent in only two situations: where he or she has been ousted from the premises or where the co-owner was in sole occupation of the premises by agreement. Although that decision has been doubted by subsequent authority (Ryan v Dries [2002] NSWCA 3 at [64]–[65] per Hodgson JA), Forgeard has not been overruled. The disputed factual position before the primary judge did not enable her to make findings that would permit a co-owner to seek an accounting for rent.
Of course, no such difficulties arise in a hearing under s 79 of the Act where the Court is adjusting, where appropriate, the parties’ interests in their assets and can take account of contributions made and benefits received throughout the relationship.
It is in the latter context that her Honour found it was inappropriate to engage in a final hearing on a discrete aspect of the parties’ property interests.
The draft Notice of Appeal raises the following grounds of appeal:
1.Self represented with assistance from my carer [Mr C Rimac] – not advised of time limit to lodge an Appeal
2.On the 8th of October 2018 I advised my then Legal Representative to immediately lodge an Appeal and she advised me that she will lodge the Appeal
3.On the 1st November 2018 the Legal Representative advised that she will not lodge the Appeal but did not advise me that I only had until the 5th of November 2018 to lodge the Appeal
4.I believe the Appeal has good prospects for being successful
5.To deny my Appeal would be contrary to the Principals of Natural Justice and it would be denying my Human Rights
(As per the original)
Only Ground 5 could be described as a ground of appeal but it is vague and too general in terms to identify error. My efforts to identify what principles of natural justice and what human rights were breached by the primary judge simply resulted in assertions that the applicant has been and continues to be robbed by the respondent. These assertions do not identify error.
In my opinion, no doubt has been cast on the primary judge’s approach to the matter. In order to determine the interim issue before the Court, a fully contested hearing would have been required. I have already described the legal difficulties faced by the applicant.
The effect of the order is not to deny the applicant’s right to have the respondent’s receipt of the rent to be taken into account, as that can be undertaken at a final hearing when that – and all other relevant circumstances – will be considered in determining the appropriate property adjustment between the parties. There appears to be sufficient property available for division between the parties to take into account at the final hearing any proper claim for adjustment for the rent received from the Suburb B property.
The applicant has not been denied his claim. It is merely being deferred to the final hearing.
The applicant asserted that he needed what he described as his share of the rent in order to support himself. As the primary judge pointed out, he did not explain what he had done with approximately $1 million of the $4.7 million received by him (his response to that is to say that the evidence given by the respondent and her lawyer is a lie), explain properly the nature of the alleged loan agreement with his nephew or explain why he cannot support himself by drawing from the $100,000 he has in the bank.
The unchallenged evidence before the primary judge was that the respondent required the rent as her primary source of income.
The issues raised by the applicant are matters that are appropriate to be raised in a final hearing and not in an interim hearing.
It is not the Court’s role to draft grounds of appeal, even for litigants in person, but having read her Honour’s reasons, I am unable to see any obvious error in it (Bahonko v Sterjov (2008) 166 FCR 415 at [3]). Therefore, there is no reason to doubt the correctness of the primary judge’s decision.
Further, given that all of the claims made by the applicant can be made at the final hearing and he appears to have assets by which to support himself until then, in my view, no substantial injustice will be suffered if leave to appeal is not given.
It follows that the application will be dismissed.
I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 30 January 2019.
Associate:
Date: 30 January 2019
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