Rosser & Rosser

Case •

[2023] FedCFamC1A 164

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

Rosser & Rosser [2023] FedCFamC1A 164

Application for leave to appeal from: Rosser and Rosser [2023] FCWAM 57
Appeal number(s): NAA 96 of 2023
File number(s): 3582 of 2022
Judgment of: RIETHMULLER J
Date of judgment: 29 September 2023
Catchwords: FAMILY LAW – LEAVE TO APPEAL – Property - Interim costs order for litigation funding – Partial property settlement order - Where application for adjournment refused - Where the applicant alleges procedural unfairness as a result of comments in argument – Test for partial property settlement – No substantial injustice – Leave to appeal is refused
Legislation:

Family Law Act 1975 (Cth) ss 79, 80, 117

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 26, 28

Federal Court and Federal Circuit and Family Court Regulations 2022 (Cth) reg 4

Family Court Rules 2021 (WA) r 146

Cases cited:

CDJ v VAJ (1988) 197 CLR 172; [1998] HCA 67

Chorn & Hopkins (2004) FLC 93-204; [2004] FamCA 633

Medlow & Medlow (2016) FLC 93‑692; [2016] FamCAFC 34

Strahan & Strahan (Interim property orders) (2009) FLC 93-466; [2009] FamCAFC 166

Wenz & Archer (2008) 40 Fam LR 212; [2008] FMCAfam 1119

Number of paragraphs: 40
Date of hearing: 10 August 2023
Place: Parramatta
Counsel for the Applicant: Mr Hedges
Solicitor for the Applicant: Bowen Buchbinder Vilensky
Counsel for the Respondent: Ms McShera
Solicitor for the Respondent: Price Family Law

ORDERS

NAA 96 of 2023
3582 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION
BETWEEN:

MR ROSSER

Applicant
AND:

MS ROSSER

Respondent

ORDER MADE BY:

RIETHMULLER J

DATE OF ORDER:

29 SEPTEMBER 2023

THE COURT ORDERS THAT:

1.The application for leave to appeal is dismissed.

2.Appeal NAA 96 of 2023 be dismissed.

3.The applicant pay the respondent’s costs fixed at $11,000.

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

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

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

REASONS FOR JUDGMENT

RIETHMULLER J

  1. The applicant and the respondent were married in February 2004 (after cohabiting from 1999). They have four children together who are now between 14-21 years of age. They separated in April 2018 and divorced in May 2021. In 2022, after a 23-year relationship, property settlement proceedings were commenced in the Family Court of Western Australia.

  2. The applicant seeks leave to appeal against the refusal of a learned magistrate to adjourn the property settlement proceedings, and against two interlocutory orders made on 21 March 2023 for the applicant to pay the respondent $66,000 by way of interim costs (litigation funding), and $80,000 by way of partial property settlement.

  3. Section 26(1)(f)(i) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“FCFCOA Act”) provides for jurisdiction to hear and determine appeals from a judgment of the Magistrates Court of Western Australia exercising original jurisdiction under the Family Law Act 1975 (Cth) (“the Act”). Leave to appeal is required to appeal from a prescribed judgment of the Magistrates Court of Western Australia (s 28(1)(b) of the FCFCOA Act). A ‘prescribed judgment’ includes an interlocutory decree (reg 4.02(1)(a) of the Federal Court and Federal Circuit and Family Court Regulations 2022 (Cth)). Interim costs orders, partial property settlement orders and adjournment applications are all interlocutory orders. To obtain leave to appeal, the applicant must demonstrate that the decision of the learned magistrate was “attended by sufficient doubt to warrant it being reconsidered by the Full Court and [that] substantial injustice would result if leave were refused, supposing the decision to be wrong”: see Medlow & Medlow (2016) FLC 93-692 at [57].

    Application to lead further evidence

  4. Whilst it is open to the court to permit further evidence to be led on appeal (see CDJ v VAJ (1988) 197 CLR 172), parties are generally bound by the case they present at first instance. Leave to adduce further evidence on appeal was refused at the hearing of the appeal with reasons to be provided later.

  5. The applicant sought leave to lead further evidence on the application for leave to appeal with respect to the issues identified in Ground 3 and Ground 4 of the proposed appeal. The evidence sought to be led in support of Ground 3 was to the effect that on 1 December 2022, the parties had received demands, and later were served with proceedings, from their former trustee in bankruptcy, seeking to recover property from them. This material does not go to the application for an adjournment filed 16 November 2022 before the learned magistrate but goes to a new basis for an application pursuant to s 79(5) of the Act raised orally at the hearing without any evidentiary basis. It does not demonstrate appealable error on the part of the learned magistrate, rather, it may be the basis for a separate interlocutory application. The appropriate course for the applicant is to bring such an application at first instance supported by appropriate affidavit evidence, rather than to attempt to litigate this issue by leading evidence (for the first time) on appeal. Leave to lead further evidence with respect to Ground 3 was therefore refused.

  6. The further evidence with respect to Ground 4 founded an argument that the learned magistrate acted upon a wrong fact: that the applicant was owed $50,000 by a company in which he has an interest. The affidavit alleges that this fact, which had been put forward in the applicant’s material before the learned magistrate (and confirmed in submissions by his representatives), was an error, alleging that in reality the applicant owes the company $50,000. The factual claim is strongly disputed by the respondent. The learned magistrate relied upon the proposition that the applicant was owed $50,000 when assessing his capacity to meet the terms of the orders that were made. However, this amount was only one item in a list of assets of the applicant that the learned magistrate found were reasonably available to meet the payments required by the orders.  Even without the $50,000, the other assets relied upon by the learned magistrate would be sufficient to meet the payments ordered.

  7. There are a number of relevant factors to consider with respect to the further evidence bearing upon Ground 4. First, the evidence is disputed. Secondly, it does not appear that it would result in a different outcome, even if accepted, as the applicant would still have the capacity to meet the terms of the orders made. Thirdly, the applicant put forward the now disputed facts in his own material and provides no real explanation for the error. Finally, to the extent that lawyers for a party make an error, it is generally a matter to be taken up between the litigant and their lawyer in civil cases. Whilst this last point is of less weight in a parenting case, this matter concerned property orders.

  8. In the circumstances of this case, the applicant had not established that it is appropriate to grant leave to lead the further evidence on the application for leave to appeal.

    Grounds of Appeal

  9. The second ground of appeal seeks to challenge the learned magistrate’s refusal to grant an adjournment of the application for litigation funding orders pursuant to s 117 of the Act. The right to appeal is a purely statutory right, provided for in s 26 of the FCFCOA Act. Section 26(2)(b)(ii) does not provide for an appeal from the refusal to grant an adjournment of a hearing. Counsel for the applicant accepted that there was no right of appeal from any refusal to grant an adjournment and instead relied upon this complaint as a particular of Ground 1. Leave was granted to amend the grounds of appeal to this effect. Ground 2 is therefore dealt with as one of the circumstances relied upon by the applicant to support his argument that he was denied procedural fairness.

    Grounds One and Two

    Her Honour made an error of law by making an order pursuant to section 117(2A) in addition to an order pursuant to section 80(1)(h) which was expressed to be an order for partial property settlement, when the matter was limited to an application for interim partial property settlement, thereby denying the appellant procedural fairness [and including that] Her Honour made an error of law in refusing to exercise her discretion to grant an adjournment to the appellant in relation to the application for an order under section 117(2A) when the matter was not listed for hearing and there had been no evidence provided by the husband in relation to the issue.

  10. At the outset I note that the manner in which the case unfolded left much to be desired. The orders sought were not contained within the respondent’s Response (as provided for in r 146(2)(c) of the Family Court Rules 2021 (WA)) but were filed and served separately. The transcript of the argument was very difficult to follow because of the constant interruptions, interjections and frequent changes between topics. Even before this court, counsel were unable to agree as to what the standard practice is in Western Australia with respect to filing any revised versions of interim orders sought. Nevertheless, the learned magistrate provided careful and detailed reasons, the substance of which are largely not challenged.

  11. In her “Form 1A- Response to Initiating Application” filed on 17 June 2022, the wife sought orders, inter alia:

    Interim Financial Support

    11. That within 7 days after the date of this order, the Applicant pay to the Respondent the sum of $50,000 by way of interim financial relief, which will be brought into account by the Court as a partial property settlement upon the final resolution of these proceedings.

  12. On 21 June 2022, the parties appeared before the learned magistrate on a large number of interlocutory issues, many of which were resolved with consent orders. The request by the respondent for a partial property settlement order was identified and the subject of directions for the filing of further affidavit material and was set for hearing on 16 September 2022 (Transcript 21 June 2022, p.18 and p.20).

  13. The issues relating to partial property settlement were unable to proceed on 16 September 2022 as a result of the respondent filing subpoenas on 23 August which, unsurprisingly, had not been answered by 16 September (Transcript 2 December 2022, p.34 line 10). The matter was then set for hearing on 2 December 2022. 

  14. On 10 November 2022, the respondent filed a document headed ‘Minute of Proposed Interim Orders Sought by the Respondent’ (which was not included in the appeal book, but tendered by consent on the hearing of the appeal) seeking orders, inter alia:

    Legal fees

    2. Within 28 days, pursuant to s 117(2) of the Act, the Applicant pay to the Respondent the sum of $150,000 by way of interim costs in these proceedings.

    3. In the alternative to the preceding paragraph, within 28 days, pursuant to s 80(1)(h) of the Act, the Applicant pay to the Respondent the sum of $150,000 with such sum to be characterised by the trial judge.

  15. At the outset of the hearing on 2 December 2022, counsel for the respondent provided a revised set of interim orders the wife was then seeking, including:

    Legal fees

    2. Within 28 days, pursuant to s 117(2) of the Act, the Applicant pay to the Respondent the sum of $150,000 $70,000 by way of interim costs in these proceedings.

    3. In the alternative to the preceding paragraph, within 28 days, pursuant to s 80(1)(h) of the Act, the Applicant pay to the Respondent the sum of $150,000 $70,000 with such sum to be characterised by the trial judge.

    …

    Interim financial support

    12. Within 28 days, pursuant to s 80(1)(h) of the Act, the Applicant pay to the Respondent the sum of $80,000 by way of partial property settlement.

  16. The revised orders that the respondent wife’s counsel provided on the morning of the hearing were the subject of objection by counsel for the applicant on the basis that “until this morning, we’ve got an unallocated demand that we’re entitled to prepare [for] on the basis that there was no explanation for what they’re seeking” (Transcript 2 December 2022, p.27 line 51 to p.28 line 3). It appears that the objection overlooked the terms of the 10 November 2022 minute of proposed orders. When asked how long an adjournment was required, counsel for the applicant then commenced submissions about a writ that had been issued in the Federal Court for $6.8 million, evoking interruptions by counsel for the respondent before argument diverted to a number of other unrelated topics.

  17. The learned magistrate correctly identified that it was not open to her Honour to make an order in the form of the most recently proposed Order 3 as it is necessary, when making a contested order of this type, to identify the basis of which the order is made (see Transcript 2 December 2022, p.30 line 30). This was readily conceded by counsel for the respondent (although no explanation was given for why the order in this form was handed up at the commencement of the hearing by counsel, potentially leading the learned magistrate into error). Discussion also ensued about the potential source of funds, including the possible sale of motor vehicles. The learned magistrate did not adjourn the matter to another day, although does not appear to have explicitly ruled on the adjournment application (probably because the submissions had moved on to the issues concerning the effect of the claims in the Federal Court). The matter was stood down for counsel to have discussions. The husband did not raise the adjournment request again and the matter was set for hearing after lunch. 

  18. However, it was clear (at least from 10 November 2022) that the wife was seeking an interim payment from the husband of $150,000, although the characterisation of that sum varied through the various versions of the orders sought: whether it was a litigation funding order relying upon the s 117 costs powers or a partial property settlement order (relying upon the powers in s 80 which flow from s 79 of the Act). The latest version of orders sought could hardly have taken the applicant by surprise. The orders made by the learned magistrate were clearly within the ambit of the November version of the orders sought. These issues do not show that the decision to proceed to hear and determine the issues was attended by sufficient doubt to warrant its reconsideration, nor that it resulted in any substantial injustice.

  19. The second limb to the applicant’s argument was based upon an exchange with the learned magistrate at the start of the applicant’s submissions, when counsel for the applicant enquired of the learned magistrate: (at Transcript 2 December 2022, p.61 line 3).

    HEDGES, MR: So look, am I right to understand the head of power you’re asking to exercise is section 79?

    HER HONOUR: Yes.

    HEDGES, MR: Okay. Right. …

  20. Later, however, it is clear that counsel for the applicant was also addressing the learned magistrate on costs orders, with counsel for the applicant (at Transcript 2 December 2022, p.85 line 38 to p.86 line 22) making submissions that:

    HEDGES, MR: Now, in terms of the actual order sought which I will pick up in a minute, the wife’s costs practice direction notice dated 2 December has total estimated costs at $54,000 to $61,500. So if you’re trying to justify an application for interim funding, that’s the estimate. It’s not a, “Well, maybe we haven’t asked for enough,” which is essentially what you’re being told. One would think that’s the ceiling.

    …

    HEDGES, MR: And they’ve already paid $8,650. So that needs to be deducted from the range in terms of what is a reasonable estimate based on the wife’s own case of what is said to take her through to the end of the case.

    HER HONOUR: So when I do that exercise, which I did, it takes me to $52,850.

    HEDGES, MR: Yes.

    HER HONOUR: So you’re saying that’s the maximum that I should be looking at.

    HEDGES, MR: Yes. Now, somehow I’ve just put aside the actual orders sought which I was talking to earlier, but I will find that shortly.

    HER HONOUR: It’s within 28 days pursuant to section [80(1)(h)] of the Act, the applicant pay to the respondent the sum of $80,000 by way of partial property settlement.

  21. In the reasons for judgment, the learned magistrate considered both interim property settlement orders and orders for litigation funding pursuant to the costs power in s 117 of the Act, correctly noting that it may be fatal to an interim property settlement order (but not to a costs order) if the amount could not be accounted for against the likely final property settlement orders (see [81]-[83]). However, this was not a real issue in the present proceedings as the learned magistrate explains at [151] (after a careful examination of the matters relevant to s 79 of the Act) saying:

    151.     [The husband] does not challenge that the amounts sought by [the wife] by way of partial property settlement (and as a lump sum payment for legal costs) are less than what [Ms Rosser] will ultimately receive by way of property settlement. Therefore, the order for partial property settlement is capable of being reversed (as is an order of lump sum costs, if made).

  22. The learned magistrate ultimately made orders that $66,000 be paid by way of a litigation funding order and $80,000 by way of partial property settlement. 

  23. The applicant argues that as a result of the exchange with the learned magistrate concerning partial property settlement orders, he was effectively denied procedural fairness with respect to the litigation funding order. For this argument to succeed the effect of the exchange would need to have resulted in counsel for the husband not making submissions on the costs issue.

  24. The exchange relied upon by the applicant, when taken in context, relates to the partial property settlement part of the argument. The later submissions by counsel for the applicant as to the detail of the costs issue demonstrate that the litigation funding order was also being considered. These submissions answered the submissions of counsel for the wife that had earlier been made as to litigation funding orders (see Transcript 2 December 2022, p.54 to p.55). As a result, I am not persuaded that the applicant has shown that the learned magistrate’s decision was attended by sufficient doubt to warrant it being reconsidered on this basis.

  25. Even if the procedure adopted was attended by doubt, I am not persuaded that the applicant has shown a “substantial injustice” if leave to appeal were refused with respect to Ground 1 and Ground 2 for the following reasons. 

  26. In this case, despite the nature of the wife’s proposed order changing, she was consistently seeking a form of interim payment during the proceedings. The parties had been together for 23 years, the husband had a significant income, the wife’s income was insufficient to meet her household expenses and the wife had access to less than three per cent of the parties’ assets.  As the learned magistrate identified:

    149.     Largely using [the Husband’s] figures, the total net assets and superannuation are about $6.4 million. Of that, the value of the assets in [the Wife’s] name (on [the Husband’s] figures) is about $77,000 and she has [Super Fund 1] of $60,000 (although [the Wife] says that amount is $37,563). She also has an interest in the self-managed superannuation fund which has an estimated value of $615,000, but she does not know the value of her entitlements.

  1. This was not a case where there was any doubt that the wife would receive more than the total amount sought at the interim hearing. A presently available source of property to meet the orders was identified by the learned magistrate. 

  2. The applicant relied heavily upon the statement in Strahan & Strahan (Interim property orders) (2009) FLC 93-466 that the “applicant is required to show more than the mere fact that upon a final hearing the applicant would receive the property being sought or an amount in excess of the funds being sought from the other party”. Whilst the principle cannot be doubted, it seemed to take on a significance far greater than was warranted. This requirement is not so stringent that an applicant must show “compelling circumstances” (a description of the relevant test that was rejected in Wenz & Archer (2008) 40 Fam LR 212) or similar. The learned magistrate identified that there was a reason why the wife required funds in the interim: to meet her expenses and legal fees. The wife had shown more than the “mere fact that upon a final hearing” she would receive more than the amount sought. A spouse seeking a partial property settlement order should not be treated as though their application is somehow akin to Oliver Twist asking, “Please, sir, I want some more”, but rather as a litigant with an entitlement reflected in their rights to obtain a property settlement order pursuant to s 79 of the Act.

  3. Further, as parties are generally expected to fund their own cases in property settlement proceedings, a partial property settlement order will usually be preferable to a litigation funding order if it is open to make a partial property settlement order. This is because a litigation funding order of this type is most likely to be taken into account as an “add-back” (see Chorn & Hopkins (2004) FLC 93-204), just as a partial property settlement sum would be taken into account in the final determination pursuant to s 79 of the Act. The practical result of the litigation funding orders in this case was to place a constraint upon the wife’s use. Part of the funds that would ultimately form part of her property settlement amount. Effectively, the orders placed her solicitor in the position of supervising her use of the funds, yet there was nothing to indicate that such a restriction upon her use of the funds was necessary. On the findings of the learned magistrate the only reason why the entire sum could not have been ordered as a partial property settlement, rather than resorting to the powers pursuant to s 117 of the Act, was the late change in the form of orders sought by the wife.

  4. I therefore refuse the applicant leave to appeal with respect to Grounds 1 and 2

    Ground 3

    Her Honour dismissed the appellant's application to adjourn the proceedings generally pending determination of third party interests without providing adequate reasons (JJ paragraph 12). 

  5. There is no right of appeal against a refusal of an application to adjourn proceedings, for the reasons set out above. The applicant argues that as the adjournment application was pursuant to s 79(5) of the Act, which provides a specific power to adjourn the proceedings generally in limited circumstances, it fell outside the ambit of s 26(2)(b)(ii) of the FCFCOA Act. Whilst the argument was not developed, it is notable that s 79(5) of the Act provides for a power to adjourn the “proceedings” whereas the ambit of s 26(2)(b)(ii) of the FCFCOA Act is limited to adjourning a “hearing”. Ultimately, however, this point does not need to be determined in this appeal as leave to appeal should be refused in any event.

  6. The applicant complains that the learned magistrate provided inadequate reasons for refusing to order that the proceedings be adjourned. The extent of reasons required from a court depends on the circumstances of the case. There is no obligation for the learned magistrate to set out the law, as it is assumed (until the contrary is shown) that the learned magistrate knows the law to be applied.

  7. In this case there was, in substance, no material before the court to provide an evidentiary basis for an order pursuant to s 79(5) of the Act. The affidavit filed 16 November 2022 merely expressed the husband’s desire “to implement transactions”. The husband said that the unspecified transactions had “been designed by my commercial lawyers and explained in writing to [the wife]” (at [3]). The wife was opposed to such an adjournment. Neither party placed evidence before the learned magistrate setting out specifically what was proposed. Other arguments raised by the applicant on this issue were without any evidentiary basis.

  8. The learned magistrate refused the application, providing brief reasons:

    12.       [The husband] wanted the proceedings adjourned generally as he wishes to engage in confidential commercial transactions which [the wife] had not yet consented to (although [the husband] says he does not require her consent).  However, the evidence was not persuasive why the interim applications and the proceedings should be adjourned.

  9. Whilst the reasons are brief, there was no substantive evidence before the learned magistrate that could be addressed in the reasons. It is difficult to see what more the learned magistrate could usefully say on the issue given the evidence that was actually before the court, nor how the applicant could have succeeded upon the limited evidence. 

  10. I am not persuaded that the applicant has shown that the learned magistrate’s decision was attended by sufficient doubt to warrant it being reconsidered. Nor am I persuaded that substantial injustice would result if leave were refused as it was not a final order, and thus the applicant can file an application in a case with appropriate supporting affidavit material in order for the question to be properly considered if he wishes to pursue such an adjournment. 

    Ground 4

    Her Honour made an error of fact in finding that the appellant had a personal loan owed to him by [B Company] in the sum of $50,000 when the sum was properly characterised as a debt to [B Company] of $50,000 (JJ paragraph 153(d)) which had material effect upon the decision.

  11. In the absence of evidence to show an error of fact, this ground must be dismissed. In any event, as identified above, the evidence accepted by the learned magistrate showed that the applicant had sufficient capacity to meet the payments set out in the disputed orders even without this alleged asset. This ground is without merit.

    Conclusion

  12. In this matter I am not persuaded that the applicant should be granted leave to appeal. The application for leave to appeal should be dismissed.

  13. The applicant has been wholly unsuccessful on the appeal, following a detailed judgment at first instance. The parties’ financial circumstances are referred to above. I am persuaded that in the circumstances of this case, the applicant should pay the costs of the respondent for the appeal pursuant to s 117 of the Act.

  14. Counsel for the respondent submitted that costs be fixed at the amount set out in their schedule of costs, $12,472, including $4,322 for solicitors’ fees. The applicant submits that two-thirds of the respondent’s quantum is reasonable. The applicant’s costs schedule set out the applicant’s estimated party and party costs at $17,285.01, including $2,655.01 for solicitor’s fees. The time spent by counsel is similar in both costs estimates (although the applicant’s costs came to a greater total as the applicant was represented by senior counsel). One would ordinarily expect the applicant’s solicitor’s fees to be greater than the respondent’s fees as the applicant is the party instigating the appeal. Both parties are content for me to make a lump sum assessment rather than referring the costs for assessment. I find that $11,000 is a reasonable amount for the respondent’s party and party costs in this matter and make orders accordingly.

I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Riethmuller.

Dated:       29 September 2023

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