Ruscoe v Walker
[2001] FamCA 268
•10 May 2001
[2001] FamCA 268
FAMILY LAW ACT 1975
IN THE FULL COURT OF THE
FAMILY COURT OF AUSTRALIAAT SYDNEY Appeal No. EA112 OF 1999
File No. SY8560 OF 1997
IN THE MATTER OF: RUSCOE
Appellant/Wife
AND: WALKER
Respondent/Husband
CORAM: LINDENMAYER, COLEMAN & JOSKE, JJ
DATE OF HEARING: WRITTEN SUBMISSIONS
DATE OF JUDGMENT: 10 MAY, 2001
REASONS FOR JUDGMENT OF THE FULL COURT
AS TO ORDERS & COSTSAppearances: Mr Trench of Counsel (instructed by Slade Manwaring, Solicitors, Level 21, 31 Market Street, Sydney, NSW, 2000) for the Appellant/Wife
Mr Knox of Counsel (instructed by Adrian Twigg & Co, Solicitors, 162 Goulburn Street, Sydney, NSW, 2000) for the Respondent/Husband
FULL COURT OF THE FAMILY COURT – Appeals – Successful appeal - Discretion - Whether the Full Court should re-exercise the discretion or remit the proceedings for a partial or complete re-hearing – Whether re-hearing may be limited so that issues of valuation and distribution of property, which have been either determined on appeal or determined at trial and not challenged on appeal, are not disturbed, notwithstanding that evidence of events occurring or circumstances arising since trial, admitted for the purpose of being considered on the exercise of discretion, may establish changes in value of property. Allesch v Maunz [2000] HCA 40; (2000) FLC 93-033 discussed and considered.
COSTS OF THE APPEAL
On 15 December, 2000, the Full Court delivered its substantive judgment in relation to an appeal, instituted by the wife, from property orders made by Mullane J on 15 November, 1999.
In that judgment the Full Court held that the trial Judge had erred, firstly, with respect to some factual findings and arithmetical calculations concerning the property and liabilities of the parties and, secondly, in his treatment of an asset of the parties converted by the husband to his own use. As a result of those errors, it was ultimately determined that his Honour undervalued the net property of the parties by $216 209.
It was also concluded that, having regard to both his findings regarding contributions and his assessment of the impact of the relevant s.75(2) factors, the trial Judge had, because of his errors relating to the net property of the parties, undervalued the wife’s entitlement under s.79 by $78,101.
It was concluded by the Full Court that even if it was open to the trial Judge on his findings of fact to determine that no adjustment was called for pursuant to the relevant factors in s75(2) of the Act, the conclusion that his Honour had significantly undervalued the net property of the parties called for a reconsideration of the impact of those factors on the exercise of discretion under s.79 of the Act. The Court pointed out that that would involve either a re-exercise of the discretion by the Full Court, based upon the amended property figures that had been arrived at, or a remittal of the proceedings for a re-hearing that was either complete or partial.
Due to the then recent decision of the High Court in Allesch v Maunz [2000] HCA 40; (2000) FLC 93-033, the Full Court considered it inappropriate to make orders either way without giving the parties the opportunity to make further submissions as to the proper course to be adopted, and an opportunity to indicate whether, if the Court decided to re-exercise the discretion, either of them would seek to place further evidence (and if so what evidence) before the Court of events which had occurred or circumstances which had arisen (relevant to the re-exercise of discretion) since the decision of the trial Judge. Accordingly, only orders directing the parties to file and serve written submissions on these points were made when the substantive judgment was delivered.
Essentially, the appellant submitted that the Full Court should re-exercise the discretion in place of the trial Judge, but in the event that such an order was not forthcoming and the proceedings were remitted for re-hearing, then the appellant submitted that the re-hearing should be limited to such issues “as appear proper issues of fact relevant to the Court exercising its discretion.” Whereas the respondent wanted the matter remitted for a full re-hearing before a single Judge.
The wife further submitted that if the appeal succeeded, there should be a costs order in her favour or, alternatively, a costs certificate under s.9 of the Federal Proceedings (Costs) Act. The wife’s costs of the appeal were quantified by her counsel at $21 368.
The husband submitted that, if the appeal was successful there should be costs certificates issued for both parties pursuant to the Federal Proceedings (Costs) Act .
Held: in allowing the appeal and remitting the proceedings for a limited re-hearing;
(per Lindenmayer & Joske JJ)
1.There can be no doubt that the public interest in putting an end to litigation, the relevant expression of which is to be found in s.97(3) of the Act, points strongly against a further re-hearing of these proceedings, given the particularly unfortunate and protracted history of this piece of litigation. At the same time, however, so much time has passed since the last hearing before the trial Judge that to deny the parties the opportunity (sought by the husband) to at least update their financial circumstances, which are so relevant to the ultimate exercise of discretion, would seem to pay scant regard to the instruction of the High Court in Allesch v Maunz (supra) that the re-exercise of discretion by this Court on appeal is a re-exercise on the facts and the law as they stand at the time of the determination of the appeal, not as they were at the time of the hearing before the trial Judge. On the facts of the case, the appropriate course is to remit the proceedings under s.79 of the Act for a re-hearing, but one limited to a reconsideration of any contributions of the parties made since the trial Judge’s orders (which he held to have been equal to that date, a finding which neither party challenged on this appeal), and of the impact of the relevant s.75(2) factors based on the evidence before the trial Judge plus such further evidence of events which have occurred or circumstances which have arisen since his orders as the parties may choose to adduce, and the new trial Judge may admit, on the re-hearing. There having been no stay of the trial Judge’s orders, it would be quite unjust to the wife to allow the husband now to have the opportunity to reopen the whole issue of property settlement including issues of valuation and distribution of property and to seek a result more favourable to him than that arrived at by the trial Judge when he did not at any time cross-appeal from those orders, and when the wife’s appeal has been so significantly successful. Accordingly, the new trial Judge’s exercise of discretion would be limited to determining whether any further, and if so what, cash adjustment should be paid by the husband to the wife to achieve a just and equitable division between the parties of the net property as found by the Full Court.
(per Coleman J, dissenting as to the form of the re-hearing)
2.As the High Court in Allesch v Maunz (supra) said that the Full Court may re-exercise the discretion “by reference to the circumstances as they exist at the time” of the appeal, it would be wrong for the Full Court, in remitting the matter for re-hearing, to fetter the discretion of the judge conducting the re-hearing in a way that is likely to prevent the judge re-exercising the discretion “by reference to the circumstances as they exist” at that time, including the value of all property of the parties at the time of the re-hearing.
(per curiam)
3.Having regard to the outcome of the appeal, the relative financial circumstances of the parties, and the overall circumstances of the case, there are circumstances justifying the making of an order that the respondent husband pay the appellant wife’s costs of the appeal. However, the quantification of the wife’s costs by her counsel seems well outside the range of what would be regarded as normal party and party costs (although quite possibly justified on a solicitor and client basis). Accordingly, the husband is ordered to pay the wife’s costs of the appeal to be taxed, if not agreed.
REPORTABLE
LINDENMAYER & JOSKE JJ:
INTRODUCTION
1. On 15 December, 2000, this Court delivered judgment (“the substantive judgment”) in relation to an appeal by the wife from orders made by Mullane J (“the trial Judge”) on 15 November, 1999, in proceedings between the wife and the husband for orders under s.79 of the Family Law Act 1975 (“the Act”) in relation to their property.
2. In the substantive judgment we upheld a number of the wife’s grounds of appeal in relation to factual findings and arithmetical calculations of the trial Judge relating to the property and liabilities of the parties (grounds 1, 2, 5 and 6) and one ground of appeal relating to his Honour’s treatment of an asset of the parties converted by the husband to his own use (ground 7). We concluded (in paragraph 133 of the substantive judgment) that as a result of those errors his Honour undervalued the net property of the parties by $206,209. However, there has been an error either in the calculation or the transcription of that figure, and the correct figure (being the difference between his Honour’s figure of $689,776 and our figure of $905,985) should be $216,209.
3. We also concluded (in paragraph 127 of the substantive judgment) that, as a consequence of his undervaluing the net property of the parties, his Honour undervalued the wife’s entitlement under s.79 (having regard to his findings on contributions and his assessment of the impact of the relevant s.75(2) factors) by $78,101 (and our error in calculating or recording the extent of his undervaluation of the parties’ net property, mentioned in the previous paragraph, is not reflected in that figure, since it was separately calculated and arrived by a different process).
4. However, we also concluded (in paragraph 133 of the substantive judgment) that, even if his Honour’s determination, that no adjustment was called for by reference to the relevant factors referred to in s.75(2) of the Act, was open to him on his findings of fact (a determination which was challenged by ground 3 of the wife’s Notice of Appeal), our conclusion that he had significantly undervalued the net property of the parties called for a reconsideration of the impact of those factors on the exercise of discretion under s.79 of the Act. We pointed out that that would involve either a re-exercise of the discretion by this Court, based upon the amended property figures at which we had arrived, or a remittal of the proceedings for a rehearing (complete or partial). We accordingly found it unnecessary to consider ground 3 of the Notice of Appeal.
5. Because of the then recent decision of the High Court in Allesch v Maunz [2000] HCA 40; (2000) FLC 93-033, published after we had completed the appeal hearing and reserved our judgment thereon, we considered it inappropriate for us to either re-exercise the discretion or remit the proceedings for rehearing without giving the parties the opportunity to make further submissions as to the proper course to be adopted, and an opportunity to indicate whether, if we decided to re-exercise the discretion, either of them would seek to place further evidence (and if so what evidence) before the Court of events which had occurred or circumstances which had arisen (relevant to the re-exercise of discretion) since the decision of the trial Judge.
6. Accordingly, we did not at that time make orders disposing of the appeal, but only orders directing the parties to file and serve written submissions upon the matters referred to in the immediately preceding paragraph. We also gave the parties liberty to make submissions in relation to the costs of the appeal supplementary to the oral submissions thereon which had been made at the appeal hearing.
7. Having received the written submissions of the parties, made pursuant to our orders of 15 December, 2000, it is now necessary for this Court to consider, in light of those submissions, what orders this Court should now make to finally determine this appeal, in so far as it is within the power of this Court so to do.
THE SUBMISSIONS
8. The Court has received the following submissions, filed by the parties pursuant to its orders of 15 December, 2000:-
(a) “Appellant’s Submissions”, filed on 12 January, 2001;
(b) “Respondent’s Submissions”, filed on 31 January, 2001; and
(c) “Appellant’s Submissions in Reply”, filed on 9 February, 2001.9. The submissions contained in the “Appellant’s Submissions” may be summarised as follows:-
(i)This Court should re-exercise the discretion in place of that of the trial Judge, on the basis of the facts as they may be found by this Court now to be, and not remit the matter for rehearing.
(ii)In re-exercising the discretion, this Court should act on the evidence which was before the trial Judge and the further evidence admitted by this Court upon the hearing of the appeal [as to which see paragraphs 54 and 55 of the substantive judgment], but should not now admit any further evidence of events which may have occurred or circumstances which may have arisen “since the hearing of the appeal”.
(iii)The wife does not seek to place before the Court any further evidence relevant to the re-exercise of discretion.
(iv)As the husband did not seek to put further evidence before the Court on the hearing of the appeal it is now too late for him to seek to do so.
(v)If, contrary to the submission referred to in sub-paragraph (i) above, this Court declines to re-exercise the discretion, then “the proceedings should be remitted for a rehearing limited to such issues as appear proper issues of fact relevant to the Court exercising its discretion”.
(vi)In relation to costs, the wife relies upon the oral submissions made at the hearing of the appeal, and “the costs of these submissions should follow the costs of the appeal in the same manner”.
10. The submissions contained in the “Respondent’s Submissions” may be summarised as follows:-
(i) The proceedings should be remitted for a full rehearing before a single judge.
(ii)If this Court were to re-exercise the discretion, it should do so on the basis of the facts as it may find them to be at the time it re-exercises the discretion.
(iii)In the event that this Court were to decide to re-exercise the discretion, the husband would seek to place before the Court further evidence of events which have occurred or circumstances which have arisen since the decision of the trial Judge in relation to the following issues:-
(a)the effect, in relation to the husband’s dairy quota, of the implementation of the Dairy Industry Act [referred to in paragraphs 52, 53 and 62-67 of the substantive judgment];
(b)a decline in the income of the husband’s farming properties;
(c)an increase in the “placements” at the day care centre retained by the wife, resulting in an increase in her income and in the value of that centre;
(d)the change in J.’s living circumstances, and the financial consequences of that;
(‘d’)[sic.] the costs incurred by the husband in retaining and maintaining the company V. Pty Ltd and its assets;
(e)“the reality of the sand royalty payments and who, and which entity, actually received those payments, what the level of payments were and the taxation consequences of those payments”; and
(f)an alleged withdrawal by the wife from the account of V. Pty Ltd of $10,000 “on the last day before the expiration of the appeal period”.
(iv)The fact that all or most of those issues would be likely to be contested, so that “a proper determination of the facts on which the discretion can be exercised will require cross-examination” supports the submission that there should be a remittal for rehearing, this Court not being “in a position to make an assessment of such contested evidence … simply on the basis of affidavit evidence”.
(v)All relevant evidence should be considered in the context of a full hearing, because “[d]etermination of particular issues of fact cannot be considered in isolation from the totality of the factual matrix which forms the basis of the final overall decision”.
(vi)The requirement that the exercise of discretion be based on facts found to exist at the time of its exercise requires a full rehearing of all issues, including those of value, given there was a “substantial amount of evidence given as to the changing values of many of the major items in the property pool”, and any changes in the level of income from the various enterprises conducted by the parties (day care centre, physiotherapy practice and sand mining operations) will be reflected in changes in the values of those enterprises.
11. The submissions contained in the “Appellant’s Submissions in Reply”, in so far as they are not repetitive of her primary submissions, may be summarised as follows:-
(i)Although the parties may be given an opportunity to adduce further evidence, there are sound reasons of principle and policy why a rehearing should not be ordered. Those include:-
· the “responsibility of the Court to the parties to finalise litigation”, and its statutory obligation (under s.97(3) of the Act) to ensure that proceedings are not unduly protracted; and
· that a rehearing would subject these parties and their three children to the additional costs and uncertainty of yet another lengthy and expensive hearing (there having already been an initial hearing in August/September, 1998, an appeal from the result of that hearing which resulted in an order, in May, 1999, for a rehearing, which was the hearing before Mullane J in August, 1999, which, in turn, led to this appeal) [a factor which was referred to briefly in paragraph 134 of the substantive judgment].
(ii)The circumstance that the values of the properties of the parties or their incomes may have fluctuated since the hearing before the trial Judge, now eighteen months ago, is not unusual, and there is nothing in this case to distinguish it from any other property case with multiple assets. With constantly changing markets for various assets it is likely that the value of those assets “would never again have exactly the same value as they had at ‘the day’ of the hearing at first instance in any case coming before the Full Court”, so that this argument against the Full Court’s re-exercise of the discretion “would apply to any case involving financial matters coming before the Court”.
(iii)The husband’s submission that there should be a rehearing “is tainted by the motivation to avoid a possible unfavourable judgment” having regard to the following background matters:-
· the husband’s failure to cross-appeal;
· his failure to submit to the Full Court at any time that the trial Judge erred;
· his opposition to the wife’s application to adduce further evidence on the appeal, particularly with reference to the effect upon his milk quota of the implementation of the Dairy Industry Act; and
· the possibility that a re-exercise of discretion by the Full Court might result in the award of a greater amount to the wife than that referred to in paragraph 127 of the substantive judgment as resulting from a mere correction of the trial Judge’s errors in relation to the pool of property.
(iv)The decision of the High Court in Allesch v Maunz (supra) “is not authority for the proposition that the parties ought endlessly be afforded every opportunity to relitigate on a multitude of issues” and only “gives a discretion to take further evidence not an obligation”. In the exercise of that discretion the husband’s application to adduce further evidence on a range of issues identified in his submissions should be rejected.
(v)If the matter is to be remitted for a rehearing it should be in relation to specific issues only, on which a finding of fact is required, which should be determined by one member of this Full Court after hearing oral submissions from the parties.
(vi)The husband has presented no argument that the evidence he proposes to adduce would lead to a different result [presumably, from that foreshadowed in paragraph 127 of the substantive judgment], and has not provided “a single monetary figure in support” except for the $10,000 allegedly appropriated by the wife, in respect of which no proceedings for breach or enforcement of the existing order have been instituted.
DISCUSSION
12. There can be no doubt that the public interest in putting an end to litigation, the relevant expression of which is to be found in s.97(3) of the Act, points strongly against a further rehearing of these proceedings, given the particularly unfortunate and protracted history of this piece of litigation. At the same time, however, so much time has passed since the last hearing before the trial Judge that to deny the parties the opportunity (sought by the husband) to at least update their financial circumstances, which are so relevant to the ultimate exercise of discretion, would seem to us to pay scant regard to the instruction of the High Court in Allesch v Maunz (supra) that the re-exercise of discretion by this Court on appeal is a re-exercise on the facts and the law as they stand at the time of the determination of the appeal, not as they were at the time of the hearing before the trial Judge.
13. It is true that the High Court did not say in that case that whenever this Court decides to re-exercise the discretion it must admit further evidence of relevant events which have occurred since the trial, but what it did say is that if this Court decides “to re-exercise the discretion by reference to circumstances as they exist at the time of the appeal”, it should not do so without first giving the parties “an opportunity to adduce evidence as to those circumstances” (emphasis added). It seems to us that, on a proper reading of the majority judgment in that case, the only alternative open to this Court to a re-exercise of discretion on the circumstances as they exist at the time of the re-exercise is to remit the matter for a rehearing. It follows that if the Court proposes to re-exercise the discretion it must admit any evidence which either party seeks to adduce of any events which have occurred or circumstances which have arisen since the trial which are relevant to that re-exercise of discretion. Undoubtedly, the Court has a residual discretion whether or not to admit any such evidence proffered by a party, but it seems to us that if the proffered evidence is evidence which is clearly relevant to the exercise of the ultimate discretion, and is of events which have occurred or circumstances which have arisen since the trial, it would prima facie be an erroneous exercise of discretion for the Court to refuse to admit it.
14. It is also true that in his submissions the husband has not (save in respect of the allegation of $10,000 taken by the wife from the account of the company) descended to particulars of the fresh evidence which he seeks to adduce. However, that it in keeping with order 1(b) of our orders of 15 December, 2000, which required the parties to indicate “in outline only” the evidence that they would seek to adduce if the Court were to undertake a re-exercise of the discretion. What his submission does outline, in the main, is changes in his own and the wife’s financial circumstances since the trial, which, if established by admissible evidence, would be relevant to at least the third step of the three step process (referred to in such cases Pastrikos and Pastrikos (1980) FLC 90-897, Lee Steere and Lee Steere (1985) FLC 91-626 and Clauson and Clauson (1995) FLC 92-595) which this Court follows in the determination of proceedings under s.79 of the Act, that being the step which this Court would be required to complete in order to finally resolve this appeal, if it undertook a re-exercise of the discretion.
15. Having said that, however, we would also note that at least in respect of one of the issues which the husband’s submissions identify as being the subject of his application to adduce further evidence (viz. the royalty payments issue referred to in paragraph 10(iii)(e) hereof) the evidence outlined does not appear to be evidence of events occurring or circumstances arising since the trial, but rather evidence which could have been available at the trial but was not called. Thus in this respect at least the husband would appear to be attempting to revisit an issue dealt with at the trial and to improve his case as presented on that issue at the trial. In our opinion, that would certainly not be an appropriate subject for the admission of further evidence at this stage, although, if a complete rehearing were ordered, it would be open to the husband (and indeed to both parties) to relitigate all issues, including that one.
16. Another issue which the husband seeks to revisit (albeit on the basis of evidence of events occurring since the trial) is the issue of valuation of the relevant assets. In our opinion, however, it would not be appropriate for this Court to allow or facilitate that course in this case. As we understand it, there has been no stay of the trial Judge’s orders pending this appeal, and in the appeal neither party sought to disturb the distribution of property effected by his Honour’s orders of 15 November, 1999. The effect of those orders was that the wife retained or received her physiotherapy practice, the P. Day Care Centre, her property at SWR, a motor vehicle, certain company shares, jewellery, furniture and furnishings, and bank credits, whilst the husband retained or received his farming property at S, the parties’ shares in V. Pty Ltd (carrying with them the sand-mining business of that company), other shares in public companies, plant and equipment, a motor vehicle, furniture, furnishings and personal effects, and bank credits, and the husband was to pay to the wife a cash adjustment of $53,538. The only issue on the appeal was the quantum of the cash adjustment payable by the husband to the wife under order 1 of those orders, and the husband did not cross-appeal, even against that order.. From the form of the order ultimately sought by the wife in the appeal (as set out in paragraph 3 of the substantive judgment) it is clear that that amount had been paid to her by him prior to the appeal hearing.
17. Issues of identification and valuation of the property and liabilities of the parties to proceedings under s.79 of the Act are always, of necessity, resolved on a “snap-shot” basis as at the date of the trial (or as at the nearest practicable date thereto). Why should these parties be able or obliged to take another “snap-shot” of their assets and liabilities for the purpose of the proceedings after they have moved on from that date, each receiving and dealing with, as he or she has seen fit, the property allocated to him or her by the trial Judge’s orders? In our view, they should not be able or obliged to do so, and that applies particularly to the husband, as he did not see fit to cross-appeal against any aspect of the trial Judge’s determination of the proceedings, and must therefore be taken to have been content with the distribution of property (including the cash adjustment) ordered by his Honour.
18. To relate this back to what we said in paragraph 13 hereof, we consider that, in the context of this case, further evidence directed to the identification and valuation of the property and liabilities of the parties, as part of the first step of the three step process earlier identified, would not be relevant to the limited re-exercise of discretion called for as a result of this Court’s determination, in the substantive judgment, as to the outcome of the appeal. The relevant discretion to be re-exercised here is as to the division of the property pool, not its quantification, the latter being a preliminary or preparatory fact-finding exercise which has been concluded by this Court’s determination, in the substantive judgment, that the net property pool is $905,985.00. The task of the Full Court is to make the order which ought to have been made at the trial. In re-exercising the discretion as to how the property pool should be divided, the Court can and should take account of events which have occurred since the trial relating to the property and financial resources of the parties, but none of those events can change what was in the pool of property at that time. Of course, some evidence which might have been relevant to an issue of valuation of a property (such as the current level of income produced by it or the current income producing capacity of it) may nevertheless be relevant and admissible on the rehearing in relation to the third step of that process (which is, essentially, the identification and evaluation of the relevant s.75(2) factors, and the determination of any adjustment which consideration of those factors indicates is called for from the position arrived at on the basis of the parties’ contributions). Indeed, even evidence of the current value of a property of either party, if different from the value at the date of trial by reason of events which have occurred or circumstances which have arisen since 15 November, 1999, would be admissible for the purpose of the re-exercise of discretion, but again only in relation to and for the purposes of the third step of that three step process, and not for the purpose of altering the identification and quantification of the parties’ property and its net value in and for the purposes of the first step of that process.
19. In paragraph [30] of their joint judgment in Allesch v Maunz (supra) Gaudron, McHugh, Gummow and Hayne JJ said that, instead of itself exercising the discretion by reference to circumstances as they then exist, this Court “may, instead, set aside the order under appeal and remit the matter for rehearing or, in terms of s.94(2) of the Act order, a re-hearing, on such terms or conditions, if any, as it considers appropriate”. (Emphasis added.) The concept of “a rehearing, on such terms or conditions, if any, as it considers appropriate” is wide enough, in our view, to encompass a limited rehearing of some issue or issues, or of some aspect of the exercise of discretion, which this Court considers appropriate in all of the circumstances of the case, including the history of the litigation to date and the grounds upon which the appeal has been upheld.
20. In the Court of Appeal, in England, in Commissioners of Customs & Excise v Ferrero UK Limited [1997] EWCA 1679 (6th May 1997) (reported in The Times, May 19, 1997), Lord Woolf MR, when referring to Order 55 r7(5) of the Rules of the Supreme Court 1965 (which empowered a judge of the High Court hearing an appeal from a court or tribunal to “remit the matter with the opinion of the court for rehearing and determination”), said this:
“The use of the words ‘for rehearing and determination’ suggest to me that when the matter goes back to a Tribunal under that provision the matter is to be reheard and determined. It may be that what is to be reheard and determined is not the whole of the issues which were previously determined, it may only be part of those issues. It seems to me that it is a situation which it is contemplated will take place after the court has made some enquiry into the merits. I would accept that although the power is not contained in Order 55 rule 7, the court may, as part of its jurisdiction for the purposes of assisting it to determine an appeal, obtain additional assistance from the Tribunal which previously determined the matter if it considers that it is necessary to do so. That must be an inherent power in the court exercising its appellate jurisdiction in relation to Tribunal decisions.”
21. If the power to remit for a partial rehearing is to be inferred, as part of the inherent power of an appellate court which may “remit … for rehearing and determination”, how much stronger must that inference be where the appellate court is given express statutory power to order “a re-hearing on such terms and conditions, if any, as it considers appropriate”? In our view, that inference must be considerably stronger in the latter case. See also Pennisi v Pennisi (1997) FLC 92-774 at 84,542.
CONCLUSION
22. Having considered the submissions of the parties, and having regard to the matters discussed above, we are of the opinion that the appropriate course, in this case, is to remit the proceedings under s.79 of the Act for a rehearing, but one limited to a reconsideration of any contributions of the parties, under s.79(4)(a), (b) and (c) of the Act, made since the trial Judge’s orders (the parties’ total contributions to that date having been held to be equal, a finding which neither party challenged on this appeal), and of the impact of the relevant s.75(2) factors based on the evidence before the trial Judge plus such further evidence of relevant events which have occurred or circumstances which have arisen since his orders as the parties may choose to adduce, and the new trial Judge may admit, on the rehearing. That would include the evidence relating to the child J.’s change of residence, which was admitted as “fresh evidence” on the appeal.
23. In short, the starting point for the rehearing, in our view, would be that the assets and liabilities of the parties, for the purpose of the proceedings, would be as set out in paragraph 124 of the substantive judgment, the contributions of the parties, under s.79(4)(a), (b) and (c) of the Act, up to 15 November, 1999, would be taken as equal, and the distribution of property effected by the orders of that date (including the cash adjustment paid by the husband under order 1) would remain undisturbed. The judge conducting the rehearing would be required only to make an assessment of any subsequent contributions of either party, and then, having regard to that, and to relevant matters arising under s.75(2) (as revealed by the evidence before the trial Judge and any evidence admitted at the rehearing of relevant events occurring or circumstances arising since 15 November, 1999) to re-exercise the discretion under s.79, but in relation only to the question whether any further (and if so what) cash adjustment should be paid by the husband to the wife, and the terms of any such payment.
24. In our view, it would be quite unjust to the wife to allow the husband now to have the opportunity to reopen the whole issue of property settlement and to seek a result more favourable to him than that arrived at by the trial Judge when he did not at any time cross-appeal from those orders, and when the wife’s appeal has been so significantly successful.
25. Although, in the scenario we propose, the judge conducting the re-hearing, would be required to consider and evaluate any contributions of either party under s.79(4)(a), (b) and (c) of the Act since 15 November, 1999, it is likely that, in practical terms, the only relevant contributions which he or she would be called upon to consider and evaluate would be those made under s.79(4)(c). We say that because the parties have each received and will retain the property distributed to them pursuant to the trial Judge’s orders (there having been no stay of those orders sought by either party pending the appeal). It is therefore unlikely that either party will have made, since 15 November, 1999, any contribution to or in relation to the property retained by the other, and it is likely that each party’s contributions to or in relation to property since that date will have been confined to the property which he or she has received or retained pursuant to his Honour’s orders. Any such contribution could not increase that party’s entitlement to that property, since he or she has it all, anyway, and it could not increase his or her entitlement to the property of the other, being no contribution to or in relation to it. On the other hand, contributions under s.79(4)(c) may give one party some entitlement in respect of property of the other even though not directly linked to the acquisition, conservation or improvement, or otherwise related to that property: Shaw and Shaw (1989) FLC 92-010 at 77,292.
COSTS
26. At the conclusion of the appeal hearing, counsel for the appellant wife submitted that if the appeal succeeded (as it has) there should be a costs order in favour of the appellant or, alternatively, a costs certificate under s.9 of the Federal Proceedings (Costs) Act 1981 (“the Costs Act”). The wife’s costs of the appeal were quantified by her counsel at $21,368.
27. Counsel for the respondent husband submitted that, if the appeal succeeded, there should be costs certificates for both parties, in his client’s case, pursuant to s.6 of the Costs Act. The husband’s costs were quantified by his counsel at between $4,000 and $4,500.
28. The appeal has succeeded, essentially, on questions of fact. The respondent husband has been at least substantially, if not “wholly” unsuccessful in the appeal. He sought to uphold the trial Judge’s orders without variation, and contested all grounds of appeal. The appellant wife succeeded substantially, although perhaps not “wholly”, given that we rejected grounds 8 and 9 of her appeal. Those, however, were very much subsidiary to the grounds which were upheld.
29. Having regard to the outcome of the appeal, the relative financial circumstances of the parties, and the overall circumstances of the case, we consider that there are circumstances justifying the making of an order that the respondent husband pay the appellant wife’s costs of the appeal. However, the quantification of the wife’s costs by her counsel seems to us well outside the range of what we would regard as normal party and party costs (although quite possibly justified on a solicitor and client basis). Accordingly, we would order the husband to pay the wife’s costs of the appeal to be taxed, if not agreed.
ORDERS
30. For the forgoing reasons the orders we would propose are:-
1. That the appeal be allowed.
2.That orders 1 to 7 of the orders of the Court made herein by The Honourable Justice Mullane on 15 November, 1999, be affirmed as a partial determination of the proceedings for property settlement between the parties hereto.
3.That the proceedings for property settlement be remitted for a partial rehearing by a single judge at the Sydney Registry of this Court (“the new trial judge”), with priority, such partial rehearing to be conducted within and subject to the following limitations and conditions:-
(i)The starting point shall be that the property and liabilities of the parties, for the purpose of the proceedings, shall be as set out in paragraph 124 of the reasons for judgment of the Full Court delivered herein on 15 December, 2000;
(ii)The contributions of the parties, under paragraphs 79(4)(a), (b) and (c) of the Family Law Act 1975 (“the Act”) up to 15 November, 1999 (the date of the orders referred to in paragraph 2 of these orders) shall be taken as equal (as found by The Honourable Justice Mullane in his judgment of 15 November, 1999, and not challenged in the appeal).
(iii)The distribution of property between the parties as provided by orders 1 to 7 of the orders of 15 November, 1999, shall not be disturbed, the only issue to be determined at the rehearing being the quantum of the further cash adjustment (if any) to be paid by the husband to the wife and the terms of any such payment (including as to payment of interest, if any, thereon and any consequential orders) in order to bring about (in conjunction with that distribution of property) a just and equitable division between the parties of the property and liabilities referred to in sub-paragraph (i) of this order in accordance with the discretion conferred on the Court by subsections 79(1) and 79(2) of the Act.
(iv)In determining that issue, the new trial judge shall take into account, in addition to the contributions of the parties up to 15 November, 1999 (taken as equal), the contributions (if any) of the parties, pursuant to paragraph 79(4)(a), (b) and (c) of the Act, made since 15 November, 1999, and the matters referred to in paragraphs 79(4)(d), (e), (f) and (g) of the Act, insofar as they may be relevant to the exercise of discretion, having regard to the relevant evidence which was before The Honourable Justice Mullane at the hearing on 16 to 20 August, 1999, and such further evidence as the new trial judge may admit of relevant events which have occurred or circumstances which have arisen since 15 November, 1999.
4.That either party have liberty to apply to the Full Court (as presently constituted), prior to the commencement of the rehearing, for any further directions as to the issues to be addressed at the rehearing, by filing and serving upon the other party a written notice identifying the further directions sought, together with written submissions in support thereof, and such other party have liberty to file, and serve upon the first-mentioned party, a response to the application (together with supporting written submissions) within fourteen days of the receipt of the first-mentioned party's application and supporting submissions.
5.That the remitted proceedings be listed by the Registrar for a directions hearing, with priority.
6.That the respondent husband pay the appellant wife’s costs, of and incidental to the appeal (including the costs of the submissions made pursuant to the orders of this Full Court of 15 December, 2000) such costs to be taxed, if not agreed.
COLEMAN J:
31. I have read the judgment of Lindenmayer and Joske JJ in relation to the re-exercise of the trial Judge’s discretion consequent upon the substantive appeal having been allowed, and in relation to the costs of the appeal.
32. I agree with the costs orders proposed by Lindenmayer and Joske JJ and with their Honours' reasons for those orders.
33. Regrettably, whilst acknowledging the concerns raised by Lindenmayer and Joske JJ in relation to the scope of the rehearing and re-exercise of the trial Judge’s discretion, my understanding of the judgment of the majority in Allesch v Maunz (2000) FLC 93-033 does not permit me to agree that the evidence able to be adduced at the rehearing should be as limited as Lindenmayer and Joske JJ propose.
34. The majority in Allesch v Maunz said:
“30.Although, on an appeal by way of rehearing from a discretionary judgment, an appellate court may, itself, exercise the discretion in question by reference to circumstances as they then exist, it is not bound to do so. It may, instead, set aside the order under appeal and remit the matter for rehearing or, in terms of s 94(2) of the Act ‘order a re-hearing, on such terms and conditions, if any, as it considers appropriate.’ And where circumstances have or are likely to have changed between the original hearing and the disposition of the appeal, it is not uncommon for an appellate court to remit the matter for rehearing rather than, itself, exercise the discretion in question.
31.If on an appeal by way of rehearing from a discretionary judgment an appellate court is minded to exercise the discretion in question by reference to circumstances as they exist at the time of the appeal, it is necessary that the parties be given an opportunity to adduce evidence as to those circumstances.”
35. Despite the force of Lindenmayer and Joske JJ’s logic, it does seem to me that the exercise of discretion “by reference to the circumstances as they exist at the time” that discretion is exercised means that any “changed circumstances” which have occurred between the original hearing and the disposition of the rehearing may be raised by a party and considered by the Court in the re-exercise of discretion. The directions proposed by Lindenmayer and Joske JJ, in my respectful opinion, fetter the discretion of the judge conducting the rehearing in a way that is likely to prevent that judge from re-exercising the Court’s discretion “by reference to the circumstances as they exist” at that time. I would accordingly limit the judge conducting the rehearing to evidence of matters or events arising subsequent to the original hearing and up to the time the disposition of the rehearing, whether arising under s.79(4) or s.75(2), including the value of all property of the parties at the time of the rehearing.
I certify that the preceding 35 paragraphs are a true copy of the reasons for judgment delivered by this
Honourable Full Court.
L. Kopp
Associate
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