Sappho & Sappho

Case [2022] FedCFamC1F 785

Federal Circuit and Family Court of Australia

(DIVISION 1)

Sappho & Sappho [2022] FedCFamC1F 785

File number(s): ADC 885 of 2020
Judgment of: BERMAN J
Date of judgment: 18 October 2022
Catchwords:

 FAMILY LAW – PRACTICE AND PROCEDURE – Leave to reopen – Where the trial concluded in July and judgment was reserved – Where a settlement claim payable by the husband was contingent during the trial but has since crystallised following the reservation of the judgment – Where the husband seeks leave to adduce further evidence in relation to the settlement claim – Where the settlement is a genuine arm’s length transaction – Where the wife does not seek to challenge the evidence – Orders made.

FAMILY LAW – COSTS – Circumstances justifying order – Where the wife seeks costs on an indemnity basis in relation to the husband’s application to adduce further evidence – Where the husband did not provide sufficient and relevant discovery with respect to the settlement claim payable – Where the prejudice caused to the wife by the husband’s application to adduce further evidence can be remedied by costs – Consideration of party and party costs – Consideration of indemnity costs – Orders made.

Legislation:

Child Support (Assessment) Act 1989 (Cth) s 116(1)(b)

Family Law Act 1975 (Cth) s 117(2A)
Cases cited:

Aheb & Aheb (No. 3) [2009] FamCA 524

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175

Gelly and Gelly (no 1) (1992) FLC 92-290

Kohan & Kohan (1993) FLC 92-340

Murray v Figge (1974) 4 ALR 612

Prantage & Prantage (2013) FLC 93-544

Re Wilcox; Ex parte Venture Industries Pty Ltd and Ors (No 2) (1996) 72 FCR 151

Smith v New South Wales Bar Association (No 2) (1992) 176 CLR 256

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

Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471
Division: Division 1 First Instance
Number of paragraphs: 64
Date of hearing: 5 October 2022
Place: Adelaide
Counsel for the Applicant: Mr Anderson
Solicitor for the Applicant: Clelands Lawyers Adelaide Pty Ltd
Counsel for the Respondent: Mr Heinrich
Solicitor for the Respondent: Camatta Lempens Pty Ltd

ORDERS

ADC 885 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS SAPPHO

Applicant
AND:

MR SAPPHO

Respondent

order made by:

BERMAN J

DATE OF ORDER:

18 October 2022

THE COURT ORDERS THAT:

1.Leave be given to reopen the trial to adduce further evidence relating to the settlement of the claim with Mr FF.

2.The husband pay the wife’s costs in the sum of SIX THOUSAND FOUR HUNDRED AND EIGHTY DOLLARS ($6,480) with such sum to be included in the settlement sum payable by the husband to the wife.    

3.The Application in a Proceeding filed 16 September 2022 is dismissed.

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…

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AGLC
Sappho & Sappho [2022] FedCFamC1F 785
Case
[2022] FedCFamC1F 785
Decision Date

CaseChat Overview and Summary

The case involves an application by the husband to adduce further evidence in a proceeding. The husband's business had employed contracted health professionals, and disputes arose between the professionals and the husband regarding their employment contracts and whether they had received their full entitlements. The claim involving one of the professionals, Mr HH, had been resolved, and the husband and wife agreed to include a liability to JJ Finance for monies provided to settle Mr HH’s claim. The claim involving Mr FF remained unsettled at the time of trial. The husband did not provide his defence, and the wife argued that the liability was contingent and the claim should be ignored due to the lack of full and frank disclosure. The husband later settled with Mr FF, and the wife filed two applications in a proceeding, one of which sought orders to tender a letter acknowledging child support departure orders.

The court was required to decide whether the husband should be permitted to adduce further evidence regarding the settlement of Mr FF's claim. The court considered various factors, including the nature of the proceeding, whether the occasion for calling further evidence ought reasonably to have been foreseen, the importance of the issue on which the further evidence is sought, the degree of relevance and probative value of the further evidence, the prejudice to the other party, the public interest in the timely conclusion of litigation, and the explanation offered for not having called the evidence.

The court concluded that the purported settlement of Mr FF's claim was not a tactical manoeuvre and lacked veracity. The husband sought to bring to account as a liability the potential settlement sum of $450,000, which was a matter of conjecture. The more significant concern was the lack of discovery by the husband regarding information surrounding Mr FF's claim. The wife did not seek to challenge the settlement nor recall either the husband or any other person for cross-examination. The court considered the amount settled with Mr FF to be substantial as a proportion of the asset pool and that the existence of the claim was the subject of disclosure. The court ordered that the proceedings be reopened to enable the husband to adduce evidence of the settlement of his claim.

The court ordered that the proceedings be reopened to enable the husband to adduce evidence of the settlement of his claim. The court also ordered that the wife's application to tender a letter acknowledging child support departure orders be allowed.

Orders

Orders of the court

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Background

Background to the litigation

The husband’s application is opposed.Background The husband’s business employed contracted health professionals, pursuant to employment contracts. In 2020, Mr HH and Mr FF left the business and a dispute arose between each of the contracted health professionals and the husband, as to matters relating to their employment contracts and whether they had received their full entitlement pursuant to the terms and conditions entered into. At the time of trial, the claim involving Mr HH had been resolved and agreement was reached between the husband and wife to include a liability of $181,000 to JJ Finance for monies provided that enabled Mr HH’s claim to be settled. At the time of trial, there was no indication that Mr FF’s claim would be settled. Litigation had been issued and a Statement of Claim formed part of the evidence in the proceedings, outlining the particulars of claim which totalled $679,922. At trial, the respondent contended that he had received advice from his solicitors that his liability may well be in or around $450,000 and as such, it should be brought to account as a liability of either the business or the husband. Mr KK, the jointly appointed single expert, was asked to consider the employment claim and it was his opinion that it was contingent and until crystallised, either by judgement or agreement, it was not able to be properly assessed. An issue of contention between the parties is the extent of discovery that would have enabled the wife and the Court to better understand the husband’s defence to the claim. The husband did not provide his defence but in evidence, he conceded that he did not consider he should be liable to Mr FF at all. It is conceded that there were a raft of documents that could have been provided, including letters of advice from the husband’s solicitors and without prejudice correspondence (Exhibit “13”). The submission of the wife was that the liability was contingent and in circumstances where there had not been full and frank disclosure, then the claim should be ignored. It is an argument that had merit. What has now transpired, is that the claim has settled and whether it is conceded or not, the evidence persuades me that the settlement with Mr FF, as contained in the Deed of Settlement, is a genuine arm’s length transaction. I am also satisfied that the claim is to be paid by money the husband has borrowed from Mr GG. What remains uncertain, is whether the settlement was reasonable in all the circumstances and made good commercial sense as opposed to the husband being prepared to settle for an unreasonably high amount.The wife’s further applications in a proceeding Presumably in answer to the husband’s Application in a Proceedings seeking leave to adduce further evidence, the wife filed two Applications in a Proceeding. The first Application in a Proceedings sought orders that she be granted leave to tender a letter from Australian Government Services (Child Support) dated 24 August 2022, acknowledging that the Registrar has now received notice of the child support departure orders as sought in the Amended Initiating Application filed 22 June 2022.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

BERMAN J
In Stephens (supra), there is a convenient and apposite summary: 273.We observe that in Australian Securities and Investments Commission v Rich (2006) 235 ALR 587 Austin J set out at 593 what he described as a “useful statement of relevant discretionary factors” to the exercise of discretion to permit a beginning party in a civil penalty proceeding to adduce further evidence after it had closed its case. The factors included:•the nature of the proceeding;•whether the occasion for calling further evidence ought reasonably to have been foreseen;•the importance of the issue on which the further evidence is sought to be adduced;•the degree of relevance and probative value of the further evidence;•the prejudice to the other party;•the public interest in the timely conclusion of litigation;•the explanation offered for not having called the evidence.It may also be relevant to consider what the High Court recently said in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175.Conclusion I have given careful consideration to the various factors that are likely to be influential on the success or otherwise of the husband’s application to adduce further evidence. I do not consider that the purported settlement of Mr FF’s claim was either a tactical manoeuvre or lacks veracity. If the claim had settled during the course of the proceedings there could have been no objection to the evidence being introduced. Moreover, the parties reached agreement that the liability to JJ Finance should be brought to account in circumstances where monies were borrowed to settle the claim with Mr HH. The difficulty for the husband is that during the course of the proceedings he sought to bring to account as a liability, the potential settlement sum of $450,000. It is a matter of conjecture as to what would have happened if that amount was brought to account and the husband subsequently settled with Mr FF for a lesser sum. The more significant concern, is that during the course of the proceedings there was a distinct lack of discovery by the husband in respect of information surrounding Mr FF’s claim. It is noted that the lack of disclosure extended to the pleadings in the litigation but in particular, the husband’s defence. The majority of the documents which would have enabled the Court, if necessary, and the wife to be satisfied as to the progress of the claim and the nature of the proceedings, were not provided. Having said that, the claim with Mr FF has now resolved for a sum certain. As I understand the wife’s position, she does not seek to challenge the settlement nor that either the husband or any other person be recalled for cross examination. I consider that the amount as settled with Mr FF is substantial as a proportion of the asset pool and at the very least, the existence of the claim was the subject of disclosure. I propose to order that the proceedings be reopened to enable the husband to adduce evidence of the settlement of his claim.

Ratio Decidendi

Legal Principle Established

Established by: BERMAN J

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