SAUNDERS & KURDOWSKI
[2015] FamCAFC 119
•19 May 2015 (parenting) 20 May 2015 (financial)
FAMILY COURT OF AUSTRALIA
| SAUNDERS & KURDOWSKI | [2015] FamCAFC 119 |
| FAMILY LAW – APPEAL – CHILDREN – Where the wife appealed against parenting orders – Where the husband did not participate in the appeal – The Magistrate erred by ordering equal shared parental responsibility without giving the parties an opportunity to make submissions on the matter, and after finding they are unable to communicate – The Magistrate erred in allowing the husband to spend time with the child in order to be involved in the child’s schooling in circumstances where the child was being homeschooled by the wife – Appeal allowed in relation to the parenting orders – Re-exercise of discretion – Order for the wife to have sole parental responsibility – Order for the child’s alternate weekends with the husband to commence on Friday afternoon, rather than Thursday afternoon as the Magistrate had ordered. FAMILY LAW – APPEAL – PROPERTY – Where the wife appealed against property orders – The wife was denied procedural fairness when the Magistrate accepted a large number of documents into evidence during closing submissions – The Magistrate erred by overlooking the existence of a mortgage over a property – The form of the order regarding a superannuation fund was deficient given that the primary asset of the fund is real estate which would need to be sold in order to bring about the required division – The Magistrate erred in finding that the wife owned a business when there was no evidence to this effect – Appeal allowed in relation to the property orders – Property dispute remitted for rehearing. |
| Family Law Act 1975 (Cth) – s 60CC, s 61DA Family Law Rules 2004 (Cth) – r 11.02(1) Federal Proceedings (Costs) Act 1981 (Cth) |
| Mellick & Mellick [2014] FamCAFC 236 |
| APPELLANT: | Ms Saunders |
| RESPONDENT: | Mr Kurdowski |
| FILE NUMBER: | PTW | 5566 | of | 2010 |
| APPEAL NUMBER: | WA | 28 | of | 2014 |
| DATE DELIVERED: | 19 May 2015 (parenting) 20 May 2015 (financial) |
| PLACE DELIVERED: | Perth |
| PLACE HEARD: | Perth |
| JUDGMENT OF: | Thackray J |
| HEARING DATE: | 19 May 2015 (parenting) 20 May 2015 (financial) |
| LOWER COURT JURISDICTION: | Magistrates Court of Western Australia |
| LOWER COURT JUDGMENT DATE: | 21 October 2014 |
| LOWER COURT MNC: | [2014] FCWAM 240 |
REPRESENTATION
| THE APPELLANT: | In person |
| THE RESPONDENT: | No appearance |
Orders
19 May 2015
The appeal against the parenting orders be allowed.
Paragraphs 2 and 3 of the orders made on 21 October 2014, as amended under the slip rule on 10 March 2015, be discharged.
The appellant mother shall have sole parental responsibility for the child C KURDOWSKI born on … 2003.
Until further order of the court, the child shall spend time with the father each alternate weekend from 2.00 pm on Friday until 4.00 pm on Sunday commencing Friday, 29 May 2015.
20 May 2015
The appeal against the property settlement orders be allowed.
Paragraphs 5 to 21 of the orders made on 21 October 2014, as amended under the slip rule on 10 March 2015, be discharged.
The applications for property settlement be remitted for rehearing in the Magistrates Court of Western Australia before a Magistrate other than Magistrate Kaeser.
There be no order for costs in relation to the appeal.
The court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by her in relation to the appeal.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Saunders & Kurdowski has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH |
Appeal Number: WA 28 of 2014
File Number: PTW 5566 of 2010
| Ms Saunders |
Appellant
And
| Mr Kurdowski |
Respondent
EX TEMPORE REASONS FOR JUDGMENT
19 May 2015 - Parenting
Before the Court is the Notice of Appeal filed by Ms Saunders on 14 November 2014, in which she challenges all of the orders made by Magistrate Kaeser in the Magistrates Court of Western Australia on 21 October 2014. Those orders related to both parenting and financial issues, but I am at present dealing only with the appeal against the parenting orders.
The respondent to the appeal is Mr Kurdowski. He failed to attend the directions hearing and did not attend today. He has also failed to comply with the order that I made on 27 February 2015 for him to file a summary of argument, notwithstanding that the Appeal Registrar has sent him copies of all relevant correspondence and a copy of the order of 27 February 2015.
The wife asserted that she posted her summary of argument filed on 27 March 2015 to the husband, and although she has not provided any proof of service, she says proof is available. I am, in any event, satisfied that the husband is properly on notice in relation to the appeal, but has elected not to participate. As an aside, I note that the wife has informed me that the husband has told her that he is “above the law” and therefore not bound by court orders.
Given the husband’s failure to participate, I will deal with the matter on the basis of the wife’s written and oral submissions, noting that while the appeal is not opposed, an appellant must still show that the Magistrate erred.
The proceedings before the Magistrate, which concerned the youngest child of the parties’ marriage, C, born in 2003, were conducted in an entirely chaotic fashion. Neither party was represented, and with all due respect to them, it is obvious that they did not have any idea how to present a case. One must therefore appreciate the difficulty that the Magistrate faced in sorting out their issues.
The orders sought by the wife were set out at [14] of the Magistrate’s reasons. The wife did not seek an order about parental responsibility, which is the first complaint she wants me to consider. The orders she did seek were that:
a)the child spend time with the husband each alternate weekend from 4.00 pm on Friday to 4.00 pm on Sunday, and for half of the holidays;
b)the handovers take place at the front of the home; and
c)the husband be restrained from drinking alcohol and taking illicit drugs during times that he spends with the child.
The orders sought by the husband were described by the Magistrate at [17] in these terms:
The husband confirmed that he sought an equal time arrangement with [C]. He did not particularise that any further. His Form 1A response simply seeks orders that, “[C] to be 50/50 custody”.
Once again, it can be observed that no order was sought by the husband dealing with the issue of parental responsibility.
The Magistrate recorded that the husband had not seen the child for almost 15 months at the time of trial. The child was therefore being cared for entirely by the wife, who was also homeschooling him.
Some remarks made by the wife today suggest that she does not accept that the husband had not seen the child for 15 months, but I am prepared to proceed on the basis that the Magistrate correctly recorded the evidence before him.
Parental responsibility
Although the Magistrate’s reasons indicated his intention to make an order for equal shared responsibility, I observed at the directions hearing that no such order had been made. The file was then referred to the Magistrate to see whether he wished to correct the record pursuant to the slip rule. On 10 March 2015, the order was amended to provide, in paragraph 2, for the parties to have equal shared parental responsibility.
The Magistrate did not record in his reasons that neither party had sought an order about parental responsibility. Had his Honour not made any order dealing with that topic, the default position under the law would have applied – each parent would have parental responsibility, but not equal shared parental responsibility. This would have left each of them able to make decisions relating to long-term matters concerning the child without consulting with each other or needing to come to an agreement.
Section 61DA of the Family Law Act 1975 (Cth) (“the Act”) obliges the court, when making parenting orders, to presume that it would be in the child’s best interests to have equal shared parental responsibility. However, the presumption does not apply where there has been violence or child abuse. Having correctly set out this aspect of the law and some of the evidence, the Magistrate stated (emphasis added):
34… Both parties are headstrong and prepared to stand their ground. They each perceive the other in extremely negative terms and would be unable to prevent taking their disputes beyond discussion into the realm of physicality.
35In my view, there are clearly reasonable grounds to believe that the parties have engaged in conduct that falls within the definition of family violence.
The Magistrate made other strong findings about the capacity (or lack thereof) of the parents to discuss matters (emphasis added):
81… I would be concerned about their respective capacities to implement a substantial and significant time arrangement. They would also have some trouble communicating properly about such an arrangement. The ongoing dispute between them has made their communication more difficult. As the husband acknowledged in his affidavit filed on 4 July 2014, the wife is “impossible to communicate with”. I do not necessarily ascribe to that view but it indicates the reality that the parties cannot talk to each other about day to day issues.
…
227… I intend to finalise these proceedings as to do otherwise would ensure that these parties would be locked in litigation for many years to come. They both have the necessary willpower to keep this conflict running for years.
After making findings in relation to the various matters in s 60CC of the Act, the Magistrate set out his conclusions in relation to the issues concerning the child at [74] and following. In relation to parental responsibility, his Honour said:
74Notwithstanding the presence of family violence in the past, in my view it would be better for [the child] if his parents had equal shared parental responsibility. This would require them to consult each other and to try to make joint decisions about major long-term issues for [the child].
The wife has three primary complaints in relation to the decision to order equal shared parental responsibility. First, she claims that she was denied procedural fairness because the issue was never raised during the hearing. Given that neither party sought an order relating to parental responsibility, it would not be surprising if the matter had not been raised. My electronic search of the transcript indicates that the words “equal” and “parental responsibility” were never used, so it appears the wife is correct in saying the issue was not discussed. If so, the wife was denied procedural fairness because she was entitled to make submissions as to why the order would not be in the child’s best interests. The appeal would therefore succeed on that basis alone. However, there are even more compelling reasons why the order for equal shared parental responsibility was not an appropriate exercise of discretion.
The wife’s second complaint is that the parties are unlikely to be able cooperate to the extent required by an order for equal shared parental responsibility. On the Magistrate’s own findings, it seems highly improbable that this couple will ever communicate effectively and come to agreements about the child. This is evidenced by the fact that one of the matters that brought them to court in the first place was their disagreement about the child’s schooling.
In Mellick & Mellick [2014] FamCAFC 236, the Full Court recently stated that:
50… equal shared parental responsibility carries with it the obligations imposed by section 65DAC of the Act, namely, an obligation to consult, to make a genuine effort to come to a joint decision (s 65DAC(3) of the Act) and to jointly decide major long-term issues (s 65DAC(2) of the Act).
Given the improbability of the parents ever consulting or making genuine efforts to come to joint decisions, I respectfully consider that the Magistrate erred in making an order for equal shared parental responsibility.
The third proposition put by the wife is that she is the logical person to make long‑term decisions concerning the child, because she has been his primary care-giver. I accept that it would be appropriate for the wife to have sole parental responsibility if there is to be an order for sole parental responsibility.
For the reasons I have given, the appeal against this part of his Honour’s orders must be allowed. The question then arises whether it is appropriate to re‑exercise the discretion of the Magistrate, or whether the issue should be remitted for hearing by another magistrate. The only concern I have about re-determining the matter myself is in relation to procedural fairness, since neither party sought an order for parental responsibility in the hearing below, and the husband is not present today to make any submissions on the issue.
The wife did, however, foreshadow in her summary of argument that she considers she should be the parent primarily responsible for decision‑making concerning the child. The husband elected not to participate in the appeal, and therefore cannot reasonably complain that he has not been heard on this issue. In any event, I consider that it is clear on the evidence that the wife should have sole parental responsibility. It would be a waste of resources for the matter to be remitted simply to ensure that the husband is given a further chance to be heard on the topic. Therefore, on the re-exercise, I will make an order that the wife have sole parental responsibility.
By way of explanation, making an order for sole parental responsibility gives the wife the right to make decisions relating to major long-term issues concerning the child, but such decisions would need to take account of the wife’s obligation to ensure that the child lives close enough to the husband to facilitate the contact orders. The order does not prevent the wife from consulting with the husband about major long-term issues if she wishes to do so, and the husband can still make day‑to‑day decisions when the child is in his care.
Alternate weekends
I turn now to the wife’s complaint about paragraph 3 of the amended orders, which requires the child to spend time with the husband on alternate weekends, from after school on Thursday to the start of school on Monday. Although the wife agreed to the husband having the child on alternate weekends, her proposal was for the time to commence at 4.00 pm on Friday and conclude at 4.00 pm on Sunday; whereas the husband’s proposal was for “50/50”.
The Magistrate, for good reasons, concluded that an equal time arrangement would not be in the child’s best interests. However, his Honour did not accept the wife’s proposal for the time that the child should spend with the husband. In arriving at his decision, the Magistrate approached the matter on the basis that, having decided to order equal shared parental responsibility, he was required by the Act to consider whether equal time or “substantial and significant time” would be in the child’s best interests. Although I have found the Magistrate should not have made the order for equal shared parental responsibility, he nevertheless had to consider the equal time proposal because that was what the husband was seeking. Logically, that would also have required consideration of “substantial and significant time”, as such an outcome fell partway between the proposals of the parents.
The Magistrate recorded at [76] that the child was nearly 11 years old and that he had not seen the husband for some 15 months prior to the trial, but that there had previously been a roughly equal sharing of the child’s time. His Honour also recorded that at the end of the trial, he had immediately put in place an arrangement (pending delivery of judgment) for alternate weekend contact from 4.00 pm on Friday to 4.00 pm on Sunday, since this is what the mother had conceded would be appropriate.
His Honour, having considered the evidence, expressed his satisfaction that a “substantial and significant time” arrangement would be in the child’s best interests. The Magistrate recognised at [79] that the Act defines “substantial and significant time” as including weekends, weekdays and holidays with both parents; and time that allows the parent to be involved in the child’s daily routine and events that are of special significance.
At [80], his Honour identified the matters the court must take into account in determining whether such an arrangement is “reasonably practicable”. One of these is the parents’ capacity to communicate and resolve difficulties that might arise in implementing the arrangement. At [81], his Honour expressed concern about the parents’ capacity to communicate, before saying (emphasis added):
82I do, however, think that [the child] would benefit from arrangements that go beyond the “alternate weekend” routine suggested by the wife. The husband could be involved in [the child’s] school and could deliver him to and collect him from school. This would be good for [the child].
83In my view, something slightly beyond the wife’s proposals would be in [the child’s] best interests. In my view, extended alternate weekends would be appropriate. If [the child] was in the husband’s care from after school on Thursday until school on Monday each alternate weekend, that arrangement would provide a reasonable amount of time for [the child] to spend with the husband and would allow the husband to be involved in school which is an important element of a child’s daily routine. It would also be an arrangement that would not require too much extra communication between the parties, being in one block of time. I would have some concern about putting in place an arrangement that provided for time on intervening weeks as that would increase the amount of potential conflict between the parties and potential need for communication. The parties have adopted similar positions in relation to school holiday periods (half each).
With respect, it is difficult to follow his Honour’s reasoning. While it was correctly recorded at [19] that the child was being homeschooled, his Honour’s reasoning revolves around the collection and delivery of the child from school, thereby allowing the father to have involvement in the child’s schooling. Perhaps the Magistrate had in mind that the child might attend a mainstream school in future? However, one of the disputes that his Honour was being asked to determine was whether the child should continue being homeschooled. Resolution of that issue was postponed pending other developments, and there was accordingly no guarantee that the child would commence attending a mainstream school (noting that he is autistic and has been homeschooled for some time).
In this context, the Magistrate made an order by consent for the child to undergo NAPLAN testing before the end of 2014. His Honour said (emphasis added):
20The husband wanted (and the wife agreed) for [the child] to sit approved exams at the end of 2014 in order to assess his educational level (and the potential effectiveness of the home schooling provided by the wife). For this reason, the Court made orders on 11 July 2014 for [the child] to undertake NAPLAN testing by the end of the 2014 academic year with the results to be provided to each party. The rationale behind that was that the husband conceded that if [the child] was at his expected level then he would have no objection to him remaining home schooled until the start of the 2016 academic year. In that year, [the child] would be in year 7 and would commence high school. In the event that [the child] was not at the expected level then the husband’s position was that he should be enrolled at [W Primary School] in order to improve his educational level prior to the commencement of high school.
21The wife’s position was that she wished to continue home schooling [the child]. She was open to consider him attending a high school in 2016 and therefore was open to the prospect that home schooling might stop when he enters year 7 in 2016. Those are issues that cannot be dealt with in this judgment, given that the test has not occurred yet. As part of the overall orders, I will preserve liberty to apply in relation to the education issue.
I am informed by the mother that his Honour’s orders were made too late in the year for the child to undertake the testing in 2014, and that no arrangements have been made for the testing to be done this year. The child’s future schooling arrangements are therefore in limbo.
The Magistrate’s reasons indicate that there was at least a possibility, even on the husband’s case, that the child would not attend a mainstream school this year, and the question of whether he would attend a school in 2016 was also left unresolved. The effect of the order is that the child is not being schooled each alternate Friday, because he is obliged to leave the wife’s care on Thursday afternoon. There is no indication that the husband is homeschooling the child on the Fridays he has him.
With respect to the Magistrate, the order was made on a false premise, being that the order would allow the husband to be involved in the child’s schooling. The order might be in the child’s best interests if he starts attending a mainstream school. However, at the present time, notwithstanding the potential benefit to the child of spending a little more time with the husband on alternate Fridays, I consider that that his Honour’s reasoning was erroneous; the order was not in the child’s best interests; and that the appeal should be allowed on that basis.
The wife’s proposal now is that she is willing for the husband to collect the child at 2.00 pm on Friday rather than 4.00 pm. Her rationale is that the child could commence his studies a little earlier on the alternate Fridays, so he could have the benefit of spending much of the afternoon with the husband. She also seeks, as she did at trial, that the time with the husband conclude at 4.00 pm on Sunday rather than extending through to Monday morning.
The wife’s submissions today were initially based on the difficulty she says she has experienced in getting the child back from the husband on Monday, but I pointed out that she has not applied to introduce further evidence about this. Although it would be open to both parties to adduce further evidence now that the appeal is being allowed, that would prolong the proceedings even further. Given the most unfortunate history of the matter, and the importance of conserving court resources, I consider that the better approach is for me to proceed on the basis of the evidence that was before the Magistrate – especially as I intend only to make an interim order on the re-exercise of the discretion.
The findings of the Magistrate suggest to me that there was a real likelihood of problems between the parents in ensuring the child was returned on time to the mother on Monday morning. Even without the benefit of the further evidence the mother wished to adduce about such problems actually having occurred since the orders were made, I consider that the child is more likely to benefit from a return to his primary place of residence on the Sunday evening so that he can be settled down and got ready for homeschooling the next day.
In my view, the order that would promote the child’s best interests would be for him to commence his weekends with the husband at 2.00 pm on Friday and return to the wife on Sunday at 4.00 pm. However, that order ought to be made only “until further order of the court”. Although the husband seems to have done nothing about the issue concerning the NAPLAN testing, it is possible that the child may go to a mainstream school in the future, in which case some of the matters I have relied upon in reaching my decision today would no longer apply. In making the proposed order only “until further order”, I am also cognisant of the fact that neither party has presented further evidence about how the order has been working out “on the ground”. Finally, I am mindful of the fact that although the child has autism, he is of an age where his wishes may be a consideration that the court should take into account, and that there is no evidence of his wishes. Making the order “until further order” leaves open the possibility of the regime being revisited at some future point, with the benefit of more evidence than I currently have available.
Drug and alcohol testing
The third complaint was the Magistrate’s failure to make an order for the husband to undergo mandatory drug and alcohol testing. It is apparent from the Magistrate’s reasons that the wife had serious concerns in relation to the husband’s consumption of alcohol and drugs. The wife’s submissions today made it clear that she continues to have those concerns.
The Magistrate was well aware of the wife’s concerns. Indeed, as referred to in [2] of the reasons, an order was made on the last day of trial that:
By consent and until further order of the Court, the Husband be restrained and an injunction be granted restraining him from drinking alcohol or taking any form of illicit drug during the time that he has the child, [C], in his care.
The fundamental difficulty facing this complaint is that the wife has not been able to take me to any part of the record to indicate that the Magistrate was requested to make an order for drug testing. In circumstances where the Magistrate was not invited to make such an order, it cannot be said that his Honour erred in failing to do so. However, I advised the wife that if she has evidence to establish that the husband has breached the injunction, then she can take the matter back to a magistrate for further orders arising from any such breach.
There is therefore no merit in this part of the complaint.
NAPLAN testing
The wife’s final complaint concerned the order for NAPLAN testing. That order was made by consent and the wife does not pursue that part of her appeal.
Conclusion
For all of those reasons, I propose to make the following orders in relation to the appeal against the parenting orders:
(1)The appeal against the parenting orders be allowed.
(2)Paragraphs 2 and 3 of the orders made on 21 October 2014, as amended under the slip rule on 10 March 2015, be discharged.
(3)The appellant mother shall have sole parental responsibility for the child C KURDOWSKI born … 2003.
(4)Until further order of the court, the child shall spend time with the father each alternate weekend from 2.00 pm on Friday until 4.00 pm on Sunday commencing Friday, 29 May 2015.
20 May 2015 - Financial
I have heard submissions from the wife today in relation to her appeal against the financial orders made by Magistrate Kaeser. The Notice of Appeal was prepared without the benefit of legal representation and the grounds are very poorly drawn. Although the wife’s Summary of Argument filed on 27 May 2015 did not greatly advance the matter, her oral submissions have identified a number of errors in the disposition of the matter at first instance.
In finding error on the part of the Magistrate, I note that the financial dispute has a degree of complexity, and I again record that the case was presented in a chaotic fashion. Indeed, his Honour raised the possibility of adjourning the trial, but decided, with some agreement from the parties, that it was better to try to get the matter out of the way.
In his reasons, the Magistrate understandably expressed dissatisfaction with the way in which he had to decide the matter. However, he adopted a pragmatic approach and tried to provide finality to the parties. Regrettably, in trying to achieve what was almost the impossible, his Honour has fallen into a number of errors. I will briefly describe some of the errors, which are sufficient to persuade me that the only alternative is for there to be a retrial.
Procedural fairness
On 5 March 2014, the husband was ordered to file his trial affidavits, an updated Financial Statement and an amended Response within 21 days. However, these documents were not filed until 4 July 2014, which was less than one week prior to the commencement of the trial. The husband’s trial affidavit was lengthy and difficult to comprehend, and it referred to various documents that were not annexed to the affidavit.
The wife drew his Honour’s attention to the difficulty in which she found herself as a result of the late filing of the husband’s material. The following exchange occurred (transcript, 10 July 2014, p 5):
HIS HONOUR: Okay. Now, Ms [Kurdowski], the issue you raised about the affidavit, there are, probably, two ways that we could, potentially, proceed. One is that you say, “This affidavit was late. It’s not fair that I get lumbered with this at the last minute. I’ve only had a few days to take it onboard and to read it and to deal it and, therefore, I need more time,” and an application for more time means that you are applying to vacate today’s trial and adjourn to another date.
Now, whether that’s adjourned to tomorrow or back into the callover to be re‑listed for another trial in about three months time, they’re the options in terms of giving you more time. The second option, really, is that you complain about – and, perhaps, quite correctly complain about – the late filing, but that we get on with it anyway. And I’m putting these in very simple terms, so that – not suggesting you can’t understand complex terms, but I’m trying not to use too much legalese with both of you. If we get on with it, it means that you’ve had a chance to read it, accept you haven’t had much time, but you want the trial to proceed anyway.
[KURDOWSKI], MS: Yes, that’s ‑ ‑ ‑
HIS HONOUR: So which of those two options would you like?
[KURDOWSKI], MS: The latter.
HIS HONOUR: All right.
As the wife consented to continuing with the trial, it could be thought that his Honour’s decision to proceed was not an error. However, it might also be thought that the wife, as a self-represented litigant, ought to have been given a more comprehensive statement of all the options available in light of the very late filing of the husband’s material. It seems that the wife was not presented with a third option, namely of seeking that the husband not be able to rely upon his late filed affidavit at all – which arguably was not properly before the court unless leave to rely upon it was sought and granted: Family Law Rules 2004 (Cth), r 11.02(1).
A matter of even greater concern arose during the husband’s closing address, when he sought to tender some lever arch files full of disclosure documents, having been correctly informed by the Magistrate that he could not rely on them because they were not in evidence. After the wife told his Honour that she had probably seen the husband’s list of disclosure documents “quickly with the lawyer”, the following exchange occurred (transcript, 11 July 2014, p 14 et seq):
HIS HONOUR: And what a lawyer – and I have to presume this. What a lawyer would have done would have explained to you that once you get the list you’ve got an opportunity for either you or he or she – I can’t remember whether it’s a male or female lawyer you had. Would have a chance to inspect those documents and have a look at them.
[KURDOWSKI], MS: I do recall that the lawyer asked for a couple of items ‑ ‑ ‑
HIS HONOUR: Okay.
[KURDOWSKI], MS: ‑ ‑ ‑ to be copied.
HIS HONOUR: So ‑ ‑ ‑
[KURDOWSKI], MS: But I can’t really even remember what they were now. But not everything. Certainly not everything. And I never inspected everything.
HIS HONOUR: Unfortunately I’m not too concerned about whether you’ve actually inspected. I’m concerned about whether you were given a chance to. And if you were given an opportunity to and you failed to do so then that’s on you.
[KURDOWSKI], MS: Okay.
HIS HONOUR: The question then for me is whether I allow the husband to rely upon all of those documents, as he seems to be saying he wants to do.
[KURDOWSKI], MS: Okay.
HIS HONOUR: Do you agree with that?
[KURDOWSKI], MS: That’s fine. Yes.
HIS HONOUR: Are there any other documents that you say you should be able to rely upon, in order to be fair to you, that is not already in the – I think it’s five – no. Six affidavits that you’ve filed already? I have the impression that the answer is going to be “no” but I’m not telling you what you should say. But because you’ve filed six affidavits and you’ve tendered a number of exhibits it seems to me that you might have covered that but that’s up to you.
…
[KURDOWSKI], MS: Yes. I think I’ve covered it.
HIS HONOUR: You’re okay?
[KURDOWSKI], MS: Yes.
HIS HONOUR: Yes. All right. Thank you.
…
HIS HONOUR: … I’m going to take the rather unusual step, given that the two parties are representing themselves, to allow all of that evidence in. So there will be a further exhibit.
…
HIS HONOUR: … The three volumes of disclosed documents of the husband together are tendered into evidence marked exhibit H9.
In my respectful view, all of the options reasonably available to the wife were not put to her by the Magistrate. His Honour accepted three large volumes of material into evidence, after the evidence had closed, and without the wife having been given any notice they were to be relied upon. She was not offered an opportunity to cross-examine on them, or even read them. The Magistrate was no doubt correct in saying that the wife had previously had the chance to inspect the documents prior to trial, but this was not sufficient to afford procedural fairness in the circumstances.
In dealing with this appeal, I have faced precisely the same difficulties as the Magistrate, in that the matter was presented in a most unsatisfactory way. I am therefore unsure whether I am right in thinking that, for example, the evidence about the extent of the husband’s claimed taxation can be ascertained only by reference to Exhibit H9. However, if that is correct, then the wife had no opportunity to present the arguments that she raised on appeal about that evidence being out of date. To compound matters, the bundle of exhibits provided by the registry today is deficient because the document about the tax is missing, although the Magistrate referred to it at [102] of his reasons.
In my view, there has been a denial of procedural fairness to the wife in the way all of the additional the material was placed before the Magistrate. Apart from any other consideration, it is unclear, from reading his Honour’s reasons, how all of the material was taken into account. The appeal should be allowed on this basis alone; however, there are other matters which also indicate appellate error.
Suburb B mortgage
In the course of the wife’s submissions today, it emerged that the Suburb B property is subject to a mortgage, which was not included in the table of liabilities at [117] of the reasons. It is clear from reading the reasons that his Honour should have appreciated there was a mortgage over the property, because the relief sought by the wife dealt with it. Furthermore, the mortgage was shown in the husband’s Financial Statement filed on 4 July 2014.
The orders made by the Magistrate require the proceeds of the sale of the Suburb B property to be applied to the taxation liability. At [112] of the reasons, his Honour stated that the proceeds from the sale of the Suburb B property, the caravan and the boat “should extinguish the current debts to the Australian Taxation Office”. However, when the mortgage over the property is taken into account, the net value of the property is very modest. The Magistrate erred by overlooking the mortgage, and there is a consequent flaw in his reasoning about discharging the taxation liability.
Superannuation fund
The primary asset of the parties’ superannuation fund is a property at Town Y (see [100] and [117] of the reasons). His Honour made the following order in relation to the fund:
By consent, the parties do all things necessary to effect the transfer of the amount of $198,654.36 from the [Superannuation Fund] to the wife by way of a rollover to a further fund of her choice.
The wife informed me today that nothing has been done to implement the order, which is not surprising, given that the main asset of the fund is real estate, and no mechanism was provided in the order for how the property was to be sold to realise the amount to be rolled over.
As the wife pointed out, even if it is assumed that the words “do all things necessary” includes taking steps to sell the property, the order does not account for the possibility of the property selling for an amount different to the value adopted by the Magistrate. His Honour’s intention (see [231] of the reasons) was to give the wife half of the value of the fund, but it would be quite coincidental if this were achieved under the terms of the order. Even though the order was made by consent, it would have been desirable for the Magistrate to point out the need for further definition of the order.
Suburb C property
A further concern relates to the Magistrate’s assumption that the Suburb C property previously owned by the parties had been the subject of a mortgage. This appears from the following paragraphs of the reasons:
184After the parties sold the [Suburb C] property in approximately 2011, the net proceeds of sale were used to:
(a) pay the Westpac business loan of $94,000;
(b)pay Visa credit cards outstanding to Westpac of $12,500; and
(c) $92,000 was deposited to the business bank account.
185The husband has said that he received $253,000 from the sale of that property and accounted for that money by way of the above paragraph. I note that there is an amount of $54,500 that is still unaccounted for. The added issue in relation to that said was that the wife says the property was sold for $453,000, not $253,000. The settlement statement dated 25 May 2011 shows that the sale price of the property was $453,200. After the payment of commissions and various outlayings, the balance due to the parties was $440,606.65. The settlement statement does not indicate as to whether there was a mortgage that had to be repaid on that property. If there was, then the balance of the money has generally been accounted for. If there was no mortgage at the time, then there is an amount of about $220,000 that is unaccounted for by the husband.
186The wife has not provided evidence to enable me to conclude that this money has somehow “disappeared” - that is, that the husband has funnelled it to his own benefit.
187The only plausible explanation was that there was a mortgage at the time that was discharged when the property was sold. The unaccounted balance from above is $36,500. That figure is relatively small compared to the amounts the wife has withdrawn for her own benefit. In addition, the wife has not shown that the husband utilised this amount for his own benefit.
In paragraph 7 of her affidavit filed on 26 November 2013, the wife stated:
7.[THE HUSBAND] TOOK $235,000 OUT FROM OUR JOINT ACCOUNT AT WESTPAC ON 18 JANUARY 2012. TO THIS DAY THERE IS NO EXPLANATION AS TO WHY HE FELT THIS MONEY TO BE HIS AS THIS MONEY WAS THE PROCEEDS FROM SELLING A SHARED PROPERTY IN [SUBURB C] IN WHICH I PAID FOR HIS BUSINESS BILLS $120,000 AS HE REQUESTED AND THEN $100,000 OF THAT PROPERTY MORTGAGE AS HE AGREED TO. THE REST IS $235,000 LEFT FROM [SUBURB C] PROPERTY MONEY.
From my reading of the transcript, it does not appear that this evidence was challenged. Given the property was sold for $440,606 net, it is plausible that the wife was right in saying that the husband took $235,000 from the sale proceeds. The possibility the wife was correct is increased by reference to a bank statement attached to her affidavit filed on 10 February 2014, which shows the husband receiving at amount of $222,098 into his account on 18 January 2012, some eight months after the settlement of the sale of the Suburb C property.
NOTE: In settling these reasons, I have had time to study the bank statement more carefully. At the time I delivered my ex tempore reasons, I understood that the disbursements referred to at [184] of the Magistrate’s reasons had been made at the time of settlement of the Suburb C property. I therefore assumed that the money placed in the account some eight months after the sale was in addition to the amounts mentioned at [184]. However, closer examination of the bank statement reveals that there were withdrawals of $ 95,725 and $92,000 from the account soon after the $222,098 was deposited. I now accept it is probable that these payments were those mentioned at [184(a)] and [184(c)] of the reasons. The bank statement therefore does not provide any corroboration for the proposition that the Suburb C property was unencumbered, but conversely it does not establish that it was encumbered. The confusing information provided by the husband (see p 16 of the affidavit filed on 4 July 2014) does not positively assert that the Suburb C property was encumbered – he only refers to the $235,000 as being the “residual” from the sale of the property.
Other complaints
The wife complains about the finding at [201] that there had been deliberate non-disclosure by both parties. The reasons do not indicate what led his Honour to this conclusion concerning the disclosure made by the wife. I only mention this complaint in passing, because I do not have the benefit of any argument from the husband, and the wife’s submissions were not sufficient to persuade me that his Honour was in error in making this determination.
The wife also sought to persuade me that the Magistrate was incorrect in relation to his approach to a distribution made to the wife from a family trust. On the basis of the information currently available to me, and notwithstanding the submissions that have been made by the wife, I see no error in the Magistrate’s approach in this regard.
Another matter on which the wife relied was the Magistrate’s finding at [206] that the wife “has a business”. The basis upon which his Honour arrived at that conclusion is not apparent. There appears to be no evidence indicating that the wife owned a business, aside from the business the parties jointly conducted prior to separation.
Conclusion
The appeal against the financial orders will be allowed due to the denial of procedural fairness and the factual errors I have mentioned. The matter must be remitted for retrial, because I am in no position to arrive at a principled decision given the unfortunate state of the evidence.
In sending the matter back for a retrial, I recognise it is quite probable that the next judicial officer will face a similar mess. That is not within my control; however, I suggest that when the matter is listed for a directions hearing, orders ought to be made requiring each party to file one affidavit setting out all of the evidence on which they intend to rely and attaching all documents they wish to have received in evidence.
I have explained to the wife that the consequence of setting aside the orders is that interim orders previously in place will spring back into life. That includes the order made on 4 April 2012 requiring the husband to meet the mortgage payments on the properties. The wife told me the husband has not been meeting those payments, and I advised her of the option of applying to enforce the order.
For all of those reasons, I will make the following orders in relation to the appeal against the financial orders:
(1)The appeal against the property settlement orders be allowed.
(2)Paragraphs 5 to 21 of the orders made on 21 October 2014, as amended under the slip rule on 10 March 2015, be discharged.
(3)The applications for property settlement be remitted for rehearing in the Magistrates Court of Western Australia before a Magistrate other than Magistrate Kaeser.
Costs
The wife does not seek an order for costs against the husband because she doubts he would pay. In any event, this is not an appropriate case for an order for costs, inter alia because both parties contributed to the errors of the Magistrate.
The wife does, however, seek a certificate under the Federal Proceedings (Costs) Act 1981 (Cth), which may cover at least the costs of the transcript. Notwithstanding that the parties presented their case in an entirely unhelpful and haphazard fashion, the errors of the Magistrate are errors of law and I do not think it reasonable that the wife be out of pocket. I will therefore order that a certificate be granted to her only in relation to the costs of the appeal.
I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thackray delivered on 19 & 20 May 2015, edited to correct grammatical errors and some infelicity of expression.
Associate:
Date: 24 June 2015
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