Scepetti and Scepetti
[2014] FamCAFC 33
FAMILY COURT OF AUSTRALIA
| SCEPETTI & SCEPETTI | [2014] FamCAFC 33 |
| FAMILY LAW – APPLICATION IN AN APPEAL – Application to extend time to file a Notice of Appeal – Where granting of leave is not automatic and involves the exercise of discretion – Where the applicant failed to establish an adequate explanation for her delay in filing a Notice of Appeal – Where consideration of the grounds of appeal fail to demonstrate that to deny the proposed appeal would cause an injustice – Application dismissed. |
| Family Law Rules 2004 (Cth): rr 22.02, 22.03, 22.12 |
| Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Gallo & Dawson (1990) 93 ALR 479 Gronow v Gronow (1979) 144 CLR 513 Metwally v University of Wollongong (No 2) (1985) 60 ALR 68 Steinbrenner & Steinbrenner [2008] FamCAFC 193 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 |
| APPLICANT: | Ms Scepetti |
| RESPONDENT: | Mr Scepetti |
| FILE NUMBER: | PAC | 1979 | of | 2010 |
| APPEAL NUMBER: | EA | 163 | of | 2013 |
| DATE DELIVERED: | 12 March 2014 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ryan J |
| HEARING DATE: | 11 December 2013 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 20 September 2013 |
| LOWER COURT MNC: | [2013] FamCA 903 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Ms Snelling |
| SOLICITOR FOR THE APPELLANT: | Valenti & Valenti Solicitors |
| COUNSEL FOR THE RESPONDENT: | Ms Judge |
| SOLICITOR FOR THE RESPONDENT: | Saldaneri & Associates |
Orders
That the Application in an Appeal filed by Ms Scepetti on 13 November 2013 (and as amended on 10 December 2013) for an extension of time to file a Notice of Appeal against the orders of the Honourable Justice Foster made on 20 September 2013 be dismissed.
That the applicant pay the respondent’s costs of her Application in an Appeal referred to in order 1 within 28 days of agreement or as assessed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Scepetti & Scepetti has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISDICITON OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 163 of 2013
File Number: PAC 1979 of 2010
| Ms Scepetti |
Applicant
And
| Mr Scepetti |
Respondent
REASONS FOR JUDGMENT
This is an application by Ms Scepetti (“the wife”) for an extension of time to file a notice of appeal. The proposed appeal concerns property orders made pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) by Foster J on 20 September 2013. His Honour determined that the parties’ property should be divided equally as a consequence of which from $253,148 held in a controlled monies account on their behalf, the husband received $235,649 with the balance paid to the wife. If an extension of time is granted, the wife would argue that the result was manifestly unjust and seek orders which would distribute the parties’ property 65 per cent to her and the balance to the husband.
Mr Scepetti (“the husband”) is the respondent in this application. It is his position that the wife’s application should be dismissed. In summary, he argues that the wife failed to adequately explain why she took nearly two months to present her proposed notice of appeal or why refusal of her application would constitute an injustice to her and that allowing her to prosecute an appeal inevitably involves prejudice to him.
Background Facts
So as to give this application context, it is necessary to record a few seemingly uncontroversial facts.
The parties married and commenced cohabitation in June 1988. At that time, the husband had no assets of substance and the wife had a 50 per cent interest in a cottage at Suburb 3. Save for the significance of the wife’s greater initial contribution, before his Honour it was agreed that the parties’ contributions during cohabitation were equal.
There are three children of the marriage, W, L and B.
Following their marriage, the parties lived with the wife’s parents. Quickly they purchased land at Suburb 4 for $47,500 of which $6,500 constituted the sale proceeds of the husband’s car with the balance raised by mortgage.
About four years later, they raised a mortgage and built a home on the Suburb 4 land. Having lived in the Suburb 4 home until early 1994, when it was sold, they again moved in with the wife’s parents.
With the $190,000 net proceeds from Suburb 4, the wife and her brother entered into a joint venture with the owner of the property adjacent to Suburb 3 for the development of 15 townhouses on the combined site. In addition to the $190,000, they contributed an additional $110,000 raised by way of further borrowings secured against Suburb 3. No evidence was adduced as to the value of the wife’s interest in Suburb 3 at the commencement of cohabitation or, it would seem, at the time of the joint venture.
As a result of the development, the wife received four townhouses subject to the outstanding mortgage of $110,000.
In 1996, the parties purchased another property at Suburb 3 for which they paid $150,000. They borrowed $140,000 and met the shortfall from savings.
In the following two years the wife sold two townhouses for $147,000 and $180,000 respectively. From the sale proceeds about $257,000 was paid to discharge the parties’ mortgages with the surplus used for joint matrimonial purposes.
In February 2001, the parties purchased a business for $25,000 in relation to which an additional $20,000 was spent on stock and equipment. They drew down on their mortgage facility to make these payments.
In mid 2004, they purchased two shops in Suburb 5 for $148,500. Again, they drew down on their mortgage which, with that transaction taken into account, stood at $260,000.
Two years later the parties refinanced their mortgage, which then stood at $360,000 and established a line of credit in the amount of $187,500. The lender took security over their home at Suburb 3 and one of the two remaining townhouses.
In 2007, the parties constructed a self-contained villa on the Suburb 3 property. The $70,000 construction cost was obtained by drawing down on their line of credit. The villa was rented for $150 per week until March 2010.
The parties separated in October 2009 whereupon the husband vacated the family home and the wife and three children remained in occupation.
At separation, the parties owed $338,000 on the mortgage and $16,000 on the line of credit.
After separation, both parties drew down on the line of credit which, when it was discharged in August 2012 stood at $136,286. The mortgage secured on the family home was discharged at the same time with the balance then standing at $336,231.
From her income, post separation, the wife paid approximately $40,000 in mortgage repayments. An additional $53,000 paid in mortgage instalments came from drawdowns on the line of credit.
Following separation the husband did not pay anything towards the mortgage or line of credit.
Between February 2010 and August 2011, the husband paid child support of $220.70 per month. His child support liability ceased in August 2011 when L came into his care. Following this, the wife was assessed to pay child support of $170 per month which, in mid 2013, was reduced to $128 per month.
Both parties have remarried. The wife and her husband purchased a home at in the Greater Western Sydney region for $720,000, following which, in September 2011, she vacated the family home at Suburb 3. The Suburb 3 home subsequently sold for $650,000. After discharge of the mortgage and line of credit, the net sale proceeds of $170,364 were deposited in a controlled monies account.
The husband and his wife lived with her two children in rented accommodation.
The wife sold one of her two remaining townhouses in 2012 with the net sale proceeds secured in a controlled monies account pending completion of property proceedings. The Suburb 5 shops were also sold with the net sale proceeds of $123,568 similarly held in a controlled monies account. Both parties received distributions from the controlled monies account which
his Honour took into account.
The child L had a difficult year in 2013 and as a consequence of his challenging behaviour he was twice suspended from school for significant periods. Having obtained brief respite care in June 2013, in mid August 2013 the husband again obtained emergency respite care for him. Whether or not the husband relinquished L’s care on a permanent or temporary basis was and remains contentious. In any event, without first informing the husband, in late August 2013, the wife applied to the Guardianship Tribunal for orders that she be appointed L’s guardian and financial manager. Those proceedings had not been completed (and still have not) when the hearing before the
trial judge took place. His Honour determined that L would probably return to live with the husband.
Contributions were assessed as favouring the wife 55 per cent compared to the husband’s 45 per cent. The wife’s greater income, the comparatively advantageous financial circumstances of her relationship with her husband, that she would support B without financial assistance from the husband and he would, in all likelihood, resume L’s care resulted in a five per cent adjustment pursuant to s 75(2) in favour of the husband.
The Applicable Rules and Principles
Chapter 22 of the Family Law Rules 2004 (“the rules”) deals with appeals.
Rule 22.02 provides that an appeal is to be commenced by filing a notice of appeal.
Rule 22.03 sets out the timeframe within which an appeal is to be filed: namely 28 days. In this case, the last day for filing a notice of appeal was 18 October 2013.
Provision is also made in r 22.02 for an application for leave to appeal in relation to which r 22.12 contains examples of procedural orders which may be made in respect of such applications.
The principles relating to applications for an extension of time to file an appeal are set out Gallo v Dawson (1990) 93 ALR 479. The granting of leave is not automatic and involves the exercise of discretion. Discretion to extend time is given for the sole purpose of enabling the court to do justice between the parties. In determining whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the nature of the litigation, the consequences for the parties of the grant or refusal of leave and the explanation for the delay proffered by the applicant.
In order to determine whether or not compliance with the times fixed by the rules would have the rules become instruments of injustice, it is necessary to consider the possible merits of the appeal. The point being, refusal of an application to extend time for an unmeritorious appeal would not work an injustice.
Delay
In support of her application the wife relied on her affidavits filed on 13 November 2013 and 10 December 2013. She explains that approximately two years after separation she was diagnosed as suffering from anxiety and depression. It is her evidence “[t]he strain of managing the children, the home, [L’s] therapies and behaviour and my employment became too difficult and I was unable to cope, until I received counselling and assistance. [L] went to live with [the husband] at that time”.
Her evidence is consistent with the report prepared by her psychologist, Ms C, dated 10 August 2013 and annexed to her affidavit filed 10 December 2013. In that report, the wife’s psychologist opined:
In my opinion [the wife] has responded very well to therapy, including supportive, strengths-based counselling, CBT (Cognitive Behavioural Therapy) and ACT (Acceptance & Commitment Therapy). She has benefited from postponement of Court proceedings and now manages her anxiety and stress in more helpful ways. She has a very supportive husband (remarried) and has since been able to gain access to [L]. [The wife] has also been seeing a psychiatrist [(Dr T)].
I am reasonably confident that given her progress, notwithstanding her own psychological resourcefulness, her mental health status will continue to improve. She has already established that she is able to work fulltime and support herself and her family, given the high levels of distress she has already encountered in her life. [The wife] has benefitted from a postponement of Family Court proceedings, particularly in reducing her stress levels but, in my opinion is now capable of speaking on her own, and her family’s, behalf.
It is the wife’s evidence, that some six weeks later when she received
his Honour’s reasons for judgment she was:
4.… again quite ill and unable to face reading the judgment or discussing it with my solicitor. I read the orders and put it aside. I was unable to have a sensible discussion with my solicitor due to my mental state. It was not until I received a telephone call from my solicitor, saying “I have received a telephone call from the husband’s solicitor advising that they are filing a costs application” that I could force myself to properly read the judgment. I was concerned at the judgment and considered it to be unjust given the sacrifices made by my parents in order to give me a good start in life and that their efforts had been given so little consideration when the Judge assessed my contributions to the property pool. I sought advice as to whether or not I could Appeal the judgment. I understand I should have lodged the appeal within 28 days of the judgment, but I was not in a position to make this decision at that time due to my mental state.
Ms C provided an updated report on 26 November 2013. In that report, she confirmed that the wife continued to receive treatment and that between
3 October 2013 and 26 November 2013 the wife attended six appointments with her. According to the wife, these consultations involved treatment called “Eye Movement Desensitisation and Reprocessing (EMDR)”.
In her latter report, Ms C did not provide an opinion different to her conclusion recorded above. Thus, notwithstanding the wife’s evidence that her mental state interfered with her capacity to deal with the judgment, the psychologist’s evidence does not support this claim.
Evidence adduced in the husband’s case reveals that the wife’s evidence, at [4] of her affidavit filed 13 November 2013 that it was not until she received the telephone call from her solicitor in relation to a mooted costs application that she properly read the judgment, cannot be accepted. Attached to the husband’s affidavit affirmed on 10 December 2013 is correspondence from the wife to the Guardianship Tribunal. In an email dated 24 September 2013, four days after judgment was delivered, the wife provided a brief précis of that portion of the judgment which resulted in an adjustment pursuant to s 75(2) of the Act as a consequence of L probably returning to the husband’s care. I accept the argument advanced by counsel for the husband that the wife’s letter demonstrates that by 24 September 2013 she had read the judgment and understood it sufficiently well to appreciate the effect of the orders and that an adjustment had been made as a consequence, inter alia, of L’s future residence with the husband.
Although the wife’s email dated 21 October 2013 addressed to the Guardianship Tribunal again contains detailed and specific reference to
his Honour’s judgment and demonstrates that the wife had clearly read it sufficiently well to advance arguments based on a specific paragraph at page 17 of the judgment, that correspondence was sent after the 28 day filing period and hence does not indicate that the wife was familiar with the judgment prior to expiration of the appeal period. However, it reinforces that there can be no doubt that weeks before the wife presented this application she was well acquainted with the judgment and its ramifications.
The correspondence attached to the husband’s affidavit also confirms the wife’s evidence that she was actively involved in proceedings undertaken in the Guardianship Tribunal for her to be appointed L’s guardian. This involved meetings, filing material, appearances and correspondence. The wife’s correspondence, under her own hand, is concise and relevant and demonstrates her capacity during the period under discussion to conduct litigation. Although it is accepted that her involvement in the Guardianship Tribunal proceedings will have impacted upon the time she could devote to an appeal, within a week of his Honour’s judgment the wife stopped paid work as a consequence of which she had sufficient available time to attend to this matter. The effect of these findings is that the wife has failed to establish an adequate explanation for her failure to file a notice of appeal in time.
Merits of the Appeal
Although it is not necessary, and in some circumstances may be inappropriate that the proposed grounds of appeal be examined in detail, this exercise having been undertaken by counsel, it was necessary in these reasons to address that issue in some detail.
If granted an extension of time, the wife raises 11 grounds of appeal. In summary, these raise the following issues:
·that a five per cent adjustment in the wife’s favour as a consequence of her initial contributions is manifestly inadequate (grounds 1 and 2);
·failure to give any or sufficient weight to the wife’s introduction of an income producing property and the provision of free accommodation by the wife’s parents for five years (grounds 1 and 2);
·failure to give weight to the wife’s post separation contributions to the maintenance of the property of the parties and her care of the children (ground 3);
·erred in finding that the child L was likely to return to the husband’s care and live with him (ground 4);
·denied the wife procedural fairness by refusing to give leave for her to rely on an affidavit of L’s childcare worker presented at the commencement of the hearing (ground 5);
·erred in making an adjustment in the husband’s favour pursuant to s 75(2) and in so doing gave insufficient weight to those factors that warranted an adjustment in the wife’s favour (grounds 6, 7, 8 and 9 (also a reasons ground)); and
·delivered a result that was manifestly unjust in that the orders were neither just or equitable.
Before these matters are discussed, it is useful to recall that before his Honour the parties agreed that contributions made by and on their behalf during the duration of cohabitation were equal. Secondly, notwithstanding that the wife argued for an adjustment in her favour as a consequence of her initial contribution, namely, her interest in Suburb 3, she did not adduce evidence of its value. Thirdly, as Stephen J explained in Gronow v Gronow (1979) 144 CLR 513, at [519 – 520]:
… disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge’s discretionary decision on grounds which only involve conflicting assessments of matters of weight…
At [93] – [101] inclusive, his Honour addressed the significance of the wife’s greater initial contribution including that the properties she owned “at various periods provided rental income” which supplemented the income earned by the parties [101]. In so doing, he analysed the use to which the wife’s initial contribution was put and evaluated its significance in light of the other contributions the parties made to the townhouse development. Having determined that the townhouse development achieved some $980,000
his Honour concluded that that sum “…reflects the growth in time of the parties’ initial joint capital contribution of $190,000 and the initial mortgage borrowing over a significant period of years” [99]. However, his Honour observed that “[t]he underlying value of the wife’s initial equity is not known nor is the ‘value added’ to the property by reason of the development [96]. Unable to guess what it might have been, his Honour was satisfied an adjustment in the wife’s favour was warranted, which he assessed at five per cent. The effect of this was a 10 per cent differential in relation to the parties’ contributions as at the date of separation which equated to $100,000.
As the background facts outlined above demonstrate, that the parties lived with the wife’s parents at different periods during the marriage is uncontroversial. Reference was made to these facts by his Honour. However, having conceded that contributions made during the marriage were equal, it is not open to the wife to argue on appeal that his Honour erred by failing to give her more than equality of contribution during cohabitation (Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; Metwally v University of Wollongong (No 2) (1985) 60 ALR 68).
It could not be said that the wife has pointed to clear error by the trial judge in relation to the evaluation of her greater initial contribution on the assessment of contributions as at the date of separation.
The procedural fairness challenge concerns his Honour’s refusal to grant the wife leave to rely on an affidavit from L’s case worker presented on the first day of the hearing. Procedural fairness issues might have been more clearly engaged had permission been given (Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175). In any event, the wife did not seek an adjournment so as to afford the husband procedural fairness or, it would seem, seek to introduce this evidence by way of a case in reply.
In relation to post separation contributions, his Honour addressed at some length the parties’ contributions made in the four years between separation and hearing. This included the disposition of property, draw downs on the line of credit, interim distributions ($235,000 to the husband and $123,626 to the wife). By agreement, the interim distributions paid to the husband were included in the property pool for adjustment, as was $110,000 distributed to the wife. In addition, $26,500 withdrawn by the husband from the line of credit was notionally included as his asset.
Although it is clear that the wife sought an adjustment in her favour as a consequence of her maintenance and management of the family home and townhouses, there is no dispute that she lived in the family home to the exclusion of the husband and received the rental income from the villa development and townhouses. Although his Honour did not explicitly offset one against the other, his reference to these factors, along with the other matters which the wife would raise on appeal, shows that these matters as well as the parties’ responsibilities for the children were taken into account when he concluded that “… the detailed post separation history set out above [means that] there is nothing of substance to distinguish either party’s contributions over that of the other. No adjustment is called for” [103].
Although his Honour’s findings of fact in relation to the parties’ contributions and other factors post separation are more extensive than have been recorded here, the level of detail explored by his Honour detracts from rather than assists the challenge which the wife would make.
During submissions counsel for the wife attempted to expand on her challenge that it was not possible to discern a path of reasoning for his Honour’s findings in relation to s 75(2) or the result which he gave. As the transcript of this hearing would reveal, these exchanges did no more than highlight that
his Honour’s pathway of reasoning was clear. It follows that it must be the step from words to figures which is said to be deficient.
As Coleman J explained in Steinbrenner & Steinbrenner [2008] FamCAFC 193 the “leap” from words to figures can be difficult to explain. In this regard, counsel for the husband demonstrated how his Honour’s findings support his ultimate findings as to contributions, s 75(2) and the orders which he made. It is perhaps useful for the wife to appreciate that, merely because someone might on the same facts reach a different conclusion, does not bespeak error.
Including the wife’s assertion that the result is manifestly unjust and neither just nor equitable, she has failed to demonstrate that her proposed appeal is based on sufficiently strong grounds that, to deny her the opportunity to pursue it, is likely to cause an injustice.
Potential Prejudice to the Respondent
The husband deposes that he has commenced a new business which, whilst growing, is not doing very well but enables him to meet his bills. With the property settlement and $80,000 he borrowed from his parents, he has purchased a home in which he, his new wife and her two teenage children reside. He explains that having been involved in proceedings with the wife since 2010 he cannot afford further legal expenses.
Although it is accepted that an appeal would occasion the husband a degree of difficulty, it is not accepted that the matters upon which the husband relies should carry weight in deciding whether or not the wife should be given an extension of time.
Conclusion
Having determined that the wife has not provided sufficient explanation for the delay and her proposed grounds of appeal do not provide a basis upon which one might conclude that her appeal is meritorious, she has not established that the refusal of leave is likely to cause an injustice.
It follows that the wife’s application for an extension of time will be dismissed.
Costs
Counsel for the husband asked that the wife pay the husband’s costs on an indemnity basis. Asked to address the court on what it was that justified an otherwise extraordinary order, counsel could not. There is nothing about the wife’s conduct of this matter that is extraordinary and which would warrant such an order. However, she has been totally unsuccessful and an order for costs in favour of the husband is just.
I certify that the preceding fifty eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan delivered on
12 March 2014.
Associate:
Date: 12 March 2014
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