SCVG and KLD (No 3)

[2015] FamCA 858

FAMILY COURT OF AUSTRALIA

SCVG & KLD (NO 3) [2015] FamCA 858

FAMILY LAW – Stay application combined with an application for disqualification on the grounds of bias – Application for recusal refused but stay granted on conditions – Appeal is in relation to a costs judgment only.

Family Law Act 1975 (Cth)

Aldridge & Keaton (Costs) [2010] FamCAFC 78
Browne & Green [2002] FamCA 791 FLC 93-115
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
Jackson & Balen (2009) FamCAFC 13,
Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681
Johnson v Johnson (2000) 201 CLR 458
Prantage & Prantage [2013] FamCAFC 105
Re JRL; Ex parte CJL (1986) 161 CLR 342

APPLICANT: Mr SCVG

RESPONDENT: Ms KLD

FILE NUMBER: SYC 4380 of 2008

DATE DELIVERED: 15 October 2015

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 13 October 2015

REPRESENTATION

THE APPLICANT: In Person

SOLICITOR FOR THE RESPONDENT: Mr Macphillamy, Macphillamy’s

Orders

1. That the oral application by Mr SCVG for recusal is refused.

2. That the payment by the applicant of any costs determined pursuant to paragraphs 1 and 2 of the orders made on 20 August 2015 is stayed pending the final determination by the Full Court of the Family Court of Australia arising out of the Notice of Appeal filed on 15 September 2015.

3. That the applicant and the respondent forthwith complete all other requirements of paragraphs 1 and 2 of the orders made on 20 August 2015.

4. That subject to any order by a judge of the Full Court of the Family Court of Australia to the contrary, the appeal against the order made on 20 August 2015 is to be consolidated with the applicant’s appeal against the orders of Judge Scarlett made in the Federal Circuit Court of Australia and currently pending before the Full Court of the Family Court of Australia.

5. That the foregoing order forthwith be brought to the attention of the relevant registrars and administrative personnel of the Appeal Division of the Sydney Registry of the Family Court of Australia.

6. That the application in a case filed on 28 September 2015 by the applicant is otherwise dismissed.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: SYC 4380  of 2008

Mr SCVG

Applicant

And

MS KLD

Respondent

REASONS FOR JUDGMENT

1. For my convenience, I shall refer to the parties in these reasons as Mr SCVG and Ms KLD respectively as indeed I did in the more recent costs judgment.

2. On 19 August 2015, I made an order in favour of Ms KLD that Mr SCVG pay a portion of her legal costs arising from a substantive parenting dispute I concluded in February 2015.

3. On 15 September 2015, Mr SCVG filed a notice of appeal seeking inter alia that the August costs order be discharged. On 28 September, he then filed an application seeking a stay (of the August orders). I heard that by electronic means on the morning of 13 October.

4. During the hearing, Mr SCVG sought that I disqualify myself on the basis that I was biased against him having determined the costs orders. In and amongst his notice of appeal, he had set out that “the trial judge erred in law by acting with actual bias…”.  Accordingly, I said that as Mr SCVG was making a formal application for me to recuse myself, I would deal with that first.

5. Mr SCVG represented himself in the stay application and, as an indication that he understood what was required, confirmed that he had read authorities about the nature of the function of the Court even if he disagreed with them. He referred to Aldridge & Keaton (Costs) [2010] FamCAFC 78. He also confirmed that he had a pending appeal from Federal Circuit Court orders in relation to child support and observed that he had been granted a stay there. Thus, I have approached the matter on the basis that although Mr SCVG is without legal representation, he is a man who is well versed in the court process and researches things before committing himself to paper. That can also be seen to some extent (and subject to what I say below) in his notice of appeal.

6. I raise those matters also because the wife who was represented by her solicitor Mr Macphillamy, submitted that there was no evidence provided by Mr SCVG upon which the Court could determine the matter properly. Mr SCVG’s response was that affidavits were confined to facts and this application was a matter of submissions.

7. I deal first with the disqualification application.

8. The submission of Mr SCVG was that it was “common sense” that a judge could not make an unbiased assessment about whether or not the appealed decision was wrong. I did not call upon Mr Macphillamy to respond.

9. The starting point (even if Mr SCVG disagrees) is the rules of Court. Chapter 22 of those rules provides:

   (1)      The filing of a Notice of Appeal does not stay the operation or enforcement of the order appealed from, unless otherwise provided by a legislative provision.

   (2)      If an appeal has been started, or a party has applied for leave to appeal against an order, any party may apply for an order staying the operation or enforcement of all, or part, of the order to which the appeal or application relates.

   (3)      An application for a stay must be filed in the Registry in which the order under appeal was made and be heard by the Judge of the Family Court, Judge of the Federal Circuit Court or Magistrate who made the order under appeal. (my emphasis)

10. There are notations to the rule which are not relevant.

11. The rules cannot however preclude an application for recusal of the type made by Mr SCVG.

12. The principles governing disqualifications have been canvassed many times in various authorities and hardly need restating but for the benefit of Mr SCVG and because one of the grounds of appeal is that my approach to the costs judgment was infected by bias, I shall briefly mention some.

13. In Johnson v Johnson (2000) 201 CLR 458, Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ discussed the grounds upon which a judge should accede to a disqualification application. Their Honours said:

    …the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias … is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide.

14. Their Honours also mentioned that the fictional observer had to consider the application in the “context of ordinary judicial practice”.

15. It is also well known that the observer is to understand that the decision maker is a judge whose training, tradition and oath or affirmation require him or her to discard the irrelevant, the immaterial and the prejudicial.

16. Judges must not simply agree to recusal based upon the request of an unhappy or unsuccessful litigant (Re JRL; Ex parte CJL (1986) 161 CLR 342). In a costs application in particular, it is appropriate for the trial judge to determine the matter because an issue is whether there are justifiable reasons as a result of the substantive proceedings to depart from the legislative starting point that each party should bear their own costs (s 117 of the relevant Act). The same observations can be said of a stay application.

17. In Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 the High Court of Australia referred to the fact that objections should not prevail unless they were based upon substantial grounds for contending that the judge was disqualified from hearing and deciding the case.

18. The grounds of appeal might be one thing but the submission of Mr SCVG was as simple as that a judge could not make an unbiased assessment of not only the case to make a costs order but also to objectively assess the merits of the appeal.

19. Having regard to chapter 22 of the rules and the authorities, I am satisfied that the fictional observer, properly informed, would not consider that anything I had said or indeed done including in the reasons for judgment relating to costs would preclude me from determining the stay application on an objective basis. The oral application for recusal must therefore fail.

20. In relation to the stay application, Mr SCVG had understood what had to be considered. He submitted:

    ·   He did not have to show special or exceptional circumstances;

    ·   The refusal of a stay would render his appeal nugatory (a word he said he had just learned) because if he had to pay anything to Ms KLD, it would be difficult to “extract” it back and he would probably have to bankrupt her to do so;

    ·   The best interests principles were not relevant because they were not affected by the outcome of the stay;

    ·   His 18 grounds (that is to say, the extent and size of his grounds) was indicative of the fact that he was bona fide about the appeal and that it was not just a delaying tactic;

    ·   The bias issue was his genuine view that the costs order should not have been considered by me;

21. Mr SCVG submitted that it was relevant that Judge Scarlett in a child support stay application had granted him a stay pending his appeal.

22. Mr Macphillamy submitted that, as a starting point, there was no evidence provided to support the stay. As stays are generally determined on submissions primarily about the judgment and the grounds of appeal, there is nothing in that.

23. Mr Macphillamy rejected all of the submissions of Mr SCVG. He said Mr SCVG:

    ·   had not addressed paragraph 28 of the reasons for judgment;

    ·   had not discharged the onus on him to justify the stay keeping in mind the principles that Ms KLD was entitled to the fruits of her judgment; and

    ·   was using this as a delaying tactic.

24. It was submitted for Ms KLD that the order I made required agreement about costs and failing agreement, an assessment of the costs and none of that had occurred. Mr SCVG said that either of those would not take any time at all and he indicated his experience with the Sydney registry was that registrar assessments were quickly dealt with. I take it he spoke from experience.

25. Mr Macphillamy “queried” the bona fides of Mr SCVG whatever that means.

26. Neither party was able to tell me the likely delay in the appeal being listed and heard. Each agreed that I should ascertain from the Appeals Division what the time prospects were. Whilst I did make such a contact, because there is also a child support appeal pending and appeal books have been filed, I consider that the appropriate way to deal with the costs matter is to order (subject to any view of a Judge of the Appeal Division to the contrary) that the appeals should be consolidated. Whilst Mr SCVG was overtly opposed to that, it was on the basis that the appeal would take longer. The Court is entitled to consider its resources and that submission has little merit.

27. Before examining each of the matters raised by Mr SCVG, the following is, in my view, the way in which I should approach the issue.

28. Whilst there have been a number of authorities relating to applications for a stay, this Court has generally adopted the position set out in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681. In Jackson & Balen (2009) FamCAFC 13, the Full Court of this Court set out a variety of principles and despite Mr SCVG having mentioned some of them, I think a general synopsis is important here because of what I perceive to be his presumption that he has a right to a stay. Those principles of importance are:

    ·       the onus to establish a proper basis for the stay is on the applicant for the stay;

    ·       it is not necessary for the applicant to demonstrate any “special” or “exceptional” circumstances;

    ·       a person who has obtained a judgment is entitled to the benefit of that judgment;

    ·       a person who has obtained a judgment is entitled to presume the judgment is correct;

    ·       the mere filing of an appeal is insufficient to grant a stay;

    ·       the application must be bona fides;

    ·       a stay may involve a court weighing the balance of convenience including making orders for a stay that provides terms that are fair to all parties;

    ·       a weighing of the risk that an appeal may be rendered nugatory if a stay is not granted; and

    ·       some preliminary assessment of the strength of the proposed appeal should be undertaken.

29. As for the issue about the refusal to grant of a stay rendering the appeal nugatory, I think there is little doubt that this is normally the most important matter and one which will substantially shed light on whether it will be appropriate to grant a stay.

30. It has also been said many times that is difficult to assess the merits of an appeal from the pleaded grounds of appeal or the prospects of success. However,  it is appropriate and helpful to assess whether the applicant for the stay has an arguable case.

31. Whilst Mr Macphillamy doubted or queried the bona fides of Mr SCVG, I would not do so in circumstances where he has methodically set out his “grounds” but also because he has generally appealed against most decisions. Indeed, it was part of the substantive parenting case that the expert social scientist was concerned about that very fact as an indicator of the genuineness of Mr SCVG as a parent. I have little doubt that Mr SCVG believes he is right. On that basis, I would not say he is not genuine in his appeal. That does not mean his appeal has merit.

32. It follows that I do not accept that Mr SCVG has instituted his appeal for delaying purposes. From my knowledge of the history of the litigation as it unfolded in the substantive trial, the various appeals of which I am aware would seem to have been prosecuted when he was called upon.

33. Delay is not the issue here even if the reality is that the very appeal causes that. To a large extent, the delay can be resolved by two determinations. First, the consolidation of the appeals should shorten time but also reduce costs. Secondly, the order I made required the quantification of the costs to be determined. That process should continue so that if Mr SCVG is unsuccessful, the delay for Ms KLD is not exacerbated. Conversely, as Mr SCVG considered that the quantification process was quickly undertaken, there is no prejudice to him. His participation in that process does not give rise to any estoppel or prejudicial matters. Thus, those orders should be made as a condition of the stay.

34. There can be little doubt that the stay is an exercise of discretion. Many facets of that discretionary exercise need consideration and the dot points above lead the way.

35. For example, any delay in the hearing of the appeal is not only relevant but also important to Ms KLD as she is presumed to be entitled to enjoy the fruits of her judgment which is also presumed to be correct. I am also conscious that some appeal hearings result in further delays whilst judgments are considered and prepared. In my view, that is not significantly high in the list of importance here because of two things. First, this parenting dispute has been going on for 10 years or more and whilst that is regrettable because the children have become affected by it (which must be the case as my substantive reasons were not the subject of an appeal), Mr SCVG is a litigant who needs to complete a process and Ms KLD is well accustomed to that approach by him. She will no doubt reluctantly respond as she did to the substantive proceedings. Secondly, the other matters in the dot pointed list are more relevant to the exercise of the discretion. 

36. I reject Mr VD’s submission that a refusal of a stay would render his appeal nugatory. There was nothing I heard nor anything in the substantive proceedings which would support his assertion so put. I did observe that there was another basis relating to his superannuation situation about which I had concern and he made reference to that later in a remark he made about the consequences of obtaining his superannuation money. I canvassed it in the reasons for judgment and I think it appropriate to take it into account. I am not entirely clear what impact such a capital sum payment would have on his superannuation fund which seemed to be the main source of his wealth. I remain uncertain what impact the order might have on his superannuation entitlements generally but it is a matter that I consider I can take into account because of the anticipated size of the order and the purported grounds of appeal include that any costs order at all is a significant departure from the principle in s 117 of the Act.

37. In saying that, I am conscious that appeal courts indicate significant reluctance to interfere with costs judgments (see Browne & Green [2002] FamCA 791 FLC 93-115) but that indeed is what occurred in Prantage & Prantage [2013] FamCAFC 105 in relation to the issue of indemnity costs. To a degree, that is one of the issues here and a complaint is made about it by Mr SCVG.

38. Assessing the merits of the appeal from the current notice of appeal is difficult trying to decipher grounds from complaints. I consider many of the matters pleaded are not grounds at all but no doubt other minds will turn their attention to that detail. It is important that I sift through what Mr SCVG says to ascertain whether I consider that he has an arguable case. He said I had:

    ·failed to apply the Act and settled law relating to costs;

    ·given no weight to two of his late filed affidavits;

    ·used hindsight to determine his parenting application was unrealistic;

    ·erred in describing his submission about costs in parenting cases as an incorrect statement of law;

    ·taken into account matters in the 10 year parenting history of litigation which were not in evidence and had made determinations not on the evidence;

    ·taken the view that he had not “moved on” and this was contrary to the legislative intent of the Act;

    ·erred in saying that the litigation had proceeded without a change of circumstances where the other parties did not argue that;

    ·found him the stronger litigant financially;

    ·erred in saying that there had to be a nexus between the litigation and the costs;

    ·inaptly described the obligations of Ms KLD relating to her completion of the financial statement;

    ·not accepted his evidence about alienation;

    ·conflated his conduct as a parent with his conduct as a litigant;

    ·shown bias; and

    ·departed from the normal standard relating to costs by ordering them on an indemnity basis.

39. In respect of many of the grounds, Mr SCVG faces the problem I described in the first part of paragraph 37 above or alternatively that his claims are challenges to the exercise of discretion.

40. There are some matters about which there may be an arguable case. They are:

    ·his point about costs in parenting cases (including his 10^th ground about a nexus) even though that issue might still be a matter of discretion rather than principle;

    ·that I had looked holistically at the 10 year history and not had evidence upon which to find that his approach to the litigation justified an order for costs; and

    ·that I had determined an order for costs other than on the scale determined by the rules of the Court.

41. I find therefore that the stay should be granted but on the conditions I earlier outlined. I am satisfied that Mr SCVG has satisfied the relevant onus by pointing to matters that may amount to an arguable case and that the inconvenience to Ms KLD is modest in all of the circumstances even though she is entitled to have the fruits of her judgment. The delay should be ameliorated by the consolidation of the appeals as the child support case is already (apparently) in the Court’s listing system. I reject that there would be a nugatory effect on the basis that Mr SCVG argued it but I have some concerns about the matters that I raised concerning his superannuation.

1. Notwithstanding his sometimes strident language and his dogged approach to matters, I find his appeal could be said to have bona fides.

2. Thus, the balance of convenience requires the stay to be granted.

I certify that the preceding forty three (43) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 15 October 2015.

Associate: 

Date:  15 October 2015