SCVG & Estate of KLD (No 2)
[2023] FedCFamC1A 105
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
SCVG & Estate of KLD (No 2) [2023] FedCFamC1A 105
Appeal from: SCVG & Estate of KLD (No 5) [2022] FedCFamC1F 818 Appeal number(s): NAA 258 of 2022 File number(s): SYC 4380 of 2008
SYC 5956 of 2016Judgment of: RIETHMULLER, CAMPTON & CURRAN JJ Date of judgment: 4 July 2023 Catchwords: FAMILY LAW – APPEAL – LEAVE TO APPEAL – Appeal from orders dismissing the appellant husband’s applications to set aside three judgments on the basis of fraud and for leave to seek a variation in a child support assessment out of time – Where the wife is deceased and her estate is the first respondent to the appeal – Whether leave to appeal is required – Primary judge exercised jurisdiction pursuant to s 111 of the Child Support (Assessment) Act 1989 (Cth) – An order dismissing application to set aside a judgment is interlocutory – Leave to appeal required – Appellant failed to demonstrate the wife’s representations of her assets were fraudulent – Materiality of the fraud to the decision – Appellant failed to demonstrate sufficient doubt and substantial injustice – Leave to appeal refused – Appeal dismissed – Appellant to pay the first and second respondents’ costs in fixed sum
FAMILY LAW – APPLICATIONS IN AN APPEAL – Adduce further evidence – Written and oral applications advanced – Where the evidence would not have affected the outcome of the appeal – Majority of evidence available at trial – No new cogent evidence – Applications dismissed
Legislation: Acts Interpretation Act 1901 (Cth) s 15AA
Child Support (Assessment) Act 1989 (Cth) Pt 7, ss 4, 111, 112, 117, 159
Evidence Act 1995 (Cth) s 38
Family Law Act 1975 (Cth) ss 102QB, 117
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 28, 35
Judiciary Act 1903 (Cth) s 55GZ
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10.13
Federal Court and Federal Circuit and Family Court Regulations 2012 (Cth) reg 4.02
Cases cited: Ascot Investments v Harper (1981) 148 CLR 337; [1981] HCA 1
Bienstein v Bienstein (2003) FLC 93-124; [2003] HCA 7
Branir Pty Ltd and Ors v Owston Nominees (No2) Pty Ltd
and Anor (2001) 117 FCR 424; [2001] FCA 1835
Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246; [1981] HCA 20
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67
Clone Pty Ltd Ltd v Players Pty Ltd (In Liq) (2018) 264 CLR 165; [2018] HCA 12
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33
Edwards v Noble (1971) 125 CLR 296; [1971] HCA 54
Fierro & Fierro (No 2) [2022] FedCFamC1F 344
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
Hip Foong Hong v H Neotia & Co [1918] AC 888; [1918] UKPC 65
Hsiao v Fazarri (2020) 270 CLR 588; [2020] HCA 35
Jenyns v Public Curator (Qld) (1953) 90 CLR 113; [1953] HCA 2
Lee v Lee (2019) 266 CLR 129; [2019] HCA 28
McDonald v McDonald (1965) 113 CLR 529; [1965] HCA 45
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Paciocco v Australia and New Zealand Banking Group Limited (2015) 236 FCR 199; [2015] FCAFC 50
Patch v Ward (1867) 3 Ch App 203; [1867] UKLawRpCh 114
Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550; [2016] HCA 22
SCVG & KLD (No 2) [2015] FamCA 687
SCVG & KLD and Anor [2017] FamCAFC 95
SCVG & KLD (No 5) [2018] FamCA 594
SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189; [2007] HCA 35
The Juliana (1822) 165 ER 1560; [1822] EngR 235
Vadisanis & Vadisanis and Anor (2015) FLC 93-671; [2015] FamCAFC 180
Victor & Duncan & Anor (SSAT Appeal) [2015] FCCA 1073
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Number of paragraphs: 150 Date of hearing: 31 March 2023 & 28 June 2023 Place: Heard in Sydney, delivered in Brisbane (via video link) The Appellant: Litigant in person Counsel for the First Respondent: Mr Condon SC and Ms Tabbernor Solicitor for the First Respondent: Macphillamy’s Lawyers Solicitor for the Second Respondent: Sparke Helmore Lawyers ORDERS
NAA 258 of 2022
SYC 4380 of 2008
SYC 5956 of 2016FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR SCVG
Appellant
AND: ESTATE OF KLD
First Respondent
CHILD SUPPORT REGISTRAR
Second Respondent
order made by:
RIETHMULLER, CAMPTON & CURRAN JJ
DATE OF ORDER:
4 JULY 2023
THE COURT ORDERS THAT:
1.The husband’s Application in an Appeal filed 11 April 2023 be dismissed.
2.The husband’s oral application for leave to appeal is refused.
3.The husband’s Amended Notice of Appeal filed 21 February 2023 is dismissed.
4.Within 28 days of the date of these Orders, the husband pay the first respondent’s costs fixed at $49,500.
5.Within 28 days of the date of these Orders, the husband pay the second respondent’s costs fixed at $7,612.54.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym SCVG & Estate of KLD (No 2) has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
RIETHMULLER, CAMPTON & CURRAN JJ:
INTRODUCTION
By an Amended Notice of Appeal filed 21 February 2023, the appellant, Mr SCVG (“the husband”) appeals from orders made by a judge of the Federal Circuit and Family Court of Australia (Division 1) on 26 October 2022, dismissing:
(a)By Order 3, his application for leave to bring a departure application as to child support assessments payable by him for the period 15 July 2011 to 3 December 2015; and
(b)By Orders 1, 2 and 4, his applications to set aside three perfected judgments on the ground of fraud, those being the judgments of:
(i)Cronin J on 20 August 2015, that the husband pay a proportion of the costs of the wife incurred in a parenting proceeding;
(ii)Judge Scarlett on 15 April 2015, dismissing an appeal of the husband from a decision of the Social Security Appeals Tribunal (“SSAT”); and
(iii)The primary judge on 14 September 2017, dismissing the husband’s application for review of a costs assessment made by a delegated judicial officer.
The estate of the wife (the late Ms KLD (“the wife”), who passed away in 2019) is the first respondent and the Child Support Registrar is the second respondent to the appeal. They each resist the appeal.
As was identified during the hearing of the appeal:
(a)It is uncontroversial that leave is required to appeal from the primary judge’s refusal to grant the husband leave to pursue child support departure relief (s 28(3)(b) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCOA Act”)); and
(b)If the primary judge’s orders dismissing each of the husband’s applications to set aside the three perfected judgments were interlocutory rather than final orders, leave would be required to appeal from those orders (s 28(3)(e) of the FCFCOA Act and reg 4.02(1)(a) of the Federal Court and Federal Circuit and Family Court Regulations 2012 (Cth)). We invited submissions on this topic during the hearing of the appeal.
Although the controversies relating to the applications to set aside the challenges to the three perfected judgments were resolved on a final basis, for the reasons that follow we consider that each decision did not finally determine the parties’ rights and that the orders subject to challenge were interlocutory.
For the reasons that follow, the oral application for leave to appeal is refused, the Amended Notice of Appeal filed 21 February 2023 is dismissed, and the husband is ordered to pay the costs of both the first respondent and the second respondent.
BACKGROUND
The first judgment that the husband sought to have set aside in the proceedings being the subject of this appeal was that of Cronin J on 20 August 2015 (SCVG & KLD (No 2) [2015] FamCA 687), where Cronin J ordered that the husband pay a proportion of the wife’s costs in a parenting proceeding.
The wife filed a Financial Statement on 16 March 2015 which listed three family companies in which she held shares. The value of the shares held in two of those proprietary limited companies, in which other family members also held shares, was described by the wife as “nominal”, while the value of the four shares she held jointly with two other family members in the third proprietary limited company was noted as “nil”. In her Financial Statement, the wife also deposed that she had debts of “$650,000+”, about which she said at paragraph 4 of her affidavit of the same date:
My mother... has paid in excess of $650,000 on my behalf in legal fees to enable me primarily to defend proceedings commenced by [the husband] since 2005. I currently owe my counsel and my solicitor $200,000 in respect of the substantive proceedings which I will also need to borrow from my mother. I intend repaying my mother these amounts over time and as my financial circumstances improve.
When making the costs order, Cronin J had regard to the wife’s Financial Statement, which his Honour described as requiring “[the wife] to subjectively set out [her finances] as she saw things”: at [39]. Cronin J also noted that the evidence “d[id] no more than indicate what [his Honour] consider[ed] to be an equivocal position about who was covering [the wife’s] costs”: at [87]. Cronin J proceeded on the basis that neither party was impecunious and that both parties could contribute to their costs, saying “even if [the wife] had significantly greater financial resources than [the husband], that alone is not a basis not to make a costs order” (at [27]), noting that the husband had “unnecessarily incurred costs” in circumstances where:
43.… the pursuit of orders in the terms sought by [the husband] entitled the Court to say that there are doubts about his bona fides. The way in which he went about the proceedings accusing [the wife] of alienating the children without any foundation in the context of ten years of litigation enables me to find that [the husband] intended to pursue what he wanted having not obtained that outcome in the previous proceedings. That persistence, caused [the wife] significant costs by having to participate in proceedings which were really about why the children had adopted a position of reticence to have a relationship with [the husband].
The husband’s appeal against the costs orders made by Cronin J was dismissed: see SCVG & KLD and Anor [2017] FamCAFC 95. The Full Court, in dismissing that appeal, confirmed that Cronin J “was not obliged to undertake [a] close examination of [the wife’s] circumstances” (at [77]), with May J noting that “it was the husband’s conduct that largely formed the basis of making a costs order, and not the financial circumstances of either party”: at [184].
In the proceedings before the primary judge, the husband alleged that the wife’s representations as to the value of shares and debts for legal fees were fraudulent. The wife duly listed the companies in her Financial Statement and identified that they were the source of her income. The first respondent accepted that the wife’s interests in the various companies had considerable value. This was not a case where the wife failed to disclose her title to the company shares. In an affidavit addressing these issues, the wife explained that she took the view that her interests had limited value insofar as she was unable to deal with those interests without the consent of other family members (as recorded by the primary judge at [62]).
The primary judge considered the claim of the wife that her recording of the values of nil and nominal on her Financial Statement “reflect[ed] [her] understanding of [her] financial position as [she] saw things at that time” (at [54]), as well as the other facts and circumstances relied upon by the husband. The primary judge concluded at [66] that the “enmeshing of … interests with other family members, and [the] perceived inability to deal with the interests without the acquiescence of others provide reasonable grounds for [the wife] to consider that the interest lacked value”.
The husband also alleged that the representations with respect to debts for legal fees were fraudulent, relying upon two facts. First, a statement of the wife made to the SSAT in 2012 that her mother’s payment of her legal fees “at [that] moment [was] a gift”: at [70]. Secondly, an affidavit of the wife filed on 27 November 2018, where the wife acknowledged that she had described the legal fees met by her parents as a gift whilst her father was alive and as a loan thereafter, stating her understanding was that “one way or another, [she] will end up paying for [her] legal fees … most likely through a reduction in [her] inheritance”: at [74].
The primary judge was not persuaded that the wife had knowingly made false statements with respect to the legal fees “as opposed to a mere misapprehension on her part”, forming the view that the statements were “equally understandable as confusion or misapprehension on [her] part… particularly in the context of the monies being provided by family members”: at [81].
Thus, the primary judge was not persuaded that the conduct of the wife amounted to fraud, nor that it was sufficiently material to the costs decision of Cronin J to justify setting aside the costs orders. Indeed, these representations appear to be in the category described by Cairns LJ in Patch v Ward (1867) 3 Ch App 203, where his Lordship said (at 207) that:
… the insisting upon rights which, upon a due investigation of those rights, might be found to be overstated or overestimated, is not the kind of fraud which will authorize the Court to set aside a … decision.
The judgment of Judge Scarlett
On 7 March 2013, the SSAT made a decision increasing the husband’s child support assessment payable to the wife. The husband appealed the decision to the Federal Circuit Court of Australia (as it was then known), which appeal was dismissed by Judge Scarlett on 15 April 2015: see Victor & Duncan & Anor (SSAT Appeal) [2015] FCCA 1073. An appeal from that decision of Judge Scarlett was dismissed by the Full Court on 24 May 2017: see SCVG & KLD and Anor [2017] FamCAFC 95. Neither of the appeals alleged fraud but were pursued, relevantly to these proceedings, on the basis that the SSAT had failed to make enquiries into the wife’s affairs.
In the proceedings before the primary judge, the husband did not allege that the wife perpetrated a fraud before Judge Scarlett, rather, she had misled the SSAT. The representations that the wife made to the SSAT, which were relied upon by the husband as the basis of the fraud claim, were in similar terms to those made in the wife’s Financial Statement before Cronin J (that her shareholdings in family companies had a nominal or nil value). The husband failed to establish that the wife’s representations to the SSAT were a fraud for the same reasons as those with respect to the Cronin J matter: at [113]–[114].
The SSAT decision was not the subject of an application for judicial review before the primary judge based upon claims of fraud. The primary judge noted at [98] that the wife had not made any representations directly to Judge Scarlett (as those proceedings were an appeal on points of law which did not receive evidence from the wife directly).
As a result, the primary judge concluded that the husband could not succeed on the application to set aside the judgment of Judge Scarlett for fraud: at [108].
The child support application
Pursuant to Pt 7 of the Child Support (Assessment) Act 1989 (Cth) (“CSA Act”), the husband sought leave to bring a departure application with respect to the child support assessments made for the period of 15 July 2011 to 3 December 2015. The child support assessments for the period 15 July 2011 to 31 December 2014 were altered by the SSAT decision of 7 March 2013, which was the subject of the appeal heard by Judge Scarlett referred to above. There were a number of child support assessments in this period, although the later assessments were quite low (from 1 January 2015 to 13 May 2015, the assessment was $32.43 per week and from 14 May 2015 to 3 December 2015, it was $36.03 per week).
On 1 May 2018, the Administrative Appeals Tribunal (“AAT”) made a determination setting the husband’s child support from 4 December 2015 at a much lower rate than that set in the earlier assessments following the SSAT determination. The husband sought leave to apply for a departure from the earlier assessments in order to have them set at the same rate as that set by the AAT in the 2018 departure decision.
As this application was brought more than 18 months after the relevant period, the husband required leave pursuant to s 111(1) of the CSA Act. The relevant considerations for such leave are contained in s 112(4) and s 112(5) of the CSA Act, which include any “hardship” to the husband and the other party and “any other relevant matter”. Whether the husband had shown a prima facie case that the assessment was not “just and equitable”, as that term is used in s 117 (the departure provision) of the CSA Act, would ordinarily be a relevant matter.
In his pleadings (which are Annexure D to the primary judge’s reasons), the husband relied upon three claims: first, the wife’s representations concerning the value of her interests in family companies made on 1 August 2016; second, her claim made on 1 August 2016 that she had a debt to her mother for legal fees; and third, the child support assessment set by the AAT in 2018. The primary judge noted at [115]–[118] that the claim pleaded with respect to child support relied upon representations that occurred after the relevant assessment was made by the SSAT in 2013, and therefore could not have affected the SSAT’s considerations. The claim that the wife’s representations amounted to a fraud on the SSAT were rejected for the same reasons with respect to the Cronin J judgment. In any event, the husband did not appear to have addressed the relevant factors in s 112 of the CSA Act.
The dismissal judgment claim
On 14 September 2017, an application by the husband to review various decisions of registrars with respect to the assessment of costs was dismissed by the primary judge when the husband failed to appear on that day.
As noted by the primary judge (at [122]), the review application was listed on 14 September 2017 to meet the husband’s convenience. The husband had sent emails on 11 September 2017 to the wife’s solicitor and a Court email address, attaching an application to adjourn the proceedings. The Court email address was not one used by Court staff for receipt of email correspondence. As a result, the husband received no response (unlike his previous dealings with the registry). The husband did not file the application documents electronically through the Court internet portal, nor did he deliver them to the registry. The husband understood, by 13 September 2017, that no adjournment had been granted: at [127]. On 13 September 2017, the husband sent further emails to the misidentified email address (from which he had received no response in the past) requesting leave to appear via telephone, and forwarded a copy of this request to the wife’s solicitor the same day. Within the email to the wife’s solicitor, there was a reference to the husband’s earlier adjournment application documents of 11 September 2017 which had not been filed: at [129].
When the matter was called in Court on 14 September 2017, the husband failed to appear. The wife’s solicitor did not advise the primary judge of the emails from the husband seeking an adjournment, as no adjournment had been granted and no adjournment application had been filed. The primary judge made orders on that date dismissing the husband’s review application as a result of the husband’s failure to appear. This decision was not the subject of an appeal by the husband.
An application to set aside the orders dismissing the husband’s review application was later heard by the primary judge and dismissed on 8 August 2018: see SCVG & KLD (No 5) [2018] FamCA 594. In that judgment, the primary judge considered the factors raised by the parties that were relevant to the exercise of discretion and refused the husband’s application. This decision was also not the subject of an appeal by the husband.
In the substantive judgment subject to this appeal, the husband sought to have the decision of the primary judge on 14 September 2017 set aside on the grounds of alleged fraud by the wife’s solicitor, due to the solicitor’s failure to advise the Court that the husband had sent emails to him seeking an adjournment. The primary judge concluded that though there was a professional obligation upon the solicitor to inform the Court of his receipt of the husband’s correspondence, when the Court was requested to act upon the husband’s non-appearance, his Honour was not persuaded that this amounted to a fraud on the Court in the circumstances of the case.
LEAVE TO APPEAL
In Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246, the High Court set out that the test for determining whether an order is final or interlocutory is whether the order finally determines the rights of the parties as a matter of law, not as a matter of the practical consequence of the order. The High Court in Bienstein v Bienstein (2003) FLC 93-124 (at [25] per McHugh, Kirby & Callinan JJ) held that a judgment or order is not final where “the unsuccessful party could make a further application for the same relief, even though such an application might have very little prospect of success”. That is the circumstance here. The right to apply to set aside a final judgment remains, even after an application is dismissed, if new evidence comes to light that founds a subsequent application.
We are accordingly satisfied that leave is required for the husband to appeal from Orders 1, 2 and 4 made on 26 October 2022 pursuant to s 28(3)(e) of the FCFCOA Act.
Absent objection, insofar as it was necessary, the husband sought and was granted leave during the hearing of the appeal to make an oral application for leave to appeal. The parties’ agreed position was that the oral application for leave to appeal would be heard at same time as appeal.
To obtain leave to appeal, the husband must demonstrate that the decision of the primary judge was “attended by sufficient doubt to warrant it being reconsidered by the Full Court and [that] substantial injustice would result if leave were refused, supposing the decision to be wrong” (Medlow & Medlow (2016) FLC 93-692 at [57] (emphasis in original)).
APPLICATIONS IN AN APPEAL
The husband has made three applications to adduce further evidence on the appeal.
The first application to adduce further evidence is set out in his Amended Application in an Appeal filed 9 March 2023. The relevant part of that application is as follows:
1. Grant leave to husband … to adduce further evidence, being:
A -ASIC and ASX documents relating to [AC Ltd], including ASX document announcing that [AC Ltd] listed in 2006 for $5.3 million, Change of Director’s shareholding form lodged by [the wife’s brother] (made public by the ASX) reporting that on [...] 2008 he sold 7.3 million [AC Ltd] shares for [over AUD$4 million] which he had held “indirectly” for the [the wife’s] family, and the “100 years of sandstone restoration with [AC Ltd]” document.
B -Application in a Proceeding and supporting Affidavit lodged for filing with the [City VV] registry on 15 February 2022 and email communications related thereto.
C - Affidavit of [the wife] filed I 6/3/15 before Cronin J for indemnity costs application and related Written Submissions claiming estimated costs of $350,000, [the wife’s solicitor’s] Itemised Costs Account filed 23/8/16 disclosing solicitor’s costs of $72,382 and subsequent cost assessment order of [a Registrar] dated 21/4/17 for $67,959.
2. Grant leave to issue a subpoena to [the wife’s brother] in the form attached hereto.
(As per the original)
The attached form of subpoena would require the wife’s brother to attend Court and give evidence at the hearing of the appeal. That form of subpoena would also require the wife’s brother to produce a document described as “Change of Director’s shareholding form lodged by [the wife’s brother] with the ASX reporting that on [...] 2008 he sold 7.3 million [AC Holding Ltd] shares for [over AUD$4 million]”.
Section 35 of the FCFCOA Act affords the Court a discretion to admit further evidence on appeal. The power “exists to serve the demands of justice” (Hsiao v Fazarri (2020) 270 CLR 588 at [43]) and is remedial in nature. The High Court at [109] in CDJ v VAJ (1998) 197 CLR 172 noted that “its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous”. Although there is no fixed rule with respect to applications to adduce further evidence on appeal, the High Court said at [116] that “where the evidence has been deliberately withheld, the failure to call it will ordinarily weigh heavily in the exercise of the discretion.” Other relevant considerations include whether the evidence could have been obtained with reasonable diligence, the weight of the further evidence and whether it would have been likely to affect the outcome of the trial.
The documents identified in paragraph 1A of the husband’s Application in an Appeal filed 9 March 2023 appear to go to the value of one of the entities in which the wife indirectly held an interest. The subpoena sought is to be directed to the wife’s brother, a witness who gave evidence at the trial before the primary judge and who was involved in the operation of the business (AC Ltd) to which the documents relate.
The husband sets out in his supporting affidavit filed 9 March 2023that he made a deliberate decision not to exhibit those documents to his trial affidavit. It was not ultimately an issue in the trial that the various entities in which the wife had interests were not of nil or nominal value (at [52]). It appears that the husband wishes to rely upon this evidence to argue that the wife’s brother was not providing honest answers when he stated in evidence that he could not recall speaking to the wife about these issues. Such an argument was open to the husband at the trial of the matter and, at best, only leads to the proposition that the wife’s brother’s evidence is not reliable on this issue. Such a conclusion does not afford evidence as to the central issue in the proceedings, being the wife’s state of mind at the relevant time. This evidence would have affected the outcome.
The documents identified in paragraph 1B of the Application in an Appeal filed 9 March 2023 are documents he believed he lodged with the registry, but that were not in fact lodged due to the husband sending them to an email address that was not a document lodgement email address.
The relevance of these documents has always been obvious as they go to whether the husband attempted to apply for an adjournment of the 14 September 2017 hearing that led to his application with respect to costs assessments being dismissed. However, it was accepted in the primary judge’s reasons that the husband had sent emails as described, but to the wrong email address. Thus, in this respect, the documents do not go to a fact that was in dispute. The documents have been in the husband’s possession throughout the proceedings. At its highest, the husband’s evidence is that he “accidentally failed to include copies” of the documents in his trial material. The husband was granted leave by the primary judge to adduce further evidence after the trial which evidence is an annexure to the order of 23 February 2022 which granted him leave.
This additional evidence would not be cogent evidence in the context of the proceedings.
The documents identified in paragraph 1C of the husband’s orders sought relate to the quantum of costs sought by the wife before Cronin J prior to his Honour giving judgment on the costs issue (one of judgments the husband sought to set aside for fraud).
The husband contends that these documents, when compared to the amount of the costs subsequently claimed in an itemised costs account (and then the slightly reduced amount assessed by a registrar), show that the wife and her solicitor made grossly inflated claims as to the amount of the wife’s costs before Cronin J. The husband argues that this evidence goes to prove that the solicitor, as he put it, “had ‘form’ in such fraudulent conduct” and is therefore relevant to the claim that the solicitor was acting fraudulently.
The husband has had possession of copies of these documents throughout the proceedings. We are not persuaded that the documents are relevant for the purpose that the husband identifies, for two reasons. First, it is common for costs estimates to be far higher than the amounts calculated on a formal assessment under the Federal Circuit and Family Court (Family Law) Rules 2021 (Cth). That there is a significant difference between the two does not prove fraud on the part of the solicitor. Secondly, the solicitor’s conduct in this regard, even if proved, is not sufficiently similar to the conduct in question at the trial so as to be of any real weight, if the documents were to be admitted.
Whilst, generally speaking, material that was available to be used at the hearing should not be readily admitted on appeal, the whole of the circumstances of the particular case must be considered. The need for finality of litigation must also be borne in mind as an important consideration, as the High Court identified in Coulton v Holcombe (1986) 162 CLR 1, saying (at 7):
It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish.
It is also relevant to have regard to the nature of these proceedings as a whole, the nature of the evidence sought to be led on the appeal, its weight and relevance to the issues, and the reasons that it was not relied upon at trial.
Having regard to those considerations, we were not persuaded that the husband should be granted leave to adduce this further evidence in the appeal and therefore dismissed the Application in an Appeal filed 9 March 2023 at the hearing of the appeal.
At the appeal hearing on 31 March 2023, the husband made an oral application to adduce further evidence with respect to the dealings of the wife and her family with respect to AC Ltd. It was evidence that was available to him at the time of the trial. For the same reasons with respect to paragraph 1A of the husband’s Application in an Appeal filed 9 March 2023, we dismissed the oral application.
Following the hearing of the appeal, the husband filed a second Application in an Appeal on 11 April 2023 seeking leave to adduce further evidence and make further submissions concerning the date upon which he obtained the transcript of the proceedings before the primary judge on 14 September 2014 (when he alleges that the wife’s solicitor acted fraudulently in failing to disclose his email seeking an adjournment). The husband pressed his application to make further submissions even if he was not permitted to lead the further evidence.
The husband’s Application in an Appeal filed 11 April 2023 was heard on 28 June 2023. The second respondent was excused from participating in that hearing.
The date the husband obtained the transcript was always known to the husband who could have led evidence of it before the primary judge. There is no adequate explanation of his failure to lead the evidence. The evidence would only affirm what appears at [156] of the reasons of the primary judge that the husband’s access to the transcript was ‘subsequent’ to his unsuccessful application to set aside the primary judge’s orders dismissing the relevant application for non-appearance. The issues are the subject of Ground 24, which had already been addressed in argument at the hearing of the appeal. In submissions, the husband said that even without this further evidence there was unchallenged oral evidence on the issues in the transcript. Thus the further evidence is not required. It seems that this application was, in substance, to seek to make submissions on Ground 24, the substance of which had already been made at the hearing of the appeal. We therefore dismiss this Application in an Appeal.
THE GROUNDS OF APPEAL
In his Amended Notice of Appeal filed 21 February 2023, the husband relies upon 25 grounds of appeal. Many of the grounds were articulated by way of prolix narrative and did not plainly identify themselves as asserting an error of law, or of fact, or of the proper exercise of discretion. As many of the grounds overlap, it is convenient to group the relevant grounds of appeal by reference to established appellate principles.
Errors of law – fraud and the standard of proof
Grounds 2, 5, 7, 8, and 22
As recorded, the primary judgment was concerned with whether three previously perfected judgments should be set aside on the basis that they were obtained fraudulently. The primary judge’s statement of the relevant law was set out at [19]–[44]. Many of the husband’s grounds were directed to whether the primary judge identified and applied relevant principle. These grounds provided:
2.The primary judge erred by applying the wrong standard of truthfulness or test of deception. The primary judge erroneously reasoned that for SSAT, AAT and Court proceedings challenging the truth of financial statements made to the CSR, the legislature intended that it is sufficient for a party and the tribunal to apply a test of deception using a lower standard of truth, of how she says “she saw it at the time”, rather than the test authoritatively set out in s159 of the [CSA Act] as applying to the underlying statements made to the CSR “ In a prosecution of a person for an offence against subsection (1), if, having regard to (a) the person’s abilities, experience, qualifications and other attributes; and (b) all the circumstances surrounding the alleged offence; the person ought reasonably to have known that the statement to which the prosecution relates was false or misleading in a material particular, the person is to be taken to have known that the statement was false or misleading in a material particular.
…
5.The primary judge erred by reasoning that “material I advanced that the [wife] was in an even stronger financial position was not germane to the conclusion reached by Cronin J who had already found in favour of [the husband] in respect of [the wife’s] financial circumstances”, and even if it was not germane, by HCA authority McDonald, it was not necessary for it to be germane for the Cronin J cost order to be set aside for fraud,
…
7.The primary judge erred by failing to make the binary decisions he was bound to make based on the evidence on the balance of probabilities in order to decide the case, of whether [the wife’s] shares in family companies were worthless, whether she believed they were worthless, whether she had the liability to her mother, and whether she believed she had that liability, instead the judge relied on finding that I failed to “prove” the negative of these four things when on the whole of the evidence it was not open or glaringly improbable on the balance of probabilities that her shares in family companies were worthless, that she had an actual liability to her mother and that she believed those things..
8.The primary judge erred by relying on a NSWSC case not binding or persuasive as it contradicts the High Court’s clearly stated principles in McDonald and Clone that materiality and determinative effect of the fraud is not required as a pre-condition for setting aside, and on misquoting Williams J’s reasoning in Cabassi that the fraud must have misled the court in a manner material to the outcome the trial, when Williams J did not refer to materiality to the outcome and in any event, such reasoning was specifically rejected by the majority of the High Court in McDonald saying: “... such considerations do not apply to surprise, and even less so to questions of fraud.. a judgment tainted and affected by fraudulent conduct is tainted throughout, the whole must fail”
…
22.The primary judge erred by reasoning that the solicitor’s conduct was not part of an effort to effect a deception upon the court by [the wife] and circular reasoning that it was malpractice not amounting to fraud as, in light of his reasoning that despite [the wife] being bound by the conduct of her solicitor because the conduct was not demonstrated to be at her instigation, and secondly, even if the failure by the solicitor was to be characterised as malpractice, in Clone it was observed that the capacity to set aside for fraud was “never suggested to extend to malpractice not amounting to fraud in the course of proceeding.” , in circumstances where he knew that [the wife] was terminally ill and not in attendance, so could not be in a position to “instigate” anything. Also he erred in the circular reasoning of Clone referring to malpractice not amounting to fraud as a reason to decide there is no fraud as it is that very question of whether there is “fraud” that he had to determine.
(Emphasis in original)
It is convenient to revisit the relevant principles applicable to a challenge to a perfected judgment contended to have been obtained by fraud.
Fraud goes to the heart of the administration of justice within the judicial process. It is therefore a ‘tolerable’ exception to finality, in that it is inconsistent with the Court’s character in administering justice. It has therefore been recognised that it is within this Court’s powers to set aside its own orders obtained by fraud (for example, as articulated in r 10.13(2) of the Rules, and considered by the Full Court in Vadisanis & Vadisanis and Anor (2015) FLC 93-671 at [31]– [39]).
In Clone Pty Ltd v Players Pty Ltd (In Liq) (2018) 264 CLR 165, the High Court described the scope of this power as “significantly circumscribed” (at [52]) in that it is contingent on proof of actual fraud in the common law sense (at [54]). So that it is clear, what is commonly understood by the lay person as fraudulent conduct is not the same thing as obtaining a judgment by fraud. Rather, what is required to be shown is:
55.…actual positive fraud, a meditated and intentional contrivance to keep the parties and the Court in ignorance of the real facts of the case, and obtaining that decree by that contrivance. Mere constructive fraud not originating in actual contrivance, but consisting of acts tending possibly to deceive or mislead without any such intention or contrivance, would probably not be sufficient…
(Clone v Players, citing Patch v Ward)
(Emphasis added)
The narrow scope of common law fraud does not extend to misconduct, accident, surprise or mistake. It does not extend to equitable fraud, lack of frankness or conducting a proceeding with an ulterior motive. Except in exceptional cases, it does not extend to fraud by perjury of a witness or witnesses acting in concert: see SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189 at [16].
The contended fraud must have “tainted and affected” the previous proceedings: see Hip Foong Hong v H Neotia & Co [1918] AC 888, cited with approval in McDonald v McDonald (1965) 113 CLR 529. A judgment will only be affected by fraud if the fraud is “material”: see Wentworth v Rogers (No 5) (1986) 6 NSWLR 534.
To the extent that the challenge was made, we are not persuaded that the primary judge’s articulation of the law is out of step with the principles enunciated by the High Court and by other superior courts as being relevant to the question of whether a judgment was obtained by fraud.
Having regard to the above, the following grounds can be dealt with briefly:
(a)Ground 2, which seeks to supplement the test for fraud (as established by authority and considered by the High Court in Clone v Players) with the terms of the offence established by s 159 of the CSA Act, must be rejected;
(b)Grounds 5 and 8, which each assert that any fraud is sufficient to require the earlier judgment to be set aside, regardless of the materiality of that fraud to the determination, are inconsistent with authority;
(c)Ground 7, which attempts to convert the matters for which he had the onus of proof into matters upon which the wife would bear the onus, is inconsistent with clear authority;
(d)Ground 22, which seeks to challenge the law set out in Clone v Players, being a recent and binding decision of the High Court, cannot succeed.
Each of Grounds 2, 5, 7, 8 and 22 are without merit.
Ground 14
14.The primary erred by failing to properly exercise the court’s equity jurisdiction by failing to consider the real justice in the case, which case, by findings he made in January 2018 is related to the integrity of the administration of justice; by his reasoning at 61 that the underlying [...] properties owned by her family companies " do not constitute property actually held by [the wife], and are of interest only insofar as they speak to the value of [L Pty Ltd] and [the wife’s] understanding of such; the correct judicial approach being as described in Jenyns by Dixon CJ, McTieman and Kitto JJ as follows: "A court of law works its way to short issues, and confines its views to them. A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case .... Thus in Meagher, Gummow and Lehane, in commencing the tour de force that is Chapter 4 entitled “Equitable Estates and Interests”, the authors say: "An examination of the nature of equitable estates and interests demonstrates that in equity there is no system or hierarchy of property concepts which, once comprehended, is a sufficient guide for all purposes and at all times.”
(Emphasis in the original)
To the extent that the wife was aware of the properties owned by the entities, the husband asserts that this is a factor that went to the determination of whether her statements were fraudulent. This argument is dealt with under Ground 1 below.
In the balance of this ground, the husband refers to general statements about the law of equity in the context of an unconscionable conduct case. The passage cited from Jenyns v Public Curator (Qld) (1953) 90 CLR 113 is a quote from The Juliana (1822) 165 ER 1560 at 1567. The Juliana is an admiralty judgment refusing to enforce the terms of a written agreement between a seaman (presumed to be illiterate) and the owners of a vessel that was lost when it ran aground on the Kentish Knock. The passage cited refers to the general proposition that, in cases concerning conscience (in the sense considered by the law of equity), the whole of the circumstances must be considered: see generally the discussion in Paciocco v Australia and New Zealand Banking Group Limited [2015] FCAFC 50 at [259]–[282]. The principles of equity do not provide for an unprincipled, free-ranging review of any issue.
This ground demonstrates no error on the part of the primary judge in the present proceedings.
Ground 23
23.The primary judge erred by not assessing the justice of the case, pursuant to Briginshaw, where Rich J described it as a comfortable satisfaction that the tribunal had reached both a correct and just conclusion”; this requires the following factors to be considered, which would lead to all my 4 applications succeeding:
-The AAT decision in 2018 vindicated my position from the start in 2012 that the CSR should have investigated [the wife’s] false financial statements, and when the CSR refused to do so, the SSAT should have done so; when it failed to do so, Judge Scarlett should have ruled that the SSAT had a duty to investigate in the interests of justice and allowed my appeal as he said he relied on the evidence before the SSAT. Had that occurred [the wife] could repeated the same fraud in the Cronin cost application, and substantial legal and court costs would be saved.
(Emphasis in the original)
The husband’s Summary of Argument filed 24 February 2023 adds nothing to the terms of this ground. To the extent that the husband argues the primary judge failed to apply the correct standard of proof, there is nothing that the husband points to in the judgment to support such a claim. The husband’s complaint that Judge Scarlett did not find that the SSAT had a duty to investigate was previously ventilated before the Full Court, which dismissed the appeal against Judge Scarlett’s orders: see SCVG & KLD and Anor [2017] FamCAFC 95 at [15], [119] and [128]. The subsequent administrative decision of the AAT (concerning child support assessments) did not create an issue estoppel nor bind the primary judge in any other way.
Ground 23 is without merit.
Procedural Fairness
Ground 19
19.The primary judge erred by denying me procedural fairness by not dealing with my Application filed 7 days after the trial seeking to provide evidence which was accidentally omitted during the trial after being instructed by his Associate to file such application “for consideration” and was “under consideration by registrar”, which evidence included an affidavit (sworn by my partner and sent to the court attached to an application for adjournment on 11/9/17, 3 days before the relevant court date of the email fraud), in circumstances where I contended this was critical to the medical evidence of why I could not attend court on the relevant court date and he acknowledged that he needed to check that point and would carefully check my evidence and “pay particular attention to that in particular”, and when there could be no prejudice to the respondents by determining my application as he took 8.5 months to deliver his reserved judgement.
(Emphasis in the original)
The husband’s contentions under this ground are that the primary judge failed to deal with an application, after the conclusion of the trial, to adduce evidence as to his partner’s medical condition at the time that he failed to appear on 14 September 2017 or, alternatively, that the primary judge failed to have regard to that material.
At the end of the trial, the husband disputed submissions by counsel for the first respondent that the evidence was to the effect that the husband “just didn’t feel like coming down to [City VV]” for the hearing on 14 September 2017: see Transcript 10 February 2022, p.78 lines 5–8. The primary judge confirmed that he had ordered a transcript of the evidence at the trial and that he would pay attention to the evidence with respect to that issue: see Transcript 10 February 2022, p.78 lines 19–24.
On 23 February 2022, the primary judge made orders allowing the husband to rely upon the additional evidence referred to in this ground of appeal (annexing a copy of the material to the orders). Thus, there is no doubt that the material formed part of the evidence and that the primary judge was aware of the material.
The additional evidence referred to in this ground of appeal was not the only evidence on this issue that was before the primary judge. In cross-examination at the hearing before the primary judge, the husband admitted that he was a “relatively experienced litigant in the Family Court in 2017”, that he knew that one only obtains an adjournment if an order is made, and that if no adjournment order had been made he was required to attend at the hearing: see Transcript 9 February 2022, p.21 lines 33–41. The husband agreed in cross-examination that he could have afforded a plane ticket but made no enquiries of airlines nor bus companies. His only explanation for his non-appearance appears in following exchange:
[COUNSEL FOR THE FIRST RESPONDENT]: There was no reason why you could not have caught a flight from Sydney to [City VV] to attend court; correct? ---
[THE HUSBAND]: When you say there was no reason, there was a reason, and that was because my partner and I wanted to go together, and she couldn’t go. That’s why I wasn’t going to fly by myself.
(Transcript 9 February 2022, p.22 lines 9–12)
The material submitted after the hearing was evidence that the husband’s spouse had a medical condition at the time and was unable to drive the husband to City VV.
The primary judge made the following finding with respect to the husband’s non-appearance on 14 September 2017:
126By his pleadings [the husband] asserts that his partner, who was to drive him to [City VV] for the court proceedings, had fallen ill and was unable to drive. In his oral evidence he accepted that at that time he was not impecunious, and that there were airlines operating between Sydney, where he lived, and [City VV], where the proceedings were listed. His identified impediment to using such an option was that he did not want to fly to [City VV] without his partner. That is, it was expressed as a question of mere preference.
The findings of the primary judge were clearly open, and indeed appear to be the only reasonable inference on the evidence before his Honour.
Ground 19 is without merit.
Evidentiary Rulings
Ground 4
In substance, this ground complains that the primary judge declined to grant the husband leave to cross-examine witnesses that he himself had called in his case. It is articulated in the Amended Notice of Appeal as follows:
4.The primary judge erred by not directing witnesses to answer questions on matters he had ruled they had knowledge of and were of central relevance and refusing my application to ask leading questions,
(As per the original)
On the first occasion, the husband sought leave pursuant to s 38 of the Evidence Act 1995 (Cth) to cross-examine the wife’s brother about whether members of the wife’s family owned part of an entity known as AC Ltd. The husband sought leave to cross-examine the wife’s brother about his lack of recollection in respect to the wife’s family allegedly owning a substantial part of AC Ltd, which the husband alleged was of significant value and had been listed on the stock market around 10 years earlier in 2006. Noting that the husband did not advance claims regarding AC Ltd in his pleadings, the primary judge concluded that none of the three categories stipulated in s 38(1) of the Evidence Act were enlivened and therefore declined the husband leave to cross-examine the witness at that time: see Transcript 9 February 2022, p.160 lines 32–46.
The husband sought to cross-examine the wife’s brother a second time, again in respect to AC Ltd, after the wife’s brother gave evidence that the wife’s family had, at some point, owned part of AC Ltd, however never in his or the wife’s name. The primary judge was again not persuaded on the evidence before him that the witness’ “lack of recollection meets the criteria for him to be treated as an unfavourable witness” (Transcript 9 February 2022, p.98 lines 2–3) and refused leave for the husband to cross-examine the witness.
The primary judge had the advantage of observing the witness in the witness box at the time. The husband argues that the AC Ltd transactions, which appear to have occurred some 16 years earlier, were of such significance that an inference that the witness must have recalled them was available to the primary judge: see Transcript 9 February 2022, p.95 line 19 to p.96 line 2. We are not persuaded that the primary judge’s discretion miscarried. In any event, the AC Ltd transactions were not an asset particularised in the pleadings by the husband, took place many years before the alleged frauds, and appeared to be no more than a collateral issue.
The husband, in his Summary of Argument, also complains that the wife’s mother “committed a contempt of court” by answering “No. It has nothing [to do] with this court” when asked if she would “like to” describe conversations with the wife: see Transcript 9 February 2022, p.95 line 19 to p.96 line 2. It is apparent that the witness was expressing her preference, which was clarified by the primary judge with the husband, who then re-framed his question. The husband did not make an application for leave to cross-examine the wife’s mother.
This ground is without merit.
Ground 10
10.The primary judge erred by reasoning the Accounting Standards have no role to play in the Financial. Statements prepared by [the wife] for either the AAT or for the proceedings before Cronin J.”, as accounting standards issued by the Australian Accounting Standards Board have the force of law for a “general purpose financial statement” as here,
The primary judge was correct in concluding that the accounting standards (Australian Accounting Standards Board, Provisions, Contingent Liabilities and Contingent Assets, 27 July 2014, p.13) were of no assistance in these proceedings, as there was no evidence that the wife was aware of those standards, nor that they applied to her when completing the relevant documents (at [78]–[79]). As a result, those standards provide no assistance in determining the wife’s state of mind at the time of making the relevant statements.
This ground has no merit.
Findings of fact
An appeal court should not interfere with a finding of fact if there was evidence on which that finding could be made, that is, if it was reasonably open on the evidence (Edwards v Noble (1971) 125 CLR 296 at [17]; Gronow v Gronow (1979) 144 CLR 513 at [8]). In Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550 at [43], it was said that an appeal court should not interfere with a finding of fact by a trial judge “unless they are demonstrated to be wrong by ‘incontrovertible facts or uncontested testimony’, or they are ‘glaringly improbable’ or ‘contrary to compelling inferences’”. It must be recognised that where there is oral evidence given at a trial, appellate judges are in a “permanent position of disadvantage as against the trial judge” in assessing the evidence and credibility of witnesses because the appeal court does not observe the witnesses giving evidence: see Fox & Percy (2003) 214 CLR 118 at [77].
However, in Lee v Lee (2019) 266 CLR 129 the relevance of oral evidence was noted, with the High Court saying:
55A court of appeal is bound to conduct a “real review” of the evidence given at first instance and of the judge’s reasons for judgment to determine whether the trial judge has erred in fact or law. Appellate restraint with respect to interference with a trial judge’s findings unless they are “glaringly improbable” or “contrary to compelling inferences” is as to factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence. It includes findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts. Thereafter, “in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge”.
(Citations omitted)
As the wife was deceased by the time of the trial, the primary judge did not have the advantage of observing her in the witness box. Whilst the appeal is by way of re-hearing and this Court has the same evidence that was before the primary judge (with respect to the relevant representations of the wife), it remains for the husband to persuade this Court that the primary judge erred in the conclusions his Honour reached on the material before him: see Branir Pty Ltd and Ors v Owston Nominees (No2) Pty Ltd and Anor (2001) 117 FCR 474 at [22] and [30].
Ground 6
6.The primary judge erred by selectively assessing my evidence according to different standards from that applied to the [wife’s] evidence, including by characterising the [wife’s] own evidence which was adverse to her case as merely my “assertions/arguments” and by using the contradictions in [the wife’s] evidence as a basis for discounting my unchallenged evidence (which was corroborated by witnesses for [the wife’s]) as to [the wife’s] knowledge and true beliefs as to the value of her shares in family companies as, by his descriptions on the evidence and findings he made [the wife] knew or ought to have known that her shares could on no view be of nil value. as the legislature’s intent was that what she “ought reasonably have known” is the test of truthfulness in such statements.
This ground is without particulars or references to instances in the primary judge’s reasons or the transcript of proceedings where there is any foundation for these allegations. In the absence of any errors on the part of the primary judge being identified by the husband, this part of Ground 6 cannot succeed.
To the extent that Ground 6 effectively repeats Ground 11, it is without merit for the same reasons.
In his Summary of Argument with respect to this ground, the husband refers to claims concerning the wife’s knowledge of the value of the shares. These matters are considered under Ground 1, which is found to be without merit.
Ground 11
11.The primary judge erred by not applying the principles which he was bound to apply based on authorities in deciding whether on the balance of probabilities [the wife’s] shares in her family companies were valueless and that she could believe them to be valueless, and in reasoning that the value of underlying assets owned by family companies in which [the wife] owned shares is irrelevant to the value of her shares and her understanding thereof, the Full Court having said in Hull v Hull a case with very similar facts involving non-controlling shareholdings in family companies: “in all seriousness it could not be said that Mrs Hull’s interest in the company is valueless”, and in Harrison & Harrison “the value to be ascribed to shares in a family company must be a realistic one, based upon the worth of the shares to the party himself or herself”
(Emphasis in the original)
This ground is misconceived in that it conflates the questions of the value of the wife’s interests in various family companies and the wife’s belief or knowledge as to that value. As recorded by the primary judge at [65], the husband was required to establish that the wife knew that the value she attributed to her interests was wrong. He failed to do so: the subjective beliefs claimed by the wife were not so perverse or reckless as to require the primary judge to reject them when considering whether she deliberately sought to mislead.
Ground 11 is without merit.
Ground 16
The primary judge erred by reasoning that Judge Scarlett’s decision did not rely on any facts or false evidence in [the wife’s] financial statements and effectively treating my application to set it aside for fraud as an appeal requiring me to show an error of law
(As per the original)
The husband argues that because Judge Scarlett concluded “there was evidence before the Tribunal to allow it to form the view that it did” (at [90]), the representations by the wife to the SSAT infected the judgment of Judge Scarlett. There is no dispute that there was no representation made by the wife in evidence in the course of the proceedings before Judge Scarlett, nor in the appeal that followed.
As the primary judge was not satisfied that the wife’s representations to the SSAT amounted to fraud, the question of whether fraud upon the SSAT would infect a subsequent appeal on a question of law from the tribunal, as were the proceedings before Judge Scarlett, is academic in the context of this appeal.
In those circumstances, this ground has no merit and fails.
Grounds 18 and 21
18.The primary judge erred by reasoning for the email fraud, that my contended “preference” to not to attend court on this: relevant date effectively renders irrelevant the fraudulent representation effectively made to the court by the solicitor.
21.The primary judge erred by concluding that the solicitor’s failure to notify the court was not material to the outcome, as its direct consequence was that my applications were dismissed with costs for my failure to appear, and as, in any event the High Court has clearly stated in McDonald and Clone that materiality of the fraud to the outcome is not required.
The primary judge did not accept that the solicitor’s failure to mention the emails was material to the outcome (at [151]–[152]). The primary judge was in a uniquely advantageous position to determine whether the solicitor’s failure to refer the Court to the husband’s email was material to the outcome, as he was the judge who determined all three applications.
In this case, the husband had sought the specific date of the listing, had the financial capacity to attend Court on that date, and knew that he had not yet been granted an adjournment. His only explanation for non-appearance was, as the primary judge identified, his preference to remain at home with his ill spouse (at [126]). There was no evidence that his partner could not be without his care for that day or, if that was the case, that he had taken reasonable steps to obtain an alternative carer. The dismissal of the application was a direct consequence of the husband’s failure to appear, not the conduct of the solicitor. It was open to the primary judge to conclude that the silence of the solicitor did not have a material effect upon the outcome.
As with many of the other grounds, the argument is academic as the husband has not proven fraud. There is no merit in these grounds, and they each fail.
Ground 24
24.The primary judge erred by finding my “repeated challenges were an abuse of process” as he did not suggest at any point in the 4 year life of the proceedings that they were an abuse of process which he was required to do if he thought they were, pursuant to Section 97(3) of the Act requiring that the court endeavour to ensure that proceedings are not protracted, and such finding is impossible to reconcile with his earlier rulings and findings which encouraged me to continue my cases, in particular:
…
(As per the original)
It seeks to challenge the primary judge’s findings that:
159.On this basis this application should also be considered to be an abuse of process.
This ground refers to findings of the primary judge with respect to the email issue. His Honour’s reasons in this regard appear at [156]–[158]:
156Here the [husband] has previously unsuccessfully sought to have the judgments the subject of this application set aside on the basis that they were made in his absence. He asserted that on making such application he was unaware that he could have sought the setting aside on the basis of fraud, and that his subsequent understanding of that, coupled with his access to the transcript and reflection on the emails sent had founded this application.
157It should however be observed that the previous application had sought to impugn the solicitor in the same manner for failing to draw the email correspondence to the court’s attention.
158That is, although this application is made reliant upon different principles to the previous application to set aside, it is reliant upon the same facts. No new fact has been identified, and no fresh or further matter discovered. The case is brought merely on an argument reliant upon a different legal principle to that first argued, and constitutes sequential challenges to the same determination on the same factual basis.
The husband has misconstrued the findings of the primary judge on this issue. There is no finding by the primary judge that the husband’s conduct in proceedings generally was an abuse of process, but rather, a finding with respect to the application to set aside the dismissal of his application to the review the costs assessments of the registrars. That finding is based upon the fact that the husband had already pursued an application to set aside the dismissal orders, based upon the same facts and circumstances (including the solicitor’s failure to advise the court that the husband had told the solicitor he was seeking an adjournment), but did not at that time raise the claim of fraud nor appeal against that decision. The transcript added little to the argument. The husband failed in his allegations of fraud. The primary judge found that pursuing a second application (this time alleging fraud) after an earlier application was pursued based upon the same facts is an abuse of process. Such a finding was open to the primary judge.
The question of whether the husband should be subject to an order pursuant to s 102QB of the Family Law Act 1975 (Cth) was adjourned to another date and not determined in the judgment subject of this appeal.
Finally, we note that where the husband alleges in this ground that the primary judge “encouraged [him] to continue [his] cases”, he misconstrues the determinations of the primary judge. The fact that the primary judge had, on many occasions, made procedural or evidentiary rulings as sought by the husband does not demonstrate that the primary judge encouraged the husband to continue. Rather, these matters demonstrate that the primary judge took considerable care to ensure that the husband was afforded procedural fairness and a determination according to law.
Ground 24 is without merit.
Ground 25
25.Erred by failing to take a compelling adverse inference from the disingenuous submissions by the [wife], that first, [the wife’s] shares “did not correspond to financial statements a year or two later” effectively a concession her shares were not of nil value, and second:” one wonders why it would be just and equitable to take money from the estate which goes to the children for historical child support that [the wife] used to raise and support and care for her children and give it to [the husband] absent proof of hardship. And at the end of the day there is no sound discretionary basis for taking the money away from the children. There’s no suggestion [the husband] going to give it to the children.”, as these submissions were clearly disingenuous as demonstrated by:
(1) the tender of the Will by the [wife], in which clause 7(y) says the executors can pay the estate to themselves despite that being a conflict of interest ,
(2) the offer I made in open court in 2018 that I would discontinue the proceedings and pay all outstanding cost orders and child support provided that those funds were held by an independent trustee for the children rather than the [wife’s] family, which offer the [wife] ignored; the judge wrote in his judgement of 13 December 2021 dismissing the [wife’s] summary dismissal application:”12 As noted above [the husband] does not dispute his noncompliance, but observes that he has made, in court, an open offer to resolve the proceedings. No response to that offer is apparent which detracts from the notion that [the husband] has taken no steps to seek the resolution of the matter”.
(3)the probate grant/Will before the court showed that the [wife] does not contend in the probate case that there is any debt to [the wife’s mother]
(As per the original)
The matters referred to in paragraphs 1 and 2 of this ground form no part of the reasons for judgment by the primary judge. The reasonable inference to be drawn from their absence from the primary judge’s reasons is that the primary judge did not take them into account. Even if the submissions the husband refers to were considered to be disingenuous, they do not assist with determining whether the wife had perpetrated a fraud, as she was no longer alive at the time such submissions were made. As a result, these parts of Ground 25 are without merit.
The third particular of this ground is without merit for the reasons set out above with respect to Ground 1.
Ground 1
This ground is articulated in the Amended Notice of Appeal as follows:
1.The primary judge erred by making findings and conclusions contrary to incontrovertible facts and/or compelling inferences and/or that were glaringly improbable.
…
It then, over two pages, narrates four findings of the primary judge which the husband contends were not open on the evidence. We have not set out in full the matters relied upon by the husband in support of this ground due to their prolixity.
It is convenient to first deal with the claim that the primary judge ought to have been satisfied that the wife’s representations as to the value of her shares were fraudulent. The husband relies upon a number of facts and circumstances, the relevant ones of which are:
(a)The wife knew of the material dividends and tax benefits she was receiving from her shares which, from 2011 to 2017, included income distributions from the entities totalling $256,886 plus franking credits thereon, which reduced her effective tax rate on her total income of $681,228 to 2.45 per cent;
(b)The ability to “deal with” shares is but one factor in their “market” value;
(c)Over six years, the wife’s mother approved the distributions made to the wife (and thus an arguable inference that their relationship meant that there would be no refusal to make such distributions);
(d)The wife’s sister would have acquiesced to the wife’s desires with respect to the entities;
(e)That the wife’s sister’s evidence was that the wife knew from their conversations that particular properties in L Pty Ltd were already regarded as being owned by the wife;
(f)The wife’s brother’s evidence that, although he was probably more financially competent than the wife, it was “not by much” (Transcript 9 February 2022, pg. 83 lines 6–16);
(g)The wife having previously given sworn testimony to the SSAT that her mother’s payment of legal expenses was a gift; and
(h)In her 2018 affidavit, the wife characterised the payment of her legal fees not as a present liability but as a possible future reduction in her or her daughters’ inheritance from her mother.
These matters, taken together with the matters listed in Grounds 11 and 14, show that the wife was aware that she received considerable financial benefit from her shares, and that her family was likely to facilitate access to property if she sought that they do so. The primary judge took all of this into account.
The primary judge also took into account that the shareholdings were disclosed and the dispute related to their value to the wife (it being accepted that the shares had an underlying value), that the wife disclosed financial benefits she received from the companies, and the evidence in the wife’s affidavit that she believed the restrictions upon her dealing with the shares resulted in them having no value.
The fact that family may have acquiesced to dealings for the benefit of the wife does not show that they would be likely to so acquiesce if the result was a benefit (even indirect) to the husband, nor that they would agree to the sale of the shares to anyone outside the family. The structure of the property holdings cannot be ignored: see generally Ascot Investments & Harper (1981) 148 CLR 337.
We are not persuaded that the primary judge erred in concluding that the husband had not proved that the wife knew that her values were wrong: at [62]–[66].
The second complaint concerns the primary judge’s findings concerning the wife’s representations as to the debt to her mother for legal fees. The relevant evidence was canvassed by the primary judge at [67]–[79]. The husband persuaded the primary judge that “the various descriptions made by [the wife] cast doubt on the status of the monies provided by her family in relation to legal expenses” (at [80]) and that the wife had been inconsistent in her evidence on this topic: at [81]. The primary judge concluded that the “ultimate nature of the monies that were paid remains unclear” (at [82]), however was not persuaded that the representations with respect to legal fees were fraudulent.
At law there is a stark dichotomy between a loan and a gift, which is usually easily identifiable in arm’s length transactions. However, obligations between family members are commonly an unclear mixture of legal and moral obligations and informal accounting through adjustments to bequests. Family obligations are commonly without documentation, because in well-functioning families strict insistence on defined rights is rarely an issue. As the monies were provided in a family context, the lack of clarity concerning the obligations is entirely unsurprising. We see no error in the primary judge’s conclusions on this issue.
Various other matters are also particularised by the husband, which can be dealt with briefly. The fact that the balance sheet of the wife’s estate included in the probate grant did not disclose a loan was not raised with the primary judge during addresses at the trial, nor was it the subject of cross-examination. In any event, given that the alleged debt was to the wife’s mother and the wife thought that it may be accounted for in the bequests in her mother’s estate, the probate document adds nothing of significance. The fact that the wife’s family’s evidence was less than forthcoming, with many occasions where they said they couldn’t remember things, goes only to their reliability as witnesses, not to the wife’s state of mind when making the representations. Finally, the AAT decision does not create an estoppel, nor otherwise bind the Court. It was not disputed that the husband first obtained copies of the tax documents relating to the companies’ debts and shares in the pre-hearing process before the AAT decision, nor does it bear on the state of mind of the wife when making the representations.
The husband places weight upon evidence of the wife’s brother that he was not much more financially competent than the wife. In the context of this case, it is that the wife had some degree of financial competence that would have led her to understand that titles of the underlying assets were not held by her and to reflect upon the impact of the restrictions upon her dealings with the shares when considering their value.
The last particular of Ground 1 argues that the primary judge’s rejection of the fraud claim against the solicitor was “glaringly improbable” and must fail for the reasons given with respect to Ground 20.
This ground does no more than seek to re-agitate the claim that the primary judge ought to have been persuaded that the wife and her solicitor both made fraudulent representations. Seen in this way, the complaint of the husband is in reality a contention that the primary judge erred by not accepting his case and an invitation for us to do so on appeal.
Ground 1 is without merit.
Ground 20
This ground is recorded in the Amended Notice of Appeal as follows:
20.The primary judge erred by reasoning that it was open to find on the balance of probabilities that this very experienced solicitor’s failure to inform the court was not deliberate, a glaringly improbable conclusion, particularly as the judge had previously struck out my pleadings, due to their “generality”, alleging that [the wife’s solicitor] had been acting for the [wife’s family] for decades, against me for 17 years, and participated in [the wife’s] fraud by placing before the Court her false financial statement (AB 80).
(As per the original)
It is convenient to address this ground together with the last particular advanced by the husband under Ground 1, which is as follows:
(d)by [his Honour’s] findings re the email fraud that “while the solicitor’s explanation does not detract from his obligation to notify the court of my contact, it is sufficient to undermine a conclusion that the solicitor’s failure was a deliberate failure”; such a conclusion is glaringly improbable.
The primary judge noted the explanation of the wife’s solicitor in respect to his failure to inform the Court of the husband’s earlier correspondence and was not persuaded that the husband had proved fraud, relevantly finding that:
135.On the current application to set aside [the wife’s] solicitor further explained that there was no reason for him to consider that the Court was unaware of the application by [the husband] that he had been forwarded by email. He said that he put the matter out of his mind, expecting that the court would have already dealt with the application.
…
145.The extent of the obligation imposed upon the solicitor to advise the court of [the husband’s] contact with him must be answered in the context of a solicitor’s paramount duty to the court and the administration of justice. That duty required, in the particular circumstances where the court had asserted no knowledge of contact from [the husband], and where the court was being asked to act on the basis of the non-appearance of [the husband], the solicitor to advise of the receipt of the application to appear by telephone that he had received the previous day. The solicitor has explained why that did not happen. While that explanation does not detract from the obligation to notify the court of the contact from [the husband], it is sufficient to undermine a conclusion that the solicitor’s failure was a deliberate failure.
The primary judge had the opportunity to observe the solicitor in the witness box. It is apparent that his Honour critically assessed the witness’ testimony (even making some adverse findings against the witness). The explanation by the wife’s solicitor was not implausible in the context of this case, but reasonably open.
In the circumstances, Ground 20 is without merit.
Grounds 3, 9 and 12
These are particularised in the Amended Notice of Appeal as follows:
3.The primary judge erred by reasoning in a contradictory circular manner that as this is an attempt to relitigate that which was litigated at first instance before Cronin J, this alone would be sufficient to defeat [the husband’s] application
9.The primary judge erred by reasoning, contrary to his own earlier findings and the evidence, that my allegations of fraud were not based upon “cogent fresh or newly discovered evidence.”
12.The primary judge erred by reasoning that “the issue of the payment of the legal fees by [the wife’s] mother, this is a matter that is not fresh in the sense contemplated by Wentworth and to pursue this issue a second time constitutes an abuse of process” as, by [the wife’s] own evidence in her affidavit not filed until 27 November 2018, the alleged debt was no more than a potential reduction in a future bequest and was in the same category as her mother’s $850,000 expenditure to build her new house which it was not contended gave rise to a debt; thus I had no evidence prior to 27 November 2018 by which to earlier litigate fraud.
(As per the original)
Ground 3 challenges the primary judge’s finding at [90] that the complaints raised by the husband to challenge the judgment of Cronin J on 20 August 2015 had already been litigated before Cronin J.
It was submitted by the husband that as there were no fraud allegations in the proceedings leading up to the Cronin J judgment, it was not possible to determine which issues had already been litigated before Cronin J. This misapprehends the primary judge’s finding at [90], which observed that the material before him relied upon to prove fraud was the same material considered by Cronin J, and hence the husband’s challenge amounted to no more than an attempt to re-litigate the issues already determined.
Grounds 9 and 12 reflect a similar misapprehension of the primary judge’s findings by the husband.
Unlike the arguments with respect to the value of the various entities in which the wife had an interest, there remains a lack of clarity as to whether the family arrangements for the payment of the wife’s legal fees were a loan from her mother (in the common law sense) or a gift. This matter was a live issue before Cronin J and the further evidence did little to clarify the issue. The inconsistencies that the husband relied upon were the differences between the wife’s statements to the SSAT in 2012 and the documents she filed in the proceedings before Cronin J in 2015. This claim can be contrasted with the claim concerning the value of the shares, where it was the documents discovered in the 2016 AAT proceedings that the husband said provided the evidence of the value of the shares.
Consequently, the primary judge was correct to conclude that there was no cogent new evidence with respect to the legal fees: the case was, in this respect, only a complaint that the evidence on this issue should not be accepted, placing it in the category of cases concerning bare allegations of perjury (see McDonald and Wentworth).
Grounds 3, 9 and 12 are without merit.
Grounds directed to the extension of time to review child support assessments
Ground 13
The primary judge erred by using my minor technical error of an incorrect start date for the relief sought date in the child support matter (15 July instead of 27 July 2011) to find my application incompetent, clearly in breach of Barwick CJ’ s statement in McDonald (quoted by the judge) about the primacy of the interest of justice.
(As per the original)
This ground misrepresents the finding of the primary judge who, at [110] of the reasons, found that the application was incompetent only to the extent that it sought leave for the period prior to 27 July 2011. There is no doubt that this period was not amenable to an order pursuant to s 111 of the CSA Act, as that provision does not allow for leave for periods greater than seven years prior to the date of the application. This finding was not the basis of the primary judge’s refusal to grant leave to the husband with respect to the balance of the period to which his application related.
Ground 13 is without merit.
Ground 15
The primary judge erred by determining that the CSR does not have a statutory duty to seek orders that are fair and equitable when conducting litigation under the objects and provisions of the Child Support Assessment Act 1989.
(As per the original)
The husband made no claims in this regard before the primary judge. The husband was unable to point to any legislative requirement or common law obligation upon the second respondent to seek any particular orders when participating in litigation. Whilst the second respondent is required to act as a model litigant, this requirement is not enforceable by the husband: see s 55GZ(2) and s 55GZ(3) of the Judiciary Act 1903 (Cth). As a result, the husband cannot succeed on this ground.
At the hearing of the appeal, the husband referred to the objects of the CSA Act set out at s 4 in support of this argument.
The purpose of s 4 of the CSA Act is to provide context for the proper interpretation of the various provisions of the CSA Act that follow, as an interpretation “that would best achieve the purpose or object of the Act … is to be preferred”: see s 15AA of the Acts Interpretation Act 1901 (Cth). The balance of the CSA Act sets out in detail how this object is to be achieved and, importantly, contains many provisions that provide specific rights, duties and powers to the second respondent, those seeking child support and those assessed to pay child support. There is no provision that required the second respondent to pursue any particular outcome in this case.
This ground is without merit.
Ground 17
The primary judge erred by reasoning that “the representation made on 1 August 2016 is not germane to the assessment for the period 15 July 2011 to 3 December 2015 and that it remains completely unclear how a purported misrepresentation in 2016 demonstrates that the administrative assessment made prior to the purported misrepresentation, and for the prior period was unjust or inequitable” as,
-in light of orders he made my pleadings which did detail how the 2016 representation was a continuation of false representations commencing in 2012 affecting assessments from 15/7/2011 were struck a embarrassing, and the settled pleadings clearly state that the pleaded false representations were those from the “ commencement of the period to which [the wife’s] first fraudulent Financial Statement filed in the SSAT” in 2012 and in light of his statement during the hearing for settling those pleadings that it was uncontroversial that [the wife’s] financial circumstances had been stable for the period 2012 to 2017.
The relevant pleadings particularise the representations of the wife made in 2016: see paragraph 4(a). In the fifth paragraph of the pleading (numbered paragraph 43), the husband merely alleged that “there has been no material change in our relative financial circumstances since 15 July 2011”.
As the primary judge identified at [118], the alleged fraud in 2016 did not demonstrate why the assessment amount for the earlier period was unjust and inequitable. Whilst the husband was able to point to a decision of the AAT in 2018 that substantially reduced his child support liabilities, that decision does not make findings with respect to the relevant circumstances of the parties in the earlier years that are the subject of this part of this application, nor does the decision of the AAT bind a court.
It appears that the husband’s almost singular focus upon allegations of fraud resulted in the husband leading no evidence, nor making any submissions, as to the various facts and circumstances identified in s 112(3) and s 112(4) of the CSA Act that were relevant to the exercise of the discretion pursuant to s 111 of the CSA Act.
As a result, this ground of appeal is without merit.
CONCLUSION
The husband has failed to establish that the decision from which he appeals is attended by sufficient doubt to warrant its reconsideration, nor that there would be a substantial injustice if the decision were not reviewed. As a result, he must be refused leave to appeal. Even if leave were not required, for the reasons set out above, the husband has not established any of his grounds of appeal.
COSTS
The parties were heard with respect to the issue of costs after they made submissions with respect to the grounds of appeal. Each party filed and served a schedule itemising the costs that they claimed, should they be successful in the appeal proceedings.
Costs in family law proceedings are governed by s 117 of the Family Law Act, which provides for a default position of each party bearing their own costs. However, the Court may order costs if it “is of opinion that there are circumstances that justify it in doing so”. A number of factors relevant to this discretion are listed in s 117(2A). Whilst there is no specific evidence of financial capacity before us, we proceed on the assumption that the first respondent and second respondent are each in a considerably stronger financial position than the husband.
The present proceedings concern an unsuccessful appeal against orders seeking to set aside previous judgments on the basis of allegations of fraud. The husband has been wholly unsuccessful. The application for leave to alter the child support assessment was pursued without addressing all of the relevant criteria in the child support legislation (even in light of this issue being raised in the first respondent’s Case Outline filed and served before the trial). In substance, the husband has continued to litigate despite the original decisions, the appeal decisions and the primary judge’s dismissal of his application to set aside the original decisions on the grounds of fraud.
The proceedings in this Court were made far more complex than was necessary by the husband’s prolix grounds of appeal and Summary of Argument.
We are persuaded that the husband should pay the costs of the first respondent and the second respondent.
The costs sought by each respondent were itemised in their respective schedules of costs. It is open to the Court to fix lump sum amounts for costs in order to minimise the expense and delay that may be associated with taxation of costs. The relevant principles are summarised in Fierro & Fierro (No 2) [2022] FedCFamC1F 344.
The first respondent sought costs in the sum of $64,847.34. We accept that the costs in this appeal will be greater than those in most appeals, as the proceedings have involved a large number of grounds and a considerable number of documents covering what is effectively four separate proceedings. However, we would not allow all of the sums claimed for solicitor and clerk time, all of the photocopying charges when over 3,000 pages could have been sent to a commercial copier, nor all of counsels’ fees (due to the additional costs caused by a late change of counsel). We are of the view that costs fixed in the sum of $45,000 are appropriate in this matter for the first respondent.
As recorded at [48]–[50] above, the husband filed an Application in an Appeal on 11 April 2023 seeking to adduce further evidence and make further submissions, which required an additional hearing date. This Application in an Appeal was heard on 28 June 2023, and for the reasons set out above, is dismissed. The husband was wholly unsuccessful in that Application in an Appeal. It is appropriate that he pay the first respondent’s costs of that application. It is noted that appearance by the second respondent on 28 June 2023 was excused. The husband and the first respondent asked that we fix lump sum amounts for any costs orders. We find that the reasonable costs of the first respondent are senior counsel’s fee of $3,500 and $1,000 for the instructing solicitor (given the limited work required by the solicitor on the Application in an Appeal).
The second respondent sought $7,612.54. The second respondent’s costs were limited by only addressing the grounds directly relevant to the second respondent and not briefing counsel. We are persuaded that the second respondent’s costs are reasonable and order the husband to pay the second respondent’s costs fixed in the amount claimed.
We therefore make orders accordingly.
I certify that the preceding one hundred and fifty (150) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Riethmuller, Campton & Curran. Associate:
Dated: 4 July 2023
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