SGY and Anor and Company Z (In Liquidation)
[2008] FamCAFC 92
•30 April 2008
FAMILY COURT OF AUSTRALIA
| SGY AND ANOR & COMPANY Z (IN LIQUIDATION) | [2008] FamCAFC 92 |
| FAMILY LAW - APPLICATION TO EXTEND TIME – Whether application to extend time to file appeal against trial Judge’s orders is competent –Whether trial Judge dealt with all orders sought in original application for leave to appeal when dealing with stay application – Whether application was dismissed by trial Judge – Whether application capable of amendment – Where at time of filing application, applicants were unrepresented – Where original application sought leave to appeal on behalf of third parties – Finding that the original application was abandoned after trial Judge’s reasons on stay application were delivered – Where second application filed for extension of time to appeal orders made by trial Judge – Whether more stringent test applies in exercise of discretion to extend time for leave to appeal than to extend time to appeal – Whether discretion to extend time under the Family Law Rules 2004 is at large – Where established principles guide the exercise of discretion - Whether orders were interlocutory and so application to extend time for leave to appeal is required – In this case, order was interlocutory - Application of Re Luck (2004) 203 ALR 1 – Where applicants put on notice and given opportunity to file amended application – Present application incompetent – Application dismissed. |
| Corporations Act 2001 (Cth) Evidence Act 1995 (Cth) - s 97, s 98 Family Law Act 1975 (Cth) - s 79, s 94, s117 Family Law Regulations 1984 – Reg 15A |
Family Law Rules 2004 - r 1.14, r 10.12(c), r 10.12(d), r 22.02, r 22.03, r 22.12,
r 22.46 Chapter 22
Bennett & Bennett (1985) FLC 91-617
Bigg & Suzi (1998) FLC 92-799)
Carr v Finance Company of Australia Ltd(No 1)(1981) 147 CLR 246
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248)
Gallo v Dawson (1990) 93 ALR 479
Licul v Corney (1976) 180 CLR 213
ReLuck (2004) 203 ALR 1
Munday & Bowman (1997) FLC 92-784
Rutherford & Rutherford (1991) FLC 92-255
Sharman License Holdings Pty Ltd and Anor v Universal Music Australia Pty Ltd and Ors [2005] FCA 802
Tormsen& Tormsen (1993) FLC 92-392
Tudor & Tudor (1992) FLC 92-273
| 1st APPELLANT: | SGY |
| 2nd APPELLANT: | LGM |
| RESPONDENT: | Company Z (In Liquidation) |
| HUSBAND: | CAM |
| FILE NUMBER: | SYF | 3359 | of | 1997 |
| APPEAL NUMBER: | EA | 152 | of | 2007 |
| DATE DELIVERED: | 30 April 2008 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Boland J |
| HEARING DATE: | 24 January 2008, 25 February 2008 and by written submissions dated 3 March 2008 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATES: | 17 December 2007, orders made 15 November 2007 and 17 December2007 , orders made 3 December 2007 |
| LOWER COURT MNC: | [2007] FamCA 1645 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANTS: | Mr Chee of The People’s Solicitors (at 24 January 2008, SGY appeared in person) |
| COUNSEL FOR THE RESPONDENT: | Mr Cohen with Ms Chang |
| SOLICITOR FOR THE RESPONDENT: | Deacons |
| COUNSEL FOR THE HUSBAND AS INTERVENOR: | Mr Bedrossian (at 24 January 2008, Mr Dominello appeared for the husband) |
| SOLICITOR FOR THE HUSBAND AS INTERVENOR: | Etheringtons Solicitors |
Orders
That paragraphs 3 and 4 of the Application in a Case filed by [SGY] and [LGM] (“the applicants”) in SYF 3359 of 1997 are dismissed.
That the Application in a Case filed by the applicants on 18 December 2007 is dismissed.
That the applicants pay the respondent, [Company Z] (In Liquidation) and the husband’s costs of the Application in a Case filed 18 December 2007 as agreed and failing agreement as assessed under Chapter 19 of the Family Law Rules 2004.
Certify for counsel.
IT IS NOTED that publication of this judgment under the pseudonym SGY and Anor & Company Z (In Liquidation) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 152 of 2007
File Number: SYF 3359 of 1997
| SGY First Applicant LGM |
Second Applicant
And
| Company Z (In Liquidation) |
Respondent
And
| CAM |
Husband
REASONS FOR JUDGMENT
Introduction
For some time in this Court Ms LGM and her sister Ms SGY have been involved in litigation between them, Ms LGM’s husband, Mr CAM, and a company (“Company Z”), now in liquidation, but formerly controlled by LGM and CAM. The litigation involves competing claims by CAM and LGM (who for convenience, I will refer to as “the husband” and “the wife”) for property settlement under s 79 of the Family Law Act 1975 (Cth) (“the Act”), and claims under the Corporations Act 2001 (Cth) (“the Corporations Act”) and/or the accrued jurisdiction involving Company Z. There are other parties to the litigation including the wife’s parents. It is not necessary that I refer to the other parties in any detail in the present application.
This complex litigation has been the subject of extensive case management by O’Ryan J who is the trial Judge for the final hearing. His Honour has also heard and determined numerous interlocutory applications.
At the heart of the applications presently before me is the question – is it necessary for the Court to grant an indulgence to LGM and SGY (who when I refer to them jointly I will describe as “the applicants”) to extend time to file an appeal against orders made by O’Ryan J on 15 November 2007, or to extend time to permit them to file an application to seek leave to appeal his Honour’s orders if those orders were in fact interlocutory.
As will be shortly seen, the present matter before me raises two primary issues for determination. In summary they are:
· is it necessary that the application filed 18 December 2007 be determined, or did the applicants file a competent application before his Honour on 28 November 2007 (albeit which required amendment) within time? (the first question); or
· if the first application was not competent, should the application filed on 18 December 2007 be granted? (the second question).
In considering the first and second questions other issues are raised. In respect of the first question it is necessary that I determine:
- whether all of the orders sought in the application were dealt with by the trial Judge;
- if his Honour did not deal with the application for leave to file an appeal is the application competent;
- is the application, if not dismissed, capable of amendment.
If it is necessary for me to determine the second question, then I am required to consider:
- the nature of the orders subject of the appeal. That is, were the orders interlocutory (requiring leave to appeal) or final in nature;
- whether the test to extend time in respect of an application for leave to appeal is more stringent than an application to extend time in respect of an appeal against final orders;
- whether there is merit in the proposed grounds of appeal or whether the grounds raise a substantial issue requiring determination;
- whether in the exercise of my discretion an extension of time should be granted.
There are two relevant applications which require consideration by me in order to answer the questions I have posed. The first is an application in a case filed on 28 November 2007 by the applicants in which they sought a stay of orders made on 15 November 2007 (which stay was refused by the trial Judge), and leave to appeal orders made on 15 November 2007 (“the first application”). The second application is an application filed on 18 December 2007, a day after his Honour published his reasons for judgment in respect of the orders of 15 November 2007, in which the applicants seek an order to extend time in which to file a Notice of Appeal against orders made by the Honourable Justice O’Ryan on 15 November 2007 (“the second application”). At the time of filing that application the applicants were unrepresented.
For ease of reference, and to aid understanding of these reasons, I have set out in annexure “A” the applications, response, affidavits relied on and details of the dates of written submissions before me relevant to these applications.
Procedural history of the applications
The second application was first listed before me on 24 January 2008. On that occasion SGY appeared on her own behalf with the assistance of a Mandarin interpreter. The husband was represented by his solicitor who sought and was granted leave for the husband to intervene in the proceedings. The wife did not appear, but Mr Cook of counsel appeared as amicus curiae and informed me that the wife was incarcerated, having been committed to prison for six months on a warrant issued in early January 2008 in accordance with orders of the Full Court. Company Z was represented by Mr Cohen of counsel.
Before me on 24 January 2008 Mr Cohen submitted that the second application was incompetent, on the basis it was asserted that O’Ryan J’s orders made on 15 November 2007 were interlocutory, and therefore not only was an extension of time required, but that the application before the Court should be amended by the applicants filing an application for an extension of time for leave to appeal. I made orders permitting the applicants to file an amended application and adjourned the proceedings for hearing to 25 February 2008.
Company Z had filed an application for security for costs of the applicants’ proposed appeal, which it was agreed would be determined by a Full Court in the event that the applicants were entitled to prosecute an appeal having been successful in their application to extend time to appeal, or to extend time to file an application for leave to appeal. I therefore do not propose to refer to any material specifically filed in support of Company Z’s security application.
Further relevant background
The procedural history before the trial Judge and summary of orders made
On 6, 7, 8 and 9 November 2007 his Honour heard and determined what appears to have been an oral application by Company Z to strike out amended responses filed, inter alia, by the applicants to an application brought by Company Z in the s 79 proceedings. Company Z had, through its solicitor, given notice it proposed to seek orders that amended responses which included points of defence, filed on behalf of the applicants and their parents, be struck out.
The trial Judge noted in paragraph 22 of his reasons for judgment delivered 17 December 2007 that Company Z sought at the November hearing orders that “defences disclosed in amended responses filed on behalf of each of the Wife, [the applicants’ parents] and [SGY] being the 1st, 2nd, 3rd and 4th Respondents to the application by [Company Z] be summarily dismissed” on the basis that the defences disclosed no triable issue. His Honour noted Company Z asserted the response should be struck out on two bases:
a)pursuant to r 10.12(d) of the Family Law Rules 2004 (“the rules”) there being no reasonable likelihood of success; and/or
b)pursuant to r 10.12(c) on the basis the defences were frivolous, vexatious or an abuse of process.
The trial Judge heard submissions from the applicants, who appeared in person, and counsel for Company Z, and on 13 November 2007 made orders dismissing the responses. The trial Judge then, on 15 November 2007, as described by him “made orders giving effect to the [sic] make [sic] on 13 November 2007.” His Honour’s reasons for judgment were subsequently published on 17 December 2007.
In summary the orders which the applicants wish to appeal made on 15 November 2007 provide that a property, described by title particulars and referred to as the QLD property (“the property”) which is registered in the names of the applicants, be held on trust for Company Z. His Honour also declared that a mortgage, held by the applicants’ parents over the property was void, and that the wife in her capacity as director of Company Z had breached provisions of the Corporations Act. The trial Judge made a number of orders to give effect to the declarations, including requiring the wife to transfer the property to the liquidator of Company Z, for the applicants’ parents to discharge the mortgage, and for provisions in default by the applicants and their parents of their obligations under the orders. His Honour also made orders for judgment in favour of Company Z against the wife for damages pursuant to the provisions of the Corporations Act for breaches of that Act. The proceedings for assessment of those damages were transferred to the Supreme Court of New South Wales under the cross vesting legislation.
Background set out in the trial Judge’s reasons for judgment
No substantial issue was raised by any party before me as to the correctness of the factual background set out in his Honour’s reasons.
The business undertaken by Company Z was the importation of wholesale computer components, and the sale within Australia of computer hardware and software.
A company, incorporated in Taiwan, known as Company X, exported computer components. The shareholders of Company X are the applicants, the applicants’ parents and another sister of the applicants.
The applicants purchased the property in 1992 for $1,350,000.00. Company Z contended before the trial Judge that the funds used to purchase the property comprised $630,000.00 of Company Z funds and an advance from the Commonwealth Bank of approximately $720,000.00. Company Z asserted payments pursuant to the advance were paid by it.
The husband and Company Z asserted that, after the husband and wife’s physical separation in about 1997, the assets and undertakings of Company Z were “assumed and converted” to the use of a company (“Company Z2”) without payment to Company Z.
In 1997, after the husband had ceased any involvement in the day to day conduct of Company Z, the advance secured over the property was paid out with funds provided by a company, Company Y). The husband and Company Z contended before the trial Judge that the loan was repaid to Company Y by Company Z2 with funds of Company Z.
In 1997 Company X commenced proceedings in the Supreme Court of New South Wales against Company Z and the husband and wife seeking, inter alia, repayment initially of approximately $4,800,000.00 plus interest. The principal sum was alleged to have been lent to Company Z between 1992 and 1996.
It is unnecessary that I record all the detail included in the trial Judge’s reasons, but to simply note that eventually Company Z was wound up on the application of Company X who had obtained a default judgment against it. That default judgment was ultimately set aside in September 2001. In subsequent proceedings the applicants each gave evidence in chief in support of Company X’s case. The wife gave evidence that properties, including the property, had been paid off with funds of Company Z. The claim by Company X was dismissed by Mathews AJ as was a cross claim by Company Z.
In 2001 the applicants co-signed with their parents (as first mortgagee) documents to further mortgage the property to obtain an advance of $300,000.00 from a company (“Company V”). In 2002 Company V transferred its mortgage over the property to PPT who received on payout a transfer of Company V’s securities. In April 2004 the security was assigned, for no consideration, to WHT, but the mortgage was not registered.
At paragraph 78 of his reasons the trial Judge recorded:
[Company Z] contended that the [QLD property] mortgage was procured by the fraudulent conduct and deceit of the Wife, [SGY] and [the applicants’ parents] by reason of their purporting to create a debt due by the Wife and [SGY] to [the applicants’ parents] in the amount of $500,000 which was in truth, and in fact, fictitious and thereupon purported to record by reason of this fictitious debt an encumbrance upon title to the [QLD property] by dealing number [omitted], which encumbrance is voidable by reason of fraud at the suit of [Company Z].
It appears the mortgage referred to by the trial Judge is a separate or different mortgage to the mortgage assigned to WHT.
In November 2003 orders were made by Campbell J in the Supreme Court of New South Wales that the husband and wife held upon trust for Company Z land in NSW and QLD, together with two units in a resort, and a motor vessel.
Responses and pleadings referred to in trial Judge’s reasons
On 28 September 2007 Company Z filed an amended response setting out the orders sought by it in the proceedings in this Court. The orders sought included the following relief:
…
3AA declaration under sections 78(1) or 106B(1) of the Act or the general law that the [QLD property] is held upon constructive trust or alternatively resulting trust on behalf of [Company Z]
3BAn order under sections 78(1) or 106B(1) of the Act or the general law that the [QLD property] Mortgage be set aside.
…
4AAn order under sections 78(2) or 106B(1) of the Act or the general law that the Wife and the Sister execute and deliver immediately to [Company Z] a transfer in registrable form of the [QLD property] from themselves or any entity or nominee under their control who or which holds such title to [Company Z].
…
6.An order under sections 78(2) or 106B(1) of the Act or under the general law, that [K] immediately deliver up to [Company Z] the original certificates of title to the [NSW property], and that the Wife and the Sister immediately deliver up to [Company Z] the original certificates of title to the [QLD property].
...
10.An order pursuant to section 80 of the Act, or alternatively, s. 1317H(1) of the Corporations Act, 2001, or alternatively the general law, that the Husband and the Wife pay damages to [Company Z] for breach of their duties under:
(a)sections 180, 181 and 182 of the Corporations Act 2001; and
(b)alternatively, the general law,
to [Company Z] in an amount to be determined or assessed.
10AAlternatively, an order that the real property of the marriage, whether held in the names of the Husband and the Wife, or by nominee companies under their control, forthwith be delivered up to [Company Z] and thereupon be vested in the Liquidator of [Company Z] to permit all just claims upon such assets as may be admitted to proof as debts in the winding up of [Company Z] thereafter to be administered by the liquidator pursuant to the provisions of the Corporations Act 2001 and the Corporation Regulations.
… (paragraph 102)
Company Z’s case was fully pleaded in a statement of facts and particulars. Included in the pleadings was a general claim in point 19A, in the following terms:
19.A.The [QLD property] mortgage was procured by the fraudulent conduct and deceit of the Wife and the Sister and the Parents by reason of their purporting to create a debt due by the Wife and the Sister to the Parents in the amount of $500,000 which was in truth and in fact fictitious and thereupon purported to record by reason of this fictitious debt an encumbrance upon title to the [QLD property] by dealing number [omitted], which encumbrance is voidable by reason of the fraud at the suit of [Company Z]. (paragraph 102)
Also relevant to this application are the claims as pleaded in point 19 as follows:
19.At all material times, the Husband and the Wife were directors of [Company Z] and owed duties to [Company Z] in that capacity pursuant to:
(a)sections 180, 181 and 182 of the Corporations Act 2001; or
(b)alternatively, pursuant to the general law to exercise due care and skill; to act in good faith in the best interests of [Company Z] as a whole; for the proper purpose; and not improperly to use their position to gain an advantage for themselves or alternatively cause detriment to [Company Z]. (paragraph 102)
The trial Judge recorded, but did not initially set out in full, that a Response was filed by the wife. His Honour noted that the Response filed on behalf of the wife’s parents was verified only by the wife’s mother, and repeated what was in the wife’s Response.
On 31 October 2007 the solicitor for [Company Z] gave notice by letter transmitted by facsimile that, on the first day of the hearing, it was proposed to seek an order that amended responses filed by the applicants individually, and the parents be struck out.
On 5 November 2007 a document titled “Proposed Points of Defence” was filed on behalf of the applicants and their parents. Part D of that document set out Points of Defence which were recorded by the trial Judge at paragraph 157 of his reasons as follows: (To aid understanding, I note that the wife was the first named respondent and [Company Z] was sixth named respondent in the s 79 proceedings.)
1.The 1st Respondent denied all the declarations and orders reference to the 6th Respondents Amended Response filed on 28 Sept. 2007 on the base [sic] that the 6th Respondent did not discover documents touching or concerning:
(a)The terms upon which “Constructive Trust” and “Resulting Trust” as defined.
(b)Arrangements between the 6th Respondent and the 1st 2nd 3rd 4th & 5th Respondent on “Constructive Trust” or “Resulting Trust”
(c)Identifying and particularising the transactions related to Paragraphs 6 to 8 and Paragraphs 9 to 15.
2. The 1st Respondent admits paragraphs 1 to 5, 5A
3.As to paragraph 6, the 1st Respondent denied the time, the Husband, the 1st Respondent and the Parents as tenants in common in equal shares purchased in the [NSW] Property.
4.The 1st Respondent denied paragraph 6, 7 A/ B/ C/ D/ E/ F, 8, 9, 10 in answer to the whole of the facts that:
(a)The 6th Respondent alleged the stamp duty was paid from [Company Z’s] fund (see 6th Respondent’s Vol 4 -p872) of which the same amount $11,694 was actualy [sic] the amount paid to ATO for Employers instalment deductions made during the month of November 1991.
The 6th Respondent alleged the balance of the purchase price was paid with [Company Z’s] funds on about 24 January 1992, of which contrary to his own admission that the bank statement was missing from 7 January 1992 to 30 January 1992 (Vol 4 p 886 to 887)
(b)The 6th Respondent alleged the only cash resources available were [Company Z’s] funds derived from its trading and buisness operations, of which was a loan account from the parents and [Company X] in amount of
$2,216,973.00 as at 30 June 1990
$3,994,100.00 as at 30 June 1991
$4,447,057.00 as at 30 June 1992
$4,158,723.00 as at 30 June 1995
$4,884,466.00 as at 30 June 1996 (see 6th Respondent’s Vol 9- p3125), that until the judgement of Mathews AJ on 14 February 2002 in proceedings SC 12674 of 1997 in the Common Law Division of the Supreme Court the plaintiff company (the 6th Respondent) had only one creditor namely “[Company X] and parents”
(c)During the proceedings SC 12674 of 1997 in the Common Law Division of the Supreme Court, the plaintiff company (the 6th Defendant) has not demonstrated, by affirmative evidence, that the assessable income derived by [Company Z] was attributable to the inherent profitability of its activities, as distinct from its default in paying its indebtedness to [Company X] for the stocks supplied by the latter. It is therefore open to claim that the latter explanation obtains against the former.
5.As to paragraph 11, the 1st Respondent does not respond to this paragraph and the 1st Respondent does not admit the trust
6.The 1st Respondent denied paragraph 12 to 24 by reason of the facts set out as for 4 (b) 4 (c) above. As far as it pleads against [Company Z2] in Supreme Court No. 50159 of 2006, the 6th Respondent has not yet identified nor particularised representations that the business of the 6th Respondent was the business of the [Company Z2], nor the belief of the customers of the business was that of the [Company Z2] rather than that of the 6th Respondent, alternatively, The Applicant and the 6th Respondent misled the 1st 2nd 3rd 4th Respondents since 1985 caused re-direction the assets and business of parents and [Company L] to the 6th Respondent without the knowledge of the 1st 2nd 3rd 4th Respondents. (see Husband Vol 1- p1 [Company L] incorporated in 1980)
…
The trial Judge noted that on the first day of the trial counsel for Company Z “proceeded to make submissions in respect of the applications for summary dismissal which were foreshadowed prior to the commencement of the trial”. The trial Judge explained when the hearing resumed on 8 November 2007 that he heard further submissions and said “There was then discussion as to whether I should also receive into evidence, subject to objections, the affidavits of the Wife, [the applicants’ parents] and [SGY]”. His Honour noted:
119.Then on 9 November 2007 counsel for [Company Z] informed me that it was accepted that having regard to the interests of justice and that the 1st - 4th Respondents were unrepresented, objectively there could be facts and circumstances that allowed for the identification of a triable issue even if they had not been put in the relevant responses.
…
121.On 9 November 2007 I received into evidence the affidavits of evidence in chief of the Wife, [the applicants’ parents] and [SGY]. I also dealt with the objections of the Husband and [Company Z] to these affidavits. The basis of the objections of each of the Husband and [Company Z] are set out in Exhibits K and L. I was concerned to ascertain the highest that the case of each of the 1st – 4th Respondents was, based on admissible evidence.
The trial Judge set out and discussed a number of “prayers for relief” or orders sought by “the respondents”. His Honour appropriately noted the relief sought in proposed orders 2 and 3 was res judicata, the relief sought having been determined in the Supreme Court proceedings.
In paragraph 4 of the Response the wife sought relief as follows:
…
4.A declaration under the general law that the [QLD property] is not in the matrimonial asset [sic]. (paragraph 146)
The trial Judge then set out the oral submissions made by [Company Z’s] counsel asserting that the cause of action, as pleaded, was not maintainable against [Company Z].
The trial judge’s decision and findings
His Honour set out in his reasons for judgment a comprehensive chronology of the history of the parties’ dealings and details of the proceedings in the Supreme Court of New South Wales, in particular, the evidence in chief of the wife in those proceedings, and in this Court. His Honour also set out the applications, responses and points of claim and defences before the Court, and quoted extensively from the oral and written submissions addressed to him. He noted the submission made on behalf of Company Z that the application being made to him was “made to the inherent jurisdiction of the Court to stop the abuse of its process when it is employed for groundless claims.” (paragraph 175).
After discussing the provisions of the rules in respect of conduct of cases in the Court his Honour said:
The Court may in an appropriate case make an order for the filing of a statement of the facts that a party contends support a right to the relief sought and particulars of the claim. The purpose of doing so, consistent with the purpose of the Rules, may be to define the issues of fact or law which the parties wish to submit for determination and set out the case which each party proposes to rely upon and give notice of that case to the opposite party. The function of the particulars as an extension of the stated facts may be to enable the opposite party to know what case such party will have to meet and enable that party to know what evidence that party ought to be prepared with. It follows that the Court may also order that the opposite party file a defence in which the opposite party sets out how it is sought to avoid the relief sought by the moving party. (paragraph 192)
His Honour then explained the right of litigants to “the full procedures of courts to prove their lawful claims or defence to claims by others” (paragraph 199) and identified the bases by which litigants may seek “an early and summary determination of litigation” namely:
· default or summary judgment; and
· striking out of a claim or defence.
He also referred to the use of a court’s inherent jurisdiction to prevent abuse of its process.
At paragraphs 194 and 195 of his reasons his Honour explained:
194.The Family Court has an inherent or implied jurisdiction to strike out the whole or part of an application or response or stay or dismiss an action which is frivolous or vexatious or an abuse of process or which must fail or which the plaintiff cannot prove. This is part of the Court’s power to control proceedings. In Westpac Banking Corp v Aldred (1986) FLC 91–753 Nygh J discussed the inherent power and said:
So under its inherent jurisdiction the court may strike out the whole or part of the indorsement on a writ or stay or dismiss an action which is frivolous or vexatious or an abuse of process or which must fail or which the plaintiff cannot prove, and which is without a solid basis.
Nygh J also relied upon s 38(2) of the Family Law Act and drew upon O 63 rr 1 and 2 of the High Court Rules. The decision was affirmed by the Full Court in In the Marriage of Spellson (1989) FLC 92–046.
195.Between 1989 and 1995 the Family Court had a system of pleadings and during that period O 11 r 11 of the Family Law Rules, which empowered a court to strike out a pleading, was in force. In Bigg v Suzi (1998) 22 Fam LR 700 at 710-711 the Full Court (Barblett DCJ, Lindenmayer and Finn JJ) discussed some of the history and affirmed that the Court had the power whether it be exercised under the inherent power or O 26 r 18 and perhaps O 63 rr 1 and 2 of the High Court Rules: see also In the Marriage of Pelerman (2000) 26 Fam LR 505 at 511.
After further discussion of the circumstances in which the rules provide for dismissal of proceedings, his Honour set out Part 10.3 of the rules which Part provides for summary dismissal after a response has been filed, and then summarised, in paragraph 199, the powers which he might exercise as follows:
I have the power to make summary orders and the circumstances in which I may do so include if I was satisfied that an application or response was frivolous, vexatious or an abuse of process or there is no reasonable likelihood of success. I have the power to summarily dispose of a case if it is clear that there is no question to be tried. This is often referred to as summary judgment and arises where the court is satisfied that there is no triable issue. It most often occurs where there is no reasonable cause of action or defence. I am also of the view that I have the power to strike out what may be a pleading such as a statement of facts as I have articulated above if it does not disclose a reasonable cause of action or defence. In summary, I have the power to make orders that a claim or defence does not go to trial in the ordinary way.
In dealing with the orders sought by the applicants and their parents, the trial Judge found no cause of action which had any likelihood of success as:
· the claim in respect of the property was “that it is not a matrimonial asset” (or a declaration that it was not a matrimonial asset);
· that the evidence relied on by Company Z among other things having regard to s 97 and 98 of the Evidence Act 1995 (Cth) was ignored by the applicants (and their parents);
· that the controversy about the NSW property was still to be resolved; and
· that the assertion Company Z had only one creditor had been resolved in the Supreme Court and was res judicata.
His Honour further found the applicants appeared to maintain:
· the contention that Company Z’s only source of cash was not its loan account with the applicants’ parents and Company X, but from profits, had not been demonstrated by Company Z by affirmative evidence.
But notwithstanding this assertion, in the Supreme Court that:
…in the [Company X] proceedings it was established that there was no default in [Company Z] paying any indebtedness to [Company X] for the stocks supplied by [Company X] and further the claim that [Company X] lent money to [Company Z] was abandoned… (paragraph 221)
His Honour further noted that in respect of the property being held on trust for Company Z a “bare denial was made”. Noting the difficulty in extracting from the applicants, who were self represented before his Honour, on hearing their oral submissions the nature of their contentions, the trial Judge explained their submissions “did not advance any meritorious points of defence in response to the Sixth Respondent’s [Company Z’s] application for summary dismissal”. Thus, as his Honour found he was satisfied on the pleadings there was no triable case, he then turned to consider whether there was a triable case on the evidence in chief of the applicants and their parents (their respective affidavit evidence having been filed).
After recording the fact the applicants had been on notice for a considerable period of time of the contentions of Company Z as to the source of funds to acquire the property, he noted that they had been unable to produce “any primary records or bank statements to satisfy me that any triable issue arises in respect of the ownership of this property”.
His Honour also made a finding at paragraph 228 that the wife had used company funds for improper purposes based on evidence before him which was not controversial.
Whilst not finding the whole of what was sought to be agitated was an abuse of process, his Honour determined that those parts of the claim which were sought to be maintained, but which were res judicata, did constitute an abuse of process.
The stay judgment
Because of the manner the applications in the proposed appeal against his Honour’s orders have come before me, it is necessary that I refer to his Honour’s second judgment, also delivered on 17 December 2007, when he had before him the applicants’ first application.
His Honour commenced his reasons noting that the application sought two forms of relief:
a)a stay of orders made on 15 November 2007, and
b)leave to appeal those orders.
His Honour also noted, at paragraph 2, that leave was sought by the wife to appeal on behalf of a person who was not a party in the proceedings before him.
His Honour made it clear that he dealt only with order 1 sought in the application, namely the stay of his orders made 13 November 2007 and 15 November 2007, which he noted he had dismissed on 3 December 2007.
The question of whether the appeal was competent, or whether leave to appeal was required was raised by the trial Judge in his reasons at paragraph 24 when his Honour said:
I informed the Wife and [SGY] that there may be an issue as to whether leave to appeal was required pursuant to s 94AA of the Family Law Act: Rutherford and Rutherford (1991) FLC 92-255 and Tudor and Tudor (1992) FLC 92-273. I informed them that they should seek legal advise [sic]. However I dealt with the stay application on the basis that leave to appeal against the orders of 13 and 15 November 2007 was not required.
His Honour further noted the submissions made by counsel on behalf of Company Z which he summarised and commented on in paragraph 61 of his reasons as follows:
The Sixth Respondent submitted that there is simply no evidence that a refusal to grant a stay will oppress the applicant or stifle the subject matter of the proposed appeal, by reason of the applicant’s failure to articulate arguable grounds of appeal in their draft Notice of Appeal. In oral submissions, Mr Cohen guided me through the proposed grounds of appeal and made submissions attacking those grounds.
Relevant statute law and rules
Section 94 of the Act provides for appeals to the Family Court from courts other than the Federal Magistrates Court. Section 94(1A) provides as follows:
An appeal under subsection (1) or (1AA) shall be instituted within the time prescribed by the standard Rules of Court or within such further time as is allowed in accordance with the standard Rules of Court.
Sections 94(2D), (2E) and (2F) are also relevant. They provide:
(2D) Applications of a procedural nature, including applications:
(a)for an extension of time within which to institute an appeal under subsection (1) or (1AA); or
(b)for leave to amend the grounds of an appeal under subsection (1) or (1AA); or
…
(e)for an extension of time within which to file an application for leave to appeal; or
(f)for security for costs in relation to an appeal; or
…
may be heard and determined by a Judge of the Appeal Division or other Judge if there is no Judge of the Appeal Division available, or by a Full Court of the Family Court.
(2E)The standard Rules of Court may make provision enabling applications of a kind mentioned in subsection (2D) to be dealt with, subject to conditions prescribed by the standard Rules of Court, without an oral hearing.
(2F)No appeal lies under this section from an order or decision made under subsection (2B) or (2D).
Chapter 22 of the Family Law Rules 2004 deals with appeals.
Rule 22.02 sets out how an appeal is to be commenced, namely by filing a Notice of Appeal (Form 20).
Rule 22.03 provides that a Form 20 must be filed within 28 days after the order appealed from is made. Rule 22.12 provides that the filing of an appeal does not operate as a stay of the operation or enforcement of the order in respect of which the appeal is filed.
Rule 22.46 provides that a party may file an application for permission to appeal within 28 days after the ordered appealed from was made. An extension of time in which to file such application may be made in reliance on
r 1.14.
The first question
Did his Honour dismiss the first application in its entirety?
There can be no dispute that the first application, if it was an application by the applicants themselves seeking leave to appeal the orders made on 15 November 2007, was filed in the time provided by the rules (rule 22.46), although not filed in the Appeal Registry.
It is clear from his Honour’s stay judgment that the he did not deal with the relief sought in orders 2, 3, and 4 of that application, but after granting an interim stay on hearing the application, subsequently, on 3 December 2007, merely dismissed the application for a stay. His Honour’s order is as follows:
Order 1 of the Application in a Case filed on 28 November 2007 by the Wife as First Respondent and [SGY] as Fourth Respondent seeking a stay of the orders made by O’Ryan J on 13 and 15 November 2007 be dismissed.
The balance of the relief sought in the first application is in the following terms:
2.That the injunctions ordered by Judicial Registrar Johnston of the Family Court of Australia on 30 August 1999, as set out in Order 1 of the Judicial Registrar’s orders were continued by His Honour Justice Rose on 7 September 1999, which orders were continued until further order by His Honour Justice Cohen on 2 November 2001, are hereby discharged to the extent necessary to allow the wife to file any Notice of Appeal against the orders made by the Honourable Justice O’Ryan within 21 days.
3.That the wife be granted leave to appeal each of Orders 4, 5, 6, 7, 8, 9 and 10 of the Orders made on 15 November 2007 on behalf of [Mr H], the widower of [Mrs H] and or [Mrs E], sister of [Mrs H].
4.That the 2nd, 3rd and 4th Respondent be granted leave to appeal each of Orders 4, 5, 6 and 7 of the Orders made on 15 November 2007 on behalf of [Mr H], the widower of [Mrs H] and or [Mrs E], sister of [Mrs H].
5.That the Husband and the 6th Respondent pay the wife, 2nd, 3rd and 4th Respondents’ costs of and incidental to this application.
The submissions made to me in respect of this application were contained principally in the written submissions filed on behalf of the applicants after an appearance by counsel on their behalf at the adjourned hearing on 25 February 2008.
Counsel for the husband appeared to concede before me that this application, being one filed in time according to the rules, could have subsequently been amended by the applicants, as could the proposed Notice of Appeal attached to it, particularly as the latter had been drafted and annexed to the application before his Honour’s reasons in respect of the summary dismissal were published.
In fairness to counsel for Company Z, I note that the proposition the first application is competent was not raised by SGY when she appeared in person before me on 24 January 2008, and was thus not addressed directly by Company Z’s counsel in his written submissions filed prior to that date. There is however reference to the fact the application was not filed as a separate application in the appeal registry of the Court at paragraph 25 of Company Z’s supplementary written submissions.
In written submissions filed by the solicitors now acting for the applicants in this application on 3 March 2008 it is submitted:
Whilst the form of orders sought is anomalous, it is clear that both [LGM] (being the “wife”) and [SGY] (being the fourth respondent) were attempting to appeal the orders of O’Ryan J from at least 28 November 2007.
It is asserted (it appears in the alternate) that if I determine the application is not competent, that the husband and Company Z were “put on notice” after service of the application. Although it is acknowledged that “notwithstanding it appears as though the application was being brought for the benefit of [Mr H]” that the notice of intention to seek leave to appeal “cannot be said to be somehow vitiated because the form of the order or accompanying affidavit appear to reveal an ‘ulterior motive’”.
It is not appropriate that I should, on this application, exhaustively consider the proposed grounds of appeal annexed to the first application. At the outset, it is appropriate that I note the proposed grounds as drafted are in many instances difficult to comprehend and are not drafted as recognisable grounds of appeal. In so noting, I take into account that at the time the document was filed the applicants were self represented. I give significant weight to the fact that the applicants did not have the benefit of his Honour’s reasons for judgment at the time of filing the application or drafting the proposed grounds of appeal if leave was granted.
In his stay judgment also delivered on 17 December 2007, the trial Judge referred to affidavit material relied on by the applicants, noting that the affidavit in support of the application had annexed to it an affidavit of Mr H sworn 16 November 2007 in the Taipei District Court. His Honour noted “[a]mong other things the affidavit contended that [Mrs H] gave money to [SGY] to purchase the [QLD property] to be held on trust for [Mrs H] as the beneficiary. Due to the fact that [SGY] was at that time not an Australian resident, it is contended that [Mrs H] sought for the wife to be a joint trustee with [SGY].” Objection was taken to the admissibility of Mr H’s affidavit by counsel for Company Z on the basis that there had been a failure to disclose documents annexed to the affidavit.
From paragraph 22 of his reasons, the trial Judge turned his consideration to whether or not he should grant a stay, and having set out the relevant principles derived from the authorities on the granting of a stay rejected, as being unsupported by evidence, the assertion that the property was held on trust for Mrs H. His Honour referred to evidence given by SGY in proceedings on 15 June 2006 when she gave evidence through a Mandarin language interpreter. SGY gave evidence that the money advanced to enable the property to be purchased would have to be paid back. She said “Yes, I will one day, when I--”. Thus, his Honour concluded this evidence implied a loan rather than a trust.
His Honour set out the submissions of each of counsel for Company Z and the husband in relation to the proposed grounds of appeal.
On its face, the application is one filed by the applicants, although the relief sought in paragraphs 3 and 4 is for orders that the applicants and the applicants’ parents be granted leave to appeal “on behalf of [Mr H], the widower of [Mrs H] and or [Mrs E], sister of [Mrs H]” (“the third parties”).
I accept that the application was filed in time and prima facie was capable of amendment. However, no application was made by the third parties to be joined as parties to claim an interest in the property. It appears to me that if the claim the applicants wished to agitate on behalf of the third parties is legitimate, those third parties can pursue their claims in Company Z’s liquidation and therefore no prejudice to them will occur. I take into account that the applicants expressly disclaim the property is “matrimonial property”, and that SGY asserted on oath that the funds used to purchase the property are repayable at some point in time.
I further take into consideration that when SGY, and subsequently the wife, were legally represented in the applications before me, no application was made to amend the first application. In so finding I accept that an application for an adjournment was made on behalf of the applicants but refused by me.
On balance I am of the view the first application was, by implication, abandoned after receipt of the trial Judge’s reasons, particularly the reasons also delivered on 17 December 2007, refusing the stay. In those reasons the trial Judge carefully examined the then proposed grounds of appeal, and considered them without merit.
I am further fortified in the view that the first application was, by implication, abandoned, by reason of the filing of the second application. In conclusion, I am satisfied it is appropriate to consider the first application abandoned, but I do take into account that it provided a form of notice to Company Z that the applicants sought to challenge the trial Judge’s orders of 15 November 2007.
The second question
The second application is an application for an extension of time to appeal all orders made by the trial Judge on 15 November 2007.
Counsel for Company Z submitted both in his oral and written submissions that the second application was incompetent because it was not an application to extend time for leave to appeal. He submitted the orders made on 15 November 2007 are interlocutory orders and therefore leave to appeal was required. He further submitted that a more stringent test applies in the exercise of discretion in extending time and relied, amongst other authorities, to the decision of Lindgren J in Sharman License Holdings Pty Ltd and Anor v Universal Music Australia Pty Ltd and Ors [2005] FCA 802.
He further submitted that the applicants had not adequately explained the delay in filing the second application, and finally, that the proposed Notice of Appeal did not disclose any appealable error by the trial Judge, and thus the application should be dismissed.
Solicitors for the applicants in their written submissions asserted that it was inappropriate to rely on authorities in the Federal Court of Australia relevant to extending time for leave to appeal as those decisions must be considered in the light of the specific rules in the Federal Court Rules relating to leave to appeal from interlocutory judgments of that Court (Order 52 Rule 10). They asserted that different principles apply in the Family Court as the extension is governed by the Court’s general power to shorten or extend time under r 1.14. They said:
It is submitted that because this rule is of such general application, that reading into it a requirement that prospects of appeal need to be demonstrated is illegitimate. In other words, since, for example, the Extension Rule could be the basis of an application to amend a pleading out of time, serve a subpoena later than otherwise would be permissible, or any number of other things, and those things do not relate to prospects of success on appeal, then the Extension Rule cannot be read as requiring an applicant to demonstrate good prospects on an appeal. It is further submitted that, when these examples are considered, that there is nothing in the Extension Rule that invites the court to, in deciding whether to use its discretion, speculate about what may be decided at some future time. (Submissions 3 March 2008, paragraph 12)
I turn firstly to the assertion that the application is incompetent being an application for an extension of time to appeal, not leave to appeal.
Section 94AA of the Act provides, in the form of a table, the circumstances in which leave to appeal is required. Leave is required to appeal from “a prescribed decree of the Family Court (constituted otherwise than as a Full Court)”. A prescribed decree for the purposes of s 94AA is defined in Reg 15A of the Family Law Regulations 1984 as follows:
(1) For items 1 to 5 of the table in subsection 94AA (1) of the Act, a prescribed decree is an interlocutory decree (other than a decree in relation to a child welfare matter).
Whether an order is interlocutory or final has been the subject of consideration in the authorities in this Court (see Rutherford & Rutherford (1991) FLC 92-255, Tudor & Tudor (1992) FLC 92-273, Bennett & Bennett (1985) FLC 91-617 and Bigg & Suzi (1998) FLC 92-799).
In his submissions in support of the argument that the second application is incompetent, counsel for Company Z relied on Licul v Corney (1976) 180 CLR 213 and Carr v Finance Company of Australia Ltd(No 1)(1981) 147 CLR 246.
Australian authorities dealing with whether an order is interlocutory or final (including Carr) are discussed by the High Court in ReLuck (2004) 203 ALR 1. In that case McHugh ACJ, Gummow and Heydon JJ referred to a long line of English authorities, and Australian authorities, which discuss whether an order, which struck out a claim on the ground it was frivolous, vexatious or an abuse of process, or that it disclosed no cause of action, was interlocutory in nature. Their Honours said at paragraph 9:
Given the long-established English rule, the decision in Tampion and our decisions in Pye, Hall, Carr and Bienstein, we see no valid reason for departing from the rule laid down in Tampion. An order is an interlocutory order, therefore, when it stays or dismisses an action or refuses leave to commence or proceed with an action because the action is frivolous, vexatious, an abuse of the process of the court or does not disclose a reasonable cause of action.
The applicants were put on notice when they received the written submissions of counsel for Company Z that the application in its present form was defective. An opportunity was afforded to the applicants by me on 24 January 2008 to file an amended Application in a Case seeking leave to appeal. No such amended application was filed.
I therefore accept that the present application is incompetent and accordingly must be dismissed.
In view of my conclusions above, it is not strictly necessary that I refer to the submissions made by counsel for the applicants, but for completeness I will do so.
I do not accept the submission that when dealing with the exercise of discretion to extend time that the discretion is at large. When dealing with an extension of time in which to appeal or to seek leave to appeal, that exercise of discretion should be guided by well established principles in dealing with such applications (see Gallo v Dawson (1990) 93 ALR 479, Tormsen& Tormsen (1993) FLC 92-392).
If the applicants’ second application had been competent, having regard to the principles as explained in Tormsen, the delay in filing the application, which was not substantial and in circumstances where the first application had been filed, would not necessarily have been fatal to the application.
Of more significance are the proposed grounds of appeal on which the applicants assert error by the trial Judge. It is not appropriate that I should closely examine those grounds in light of my conclusions set out above. However, they do not appear to me to disclose proper grounds of appeal and the arguments advanced in respect of each of the grounds contained in counsel for Company Z’s submissions appear cogent.
Costs
At the conclusion of the proceedings counsel for Company Z sought an order that the applicants pay Company Z’s costs on an indemnity basis. The husband also sought an order that the applicants pay his costs of the proceedings.
The order for indemnity costs was sought on the basis that the applicants were wholly unsuccessful in their application, and had been put on notice of the necessity to amend the application but had failed to do so.
Costs in these proceedings are governed by s 117 of the Act. Section 117(1) (2) and (2A) relevantly provide:
(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
Indemnity costs can be awarded in appropriate circumstances, but an award of such costs requires exceptional circumstances (see Munday & Bowman (1997) FLC 92-784; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248).
If an order for indemnity costs is sought it is appropriate that there is evidence of costs being charged to a party seeking such costs, which requirement may be satisfied by the production of the relevant costs agreement. No agreement was tendered before me in this costs application. As will however become apparent nothing turns on that fact.
There was no evidence before me of the applicants’ financial circumstances, those of the husband, or the financial position of Company Z. I was aware however that the wife was incarcerated for a period of six months which would preclude her being in gainful employment.
I accept that the applicants have been wholly unsuccessful in their applications. However I am not satisfied that their failure to amend the second application constitutes a circumstance of such exceptional nature that costs should be awarded on an indemnity basis.
I am satisfied having regard to the lack of success of the applicants, there are circumstances which warrant departure from s 117(1), and that the applicants should pay the costs of Company Z and the husband of and incidental to the application filed 18 December 2007.
I certify that the preceding one hundred and one (101) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Boland.
Associate:
Date: 30 April 2008
ANNEXURE “A”
Application in a Case filed in Court on 28 November 2007 (SYF 3359 of 1997) with handwritten notation: “Filed in Court on 28 November 2007 before his Honour Justice O’Ryan”
Notice of Appeal with handwritten notation: “Filed in Court on 28 November 2007 before his Honour Justice O’Ryan”
Application in a Case filed 18 December 2007 (EA 152 of 2007)
Response to an Application in a Case filed 20 February 2008.
Affidavit of SGY and LGM affirmed 26 November 2007 and filed 28 November 2007.
Affidavit of SGY and LGM affirmed 13 December 2007 and filed 18 December 2007
Affidavit of LGM affirmed 10 January 2008 and filed 11 January 2008
Affidavit of John Alan Holmes sworn 14 January 2008 and filed 15 January 2008 (paragraphs 1-24)
Affidavit of Danielle Funston sworn/affirmed 19 February 2008 and filed 20 February 2008
Submissions (dated 21 January 2008) of the Respondent opposing the Application in a Case dated 17 December 2007, filed 23 January 2008
Supplementary Submissions (dated 19 February 2008) of the First Respondent opposing the Application in Case dated 17 December 2007, filed 20 February 2008
Submissions of the Applicants filed 3 March 2008
7
5
5