SHAW & SHAW
[2014] FamCAFC 146
FAMILY COURT OF AUSTRALIA
| SHAW & SHAW | [2014] FamCAFC 146 |
| FAMILY LAW – APPEAL – application in an appeal for reinstatement following abandonment of appeal. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| Black & Kellner (1992) FLC 92-287 |
| APPELLANT: | Mr Shaw |
| RESPONDENT: | Ms Shaw |
| FILE NUMBER: | PAC | 3864 | of | 2012 |
| APPEAL NUMBER: | EA | 32 | of | 2014 |
| DATE DELIVERED: | 14 August 2014 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ainslie-Wallace J |
| HEARING DATE: | 12 August 2014 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 7 March 2014 |
| LOWER COURT MNC: | [2014] FCCA 1009 |
REPRESENTATION
| THE APPELLANT: | In person |
| SOLICITOR FOR THE RESPONDENT: | Ms Adams as agent for Hanson Lawyers |
Orders
The application in an appeal filed by Mr Shaw on 9 July 2014 to reinstate an appeal be dismissed.
Any submissions on behalf of the wife as to the costs of the application be filed and served on Mr Shaw within 28 days of this date. Any response to those submissions on behalf of Mr Shaw be filed and served on the solicitors for the wife within 21 days of service on him of the submissions for the wife.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Shaw & Shaw has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 32 of 2014
File Number: PAC 3864 of 2012
| Mr Shaw |
Appellant
and
| Ms Shaw |
Respondent
REASONS FOR JUDGMENT
On 7 March 2014 Judge Henderson made property settlement orders between Mr Shaw (“the husband”) and Ms Shaw (“the wife”). The orders divided the property of the parties as to 95 per cent to the wife and as to 5 per cent to the husband.
On 12 March 2014 the husband filed a notice of appeal against those orders. On 17 June 2014 the appeal was deemed abandoned because the husband failed to file a draft appeal index within the time prescribed by r 22.13 of the Family Law Rules 2004 (Cth).
By an application in an appeal filed 9 July 2014, the husband seeks an order that his appeal be reinstated pursuant to r 22.44. The wife opposes the reinstatement of the appeal.
Whether the appeal is reinstated is a matter for the exercise of discretion. The exercise of the discretion in not unfettered but must be exercised mindful of the purpose for which it is conferred (see Salido v Nominal Defendant (1993) 32 NSWLR 524). Guidance is provided by the discussion in Gallo v Dawson (1990) 93 ALR 479, particularly in the judgment of McHugh J where his Honour said at (480):
The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted: It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice.
Although the court in Gallo v Dawson was dealing with an application to extend time in which to bring an appeal, the principles to which the court referred have equally been applied by this court in considering applications to reinstate an appeal. Having regard to those principles, in considering whether to not reinstate an appeal would work an injustice on a party, a court ought consider; whether there are adequate reasons in explanation of the failure to comply with the rules; whether there is a substantial issue to be raised on the appeal; the history of the proceedings; the conduct of the parties; the nature of the litigation and the consequences for both parties if the sought leave is granted or refused.
Explanation for the delay in filing the draft appeal index
The husband’s affidavit is brief and is set out in full. It is handwritten. The part of the application in which the applicant’s address is to be included is the word “homeless”. The husband said:
1. I do not have any legal representation, as such I was unaware of the deadlines to file appropriate documentation. As I have no fixed address it is hard to communicate with me, and sometimes it is hard for me to get access to the internet to check emails etc. This matter is getting the better of me at the moment, as I have not seen my children for 18 months and I have lost all of my assets. Please help me in these current circumstances.
The wife filed a response to the husband’s application opposing it together with an affidavit which challenges the husband’s assertion that he was unaware of the time limits for the filing of documents. In that affidavit, the wife refers to a letter sent to the husband by the Appeals Registrar which clearly shows the date on which the Draft Appeal Index was to be filed and which notified the husband of the consequences of a failure to comply with the rule, namely that the appeal will be deemed abandoned. The wife says that a copy of this letter was forwarded to her solicitor by the husband on 13 March 2014. It was not disputed that the husband had forwarded this letter to the wife’s solicitor.
The letter, dated 12 March 2014 and addressed to the husband relevantly says:
… …
Draft Index to the Appeal Books
You are referred to Rule 22.13(2) an (3) which provide, inter alia, that an appellant must file a draft index to the appeal books within 28 days of filing the Notice of Appeal (or reasons for judgment being published) and that in the event the draft index is not filed, the appeal is deemed abandoned.
You should ensure that a draft index to the appeal books is filed with the Appeals Registry, and served on all other parties to the appeal, no later than 4.30 pm on 9 April 2014 or within 28 days of the relevant judgment being issued.
The draft index must comply with Rules 22.19 and 22.20 of the Rules. Whilst there is no prescribed form for this document, I enclose a sample index for your assistance and a copy of the relevant Rules. Failure to file the draft index by 4.30 pm on the due date will result in the appeal being deemed abandoned pursuant to Rule 22.13(3).
… ...
(Bold in original)
I observe that although the letter of 12 March 2014 to the husband identified
9 April 2014 as the date by which the appeal index had to be filed, the appeal was not deemed to have been abandoned until 17 June 2014. The husband indicated that he had asked for an extension of time in which to comply with the rules and the later date of 17 June may reflect that it had been granted to him. In any event he did not file the draft appeal index either by 17 June 2014 or 9 April 2014.
The husband contends that his circumstances prevented him attending to the preparation and filing of the draft appeal index.
It seems from the reasons of the trial judge that the husband’s circumstances were no different then than now. Her Honour observed that the husband’s evidence before her was that had been arrested by police for shoplifting in a supermarket because he had no money with which to buy food [51]; that he was homeless having been evicted from his offices in the city for failing to pay the rent and gave his address as “staircase 7, [Building CBD]” [77] and [79] and said that his computer was not working so he could not work.
These circumstances, no doubt made it extremely difficult for the husband to manage the litigation before her Honour although he appeared on each of the hearing days and represented himself. Notwithstanding his circumstances, he was able to file the notice of appeal.
Nothing put in oral argument explains why his circumstances prevented him from attending to the filing of the draft appeal index.
The letter to the husband from the Appeals Registrar could not have made it clearer that not only was there a deadline for the filing of the index but to fail to comply with that deadline would incur a consequence. The husband received the letter because he forwarded it to the wife’s solicitor. The husband is a financial professional and has in the past conducted a significant professional career. It is hard to imagine him not being able to understand the very clear terms of the Registrar’s letter to him.
In these circumstances, there is no satisfactory explanation why the husband did not file his draft appeal index within the time specified.
Substantial issue to be argued on the appeal
As part of a consideration of the application, it is necessary to consider whether the husband’s appeal is so devoid of merit that it would be futile to make the order sought because if the appeal would enjoy no prospect of success, the making of the order sought would be futile and thereby create an injustice to the wife and cause needless expenditure of funds if the appeal was otherwise to proceed. It is recognised that what must be clearly shown before an applicant is denied the right to have his or her appeal heard, is that the appeal would fail.
This determination of the merit of the appeal requires a consideration of whether the appeal is “arguable”. It will be readily understood that the determination of merit of an appeal for this purpose must of necessity be confined by the documents available to the court on the application.
The notice of appeal against her Honour’s orders states:
1. I would like to appeal the final orders as there seems to be an extreme error in the calculations used to determine the level of waste.
2. The final orders are not in the best interests of our children.
3. The final orders are not equitable, and leave me in a very bad financial position. This seems to go against the mission of the court to minimise the financial impact to all parties.
The husband seeks, in the event of the appeal succeeding, that orders be made in lieu of those of the trial judge dividing the parties’ assets as to 30 per cent to him and the balance to the wife. He further seeks a payment of $5,000 in payment for his personal belongings left with the wife.
It is necessary in determining this issue to consider the trial judge’s reasons.
The trial judge’s reasons
During the hearing before her Honour, the husband represented himself. At an earlier time, when he was legally represented, in December 2012, the husband filed a response to the wife’s application and an affidavit.
During the marriage, the wife worked in the home and the husband was employed as a professional. Up until 2006, according to the trial judge, the parties’ lives were financially comfortable and they or trusts associated with them had accumulated investments. The husband established two companies through which he conducted his business.
The judge found that although considerable amounts of money were available to the parties, between 2008 and the date of trial, the lion’s share of the money was used by the husband for his own purposes. Her Honour, on a rough calculation, considered that the amount of money used by the husband to the exclusion of the wife might be in the order of $2 million.
The trial judge found that from a pool of once considerably valuable assets and financial resources, there was at the time of trial but $381,753.56 net remaining.
Although a matter of dispute, her Honour accepted the wife’s evidence that from 2006 the husband commenced to use drugs and spent large amounts of joint funds in supporting that use [104]. Her Honour further accepted the wife’s evidence that at the same time as the husband commenced to use drugs his behaviour changed, he stopped coming home regularly and he became abusive and angry [105].
However, the judge concluded that whatever money the husband had used to the exclusion of the wife, it had been wholly expended by him. She did not find he had undisclosed assets or financial resources.
It is clear from reading the trial judge’s reasons that because of a paucity of financial information and, as her Honour found, a deliberate failure by the husband to make proper financial disclosure, the parties’ financial position from time to time and indeed at the time of the trial was obscured.
Her Honour said:
40. The husband’s total and complete failure to carry out full and frank disclosure of his financial affairs and dealings or even proffer any fulsome explanation of the multitude of financial transactions and dealings he engaged in solely pre and post separation have left me unable to fully understand or be in a position to make sense of how the parties are where they are today. Only the husband could give these explanations as he carried out all the relevant financial transactions. Rather than explain he obfuscated.
The trial judge further commented that:
41. The husband was totally uncooperative with the Court, including myself and anyone who asked him for an explanation, to produce a copy of a document, produce anything to support what he was claiming. When pressed on any issue, all including me were met with a torrent of abuse, blame for the problems he was suffering and all felt the force of his anger and frustration.
Her Honour said that the husband did nothing to assist the court to understand the complex financial arrangements that were part of the family’s affairs. In particular, in the period 2005 to the date of hearing, the husband had engaged in complex transactions in which a further accountancy partnership was acquired by his partnership for a purchase price of $2,850,000 but the husband provided no information about his liability for the price or the borrowings made to meet it [109].
Her Honour observed that in 2008 the husband’s business partners arranged to buy out his interest in the partnership for $2.3 million to be paid in instalments, commencing with a payment of $400,000 and, followed, it seems by regular payments.
The trial judge’s difficulties in understanding the parties’ financial arrangements are perhaps exemplified where she said:
120. Although the husband is, again, silent in his affidavit on this very important evidence he was clear on this in his oral evidence. He said many times he did not receive this $400,000, that there were significant debts that he, he and his wife, and various corporations and entities he controlled had, and that this money went to pay those debts.
121. The husband repeatedly said “do the maths, do the maths, it doesn’t add up, I can’t have had that money”. That is some of the clearest evidence he gave.
Her Honour, while accepting that the husband had not used the $400,000 paid to him for his own purposes, concluded however that the bulk of the money subsequently paid to the husband by his ex-partners was not used for joint purposes but for his own and observed that he gave no evidence about how the money was spent and failed to produce documents to support his assertions [125] and [126]. She found that the “significant monies” received by the husband from his ex-partners were used solely by the husband for his own purposes [133].
As to the husband’s obligation of full and frank disclosure, her Honour said:
135. The husband has failed in any meaningful away or at any reasonable level, to comply with his obligation of full and frank disclosure. The reality is that he has done the opposite. He has muddied the waters.
Her Honour further found that the affidavit filed by him in December 2012 did nothing to assist the court in understanding the financial affairs and said:
136. … For example he failed to set out the complex financial history of the parties a history in which he made all decisions solely, failed to disclose, describe or particularise what loans were still in existence when partnerships were sold, that he was still receiving money directly from [his ex-partners] including interest in contravention of the injunctive orders made in 2012 and how he spent this money. He failed to give any background or reason for his choices and decisions and demonstrated a complete lack of understanding of the consequences of his sole decisions upon the parties’ financial position today.
The trial judge concluded that the husband had intentionally misled the court [138].
As a result, the trial judge concluded that by his conduct, the husband had significantly reduced the matrimonial assets to the detriment of the wife and children [222].
The trial judge observed that despite the husband’s receipt of significant sums of money, his evidence at the date of the trial was that he was indigent, having no money and nowhere to live. She concluded that:
231. The husband said he has been evicted from his office, his computer is broken and thus he cannot work to earn income and has no money. I am satisfied the husband has spent all the money made available to him since 2008 and may well be penniless today.
Although her Honour accepted that up until 2006 the parties’ contributions could be considered equal, since separation her Honour found that the wife’s contributions greatly exceeded those of the husband and her Honour quantified those contributions as to 70 per cent as to the wife. Turning to the future and considering s 75(2), her Honour determined that there ought to be a further adjustment in the wife’s favour such that she received 95 per cent of the assets remaining to divide. Because the husband retained some superannuation and other assets, the value of those interests accounted for 5 per cent and the wife was not ordered to pay any funds to the husband in compliance with her Honour’s orders.
It is against this background that the husband’s appeal must be considered.
As indicated, the husband’s challenges to her Honour’s orders can be summarised as asserting that she erred in calculating the amount of money “wasted” by the husband because she made erroneous assumptions, and further that the outcome was neither just nor equitable.
Errors in assumptions about money expended
In oral argument on the application, the husband said that her Honour made errors in her assumptions about how money was expended, these errors were, he said, a result of the trial judge not having sufficient evidence on which to base the conclusions.
He further argued that the wife was a joint director with him of the companies and, as such she had a duty to know how the company operated. Thus he said that when he did not produce information to the court, the wife was obliged to produce that information. It is plain from reading the trial judge’s reasons that the wife produced such information as she could in an attempt to explain the financial position of the parties, including as her Honour noted at [8] a “summary of the husband’s spending from [counsel’s] reading of and cross checking bank statements”.
The only information put before her Honour by the husband was a response to the wife’s application and an affidavit, both sworn in December 2012. He did not produce any further documentary evidence. Lest it be thought that the husband’s failure to bring evidence or provide information to the court was inadvertent, her Honour at [9] of her reasons said, in listing the evidence relied on by the wife:
Wife’s Exhibit 2, an email from the husband to the wife’s solicitors dated 14 February 2014 indicating his total lack of cooperation in providing documents. The words used by him to the wife’s lawyer upon their request for documents were “fuck off”.
A party’s obligation to make full and frank financial disclosure in property proceedings in this court has long been settled. In Black & Kellner (1992) FLC 92-287 it was said:
The Full Court in Oriolo and Oriolo, supra, referred with approval to the remarks of Smithers J in the case of In the Marriage of Briese, supra, and it is perhaps worth reiterating a portion of his Honour's statement at Fam LR 662; FLC 75,181 where he said, after referring to the decision of the House of Lords in Livesey v Jenkins [1985] All ER 106:
“I believe that the conclusion of the House of Lords in the case of Livesey v Jenkins is apposite, namely that in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In that case it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of discretion. This is quite different from common law litigation between strangers, in which such a general duty does not exist, and obligations would only exist in so far as statute or court rules required. "In my view it is fundamental to the whole operation of the Family Law Act in financial cases that there is an obligation of the nature to which I have referred."
(See also Weir v Weir (1993) FLC 92-338, and Oriolo v Oriolo (1985) FLC 91-653.)
Her Honour’s findings as to the husband’s failure to disclose, failure to explain and obfuscation of material issues are not challenged on the appeal. The husband chose not to comply with his obligations of disclosure. He, and he alone, was in a position to assist her Honour in understanding what money was received by him and how it was spent. He did not. He cannot now complain of an error in calculation when it was born of his own decision.
Justice and Equity
Turning then to the second challenge to her Honour’s orders, namely that the order is neither just nor equitable, the ground effectively challenges the exercise of her Honour’s discretion.
Challenges to the exercise of a trial judge’s discretion are difficult. In Gronow & Gronow (1979) 144 CLR 513, at paragraphs 519-520 the court said:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight.
It can thus be seen that the test of establishing appealable error in this regard is not easily satisfied.
It was argued for the wife that the husband’s appeal had no reasonable prospect of success.
Nothing put by the husband either in his affidavit or orally and considered in the light of her Honour’s reasons, establishes an error of discretion.
The husband’s appeal has no prospect of succeeding and for this reason alone the application should be refused because to otherwise reinstate the appeal would be futile.
Prejudice
It could well be argued for the husband that if the appeal is not reinstated he will lose the opportunity to challenge her Honour’s orders and, if successful secure an order that was more favourable to him and thus to not reinstate the appeal would work an injustice on the husband.
The husband said that he had no fixed place to live, had little funds, did not have consistent work and had debts such that he was considering bankruptcy. He had not, before being asked, considered how he was going to pay the necessary costs of preparing appeal books and purchasing transcript to progress the matter if the appeal was reinstated. He suggested that perhaps the wife could lend him the money. Unsurprisingly, the wife’s solicitor said that no such loan would be made available to the husband.
It was argued for the wife that if the appeal was reinstated and the appeal was unsuccessful, any costs order in the wife’s favour would not be met.
Prejudice or the injustice flowing from granting or not granting the application works in relation to both parties. Given the husband’s financial circumstances, one could not be even slightly confident that if the appeal was reinstated, the husband could pay for the provision of transcript and the costs of preparing the appeal books. As her Honour’s reasons make clear the wife alone is supporting the parties’ children and herself without assistance from the husband. What once were seemingly substantial financial circumstances have been reduced such that a relatively small amount of money is left to be divided between the parties. It would in my view, work a significant injustice to the wife if the appeal was reinstated and she was thus compelled to incur further costs in opposing an appeal, which has little or no merit.
Thus for the foregoing reasons the application will be refused.
Costs
The wife sought a costs order but wished to make those submissions in writing. I will thus order that any submissions by the wife be filed and served on the husband within 28 days of the date of the judgment and the husband file and serve any submissions in response within a further 21 days.
_____________________________________________________________________
I certify that the preceding fifty eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ainslie-Wallace delivered on
14 August 2014.
Associate:
Date: 14 August 2014
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