SILVA & PHOENIX
[2018] FamCAFC 41
•7 March 2018
FAMILY COURT OF AUSTRALIA
| SILVA & PHOENIX | [2018] FamCAFC 41 |
| FAMILY LAW – APPEAL – DISQUALIFICATION – Where the primary judge was asked by the parties to make consent orders – Where the primary judge had to be satisfied on the material before him that it was just and equitable to make the consent orders as sought – Where the primary judge refused to make the consent orders finding the proposed compromise to be “manifestly inadequate” and set the matter down for hearing before him – Where the test is whether “a fair-minded lay observer might reasonably apprehend that the judge may not bring an impartial and unprejudiced mind to the resolution of the question that he or she is required to decide” – Where the test is satisfied here – Where the primary judge’s knowledge of the compromise the appellant was prepared to make for the purposes of the consent orders would be taken into account by a lay observer as apprehending that the primary judge may not bring an impartial mind to the subsequent hearing – Where the primary judge found definitively that there should be an alteration of the parties’ interest in property of greater than 10 per cent in favour of the respondent – Where the primary judge has prejudged the issue in dispute – Where it is not open on appeal for the appellant to raise a complaint of actual bias when all that was argued before the primary judge was that he be disqualified for apprehended bias –– Where there is merit in the grounds of appeal save and except to the extent that actual bias is argued – Appeal allowed. FAMILY LAW – COSTS – Where the appellant sought his costs in the event that the appeal was successful – Where the respondent opposed an order for costs – Where the respondent having not participated in the appeal was not in a position to seek a costs certificate if the appeal was successful on a question of law and no costs order was made – Where there is nothing put that would justify an order for costs against the respondent – Where each party should bear their own costs – Where the appellant should have a costs certificate pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth) – Costs Certificate ordered in favour of the appellant. |
| Family Law Act 1975 (Cth) ss 79 and 117(1) Federal Proceedings (Costs) Act 1981 (Cth) s 9 |
| Ebner v Official Trustee n Bankruptcy (2000) 205 CLR 337 Johnson v Johnson (2000) 201 CLR 488 Metwally v University of Wollongong (1985) 60 ALR 68 Michael Wilson & Partners Limited v Nicholls (2011) 244 CLR 427 Re J.R.L.; Ex parte C.J.L. (1986) 161 CLR 342 Stiffle and Stiffle (1988) FLC 91-977 Water Board v Moustakas (1988) 180 CLR 491 |
| APPELLANT: | Mr Silva |
| RESPONDENT: | Ms Phoenix |
| FILE NUMBER: | MLC | 11499 | of | 2015 |
| APPEAL NUMBER: | SOA | 50 | of | 2017 |
| DATE DELIVERED: | 7 March 2018 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 29 January 2018 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 27 June 2017 |
| LOWER COURT MNC: | [2017] FCCA 1436 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Strum QC with Ms Renwick |
| SOLICITOR FOR THE APPELLANT: | Ravi James Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Da Gama |
| SOLICITOR FOR THE RESPONDENT: | Vernon Da Gama & Associates |
Orders
The appeal be allowed.
The order made on 27 June 2017 be set aside.
Judge A Kelly be disqualified from further hearing the property settlement applications between the parties.
The court grants to the appellant husband a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant husband in respect of the costs incurred by him in relation to the appeal.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Silva & Phoenix has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 50 of 2017
File Number: MLC 11499 of 2015
| Mr Silva |
Appellant
And
| Ms Phoenix |
Respondent
REASONS FOR JUDGMENT
Introduction
By Amended Notice of Appeal filed on 1 August 2017, Mr Silva (“the husband”) appeals against the order made by Judge A Kelly on 27 June 2017 dismissing the husband’s application that his Honour disqualify himself.
Ms Phoenix (“the wife”) opposes the appeal, but she did not take part in the same and she did not file a written summary of argument. Her solicitor appeared at the hearing of the appeal, but only as a matter of courtesy to the court, and without making any oral submissions, save and except as to the issue of costs.
Background
On 7 December 2015 the wife instituted property proceedings in the Federal Circuit Court of Australia seeking interim and final property settlement orders.
On 8 July 2016 an order was made appointing the husband’s father as the husband’s litigation guardian.
On 20 January 2017 the husband filed an Amended Response to the wife’s Initiating Application, seeking, inter alia, an order that the wife’s application for an alteration of interests in property pursuant to s 79(1) of the Family Law Act 1975 (Cth) (“the Act”) be dismissed on the grounds that it is not just and equitable to make an order as required by s 79(2) of the Act.
On 27 February 2017 the wife filed an Amended Initiating Application seeking, inter alia, “a split of the total matrimonial assets being 20% to the Wife and 80% to the Husband”, and an equal adjustment of the parties’ superannuation interests.
The trial was listed to commence on 18 April 2017, but on 11 April 2017 the parties submitted to the chambers of the primary judge, a signed Minute of Final Consent Orders. The Minute provided for the husband to pay to the wife the sum of $30,000, representing approximately 10 per cent of the value of the asset pool.
On 12 April 2017, following a request from the primary judge, the parties submitted a statement of agreed facts.
Subsequently the primary judge listed the matter for mention before him on 21 April 2017. At that mention each party was represented by their respective solicitors who made submissions in support of the Minute of Final Consent Orders. However, his Honour was not prepared to make the orders, and he listed the matter for a defended hearing before him commencing on 25 September 2017.
On 9 May 2017 the husband filed an Application in a Case seeking, inter alia, that the primary judge disqualify himself from further hearing the proceedings, and that the matter be listed before a judge other than the primary judge.
That application was heard by the primary judge on 23 June 2017, and on 27 June 2017 his Honour made an order dismissing the application.
The appeal
In his oral submissions the husband’s senior counsel abandoned Ground 6, and grouped the remaining grounds of appeal together as follows:
a)Grounds 1, 2, 4 and 7 – apprehended bias.
b)Grounds 2 and 4 – actual bias (pre-judgment of a threshold issue).
c)Grounds 5, 8, 9 and 13 – pre-judgment.
d)Grounds 10, 11 and 12 – error in approach to determining an application under s 79 of the Act.
It is convenient to address the grounds of appeal in the same way as the husband’s Senior Counsel did, but I note that many of the grounds of appeal were repetitious, and it is unnecessary to consider them all.
Apprehended bias
The learned Judge at first instance erred in law in dismissing the Appellant’s application that his Honour disqualify himself from further hearing Federal Circuit Court proceeding no. 11499 of 2015 (“Proceeding”) on the ground of apprehended bias.
The learned Judge at first instance erred in holding that, by refusing to make orders in the terms of the minute of proposed consent orders dated 11 April 2017 (“Minute”), his Honour had not (or could not be reasonably apprehended to have) prejudged the Appellant’s Amended Response to Initiating Application filed 20 January 2017 (“Amended Response”).
The learned Judge at first instance erred in failing to recuse himself, of his own motion, from further hearing the Proceeding on the basis of actual or apprehended bias.
The learned Judge at first instance erred in not holding that a fair-minded lay observer might reasonably apprehend that his Honour might not bring an impartial mind to the resolution of the question he was required to decide (Reasons for Judgment at para. [26]).
The principles concerning disqualification for apprehended bias are well settled. In Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, the High Court said this:
6Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that, subject to qualifications relating to waiver (which is not presently relevant) or necessity (which may be relevant to the second appeal), a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle.
7The apprehension of bias principle may be thought to find its justification in the importance of the basic principle, that the tribunal be independent and impartial. So important is the principle that even the appearance of departure from it is prohibited lest the integrity of the judicial system be undermined. There are, however, some other aspects of the apprehension of bias principle which should be recognised. Deciding whether a judicial officer (or juror) might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge or juror will in fact approach the matter. The question is one of possibility (real and not remote), not probability. Similarly, if the matter has already been decided, the test is one which requires no conclusion about what factors actually influenced the outcome. No attempt need be made to inquire into the actual thought processes of the judge or juror.
8The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an “interest” in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed.
…
(Footnotes omitted)
I highlight paragraph 8 of those reasons, and I add that the requirements of a two-step process in the application of the apprehended bias principle has been confirmed in subsequent High Court decisions, including for example, Michael Wilson & Partners Limited v Nicholls (2011) 244 CLR 427 at 445 [63] and 446 [67].
The effect of the decision in Ebner, and the principles emanating from it are confirmatory of what was determined in an earlier decision of the High Court in Johnson v Johnson (2000) 201 CLR 488. The principle that sprang from Johnson, and which was confirmed in Ebner, is that the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias, is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide. I note also that in the case of Johnson, the High Court said this, at 493:
12The hypothetical reasonable observer of the judge’s conduct is postulated in order to emphasise that the test is objective, is founded in the need for public confidence in the judiciary, and is not based purely upon the assessment by some judges of the capacity or performance of their colleagues. At the same time, two things need to be remembered: the observer is taken to be reasonable; and the person being observed is “a professional judge whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial”.
(My emphasis)
Finally, I refer to the High Court decision in Re J.R.L.; Ex parte C.J.L. (1986) 161 CLR 342, where Mason J said, at 352:
It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party. … [D]isqualification is only made out by showing that there is a reasonable apprehension of bias by reason of prejudgment and this must be “firmly established”.
(Emphasis added)
It is said that his Honour’s comments at the hearing on 21 April 2017 demonstrated “an ineradicable apprehension of pre-judgment”. The complaint is that instead of expressing a “tentative view” his Honour was making a definitive statement.
What his Honour said was as follows:
13.On those agreed facts I concluded that I could not, without more, make a final property order approving the parties’ proposed compromise.
14.In those circumstances, I directed that the matter be listed for mention. The parties’ appeared before me on 21 April 2017. For present purposes it is sufficient to set out the following exchanges, part of which were relied upon by the respondent husband in the present application:
Thank you. I asked that this matter be mentioned and I’m particularly grateful to you for your attendance and for your ensuring that your clients are here also. There are, fundamentally, three matters that I wish to raise with the parties today. The first of those is that for there to be an approval, a court order, in relation to a resolution of any property adjustment, the court has to be satisfied that it’s just and equitable for the orders that are being proposed to be made. There are two aspects of this which are of immediate concern to me
The first is that I see that the respondent has a medical condition; he has suffered an ischaemic stroke. I understand – someone’s phone is on. I understand from the agreed facts that the respondent husband suffered that stroke in December 2015 and at the moment I have no information about his current condition, it being some nearly 16 months later, and I will not be able to make any order in this matter until I am satisfied as to what his current medical condition is. That will require medical evidence
. . .
The other aspect of it concerns the proposed division. When the proposed orders were first put before the court for approval, there was no statement of agreed facts. There now is a statement of agreed facts and that indicates that the wife is to receive less than 10 per cent.
. . .
On any view of the authorities, that is, in my view, manifestly inadequate. Now, there are two aspects to this, either or which or both of which commend themselves for consideration. One alternative is that the parties inquire of the registry whether there is available an opportunity for mediation by a court registrar and, if assistance is needed to obtain that appointment, this court will see what can be done to do that.
The further matter that commends itself to me, in the circumstances that this matter was put up for approval on a statement of agreed facts, does indicate to me the very real desirability of the applicant wife considering, at the least, that she have a conference with a suitably experienced member of the junior bar who practises in family law who is able to provide her with advice in conference about what her prospects are. . . .
. . . I am concerned that an award of nine per cent for even a relatively brief marriage is not just or equitable and I cannot approve it and will not approve it. Now, that is all I wanted to say at this stage in this proceeding. The matter will be adjourned and I think the appropriate course is to allow the parties perhaps three to four weeks to arrange for medical evidence that can be put before the court, exhibited to an affidavit from the treating practitioner and if there’s a treating specialist. I need to understand what the future needs of the respondent are and the same period will be sufficient, I think, for the applicant wife to obtain advice about this matter. . . . (emphasis added)
The court was informed that the parties had in fact been represented by counsel in the course of some negotiations for their property settlement.
The submission is that the comments made by his Honour made it clear that the application by the husband would not succeed, and, not only would there be an adjustment in the wife’s favour, but such an adjustment would be greater than the proposed settlement of approximately 10 per cent.
However, what is forgotten here is that his Honour was being asked by both parties to make consent orders. To do that his Honour had to be satisfied on the material before him that it was just and equitable to make the orders sought. Thus, it was not a matter of his Honour providing a tentative view in the context of actively managing a case; his Honour had to come to a view, and he did that.
That said, given that the proceedings then had to be listed for a defended hearing, the question is, in that context, can it be said that his Honour has pre-judged the issue in dispute. That depends on whether his Honour’s comments can be confined to the application that was before him, or whether it demonstrates a closed mind that will not be changed when the subsequent hearing takes place.
Although an argument could be mounted that it is the former, on the basis that a judicial officer is able to put aside his views in rejecting the consent orders, and bring an open mind to the subsequent hearing when there will be far more evidence put before him, the test is still whether “a fair-minded lay observer might reasonably apprehend that the judge may not bring an impartial and unprejudiced mind to the resolution of the question that he or she is required to decide.”
In my view, it is undeniable that that test is satisfied here. To also refer to what the High Court said in Ebner, what his Honour said that might lead him to decide the case on other than its legal and factual merits is identified, and there is an articulation of the legal connection between the matter and the feared deviation from the course of deciding the case on its merits. Thus, Grounds 1, 2 and 7 are made out. As to Ground 4, that is also made out to the extent that it raises apprehended bias. I will address the claim of actual bias shortly.
Although it was not included in this grouping of grounds, it seems to me that Ground 3 relates to the same complaint. Ground 3 is as follows:
The learned Judge at first instance failed to take into account a material consideration, namely that at trial his Honour would be aware that the Appellant had been prepared to compromise the Proceeding by making a payment to the Respondent, notwithstanding that the Appellant’s Response asserted it was not just and equitable to make an order under sec. 79(1) of the Family Law Act 1975(Cth) (“Act”), as required by sub-section 79(2) thereof.
Given the conclusion that I have come to in relation to Grounds 1, 2, 4, and 7, I do not need to address this ground at any length. All I need to say is that his Honour’s knowledge of the compromise that the husband was prepared to make for the purposes of the consent orders is part and parcel of what a lay observer would take into account in apprehending that the primary judge may not bring an impartial mind to the subsequent hearing. Thus, that ground is made out as well.
Actual bias – Grounds 2 and 4 (see above)
As is acknowledged in the husband’s written summary of argument, the complaint of actual bias was not the subject of the application before the primary judge; the application was only argued on the basis of there being apprehended bias, and the notion that actual bias was being alleged was expressly disavowed. Nevertheless, the husband seeks to raise actual bias on appeal, and relies on the majority decision of the Full Court in Stiffle and Stiffle (1988) FLC 91-977.
However, that decision is clearly distinguishable.
There, the primary judge intervened in the cross-examination of the wife and expressed strong views as to which of the two parents should have custody of the child the subject of the proceedings. As a result, the wife did not proceed with her case, and consented to orders in favour of the husband.
Fogarty and Joske JJ found that the primary judge had pre-judged the issues before the court, and allowed the appeal despite the wife’s counsel not making an application to the primary judge to disqualify himself, or at least to permit the wife to conclude her case.
In so holding, their Honours distinguished the case at bar from the case where a party lets a basis for seeking disqualification go unchallenged, completes his or her case, and then, if the final result is adverse, seeks to challenge those orders on appeal. In that case an appeal would not generally be permitted.
Further, in the circumstances of what occurred in the case at bar, their Honours indicated that the Full Court has a “general supervisory jurisdiction, the ultimate determinant being whether a miscarriage of justice has occurred in the particular proceeding …” (at [77,072]). However, the facts here are nothing like the facts in Stiffle, and there is no basis to look to the court’s general supervisory jurisdiction.
To repeat, the application argued before his Honour was that he be disqualified for apprehended bias, and thus, it is not open to the husband to seek to raise on appeal a complaint of actual bias (Metwally v University of Wollongong (1985) 60 ALR 68, Water Board v Moustakas (1988) 180 CLR 491).
Accordingly, these grounds of appeal, insofar as they complain of actual bias, cannot succeed. However, that takes nothing away from my finding that his Honour has pre-judged the issues of property settlement by forming the opinion that there should be an alteration of the parties’ interest in property in favour of the wife, and the alteration should be greater than 10 per cent.
Pre-judgment – Grounds 5, 8, 9 and 13
These grounds of appeal are repetitious, and they all address the issue of pre-judgment. Given my finding as to that issue, it is unnecessary to consider these grounds further.
Error in approach to determining an application pursuant to s 79 of the Act
The learned Judge at first instance erred in holding that, when a Court is asked to approve a compromise, it is required to determine what is “within the range” [sic] of a “just and equitable property settlement” [sic[, without first considering whether it is just and equitable to make any order as required by sec. 79(2) of the Act (Reasons for Judgment at para. [28]).
The learned Judge at first instance erred in holding that “a conclusion that a proposed compromise is outside the range of what is just and equitable does not trench upon, or entail any pre-judgment concerning, what is appropriate to the determination of an application for a property adjustment on its factual and legal merits” (Reasons for Judgment para. [28]).
The learned Judge at first instance erred in holding that a conclusion that a proposed compromise is outside the range of what is just and equitable only involves a recognition that such a compromise will not be approved, and by extension, would not fall within the realms of the discretionary judgment that is required for an order pursuant to sec. 79 of the Act (Reasons for Judgment at para. [28]).
Plainly, what his Honour said in [28] was his attempt to paint his view of the Minute of Consent Orders as not being any form of pre-judgment.
His Honour said this:
28.I consider that this submission fails to recognise that on 21 April 2017 there was before the court an application for approval of a compromise. There was no determination – or trial – of the factual or legal issues in dispute as to what adjustment of property interests was just and equitable as between these parties. I did not and have not embarked upon that process. To the contrary, the application for approval of a compromise of a property application might be thought to entail quite distinct considerations. Put broadly, when a court is asked to approve a compromise it is required to determine what is ‘within the range’ of a just and equitable property settlement. At that level, a conclusion that a proposed compromise is outside the range of what is just and equitable does not trench upon, or entail any pre-judgment concerning, what is appropriate to the determination of an application for a property adjustment on its factual and legal merits. To the contrary, it only involves recognition that a compromise that is beyond the range of what is just and equitable will not be approved and, by extension, would not fall within the realms of the discretionary judgment that is required for an order pursuant to s 79.
However, clearly his Honour was there suggesting an incorrect test. When considering whether to make orders in terms of a Minute of Consent Order, a primary judge has to be satisfied that it is just and equitable to make the order; it is not a question of whether the proposed orders are within or outside the range, and indeed that is not the question that his Honour ultimately answered. His Honour said this:
On any view of the authorities, [the proposed compromise] is, in my view, manifestly inadequate.
(Transcript 21 April 2017, page 2, lines 40 – 41)
And further:
…I am concerned that an award of nine per cent for even a relatively brief marriage is not just or equitable and I cannot approve it and I will not approve it.
(Transcript 21 April 2017, page 3, lines 20 – 23)
His Honour quoted these comments from the transcript in his reasons for judgment at [14], and subsequently his Honour said this:
24.…On 21 April 2017, I determined that it was not just or equitable to approve the proposed compromise because:
(a)I was not satisfied by the parties’ agreed facts, that a payment of $30,000 to the wife was a fair adjustment of the asset pool;
…
(g)nothing that was submitted to me on 21 April 2017 provided any basis for a conclusion that the proposed compromise should be approved as one which provided a just, equitable and final adjustment of property rights between these parties.
It is plain that his Honour did not conduct a forensic assessment of “the factual and legal issues in dispute as to what adjustment of property interests was just and equitable as between these parties”, as he would do in a trial, but to repeat, what his Honour did was to find definitively that there should be an alteration of the parties’ interest in property in favour of the wife, and the alteration should be greater than 10 per cent.
Conclusion
Having found merit in all of the grounds of appeal save and except to the extent that actual bias is alleged, the appeal must be allowed, the order set aside, and an order made that the primary judge be disqualified from further hearing the property settlement applications between the parties.
Costs
At the conclusion of the hearing I sought submissions as to the question of costs, depending on the result.
If the appeal was successful, the husband sought an order for costs, but if no order for costs was made, he sought a costs certificate pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth).
The wife opposed an order for costs if the appeal succeeded, but not having formally taken part in the appeal, she was not in a position to seek a costs certificate if the appeal was successful on a question of law, and no order for costs was made.
Nothing has been put to this Court that would justify an order for costs against the wife, and this is a matter where each party should bear their own costs (s 117(1) of the Act). However, it is appropriate for the husband to have a costs certificate.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 7 March 2018.
Associate:
Date: 7 March 2018
6
2