Steadman and Randall (No 2) - [2011] FamCAFC 53

FAMILY COURT OF AUSTRALIA

STEADMAN & RANDALL (NO. 2)

[2011] FamCAFC 53

FAMILY LAW - APPEAL – LEAVE TO APPEAL – PRACTICE AND PROCEDURE – DISCOVERY – where an order was made for the husband to provide discovery of documents – whether the Federal Magistrate failed to have regard to whether the documents sought to be discovered were relevant and necessary to dispose of the issues in dispute and the time, cost and inconvenience to the husband of complying with the order – whether the Federal Magistrate failed to comply with the requirements of the Rules – whether the Federal Magistrate erred in failing to provide reasons for the orders – where none of the issues sought to be agitated on the application for leave and appeal were raised by the husband’s counsel before the Federal Magistrate – where it is not open for the husband to now raise these issues – where the appeal has little or no prospects of success if leave was granted – where no error of principle or substantial injustice has been established – leave to appeal refused.

Family Law Rules 2004 (Cth) r 13.22
Federal Magistrates Court Rules 2001 (Cth) r 1.05 & r 14.06

Banque Commerciale SA En Liquidation v Akhil Holdings Pty Limited (1990) 169 CLR 279
Coulton v Holcombe (1986) 162 CLR 1
In re the Will of F. B. Gilbert (dec) (1946) 46 SR (NSW) 318
Metwally v University of Wollongong (1985) 60 ALR 68
Rand & Rand (2010) FLC 93-444
Water Board v Moustakas (1988) 180 CLR 491

APPLICANT:

Mr Steadman

RESPONDENT:

Ms Randall

FILE NUMBER:

ADC

4138

2009

APPEAL NUMBER:

2010

DATE DELIVERED:

16 March 2011

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Adelaide

JUDGMENT OF:

Strickland J

HEARING DATE:

7 March 2011

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

30 August 2010

LOWER COURT MNC:

N/A

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Pyke QC

SOLICITOR FOR THE APPLICANT:

Martin Robinson Solicitors

COUNSEL FOR THE RESPONDENT:

Mr Heywood-Smith QC with Mr McGinn

SOLICITOR FOR THE RESPONDENT:

Diane Myers

Orders

The Amended Notice of Appeal filed on 14 December 2010 be dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Steadman & Randall (No. 2) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE

Appeal Number: SA 73 of 2010
File Number: ADC 4138 of 2009

Mr Steadman

Applicant

And

Ms Randall

Respondent

REASONS FOR JUDGMENT

Introduction

This is an application for leave to appeal against orders made by Federal Magistrate Kelly on 30 August 2010, and, if leave is granted, an appeal against those orders. The application and the appeal if leave is granted are opposed.
The orders appealed against provide as follows:
1.Within 28 days the husband make discovery on oath of all documents in his possession, custody or control relating to the within proceedings OR available to him in his capacity as Director of [F law firm] and/or [T law firm], including but not limited to:
(a)the husband’s interest in the legal practice [F law firm] and/or [T law firm] and the legal practices in which the husband was employed during the parties’ marriage and post-separation;
(b)the husband’s entitlements to superannuation; and
(c)purchases of real estate by the husband during the parties’
co-habitation, marriage and post-separation.
2.The husband file and serve an Affidavit outlining the change in corporate structure in relation to his legal practice.
...

Background

The parties commenced cohabitation in early 1991 and married in May 1992.
In December 1994 the husband became a partner in F law firm, in Adelaide.
In February 1995 the parties separated.
On 20 October 2009 the wife commenced proceedings for property settlement in the Federal Magistrates Court, approximately fourteen and a half years after separation.
The husband filed a response on 24 November 2009.
On 26 November 2009 when the matter first came before Federal Magistrate Kelly, a number of orders were made including an order that “[w]ithin 28 days the parties provide mutual informal discovery of all documents in their possession, custody or control”.
On 17 March 2010 an order was made that “[t]he parties continue to provide mutual informal discovery of all documents in their respective possession, custody or control.”
On 6 July 2010, upon noting that “neither party has provided discovery notwithstanding the orders to that effect”, an order was made by Federal Magistrate Kelly that “[e]ach party make formal discovery on oath within 21 days.”
The wife filed a List of documents on 19 July 2010, and the husband filed an Affidavit of Documents on 26 August 2010. In that affidavit the husband deposed as follows:
Neither I, nor my lawyer, nor any other person on my behalf has, in my or their possession, custody or control any documents of any description whatever relating to any matter in question in these proceedings.
When the matter next came before the Federal Magistrate on 30 August 2010 the issue of discovery arose and the Federal Magistrate was alerted to the inadequate Affidavit of Documents filed by the husband. The wife’s counsel, in effect, sought an order for specific discovery, and the case was held over for a minute of the orders sought to be prepared. That was done, and upon the minute being presented to the Federal Magistrate, orders were made in terms of that minute in the presence of both counsel, and that comprises the orders sought to be appealed against.
Although the Federal Magistrate did not provide any separate reasons for judgment, the relevant transcript before her Honour was before this Court.

The application for leave

The facts relied on in support of the application are as follows:
1.In making the order of 30 August 2010, the Learned Federal Magistrate erred in that she failed to apply the relevant legal principles to the duty of the husband to make disclosure. In making the Order, serious injustice and expense has been caused to the husband.
The proposed grounds of appeal are also said to be relevant to the application for leave, and they are as follows:
1.In making Order 1(a), (b) and (c) of the Orders of 3 [sic] August 2010, the Learned Federal Magistrate failed to properly apply the relevant principles relating to duty to disclose in particular those principles and rules contained in Chapter 13 of the Family Law Rules 2004.
2.The Learned Federal Magistrate failed to have regard or sufficient regard to or to identify:
(a)The relevance of the documents the husband was ordered to disclose.
(b)The matter in issue in the proceedings to which the documents to be disclosed related.
(c)The relevant importance of the matter in issue to which the documents relate to the matters in dispute between the parties.
(d)The time, cost and inconvenience to the husband in complying with the disclosure orders, taking into account the amount of the property, the duration of the marriage and cohabitation and length to [sic] time since the parties separated.
3.In making the Order contained in paragraph 2 of the Orders, the Learned Federal Magistrate failed to have regard or any sufficient regard to or to identify:
(a)the relevance of the matters to which the husband was required to depose to issues in the proceedings or matters in dispute; and
(b)the time cost and inconvenience to the husband in complying with such Order taking into account the issues in dispute in the proceedings and the relevance of the information.
4.The Learned Federal Magistrate failed to provide any or any sufficient reasons for the Orders made.

The submissions of the parties

In summary, the primary submission of the applicant was that the Federal Magistrate was obliged to at least consider whether the range of documents sought to be discovered were relevant and necessary to dispose of the issues in dispute, and to have regard to the time, cost and inconvenience to the husband in complying with the order given the circumstances of and the issues in the case, and in particular that the period post-separation spanned approximately fourteen and a half years.
It was submitted that the relevant Federal Magistrates Court rule was r 14.06, and that insofar as the Rules of the Family Court of Australia were relevant, regard should be had to r 13.22.
Rule 14.06 of the Federal Magistrates Court Rules 2001 (Cth) provides as follows:
Rule 14.06 Order for Particular Disclosure
If, at any stage of a proceedings, it appears to the Court from evidence or from the nature or circumstances of the case or from any document filed, that some document or class of document relating to a matter in question in the proceeding may be, or may have been, in the possession, custody or control of a party, the Court may order the party:
(a) to file an affidavit stating:
(i)whether the document, or a document of that class, is or has been in the possession, custody or control of the party; and
(ii)if it has been but is not then in the possession, custody or control of the party, when the party parted with it and what has become of it, and
(b) to serve the affidavit on another party.
Rule 13.22(1) - (3) of the Family Law Rules 2004 (Cth) provide as follows:
Rule 13.22    Application for order for disclosure
(1)      A party may seek an order that:
(a)another party comply with a request for a list of documents in accordance with rule 13.20;
(b)another party disclose a specified document, or class of documents, by providing to the other party a copy of the document, or each document in the class, for inspection by the other party;
(c)      another party produce a document for inspection;
(d)      a party file an affidavit stating:
(i)that a specified document, or class of documents, does not exist or has never existed; or
(ii)the circumstances in which a specified document or class of documents ceased to exist or passed out of the possession or control of that party; or
(e)the party be partly or fully relieved of the duty of disclosure.
(2)A party making an application under subrule (1) must satisfy the court that the order is necessary for disposing of the case or an issue or reducing costs.
Note 1 Before making an application under this Chapter, a party must make a reasonable and genuine attempt to settle the issue to which the application relates (see rule 5.03).
Note 2 An application under this Chapter is made by filing an Application in a Case and an affidavit (see rules 5.01 and 5.02). The court may allow an oral application at the conciliation conference or another court event.
(3)      In making an order under subrule (1), the court may consider:
(a)whether the disclosure sought is relevant to an issue in dispute;
(b)the relative importance of the issue to which the document or class of documents relates;
(c)the likely time, cost and inconvenience involved in disclosing a document or class of documents taking into account the amount of the property, or complexity of the corporate, trust or partnership interests (if any), involved in the case, and
(d)the likely effect on the outcome of the case of disclosing, or not disclosing, the document or class of documents.
It is said that not only did the wife, as the applicant for the order, fail to undertake the task of justifying the orders sought, but the Federal Magistrate failed to comply with the requirements of the Rules, and she failed to provide any reasons for the orders that she made.
This, it is submitted, satisfies the requirement for leave being granted of there being an error of principle, but also, given the breadth of the orders and the extent of the documentation that would need to be discovered, a substantial injustice has been caused to the husband.
The submission of the respondent on the issue of leave to appeal was that before the Federal Magistrate there was no opposition by the husband’s counsel to the making of the order sought by the wife, despite the Federal Magistrate giving him the opportunity to do so, and thus it was not necessary for the Federal Magistrate in a busy list, and given the history of the matter in terms of the previous orders made and the purported compliance by the husband, to specifically address the matter now raised by the applicant or to give reasons in support of the orders made.
Thus, it is said, there has been no error of principle and/or a substantial injustice visited on the husband.

Discussion

The wife’s senior counsel took me carefully through the transcript of the hearing before the Federal Magistrate, and it is quite apparent that:
24.1The wife’s counsel introduced the issue by referring to the inadequate Affidavit of Discovery filed by the husband and identifying the topics that needed to be the subject of further orders by the Federal Magistrate.
24.2The Federal Magistrate quizzed the wife’s counsel as to what was being sought and importantly the topics of the discovery now sought.
24.3The Federal Magistrate then gave the husband’s counsel the opportunity to object to the orders being sought, but no opposition was expressed.
24.4At no stage was it suggested by the husband’s counsel, for example, that the discovery sought was not relevant to the issues in dispute or that the proposed orders were too wide, or that the husband would have any difficulty in complying.
It is also significant that when the order as drafted by the husband’s counsel was presented to and then made by the Federal Magistrate, no issue was raised by the husband’s counsel.
The plain fact of the matter is that in the circumstance of the husband’s counsel not having raised before the Federal Magistrate any of the issues sought to be agitated on the application for leave, and the proposed appeal, it is not open for the applicant to now raise those issues.
The law is clear, both from the High Court and from the Full Court of the Family Court of Australia.
As far as the High Court is concerned, in Metwally v University of Wollongong (1985) 60 ALR 68, the High Court (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ) said this at 71:
It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.
Then, in Coulton v Holcombe (1986) 162 CLR 1, the High Court (Gibbs CJ, Wilson, Brennan and Dawson JJ) confirmed at 7:
To say that an appeal is by way of rehearing does not mean that the issues and the evidence to be considered are at large. It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. The powers of an appellate court with respect to amendment are ordinarily to be exercised within the general framework of the issues so determined and not otherwise. In a case where, had the issue been raised in the court below, evidence could have been given which by any possibility could have prevented the point from succeeding, this Court has firmly maintained the principle that the point cannot be taken afterwards: see Suttor v. Gundowda Pty. Ltd.; Bloemen v. The Commonwealth. In O'Brien v. Komesaroff, Mason J., in a judgment in which the other members of the Court concurred, said:
“In some cases when a question of law is raised for the first time in an ultimate court of appeal, as for example upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is expedient in the interests of justice that the question should be argued and decided (Connecticut Fire Insurance Co. v. Kavanagh, Suttor v. Gundowda Pty. Ltd.; Green v. Sommerville). However, this is not such a case. The facts are not admitted nor are they beyond controversy.
The consequence is that the appellants' case fails at the threshold. They cannot argue this point on appeal; it was not pleaded by them nor was it made an issue by the conduct of the parties at the trial.”
In our opinion, no distinction is to be drawn in the application of these principles between an intermediate court of appeal and an ultimate court of appeal. Finally, in a recent decision of six justices of this Court (University of Wollongong v. Metwally [No. 2]) the Court said:
“It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.”
The Court of Appeal recognized the great importance, in the public interest, of these principles. Their Honours summarized them in the following terms:
“the finality of litigation; the difficulty of inducing an appeal court to consider new facts; the undesirability of encouraging tactical decisions not to present an issue at first instance: keeping it in reserve for appeal; and the need for vigilance to avoid injustice to a party having to meet new facts and new issues of law for the first time at the appeal court.” (Footnotes and citations omitted)
I also refer to Water Board v Moustakas (1988) 180 CLR 491 at 497 and Banque Commerciale SA En Liquidation v Akhil Holdings Pty Limited (1990) 169 CLR 279 at 284.
With the Full Court of the Family Court of Australia, these principles were followed and applied most recently in Rand & Rand (2010) FLC 93-444.
These principles apply here to prevent the husband raising issues which were not raised at first instance. I observe, indeed, that there was no attempt by the husband’s senior counsel to either distinguish this line of authority or to suggest that any of the recognised exceptions applied.
That is sufficient to dispose of the application, but it is instructive to further consider the argument of the husband’s senior counsel.
As referred to above, what Ms Pyke QC did was to submit that the Federal Magistrate should have addressed the issues identified in the Rules, and it was not up to the husband to raise an objection before the Federal Magistrate did so.
Ms Pyke QC is correct that r 14.06 of the Federal Magistrates Court Rules commences with the words, “[i]f … it appears to the Court from evidence or from the nature or circumstances of the case or from any document filed”, and that r 13.22(2) of the Family Law Rules provides that “[a] party making the application ... must satisfy the court that the order is necessary for disposing of the case or an issue or reducing costs”. At this point I assume for the purposes of the argument that regard can be had to r 13.22(2) of the Family Law Rules on the basis that r 1.05(2) of the Federal Magistrates Court Rules applies.
However, when analysed, in the context of no objection whatsoever being raised by the husband’s counsel to the order proposed, and importantly no submission being made as to the relevance of the documents identified, and no submission being made as to the width of the order, the Federal Magistrate was entitled to proceed on the basis of the history of the matter and the identification of the categories of documents sought. By the history, I am referring to the previous orders made and the totally inadequate Affidavit of Documents filed by the husband. The transcript reveals the sequence of events, and demonstrates the basis on which the orders were able to be made.

Further, in the circumstances that arose, there was no requirement for the Federal Magistrate to provide any separate reasons beyond what was said at the hearing.
Thus, even if leave was granted, the appeal has no prospects of success.
To return to the application, this is precisely the sort of case for which the requirement of first obtaining leave to appeal was introduced. In an oft-cited statement, Sir Frederick Jordan said this in In re the Will of F. B. Gilbert (dec) (1946) 46 SR (NSW) 318 at 323:
... I am of the opinion that, ... there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in chambers to a Court of Appeal.
There is no error of principle or substantial injustice requiring leave to be given, and I propose to dismiss the application.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 16 March 2011.

Associate:

Date: 16 March 2011