Stephens v Stephens (Disqualification) - [2010] FamCAFC 206

FAMILY COURT OF AUSTRALIA

STEPHENS & STEPHENS (DISQUALIFICATION)

[2010] FamCAFC 206

Family Law Act 1975 (Cth)

FAMILY LAW – APPEAL – DISQUALIFICATION - Appeal against trial judge’s refusal to disqualify himself from hearing costs application arising out of determination of proceedings for property settlement – Not established that “cumulative effect” of adverse findings with respect to husband’s credit gave rise to reasonable apprehension of bias – Not established that such adverse findings raised reasonable apprehension that costs proceedings would not be determined on their merits, or that husband would not net a “fair go” in that process – Appeal dismissed - Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337 discussed.

Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337

APPELLANT:

Mr Stephens

RESPONDENT:

Ms Stephens

FILE NUMBER:

MLF

2847

2002

APPEAL NUMBER:

2010

DATE DELIVERED:

27 October 2010

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Melbourne

JUDGMENT OF:

Finn, Coleman and Thackray JJ

HEARING DATE:

12 October 2010

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

21 June 2010

LOWER COURT MNC:

[2010] FamCA 553

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Dr John Walsh of Brannagh

SOLICITOR FOR THE APPELLANT:

In person

COUNSEL FOR THE RESPONDENT:

Ms KM Macmillan SC

SOLICITOR FOR THE RESPONDENT:

Kennedy Wisewoulds

Orders

The appeal by the husband be dismissed.
The husband pay the wife’s costs of and incidental to the appeal as agreed or assessed on a party and party basis.
In the event sufficient funds are still retained by the Kennedy Wisewoulds, Solicitors, the husband’s obligation to the wife pursuant to Order 2 hereof may be satisfied from that source.

IT IS NOTED that publication of this judgment under the pseudonym Stephens & Stephens (Disqualification) 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 MELBOURNE

Appeal Number: SA 48 of 2010
File Number: MLF 2847 of 2002

MR STEPHENS

Appellant

And

MS STEPHENS

Respondent

REASONS FOR JUDGMENT

introduction

By Notice of Appeal filed 19 July 2010 Mr Stephens (“the husband”) appealed against an order made by Strickland J on 21 June 2010 dismissing an application by the husband that Strickland J disqualify himself from hearing any further proceedings between the husband and his former wife Ms Stephens (“the wife”).
The husband sought that Strickland J’s order dismissing his disqualification application be set aside, and that this court order that Strickland J be disqualified from “hearing or judging any proceeding” in this matter. A variety of other orders were also sought. The husband sought that the wife pay his costs of and incidental to his appeal.
The wife resisted the husband’s appeal and sought to maintain the trial judge’s order. The wife sought that the husband pay her costs.

BACKGROUND

The history of the proceedings between the husband and wife and other parties is extensive, and has been comprehensively documented previously both in this court and the High Court. The background to the present appeal however falls within a narrow compass.
By judgment delivered on 30 November 2005 Strickland J finally determined property settlement proceedings between the husband and wife and the trustees of a number of trusts which he had earlier heard.
A series of appeals and cross-appeals ensued, culminating in a decision of the High Court on 3 December 2008, the practical effect of which was that Strickland J’s orders of 30 November 2005 were not disturbed.
On 29 April 2009, the husband filed an application seeking that Strickland J disqualify himself from further hearing the proceedings. Strickland J heard that application on 20 May 2009.
On 10 March 2010, Strickland J dismissed the husband’s disqualification application for reasons which he then published. The husband has not appealed, or sought to appeal that decision.
On 26 May 2010 the husband filed a further application by which he again sought that Strickland J disqualify himself from “hearing or judging any proceeding in this matter”.
That application was heard and determined by Strickland J on 21 June 2010. For the reasons which he then gave the husband’s application was dismissed.

THE TRIAL JUDGE’S REASONS

Strickland J referred to the husband’s disqualification application and recorded that the application before him was, although “not in precisely the same terms”, again that he disqualify himself on the grounds of either reasonable apprehension of bias or actual bias.
The trial judge accepted the submission of counsel for the wife that absent any submission by the husband as to the basis for making this further application, the husband’s further disqualification application could not succeed, as it was “a repetition of the previous application; it relies on the same factual material, and [the husband] has repeated the same submissions”.
His Honour concluded that, having been already determined, the husband’s further disqualification application should be “dismissed summarily”, either on the basis of res judicata, or issue estoppel or, pursuant to the Family Law Rules, as an abuse of process, frivolous, scandalous or vexatious.
The trial judge recorded, accurately, that, save in one respect, the evidence relied upon by the husband in his application was the same evidence as he had unsuccessfully relied upon in his 2009 disqualification application. His Honour further recorded that “The only new issue is, of course, that since the previous application was filed, I have heard and determined that and delivered reasons for judgment”.
His Honour reiterated, again accurately, that the husband relied upon findings, statements or observations made by him in his reasons for judgment of November 2005, June 2006 and March 2010 “in combination, and separately”, as evidencing the bias asserted by the husband. His Honour noted that the husband “did not refer to anything specific in my reasons of 10 March 2010 which would indicate bias”. Counsel for the husband fairly and properly conceded that his Honour was correct in what he said.

THE GROUNDS OF APPEAL

The husband’s Notice of Appeal articulated two grounds, which provided:
1.Justice Strickland ought to have disqualified himself from hearing any applications or proceeding as to costs of otherwise in MLF 2847 of 2002.
2.Justice Strickland’s reasons for judgment in the said matter given on 30 November 2005, 2 June 2006, 10 March 2009 (sic) and 21 June 2010
(a)      revealed actual bias, or
(b)      give rise to a reasonable apprehension of bias,
(i)       in favour of the first respondent; and/or
(ii)      against the appellant.
Although expressed as a ground of appeal, paragraph 3 of the husband’s grounds of appeal was in the nature of a submission, albeit it encapsulated the thrust of the present challenge.
Counsel for the husband fairly and properly acknowledged that, having not sought to appeal against Strickland J’s dismissal of his disqualification application on 10 March 2010, the husband was necessarily obliged to argue the cumulative effect of the findings, observations and statements made by Strickland J in his reasons for judgment of November 2005, June 2006 and March 2010 established that whilst his Honour may have been entitled, on the evidence before him in March 2010 to decline to disqualify himself from further hearing the proceedings, the cumulative effect of the findings, observations and statements of Strickland J in his earlier judgments, and the March 2010 judgment was to render erroneous his Honour’s refusal to disqualify himself from further hearing the proceedings in June 2010.
In oral submissions, counsel for the husband confirmed that, to the extent that the distinction was potentially material in the present circumstances, the husband relied upon reasonable apprehension of bias rather than actual bias.
It was submitted by counsel for the husband, accurately in our view, that what was “necessary in the present case is to consider all the terms of the reasons for decision of Strickland J provided on 30 November 2005, 2 June 2006 and 10 March 2010 and to decide whether those terms give rise to a reasonable apprehension of bias. Matters which by themselves would not have been sufficient may constitute part of a larger group which is sufficient for these purposes”.
Counsel for the husband identified a number of specific passages in Strickland J’s reasons for judgment of 30 November 2005 which he submitted “reflect “Strickland J.’s prejudices”.
As is clear from reading them, many of the references to Strickland J’s 30 November 2005 reasons for judgment are simply findings of fact with respect to issues which arose in the proceedings before him. Whether or not those findings of fact were reasonably open is not relevant for present purposes, quite apart from the reality that challenges to the decision of Strickland J made in reliance upon those findings of fact have been unsuccessful in this court and the High Court. As reference to those passages could not usefully inform a consideration of the present appeal we do not propose to set them out. Some of the passages which are relied upon are however capable of being relevant to the question of reasonable apprehension of bias. It is appropriate that we specifically identify those passages.
Counsel for the husband relied upon the following passages of Strickland J’s judgment:
127.In January 2002 the husband also failed to tell the wife what he was doing, again demonstrating both his egocentric personality and his view that it was entirely up to him what he did with the assets. This was a blatant attempt by the husband to move assets from the reach of the wife and the Family Court.
129.4.66In support of his position the husband claimed that this was nothing more than the carrying out of another long-standing agreement between the parties that subject to adequate provision for the wife his personal assets would go to the children and that he would determine when that should be. However, I reject this claim and find that there was no such agreement. It is another example of the husband concocting a story to justify his attempts to place assets beyond the reach of the wife and the Family Court.
204.2The husband attended to all of the financial affairs of the parties, and as trustee of the [Stephens] Trust he attended to the financial affairs of that Trust. Indeed he managed all investments of the parties and the Trust, and kept the Trust records as well as attending to all of the Trust affairs.
The wife says though that the husband insisted on controlling the family finances. She says he refused to allow her to involve herself in these matters, and he was secretive about the same. The wife had to account for items of expenditure and was subject to restrictions imposed by the husband on what she could purchase. Despite the husband’s high level of income the family was required to live frugally, for example, the heater had to be turned off except in the kitchen and the sitting room. Throughout the marriage the husband never permitted the wife to know what their financial position was but he often accused the wife of being extravagant.
The husband denies these allegations suggesting that the wife took no interest in the financial affairs of the family despite his attempts to involve her.
Once again though, I prefer the evidence of the wife on these topics. I did not find his evidence about these matters at all convincing, and particularly after hearing and observing him in the witness box. It was quite apparent that he had to be in control and that everything had to centre around him.
213.The husband in these proceedings has been prepared to acknowledge the support provided by the wife over the [Ms R] affair, although suggesting falsely that the episode was of relatively little importance. It was only in cross-examination that he conceded at least that the affair had had a profound effect on the wife. However, the husband claimed that outside of this the wife took little or no interest in his work or his career. I reject this entirely and it is yet another example of the husband’s egoism.
It was submitted that the trial judge’s statement that the husband “conveniently overlooked” the 25 per cent reduction in fees referrable to the wife’s part time status ignored the fact that the trust paid all school fees and that any reductions referrable to the wife’s part time status did not affect that.
Strickland J’s statement that the husband “fabricated” his allegation “that the wife often went out in the evening and on weekends leaving him to look after the children, and particularly from 1993 onwards” was also relied upon by counsel for the husband.
There is little doubt that the foregoing passages, written after a lengthy trial, reveal that Strickland J had by that time formed an unfavourable view of the credibility of the husband.
So far as the reasons for judgment of 2 June 2006 were concerned, it was submitted:
Strickland J. was functus officio and/or [the wife] had not complied with the Rules, and it was necessary for [the wife] to make a new application for an extension of time because the twenty-eight days referred to in Rule 19.08 had elapsed: see generally pages 3-7 of the Supplementary Appeal Book.
In the course of Strickland J’s reasons for judgment, his Honour recorded:
19.One of the few cases in the Family Court of Australia where the doctrine of functus officio has been referred to in the context of an application for costs subsequent to final orders being made is KAZIMIERCZAK and KOCH (1987) FLC 91-849. There the husband appealed, inter alia, against orders that he pay the wife’s costs of the property settlement proceedings. No order for costs was sought in the wife’s initiating application and nor was an application for costs made at the time judgment was delivered. The wife filed an application for costs approximately seven weeks after the final orders were made. One of the grounds of appeal was that because the judgment had been perfected by being drawn up and signed by the Registrar, the court was functus officio and no new order could be made for costs. The Full Court (Murray, Nygh and McCall JJ) rejected this ground and said this at 76,418-76,419:
“Whatever may be the rule in other courts, the question of costs in the Family Court is regulated by sec. 117 of the Act. Since the power to award costs is derived from the statute any limitation as to the exercise of that power must be found within the statute itself.
Proceedings for an order for costs fall within para. (f) of the definition of “matrimonial cause” in sec. 4(1), that is to say, they must be proceedings “in relation to…completed proceedings”. It may be that an application for costs is so remote in time from the original proceedings that it can no longer be described as relating to the proceedings which have been completed, but this is hardly the situation in the present case. It appears that the new r. 18 has been specifically inserted to impose a time limit to prevent applications for costs being made long after the conclusion of proceedings.”
20.In other words the court was not functus officio for the purposes of the costs application.
…
22.The husband referred me generally to the various Supreme Court Practice Publications on the topic of “functus officio”. There is no issue though with the general principles of that doctrine and there was no specific case that the husband referred me to that would suggest that the court was functus officio here in relation to the issue of costs.
Ultimately, Strickland J concluded:
25.I do not consider that the court is functus officio.
26.There is a significant point of distinction that has been overlooked or glossed over by Mr [C] and the husband. In this case and in the case of BALDI, there was an application for costs which had not been determined. The application had been removed from the active pending list but that in no sense represented a dismissal of the application. Removing an application from the pending list even by striking out that application does not prevent the matter from being relisted for hearing (BENNETT and BENNETT (1985) FLC 91-617, TUDOR and TUDOR (1992) FLC 92-273).
27.Thus, the doctrine of functus officio does not apply here to prevent the application for costs made in the wife’s Amended Form 1 application being pursued by the wife even though judgment has been delivered and final orders made.
Although, the husband caused a supplementary appeal book to be produced containing Strickland J’s reasons for judgment of 2 June 2006, we were not referred to anything in those reasons which was suggested to have been evidence of a reasonable appearance of bias. Having read Strickland J’s reasons for judgment of 2 June 2006, the absence of any such reference to it by counsel for the husband in his oral submissions is unsurprising. Nothing in that judgment could advance the husband’s appeal.
So far as Strickland J’s judgment of 10 March 2010 is concerned, it was submitted:
Strickland J. maintained that his 2005 reasons for judgment did not establish a reasonable apprehension of bias; and he gratuitously added that “this application smacks of nothing more than the husband attempting to raise the same complaints again”. This statement is a further indication of Strickland J.’s inability to bring an unprejudiced mind to matters concerning [the wife] and [the husband].
His Honour in fact said in the paragraph to which counsel for the husband referred:
86.The husband has appealed my judgment to both the Full Court and the High Court, yet my decision stands. The husband is clearly not satisfied with that and this application smacks of nothing more than the husband attempting to raise the same complaints again despite the outcome of those appeals. However, to repeat, what he thinks of the judgment is not the test and I do not accept that the husband has established a reasonable apprehension of bias on the basis of my reasons for judgment. This is apart from the fact that many of his own assertions about my reasons are simply incorrect or exaggerated.
We were not otherwise referred to anything said by Strickland J in the course of his reasons for judgment of that date which was suggested to be capable of impacting upon the issue before us. That is unsurprising. Nowhere else in his reasons did Strickland J say anything which could have fuelled a reasonable appearance of bias.
It was submitted with respect to Strickland J’s reasons for judgment of 21 June 2010:
Strickland J. deliberately ignored in these reasons the important and critical fact that [the husband] was relying, inter alia, on his reasons for judgment of 10 March 2010. He stated that the application “should not have been received by this court”. He held that the application “should be dismissed summarily” by reasons of res judicata, issue estoppel and abuse of process, etc. His statements and his decision are further indications of his inability to bring an unprejudiced mind to matters concerning [the wife] and [the husband]. (It could not have been clearer in [the husband’s] submissions that he was relying, inter alia, on the reasons for decision of 10 March 2010.)
Save to the extent that counsel for the husband’s written submission identified it and his Honour recognised, nothing in Strickland J’s reasons for judgment of 21 June 2010 to which we have been referred could have contributed to the “cumulative” demonstration of a reasonable appearance of bias.
Under the heading “Verbal Hostility by Strickland J.” it was submitted:
Tones of voice are not evident from transcript: and hence the verbal hostility of Strickland J. is not evident from the Appeal Book. However, sufficient matters of bias are set out in the foregoing analyses, without any need to take this matter into account. (Compare here Annexure BB.)

The annexure referred to in the submission above was a page from transcript of proceedings before Strickland J on 3 August 2010; however, objection was taken to the inclusion of that document in the appeal book and counsel for the husband advised that he did not need to rely upon it.
The cumulative effect of the matters thus relied upon by counsel for the husband was asserted to be that Strickland J had formed such an adverse view of the husband that he would not “get a fair go” in any proceedings determined by his Honour. The “bold demeaning statements” said to have been made by Strickland J were submitted to cumulatively establish that fact.
Although his written submissions agitated issues with respect to res judicata and issue estoppel, Counsel for the husband, sensibly in our view, did not place significant emphasis on those matters in his oral submissions. Whether or not the husband’s application could or should have been dismissed summarily on any of the bases to which his Honour referred in his judgment, it is clear that his Honour addressed the evidence upon which the husband relied. His Honour recognised that, whilst the husband relied on the same material as he had in his previous disqualification application, he also relied upon the reasons for judgment delivered by him on 10 March 2010.
Thus, whether or not the trial judge could have summarily dismissed the proceedings on the basis of res judicata, or issue estoppel, or the Family Law Rules, his reasons revealed that he directed his mind to the cumulative effect of the passages in his reasons for judgment of 20 November 2005, 2 June 2006 and 10 March 2010, and concluded that “in combination, and separately” those statements did not “indicate bias”.
We are not persuaded that the cumulative effect of the findings, observations or statements previously made by Strickland J established a reasonable apprehension of bias. There is a material distinction between findings of fact, observations and statements made by a trial judge in the course of reasons for judgment following the trial of contested proceedings, and things said by a trial judge at earlier times in the proceedings. In many cases, the proper exercise of judicial power calls for robust findings with respect to credibility. On any view of his November 2005 judgment, Strickland J formed an adverse view of the husband’s credibility. It may well be that Strickland J could not be seen as bringing an impartial mind to the determination of any further proceedings in which the husband’s credibility was an issue in the light of his November 2005 judgment. That is not said critically of Strickland J. That will usually be the position of a judge who has made adverse credit findings.
However, even if the cumulative effect of the findings, observations and statements of Strickland J relied upon by the husband established a reasonable apprehension of bias, the husband’s appeal would not in our view be entitled to succeed. As Strickland J recognised, and discussed in his reasons for judgment of 10 March 2010, there are “two steps” relevant to an application for disqualification in reliance upon the apprehension of bias. In his 10 March 2010 judgment Strickland J said:
87.…Here, even if it could be argued that the husband has satisfied the first step in identifying in my reasons for judgment some of “what it is said might lead a Judge to decide (the) case other than on its legal and factual merits”, that is certainly not the case with the second step. The husband has not articulated “the logical connection” between the relevant matters identified and the “feared deviation from the course of deciding the case on its merits”.
In Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337; 176 ALR 644; 75 ALJR 277 (7 December 2000), Gleeson CJ, McHugh, Gummow and Hayne JJ said:
8.The 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.
Nothing to which we have been referred identifies or articulates the connection to which Strickland J referred. It is to be remembered that the only proceedings in respect of which Strickland J’s disqualification was sought was with respect to the costs of the proceedings determined by him on 20 November 2005. No issue of credit would appear to arise in the context of that costs application. If and when it did, that would be a matter for Strickland J to consider. He cannot be criticised for not having considered something which was not raised with him. Whilst his Honour’s reasons for judgment in the substantive proceedings reveal that he formed an adverse view of the credibility, and perhaps the character of the husband, we are not persuaded by anything to which we have been referred that he would not give the husband “a fair go”, and decide the disputed application for costs which was pending before him on its merits.
In the absence of any basis for so concluding, and none has been suggested, we are not persuaded that the cumulative effect of the matters relied upon by counsel for the husband raising a reasonable apprehension of bias, would have obliged Strickland J to disqualify himself from hearing the proceedings which remained to be determined.

COSTS

Senior counsel for the wife sought an order for costs of and incidental to the husband’s appeal on an indemnity basis. As is readily apparent, the husband has been wholly unsuccessful. That is a relevant matter by virtue of section 117(2A).
The financial circumstances of the parties would neither support making an order for costs nor militate against doing so if the discretion were otherwise properly enlivened.
In our view, the husband’s lack of success, and reasons for it, constitute circumstances justifying an order for costs. Nothing to which we have been referred persuades us of “exceptional circumstances” such as would enliven the discretion to order indemnity costs.
It was conceded by counsel for the husband that an order for payment of any costs awarded out of funds currently preserved by injunctive order for that purpose would be appropriate and we will so order.

I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Finn, Coleman & Thackray JJ) delivered on 27 October 2010

Associate:

Date: 27 October 2010