Trustee of the Property of G Lemnos, A Bankrupt and Lemnos & Anor (No 2)

[2009] FamCAFC 200

FAMILY COURT OF AUSTRALIA

TRUSTEE OF THE PROPERTY OF G LEMNOS, A BANKRUPT & LEMNOS AND ANOR (NO. 2) [2009] FamCAFC 200

FAMILY LAW - APPEAL – FROM A DECISION OF A FAMILY COURT JUDGE – PROPERTY PROCEEDINGS – TRUSTEE OF THE PROPERTY – Established that the Full Court should remit the matter to a single Judge – Established that costs certificates should be awarded

Family Law Act 1975 (Cth) Section 117

Allesch v Maunz (2000) 203 CLR 172
Ruscoe v Walker (2001) 28 Fam LR 566; [2001] FamCA 268
Walker v Ruscoe [2002] HCATrans 101

APPELLANT: TRUSTEE OF THE PROPERTY OF G LEMNOS, A BANKRUPT

FIRST RESPONDENT: Mrs LEMNOS

SECOND RESPONDENT: Mr LEMNOS

FILE NUMBER: SYC 2906 of 2007

APPEAL NUMBER: EA 116 of 2007

DATE DELIVERED: 11 November 2009

PLACE DELIVERED: Parramatta

JUDGMENT OF: COLEMAN, THACKRAY & RYAN JJ

HEARING DATE: 3 September 2008

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE: 30 August 2007

LOWER COURT MNC: [2007] FamCA 1058

REPRESENTATION

COUNSEL FOR THE APPELLANT: Mr Skinner and Mr Walsh

SOLICITOR FOR THE APPELLANT: Church & Grace

COUNSEL FOR THE FIRST RESPONDENT: Mr Whitford SC and Mr Millar

SOLICITOR FOR THE FIRST RESPONDENT: Gayle Meredith & Associates

Orders

1. That the appeal be allowed.

2. That orders 2, 3, 4 and 5 of the orders made by Le Poer Trench J on 30 August 2007 be set aside.

3. That the proceedings be remitted for rehearing in the Sydney Registry of the Family Court of Australia before a single judge.

4. That the Court grants to the Appellant Trustee a costs certificate pursuant to the provisions of s.9 of the Federal Proceedings (Costs) Act 1981 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 Trustee in respect of the costs incurred by the Appellant Trustee in relation to the appeal.

5. That the Court grants to the Respondent Wife a costs certificate pursuant to the provisions of s.6 of the Federal Proceedings (Costs) Act 1981 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 Respondent Wife in respect of the costs incurred by the Respondent Wife in relation to the appeal.

6. That the Court grants to each party a costs certificate pursuant to the provisions of s.8 of the Federal Proceedings (Costs) Act 1981 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 each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the new trial granted by these orders.

IT IS NOTED that publication of this judgment under the pseudonym Trustee of the Property of G Lemnos, a Bankrupt & Lemnos and Anor is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 116 of 2007
File Number: SYC 2906 of 2007

TRUSTEE OF THE PROPERTY OF G LEMNOS, A BANKRUPT 

Appellant

And

Mrs LEMNOS

First Respondent

And

Mr LEMNOS

Second Respondent

REASONS FOR JUDGMENT

supplementary

1. On 12 February 2009, for reasons which the Court then published the appeal of the Trustee of the property of the bankrupt husband, G Lemnos (“the trustee”),  against orders made by Le Poer Trench J on 30 August 2007 in proceedings for settlement of property between Mrs Lemnos (“the wife”) and the trustee was allowed.

2. The Court then directed that submissions be filed and served in relation to the future course which the proceedings should take and the costs of the appeal and re-exercise of the trial Judge’s discretion. The Court has received submissions from each of the parties in relation to those matters.

The future course of the proceedings.

1. On behalf of the trustee it was submitted that this Court could, and should re-exercise the trial Judge’s discretion, albeit subject to the filing of further evidence in relation to certain specific matters.

2. It was submitted in support of that course that “apart from the additional evidence” which Counsel for the trustee identified, and intended to rely upon, the Court had “all of the evidence” before it that is “necessary to re-exercise” the trial Judge’s discretion. [Outline of Appellant’s further submissions pursuant to orders made on 12 February 2009, par 2(a)].

3. It was submitted that the further evidence upon which the trustee sought to rely was “documentary”, and would “not give rise to the necessity for cross-examination”. [Outline of Appellant’s further submissions pursuant to orders made on 12 February 2009, par 2(b)].

4. It was further submitted that remitting the matter for rehearing by a single Judge was not appropriate, in part because the “subject matter” of the proceedings was of “general importance”. [Outline of Appellant’s further submissions pursuant to orders made on 12 February 2009, par 2(c)].

5. Counsel for the trustee also submitted that the judgment of the Full Court did “not provide sufficient guidance to a single Judge as to the manner in which the discretion ought be exercised”, a proposition with which we have some difficulties. [Outline of Appellant’s further submissions pursuant to orders made on 12 February 2009, par 2(d)].

6. Counsel for the wife sought that the matter be remitted to the trial Judge for the purpose of re-exercising his discretion “in the light of the reasons of the Full Court”. [First respondent’s outline of submissions on form of orders and costs par 1(a)].

7. It was submitted that the reality that any challenge to the re-exercise of the trial Judge’s discretion by this Court could only be by way of application for special leave to appeal to the High Court “compels the conclusion that the matter should be remitted”. [First respondent’s outline of submissions on form of orders and costs, par 3].

8. Counsel for the wife further submitted that this Court’s conclusions with respect to the trial Judge’s exercise of discretion supported remitting the matter for rehearing by a trial Judge given that the re-exercise of discretion in the light of this Court’s reasons “may require that additional factual findings be expressly made”. [First respondent’s outline of submissions on form of orders and costs, par 5].

9. We are persuaded that the interests of justice would be better served, and may only be able to be served, by the matter being remitted for re-hearing by a single Judge.

10. Whilst the further evidence upon which the trustee seeks to rely may be largely, or entirely uncontroversial, the judgment of the High Court in Allesch v Maunz (2000) 203 CLR 172 raises the prospect that both sides may wish to adduce further evidence which could be controversial and require testing.

11. More significant in our view however is the submission on behalf of the wife as to the potential for further or additional findings of fact being expressly made in the course of re-exercising the trial Judge’s discretion in light of the reasons for judgment of this Court.

12. As was submitted on behalf of the wife, the matters which assume significance in this Court’s conclusion with respect the trustee’s appeal are in our view realistically likely to lead to further evidence with respect to matters which we were not extensively agitated at trial for the purpose of the re-exercise of the trial Judge’s discretion, and for such evidence to be potentially controversial. Although not of overwhelming significance, the reality that the only avenue of redress either party would have if displeased with a re-exercise of discretion by this Court is by way of application for special leave to the High Court supports the course we propose.

13. Having thus concluded, two issues require consideration in the light of submissions of Counsel for the parties. The trustee seeks to confine the further evidence which is able to be adduced before the Judge who re-exercises the trial Judge’s discretion. Whilst the Court clearly has power to do that (see Ruscoe v Walker (2001) 28 Fam LR 566; [2001] FamCA 268; Walker v Ruscoe [2002] HCATrans 101), we do not propose doing so. Although superficially attractive in terms of costs and expediency, we are concerned that an attempt to constrain the trial Judge rehearing the matter may have the effect of fettering, or appearing to fetter that Judge’s exercise of discretion.

14. Our reasons for allowing the appeal are more supportive of such an approach than that urged on behalf of the trustee. Experience suggests that well intentioned attempts to in any way direct or regulate the re-exercise of discretion are likely to create greater mischief than they seek to address.

15. The parties are, and have always been competently represented. Declining to in anyway fetter a Judge with respect to the re-exercise of the trial Judge’s discretion would not in our view be realistically likely to give rise to any possible abuse of process, or allow either party to unduly or unreasonably prolong the proceedings. Both parties are amenable to costs orders which would be likely to disincline them to so conduct themselves in any event.

16. The second question, which arises from the submissions on behalf of the wife, is whether the matter should be remitted to the trial Judge to re-exercise his discretion.

17. Although we see no particular reason why the matter should not be remitted to the trial Judge for the purpose of re-exercising his discretion that would ultimately be a matter for his Honour. The parties may well make further or different submissions to his Honour in relation to this topic than have been made to this Court. Whilst there are undoubted benefits in having a Judge who is familiar with a case re-exercise the discretion, often the benefits of a “fresh mind” outweigh such benefits. That however is a matter for the parties and his Honour to consider.

Costs

1. It was submitted on his behalf that the trustee should “have his costs” as there was “no good reason why costs should not follow the event”. [Outline of Appellant’s further submissions pursuant to orders made on 12 February 2009, par 4].

2. As is not in doubt, costs do not follow the event in this Court, and are governed by the provisions of section 117 of the Act.

3. On behalf of the wife it was submitted that the trustee should pay “a substantial portion” (at least 50 per cent) of the wife’s costs of the appeal. [First respondent’s outline of submissions on form of orders and costs, par 14].

4. Such an outcome was submitted to have been appropriate.

5. It was submitted on behalf of the wife that the “result in the appeal bears little relation to the arguments as they are expressly advanced on behalf of the appellant”, that the prolix manner in which the grounds of appeal were articulated and agitated supported such a course. [First respondent’s outline of submissions on form of orders and costs, par 6].

6. Counsel for the wife submitted that on all of the “substantial questions of construction and principle” she had been successful. [First respondent’s outline of submissions on form of orders and costs, par 9].

7. It was further submitted that the apparent bases upon which the trustee was successful were not “squarely raised” in the term suggested by Counsel for the wife by the Grounds of Appeal or the submission on behalf of the trustee in support of his appeal. [First respondent’s outline of submissions on form of orders and costs, par 11].

8. Whilst we find considerable attraction in the submissions on behalf of the wife, particularly so far as they relate to the manner in which the appeal was presented in this Court, we are ultimately not of the opinion that the circumstances justify making any order for costs. Whilst we do not accept that the trustee’s success on appeal should enliven the discretion to award costs against the wife, the fact remains that the trustee did successfully challenge the trial Judge’s decision.

9. In our view, the alternate outcome with respect to costs urged on behalf of both parties is the appropriate course for this court to adopt. We will accordingly direct that costs certificates issue to each party.

10. Whilst the submissions of the parties do not expressly seek such an order, it is reasonably clear from the submissions of Counsel for both parties that costs certificates with respect to the rehearing of the proceedings are sought as well as costs certificates with respect to the appeal.

11. In our view the parties should each receive costs certificates with respect to the re-exercise of the trial Judge’s discretion.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.

Associate:

Date: 11 November 2009