Vico and Cavallaro (No. 2) - [2008] FamCAFC 214

FAMILY COURT OF AUSTRALIA

VICO & CAVALLARO (NO. 2)

[2008] FamCAFC 214

FAMILY LAW - APPEAL – Property Settlement - Practice and Procedure – Extension of time – where the trial judge granted the husband leave for extension but made that extension conditional upon the payment of moneys to the wife’s solicitors – Evidence was given that the husband had no money – Reasons did not properly consider the effect of the monetary condition nor properly support the making of the condition – Monetary condition effectively meant that the husband could not take up the extension of time – Appeal allowed – Husband granted extension of time without conditions – Wife’s costs reserved – Costs certificates granted pursuant to Federal Proceedings (Costs) Act 1981 (Cth) to both parties for the appeal

Family Law Act 1975 (Cth), s 79

Allesch & Maunz (2000) 203 CLR 172
Taylor & Taylor (1979) FLC 90-674

APPELLANT:

Mr VICO

RESPONDENT:

Ms CAVALLARO

APPEAL NUMBER:

122

2007

FILE NUMBER:

SYF

4354

2005

DATE DELIVERED:

4 December 2008

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Warnick, Boland & Dessau JJ

HEARING DATE:

4 December 2008

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Appellant appeared in person

COUNSEL FOR THE RESPONDENT:

Mr Johnson

SOLICITOR FOR THE RESPONDENT:

Russo & Partners Solicitors

Orders

That the appeal be allowed.

That order 1 of the orders made by the Honourable Justice Benjamin on 12 October 2007 be varied by deleting the date 9 November 2007 and inserting the date 18 December 2008 and by deleting the words thereafter.

That order 2 of the orders made by the Honourable Justice Benjamin on 12 October 2007 be set aside.

That the wife’s costs of and incidental to the application for property settlement from the date of filing to the conclusion of the hearing before Justice Benjamin on 12 October 2007, including ancillary proceedings between those dates, be reserved.

That 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 the appellant husband in relation to the appeal.

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 (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 respondent wife in respect of the costs incurred by the respondent wife in relation to the appeal.

IT IS NOTED that publication of this judgment under the pseudonym Vico & Cavallaro is approved pursuant to s 121(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 122 of 2007
File Number: SYF4354 of 2005

Mr VICO

Appellant

And

Ms CAVALLARO

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

WARNICK J: Mr and Ms Vico divorced on 4 February 2005. On 4 November 2005, the wife commenced proceedings in the Family Court of Australia, seeking orders by way of alteration of property interests. Those proceedings were heard by Johnson JR on 18 July 2006, in the absence of the husband. His Honour's order notes that:
The Court is satisfied that reasonable endeavours had been made by the wife to inform the husband about these proceedings today yet he has not appeared at Court.
On its face, of course, that notation does not say that the Court is satisfied that the husband has been properly served, or even that he definitely or probably knows of the proceedings in Court that day, but it merely relates to the reasonableness of the endeavours made by the wife. Later provisions in the orders confirmed the interpretation that my comment suggests.
His Honour then, by way of orders, provided for the sale of the former matrimonial home and for division of the net proceeds of sale equally between the parties. The net proceeds were to be determined after payment of agent's commission and auction expenses, if any, and payment of legal costs on the sale of the home. The orders otherwise provided that the husband and wife retain property in their possession or control, and that the wife waive her rights to receiving spousal maintenance. The parties were required to execute all documents necessary to give effect to the orders.
The orders also provided that the orders in the preceding paragraphs, not commence operation until the expiration of 28 days after personal service on the husband of a sealed copy of the orders, and that the husband be at liberty to relist the proceedings for the purpose of any application to vary or discharge any substantive order, at any time until the expiration of the 28 day period mentioned in the preceding order. The wife's costs were reserved.
The order was not served until 13 April 2007, although it may be that the effective content of the order came to the husband’s attention earlier. In any event, he did not make an application as provided to vary or set aside the orders of the Judicial Registrar until 1 August 2007, and thus, the orders in terms have become operative and the husband was also out of time provided by the rules for the filing of an application for review. They were the circumstances in which the husband's application for an extension of time within which to file the review came before his Honour Benjamin J on 12 October 2007, leading to the orders which are the subject of the husband's appeal before us today. Those orders were that leave for the husband to review the orders be extended to 9 November 2007, subject to the husband depositing into the trust account of Russo & Company, solicitors, the sum of $15,000 in cleared funds on or before 4 pm on 2 November 2007, as security for costs.
A following order provided that in the event the husband filed a review within the time provided, then the husband pay the wife's costs of the property proceedings from the commencement to the date of hearing of the application before his Honour Benjamin J. There was provision for adjustment if the costs were less than $15,000 and a limitation that they be no more than that.
His Honour noted some of the history which I have already recorded, and indeed, taken from his Honour's reasons for judgment, noted an issue about service and perhaps prior indication to the husband or information to the husband of the content of the orders before actual service upon him, and noted the husband's submissions and some material to the effect that he did not participate in the proceedings before the Judicial Registrar and did not apply as provided or allowed in the Judicial Registrar's orders to vary or set aside the orders made on 18 July 2006, because he had been very ill, under a lot of stress, depression and taking medication due to the breakdown of his marriage.
His Honour referred to a medical certificate dated 9 June 2006 and said of it:
What it does not of course explain is why when the husband was informed of the orders in September 2006 and that fact is not an issue, as to why he did not take steps at that time.
He then referred to some principles as discussed in Taylor & Taylor (1979) FLC 90-674 and in Allesch & Maunz (2000) 203 CLR 172, another decision of the High Court. He then said:
15.Whilst that applies to an application under s 79A, the same principles, it seems to me, ought to apply in a case such as this. However, I have some concerns as I said, about the bona fides of the husband, bearing in mind the comments he made to the process server and his knowledge of these orders. He has allowed the wife to incur significant costs in these proceedings. The consequence of giving him leave will be that the wife will need to reinstruct her solicitor on this case again.
16.I have had regard to the factors under s 117A and it seems to me that any order to extend the time ought to be conditional that the wife is not further prejudiced by the husband's delay in making this application. The wife is entitled to come to this Court and seek orders of this Court. The husband is not entitled to sit on his hands and say, "Well, I'll deal with it when I'm good and ready." He was entitled to get legal advice. He was given numerous options to deal with the matter. He had some almost 12 months from the date of the order to make that application. He chose not to do so.
I interpolate here that the reasoning of his Honour in what are the passages quoted, being paragraphs (15) and (16) of his judgment, might have the reader believing that the husband's application for extension of time was to be dismissed. Par (17) however, being the penultimate paragraph of his Honour's reasons, says:
Accordingly, I will be granting leave for extension but that leave will be conditional and if the conditions are not complied with, then there will be no leave. So that the husband understands the position, I will be making orders for payment of moneys to the trust account of Mr Russo. If those moneys are not paid, then the leave that I will be giving would evaporate.
In my view, there is some lack of cogency in these reasons, and some possible inconsistency. The case of the husband insofar as it goes to the extension, seems, in one sense, to be regarded by his Honour as slight, but one must take it that it was sufficient to persuade his Honour to grant the extension of time. The condition precedent for the payment of the sum of money, unless accompanied by a consideration of the reasonableness of that condition, and the possibilities and probabilities that the husband could meet that condition, is then inconsistent with there being a proper basis for a grant of leave, if in fact it stymies, or may stymie, the grant of leave itself.
In terms of meeting the requisite standards, in my view, these observations amount to there being insufficient reasons to justify the ultimate orders and, in particular, their effect, and that is an appealable error. I should indicate that the final paragraph of the reasons contains some reference to the possibilities and/or probabilities of the husband being able to meet the condition. The paragraph is:
In his submissions, which I invited with regard to costs, the husband says that he has no money. Whilst I have great sympathy for him, he is certainly a member of the family and he is asking an indulgence of this Court in circumstances where to say his application is a thin application is to say the least, but I am giving him that leave, but it must be on the basis that the wife is not out of pocket.
I suspect that in the transcription of his Honour's oral reasons, there may have been some inaccuracy, as I do not quite understand the reference to him being certainly a member of the family, but, in any event, there is no finding there that there is either possibly, let alone on the balance of probabilities, the capacity of the husband to fulfil the condition precedent. Effectively, in that absence, there was a real risk that the result of the order was in fact not to give the husband a practical extension of time at all, whereas obviously, his Honour was satisfied that there ought be an extension, albeit satisfied that there was a real need to protect the wife in relation to the costs that she had incurred to that time.
Insofar as those costs are concerned, the order of His Honour, saw the wife virtually indemnified, subject to questions of quantum, for the costs of the proceedings, including the substantive proceedings, to and including the hearing before his Honour. If, as is the case, the husband was granted the opportunity to have a review, then we would certainly not assume, and indeed are inclined to the contrary view, that all of the wife's costs of preparation up to and including the orders before the Judicial Registrar, would be wasted. She had material before the Judicial Registrar addressing one assumes s 79 factors and related matters, and we do not assume and incline as I say to the contrary, that that would be lost.
Again, on the issue of costs, if there was some validity in the husband's explanation for his failure to appear and perhaps his failure to make the application to vary or discharge permitted under the orders of the Judicial Registrar, sufficient to found the extension of time, then at the least, in our view, there ought to have been a consideration of the relevance of that finding to the issue of costs. It is often the case that if, for example, some costs in litigation are unavoidably incurred by, for example, the adjournment of a trial because of the illness of a party, that whilst it affects all parties, no order for costs is made. Here, there should at least have been a consideration of what was to be done with such findings as had been made, as to the husband's explanation for his non-appearance and subsequent failure to file an application to vary.
The husband indicates to us that there may be other pertinent matters of fact that ought be determined. For example, what communication there was before the property order was made between himself, the Court, the wife's solicitor and whether some of that communication, or all of it, ought to have been brought to the attention of the Judicial Registrar.
These matters which we think on the face of the material before us to be relevant to the question of costs, have not, as I have indicated, either been explored at all or been satisfactorily explored in the consideration of his Honour Benjamin J, and that means that we are not in a position to be satisfied as to those matters either. In those circumstances, we consider the proper order is to reserve the wife's costs of and incidental to the application for property settlement from the time of institution and including ancillary applications, to the conclusion of the hearing before his Honour Benjamin J on 12 October 2007.
BOLAND J: I agree entirely with the reasons of Warnick J and have nothing further to add.
DESSAU J: I also agree with Warnick J's reasons and I also have nothing further to add.

ORDERS DELIVERED

RECORDED : NOT TRANSCRIBED

The Court will make orders for the grant of certificates to Mr Vico and to the wife.

RECORDED : NOT TRANSCRIBED

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court

Associate:

Date: 28 January 2009