Wei and Wei & Anor
[2020] FamCAFC 224
•10 September 2020
FAMILY COURT OF AUSTRALIA
| WEI & WEI AND ANOR | [2020] FamCAFC 224 |
| FAMILY LAW – APPEAL – PROPERTY – Where the matter proceeded undefended before the primary judge – Where the husband and intervenor identified nearly identical property pools – Where trust monies identified by the husband and intervenor had not been dealt with by the primary judge – Where the intervenor sought to correct an order pursuant to r 17.02 of the Family Law Rules 2004 (Cth) – Where the primary judge amended the judgment under r 17.02A that effected the correction – Where the primary judge overlooked updated affidavit evidence – Where the primary judge improperly excluded affidavit evidence – Where the primary judge erred in fact, contrary to the evidence – Where the slip rule cannot be called in aid to correct such errors – Where the orders made in ostensible reliance upon the slip rule must be set aside – Where the orders reflect a patent factual error by the primary judge – All three appeals allowed – Matter remitted – Costs certificates ordered. FAMILY LAW – APPEAL – COSTS – But for the intervenor’s email, the latter two appeals would never have been necessary – Decline to make order for costs on an indemnity basis – Order made for party/party costs in a fixed sum. |
| Family Law Act 1975 (Cth) ss 79, 117(2A)(c) Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 8, 9 Family Law Rules 2004 (Cth) rr 17.02(1), 17.02A |
| AN and ZHU (2006) FLC 93-257; [2006] FamCA 179 Boensch v Pascoe (2019) 375 ALR 15; [2019] HCA 49 Chang v Su (2002) FLC 93-117; [2002] FamCA 156 DJL v The Central Authority (2000) 201 CLR 226; [2000] HCA 17 Dylan & Dylan [2008] FamCAFC 109 House v The King (1936) 55 CLR 499; [1936] HCA 40 J-Corp Pty Ltd v Australian Building Labourers Federated Union of Workers (No 2) (1993) 46 IR 301; [1993] FCA 70 Pell v The Queen [2019] VSCA 186 |
| APPELLANT: | Mr Wei |
| RESPONDENT: | Ms Wei |
| INTERVENOR: | J Lawyers Pty Ltd |
| FILE NUMBER: | MLC | 530 | of | 2017 |
| APPEAL NUMBER: | SOA SOA SOA | 14 15 17 | of of of | 2020 2020 2020 |
| DATE DELIVERED: | 10 September 2020 |
| PLACE DELIVERED: | Cairns |
| PLACE HEARD: | Melbourne (via video link) |
| JUDGMENT OF: | Ryan, Kent & Tree JJ |
| HEARING DATE: | 20 August 2020 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 31 January 2020 24 February 2020 |
| LOWER COURT MNC: | [2020] FamCA 38 [2020] FamCA 96 [2020] FamCA 98 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Dr Matta |
| SOLICITOR FOR THE APPELLANT: | Kenna Teasdale Lawyers |
| THE RESPONDENT: | No appearance |
| COUNSEL FOR THE INTERVENOR | Mr Hutchings |
| SOLICITOR FOR THE INTERVENOR | J Lawyers Pty Ltd |
Orders
Appeals SOA 14, 15 and 17 of 2020 be allowed.
The orders of the primary judge made 3 February 2020 and 24 February 2020 be set aside.
Proceeding MLC 530 of 2017 be remitted for re-hearing before a Family Court judge other than the primary judge.
In appeal SOA 14 of 2020, the Court grants to the appellant a costs certificate pursuant to 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 in respect of the costs incurred by the appellant in relation to that appeal.
In appeal SOA 14 of 2020, the Court grants to the intervenor a costs certificate pursuant to 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 intervenor in respect of the costs incurred by the intervenor in relation to that appeal.
The Court grants to both the appellant and the intervenor costs certificates pursuant to the s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being certificates that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise payments under that Act to them in respect of the costs incurred in relation to the rehearing.
The intervenor pay the appellant’s costs of appeals SOA 15 and 17 of 2020 fixed in the sum of $19,977.41.
That otherwise the appellant’s applications for costs be dismissed.
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 Wei & Wei and Anor 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).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 14 of 2020; SOA 15 of 2020; SOA 17 of 2020
File Number: MLC 530 of 2017
| Mr Wei |
Appellant
And
| Ms Wei |
Respondent
And
J Lawyers Pty Ltd
Intervenor
REASONS FOR JUDGMENT
Introduction
On 31 January 2020, for reasons then delivered, the primary judge pronounced final property orders, which were later perfected by entry on 3 February 2020. From these orders the husband filed his first appeal (“appeal SOA 14 of 2020”).
On 24 February 2020, the primary judge handed down a further judgment that purported to correct the 31 January 2020 reasons and 3 February 2020 orders. From these orders the husband filed his second appeal (“appeal SOA 15 of 2020”).
Also on 24 February 2020, the primary judge delivered an amended judgment that effected the corrections to the 31 January 2020 reasons and the 3 February 2020 orders. From these orders the husband filed his third appeal (“appeal SOA 17 of 2020”).
For the reasons which follow, all three appeals must succeed.
Background
Mr Wei (“the husband”) is presently 58 years of age, and Ms Wei (“the wife”) 45 years of age. Both parties were born in China. They commenced cohabitation in January 2007, and married in 2007. They subsequently had one child. The parties (and the child) moved to Australia in November 2013, separated on 14 December 2016, and divorced in 2018. Post separation, the wife has returned to live in China, but the husband and the child, (who is presently 11 years of age), remain living in Australia.
On 19 January 2017, the wife initiated proceedings seeking orders under 79 of the Family Law Act 1975 (Cth) (“the Act”) for division of the parties’ property. However, on 12 August 2019, she discontinued her Initiating Application, and the matter was thereafter listed for an undefended hearing of the husband’s Response. However, the wife’s former solicitors (“the intervenor”) were owed fees of $133,765.39 and, by order made 22 November 2019, were given leave to intervene in the proceedings, so as to seek to recover them. The intervenor thereafter participated in the undefended hearing on 3 and 4 December 2019.
At that trial, the husband and the intervenor were agreed that the significant property of the parties remaining in Australia included monies held in trust of $175,270.67 by the intervenor (“the intervenor’s trust monies”), $222,689.40 by BB Lawyers (“the BB Lawyer trust monies”) and $93,125.00 by Lawren Legal (“the Lawren Legal trust monies”). However, whilst the primary judge’s 3 February 2020 orders divided the intervenor’s trust monies, such that the husband received 65 per cent, and the wife 35 per cent (which latter entitlement was directed to be paid in full to the intervenor) no orders were directed to the BB lawyers trust monies, or the Lawren Legal trust monies.
Subsequently, on 13 February 2020, the intervenor sent an email to the Court, identifying that the BB Lawyers trust monies and the Lawren Legal trust monies had not been dealt with by the 3 February 2020 orders, in consequence of which the primary judge, of his own motion, relisted the matter on 19 February 2020. That hearing resulted in the two sets of reasons and orders published and made on 24 February 2020. Particularly, his Honour ordered that his earlier reasons and orders be amended so as to also divide the BB Lawyers trust monies 65 per cent to the husband, and 35 per cent to the wife, such that $261,761.54 was to be paid to the husband, and $140,948.52 to the wife. The latter was, subject to the payment in full of the intervenor’s fees, with the balance remaining of $7,183.13 to be paid to the wife at her last known address. However, for reasons which remain opaque, again no orders were made in relation to the Lawren Legal trust monies.
THE APPEALS
The wife did not engage in any of the three appeals. The intervenor conceded that all three appeals should succeed. To the extent there was any disagreement between the husband and the intervenor, it was only as to whether all, or only some, of the grounds of appeal had merit. Likewise, both the husband and the intervenor were agreed that the matter should be remitted for rehearing.
WHY THE APPEALS MUST SUCCEED
The 31 January 2020 reasons demonstrate that the primary judge was then under the misapprehension that the BB Lawyers trust monies were not, in a practical sense, available for division as between the parties, because they were subject to a claim for unpaid Capital Gains Tax by the Australia Taxation Office. Thus, in the 31 January 2020 reasons the primary judge said:
85. The [appellant] said that on 20 April 2018 “we sold the [Suburb B] property at the price of $1 490 000”. He said $222 689.40 was held on trust by his former solicitors because the Australian Taxation Office sought over $186 000 in capital gains tax. He said nothing further about how the proceeds of sale of the [Suburb B] property were disbursed. He did not put into evidence the contract for the sale of the [Suburb B] property nor did he put into evidence a settlement statement showing the disbursement of funds.
86.In view of the fact that an amount over $220 000 was held in trust following the sale of the [Suburb B] property, I accept that objective evidence existed about the sale of that real estate. However, the absence of documentation rendered very difficult the task of obtaining reliable information about the actual sums of money involved in arriving at the sum in trust. Based on the raw information available, a fair distillation of the [appellant]’s contentions concerning the [Suburb B] property was as follows –
a)it was purchased for $1 400 000;
b)no details of the mortgage funds were given;
c)$370 000 was paid by the [respondent] and the [appellant] for the acquisition of the property;
d)it was sold for $1 490 000; and
e)no details were given of the disbursements of the sale price beyond the quarantining of an amount a little over $222 000 for tax.
(Emphasis added) (As per the original)
Neither the husband nor the intervenor (nor, indeed, the wife) had ever so contended, and indeed these paragraphs misstate and misapprehend the husband’s unchallenged evidence at paragraph 86 of his affidavit filed 28 June 2019, where he said:
On 20 April 2018, we sold the [Suburb B] property at the price of 1,490,000.00. Now $222,689.40 was held on trust by my prior lawyers [BB Lawyers] (Melbourne). $186,250.00 was held by the Australian Tax Office as Capital Gain Tax withholding. I have consulted with my accountant who advised me there is no guarantee that the money withheld by the Australian Tax Office will be returnable to us.
Later, at paragraph 9.6 and 10 of his affidavit filed 20 September 2019, the husband updated that evidence by identifying that he had by then “received my half of the [CGT] withholding tax in the amount of $93,125.00 and directed my solicitors to hold [it] on trust for the parties” (husband’s affidavit filed 20 September 2019, paragraph 9). Those funds comprise the Lawren Legal trust monies.
It appears likely that the primary judge conflated the second and third sentences of paragraph 86 of the husband’s affidavit filed 28 June 2019. Unsurprisingly therefore, whilst at several places in the 31 January 2020 reasons the primary judge referred to the BB Lawyers trust monies, nonetheless his Honour concluded that “the only meaningful property remaining in Australia” available for division was the trust monies held by the intervenor (at [3]), and “[i]n real terms, that resulted in the only asset in Australia being the proceeds in [the intervenor’s] trust account” (at [155]). Given those findings, it seems likely that the primary judge overlooked the husband’s updating material of 20 September 2019.
Such errors are not amenable to correction under either r 17.02 or r 17.02A of the Family Law Rules 2004 (Cth) (collectively, “the slip rule”). That is because it was not a situation where the orders made on 3 February 2020 did not reflect the intention of the court, as discerned from the 31 January 2020 reasons, (r 17.02(1)(e)) or that the reasons for those orders were either issued by mistake (r 17.02A(a)) or contained an error arising from an accidental slip or omission (r 17.02A(b)). The primary judge’s conclusions at [3] and [155] as to the property available for division, and at [85] in relation to the BB Lawyers trust monies, were errors of fact, contrary to the evidence. The slip rule cannot be called in aid to correct such errors: DJL v Central Authority (2000) 201 CLR 226.
Therefore, since recourse to the slip rule by the primary judge was not open to his Honour, by purporting to do so in his 24 February 2020 reasons, he erred in law. It therefore follows that, as the intervenor concedes, the orders made in ostensible reliance upon the slip rule must be set aside. Likewise, since the 31 January 2020 orders reflect a patent factual error by the primary judge (and hence fall within the limited exceptions to the general rule in relation to appeals from discretionary judgments articulated in House v The King (1936) 55 CLR 499), they must also be set aside.
All three appeals therefore succeed.
We should note that, although appeal SOA 14 of 2020 succeeds in a general sense because of the factual error by the primary judge, the husband was correct to identify in ground 1 of the relevant Amended Notice of Appeal, that error resulted from, and was underpinned by, errors of law perpetrated by the primary judge, including the improper exclusion of material sworn by the wife, and sought to be put into evidence by the intervenor. His Honour’s proffered reason for rejecting that material, namely that “[t]he only way I will receive an affidavit in a trial is if the witness swears up to the affidavit or if it’s by agreement” (Transcript 4 December 2019, p.10 lines 8–10) was contrary to authority which bound him: AN and ZHU (2006) FLC 93-257; Chang v Su (2002) FLC 93-117.
It is not necessary to otherwise further traverse the various grounds of appeal.
However, before concluding our discussion in relation to the appeal, we should repeat that the trial before the primary judge proceeded as an undefended hearing, involving the discretionary division of, on any view, a relatively modest pool of property. Even accepting the intervenor’s claim introduced an element of complexity, it nonetheless remained a relatively straightforward case.
It is remarkable then, that the 31 January 2020 reasons extended to no less than 61 pages, containing 235 paragraphs. Equally remarkably, the judgment referred to five pieces of Commonwealth legislative material (including the Child Support (Assessment) Act 1989 (Cth)), one piece of Victorian legislation, and no less than 84 cases. Those authorities included three English cases from the 19th century, and rather perplexingly, the decision of the Victorian Court of Appeal of Pell v The Queen [2019] VSCA 186 as well. This is all the more noteworthy as the husband cannot read English, and required an interpreter before the primary judge.
In Dylan & Dylan [2008] FamCAFC 109, this Court warned at [2]:
A trial judge’s primary function is to decide the case before the court and explain the result, but from time to time a trial judge too might go beyond that task and do so to the great benefit of the law. However, a trial judge embarking upon discussion superfluous to the discharge of the primary role may provoke an appeal, based on the proposition that the irrelevant considerations may have influenced the final result.
As well as that particular risk which straying from the discipline of judicial economy (a term we adopt from Boensch v Pascoe (2019) 375 ALR 15) may generate, there is also the risk that a trial judge may be distracted from their central function, which is to make the necessary findings of fact thrown up by the immediate case, and apply the settled law to them.
RE-EXERCISE
The factual controversies which were before the primary judge, and which would need resolution, either in the re-exercise of the s 79 discretion, or in again resolving the intervenor’s claim, do not admit such an exercise being undertaken on appeal. Accordingly, as both parties conceded, the matter must be wholly remitted.
COSTS
This proved to be the significant battleground between the husband and the intervenor. Whilst the intervenor only sought relevant certificates under the Federal Proceedings (Costs) Act 1981 (Cth), the husband sought that his costs in appeals SOA 15 and 17 of 2020 be met by the intervenor on an indemnity basis, and in appeal SOA 14 of 2020, on a party and party basis; the combined total claimed in respect of all three appeals being $57,291.00. The intervenor opposed any costs order being made against it.
The basis for the husband’s application in appeals SOA 15 and 17 of 2020 springs from the fact that it was the intervenor, by its email of 13 February 2020, that set in course the chain of events that led to those appeals, which were ultimately conceded. Particularly, although in that email the intervenor had sought that the error in relation to the BB Lawyers trust monies and the Lawren Legal trust monies be rectified by recourse to the slip rule, which argument it persisted with before the primary judge on 19 February 2020, nonetheless before us, it conceded that the orders which his Honour thereafter made were infected by legal error.
The intervenor’s response to that argument was difficult to follow, but perhaps at its highest, was either a contention that there was some (unspecified) way, other than that adopted by the primary judge, by which the slip rule could have been properly invoked to correct the erroneous conclusion in relation to the BB Lawyers trust monies, and the property to be divided, or alternatively, that whilst its invitation to the primary judge to invoke the slip rule was misplaced, nonetheless the true cause of the primary judge’s legal error was his Honour himself, and not the intervenor.
The intervenor’s arguments in this respect must fail. There was no way that the plain error of the primary judge that the BB Lawyers trust monies were likely needed to satisfy a latent CGT liability, or that the property therefore available for division comprised only the intervenor’s trust monies, could be remedied by recourse to the slip rule. Indeed, rather notably, the Lawren Legal trust monies, which were not even mentioned by the primary judge in the 31 January 2020 reasons, still remained unacknowledged by his Honour in either of the sets of reasons and orders of 24 February 2020.
Further, the simple fact is that, but for the intervenor’s 13 February 2020 email, appeals SOA 15 and 17 of 2020 would never have been necessary. Perhaps, if counsel for the intervenor appearing on 19 February 2020 had made submissions to the effect that the slip rule could not in fact be used in the way the earlier email had suggested, then the 24 February 2020 judgments and orders could have been averted, but that is moot; the fact is that counsel exacerbated the email’s errors, and positively pressed upon the primary judge the very same contentions it raised.
Section 117(2A)(c) of the Act specifically requires us, in the context of the husband’s costs application, to consider the conduct of the parties to the proceedings. We are satisfied that the intervenor’s conduct discussed above justifies an order for costs against it in both SOA 15 and 17 of 2020.
As to the claim that those costs be on an indemnity basis, we are not satisfied that the intervenor’s conduct in either appeal warrants the making of such an order. Particularly, although it might be said that its conduct in pressing to have the primary judge utilise the slip rule so as to deal with the BB Lawyers trust monies (and indeed the Lawren Legal trust monies) involved a wilful disregard of clearly established law (J-Corp Pty Ltd v Australian Building Labourers Federated Union of Workers (No 2) (1993) 46 IR 301 at 303) that does not apply to the conceded appeals, in which no such argument was maintained. We decline to make an order for costs on an indemnity basis against the intervenor.
According to the husband’s costs schedule, his party/party costs in appeals SOA 15 and 17 of 2020 are in the sum of $19,977.41 and we are satisfied that sum is reasonable. Accordingly we will fix costs in that amount.
Appeal SOA 14 of 2020, whilst involving an error of fact is, as we have said earlier, nonetheless founded, in significant part, upon errors of law. Neither party induced any of those errors, and the intervenor conceded the appeal, albeit not at the earliest possible time. We are not persuaded that those circumstances warrant any departure from the usual rule that each party should bear their own costs. There will, however, be certificates under the Federal Proceedings (Costs)Act1981 (Cth) given to the husband and the intervenor in relation to both the appeal and the re-hearing.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ryan, Kent, Tree JJ) delivered on 10 September 2020.
Associate:
Date: 10 September 2020
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