XYZ Pty Ltd and Anor & Charisteas & Ors; ABC Pty Ltd & Charisteas and Ors
[2017] FamCAFC 112
•30 June 2017
FAMILY COURT OF AUSTRALIA
| XYZ PTY LTD AND ANOR & CHARISTEAS & ORS; ABC PTY LTD & CHARISTEAS AND ORS | [2017] FamCAFC 112 |
| FAMILY LAW – APPEAL – Two appeals – Cross Appeal – Appeal against dismissal of recusal application – Apprehended bias – Waiver of right to object – Where the primary judge found that the fictional bystander would not apprehend bias – Appeal against interim injunctions against third parties – Where the third-party was not a party to the proceedings – Whether the third party was afforded procedural fairness – Notice requirement to non-parties when making injunctions –– Appeal against dismissal of recusal application dismissed – Appeal as to interim orders allowed in part – Where the Full Court will re-exercise. FAMILY LAW – APPEAL – LEAVE TO APPEAL – Application for leave largely unsuccessful. FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Application to adduce further evidence – Application granted by consent. FAMILY LAW – APPEAL – COSTS – Where the appeal and cross-appeal is largely or wholly unsuccessful – Costs ordered in favour of respondent and apportioned between various parties. | |
| Family Law Act 1975 (Cth) ss 90AF, 106B, 114, 117 |
AG & VC [2013] FamCAFC 60
Anderson v National Australia Bank [2007] VSCA 172
Blueseas Investments Pty Ltd v Mitchell and McGillivray (1999) FLC 92-856
Budd v Kambah Tea Tree Plantations Pty Ltd [2001] NSWCA 180
Charisteas and Charisteas [2015] FCWA 15
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303
Gould and Gould; Swire Investments Ltd (1993) FLC 92-434
Hunt v Hunt (2006) 36 Fam LR 64
Johnson v Johnson (2000) 201 CLR 488
Kowaliw & Kowaliw (1981) FLC 91-092
Kuru v State of New South Wales (2008) 236 CLR 1
Mann v Carnell (1999) 201 CLR 1
Medlow & Medlow (2016) FLC 93-692
Re Alley; Ex parte Australian Building Construction Employees’ and Builders Labourers’ Federation (1985) 60 ALJR 181
Sanders v Sanders (1967) 116 CLR 366
Samootin v Wagner (2006) FLC 93-265
| Vakauta v Kelly (1989) 167 CLR 568 VC & GC [2008] FamCAFC 148 VC & GC [2010] FamCAFC 62 VC & GC [2011] FCWA 89 Yunghanns v Yunghanns (1999) FLC 92-836 |
IN APPEAL NUMBER WA20 L OF 2016
| FIRST APPELLANT (FIRST CROSS-RESPONDENT): | XYZ Pty Ltd |
| SECOND APPELLANT (SECOND CROSS-RESPONDENT): | Mrs Charisteas Snr |
| FIRST RESPONDENT (FOURTH CROSS-RESPONDENT): | Mrs Charisteas |
| SECOND RESPONDENT (FIFTH CROSS-RESPONDENT): | Mr E Charisteas |
| THIRD RESPONDENT (SIXTH CROSS-RESPONDENT): | Ms Solano |
| FOURTH RESPONDENT (SEVENTH CROSS-RESPONDENT): | Ms Magnoli |
| FIFTH RESPONDENT (CROSS-APPELLANT): | Mr Charisteas |
| SIXTH RESPONDENT (EIGHTH CROSS-RESPONDENT): | Mr Barton and Mrs Charisteas Snr (as Executors of the Estate of Mr J Charisteas) |
| THIRD CROSS-RESPONDENT: | Mr Barton |
| IN APPEAL NUMBER WA21 L OF 2016 | |
| APPELLANT: | ABC Pty Ltd |
| FIRST RESPONDENT: | Mrs Charisteas |
| SECOND RESPONDENT: | Mr E Charisteas |
| THIRD RESPONDENT: | Ms Solano |
| FOURTH RESPONDENT: | Ms Magnoli |
| FIFTH RESPONDENT: | Mr Charisteas |
| SIXTH RESPONDENT: | XYZ Pty Ltd |
| SEVENTH RESPONDENT: | Mrs Charisteas Snr |
| EIGHTH RESPONDENT: | Mr Barton |
| NINTH RESPONDENT: | Mr Barton and Mrs Charisteas Snr (as Executors of the Estate of Mr J Charisteas) |
| FILE NUMBER: | (P)PTW | 4624 | of | 2006 |
| FIRST APPEAL NUMBER: | WA | 20 | L | of | 2016 |
| SECOND APPEAL NUMBER: | WA | 21 | L | of | 2016 |
| DATE DELIVERED: | 30 June 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Perth |
| JUDGMENT OF: | Bryant CJ, Ryan & Moncrieff JJ |
| HEARING DATE: | 5 and 6 April 2017 |
| LOWER COURT JURISDICTION: | Family Court of Western Australia |
| LOWER COURT JUDGMENT DATE: | 13 September 2016 |
| LOWER COURT MNC: | [2016] FCWA 106 |
REPRESENTATION
IN APPEAL NUMBER WA20 L OF 2016
| COUNSEL FOR THE FIRST AND SECOND APPELLANTS (FIRST AND SECOND CROSS-RESPONDENTS), THIRD CROSS-RESPONDENT AND SIXTH RESPONDENT (EIGHTH CROSS-RESPONDENT): | Mr Penglis |
| SOLICITOR FOR THE FIRST AND SECOND APPELLANTS (FIRST AND SECOND CROSS-RESPONDENTS), THIRD CROSS-RESPONDENT AND SIXTH RESPONDENT (EIGHTH CROSS-RESPONDENT): | West End Legal |
| COUNSEL FOR THE FIRST RESPONDENT (FOURTH CROSS-RESPONDENT): | Ms Anderson and Ms Harrison |
| SOLICITOR FOR THE FIRST RESPONDENT (FOURTH CROSS-RESPONDENT): | DCH Legal |
| SECOND RESPONDENT (FIFTH CROSS-RESPONDENT): | In person |
| THIRD RESPONDENT (SIXTH CROSS-RESPONDENT): | In person |
| FOURTH RESPONDENT (SEVENTH CROSS-RESPONDENT): | Did not appear |
| COUNSEL FOR THE FIFTH RESPONDENT (CROSS-APPELLANT): | Mr Dowding SC and Mr Robinson |
| SOLICITOR FOR THE FIFTH RESPONDENT (CROSS-APPELLANT): | DS Family Law |
| IN APPEAL NUMBER: WA21 L OF 2016 | |
| COUNSEL FOR THE APPELLANT: | Mr Penglis |
| SOLICITOR FOR THE APPELLANT: | West End Legal |
| COUNSEL FOR THE FIRST RESPONDENT: | Ms Anderson and Ms Harrison |
| SOLICITOR FOR THE FIRST RESPONDENT: | DCH Legal |
| SECOND TO NINTH RESPONDENTS: | Did not appear |
Orders
In appeal WA 20 L of 2016, that the appellant have leave to appeal against Order 11 dated 13 September 2016.
The appeal be allowed in part.
Order 11 of 13 September 2016 be set aside.
Other than as provided for above, the application for leave to appeal as contained in appeal WA 20 L of 2016 be dismissed.
Subject to Order 2 above, the appeal be otherwise dismissed.
The cross-appeal be dismissed.
In the event the adult children wish to pursue their application for orders in accordance with Order 11 of 13 September 2016 they shall file and serve written submissions in support of the application, including as to the power invoked to make the orders sought, within 14 days of the date of these orders. Any submissions in reply shall be filed and served within 10 days of the date of service of the applicants submissions.
In the event that the adult children fail to file submissions as required by Order 7 above their application for orders as per Order 11 of 13 September 2016 be dismissed.
In appeal WA21 L of 2016, the application for leave to appeal be dismissed.
Mrs Charisteas Snr pay one half of the wife’s costs of and incidental to appeal WA20 L of 2016 (including for leave) within 28 days of agreement or as assessed. The wife’s costs of the appeal are to be calculated on the basis that they are one half of the costs she incurred in the appeals (including for leave) and cross-appeal and incidental applications.
XYZ Pty Ltd pay one half of the wife’s costs of and incidental to appeal WA20 L of 2016 (including for leave) within 28 days of agreement or as assessed. The wife’s costs of the appeal are to be calculated on the basis that they are one half of the costs she incurred in the appeals (including for leave) and cross-appeal and incidental applications.
All orders made against XYZ Pty Ltd which restrain it from dealing with its or the Trust assets are varied to the extent required to enable it to pay the wife’s costs as required by Order 11 above.
The husband pay the wife’s costs of and incidental to the cross-appeal within 28 days of agreement or as assessed. The wife’s costs of the cross-appeal are to be calculated on the basis that they are one half of the costs she incurred in the appeals (including for leave) and cross-appeal and incidental applications.
The appellants and Mr E Charisteas, Ms Solano and Ms Magnoli each pay their own costs of the appeal against Order 11 of 13 September 2016.
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 XYZ Pty Ltd and Anor & Charisteas and Ors; ABC Pty Ltd & Charisteas and Ors 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 PERTH |
Appeal Number: WA 20 L of 2016; WA 21 L of 2016
File Number: (P)PTW 4624 of 2006
| In Appeal Number: WA 20 L of 2016 XYZ Pty Ltd |
First Appellant (First Cross-Respondent)
And
Mrs Charisteas
First Respondent (Fourth Cross-Respondent)
For a complete list of parties in Appeal Number WA 20 L of 2016 see Schedule A.
In Appeal Number: WA 21 L of 2016
ABC Pty Ltd
Appellant
And
Mrs Charisteas
First Respondent
For a complete list of parties in Appeal Number WA 21 L of 2016 see Schedule B.
REASONS FOR JUDGMENT
Introduction
At the conclusion of a lengthy property trial an application was made by one of the corporate parties (“XYZ”) and Mrs Charisteas Snr (“the husband’s mother”) that Walters J (“the primary judge”) recuse himself. XYZ is the corporate trustee of the XYZ Trust (“the Trust”). The husband’s mother and Mr Barton are the joint directors of XYZ. The husband’s mother is a party to the proceedings in her own right and both she and Mr Barton are parties in their capacities as directors, trustees and/or executors of the estate of the husband’s father. Theirs and XYZ’s interests are sufficiently aligned that they are represented by the same counsel and firm of solicitors.
The recusal application was dismissed (order 2 dated 13 September 2016). On 11 October 2016 XYZ and the husband’s mother filed a Notice of Appeal against this, and other orders made on the same date. We should also point out that Mr Barton was mistakenly named as an appellant and, with his consent, an order was made whereby he was removed as an appellant.
Although the application was supported by Mr Charisteas (“the husband”), he did not contend that his case was affected by an apprehension of bias in the primary judge. Nonetheless, on 30 November 2016 he filed a cross-appeal (as amended) and joined in the challenge made against order 2. As he is a party and a beneficiary of the Trust, his grounds of appeal effectively mirror those of the appellants and because no challenge was made to his standing to cross-appeal, we are prepared to proceed on the basis that he is at least a person affected by the order and to entertain the cross-appeal.
Given the complex nature of the proceedings it was understood that it would be some time before the primary judge would be in a position to make final orders. On the application of Mrs Charisteas (“the wife”), a series of interim asset preservation orders were made against XYZ and ABC Pty Ltd (“ABC”) on 13 September 2016. Broadly stated, orders 4(c) and 4(e) of these orders restrains the appellants and Mr Barton from voting in favour of any distributions of income from the Trust and from appointing or voting in favour of any resolution to appoint further directors of XYZ. Orders 5 –7 inclusive are injunctions which restrain XYZ from selling assets, borrowing or repaying monies. The injunctions are slightly more restrictive than injunctions that had been in operation for a number of years. Order 8 is an injunction in similar terms but directed to ABC. Although ABC was not a party to the proceedings, its directors and sole shareholder were. ABC now has the same representation as XYZ and associated parties.
XYZ (and the husband’s mother) appeals against orders 4(c), 4(e), 5, 6 and 7. ABC appeals against order 8.
XYZ (and the husband’s mother) also appeals against order 11 of 13 September 2016, the effect of which is, pending further order, to restrain XYZ from taking action against the spouses’ adult children to enforce orders for costs made in proceedings commenced by the children in the Supreme Court of Western Australia.
Leave to appeal is required in relation to all orders other than the recusal order. It is accepted that the test for leave is two-fold. Firstly, that the decision in question is attended with sufficient doubt to warrant the grant of leave. The second requirement is whether substantial injustice would result if leave were refused, supposing the decision to be wrong (Medlow & Medlow (2016) FLC 93-692).
Background to the appeals and cross-appeal
So as to provide context to the appeals and cross appeal, some brief background facts are required.
After some 26 years of marriage, the husband and the wife separated in 2005. The husband commenced proceedings for the settlement of property in August 2006. The parties’ financial interests included various corporate entities and trusts and were intermingled with those of the husband’s parents. The acrimonious nature of the spouses’ separation meant disentangling their interests and achieving a settlement of property was never going to be easy.
Although the wife agreed there should be a settlement of property, she sought orders different to those proposed by the husband and in late 2007 she brought an application against the Trust (and others) pursuant to s 106B of the Family Law Act 1975 (Cth) (“the Act”) to set aside 13 significant transactions. The s 106B application was considered as a discrete issue and in January 2008 the husband’s application that it be summarily dismissed failed.
The husband’s father passed away in February 2008. The executors of his estate are Lewis Barton and the husband’s mother. The estate is a party in the proceedings. With the husband’s father’s death the husband’s mother became XYZ’s sole shareholder and thus controller of the Trust.
The s 106B application was dismissed on 18 December 2008 (VC & GC [2008] FCWA 148). However, the wife successfully appealed against the orders (other than in relation to particular transactions that took place in 1997 and 2001) (VC & GC [2010] FamCAFC 62) and the balance of the s 106B applications were remitted for rehearing, to be determined as part of the property settlement trial.
Following a lengthy trial, final property orders were made in December 2011 (VC & GC [2011] FCWA 89).Relevant to the Trust, these included orders which had the effect of bringing forward the vesting date from 2064 to 30 June 2010. There is a much more complex array of facts but it is sufficient for present purposes to record that the class of specified beneficiaries was closed and comprised the spouse parties and their adult children. The class of general beneficiaries of the Trust was larger albeit it included the specified beneficiaries. The Trustee was ordered to distribute the trust fund and income, the effect of which was that between them the spouse parties would receive 40 percent of the Trust assets and their three adult children would each receive 20 percent. Prior to distribution, the husband’s mother, who is a general beneficiary and received income from the Trust, was to be paid $338,000. The inclusion of the Trust assets as property available for distribution significantly increased the value of the spouse parties’ total property. At that time the total asset pool was valued at slightly in excess of $6 million of which the spouse parties’ interests in the Trust comprised approximately 46.5 per cent.
The husband’s mother, Mr Barton and XYZ appealed against the orders that the Trust vest and distribution of its assets. In the event, the husband’s sister was granted leave to be heard in support of aspects of the appeal. The appeal was allowed and on 11 April 2013 the vesting and consequential orders were set aside (AG & VC [2013] FamCAFC 60). In a valiant attempt to assist the parties avoid a further hearing the judge who had thus far dealt with the proceedings convened a judicial settlement conference. With the parties unable to reach an agreement the judge stood aside and the case was allocated to Walters J.
Consistent with the notion that nothing could be resolved easily in this ruinously expensive litigation, the parties were unable to agree about the effect the orders made by the Full Court on 11 April 2013 had on the 2011 property orders. This question came before the primary judge who determined that the substantive property settlement proceedings remained on foot, as did the wife’s application that the Trust vest (Charisteas & Charisteas [2015] FCWA 15 at [158] – [159]). Reference to this judgment (and the trial transcript) reveals the magnitude of the factual and legal complexities involved in this multi-party litigation and the very significant effort undertaken by the primary judge to come to terms with the case and bring it to trial.
On 10 February 2015 the primary judge made orders for the future conduct of the proceedings. It should be pointed out that by the time the trial commenced on 3 August 2016 the primary judge had been heavily engaged with the proceedings for in excess of two years. The trial was listed for 18 days and, again, reference to the trial transcript shows that the primary judge was concerned to ensure the efficient presentation of the real issues in dispute. As it transpired the evidence was completed in 11 days and on 17 August 2016 the hearing was adjourned until 13 September 2016. Directions were made for the parties to file and serve written submissions; the adult children and the additional parties by 24 August 2016, the husband by the 31 August 2016 and the wife by 7 September 2016. The purpose of the adjourned date was so that counsel could speak to the written submissions and “to enable the parties to be heard in relation to the making of interim or interlocutory orders pending the delivery of judgment” [10].
All parties complied with the directions. Within her documents the wife sought a variety of asset preservation orders, including the orders against ABC which are now appealed. XYZ and associated parties filed submissions in response to the wife’s written submissions which also addressed the orders sought against ABC. In their written submissions the adult children sought an interim order against XYZ and its trustees to restrain them from taking further action against them to recover their costs in the Supreme Court action.
On 9 September 2016 XYZ and the husband’s mother asked that the primary judge recuse himself.
The recusal appeal
By an Application in an Appeal filed on 24 March 2017 the cross-appellant husband sought to rely on the whole of the transcript of 17 August 2016. The transcript was received by consent and only the question of costs of that application will require consideration.
Although reference was made to the tone of speech used when the contentious remarks were delivered, we were not asked to listen to the audio recording and have not. In deciding we did not need to listen to the recording we took into account that his Honour proffered an apology at the commencement of 12 August 2016 in which he described his remarks made the day before as demonstrating a sense of “impatience, fractiousness and intemperate[ness]” and “frustration” with respect to aspects of the conduct of the proceedings.
Before us counsel referred to the apology a number of times and it appeared to us that it was accepted that the description was apt. We thus proceed on the basis that the contentious remarks were not made in a light hearted fashion and that the fictional bystander would have understood from the words and tone used that some of the remarks suggested a certain tendency of mind whilst others conveyed his Honour’s frustration and the like with aspects of the proceedings.
The application by XYZ and the husband’s mother that the primary judge be recused was made on the basis of apprehended bias. As was mentioned earlier, the application was supported by the husband. The application was opposed by the wife and the children.
In determining that the application should be dismissed, the primary judge applied the principles that emerge from Johnson v Johnson (2000) 201 CLR 488 and Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, which the parties agreed (as do we), apply in this case. On the basis of those principles the primary judge determined that the fair minded lay observer would not reasonably apprehend that his Honour might not bring an impartial mind to the resolution of the property proceedings [88].
As the primary judge explained:
89. Nothing in the recusal submissions identifies what it is alleged might lead me to decide the case other than on its legal and factual merits. Further, it is not apparent that there is any logical connection between what I am alleged to have said or done and "the feared deviation from the course of deciding the case on its merits". The law permits a trial judge to express tentative or preliminary views without taking such expressions to indicate prejudgement, and trial judges "are not expected to wait until the end of a case before they start thinking about the issues, or to sit mute while evidence is advanced and arguments are presented". All counsel had every opportunity to deal with any observations or views that I expressed during the trial, and a number of their submissions were forcefully expressed, leading to robust exchanges.
By reference to Vakauta v Kelly (1989) 167 CLR 568 (“Vakauta”), his Honour found that because of delay, the appellants (and cross-appellant) waived their right to object to the constitution of the court. The gravamen of the decision being that the delay was so great as to interfere with the proper administration of justice and such that they could not now object [27], [31].
It needs to be understood that the moving parties relied on 10 statements and rulings as evidence which would cause apprehension of bias in the fictional bystander. These occurred throughout the trial, however none resulted in a contemporaneous recusal application albeit in a number of instances objection was taken to the remarks.
There is no challenge to his Honour’s statement of the applicable law or the adequacy of the reasons. The challenges raised by the appellants and cross-appellant can be summarised as asserting that his Honour fell into error by:
·Failing to find that the fictional bystander might reasonably apprehend the judge might not bring an impartial mind to the resolution of the proceedings;
·Finding that the application should be dismissed on the basis it had not been made on a timely basis; and
·Denying the moving parties procedural fairness by determining that the application should be dismissed on a basis not raised with them (waiver).
Procedural fairness
The procedural fairness challenge can be dealt with quickly. On a proper reading of the written submissions presented by counsel for XYZ and the husband’s mother there can be no doubt that they understood the importance of timeliness in such an application and that if not made at once, it must be made as soon as is reasonably practicable (Re Alley; Ex parte Australian Building Construction Employees’ and Builders Labourers Federation (1985) 60 ALJR 181 at 182, cited in Vakauta per Dawson J at 578). No doubt this is one of the reasons why the recusal application was made on the basis of the “nature and frequency” of the contentious statements “viewed as a whole” and not that any individual statement provided a foundation for recusal. (Submissions, paras 8 and 23).
When regard is had to the authorities the appellants relied on below, it becomes even more apparent that counsel well understood that a party who fails to raise an objection when the issue arises may be taken to have waived the right to object. It is noteworthy that the seminal authority on this point (Vakauta) was referred to in six of the authorities on which counsel relied. Finally, shortly before counsel for the moving parties was called on, in exchanges with counsel who appeared by leave for the solicitor retained by the husband’s mother, the primary judge spoke about this being “… the 11th hour, 59th minute and 59th second of the trial. The evidence is finished.” His Honour’s point being that it was very late in the process to raise new matters. We accept that the comments were not directed to counsel for the moving parties, but an astute advocate charged with presenting an application for recusal based on events that occurred sometime earlier could not but recognise that the question of delay was in play. In these circumstances the primary judge was not required to elucidate the law and entitled to proceed on the basis that the temporal question was a matter for him.
As the cross-appellant husband did not himself apply for recusal and he was given the opportunity to address the application, he cannot now complain that the question of waiver was not raised with him. Senior counsel for the husband well understood the case mounted by the moving parties, including the authorities relied on which he adopted. The observations made in the paragraph above apply with equal force to the husband.
There was no denial of procedural fairness.
Waiver
The next question to be answered is whether his Honour’s finding that the moving parties (and the husband) waived their right to object [32] was available. If this question is answered in the affirmative, the recusal appeal and the cross‑appeal must fail. This is because the remaining challenges assert errors which, even if established, are subservient to the ultimate finding as to waiver.
In Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 the High Court explained the nature of waiver at 315 – 316 thus:
30.According to its strict legal connotation, waiver is an intentional act done with knowledge whereby a person abandons a right (or privilege) by acting in a manner inconsistent with that right (or privilege) - FTN.35. It may be express or implied. In most cases concerning waiver, the area of dispute is whether it is to be implied. In some cases waiver will be imputed by the lawwith the consequence that a privilege is lost, even though that consequence was not intended by the party losing the privilege. The courts will impute an intention where the actions of a party are plainly inconsistent with the maintenance of the confidentiality which the privilege is intended to protect.
31.In Craine v Colonial Mutual Fire Insurance Co Ltd - FTN.1, it was explained that “‘[w]aiver’ is a doctrine of some arbitrariness introduced by the law to prevent a man in certain circumstances from taking up two inconsistent positions … It is a conclusion of law when the necessary facts are established. It looks, however, chiefly to the conduct and position of the person who is said to have waived, in order to see whether he has ‘approbated’ so as to prevent him from ‘reprobating’”. …
(Citations omitted)
The point of implied waiver is that even though the holder of the privilege (or right) does not intend to give it up, intention to waive is imputed. In Mann v Carnell (1999) 201 CLR 1 at [29] the plurality of the High Court summarised the position as follows:
29. … This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege ... What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.
Invariably, the question of implied waiver requires a fact based enquiry. As we mentioned earlier, in this case, the implied waiver is said to have arisen because the moving parties waited too long to raise their objection to the statements about which they now complain and to the constitution of the court. In this regard and as we said at the outset, at no stage did the husband contend that his case was affected by an apprehension of bias. Properly understood his stance was that as a general beneficiary of the Trust, he shared the moving parties’ concerns about a number of his Honour’s statements, rulings and tone as they affected the moving parties. However, to the extent that the moving parties were concerned about how the primary judge dealt with him, other than what this suggested about their case, the husband did not share their concern. The effect of this is that the moving parties and the husband cannot rely on exchanges which solely relate to the husband’s case. It is accepted that the question of the reliability of the husband’s evidence is relevant to the case presented by the moving parties.
In any event, the last of the contentious statements was made on 17 August 2016 and thus the delay ostensibly concerned the period from that day to 9 September 2016 (when the application was filed). Even though the primary judge was unavailable for part of this time, on any view the period was substantial and the question to be answered is whether the application was nonetheless made as soon as was reasonably practicable. If the remarks made on 17 August 2016 were unrelated to the case mounted by the moving parties then the period of delay is even longer.
Turning then to 17 August 2016 and whether the remarks are relevant to the application, after the luncheon adjournment, Ms Magnoli, who is one of the adult children, gave evidence. She is a lawyer and albeit a party, appeared without legal representation. Following brief cross-examination by counsel for the wife, cross-examination by senior counsel for the husband commenced. The focus of his cross-examination was on the wisdom of the wife’s decision to settle an action brought against her by a litigation lender and an action brought by the wife against her former solicitors. This was an issue of some significance to the husband who hoped to persuade the primary judge that by failing to “manage the two causes of action … appropriately” the wife had acted “wantonly”. It is uncontroversial that the wife settled her action against the insurers for a payment to her of $450,000.00 (subject to conditions which for present purposes are irrelevant). The action initiated by the litigation lenders was compromised on the basis that judgment was entered against the wife. The terms are complex but suffice to say that as at 19 January 2016 the judgment debt was fixed at $2.5 million plus interest at six percent per annum. Reliant on Kowaliw & Kowaliw (1981) FLC 91-092, the husband claimed that the wife alone should carry any negative financial consequences. These issues had nothing to do with the husband’s credit worthiness and were irrelevant to the case presented by XYZ or the husband’s mother.
Senior counsel cross-examined the witness at length about her knowledge of the actions, assistance she gave to her mother and in essence, whether she agreed that her mother had compromised “a pretty good claim” against her former solicitor (transcript of 17 August 2016, page 18, line 50). Twenty pages into the transcript of this witnesses’ evidence, the following exchange occurred:
His Honour: I’ve looked at this case, [counsel for fifth respondent/cross appellant]…
[Counsel for fifth respondent/cross-appellant]: Given the size…
His Honour: …for ten years. These parties, including the trust, have run up over $3 million worth of legal fees – that’s just in the schedule, let alone whatever is owed to [A F]. Enough is enough. In my view, it was very sensible to settle and get out of another claim.
[Counsel for fifth respondent/cross-appellant]: Well, I’m sorry you determined that without our submissions, your Honour, but with great respect…
His Honour: That – prima facie, that’s how it appears to me, [counsel for fifth respondent/cross-appellant].
(Transcript of 17 August 2016, page 20, lines 22 – 36)
Not long afterwards his Honour repeated these sentiments and said:
… [T]here have [sic] serious risks associated with it for all concerned, and people settle for a myriad of reasons. One of the other litigants – one of the other sisters, I think, said she was litigated out or somebody said that. How much do you want people – to continue to fight?
(Transcript of 17 August 2016, pp 21, lines 16 – 21)
A short time later, the primary judge pointed out that he was not bound by findings made by an earlier judge (“I don’t care”) albeit, he himself might determine that the litigation loan should be disregarded (transcript of 17 August 2016, page 21). However, as his Honour explained, that determination could be reached without his needing to re-litigate proceedings that were settled at mediation (transcript of 17 August 2016, pp 25, lines 14 – 15).
These exchanges continue over a number of pages, which in the interest of brevity, we have not recorded in full. Suffice it to say that four pages further into the transcript, senior counsel asked for a brief adjournment “in view of the interchange between us…to just consider my position.” His Honour said he would not interrupt cross-examination and would not adjourn “… at this stage…” (transcript of 17 August 2016, page 24, lines 47 – 48).
Cross-examination continued until, some eight pages further on, cross‑examination by counsel for XYZ and the husband’s mother commenced. It is during this tranche of questioning that the final contentious matter arose.
Exhibit W25 formed part of a bundle of papers produced in the Supreme Court proceedings commenced by the adult children and had been provided to the witness. As originally presented, the bundle of documents included two emails, one from a solicitor addressed to Mr Barton seeking instructions and the second being Mr Barton’s reply. In response to objection by counsel for XYZ and the other parties he represented, the primary judge declined to admit the letter from the solicitor into evidence but Mr Barton’s letter was admitted. Notwithstanding that the document had been admitted, counsel embarked on a line of questioning designed to “… attack[] the providence (sic) of [the] document” (transcript of 17 August 2016, page 40, lines 50 – 51).
His Honour summarised the position thus:
His Honour: She said privilege was claimed in respect of certain documents. This was not a document in relation to which privilege was claimed. You’re saying, “Well, she should have been aware of that and she should have drawn her own conclusions, even though certain steps were taken. She showed it to her lawyer who apparently your instructors insisted be present. She wasn’t allow [sic] to inspect them without a lawyer being present, so she went with a lawyer. She asked the lawyer. Then the next step is she asked for a copy of it. It’s provided by your instructor. End of story, [counsel for first and second appellants].
[Counsel for first and second appellants]: All right, your Honour. I will accept your Honour’s observations.
(Transcript of 17 August 2016, page 41, lines 9 – 23)
It was submitted that this “ruling” constituted “an unreasonable exercise” of discretion “in a way adverse to these [appellants] and the husband”. In any event, cross-examination continued and some six pages of transcript later, the witness withdrew. It is incorrect to describe these observations as a ruling. This is because the admission of W25 was dealt with some days earlier and no application was made on 17 August 2016 for the ruling to be reconsidered. His Honour’s remarks did not revive the issue and in our view they are irrelevant to the question of “nature and frequency” or delay.
With the oral evidence in the trial now complete, his Honour asked “where do we go from here?” (transcript of 17 August 2016, page 48, lines 4 – 5).
If, as counsel contends, all the statements and rulings said to constitute the pattern (nature and frequency) were now made, this was when, at the very least, the prospect that there might be an application for the primary judge to recuse himself needed to be raised. Although earlier in the day the primary judge had refused to disrupt cross-examination so that senior counsel for the husband could discuss the issue with his client, with that evidence completed there was an obvious opportunity to renew the application. The opportunity was not taken and it is telling that at no stage did the husband initiate an application for the judge to stand aside.
As to XYZ and the husband’s mother, we are unable to see how the matters raised by senior counsel for the husband with the witness are relevant to the issues that his Honour would need to determine in relation to them. Accepting for the purpose of argument that Mr Barton’s letter ought not to have been received into evidence, a mistaken ruling concerning the admission of evidence made after argument could not add to the evidence so as to demonstrate a pattern qua XYZ and the husband’s mother. There is no challenge to his Honour’s finding that he made dozens of rulings during the course of the trial which saw each of the parties achieve a measure of success [38]. If the pattern was said to have become apparent at this point, counsel for the moving parties should have raised it.
We do not suggest that it was necessary for counsel to be in a position to present detailed argument at that stage, but it was reasonably practicable for the issue to be identified that day. These are difficult matters but in the context of these very complex proceedings and, with substantial work to be undertaken by the parties and the judge, it could not reasonably wait another three weeks. Indeed, the exchanges which follow are all predicated on his Honour’s involvement through to judgment. It is noteworthy that his Honour made it clear he had time available during the following week. The point being, the recusal application could have been heard before any further work needed to be undertaken.
However, as we have explained the contentious remarks of 17 August 2016 were either irrelevant to how the primary judge might approach determination of the cases presented by the moving parties or did not revive an issue dealt with some days earlier. Excluding 17 August 2016 the latest contentious remark was made on 12 August 2016. We will shortly explain why the remarks did not establish a case for recusal, but point out that on the case articulated by the moving parties’ objection in respect of the constitution of the court should have been raised no later than 12 August 2016 and certainly well before it was.
Before us counsel for the appellants and senior counsel for the cross-appellant argued that the delay was partly caused by the time taken to receive the trial transcript. After we reserved our decision the solicitors’ for a number of parties wrote to the Appeal Registrar (letter of 23 May 2017) and provided information as to when the transcripts were ordered and received. At our request the Appeal Registrar enquired of all parties whether or not we could receive the letter as further evidence in the appeal. This was on the basis that if a response was not received by 15 June 2017 we would proceed on the basis that the material should be admitted and no one sought to make submissions as to its contents. There were no responses and we proceed as the Appeal Registrar said we would.
Relevant to 12 August 2016, the afternoon transcript was ordered on 18 August 2016 and the request for the morning session was not made until 29 August 2016. In both instances the time taken was languid and weakens rather than enhances the challenge to the finding as to waiver.
His Honour was right to determine that by waiting until 9 September 2016 to make the recusal application the moving parties (and the husband) waived their right to object.
As we mentioned at the start of our discussion of the recusal challenge if the waiver challenge failed the recusal appeal and the cross-appeal would be dismissed. However, for completeness we will address the remaining grounds (Kuru v State of New South Wales (2008) 236 CLR 1 at 6).
Would the fictional bystander apprehend bias?
We now turn to the final challenge raised in regards to the recusal (ground 1 in the appeal and ground 2 in the cross-appeal), the gravamen of which is that the primary judge erred in failing to find that the fictional bystander might reasonably apprehend that he might not bring an impartial mind to the resolution of the proceedings. As we said earlier the moving parties presented 10 instances where they said the primary judge made remarks suggestive of bias. Further examples were raised in the appeal but as they were not relied on below we fail to see how his Honour could be said to have fallen into error in relation to a matter that was not raised with him.
As to the matters raised with the primary judge these were discussed at some length in the reasons as to which there is no suggestion of inaccuracy. A comparison of the written outline of the submissions presented by the moving parties to the primary judge and the reasons readily demonstrates that his Honour well understood the conduct of which the parties complained. Given the number of complaints, in the interests of brevity we do not propose to discuss every instance in detail. We think the better approach is to address in greater detail those which it is said constitute the more egregious examples but considered in context of them all.
Before we do, we reject at the outset the submissions by the appellant and cross-appellant that his Honour only directed criticisms towards their cases. This is plainly incorrect. Reference need only be made to his exchanges with counsel for the wife on the afternoon of 11 August 2016 to establish the point. There are other examples and a fairer description of the totality of exchanges is that his Honour was obviously concerned to keep the hearing focused on the relevant issues, to properly engage with counsel as to the problems and difficulties he perceived with their cases as they evolved and was understandably irritated by the extent of non-compliance with carefully crafted trial directions.
To a very real extent, and as his Honour said, the remarks complained about accord with Budd v Kambah Tea Tree Plantations Pty Ltd [2001] NSWCA 180 per Heydon JA and Davies AJA to be a not infrequent modern trial experience. In particular per Heydon JA at [103]:
103. … Many of the trial judge's criticisms were entirely justified. … [T]he trial judge was entitled to seek to shorten longueurs, reduce repetition, ensure fairness and precision in the formulation of questions and curtail rambling arguments about admissibility… A reading of the whole transcript reveals that the trial judge was not at any stage going to conduct the trial merely by sitting back and letting the parties conduct the case without any intervention or restraint at all. Her technique is a common modern technique, and a not unacceptable one, particularly in a busy trial court under pressure from crowded lists. Many of the observations complained of were not directed to the plaintiffs' side alone. There were numerous other observations not referred to directed to perceived deficiencies in the behaviour of [another party] or that of counsel for the defendants. … [T]rial litigation often calls for plain speaking, directness and, sometimes, asperity. …
There is also no doubt that it is “perfectly proper for a judge to convey his or her reactions to matters of fact or law as they emerge” (Anderson v National Australia Bank [2007] VSCA 172 per Maxwell P at [81]). As Maxwell P explained the significance of the comments can then be assessed and responded to. Otherwise as Nettle JA (as his Honour then was) said in the same case at [95] “… a trial judge like any judge should strive to avoid truculence and discourtesy. But in the scheme of things, it is almost inevitable that there will be some of it in any hard fought case.” This was such a case; indeed the trial transcript well justifies his Honour’s description at [36] it was a “bitterly fought trial”.
The contentious remarks (the first step) which gave rise to the recusal application are identified at paragraphs 9-20 of counsel for the moving parties’ written submissions in the court below. The logical connection between these matters and the feared deviation from the course of deciding the case on its merits (the second step) are found at paragraphs 21-23 of the same document. The point being that the primary judge “might not bring an impartial mind to the resolution of the questions [his] Honour is required to resolve”.
As to the case presented by XYZ and the husband’s mother, the first matter of note is at paragraph 15 of the submissions and which is discussed at [56] – [59] of the reasons. It concerns statements made in relation to the husband’s mother’s evidence. Her evidence in chief was contained in an affidavit sworn five years earlier. The affidavit was 35 pages in length with dozens of exhibits directed, in particular, to XYZ, the Trust and associated entities. After her oral evidence finished (including cross-examination) and she withdrew, the primary judge offered the view: “It is clear beyond argument to me that [the husband’s mother] has no real understanding of the matters set out in that affidavit”. These remarks were clarified as meaning the husband’s mother had no present understanding of the commercial matters discussed in her affidavit.
From the transcript, it is apparent that counsel for the husband’s mother and XYZ was concerned that these remarks were somehow critical of his conduct of the case. Given a full opportunity to explore the ramifications (feared deviation) of the remarks, no complaint was made that they suggested the potential for a deviation from the proper course for deciding the case. Indeed counsel’s remarks exemplify the combative tone of the case and that his Honour was not alone in making frank and robust remarks.
The exchanges are set out below.
His Honour: [Counsel for the husband’s mother], I want to give you fair warning. I notice that a 35-page affidavit with dozens of exhibits was prepared on behalf of this witness, seemingly, by your instructor. I may have something very strong to say about that in the judgment.
[Counsel for the husband’s mother]: Well, your Honour needs to, with respect, be somewhat more clearer than that, in my respectful submission.
His Honour: It is clear beyond argument to me that [the husband’s mother] has no real understanding of the matters set out in that affidavit.
(Transcript of 11 August 2016, page 20, lines 17 – 29)
The discussion continued after the luncheon adjournment and his Honour said:
His Honour: I’m satisfied on the basis of the evidence that I’ve heard – I mean, some of the matters, obviously the history of her relationship with her husband and the poor relationship with certain family members, I accept. Anything to do with commercial matters, my view is she would have no understanding at all about at the present time.
(Transcript of 11 August 2016, page 34, lines 29 – 37)
It is telling that counsel for the husband’s mother specifically disavowed any interest in the “no understanding” of “commercial matters” remarks. So much is clear from his statement “I’m not going to deal with that”, and “… [i]t may well be an issue for someone else to address”, namely the person who prepared the affidavit. The point being, there was no suggestion that the nature and timing of his Honour’s remarks as to the effect of this witnesses’ evidence crossed any boundary of modern judicial propriety. They amounted to no more than timely (one would think helpful) disclosure of his reaction to this evidence. His Honour was right to reject this matter as a basis for recusal.
Although it was not raised with the primary judge, before us counsel for the appellants attempted to agitate the notion that the remarks directed to the author of the affidavit sounded in apprehended bias. Perhaps the reference to those remarks before us was intended to convey context and no more. However, for the avoidance of doubt, we see no basis for concern by the fictional bystander.
Another matter of significance to XYZ and the husband’s mother concerns remarks made during Mr Barton’s evidence on 12 August 2016. It is said that his Honour was “openly dismissive of evidence being given by Mr Barton”, as was the tone used. The proposition is that the criticisms should have been addressed to the questioner rather than the witness who “was simply answering questions”. This challenge was rejected at [65] – [67] of the reasons.
The transcript of 12 August 2016 shows counsel for the wife questioned Mr Barton about how he came to be appointed as a trustee and his management of the Trust. The proposition being, that as a newly appointed trustee who had no prior independent knowledge of the Trust and given that the Trust was caught in the middle of a family dispute, he would have carefully considered whether and how he might undertake the role. Counsel also sought to establish the extent of the husband’s involvement in Mr Barton’s appointment.
This segued into the following exchanges:
[Counsel for the wife]: And you presumably encouraged the same practice or did you feel that you could give all the advice to [the husband’s father], that you – that he needed?
Mr [Barton]: I look after the matters in relation to taxation and accounting. That was my main job.
[Counsel for the wife]: And so that – and that was all you – so – so you saw your role as trustee as being just someone who was going to do the books of the trust and that was it?
Mr [Barton]: No. No. No. I had to help protect [the husband’s mother]. [The husband’s father] explained to me that all the assets of the trust were generated by he and [the husband’s mother]. And he wanted me to protect [the husband’s mother] after he died.
[Counsel for the wife]: But, you knew that there were competing claims to the trust, didn’t you, Mr [Barton]?
Mr [Barton]: At what point in time?
[Counsel for the wife]: Sorry?
Mr [Barton]: When I took on the job? No.
[Counsel for the wife]: Well, when did you – when you took on the job you indicate – well, you indicated it was about October?
Mr [Barton]: Late 2006. I was appointed because he had been brought into the divorce. So, yes, I was aware that the divorce proceedings had commenced at that point in time. But, there was no documents other than a summons or whatever document he gets, to put him into the divorce.
[Counsel for the wife]: Yes. But – but the fact that – that the very start of your involvement was I want you to protect the trust?
Mr [Barton]: Yes.
[Counsel for the wife]: ...indicated that the trust was under – well – well, had been challenged, doesn’t it? It – it follows that that must be the case, for you to need to protect, must follow that there’s a challenge being made?
Mr [Barton]: Yes. Yes, well, the – the trust was involved in the divorce. Yes…Yes. That’s right. And…
His Honour: Well, he said he knows nothing about the matter. He was contacted out of the blue, knew nothing about it, until Kim Wilson & Co bring him in.
[Counsel for the wife]: Yes.
His Honour: And say, “Here you go”. And everything he knows, at least at that stage, he learnt from…
[Counsel for the wife]: Yes.
His Honour: the husband’s father’s …
[Counsel for the wife]: Yes.
His Honour: …case. He doesn’t know – he can’t know of his own knowledge whether it’s true or incorrect – true or untrue. That’s something, obviously, I will have to determine in due course. But he can’t know.
(Transcript of 12 August 2016, page 22, lines 18 – 51 & page 23, lines 1 –21)
Not long after, the following exchange occurred:
[Counsel for the wife]: Thank you. And within – so from February 2008, [the husband’s mother] was appointed as a co-director with you…?
Mr [Barton]: …Yes.
[Counsel for the wife]: … of [XYZ] Proprietary Limited?
Mr [Barton]: Mmm. Yes.
[Counsel for the wife]: Now, you would have been involved in the decision of appointing her as a director of the trustee?
Mr [Barton]: Yes.
[Counsel for the wife]: Did you as the trustee of – sorry – did you as a director of this company – was it you who agreed that she should be the co-director?
Mr [Barton]: Yes.
[Counsel for the wife]: Do you consider that it is a – that to appoint someone of [the husband’s mother’s] – having regard to her language difficulties and having regard to her educational background, that it was a sound decision for you to make as in effect the surviving trustee at that time?
Mr [Barton]: …It wasn’t solely my decision. [The husband’s father] and I made that decision – so. I respected [the husband’s father] very much so.
[Counsel for the wife]: You respected…?
Mr [Barton]: [The husband’s father]. And as I said the assets of all the trusts were those generated by [the husband’s father] and by [the husband’s mother].
His Honour: You don’t know that.
Mr [Barton]: Pardon?
His Honour: That’s the second time you’ve said it.
Mr [Barton]: Well, sorry. That’s what [the husband’s father]…
His Honour: All right. But…
Mr [Barton]: Okay. Sorry.
His Honour: All right. You were told that by somebody.
Mr [Barton]: Yes. Okay.
His Honour: That doesn’t make it so or make it not so.
Mr [Barton]: Righto.
His Honour: The fact of the matter is, because I said earlier, you haven’t got a clue.
[Counsel for the husband’s mother]: Well, I…
His Honour: …about what happened prior to 2006, other than what you were told.
Mr [Barton]: Yes.
(Transcript of 12 August 2016, page 27, lines 7 – 51 & page 28, lines 1 – 7)
Immediately thereafter counsel for the moving parties (and the witness) objected in the following terms:
[Counsel for the husband’s mother]: Your Honour, I object for two reasons. Firstly, what Mr [Barton] has been doing thus far is in answer to cross-examination. I haven’t raised this issue; my learned friend has been asking the questions. Secondly, it’s relevant to his state of mind at the time. He’s being asked about what he thought was prudent and not prudent. It’s not a matter of proving the facts, because it is hearsay; I accept that. But that’s his state of mind, and it’s relevant to the answers to the questions in my respectful submission.
His Honour: Well, I don’t understand the objection. Please continue, [counsel for the wife]. And, [counsel for the husband’s mother], I don’t know whether you’re aware that you have a smirk. It’s an unfortunate, perhaps, tickle [sic] or manner that you have that you’re not aware of…
(Transcript of 12 August 2016, page 27, lines 8 – 23)
What is notable from this exchange is that it was conceded that this witness’s evidence could not establish the facts concerning the method of acquisition of trust assets prior to his appointment. Yet, his Honour’s remarks are clearly directed to that issue and not what the witness believed the situation to have been. In our view these remarks do no more than demonstrate to the witness and everyone else involved the care that was required to differentiate between what the witness knew firsthand and matters that were recounted to him through a third party. The remarks may well have been of assistance to the witness and those appearing in the case. Even if the tone was dismissive the objection was unwarranted.
The “smirk” comment was not raised as a basis for recusal below and does not require consideration by us. However, it would not trouble the fictional bystander who would accept that the primary judge believed he saw counsel behave in the manner described and raised his concern, albeit somewhat acerbically. The question is not whether other judges might have let it pass unremarked, but whether it could reasonably add to a pattern of troubling behaviour by the judge. We think not.
Paragraphs 9, 10, 12 and 13 of the submissions concern comments made about the husband’s evidence on matters relevant to XYZ and the husband’s mother. Paragraphs 9 and 10 relate to exchanges concerning the sale by XYZ of a property referred to as the C property. Order 1(c) made on 5 August 2010 restrained XYZ, the husband’s mother and Mr Barton from distributing Trust income or capital without 28 days advance notice to the wife.
The day before the Full Court made its orders of 10 April 2013, XYZ entered into a contract for the sale of the C property in the amount of $3.5 million. The husband was the agent on the sale. Although not without doubt, it would seem to have been at least the husband’s view that the Trust was restrained from selling the C property without notice to the wife. Advance notice was not given and the sale was duly completed. After $2.73 million was paid to discharge the mortgage secured against the property, the balance was distributed to the husband’s mother. If an order was breached we understand it is uncontentious it is order 1(c) of 5 August 2010.
Notwithstanding there was no application to set aside the transaction, the primary judge was concerned about it, as was the wife (see [37] of the reasons). At paragraph 9 of the submissions, it is argued that his Honour was wrong to say “when I look at the timing of the sale of the [C property], the wife has every reason to be concerned about it”. The point being that as the wife had not sought to set the transaction aside, and as the issue was not raised in opening addresses, the wife was not so concerned.
The distinction drawn by the moving parties qua the wife’s position is very fine indeed and the circumstances of these transactions were permissibly of interest to the judge. The fictional bystander would be untroubled by his Honour’s remarks. Indeed, the bystander would be troubled had his Honour not been interested in the circumstances surrounding the sale of the C property and distribution of the Trust assets.
Paragraphs 12 and 13 of the submissions concern comments made to the husband while he gave evidence. The exchanges concern the husband’s role in the sale of the C property in possible breach of the August 2010 injunctions and have some relevance to the case mounted by the moving parties.
The central elements of the exchanges follow:
[Counsel for the wife]: Are you aware when your former wife was notified of the sale of [the C property] or her solicitors?
[The husband]: I would have thought it was pretty close to the date of receipt of the offer. I don’t know.
[Counsel for the wife]: Did you take steps as the agent for the trust and as a party to these proceedings to ensure that that information was conveyed to your former wife or her solicitors?
[The husband]: No, that’s the trust…that’s the vendor’s obligation.
[Counsel for the wife]: But you are, in fact, wearing two hats in this transaction [the husband]; one is, that you are the consultant for the trust and the other one is that you are the selling agent for the trust?
[The husband]: Well, I don’t believe that I’ve been injuncted or required to do anything in relation to the [XYZ] Trust properties by anyone. I assumed and I believe…
[Counsel for the wife]: No, but that’s not what I’m talking about. I’m saying to you…? ... That’s what I’m talking about … you were in possession of the documents…?
[The husband]: Yes.
[Counsel for the wife]: Relating to this transaction…?
[The husband]: Yes.
[Counsel for the wife]: …and I’m suggesting to you that you had an obligation to disclose what was going on?
[The husband]: I’m suggesting I don’t have that obligation.
His Honour: I’m suggesting you probably do?
[The husband]: Okay.
His Honour: (indistinct) to aid and abet (indistinct) order?
[The husband]: Sorry, your Honour, there’s not a question of trying to aid and abet.
His Honour: Well…
[Counsel for the husband]: Your Honour, I make a – I want to complain about that comment. If I heard it correctly, your Honour, said something to the effect of aiding and abetting a breach of an order.
His Honour: Yes…
[Counsel for the husband]: Now, your Honour…
His Honour: …If his understanding is that the order has the effect that he says that he says that it has, and it – that’s another story, but its that’s – he said that was his understanding, then he can’t just step back and allow some – what he perceived to be a breach occurring with doing nothing.
[Counsel for the husband]: Well, firstly your Honour, I don’t accept that he aided and abetted or that its [sic] being put to him that he aided or abetted the breach of an order, and, secondly, I don’t accept that it should be put to him in those terms. He’s…
His Honour: Well, how would you like it put, [Counsel for the husband]?
[Counsel for the husband]: Well, I put it on the basis that he is acting as an agent with responsibility as an agent and conveyed to the trustee the offer that he had received and puts a counteroffer. Now, there is no sale at that point, there is a sale when the conditions are met, and with great respect, your Honour, I would put that is not him aiding and abetting something, and I think that with great respect to your Honour, it’s a description that contains in it a pejorative referral which suggests that my client has behaved improperly.
His Honour: But the term of the – I think that’s the term that’s used in the Act about the parties who assist in a contravention of an orders. Now, if this witness thinks that there is an order which impedes him from doing or impedes the trust from doing certain things and he doesn’t ensure that those things are done. Now, it appears on the surface in A1 he has put in place a condition which he says is appropriate. My understanding of the question was that – or his response, was that he didn’t regard himself as having any responsibility. It was the trust’s responsibility.
(Transcript of 10 August 2016, page 63, lines 15 – 49 & page 64, lines 1 – 46)
Exchanges on the point continued and the primary judge observed that he had not said or determined the husband “… had aided and abetted” a breach of the order. Senior counsel for the husband acknowledged that he had misunderstood what had been said. The concession was appropriately made, as was his Honour’s rejection of this component of the recusal application.
We are also in full agreement with his Honour’s observations at [54] where he rejected the argument by the moving parties that his remarks were capable of unnerving the witness. There is no sign of it and there was no application on behalf of the husband for the judge to recuse himself.
Paragraphs 14 and 16 of the submissions concern further comments made during cross-examination of the husband. Simply stated, it became apparent that the husband’s evidence as to his current indebtedness to the Australian Taxation Office was other than as originally stated (16) and to be frank, confusion abounded in relation to a loan advanced by him to X Pty Ltd (14). The parties had been directed to “vouch” for the existence of liabilities that is, to corroborate by documents any liability said to be relevant, at least by the time the trial commenced. This process had not been completed and, as the exchanges relied on identify, the primary judge was frustrated that time was being taken in relation to these issues during cross-examination and that he was expected to make findings based on oral testimony when, there was no doubt, documentary evidence would resolve the issue. The factual matters at issue in paragraphs 14 and 16 have nothing to do with XYZ or the husband’s mother.
His Honour’s comments should be seen as doing no more than identifying the consequences of the failure to comply with the Family Law Rules 2004(Cth) and trial directions. These matters do not advance the case for recusal and his Honour was correct that no second step nexus was established in relation to them.
However, the exchanges during the afternoon of 11 August 2016 were testy, with his Honour demonstrating his frustration with all counsel. At the commencement of the hearing the following morning, he proffered the apology to which reference was made at the commencement of these reasons. The apology was given generally and not, as is implied by paragraph 7, only to counsel for the moving parties and senior counsel for the husband. The fictional bystander would regard the apology as genuine and accept his Honour’s statement “I can assure you, all views I express until the final judgment are tentative”, notwithstanding “the impatience I displayed yesterday [which] reflected my frustration with the manner in which aspects of the case have been conducted. It says nothing about the manner in which I am likely to decide the issues” (transcript of 12 August 2016, lines 44 – 50 & page 3, lines 1 – 2).
We have already dealt with the matters raised at paragraphs 19 and 20 and need say nothing beyond what we have said. We agree with his Honour’s remarks at [68] – [71].
It follows that we agree with the primary judge that the feared deviation identified at paragraphs 21-23 of counsel for the moving parties’ summary of argument was not established. Our opinion remains the same even if the remarks of 17 August 2016 are added to the mix. The exchanges concerning the Kowaliw issue are no more than robustly expressed observations about the obvious challenges the husband faced and as we said earlier, the admission of W25 said nothing about possible apprehended bias.
Error has not been established and the recusal appeal and the cross-appeal will be dismissed.
Section 90AF
Before we discuss the appeals against the injunctions we will set out the statutory provision upon which the orders are based.
FAMILY LAW ACT 1975 – SECTION 90AF
Court may make an order or injunction under section 114 binding a third party
(1) In proceedings under section 114, the court may:
(a) make an order restraining a person from repossessing property of a party to a marriage; or
(b) grant an injunction restraining a person from commencing legal proceedings against a party to a marriage.
(2)In proceedings under section 114, the court may make any other order, or grant any other injunction that:
(a)directs a third party to do a thing in relation to the property of a party to the marriage; or
(b)alters the rights, liabilities or property interests of a third party in relation to the marriage.
(3) The court may only make an order or grant an injunction under subsection (1) or (2) if:
(a)the making of the order, or the granting of the injunction, is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; and
(b)if the order or injunction concerns a debt of a party to the marriage - it is not foreseeable at the time that the order is made, or the injunction granted, that to make the order or grant the injunction would result in the debt not being paid in full; and
(c)the third party has been accorded procedural fairness in relation to the making of the order or injunction; and
(d)for an injunction or order under subsection 114(1) - the court is satisfied that, in all the circumstances, it is proper to make the order or grant the injunction; and
(e)for an injunction under subsection 114(3) - the court is satisfied that, in all the circumstances, it is just or convenient to grant the injunction; and
(f)the court is satisfied that the order or injunction takes into account the matters mentioned in subsection (4).
(4)The matters are as follows:
(a)the taxation effect (if any) of the order or injunction on the parties to the marriage;
(b)the taxation effect (if any) of the order or injunction on the third party;
(c) the social security effect (if any) of the order or injunction on the parties to the marriage;
(d) the third party's administrative costs in relation to the order or injunction;
(e)if the order or injunction concerns a debt of a party to the marriage the capacity of a party to the marriage to repay the debt after the order is made or the injunction is granted;
(f)the economic, legal or other capacity of the third party to comply with the order or injunction;
(g)if, as a result of the third party being accorded procedural fairness in relation to the making of the order or the granting of the injunction, the third party raises any other matters - those matters;
(h)any other matter that the court considers relevant.
(Notes omitted)
There is no doubt that a court exercising jurisdiction under ss 114 or 90SS of the Act can issue an injunction directly against a third party (Sanders v Sanders (1967) 116 CLR 366). Relevant to the issues raised in these appeals, it is apparent that pursuant to s 90AF, in proceedings under s 114, the court may make injunctions against third parties, subject to conditions which are designed to ensure the discretion is carefully linked and sufficiently connected to the subject matter of the marriage and matrimonial causes (Hunt v Hunt (2006) 36 Fam LR 64 at [119]. The third party must be afforded procedural fairness (s 90AF(3)(c)), and the order must be reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage” (s 90AF(3)(a)). And the court must be satisfied that, in all the circumstances, it is proper (s 90AF(3)(d)) and just and convenient (s 90AF(3)(e)) to make the injunction. Section 90AF(3)(f) requires that the order or injunction takes into account the matters listed in s 90AF(4).
Injunctions against XYZ Pty Ltd
As we said earlier, the appellants challenge orders 4(c), 4(e), 5, 6, 7 and 11. These orders make various interim injunctions against XYZ, the husband’s mother and Mr Barton as to dealing with Trust property to the following effect:
·Order 4(c) restrains the appellants and Mr Barton from voting in favour of any resolution to pay, apply, distribute income or capital;
·Order 4(e) restrains the appellants and Mr Barton from appointing any further directors to XYZ;
·Order 5 restrains the appellants and Mr Barton from selling, disposing of, transferring, assigning or otherwise dealing with the property and assets in the possession of the Trust or under its control, borrowing any monies or repaying any loans or loan accounts, save in the ordinary course of business;
·Order 6 defines “ordinary course of business”;
·Order 7 gives the appellants and Mr Barton, on 14 days’ notice, liberty to be apply to the Court to pay outstanding invoices, accounts, debts, and fees, as well as the Trust’s reasonable and necessary legal fees and expenses; and
·Order 11 restrains the appellants and Mr Barton from taking any action against the adult children to recover costs pursuant to orders made in the Supreme Court of Western Australia on 20 October 2014 and 14 April 2016, and to otherwise enforce those orders.
As order 11 is a separate injunction relating to the children who are otherwise not central to the other orders, we will deal with the Supreme Court injunction separately.
Injunctions against XYZ relating to the Trust
The appellants challenge the orders in similar terms to one of the grounds mounted by ABC. Namely, that the orders were not reasonably necessary, or reasonably appropriate and adaptive, to effect a division of property between the parties of the marriage, were not proper, and were not convenient, as required by ss 90AF(3)(a), 90AF(3)(d) and 90AF(3)(e) of the Act.
The injunctions in the most part merely strengthened injunctions that had been in place from August 2010. His Honour’s reasons for granting the relief emerge from the trial transcript; and include:
·“The whole thrust of my conclusions are to the effect – is to the effect that the assets of the trust and of the parties must be preserved to the greatest extent possible” (transcript of 13 September 2016, page 66 lines 25 – 28);
·“My own view is that the orders from August 2010 don’t go far enough and in my view they should be tightened. That’s all I need to say” (transcript of 13 September 2016, page 66, lines 45 – 48);
·“I propose to make orders that will ensure that all assets are preserved to the greatest extent possible” (transcript of 13 September 2016, page 61, line 51 & page 62, lines 1 – 2);
·“… the trust should be restrained as much as possible from dealing with its assets pending the delivery of my judgment” (transcript of 13 September 2016, page 60, lines 16 – 18); and
·“… it’s essential that no moneys be distributed to any beneficiaries of the trust, that no distributions be made of any nature whatsoever and that no more than the essential payments be made to enable the trust to tick over, as it were, until judgment can be delivered” (transcript of 13 September 2016, page 60, lines 36 – 41).
Furthermore, the primary judge provided context for his concerns, and why he believed injunctions of this nature were essential; namely the oft cited issue of XYZ’s dealings with trust assets. In particular, the sale of the C property and distribution of the proceeds to the husband’s mother, as well as his “grave” concerns about payments that had been made to Mr Barton (and historically, to the husband) in management fees. Underscoring these issues was his view that there “may well be a very strong argument from the wife’s point of view …that the trust should be treated as the asset of the parties” (transcript 13 September 2016, page 61, lines 7 – 10). It is clear that his Honour wanted to achieve as tight a rein on the Trust’s assets as possible.
His Honour spent considerable effort with the parties to determine the categories of activity that would define the Trust’s “ordinary course of business” so as to allow the Trust to “tick over”. A particular issue raised before us by counsel for XYZ was that the payment of legal fees was not included in this definition, and therefore the Trust would need to utilise the liberty to apply so as to discharge or vary the orders. His Honour dealt with this argument on 13 September 2016, when he said he was:
… not prepared to make any allowance for legal fees. I’ve heard what [counsel for the Trust] has said, but I am more than concerned about the amount of legal fees that the trust has incurred so far, particularly in relation to these proceedings and, in my view, there is some merit, at least in the submissions on behalf of the wife, that the trust could have taken a back seat in relation to these proceedings far more so than it did, and that relates to my view that I’ve indicated, which is a preliminary view of course, that the trust amounts to something of a false front.
(Transcript of 13 September 2016, page 77, line 14 – 24)
His Honour expressly identified “reasonable and necessary legal fees and expenses” as one of the items that the Trust and its directors had liberty to apply to the court to be paid (order 7(b)).
Having regard to the matters above, it is obvious that the primary judge considered that orders of the type made were necessary to protect the assets of the Trust (and therefore necessary to effect a division of property between the parties, pursuant to s 90AF(3)(a)).
Beyond the scope of the ground of appeal, before us counsel for the appellant argued that in breach of ss 90AF(3)(f) and 90AF(4)(b) his Honour failed to have regard to the taxation effect of the injunctions. This is a mandatory consideration. Suffice to say, the transcript of 13 September 2016 demonstrates that his Honour was alive to the possible taxation consequences of the injunctions. These were addressed by making provision for the order to be varied and by the payment of GST liabilities included as being in the ordinary course of business (order 6(c)).
As to order 4(e), which restrained the appellant, the husband’s mother and Mr Barton from appointing or voting in favour of any resolution to appoint any further directors to XYZ, the order merely continues the restraint contained in the August 2010 orders. It is patently obvious that his Honour considered that the circumstances which justified the original order pertained and the order should continue. If perchance an additional director was required the order is capable of prompt variation.
When regard is had to all the circumstances of the case the decision is not attended by sufficient doubt to warrant a grant of leave. Nor, given the liberty to apply could it be said that there exists the potential for substantial injustice.
Supreme Court injunction
The appellants also challenges order 11 by which XYZ is restrained from taking “any action or further action” against the adult children:-
a)To recover costs pursuant to orders made in the Supreme Court of Western Australia on 20 October 2014 and 14 April 2016;and
b)To otherwise enforce the Supreme Court orders.
The appellants were willing to compromise this aspect of the appeal on the basis that the order was amended so that the costs assessment process could be completed. In other words, the restraint would operate only in relation to enforcement. The children did not agree and seek to uphold the order without modification.
It will be recalled that the children commenced proceedings in the Supreme Court of Western Australia, relevantly for pre-action discovery against XYZ. Various orders for costs were made in favour of XYZ of which three remain outstanding. XYZ took steps to have the costs assessed; however, that process had not been completed prior to the hearing in the Family Court of Western Australia. During the trial (in written submissions) the children sought an order as per order 11. The application was opposed and the order made without reasons.
Unfortunately, not even the trial transcript reveals the source of power upon which the order is based. The parties assume it is s 90AF. It is a most unusual order and we are not yet satisfied that s 90AF applied. The children are not parties to the marriage and their property is not property of the parties to the marriage. We cannot see how the conditions contained in s 90AF(3) were met. In these circumstances, we consider that his Honour was obliged to give at least short reasons.
The failure to do so is an error of law.
It follows that the decision is attended by sufficient doubt to warrant it being reconsidered by the Full Court and that if leave were refused, supposing the decision to be wrong, would occasion substantial injustice. Leave to appeal will be given, the appeal allowed and the order will be set aside.
Injunctions against ABC Pty Ltd
The second appeal (WA21 L/2016) is by ABC and concerns order 8 made on 13 September 2016. This order restrains ABC t from selling, disposing or otherwise dealing with its assets, from borrowing funds or repaying debts. In effect, the assets of ABC are frozen pending further order. Order 9 of the same orders gives ABC “liberty to apply on 14 days’ notice to vary or set aside the injunction contained in para 8 above”.
As we said at the commencement of these reasons ABC is not a party to the substantive matter. ABC is the corporate trustee of the ABC Discretionary Trust (“ABCDT”), the sole shareholder of which is the husband’s mother. She and Mr Barton are the directors of ABC, as well as being the joint guardians and appointers of the ABCDT. It will be recalled that the husband’s mother is a party in her own right and both she and Mr Barton are parties in their capacities as the directors of XYZ and executors for husband’s father’s estate. They were represented throughout the hearing.
It is also important to understand the context in which ABC became an issue at trial. During cross-examination of the husband by counsel for the wife on 11 August 2016, he gave evidence that the sole asset of ABC comprised the proceeds of the sale of a business which the husband and wife operated during the marriage. At the time of trial, these proceeds totalled $282,579.08, which had lain dormant in a bank account since at least 2014. Counsel for ABC made it clear these matters are uncontentious.
On 7 September 2016, in her written closing submissions, the wife sought orders that the husband’s mother transfer her (100 percent) shareholding in ABC to the wife. The wife also sought interim orders preserving the funds in the bank account. Essentially, it is the wife’s case that the proceeds of the sale of the business are beneficially held on trust for the husband and the wife, and are an asset that should form part of the property available for distribution and be awarded to her.
At no stage in the proceedings did the wife seek to join ABC to the proceedings, and before 7 September 2016 ABC was unaware that there was a case against it. However it is again important to note that it was only during cross-examination of the husband that the source of the funds which now comprise this company’s asset became clear. In other words, until then the wife had no reason to move against the company.
Is Order 8 within power?
The first ground of appeal raised by ABC is that the order was made without power. Counsel explained that this is because “there can’t be any question of an in rem remedy against ABC”, and that
… “it’s absurd, with respect, to think that an order – a final order can be made by the trial judge against [ABC]. And if that’s right, as it must be, in my respectful submission, then you can’t, under section 90AF(3)(a), freeze the assets pending judgment”
(Transcript of 6 April 2017 page 189, lines 21 – 24)
The point being that the fact that wife does not seek a permanent injunction in similar terms to the interim order was fatal. However, this submission overlooks that the wife sought final orders in regards to the assets of ABC and the injunction is clearly intended to preserve the status quo pending determination of her claim. There can be no question that if his Honour was satisfied that the ABC funds were beneficially owned by the husband and the wife, the final relief she sought could be given.
Before us, counsel for ABC conceded, subject to the suggestion that the distribution of the assets of ABC was not an issue in the proceedings, that his Honour had power to make such an order (transcript 6 April 2017 page 191-192). The concession was well made and given the wife’s proposed order 25(c) this argument must fail (Yunghanns v Yunghanns (1999) FLC 92-836).
It was also argued that there is nothing in the Act, or otherwise, “that gives the court jurisdiction to make an interlocutory injunction against someone who is not a party to the proceedings in which the order is made” (summary of argument para 7). Section 90AE and s 90AF are specifically concerned with the giving of notice to third parties of orders sought against them and are not concerned with joinder (Samootin v Wagner (2006) FLC 93-265 (“Samootin”)). The Act is silent about joinder and various methods have been described whereby a third party in fact becomes a party. For example, by being named on an application, by order and, in our view as occurred here, through service of a claim for relief seeking orders against them. Moreover as the discussion which follows demonstrates ABC was given a full right to participate in the application made against it. This argument is one of form over substance (Gould & Gould; Swire Investments Ltd (1993) FLC 92-434).
The second ground of appeal is in two parts. The first asserts that ABC was not afforded procedural fairness (as required pursuant to s 90AF(3)(c)) and thus an essential condition on the exercise of the power was not met. The second argues that the order was not reasonably necessary, or reasonably appropriate and adaptive to effect a division of property between the parties to the marriage (s 90AF(3)(a)), was not proper (s 90AF(3)(d) and was not just or convenient (s 90AF(3)(e)). Each must be dealt with before an order can be made (Samootin at [7]).
Was ABC afforded procedural fairness?
It is common ground that the first time that the sole shareholder and directors of ABC learnt that orders were sought against the company was when the wife filed her written submissions. However, it bears repeating the sole shareholder, both directors, the husband and the wife had been questioned in the hearing about ABC and its assets.
Counsel for ABC contended that in order to engage the provision, the requirement that procedural fairness be afforded under s 90AF(3)(c) demanded that the third party be heard before the order was made, and that a general liberty to apply to set the order aside would not satisfy the provision. Although we broadly agree with these propositions we are satisfied notice was given.
It should also be noted that, despite the contention that ABC was not afforded procedural fairness, the directors and shareholder made written submissions in response to the wife’s submissions seeking interim and final orders. The chronology is important. The wife’s written submissions were filed on 7 September 2016. It was at this stage that the directors and shareholder in ABC were made aware of the case that they were to meet. On 9 September 2016 the submissions of the second to fifth respondents (which includes the directors of ABC) in response to the wife’s submissions was filed. Paragraphs 52 – 54 respond to the orders sought by the wife, under the heading “ABC Pty Ltd atf The ABC Discretionary Trust (“ABCDT”)”.
These submissions make the point that to allow the wife to expand her case to include the assets of the ABCDT in the property pool at such a late stage would be a denial of procedural fairness to ABC. Despite the continuing theme of the submissions then and in this appeal, we do not see how ABC can claim the benefit of making submissions on the point in response to the wife, while also claiming that they have not had the opportunity to be heard.
Was s 90AF(3) satisfied?
The second aspect of this ground relates to the requirements of ss 90AF(3)(a), 90AF(3)(d) and 90AF(3)(e) outlined above. The argument being that “[ABC] could not be subject of any relief as it is not a party to the proceedings and was not involved in the trial”.
This is a similar point to the one raised in the first ground. As we said earlier, the wife undoubtedly sought to secure sole ownership of the company.
Sections 90AF(3)(d) and 90AF(3)(e) require the court to have regard to “all the circumstances” of the case when making an order. Again, context is important, and it is unsurprising that an asset preservation order was made in a hearing where a significant issue was how the same people who own and control ABC were said to have misused XYZ funds.
This submission is no more persuasive in the context of this ground than it was with the former.
Are the reasons adequate?
The third ground of appeal is that as an interlocutory order of this nature affects the substantive rights of, in this case, a third party, his Honour was required to provide reasons for his decision.
Oral submissions were given on 13 September 2016. It can be seen that his Honour accepted the submission of counsel for the wife that ABC’s only assets were the proceeds of sale of the business operated by the husband and the wife and which had sat dormant in a bank account since July 2014. It would have been tediously repetitive to expect his Honour to again mention the C property and his concern about the disposition of assets in favour of the husband’s mother. In short his Honours reasons are obvious; he wanted to ensure the same fate did not befall the proceeds of sale of the business. Hence he sought an undertaking from the wife in relation to damages, and said:
HIS HONOUR: On the undertaking of the wife as to damages, and until further order, I will make an order in terms of paragraph 6, and I will give [ABC] Proprietary Limited liberty to apply on 14 days [sic] notice to vary or set aside the order I’ve just made. There appears to be no evidence that it will cause immediate discomfort to anybody but we will see.
(Transcript of 13 September 2016, page 64 lines 9-15)
Before us an attempt was made to argue that the wife’s undertaking should not have been accepted. The point being that unless she is wholly successful at trial she is a person of straw. We agree with the submission of counsel for the wife that in this respect the case is on all fours with Blueseas Investments Pty Ltd v Mitchell and McGillivray (1999) FLC 92-856 and his Honour was able to accept the undertaking.
As neither element for a grant of leave has been established leave to appeal will be refused.
Conclusion and costs
Other than in relation to order 11, none of the appellants’ challenges to the orders has succeeded and the balance of the appeals will be dismissed. The cross-appeal has also failed and it too will be dismissed.
As to the application in respect of order 11, this is a discrete issue appropriately addressed by a re-exercise. We will require submissions as to power and the basis for or against the order. In the event the adult children do not file submissions their application will be dismissed.
As is customary, we sought submissions from the parties on the question of the costs of the appeal and cross-appeal to save the time and expense of them making those submissions at a later time. In the event the appeal and cross‑appeal were unsuccessful, the wife sought costs against the appellants and cross-appellant. The appellants and cross-appellant argue that if the appeals are unsuccessful, costs should not be awarded against them.
In opposition to an order for costs, it was argued that the appeals raised matters of substance and were significantly motivated by the need to ensure “that justice is being seen to be done”.
The issue of costs of an appeal is governed by s 117(1) of the Act which provides that each party to proceedings under the Act bear his or her own costs, unless the court is of the opinion that the circumstances justify the making of a costs order (s 117(2)). In determining what order (if any) should be made under s 117(2), the court must have regard to the factors in s 117(2A).
It is not possible to make specific findings about the financial circumstances of the parties. However, at this stage, it is apparent that the husband’s mother has had the benefit of the C property net proceeds and the Trust has met her and its considerable legal expenses. We know little of the husband’s financial circumstances, however we infer that when he decided to present the cross-appeal he did so on the basis that he understood that if he failed there was a realistic prospect that costs would be ordered against him. Even if he is impecunious, it is well settled that impecuniosity is not an absolute barrier to an order for costs.
As against the wife, the appeals and cross-appeal have been wholly unsuccessful. There can be no doubt that the wife has incurred expenses unnecessarily and she can ill afford to do so. It is appropriate that the appellants and cross-appellant pay her costs, including those of the application to adduce further evidence. This requires consideration of how and in what proportion those costs should be met. As to ABC, its assets are claimed by the wife in the substantive proceedings. It would potentially defeat the purpose of an adverse costs order if ABC funds were used to satisfy an order in her favour.
We have considered the proportions in which the costs should be visited on the appellants and cross-appellant. Little time was taken in relation to the appeal against order 11 and in reality the time and effort in the appeals and cross-appeal was overwhelmingly concerned with the recusal appeal. That being so, we consider that the husband, the husband’s mother and XYZ should contribute to the wife’s costs of and incidental to the appeals and cross-appeal. The husband should pay one half of the wife’s total costs and the other two appellants should pay the remaining half in equal proportions.
As to the appeal in relation to order 11, the appellants and the children will each pay their own costs.
I certify that the preceding one hundred and thirty seven (137) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, Ryan & Moncrieff JJ) delivered on 30 June 2017.
Associate:
Date: 30 June 2017
| SCHEDULE A: Parties in Appeal Number: WA 20 L of 2016 XYZ Pty Ltd |
First Appellant (First Cross-Respondent)
And
| Mrs Charisteas Snr |
Second Appellant (Second Cross-Respondent)
And
Mrs Charisteas
First Respondent (Fourth Cross-Respondent)
And
Mr E Charisteas
Second Respondent (Fifth Cross-Respondent)
And
Ms Solano
Third Respondent (Sixth Cross-Respondent)
And
Ms Magnoli
Fourth Respondent (Seventh Cross-Respondent)
And
Mr Charisteas
Fifth Respondent (Cross-Appellant)
And
Mr Barton and Mrs Charisteas Snr (as Executors of the Estate of Mr J Charisteas)
Sixth Respondent (Eighth Cross-Respondent)
And
Mr Barton
Third Cross- Respondent
SCHEDULE B: Parties in Appeal Number: WA 21 L of 2016
ABC Pty Ltd
Appellant
And
Mrs Charisteas
First Respondent
And
Mr E Charisteas
Second Respondent
And
Ms Solano
Third Respondent
And
Ms Magnoli
Fourth Respondent
And
Mr Charisteas
Fifth Respondent
And
XYZ Pty Ltd
Sixth Respondent
And
Mrs Charisteas Snr
Seventh Respondent
And
Mr Barton
Eighth Respondent
And
Mr Barton and Mrs Charisteas Snr (as Executors of the Estate of Mr J Charisteas)
Ninth Respondent
6
16
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