Zimmerman & Bertram [2008]

FAMILY LAW - APPLICATION – EXTENSION OF TIME TO APPEAL PROPERTY ORDERS – Where delay not substantial – Where reason for delay not compelling – Where appellant able to pay costs if appeal unsuccessful – Where applicant has complied with trial judge’s orders – Where only prejudice to respondent is on-going litigation – Where prejudice to applicant would be inability to appeal orders – Where competing interests finely balanced – Where strict application of the rules would create an injustice – Extension of time granted.

FAMILY COURT OF AUSTRALIA

REPRESENTATION

ORDERS

(1) That the period in which the husband may file a Notice of Appeal against the property orders made by the Honourable Justice Moore on 19 February 2008 be extended to 4.00 pm on 14 July 2008.
(2) The parties’ solicitors shall attend upon the appeal registrar at a date and time notified by the Court for a procedural hearing for the conduct of the appeal.
(3) The husband shall pay the wife’s costs of and incidental to this application including the costs of 28 May 2008 as agreed and failing agreement as assessed under Chapter 19 of the Rules.
(4) Order 3 of the orders made on 28 May 2008 reserving costs is discharged.

IT IS NOTED that publication of this judgment under the pseudonym Zimmerman & Bertram is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Appeal Number: EA 51 of 2008
File Number: SYF 3586 of 2006

Applicant

And

Respondent

EX TEMPORE REASONS FOR JUDGMENT

INTRODUCTION

1. On 19 February 2008 Moore J published reasons and on 21 February 2008 made orders in proceedings between Mr Zimmerman (“the husband”) and Ms Bertram (“the wife”). Any appeal against her Honour’s orders was required under the Family Law Rules 2004 (“the rules”) to be filed within 28 days of the date of those orders.
2. No appeal was filed in the time prescribed by the rules. However, on 9 May 2008 the husband filed an application seeking an extension of time to appeal three of the parenting orders made by the trial Judge (Orders 2E, 2F and 4) and each of the property orders (Orders 5 and 6).
3. The husband’s application for an extension of time in which to file his proposed appeal was initially supported by an affidavit of his solicitor, Clayton Andrew Long (“Mr Long”) sworn on 9 May 2008. Mr Long deposed to the making of the orders, and annexed a copy of the reasons for judgment of the trial Judge. In Court on 28 May 2008 the husband’s solicitor filed an affidavit of the husband also in support of the application. I will return to discuss the contents of the husband’s affidavit shortly.
4. The proposed grounds of appeal are set out in a draft Notice of Appeal. None of the proposed grounds challenge Orders 2E, 2F and/or 4 and I was advised today that the husband no longer seeks to appeal her Honour’s parenting orders. I will later set out the proposed grounds of appeal.
5. As the husband was not ready to proceed on 28 May 2008 I stood over his application until 7 July 2008.
6. The wife, through her counsel, has made an oral application that the application for an extension of time sought by the husband in which to file an appeal be dismissed. She has not filed any written material. Her counsel sought, and was granted leave, to cross examine the husband on his affidavit in support of his application.

PROPOSED GROUNDS OF APPEAL

1. It is convenient at this point to set out the proposed grounds of appeal. They are as follows:
   1. That Her Honour’s finding as to initial contributions was against the weight of evidence.
   2. That Her Honour erred by finding that the initial contributions were 70% to the husband and 30% to the wife.
   3. That Her Honour erred by giving insufficient weight to the initial contributions of the husband, particularly in circumstances of the short duration of the marriage.
   4. That Her Honour erred in failing to specifically identify and make an adjustment for the husband’s post separation financial contributions.
2. That the trial Judge’s adjustment to take into account section 75(2) matters was outside the wide ambit of her discretion.
   1. That her Honour erred in failing to approach the identification and assessment of contributions to superannuation in the manner established by the Full Court in Coghlan (2005) FLC 92-220 [sic].
   2. That Her Honour erred in failing to deal with the submission on behalf of the husband that amounts provided to the parties by interim distribution be characterised as partial property settlement.
   3. That Her Honour attached inadequate weight to the husband’s post separation contributions.

EVIDENCE

1. The evidence in support of the application is found firstly in Mr Long’s affidavit. I have already commented on the brevity of the affidavit. Its contents are as follows:
   1. I am the lawyer for the Applicant Husband in these proceedings.
   2. This matter was heard before Her Honor [sic] Justice Moore, on 2 August, 2 November, 17, 18 & 21 December 2007.
   3. Her Honor [sic] Justice Moore delivered Judgment in these proceedings on 19 February 2008 in the Cairns Registry. Attached hereto and marked with the letter “A” is a copy of the Judgment. Attached hereto and marked with the letter “B” is Notice of Appeal [sic] which will be filed should the Court be satisfied that leave be granted to file the Notice out of time.
2. In his affidavit the husband deposes in paragraph 4 to his wish to appeal both her Honour’s parenting and property orders. He further deposes that he has paid the sum due to the wife pursuant to her Honour’s property orders.
3. The husband says “I initially determined to appeal but I took into account in a preliminary decision not to, her Honors’ [sic] observations about the necessity for the parties to work more actively together in order to succeed in collaborative parenting of our daughter [E]”.
4. The husband also deposes that, on about 25 March 2008, he received an application by the wife for costs of the first instance proceedings. He also deposes to his knowledge that he had one month in which to file an appeal, but he says in the period mid February to mid April 2008 “I was not in a position to give any consideration to whether or not to pursue an Appeal in these proceedings because of extreme pressure upon me in my employment role”. The husband asserts he was under pressure because of the activities of a “rogue trader” of his employer and this required him to work about 70 hours per week until Easter. The husband says in about mid April 2008 he approached his solicitor to arrange a conference with senior counsel to consider an appeal. The husband was extensively cross examined about this aspect of his affidavit. I accept the husband did, during the relevant period referred to in his affidavit, work long hours, and even if he was not directly involved in derivates trading, that the losses suffered by his employer had an overall effect on loan operations with which the husband was directly involved.
5. The husband annexed to his affidavit a letter dated 14 March 2008 addressed to the wife’s solicitors. I have already referred to some of the comments in that letter. In that letter the husband’s solicitors said:

...

We have reviewed in detail the Judgment with our client. He has concluded the Judgment is appealable in several areas. We are confident that several aspects of the Judgment could be overturned or amended in our client’s favour on appeal.

Despite this view, our client has elected not to appeal the Judgment. He has advised us that this decision is based in part to avoid the additional stress and emotional strain that a further 12 months of litigation will have upon him personally, also out of deference to your client to save her from the same negative experience. Perhaps most significantly out of regard for [E] he will not appeal so as to shield her from any potential impact from continued antagonism between the parties, especially as she is getting older and becoming more aware of events surrounding her.

In coming to this decision, which was not taken lightly, our client has advised that he is also very aware of and sensitive to the toll the litigation has taken on his relations with your client and the need to work collectively to repair the same for the sake of [E]. Any further litigation clearly would not assist in this regard.

Accordingly, in relaying his decision not to pursue an appeal of the Judgment, our client has asked us to convey to you for the benefit of your client, that he seeks your client’s commitment to work more co-operatively with him in the future in all matters pertaining to [E]. Our client appreciates he needs to also provide the same commitment to work harder at co-operating and communicating when it comes to relations with your client pertaining to [E] and he is prepared to provide this commitment.

...

RELEVANT STATUTE LAW AND RULES

1. Section 94 of the Act provides for appeals to the Family Court from courts other than the Federal Magistrates Court. Section 94(1A) provides as follows:

An appeal under subsection (1) or (1AA) shall be instituted within the time prescribed by the standard Rules of Court or within such further time as is allowed in accordance with the standard Rules of Court.

1. Sections 94(2D), (2E) and (2F) are also relevant. They provide:

(2D) Applications of a procedural nature, including applications:

(a) for an extension of time within which to institute an appeal under subsection (1) or (1AA); ...

...

may be heard and determined by a Judge of the Appeal Division or other Judge if there is no Judge of the Appeal Division available, or by a Full Court of the Family Court.

(2E) The standard Rules of Court may make provision enabling applications of a kind mentioned in subsection (2D) to be dealt with, subject to conditions prescribed by the standard Rules of Court, without an oral hearing.

(2F) No appeal lies under this section from an order or decision made under subsection (2B) or (2D).

1. Chapter 22 of the rules deals with appeals.
2. Rule 22.02 sets out how an appeal is to be commenced, namely by filing a Notice of Appeal (Form 20).
3. Rule 22.03 provides that a Form 20 must be filed within 28 days after the order appealed from is made. Rule 22.12 provides that the filing of an appeal does not operate as a stay of the operation or enforcement of the order in respect of which the appeal is filed.
4. Rule 22.42 provides for an application to be made in respect of an appeal including an application for permission to appeal an order.
5. Rule 1.14 of the rules permits a party to seek an order extending time even though the time fixed under the rules has passed.

RELEVANT LEGAL PRINCIPLES – APPLICATION FOR EXTENSION OF TIME TO APPEAL

1. The relevant principles to be applied in deciding whether to extend time for lodging an appeal, or an application for leave to appeal, are set out in Gallo v Dawson reported in [1990] HCA 30; (1990) 93 ALR 479. The granting of leave is not automatic but involves the exercise of discretion. The discretion to extend time is given for the sole purpose of enabling the Court to do justice between the parties. In determining whether the rules will work an injustice it is necessary to have regard to the history of the proceedings, the nature of the litigation, the proposed grounds of appeal and the consequences for the parties for the grant or refusal of the leave.
2. The principles have been referred to in a number of cases in this Court including McMahon & McMahon reported in (1976) FLC 90-038 at 75,144, Tormsen & Tormsen (1993) FLC 92-392 at page 80,017 and Gallo v Dawson (supra) at 480 to 481 where McHugh J said:
   

The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194 5 ; 70 ALR 185 When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes, at 263 4; Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201. It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice. As the Judicial Committee of the Privy Council pointed out in Ratnam v Cumarasamy [1965] 1 WLR 8 at 12 ; [1964] 3 All ER 933 at 935:

The rules of court must prima facie be obeyed, and in order to justify a court in extending the time during which some step in procedure requires to be taken there must be some material upon which the court can exercise its discretion.

DISCUSSION

1. I propose to consider this application having regard to the criteria enunciated by McHugh J in Gallo v Dawson. Before commencing my discussion I will refer briefly to her Honour’s reasons for judgment.

The trial Judge’s reasons

1. Her Honour’s reasons disclose that the parties began living together in the latter half of 2003 or early 2004. They married in February 2005. The only child of the marriage, [E] was born in November 2005. The parties separated five months after the child’s birth. At separation the wife commenced living with the child at her parents’ home. The parties were divorced in July 2007.
2. At the commencement of the parties’ cohabitation the husband was employed as a senior executive with a bank, earned a substantial salary and had discretionary bonus entitlements. Although he had a period of some months unemployment during the parties’ marriage, at the date of trial he was employed as a senior executive with another bank and in receipt of a base salary of approximately $286,800.00 and had an entitlement to performance-based bonuses.
3. The wife has tertiary qualifications including an MBA. At commencement of cohabitation the wife was employed as a marketing executive with a large legal firm, and was in receipt of an income of approximately $140,000.00.
4. Early in the parties’ cohabitation they lived in rented accommodation. The husband had cash of approximately $994,000.00, household contents, a superannuation entitlement in a self managed super fund of approximately $88,000.00, a share portfolio worth approximately $25,000.00 and a motor vehicle purchased in 2003 for approximately $99,000.00. In 2004 the wife sold a property owned by her on the upper North Shore. She deposited $250,000.00 into the husband’s bank account. The wife also had superannuation entitlements in a self managed fund of approximately $130,376.00 and an interest in a ski lodge.
5. In mid 2004 the parties bought an apartment on the lower North Shore as joint tenants for a purchase price of $1,518,000.00. The husband contributed approximately $1 million to the purchase price and the wife contributed $250,000.00. On her redundancy the wife received $32, 200.00.
6. In August 2005 the parties carried out renovations to the lower North Shore property which were funded by borrowings of approximately $112,500.00.
7. The trial Judge found the wife was primarily responsible for household duties and the care of the child after her birth.
8. The property was sold at a sale price of $2.19 million and the net proceeds paid into an interest bearing account pending property settlement. Each party received $230,000.00 from the proceeds on the basis the nature of the payment received would be characterised by the trial Judge. Both parties used some of the funds received to pay their respective legal costs.
9. At the date of the hearing the husband was paying child support in the sum of $327.00 per week.
10. The property dispute before the trial Judge was of very limited ambit. There was no real dispute about the identification and value of the parties’ assets the largest in quantum of which was the proceeds of the lower North Shore property held in a controlled monies account. The argument about “add backs” was of limited scope, and her Honour’s decision in respect of these matters was in accordance with authority and within the reasonable ambit of her discretion.
11. In paragraph 84 of her reasons the trial Judge set out in tabular form the list of the parties’ assets and liabilities. I do not on this application have the benefit of the transcript before her Honour, or access to documents to demonstrate whether the list of assets and liabilities was an agreed list. There is no evidence before me to indicate whether the parties’ agreed to their superannuation entitlements being included in the list, or whether they asserted the superannuation interests (husband $211,764.00 and wife $174,880.00) should be dealt with separately.
12. Her Honour, at paragraph 88, explained that the marriage was a short one, and that at the commencement of cohabitation the “husband was by far in the stronger financial position”. Thereafter her Honour summarised each party’s evidence about their contributions, and recorded the submissions made on their behalf by their respective counsel. The trial Judge noted counsel for the husband’s submissions that initial contributions should be assessed the proportions of 80/20 and counsel for the wife submitted they should be assessed at 70/30. Her Honour explained (referring to the husband’s submission of an 80/20 division) “[b]ut in my view that is too heavily weighted in his favour and Mr Mater’s [the wife’s counsel] estimate is more within the range though I would not necessarily align myself with the mathematical way he went about calculating it”. Her Honour also rejected a Kennon argument mounted on behalf of the wife.
13. Her Honour then turned to s 75 (2) factors and commenced by noting these factors favoured the wife. She identified two principal matters – the care of the child, and the disparity in the parties’ earning capacities.
14. After discussing issues relative to the wife’s health, her Honour concluded the wife could maintain employment if she chose, and if she did not have caring responsibilities for the child. But her Honour concluded “even if she were to re-enter the workforce there still remains a significant disparity” between the wife’s earning capacity and what the husband was earning.
15. Thereafter her Honour recorded counsel’s submissions concerning an appropriate adjustment under s 75(2) noting that the husband contended the adjustment should be 10 per cent and the wife sought between 20 and 25 per cent Having noted what was put in the outline of case documents, and the claim for spousal maintenance, her Honour concluded an adjustment of 15 per cent or $322,984.00 was appropriate.
16. Finally the trial Judge considered the overall justice and equity of the orders which resulted in the wife receiving 45 per cent of the assets or $968,952.00 and the husband receiving 55 per cent or $1,184,273.00.

Consideration of the application

1. In considering this application on the evidence presented I must endeavour to ascertain whether in all the circumstances the rules, if applied, will work an injustice. In so doing I propose to consider the question of delay, the prejudice to either party if leave is or is not granted, and assess, in a general way, the likely success of the proposed grounds of appeal, although the latter is also fraught with difficulty given I do not have the benefit of transcript or documents from the Court below, and the grounds are, for the most part drawn in very general terms.

(a) Delay

1. The husband’s affidavit material as to his failure to file an appeal in the time provided in the rules is in some respects contradictory. Although he deposed to being preoccupied by the extreme circumstances which were caused by the activities of a rogue trader, his solicitors’ letter of 14 March 2008 is clear in its terms, namely he had received legal advice and determined not to appeal.
2. Whilst the delay in filing the application is not substantial (some seven weeks) the husband’s explanation for delay is not compelling, and he appears to have undergone a change of mind about an appeal after receiving the wife’s application for costs.

(b) Prejudice to either party

1. In considering the question of prejudice to the husband in respect of the property orders, unless there are grounds under s 79A, or consent under s 79A(1A) which on the evidence before me appears unlikely, the husband will be denied the opportunity to challenge her Honour’s orders unless leave is granted.
2. The wife did not file a response to this application, or file any material in support of her opposition to the extension of time. However I accept that ongoing litigation is likely to cause stress both emotional and financial to the wife. That stress may impact on the child’s best interests.
3. Ameliorating that prejudice to some degree is the financial position of the parties. The husband has significant assets and income, and if an appeal is dismissed, he has the capacity to pay any costs ordered. He has paid the sum due to the wife pursuant to the property orders. These matters favour the granting of leave.

(c) History of the litigation and conduct of the parties.

1. I am satisfied there is nothing in the history of this matter, or the conduct of the parties, which is relevant to the exercise of my discretion.

(d) Proposed ground of appeal

1. The most significant factor for me to take into account in the exercise of my discretion in respect of the extension of time sought is my assessment of the prospects of success of the appeal. At the outset it is appropriate that I record that the appeal is an appeal against a discretionary judgment. The limits on appellate interference in such circumstances are well known (see House v The King [1936] HCA 40; (1936) 55 CLR 499 and Gronow & Gronow [1979] HCA 63; (1979) 144 CLR 513). In addition to these authorities I take into account the decision in Australian Coal & Shale Employees Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621 to which Mr Mater helpfully referred me.
2. Proposed grounds 1, 2 and 3 attack the weight given by the trial Judge to the husband’s initial contributions. To succeed on this ground the husband would have to prove that the trial Judge’s discretion miscarried, and that she had given insufficient weight to relevant factors. Whilst I cannot definitely say, particularly without the benefit of the record in the Court below, that these grounds have no prospects of success, given the nature of the challenge and having regard to the discretionary exercise conducted by the trial Judge, prima facie they do not appear strong.
3. Proposed grounds 4 and 8 are inter-related. I will discuss proposed ground 4 when I consider ground 8.
4. The challenge mounted in ground 5 is to the adjustment made in the wife’s favour under s 75(2). That is, her Honour made an adjustment of 5 per cent more than that which the husband contended was appropriate at trial. My remarks about grounds 1, 2 and 3 are apposite to this challenge. I note it is not contended that her Honour failed to take into account any relevant matter or that she took into account irrelevant matters in the exercise of her discretion under s 75(2).
5. Proposed ground 6 challenges her Honour’s treatment of the parties’ respective superannuation interests. Absent any evidence of how this issue was presented at trial, I am unable to assess any possible merit in this ground, although I note Mr. Mater’s submissions from the bar table today which appear cogent.
6. Proposed ground 7 attacks the trial Judge’s asserted failure to characterise the interim property distribution received by the wife as “property”. It appears from her Honour’s reasons each party received a distribution, and used part of the distributed funds in payment of legal costs which were “added back” as property. It appears to me that to “add back” the total interim distribution and legal costs paid would have involved “double counting”. However I cannot be definite about this issue without the benefit of transcript and exhibits before the trial Judge.
7. Proposed ground 8 challenges the weight afforded by her Honour to the husband’s post separation contributions. Similar considerations apply to this proposed ground as enunciated by me in respect of proposed grounds 1, 2, 3 and 4.
8. Overall, noting the limitations inherent in endeavour to assess prospect of success of an appeal without the record of the Court below, I find on the material before me that the prospects of success of the property appeal are not significant, nor are they entirely hopeless.

CONCLUSIONS

1. The balancing of relevant factors in this matter in determining whether or not to exercise my discretion to extend time in respect of the property orders is finely balanced. The delay in bringing this application is not substantial, however, evidence as why the application was not brought in time is controversial given the husband’s solicitors’ letter. I accept the wife would incur further legal costs in opposing the appeal. But the wife has received the whole of the benefit of the orders of the trial Judge. Any prejudice suffered by her must be limited to stress of ongoing litigation and the limited costs involved as a respondent to the appeal. That prejudice can be offset to a degree by a costs order against the husband if the appeal is unsuccessful. From the husband’s point of view, without an extension, he cannot challenge the property orders, and his proposed grounds of appeal are not entirely hopeless. In those circumstances, in the exercise of my discretion, I find strict compliance with the rules insofar as an inability to challenge her Honour’s property orders are concerned would work an injustice. I am therefore satisfied that time should be extended to challenge the trial Judge’s property orders.

COSTS OF THIS APPLICATION

1. Notwithstanding that the husband has been successful in this application in part, the necessity for the application was his failure to file an appeal in time provided in the rules. He was not ready to proceed when the matter was listed before the Court on 28 May 2008. The husband has received an indulgence from the Court. In these circumstances I am satisfied it is appropriate that the husband should pay the wife’s costs of and incidental to this application as agreed and failing agreement as assessed under Chapter 19 of the rules.

I certify that the preceding sixty one (61) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Boland.

Associate:

Date: 5 August 2008