Barbey & Tuttle [2013] FamCAFC 44; (22 March 2013)

Last Updated: 27 March 2013

FAMILY COURT OF AUSTRALIA

BARBEY & TUTTLE

[ 2013] FamCAFC 44

FAMILY LAW – APPEAL – PROPERTY – Appeal from a discretionary decision of a Federal Magistrate dismissing an application under r 16.05 (Federal Magistrates Court Rules 2001) to set aside final property orders made in default of the appellant wife’s appearance – Where the property proceedings were initiated by the defaulting appellant wife – Whether the Federal Magistrate erred in the weight given to the relevant considerations in the exercise of his discretion – Where the appellant argued the Federal Magistrate erred by giving too much weight to the consideration of adequate excuse for failure to appear and failing to have proper regard to the consideration of an arguable case alternative to the orders made – Where the detailed chronology and evidence before the Federal Magistrate indicated the wife had failed to participate at all in the proceedings, both by failing to appear and failing to comply with orders to advance her application towards determination – Where there was no reasonable explanation for the wife’s failure to appear or participate in the proceedings – Whether the Federal Magistrate erred in not allowing oral submissions from the appellant’s counsel on the issue of arguable case – Where the absence of oral submissions did not prevent consideration of the arguable case point – Where the onus was on the wife to establish an arguable case on the basis of evidence and she failed to do so – Where it was not suggested before the Federal Magistrate or on appeal that the orders were incorrect or manifestly unjust – Where his Honour correctly found that an order for costs could not satisfactorily address the prejudice to the respondent husband if the orders were to be set aside – Where the Federal Magistrate applied correct legal principles in the exercise of an unfettered discretion – No appealable error demonstrated – Appeal dismissed.

FAMILY LAW – COSTS – Where having regard to s 117(2A) considerations including the wife’s conduct in relation to the proceedings, that the proceedings were necessitated by her failure to comply with previous orders, and that she was wholly unsuccessful, the Court is satisfied the discretion to order costs ought be exercised – Appellant ordered to pay the respondent’s costs of and incidental to the appeal.

Family Law Act 1975 (Cth) Federal Magistrates Court Rules 2001 (Cth) r 16.05

Allesch v Maunz (2000) 203 CLR 172 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Clifford & Mountford [2006] FMCAfam 450

APPELLANT:

Ms Barbey

RESPONDENT:

Mr Tuttle

FILE NUMBER:

BRC 1523 of 2011

APPEAL NUMBER:

NA 35 of 2012

DATE DELIVERED:

22 March 2013

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

May, Murphy & Kent JJ

HEARING DATE:

22 February 2013

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

2 April 2012

LOWER COURT MNC:

[2012] FMCAfam 299

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Shoebridge

SOLICITOR FOR THE APPELLANT:

John Woulfe Solicitors

COUNSEL FOR THE RESPONDENT:

Mr Galloway

SOLICITOR FOR THE RESPONDENT:

Gall Standfield & Smith Lawyers

ORDERS

(1) The appeal be dismissed.
(2) The appellant wife pay the respondent husband’s costs of the appeal as agreed or failing agreement as assessed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Barbey & Tuttle has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE

Appeal Number: NA 35 of 2012
File Number: BRC 1523 of 2011

Ms Barbey

Appellant

And

Mr Tuttle

Respondent

REASONS FOR JUDGMENT

MAY J

1. By notice of appeal filed 30 April 2012, the wife appeals an order of Federal Magistrate Coates made on 2 April 2012, dismissing her application to set aside final property orders made in default of her appearance at the hearing.
2. Having regard to the Federal Magistrate’s reasons, it is apparent that the wife’s application was dismissed on the bases that the she had failed to satisfactorily explain her failure to comply with orders and to attend the final hearing, and had failed to demonstrate by her evidence that different orders may have been made.
3. On appeal it is argued for the wife that his Honour erred in his treatment of the relevant considerations, namely adequate excuse and an arguable case. As will be seen, a number of grounds of appeal relating to the substantive judgment and orders itself were properly abandoned, as irrelevant to the determination of the appeal.
4. This appeal concerns the proper approach of a trial judge when a party fails to appear in Court, comply with orders allowing for the orderly disposition of the case, and orders are ultimately made in their absence. In addition, in this case that litigant then makes an application to set aside the final orders but fails to provide an acceptable excuse for their default.
5. Following an undefended hearing on 3 November 2011, having satisfied himself that the orders sought by the husband in his response were just and equitable, the Federal Magistrate dismissed the wife’s initiating application and made orders providing for a division of the parties’ assets 80 per cent to the husband and 20 per cent to the wife.
6. It is not necessary to refer to the reasons for judgment of the Federal Magistrate in respect of the final property orders because the wife has not sought to appeal those orders. It is significant, however, to note that the property proceedings were in fact commenced by an initiating application of the wife, filed on
   28 February 2011.
7. It is also unnecessary to consider in detail the background to the parties’ relationship. It is important, however, to detail the chronology of the proceedings which was a primary consideration in the Federal Magistrate’s decision, correctly in my view as will be seen, to dismiss the application to set aside the orders.

CHRONOLOGY

8. A comprehensive and accurate summary of the chronology of this matter was contained in affidavits of the husband’s solicitor filed in the property proceedings on 24 August 2011 and 7 September 2011. These affidavits were before the Federal Magistrate at the final hearing on 3 November 2011.
9. At the appeal hearing, counsel for the wife confirmed that nothing about the chronology or the wife’s actions, as described by the husband’s solicitor or his Honour, was controversial.
10. The parties commenced cohabitation in 2006, married in 2008 and separated in 2010. As mentioned, the proceedings were commenced by initiating application filed by the wife in the Federal Magistrates Court on 28 February 2011. She sought orders that she retain two properties and the husband pay her $100,000. Alternatively if the properties were ordered to be sold, she simply sought the husband pay her $100,000. The wife also asked for orders in relation to the husband’s superannuation.
11. At the same time she filed the initiating application, the wife filed a financial statement and a short affidavit. In the affidavit she deposed briefly to what property she said she had at the commencement of the relationship, and what financial contributions she made during the course of the relationship.
    No further material was filed by her subsequently (despite orders that she do so), until the application to set aside orders on 29 November 2011.
12. The husband filed an affidavit and financial statement on 3 June 2011. In his affidavit, the husband responded to the wife’s statements about contributions at the commencement of and during the relationship. He responded to the wife’s table of assets, liabilities, superannuation and financial resources, adding comments about value and ownership. It was clear from the affidavit that the husband asserted valuation of properties was necessary, together with disclosure from the wife.
13. On 6 June 2011 an application for directions was heard and consent orders were made, providing for discovery within 28 days, in accordance with an attached schedule. Orders regarding valuation of superannuation interests, a mediation to be held on 4 August 2011, and the Court appointment of experts for real estate and chattels were also agreed and orders made. It was ordered that in the event mediation was unsuccessful, the matter would be further mentioned on 29 August 2011. The wife was legally represented up until and including the directions hearing.
14. The husband filed a formal response on 14 June 2011. He sought orders for payment of monies by the wife, declarations about equitable interests in properties, sale of other properties, and an account of the asset pool and financial contributions of the parties, to determine whether payment adjustment between them was required to achieve a just and equitable distribution.
15. The affidavits of the husband’s solicitor filed on 24 August 2011 and
    7 September 2011 confirm that the wife failed to comply with, and/or respond to the husband’s attempts to comply with the orders for disclosure, superannuation, mediation, and expert valuations.
16. The solicitor’s affidavits detail repeated, diligent attempts to contact the wife directly from 8 July 2011 (having been advised her solicitors no longer acted for her and no further address for service being filed), to provide her with the husband’s material and Court documents, and to make arrangements for mediation and valuations.
17. The solicitor attempted contact by telephone at the wife’s place of work and by mobile, and left detailed voice messages. He sent emails to the address which she gave him by phone and was used by her in separate correspondences to the husband. The solicitor sent by registered mail to her known residential address a letter requesting a notice for an address for service, which was returned marked “unclaimed”. The solicitor subsequently caused the husband’s disclosure documents to be personally served on the wife at her residential address on 2 August 2011 (affidavit of service filed 8 August 2011).
18. The wife did not take the solicitor’s calls, did not return his messages, and did not reply to his emails. She did, however, email the husband directly on 11 July and 3 August 2011, suggesting to him to settle out of Court. She emailed again on 19 August 2011, apparently to deter the husband from continuing with the litigation. The solicitor’s various attempts at contacting the wife, and the wife’s emails to the husband are evidenced in annexures (SH1-15) of the solicitor’s affidavit filed 24 August 2011.
19. On 11 August 2011 the husband’s solicitor instructed Herron Todd White to value all four parcels of real estate in accordance with the 6 June 2011 consent orders. Payment being required in advance, the husband paid the valuation fee on the basis that reimbursement from the wife would subsequently be sought.
20. On 22 August 2011 the two properties in which the husband has a legal interest were inspected for valuation. An affidavit of the valuer was filed on
    21 September 2011, in which the valuer deposes he had not been able to inspect and therefore value the other two properties because, “despite several attempts being made to contact the Applicant Wife to arrange inspection of those properties, she has failed to response to those approaches, and has failed to make those properties available for inspection of valuation”.
21. On 24 August 2011 the solicitor emailed the wife informing her that on
    29 August 2011 orders would be sought that her application be struck out, the husband’s response be set down for an undefended hearing, and she pay the husband’s costs.
22. On 25 August 2011, the wife sent one email to the husband’s solicitor confirming she had received his email of 24 August, but had not read it as she was “still reading through the ridiculous amount of paperwork” she confirmed she had received. She advised she sought a less expensive mediator, then ten minutes later sent another email saying she did not wish to partake in mediation. The husband’s solicitor replied to both emails that day, advising that her personal attendance was required at the then upcoming hearing on
    29 August 2011.
23. In what appears to be a further effort on the part of the husband’s solicitor to engage the wife’s participation in the proceedings, on 26 August 2011 he sent a letter to wife reiterating an application for the costs of the adjournment on
    29 August 2011 would be sought against her, and a detailed scheduled of costs to be claimed (total $3,137) was attached.
24. The wife did not appear on 29 August 2011. The Federal Magistrate ordered the matter be adjourned to 30 September 2011 and that the wife appear in person. It was noted on the order that if the wife failed to appear or produce “persuasive evidence as to incapacity or inability to appear in person”, then the Court “may consider making orders on a final basis in her absence” (emphasis added).
25. On 6 September 2011, the solicitor emailed the wife a letter setting out the status of the matter, and advising of the husband’s intention to seek final orders in the terms of the husband’s response at the Court hearing on
    30 September 2011. A copy of the order dated 29 August 2011 was also attached. The solicitor included a letter informing the wife of the arrangements for the valuation of properties and seeking her cooperation, with reference to the 6 June 2011 consent orders.
26. Before the hearing on 30 September 2011, the husband’s solicitor filed a further affidavit on 7 September 2011. The affidavit updated his attempted communication with the wife, and the steps taken on behalf of the husband to have the properties valued.
27. Again, all correspondence is recorded in evidence as annexures (SH 1-12) to the solicitor’s affidavit filed 7 September 2011. It is apparent from a subsequent affidavit of service filed on 26 September 2011, that the wife had been personally served on 13 September 2011 with the Court order of
    29 August 2011, and the husband’s solicitor’s affidavits of 24 August and
    7 September 2011. According to the Agent’s affidavit, the wife refused to open the door to accept the documents, so the Agent left the documents at the front door of the property.
28. On 29 September 2011 the husband’s solicitor filed a further affidavit, identifying the property pool as claimed by the husband, and the orders sought by him for the appointment of a trustee for sale for one property and the letting of another, and the application of proceeds of sale to the payment of a joint mortgage on other properties, with a view to each party retaining their current residence. The solicitor deposed to the husband’s advice that the wife had failed to sign an authority to rent out one property, and not made any financial contribution to the joint mortgage on that property, such that the husband had borne the entire burden of the mortgage payments since separation.
29. The wife failed to appear again on 30 September 2011. The Federal Magistrate ordered the wife to file and serve within 14 days an affidavit explaining her failure to comply with the consent orders of 6 June 2011, and her failure to appear on both 29 August and 30 September 2011. It was noted on that order that should the wife fail to appear on 3 November 2011 the Court “will make orders in default of her appearance” (emphasis added).
30. The wife failed to appear again on 3 November 2011. At the hearing, the husband filed an affidavit of his own by leave. This document was not served on the wife prior to the hearing. The affidavit set out, in submissions style format: the parties’ separate assets and liabilities at commencement of cohabitation, initial capital contributions, financial and other contributions during the relationship. The husband stated, “on a contribution basis solely, I respectfully submit that a division of assets on a 80-20% basis in my favour would be just and equitable”.
31. Under a heading “Orders Sought”, the husband sought that a trustee be appointed to sell both non-resident properties referred in paragraph 28 above, and for the proceeds to be applied to the joint mortgage, with the husband to take over the remainder of that debt. He also sought that the wife deliver goods and chattels listed, and in default of delivery pay him $5,000 (an estimated value, the wife not having made them available for valuation in accordance with the consent orders).
32. The husband sought the inclusion of $254,985 as an add-back for monies withdrawn by the wife pre-separation from a line of credit account and a mortgage account (both in her name), and the joint mortgage account. These withdrawals were proved by bank statements of the wife, obtained under subpoena as the wife herself had failed to disclose.
33. As foreshadowed in the orders of 30 September 2011, in default of her appearance on 3 November 2011 and having satisfied himself that the orders proposed by the husband were just and equitable, the Federal Magistrate made final orders in the terms sought by the husband.
34. On 29 November 2011, the wife filed the application to have the orders set aside pursuant to r 16.05 of the Federal Magistrates Court Rules 2001. She also filed a notice of address for service.
35. It is apparent from the detailed chronology and evidence contained in the affidavits filed in the husband’s case that the wife failed to participate at all in the proceedings. In so failing, she put the husband to significantly more than his reasonable share of expense and trouble to comply with consent orders aimed at resolving the property dispute.

THE APPLICATION TO SET ASIDE

36. The wife’s application to set aside the orders was filed approximately three and a half weeks after the orders were made. In the application, she sought that the orders be set aside (and stayed pending that determination), that her application be reinstated, the matter be listed for urgent hearing and all time periods abridged. In addition, she sought time to comply with the discovery orders made 6 June 2011, that the husband pay the joint mortgages, and that the parties attend mediation.
37. In the affidavit in support, the wife attempts to explain her failure to appear at each Court hearing on 29 August, 30 September and 3 November 2011. As to the first, when the matter was adjourned, the wife provided a copy of a fax sent to the Federal Magistrates Court dated “29-08 09:28”, which states “No: BRC 1523/2011 [MS BARBEY] IS UNABLE TO ATTEND TODAY & FOLLOWING IS DOCTOR’S CERTIFICATE”. An attached medical certificate from a Dr H dated 25 August 2011 states “Ms [Barbey] IS RECEIVING MEDICAL TREATMENT FOR THE PERIOD Thursday,
    25 August 2011 TO Monday, 29 August 2011 INCLUSIVE ...She WILL BE UNFIT TO CONTINUE her USUAL OCCUPATION”.
38. As to the hearing on 30 September 2011 when the matter was adjourned again, the wife provided another copy of a sent fax, dated “30-09 9:39”, which states “[MS BARBEY] No BRC 1523 IS UNABLE TO ATTEND TODAY AND WILL FORWARD DOCTORS CERTIFICATE”. An attached certificate from a Dr T dated 30 September 2011, using the same language as the first certificate, says the wife was receiving treatment for 30 September 2011 (one day only).
39. In neither of these medical certificates was any diagnosis or description of the wife’s ill health provided.
40. As to the final hearing on 3 November 2011 at which final orders were made in default of her appearance, the wife attached a copy of a fax sent to the Court dated “18-10 15:35” which stated “[MS BARBEY] No BRC 1523...This is prior notice that [Ms Barbey] will not be able to attend the hearing on
    3 November 2011 as she will be away on business”.
41. In her affidavit the wife states that from 19 October 2011 until
    4 November 2011 she was away overseas in the United States for a convention “in relation to another business [she] is involved with”. An additional annexure, with no fax markings, states “[Ms Barbey] will be away on business from
    19 October 2011 to 18 November 2011 and will be attending the Annual Conference during this time.” It is signed by “Ms E”. The document is described by the wife as “confirmation from [Ms E] of my employment regarding the conference that I attended overseas”.
42. The wife deposed that she “verily believed that the Notices forwarded to the court on 29 August 2011, 30 September 2011 and 18 October 2011 were sufficient to have the various dates adjourned”. No application was ever made for an adjournment.
43. Apart from these feeble attempts to explain the failure to appear at Court, the wife does not make any attempt to explain her persistent failure to comply with Court orders and solicitors’ requests for disclosure and valuation. She knew that her former solicitors filed a notice of withdrawal on 28 July 2011.
44. It is of considerable significance that no claim was made, in the wife’s affidavit before the Federal Magistrate in the application to set aside nor in submissions before us, that the result ordered by his Honour was grossly unjust or unreasonable.
45. In her affidavit the wife said she would be prepared to agree to an order for sale of one of the properties, but would not agree to the appointment of a trustee on the basis of cost, and that she and the husband could themselves make arrangements for sale. The wife agreed that the proceeds should be applied to reduce the joint mortgages. The wife also agreed to make available for collection the goods and chattels sought by the husband.
46. As will be seen, the wife’s counsel in the appeal sought to emphasise that the Federal Magistrate had not permitted counsel who appeared for the wife in the application to make oral submissions about the arguable case consideration. In light of the observations just made about the wife’s position in her affidavit material and in the appeal regarding the effect and operation of the orders, it will be seen that no appealable error is established by this argument.

REASONS OF THE FEDERAL MAGISTRATE

47. The wife’s application was heard on 13 December 2011. Written reasons dismissing the application were delivered on 2 April 2012.
48. His Honour began by stating the rule, and quoted from the case of Clifford & Mountford [2006] FMCAfam 450 as authority for the “usual, but not exclusive considerations” for an application under r 16.05(2)(a) (at paragraph 5):

“34. From the abovementioned authorities, it seems to me that the following principles emerge in respect of applications under r.16.05(2)(a):

a) The discretion to be exercised is unfettered, but nonetheless to be exercised judicially and bearing in mind the public interest in there being an end to litigation.

b) There are three criteria, each of which should usually be demonstrated before a judgment or order is set aside under r.16.05(2)(a), namely:

i) a reasonable explanation for the applicant's absence at the trial or hearing;

ii) material arguments available to the applicant that might reasonably lead to the making of an order different to that sought to be set aside; and

iii) no prejudice to the party with the benefit of the orders sought to be set aside that is not able to be adequately addressed by the Court.

b) Matters relevant to the three criteria set out above will include, but will not necessarily be limited to:

i) Whether a party with notice of proceedings disregarded the opportunity of appearing at and participating in the trial;

ii) Delay, if any, in bringing the application to set aside and whether, if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it;

iii) the conduct of the applicant since the judgment or order sought to be set aside was made.”

(Bold emphasis added)

49. Under the heading “History”, the Federal Magistrate subsequently recounted the history of proceedings since the wife’s initiating application was filed on
    28 February 2011. His Honour referred at length to the information and evidence contained in the husband’s solicitor’s affidavits.
50. Next under the heading “Consideration”, the Federal Magistrate discussed at length the claims and evidence of the wife, as contained in her affidavit and annexures in support of her application. It is not submitted that his Honour in any way mistook the facts or wrongly stated the applicable legislation or principles.
51. The wife’s grounds of appeal do assert error in his Honour’s assessment of reasonable excuse for her failure to appear, and some submissions were made in this regard. By the conclusion of her counsel’s submissions in the appeal, however, it became apparent that on the evidence no real issue could be taken with his Honour’s finding at paragraph 74, that there was no reasonable explanation from her as to what had occurred. Counsel instead placed considerably more emphasis on the arguable case ground as an alleged error of law by the Federal Magistrate.
52. As such, I consider it is unnecessary to set out at length his Honour’s reasons under the reasonable explanation consideration. In essence his Honour found, correctly, that given the wife’s state of knowledge of Court hearing dates (as confirmed by her own evidence), the undependable nature of the medical certificates, and indeed the lack of additional supporting information or evidence put before him by the wife, there was on the wife’s own evidence (leaving aside the husband’s solicitor’s extensive affidavit evidence) no reasonable explanation for her failure to appear, and her failure to comply with Court orders (reasons paragraphs 67, 70-71, 73-74) .
53. His Honour inferred, from the wife’s failure to comply with the consent orders or to respond to the numerous efforts of the husband’s solicitor, that she did not intend to cooperate with the Court process or to have the matter dealt with expeditiously (reasons paragraph 79). That inference, and the ultimate finding in that respect, was each well open to the Federal Magistrate.
54. Of course, absence of reasonable excuse may not be fatal to an application to set aside orders, especially where it can be demonstrated that there has been a miscarriage of justice.
55. Turning to the second consideration, arguments available to the wife which might reasonably lead to the making of different orders, the Federal Magistrate found that the wife had failed to demonstrate this at all:
    75. But her material in support of the application to set the final orders aside do not comply with the requirements of showing a case whereby the orders may have been differently considered. She does not address the issues, which I stated in my judgment she must do. At paragraph 25 I stated: “Should the wife bring an application to re-open the proceedings under this Court’s rules then she will have ample opportunity to address each and every salient point made in the husband’s affidavit about her dealings with substantial amounts of money which I will refer to shortly.”
    76. That has not been done, but I anticipated that she would have to put a case to show the orders would be different.

...

79. ... in the final orders judgment I stated there were numerous issues the wife would have to address if she brings this application, such as use of monies (see paragraphs 24, 25, 28, 32 and 35, among others, of the reasons for judgment) – these issues have not been addressed...
56. The Federal Magistrate also considered the prejudice to the husband and whether this could be addressed by orders of the Court. His Honour said:
    77. Nor does she show how the respondent would not be prejudiced since he has done everything to comply with the orders and in fact paid the joint debts which she has not paid.

...

79. ... Costs could never restore to the husband to the position he was previously in, and the prejudice would be great.
57. His Honour referred (at paragraph 78) to French CJ’s statements in the High Court decision Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (page 182), in particular the requirement to take into account the efficient use of courts as publicly funded resources, and the need to maintain public confidence in the judicial system.
58. His Honour was not satisfied the wife had provided a reasonable explanation of her failure to comply with orders and to attend Court, determined that costs could not satisfactorily address the prejudice to the husband if the orders were to be set aside, and that the wife had not addressed the substantive issues in the case to demonstrate that other orders might reasonably be made.

THE APPEAL

59. At the hearing of the appeal, counsel for the wife advised that grounds 2 and 3 were abandoned. Counsel made submissions in relation to those grounds which directly concern the refusal to set aside the default judgment, on the basis of adequate excuse (grounds 1, 4 and 7) and arguable case (ground 4).
60. Counsel submitted that grounds 5, 6, 8, 9, 10 and 11 go to the substance of the default judgment itself, rather than the decision not to set the orders aside. It was accepted that these matters would only be relevant for our consideration in the event that the appeal is allowed, and if we decided to re-exercise the trial judge’s discretion. It is therefore unnecessary to make any further reference to those grounds.

RELEVANT PRINCIPLES

61. This is an appeal against a discretionary decision. The principles which inform appellate review of such decisions are well settled.
62. Rule 16.05 (2)(a) of the Federal Magistrates Rules relevantly provides:

Setting aside

(2) The Court may vary or set aside its judgment or order after it has been entered if:

(a) the order is made in the absence of a party; ...

63. Rule 1.03 lists a number of objects of the Rules, including obligations of parties to assist the Court:

Objects

(1) The object of these Rules is to assist the just, efficient and economical resolution of proceedings.

...

(4) To assist the Court, the parties must:

• avoid undue delay, expense and technicality
• consider options for primary dispute resolution as early as possible.

64. As to the principles to be applied in the determination of a r 16.05 application to set aside orders, the exercise of discretion in considering such an application is unfettered, though must be exercised judicially.
65. The High Court in Allesch v Maunz (2000) 203 CLR 172, considered whether the Full Court of this Court had been correct (on a re-exercise of discretion), in exercising the discretion to set aside an order of a Family Court judge made in the absence of a party. The relevant provision in that case (for property proceedings in the Family Court) was s 79A, which enables the Court to set aside an order if satisfied there was a “miscarriage of justice”.
66. Their Honours (Gaudron, McHugh, Gummow and Hayne JJ) indicated that a Court will ordinarily be satisfied a miscarriage of justice has occurred if a person is the subject of an adverse order and their failure to appear is sufficiently explained, unless it is apparent that no different result would be reached on a rehearing, or that a rehearing would work an irremediable injustice to the respondent (paragraph 28, pages 182-183).
67. Of interest to this case, their Honours also discussed whether the decision to set aside the orders was pursuant to the inherent power of the Family Court (as identified in Taylor v Taylor [1979] HCA 38; (1979) 143 CLR 1), or pursuant to s 79A of the Family Law Act 1975 (Cth). By reference to the provisions of s 79A their Honours said (at pages 181-182):

The discretion to set aside an order made in the absence of a party

25. There was discussion in the majority judgment of the Full Court as to whether the discretion to set aside the property settlement orders arose under the property settlement orders, themselves, pursuant to s 79A of the Act, or pursuant to the inherent power of the Family Court identified by this Court in Taylor v Taylor. Section 79A has been amended since the decision in Taylor and, by sub-s (1)(a), the Family Court may now, in its discretion, set aside a property settlement order, if satisfied that “there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence, the giving of false evidence or any other circumstance”. There can be no doubt that the expression “any other circumstance” is wide enough to encompass the situation in which an order has been made in the absence of a party. Accordingly, s 79A must now be construed as applicable to that situation.
26. Given that s 79A(1)(a) now confers power on the Family Court to set aside an order made in the absence of a party, it may be doubted whether there is any longer any scope for the exercise of inherent power in that regard. And even if the husband's application to set aside the property settlement orders was made pursuant to those orders rather than pursuant to s 79A, the orders could not be set aside on any basis other than that directed by that section, namely, that the Court was satisfied that there had been a miscarriage of justice. However, nothing turns on the nature of the application or the source of the discretion which Finn J was called to exercise and which the Full Court exercised in dismissing the appeal from her Honour's judgment. That is because there is nothing in s 79A to suggest that the discretion thereby conferred is to be exercised on any different basis from that applicable in the case of an inherent discretion.

...

28. The consideration which informs the power conferred by s 79A of the Act is that the court be satisfied that there was “a miscarriage of justice”. And whether exercising inherent power or a power of the kind conferred by s 79A, a court will, ordinarily, be satisfied that there has been a miscarriage of justice if a person has suffered an adverse order in circumstances where his or her failure to appear is adequately explained unless it also appears that no different result would be reached on a rehearing or that a rehearing would work an irremediable injustice to the other side. In this last regard, it should be noted that injustice will often be capable of remedy by the imposition of terms as to costs. However, where, as here, orders have been carried into effect, injustice may not be capable of remedy except on terms that those orders stand and that the matter be reopened only to a limited extent.

(Footnotes omitted)

68. In this case, no application was brought pursuant to s 79A. The evidence of the wife before the Federal Magistrate would not have revealed an “adverse order”.
69. As much was made by counsel for the wife of Kirby J’s statements in Allesch v Maunz about the general need to afford a hearing, it is as well to set out that part of his Honour’s reasons, noting that his Honour concurred with the majority judgment (at pages 184-185):
    35. It is a principle of justice that a decision-maker, at least one exercising public power, must ordinarily afford a person whose interests may be adversely affected by a decision an opportunity to present material information and submissions relevant to such a decision before it is made. The principle lies deep in the common law. It has long been expressed as one of the maxims which the common law observes as “an indispensable requirement of justice”. It is a rule of natural justice or “procedural fairness”. It will usually be imputed into statutes creating courts and adjudicative tribunals. Indeed, it long preceded the common and statute law. Even the Almighty reportedly afforded Adam such an opportunity before his banishment from Eden.
        

(Footnotes omitted)

70. It is also important to note Kirby J’s subsequent comments, about the extent of the right to be heard, of particular relevance to the circumstances in this case:
    38. ...Having regard to the circumstances in which the initial proceedings took place in the absence of Mr Allesch (the appellant), it is worth emphasising that the principle just described does not require that the decision-maker actually hear (or receive the submissions of) the party potentially liable to be adversely affected. Sometimes, through stubbornness, confusion, misunderstanding, fear or other emotions, a party may not take advantage of the opportunity to be heard, although such opportunity is provided. Affording the opportunity is all that the law and principle require.
    39. Decision-makers, including the courts, cannot generally force people to protect their own rights, to adduce evidence or other materials, to present submissions or to act rationally in their own best interests. This consideration may be especially relevant in relation to the Family Court where emotions, often engendered by the highly personal issues involved, can sometimes cloud rational thought.
    40. Nor are courts obliged to delay proceedings indefinitely because one party, although proved to be on notice of the proceedings, refuses or fails to appear in person or to be represented by a lawyer or some other individual permitted to speak for them who can explain the need for an adjournment. The rights of other parties are commonly involved. In the Family Court, the rights of non-parties (especially children) may be affected. Additionally (as this Court has accepted) the rights of the public in the efficient discharge by courts of their functions must be weighed against unreasonable delay in concluding litigation.

(Footnotes omitted)

71. There must also be firmly kept in mind the High Court’s statements about the public interest in court efficiency in Aon Risk Services Ltd, to which the Federal Magistrate in his reasons for judgment referred.

SUBMISSIONS FOR THE APPELLANT WIFE

72. Mr Shoebridge, who was not the author of the written outline of argument nor appeared for the wife before the Federal Magistrate, did not refer to the outline at the hearing, and we will therefore focus on the oral submissions made ably by him.

Explanation for non-attendance

73. As mentioned, the wife does not take issue with anything the Federal Magistrate said about reasonable explanation for failure to appear, or rather absence thereof. Her counsel sought to argue instead, that the consideration of adequate excuse was not fatal to her application.
74. It was suggested that there is nothing in the wording of r 16.05, or the common law (with reference to Allesch v Maunz) that codifies the discretion and therefore no one element is of itself determinative of the application to set aside. This submission is doubtless correct.
75. Counsel argued that his Honour gave too much weight to the consideration of adequate excuse, and failed to properly take into account the consideration of a possible arguable case for different orders.
76. Counsel properly conceded that the wife knew orders may be made in default of her appearance, however suggested she may not have known that the orders would be final, could not have known other material may be relied on, or that the relief sought against her (in response to her own application) may have been different to that already contained in the material.
77. These arguments were not raised by counsel appearing for the wife at the time of the hearing before the Federal Magistrate of her application to set aside the orders. However, in light of the central assertion of lack of procedural fairness by the wife in this appeal, they will be considered.
78. Having acknowledged, properly, that based on the chronology of events, the history of the orders, and on the evidence and submissions before his Honour, the wife had failed to demonstrate an objectively reasonable explanation for her persistent non-attendance and general non-participation in the proceedings, the wife’s counsel placed greater emphasis on submissions under the related arguable case ground.

Arguable Case

79. Under this ground it was submitted that even if the wife had failed to establish reasonable excuse, the inherent jurisdiction to set aside a decision or orders requires the Court to perform a balancing act more complex than merely considering the finality of the proceedings and the prejudice to the other party. The additional issue of an arguable case must be considered.
80. That the wife had not had notice of the husband’s affidavit filed by leave on the morning of the final hearing was raised as a matter of significance. The point of the submission being that even “terrible litigants” deserve procedural fairness (Kirby J in Allesch v Maunz was referred to).
81. As the case of Allesch v Maunz was sought to be relied on by the wife, we would note that in that case, the matter proceeded to an undefended hearing after just one failure to appear (the two hearings being one month apart). In this case, there were two failures to appear before the undefended hearing proceeded, and the time was over many months. It is also relevant to note that in Allesch v Maunz, the defaulting party was the respondent husband, who it emerged had been seriously ill and in hospital.
82. In addition it was argued that the Federal Magistrate had denied the wife’s counsel an opportunity to make submissions on the arguable case issue at the hearing of the application. We were referred to the transcript of proceedings where the following exchange occurred between his Honour and counsel for the wife (Transcript, 13 December 2011, page 16-19):

HIS HONOUR: ...I’m not particularly concerned whether [the wife] would get a different result...erring on the side of caution, I would assume that you may get a different result.

WIFE’S COUNSEL: Well, I would – if your Honour is not of that view or in any doubt about that, then I would address you in relation to that in detail, because my submission is it is a requirement in relation to Allesch & Maunz.

HIS HONOUR: Well, look, I – but I would – as I say, I will err on the side of caution. You would probably get a different result. What is really on my mind is this absence of your client at fairly crucial appearances, and whether there is an adequate explanation...

...

All right, well, look, as I said, I think – I would take the view that the result may be different. Unless Mr McGregor raises that again, I don’t require that you do address me on that. It’s really this issue, though, of whether an explanation is adequate in the circumstances which is exercising my mind at the moment.

83. We were then referred to the reasons for judgment where, at paragraphs 60, 75 and 79, his Honour finds that the wife was required to address the issue of a different result and failed to do so. Counsel for the wife submitted that his Honour’s comments and findings were significant and unfair, given the wife’s counsel had attempted to make submissions on the issue.
84. Counsel further submitted that this was not a case where the wife had simply waived her opportunity to be heard. He referred to the husband’s affidavit filed by leave on 3 November 2011, and that the wife had had no notice of that particular affidavit and therefore could not respond.
85. We pressed counsel for the wife to demonstrate on what basis the material filed by the husband with leave on 3 November 2011 was materially different from that which was already filed by him about which the wife was aware. Her counsel listed:
    • The appointment of a trustee for the sale of two properties (in the solicitor’s affidavit filed 26 September 2011 the husband sought that a trustee be appointed for sale of one property, and that the second property be sold upon sale of the first).
    • The 80 per cent to the husband, 20 per cent to the wife particularisation of distribution (the orders giving effect to this distribution namely by sale of some property and retention of the other properties the parties each lived in, paying down of joint mortgages and delivery of chattels had been sought by the husband in his solicitor’s affidavit filed 24 August 2011).
    • The inclusion of the add-back (the evidence supporting the husband’s claim having been produced under subpoena, following the wife’s non-compliance with consent orders for disclosure, including “Any purchase or disposal of property in the last 12 months prior to and since separation”).

SUBMISSIONS FOR THE RESPONDENT HUSBAND

86. It is not necessary in these circumstances to refer at length to the submissions on behalf of the husband. After referring to the absence of proper explanation for the non-appearance and non-compliance with orders, Mr Galloway submitted the only real argument of merit is whether the husband’s affidavit filed by leave on 3 November 2011 worked an injustice on the wife which outweighs the prejudice to the husband, having been brought to Court on numerous occasions.
87. It was submitted that it was the failure of the wife to provide evidence, disclosure and valuations which compelled the husband to supply the evidence, which might have otherwise come from the wife, in his own affidavit.
88. As can be seen from the consent Order 2a and Schedule A, if the wife had complied with these specific (and general) orders, it would have revealed the information the husband’s affidavit presented.
89. As to the division of 80 per cent of the assets in favour of the husband, counsel submitted that the husband’s earlier materials demonstrated he had contended he contributed amounts to an outcome even less favourable to the wife, approximately 85 per cent to him and 15 per cent to her (though not expressed explicitly in those terms).

CONCLUSIONS

90. The discretion to set aside orders made in default of a party’s appearance is unfettered. Regard should be given to the explanation for a failure to appear, the possibility of a different result, and prejudice to the other party (and how this may be addressed). His Honour did consider each of these matters, and did not err in his approach. He was not bound to give one matter more weight than another, and was correspondingly entitled to place significant weight on the wife’s failure to establish a reasonable explanation for her failure to appear or to participate in the proceedings.
91. The arguable case consideration might have been established by contrary evidence in the wife’s material. That his Honour did not hear submissions on this did not prevent him from properly considering the point. The onus was on the wife to provide evidence, which she failed to do. No amount of submissions could have overcome the absence of evidence from the wife.
92. The evidence which formed the basis of the add-back, the only genuinely controversial matter in the updated response/orders sought by the husband, was from the wife’s own bank accounts, which had to be obtained under subpoena because of her own non-compliance. The wife gave no explanation for that expenditure in her affidavit in support seeking to set aside the orders.
93. It was not apparent on the material before his Honour, what alternative orders or distribution the wife sought, or would seek if successful in her application to set aside. Nor was it suggested in her material before the Federal Magistrate or before us on appeal that the 80/20 distribution was incorrect or manifestly unjust.
94. In these circumstances, His Honour could not have made, even with further oral submissions, a determination that the wife might obtain a different result, which the High Court expressed in Allesch v Maunz to be in effect a condition to the exercise of the discretion. He did, as was required of him, have regard to the issue. Accordingly, there can be no appealable error.
95. The issue of prejudice to the husband was not addressed at all by the wife. In the absence of evidence or argument from her, his Honour’s finding that the prejudice to the husband was significant and could not be sufficiently addressed by costs, was entirely justified in the circumstances of this case.

COSTS

96. As is usual, at the conclusion of the hearing we requested submissions from counsel as to costs.
97. Having regard to the provisions of s 117(2A) of the Family Law Act 1975 (Cth), namely the wife’s conduct in relation to the proceedings, that proceedings were necessitated by her failure to comply with previous orders of the Court, and that she has been wholly unsuccessful, I am satisfied that the discretion to order costs ought be exercised.

MURPHY J

98. I have read the reasons of May J and agree with them and with the orders her Honour proposes.

KENT J

99. I agree with the reasons for judgment of May J and the orders proposed by her Honour.
    

I certify that the preceding ninety-nine (99) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (May, Murphy and Kent JJ) delivered on 22 March 2013.

Associate:

Date: 22 March 2013