Cassuben & Cassuben and Anor [2018] FamCAFC 238 (6 December 2018)

Last Updated: 13 December 2018

FAMILY COURT OF AUSTRALIA

CASSUBEN & CASSUBEN AND ANOR

[2018] FamCAFC 238

FAMILY LAW – APPEAL – LEAVE TO APPEAL – Where appeal against interlocutory orders made by an acting magistrate of the Magistrates Court of Western Australia – Where leave to appeal and the substantive appeal heard simultaneously – Where the husband relies on the success of the grounds of appeal as the basis for leave to be granted – Where prospects of appeal weak – Where consideration of cost orders made under s 117(2A) of the Family Law Act 1975 (Cth) – Where the magistrate gave sufficient consideration to factors under Part 15.5 of the Family Law Rules 2004 (Cth) when granting the wife permission to adduce evidence from an adversarial witness – Where there is no obvious error of principle or substantial injustice established – Where leave to appeal is refused – Where the applicant to pay the first respondent’s costs of and incidental to the application for leave – Appeal dismissed.

Family Law Act 1975 (Cth) ss 4AB, 43(1)(ca), 79, 94AA, 117, 117(2A) Family Law Regulations 1984 (Cth) reg 15A Family Law Rules 2004 (Cth) rr 1.12, 15.42, 15.51, 15.52,15.64B, 15.65

Adam P. Brown Male Fashions Pty Ltd v Philip Morris Incorporated (1981) 148 CLR 170; [1981] HCA 39 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 Australian Coal &Shale Employees’ Federation v Commonwealth (1953) 94 CLR 621; [1953] HCA 25 Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63 Luadaka and Luadaka (1998) FLC 92-830; [1998] FamCA 1520 Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17 Phoenix Institute of Australia Pty Ltd v Australian Competition and Consumer Commission [2017] FCAFC 155 Rose & Duroux (1976) FLC 90-064; [1976] FamCA 53 Rutherford and Rutherford (1991) FLC 92-255; [1991] FamCA 68 Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466; [2009] FamCAFC 166 Zschokke and Zschokke (1996) FLC 92-693; [1996] FamCA 79

APPELLANT:

Mr Cassuben

1ST RESPONDENT:

Ms P Cassuben

2ND RESPONDENT:

Ms L Cassuben

FILE NUMBER:

PTW

5173

of

2016

APPEAL NUMBER:

WEA

19

of

2018

DATE DELIVERED:

6 December 2018

PLACE DELIVERED:

Newcastle

PLACE HEARD:

Perth

JUDGMENT OF:

Strickland, Austin & Sutherland JJ

HEARING DATE:

28 September 2018

LOWER COURT JURISDICTION:

Magistrates Court of Western Australia

LOWER COURT JUDGMENT DATE:

2 May 2018

LOWER COURT MNC:

NA – Transcript of hearing

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Hedges

SOLICITOR FOR THE APPELLANT:

DCH Legal Group

COUNSEL FOR THE 1ST RESPONDENT:

Mr Rynne

THE 2ND RESPONDENT:

In person

ORDERS

(1) The first respondent’s oral application to adduce further evidence in the appeal is dismissed.
(2) Leave to appeal is refused.
(3) The Amended Notice of Appeal dated 30 August 2018 is dismissed.
(4) The applicant shall pay the first respondent’s costs of and incidental to the application for leave to appeal, assessed in the sum of $1,500.

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 Cassuben & Cassuben and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH

Appeal Number: WEA 19 of 2018
File Number: PTW 5173 of 2016

Mr Cassuben

Appellant

And

Ms P Cassuben

First Respondent

And

Ms L Cassuben

Second Respondent

REASONS FOR JUDGMENT

1. On 2 May 2018, acting Magistrate Cohen of the Magistrates Court of Western Australia made procedural and interim costs orders between Mr Cassuben (“the husband”) and Ms P Cassuben (“the wife”) in expectation of their substantive dispute under Part VIII of the Family Law Act 1975 (Cth) (“the Act”) being heard several months later. The husband’s mother, Ms L Cassuben was joined to the proceedings as the second respondent and, although she appeared at the appeal, she was not legally represented and did not actively participate.
2. Relevantly, the orders required the husband to pay to the wife’s lawyers the same sums of money he pays to his own lawyers in satisfaction of legal costs and disbursements in the proceedings (Orders 9–14) (“the Costs Orders”) and allowed the wife to adduce expert opinion evidence from an adversarial expert witness she privately engaged (Order 1) (“the Expert Witness Order”).
3. The husband filed a Notice of Appeal on 30 May 2018. However, that Notice of Appeal was defective in that it did not seek leave to appeal which was required given that the orders were interlocutory in nature.
4. On 11 September 2018 the husband filed an Application in an Appeal seeking leave to rely on an Amended Notice of Appeal dated 30 August 2018 which added two grounds of appeal, but still did not seek leave to appeal.
5. On 13 September 2018 the husband sought to file a Further Amended Notice of Appeal in which he did seek leave to appeal but in which he also sought to add one further ground of appeal.
6. The wife had no objection to the application filed on 11 September 2018, but neither consented nor objected to the reliance on the Further Amended Notice of Appeal.
7. The matter was argued on the basis that leave to appeal was sought. The wife resisted leave being granted, and if it was granted, resisted the appeal.

BACKGROUND

8. The spouses married in February 2004 and separated in March 2016.
9. The husband commenced the proceedings in August 2016, seeking parenting orders in respect of the spouses’ children and the division of their property. The wife responded to his application in December 2016 and the second respondent was joined to the proceedings in December 2017.
10. In October 2016, with the spouses’ consent, some procedural orders were made appointing a single expert witness to provide expert opinion evidence about the value of the husband’s proprietary interests in a corporation and some businesses, since there was a substantial underlying contest about the nature and value of the spouses’ property interests. The husband contended their debts overwhelmed their assets, but the wife was dissatisfied with the frankness of the husband’s financial disclosure and was unconvinced of their alleged penury. The single expert evidence was needed to help illuminate that dispute and, at least in its untested form, tended to vindicate the husband’s contention.
11. The spouses filed interim applications in late 2017, which were listed for hearing in February 2018. The wife amended her application just in advance of the hearing. Relevantly for the appeal, the wife sought: the costs orders (in similar but not identical form to the orders made); an order that a different single expert witness be appointed to provide fresh expert opinion evidence about the value of the husband’s proprietary interests in the corporation and the businesses; and the Expert Witness Order (again, in similar but not identical form to the order made). The husband opposed her application in all respects, but he also sought an order for the original single expert witness to prepare an updated valuation report.
12. So, in respect of the expert evidence, the husband wanted to retain and update the evidence of the existing single expert, whereas the wife wanted a different single expert appointed to prepare a fresh report and permission granted for her to adduce evidence from her own adversarial expert witness on the same topic.
13. The interim hearing between the spouses was commenced in February 2018, but adjourned part-heard until April 2018. Judgment was reserved, after which the magistrate pronounced orders and published reasons in May 2018. Aside from the costs orders and the expert witness order, the magistrate also ordered the original single expert to prepare an updated valuation report (Order 3), as the husband had sought. That order was not the subject of appeal.

APPLICATIONS IN AN APPEAL

14. Apart from omitting to seek leave to appeal in the first Amended Notice of Appeal, the only difference between the two Amended Notices of Appeal was a single ground of appeal which related to the existence of power to make the costs orders. The husband admitted the wife had insufficient notice of his intention to argue that particular ground of appeal and, furthermore, his written summary of argument did not usefully elaborate the ground. Accordingly, he conceded it would be procedurally unfair to the wife for the appeal to incorporate that particular ground, in which event he applied for an adjournment of the appeal to give the wife time to consider and meet the new ground and his proposed argument in support of it.
15. Following discussion of the principles espoused in Aon Risk Services Australia Ltd v Australia National University (2009) 239 CLR 175 and how the upcoming trial of the substantive proceedings would be heard sooner than could the rescheduled appeal, orders were made to:
    • (a) refuse the husband leave to rely upon his Amended Notice of Appeal dated 13 September 2018;
    • (b) dismiss the husband’s adjournment application; and
    • (c) grant (with the wife’s consent) the husband leave to rely upon his Amended Notice of Appeal dated 30 August 2018 and to orally amend it to include his application for leave to prosecute the substantive appeal embodied within that document.
16. The husband’s counsel informed us that, given the preceding discourse, he did not require the publication of reasons for the orders to that effect.

LEAVE TO APPEAL

17. As indicated, the appealed orders are interlocutory in nature and thus, the husband requires leave to appeal them (s 94AA of the Act; reg 15A of the Family Law Regulations 1984 (Cth)). In instances of procedural orders, an appellant must conjunctively demonstrate that the subject orders manifest an error of principle and cause substantial injustice. Such constriction exists because, if a “tight rein” were not kept upon interference with procedural orders, the proliferation of appeals would be disastrous to the proper administration of justice. There is, and must be, a material difference between the exercise of discretion on a point of only practice and procedure and an exercise of discretion which determines substantive rights (see Adam P. Brown Male Fashions Pty Ltd v Philip Morris Incorporated [1981] HCA 39; (1981) 148 CLR 170 at 177; and Rutherford and Rutherford [1991] FamCA 68; (1991) FLC 92-255).
18. The husband’s application for leave to appeal was heard simultaneously with the substantive appeal, as is often the case, because the application and the appeal cover common factual and legal territory (see Phoenix Institute of Australia Pty Ltd v Australian Competition and Consumer Commission [2017] FCAFC 155 at [42]) and the perceived strength of the appeal is liable to influence the determination of whether leave to appeal should be granted. Indeed, the husband relied on the success of the grounds of appeal as the basis for leave to appeal being granted. For the reasons which follow, the prospects of the appeal were weak, there was no obvious error of principle, and the orders did not wreak substantial injustice upon the husband, so leave to appeal should be refused. Consequently, the wife’s oral application to adduce further evidence on the appeal will also be dismissed.

GROUNDS OF APPEAL

19. The husband contended the costs orders were erroneously made for a variety of reasons (Grounds 1–2, 4–5, 7(b)–9) and the Expert Witness Order was made in error because the magistrate failed to address the criteria which were pertinent to that decision (Ground 10). Grounds 3, 6 and 7(a) were abandoned.

THE COSTS ORDERS

20. The Costs Orders were not stayed pending the determination of this appeal. At the commencement of the appeal the husband confirmed he has not yet paid any money to the wife’s lawyers pursuant to the Costs Orders, but he contended he was not acting in breach of the orders because he has not since paid any money to his own lawyers either. The Costs Orders do not require him to pay any money to the wife’s lawyers if he does not pay money to his own. The husband’s interpretation of the orders is correct, but the situation is less than satisfying, because his lawyers represented him on the appeal and will continue to represent him in the substantive proceedings. Either they do so on a pro bono basis, about which altruism the husband’s counsel was less than clear, or they do so in expectation of eventual payment, in which event their delayed payment has the appearance of a contrivance to outflank the operation of the Costs Orders. It also arouses curiosity about how they expect to be paid later, given the husband maintains there is no net capital to divide between the spouses because their debts exceed assets by close to $2 million.
21. The husband abandoned Grounds 3, 6 and 7(a), so he eventually contended the costs orders were wrongly made because the magistrate:
    • (a) erred in fact by finding the wife had no knowledge of the spouses’ finances (Ground 1);
    • (b) erred in law by finding the wife’s allegations of family violence were a relevant consideration in deciding whether to make the costs orders (Ground 2);
    • (c) erred in fact by finding the wife could not adequately represent herself at trial without legal representation (Ground 4);
    • (d) erred in fact and in law by failing to adequately consider the reversibility of the Costs Orders and then making the Costs Orders anyway, when their irreversibility rendered them unjust (Grounds 5(a) and 5(b));
    • (e) erred in fact by finding the wife’s adversarial expert’s opinion provided “some foundation for the wife’s position” that the “asset pool was not negative in value” (Ground 7(b));
    • (f) erred in fact and in law by finding, against the weight of the evidence, that the orders were just (Ground 8);
    • (g) erred by acting upon wrong principles or allowing extraneous or irrelevant matters to guide the exercise of discretion (Ground 9.1); and
    • (h) erred in law by failing to give adequate reasons (Ground 9.2).

Ground 1

22. In the reasons for judgment, the magistrate observed:
    114. The parties’ financial circumstances are complex, particularly for a self-represented person who has had no knowledge or control over the parties’ finances. I struggle to see how the wife could adequately represent herself, particularly at a trial where she would be required to crossexamine not just the husband and the [second] respondent but the expert witness.
23. The husband contended the magistrate was factually mistaken to conclude the wife had no knowledge of the spouses’ finances because he had fully and frankly disclosed his financial circumstances, she was then seized of the single expert evidence about the value of his proprietary interests, and she had acquired some tertiary accountancy qualifications which would enable her to comprehend the single expert evidence. While all of that might have been true, the husband assumed the magistrate was speaking in the present rather than the past tense, which may not have been correct.
24. The magistrate’s actual finding was the wife “has had” no knowledge of the spouses’ financial circumstances – not that she then “had” no such knowledge. Her past ignorance of the spouses’ financial affairs was undoubtedly correct. The husband controlled the spouses’ financial affairs and, in particular, the corporation and businesses which previously afforded them with income. The husband conceded the magistrate’s finding was unexceptional if it was construed as a conclusion about historical rather than the current state of affairs.
25. If, alternatively, the magistrate was speaking of the wife’s current state of knowledge, then it was incorrect to find she had no knowledge of the spouses’ financial circumstances, but her familiarity and comprehension of their financial circumstances was certainly inferior to the husband’s understanding. It is difficult to accept the magistrate was intending to convey any finding that the wife had absolutely nil knowledge of the spouses’ finances, but if that was her Honour’s intention then the finding was mistaken because the wife did have some knowledge.
26. Even if the mistaken finding of fact is assumed, the finding was only one of several upon which the magistrate relied to conclude the wife ideally needed legal representation at the trial to properly advance her case which, in turn, led to the Costs Orders being made. Since English was the wife’s third language and she intended to challenge the reliability of the single expert’s evidence about the value of the husband’s corporate and business interests, the lack of legal representation would in itself hamper the presentation of her case at trial. Consequently, the current state of the wife’s knowledge about the spouses’ financial circumstances was not an essential component of the decision to make the Costs Orders and so the materiality of the factual mistake was questionable, in which event any error of principle was relatively inconsequential.
27. The husband commendably conceded the assumed merit of Ground 1 would not, in isolation, sustain the appeal and require the Costs Orders to be quashed so there was no point in pursuing it further. If it had no individual merit, it could not add aggregate weight to any other ground of appeal.

Ground 2

28. Because the Costs Orders were made pursuant to the discretionary exercise of power under s 117 of the Act, the magistrate was obliged to consider the statutory factors prescribed by s 117(2A) of the Act. In doing so, the magistrate considered s 117(2A)(c) – the conduct of the parties “in relation to the proceedings”.
29. Under that rubric, the magistrate referred (at [99]–[101]) to several allegations made by the spouses against one another. Relevantly for this ground of appeal, her Honour referred to the wife’s allegations of her “emotional, psychological and financial abuse” by the husband. Evidently, they were allegations which related to the husband’s conduct both before and after the spouses’ separation but, importantly, the husband asserted they were allegations which only related to his mistreatment of her and not to the nature of his conduct “in relation to the proceedings”, within the meaning of s 117(2A)(c). He, therefore, contended the magistrate fell into legal error by considering an extraneous or irrelevant consideration, which affected the decision to make the Costs Orders.
30. The husband correctly contended her Honour ought not to have considered, under s 117(2A)(c) of the Act, the spouses’ conduct which was unrelated to the prosecution of their respective applications for property settlement relief. However, several impediments still blocked the husband’s successful reliance upon this ground of appeal.
31. First, the ground of appeal complained of the magistrate’s “finding” that the wife’s allegations of family violence were relevant considerations, but there was no finding. Her Honour only noted the wife’s allegations that the husband had abused her, including by his “financial abuse”. In dealing with the distinction between finding facts and noting allegations, the husband submitted there was no utility in the magistrate mentioning the wife’s evidence on the issue unless her Honour considered it to be relevant, which is a convenient segue to the other impediments.
32. Second, in exercising jurisdiction under the Act, her Honour was obliged to have regard to the need to ensure the wife’s protection from “family violence” (s 43(1)(ca)), for which purpose the definition of “family violence” is very broad indeed (s 4AB). It includes behaviour by one family member which coerces or controls another family member and may be exemplified by the deprivation of financial autonomy (s 4AB(2)(g)). The magistrate recited the wife’s evidence about the way in which the husband was exerting his financial superiority to her disadvantage in the litigation (at [17]–[18]), so the evidence was linked to his conduct of the proceedings, even if only tenuously. Of course, the wife’s evidence was untested during the interim hearing, but it was nonetheless evidence upon which the magistrate was entitled to rely. The weight attached to it was another matter, which is not an issue we need consider.
33. There could be little doubt the wife was alleging the husband’s deprivation of her financial autonomy. Although the husband alleged his virtual insolvency, he held his real estate, corporate and business interests exclusively and not jointly with her. He conceded that, at least in the past, he had been in a strong financial position. He controlled all assets, which were said to be collectively worth about $4.478 million. He contended that debt of $6.542 million accounted for his impecuniosity, but his liabilities and their value were the subject of dispute. By comparison, the wife was almost penniless. She and the two children lived in rent-free accommodation and they subsisted on welfare payments and her weekly musical tuition fees of $50. The husband paid her child support of only $10.38 per week.
34. The wife’s interim application for the husband to contribute to the payment of her legal costs in the proceedings was motivated by her inability to pay her own costs. Although the husband was ensuring the payment of his own legal costs, he resisted paying hers. The fact he was able to pay his costs by borrowing money from the second respondent did not nullify the wife’s application. He had a financial resource he was not prepared to share with her and her financial independence from him was contingent upon the finalisation of the property settlement proceedings. Therefore, as the wife submitted, her allegations about the husband’s “financial abuse” were feasibly relevant as his conduct “in relation to the proceedings” within the meaning of s 117(2A)(c) of the Act. Put another way, his alleged conduct was not definitively irrelevant. No error of principle was so clear that the grant of leave to appeal on this point was warranted.
35. Third, even if the alleged conduct was an irrelevant consideration and even if the magistrate is assumed to have made an incorrect finding about it, adverse to the husband’s interests, it was relatively immaterial to the decision. After considering the mandatory statutory factors under s 117(2A) of the Act, her Honour was influenced to make the Costs Orders because of the inequality of the spouses’ respective positions. The husband was possessed of the vast bulk of assets, he was seized of greater knowledge about the spouses’ financial history, their financial circumstances were complex, the single expert evidence was in dispute, and he enjoyed legal representation. The magistrate did refer to the inherent unfairness of an unrepresented litigant conducting a trial against an allegedly abusive and legally represented partner (at [113]), but it was the comparative lack of legal representation which was material to their inequality, not the contentious allegations of family violence. They were only relevant to the issue of how the wife would perceive it to be even more difficult to conduct her own case. If she genuinely believed she was victimised by the husband’s abuse, it would likely have been harder for her to confront and challenge him in cross-examination, regardless of whether her allegations were objectively true.

Ground 4

36. In the reasons for judgment, the magistrate stated she “struggle[d] to see how the wife could adequately represent herself” at trial (at [114]).
37. In this ground of appeal, the husband transformed that observation into an asserted finding that the wife “could not” adequately represent herself at trial, which finding he contended was wrong.
38. Her Honour did not, however, positively find the wife was incapable of representing herself adequately. Rather, her Honour doubted the wife could do so. The distinction is subtle, but nonetheless important.
39. The magistrate’s doubts were well founded. The wife emigrated from Europe to marry the husband and English was not her native language. Although her comprehension and literacy were reasonably proficient, the wife deposed:

...I do not have a very good comprehensive understanding of the Family Court of Western Australia proceedings and procedures.

40. That was another impingement upon the adequacy with which she could present her case, compounding her inferior knowledge of the spouses’ broader financial affairs, her perceived lack of fortitude to cross-examine the husband by whom she alleged she was grossly abused, and her incapacity to tactically interrogate the single expert over the reliability of his evidence. Her lack of legal representation in those circumstances was a serious disadvantage.
41. The husband’s other misconception in pressing this ground of appeal was his contention that there was no evidence to prove the wife’s incapacity to represent herself at trial and so it was an error of law to find she could not do so. When invited to identify the evidence he would expect to see adduced to justify any finding about the wife’s incapacity to represent herself, the husband’s counsel obfuscated and did not expressly respond. Perhaps the wife could have asserted her bare opinion in an affidavit that she could not represent herself at trial, but such self-serving opinion evidence might well have drawn an objection. But, more importantly, she did not need to express her opinion. The conclusion about her probable inability to adequately represent herself is an inference easily drawn from the evidence about her lack of comparable knowledge about the spouses’ financial history, the complexity of their financial circumstances, her lack of guile to proficiently challenge the single expert in cross-examination, and her perception of victimisation by the husband’s abuse which would make it difficult for her to cross-examine him.

Ground 5

42. The husband’s dual contention under this ground of appeal was that the magistrate erred in fact and in law by, first, failing to adequately consider the reversibility of the Costs Orders once the property settlement was finalised, and second, by unjustly making the Costs Orders notwithstanding, because he would not be able to later recoup any money he pays to the wife’s lawyers due to the spouses’ liabilities exceeding their assets.
43. At the outset of the discussion in the reasons for judgment dealing with the Costs Orders (at [79]–[82]), the magistrate properly acknowledged the wife’s application was for an order under s 117 of the Act compelling the husband to pay her costs in equal amounts to those he commits to payment of his own costs. The application was not made under s 79 of the Act for his payment to her of a lump sum. Given the conceptual distinction between the two types of applications, identification of the source of power for the order was necessary because it informed the discretionary considerations the magistrate was obliged to take into account in determining the wife’s application (see Strahan & Strahan (Interim Property Orders) [2011] FamCAFC 126; (2011) FLC 93-466 (“Strahan”) at [84][85], [208][210]; Luadaka and Luadaka [1998] FamCA 1520; (1998) FLC 92-830).
44. Since the wife was seeking an order in her favour under s 117 of the Act, the magistrate was obliged to consider the factors set out within s 117(2A) of the Act in determining whether any order should be made. None of those factors prescribes the “reversibility” of costs orders as a material consideration, though of course it could be considered under s 117(2A)(g) of the Act.
45. The factors prescribed by s 117(2A) of the Act are mandatory considerations, but they are not exclusive considerations, which is why this Court was able to develop three factors as guideline considerations in cases where one litigant seeks an order compelling another litigant to fund their legal costs, regardless of the head of power relied upon to make the order and even though none of the three factors find expression within the provisions of the Act. Those three considerations are: the respondent’s position of relative financial strength, the respondent’s capacity to meet his or her own litigation costs, and the applicant’s inability to meet his or her own litigation costs (see Strahan at [90], [217]; Zschokke and Zschokke [1996] FamCA 79; (1996) FLC 92-693 (“Zschokke”) at 83,217–83,218).
46. While it is acknowledged how the inability to reverse the payment of a lump sum made under an interim property settlement order may be fatal to an interim application made under ss 79 and 80(1)(h) of the Act, the Court has baulked at making the same concession in relation to applications for interim costs under s 117 of the Act (see Zschokke at 83,217-83,218, 83,220).
47. In this case, the magistrate expressly acknowledged those guideline authorities (at [84]–[86], [107], [109]), dealt with more recent authorities cited by the spouses (at [87], [94]), and then turned attention to the s 117(2A) factors (at [95]–[106]). While her Honour explicitly noted the irreversibility of costs orders may be a significant factor which militates against them being made (at [109]), the husband complained her Honour then failed to go on and consider whether the costs orders would be reversible in the circumstances of this case. In so far as the ground of appeal asserted or implied the magistrate failed to consider the reversibility of the costs orders at all, it was wrong. Its potential as an influential feature was plainly acknowledged, though tempered by recognition it is liable to carry less significance in applications under s 117 than those under s 79 of the Act.
48. True it is, the magistrate did not proceed to find whether or not the Costs Orders would be reversible in this instance, so the complaint is not about any mistaken finding. Rather, it is about the absence of one, which complaint assumes a finding by the magistrate one way or the other was obligatory. Therein lies the flaw of this ground of appeal. The magistrate was not obliged to make any finding; not least because it was impossible. There was a chasm between the spouses’ positions. The husband asserted a net deficit of some $2 million, which assertion the wife did not accept. There were disputes over the adequacy of the husband’s financial disclosure, the incompatibility between the documents so far disclosed by him and other known facts, and the existence and value of his asserted liabilities. The evidentiary disputes and contradictory arguments could not be resolved by the magistrate at an interim hearing. Consequently, no factual finding about the reversibility of the Costs Orders was possible. The most which could be concluded was that if the husband was eventually vindicated at trial by a finding that the spouses’ debts exceeded their assets, then any money he paid to the wife’s lawyers would not likely be recouped. The ground of appeal wrongly assumed the ultimate factual findings at trial would vindicate the husband, but they may not. If the wife’s suspicions are proven correct and assets are available for division between them, the recoupment of costs paid by the husband might be possible.
49. Importantly for the discussion of this ground, the magistrate made another order appointing the husband as the trustee for sale of several items of personal property (in which the wife has either exclusive or joint proprietary interest) and requiring the net proceeds of sale to be retained in a joint interest bearing account pending further order of the Court (Order 6). During the appeal we were informed the sale of the designated property is anticipated to fetch not less than $100,000, which funds will potentially enable the husband to recoup any money he pays to the wife’s lawyers under the Costs Orders. Since he has not yet paid any money at all to the wife’s lawyers, he has nothing to recoup anyway. In the face of that reality, it was virtually impossible for the husband to contend the appealed orders caused him substantial injustice, even if they might be the product of the erroneous application of principle.

Ground 7(b)

50. This ground of appeal alleged the magistrate erred by finding the wife’s adversarial expert’s opinion provided “some foundation for the wife’s position” that the “asset pool was not negative in value”.
51. The report procured by the parties from the single expert about the value of the husband’s corporate and business interests tended to support his case about the lack of net assets for division between the spouses.
52. The wife was doubtful about the reliability of the single expert evidence and so she retained an adversarial expert for advice. The report of the adversarial expert was annexed to her affidavit. The adversarial expert expressly abstained from offering any opinion about the value of the husband’s proprietary interests until furnished with “source documents”, but did criticise the single expert’s methodology of valuing businesses rather than the husband’s shareholdings in the corporations which owned and conducted the businesses. The adversarial expert also commented on how the single expert may have incorrectly attributed legal ownership of certain assets and the liability for certain debts.
53. In that context, the magistrate observed:
    108. The wife seeks to lead evidence from [the adversarial expert], [who] calls into question the methodology and opinions of [the single expert]. Whilst the [adversarial expert’s] report contains a caveat, namely, it is based on and subject to those documents provided on behalf of the wife, it provides some foundation for the wife’s position.
54. While this ground contends the magistrate erred in fact by finding the adversarial expert report “provides some foundation for the wife’s position”, the factual error was asserted on a false premise: the wife was contending for a position she was not.
55. Once it is understood that “the wife’s position” was her unwillingness to accept the accuracy of the single expert evidence at face value – not necessarily that the spouses’ financial affairs were in surplus rather than deficit in positive rebuttal of the husband’s opposite contention – the magistrate’s characterisation of the adversarial expert’s report was perfectly correct. It did provide “some foundation” for her complaints about the accuracy of the single expert’s evidence and the extent to which it supported the husband’s case.
56. The wife certainly hoped the spouses’ financial affairs were in far better shape than the husband contended – hopefully even in surplus, so they would have net assets to divide between them – but she could not contend for that finding in the absence of evidence, which was why she challenged the single expert and wanted to rely upon her adversarial expert. The limitations upon the wife’s contentions were plainly recognised by the magistrate in the following terms (and repeated at [88]):
    59. Important to the wife’s assertion about the variance in the husband’s position about the parties’ financial circumstances and her current inability to concede the asset pool, is her claim that the husband has not provided full and frank disclosure and/or his solicitors have been difficult in providing her with copies of disclosure documents requested by her.
    60. The wife asserts that she is simply unable to accept the husband’s position about the parties’ assets and liabilities until she, her lawyers, and her forensic accountant have had an opportunity to review all of the relevant disclosure.

(Emphasis added)

57. While the husband strenuously denied any failure to comprehensively comply with his obligation of disclosure, the truth of his denial was beside the point. For the purpose of this ground of appeal, the magistrate recognised the wife’s current position was confined to an inability to concede as correct the untested evidence of the husband and single expert about the extent of the spouses’ assets and liabilities. Furthermore, she did not expect to be able to either concede or refute that evidence until after she had reviewed all of the material disclosed by the husband. His criticism of her for not already having done so did not add any weight to this ground of appeal.

Ground 8

58. This ground of appeal asserted the magistrate erred in fact and law by finding, against the weight of the evidence, that the Costs Orders were just.
59. Before proceeding, it is as well to remember that appeals based on assessments about the weight which should, or should not, have been afforded to various features of the evidence are notoriously difficult to sustain (see Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 539–540; Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513 at 519–520; Rose & Duroux [1976] FamCA 53; (1976) FLC 90-064 at 75,324). In fact, the appeal should commence from the presumption that the primary decision was correct (see Australian Coal and Shale Employees’ Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621 at 627–628).
60. In support of this ground, the husband nebulously submitted that the magistrate failed to:
    • (a) make any finding about the correctness of his evidence as to the spouses’ financial circumstances;
    • (b) heed how the second respondent had funded his legal costs;
    • (c) attribute weight to the wife’s failure to sell items of personal property and use the proceeds of sale to pay her legal costs;
    • (d) explain her Honour’s understanding of “the wife’s position”;
    • (e) address the fact that, “even on the wife’s position, the asset pool was negative”; or
    • (f) recognise that the wife had no right to legal representation at trial.
61. None of the husband’s submissions are accepted.
62. The magistrate could not have made any finding at the interim hearing to resolve the factual dispute over the extent of the spouses’ assets and liabilities. Had her Honour done so, she would have been in error because it is procedurally unfair to resolve an integral controversy by summarily accepting some evidence and rejecting other evidence when it all remains untested.
63. The second respondent’s payment of the husband’s legal costs neither added to nor detracted from the spouses’ countervailing arguments. It was consistent with the husband’s assertion of being unable to afford his own legal fees, but it was also evidence of how he used the second respondent as a financial resource from which he derived unilateral benefit. It should not be overlooked that, even though the husband alleged his debts exceeded his assets, the assets he controls still produce income.
64. The magistrate rightly criticised the wife (at [102]–[103]) for not having sold items of personal property and using one-half of the sale proceeds to fund her legal fees, as earlier interim orders made in October 2016 provided. For reasons already addressed, the sale of personal property under the fresh interim orders made by the magistrate in May 2018 will yield cash, which will be held in an account, from which the husband will be capable of re-imbursement of any money he pays to the wife’s lawyers under the Costs Orders.
65. For reasons already given in respect of Ground 7(b), the magistrate did squarely explain the nature of “the wife’s position” at the interim hearing. The “wife’s position” was not acceptance that the “asset pool was negative”, but rather, she doubted it, and further, she was not yet prepared to accept the correctness of the husband’s assertion that it was negative.
66. Lastly, it could hardly be correctly contended the magistrate mistakenly assumed the wife enjoyed a right to legal representation at trial, since she expressly recognised the husband had no such right. The magistrate observed (at [92]–[93]) that, if as a consequence of making the Costs Orders the husband would also have to forego legal representation because of an inability to fund both spouses’ legal costs, then so be it. The magistrate noted that was the “sad reality” for many litigants and her Honour did not regard it as a consideration of significance. The magistrate was conscious of the unfairness of only one party being legally represented in a difficult case involving complex commercial interests and how fairness could be ensured by both spouses either being with or without legal representation.

Grounds 9.1 and 9.2

67. Ground 9.1 contended the magistrate erred by acting upon wrong principles or allowing extraneous or irrelevant matters to guide the exercise of discretion.
68. Ground 9.2 contended the magistrate erred in law by failing to give adequate reasons.
69. The husband’s written summary of argument did not articulate any submissions in support of these grounds, because these were the grounds added to the Amended Notice of Appeal dated 30 August 2018. Nor were any oral submissions made to usefully illuminate the grounds, in which event they are rejected as unmeritorious. The reasons canvassed under the preceding grounds of appeal demonstrate the magistrate made no patent error of principle in making the Costs Orders and gave adequate reasons for the decision to make them.

THE EXPERT WITNESS ORDER

70. The husband asserted the Expert Witness Order was made in error because the magistrate “failed to address the relevant criteria for permission to be granted” enabling the wife to call evidence from an adversarial expert witness (Ground 10).
71. The past practice of allowing parties the unfettered freedom to call conflicting evidence from their own adversarial experts has long passed. The practice has been eradicated in most superior jurisdictions (see, for example, Part 23 of the Federal Court Rules 2011 (Cth) and Part 31 of the Uniform Civil Procedure Rules 2005 (NSW)). The Family Law Rules 2004 (Cth) (“the Rules”) similarly provide (see Part 15.5).
72. The overriding purpose of the Rules is to ensure that, if practicable and without compromising the interests of justice, any necessary expert evidence should be given by a single expert (r 15.42(c)), though a party may apply for permission to adduce evidence from an adversarial expert if it is necessary in the interests of justice (rr 15.42(e), 15.51). Any such application for permission to adduce adversarial evidence should be supported by an affidavit containing prescribed information (r 15.52). Of course, the application of those rules is always liable to be waived if the Court considers it appropriate (r 1.12).
73. In this case, the wife sought permission under r 15.51 to adduce evidence at trial from her adversarial expert witness. Although a copy of the adversarial expert witness’ report was annexed to the wife’s affidavit, she did not expressly address in her affidavit all of the supporting evidence which r 15.52(2) stipulated. Specifically, the husband contended in the appeal there was no evidence about the precise issue to which the adversarial expert’s evidence was directed (r 15.52(2)(c)), nor the reason why the adversarial expert’s evidence was necessary (r 15.52(2)(d)).
74. Nonetheless, the wife did depose to her “concerns” about the reliability of the single expert witness’ report, which gave rise to her challenge to it, and the magistrate summarised those concerns in the reasons for judgment (at [72]–[73]). They were said to be: the report was rudimentary; it had deficiencies, including technical errors; it contained inconsistencies; it provided comment without foundation; insufficient investigations were undertaken; and the single expert incorrectly valued businesses rather than the husband’s shares in the corporations which owned and conducted those businesses. Obviously enough, if those criticisms were eventually made good at trial, the single expert evidence would have been sapped of considerable weight. But, as the magistrate correctly observed (at [76]), they were issues for cross-examination at trial.
75. Given the wife’s disclosure of her adversarial expert’s report and her articulation of the problems she perceived with the single expert’s evidence, most of the considerations prescribed by r 15.52(2) of the Rules were covered by the evidence, even if only by implication, including those under rr 15.52(2)(c) and 15.52(2)(d). The husband could not have been left in any real doubt the wife intended to challenge the methodology adopted by the single expert and the accuracy of his ultimate valuation opinion evidence. The grounds upon which she intended to mount that attack were also sufficiently exposed, both to the husband and the magistrate. Accordingly, the submission that the magistrate “failed to address the relevant criteria” could not be properly maintained. Her Honour did so. The only question reasonably open was whether her Honour considered the relevant criteria sufficiently.
76. One reason which could have militated against the wife being permitted to adduce adversarial evidence was her failure to confront the single expert with her concerns, so he had the opportunity to address them or amend his evidence, which the Rules permitted her to do either in conference or by interrogation (rr 15.64B and 15.65). However, the failure was not overlooked. The magistrate noted she had not done so within the time allowed by the Rules (at [75]). Nevertheless, the magistrate ultimately concluded it was “essential” to the wife’s case, by reason of her stated concerns about the single expert evidence and the complexity of the spouses’ financial circumstances, for her to be permitted to adduce the adversarial expert evidence (at [78]). In reaching that conclusion the magistrate did not give express attention to the considerations catalogued by r 15.52(3), but her Honour did not need to since resort to those considerations is permissive, not mandatory.
77. In the circumstances, the magistrate gave sufficient consideration to the factors which relevantly bore upon the determination of whether the wife ought to have been granted permission to adduce evidence from an adversarial expert. But even if her Honour had not, the husband’s case on the application for leave to appeal would not have been advanced. While it would have been an error of principle to not take into account relevant considerations, the Expert Witness Order made by the magistrate did not cause the husband to suffer substantial injustice. The adversarial expert witness called by the wife at the trial will be amenable to challenge by him in cross-examination and he will have the benefit of the updated report from the single expert witness, which the magistrate ordered be procured in accordance with his application. For those reasons, leave to appeal against the Expert Witness Order should be refused even if the magistrate had erred at law.

CONCLUSION AND ORDERS

78. Leave to appeal is refused and the Amended Notice of Appeal dated 30 August 2018 is dismissed.
79. In the event of the appeal’s dismissal (or, inferentially, the refusal of leave to appeal) the wife sought an order requiring the husband to pay her costs in the sum of $1,500. He sensibly did not resist a costs order of such a modest sum and so an order to that effect is made.

I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Austin & Sutherland JJ) delivered on 6 December 2018.

Associate:

Date: 6 December 2018