· 2022-02-18T17:08:59+0000 · 762 posts

Appellant Opposes Interim Property Orders

Cantoni & Cantoni [2022] FedCFamC1A 11 (7 February 2022)

Interim property orders were made by the primary judge ordering the sale of the subject property. The appellant contends primary judge gave inadequate reasons for rejecting the tender of an expert report when considering an interim application for orders for the sale of a property which is the principle asset of the parties. The Court assessed whether or not leave to appeal should be allowed.

Facts:

The appellant wife (“the appellant”) seeks leave to appeal from orders made by the primary judge on 2 July 2021 pursuant to which the primary judge ordered the partially constructed development at D Street, Suburb E (“the property”) to be sold.

The appellant argued that any sale of the property in its current incomplete state was likely to derive no return to the parties in their s 79 of the Family Law Act 1975 (Cth) application whereas a sale of the property, once building works were completed, would likely generate an amount sufficient to meet all creditors and provide a surplus for division among the parties.

The appellant contended that she had arranged with a builder to perform all necessary works so as to complete the development of the property, at a particular price, and who was willing to wait until settlement of the sale of the property before seeking payment for the building works. She also contended that her father would guarantee her obligations under the building contract.

This proceeding was commenced in 2018. It was common ground that the property is the parties’ major asset. They are joint proprietors. The appellant and the respondent commenced living together in 1996 or thereabout, they married in 2002 and separated in 2018. Prior to their separation, in 2016 the appellant and the respondent entered into a building contract with F Pty Ltd for the development of the property.

In late 2016, F Pty Ltd commenced building works. Following a disagreement between the respondent and F Pty Ltd about the quality of workmanship to that date, in 2017 F Pty Ltd ceased works at the property after which no further payments to F Pty Ltd were made. In 2018, the appellant commenced property settlement litigation in what was then the Family Court of Australia. On 14 September 2018, orders were made for the appointment of an independent trustee to take control of the completion of building works at the property and to sell the property in its completed state.

On 13 August 2019, the parties agreed to vary the 14 September 2018 orders by consenting to the appointment of Mr J, an architect, to act as the contract administrator for the completion of construction works. Mr J’s involvement in the project ceased in late 2019, since which time works at the property have not progressed. By Application in a Case filed 28 January 2021, the respondent sought that the parties jointly appoint a real estate agent, to sell the property. If the parties cannot agree on the appointment of a real estate agent, then either party may write to the President of the Real Estate Institute of Victoria (“REIV”) with a request that a real estate agent be nominated by the President (or his nominee) of the REIV and such nominated real estate agent will sell the [the property].

If the President of REIV is unable or unwilling to nominate a real estate agent, then either party can make an application to the Court for the appointment of a real estate agent. On the other hand, the appellant sought that the Wife have liberty to rely on the evidence of [Mr B] as to his opinion regarding the value of [the property]. In the alternative to order 1, and prior to any interim hearing on the Husband 's Application in a Case filed 1 February 2021, that a single expert be appointed. In the event the parties do not agree on a single expert within 7 days of the date of the Order that the Wife nominate three real estate experts within 7 days, and thereafter within 7 days of the nomination the Husband elects one of the nominated experts. Should the Husband fail to nominate an expert within 7 days the Mother is a liberty to elect the single expert from one of the three so nominated.

The respondent’s Application in a Case filed 28 January 2021 came before a senior registrar on 12 March 2021. The appellant applied to adjourn the hearing of that Application. The appellant’s adjournment application was refused and the senior registrar made orders in accordance with the respondent’s application. The effect of those orders was that the property would be sold forthwith in its partially completed condition for the best price reasonably obtainable. By Application in a Case filed on 17 March 2021, the appellant sought orders for the review of the senior registrar’s orders made on 12 March 2021.

The appellant’s solicitor, who appeared before the primary judge, sought leave to rely on the affidavit of Ms U. The primary judge refused that leave. The only reasons provided by the primary judge in refusing to allow the appellant to rely on Ms U’s affidavit was that “she’s not a single expert.”

Issue:

Whether or not the court should grant the leave to appeal.

Applicable law:

Family Law Rules 2004 (Cth) r 15.52 - provides that a party may seek permission to tender a report or adduce evidence from an expert witness by filing an Application in a Case.

Fleming v The Queen (1998) 197 CLR 250; [1998] HCA 68 - provides that the failure of a trial judge to provide adequate reasons makes it impossible for the party aggrieved by the ruling and for an appellate court to determine whether the ruling was based on an error of law and, in those circumstances, the failure to give reasons will itself constitute an error of law.

Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34 - provides that the application for leave must demonstrate that the first instance decision is attended by sufficient doubt as to warrant appellate interference. Additionally, the applicant for leave must show that substantial injustice would result if leave to appeal were refused, supposing the decision at first instance were wrong.

Police Federation of Australia and Another v Nixon and Another (2011) 198 FCR 267; [2011] FCAFC 161 - provides that the obligation to give reasons varies with the circumstances of the case.

R v McCullagh (No 3) (2007) 179 A Crim R 334; [2007] VSCA 293 - provides that the reasons provided must disclose the process of reasoning and allow a party and, indeed, an appellate court, to assess whether the judge has made an error of law.

Webb v R (1994) 13 WAR 257; 74 A Crim R 436 - provides that while there is generally no need to give detailed reasons when exercising a procedural discretion such as, whether in the context of this case the affidavit of Ms U should have been admitted into evidence, the reasons provided must nonetheless disclose the process of reasoning and allow a party and, indeed, an appellate court, to assess whether the judge has made an error of law.

Analysis:

The primary judge failed to provide adequate reasons when refusing the appellant leave to rely on the valuation evidence of Ms U as set out in Ms U’s affidavit filed 13 May 2021. That error renders the primary judge’s orders of 2 July 2021 attended by sufficient doubt as to warrant appellate intervention. Substantial injustice will result if leave to appeal is refused.

The primary judge in this matter was placed in an invidious position as a result of the appellant not having complied with the requirements of the then applicable Family Law Rules 2004 (Cth) (“the Rules”). First, the appellant did not file a formal application seeking leave to rely on an adversarial report. Second, the appellant failed to support such an application with an affidavit addressing the requirements of the Rules as required of a party seeking to rely upon an adversarial report. Permitting the appellant to rely upon the report of Ms U in the circumstances of the interim hearing would have deprived the respondent of rights that the respondent had, to ask questions of the witness

The primary judge did not, in giving reasons for rejection of the report of Ms U, refer to those matters. Instead, the reason provided by the primary judge for rejecting the report of Ms U was solely that she was not “a single expert.”

Conclusion:

The Court granted the leave to appeal. The appeal is allowed. The orders of the primary judge made 2 July 2021 are set aside. The review of the senior registrar’s orders made 12 March 2021 must be remitted for rehearing by another judge of Division 1 of the Federal Circuit and Family Court of Australia. The Court grants to the appellant a costs certificate.

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