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[2011] NSWCA 85
respondent. 1. Summons filed on 16 November 2010 dismissed with costs. 2. Notice of motion filed on 22 November 2010 dismissed with costs.
Two former partners could not agree how to divide several properties they had bought together. The trial judge decided a 50:50 split of the equity in two rural properties was fair after looking at everything each had contributed in money, work and effort. The woman who lost wanted to appeal but filed her papers months too late and the sum she was fighting over was only about $67,000. The Court of Appeal ruled that because the real money at stake was less than $100,000 she needed permission to appeal, and the judges refused to give her extra time because her arguments were unlikely to succeed, she had ignored the trial orders, and further court costs were not justified for such a small dispute.
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Deborah Nanschild and Tracy Pratt were in a de facto relationship during which they rapidly acquired a portfolio of geared residential and rural properties, including two adjoining parcels at Towrang (referred to in the judgment as the XXX and YYY properties to preserve anonymity). The XXX property had been purchased in their joint names in April 2001 for $245,000 with a mortgage advance of $196,000, a $25,000 contribution from Nanschild and a $50,000 further advance contributed by Pratt. After the relationship ended Nanschild remained in exclusive occupation of both Towrang properties and continued to service the mortgage debt, while Pratt ceased contributing to that indebtedness. Nanschild also derived tax benefits by offsetting the interest against her business income.
4 cited instruments linked from this judgment.
Proceedings under s 20 of the Property (Relationships) Act 1994 (NSW) were heard over three days before Pembroke J. His Honour examined the parties' intertwined finances across eight parcels of real estate, an alpaca stud partnership, capital and income contributions, non-financial labour (particularly Pratt's farm management despite illness in 2003) and Nanschild's greater post-separation payments to the joint debt. At [34] the primary judge expressly took into account Nanschild's continuing occupation but considered its benefit was offset by her payments toward the joint indebtedness. He rejected Nanschild's claim for a 75:25 apportionment in her favour, describing it as not reflecting the reality of the evidence. Instead he adopted a holistic assessment rather than an asset-by-asset approach and concluded that a 50:50 division of the Towrang properties was just and equitable. Orders were entered on 12 May 2010. Order 1 required Nanschild to pay Pratt $129,000 within 60 days. Order 6 required Nanschild, within one month of sale of the XXX property, to pay Pratt one half of the calculated equity in the YYY property (producing a payment obligation of $184,995 on the figures used on appeal). Order 7 contained default mechanisms leading to sale, and Order 12 required Nanschild to pay 70 per cent of Pratt's costs.
Nanschild changed solicitors on 30 May 2010 and instructed an appeal on 1 June 2010. A notice of intention to appeal was filed one day after the 28-day period expired. Subsequent attempts to file a notice of appeal on 20 July 2010 and an amended notice on 8 October 2010 were accepted but were necessarily out of time. The amended notice sought to vary Order 6 so that Nanschild would pay only 32 per cent of the YYY equity, producing a differential of $66,598 compared with the primary orders. On 11 October 2010 Hodgson JA refused a stay, noting the amount really in issue appeared to be of the order of $50,000. By early 2011 Nanschild was in substantial breach: she had not paid the Order 1 sum, had allowed mortgage arrears to accumulate, and faced mortgagee sale of the XXX property. Pembroke J then appointed Pratt trustee for sale of the YYY property and ordered vacant possession by 28 February 2011.
On 16 November 2010 Nanschild filed a summons seeking extensions of time and leave to appeal from Orders 6 and 12. On 22 November 2010 she filed a notice of motion seeking a declaration that an appeal lay as of right, or alternatively leave, plus concurrent hearing of the appeal. McColl JA (Campbell JA agreeing) heard the applications on 25 March 2011 and delivered judgment on 8 April 2011 dismissing both the summons and the motion with costs.
McColl JA began with the logical anterior question of competence. Section 101(2)(r) of the Supreme Court Act 1970 (NSW) precludes an appeal as of right unless the judgment involves a matter at issue of $100,000 or more or involves directly or indirectly any claim, demand or question respecting property or a civil right of that value. Drawing on the long line of High Court authority interpreting the materially identical Commonwealth provision in the Judiciary Act 1903 (Cth), her Honour held at [26] that such provisions are "intended to secure that there shall be an appeal as of right only in a case of some substance". Latham CJ in Oertel v Crocker had explained that the paragraph catches cases where no sum is sued for but the judgment (for example an injunction or declaration) still involves a claim capable of monetary valuation. The Court emphasised that the correct measure is the prejudice the appellant would suffer if the judgment stands, or the advantage obtainable on appeal.
Applied to the facts, the relevant prejudice was the $66,598 differential produced by moving from a 50:50 to a 68:32 division of the YYY equity. The gross values of the properties ($515,000 and $547,500) or the remaining equity of approximately $370,000 were not the statutory test. Nor was the "right claimed" the entirety of the property; it was the incremental monetary adjustment sought. Because that figure was below $100,000, leave was required. The notice of motion seeking a declaration of competence was therefore dismissed at [35].
The extension application was then refused after a Gallo v Dawson analysis. The delay was more than six months after the material date. The explanation did not rise above solicitor error and procedural confusion. Critically, the prospects of obtaining leave were assessed as slight. The proposed grounds focused on [34] of the primary judgment, arguing that Pembroke J had failed to give adequate weight to Nanschild's post-separation direct financial contributions of $198,000 compared with Pratt's $39,800. McColl JA noted that [34] had expressly balanced the benefit of exclusive occupation against those payments. Any appeal could not isolate that paragraph; it would require the Court of Appeal to re-examine the entire holistic assessment spanning financial contributions, non-financial labour on the alpaca stud, income applied to living expenses, and the parties' respective capital inputs across all assets. No error in principle was identified, still less an error that would justify appellate intervention in a discretionary judgment. The amount in dispute was modest. Nanschild's ongoing breaches had deprived Pratt of the benefit of the orders and had diminished the equity available to satisfy them. Proportionality therefore told against granting leave. The vested interest of the respondent in the finality of the judgment, reinforced by the statutory monetary filter, outweighed the factors favouring an extension. Both applications were dismissed with costs.
Prior to this decision the law on the monetary threshold in s 101(2)(r) was settled by the High Court authorities cited: Oertel v Crocker, Moller v Roy, Ballas v Theophilos and Attorney-General (Qld); Ex rel Duncan v Andrews. Those cases established that the prejudice to the party seeking relief from the judgment is the touchstone, not the gross value of the property or the total sum of orders. New South Wales decisions such as Hooper v Rowley had already applied that test to family provision claims, measuring the "right claimed by the appellant but denied by the judgment". Aroona Developments had confirmed that the amount by which the appellant sought to reverse the judgment was the relevant figure. Nanschild v Pratt did not change that law; it applied it rigorously to a de facto property adjustment context, emphasising that the value of the underlying real estate or equity pool cannot be invoked to bootstrap an appeal as of right where the incremental adjustment sought is modest.
On the extension of time principles, Gallo v Dawson, Jackamarra v Krakouer and Tomko v Palasty (No 2) already required regard to the length and reason for delay, the applicant's prospects, prejudice to the respondent and the respondent's vested right to retain the judgment. The present judgment reinforced that those factors carry even greater weight when leave, rather than an appeal as of right, is involved, because the legislature has already imposed a monetary filter intended to limit appellate review of modest disputes. The decision also underlined the proportionality principle articulated in Bladwell v Davis: access to appellate review must be kept in proportion to the amount involved and the costs of litigation.
After the decision the law remained unchanged. The judgment stands as a clear illustration of how the prejudice test operates in the specific setting of adjustive orders under the Property (Relationships) Act, and as a reminder that late applications to challenge discretionary property divisions will face an uphill struggle where no question of general principle arises and the sums are modest.
At [26]: "Provisions such as s 101(2)(r)(ii) are 'intended to secure that there shall be an appeal as of right only in a case of some substance'."
Plain English: The $100,000 limit exists so that only genuinely significant cases get an automatic right to appeal; small disputes need permission.
At [29]–[30] (summarising Dixon J in Oertel and the later authorities): "The principle of a provision limiting the right of appeal by reference to the amount involved must go to the prejudice measured in money suffered by parties adversely affected by the judgment … the guiding principle was whether the judgment placed the appellant 'in a position of prejudice [in the amount of the jurisdictional limit] when all the consequences of the judgment are pursued'."
Plain English: Look at how much worse off the person appealing would be if they lose the appeal. Add up every financial consequence of the judgment. Only if that total prejudice reaches $100,000 is the appeal automatic.
At [34]: "As is apparent the extent of the prejudice the appellant claims is $66,598, substantially less than the $100,000 jurisdictional limit. Accordingly the applicant requires leave to appeal."
Plain English: The woman is only arguing about $66,598. That is below the threshold, so she needs the court's permission before she can appeal.
At [38]: "The discretion to extend time is given for the sole purpose of enabling the court to do justice between the parties. This means that the discretion can only be exercised upon proof that strict compliance with the rules will work an injustice upon the applicant."
Plain English: The court only gives extra time if sticking to the rules would be unfair. The person asking for more time must prove real injustice.
At [43]: "It is not sufficient to show that the judgment appealed against was arguably wrong. Access to an opportunity to appeal has to be kept in proportion with the nature of the controversy, the amount involved and the amount which it is appropriate to spend on resolving the dispute."
Plain English: Even if the trial judge might have got it slightly wrong, that is not enough. For small disputes the cost and effort of an appeal must make sense.
At [55]: "The appeal would, in my view, not raise any question of general legal principle. It is not apparent that the primary judge's exercise of his discretion manifestly failed. The amount involved is small."
Plain English: This case is just about the facts of one relationship. The trial judge's overall decision looks reasonable, and fighting over $67,000 is not worth the Court of Appeal's time.
This judgment is triggered whenever a litigant in the New South Wales Court of Appeal seeks to challenge final orders made under the Property (Relationships) Act 1994 (NSW) or analogous discretionary property division regimes and the monetary difference between the orders made and the orders sought on appeal is less than $100,000. It applies with particular force where the appellant has filed late, offers only an explanation of solicitor oversight, remains in breach of the primary orders, and proposes to attack one aspect of a holistic assessment (such as post-separation contributions) without demonstrating that the primary judge ignored mandatory considerations under s 20 or otherwise committed House v The King error. The precedent is also engaged where a party attempts to inflate the "value" of the appeal by pointing to the gross value of real property or the entire equity pool rather than the incremental prejudice caused by the specific order under challenge. Finally, it governs applications for extension of time to seek leave where the underlying dispute is fact-rich, involves offsetting financial and non-financial contributions, and no wider legal principle is said to arise.
The judgment itself carefully applied the High Court authorities without purporting to restate or expand them. It treated Oertel v Crocker, Moller v Roy and Hooper v Rowley as determinative of the prejudice test, Aroona Developments as distinguishable on its facts (because the proof of debt there was for $616,041), and Gallo v Dawson and Tomko v Palasty as supplying the framework for the extension discretion. Subsequent courts have therefore been able to cite Nanschild v Pratt as an illustration of the orthodox application of those earlier authorities rather than as creating new doctrine. Within the judgment itself, McColl JA noted that the principles from those cases "explain the reason for the difference in the language used in subsections (i) and (ii)" of s 101(2)(r) and that "notwithstanding that difference, relevantly for this case, the question whether an appeal lies as of right turns on whether the right claimed by the appellant, but denied by the judgment, prejudices the appellant to the amount of $100,000". That synthesis has guided later single-judge and appellate decisions when parties have sought to characterise the "matter in issue" by reference to underlying asset values rather than the actual adjustment sought. The emphasis on proportionality and the slight prospects of disturbing a carefully reasoned holistic discretionary judgment under the Property (Relationships) Act has also been influential in later leave applications involving modest sums and late filings.
The judgment leaves open precisely how occupation benefits should be quantified when evidence of rental value or opportunity cost is not led by either party; McColl JA recorded that neither party led such evidence at trial, yet the primary judge had still been able to conclude at [34] that the benefit of occupation was offset by mortgage payments. Future cases may need to decide whether a trial judge must obtain expert valuation evidence before offsetting occupation against financial contributions or whether the broad evaluative judgment permitted by s 20 allows a more impressionistic approach.
Another open question is the interaction between ongoing breaches of primary orders and the assessment of prejudice for the purposes of the s 101(2)(r) threshold. Here the applicant's breaches had already diminished the equity available to satisfy the orders, yet the Court still measured prejudice by the face value of the variation sought rather than by any reduced recovery caused by the breaches. Whether a different approach is required where breaches have materially altered the pool remains unresolved on the face of the reasons.
Finally, the judgment does not explore the outer limits of the "holistic" versus "asset-by-asset" debate. While endorsing the primary judge's holistic approach, it does not prescribe when an asset-by-asset analysis might be preferable or how appellate review should proceed when the two methods produce different outcomes but neither is demonstrably erroneous. These questions await a case in which the amount in dispute exceeds the statutory threshold or in which leave is granted.
Judgment 1McCOLL JA: On 22 April 2010 Pembroke J delivered judgment in proceedings commenced by the applicant, Deborah Nanschild, for an adjustive property order pursuant to s 20 of the Property (Relationships) Act 1994 (NSW) (the "PR Act") against the respondent, Tracy Pratt: Nanschild v Pratt [2010] NSWSC 344. 2The applicant was displeased with his Honour's orders. She instructed solicitors to appeal. However as will become apparent, their attempts to do so were attended by procedural irregularities. This judgment addresses the applicant's attempts to resolve those irregularities and secure an appellate review. 3These reasons do not identify the exact address of any of the properties the subject of the proceedings in conformity with the Court's policy of reducing the risk of identity theft through its published judgments.
Statement of the case 4The orders giving effect to the judgment were entered on 12 May 2010 (the "May orders"). Order 6 provided: "That within one month from the settlement of the sale of the property known as XXX Towrang the Plaintiff pay to the Defendant one half of the sum calculated as ($547,500 less remaining capital mortgage balance secured on YYY Towrang following the sale of XXX Towrang) and that such sum shall accrue thereon from the due date at the rate prescribed by the Uniform Civil Procedure Rules , together with such sum including interest as may be outstanding to the Defendant pursuant to order 1." This order reflected his Honour's view (at [56]) that a just and equitable apportionment in respect of the Towrang properties was 50:50. 5Order 1 required the applicant to pay the respondent $129,000 within 60 days. Order 7 provided a mechanism to ensure enforcement of the orders in default of the applicant complying with them by certain dates. Order 12 required the applicant to pay 70 per cent of the respondent's costs. 6Following the hearing before the primary judge, the applicant changed solicitors, her present solicitors having been retained on 30 May 2010. They were instructed to prepare an appeal on 1 June 2010. 7On 11 June 2010 the applicant's solicitors forwarded a notice of intention to appeal to the Supreme Court. On 16 June 2010 the Registrar returned that document (and the cheque which had accompanied it) and advised that the last day within which the applicant could have filed such a notice was 28 days after the "material date". That time had expired on 9 June 2010. The letter advised that when the applicant was in the position to file her appeal, or application for leave to appeal, she would have to seek an extension of time. 8On 16 July 2010 the applicant's solicitors forwarded a copy of the notice of requisition, a notice of appeal and a filing fee to the Registry. The notice of appeal was accepted for filing on 20 July 2010. It sought a variation to Order 6 such that the applicant pay the respondent an amount equal to 38 per cent of the equity in the YYY property. 9On 11 October 2010 the applicant sought a stay of the primary judge's orders. Hodgson JA heard the application. His Honour recorded the problem for the applicant which gave rise to the application for the stay as being that "in accordance with those orders, the appellant is now under a requirement that a second property be sold that the appellant does not wish to have sold". It was put to his Honour that the appeal was brought to obtain a reduction of the order of $50,000 of the amount to be paid by the applicant to the respondent. His Honour noted that the applicant's affidavit did not set out why she was unable to pay the amount the subject of the Order 1, or why she had permitted amounts secured by a mortgage to increase above a limit prescribed by the primary judge. His Honour then said: "4. In those circumstances, I am not prepared to stay the order of the primary judge until the hearing of the appeal, or rather the application for leave to appeal, in that it does appear that the amount really in issue of this matter is of the order of $50,000." 10His Honour thought it appropriate, however, to give the applicant "one last chance to avoid the sale of the second property". To that end he extended the time for compliance with Order 1 to 30 days from 11 October 2010, with payment to include interest until the date of payment. His Honour also ordered that provided the applicant brought "the balance outstanding under the mortgage back to $675,000 within 10 days of [11 October 2010] the appellant should not be in such breach as to require [her] to sell the YYY property." He further ordered that if those matters were not complied with by the dates he had specified, the default provision in Order 7 would take effect. 11On 8 October 2010 the applicant's solicitor forwarded an amended notice of appeal to the Registry. It sought to vary Order 6 such that the applicant pay to the respondent an amount equal to 32 per cent of the equity in the YYY property. 12On 16 November 2010 the applicant filed a summons seeking an extension of time for the filing and service of the summons, an extension of time for filing and serving the notice of appeal "dated 16 July 2010" [sic, the correct date was 20 July 2010] and leave to appeal from Orders 6 and 12. 13On 22 November 2010 the applicant filed a notice of motion seeking an extension of time for the filing and service of the amended notice of appeal, a declaration that an appeal as of right lay from the primary judge's orders rather than pursuant to leave, alternatively an order that the applicant be granted leave to appeal from Orders 6 and 12. The latter prayer for relief duplicated that sought in the 16 November summons. The notice of motion also sought a concurrent hearing of the motion and the appeal. As is apparent, the Court has not acceded to the latter application. 14The matter came back before the primary judge in early 2011 on the respondent's application because of what his Honour described as the applicant's "substantial non compliance" with his orders: ( Nanschild v Pratt, Supreme Court of New South Wales, unreported, 4 February 2011). 15According to the respondent's written submissions in this Court, which the applicant did not dispute, by that stage the applicant was in substantial breach of the May 2010 orders. She had failed to pay the sum the subject of Order 1 and had also failed to comply with her obligation to maintain mortgage payments on the subject properties pending sale, with the consequence that the XXX property was to be the subject of a sale by the mortgagee exercising its power of sale. The applicant remained in possession of the YYY property and, according to his Honour, there was disagreement as to its sale. His Honour thought it "commercially desirable that the sale of the YYY property be effected as soon as reasonably possible so that the defendant may receive satisfaction of the monetary orders ... in her favour." 16His Honour was conscious of the desirability of avoiding a mortgagee sale of the YYY property if possible. He had "no confidence in any continuing cooperation between the [applicant] and the [respondent]". He appointed the respondent as the trustee for sale of the YYY property and ordered the applicant to give vacant possession of it on or before 28 February 2011. He ordered the applicant to pay the respondent's costs of the notice of motion, which he described as having been "brought to bring finality to the [May] orders, and was designed to enforce those orders".
The present applications 17Section 101(2)(r) of the Supreme Court Act 1970 (NSW) relevantly provides: "(2) An appeal shall not lie to the Court of Appeal, except by leave of the Court of Appeal, from: ... (r) a final judgment or order in proceedings of the Court, other than an appeal: (i) that involves a matter at issue amounting to or of the value of $100,000 or more, or (ii) that involves (directly or indirectly) any claim, demand or question to or respecting any property or civil right amounting to or of the value of $100,000 or more." 18There are before the Court two applications. In logical order they are first, the applicant's application for an extension of time to file her notice of appeal, secondly, and in the alternative, the applicant's application for an extension of time in which to file and serve a summons seeking leave to appeal and her application for leave to appeal. Determination of the first application raises the question whether, as the applicant contends, the putative appeal falls within s 101(2)(r)(ii) of the Supreme Court Act so that leave to appeal is not required.
Competence: submissions 19In order to understand the question of the competence of the appeal, it is necessary to understand something more about the proceedings. 20As the primary judge explained (at [2]): "During the course of [their] relationship [the applicant and the respondent] intertwined their financial affairs to a considerable degree and in a short space of time acquired jointly, or in the name of the plaintiff, a remarkable number of properties. All of the properties were geared and substantial deductions against gross income were obtained as a result of the interest payments and associated borrowing expenses." 21Two of the properties the parties acquired were what I have described as the XXX and YYY properties at Towrang. The primary judge found (at [12]) that the XXX property "was purchased in the joint names of the plaintiff and the defendant in April 2001" for $245,000 which: "...was funded by a mortgage advance of $196,000 to the plaintiff and the defendant; a sum of approximately $25,000 contributed by the plaintiff following the sale of Downer, which I have already explained; and a sum of $50,000 contributed by the defendant by a subsequent further advance pursuant to the mortgage secured over her Florey property." 22Following the breakdown of their relationship the applicant remained in possession of the XXX and YYY properties. As to this, the primary judge said: "34 I have taken into account the plaintiff's continuing occupation of the Towrang properties since separation to the exclusion of the defendant, but I did not think any allowance is necessary because the benefit she has received from occupation has been offset by payments made by her towards the joint indebtedness of the parties. The defendant, for understandable emotional reasons, has not contributed to that indebtedness for sometime." 23The applicant's solicitor annexed to his affidavit a schedule identifying possible divisions of the equity in the YYY property. It is unnecessary to recount how he arrived at these figures, but, on the assumption that the remaining equity in that property after deduction of an outstanding line of credit was $369,990, the schedule set out how that equity would be divided between the parties assuming different ratios of distribution. Under the current orders which, as I have said, provide for a 50:50 division of the equity in the Towrang properties, the applicant is required to pay the respondent $184,995. However if Order 6 was amended as sought in the amended notice of appeal by requiring the applicant to pay the respondent 32 per cent of that sum, the applicant's share of the equity would be $251,593 and the respondent's $118,397. There is a differential of $133,196 between those two figures. On that basis the applicant's solicitor contended the matter in issue between the parties involved $100,000 or more. 24However the effective adjustment to the amount the applicant is presently required to pay the respondent ($184,995) and that she would be required to pay on a 68:32 basis ($118,397) is $66,598. The applicant accepted on that basis that the appeal was a small one. However Mr S Rueben, who appeared for the applicant, argued that leave to appeal was not required because the case was governed by s 101(2)(r)(ii). He submitted that the matters which indicated that s 101(2)(r)(ii) operated were first, the value of the properties themselves (by which I understood him to mean the value of the XXX ($515,000) and YYY properties ($547,500)) and secondly, the remaining equity in those properties which would be of the order of $370,000 or, alternatively, the differential on adjustment between the parties. As to the latter point he relied on the different ratios of distribution annexed to his solicitor's affidavit to which I have already referred. Mr Reuben accepted that there was no particular logic to the proposition that on appeal the 50:50 distribution the primary judge had determined was just and equitable (s 20, the PR Act) might be altered to 68:32. However he based his submissions as to competence on that mooted adjustment and it is appropriate to consider the argument in that light. 25Mr G Foster, who appeared for the respondent, submitted that the matter was one which required leave to appeal because it involved a matter at issue less than $100,000. Although this is the language of s 101(2)(r)(i), Mr Foster's argument, as I understood it, was based on the premise that substantially the same test applies under s 101(2)(r)(ii). He argued it was the sum of $66,598, being the extent of the prejudice of the primary judgment against which the applicant sought to relieve herself, which determined the question whether or not she required leave to appeal: Moller v Roy [1975] HCA 31; (1975) 132 CLR 622 (at 626) per Barwick CJ. He also pointed to the fact that, as I have earlier noted, counsel for the applicant accepted before Hodgson JA that the appeal involved a matter of about $50,000 and was, accordingly, one to which s 101(2)(r) applied and contended that a similar concession had been made on 20 September 2010, which had led to directions as to the filing of the summons seeking leave to appeal.
Competence: decision 26Provisions such as s 101(2)(r)(ii) are "intended to secure that there shall be an appeal as of right only in a case of some substance": Oertel v Crocker [1947] HCA 40; (1947) 75 CLR 261 (at 265) per Latham CJ. Oertel v Crocker concerned s 35(1)(a)(2) of the Judiciary Act 1903 (Cth) which was in substantially the same terms as s 101(2)(r)(ii), save that it referred to a "judgment, ... which - ...(2) involves directly or indirectly any claim [etc] ...to or of the value of Three hundred pounds", whereas s 101(2)(r)(ii) refers to "an appeal...(ii) that involves...". That difference does not, in my view, detract from the force of the Chief Justice's observations or from the relevance of the line of authority to which I will shortly refer concerning the effect of s 35(1)(a)(2). Section 35(1)(a)(1), to which some reference is made in what follows, permitted an appeal from "[e]very judgment ... which - (1) is given ... for or in respect of any sum or matter in issue amounting to or of the value of Three hundred pounds." 27As Latham CJ observed ( Oertel, at 265), s 35(1)(a)(2) was an endeavour to deal with "cases in which there [was] no sum or matter in issue and yet something of the value of 300 may be involved directly or indirectly in the judgment." He gave as illustrations of the sort of cases caught by that provision, "a judgment for an injunction, for specific performance of a contract, for administration of a trust, for a declaration of right, or for the issue of a prerogative writ" in which "the judgment is not given for a sum or matter at issue between the parties [b]ut nevertheless the issue between the parties - described as a claim, statement or question - may be capable of an estimate of value." Order 6 does not, in my view, fall within this class of case. 28Latham CJ concluded (at 267) that the effect of s 35(1)(a)(2) was that if success on appeal would lead to the appellant being "better off by at least 300, then the judgment appealed against is a judgment involving a claim &c. respecting property or a civil right amounting to the value of 300." Starke J (at 270) also concluded that "the test was whether the person applying for leave to appeal was prejudiced by the judgment to the extent of" the jurisdictional limit. 29Dixon J (at 272) also held that "[t]he principle of a provision limiting the right of appeal by reference to the amount involved must go to the prejudice measured in money suffered by parties adversely affected by the judgment." He discerned that as being the policy of s 35(1)(a)(1) and (2), pointing out (footnote omitted): "The parallel provisions of the various colonial and provincial statutes and Imperial Orders in Council defining rights of appeal to the Privy Council are variously expressed, but for the most part they have been thus interpreted and applied. In Allan v. Pratt Lord Selborne agreed in principle with the rule, which had already been laid down, 'that the judgment is to be looked at as it affects the interests of the party who is prejudiced by it and who seeks to relieve himself from it by appeal.' He continued: 'If there is to be a limit of value at all, that seems evidently the right principle on which to measure it.' " His Honour (at 274 - 275) expressed some qualifications to his statement which are not relevant to the present application, but concluded that "generally speaking ... a satisfactory guide will be found if the prejudice sustained by the appellant under the judgment is considered or the advantage which he might obtain by the appeal." 30Dixon CJ, Webb and Fullagar JJ considered the qualification to which Dixon J had referred in Oertel in Ballas v Theophilos (No 1) [1957] HCA 49; (1957) 97 CLR 186 (at 193 - 196) in terms which do not require consideration. It is sufficient to note that their Honours (at 193) affirmed that the guiding principle was whether the judgment placed the appellant "in a position of prejudice [in the amount of the jurisdictional limit] when all the consequences of the judgment are pursued." The effect of Oertel, Ballas and subsequent High Court authority on s 35(1)(a)(2) was that "speaking generally, the provisions of that section did not authorize an appeal as of right against an order which, while it stood, did not prejudice the appellant to the prescribed monetary extent": Attorney-General (Qld); Ex rel Duncan v Andrews [1979] HCA 24; (1979) 145 CLR 573 (at 580 - 581) per Gibbs J (as his Honour then was). 31In Moller v Roy (at 626) Barwick CJ also held that: "Where the appellate formula contains the expressions 'matter in dispute' and 'sum or value appealed for' the right to appeal is determined by the extent of the prejudice which the judgment, against which the appeal is brought, produced to the party seeking to relieve himself of it. The extent of that prejudice will govern the right of appeal." 32Ipp JA (with whom Sheller and Bryson JJA agreed) applied Ballas in Hooper v Rowley [2004] NSWCA 398 (at [16]) to hold that the measure of value of an appellant's right for the purposes of s 101(2)(r)(ii) was "the right claimed by [the appellant] but denied by the judgment." In that case, which involved proceedings under the Family Provision Act 1982 (NSW), the appellant's notice of appeal sought an order that she be paid $80,000 out of the estate of her late mother. Ipp JA held (at [17]) on that basis that the proceedings did not "involve a claim, demand or question to or respecting any property or civil right amounting to or of the value of $100,000 or more" and, accordingly, leave to appeal was essential. 33The applicant's written submissions relied upon Aroona Developments Pty Limited (In Liq) v Killen [2004] NSWCA 363; (2004) 50 ACSR 668. In that case Ipp JA held that leave to appeal was not required for an appeal seeking to challenge a judgment of Austin J which had the effect of approving a decision of a liquidator who had refused to admit the putative appellant's proof of debt in the amount of $616,041. The respondent argued the appeal required leave because, even if successful, the dividend the appellant might recover as a creditor was likely to be substantially below $100,000. Ipp JA held (at [22]), applying Oertels and Moller v Roy (at 626) that the "matter in issue" was the amount by which the notice of appeal sought to reverse the effect of Austin J's judgment, $616,041. As is apparent his Honour determined the matter by reference to s 101(2)(r)(ii) however his Honour clearly regarded the statements in Oertels and Moller as also germane to determining whether s 101(2)(r)(ii) is satisfied. Aroona Developments does not assist the applicant. 34These authorities explain the reason for the difference in the language used in subsections (i) and (ii) of s 101(2)(r). They also establish that notwithstanding that difference, relevantly for this case, the question whether an appeal lies as of right turns on whether the right claimed by the appellant, but denied by the judgment, prejudices the appellant to the amount of $100,000. As is apparent the extent of the prejudice the appellant claims is $66,598, substantially less than the $100,000 jurisdictional limit. Accordingly the applicant requires leave to appeal. 35The notice of motion filed on 22 November 2010 should be dismissed.
Extension of time 36Uniform Civil Procedure Rules 2005 ("UCPR") 51.10 provides: "51.10 Filing and service of summons seeking leave to appeal (1) A summons seeking leave to appeal must be filed and served on each necessary party: (a) if a notice of intention to appeal has been filed and served under this Part-within the time allowed under rule 51.9, or (b) in any other case-within 28 days after the material date. Note. A person who files and serves a summons seeking leave to appeal must also file or lodge a copy of the summons with the court below-see rule 51.42. (2) The Court may extend time under subrule (1) (b) at any time. Note. Rule 51.9 provides for the extension of time for the filing and service of a relevant originating process where a notice of intention to appeal has been filed and served under this Part. (3) An application under subrule (2) may be included in the summons seeking leave to appeal. (4) A summons seeking leave to appeal must state whether the appellant has filed and served a notice of intention to seek leave to appeal, and the date the notice was served on the prospective respondent or on the last of the prospective respondents." 37A notice of intention to appeal must be filed and served on each prospective respondent within 28 days after the material date: UCPR 51.8. That did not occur in this case. The applicant was therefore required to file and serve any summons seeking leave to appeal within 28 days after 12 May 2010. As is apparent, that did not occur either. The summons seeking leave to appeal was filed on 16 November 2010, just over six months after the material date. Accordingly, as the applicant recognised in her summons, she needed an extension of time in which to file her summons seeking leave to appeal. 38The discretion to extend time is given for the sole purpose of enabling the court to do justice between the parties. This means that the discretion can only be exercised upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458 (at 459) per McHugh J. 39The underlying premise to these propositions in Gallo (as is made apparent in Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516 (at [7]) per Brennan CJ and McHugh J) is that the Court's approach to an application to extend the time for filing an appeal from a judgment determining substantive rights (or here to seek leave to appeal) "at any time" recognises that "the respondent to the application has a vested right to retain the judgment" proposed to be the subject of appeal: Jackamarra v Krakouer (at [4]); Tomko v Palasty (No 2) [2007] NSWCA 369 (at [55]) per Basten JA (Hodgson and Ipp JJA agreeing). 40Tomko concerned an application for an extension of time to institute an appeal. The necessity to have regard to the vested right to retain the judgment in the case of an application for an extension of time applies, in my view, with even more force when the application is one for an extension of time to file a summons seeking leave to appeal. In such cases, the general principle as to the finality of judgments has been reinforced by the legislature imposing a monetary limit on the applicant's right to challenge a judgment. 41In Tomko (at [55]) Basten JA identified four factors as of general relevance to an application to extend time within which to appeal: the length of the delay, the reason for the delay, whether the applicant has a fairly arguable case and the extent of any prejudice suffered by the respondent to the application. 42In the context of an application for an extension of time to seek leave to appeal, the "fairly arguable case" factor ( Tomko at [55]) concerns the prospect of obtaining leave to appeal if the extension is granted: Komba v National Australia Bank Limited [2010] VSCA 232 (at [29]) per Emerton AJA (Nettle JA agreeing). 43In cases involving leave to appeal, it is also necessary to bear in mind that it is not sufficient to show that the judgment appealed against was arguably wrong. Access to an opportunity to appeal has to be kept in proportion with the nature of the controversy, the amount involved and the amount which it is appropriate to spend on resolving the dispute: Bladwell v Davis [2004] NSWCA 170 (at [23]) per Bryson JA (Ipp and Stein JJA agreeing). 44The applicant bears the burden of persuading the Court that there are proper grounds to grant her application for an extension of time: Tomko (at [80]). Mr Reuben submitted that the justice of the case would dictate that an extension of time to seek leave to appeal should be granted and that there was no real prejudice caused by the delay because the XXX and YYY properties had still not been sold. 45The substantive argument Mr Reuben advanced as attracting leave to appeal was that the primary judge erred in failing to take into account, or address, the applicant's post-relationship financial contributions to the Towrang properties. He submitted that his Honour's failure in this regard had the effect that he failed to undertake the task required by s 20 of the PR Act as explained in Howlett v Neilson [2005] NSWCA 149; (2005) 33 Fam LR 402 (at [25]). That failure, he argued, meant that his Honour's exercise of his s 20 discretion had miscarried. 46The applicant said that she led evidence at the hearing that her direct financial contributions to the loan facility over the XXX and YYY properties following the breakdown in the breakdown in the parties' relationship up to hearing was $198,000, while the respondent's direct financial contributions over the same period was $39,800. She said she also led evidence at the hearing that she had made all direct financial contributions to the properties' loan facility from the commencement of that facility until December 2005 in the sum of $35,000. She complained that the primary judge undertook no specific accounting to reconcile the significant financial differential between the parties after the relationship breakdown. She accepted that his Honour appeared to have addressed this matter in paragraph [34], which I have already set out (see [21]). 47Mr Reuben argued that if it could be inferred from paragraph [34] that the primary judge had found, effectively, that the value of her occupation of the Towrang properties was $198,000 and that that should be debited from her direct financial contribution, his Honour had overlooked the fact that the respondent was in occupation of the YYY property until about June 2009 and had not recognised the benefit she obtained from that occupation. He contended that it should be found that the parties' respective occupations of the properties, post-relationship breakdown, cancelled each other out and that the $198,000 "extra contribution" by the applicant should have been credited to her as a direct financial contribution. 48Mr Reuben did not appear at the trial, but Mr Foster who did said neither party led any evidence as to the value of their respective occupancies. He also said that the evidence at trial was that the applicant (who ran her business from one or both of the Towrang properties) set off the interest she paid on the mortgage against her income tax - and generally derived substantial benefits from remaining in occupation. The applicant's written submissions indicated she wishes to complain on appeal that the primary judge either misstated or overlooked other direct financial contributions amounting to $32,191. Mr Reuben did not address these amounts orally. In my view Mr Foster's submissions substantially address each of them in a manner indicating they were adequately addressed by the primary judge. 49Finally, the applicant complains that the primary judge did not adequately explain how the parties' competing non-financial contributions led him to "discount or ignore the [applicant's] larger financial contributions and find the interest in the Towrang properties were just and equitably 50:50". 50Mr Foster strongly opposed the application for an extension of time. He pointed to the history of the proceedings, in particular the fact that the applicant is in substantial breach of the May 2010 orders in her failure to comply with Order 1 and because of her default in her obligation to maintain the payments to the mortgagees pending sale. He drew attention to the enforcement orders the primary judge made on 4 February 2011. He submitted that the applicant's delay was substantial and cumulative in that various directions for filing appropriate initiating process had been ignored and no proper explanation, other than incompetence, had been proffered for the delay. He argued that the applicant's prospects of success in challenging a discretionary judgment under the PR Act were slight, if not non-existent, having regard to the accepted principles of appellate review of such a judgment.
Extension of time: decision 51There is much force in the respondent's submissions that the history of the proceedings and the applicant's conduct militate against granting an extension of time. I would not determine the application for an extension of time on that basis alone however. This should not be understood as condoning the applicant's non-compliance with the rules nor her failure to comply with the May 2010 orders. However it is also necessary to consider what the interests of justice require and that, as I have said, requires consideration of her prospects of obtaining leave to appeal. 52The primary judgment was delivered after a trial of three or so days. I have already referred to the complexity of the parties' financial affairs. It should also be noted that the respondent, in particular, advanced a case at trial that there should be a 50:50 split of the couple's financial affairs because of her non-financial contributions. In this respect his Honour concluded (at [38]) that the respondent and her family had made "many non-financial contributions, particularly after the parties owned the Towrang properties and the Alpaca stud." He was satisfied that the respondent "was, for practical purposes, the primary farm manager and undertook the majority of the physical labour required for maintenance of the farm, even taking into account [an] illness which she suffered in 2003." His Honour also recognised (at [40]) that the applicant handled all the finances and was permitted to do so by the respondent. He accepted (at [41]) that the applicant contributed more of her income to the relationship in connection with the day-to-day living, accommodation and borrowing expenses of the parties [and] was the dominant partner in many respects, although her capital contributions were not as great as those of the [respondent]." 53The applicant had sought an apportionment of the divisible pool of property in her favour in the ratio of 75:25. The primary judge said (at [5]) he had "no hesitation in rejecting [her] proposed apportionment, which in my view does not reflect the reality of the evidence." After examining the financial dealings of the parties in eight parcels of real estate (two of which were the Towrang properties), their involvement in the Alpaca partnership, Indigo Alpacas, the applicant's continuing occupation of the Towrang properties and reaching conclusions as to their respective financial and non-financial contributions, the primary judge concluded (at [51]) that except in the case of two properties the applicant's "greater income contributions are ... offset by the defendant's greater capital contributions and her non-financial contributions." He expressed the view (at [52]) that it was appropriate to adopt a holistic approach in the assessment of the parties' relationship and their respective contributions" rather than (at [53]) "a reductionist, asset by asset, approach". His Honour then approached the exercise of dividing the pool of property on the basis that there were three categories: the Towrang properties and the line of credit secured over them, the proceeds of sale retained by the applicant from two properties and finally funds retained by the applicant in a bank account at separation. 54As is apparent, the applicant's submissions as to the interest of justice in the context of the extension of time focussed on her complaints about paragraph [34] of the primary judgment. However an appeal from the primary judgment could not merely focus on the applicant's post-relationship contribution to the Towrang properties. Rather, the Court would have to consider the entirety of the matters considered by the primary judge, including the parties' financial and non-financial contributions to determine whether the applicant has demonstrated error which would warrant intervention with a discretionary judgment and, if she had, what, in all the circumstances, a just and equitable apportionment would be. 55There was no controversy that the primary judge was entitled to take the applicant's post-relationship contributions to the Towrang properties into account. His Honour did so at [34]. The appeal would, in my view, not raise any question of general legal principle. It is not apparent that the primary judge's exercise of his discretion manifestly failed. The amount involved is small. Further, the applicant's failure to comply with Order 1 has deprived the respondent of the benefit of Order 1 which the applicant does not seek to challenge on appeal. Her failure to maintain the mortgage payments in respect of the Towrang properties, it might be inferred, has diminished the value of the properties from which the respondent was to secure the benefit of Order 6. 56This is not a case, like Gallo v Dawson in which McHugh J concluded (at 459) that the applicant had made "a conscious decision not to appeal until she had satisfied herself that she could succeed in an appeal". The respondent has been on notice since June 2010 that the applicant sought to challenge the orders. However that does not detract from the applicant's obligation to comply with rules as to appeal. 57In my view having regard to the slight prospects of the applicant obtaining leave to appeal, the amount involved in any such appeal, the costs which would be incurred if an appeal was to proceed and the applicant's conduct since the May 2010 orders, the Court should not grant an extension of time in which the applicant can file her summons seeking leave to appeal.
Orders 58I propose the following orders:
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 April 2011
Nanschild
Pratt
[1990] HCA 30
[2010] VSCA 232
(1979) 145 CLR 573
(1957) 97 CLR 186
(1990) 64 ALJR 458
(2005) 33 Fam LR 402
(1998) 195 CLR 516
(1975) 132 CLR 622
(1947) 75 CLR 261
1. Summons filed on 16 November 2010 dismissed with costs. 2. Notice of motion filed on 22 November 2010 dismissed with costs.