Tobin v Ezekiel

Judgment 1THE COURT: On 13 September 2012 the Court delivered judgment in this appeal. The orders made included orders allowing in part the appeal from orders made by Brereton J rejecting the appellants' applications for provision under the Family Provision Act 1982. In relation to those applications, the Court designated as notional estate, the property at Beach Road, Bondi Beach, subject to existing registered mortgages, and ordered that provision be made for the second appellant, Clara, in the amount of $225,000. There was no order making provision for the first appellant, Evelyn. The leading judgment was that of Meagher JA with whom Basten and Campbell JJA agreed: Tobin v Ezekiel [2012] NSWCA 285. 2The evidence before this Court estimated the value of that property in early 2012 at between $1.9m and $2.3m. The total amount secured by registered mortgages was between $1.08m and $1.09m: at [113], [121]. 3By a notice of motion filed on 19 September 2012, the appellants seek to reopen the appeal insofar as it deals with their claim under the Family Provision Act. If the Court permits that reopening, they seek orders that provision be made for Evelyn and that increased provision be made for Clara. 4In support of that motion the appellants rely on three affidavits. They are affidavits of Grant Watson, sworn 15 October 2012 and 5 November 2012, and of Evelyn Tobin, sworn 14 October 2012. The first affidavit of Mr Watson contains analysis and argument concerning the legal costs incurred by the respondents, the amounts borrowed by the respondents and secured by registered mortgages over the property and the question whether those costs and borrowings were to be taken into account when considering the financial circumstances of the parties. That analysis refers to material which was not in evidence before this Court, although that material appears to have been available to the appellants immediately after the hearing of the appeal and when further evidence and submissions were received. It also contains analysis and argument as to the financial circumstances and needs of the appellants and respondents, Morris and Albert. It argues that a significantly greater provision of $450,000 should be made for Clara; acknowledges that the needs of Albert include the provision of owned accommodation; argues that any assessment of Morris' financial circumstances should take account of a claim against his former wife having a potential value in excess of $700,000; and argues, on the basis of Evelyn's recent affidavit, that an unspecified provision should be made for her. 5The second affidavit of Mr Watson contains calculations as to the amount of interest which may have been payable and capitalised on the borrowings of the respondents. It also contains further argument concerning the assets and financial position of Morris. The affidavit of Evelyn Tobin contains more recent information as to her financial circumstances and those of her husband. 6The appellants' application is made under the Uniform Civil Procedure Rules 2005 (UCPR) Rule 36.16. Sub-rule (3A) provides that if a motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the Court may entertain the matter as if the judgment or order had not been entered. Under sub-rule (1) the Court may set aside or vary a judgment or order if the notice of motion is filed before the entry of judgment or order. The appellants' motion was filed within 14 days of entry of the Court's judgment on 13 September 2012. 7The circumstances in which the power to reopen a final judgment may be exercised have been addressed by the High Court in a number of cases including Wentworth v Woollahra Municipal Council [1982] HCA 41; 149 CLR 672; State Rail Authority of New South Wales v Codelfa Construction Pty Ltd [1982] HCA 51; 150 CLR 29; Smith v New South Wales Bar Association [1992] HCA 36; 176 CLR 256; Autodesk Inc v Dyason (No 2) [1993] HCA 6; 176 CLR 300; Elliott v The Queen [2007] HCA 51; 234 CLR 38; and Aktas v Westpac Banking Corporation (No 2) [2010] HCA 47; 241 CLR 570. That power is exercised with great caution because of the public interest in maintaining the finality of litigation. It may be exercised if it can be shown that by accident and without fault on the part of the applicant, he or she has not been heard: per Mason ACJ, Wilson and Brennan JJ in Wentworth at 684. However, the exercise of the power is not confined to circumstances where there has been a denial of a fair hearing. It may be used to rectify an apparent error arising from a miscarriage in the Court's judgment because it has proceeded on a misapprehension of the relevant facts or law: per Mason CJ in Autodesk Inc at 302; per French CJ, Gummow and Hayne JJ in Aktas at [6]. However, the power is not to be exercised to enable the re-agitating of arguments already considered or because the party seeking the re-hearing has "failed to present the argument in all its aspects or as well as it might have been put". The purpose of the jurisdiction "is not to provide a backdoor method by which unsuccessful litigants can seek to reargue their cases": per Mason CJ in Autodesk Inc at 303. 8Before turning to the matters upon which the appellants rely as justifying the reopening of this Court's judgment, the following observations should be made. By their amended notice of appeal, the appellants sought orders which included that in the event of error on the part of the primary judge when addressing questions arising under the Act, this Court should proceed to reconsider those questions and make such provision for the appellants as it should determine. Notwithstanding that the appellants also sought, in the alternative, an order that the matter be remitted to the Equity Division to determine the amount of any such provision, in their written and oral submissions the parties proceeded on the basis that if there was any such error, this Court would address those questions on the materials before it. To enable it to do so, this Court received on the appeal further evidence as to the current value of the property, the extent to which it was mortgaged and the legal costs incurred by the parties: at [113]. 9During oral argument the Court invited the parties to make submissions as to how the legal costs incurred in the proceedings might be taken into account when assessing whether provision should be made. Up to date estimates of those costs were requested. As a result, the Court received supplementary written submissions following the completion of oral argument. It also received an affidavit of the respondents' solicitor, Mr Zwar, sworn 7 April 2012. The respondents' submissions addressed whether their liabilities for borrowings used to pay legal costs were to be taken into account. It was said that no submission was made by the appellants to the primary judge that the borrowing liabilities incurred to that time should not be taken into account when considering the respective financial positions of the parties. It was also said that the primary judge did not err in taking those liabilities into account, to the extent that they were used to pay legal costs. The appellants addressed two paragraphs of their written submissions in response to the "relevance of costs". They submitted that the "cost of the funds borrowed" was not a matter to be taken into account and that any charge given by the respondents to a financier over their interest in the estate was not relevant to any issues arising under the Act. The appellants made no submission that the legal costs incurred by the respondents as executors in defending the proceedings should not be paid out of the estate as costs reasonably incurred. Nor did they address any submission to the borrowings which had been made after March 2011 and the extent, if any, to which the proceeds of those borrowings may have been applied for the benefit of the respondents and not in payment of legal costs. This was notwithstanding that the supplementary submissions of the respondents indicated that some part of those borrowings had been applied to pay expenses other than legal expenses. 10The appellants submit that there are three matters, taken separately or together, which require that this Court reopen its judgment and re-exercise the power to make orders for provision under the Act. It is submitted that the Court proceeded on a misapprehension that the costs incurred or estimated to have been incurred by the respondents in defending the proceedings, including the appeal, were approximately $915,000: at [113]. It is said that, on the evidence before the Court, the correct amount was about $715,000. Next, it is submitted that when assessing the relative financial positions of the parties, the Court proceeded on an incorrect basis, namely that Morris' potential claim to a half interest in the Caulfield property (previously owned by him and his former wife) was worth about $175,000: at [84], [85]. It is said that the Court should have treated this claim as worth $700,000. Finally, it is submitted that in assessing the financial and other needs of Albert, the Court proceeded under the misapprehension that there was no evidence as to the likely cost of his purchasing alternative satisfactory accommodation in the Bondi area: cf [116]. It is said that there was evidence that as at April 2008, the cost of a two bedroom unit within that locality was in the range $500,000 to $550,000. 11The second and third of these matters may be dealt with shortly. 12As to the second, the primary judge made an express finding, when considering Morris' financial position, as to the potential value of his claim against his former wife for a property settlement in respect of his half interest in the Caulfield property. His Honour found that the value of that claim "could not realistically exceed half [the value of the property] of $350,000 ($175,000)": Tobin v Ezekiel [2011] NSWSC 81 at [138]. The appellants did not appeal from that finding or make any submissions to this Court as to its being incorrect. The submissions made to this Court in relation to error on the part of the primary judge focussed on his Honour's conclusion that Morris and Albert did not have "assets or resources of significance beyond those disclosed" in circumstances where his Honour had also found that they had given false or unreliable evidence as to their earning capacity: [2011] NSWSC 81 at [147]. Those submissions were dealt with by this Court and accepted: at [95]-[106]. However, in the course of that argument the Court was not taken to any evidentiary material which called this finding of the primary judge into question. The appellants now seek to argue that this finding of the primary judge was wrong and that its being wrong was due, at least in part, to a failure on the part of Morris to disclose in his affidavit evidence that the Caulfield property had been sold for $1.6 M. 13These circumstances do not enliven the jurisdiction of this Court to reopen its judgment. What the appellants now seek to do is raise and argue an issue which was not raised on the appeal or referred to before this Court. If this Court has proceeded on some misapprehension as to the true facts, and it is not necessary to determine whether that is so, it was due to the appellants not raising this matter as an issue before the Court and addressing submissions to it. It is not suggested that the appellants were not given an adequate opportunity to do so. 14As to the third of these matters, the appellants' position before this Court was that any dependency which Albert had on his parents for accommodation did not justify allowance being made for him which might include his continuing to reside in the Beach Road property: at [93]. No alternative submission or argument was put on behalf of the appellants as to a particular sum or allowance which would be appropriate as reasonable provision for such accommodation, either by way of purchase or by way of rental. Nor was the Court referred to the single page valuer's estimate dated 24 April 2008 which is now relied upon as relevant to the relative financial positions of the four children. Furthermore, Meagher JA's comment (at [116]) was as to the absence of evidence concerning the cost of rental accommodation in the area where Albert had lived for his adult life. The material referred to by the appellants does not answer that description and, accordingly, the observation made would seem to remain correct. 15The circumstances concerning this third matter also do not enliven the jurisdiction of the Court to reopen its judgment. The letter to which reference is made does not establish that the Court proceeded on a misapprehension as to any relevant fact. The Court's attention was not directed to it by any submissions made and there was no failure to address any argument put on behalf of the appellants. Finally, it was not material to the Court's consideration whether, having regard to the relative financial positions of the respondents, inadequate provision had been made for Clara and Evelyn. 16It remains necessary to consider the first matter relied upon by the appellants. The Court approached the question as to inadequacy of provision on the basis that the only significant asset in Lily's estate was the Beach Road property. That property had a value in early 2001 estimated as between $1.9m and $2.3m. The respondents had been permitted, by orders of the Court, to mortgage that property up to an amount of $1.1m. As at April 2012 the amount secured by registered mortgages was between $1.08m and $1.09m. 17At [113] Meagher JA recorded that the costs incurred or estimated to have been incurred by the respondents in defending the proceedings, including the appeal, were approximately $915,000. That calculation was not provided by either of the parties and was made by reference to information contained in Mr Zwar's affidavit sworn 7 April 2012. It is now apparent that the calculation of that amount was wrong and that the correct calculation was $715,000. However, that miscalculation was not material to the reconsideration of the exercise of the relevant discretionary power. 18As is noted in the reasons of Meagher JA (at [113]), the appellants did not submit that the legal costs incurred by the respondents as executors in defending the proceedings should not be treated as liabilities of the estate. Nor did they submit that because some of the borrowings made after March 2011 had been applied other than in payment of such legal costs, to the extent that they had been so applied, the benefits received by the respondents should be taken into account in addressing whether orders for provision should be made. 19If the appellants had argued that the respondents had received such benefits after March 2011, the amount of legal costs incurred may have been relevant to a determination of the extent to which the respondents had received such benefits. The evidence before the Court, although described as "not clear" (at [113]), suggested that approximately $100,000 of the legal costs incurred remained unpaid. That would have indicated, on the Court's, albeit wrong, calculation, that $815,000 of the total amount borrowed and secured by the mortgages was likely to have been expended on legal expenses. That in turn would have suggested that it was most unlikely that Morris and Albert had received any significant benefits from those borrowings beyond the $156,000 which the evidence before the Court established that they had received from the first advance: at [121]. And that analysis does not take into account any allowance for capitalised interest. It is unlikely that a different conclusion would have been reached on the same material if that analysis had been applied to costs calculated at $715,000. It would have indicated that a further $200,000 had to be accounted for. However, part of that amount would have been explicable as applied in satisfaction of capitalised interest. 20Although in the reasons of Meagher JA there is a miscalculation of the total amount of legal costs incurred by the respondents, that amount was not material to this Court's consideration of the issues raised in argument. For that reason the fact of the miscalculation does not provide a basis for reopening this Court's judgment. What the appellants now seek to do is introduce two further arguments which were not made in this Court. Those arguments emerge from the discussion above. The first is that the legal costs incurred by the respondents should not be treated as liabilities to be reimbursed from the estate so that, to the extent that those liabilities will be discharged from the sale of the property, the amounts applied should be regarded as benefits received by the respondents from the estate and taken into account on that basis. The second is that some of the borrowings made after March 2011 were applied other than in payment of legal costs or other liabilities of the estate and, to that extent, those amounts also should be treated as benefits received by the respondents from the estate. In support of those arguments the appellants rely on material some of which was not in evidence at trial nor sought to be tendered on the hearing of the appeal, although apparently available to them at the time their supplementary submissions were provided in April 2012. The power to reopen cannot be used to enable those arguments to be made. Those arguments could have been presented on the hearing of the appeal. 21The appellants' notice of motion is dismissed. The appellants must pay the respondents' costs of that motion.