Ely v Smith[2022] QCATA 123

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   This is an appeal which concerns whether the tribunal had jurisdiction to hear and determine a minor debt claim for money lent during a de facto relationship, and to determine a claim in respect of a debt which arose soon after the end of the relationship, and whether diverse expenditure by the debtor for the purposes of the relationship should have been considered as a set-off.  The appeal also concerns whether there was an error of law, or an appearance of bias, where the Adjudicator may have made a mistake of fact, and may have made an incorrect assumption, and expressed an adverse opinion about one of the parties when this may not have been necessary to determine the matter.
2. [2]
   The claim before the Adjudicator was brought by Graham Smith against Wa-Eeda Ely.  Mr Smith said that during their de facto relationship, on 1 August 2017 he lent Ms Ely $15,000 and they both agreed that this would be repaid 3 years’ later with $1,000 for interest (this can be called the ‘loan claim’).  He said that the loan agreement was contained in, or evidenced by, a written agreement which they had both drawn up and signed but which was now missing because Ms Ely had found the only paper copy and destroyed it, and because she had destroyed all electronic copies of the agreement.
3. [3]
   He also said that after the relationship ended, Ms Ely had withdrawn $2,000 in cash from his building society account using his bank card without his consent and so she owed him that amount (the withdrawal claim).
4. [4]
   Ms Ely’s defence to the loan claim was that although she did receive $15,000 from Mr Smith, it was not a loan and simply reflected the fact that they were in a de facto relationship.  She denied the existence at any time of any document in writing agreeing to the loan or evidencing the loan.
5. [5]
   Ms Ely’s defence to the withdrawal claim was that she was entitled to withdraw the money because she owned it jointly.
6. [6]
   Having heard the parties and read the written material, the Adjudicator made a decision giving oral reasons.  In the loan claim the Adjudicator found as a fact that there had been a written agreement for a loan which had been signed by both parties, and which was of sufficient formality to have created a distinct contractual arrangement over which the tribunal had jurisdiction.  The Adjudicator ordered Ms Ely to repay the $15,000 and $1,000 interest as claimed. 
7. [7]
   In the withdrawal claim the Adjudicator found that Ms Ely had withdrawn the $2,000 from Mr Smith’s card without authorisation and ordered her to pay this amount to Mr Smith.

The appeal

8. [8]
   Ms Ely’s grounds of appeal briefly stated, in the order in which I shall deal with them are:

   1. (a)
      that the Adjudicator had no jurisdiction to hear and determine the loan claim and the withdrawal claim because the events happened during a de facto relationship;^[1]
   2. (b)
      various comments made by the Adjudicator demonstrated bias;^[2]
   3. (c)
      in the light of various points made, that the Adjudicator was wrong to make a factual finding that there was a loan agreement;^[3]
   4. (d)
      in the light of various points made, that the Adjudicator was wrong to make a factual finding that there was liability because of the withdrawals;^[4]
   5. (e)
      that the Adjudicator should have considered Ms Ely’s defence of set-off.^[5]
9. [9]
   In appeals in the minor civil dispute jurisdiction of the tribunal, leave to appeal is necessary before the appeal can be made.^[6]  Having regard to the discussion below, grounds (a), (b) and (e) are arguable and so I shall give leave to appeal.  I shall now consider the grounds of appeal in detail.

Ground (a) – no jurisdiction

10. [10]
    For this ground, citing relevant provisions of the Family Law Act 1975 (Cth), Ms Ely relies on the fact that the family courts have exclusive jurisdiction under that Act to hear and determine a ‘de facto financial cause’.  On that basis it is said that QCAT had no jurisdiction to hear the claims brought by Mr Smith.
11. [11]
    This is not a new point made for the first time on appeal.  Ms Ely raised a concern in her submissions in response to the claim that the matter should not be in the tribunal.  She said:^[7]

I do not believe that this dispute should be before QCAT, as this is a dispute between myself and my ex-boyfriend being the Applicant.  The Applicant and I were in a relationship from November 2016 to 16 February 2018.  From approximately June 2017 to 16 February 2018 the Applicant and I cohabited at (address).  We would share expenses, such as rent, food, utilities, things for our daughter, etc.

12. [12]
    Although this shows that the period of cohabitation was less than the two years required to give the family court jurisdiction to make a property order, I shall take it that the fact that there was a child of the relationship, would provide such jurisdiction.^[8]
13. [13]
    No doubt because of this point, in the hearing the Adjudicator asked the parties whether there were any proceedings underway, or any past proceedings, in the Federal Circuit and Family Court of Australia.^[9]  There were no such proceedings.  The Adjudicator decided that the tribunal did have jurisdiction over the claims brought by Mr Smith because they were claims for the recovery of a debt or liquidated demand of money justiciable in the tribunal.
14. [14]
    In order to see whether the Adjudicator was correct to decide that the tribunal had jurisdiction to hear the claims, it is necessary to understand the terms under which the family courts have exclusive jurisdiction in the case of de facto relationships. 
15. [15]
    The exclusivity arises because the Queensland State has referred jurisdiction over family property matters to the Commonwealth.^[10]  In the case of de facto relationships, this was done by the Commonwealth Powers (De Facto Relationships) Act 2003 (Qld).  That Act used closely similar wording to that in the Family Law Act 1975 (Cth), which thereafter governed such family property matters.  For this purpose therefore, it is only necessary to look at the Family Law Act to see the extent of the exclusivity provisions.
16. [16]
    There are two such provisions.  The first is in section 39A(5) of the Family Law Act 1975 (Cth) which provides:

Proceedings only to be instituted under this Act

5. (5)
   A de facto financial cause that may be instituted under this Act must not, after the commencement of this section, be instituted otherwise than under this Act.

17. [17]
    A ‘de facto financial cause’ is defined in section 4 (interpretation) as including applications for maintenance, but also more relevantly:

3. (c)
   proceedings between the parties to a de facto relationship with respect to the distribution, after the breakdown of the de facto relationship, of the property of the parties or either of them;

18. [18]
    The second is in section 90RC(2) of the Family Law Act which states:

(2) Parliament intends that the de facto financial provisions are to apply to the exclusion of any law of a State or Territory to the extent that the law:

1. (a)
   deals with financial matters relating to the parties to de facto relationships arising out of the breakdown of those de facto relationships; and

2. (b)
   deals with those matters by referring expressly to de facto relationships (regardless of how the State or Territory law describes those relationships).

Note 1: If, for example, both this Part and a law of a non‑referring State deal with the distribution of property between the parties to a de facto relationship that has broken down after the commencement of this section, then the parties can only seek to distribute the property under this Part.  Subsection (2) has the effect of preventing the parties from seeking to distribute the property under the State law.

19. [19]
    For ‘financial matters’ we need to look at section 4 (interpretation) again:

financial matters means:

1. (a)
   omitted

2. (b)
   in relation to the parties to a de facto relationship—any or all of the following matters:

1. (i)
   the maintenance of one of the parties;

2. (ii)
   the distribution of the property of the parties or of either of them;

3. (iii)
   the distribution of any other financial resources of the parties or of either of them.

20. [20]
    So, apart from maintenance, the exclusivity provisions are in respect of the ‘distribution’ of the de facto parties’ property or financial resources.
21. [21]
    It is clear from the Family Law Act what is meant by ‘distribution’ of the parties’ property or financial resources.  In the case of de facto partners, the power to distribute the property of the parties is in section 90SM, which empowers the family court to alter the interests of the parties in property or to order its settlement or transfer.  The power is supplemented by a power in section 90SS to order payment of a lump sum or maintenance, or the provision of security and other such orders.
22. [22]
    When considering what order (if any) to make adjusting the interests of the parties to a de facto relationship, section 90SM requires the family court to take into account a number of things.  These include what direct or indirect financial or non-financial contributions were made to the property or to its acquisition, conservation, or improvement.  Also to be taken into account are the contributions to the welfare of the family, the effect of the proposed order on earning capacity, and all those matters which may be taken into account when considering questions of maintenance such as the financial position, health and responsibilities of the party, the length of the relationship and similar matters.  The court may make such order as it considers appropriate but by section 90SM(3) the court must not make an order unless it is satisfied that, in all the circumstances, it is just and equitable to do so.
23. [23]
    In the family courts, it has been understood that the first step in proceedings under section 90SM is to identify the ‘pool of assets and liabilities’ of the parties.^[11]  Such pool of assets and liabilities will appear from the parties’ own disclosures or by agreement, or if necessary by a finding of the family court under powers to declare interests in property.^[12]
24. [24]
    It can be seen that although the identifying of the pool of assets and liabilities of the parties is a necessary precursor to any ‘distribution’, it is not actually part of the distribution.  This is because no changes are made in this first step to a party’s interest in any asset or to the extent of any liability.  It is done simply to identify the pool of resources and liabilities.  It follows that this first step is not within the exclusivity provisions in sections 39A(5) and 90RC(2) of the Family Law Act 1975 (Cth).
25. [25]
    Since when hearing a claim of the type which is on appeal before me, the tribunal is simply deciding whether or not there are debts which are outstanding, the tribunal is not carrying out a distribution of property.  The right to repayment of the debts would be an asset held by Mr Smith and a liability owed by Ms Ely and so would form part of the pool of assets and liabilities of the parties in any proceedings for a property order.^[13]
26. [26]
    QCAT case law certainly supports this view.  For example, in King v Stahlhut [2011] QCATA 293, there was an agreement that Ms King would move into a house owned by Ms Stahlhut.  She said the agreement was that she would contribute to the expenses relating to the house including mortgage payments, but that if the relationship failed and she moved out within 12 months, he would repay her those contributions.  Senior Member Richard Oliver decided that the proceeding was not concerned about the division of property rights or pooling of assets for their joint benefit.  Instead it was about whether the agreement as alleged by Ms King was in fact entered into, or whether in fact, as Mr Stahlhut contended, she simply paid a fair and reasonable amount to cover her expenses whilst being accommodated in his house.  So if there were a de facto relationship between the parties it was an error of law for the tribunal to refuse to hear the matter.^[14]
27. [27]
    In Bradshaw v Whitcombe [2017] QCATA 132 Justice Carmody came to the same conclusion.  This was an appeal in a claim brought by one debtor against another, effectively for a contribution.  The tribunal had dismissed the claim for lack of jurisdiction because the obligation seemed to arise from a de facto relationship.  Justice Carmody decided the tribunal should have heard and determined the matter because:

‘de facto financial cause’ means proceedings between de factos with respect to the distribution of their property after the breakdown of the relationship .. the QCAT proceedings do not relate to a de facto financial cause because they are not ‘with respect to the distribution’ of those interests.  Any valid claim against the respondent does not derive from the fact that the 1st applicant and the respondent were de facto partners but is based solely on the law of obligations. The domestic relationship was purely coincidental to the subject matter of the proceedings and the dispute does not ‘arise out of’ its breakdown.  The federal power to alter property rights is not engaged to the exclusion of state laws.

28. [28]
    Similar was Theodorou v Provatidis [2022] SADC 16 where the court was asked to determine the parties’ property and contractual rights in an opal business.  It was said that the court had no jurisdiction because the parties were in a de facto relationship.  But her Honour Judge Thomas said that the proceedings were not for the ‘distribution’ of the property of the parties, but were to determine ‘antecedent questions as to the existing general law property rights’ of the parties.  Her Honour also found as a fact that there was no de facto relationship so there would be no prohibition against the court hearing the matter anyway.
29. [29]
    There will be cases however, when the claim cannot be untangled from matters which are of the nature of a family property dispute.  This was the case in Smithies v Barry (Civil Dispute) [2016] ACAT 31 where what appeared at first sight to be a claim similar to Mr Smith’s withdrawal claim, where one de facto party had used the credit card of the other de facto party on certain family expenses.  Referring to the ‘complicated tapestry of circumstances’ Senior Member H Robinson said:^[15]

Significantly, the parties do not agree on the circumstances in which the VISA card was used during the relationship, or on the terms of its use after the relationship ended.  The oral submissions of both parties about this issue refer to agreements about living expenses, liabilities, family arrangements, and other property interests.  Having regard to this evidence, I accept the respondent’s argument that I cannot reach a conclusion about what was agreed without, at the least, considering the broader circumstances of the breakdown of the relationship, the subsequent arrangements made between the parties and their broader property interests.  These matters are ‘de facto property causes’.

Still, the respondent has conceded that he agreed to pay $7000 directly to the applicant to go toward to VISA card, and that $3000 of this remains outstanding.  Can, as the applicant contends, the Tribunal simply apply to ordinary principles of contract law to this agreement?  The reason why it cannot becomes apparent when looking to the respondent’s response.

The respondent’s defence to the claim is that the VISA card has at least been partially discharged by payments from what, he contends, are a joint savings account and a joint mortgage account.  The applicant agrees that these transactions took place, but says that the mortgage account was in fact in her name alone, and the joint account contains monies that are exclusively hers.  Both parties referred to potentially conflicting documentation (some of which was filed, but much of which was not) and the applicant made a number of appeals to fairness.  What should be apparent from this is that I cannot make any decision on these issues without unpicking the financial arrangements between the parties and determining the ‘ownership’ of the monies in the respective accounts and their distribution.  Conflicts over ownership of this nature can be resolved through the making of a ‘financial interest declaration’ under section 90SL of the Family Law Act and as such this is a ‘de facto financial cause’.

Consequently, I am satisfied that, no matter how one characterises this dispute, it is a matter that is properly a de facto cause under the Family Law Act, or at least is so extrinsically intertwined with such a financial cause that I cannot feasibly hear this matter without considering issues that fall exclusively within the ambit of the Family Law Act.

30. [30]
    A more obvious case was Chung v Yang [2021] QDC 68 where there was a claim for a declaration of a resulting trust of monies held by one of the parties in a de facto relationship, and claims for damages for conversion by one of the parties of a motor vehicle and personal effects of the other party.  Reid DCJ decided that the claim was in effect ‘a proceeding between the parties to a de facto relationship with respect to the distribution, after the breakdown of the de facto relationship, of the property of the parties or either of them.’
31. [31]
    In the context of parties who are or have been in a de facto relationship, the most common type of case heard in the tribunal as a minor civil dispute will be a claim to recover a debt or liquidated demand of money.  Since in such a claim it is more difficult to show an intention to create legal relations where the parties were in a de facto relationship at the time of the alleged agreement,^[16] the tribunal will look for some element of written or oral formality, or degree of certainty, demonstrating such an intention before such a claim will succeed in the tribunal anyway.  Where such an intention is shown, this will take the claim well away from any concept of ‘distribution’.  The tribunal will simply be deciding who owes whom what.  In the light of Smithies and Chung above, decision makers may have to consider whether a particular claim can be dealt with discretely, that is to say whether it can be heard and determined without needing to consider matters which are in the domain of a family court when hearing an application for a property order. 
32. [32]
    Even if the tribunal would have jurisdiction to hear a particular claim, one consideration will be whether an application for a property order is underway or planned.  If such proceedings may adjust rights over the property forming the subject matter of a claim in the tribunal it might be necessary to stay the claim in the tribunal.  This was done in the District Court in FDM v MD [2012] QDC 52, where Newton DCJ stayed an action pending resolution of an appeal to the Full Court of the Family Court on the basis that the applicant was seeking a declaration as to beneficial interests in a property which was the subject of de facto financial cause.  Judge Newton decided that until the family proceedings were concluded, section 39A(5) of the Family Law Act 1975 (Cth) should be given its full meaning and effect and so it was right to decline to further proceed to determine the application pending the conclusion of the appeal.
33. [33]
    Where an application for a property order is proposed by a party, it would be noted that the time limit for such proceedings in the case of a de facto relationship is 2 years from the end of the de facto relationship or 12 months after any financial agreement is found to be invalid.^[17]  The time can be extended by consent.  Leave to bring a claim may be given in cases of hardship or in maintenance cases where financial support is needed.
34. [34]
    In this appeal it is clear that both Mr Smith’s claims could be dealt with discretely, without having to disentangle issues in the sole domain of the family court and without making any distribution as contemplated in the Family Law Act.  This was because for the loan claim, as found by the Adjudicator, the parties had signed a loan document in respect of the loan.^[18]  This displayed the obvious intention that it should be an obligation separate from any distribution available in the family courts should the relationship break down.  The Adjudicator found that it therefore ‘fell outside of the de facto financial arrangements’.^[19]  And for the withdrawal claim, as the Adjudicator found, the withdrawals happened after the end of the relationship,^[20] and Ms Ely had no authority to make the withdrawal, because the money was not owned jointly as she claimed but was only owned by Mr Smith.^[21]
35. [35]
    In addition to this, neither party had applied for a property order and it was not suggested that any such application was contemplated.  Indeed, two years having passed since the last cohabitation date, leave would have been needed on the grounds of hardship to bring such an application.
36. [36]
    In the circumstances the Adjudicator was clearly right to decide that the tribunal had jurisdiction to hear the claim, and also that it was right for the tribunal to hear and determine the claim.

Ground (b) various comments made by the Adjudicator demonstrated bias

37. [37]
    This ground needs to be considered not only in the way that Ms Ely presents it, that is considering whether the Adjudicator demonstrated bias, but also whether the circumstances disclose an error of law.
38. [38]
    In this ground Ms Ely relies on certain things said by the Adjudicator in the reasons.  There is no complaint made about anything said by the Adjudicator during the hearing.  The effect of her submission is that the Adjudicator made mistakes of fact and expressed adverse opinions which were not necessary to determine the matter.
39. [39]
    I should point out that in order to provide the necessary facts which support this ground of appeal, Ms Ely has given certain information to the Appeal Tribunal.  This information is given in her submissions on appeal.  Since Mr Smith has had a chance to make submissions in reply, he could have disagreed with the information but he has not done so.  Although there would be some difficulty in accepting such information as fresh ‘evidence’ in support of a submission that there would be a miscarriage of justice if the evidence were not received,^[22] this is not the nature of the ground.  In the circumstances, it is only fair to Ms Ely to treat the information given by Ms Ely as correct for the purpose of the appeal, to enable this ground of appeal to be properly considered.
40. [40]
    The relevant passages in the reasons in this ground of appeal are:

The fact is that after an alleged assault of Mr Smith on Ms Ely, that he was arrested and taken away by the police, as I understand it, on the 16^th of February 2018, or the day before.  It turns out, because a jury acquitted Mr Smith of the serious allegation of rape and assault, that Ms Ely’s charges laid through the police were unfounded.  It is astounding, to say the least, that Ms Ely should seek to transact on Mr Smith’s credit card account two days after she, on complaint to the police, had had him removed and incarcerated.

How could Mr Smith possibly give any authorisation from jail, on unsubstantiated charges of rape and assault for these withdrawals of $1,000 on the 9^th and 10^th of March 2018 to occur?  The answer to the rhetorical question is obvious: he could not and he did not.  I am satisfied on the standard referred to in Briginshaw v Briginshaw, that is the highest standard on probabilities, that the withdrawal of these funds was made dishonestly, without authority, and for the purposes of further damaging Mr Smith and his financial position, in other words maliciously.  It follows that Ms Ely is liable to repay Mr Smith on account of the unauthorised credit card withdrawal, on 9^th March 2021 and the 10^th March 2021.

I have, in coming to this conclusion, carefully considered Ms Ely’s response.  Her response relevantly is attached to the form 7, filed the 12^th February 2021.  Of some interest, in paragraph 4B, is that she said that she did not admit that she attempted to draw the sum of $7000 or $100.  Instead, she said she was attempting to withdraw two and a half thousand dollars, to which she referred later on.  However, if one looks at exhibit A1, it is quite clear that Ms Ely continued in her attempts at unauthorised withdrawal from the credit card account of Mr Smith with Newcastle Permanent.  Indeed, as the document, exhibit A1, discloses, on the 11^th March, on three occasions, and on the 13^th March 2018 on two occasions.  So determined, was Ms Ely to further damage Mr Smith while he was sitting in jail incommunicado.

41. [41]
    Ms Ely says that the Adjudicator made a number of factual errors in these passages. 
42. [42]
    Ms Ely says that Ms Smith was not charged with rape and assault.  She says he was arrested because she had accused him of assault,^[23] but he was actually charged with ‘choking, suffocation or strangulation in a domestic setting’ under section 315A of the Criminal Code 1899 (Qld).^[24]
43. [43]
    Ms Ely says that it is wrong to say that the acquittal means that the complaint was ‘false’.  No doubt Ms Ely has in mind that there is a high standard of proof in criminal proceedings.
44. [44]
    In any case she says that the complaint and acquittal was irrelevant to the resolution of the matters in dispute so there was no reason for the Adjudicator to mention them in the reasons at all.
45. [45]
    Ms Ely says that the Adjudicator was wrong to say that the withdrawals on the card were ‘two days’ after Mr Smith’s arrest.  Instead, his arrest was on about 16 February 2018 and the first two withdrawals were on 9 and 10 March 2018 so it was some 3 weeks later.
46. [46]
    Ms Ely says that the Adjudicator was wrong to say that Mr Smith was in jail when the card was used.  She says that he was released on bail on 17 February 2018,^[25] and the cash withdrawals on the card were made on 9 and 10 March 2018.^[26]
47. [47]
    Ms Ely says therefore that the Adjudicator was wrong to find it ‘astounding’ that she would make transactions on the respondent’s account when the respondent could not give permission from jail, and wrong to find that this was done ‘for the purposes of further damaging Mr Smith and done ‘maliciously’ while he was ‘sitting in jail incommunicado’.
48. [48]
    Ms Ely says that the words used by the Adjudicator indicated a certain ‘level of ire’ directed to her, and that since the findings of fact were adverse to her and not supported in the evidence, this demonstrates that the Adjudicator was biased against her.

Was there evidence supporting the findings?

49. [49]
    It does appear from the reasons that the Adjudicator believed that Mr Smith was kept in jail after his arrest and was there when the card was used by Ms Ely.  There was some evidence before the Adjudicator which seems to say that this is what happened.  It appears from Mr Smith’s written evidence,^[27] where he was responding to Ms Ely’s written evidence.^[28]
50. [50]
    What Ms Ely said in her written evidence was:

On 16 February 2018, our relationship came to an end following a violent altercation that resulted in the Applicant being arrested by the Queensland Police and I was sent to the Gold Coast Hospital with multiple injuries, including to my throat, shoulder, chest and belly.

51. [51]
    Mr Smith answered this as follows:

False statement: please see hospital report showing no injuries to the respondent and the request to receive an increased ‘crisis payment plan’ from Centrelink.  The respondent was self-discharged from the hospital at 4.00am as supported Auscript document and begun immediately illegally accessing my social media to look for the $16,000 loan contract we both signed using her IP address (quoted) from her home computer at 6.36am whilst I was still in lock up and then continually for weeks to follow.

52. [52]
    In the minor civil dispute file, the Adjudicator has marked the document and Mr Smith’s comments, tending to show that it was regarded as important.
53. [53]
    It is unfortunate that the Adjudicator did not check with the parties during the hearing about the period that Mr Smith spent in jail after his arrest if this seemed to be important.  There is an ambiguity in Mr Smith’s answer recited above where he says that he was ‘still in lock up and then continually for weeks to follow’.  If Ms Ely is correct that he was released on bail soon after his arrest, then it seems likely that this comment refers to access to social media for weeks to follow, rather than being locked up for weeks to follow.
54. [54]
    It is unfortunate that the Adjudicator was mistaken in saying that the unauthorised withdrawals were made by Ms Ely two days after his arrest, when in fact on the evidence they were 3 weeks after.
55. [55]
    It is unfortunate that the Adjudicator did not check with the parties exactly what offence Mr Smith was charged with and acquitted of if this seemed to be important.  There was some evidence before the Adjudicator from three sources which seems to explain the Adjudicator’s belief that Mr Smith had been charged with rape and assault.  One was a document filed by Mr Smith entitled ‘Being accused of Rape and assault’ in which he says:

In the desperate attempt of defaming me the respondent supported by her own mother entered the police station and accused me of raping her.

56. [56]
    Ms Ely’s statement to the police dated 17 February 2018 was filed in the tribunal.  In the statement she said:

Following Zamia’s passing, Graham also became sexually demanding to the point where he was forcing himself on me.  If I refused to have sex with him, he would become very angry and would force me to have sex with him.

57. [57]
    Then there was the following passage during the hearing.  When referring to Ms Ely’s complaint to the police on 16 February 2018 Mr Smith said:^[29]

Mr Smith: I was being accused of things I hadn’t done.

Mr Smith: And the respondent assaulted me, called the police and said that I assaulted her and that I’d been raping her.

Adjudicator: Is that when you were charged?

Mr Smith: That’s correct.

Adjudicator: Shortly after that.

Mr Smith: Yes.  So the police officer said, “Look, mate, we’ve got to take someone away.  We’re taking you away.”

Adjudicator: Right.  What event, from your perspective, Ms Ely, ended the relationship?  Was it the same event?

Ms Ely: Mr Smith assaulted me.  I did call the police and the police found me in tatters and quite bruised and battered, and they took him away because there was evidence that I had been harmed.

58. [58]
    Having regard to the heavy burden of proof in criminal proceedings it is unfortunate that the Adjudicator expressed the view that the acquittal meant that the allegations made by Ms Ely were ‘unfounded’. 

Considerations of ground (b) – whether an error of law

59. [59]
    It might be said that bias should be considered first, because if there were actual bias or bias were reasonably perceived, then there should be a fresh hearing.^[30]  With that in mind however, I propose to deal with these matters the other way round because it is convenient, in order to explain the conclusion that I have reached on this ground, first to consider whether the ground discloses a flaw in the Adjudicator’s reasoning, which would be an error of law, and then to consider the question of bias. 
60. [60]
    Dealing with the Adjudicator’s stated reasons for finding against Ms Ely on the loan claim, this had nothing to do with the matters complained of as can be seen from the approach taken by the Adjudicator. 
61. [61]
    First the Adjudicator referred to a transcript of District Court proceedings in which Mr Smith faced the criminal charges which resulted from Ms Ely’s complaint to the police of 16 February 2018.  Ms Ely gave evidence in the hearing and under cross examination she was asked about the loan of $15,000 and she said that Mr Smith had offered to lend her $15,000 and she agreed that the arrangement with Mr Smith was that she would pay this amount back to him in full with some interest.^[31]
62. [62]
    Then the Adjudicator recited an SMS text sent by Ms Ely on 31 December 2017 in which she had expressly referred to a written and signed loan agreement (exhibit A3).  The Adjudicator said:^[32]

.. Ms Ely acknowledged in her own script, in her own text to Mr Smith, that they had signed a loan agreement, yet throughout these proceedings, both at the prior hearing and again today, Ms Ely disputed that she had ever signed a loan agreement.  She disputed that a loan agreement in writing ever existed.  Exhibit A3 is proof of her dishonesty in maintaining that assertion, where in her own words she admitted the existence of the document.  Her continued denial of the existence of the document does nothing to assist her credibility and that of her defence in this case.

63. [63]
    Having dealt with some other matters the Adjudicator then said:^[33]

It seems to me, on the balance of probabilities, that the de facto relationship lasted for at least a year, if not some months longer.  However, I return to my earlier finding that the loan agreement, formalised, signed, in respect of which Ms Ely admitted liable, fell outside the run of transactions in the course of the de facto relationship.  The money is owing, as is the agreed sum of interest, which was $1,000, that is interest fixed.  So Ms Ely’s indebtedness is $16,000 on account of the minor debt claim.

64. [64]
    It is notable that the finding and decision reached on the loan claim did not depend on any finding of the timing of arrest, incarceration, authorisation, the nature of the charge or effect of acquittal, or the timing of the withdrawals in the withdrawal claim, or whether Ms Ely acted in an astounding way or maliciously.  The loan claim was clearly meritorious on the evidence even if no such findings had been made.
65. [65]
    Turning to the withdrawal claim, Ms Ely admitted having withdrawn the $2,000 from Mr Smith’s account in two withdrawals of $1,000 each on 9 and 10 March 2018.  She said that it was part of $2,500 which had been donated to them both for certain expenditure which she had incurred, but that Mr Smith had put the money into his account in his sole name.  The inference was that it was jointly owned money and she was therefore entitled to it.^[34]  Ms Ely was not saying that Mr Smith had authorised the withdrawals at any time. 
66. [66]
    Mr Smith’s answer was that the money in the account was his own and nothing to do with any donated money.^[35]  The Adjudicator found Ms Ely’s defence to the claim to be ‘implausible and improbable’.^[36]  The Adjudicator could not have found otherwise on the evidence because Ms Ely’s defence that she believed she was entitled to withdraw the money was belied by the fact that on several occasions after 10 March 2018 she tried to withdraw more from the card than the amount to which she claimed to be entitled, even after having successfully withdrawn the $2,000.^[37]
67. [67]
    Again the decision on the withdrawal claim did not depend on any finding of the timing of arrest, incarceration, authorisation, the nature of the charge or effect of acquittal, or the timing of the withdrawals, or whether Ms Ely acted in an astounding way or maliciously.  The withdrawal claim was clearly meritorious on the evidence even if no such findings had been made.
68. [68]
    It follows that the doubts about the correctness of the above findings have no impact on the Adjudicator’s decision on the loan claim and on the withdrawal claim.  The decision did not depend on the findings.  The decision making process was not flawed in that respect.

Consideration of ground (b) – whether actual or perceived bias

69. [69]
    On the question of bias, Ms Ely relies on the impression of ‘ire’ given by the Adjudicator, and she says that the Adjudicator was actually biased against her as shown from the facts found by the Adjudicator unsupported by evidence, and from the irrelevance of the adverse findings.  For the purposes of this appeal, perceived bias would be sufficient and I need to consider this too. 
70. [70]
    The considerations which apply to a judge when deciding whether to be recused on the grounds of perceived bias prior to a hearing may by analogy be applied after a hearing has taken place.  Adapting the dicta in Ebner v Official Trustee in Bankruptcy to suit, this would be where a fair minded lay observer might reasonably apprehend that the judge might not have brought an impartial mind to the resolution of the question the judge is required to decide.^[38]  As explained in Ebner this is a two step process.  Firstly it requires the identification of what it is said might have lead a judge ... to decide a case other than on its legal and factual merits. The second step is no less important.  There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits.
71. [71]
    It can be seen that it is only where the actual or perceived bias might have caused the Adjudicator to reach the wrong conclusion on the merits that the appeal on this ground will be successful.  This might be where the bias appeared before the evidence and submissions had been completed, so that it can be said that the Adjudicator might have pre-judged the outcome of the case.  Ms Ely does not suggest in this appeal that this happened.  And there is nothing to show that this might have been the case.  The Adjudicator carefully took a balanced view during the hearing, and waited until the end of the hearing to give the reasons for the decision.
72. [72]
    What is complained of here is that the Adjudicator appeared to be biased from things said at the time of or after making the decision.  The obvious difficulty here is that decision makers often have to make adverse findings against a party as part of the decision making process itself and as part of the reasons given for reaching the decision.  It is true that in this case, as discussed above, some of the Adjudicator’s comments were irrelevant to the decision making.  Those comments being about the timing of arrest, incarceration, authorisation, the nature of the charge or effect of acquittal, the timing of the withdrawals, and whether Ms Ely acted in an astounding way or maliciously.  So what needs to be considered is whether those things demonstrated that the Adjudicator may not have had an open mind when making the decision itself.
73. [73]
    In this respect the comments need to be considered in the light of the Adjudicator’s legitimate findings which reflected adversely on Ms Ely.
74. [74]
    The Adjudicator found as a fact that a loan agreement had been drawn up and had been signed by both parties.  But Ms Ely had maintained throughout the case that this had not happened.  Since there was no middle ground available here, it was inevitable that the Adjudicator therefore found that she was dishonest in denying the existence of the written agreement.  As the Adjudicator said:^[39]

Her continued denial of the existence of the document does nothing to assist her credibility and that of her defence in this case.

75. [75]
    The Adjudicator also accepted that Ms Ely had destroyed the document and copies of the document.  As the Adjudicator said:^[40]

I accept Mr Smith’s submission on the evidence that I should draw the inference that she destroyed the contract so as not to have it available for production in evidence at a later stage to prove Mr Smith’s claim in the event of her default.  She never intended to repay the money.  She denied, in paragraph 3, that she destroyed the contract.

As I said, another example of Ms Ely’s dishonesty.

76. [76]
    It must not be forgotten that Mr Smith absolutely denied having assaulted Ms Ely or having raped her.^[41]  In deciding that Ms Ely’s complaints about this were unfounded, the Adjudicator must have found Mr Smith to be truthful in this respect.  This would have been in the light of the other findings about her credibility, supported by the acquittal in the criminal proceedings.
77. [77]
    There is some explanation therefore why the Adjudicator made adverse findings about the credibility and motives of Ms Ely. 
78. [78]
    There is also an explanation for the Adjudicator’s belief that Mr Smith was in jail at the time of the card withdrawals, as can be seen above.  This means that this was not something which the Adjudicator plucked out of the air in order to find a way to be critical of Ms Ely. 
79. [79]
    In the light of these explanations, although it is true that the Adjudicator was not required to make the comments to which objection is taken, it cannot be said that the fact that they were expressed was an indication of bias in the sense that it appears that the Adjudicator might have been unable to reach the decision on the claim with an open mind.
80. [80]
    There is a further allegation of bias.  It is said that there were findings of fact which were unsupported in the evidence.  The findings are set out in the submissions.^[42]  These are the same findings of fact with which Ms Ely disagrees and which form the basis of grounds of appeal (c) and (d) which Ms Ely says show that the Adjudicator made incorrect findings of fact.  As a submission in support of an allegation of bias this is problematical.  It is the Adjudicator’s task to make findings of fact.  Making such findings contrary to the case as presented by one party cannot of itself indicate bias against that party, where those findings were open to the Adjudicator on the evidence.

Grounds (c) and (d) in the light of various points made, that the Adjudicator was wrong to make a factual finding that there was a loan agreement and that there was liability because of the withdrawals

81. [81]
    Ms Ely’s points made on appeal go carefully through the evidence and the written material and analyse where the Adjudicator might have reached a different conclusion on that evidence.  The main point made is that the alleged admissions made by Ms Ely (under cross examination in the District Court and in the SMS text) were not admissions at all – they were taken out of context and do not have the effect alleged.  There is another point made about inconsistencies in the paperwork relied on by Mr Smith.  But these points were also made in written submissions before the Adjudicator and/or at the hearing.  This means that in this ground of appeal, it is said that the Appeal Tribunal ought to reach a different view than that reached by the Adjudicator. 
82. [82]
    When considering ground (b), and whether the ground of appeal disclosed an error of law I have recited the Adjudicator’s reasons for finding in favour of Mr Smith in the loan claim and the withdrawal claim.  It is clear from those considerations that the findings were not only open to the Adjudicator to make, but that on the evidence they were probably the only findings that could have been made. 
83. [83]
    Grounds (c) and (d) cannot succeed.

Ground (e) the Adjudicator should have considered the defence of set-off

84. [84]
    This ground of appeal refers to a set-off that Ms Ely claimed as a defence to Mr Smith’s debt claims.  The Adjudicator explained that the set-off was for payments Ms Ely had made for the purposes of the de facto relationship and for their joint benefit, and that she had filed documents showing that her expenditure in this respect exceeded the claim.^[43]
85. [85]
    Claims may be set-off where the equity of the case requires it, which depends on how closely the claims are related, particularly as to time and subject-matter.^[44] 
86. [86]
    The Adjudicator decided not to consider the set-off because the tribunal could not decide whether there was an entitlement to set-off because of the payments.  Only the family courts had jurisdiction to do that.^[45]
87. [87]
    What is said in this ground of appeal is that since the Adjudicator decided that the tribunal had jurisdiction to hear Mr Smith’s debt claims, it was then inconsistent to refuse to hear Ms Ely’s claim for a set-off as a defence to the claim.
88. [88]
    The Adjudicator was clearly right to regard the set-off here as exclusively justiciable in the family courts.  This was because Ms Ely’s claim for set-off was not based on any legal right to repayment of the payments she had made.  Only by a distribution of the property of the parties after the breakdown of the de facto relationship could such adjustment be made.  As such it would have come under the exclusivity provisions discussed above under ground (a) of the appeal.
89. [89]
    This is quite different therefore from the usual approach of the tribunal, to hear a set-off as a defence to a claim, even if the set-off would be outside the tribunal’s jurisdiction if it were brought as a separate claim.  A typical example might be where a professional brought a debt claim to recover fees for work done for a client.  The client would be able to defend the claim on the basis that loss was suffered as a result of defective work even though a claim for such loss brought as a separate claim would be outside the tribunal’s jurisdiction.^[46]

Conclusion

90. [90]
    I have granted leave to appeal because three of the grounds were arguable.  However the grounds of appeal have failed.  Accordingly, I dismiss the appeal.