Adler & Adler
[2021] FedCFamC2F 579
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Adler & Adler [2021] FedCFamC2F 579
File number(s): NCC 2561 of 2021 Judgment of: JUDGE BETTS Date of judgment: 6 December 2021 Catchwords: FAMILY LAW – PROPERTY – s 79A enforcement proceedings – undefended hearing, as husband not participating – where the Court made final property settlement orders by consent providing that a base amount of $68,160 be allocated to the wife out of the husband’s interests in his super fund – where the fund was unable to comply with the order as the husband had transferred the entirety of his superannuation into another fund – where there has clearly been a miscarriage of justice and it is appropriate for the Court to make another order in its substitution namely for the relevant superannuation splitting orders to be set aside and that the base amount of $68,160 be allocated to the wife out of the husband’s interests in his current superannuation fund.
1 FAMILY LAW – PROPERTY – costs application – where the wife seeks her costs of and incidental to her application on an indemnity basis – where the husband’s misconduct is such that indemnity costs is appropriate – costs order made.
Legislation: Family Law Act 1975 (Cth), Pt VII & VIII Cases cited: Colgate-Palmolive Company v Cussons (1993) 46 FCR 225
In the Marriage of Suiker (1993) FLC 92-436
Ragata Developments Pty Ltd v. Westpac Banking Corporation, Federal Court of Australia, unreported, 5 March 1993
Tetijo Holdings Pty Ltd v. Keeprite Australia Pty Ltd Federal Court of Australia, unreported, 3 May 1991
Division: Division 2 Family Law Number of paragraphs: 46 Date of last submission/s: 6 December 2021 Date of hearing: 6 December 2021 Counsel for the First Applicant: Mr Bithrey Solicitor for the First Applicant: Hamilton & Associates Solicitor for the First Respondent: Self-Represented/No appearance ORDERS
NCC 2561 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS ADLER
Applicant
AND: MR ADLER
Respondent
ORDER MADE BY:
JUDGE BETTS
DATE OF ORDER:
6 DECEMBER 2021
THE COURT ORDERS THAT:
1.The matter proceed by way of Undefended Final Hearing today.
2.Pursuant to section 79A of the Family Law Act1975, Orders 3 and 4 of the Final Property Consent Orders made in this matter on 15 April 2021 be set aside.
3.A base amount of $68,160.00 is allocated, as required by section 90XT(4) of the Family Law Act 1975, to the Applicant, out of the Respondent’s interest in his current superannuation fund, once determined.
4.Pursuant to section 90XT(1)(a) of the Family Law Act 1975, whenever a splitable payment becomes payable in respect of the superannuation interest of the Respondent, in his fund (the fund);
(a)The Applicant shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations2001, using the base amount of $68,160.92 (provided that such base amount shall not exceed the value of the interest determined under section 90XT(2) and;
(b)There will be a corresponding reduction in the superannuation interest of the Respondent, being the person to whom the splitable payment would have been made, but for these Orders;
(c)These Orders, have effect from the operative time, and the operative time for this Order, is the beginning of the fourth (4th) business day after the day on which a sealed copy of these Orders is served on the Trustee;
(d)Having been afforded Procedural Fairness, these Orders bind the Trustee of the fund.
(e)That each party and the Trustee has liberty to apply, on not less than three (3) business days’ notice in respect of the implementation of these superannuation splitting orders.
5.In the event that either party refuses or neglects, or is unable to execute any instrument or documents, being an instrument or documents of which the execution is provided for within these Orders, or, in the event that it is necessary to put into effect the provisions of these Orders, then at the request of the other party, a Judicial Registrar of the Federal Circuit and Family Court of Australia is hereby appointed pursuant to section 106A of the Family Law Act 1975, to execute any such instrument or document in the name of the party refusing or neglecting to sign or complete, or being unable to do so.
6.The Husband is to pay the Wife’s costs of and incidental to this application on an indemnity basis, fixed in the amount of $8,985.00 by 31 March 2022.
7.A copy of the oral reasons delivered today be taken out and settled.
NOTATION:
8.The Court has expressed serious concerns about the Husband’s conduct and behaviours. If the Husband does not pay the costs order herein and if the Wife brings an enforcement application, the Husband will be required to appear in person failing which a Warrant may issue for his arrest.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Adler & Adler has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BETTS
These reasons for judgment were delivered orally. They have been corrected from the transcript so as to make them easier to read.
OVERVIEW
On 15 April 2021, this court made a final property settlement order between the applicant wife and the respondent husband pursuant to section 79 of the Family Law Act (“the Act”). Relevantly the order provided that a base amount of $68,160 be allocated to the wife out of the husband’s interests in his B Super Fund: see section 90XT of the Act.
The proceedings have come back to this court in very short order. This is because, having made that order by consent, it has become apparent that the husband has, in the intervening period (although the exact date upon which he did so is not known), rolled those superannuation moneys out of B Super Fund and into C Super Fund.
On all of the evidence before me, the husband either rolled those moneys out prior to signing the consent order or, alternatively, he did so in the weeks following. I say that because when the wife’s solicitor contacted B Super Fund after the making of the orders, they received correspondence on 6 May 2021 advising that B Super Fund were unable to comply as the husband had transferred the entirety of his superannuation into another fund.
On the basis, having written to the husband and attempted to resolve the matter unsuccessfully, the wife brought the within application on 30 July 2021 seeking, inter alia, that pursuant to section 79A of the Act, that the relevant superannuation splitting orders be set aside and that a base amount of $68,160 be allocated as required by section 90XT(4) of the Family Law Act to the wife out of the husband’s interests in whichever superannuation fund it was found he had rolled his money into. The wife also sought costs of the application.
PROCEDURAL HISTORY
The matter came before the court on 14 September 2021, when it was heard by Judicial Registrar Clarke. On that occasion, there was no requirement for appearances. The husband was aware of the proceedings however. He had been served on 19 August 2021 and so he was well aware that the proceedings were on foot.
On that day, Judicial Registrar Clarke listed the matter for hearing before me today, as well as making various orders concerning the filing and service of any amended or consolidated material.
The Judicial Registrar specifically noted in her orders that:
(a)These parties had previous financial proceedings: NCC4680/2020 which proceeded on an undefended basis on 31 March 2021 as the respondent had failed to engage in proceedings after three (3) court events. Judgment was reserved.
(b)Prior to delivery of the reserved judgment, the respondent signed terms of settlement which were jointly submitted to chambers and made by consent on 15 April 2021.
(c)The final orders made by consent are now not capable of implementation as the respondent’s superannuation, the subject of those orders, appears to have been either transferred or withdrawn.
(d)An affidavit of service filed 20 August 2021 provides that the respondent was personally served with the current initiating application and supporting documents on 19 August 2021.
The wife’s legal representatives wrote to the husband enclosing a copy of the orders made by Judicial Registrar Clarke and drawing his attention to the fact that the matter was listed for hearing before me today. They also emailed the husband in that regard.
Separately, they pursued information from various superannuation funds, and it was through these inquiries that they ascertained that he had rolled his fund into C Super Fund.
C Super Fund have been served with a copy of the wife’s proposed order. They raise no objection to it and do not wish to be heard in the proceedings. They were necessarily served on somewhat short notice because of the timeframe involved in these court proceedings. The wife’s solicitor has acted promptly and should be commended for following up on the matter in the way that she has.
The husband has not attended court today. I intend to deal with the matter on an undefended final basis, particularly when I have regard to the past history of the original proceedings which does not paint the husband in any favourable light whatsoever. Indeed, in the earlier proceedings, the husband did not participate at all. He did not provide financial disclosure, despite being served with the wife’s application. He never filed any material whatsoever. He did not attend at court. Indeed, the matter had proceeded to an undefended hearing before me on 31 March 2021, and it was only after judgment had been reserved that day that the husband then delivered the signed orders to the wife which were made by the court on 15 April 2021.
The husband has, throughout these proceedings, behaved as though the Family Law Act and the rules of court have no application to him. His failure to provide any disclosure or to meaningfully participate in those original proceedings, and indeed in these proceedings, is demonstrative of complete disregard for the law, disregard for the wife, disregard for the court. To the extent that he did participate in those earlier proceedings, all he did was execute a document which was entirely frustrated by his own actions in rolling the moneys out of the fund.
MATERIAL RELIED UPON
In arriving at my decision, I have had regard to the content of the following documents:
·The Initiating Application of the wife filed 30 July 2021;
·Her affidavit of 30 July 2021;
·The previous orders, to which I have already made reference;
·The affidavit of service of Ms D filed 20 August 2021;
·The tender bundle which constitutes exhibit 1 in the proceedings.
SECTION 79A OF THE ACT
There is no question that the court has ample jurisdiction to deal with the matter today as the wife seeks. Pursuant to section 79A(1) of the Act, a court may on application by a person affected by an order made by a court under section 79 in property settlement proceedings, if satisfied that:
(a)There has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence, or any other circumstance;
…
then the court may in its discretion vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
In this particular case, it is unarguable that the orders have given rise to a miscarriage of justice by reason of suppression of evidence or a failure to disclose relevant information on the husband’s part - namely, that he was rolling, or had already rolled, the moneys out of the B Super Fund. It certainly has all of the flavour of fraud as well, although I don’t need to make a finding to that effect, at least at this time.
If the case does not fit within the above categories, it most definitely constitutes a miscarriage of justice by reason of “any other circumstance” within section 79A(1)(a).
The Full Court said in In the Marriage of Suiker (1993) FLC 92-436 that section 79A ought to be given a broad interpretation given its remedial nature. The court there emphasised the relevance of the importance of full and frank disclosure of financial information, emphasizing that where a consent order is based on misleading information or if the information is inadequate, then there may be a miscarriage of justice.
This case is really very straightforward. There has clearly been a miscarriage of justice. The issue is whether the court should not, in the exercise of discretion, make another order in substitution. That itself is also a straightforward matter. The answer is of course that the court should do so.
Only seven (7) months ago, the court made a consent order between the parties. At that time the court indicated that, but for the husband’s consent while judgment was reserved, this would have been the order that would have been made in any event. This highlights and emphasises that as at April 2021, this court considered that the super splitting order (and all of the other orders collectively) resulted in a “just and equitable” division of the parties’ property.
Nothing has changed in the intervening seven (7) months.
The wife does not seek any additional property settlement from the husband; she only seeks the fruits of the order to which he seemingly gave his consent in April 2021. This was a long relationship. It is a case in which the parties were together for something like nineteen (19) years. The wife is legally represented. She has understood, no doubt, the commercial realities of litigation and the difficulty in litigating with somebody who chooses not to participate or to make disclosure, which is what the husband did the first time around and, it might fairly be said, he has done this time around too.
The super split figure that was arrived at by the court, in my view, was and remains a “just and equitable” property division between the parties, as that expression is understood in the authorities and having regard to section 79 of the Act.
I propose, for these reasons, to make the orders set out in the proposed minute of order by the wife.
WIFE’S COSTS APPLICATION
I will turn now to the question of costs. The wife seeks her costs of and incidental to the within application on an indemnity basis. Those costs have been calculated in the sum of $8,985 by reference to the relevant costs agreement between the wife and her solicitor, and the various documents which have had to be prepared by the wife’s solicitor in order to properly run this case.
I note, for the record, that significant work has had to be carried out by the wife in tracking down the holder of the husband’s superannuation moneys.
Pursuant to section 117(1) of the Act, the ordinary rule is that each party to proceedings shall bear his or her own costs. However, subsection (2) provides that if, in proceedings under the Act, the court is of opinion that there are circumstances that “justify” it doing so, then the court may make such order as to costs as the court considers “just”. The court is obliged to have regard to the matters set out in section 117(2A), to which I will now turn briefly.
Firstly, I do not know the financial circumstances of the husband because he has refused to provide that information to the wife or to the court: s 117(2A)(a).
No party is legally aided: s 117(2A)(b).
Section 117(2A)(c) looms large. The husband failed, throughout the whole of the first proceedings, to properly participate save for signing a consent order which could not then be effected because the husband had himself either frustrated it prior to signing the order, or very quickly after signing it. He has behaved in a manner that I will not repeat. I refer to my reasons delivered earlier today. His conduct falls so far short of the mark that it borders on contempt of this court.
The husband has failed, by reference to s117(2A)(d), to comply with the previous orders of the court and it can only be his actions that created this very problem that I have now had to deal with.
He has been wholly unsuccessful in the proceedings: s 117(2A)(e).
One other matter looms large, namely, that the wife’s solicitor wrote to the husband seeking his cooperation after the advice had been received from B Super Fund that he had rolled out his superannuation entitlements into another fund. All the wife sought was that he provide details of his current superannuation fund and whether or not he would be prepared to sign off on new terms of settlement consistent with the old terms of settlement. I refer here to annexure “N” to the wife’s affidavit. The husband did not respond.
Given his behaviour in this matter, I have absolutely no doubt that he was thumbing his nose at the wife, thumbing his nose at the court, and thumbing his nose at the process. The wife did all she reasonably could to avoid this problem but, once again, the husband has made her drag herself through the court proceeding again, just to receive the fruits of an order she should have received seven months ago: s117(2A)(e); s 117(2A)(f); s117(2A)(g).
I also accept the submission made by Mr Bithrey that the superannuation split being received by the wife is somewhat intangible. She will not be able to access those moneys potentially for many years: s 117(2A)(g).
Ordinarily, if the court decides that it is “justified” to make an order for costs - and in this case it clearly is justified - the usual rule is that the court makes an order for costs to be paid on a standard (or party and party) basis.
It was never intended by the making of such an order that a party receive a full indemnity for costs. However, as was identified by Sheppard J in Colgate-Palmolive Company v Cussons (1993) 46 FCR 225, there are various categories of case in which the justice of the case requires an order for indemnity (or solicitor and own client) costs. These include examples such as:
“particular misconduct that causes loss of time to the court and to the other parties.”
as referred to by French J (as his Honour then was) in Tetijo Holdings Pty Ltd v. Keeprite Australia Pty Ltd, Federal Court of Australia, unreported, 3 May 1991.
This case falls into that category.
Sheppard J also referenced the decision of Davies J in Ragata Developments Pty Ltd v. Westpac Banking Corporation, Federal Court of Australia, unreported, 5 March 1993) wherein another category was identified:
“the fact that proceedings were commenced or continued for some ulterior motive.”
In this case, the husband effectively forced the wife to recommence proceedings from scratch, having ignored her correspondence, so that she could obtain the fruits of the earlier proceeding. In that sense, it is impossible to see how the husband didn’t put her through these proceedings for no purpose other than his own satisfaction or, perhaps, to send her a message - and perhaps the court a message as well.
The husband has not responded to the letter from Hamilton and Associates. He could have simply revealed the name of the fund to the wife’s solicitors. They could then have signed consent orders and, sure, this would have cost some additional money to the wife, but those costs would have been relatively “small fry” in the scheme of what has now happened.
In short, I am comfortably satisfied that this case easily falls within the category of case in which an order for indemnity costs is appropriate.
I am also satisfied that the quantum is entirely appropriate. Mr Bithrey described it as “potentially a princely sum” but with respect, I think he’s too modest on that. I don’t see it as a princely sum given the work involved in the matter and the appearances in this court.
I consider it an entirely appropriate amount and I propose to order that the husband is to pay the wife’s costs of and incidental to this application on an indemnity basis, fixed in the amount of $8,985.
I am going to order that my oral reasons today be taken out. I think it might be useful for future reference to have these in writing. I am going to order that the husband pay that amount by 31 March 2022 and I will additionally note in the orders that the court has expressed serious concerns about the husband’s conduct and behaviours.
If the husband does not pay the costs order contained in these orders and if the wife brings an enforcement application, the husband will be required to attend court in person, failing which a warrant may be issued for his arrest.
I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Betts. Associate:
Dated: 6 December 2021
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