Aheb and Aheb

[2009] FamCA 56

FAMILY COURT OF AUSTRALIA

AHEB & AHEB [2009] FamCA 56

FAMILY LAW – ORDERS – Application for variation of partial distribution of property orders – interim proceeding – substitute sale of property orders – Party failing to attend on interim hearing – Natural justice – Res judicata

Family Law Act 1975 (Cth)

Blair v Curran (1939) 62 CLR 464
C and C [2001] FamCA 1279
H and H [1993] FamCA 49
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Taylor v Taylor (1979) 143 CLR 1

APPLICANT: Mr Aheb

RESPONDENT: Ms Aheb

FILE NUMBER: MLF 2471 of 2006

DATE DELIVERED: 5 February 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: 4 February 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR CARLILE

SOLICITOR FOR THE APPLICANT: J K LAWYER & CO

COUNSEL FOR THE RESPONDENT: MR MORT

SOLICITOR FOR THE RESPONDENT: JANE BALDWIN

Orders

1. That the application of the husband filed on 20 January 2009 and the response of the wife filed 2 February 2009 are dismissed.

2. That should any party desire to make any application for costs arising out of these orders, they do so by written submission including as to quantum of such costs by filing them with my Associate by email and served upon the other party by no later than 4.00pm on 23 February 2009.

3. That the recipient of any such application for costs may file and serve any submission in reply by 4.00pm on 27 February 2009, such submission being provided to my Associate at the email address shown above.

4. That any such application for costs be determined in chambers.

IT IS NOTED that publication of this judgment under the pseudonym Aheb & Aheb is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 2471  of 2006

MR AHEB

Applicant

And

MS AHEB

Respondent

REASONS FOR JUDGMENT

1. On 30 December 2008, I ordered that the former matrimonial home at W be sold and upon the payment of the various expenses associated with the sale, the discharging of the encumbrance and the payment of some legal costs, the balance of the net proceeds were to be paid to the wife by way of partial property settlement. 

2. The husband did not attend that hearing.  He now seeks to discharge those orders and to put in place a series of different orders because it is his desire as part of the proceedings before Murphy J which are still part-heard, to retain the former matrimonial home.

3. Whilst on the face of the figures, it might appear that there is more than ample equity for the husband to take a transfer of the former matrimonial home as part of his ultimate entitlement, my limited understanding of the proceedings before Murphy J would suggest that the significant dispute between the parties relates to money missing, misused or to be added back in some way.

4. The wife argued before me that there was a preliminary issue that I was bound by the principle of res judicata and having determined the case, the husband had no right to relitigate it noting that he had not made any application for leave to appeal.

5. I propose to deal with the res judicata point as the first issue.  In my reasons for judgment which were ex tempore on 30 December 2008, I indicated that although the husband had not been heard in the proceedings, I was satisfied that he had been provided natural justice and had had enough time to be prepared for the proceedings.  That conclusion was drawn from material provided to me and becomes important when I consider the evidence of the parties below.

6. The husband’s application in a case was filed on 20 January 2009.  He sought that my orders of 30 December 2008 be discharged or otherwise that there be a stay of execution until the application “could properly be heard”.  The latter point was not argued.  The husband seeks the discharge of my orders.  In addition, he sought that there be a sale of two investment units in B and various ancillary orders to implement those sales.  His application sought that upon the sales, $40,000 be paid to each of the respective lawyers to give effect to an order of Murphy J made on 28 November 2008 and to pay to the husband a sum of $14,450.52 as an adjustment in relation to the disparity of income drawn from rental property between he and the wife.  He sought that a further $20,000 to be paid to him for ongoing medical treatment and otherwise the balance be divided equally.

7. In addition to those orders, the husband sought that the orders of 30 October 2007 be varied to require the wife to pay out of the joint funds of the parties to the husband the sum of $455 per week on a monthly basis.

8. The husband also sought what on its face, looks like a discovery order but that was not pressed.

9. The wife’s response was filed on 2 February 2009 and she sought a dismissal of the husband’s application and although it was not pressed, an order that the husband be restrained from bringing further interim applications.

10. The wife’s argument is that I had determined the matter and that the husband was fully aware that it was to be so heard.  The husband’s argument is that he had an explanation for his non-attendance but that in any event, the orders I made were of an interim nature and as such, could be varied at any time.

11. In Blair v Curran (1939) 62 CLR 464 of the defence of res judicata, Dixon J said:

    A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.

12. The same principle was set out in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589.

13. In C and C [2001] FamCA 1279, the Full Court examined the concept of res judicata. At paragraph 109 of the judgment of Lindenmayer J with which Holden and Watt JJ agreed his Honour approved what was said in the learned works by Spencer Bower, Turner & Handley titled Res Judicata (1996) where it was said that a party setting up res judicata as a defence must show:

    (a)      the decision was judicial and pronounced;

    (b)the court had jurisdiction over the parties and the subject matter;

    (c)the decision was final and made on the merits;

    (d)the same question was raised in the subsequent litigation; and

    (f)the parties to the later litigation were parties to the earlier litigation.

14. There is no question in this case that I did not make a final judicial decision on the merits.  I was dealing with an interim position to protect the assets of the parties and to alleviate the financial pressure on the wife as a result of the unexplained financial behaviour of the husband.  To that extent therefore, this situation is analogous to an application for an injunction and indeed orders of that nature made on an interim basis.  If a court subsequently determines that the circumstances giving rise to the initial injunctions no longer apply, the court may alter its orders.

15. As such, the husband is not estopped from seeking a variation of the orders. 

16. The next dilemma however is that pursuant to the orders of 30 December 2008, apart from selling the house for the reasons to which I have referred, I made a partial property settlement order.  The power to make such an order has been accepted for a long time and in particular, the Full Court in H and H [1993] FamCA 49 said:

    42. We do not doubt that the Court has power in a proper case in s.79 proceedings to make what may be conveniently described as an interim order, that is an order dealing with some of the property of the parties prior to the final hearing. We do not consider that it is necessary to draw a distinction in terminology between an "interim" order and a "partial" order.

    43.But in the exercise of that power the following matters need to be considered:-

    (1)The exercise of the power should be confined to cases where the circumstances presented at that time are compelling. As a generality, the interests of the parties and the Court are better served by there being one final hearing of s.79 proceedings. However, circumstances may arise before there can be a final hearing which dictate that some part of the property of the parties should be the subject of orders. A common example is where both parties agree to the disposal of some assets pending the trial. However, we do not consider that it is confined to cases where the parties consent. Urgent situations may arise where it is necessary to exercise this power if injustice is to be avoided. Examples include cases where it is necessary to do so to avoid an asset being eroded or lost in the intervening period, and cases (beyond the maintenance power) where an order in favour of one party is necessary to preserve or obtain a home for or is otherwise necessary for the welfare of the children. As to the position in England under the Matrimonial Causes Act 1973 in relation to an interim property order in opposed proceedings and as to the matters to be taken into consideration in the exercise of that discretion including the "overriding grounds of individual or family welfare" - see the discussion in Barry v Barry (1992) 3 ALL ER 405.

    (2)It is an exercise of the s. 79 power. Consequently it must be performed within those parameters. Since it is not the final hearing the Judge is unlikely to have the final findings, but the exercise must fall within that general framework and the material available at that time.

    (3)Of necessity it is likely to be a somewhat imprecise exercise. Consequently, it must be exercised conservatively and the Judge must be satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the order which is contemplated is capable of being reversed or adjusted if it is subsequently considered necessary to do so. It is for this reason that we doubt whether the distinction which Nygh J drew between interim and partial orders is necessary or desirable.

17. My reasons for judgment on 30 December 2008 will show that it was my intention to avoid assets being eroded or lost and that I did not have the benefit of having to make final findings. I noted that on the evidence presented to me, the wife said that the husband was living in the home only 20 per cent of the time and there was over $2 million worth of assets as a result of which, not only was the protection of the asset base important but that any distribution at this point in time could easily be rectified in the final hearing. As the Full Court noted above, it is important when making a partial distribution of property to be able to reverse or adjust that order if it subsequently becomes necessary to do so. For that reason, I do not feel constrained by the orders I made by virtue of the fact that I was exercising some form of s 79 partial property settlement order.

18. The next question is whether or not the husband has been provided with natural justice.  In Taylor v Taylor (1979) 143 CLR 1, Gibbs J examined the issue of the finality of s 79 orders but noted that there are a number of qualifications to the finality. One of those qualifications was that a court has a general or inherent power as a matter of natural justice to review orders made in the absence of a party. In Taylor however, what gave rise to the appeal was the fact that the husband had no knowledge of the hearing that was conducted on an ex parte basis.  That is not the case here.  I have already said in my December reasons why I proceeded in the absence of the husband.  I have now had the advantage of reading his affidavit in support of the application before me.  He said that after the hearing before Murphy J on 28 November 2008, he instructed his solicitor to seek a court hearing on an urgent basis to vary or discharge the orders of Murphy J.  That application came before me on 16 December 2008 when I made orders for various documents to be filed for the hearing on 30 December 2008.  The husband said:

    …I was unable to and did not correspond with my solicitor for reasons of extreme health.  I was very sick at that time and did not access my electronic mail account, as such I did not respond to my solicitor’s electronic messages between the dates 16 December until about 23 December 2008, when my next correspondence to my solicitor was made.  By that time, although I provided last minute instructions for an application and an affidavit to be prepared for me, it may have been too late to properly present my application for the Court hearing on 30 December 2008.

19. It is the last sentence of that statement by the husband that I find perplexing.  On the hearing before me on 30 December 2008, I had access to an affidavit filed by the solicitor for the husband.  It was filed on 24 December 2008.  The solicitor indicated that the husband did not respond to her requests for instructions and she had been unable to get “satisfactory instructions and details from him to mount the application to vary” Murphy J’s orders of 28 November 2008.  Whilst that might be a generally correct overview of the problem, what could not be argued is that the husband had given instructions after the 28 November hearing as I have outlined above.  Just what the solicitor meant by “satisfactory instructions” or “details” is not clear but there can be no doubt that the husband knew that the application was before the Court on 16 December 2008 as senior counsel had been engaged to appear for him.  I must conclude that he did not follow up on the outcome of that application let alone contemplate that it may have been adjourned.  His explanation is that he did not correspond for reasons of extreme ill health.  Whilst the husband attached to his affidavit a variety of medical reports and other associated statements, there is no evidence to support the husband’s own statement that he was so ill as to be unable to correspond with his solicitor.  Curiously however, he refers to the fact that by 23 December 2008, he did provide last minute instructions but then said it may have been too late to present the documents for the hearing on 30 December 2008.  No such intimation was made either to the practitioners for the wife or to me.  Curiously also, the husband’s solicitor swore the affidavit to which I have referred on 23 December 2008 and filed it on 24 December 2008 indicating that the husband had not instructed his lawyers to appear on 30 December 2008.  Whilst there might be a fine line between the time to which the husband refers and that of his solicitor, it is hard to understand what the husband was referring to in relation to his correspondence with his lawyer around 23 December 2008.  He does say in paragraph 5 of his affidavit that he sent his affidavit by facsimile transmission which would have arrived after hours on 29 December 2008 and just what he meant by the fact that that was too late for it to be filed on 30 December 2008 escapes me.

20. Accordingly, this is not a situation in which the husband was oblivious to what was happening.  It was an application initiated by him and although he may have been ill during a discrete period, no application was made on his behalf for any adjournment.  As such, any issue of natural justice cannot be argued.

21. The next issue relates to whether the orders I made on 30 December 2008 as partial property orders under s 79 of the Family Law Act 1975 (Cth) (“the Act”), should be simply varied or discharged.  There is little doubt that I can make a consequential order in a property proceeding arising from a final property order.  For reasons I have indicated earlier, I do not see that I need to enter into any discussion about a distinction between a substantive order and a machinery order having regard to the fact that I considered the orders to be of an interim nature that could be varied as mentioned by the Full Court in H & H supra.

22. I turn then to the substantive applications and the evidence before me.  The nub of the husband’s case is that I have ordered the sale of a property that he wishes to retain in the ultimate settlement.  He describes it as his home.  There is no question that the wife does not wish to live there.  There are other properties of an investment nature that the parties own.  The inference the husband would have me draw is that it would be unreasonable for me to permit the continuation of the sales ordered on 30 December 2008 having regard to the fact that he desires to take that property.  However as I pointed out in my reasons for judgment on 30 December 2008, the husband could buy the property at auction if he so chose.  Whilst there was some discussion between counsel and myself on this application about Victorian law restrictions on parties bidding at their own auctions, it does not seem to me to be a major problem because the husband could always buy the property if he were able to obtain the necessary finance.  That might mean that he might need to consider some discussions with the wife.  That in turn may overcome the inconvenience and the costs of a sale. 

23. The husband’s evidence was that he was in urgent need of $20,000 to undergo medical treatment in Egypt as well as the hospital costs for surgery.  Much of the wife’s case before me on 30 December 2008 related to the fact that the husband had taken a substantial amount of money from his superannuation entitlements and spent it unilaterally.  At paragraph 14 of his affidavit, the husband referred to what he had done with the money.  He set out that he had paid some mortgage payments and $130,000 to his lawyers.  The payment to the lawyers is a subject of controversy having regard to the injunctions imposed particularly by Murphy J.  The husband set out that he spent $12,683.36 on “living expenses” in Egypt between August and December 2008.  On any view, that is a substantial amount of money for living expenses in such a short period of time.  He then referred to overseas expenses in London and his market research expenses associated with an importation business.  Those expenses were apparently incurred in Spain and Paris between August and December.  He then set out:

    Other expenses for ongoing business and litigation requirements in Cairo, as well as ongoing bills and expenses in  Australia – being a total of approximately $76,000 since August to December 2008; some of these expenses were long overdue and requiring urgent attention.

24. The absence of not only any comprehensive explanation to the Court let alone any source documents to the wife in circumstances where the husband was seeking to set aside the orders of Murphy J because of apparent impecuniosity and in circumstances where a significant part of the substantive dispute relates to large sums of money, is quite staggering.

25. In his application, the husband wanted the sale of two investment properties for the purposes of the carrying out of the orders of Murphy J of 28 November 2008.  There is no indication that I can find that Murphy J was contemplating the sale of any property because his Honour was of the understanding that the money was sitting in the CBA bank account.  His Honour not only ordered the disposal of $80,000 to the lawyers but injuncted the husband for the use of those funds otherwise.  To now seek orders for the sale of a property to fulfil those orders in my view cannot be justified. 

1. In addition, the husband seeks $20,000 for ongoing medical treatment and whilst he may very well be quite ill, there has been ample time for him to obtain appropriate medical reports and advice other than those to which I have already referred.  Those attached to his affidavit are certainly not current or consistent with an urgent requirement for medical treatment.

2. The husband also sought the payment out of the sale proceeds of $14,450.52 for an adjustment to be made because of the disparity of drawings from rental properties.  In my view, that is a matter that is more appropriately dealt with at trial.  For me to make such an order now sought by the husband smacks of a money grab.

3. The husband also sought that the wife make a payment out of joint funds to him of $455 per week on a monthly basis.  There is no justification for that order in jurisdictional terms.  If it purports to be an application for spousal maintenance, the evidence does not support such a claim.  Certainly, in circumstances where the wife indicated that substantial sums of money had been taken by the husband and I have already referred to those in my reasons of 30 December 2008, it would be hard to justify me making such an order now.  Alternatively, if this was an order sought on the basis of partial settlement of property, the evidence is far short of justifying such a regular payment.

4. In his affidavit, the husband set out that his weekly expenses were $467 per week.  He then set out that he was forced to cash in his superannuation fund in order to obtain funds to survive.  However, on his own evidence, he spent $12,683 on living expenses in Cairo, $2091 on overseas expenses associated with business activities and a further $76,000 for ongoing business and litigation requirements in Cairo as well as ongoing bills and expenses in Australia.  Much more explanation would be needed for me to be justified in making the orders sought where the evidence of the use of such funds is not accepted by the wife and no source documents have been provided.

5. I very much appreciate that the husband feels that it is “extremely humiliating” to have to “beg and borrow money in order to survive” when there are at least eight investment properties in Australia yielding income of approximately $8000 per month.  Having said that however, as I understand it, no such application has been made to date to sort that issue out.  The husband’s current application seeks that I sell the two properties in B.  However it was only on hearing submissions from counsel for the wife that I became aware and I suspect counsel for the husband himself became aware, that the parties’ son and daughter-in-law and family are living in one of those units without paying rent.  Such a sale would create obvious family problems.  Counsel for the husband quickly turned to a schedule of investment properties and picked two other properties which could be substituted for the purposes of the sale.  These properties appear to have some agreed values.  I do not feel at all comfortable about making sale and partial distribution orders in circumstances where there is no agreement between the parties.  The very problem about which the husband complains namely the fact that he wants to retain a property I so ordered sold, could apply to the wife as well.  In those circumstances, it would be quite inappropriate for me to make an order for the sale of other properties just for the sake of satisfying the current requirements of the husband in those controversial circumstances.

6. In his affidavit, the husband said that he always considered and still considered the former matrimonial home as his residential address.  He referred to the fact that his children grew up in that property and it held memories for him.  He said it was of great sentimental value.  He said as all of the current investment properties were leased out, if the former matrimonial home was sold, he would have nowhere to live.  However, he did not respond to the wife’s assertion that he was only living in the house about 20 per cent of the time.  It is to be noted that on his own evidence, he has spent a significant portion of time between August 2008 and September 2008 in Egypt.

7. For her part, the wife filed an affidavit in which she said that she had instructed an agent to place the former matrimonial home on the market for sale in accordance with the orders I had made as well engaged a conveyancer to prepare the necessary sale documents.  She made arrangements in relation to cleaning and maintenance of the property to bring it up to a saleable state.  In addition, and in accordance with the orders that I made, the wife made arrangements in relation to the husband’s personal belongings.

8. In relation to the husband’s affidavit, the wife said of his medical condition that he had always suffered blood pressure and diabetes but that did not seem to restrain his ability to travel extensively all over the world as well as involving himself in various businesses and court cases.  Whilst that may very well have been a comment which I should ignore, the reality is that the husband has not provided any evidence as to the urgency of the medical situation. 

9. The wife also said that the husband lives primarily in Egypt and that in any event, with the husband’s own evidence as to his incapacity, she said that the former matrimonial home would be virtually impossible for the husband to live in.

10. I am determining this matter on the basis of the evidence before me.  I do not see that I am restricted in any way from varying the orders that I made on 30 December 2008.  Those orders were of a discretionary nature bearing in mind the powers I was then exercising.  Even allowing for the fact that I accept there is power for me to do what the husband wants me to do, I do not feel it is appropriate in the circumstances to vary the orders or to stay the execution of them.  The husband had the opportunity to appear bearing in mind it was his own application that initiated the reaction and response of the wife.  He does not say anywhere in his affidavit that he did not understand that the wife was making the application she was. 

11. It would be inappropriate in my view to make the orders for distribution of funds on any sale in the terms that the husband now seeks.  As the Full Court said in H & H, those sorts of orders should only be made in exceptional circumstances.  On 30 December 2008, I deemed the circumstances were exceptional.  Nothing I have read from the husband or heard from his counsel in relation to his material has changed that position.

12. In relation to questions of injunctive relief if that is the basis upon which the husband seeks these orders, ultimately, he seeks that I exercise a discretionary power arising from s 114 of the Act. Section 114(1) says:

    (1)In proceedings of the kind referred to in paragraph (e) of the definition of matrimonial cause in subsection 4(1), the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including:

    (a)an injunction for the personal protection of a party to the marriage;

    (b)an injunction restraining a party to the marriage from entering or remaining in the matrimonial home or the premises in which the other party to the marriage resides, or restraining a party to the marriage from entering or remaining in a specified area, being an area in which the matrimonial home is, or the premises in which the other party to the marriage resides are, situated;

    (c)an injunction restraining a party to the marriage from entering the place of work of the other party to the marriage;

    (d)an injunction for the protection of the marital relationship;

    (e)an injunction in relation to the property of a party to the marriage; or

    (f)an injunction relating to the use or occupancy of the matrimonial home.

13. The fundamental requirement before exercising that power is that a court is satisfied that it is proper to make the orders ought.  I am not at all convinced on the material put before me by the husband that it would be appropriate or proper to make the orders he now seeks.

14. In the circumstances, I reiterate what I said in December namely that if the husband desires to retain the property, he has his remedies elsewhere.  If the matter is otherwise as urgent as the husband might have me accept, other applications came be made including to Murphy J for a resumption of the trial at a date earlier than his Honour’s return to Melbourne from the Brisbane Registry.

15. Accordingly, I propose to make orders.

I certify that the preceding Forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  6 February 2009