Akbari & Yawen
[2022] FedCFamC1F 738
Federal Circuit and Family Court of Australia
(DIVISION 1)
Akbari & Yawen [2022] FedCFamC1F 738
File number: CAC 334 of 2018 Judgment of: GILL J Date of judgment: 27 September 2022 Catchwords: FAMILY LAW – PROPERTY – Application to vary property consent orders pursuant to section 90 SN of the Family Law Act 1975 (Cth) – Miscarriage of justice related to mistake of fact. Legislation: Family Law Act 1975 (Cth) ss 90SM, 90 SN Cases cited: M & M [2003] FamCA 1304
Suiker & Suiker (1993) FLC 92-436
Division: Division 1 First Instance Number of paragraphs: 51 Date of hearing: 26-27 September 2022 Place: Canberra Counsel for the Applicant: Mr Finch Solicitor for the Applicant: Prudential Legal Solutions Counsel for the Respondent: Ms Haughton Solicitor for the Respondent: Inprivate Law ORDERS
CAC 334 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS YAWEN
Applicant
AND: MR AKBARI
Respondent
order made by:
GILL J
DATE OF ORDER:
27 September 2022
THE COURT DECLARES THAT:
1.There has been a miscarriage of justice by any other circumstance for the purposes of s 90SN of the Family Law Act 1975 (Cth) (“the Act”) such as to warrant that the consent orders of 7 March 2018 be varied or set aside and another order be made pursuant to s 90SM of the Act.
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 the pseudonym Akbari & Yawen has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
GILL J:
Introduction
The parties entered into consent orders for the adjustment of their property interests pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”) in March 2018.
The applicant seeks the variation of those orders pursuant to s 90SN of the Act, such that they be varied to provide for the applicant to receive a sum of $182,000 rather than the sum of $139,000 that was provided for in the orders. This variation is contended to cause the terms to reflect the underlying agreement between the parties that there be an equal division of the net equity held in their jointly acquired property during the relationship (B Street, Suburb C - “B Street”) in the context of an equality of their financial contributions.
The question of whether there was a miscarriage of justice warranting a remedy under s 90SN was dealt with as a threshold issue, with the issue of remedy being reserved for further determination.
The central contention relied upon by the applicant in seeking the setting aside of the consent orders was that they had been entered into in reliance upon an error as to the financial contributions made by each of the parties in relation to B Street. It is contended that the orders that equally divided the equity in this property between the parties were reliant upon an erroneous understanding that their financial contributions to this property had been equal. That erroneous understanding was contended to have flowed from a spreadsheet used by the parties to record their contributions that was said to have contained an erroneous formula within it.
The orders otherwise provided for the parties to retain other items acquired by them either prior to or during the relationship, including the retention of motor vehicles by each party, and the applicant’s retention of real property that she acquired prior to the relationship. This approach by the parties, in the context of a short relationship, was sensible in the manner in which it recognised contributions.
Other arguments for the setting aside were raised by the applicant.
The first was the assertion that the respondent had failed to disclose a motorcycle in his application for consent orders that he disposed of on the day that he executed the consent terms. It was accepted that the proceeds of the disposal were disclosed in the bank records provided by the respondent. It was not contended that the disposal was under value. It was not contended that the motorcycle was in any sense material which, given the manner in which the parties quarantined their property obtained outside their relationship, it could not be.
The second related to a purportedly false statement by the respondent in the application for consent orders, where he failed to tick the box indicating that he had received independent legal advice, which was said to constitute a false statement by virtue of his later description of having consulted a lawyer. This was relied upon purely as a false statement.
The third related to the respondent receiving into an account a deposit of $16,500 immediately following the entry into the consent terms, without subsequently providing an explanation. It is contended that this represents a failure to disclose a material asset held by the respondent.
Material Relied Upon
Applicant Wife
As per the Case Outline Document filed on 26 September 2022, the applicant relies upon the following documents:
(1)Minute of orders (Exhibit A2)
(2)Paragraphs 35-40, 42-50, 54-59, 62-94, 99, 100, 109, 128, 130, 131, 132-135 of her affidavit filed 6 September 2022
(3)Financial Statement filed 6 September 2022
(4)Tender Bundle
Respondent Husband
The respondent called no evidence in response to the assertion that there had been a miscarriage of justice warranting remedy.
Orders Sought
The applicant seeks that there be a variation of the cash payment component of the consent orders such that the respondent be liable to pay $182,000 rather than the $139,000 that he was previously required to, and has paid.
The respondent sought the dismissal of the application.
Each sought that they be heard in the event that it was determined that an order should be made pursuant to s 90SN prior to such further orders being made.
The purported critical error
The applicant relies upon an error in the spreadsheet prepared by the respondent that recorded the various payments made by the parties in respect of B Street and its improvement, along with payments made for their expenses. The spreadsheet approached the contributions of the parties as though it was an accounting exercise, but it was an approach that the parties were content to pursue as reflective of their joint life.
The error was not to any significant degree as to the payments that were recorded, but rather in the way that they were treated in calculating the amount that the applicant would need to pay to the respondent to equalise their contributions to B Street and their other expenses.
The applicant described that the respondent maintained the spreadsheet and that he showed it to her on 7 January 2018, after which she then sent a copy (as at Y-17) to her work email. The applicant described at [79] of her affidavit filed 6 September, her disagreement with the spreadsheet.
A screenshot of the spreadsheet was sent by the respondent to the applicant on 22 January 2018 (Y-20). The applicant requested the actual spreadsheet on 6 February 2018 (Y-21), but was told that it had corrupted and would be fixed.
On 7 February 2018, the applicant returned the spreadsheet that she had sent herself on 7 January 2018, with modifications, adding references for groceries in 2016, plus rent and other bills (Y-15 and Y-22). In that document, she replicated an amount of $97,761 as the purported shortfall in her share of payments, although she then discounted it to reflect the additional matters that she sought be taken into account.
She described that she did not see an error within the spreadsheet and offered to settle for $80,000 after deducting $17,640 for accommodation for the respondent from the shortfall amount.
The respondent replied that he was not going to check the modified version, and asked the applicant to check the figures in the consent terms. The applicant asked the respondent to highlight items in the spreadsheet that she had a right to. On 9 February, the respondent provided the applicant with the application for consent orders and asked her to check it.
On 10 February 2018, the respondent signed the terms.
On 12 February the respondent advised that he had updated the spreadsheet with the applicant's figures, that he would provide no further updates and asked for her final decision the following day.
On 13 February the respondent emailed the applicant (Y-19) offering to pay for the 2016 groceries and to pay back half the stamp duty to the applicant. He asserted that if they litigated he would obtain an estimate for the work that he had undertaken which he considered was worth $30,000, and asked for her decision.
This was followed by further exchanges that included assertions by the applicant that she only wanted her contribution acknowledged, and by the respondent that the applicant had not paid her half share.
On 14 February 2018 further exchanges took place to identify the division of chattels.
On 16 February 2019 the applicant signed the terms.
In their application for consent orders the parties indicated at question 68 that their financial contributions were the same.
It is necessary to understand the error in the spreadsheet that was ultimately conceded by the respondent. The spread sheet, which appears at Y-17, records expenses related to the applicant, shared expenses, expenses, purchases, mortgage, and paid amount (relating apparently to those items paid directly by the applicant). The various expenditures (excluding those under the heading for the applicant) totalled, on the spreadsheet, $331,379. The direct payments by the applicant were netted off at $27,030 after deducting from the applicant’s payments those items in the first column that correspond to expenditures incurred by the respondent for the applicant.
A further calculation of the applicant’s reimbursements to the respondent was made, totalling $107,192. This meant that relevant payments in relation to the expenditures of $134,223 had been made by the applicant.
These figures were not the subject of any substantive challenge, despite the assertion of other errors in the spreadsheet.
An error arose in the adding together of the total for the expenditures with the total of the expenses paid or reimbursed by the applicant. This led to a total figure for expenditure of $465,603 (a total that did not appear on the balance sheet but which may be derived from either adding the totals for the expenditures and reimbursements, or from adding the total for each person’s share which was calculated to be $232,801).
Having calculated each person’s share at $232,801, the payments made by the applicant were then deducted, leaving her with an outstanding amount to equalise their payments of $98,574.
The respondent accepted that this approach was erroneous.
If the accounting approach adopted by the parties was to be followed, it necessitated totalling their expenditures and halving them for each person's share, then deducting from that share what each had contributed to the expenses and reimbursed the other for.
If the total was adopted of $331,379 that left a share for each of half of that amount, being approximately $165,660.
Of this it appeared uncontroversial that the applicant had paid and reimbursed a total of $134,223, leaving an outstanding amount to equalise of approximately $31,345.
As outlined above, the applicant apparently did not accept the equalisation figure from the spreadsheet and instead paid to the respondent a sum of about $78,000 over a series of payments spanning 7 January 2018 until 2 February 2018. This was more than $46,000 more than the amount required to actually equalise the parties’ financial contributions in advance of the equal division provided for in the consent orders.
The other issues
The applicant did not address how her contentions in respect of the motorcycle, the failure to tick the box in the application for consent orders in relation to legal advice, or how the respondent’s receipt of monies after the consent orders were made influence the application pursuant to s 90SN.
Principles
The applicant seeks to vary the consent orders pursuant to s 90SN(1)(a) of the Act which is in the following terms:
90SN Varying and setting aside orders altering property interests
(1)If, on application by a person affected by an order made by a court under section 90SM in property settlement proceedings, the court is 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;
…
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 90SM in substitution for the order so set aside.
In M & M,[1] the Full Court considered mistake as a basis for setting aside an order pursuant to s 79A of the Act (the counterpart to s 90SN) at [33]:
33. The judicial process involves many elements. It involves giving the parties a fair hearing. It involves procedural regularity. It involves arriving at a just decision based on evidence properly put before it. There is often heavy reliance upon the conduct of counsel and concessions and agreements reached by counsel. In our view, where a concession is made or an agreement is reached based on a fundamental misunderstanding by counsel of the nature of his, her or their instructions then, if that misunderstanding has led to a result which is neither appropriate nor just and equitable in property proceedings, it is properly within the discretion of a judge hearing an application under s 79A to find that there has been a “miscarriage of justice”. The effect of that miscarriage of justice on the outcome of the proceedings will, of course, depend upon the magnitude of the error as well as other factors, including the timeliness of its discovery and the hardship that may befall either or both of the parties if the order is or is not made.
[1] [2003] FamCA 1304.
The contention for the applicant is that there was a mistake as to fact that vitiates the consent given for the making of the orders that has resulted in a miscarriage of justice. The applicant does not suggest any mala fides on the part of the respondent, accepting that it may have been a mutual error that both parties fell into as a result of the spreadsheet as referred to above.
Although the error in the spreadsheet was accepted by the respondent, its significance was not. It was not accepted that the error impugned the court process, it being at best a unilateral mistake made by the applicant. Further it is noted that there is no purported error in the orders themselves.
What was the significance of the spreadsheet error?
The applicant contended that the error led to a fundamental mistake. The applicant relied upon the statement of the Full Court in Suiker & Suiker,[2] where it was said at 80,471:
It is implicit in these passages that the consent to an order must be informed consent. The consent to the order is itself part of the judicial process on which the Court places reliance. If that consent is based on misleading or inadequate information, then there may be, in our opinion, a miscarriage of justice either by reason of the “suppression of evidence” or by reason of “any other circumstance.”
[2] (1993) FLC 92-436.
Further in that same case the court noted at 80,472 the breadth of the miscarriage referred to in the section:
As regards the view expressed in Clifton and Stuart that the expression “miscarriage of justice” “relates to the integrity of the judicial process” we are of the opinion that this passage was not intended to refer only to the hearing in the Family Court, but that the expression “judicial process” can refer to a variety of matters and circumstances which had an influence on the outcome of the litigation.”
The essential issue is the role played by the error in the orders that were ultimately made, and whether that resulted in a miscarriage of justice.
Despite limited evidence as to the nature of the reliance upon the spreadsheet, and the limited information about the spreadsheet, what can be gleaned is the following:
(a)Both parties were conscious that the payments each had made in relation to B Street and their expenses were matters of fundamental importance to them in determining the division of the equity of B Street which was the product of their relationship.
(b)The purpose of the spreadsheet was to enable the parties’ payments to be reckoned against each other and equalised, the calculation of the equalisation being the end point of the spreadsheet.
(c)That equalisation was the context of the proposed equal division of the equity in B Street.
(d)Although the parties ultimately disagreed as to what would result in equalisation, they each apparently (and the applicant certainly) reached their conclusions based upon the calculation contained in the spreadsheet.
(e)The methodology of the spreadsheet calculation was significantly erroneous.
(f)Although the orders themselves did not refer to the other payments between the parties, as identified by the applicant, the application for the consent orders was predicated upon the applicant making a payment prior to the orders directed to equalisation of their financial contributions.
(g)Where what the parties took as available for division was the equity in B Street the error in the spreadsheet equated to a little less than five percent of that amount, and was a significant amount in its own right.
What this means is that what the applicant considered that she was agreeing to (and apparently the respondent as well) was not in fact what was agreed to. They were each giving their consent to orders designed to effect equal division reliant upon an understanding as to what constituted their equal financial contribution (even if the respondent accepted that the applicant would pay less than what he considered was required for equalisation).
Accordingly, it may be taken that the error vitiated the consent as the consent was reliant upon a significantly false premise.
Conclusion
There has been a miscarriage of justice by any other circumstance for the purposes of s 90SN of the Family Law Act 1975 (Cth) (“the Act”) such as to warrant that the consent orders of 7 March 2018 be varied or set aside and another order be made pursuant to s 90SM of the Act.
The parties will be heard as to the appropriate remedy.
I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill. Associate:
Dated: 27 September 2022
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