Arthurman & Arthurman
[2019] FamCAFC 214
•19 November 2019
FAMILY COURT OF AUSTRALIA
| ARTHURMAN & ARTHURMAN | [2019] FamCAFC 214 |
| FAMILY LAW – APPEAL – INTERIM PROPERTY – Leave to appeal – Whether the primary judge erred by refusing the husband’s application for summary dismissal of the wife’s application for the dissolution of a trust, reimbursement of land tax associated with sale of property and indemnification against future liability – Where the wife filed a Notice of Contention – Where the primary judge found that only the wife’s application for dissolution of the trust had no reasonable prospect of success but declined to strike out part of the wife’s application as the husband had not sought that his Honour do so – Whether the primary judge’s decision was “attended by substantial doubt” to warrant granting leave to appeal – Where the husband asserted that the primary judge had made errors of fact – No error of fact found – Where even if there was an error of fact, it would not be material to the outcome of the primary judge’s decision – Where the decision of the primary judge was not attended by sufficient doubt to warrant the grant of leave to appeal – The husband has not established that he will suffer a substantial injustice if leave to appeal were refused – Leave to appeal not granted – Where the parties had agreed costs of the appeal should follow the event – Husband ordered to pay the wife’s costs of the appeal in a fixed sum. |
| Family Law Act 1975 (Cth) ss 79, 79A, 94AA Federal Court of Australia Act 1976 (Cth) s 31A Family Law Rules 2004 (Cth) rr 1.04, 1.10, 10.12, 10.14 Family Law Regulations 1984 (Cth) reg 15A(1)(a) |
| Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40 Apoda & Apoda [2013] FamCA 265 Athens v Randwick City Council (2005) 64 NSWLR 58; [2005] NSWCA 317 Bretton & Bondai [2013] FamCAFC 168 Ebner & Pappas (2014) FLC 93-619; [2014] FamCAFC 229 Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63 Lindon v The Commonwealth (No.2) (1996) 136 ALR 251; [1996] HCA 14 Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27; [2013] VSCA 158 Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34 National Companies and Securities Commission v News Corporation Ltd (1984) 156 CLR 296; [1984] HCA 29 Nicholson v Nicholson (1974) 2 NSWLR 59 Pelerman & Pelerman (2000) FLC 93-037; [2000] FamCA 881 Rafferty & Spencer (2016) FLC 93-710; [2016] FamCAFC 97 Rand & Rand (2010) FLC 93-444; [2010] FamCAFC 167 Spencer v Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28 Vadisanis & Vadisanis (2015) FLC 93-671; [2015] FamCAFC 180 Yates Property Corp Pty Ltd v Boland (1998) 89 FCR 78 |
| APPELLANT: | Mr Arthurman |
| RESPONDENT: | Ms Arthurman |
| FILE NUMBER: | SYC | 399 | of | 2017 |
| APPEAL NUMBER: | EAA | 114 | of | 2018 |
| DATE DELIVERED: | 19 November 2019 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Alstergren CJ, Aldridge and Watts JJ |
| HEARING DATE: | 5 March 2019 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 25 July 2018 |
| LOWER COURT MNC: | [2018] FamCA 551 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Apelbaum |
| SOLICITOR FOR THE APPELLANT: | Dunn Legal |
| COUNSEL FOR THE RESPONDENT: | Mr Roberts |
Orders
The application for leave to appeal be dismissed.
The appeal be otherwise dismissed.
There be costs fixed in the amount of $4,950 to be paid by the appellant to the respondent.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Arthurman & Arthurman has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EAA 114 of 2018
File Number: SYC 399 of 2017
| Mr Arthurman |
Appellant
And
| Ms Arthurman |
Respondent
REASONS FOR JUDGMENT
Background
This is an appeal brought by Mr Arthurman (“the husband”) pursuant to a Notice of Appeal filed on 20 August 2018. The orders of the primary judge, delivered on 25 July 2018, dismissed the husband’s Application in a Case which sought to summarily dismiss an Amended Initiating Application filed by Ms Arthurman (“the wife”) on 24 January 2017.
The substantive proceedings originally came before Fowler J of this Court in December 2007 and March 2008. At that time, the parties were seeking alteration of property interests pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). Those property interests included, relevantly:
·A fixed trust, the H Pty Ltd (the “Trust”), which was established by a deed of settlement dated 20 April 1994 with the husband and wife as trustees;
·A corporate entity, H Pty Ltd (the “Company”), which was the sole beneficiary of the Trust and whose sole shareholders were the husband and wife; and
·Two properties at W Street (“the Properties”) which, prior to orders being made, were registered in the names of the husband and wife who held the Properties as trustees for the Trust.
It is unnecessary to recount the extensive factual background to these proceedings beyond noting in summary that:
·On 18 March 2008, Fowler J made orders (“the 2008 orders”), including a property settlement order, requiring, among other things, that the Trust be dissolved; the husband receive the shares in the Company; the Properties be sold within 30 and 45 days, respectively and requiring the husband to pay to the wife a sum of $911,009. Order 14 gave the parties liberty to apply in relation to the implementation of the property settlement order;
·The wife appealed the 2008 orders and obtained a stay of the property settlement order on 17 September 2008. Her appeal was ultimately unsuccessful;
·On 20 September 2013, the 2008 orders were modified altering the amount the husband was to pay the wife;
·The properties were not sold until 3 October 2013 and as a result, land tax accrued on the Properties;
·The parties were pursued by the Office of State Revenue for land tax arrears of $32,256.62 accruing during land tax years 2010 through 2014 (“the land tax”); and
·On 10 January 2017, the amount of the land tax was ultimately garnisheed from the wife’s bank account, of which monies she claims were held by her on trust for the parties’ son.
The wife filed an Initiating Application commencing the present proceedings on 24 January 2017, followed by an Amended Initiating Application on 15 March 2017. As the primary judge noted at [43], the wife sought three species of relief:
·The dissolution of the Trust;
·Reimbursement for the garnished land tax, for which the husband should have been solely responsible; and
·Indemnification against any other fees, taxes or imposts for which the Trust may incur or be assessed as owing.
Reasons of the primary judge
In his Honour’s reasons, the primary judge evaluated the prospects of success of each of the three species of relief identified at [43] of the reasons.
Claim 1: Dissolution of the Trust
Regarding the question of whether the Trust had been dissolved, his Honour held at [52]:
In my view it is important to recognise that a trust does not exist in the abstract, but only attaches to property. Upon the trustee ceasing to own the bare legal interest, and upon the legal and beneficial interest both residing in the beneficiary, any trust ceases to exist…
His Honour concluded at [55], that the wife’s claim for the dissolution of the Trust was doomed to fail as the Trust had been dissolved on 3 October 2013 when the Company received the proceeds of sale of the Properties.
Claim 2: Reimbursement of garnished land tax
Despite finding that the wife’s claim for the dissolution of the Trust was bound to fail pursuant to Claim 1 above, the primary judge held that the wife’s claim for reimbursement of land tax sat independently and therefore, was not also bound to fail as a matter of course.
The primary judge made a number of observations on this issue, including at [58]:
… [the circumstances] have seen the wife solely shoulder liability for land tax assessed on the [properties] for periods when the 2008 orders did not contemplate that would occur. In effect therefore, her entitlement under the orders, as a matter of practical reality, have reduced by that amount. That was plainly not the intent of the 2008 orders, although all of this has come about because the parties did not comply with them.
His Honour went on to find that such an outcome would not necessarily be “incapable of remedy” in this Court, whether under the liberty to apply expressly reserved by Order 14 of the 2008 orders or pursuant to a general liberty to apply “if the orders are necessary to give effect to the order or to work it out to cover unforeseen circumstances” (at [59] of the reasons, citing Nicholson & Nicholson (1974) 2 NSWLR 59 (“Nicholson”) at [52]). As such, the primary judge concluded that the wife’s claim for reimbursement of land tax was not doomed to fail, frivolous, vexatious or an abuse of process. It did not matter whether the wife might have had rights enforceable elsewhere.
Claim 3: Indemnification against future liability
His Honour held at [63], that the wife’s claim for indemnification against any future liability with respect to the Properties was “indistinguishable from the claim which the wife brings in relation to reimbursement for land tax”. Whilst his Honour acknowledged that there did not appear to be a present claim by any other authority such as the Office of State Revenue against the husband and wife as trustees, it was by no means impossible that such a claim might arise in the future against which the wife might seek indemnification. This claim was accordingly, not doomed to fail, frivolous, vexatious or an abuse of process.
The present appeal
Leave to appeal
The husband’s appeal is against an interlocutory decree and is not in relation to a child welfare matter. The husband, therefore, requires leave to appeal to the Full Court of the Family Court of Australia pursuant to s 94AA of the Act and reg 15A(1)(a) of the Family Law Regulations 1984 (Cth). As the Full Court held in Medlow & Medlow (2016) FLC 93-692 (“Medlow”), leave to appeal will only be granted where:
a)The decision of the primary judge was “attended by sufficient doubt” to warrant its reconsideration; and
b)If leave were refused, a “substantial injustice” would ensue.
Counsel for the husband acknowledged that leave to appeal would be required but submitted that the question of whether the primary judge’s decision was attended by sufficient doubt could only be answered after determining the success of the husband’s grounds of appeal. The test in Medlow requires an examination of the grounds of appeal to determine whether the decision of the primary judge was attended by sufficient doubt to warrant its reconsideration.
The law regarding summary dismissal
Pursuant to r 10.12 of the Family Law Rules 2004 (Cth) (“the Rules”) a party may apply for summary dismissal of an application where the party claims that:
(a) the court has no jurisdiction;
(b) the other party has no legal capacity to apply for the orders sought;
(c) it is frivolous, vexatious or an abuse of process; or
(d) there is no reasonable prospect of success.
In Pelerman & Pelerman (2000) FLC 93-037 at [46], the Full Court summarised the principles relating to summary dismissal set out in the judgment of Kirby J in Lindon v The Commonwealth (No.2) (1996) 136 ALR 251 at 255–256 as follows:
(a) The power for summary dismissal is a discretionary one.
(b) Relief is “rarely and sparingly provided”.
(c)The parties seeking summary dismissal must show that the application is “doomed to fail” or has been otherwise described “that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious”.
(d)A weak case or one that is unlikely to succeed is not “sufficient to warrant termination”.
(e)“If there is a serious legal question to be determined, it should ordinarily be determined at a trial.”
(f)“If notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a Court will ordinarily allow that party to reframe its pleadings.”
(Emphasis removed)
The phrase “no reasonable prospect of success” has been the subject of frequent discussion in this and other superior courts. In Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [59], Hayne, Crennan, Kiefel and Bell JJ discussed this phrase as it appeared in s 31A of the Federal Court of Australia Act 1976 (Cth) and noted that it must be read as a whole. It should not be paraphrased or defined by analogy to other terms such as “frivolous”, “untenable”, “groundless” or “faulty”.
In Bretton & Bondai [2013] FamCAFC 168 at [59] and [122], the Full Court held that “no reasonable prospect of success” was conceptually different to “doomed to fail”. This distinction was cited with approval by the Full Court in Ebner & Pappas (2014) FLC 93-619 at [60], who went on to consider the interpretation of the same words by the Victorian Court of Appeal in Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27 (“Lysaght”).
According to the Court in Lysaght, the test asks whether the application has a “real” as opposed to “fanciful” chance of success. Whilst it must be applied by reference to its own language, the test is nonetheless broader than “hopeless” or “bound to fail”. It must also be borne in mind that “the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried” (Lysaght at [35]).
Grounds of appeal
The husband relies on 10 grounds of appeal, though many appear to overlap to some extent. The grounds of appeal are somewhat convoluted, however, we have done our best to discuss each of them below.
As was explained to counsel for the husband during the appeal hearing, the primary judge did not, and was not required to, determine the rights of the parties with respect to the land tax. All his Honour was asked to determine was whether the wife’s application had no real prospect of success or was otherwise frivolous, vexatious or an abuse of process such that it should be dismissed outright pursuant to r 10.12 of the Rules. The husband appears to be arguing his ultimate case in this appeal, rather than asserting that the primary judge erred in applying the principles relevant to summary dismissal. The more arguments the husband poses regarding his ultimate case, the more apparent it becomes that there are in fact multiple matters to be determined at a substantive trial.
Ground 1 – The implied stay
This ground takes issue with an observation made by the primary judge at [57] that “[i]t appears as though the parties treated the wife’s s 79A applications and appeal as effecting a stay of the 2008 orders, although the terms of any implied stay were apparently never negotiated”.
Given the 2008 orders were stayed in 2008, the husband submitted that this observation was an error of fact which led his Honour to misinterpret the intention behind the 2008 orders. He relies on the following comments made by his Honour:
·“The parties did not act consistently with the 2008 orders” (at [57]);
·“Had the parties complied with the 2008 orders within their contemplated timeframes, then none of the land tax liability could possibly have been sheeted home to the wife” (at [57]);
·“[A]ll of this has come about because the parties did not comply with [the 2008 orders]” (at [58]); and
·“[Because] the trust subsist[ed] for more than five years beyond the time the 2008 orders contemplated, a different set of circumstances came to prevail” which “is of the parties own making” (at [63]).
The husband’s submission is that, had the primary judge acknowledged that the 2008 orders were stayed by the Court on 17 September 2008 and not by some unspoken agreement between the parties, his Honour would have reached a different conclusion about whether the 2008 orders intended for the wife to pay the land tax. The husband also submits that, in placing weight on the wife receiving no interest upon her entitlements to the Properties, his Honour overlooked the fact that the wife had the benefit of living in one of the Properties without having to pay rent.
In her written submissions, the wife accepts that Fowler J stayed all but orders 13 and 14 of the 2008 orders on 17 September 2008 and that the 2008 orders were not implemented for a period of five years after the orders were made. According to the wife, the origin of the stay (whether Court ordered or tacit agreement) would not have affected his Honour’s determination of whether the relief sought by the wife was doomed to fail, frivolous, vexatious or an abuse of process.
We agree with the wife.
It is not clear that the primary judge made a mistake of fact in the first place. His Honour was correct in finding that neither party had complied with the 2008 orders, which were not stayed until some six months later, regardless of why that non-compliance occurred. Although the husband might say that his non-compliance was predicated on the wife’ refusal to transfer her interest in the Properties to the husband (likely in anticipation of her appeal and s 79A applications), at no point did the husband seek to enforce the wife’s performance of the 2008 orders. As such, it could rightly be said that the parties acted as though there was an implied stay on the 2008 orders up until Fowler J ordered a stay on 17 September 2008.
Even if the primary judge’s reference to an implied stay was a mistake of fact, we are not convinced that it had any impact, much less a material impact, on his Honour’s analysis. During the appeal hearing, despite having been asked on multiple occasions about the materiality of the distinction between an actual and implied stay, counsel for the husband seemed unable to articulate a clear response (Transcript 5 March 2019, p 11 line 21–p 12 line 42). In our view, nothing appears to flow from the distinction between the Properties remaining in the parties’ ownership due to a stay ordered by the Court rather than due to an understanding between the parties that they would act as though the orders had been stayed.
With respect to the husband’s assertion that the primary judge overlooked the fact that the wife had the benefit of residing rent-free in one of the Properties, we refer to [57] where his Honour plainly acknowledged that the wife resided in one of the Properties, but did not pay rent, until it was sold in 2013.
Ground 2 – Procedural fairness
In this ground, the husband claims that other than at one point during the hearing (Transcript 7 December 2017, p 33 lines 20–26), the primary judge did not raise the issue of an implied stay to the parties and, therefore, the parties were denied the chance to make submissions with respect to whether such a stay existed. Such a denial, according to the husband, constituted a failure to “afford a person whose interests may be adversely affected by a decision an opportunity to present material information and submissions relevant to such a decision before it is made” (Allesch v Maunz (2000) 203 CLR 172 per Kirby J at [35]).
In response, the wife submits that the husband was represented by counsel at the hearing (who also represented the husband in the 2008 proceedings), and that counsel for the husband clearly made submissions as to the husband’s interpretation of the 2008 orders in respect of the wife’s liability to pay taxes. The wife refers to the transcript from the hearing on 7 December 2017 in which counsel for the husband submitted that “in whatever universe of legal construction there might be, it was very much from 2008 [the wife’s] obligation to pay any taxes that arose, and that’s precisely what has happened” (Transcript 7 December 2017, p 36 lines 23–26).
It is well established that questions of procedural fairness will turn on their own facts (National Companies and Securities Commission v News Corporation Ltd (1984) 156 CLR 296 at 312).
In our view, the discussion of the stay during the hearing before the primary judge, which the husband himself refers to, illustrates that the parties had ample opportunity to, and in fact did, discuss the nature of the stay:
HIS HONOUR: … It is the next sentence I’m asking you about. This was six months prior to the substantive orders coming into effect. What do you mean by that?
[THE WIFE]: The substantive order that the [Properties] be sold.
HIS HONOUR: But they’ve been in effect since 2008, hadn’t they?
[THE WIFE]: No, your Honour, that was – they were stayed pending the determination of my appeal. My appeal was dismissed on 1 May 2013. So they in fact did not come into effect until 2013.
HIS HONOUR: Is that agreed, [counsel for the husband]?
[COUNSEL FOR THE HUSBAND]: It is agreed that [the wife] launched an appeal which was unsuccessful. I’m not familiar precisely with the dates, but I think that’s about right. And the reason that ---
HIS HONOUR: But was there a stay on the orders?
[COUNSEL FOR THE HUSBAND]: There was a stay, yes.
HIS HONOUR: I see. All right.
[COUNSEL FOR THE HUSBAND]: There was a stay. And the reason it took five years is because one first had to deal with [the wife]’s – she brought three section 79A applications, one in her on right, one in the right of the company and one in the right of the trust. They actually dealt with many appeals ---
HIS HONOUR: I see. All right. Thank you. …
(Transcript 7 December 2017, p 33, lines 5–33)
It is not clear to us what further submissions the husband could have made with respect to the stay. In any event, as explained above, we do not consider that the origin of the stay would have had any impact on his Honour’s finding that the wife’s application did not satisfy the criteria for summary dismissal in r 10.12 of the Rules.
Grounds 3, 4 and 5 – Intention of the 2008 orders
These grounds assert that the primary judge erred by first referring to a number of matters at [57] to “summarise how this situation came about” and then observing at [58] that the wife paying land tax was “plainly not the intent of the 2008 orders”. According to the husband, in doing so, his Honour improperly considered the surrounding circumstances of the 2008 orders (i.e. the matters summarised in [57]) without first finding that the 2008 orders were unclear or ambiguous.
In his written submissions, the husband quotes the judgment of Le Poer Trench J in Apoda & Apoda [2013] FamCA 265 (“Apoda”) at [46], where his Honour set out the approach to interpreting orders as follows:
a) Determine if there is any ambiguity created by the orders.
b)Whether there be ambiguity or not, identify the “surrounding circumstances” (other than the subjective intention of the parties) of the making of the orders and what has occurred thereafter to create the dispute, so far as those circumstances are such as might be available to assist in the construction of a contract.
c) Reach a conclusion in relation to the construction.
(Emphasis added)
Whilst it appears that the husband relies on Apoda as authority for the proposition that the Court cannot consider surrounding circumstances when interpreting orders unless the Court has first found that those orders are unclear or ambiguous, Le Poer Trench J did not articulate any such restriction.
At [38]–[40], Le Poer Trench J referred to Athens v Randwick City Council (2005) 64 NSWLR 58. There, Hodgson JA, with the agreement of Santow and Tobias JJA said:
36.It is very desirable that orders be completely self-contained and self-explanatory. However, as pointed out by Campbell J in Kirkpatrick at 578 [55], the recipient of an order is expected to try to understand and obey it. In my opinion, in considering whether an order is expressed so that the recipient knows or plainly should know what is required, it may be appropriate to have regard to the circumstances in which the order is made, including the terms of the reasons given for the order and elements of applicable law.
This theme was further developed by Santow JA, with Tobias JA agreeing, especially at [140]. Consistently, Drummond J in Yates Property Corp Pty Ltd v Boland (1998) 89 FCR 78 said:
... It is impermissible... as well as being quite unrealistic, to attempt to read, that is, to understand, an order in isolation from the context of the reasons for it being made. The Full Court of the Supreme Court of Queensland, in Australian Energy Ltd v Lennard Oil NL (No 2) [1988] 2 Qd R 230 held that, in interpreting an order of a court framed in unambiguous language, regard should still be had to the reasons given by the Court for making the order because they form part of a context in which the order was made. The case for referring to the reasons for an order where there is any suggestion that order may be expressed in unclear terms is a fortiori.
This passage was expressly adopted by the Full Court in Rand & Rand (2010) FLC 93-444 at [105].
We are of the view that it was open to the primary judge to consider the surrounding circumstances at [57] when commenting on the intent of the 2008 orders, and we do not consider that his Honour was required to make an express finding that the 2008 orders were unclear or ambiguous before doing so. In fact, his Honour was not required to interpret the 2008 orders beyond what was necessary to satisfy himself as to whether or not the wife’s application had any reasonable prospect of success.
With respect to the husband’s complaint that the primary judge failed to take into consideration all the relevant circumstances, we note that the husband could not point to any circumstance which his Honour omitted other than the stay ordered on 17 September 2008. Firstly, it is well established that a judge at first instance is neither expected nor required to make an explicit finding on every fact or argument relied on by a party (see Rafferty & Spencer (2016) FLC 93-710 at [30]–[35]), a fortiori when dealing with an application for summary dismissal which already requires only limited findings of fact. Secondly, for the reasons set out above, we do not consider the origin of the stay to be material to the outcome of his Honour’s decision.
Grounds 6 and 8 – Liberty to apply
The crux of this ground is that, once the sale of the Properties settled on 3 October 2013 and the husband transferred the sum of $870,009 to the wife in accordance with the consent orders made on 20 September 2013, in the husband’s view, there was nothing left in the 2008 orders to implement. Therefore, according to the husband, the primary judge should not have allowed the wife to bring her Amended Initiating Application filed 24 January 2017 pursuant to the express liberty to apply contained in Order 14 of the 2008 orders or any other implied liberty to apply such as that described in Nicholson.
We accept that it was open to the primary judge to find at [59] that he was not satisfied that the issue as to whether the wife should “solely shoulder” the land tax liability was incapable of remedy by resort to the express or implied liberties to apply.
The 2008 orders, as amended by the consent orders made on 20 September 2013, state that the wife is to receive the sum of $870,009, which, according to the reasons given by Fowler J, represented approximately 38% of her interest in the marital pool. However, as a result of a matrix of circumstances, the wife has received $870,009 less $32,256.62 in land tax. Whilst the wife may have known at the time that the 2008 orders were made, or shortly thereafter, that she would be exercising her rights to appeal and bring further applications pursuant to s 79A of the Act, it was by no means foreseeable that the present circumstances would eventuate.
In our view, it is disingenuous to argue, as counsel for the husband attempted to during the appeal hearing, that because there is no express reference to land tax in the 2008 orders, the orders have been fully implemented and the land tax will just have to lie where it fell. The reason that the very concept of liberty to apply exists is to help parties navigate unforeseen complications such as in the present case.
Turning briefly to the husband’s complaint that the primary judge erred in finding that there was liberty to apply despite there being “no present claim”, we consider that this ground misinterprets his Honour’s statement. When assessing whether the wife’s claim for indemnification had any reasonable prospect of success, the primary judge said at [62]:
In my view, notwithstanding the fact that there is apparently no present claim by any other authority against the trustees, it is by no means impossible to conjecture that such a claim may arise in the future. Particularly the wife points to capital gains tax as a likely prospect.
It is clear that the “claim” in question was a claim against the wife as trustee of the Trust brought by a third party such as the Office of State Revenue. As indemnification is a forward-looking remedy, it was sufficient for his Honour to find that it was not impossible for such a claim to arise against the wife in the future. And given the nature of the remedy, it would not make sense for the wife to have to wait until some other claim arose before seeking indemnity against further liability.
Ground 7 – Issue estoppel, res judicata and Anshun estoppel
This ground asserts that, as the proceedings were finalised by the 2008 orders and the wife was unsuccessful in her appeal and s 79A applications, she should be estopped from seeking a further remedy with respect to the 2008 orders.
We disagree and fail to see how the doctrine of issue estoppel, res judicata or Anshun estoppel apply here. In any event, as the wife’s written submissions note, the husband did not raise any of these issues at trial and thus he cannot be allowed to raise them for the first time on appeal.
Ground 9 – Lack of express indemnity
This ground takes issue with the primary judge’s comment at [64] that he placed “little weight upon the fact that the orders contained an express indemnity in relation to one property, but not the other.” According to the husband, the 2008 orders were unambiguous on their face, and his Honour was not entitled to assign weight to particular orders or “go behind” their intent. The husband cited the Full Court decision of Vadisanis & Vadisanis (2015) FLC 93-671 (“Vadisanis”) at [32] – [36] as authority for this point.
We have already addressed the issue of interpretation of orders in these reasons, and we only find it necessary to add a few observations:
·Firstly, the husband’s assertion that the 2008 orders are “unambiguous” fails to stand up against the primary judge’s findings at [22] regarding the lack of clarity of other parts of the orders.
·Secondly, it bears repeating the well-established principle from Gronow v Gronow (1979) 144 CLR 513 at 520 that an appellate court should be “slow to overturn a primary judge’s discretionary decision on grounds which only involve conflicting assessments of matters of weight”. In our view, it was open to the primary judge to give little weight to the presence of the express indemnity in relation to another property, particularly given that the 2008 orders were effectively made in the form submitted by one party and that they contained the drafting error identified by his Honour at [22].
·Finally, it is worth noting that Vadisanis concerned the Court’s power to reopen perfected orders, which as we have already established, is not what the wife’s Amended Initiating Application filed 24 January 2017 seeks.
Ground 10 – Partial dismissal
This ground asserts that given the primary judge had found that the wife’s application to dissolve the Trust was bound to fail, he should have partially struck out or partially dismissed that part of the wife’s application. At [65], the primary judge declined to do so, observing that the husband had not applied for a partial striking out or dismissal of the wife’s application.
The husband submits that r 1.04 of the Rules, which states that the “main purpose of these Rules is to ensure that each case is resolved in a just and timely manner at cost to the parties and the court that is reasonable in the circumstances of the case”, makes it incumbent on the Court to dismiss any part of an application that the Court has found is doomed to fail.
We do not accept the husband’s submission that r 1.04 of the Rules creates a positive obligation on the Court to strike out any part of a pleading that the Court has found is doomed to fail. Rule 10.14, which sets out the summary orders that the Court may make, is discretionary and intentionally broad. The breadth of this discretion is in keeping with the Court’s general discretion to make orders pursuant to r 1.10 of the Rules, and for the avoidance of doubt, is reiterated in the note that r 10.14 “does not limit the powers of the court”.
It was open for the primary judge not to sever part of the wife’s application on his own motion.
Conclusion
None of the husband’s ten grounds of appeal establish that the decision of the primary judge was “attended by sufficient doubt” so as to warrant the grant of leave to appeal. The husband has not established that he will suffer a substantial injustice if he was refused leave to appeal. Accordingly, the husband’s application for leave to appeal shall be dismissed.
The Wife’s Notice of Contention
The wife filed a Notice of Contention on 3 September 2018, supporting the orders made by the primary judge but indicating that she does not support his Honour’s findings at [50]–[55] that her claim for dissolution of the Trust was bound to fail. According to the wife, it was not open to the primary judge to find that the Trust had been dissolved on 3 October 2013, as there was no evidence before his Honour that the proceeds of sale of the properties had passed to the beneficiary Company.
As we have found no demonstrable error in the reasoning of the primary judge, we do not consider it necessary to do anything beyond note the wife’s contention.
Costs
When asked about costs at the appeal hearing, both parties indicated that they would be satisfied for the costs of this appeal to follow the event. As the husband’s appeal was wholly unsuccessful, we are minded to order that he pay the wife’s costs fixed in the sum of $4,950, which was the amount indicated by counsel for the wife.
I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Alstergren CJ, Aldridge & Watts JJ) delivered on 19 November 2019.
Associate:
Date: 19 November 2019
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