B Pty Ltd & Anker

Case [2025] FedCFamC1A 85

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

B Pty Ltd & Anker [2025] FedCFamC1A 85

Appeal from: Walterson and Anker & Anor [2024] FCWA 270
Appeal number: NAA 353 of 2024
File number: PTW 1806 of 2020
Judgment of: RIETHMULLER, CAMPTON & CHRISTIE JJ
Date of judgment: 14 May 2025
Catchwords:

FAMILY LAW – APPEAL – LEAVE TO APPEAL – Meaning of “interlocutory order” – Where the primary judge made orders summarily dismissing the creditor’s claim pursuant to s 79 of the Family Law Act 1975 (Cth) – Whether the creditor requires leave to appeal orders summarily dismissing the s 79 claim – Orders summarily dismissing s 79 proceedings are “interlocutory orders” for the purposes of seeking leave to appeal – Leave to appeal required – Leave to appeal refused.

FAMILY LAW – APPEAL – PROPERTY – Rights of third parties – Rights of creditors intervening in property settlement proceedings – Consideration of “matrimonial cause” – Where the creditor seeks to pursue a s 79 claim independently of a spouse of the marriage –Whether a creditor can pursue property settlement orders where there is no pending claim by a spouse of the marriage – Whether rights of a spouse under s 79 can be pursued by a creditor in the absence of extant proceedings – Whether a creditor’s rights are limited to the procedural rights of a party either supporting or opposing the orders sought by a spouse of the marriage – Claims under s 79 are limited to proceedings which constitute a “matrimonial cause” – Section 79 only applies where a claim is brought under circumstances arising out of a marital relationship – Creditor’s application to pursue a s 79 claim independently of spouses dismissed – Appeal dismissed.

Legislation:

Family Law Act 1975 (Cth) Pt VIIIAA, ss 4, 39, 41, 79, 79A, 80, 90AE, 92, 93, 117

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 28

Family Court Rules 2021 (WA) rr 86, 172, 176

Federal Court and Federal Circuit and Family Court Regulations 2022 (Cth) reg 4.02

Revised Explanatory Memorandum, Family Law Amendment Bill 2003 (Cth)  
Cases cited:

Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337; [1981] HCA 1

Australian Eagle Insurance Co Ltd v Parry (1992) ANZ ConvR 166

Barre & Barre [2021] FamCA 101

Beck v Spalla (2005) 142 FCR 555; [2005] FCAFC 82

Bienstein v Bienstein (2003) FLC 93-124; [2003] HCA 7

Biltoft and Biltoft (1995) FLC 92-614; [1995] FamCA 45

Bryson & Pember [2013] FamCA 43

Cao & Trongand Anor [2018] FamCA 460

Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246; [1981] HCA 20

Commissioner of Taxation v Tomaras (2018) 265 CLR 434; [2018] HCA 62

Dembitzer v Mills [1980] 2 NSWLR 697; (1980) 6 Fam LR 305

Deputy Commissioner of Taxation v Klimanand Kliman (2002) FLC 93-113; [2002] FamCA 629

Doughertyv Dougherty (1987) 163 CLR 278; [1987] HCA 33

Egan…

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AGLC
B Pty Ltd & Anker [2025] FedCFamC1A 85
Case
[2025] FedCFamC1A 85
Decision Date

CaseChat Overview and Summary

In the matter of B Pty Ltd & Anor, the applicant intervenor, B Pty Ltd, sought leave to appeal against the orders of the primary judge dismissing property settlement proceedings between the first respondent wife and second respondent husband. B Pty Ltd, a former solicitor for the wife, had a judgment debt of $210,000 for outstanding legal fees and sought to pursue this debt in the property settlement proceedings after obtaining leave to intervene. The wife had failed to comply with directions for the preparation of her property settlement claim and did not appear before the primary judge. The husband expressed a preference for the financial proceedings to conclude without further action on his part.

The primary judge dismissed the proceedings, concluding that what was effectively being sought was a process whereby the husband would pay the wife's judgment debt for her. B Pty Ltd appealed this decision, contending that the primary judge's orders were interlocutory and did not require leave to appeal. Additionally, B Pty Ltd argued that it was entitled to pursue its claim under s 79 of the Family Law Act 1975 (Cth), independent of the spouses' proceedings. The court had to determine whether the orders summarily dismissing the s 79 claim constituted interlocutory orders for the purposes of seeking leave to appeal and whether a creditor could pursue property settlement orders in the absence of a pending claim by a spouse of the marriage.

The court held that orders summarily dismissing s 79 proceedings are interlocutory orders for the purpose of seeking leave to appeal. However, the appeal was dismissed because the primary judge was correct to dismiss the wife's claim, given her failure to comply with previous directions and her absence from the proceedings. The court further determined that the intervenor had no substantive claim pursuant to s 79 of the Act. The intervenor's cause of action for the debt claim merged in the judgment of the Supreme Court and could not form the basis for a cause of action within the court's jurisdiction. Additionally, an intervenor may not continue to pursue a spouse's property settlement claim if the spouse abandons their claims or rights under s 79 of the Act, as the s 79 claim is a personal right of the spouse which is not assignable or transferrable. The court concluded that none of the various consequential powers available to effect a property settlement order provided a basis for an independent claim by the intervenor against the husband.

The court refused leave to appeal and dismissed the appeal, with no order for costs as the second respondent had incurred no recoverable costs in the appeal.

Orders

Orders of the court

NAA 353 of 2024

PTW 1806 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

B PTY LTD

Appellant

AND:

MS ANKER

First Respondent

MR WALTERSON

Second Respondent

ORDER MADE BY:

RIETHMULLER, CAMPTON & CHRISTIE JJ

DATE OF ORDER:

14 MAY 2025

THE COURT ORDERS THAT:

1. Leave to appeal is refused.

2. Appeal NAA 353 of 2024 is dismissed.

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).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

The applicant intervenor seeks leave to appeal against orders of the primary judge dismissing property settlement proceedings pending between the first respondent wife and second respondent husband. The applicant is a former solicitor for the wife in the proceedings and has a judgment debt of $210,000 for outstanding legal fees, which it sought to pursue in the property settlement proceedings after leave was granted to intervene. BACKGROUND There has been considerable litigation between the husband and wife with respect to both parenting and property issues. The wife has received lump sum payments of over $730,000 from the husband since separation (at [15]). The wife did not comply with directions for the preparation of her property settlement claim and failed to appear before the primary judge (see [8]–[12]). The husband made submissions to the primary judge that he “does not actively seek any orders in the financial case, which was commenced by the wife, and has a strong preference for the financial proceedings to conclude without him having to take any further steps” (at [13]). The intervenor opposed the dismissal of the proceedings, effectively seeking to “step into the shoes of the wife and run a case based on the proposition that property interests should be altered in her favour, thereby creating in her a ready capacity to meet the debt the intervener seeks to recover” (at [22]). As the primary judge identified, “in effect what was being sought was a process whereby the husband would pay the wife’s judgment debt for her” (at [27]). The primary judge dismissed the proceedings.LEAVE TO APPEAL The proposed appeal requires leave if it concerns interlocutory orders: see s 28(3)(e)(ii) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCOA Act”) and reg 4.02 of the Federal Court and Federal Circuit and Family Court Regulations 2022 (Cth) (“FCFCOA Regulations”). An order is final if it determines the rights of the parties as a matter of law, not as a matter of the practical consequence of the order: Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246. A judgment or order is not final where “the unsuccessful party could make a further application for the same relief, even though such an application might have very little prospect of success”: Bienstein v Bienstein (2003) FLC 93-124 at [25] (footnote omitted). In Robson and Robson& Ors (2003) FLC 93-145, the Full Court found that an order summarily dismissing a claim pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) fell within the meaning of the phrase “an order made by a court under section 79 in property settlement proceedings” so as to satisfy one of the requirements to bring an application pursuant to s 79A of the Act. In 2005, s 79(17) of the Act was added defining certain interlocutory orders in s 79 proceedings as final orders for the purpose of s 79(11) and (14). Robson’s case did not establish that an order summarily dismissing proceedings pursuant to s 79 is outside the definition of an interlocutory order for the purpose of reg 4.02 of the FCFCOA Regulations (as interpreted in accordance with Carr and Bienstein), which is for the purpose of regulating the right to appeal. Robson’s case only addresses the right to bring proceedings under s 79A.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The wife had failed to comply with previous directions and failed to appear. There were no other substantive claims or causes of action pending before the court. The primary judge was correct to dismiss the wife’s claim in such circumstances.CONCLUSION The intervenor had no substantive claim pursuant to s 79 of the Act. The intervenor’s cause of action for the debt claim merged in the judgment of the Supreme Court and thus could not have formed the basis for a cause of action within the court’s accrued jurisdiction. An intervenor may not continue to pursue a spouse’s property settlement claim if the spouse abandons their claims or rights under s 79 of the Act as the s 79 claim is a personal right of the spouse which is not assignable or transferrable. None of the various consequential powers available to the Court to effect a property settlement order provided a basis for an independent claim by the intervenor against the husband. The primary judge was correct to dismiss the proceedings. We therefore dismiss the application for leave to appeal. As the second respondent has incurred no recoverable costs in the appeal, we make no order for costs.

Ratio Decidendi

Legal Principle Established

At a general level, the appellant argued that it had a right to pursue a claim under s 79 of the Act. It is appropriate to consider this general claim before addressing the specific grounds concerning the primary judge’s finding that there is no jurisdiction to entertain the intervenor’s claim (Grounds 2, 6, 7, and 8).The operation of s 79 of the Act The words of s 79(1) are in broad terms, relevantly providing:(1)In property settlement proceedings, the court may make such order as it considers appropriate:(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; or(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage—altering the interests of the bankruptcy trustee in the vested bankruptcy property;including:(c)an order for a settlement of property in substitution for any interest in the property; and (d) an order requiring:(i) either or both of the parties to the marriage; or (ii) the relevant bankruptcy trustee (if any);to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines. Section 79 is not to be read as a free ranging general power to alter property rights of anyone who has ever married: the provision must be read to ensure that it remains within the ambit of the jurisdiction conferred by the Act, which is ultimately constrained by the limits of the constitutional power of the Commonwealth. The breadth of s 79 is limited by the requirement that the proceedings are a “matrimonial cause” as defined in subparagraph (ca) in s 4 of the Act. This limit is imposed by s 39 of the Act (Russell v Russell (1976) 134 CLR 495 at 538; Fisher v Fisher (1986) 161 CLR 438; Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337) although, in this case, it is by a proclamation under s 41 of the Act because this is an appeal from the Family Court of Western Australia. In Russell, Gibbs J said that the only way the relevant part of the definition of “matrimonial cause” can fit within constitutional bounds is if it is limited to “proceedings between the parties to a marriage” (at 528), because “conferring a jurisdiction unlimited as to parties … travels beyond the marriage power” (at 541; see also R v Ross-Jones; Ex parte Beaumont (1979) 141 CLR 504 at 510). Importantly, the “section can only have a valid application with respect to a claim based on circumstances arising out of the marriage relationship” (Doughertyv Dougherty (1987) 163 CLR 278 at 286, citing Russell at 525, 528, 542–543, 552–553). That is, “the rights and duties which the … Court may validly create or define under the section are confined to those which have their basis in the marital relationship” (Dougherty at 288). This reflects the fundamental structure of family law in Australia as a separate property regime rather than a community property regime: each spouse has their individual property entitlements at law and equity (Wirth v Wirth (1956) 98 CLR 228 at 231–232 and 247–248; Stanford v Stanford (2012) 247 CLR 108 at [37]–[39] and [50]). Whilst the Court may alter spouses’ property rights by making orders pursuant to s 79 of the Act, there is no presumption of equal sharing of property interests (Mallet v Mallet (1984) 156 CLR 605).