Baros & Baros
[2021] FamCA 534
•23 July 2021
FAMILY COURT OF AUSTRALIA
Baros & Baros [2021] FamCA 534
File number(s): SYC 1621 of 2019 Judgment of: HARPER J Date of judgment: 23 July 2021 Catchwords: FAMILY LAW – SUMMARY DISMISSAL – Where the parties reached consent orders in relation to their property dispute in 2019 – Where the husband alleges that the wife subsequently caused emails to be sent to his employer resulting in his unemployment – Where there was a provision in the consent orders preventing the wife from contacting his employers – Where the husband brought an application pursuant to s 79A(1)(c) – Where the wife sought the summary dismissal of the husband’s application – Where the wife relied on evidence which demonstrated factual disputes appropriate for a final hearing – Where there were disputes as to the interpretation of the consent orders – Where a final hearing is needed in order to determine the disputes – Application dismissed.
FAMILY LAW – COSTS – Where wife wholly unsuccessful on summary dismissal application.
Legislation: Family Law Rules 2004 (Cth) rr 10.12, 10.14
Federal Court of Australia Act 1976 (Cth) s 31A
Family Law Act 1975 (Cth) ss 45A, 79, 79A
Civil Procedure Act2010 (Vic) s 63
Cases cited: Apoda & Apoda [2013] FamCA 265
Arthurman & Arthurman [2019] FamCAFC 214
Bigg & Suzi (1998) FLC 92-799
Boston Commercial Services Pty Ltd v GE Capital Finance Australia Pty Ltd (2006) 236 ALR 720; [2006] FCA 1352
Bretton & Bondai [2013] FamCAFC 168
Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955
Ebner & Pappas [2014] FamCAFC 229
Farina & Lofts [2019] FamCA 228
Fitzgerald v Penn (1954) 91 CLR 268 at 277
Friar & Friar [2011] FamCAFC 71
Karlsson & Karlsson [2020] FamCAFC 207
Korsky & Bright (No. 2) (2007) FLC 93-352
Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 178 FCR 401
Langford & Coleman (1993) FLC 92-346; [1992] FamCA 68
Lindon v Commonwealth of Australia (No. 2) (1996) 136 ALR 251
Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27
March v E & MH Stramare Pty Ltd (1990) 171 CLR 506
Munnings v Australian Government Solicitor (1994) 68 ALJR 169
Olman and Anor & Teitzel [2020] FamCAFC 136
Pelerman & Pelerman (2000) FLC 93-037
Ritter & Ritter [2020] FamCAFC 86
Riva NSW Pty Ltd v Official Trustee in Bankruptcy [2017] FCA 188
Simmons & Simmons (2008) 40 Fam LR 520
Spencer v Commonwealth of Australia (2010) 241 CLR 118
Stanford & Stanford (2012) 247 CLR 108
Suiter & Suiter [2016] FamCAFC 72
Webster v Lampard (1993) 177 CLR 598
Number of paragraphs: 93 Date of hearing: 1 April 2021 Place: Sydney Counsel for the Applicant: Mr Gould Solicitor for the Applicant: KP Lawyers Counsel for the Respondent: Mr Todd Solicitor for the Respondent: Michael Conley Lawyers ORDERS
SYC 1621 of 2019 BETWEEN: MR BAROS
Applicant
AND: MS BAROS
Respondent
ORDER MADE BY:
HARPER J
DATE OF ORDER:
23 JULY 2021
THE COURT ORDERS THAT:
1.The Application in a Case filed by the Respondent Wife on 22 December 2020 be dismissed.
2.The Respondent Wife pay the Applicant Husband’s costs of an incidental to the Application in a Case filed on 22 December 2020 as agreed or assessed in accordance with the Family Law Rules 2004 (Cth).
3.The matter be referred back to the Docket Registrar for further case management.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Baros & Baros has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
Property proceedings were commenced in this Court by Ms Baros (“the wife”) on 15 March 2019 (“the initial proceedings”). The respondent to these proceedings is the wife’s former spouse, Mr Baros (“the husband”).
On 2 July 2019 the parties entered into interim consent orders which in summary provided for the husband to continue to pay the wife $500 per week, for the parties to seek a mortgagee moratorium on mortgage payments, and in the event no moratorium could be achieved, sale of the property situated at B Street, Suburb D (“the former matrimonial home”)
On 23 July 2019, at a conciliation conference, final orders (“the final orders”) were made by consent resolving the initial proceedings by altering the property interests of the parties pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
Broadly, the final orders left in place the orders for sale of the former matrimonial home made on 2 July 2019, but discharged consequential interim orders dealing with the disbursement of the proceeds of sale and other matters which do not require comment.
The final orders provided for the proceeds of such sale to be utilised in payment of the mortgage over the property, all costs of sale, the sum required to discharge the lease of the parties’ motor vehicle 1, all school fees outstanding in relation to the wife’s children, in payment to the wife of the sum which would give effect to an overall distribution of 60 per cent to her, and the balance to the husband.
Additionally, the orders provided for the husband to transfer the motor vehicle 1 to the wife upon completion of the sale of the former matrimonial home, with the wife to indemnify the husband of any associated costs other than lease repayments. The husband was thereafter to pay to the wife the sum of $41,600 minus the amount of spousal maintenance paid by him from the date of the final orders until completion of the sale of the former matrimonial home.
Importantly for the present application, Order 13 of the final orders also included a without-admission restraint which prevented the wife from contacting the husband’s place of employment or contractors.
Issues emerged between the parties shortly after the making of the final orders for reasons which will appear later. The wife sought to bring enforcement proceedings; the husband foreshadowed bringing an application to set aside the final orders.
On 30 July 2020, the husband filed an Initiating Application (“the present proceedings”), seeking relief pursuant to s 79A of the Act. The wife opposed this Application, and on 22 December 2020 brought an Application in a Case for the summary dismissal of the husband’s Initiating Application.
This judgment deals with the wife’s application for summary dismissal.
I note here that G Lawyers, a firm of solicitors, filed a Notice of Intervention by Person Entitled to Intervene on 29 March 2021. Their basis of the intervention is said to be as a creditor of the husband. G Lawyers were former solicitors of the husband. G Lawyers claims the husband owes it legal fees, and seeks an injunction “carving out” $80,000 from funds, being the balance of the proceeds of sale of the former matrimonial home, held in a controlled monies account. G Lawyers filed a Case Outline which set out the injunctive relief sought, and submissions. However G Lawyers appeared at the hearing and made clear it did not wish to participate in the hearing of the wife’s application for summary dismissal. This judgment does not deal with any questions relating to the intervention.
BRIEF HISTORY
At the time the final orders were made, the husband worked for himself through a company called H Pty Ltd. This company had a contractual relationship with J Pty Ltd, which seems to have involved F Company. This relationship had subsisted for 15 years. There was no dispute that this relationship was clearly an important source of income for the husband.
Following the making of final orders, the wife filed an Application in a Case on 4 October 2019, seeking a range of disclosure. She claimed that the husband had failed to comply with the final orders, and as a result sought to properly understand his financial position prior to bringing an enforcement application.
It seems sale of the former matrimonial home did not go smoothly. Further orders were made by consent on 25 November 2019 for the former matrimonial home to be listed for auction. After deducting the usual costs from the proceeds, the parties were to retain $50,000 each, with the remaining funds being placed in a Controlled Monies Account. It is not entirely clear why this order was made, in light of the final orders which also addressed the sale of the former matrimonial home.
On the same date, the husband was given leave to file an application for orders pursuant to s 79A within 21 days. The husband did not do so within time, and as a result on 14 February 2020 was forced to file an Application in a Case seeking further leave to file an Initiating Application.
On 2 April 2020, Senior Registrar Campbell (as he then was) ordered that, in the event the husband filed an application pursuant to s 79A, he was to also file and serve an affidavit annexing a pleading in the form of a Points of Claim.
The former matrimonial home has been sold. The sale settled on 3 May 2020. Parties each received the sum of $50,000 by way of partial property settlement. The wife receives a further $13,947.50 in reimbursement of costs relating to the sale.
The husband filed his Initiating Application on 30 July 2020. He filed a Points of Claim. His application sought that the final orders, other than the restraint on the wife from contacting his employment and contractors, and the interim orders of 2 July 2019 be set aside to the extent they were operative. He further sought an order for the nett proceeds of sale of the former matrimonial home to be distributed with the first half transferred to himself, and thereafter in payment of his costs on an indemnity basis, in payment of any capital gains tax liability otherwise payable by him in relation to the “letting by the [wife]” of the property, in payment of $13,947.50 to himself for reimbursement of monies previously paid to the wife under protest, and the remainder to the wife.
The Initiating Application and accompanying affidavit did not specify the particular ground of s 79A upon which the father was relying. Rather, it claimed that the husband had become unemployed due to the wife’s adult son informing his contractor of certain criminal convictions made against the husband on 24 July 2019. Due to his unemployment, and the circumstances surrounding this unemployment, the husband asserted that the final orders were no longer just and equitable. These assertions were sufficient, in my view, to direct attention to s 79A(1)(c).
The proceedings thereafter came before Senior Registrar Campbell (as he then was) on 3 August 2020. Orders were made by consent for each party to receive $108,000 by way of partial property settlement.
The matter subsequently came before the Court on 18 November 2020 for a case assessment conference, and orders were made for the exchange of financial disclosure by no later than 9 December 2020.
The orders of 18 November 2020 additionally required the husband to file an Amended Initiating Application outlining the particular subsection of s 79A upon which he relied. He did so on 1 December 2020. This Amended Initiating Application confirmed that he would be relying on s 79(1)(c) of the Act.
The wife asserts that the husband only provided her with financial disclosure shortly prior to a directions hearing on 17 December 2020. The material revealed that the husband had been employed full time since 10 August 2020, although she claimed contrary assertions had been made to both her and the Court during that period.
As a result, on 22 December 2020, the wife filed an Application in a Case seeking that the Initiating Application filed by the husband on 30 July 2020, as amended on 1 December 2020, be summarily dismissed. By his Response to the Application in a Case filed 4 March 2021, the husband opposed this Application.
On 12 February 2021, directions were made for the filing of documents and the matter was listed before me for interim hearing.
EVIDENCE RELIED UPON
The wife relies upon the following documents:
(a)her Amended Application in a Case filed 25 March 2021;
(b)her affidavit filed 25 March 2021;
(c)the affidavit of Mr K filed 26 March 2021;
(d)the affidavit of Ms L filed 25 March 2021; and
(e)the Tender Bundle provided 26 March 2021.
I note that there was objection by the husband to the affidavits listed above at b – d. The husband contended that his evidence should be taken at its highest (Webster v Lampard (1993) 177 CLR 598; [1993] HCA 57 at 608; Munnings v Australian Government Solicitor (1994) 68 ALJR 169; [1994] HCA 65 at 171), and consequently there was no place for evidence from the wife. Objection was also taken on the basis that orders had been made for one affidavit only by each party.
However, as the authorities discussed later make clear, the Court must evaluate the prospects of success of the husband for the purposes of the wife’s application. While the Court does not embark on some kind of mini-trial, it must grapple in part with the question whether there are factual disputes which should be permitted to go to trial. Leave was granted for the wife to rely on her material for this reason. By relying on her own evidence of course she ran the risk of helping to establish real or not fanciful factual disputes which should proceed to final hearing.
The husband relies upon the following documents:
a.his Response to the Application in a Case filed 4 March 2021;
b.his affidavit filed 4 March 2021; and
c.his Tender Bundle provided 26 March 2021.
In addition, the orders of 2 July 2019 were marked as “Exhibit A”, whilst the orders of 25 November 2019 were marked as “Exhibit B”, having both been tendered by the wife with no objection.
THE LAW – SUMMARY DISMISSAL
Although the wife did not refer to s 45A of the Act, as the husband pointed out in his written submissions, this section is the jurisdictional basis on which a summary dismissal can be ordered by the Court. Section 45A relevantly provides:
45A Summary decrees
…
No reasonable prospect of successfully prosecuting proceedings
(2) The court may make a decree for one party against another in relation to the whole or any part of a proceedings if:
(a) the first party is defending the proceedings or that part of the proceedings; and
(b) the court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceedings or that part of the proceedings.
When there is no reasonable prospect of success
(3) For the purposes of this section, a defence or proceedings or part of proceedings need not be:
(a) hopeless; or
(b) bound to fail;
to have no reasonable prospect of success.
In addition, a party may apply for summary dismissal pursuant to rule 10.12 of the Family Law Rules 2004 (Cth) (“the Rules”), which is in the following terms;
10.12 Application for summary orders
A party may apply for summary orders after a response has been filed if the party claims, in relation to the application or response, 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 likelihood of success.
Rule 10.14 of the Rules sets out the powers which the Court may exercise on a summary dismissal application:
10.14 What the court may order under this Part
On an application under this Part, the court may:
(a) dismiss any part of the case;
(b) decide an issue;
(c) make a final order on any issue;
(d) order a hearing about an issue or fact; or
(e) with the consent of the parties, order arbitration about the case or part of the case.
Note: This list does not limit the powers of the court. The court may make orders on an application, or on its own initiative (see rule 1.10).
It can be seen that the statutory test to be satisfied for an application for summary dismissal in s 45A is “no reasonable prospect of successfully prosecuting the proceedings”. The wording in Rule 10.12(d) is slightly different: “there is no reasonable likelihood of success”. However, nothing was said to turn on this difference. The wording of s 45A, as the statutory provision granting the Court power, should be applied, and as the discussion below demonstrates the authorities draw no distinction between the wording of s 45A and the wording of Rule 10.12(d).
The Full Court reiterated the relevant principles governing the question of summary dismissal recently in Ritter & Ritter [2020] FamCAFC 86 at [27], in particular following Lindon v Commonwealth of Australia (No 2.) (1996) 136 ALR 251; (1996) 70 ALJR 541; [1996] HCA 14 at [14] (“Lindon”), per Kirby J:
The approach to be taken by the Court to the Commonwealth's application for summary relief is not in doubt:
1. It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against Government and other powerful interests. This is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the Court, is rarely and sparingly provided;
2. To secure such relief, the party seeking it must show that it is clear, on the face of the opponent's documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious;
3. An opinion of the Court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment;
4. Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of demurrer. If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts;
5. 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 pleading. A question has arisen as to whether O 26, r 18 applies to part only of a pleading. However, it is unnecessary in this case to consider that question because the Commonwealth's attack was upon the entirety of Mr Lindon's statement of claim; and
6. The guiding principle is, as stated in O 26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the Court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the Court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit. (Citations Omitted)
Although directed to the rules of the High Court, and to proceedings in a jurisdiction where traditional pleadings are used, these principles have long been applied in this Court in applications for summary dismissal: Bigg & Suzi (1998) FLC 92-799; (1998) 22 Fam LR 700 (“Bigg & Suzi”); Pelerman & Pelerman (2000) FLC 93-037; (2000) 26 Fam LR 505; [2000] FamCA 881 at [46]; Korsky & Bright (No 2) (2007) FLC 93-352; (2007) 28 Fam LR 106; [2007] FamCA 1512; Simmons & Simmons (2008) 40 Fam LR 520; [2008] FamCA 1088 at [51]; Friar & Friar [2011] FamCAFC 71 at [51]; Ebner & Pappas [2014] FamCAFC 229 (“Ebner”) at [57]. Olman and Anor & Teitzel [2020] FamCAFC 136 at [28]; Karlsson & Karlsson [2020] FamCAFC 207 at [41].
The test set out in Lindon is usually understood as the “doomed to fail” test. But in Spencer v Commonwealth of Australia (2010) 241 CLR 118; (2010) 269 ALR 233; [2010] HCA 28, the High Court, when construing the wording “no reasonable prospect of successfully prosecuting the proceedings” in s 31A of the Federal Court of Australia Act 1976 (Cth), pointed out that the legislation has introduced the concept of reasonableness in assessing the prospects of a claim. At [22], French CJ and Gummow J said the criterion of a “reasonable prospect” of success has been understood “in analogous statutory settings to mean a “real” rather than “fanciful” prospect”, and the expression “no reasonable prospects of success” applies to a case in which the pleadings disclose “no reasonable cause of action and their deficiency is incurable.” They continued at [25]:
Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a "fanciful" prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. It will include the case in which there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and any case which might be propounded by permissible amendment. It will include the class of case in the longstanding category of cases which are "frivolous or vexatious or an abuse of process".
Hayne, Crennan, Kiefel and Bell JJ further held at 139 [52]:
52. ...effect must be given to the negative admonition in sub-s (3) that a defence, a proceeding, or a part of a proceeding may be found to have no reasonable prospect of successful prosecution even if it cannot be said that it is “hopeless” or “bound to fail”. ...[I]t is important to begin by recognising that the combined effect of sub-ss (2) and (3) is that the enquiry required in this case is whether there is a “reasonable” prospect of prosecuting the proceeding, not an enquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail.
Although s 45A of the Act was drafted following the decision Lindon, the Full Court initially said that the Lindon test remains relevant and preferred: Simmons at [51]. Later, Finn and Strickland JJ at [59] and May J at [120], [121] and [122] pointed out in Bretton & Bondai [2013] FamCAFC 168 the Lindon principles remain apposite even though Kirby J was addressing a “doomed to fail” test, and s 45A and Rule 10.12(d) introduce the different concepts of “no reasonable prospects” and “no reasonable likelihood” of success. See also Karlsson & Karlsson [2020] FamCAFC 207 at [40]. Section 45A(3) makes clear that the section establishes a test for summary dismissal which is different to the “doomed to fail” test.
In Ebner at [62], and Arthurman & Arthurman [2019] FamCAFC 214 at [17], [18], the Full Court cited with approval the interpretation of the applicable test stated by the Victorian Full Court in Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27; [2013] VSCA 158 at [27]; [35], in construing s 63 of the Civil Procedure Act2010 (Vic), as follows:
a.the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
b.the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in [General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125];
c.it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
d.at the same time, it must 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; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.
As the decision in Spencer makes clear, in determining whether a party has a “real” and “not fanciful” case which is devoid of incurable deficiency, or has “reasonable prospects”, persuasive guidance can be derived from other authorities discussing the application of the Federal Court of Australia Act 1976 (Cth), s 31A.
In Boston Commercial Services Pty Ltd v GE Capital Finance Australia Pty Ltd (2006) 236 ALR 720; [2006] FCA 1352 at [45], Rares J held:
...the Court must be very cautious not to do a party an injustice by summarily dismissing the proceedings where, in accordance with the principles in Hocking v Bell (1947) 75 CLR 125, contested evidence might reasonably be believed one way or the other so as to enable one side or the other to succeed. As soon as the evidence may have such an ambivalent character prior to a final determination, I am of opinion that then, as a matter of law, at that point there are reasonable prospects of success within the meaning of s 31A. Unless only one conclusion can be said to be reasonable, the moving party will not have discharged its onus to enliven the discretion to authorise a summary termination of the proceedings which s 31A envisages... [citations omitted]
Rares J continued at [47]:
…[s 31A] is engaged only to determine summarily a claim or defence which has no reasonable prospect of success. The purpose of the enactment is to enable the Court to deal with matters which should not be litigated because there is no reasonable prospect of any outcome but one. If there is a reasonable danger that a claim or defence could be dismissed under s 31A, which could succeed at a trial, the provision would create miscarriages of justice. It is a key feature of the judicial power under Ch III of the Constitution that the Court be in a position to, and in fact does, quell a controversy. The exercise of the judicial power to prevent the substantive agitation of a controversy in which each side has a reasonable prospect of success would defeat, not advance, the ends of justice.
In Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955, Gilmour J observed that:
... in a case where evidence can give colour and content to allegations, and where questions of fact and degree are important, the Court should be more reluctant to dismiss a proceeding on the face of a pleading [at [6(c)]]; [and]... if there was a real issue of fact or law to be decided, and the rights of the parties depend upon it, it is obviously appropriate that the matter goes to trial. It cannot be said that where there is a real factual dispute and that factual dispute must be resolved to determine whether the claims succeeds that there is ‘no reasonable prospect of success [at [6(e)]]; and... evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects. [at [6(h)]].
It has been recognised that the question whether a proceeding has no reasonable prospect of success necessitates the making of value judgments in the absence of a full and complete factual matrix and argument, with the result that the provision vests a discretion in the Court: Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 178 FCR 401; (2009) 259 ALR 319; [2009] FCAFC 117; at [28].
The wife herself relied upon the decision of Perry J in Riva NSW Pty Ltd v Official Trustee in Bankruptcy [2017] FCA 188, where Perry J followed
[49] Finally, in his Honour’s helpful explanation of how these principles are to be applied, Reeves J in [Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256] further explains at 271–272 [46] that:
…the determination of a summary dismissal application therefore does not require a mini-trial based upon incomplete evidence to decide whether the proceedings are likely to succeed or fail at trial. Instead, it requires a critical examination of the available materials to determine whether there is a real question of law or fact that should be decided at trial. Each application for summary judgment or summary dismissal has to be determined according to its particular circumstances. What is required is a practical judgment of the case at hand. The relevant circumstances will partly depend upon the stage which the proceedings have reached. Among other things, this will affect the materials available to the Court considering the application, for example, whether pleadings have been exchanged, or discovery of documents has occurred.
[50] To illustrate the application of these principles, Reeves J explained at [47] that the moving party is more likely to succeed if she or he demonstrates that the applicant’s success relies on a question of fact that is fanciful, trifling, implausible, improbable, tenuous or contradicted by all the available documents or evidence. Conversely, his Honour explained that, as a general principle, such an application is unlikely to succeed where, on a critical examination of all the available materials, the Court is satisfied that there appears to be a real question of fact to be determined. The latter, in his Honour’s view, is more likely to be the case where the available materials include pleadings that raise factual disputes that can truly be described as significant, substantial, plausible or weighty.
It is necessary then to turn to the husband’s application under s 79A(1)(c) of the Act.
THE LAW – SECTION 79A(1)(C)
As identified above, the husband’s Initiating Application is grounded in s 79A(1)(c) of the Act, which reads as follows;
79A Setting aside of orders altering property interests
(1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
… (c) a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order …
The purpose of 79A(1)(c) is “[e]nsuring that justice and equity is achieved in the context of default of an order having occurred…”: Blackwell & Scott [2017] Fam CAFC 77 (“Blackwell”) at [46].
In order to be ultimately successful in his substantive application, the husband must demonstrate that the default has occurred, and that it is just and equitable in the circumstances arising as a result of the default to set the order aside and make alternate orders. There must, however, be a “causal link or nexus between the default and the circumstances that have arisen” (Blackwell at [6]). In Blackwell at [8], Aldridge J applied the general law approach to causation, that is, it is a question of fact to be resolved as a matter of common sense: Fitzgerald v Penn (1954) 91 CLR 268 at 277; March v E & MH Stramare Pty Ltd (1990) 171 CLR 506 at 515 and 522-3.
The submissions of the parties assumed “order” as used in s 79A(1)(c) referred to the entire body of orders comprised in the final orders. I will do the same. The husband’s proceeding under s 79A(1)(c) is structured around the contention that the wife’s breach of Order 13 should lead to a setting aside of the interim orders of 2 July 2019 and the final orders, to the extent they are operative, followed by different orders for property adjustment. His Points of Claim articulate more particulars of this claim.
DISCUSSION
Summary of the husband’s section 79A(1)(c) claim
The husband’s claim relies specifically on order 13 of the final orders, which restrains the wife from “contacting the place of employment of the husband, J Pty Ltd or the contractors for the husband or the husband’s company”. This order was made on a without admission basis.
The husband argues that the order is widely framed, and, properly construed, prevents the wife from contacting any of the nominated entities through third parties or an amanuensis.
In particularising his claim, the husband relies on an email sent by the wife’s adult son, Mr K Baros (whom I will refer to as “Mr K” for clarity, intending no disrespect), to J Pty Ltd, a company specifically mentioned in Order 13, and according to the husband, the employer with whom he had a 15 year contractual relationship.[1] In the email, Mr K states that he was making contact, “on behalf of [his] mother” in order to “inform [J Pty Ltd] of the final verdict of the domestic violence court case which was on the 24th July 2019 between [the wife] and [the husband]”. Mr K then attached the final judgment in the criminal proceedings, specifying that the husband had been “formally charged with a criminal record”, as well as informing J Pty Ltd that the second branch of the criminal proceedings relating to an alleged sexual assault would proceed to final hearing in May 2020. Mr K also noted that “on the 17th July, M Company came [sic] and collected [the husband’s] motor vehicle 2 because he had not met his finance payments”, before asking whether the husband was working with a standby motor vehicle 2 or with that same motor vehicle 2.
[1] Husband’s Electronic Court Book, pg. 61.
The husband suggests that it is clear on the face of the email that Mr K was in contact with the husband’s employer on behalf of the mother. He claims that this email was sent in direct defiance of Order 13, and was done with the intention of prejudicing the husband’s employment.
The day after Mr K’s email was sent, on 29 July 2019, the husband’s employment was terminated. According to the letter of dismissal, this was because “[h]aving regard to [the husband’s corporate entities’] past performance and other matters J Pty Ltd in its sole discretion considers relevant, J Pty Ltd has determined not to enter into a further agreement with [the corporate entity]”.[2]
[2] Ibid, pg. 58.
In his evidence, the husband additionally suggests that he was called into a meeting with his general manager, Mr N, and his supervisor, Mr P on 29 July 2019. The husband deposed that Mr N told him that J Pty Ltd could not “proceed with giving [him] a further contract after 15 years working for [them]. The reason being the email [they had] received from [the husband’s] ex-wife’s son”.[3]
[3] Affidavit of the Husband filed 4 March 2021, pg. 4 [23].
According to the husband, his income at the time of signing the final orders was approximately $14,800 per month, derived from his work with J Pty Ltd.[4] Following his termination from J Pty Ltd, he was thereafter unemployed for approximately 12 months, until August 2020. He is now working for Q Pty Ltd, with a total monthly income of approximately $4,400.[5] As such, he receives $10,400 less per month at present than at the time of the final orders.
[4] Ibid, pg. 4 [27].
[5] Ibid, pg. 4 [29].
It is ultimately the husband’s case that he lost his employment, and therefore income, as a result of the wife’s default. He suggests that there is a direct causal link, and as a result of his decreased earnings it would be just and equitable to set aside the final orders.
Taking the husband’s evidence at its highest, in the sense that it is untested, in my view these facts, if found in the husband’s favour, could establish sufficient to preclude a conclusion that he has no reasonable prospects of success.
However, as already noted, the wife also sought to read and rely upon her own evidence, in support of summary dismissal.
The wife’s summary dismissal argument
The wife suggests that, “[h]aving regard to the standard of proof required”, the husband’s case does not meet the “requisite standard”, even if taken at its highest.[6] She suggests that his case is built on “a series of tenuous, implausible, cascading aetiological premises that are neither factually supported in the Husband’s case, taking it at its highest, nor even logically available”.[7]
[6] Wife’s Electronic Court Book, pg. 9.
[7] Ibid.
The reference to the husband’s onus of proof is somewhat confusing. Since she brought the application for summary dismissal, it is the wife who bears the onus of satisfying the Court that the husband has no reasonable prospect or likelihood of success.
Counsel for the wife structured his argument by reference to the three elements of s 79A(1)(c); a default, a causal connection between the default and the circumstances that have arisen, and it being just and equitable to make the orders.
The Default
The wife argued that the final orders only restrained herself from contacting J Pty Ltd, and it was clear she did not. The wife relied upon her own evidence, as well as the evidence of her two adult children, to argue she had no direct contact with J Pty Ltd, and that she did not make the request to Mr K to contact J Pty Ltd; rather, he did so without any communication with his mother.
There are two obvious reasons why these arguments should be rejected. The first is that the husband proposes an interpretation of the final orders which would prohibit the wife using third parties to effect the contact prohibited by Order 13. Such an interpretation is plainly plausible. The husband gave evidence that he would not have entered into the final orders if Order 13 had not been included. On their face, the final orders raise the inference that the purpose of Order 13 was to protect the husband’s employment and income, as part of a just and equitable outcome under s 79 of the Act.
Furthermore, the wife’s own material, particularly the affidavit of Ms L (whom I will refer to as “Ms L” for clarity, intending no disrespect) who is the wife’s daughter, shows beyond argument that there began a deliberate course of conduct in late 2018 or 2019 of reporting by email to J Pty Ltd information about the husband’s criminal litigation for the purpose of drawing a connection between his alleged criminality and his employment. There is a factual dispute about who was responsible for these emails, whether the wife herself, or through her daughter Ms L, and without the wife’s knowledge. This is not capable of resolution on a summary dismissal application. But more than that, although I express no concluded view, this course of conduct may be a factor which, after a final hearing, may be held to support the husband’s construction of Order 13; that is, it was objectively intended to capture the wife acting through third parties, including her children. In construing a Court order, even one made by consent, the Court may look to extrinsic material, but not the subjective intentions of the parties, to resolve ambiguity in a court order: Langford & Coleman (1993) FLC 92-346; [1992] FamCA 68 at 79,671; Apoda & Apoda [2013] FamCA 265 at [35] - [41]; Suiter & Suiter [2016] FamCAFC 72 at [28]; Farina & Lofts [2019] FamCA 228 at [23].
The second reason this argument should be rejected is that the wife’s evidence itself, which she chose to rely upon in support of her application, in this regard simply shows that there is a real question of fact concerning the circumstances in which Mr K sent his email on 28 July 2019. By its very terms, the email raises a clear and ready inference that the wife procured her son to contact J Pty Ltd with the deliberate intention of undermining or destroying the husband’s livelihood or income from that employer. The denials and assertions by the wife and her son do not, on a summary judgment application, demonstrate that the husband’s contentions about the email are fanciful or not real. On the contrary, they demonstrate that the credibility of the wife and her son as witnesses is likely to be the subject of challenge at a final hearing, and this contested evidence might reasonably be believed one way or the other so as to enable one side or the other to succeed.
I note that, understandably, in the course of oral submissions, Counsel for the wife conceded there was a factual dispute in relation to the question of default. I am not satisfied the wife’s material and arguments demonstrate the husband’s claims in respect of default for the purposes of s 79A(1)(c) have no reasonable prospect or likelihood of success.
The Causal Nexus
The wife next argues that the husband is unable to demonstrate a causal nexus between the alleged default and his termination by J Pty Ltd.
Firstly, she suggests that the letter of termination sent by J Pty Ltd to the husband informing him that his contract would not be renewed does not specify the reason, other than stating that the failure to renew related to H Pty Ltd’s “past performance” and “other matters”.[8] Additionally, she suggests that the further evidence proffered by the husband, being the evidence of a conversation with Mr N, for his employer, on 29 July 2019, is hearsay evidence which has not been corroborated by the purported source.
[8] Husband’s Electronic Court Book, pg. 58.
I reject both these arguments. As already pointed out, the question of causation is a question of fact to be resolved as a matter of common sense. In the context of a summary dismissal application, the reference in the termination letter to “other matters” when viewed against Mr K’s email dated 28 July 2019 again allows for an obvious inference that Mr K’s email was a factor in bringing about the termination of the husband’s employment, as indeed may have been the purpose of the email. Whether it was necessary or sufficient in itself to bring about the cessation of the husband’s contractual relationship is a question which is appropriate for determination after a final hearing when all the admissible evidence is adduced and tested in cross-examination.
Similarly, the husband’s evidence of a conversation with Mr N in 29 July 2019 shows the husband’s claim is not fanciful, but may be substantial. Of itself this evidence taken at its highest could establish causation.
As noted, the wife contends that because the husband’s evidence in this regard is hearsay, it can be discounted in a summary judgment application. In my view, this is misconceived. Her application is interlocutory: Ebner at [30] – [32]; Ritter at [30]. At this stage of proceedings, challenging evidence as hearsay, even if correct, is not to the point for the purposes of an interlocutory application: Evidence Act 1995 (Cth) s 75). The source of the husband’s evidence is clearly Mr N. Corroboration is not necessarily essential even for a final hearing, and certainly is not to the point in the context of this summary dismissal application.
The question is whether there exists a factual dispute which should be resolved at a final hearing. The husband may call Mr N as a witness. So may the wife. If called, his evidence will be tested, and might reasonably be believed one way or the other. The wife’s argument seems to confuse what is desirable for a final hearing with the question of the husband’s reasonable prospects of success at an interlocutory stage. It cannot at this stage be said only one factual conclusion is reasonable. I am unable to conclude the husband has no reasonable prospects of success in demonstrating as a matter of common sense a causal connection between the wife’s alleged breach of Order 13 and a loss of income. This conclusion is sufficient to dispose the wife’s argument concerning the causal nexus between the alleged default and the circumstances which have arisen as a result of the default.
However, it should be said this conclusion is fortified by the wife’s evidence. She points to the affidavit of her adult daughter, Ms L, who exhibited emails to Mr N. These emails are dated between 5 June and 17 July 2019, meaning that they occurred prior to the final orders being made, as well as occurring mere days before the alleged conversation between the husband and Mr N. Ms L claims she sent these emails from her mother’s email address, without her mother’s knowledge. This may be true or it may not be true. The emails are all on their face expressed to be sent by the wife. This raises a factual issue to be determined.
The emails were obviously intended to invite the husband’s employer, and F Company, to consider impugning their commercial relationship with the husband in light of his alleged criminal conduct. For example, an email of 7 July 2019 to Mr P, and apparently signed by the wife, states:
Mr P, I am aware that this situation is a direct family issue and F Company has no direct involvement but why is the company allowing a subcontractor to work after lying about having charges dropped when they are still ongoing? The approach that has been taken in dealing with this situation has to break some sort of code of conduct or policy of the F Company? Does this mean that F Company is allowing someone involved in a matter of domestic and sexual violence to continue working with no repercussions?
The email then asked for the contact details of the supervisor of Mr P, and on 16 July 2019, a further email was sent, again apparently from the wife, to Mr N, which in part stated:
I am writing to discuss a situation with one of your subcontractors. It is in regards to a domestic violence and sexual assault case that is continuing with subcontractor and my estranged husband Mr Baros. I wanted to discuss the policies that F Company have in place in dealing with situations such as these and if he will be continuing as a subcontractor. | have been in contact with Mr P, one of the J Pty Ltd managers since the beginning of this situation and Mr Baros’s motor vehicle 2 was periodically suspended until he lied about having his charges dropped and he was set back to work. Since then, no further action has been taken. The approach that has been taking in dealing with situation has to break some sort of code of conduct or policy of J Pty Ltd? I have an understanding from Mr P that this situation does not directly involve the company but why are they allowing a subcontractor to he about situation of this severity?
Significantly, according to the wife, Mr N states in an email dated 17 July 2019:
We do have clauses in our contract, as well as a code of conduct, and policies and procedures to take action should something occur within the provision of service outlined in those documents. As this matter does not relate to the provision of a service, and is a personal matter it does fall outside of those requirements at this stage.[9]
[9] Wife’s Electronic Court Book, pg. CB68.
The email of 17 July 2019 continued as follows:
These matters need to be finalised in court before we can explore options within our contract, as at this stage [the husband] is defending the claims made against him.
If you could keep me updated with the outcomes of these court cases that would be appreciated.[10]
[10] Ibid.
On their face, and irrespective of their author, these emails disclose an intentional concerted campaign to undermine the employment relationship of the husband with J Pty Ltd and F Company. On one view, they disclose a calculated and punitive objective.
The wife argues that these emails show the notification of the criminal proceedings by Mr K on 28 July 2019 could not have caused the husband’s termination, as J Pty Ltd were aware of the criminal proceedings prior to termination and did not act on that knowledge. I reject this submission. That may be the conclusion reach after a trial, but the emails are at this stage equivocal. Again it cannot be said only one factual conclusion is reasonable. On one view, they merely show Mr N proposed to wait for criminal proceedings against the husband to be finalised before exploring “options” within the husband’s contract.
Mr N was extremely clear in his email that further options regarding the husband’s employment status could be explored in the event that the proceedings were finalised, as at the time of Mr N’s email on 17 July 2019 the husband was continuing to dispute the family violence related charge. The email of 28 July 2019 from Mr K then told Mr N that the criminal matters were finalised, triggering the exploration of “options”, which according to the husband included termination or non-renewal.
The wife’s counsel suggested that the email of 17 July 2019 demonstrates that the husband’s assertion of a conversation on 29 July 2019 in which Mr N blamed the notice of the criminal proceedings as reason for his termination as “glaringly improbable, tenuous, and contradicted by the available evidence”.[11] I reject this submission. Far from being improbable, the wife’s own evidence, discussed above at [75] - [84], arguably exposes an intention to bring about the disruption or termination of the husband’s employment relationship with J Pty Ltd, for that very reason, that is, the existence of the criminal proceedings. It would be entirely consistent with her evidence if Mr N said as much to the husband. The submission assumes, like many of the wife’s submissions, that it will be her evidence that will be accepted at a final hearing. This of course simply highlights a central weakness of her application, namely, pervasive factual contests which could reasonably to determined one way or the other and thus are appropriate for a trial and not summary dismissal.
[11] Transcript of Proceedings dated 1 April 2021, pg. 11 lines 15-16.
As further illustration of the point, the evidence of Ms L, set out above, is also consistent with an inference that the wife, either herself or through her children, was laying the groundwork and positioning herself to undermine the husband’s employment relationship with J Pty Ltd as soon as the final orders were made. I express no concluded view about this. I simply point to the inference as demonstrating yet another area of factual contest which shows it cannot be concluded that the husband has no reasonable prospects or likelihood of success.
Just and Equitable
The wife contends that the just and equitable question was not addressed in the husband’s material, and therefore cannot be made out. I reject this submission. It seems to assume that the onus, in the wife’s application, lay on the husband to demonstrate it would be just and equitable to set aside the final orders. However, as already pointed out, the onus lay on the wife to demonstrate the husband had no reasonable prospect of success.
Conclusions about what is “just and equitable” lie at the heart of property adjustment orders under s 79. The High Court in Stanford & Stanford (2012) 247 CLR 108; (2012) FLC 93-518; [2012] HCA 52 at [36] said:
The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.
Section 79A(1)(c) directs attention to what is just and equitable in the circumstances that have arisen by reason of the relevant default. The husband has given evidence that he has lost income as a result of the wife’s default. His claim, which I am otherwise unable to conclude has no reasonable prospect of success, is that the wife deliberately breached the final order (Order 13) designed to protect his livelihood. This order, like the rest of the final orders, were by definition just and equitable. These factors alone may support a conclusion that the circumstances which arose allegedly by reason of the wife’s default make it just and equitable to set aside the final orders. Again I express no concluded view, but make the point that the wife’s submission cannot be accepted.
The wife made a number of other submissions to suggest that substituting the final orders would not be just and equitable. She submitted that the final orders were agreed to by the husband at a time when he was represented, therefore had the benefit of legal advice and he obtained 40 per cent of the asset pool by virtue of the orders.
In addition, according to the wife the consent orders were made at a time when the husband proposed to retire “in a few years”.[12] This, according to the wife, would inherently mean that his income would shortly and vastly decrease; despite this, he still agreed to the final orders. In addition, the wife points to her claim that the husband has been in default of the final orders, as well as claims of lack of full and frank disclosure, particularly regarding his employment.
[12] Ibid, pg. 11 line 45.
All these matters may ultimately bear on the just and equitable question, but they may not. For example, it is not self-evident why the husband’s consent to the final orders with legal advice is of any relevance when his application under s 79A(1)(c) is based upon the wife’s breach of one of the final orders, Order 13, which the husband states was central to him entering into the final orders at all. This, together with the other matters adverted to in the wife’s submissions, require factual findings to be made. In my view, the broad and open ended scope of the expression “just and equitable” make it inherently inappropriate for determination on a summary dismissal application, although I do not rule out the possibility. In any event, the wife’s submissions tend to expose the need for a final hearing to determine the just and equitable question in the circumstances of these proceedings.
CONCLUSION
I am not persuaded the wife has shown the husband has no reasonable prospect or likelihood of success in prosecuting his claim. Her application will be dismissed.
Both parties claimed costs against the other on this application. The wife has been wholly unsuccessful. According to the evidence, both parties will receive funds from the sale of the former matrimonial home by virtue of previous orders. Taking account of s 117(1) and (2A), I see no reason why the wife should not pay the husband’s costs her application. I see no point in putting the parties to the expense of seeking further submissions on costs. I will also make a costs order in favour of the husband.
I certify that the preceding ninety-three (93) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 23 July 2021
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