Blackwell & Scott
[2017] FamCAFC 77
•28 April 2017
FAMILY COURT OF AUSTRALIA
| BLACKWELL & SCOTT | [2017] FamCAFC 77 |
| FAMILY LAW – APPEAL – FINANCIAL – where the parties reached final consent orders in relation to the just and equitable settlement of their property – where by those consent orders the parties were to receive an equal division of their property – where to effect that settlement the de facto husband was to retain real property held by him and pay to the de facto wife a cash payment of $130,000 – where the husband failed to make the relevant cash payment – where the value of the subject real property increased significantly between the making of the consent orders and the time, 13 months later when the husband made the required cash payment – where the subsequent late payment of the cash sum did not affect an equal division of the property of the parties – where the wife brought an application pursuant to s 90SN(1)(c) of the Family Law Act 1975 (Cth) seeking to set aside the consent orders – where the trial judge set aside the original consent orders – whether the circumstances had "arisen as a result of that default" – where the appeal is dismissed. |
| Acts Interpretation Act 1901 (Cth) |
Family Law Regulations 1984 (Cth)
Family Law Rules 2004 (Cth)
| Chisholm, R; Christie, S; Keamey, J, Annotated Family Law Legislation, 3rd Ed, LexisNexis, 2015, 972 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 Prowse & Prowse (1995) FLC 92-557 Re: Gilbert and the Estate of Gilbert (dec’d) (1990) FLC 92-125 Metropolitan Gas Co v the Federal Gas Employees’ Industrial Union (1925) 35 CLR 449 |
| APPELLANT: | Mr Blackwell |
| RESPONDENT: | Ms Scott |
| FILE NUMBER: | PAC | 4023 | of | 2013 |
| APPEAL NUMBER: | EA | 41 | of | 2016 |
| DATE DELIVERED: | 28 April 2017 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Aldridge, Kent & Watts JJ |
| HEARING DATE: | 22 March 2017 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 29 February 2016 |
| LOWER COURT MNC: | [2016] FCCA 684 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr S Williams |
| SOLICITOR FOR THE APPELLANT: | Mills Oakley Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Sansom SC |
| SOLICITOR FOR THE RESPONDENT: | Rafton Family Lawyers |
Orders
The appellant have leave to appeal the orders made by Judge Brewster on 29 February 2016.
The appellant’s appeal from the orders made by Judge Brewster on 29 February 2016 be dismissed.
The appellant pay the respondent’s costs of and incidental to the appeal in the sum agreed between the parties or, failing agreement, as assessed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Blackwell & Scott 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: EA 41 of 2016
File Number: PAC 4023 of 2013
| Mr Blackwell |
Appellant
And
| Ms Scott |
Respondent
REASONS FOR JUDGMENT
Aldridge J
I have had the benefit of reading the Reasons of Kent J. I agree with the orders proposed by his Honour and generally with his Honour’s Reasons.
However, whilst I consider that Monticone & Monticone (1990) FLC 92-114 (“Monticone”) contains a useful discussion of the circumstances that are to be taken into account in deciding that it is just and equitable to vary or set aside an order under s 90SN of the Family Law Act 1975 (Cth) (“the Act”), I do not consider that it lends any assistance to the determination of the issues in this appeal, including the central question in this appeal, namely whether the relevant circumstances “have arisen as a result of [the husband’s] default”. This is because in that case the court did not need to consider submissions akin to those made in this appeal.
I also do not agree that the inclusion of the words “just and equitable” within s 90SN(1)(c) itself assists with the resolution of whether the relevant circumstances in this case have arisen as a result of the husband’s default.
It is therefore necessary that I explain why, in my view, it was open to the primary judge to find that as a result of the husband’s default, circumstances had arisen that made it just and equitable for the earlier orders to be set aside or varied.
Section 90SN(1)(c) relevantly provides:
(1)If on application by a person affected by an order made by a court under section 90SM in property settlement proceedings, the court is satisfied that:
…
(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; or
…
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 90SM in substitution for the order so set aside.
It is clear therefore, as Kent J points out, that there must be a causal link or nexus between the default and the circumstances that have arisen. This is made plain by the use of the words “have arisen as a result of that default” in the sub‑section.
The question then is how does the court determine the relevant circumstances that have arisen as a result of the default?
The issue of causation, or more correctly in this case, the application of the words “the circumstances that have arisen as a result of that default”, 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. & M. H. Stramare Pty Limited (1990) 171 CLR 506 at 515 and 522-3.
As to the present case, it is therefore necessary to look at the circumstances in a practical and common sense way in order to see if they have arisen as a result of the husband’s default. In doing so it is necessary to bear in mind the purpose of s 90SM and s 90SN and answer the question posed in the preceding paragraph in that light. As Gaudron J stated in Chappel v Hart (1998) 195 CLR 232 at [7], “[q]uestions of causation are not answered in a legal vacuum. Rather, they are answered in the legal framework in which they arise”.
What then is the legal framework? Section 90SN applies to orders for property division made under s 90SM and empowers the court in the limited circumstances set out in that section to set those orders aside or to vary them. Section 90SM requires the court to consider whether it is “just and equitable” to divide the property of the parties and that any division of the property of the parties made by the court must be “appropriate”.
The question posed by s 90SN is whether the property orders made under s 90SM continue to be just and equitable or appropriate, subject to the terms, in this case, of s 90SN(1)(c) being met, including the requirement that the relevant circumstances must have arisen as a result of default. It is therefore entirely proper to look at the content and effect of the s 90SM orders to identify the relevant changed circumstances.
The primary judge found, without challenge, that the evident purpose of the property settlement orders was to achieve an equal division of the property of the parties. Thus, to use the words of s 90SM, it was just and equitable and appropriate that there be such a division and that that division be effected by a payment to the wife of $130,000.
The husband’s delay in complying with the orders was lengthy and substantial. By the time he did comply with the obligations imposed upon him by the orders, the wife did not receive anything close to 50 per cent of the matrimonial property, which was both the intent and effect of the orders at the time the parties consented to them. I agree with the analysis of this issue by Kent J in [58] to [61] of his Honour’s Reasons.
Thus whilst it is entirely correct to say that the husband’s default did not cause house prices to rise, that is not the relevant enquiry. The relevant enquiry is whether circumstances have arisen as a result of the husband’s default that would make it just and equitable to reconsider the earlier orders. The circumstances that arose were that, as a common sense proposition, the wife received significantly less than an equal division of the property and the husband received considerably more. That difference resulted directly from the husband’s delay in complying with the orders. The primary judge was therefore entitled to find that the position of the wife had arisen as a result of the husband’s breach.
It is not the point that the wife got the bargain to which she agreed. The point is that by reason of the husband’s default the agreed equal division of the parties’ property did not take place.
Kent J
The determinative issue in this application for leave to appeal and the appeal if leave is granted, is the proper interpretation of s 90SN(1)(c) of the Act in its application to the facts of this case, on the specific question of interpretation raised in the appeal.
That section, within Part VIIIAB – financial matters relating to de facto relationships – was inserted into the Act in 2008.[1] It is the counterpart provision, in de facto relationships and s 90SM orders, to s 79A(1)(c) and s 79 orders.
[1] Act No. 115 of 2008.
On 24 February 2014 Mr Blackwell (for convenience referred to as “the husband”) and Ms Scott (for convenience referred to as “the wife”) sought and obtained consent orders for property settlement pursuant to s 90SM of the Act.
Those orders were negotiated and made in the wake of the breakdown of the parties’ de facto relationship. That relationship had subsisted between about 2002 and 2012 and had produced two children aged 10 years and eight years respectively at the time the orders were made.
As the wife contends and the husband acknowledges[2] those orders were negotiated and made on the basis that they effected an equal division between the parties of their net assets. To achieve that, the orders provided, in summary:
a)That a real property at Suburb B held in the husband’s sole name be sold and, subject to a provision for the parties to share equally in any proceeds of sale exceeding a sale price of $440,000, the wife was to retain the net proceeds after payment of identified debts (Orders 1 to 7);
b)That the parties each pay one half of the capital gains taxation “arising as a result of the sale of the [Suburb B] property” (Order 9);
c)That in relation to a real property at Suburb K held in the husband’s sole name, the husband was to pay the wife $130,000 within 90 days of the orders (that is, on or before 23 May 2014) (Order 10) and simultaneously with the husband’s compliance with that order, the wife “shall relinquish any right, title and interest in the [Suburb K] property” (Order 12);
d)That pending sale of the Suburb B property the husband was to be solely responsible for mortgage payments, outgoings and other expenses relating to that property (Order 8);
e)That the husband indemnify the wife with respect to the mortgage on the Suburb K property (Order 11).
[2] Paragraph 16 of husband’s affidavit filed 16 November 2015.
It is tolerably clear from the orders generally but in particular from Orders 10 and 12 that the figure of $130,000 was struck by reference to, inter alia, the equity in the Suburb K property at the time of the consent orders.
With respect to the sale of the Suburb B property, a price of $545,000 was achieved so that upon settlement of that sale on 1 August 2014, the parties shared equally in the $105,000 excess above the figure of $440,000 nominated in the consent orders and as provided for in them.
In breach of the consent orders the husband did not make the ordered payment of $130,000 to the wife on or before 23 May 2014, and that breach continued for a very substantial period.
On 11 September 2014, the husband’s breach then continuing, the wife filed an initiating application seeking to have the consent orders made on 24 February 2014 set aside. Whilst that application identified s 79A of the Act as the source of power for the orders sought, it is uncontroversial that the application was intended to be made, and subsequently proceeded, pursuant to s 90SN of the Act.
It was not until 18 June 2015, some 13 months after the ordered period for payment expired on 23 May 2014, and some nine months after the wife had instituted the subject proceedings, that the husband paid the wife the sum of $130,000. It was not until November 2015 that the husband paid the wife interest on that capital sum referable to the period of default and calculated pursuant to the Family Law Rules 2004 (Cth) (“the Rules”) (r 17.03).
In the meantime, the wife having lodged a caveat on the Suburb K property upon the husband’s default of the orders in failing to make payment, she received notice in April 2015 that the caveat was to be lapsed at the husband’s instigation. The wife filed an application in a case on 18 May 2015 seeking injunctive relief restraining the husband from transferring, further encumbering, or selling the Suburb K property. That application was resolved by interim consent orders made on 11 June 2015 which, inter alia, allowed for the husband to refinance the Suburb K property for the purpose of paying the wife $130,000 plus interest in accordance with the Rules. The wife’s substantive proceedings remained on foot. That is, there is no suggestion that the interim consent orders referred to incorporated any resolution of the wife’s substantive claim.
Between the date of the original consent orders on 24 February 2014 and each of the payment by the husband in June 2015 and the hearing and determination of the wife’s s 90SN application by Judge Brewster on 29 February 2016, the value of the Suburb K property had increased very substantially. Taken from the trial judge’s reasons (at [3]), financial statements filed by each party in advance of the making of the consent orders, placed a value of between $600,000 (the husband’s figure) and $650,000 (the wife’s figure) on the Suburb K property. Compared to those figures, a single expert valuer valued the Suburb K property at $860,000 as at 16 December 2014 and at $1 million as at 26 October 2015.
On 29 February 2016 Judge Brewster conducted the first stage of a bifurcated approach to the wife’s application. On that date Judge Brewster ordered, inter alia, that:
... pursuant to section 90SN(1)(c) of the Family Law Act 1975 the Orders made in the Family Court of Australia on 24 February 2014 be set aside.
His Honour otherwise made orders/directions to progress the matter to its second stage, that is, the determination of orders pursuant to s 90SM of the Act. Judge Brewster’s orders are accompanied by remarkably brief reasons for judgment delivered extemporaneously (a total of nine paragraphs). However, importantly, neither the husband’s application for leave to appeal, nor his appeal if leave is granted, is founded upon any complaint about the adequacy of the trial judge’s reasons. In the course of the hearing before us counsel for the husband disavowed any contention to the effect that the reasons were inadequate.
Is leave to appeal required?
Whilst the husband formally applies for leave to appeal, his application for leave to appeal within his amended notice of appeal filed on 3 May 2016 contains (in ground 1) that the order made by Judge Brewster on 29 February 2016 is a final order.
If the trial judge’s order is an “interlocutory decree” it is a “prescribed decree” from which leave to appeal is required.[3]
[3] Family Law Regulations 1984 (Cth), r 15A; s 94AA(1).
In Saintclaire & Saintclaire (2015) FLC 93-684, a case dealing with primary orders setting aside a financial agreement, the Full Court observed:
7.The test for whether a judgment or order is final or interlocutory is stated as: “Does the judgment or order, as made, finally dispose of the rights of the parties?”[4] In applying that test, the High Court has said that the court should have regard to the “legal rather than practical effect of the judgment”. Expression of the principle is one thing; its application is another. It has been said by the High Court that the question is “productive of much difficulty”.[5]
8.An example of that difficulty in this court arises in relation to s 44(3) of the Act. Existing authority is to the effect that an order granting leave under the sub-section is interlocutory, but some commentary at least, suggests that an order refusing leave may be final…[6]
[4] Citing Gibbs J (as he then was); Mason J agreeing in Licul v Corney (1994) 180 CLR 213.
[5][6] Citing as to the former, in the marriage of Emamy & Marino (1994) FLC 92-487 (Kay J dissenting); as to the latter see Chisholm, R; Christie, S; Keamey, J, Annotated Family Law Legislation, 3rd Ed, LexisNexis, 2015, 972.
There can be no doubt that the subject orders made by Judge Brewster on 29 February 2016 are interlocutory in their legal effect. Those orders do not finally dispose of the substantive rights of the parties. Thus, leave is required.
We proceeded at the hearing on the basis that we would receive submissions from counsel for each respective party both as to the question of leave and as to the merits of the appeal generally together rather than dealing with the question of leave to appeal as a discrete matter. The discretion to grant leave to appeal is unqualified and unfettered. Relevant to the exercise of discretion in this case is the lack of Full Court authority discussing in any detail the meaning or proper interpretation of s 90SN(1)(c) (or s 79A(1)(c)) relevant to the specific contention the husband raises in this appeal concerning its interpretation and application, outlined below. I consider it appropriate in these circumstances that leave be granted.
The proper interpretation and application of s 90SN(1)(c)
Whilst the husband’s amended notice of appeal advances four grounds of appeal, and sub-grounds within three of them, the gravamen of the husband’s contention on appeal is that the trial judge wrongly interpreted and applied s 90SN(1)(c) of the Act to the facts of this case on the specific question of interpretation raised in the appeal.
Section 90SN(1)(c) relevantly provides:
90SN Varying and setting aside orders altering property interests
(1)If, on application by a person affected by an order made by a court under section 90SM in property settlement proceedings, the court is satisfied that:
…
(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; or
…
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 90SM in substitution for the order so set aside.
As already noted, the counterpart to s 90SN(1)(c) is s 79A(1)(c). But for the references in s 79A to “section 79” whilst s 90SN refers to “section 90SM”, the respective sections are identical. It follows that judicial pronouncements on the proper interpretation of s 79A(1)(c) are relevant to our consideration of the proper interpretation of s 90SN(1)(c). Whilst there have been many reported cases which have dealt with an application under s 79A(1)(c) there are very few authoritative pronouncements of the Full Court specific as to the meaning to be given to “in the circumstances that have arisen as a result of that default” which is the focus of the husband’s appeal.
Whilst the husband acknowledges the wife to be “a person affected by an order” within the meaning of the subsection and that the husband was in “default”, the essence of the husband’s contention is that the substantial increase in the value of the Suburb K property is not causally related to the husband’s default. The husband contends that the wife had to prove a cause and effect between the default on the one hand, and the increase in property value on the other, for the subsection to have operation. It is thus contended that the trial judge was in error in giving operation to the subsection absent the causation contended for by the husband. This is the specific question of interpretation raised.
Counsel sought to emphasise, in support of his argument concerning causation or the necessary causal connection for s 90SN(1)(c) to operate in the circumstances of this case, the contrast between the terms of that subsection and other subsections of s 90SN(1). Subsection (b) refers to “in the circumstances that have arisen since the order was made” and (d) to “in the circumstances that have arisen since the making of the order” in contrast to “in the circumstances that have arisen as a result of that default” appearing in (c). Thus counsel contended that it was not sufficient, for (c) to operate, for circumstances to have arisen since the order was made; there must be a direct causal connection between the “default” and circumstances caused by the default.
Apart from this particular distinction when comparing the subsections, which counsel for the husband sought to emphasise, there is another important point of distinction between subsection (c) and the other subsections of s 90SN(1). Subsection (c) is the only subsection of s 90SN(1) in which, within the subsection itself, appear the words “it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order”. True it is that the discretion conferred by s 90SN(1) as it is expressed in the closing paragraph of the subsection is expressed for each of the subsections, including (c), if, respectively, the requirements of the particular subsection are fulfilled. However, for reasons which will be further discussed, the inclusion of those words referred to in subsection (c) itself and consideration of what is “just and equitable” in the context of the subsection necessarily focuses attention upon the meaning to be given to “in the circumstances” as it appears in subsection (c).
The construction of the subsection counsel for the husband contended for, may be conveniently described as a narrow approach placing a narrow or strict construction on the necessary causal connection between “default” and “circumstances that have arisen as a result of that default”.
Relevant to the legal concept of causation, Mason CJ observed in March v E. & M. H. Stramare Pty Limited (1990) 171 CLR 506 at 515 at [5]:
It has often been said that the legal concept of causation differs from philosophical and scientific notions of causation. That is because “questions of cause and consequence are not the same for law as for philosophy and science”, as Windeyer J. pointed out in The National Insurance Co. of New Zealand Ltd. v. Espagne [1961] HCA 15; (1961) 105 CLR 546, at p 591. In philosophy and science, the concept of causation has been developed in the context of explaining phenomena by reference to the relationship between conditions and occurrences. In law, on the other hand, problems of causation arise in the context of ascertaining or apportioning legal responsibility for a given occurrence. The law does not accept John Stuart Mill's definition of cause as the sum of the conditions which are jointly sufficient to produce it. Thus, at law, a person may be responsible for damage when his or her wrongful conduct is one of a number of conditions sufficient to produce that damage: see McLean v. Bell (1932) 147 LT 262, per Lord Wright at p 264; Sherman v. Nymboida CollieriesPty. Ltd. [1963] HCA 62; (1963) 109 CLR 580, per Windeyer J. at
pp 590-591.
A useful starting point in addressing the husband’s contention is to observe the contrast to what may be characterised as final orders in civil jurisdiction in the strict sense, that is, orders which finally determine the relevant substantive legal rights of the parties when made, subject only to enforcement or rights of appeal. That same strict characterisation cannot be given to orders under s 79 or s 90SM of the Act, by reason of s 79A or s 90SN, respectively.
Given that the power to make orders under s 79 or s 90SM altering property interests is exercisable only upon satisfaction that “in all the circumstances it is just and equitable to make the order” (s 79(2) or s 90SM(3)) and the order must be “appropriate” by reference to prescribed considerations to be taken into account (s 79(1) and (4) or s 90SM(1) and (4)) the intended remedial purpose of each of s 79A and s 90SN is clear – to afford a discretion designed to permit the Court to relieve a party affected by a s 79 or s 90SM order of an injustice.
This is not to say that orders under s 79 or s 90SM are to be regarded as provisional and subject to ready circumvention under s 79A or s 90SN. That would be inconsistent with, for example, s 81 and s 90ST respectively and the basic principle that there can be only one property settlement between the parties to such proceedings.[7] The point is that it is consistent with the language and purpose of s 79 and s 90SM, respectively, to construe s 79A and s 90SN liberally to achieve their intended remedial purpose.
[7] As discussed in, for example, Kowalski & Kowalski (1993) FLC 92-342 and Gabel & Yardley (2008) FLC 93-386.
Specifically with respect to subsection (c) of each of s 79A(1) and s 90SN(1), the subsection is only engaged when a person is in default of a property adjustment order. Given that the usual civil remedy when default of an order occurs is enforcement, the purpose of each subsection can be seen to reflect the recognition that in some instances of default, enforcement will be an inadequate remedy to achieve justice and equity. Likewise the corollary, that is, in some instances of default (as will shortly be referred to) it will be unjust and inequitable to permit an enforceable order to stand. Ensuring that justice and equity is achieved in the context of default of an order having occurred is the central purpose of subsection (c).
That being the purpose s 15AA of the Acts Interpretation Act 1901 (Cth) provides:
In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation.
In Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 the plurality of the High Court (McHugh, Gummow, Kirby and Hayne JJ) stated, at 381:
The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus, the process of construction must always begin by examining the context of the provision that is being construed.
In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 the plurality of the High Court (Hayne, Heydon, Creenan and Kiefel JJ) said (at [47]):
This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy. (Citations omitted)
As I will seek to demonstrate, accepting that a necessary causal connection must be established between default and “in the circumstances that have arisen as a result”; the meaning to be given to “in the circumstances” in the context of the remedial purpose of s 90SN, and the unitary manner of expression of the terms of subsection (c), in which “in the circumstances” and the just and equitable element as expressed appears, informs what may be concluded to be “a result” of default.
Before doing so, I note that the interpretation and application given to s 79A(1)(c) (the counterpart provision) by the Full Court of this Court in Monticone does not appear to lend support to the husband’s narrow construction.
In Monticone the husband was ordered to pay to the wife $325,000 on or before 25 May 1988. Upon that payment, the wife was to transfer title to the former matrimonial home to the husband. Default provisions in the orders provided that if the husband failed to pay, the matrimonial home would be sold and the proceeds divided equally between the parties. At a time when the husband remained in default in paying the full amount (he had paid most of the sum) the wife sought enforcement of the default provisions. The husband at that time being in a position to pay the balance of the sum cross-applied under s 79A(1)(c) to set aside the default provisions. Commencing at 77,755 the Full Court said:
Section 79A(1)(c) provides that the Court may in its discretion vary or set aside an order made under sec. 79 if 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; or”
The meaning of that provision was considered by Gee J. in Rohde and Rohde ; 10 Fam. L.R. 56. In that case the husband was ordered pursuant to sec. 79 to pay the wife $115,000 and was restrained from encumbering his property further till the sum was paid. During the hearing the husband had been seeking further loans to irrigate his farming property which were effected by a third and fourth mortgage registered over the property prior to judgment being delivered. At the hearing the husband did not refer to these negotiations. After judgment was delivered, the husband’s financial position deteriorated due to failure to pay under the third mortgage. The husband sought to set aside the order pursuant to sec. 79A(1) of the Act.
His Honour in FLC 91-592 at p. 79,769 ... came to the conclusion that the husband had defaulted under the order rejecting the argument that this word should be confined to a deliberate flouting of an order. Likewise in the present case the husband by his non-compliance with the deadline as extended has defaulted.
The important question in Rohde, as in this case, was whether it is just and equitable to vary the orders or set them aside. In seeking to elucidate the meaning of that term as used in sec. 79A(1)(c), Gee J. said…:
“What the Court has to do in considering what is ‘just and equitable’ under sec. 79A(1)(c) is to exercise a judicial discretion and one exercisable after a consideration of all the circumstances that have arisen as a result of the default referred to in the provision: see Cominos v. Cominos (1972) 46 A.L.J.R. 593, especially per Mason J. at p. 601.
In the course of the judgment of Barwick C.J. in Sanders v. Sanders(1967) 116 C.L.R. 366, his Honour refers to the phrase ‘just and equitable’ in sec. 86(1) of the Matrimonial Causes Act 1959-1966. His Honour refers to that phrase as embodying ‘cogent considerations of justice founded on the conduct and circumstances of the parties’. (See p. 376.)”
On the facts of Rohde, his Honour came to the conclusion that the husband had materially and primarily contributed to his difficulties in complying with the orders through his conduct prior to the delivery of judgment, which conduct could have been disclosed to the Court at the hearing. In those circumstances it would not have been consonant with cogent considerations of justice to relieve him of the consequences of such conduct. We respectfully agree both with his Honour's reasons and with his conclusion in that case.
The Full Court in Monticone turned to consider the husband’s attempts to raise money in order to comply with the order and dealt with the fact that the trial judge had (wrongly) taken judicial notice, as a matter of common knowledge, of the substantial rise in Sydney property values without there being expert evidence. The Full Court then continued (at 77,756):
The legal burden of establishing a case for variation under sec. 79A(1)(c) lies upon the applicant for such relief, the husband in this case. On the evidence adduced by him he established that he paid over two-thirds of the original sum within the relevant period, that he did his best to raise the outstanding balance as soon as practicable thereafter, that it was delayed through no fault of his own and that the money was available at the time when the wife commenced proceedings for enforcement. The wife's case on her affidavit evidence was basically that she was not paid the full amount within the time stipulated. However, the husband paid interest on the amount outstanding. That, in our view, would establish that it was prima facie just and equitable to make the variation sought by the husband, unless the wife could point to a particular hardship on her part such as a sharp increase in the value of the subject property during the relevant period which could not be compensated for by the payment of interest: see Slapp and Slapp. There was no admissible evidence on that point.
In the circumstances we conclude that his Honour was in error in making the orders for enforcement. The appeal should therefore be allowed and the orders set aside. In this case the “cogent considerations of justice founded on the conduct and the circumstances of the parties” indicate that this Court should exercise its discretion pursuant to sec. 79A(1) to set aside [the orders].
The Full Court in Monticone did not specifically advert to or make findings about particular circumstances the Court identified as being “as a result of” the subject default by applying a strict test of causation. Rather, focusing upon “cogent considerations of justice founded on the conduct and the circumstances of the parties” and upon what is “just and equitable” within the meaning of s 79A(1)(c), the Court can be seen to have considered a wide range of circumstances and implicitly accepted those they discussed, or enough of those they discussed, as having “arisen as a result of the default”. Such a wide interpretation is supported by Full Court authority that s 79A (and by necessary inference s 90SN) is a remedial section which should be construed liberally to effect its intended purpose of achieving justice and equity.[8]
[8] Re: Gilbert and the Estate of Gilbert (dec’d) (1990) FLC 92-125; Suiker & Suiker (1993) FLC 92-436; Barker & Barker (2007) 36 FamLR 650.
Whilst the facts in each of Monticone, as outlined above, and those in Rohde and Rohde (1984) FLC 91-592 (“Rohde”) discussed in Monticone, differ substantially from the facts of this case, the focus in Monticone upon circumstances is, I consider, important. No definition or prescription as to the meaning of “circumstances” as it appears in s 90SN(1)(c) is contained within the subsection or in the Act. There is no reason to conclude that it is to be given other than its ordinary meaning. “Circumstances” obviously has a wide meaning capable of embracing a wide variety of things. The definition of “circumstance” in the Shorter Oxford Dictionary relevantly includes “that which stands around or surrounds; the material, logical, or other environmental conditions of an act or event; the time, place, manner, cause, occasion etc of an act or event”.
The subsection thus directs attention to relevant “circumstances” – a potentially wide category of things – existing at the time of the making of the order in order to identify what relevant “circumstances” can be seen to have “arisen” (ie presented themselves).
In conformity with the ordinary meaning of “result”, a default which gives rise as a consequence or effect to any identifiable “circumstances” that have arisen since the order was made will fulfil that requirement of the subsection.
The relevant “circumstances” when the subject consent orders of 24 February 2014 were made, included that the orders were intended and designed to effect an equal division of the parties’ net assets. The adoption of $130,000 as the cash sum to be paid to the wife was plainly not arbitrarily selected, but was adopted to effect an equal division given, relevantly, the value of the Suburb K property at the time at $600,000 to $650,000. However, the orders could only ever effect an equal division, or any approximation of an equal division (given the 90 day period allowed for the payment) if the payment of $130,000, when made to the wife, secured her receipt of an equal division or approximately equal division relative to the then worth of the Suburb K property.
By prescribing a period of 90 days for the payment the parties accepted, and the Court endorsed by making the consent orders, that it was just and equitable that there be an allowance of 90 days to effect the payment. Had the value of the Suburb K property risen or fallen within that 90 day period, the relevant circumstance was that both parties had accepted that prospect and the Court had endorsed that acceptance in making an order in those terms.
In contrast, the critically important circumstances arising upon and from the husband’s continuing default over the 13 month period referred to, included that when the wife finally received the payment of $130,000, even with the subsequent payment of interest, she was not then receiving an equal division by reference to the worth of the Suburb K property at the time of receipt.
In short, the relevant circumstance of and at the time of the consent order was that payment to the wife of $130,000 in accordance with its terms, meant that the wife would be receiving, at the time of payment, her equal entitlement to the net assets. Concomitantly, the husband would be retaining free of any claims by the wife, the Suburb K property. The relevant circumstances arising as a result of the husband’s default included that payment of $130,000 even with interest, could no longer achieve the wife receiving anything approximating an equal entitlement at the time the payment was made.
In my judgment the husband’s central contention ignores the proper meaning to be given to “circumstances” as it is used in the unitary terms of the subsection. The subsection only operates if there has been default but its remedial purpose in that event is to confer a discretion to vary or set aside the order.
The formulation by the husband of a test of causation in terms that the increase in the value of the Suburb K property was caused by the market, and is not the result of the husband’s default, is misconceived. Properly expressed by reference to the terms of the subsection, the substantial increase in the value of the Suburb K property is the reason why the husband’s default results in circumstances arising to make it just and equitable to vary or set aside the orders.
The trial judge’s approach – the husband’s specific challenges
It bears repeating that on the hearing of this appeal the husband’s counsel eschewed any challenge by the husband as to the adequacy of the trial judge’s reasons for judgment. Thus the ambit of the husband’s grounds of appeal and argument in support of them is delineated by the absence of any such challenge. Whilst there may well be good reason, including tactical considerations, for the husband not to challenge the adequacy of the trial judge’s reasons, absent such a challenge it is difficult to see how some of the husband’s specific challenges are sustainable.
Ground 1 of the appeal as it is expressed is difficult to interpret. As illuminated by the husband’s summary of argument and oral argument on appeal, we proceeded on the basis that the husband contends that the trial judge failed to identify the issues for determination and erred in the manner in which his Honour applied s 90SN(1)(c) to determine those issues.
As each of grounds 2 and 3 agitate what are in essence particulars of asserted errors in support of ground 1, it is convenient to deal with grounds 1 to 3 together. Ground 4 contains a discrete challenge that his Honour erred in failing to have regard to the wife’s “acceptance” of each of the capital payment of $130,000 (in June 2015) and interest (in November 2015).
Whilst it is axiomatic that in a total of nine paragraphs of reasons for judgment the trial judge did not discuss the interpretation and application of s 90SN(1)(c) in the manner or to the extent I have, it is clear enough that the trial judge applied the subsection in the manner in which I have identified as it fell to be applied on the facts of this case.
At [2] of the reasons the trial judge correctly identified that the subject consent orders were intended to effect an equal division of the parties’ net assets. That identification included reference to the provision in the orders for the parties to share equally in any excess sale price, above $440,000, achieved in the sale of the Suburb B property and that this in fact had occurred.
I reject the husband’s contention that the trial judge erred in relying upon an “assumed” value for the Suburb K property. As has already been observed, acceptance that the parties intended, and the consent orders as made were to effect, an equal division of their net assets, the figure of $130,000 was not arbitrary. It was, on the evidence and as reflected in the structure of the orders, the product of the accepted value of the Suburb K property as at the time of the consent orders. The trial judge specifically referred to, at [3] of the reasons, the parties’ respective financial statements in which each party deposed to, and sought that the Court accept, the value ascribed to the Suburb K property.
At [4] to [8] of the reasons the trial judge said:
4.The orders further provided that the respondent was to pay the applicant a sum of $130,000 within 90 days. It further provided that he would retain the [Suburb K] property.
5.The respondent did not pay the $130,000 within 90 days. Indeed, it was not until over a year later in June of 2015 that the $130,000 was paid and November/December 2015 before interest payable under the Rules was paid which amounted to just under $12,000 which represented an interest rate of, I am told, 8 per cent.
6.The case of the applicant essentially is that the parties struck a bargain which was based on the values of property or their understanding of the values of property at the time and her getting $130,000 within 90 days. Since that 90-day period expired the value of the [Suburb K] property has risen. It was valued by a valuer Mr [A] as at December 2014 at $860,000; some $200,000 more than the value the parties attributed to it when the orders were made and, as at 26 October 2015, at $1 million.
7.In my opinion, the applicant has not got the bargain she negotiated for which was based on assumed values for the [Suburb K] property of around $600,00[0] to $650,000. Section 90SN, and in particular section SN(1)(c), of the Act provides that where a person is affected by an order made under section 90SM and the court is satisfied that, a person has defaulted in carrying out an obligation imposed on that 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 set the order aside or make another order as substitution for the order.
8.There is no doubt there has been a default. In my view, because of the change in the landscape in relation to the value of the [Suburb K] property, it is just and equitable to set the order aside. I am asked to refuse the application on discretionary grounds because the applicant, in her first financial statement which was extant at the time the orders were made, did not disclose that she ran a business. I do not know whether the respondent was aware that she ran the business. It is not suggested this business is of great value. Its value is its stock in trade. I do not believe that that is a sufficient reason to refuse to exercise my discretion in her favour and I do exercise my discretion in her favour.
Read together, [4] to [7] of the reasons, whilst briefly expressed, do no more or less than contrast the relevant “circumstances” at the time of the consent orders with relevant circumstances arising as a result of the default via reference to the expert valuation evidence concerning the Suburb K property. Whilst expressed in the language of “bargain” his Honour’s findings plainly reflect that the wife did not receive, when paid the sum of $130,000, that which the consent orders were intended to effect.
The finding the trial judge expressed at [8] that “[i]n my view, because of the change in the landscape in relation to the value of the [Suburb K] property, it is just and equitable to set the order aside” – which is the subject of specific criticism by the husband – must be read in context. Having made findings supporting that the subsection was engaged, the finding at [8] is readily characterised as a finding that the extent of the increase in the value of the Suburb K property, by reference to the husband’s default, satisfied the just and equitable requirement of the subsection.
For these reasons, and resting as they do on the misconceived formulation of causation as earlier discussed, I find no merit in grounds 1 to 3.
The complaint in ground 4 that the trial judge erred in failing to have regard to the terms of the interim consent order of 11 June 2015 and the wife’s acceptance of the capital payment and interest in June and November 2015 respectively, may be briefly dealt with.
For the reasons earlier expressed, these payments when made did not achieve what the consent orders were intended to achieve. The trial judge recorded at [5] of the reasons the facts as to those payments/receipts. There was no contention either in the proceedings below or in argument of this appeal that the consent orders of 11 June 2015 reflected some kind of accord and satisfaction of the wife’s substantive proceedings which were on foot.
In Monticone the Full Court’s endorsement of Gee J’s approach in Rohde included endorsement of the approach that “just and equitable” within the meaning of s 79A(1)(c), (and hence s 90SN(1)(c)), is whether upon consideration of the identified circumstances arising as a result of the default it is just and equitable to vary or set aside the subject order. That judicial discretion is informed by the feature that the setting aside of an order may, as it was foreshadowed to occur here, lead to a determination of a further order under s 90SM that is, at the time of its making, “appropriate” if it is just and equitable to make an order (s 90SM(2)).
The trial judge, having recorded the relevant facts as referred to, was entitled in the exercise of the discretion under s 90SN(1)(c) to conclude that the just and equitable requirement in that subsection was fulfilled, for the reasons his Honour identified, notwithstanding the payments by the husband referred to.
I find no merit in ground 4.
As I find no merit in any of the grounds of appeal, I would dismiss the appeal.
Costs
The wife sought an order for costs pursuant to s 117 of the Act in the event that the husband’s appeal was dismissed.
Counsel for the husband acknowledged, appropriately in my view, that the husband could not resist such an order in the event that his appeal was dismissed.
I am satisfied that there are justifying circumstances for an order for costs to be made in favour of the wife and I would make such an order.
Orders
The husband should have leave to appeal the orders made by Judge Brewster on 29 February 2016 but the husband’s appeal from those orders ought be dismissed. I would further order that the husband pay the wife’s costs of and incidental to the appeal in the sum agreed between the parties or, failing agreement, as assessed.
Watts J
I have had the advantage of reading the Reasons of Aldridge J and Kent J. I agree generally with what Aldridge J has said. There are some parts of what Kent J has said with which I respectfully do not agree. I do not agree with Kent J’s contention that the words “just and equitable” in s 90SN(1)(c) of the Act affect the meaning to be given to the expression “in the circumstances that have arisen as a result of that default”. I also respectfully do not agree with Kent J’s view that the Full Court in Monticone adopted a wide interpretation of the “circumstances” which had “arisen as a result of the default” when considering s 90SN(1)(c) in that case.
Kent J sets out the facts in this case at [18] – [29] and the trial judge’s Reasons at [68] – [72].
The wife’s application was made pursuant to s 90SN(1) of the Act. In order to see s 90SN(1)(c) in context, it is useful to set out the whole of that subsection:
90SN Varying and setting aside orders altering property interests
(1) If, on application by a person affected by an order made by a court under section 90SM in property settlement proceedings, the court is satisfied that:
(a) there has been a miscarriage of justice by reasons of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or
(b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or
(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; or
(d) in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the de facto relationship, the child or, where the applicant has caring responsibility for the child (as defined in subsection (3)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order; or
(e) a proceeds of crime order has been made covering property of the parties to the de facto relationship or either of them, or a proceeds of crime order has been made against a party to the de facto relationship;
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 90SM in substitution for the order so set aside.
Note: For child of a de facto relationship, see section 90RB.
The structure of s 90SN(1) and s 79A(1) (which is a mirror provision) is clear. In order for an applicant to be successful the applicant bears the onus of establishing:
a)One or more of the five relevant grounds set out in s 90SN(1)
b)That the discretion referred to in the words “the court may, in its discretion” should be exercised.
It is not axiomatic that when a ground is established under s 90SN(1) that the court will vary the original order or set that order aside and or make another order in substitution for the original order. In Morrison & Morrison (1995) FLC 92-573 (“Morrison”) (at pages 81,672 and following under the heading “Ground 2 – Discretion”) the Full Court made it clear that the circumstances which may or may not justify the exercise of the discretion can be far wider than those which are considered under a particular ground under s 90SN(1).
After a ground is established, the exercise of discretion, inter alia involves an ultimate consideration as to whether or not it is just and equitable to change the original order. That is obviously so if a new order is to be made under s 90SN. Subsection 90SN(1) uses the word “appropriate” reflecting the use of that word in s 90SM(1). Subsection 90SM(3) provides that the court must not make a new order under s 90SM unless it is satisfied that, in all circumstances, it is just and equitable to make the order.
The ground relied upon by the wife in this case is s 90SN(1)(c) (“subsection (c)”). It contains different language to that contained in s 90SN(1)(b) and (d) which use the words “circumstances that have arisen since the order was made” and “circumstances that have arisen since the making of the order”. In contrast, subsection (c) uses the words “in the circumstances that have arisen as a result of that default”. Given that different words have been used in the same subsection of the Act, the presumption in statutory interpretation of consistent use applies (Scott v Commercial Hotel Merbein Pty Ltd [1930] VLR 75). Accordingly, the circumstances which will trigger a ground under subsection (c) are defined in narrower terms than the circumstances which will trigger the grounds in subsection (b) and subsection (d).
The ground in subsection (c) contains three elements:
a)A default;
b)Circumstances that have arisen as a result of that default; and
c)Having regard to those circumstances (and importantly not all the circumstances that have arisen since the order was made) the applicant bears the onus of establishing that it would be just and equitable to change the order.
Subsection 90SN(1) should be read as a whole and subsection (c) should be examined in the context of that provision (Metropolitan Gas Co v the Federal Gas Employees’ Industrial Union (1925) 35 CLR 449 at 455; Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 381). The words “the circumstances” in subsection (c) are qualified by the adjectival clause “that have arisen as a result of that default”. Given the plain words of the qualifying clause there is no warrant (and certainly no reason in the facts of this case) to adopt a wider definition of the words “the circumstances” in subsection (c). Having accepted that the general purpose of s 90SN is remedial, then no matter of consistency or fairness gets in the way of the logical construction of the clear and unambiguous words “in the circumstances that have arisen as a result of that default” (see NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509 at 514).
Kent J at [40] above draws attention to the fact that subsection (c) is the only ground in which, within the subsection itself, appear the words “it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order”. Kent J goes on to state at [40] that the inclusion of the words “just and equitable” in the subsection (c) ground and consideration of what is “just and equitable” in the context of the subsection, necessarily focuses attention on the meaning to be given to “in the circumstances” as it appears in subsection (c). Further, Kent J at [50] says the meaning to be given to “in the circumstances” when combined with the just and equitable element, informs what may be concluded to be a “result” of default. I do not agree that the words “in the circumstances” acquire a different meaning as a result of the inclusion of the words “just and equitable” in subsection (c). The circumstances which are relevant to a consideration under s 90SN(1)(c) are those that have “arisen as a result of that default”. It is only with a focus on those circumstances, when considering the subsection (c) ground, that the question should be asked as to whether or not it is “just and equitable” to vary the order. If the applicant establishes the ground then the question still needs to be asked as to whether or not it is appropriate and just and equitable to exercise discretion to vary, set aside or make another order in substitution. When exercising the discretion all relevant circumstances, can be considered.
Clearly, as Kent J points out in [56], it might be necessary when deciding whether the subsection (c) ground exists, to consider the circumstances that have arisen since the making of the orders in order to understand what circumstances have arisen as a result of the default, but to establish the subsection (c) ground it is only the circumstances that have arisen as a result of the default that are relevant to the consideration as to whether it is “just and equitable” to change the orders.
Kent J has extensively quoted the Full Court’s discussion in Monticone. I agree with Aldridge J’s observation that the Full Court in Monticone did not consider the central question in this appeal.
At [54] Kent J says:
The Full Court in Monticone did not specifically advert to or make findings about particular circumstances the Court identified as being “as a result of” the subject default by applying a strict test of causation. Rather, focusing upon “cogent considerations of justice founded on the conduct and the circumstances of the parties” and upon what is “just and equitable” within the meaning of s 79A(1)(c), the Court can be seen to have considered a wide range of circumstances and implicitly accepted those they discussed, or enough of those they discussed, as having “arisen as a result of the default”. Such a wide interpretation is supported by Full Court authority that s 79A (and by necessary inference s 90SN) is a remedial section which should be construed liberally to effect its intended purpose of achieving justice and equity.
(Footnote omitted)
In so far as Kent J’s use of the words in [54] “a wide range of circumstances”; “enough of those discussed” and “wide interpretation” might suggest that the Full Court in Monticone took into account circumstances which could not comfortably be described as having arisen as a result of the default when dealing with the subsection (c) ground, I respectfully disagree.
Although the Full Court in Monticone do discuss some of the history between the making of the orders and the default, the Full Court identifies five circumstances relevant to the subsection (c) ground:
a)The husband had paid more than two thirds (and, it follows, owed less than one third) of the ordered sum at the date of default;
b)The husband did his best to raise the outstanding balance as soon as practicable after the default;
c)The delay in the outstanding payment was not the husband’s fault;
d)The husband had the money to pay the wife when she filed the application to enforce the default order for sale;
e)The husband paid interest on the outstanding amount.
All of these circumstances can be comfortably described as circumstances arising as a result of the default, in that none of those circumstances would have happened had it not been for the default.
The Full Court in Monticone referred to what Gee J said in Rohde:
The important question in Rohde, as in this case, was whether it is just and equitable to vary the orders or set them aside. In seeking to elucidate the meaning of that term as used in sec. 79A(1)(c), Gee J. said…:
“What the Court has to do in considering what is ‘just and equitable’ under sec. 79A(1)(c) is to exercise a judicial discretion and one exercisable after a consideration of all the circumstances that have arisen as a result of the default referred to in the provision: see Cominos v. Cominos (1972) 46 A.L.J.R. 593, especially per Mason J. at p. 601.
In the course of the judgment of Barwick C.J. in Sanders v. Sanders(1967) 116 C.L.R. 366, his Honour refers to the phrase ‘just and equitable’ in sec. 86(1) of the Matrimonial Causes Act 1959-1966. His Honour refers to that phrase as embodying ‘cogent considerations of justice founded on the conduct and circumstances of the parties’. (See p. 376.)”
The definition of “just and equitable” proposed by Gee J in Rohde picks up statements of the High Court in Cominos v Cominos (1972) 127 CLR 588 and Sanders v Sanders (1967) 116 CLR 366. Those statements are statements that relate to the meaning of the phrase “just and equitable” in the context of s 86(1) of the Matrimonial Causes Act 1959 (Cth) (the current equivalent sections are s 90SM(3) and s 79(2) of the Act). The Full Court in Monticone indicate that when considering the expression just and equitable one needs to take into account “cogent considerations of justice founded on the conduct and circumstances of the parties”. As Gee J makes clear, the circumstances referred to for the purposes of subsection (c) are those “that have arisen as a result of the default referred to in the provision”.
The Full Court in Monticone having been satisfied that the subsection (c) ground was established, then observed:
That, in our view, would establish that it was prima facie just and equitable to make the variation sought by the husband, unless the wife could point to a particular hardship on her part such as a sharp increase in the value of the subject property during the relevant period which could not be compensated for by the payment of interest: see Slapp and Slapp. There was no admissible evidence on that point.
(Emphasis added)
The reference to Slapp & Slapp (1989) FLC 92-022 is a reference to a circumstance where the court had evidence that there had been a significant increase in the value of the property which could not be compensated by the payment of interest under the Rules.
Whilst the Full Court in Monticone referred to the words “prima facie” when referring to the establishment of the subsection (c) ground, subsequent Full Courts in Prowse & Prowse (1995) FLC 92-557 (“Prowse”) (and again in Morrison) said:
... we do not think it would be correct to say that there is even a prima facie entitlement to have the consent orders set aside once a miscarriage of justice [or any other ground] has been established, because to do so would be to limit the discretion of the Court and to place an onus upon the respondent to show circumstances why the order should not be made. The better view, in our opinion, is that an applicant for an order under s. 79A(1) [or s 90SN(1)] bears the onus of satisfying the Court that the original orders should be set aside or varied, and that includes the onus of satisfying the Court not just that there has been a `miscarriage of justice' [or any other ground] but also that the appropriate exercise of the discretion is to so order.
(Words in bold added)
The Full Court in Prowse (and reiterated in Morrison) observed:
All of the circumstances surrounding the making of the consent orders, and the circumstances of the parties since that time need to be considered in order to determine whether the justice of the case calls for an exercise of discretion…
The meaning of the words “just and equitable” as they explicitly appear in subsection 90SN(1)(c) and as they are relevant to the exercise of the discretion are identical.
It is pertinent to observe that the facts in this case are different from the facts in Monticone and Rohde. Importantly in this case it is the person who has not defaulted in their obligations under the orders who is seeking to rely upon the other party’s default.
The central assertion in the husband’s case is that the wife cannot rely upon the increase in the value of the major asset as being the circumstances which have arisen as a result of the default. If that was the wife’s case then her argument that the subsection (c) ground was made out would fail because it could not be said that the husband’s default caused the rise of the value of real estate in the Sydney property market. That however is not the wife’s contention. The circumstances to which the wife points as having arisen as a result of the husband’s default are that she has not got the bargain she negotiated, namely a property settlement order that would have the effect of dividing the net value of the assets of the parties equally.
Given that those were the circumstances upon which the wife relied, the trial judge was correct in being satisfied that the wife had established the subsection (c) ground namely that it was just and equitable to change the order because by reason of the husband’s default the wife did not get an equal division of the net assets.
In this case the trial judge having found the subsection (c) ground established went on to consider arguments made by the husband that an order should not be made on discretionary grounds arising from an alleged non-disclosure of a business the wife ran. Those circumstances predated the husband’s default and could not have been said to have arisen from the husband’s default. The trial judge was entitled to base his decision as to whether or not he exercise his discretion upon cogent considerations of justice founded on all of the conduct and the circumstances of the parties. Having considered the husband’s arguments on discretionary grounds the trial judge found that the discretion should be exercised in favour of the wife. There is no complaint by the appellant as to how the trial judge exercised his discretion.
The above discussion disposes of all grounds of appeal apart from ground 4. I agree with what Kent J has said at [26] and [74] – [78].
I agree there is no merit in any ground of appeal and the appeal should be dismissed.
As Kent J has said, the husband acknowledged that he could not resist a costs order in the event the appeal was dismissed.
I certify that the preceding one hundred and twelve (112) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Aldridge, Kent & Watts JJ) delivered on 28 April 2017.
Associate:
Date: 28 April 2017
Citing Carr v Finance Corp of Australia Ltd (1981) 147 CLR 246 at 248 per Gibbs CJ – and also the discussion of relevant principles by this Court in Bruce F McLaren Holdings & Ors v McLaren (2000)
FLC 93-030.
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