Bloomfield v Grainger - [2014] FCCA 2074

FEDERAL CIRCUIT COURT OF AUSTRALIA

BLOOMFIELD & GRAINGER & ANOR

[2014] FCCA 2074

Catchwords:
FAMILY LAW – Financial – summary dismissal of whole matter – creditor seeks to set aside a binding financial agreement made during a marriage – the wife, a bankrupt at the time the creditor commenced the action – summary dismissal of part of the claim – creditor seeks to set aside the agreement because it does not comply with formal requirements – creditor has no standing to pursue this claim.

Legislation:

Corporations Act 2001

Bankruptcy Act 1966, ss.58, 82, 107

Family Law Act 1975, ss.4A, 90C, 90G, 90K, 90UM

Federal Circuit Court of Australia Act 1999, s.17A

ASIC v Rich (2003) 31 Fam LR 667
Clyne v Deputy Commissioner of Taxation (1984) 154 CLR 589
Ejueyitsi v Bond University [2012] FMCA 872
Reamy & Anor & Milne [2012] FMCAfam 143
Spencer v Commonwealth of Australia (2010) 241 CLR 118
Trustee for the Bankrupt Estate of N Lasic v Lasic (2009) 41 Fam LR 369

Applicant:

MS BLOOMFIELD

First Respondent:

MR GRAINGER

Second Respondent:

THE BANKRUPT ESTATE OF MS GRAINGER

File Number:

BRC 89 of 2014

Judgment of:

Judge Cassidy

Hearing date:

27 June 2014

Date of Last Submission:

27 June 2014

Delivered at:

Brisbane

Delivered on:

24 September 2014

REPRESENTATION

Counsel for the Applicant:

Mr Jones

Solicitors for the Applicant:

Tucker & Cowen Solicitors

Senior Counsel for the First Respondent:

Mr Looney QC

Junior Counsel for the First Respondent:

Dr Greinke

Solicitors for the First Respondent:

Morgan Conley Solicitors

Solicitors for the Second Respondent:

No appearance

ORDERS

That paragraphs 35, 36, 37, 38, 43, 44, 45 and 46 of the statement of claim be struck out.
That paragraph 2 of the relief sought in the initiating application be struck out.
That otherwise the application in a case filed 1 May 2014 be dismissed.
That any application for costs be filed by no later than 4.00pm on 8 October 2014 and be dealt with by way of written submissions.
That any response by way of written submissions be filed by no later than 4.00pm on 22 October 2014.
That this matter be adjourned for judgment of the costs application (if any) at 9.30am on 18 November 2014 in the Federal Circuit Court of Australia at Brisbane.
That all parties be granted leave to appear by telephone for the delivery of the costs judgment (if any).

NOTATION:

(A)That the matter may be transferred to the Family Court of Australia on 18 November 2014 in the event there is no opposition from the parties. The parties be at liberty to either relist the matter for submissions in relation to the transfer or, file written submissions within the same time frame as for the costs.

IT IS NOTED that publication of this judgment under the pseudonym Bloomfield & Grainger & Anor is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRC 89 of 2014

MS BLOOMFIELD

Applicant

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] FCCA 2074
Decision Date: 24 September 2014

CaseChat Overview and Summary

This matter came before Judge Cassidy of the Federal Circuit Court of Australia concerning an application to strike out parts of a statement of claim and relief sought. The applicant sought to have certain paragraphs of the statement of claim and a specific item of relief dismissed.

The central legal issue before the Court was whether the applicant had demonstrated that the respondent had no reasonable prospect of successfully defending the proceeding or that part of the proceeding, as contemplated by section 17A of the *Federal Circuit Court of Australia Act 1999* (Cth). This involved considering the threshold for summary judgment, which requires a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial.

Judge Cassidy applied the principles established in cases concerning summary judgment, noting that the approach taken under section 17A of the *Federal Circuit Court of Australia Act 1999* is generally apposite to that under section 31A of the *Federal Court of Australia Act 1976*. The Court referred to the High Court's pronouncements in *Spencer v Commonwealth of Australia* and *Fancourt v Mercantile Credits Ltd*, emphasizing that the power to order summary judgment should be exercised with great care and only when it is clear that there is no real question to be tried. The Court must make a practical judgment as to whether the applicant has more than a "fanciful" prospect of success.

The Court ordered that specific paragraphs of the statement of claim and a portion of the relief sought be struck out. The remainder of the application was dismissed. Directions were given for the filing of written submissions regarding costs, with a further hearing scheduled for the judgment of the costs application. The matter was also noted for potential transfer to the Family Court of Australia.

Orders

Orders of the court

That paragraphs 35, 36, 37, 38, 43, 44, 45 and 46 of the statement of claim be struck out.

That paragraph 2 of the relief sought in the initiating application be struck out.

That otherwise the application in a case filed 1 May 2014 be dismissed.

That any application for costs be filed by no later than 4.00pm on 8 October 2014 and be dealt with by way of written submissions.

That any response by way of written submissions be filed by no later than 4.00pm on 22 October 2014.

That this matter be adjourned for judgment of the costs application (if any) at 9.30am on 18 November 2014 in the Federal Circuit Court of Australia at Brisbane.

That all parties be granted leave to appear by telephone for the delivery of the costs judgment (if any).

NOTATION:

(A) That the matter may be transferred to the Family Court of Australia on 18 November 2014 in the event there is no opposition from the parties. The parties be at liberty to either relist the matter for submissions in relation to the transfer or, file written submissions within the same time frame as for the costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Section 17A of the Federal Circuit Court of Australia Act 1999 (Cth) provides for summary judgment: “17A Summary judgment(1) The Federal Circuit Court of Australia may give judgment for one party against another in relation to the whole or any part of a proceeding if:(a) the first party is prosecuting the proceeding or that part of the proceeding; and(b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.… (3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:(a) hopeless; or(b) bound to fail;for it to have no reasonable prospect of success.(4) This section does not limit any powers that the Federal Circuit Court of Australia has apart from this section.” Federal Magistrate Jarrett (as he then was) summarised the approach taken in Ejueyitsi v Bond University [2012] FMCA 872 where Jarret FM opined:“[24] The approach taken in cases dealing with s.31A of the Federal Court of Australia Act 1976 are generally seen as apposite in cases dealing with s.17A of the Federal Magistrates Act 1999: George v Fletcher (Trustee) [2010] FCAFC 53 at [75] and [105].[25] The words of s.31A mean what they say and there is little point in attempting to formulate other phrases to encapsulate their meaning: Spencer v Commonwealth of Australia (2010) 241 CLR 118, per Hayne, Crennan, Kiefel and Bell JJ at [58] – [59]. The Court must embark upon a “practical judgment…as to whether the applicant has more than a ‘fanciful’ prospect of success”: per French CJ and Gummow J at [25]. What is required by the section is set out by the Hayne, Crennan, Kiefel and Bell JJ as follows at [60]:… The Federal Court may exercise power under s 31A if, and only if, satisfied that there is “no reasonable prospect" of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to "no reasonable prospect” can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase “just and equitable” when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.” I was referred by Mr Jones, Counsel for the applicant, to paragraph 24 of Spencer v Commonwealth of Australia (2010) 241 CLR 118:“[24] The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action (51) or on the basis that the action is frivolous or vexatious or an abuse of process (52). The same applies where such a disposition is sought in a summary judgment application supported by evidence. As to the latter, this Court in Fancourt v Mercantile Credits Ltd [(1983) 154 CLR 87 at 99] said:“The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried.”More recently, in Batistatos v Roads and Traffıc Authority (NSW) (54) Gleeson CJ, Gummow, Hayne and Crennan JJ repeated a statement by Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde (55) which included the following:“Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways (56), but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.”There would seem to be little distinction between those approaches and the requirement of a “real” as distinct from “fanciful” prospect of success contemplated by s 31A (57). That proposition, however, is not inconsistent with the proposition that the criterion in s 31A may be satisfied upon grounds wider than those contained in pre-existing Rules of Court authorising summary dispositions.”[Footnotes omitted.]

Ratio Decidendi

Legal Principle Established

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