Boulos v Boulos

[2004] HCATrans 467

[2004] HCATrans 467

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S605 of 2003

B e t w e e n -

MAGDI BOULOS

Applicant

and

BERNADETTE BOULOS

Respondent

Application for special leave to appeal

GLEESON CJ
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 19 NOVEMBER 2004, AT 10.23 AM

Copyright in the High Court of Australia

MR G.O’L. REYNOLDS, SC:   May it please the Court, in this matter I appear for the applicant with my learned friend, MR P.J. LIVINGSTONE.  (instructed by Adrian Twigg & Co)

MR P. HALLEN, SC:   May it please your Honours, I appear with MR P.A. CAMPTON for the respondent.  (instructed by The Argyle Partnership)

GLEESON CJ:   Yes, Mr Reynolds.

MR REYNOLDS:   As your Honours will have seen from our written submissions, this case involves three general issues of law which arise under the Family Law Act.  The first is what has been described as the “clean break” principle.  The second is the construction of section 81 of the Act, and the third is the construction of section 44 of the Act.  There are two more particular questions of law which arise.  The first of those questions is the issue of whether the “clean break principle” or section 81 is relevant to the granting of leave under section 44(3).

GLEESON CJ:   Is this “clean break” principle of which you speak something that has an application or operation independent of section 81, or is it just something that informs section 81?

MR REYNOLDS:   The former, your Honour.  It is described in the case as a general policy arising from the provisions of the Act.

GLEESON CJ:   So it is a discretionary consideration.

MR REYNOLDS:   Quite.  Now, on that first issue I have identified, there are two earlier decisions, your Honours will have seen from the application book, of the Full Court of the Family Court.  The first is a case called Whitford v Whitford, the second is a case of Hall v Hall.  In both of those cases the court said that the judge exercising the section 44(3) discretion must have regard to either section 81 or the “clean break” principle.

McHUGH J:   What about Park and Vaughan, those two cases?

MR REYNOLDS:   Your Honour, they deal with a slightly different issue.  That is the second of the two more particular questions, which I will be coming to in a moment.  Now, in the present case the Full Court stated categorically that section 81 was irrelevant to the exercise of the discretion in section 44(3).

GLEESON CJ:   Well, on that, can we just look at the words of 81, which appear on page 43 of the application book?  First of all, the opening words are, “In proceedings under this Part”.  Was the application that you are making a proceeding under this Part?

MR REYNOLDS:   No, and I need to deal with that.

GLEESON CJ:   Well, the next thing you may need to deal with is this.  Section 81, in its terms, directs the court in the way it makes orders.  Was the court embarked on the process of making orders when it dealt with your application?

MR REYNOLDS:   No.  Can I deal with both those two questions, hopefully at the same time?

GLEESON CJ:   Yes.

MR REYNOLDS:   We would make three points.  The first is that it is agreed that, as between the parties – and it was a matter, I think, noted by the court – that on a section 44(3) application the main thing the court needs to look to is the ultimate prospects of success on the maintenance final hearing.  Now, it is agreed that on that ultimate hearing section 81 is relevant.  So our first point is that section 81 must be relevant to section 44(3), at least insofar as the court must, as a primary factor in the exercise of a discretion, gauge the prospects of success ultimately on the maintenance application.

The second point that we would make is that the original application that was filed in these proceedings, in pursuance of which the consent orders were made, was on any view an application under Part 8.  We submit that part of the way section 81 operates is to direct a court, looking later on at the orders that were made in the Part 8 application, to treat those orders earlier made as orders which will finally determine the financial relationship between the parties.  Those are the first two points.

The third one is that this proposition that this is not a Part 8 application altogether ignores the “clean break” principle which, as I said to your Honour the Chief Justice earlier on, is a principle which arises generally from the operation of the Act.

The second, more particular issue of law which arises in this case involves a situation where, as here, the court orders expressly state that the orders are intended finally to determine the financial relationship between the parties.  The issue which we say is raised is whether such an order provides any protection at all against later attempts to reopen those issues and, if so, what the nature of that protection is.

Now, your Honours will have seen from our submissions that there have been two cases in the Full Family Court which have articulated two different approaches to that particular issue.  In one case, the decision of Park v Park, the court indicated that where orders of that kind were made that an applicant who wanted to reopen these issues, the earlier financial orders, would have to show that unforeseeable circumstances have arisen, which we say obviously is a very onerous test.

There is another decision which we have referred to called Vaughan v Vaughan, in which a different test was articulated, namely, a test of whether unexpected circumstances have arisen – obviously an easier test to satisfy.  Now, in this particular case the Full Court referred to those two statements of principle, but the court did not pronounce definitively in favour of either.  It will not surprise your Honours to know that the unresolved status of what the test is is a matter which we rely upon in support of a grant of special leave.

Now, as your Honours will have seen from the written submissions, the respondent says, “Well, this isn’t an appropriate vehicle to test that point”.  The reason is that there was a finding in respect of one fact that that matter was unforeseeable and, therefore, the dichotomy between those two tests simply does not arise.

Now, I need then to take your Honours to one finding of fact, which is to be found in the application book at the bottom of page 50.  There is there a reference to some shares in a company known as the Citiwest Centre – that is in paragraph (d) at about point 8.  Then there is a reference, down the last three lines:

that the husband promised to pay to the wife $1,000,000 and look after her for life in return for the transfer by her to him of certain share.

These are the important words:

The fact that the husband subsequently reneged on that promise cannot, in our view, be seen as “foreseeable circumstances”.

With great respect, we submit that that argument, which I might add was never put on behalf of the wife in the Full Court, those circumstances simply cannot be characterised as unforeseeable.

First of all, that test, your Honours do not need me to say, is a very, very demanding test.  Second of all, that the husband would renege on this alleged promise, we submit, is certainly foreseeable by reason of three matters.  First of all, this alleged agreement was oral, never formalised, never confirmed in writing or made the subject of any court order.  Secondly, and most importantly – and I do not understand this to be a matter of dispute – the wife, under the consent orders, was already bound to transfer her shares in that particular company.  The third point, just as a general matter of experience of the world and perhaps the commercial world, it is very difficult, we submit, to say it is unforeseeable that somebody will not renege on an agreement; more particularly, an informal one.  I might add that the wife’s whole case below was that this was a man who basically did not keep his promises about financial matters.

McHUGH J:   Is not your principal difficulty that section 44(3) itself incorporates the “clean break” principle insofar as it is relevant, in that it specifically declares that parties are not to commence proceedings for spousal maintenance, or for an alteration of property interest, within 12 months?  Is that not an aspect of the “clean break” principle?

MR REYNOLDS:   It is certainly an aspect, but not the whole of it, and that is our point ‑ ‑ ‑

McHUGH J:   But on a leave application, why does that not cover the ground in so far as the “clean break” principle is concerned?

MR REYNOLDS:   Well, again, the courts have indicated, we submit ‑ ‑ ‑

McHUGH J:   I mean they are just words.  You are talking about the “clean break” principle.  What do you mean by it?  Do you mean that leave should not be granted?  How does it work in concrete terms?

MR REYNOLDS:   In concrete terms, it operates by applying – and this is our point – a test of whether unforeseeable circumstances have arisen, at least in the situation where the orders that are made are earmarked as intended finally to determine the relationship between the parties financially.

McHUGH J:   Well, you have a finding of fact against you in this case that there were unforeseeable circumstances.

MR REYNOLDS:   And we submit that that finding of fact is, with respect, manifestly erroneous.

McHUGH J:   That means then we have to examine the facts of the case.

MR REYNOLDS:   Only that one fact, your Honour, which, I submit, could be examined in under three minutes, as I have attempted to do.  As I say, we submit that it is manifestly erroneous.  So there are those three general issues, which I outlined at the beginning, and the two more

particular issues which, we submit, warrant a grant of special leave in this case.  Those are my submissions.

GLEESON CJ:   Thank you, Mr Reynolds.  We do not need to hear you, Mr Hallen. 

This is an application for special leave to appeal from a discretionary decision of the Family Court.  We are of the view that there are insufficient prospects of success to warrant a grant of special leave, and the application is refused with costs. 

We will adjourn for a short time to reconstitute. 

AT 10.35 AM THE MATTER WAS CONCLUDED