Cahill & Cahill
[2022] FedCFamC1F 53
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Cahill & Cahill [2022] FedCFamC1F 53
File number(s): MLC 12291 of 2020 Judgment of: CAMPTON J Date of judgment: 10 February 2022 Catchwords: FAMILY LAW – REVIEW – Where a judicial registrar made an order extending the time in which the wife could file an Application to Review a registrar’s decision to make consent property orders – Where the husband sought a review of that order – Where the husband contends the wife’s application for an extension of time to review the making of the Consent Orders is an abuse of process – Where the process of review is a right at law ensuring the Constitutional validity and integrity of the powers and functions of this Court – Where the wife’s delay in applying for a review of the Consent Orders and any consequential injustice contended to arise to the husband had its genesis in the husband’s disclosure failures – Where the husband’s non-disclosure had a consequential impact on the reality of the wife’s consent to the Consent Orders – Review dismissed – Costs of the review ordered against the husband. Legislation: Australian Constitution s 92
Family Law Act (1975) (Cth) ss 79, 79A
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 67
Family Law Rules 2004 (Cth) rr 13.01, 13.04, 13.07, 18.05, 18.08, 18.10
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.04, 1.14, 1.31, 1.33. 1.34, 6.01, 6.03, 16.06, 14.07, 15.06
Cases cited: Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256; [2006] HCA 27
Brimson v Rocla Concrete Pipes (1982) 2 NSWLR 936
Gallo v Dawson (1990) 93 ALR 479; [1990] HCA 30
Ghosh v NineMSN Pty Ltd (2015) 90 NSWLR 595; [2015] NSWCA 334
Gilbert v Estate of the late Gilbert (1990) FLC 92-125
Harris v Caladine (1991) 172 CLR 84; [1991] HCA 9
Henley & Henley [2019] FamCA 101
Jameel v Dow Jones & Co Inc [2005] QB 946
Mirren & Mirren [2020] FamCAFC 94
Moore v Inglis (1976) 50 ALJR 589
Pearce & Pearce [2016] FamCAFC 14
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1980] HCA 41
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
Stokes (by a tutor) v McCourt [2013] NSWSC 1014
Suiker & Suiker (1993) FLC 92-436
Tomlinson v Ramsey Food Processing Pty Ltd (2015) 156 CLR 507; [2015] HCA 28
Williams v Spautz (1992) 174 CLR 509; [1992] HCA 34
Division: Division 1 First Instance Number of paragraphs: 102 Date of hearing: 3 February 2022 Place: Sydney Counsel for the Applicant: Ms Tulloch Solicitor for the Applicant: Fair Family Law Counsel for the Respondent: Mr Schmidt Solicitor for the Respondent: Tisher Liner FC Law ORDERS
MLC 12291 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CAHILL
Applicant
AND: MR CAHILL
Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
10 FEBRUARY 2022
THE COURT ORDERS THAT:
1.The Application for Review filed by the husband on 16 December 2021 of the orders made by a judicial registrar on 29 November 2021 be dismissed.
2.Order 1 made by the judicial registrar on 29 November 2021 be confirmed.
3.The application of the wife to review the Orders made on 21 January 2021 be allowed and the said orders be discharged.
4.The Application for Consent Orders filed 11 November 2020 be dismissed.
5.Each party pay their own costs and incidental to the application of the wife for leave to extend the time to review the orders made 11 November 2020 as determined by the judicial registrar on 29 November 2021 with the Order reserving costs made on that day being discharged.
6.The husband shall pay to the wife the cost of the Application in a Proceedings filed 16 December 2021 in the sum of $4,924 within 14 days of the date of this order.
7.The legal representatives of each of the husband and the wife submit to the docket registrar within 14 days an agreed minute of directions providing for the further management of the proceedings.
8.The proceedings be listed for further case management before senior judicial registrar Sudholz at 12.00 pm on 1 March 2022.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cahill & Cahill has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J
INTRODUCTION
The husband by way of an Application for Review filed on 16 December 2021 (“the Review Application”) seeks a review of a decision made by a judicial registrar on 29 November 2021 granting the wife leave to proceed out of time with her application to review the consent orders made by a registrar on 21 January 2021 pursuant to s 79 of the Family Law Act (1975) (Cth) (“the Act”) and reserving each party’s costs of the application for leave. The wife resists the review.
For the reasons which follow, the Review Application will be dismissed with the husband to pay the wife’s costs of opposing it. No order as to costs will be made as reserved by the judicial registrar on 29 November 2021. The Application for Consent Orders filed 11 November 2021 will be dismissed, and the orders made by consent on 21 January 2021 set aside. Directions as to the progression and management of the s 79 dispute between the parties are reserved. The s 79A relief sought by the wife is otiose.
BACKGROUND
The husband was born in 1985 and is 36 years of age. He is a professional. The husband ceased working in November 2020 and sometime thereafter recommenced working on a part-time basis, earning about $112,000 per annum.
The wife was born in 1986 and is 35 years of age. She is a professional and works three days a week earning about $64,000.
The parties married in 2012 and separated in 2018. An Order for divorce was made in 2021.
The parties have a daughter, X, born in 2016 (“X”). The parenting of X is regulated by way of orders made by a senior judicial registrar on 16 September 2021. They provide for X to live with the wife and to spend five nights per fortnight with the husband commencing from term four 2021, four night block periods during school holidays with the husband commencing from term one 2022, and from December 2022 for half of each school holiday period on a week about basis.
The parties filed an Application for Consent Orders pursuant to s 79 of the Act on the 11 November 2020 (“the Application for Consent Orders”).
On 21 January 2021, by consent, a registrar made the orders as to the division of the parties’ property (“the Consent Orders”). It was uncontroversial that the making of the Consent Orders was an exercise of the powers and functions delegated to the registrar pursuant to r 18.05(1) of the then applicable Family Law Rules 2004 (Cth) (“the old Rules”). The parties agreed that they had pursuant to r 18.08 of the old Rules, 21 days from 21 January 2021 to apply for a review of the delegation of powers and functions by way of the registrar’s decision to make the Consent Orders. Rule 18.10 of the old Rules prescribed that the hearing on review was by way of an original hearing.
The time for the wife to apply for a review of the Consent Orders expired on 11 February 2021.
The Initiating Application of the wife filed 26 May 2021 sought leave to extend the time to apply for a review of the Consent Orders, or in the alternative sought relief pursuant to s 79A(1)(a) of the Act to vary or set aside the consent orders. The wife’s Application for Review of the Consent Orders was three and a half months out of time.
On 1 September 2021 the old Rules were replaced by Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the current Rules”). The current Rules applied to the exercise of delegated power by the judicial registrar on 29 November 2021. The parties agree that r 1.14 of the current Rules prescribe that the time for a party to apply for a review the made by a judicial registrar (of the same character as the Consent Orders made by a registrar in this matter) is also 21 days.
The current Rules provide:
1.31 Court may make orders or dispense with these Rules
(1)The court may, in the interests of justice, dispense with compliance, or full compliance, with any of these Rules at any time.
(2)If, in a proceeding, the court gives a direction or makes an order that is inconsistent with any of these Rules, the direction or order of the court prevails in that proceeding.”
1.33 Failure to comply with a legislative provision or order
(1)If a step is taken after the time specified for taking the step by these Rules, the Family Law Regulations or a procedural order, the step is of no effect.
1.34 Relief from orders
(1) A party may apply for relief from:
(a) the effect of sub rule 1.33(1)…….
(2)In determining an application under sub rule (1), the court may consider the following:
(a)whether there is a good reason for the non-compliance;
(b)the extent to which the party has complied with orders, legislative provisions and pre-action procedures;
(c)whether the non-compliance was caused by the party or the party’s lawyer;
(d)the impact of the non-compliance on the management of the proceeding;
(e)the effect of the non-compliance on each other party;
(f)costs;
(g)whether the party should be stayed from taking any further steps in the proceeding until the costs are paid;
(h)if the application is for relief from the effect of sub rule 1.33(1)—whether all parties consent to the step being taken after the specified time.”
The wife’s application for leave to extend the time she had to apply for a review of the Consent Orders was initially determined in her favour on 29 November 2021 before the judicial registrar pursuant to r 1.34(1)(a) of the current Rules. It was not the subject of contest that a judicial registrar was seized of the delegated power to determine the wife’s application to extend time for the filing of her review application. Table 2 to “Schedule 4 – Delegated Powers” of the current Rules provides at r 14.8 that the power to grant relief from the effect of r 1.33(1) is delegated to judicial registrars and senior judicial registrars.
Rule 14.07 of the current Rules sets out the power of the Court on review from an order of a judicial registrar is by way of an original hearing. The task is not to ascertain whether, in the making of the order by the judicial registrar, there was error. The review of the judicial registrar’s determination is an original hearing in the sense error does not need to be established (Henley & Henley [2019] FamCA 101 at [7]). Thus, the review is taken to mean a re-examination of the matter afresh.
For the purposes of the hearing before me, the parties agreed for me to determine first in time the husband’s Review Application filed 16 December 2021. In the event his Review Application was:
(a)successful, then the orders made by the judicial registrar granting the wife leave to review the exercise of delegated power in making the registrar making the Consent Orders on 21 January 2021 would be of no effect, and the orders of the judicial registrar would be discharged. The wife’s substantive relief pursuant to s 79A of the Act would remain on foot; or if it was
(b)unsuccessful, then no contest would be presented by the husband on the hearing of the wife’s Application for Review of the Consent Orders as contained in her Initiating Application filed 26 May 2021 in circumstances where, for the purposes of the hearing on the review, the wife withdraws her consent to the making of the Consent Orders. Adopting the approach taken by the Full Court in Mirren & Mirren [2020] FamCAFC 94 at [18], the practical effect of the extension of time would be to set aside the Consent Orders made by the registrar on 21 January 2021, the wife’s withdrawal of her consent leading to the inevitable dismissal of the Application for Consent Orders.
EVIDENCE
The wife relied upon the following documents:
(c)Her Initiating Application filed 26 May 2021;
(d)Her affidavit filed 26 May 2021;
(e)Her affidavit filed 8 October 2021; and
(f)Her financial statement filed 26 May 2021.
The husband relied on the following documents:
(a)His Response to Initiating Application filed 31 August 2021;
(b)His affidavit filed 31 August 2021 from paragraph 45 to the end of the document; and
(c)His affidavit filed 15 October 2021.
The husband filed an Application in a Proceeding on 21 January 2022 seeking leave to adduce and rely upon expert opinion evidence as to the value of the parties’ home at B Street, Suburb C in the state of Victoria (“the Suburb C Property”) contained in the affidavit of Mr D (a real property valuer) filed on 27 January 2022. In circumstances where the parties agreed for the purposes of the hearing as to the Suburb C Property having a value of $1.5 million, the husband’s Application in a Proceeding was by consent withdrawn and dismissed.
Other documents became exhibits;
(a)CRTX 1 – Orders made by a judicial registrar dated 29 November 2021 granting the wife leave to make her application to review of the Consent Orders out of time;
(b)CRTX 2 – Application for Consent Orders filed 11 November 2020;
(c)CRTX3 – Consent Orders made by the registrar on 21 January 2021;
(d)W1 – Costs Notice of wife filed 31 January 2022;
(e)H1 – Costs Notice of husband filed 31 January 2022;
(f)H2 – Historical title search of the Suburb C Property as at 21 January 2022, confirming the registration of the transfer of the husband’s interest to the wife on 12 February 2021 and the wife’s refinance of the mortgage secured over the property in favour of Westpac Banking Corporation on 12 February 2021;
(g)H3 – Letter from wife’s solicitors to husband’s solicitors dated 15 February 2021;
(h)H4 – Husband’s schedule as to costs sought on review.
FACTUAL MATTERS
The Application for Consent Orders filed by the parties on 11 November 2020 records that the primary property available for adjustment was:
(a)The jointly owned Suburb C Property, valued at $1,250,000;
(b)The husband’s 25 per cent interest in E Pty Ltd and the F Trust (“E Pty Ltd”), valued at $800,000;
(c)The husband’s Motor Vehicle 1, valued at $3,500;
(d)Furniture of each party, recorded as having a value of $20,000 for the wife and $5,0000 for the husband;
(e)Cash at bank totalling $101,306; and
(f)Cryptocurrency held by the husband $167,085.
The parties had the following by way of liabilities as recorded in the Application for Consent Orders:
(a)The mortgage secured over the Suburb C Property of $275,246;
(b)The husband’s personal loan to her parents in the sum of $15,000;
(c)The father’s personal loan to his father in the sum of $9,000;
(d)An allowance for the estimated Capital Gains Tax to be incurred upon the sale of the father’s cryptocurrency, recorded as “$ E 41,771”;
(e)The father’s estimated income tax liability for the financial year ending 30 June 2020, being $10,000.
The wife’s superannuation interest was valued at $78,486 and the husband’s superannuation interest was valued at $16,900.
The parties’ total net property and superannuation available for adjustment as recorded in the Application for Consent Orders was $2,091,260.
The recorded intended effect of the adjustment of the total property including superannuation as between the parties by way of the Application for Consent Orders was 63.4 per cent in favour of the wife and 36.6 per cent in favour of the husband. That would equate to the wife receiving $1,325,859 and the husband receiving $765,401 upon effecting the Consent Orders.
The Consent Orders provided for inter alia:
(a)The husband to transfer his interest in the Suburb C Property to the wife by 20 February 2021 and contemporaneously:
(i)The wife to discharge the mortgage secured over the Suburb C Property and refinance the associated loan into her sole name;
(ii)The husband to pay to the wife the sum of $170,000; and
(iii)The parties to pay to the wife the amount held in their joint bank account;
(b)In the event the husband did not make the payment of $170,000 by 20 February 2021, the husband to sell his interest in his cryptocurrency account and pay to the wife from the proceeds of sale the amount left outstanding;
(c)The husband to transfer to the wife his right, title and interest in the Motor Vehicle 1;
(d)The husband to retain his interests in:
(i)E Pty Ltd;
(ii)The F Trust;
(iii)His cryptocurrency accounts;
(iv)His superannuation;
(v)Any funds in any bank account in his sole name.
(e)The wife to retain her:
(i)Her superannuation;
(ii)Any funds in any bank account in her sole name.
The Application for Consent Orders contained a “Statement of Truth” signed by each of the parties on 11 November 2021. Part of each Statement of Truth recorded:
(a)That each of the parties “had independent legal advice on [their] relevant rights under the Family Law Act and the effect and consequences of orders being made in the terms proposed”;
(b)A declaration that each party “[has] no interest in property, superannuation or a financial resources” not described in the Application for Consent Orders, and that where an estimate of the value of the property or liability is given, it is “based on knowledge, information and belief and is given in good faith”.
The Application for Consent Orders also included a statement by each party’s solicitor executed on 11 November 2021, which recorded that they had given the parties “independent legal advice as to the meaning and effect of the proposed Consent Orders and explained their rights, entitlement and obligations”.
The wife’s affidavit records that she made a direct initial financial contribution of $400,000 received from her parents by way of an “early inheritance” and contributed $150,000 in savings at the commencement of the parties’ relationship. The $400,000 and $100,000 from her savings were applied to the acquisition to the Suburb C Property in 2013. Such contention was recorded at question 69 of the Application for Consent Orders and Mr H as “agreed” by the husband, who did not appear to put this evidence into issue.
The husband contributed at the commencement of cohabitation what he describes as one third share in an enterprise known as G Pty Ltd. That corporation was merged and rebranded into E Pty Ltd as trustee for the F Trust in April 2015. Question 69 of the Application for Consent Orders also records that he came into the relationship with approximately $50,000 in cash and a motor vehicle estimated to be worth $20,000. There was no evidence of the husband’s cash holdings having been applied to the relationship or the purchase of the Suburb C Property.
When G Pty Ltd became E Pty Ltd in April 2015, the husband’s interest in E Pty Ltd was 25 per cent, his brother Mr H held a 25 per cent interest and his mother held a 25 per cent interest. The remaining 25 per cent interest was held by an unrelated party, Ms J.
The husband said in his affidavit evidence that in September 2020 he disclosed his “estimated values of [his] interest in E Pty Ltd as at January 2020 and September 2020 based on the information available to [him] at that time.” On 9 October 2020, prior to the execution of the Application for Consent Orders, he disclosed to the wife the taxation returns and published financial statement statements of E Pty Ltd for the financial year ending 30 June 2020. He said he also instructed his accountants to speak directly with the wife and answer any questions she may have in relation to his interest. There was no evidence before me that the wife availed herself of that opportunity.
The husband gave evidence as to what he described as a significant conflict between him and his brother Mr H in late 2020 as to the husband’s continuing role in E Pty Ltd.
In late 2020 the husband’s father approached him to purchase his interest in E Pty Ltd for the sum of $770,000, subject to finance. He said that he advised his father that he would consider the offer but would prefer to “find another way” as he did not wish to leave E Pty Ltd.
The husband gave evidence of advising the wife of the terms of the conflict with his brother and the offer from his father during the first two weeks of November 2020. The wife denies the fact of the said conversations and their content. I am unable to make a finding on these disputed matters in the context of this truncated hearing.
The husband said in late 23 November 2020 he was given three days’ notice as to the cessation as to his engagement and employment with E Pty Ltd, his last day of employment being on 27 November 2020. The husband said he advised the wife of this circumstances by way of telephone. A number of text messages passed between the parties on 25, 26 and 27 November 2020.
The wife contends that the husband said in a conversation “if I do sell for more [than the agreed value] I would of course split the difference with you”. The husband denied that conversation. I am unable to make a finding on this dispute in the context of this hearing.
The husband gave evidence as to meeting with a number of investors in an attempt to sell his interest in E Pty Ltd between 1 December 2020 and 11 December 2020.
On 21 December 2021 the husband received an offer in writing by email from his father to acquire his interest in E Pty Ltd for $1 million. The offer was subject to an application for finance and carried with it an additional condition that the husband would loan $500,000 back to E Pty Ltd on terms that $300,000 of the loan would be repaid within one year and the balance of $200,000 within two years.
It is uncontroversial that the husband did not disclose the fact or terms of the offer he received as contained in this email. This presents in sharp contrast to the husband’s disputed disclosure to the wife of the 10 November 2021 offer from his father of a lesser consideration of $230,000.
On 20 January 2021 the Westpac Bank rejected the finance application to facilitate the buyout of the husband’s interest. The husband gave evidence as to receiving advice of that rejection on 25 January 2021.
The Consent Orders were made by the registrar on 21 January 2021.
On 25 January 2021 (four days after the Consent Orders were made) the husband agreed with his parents that they would pay to him a sum of $1 million to acquire his 25 per cent interest in E Pty Ltd.
On 28 January 2021 the husband received a cheque from his father for $500,000.
On 30 January 2021 the husband received the sale contracts and other documentation for the buyout by his parents. He, his parents and his brother executed those documents on 2 February 2021. On that same day he received a cheque for $500,000 from his mother.
On 3 February 2021 the parties attended the bank together to facilitate the husband paying to the wife the sum of $170,000 pursuant to the Consent Orders made 21 January 2021. The wife’s understanding was that the husband was to liquidate his crypto-currency account to make that payment. The wife in her affidavit of 8 October 2021 said at paragraph 9(d):
… I did not hear anything further from [the husband] about the sale of the business until 3 February 2021 when we were at the bank and the bank teller mistakenly told me about the account with a balance of $1,000,000. [The husband] and I then had an argument at the bank about why he had not told me about the sale.
After this inadvertent disclosure was made by the bank teller, the husband disclosed to the wife he had disposed of his 25 per cent interest in E Pty Ltd for $1 million.
The wife said in her affidavit that in the event that the husband had disclosed to her the fact of and terms of the offer made by his father on 21 December 2021, she would not have entered the Consent Orders, and in the circumstances of the parties having already filed the Application for Consent Orders, would have withdrawn her consent to the orders being made. This evidence was not put into issue by the husband.
The wife accepted the payment of $170,000 from the husband while attending at the bank on 3 February 2021. The legal interest in the Motor Vehicle 1 was transferred by the husband to the wife at or about that time. On 12 February 2021 the wife progressed and completed the husband’s transfer of the interest in the Suburb C Property in her favour and she refinanced the K Bank mortgage.
The husband contended that save the delivery to him of items of personalty, the Consent Orders had been completed, implemented and perfected by 12 February 2021.
On 15 February 2021 the solicitors for the wife forwarded to the husband’s solicitors a letter putting the husband on notice of a contended failure by him to comply with his disclosure obligations in respect of the acquisition by his family of his share of the E Pty Ltd enterprise prior to the making of the Consent Orders on 21 January 2021. The letter requested documents as to the disposal of his E Pty Ltd interest by way of discovery. It put the husband on notice of a possible s 79A Application following the provision of disclosure by close of business 26 February 2021.
On 2 March 2021 the husband’s solicitors responded to the letter from the wife’s solicitors of 15 February 2021. That letter records the husband being “disappointed that your client is considering a s 79A Application, especially in circumstances where by he has been wholly transparent with your client throughout this entire process” and “confirming that out client’s exit from the business was a huge shock to him, and we note that he is currently unemployed”. The letter recorded:
(a)A chronology of events as to the husband’s role in E Pty Ltd from 1 October 2020 until 3 February 2021; and
(b)Confirmed on the husband’s instructions that “(he) is aware of his obligations to make a full and frank disclosure throughout family law proceedings…”; and said
(c)“our client has not consciously engaged in any deceit or wrong doing…this is evidenced by the time line of events that clearly shows our client could not have reasonably foreseen he would receive the payment for $1 million dollars for his share in the company during the time prior to the orders being made. As such there was nothing to disclose”; and recorded that
(d)“it was not until after the orders were made, was there an offer of $1 million dollars (subject to finances). As such there was nothing deliberately or inadvertently not disclosed”; and stated
(e)The husband’s contention that he had made “extensive full and frank disclosure relating to his financial position”, that the value of the husband’s interests in E Pty Ltd was “agreed by your client” and that should the wife bring an s 79A Application it would be rigorously opposed.
(f)The letter concluded by identifying the husband’s “commitment to resolving all matters between the parties amicably.
The wife’s affidavit records that her solicitors again wrote to the husband’s solicitors with an offer to “resolve the matter” and that her solicitors received no response.
On 9 April 2021 the husband instructed his current solicitors to send a letter to the solicitors for the wife requesting that the wife “not take any further steps until they had an opportunity to review the file once received” and that they would then correspond with the wife’s solicitors. The wife’s solicitors requested a response from the husband’s solicitors by 20 April 2021.
Further exchanges occurred between the party’s solicitors between 27 April and 10 May 2021 including an offer from the solicitors for the wife on the later date. No response was received by the wife. She initiated her current substantive application including the application for leave to commence out of time on 26 May 2021.
The husband in his affidavit filed 15 October 2021 said in explanation of the juxtaposition in his conduct (on his case) as to disclosing to the wife the 10 November subject to finance offer made by his father of $770,000 and him not disclosing to the wife the 21 December 2021 subject to finance offer made by his father for $1,000,000:
20.In hindsight, I accept that I should have advised [the wife] of the email from my father and the proposal made on 21 December 2020 to acquire my interest in [E Pty Ltd] for $1 million if finance could be obtained. At the time, I did not have confidence that this proposal would proceed, when it was conditional on finance. Whilst I realise it is not an excuse, I felt overwhelmed. I had just been pushed out of a business I had founded and worked in for the past 15 years, I was grappling with the uncertainty around the above proposal, I had no future employment lined up, and was dealing with the breakdown of a relationship between me and my brother.
THE LAW AND RELEVANT PRINCIPLE
The Court has a general power to grant an extension of time within which to take a particular step as identified in r 15.06(1) of the current Rules. This power is not limited to extending time to permit the later filing of an Application for Review an exercise of delegated power by a judicial registrar. The power to grant an extension of time maybe enlivened whether or not the time fixed for doing the thing has passed (r 15.06(2), current Rules).
The relevant principles as to an exercise of the discretionary power to extend time was agreed by the parties to being typically referenced by the well-known statement of McHugh J in Gallo v Dawson (1990) 93 ALR 479 (“Gallo v Dawson”) where His Honour said at 480:
… The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the Court or Justice to do justice between the parties. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted. It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice…
(Citation omitted)
The issue for the Court is whether the strict application of the Rules would constitute an injustice.
THE WIFE’S CASE
The wife’s contends that:
(a)A strict compliance with the Rules as to the time for filing an Application for Review will work an injustice upon her;
(b)She made her application seeking leave to extend the time to review in a timely manner in circumstances where she initially discharged her obligation to obtain disclosure in compliance with the pre filing procedures prescribed by the rules and attempted to resolve or compromise the dispute by the husband through agreement;
(c)The circumstances by which she inadvertently received advice as to the fact of the disposal of the business by the husband for $1 million dollars being chronologically proximate to the making of the Consent Orders was relevant to the exercise of discretion;
(d)The consequence of the husband failing to inform her of the terms of the offer from his father made in December 2021 to acquire the his interest in the E Pty Ltd for $1 million (albeit it subject to conditions including finance) impugned her true consent to the Consent Orders and the process by which those orders were obtained. She drew analogies to the circumstances identified by the Full Court in Suiker & Suiker (1993) FLC 92-436 and in Pearce & Pearce [2016] FamCAF 14;
(e)The husband’s disclosure failures identified within the Rules continued up until the date of the making of the orders;
(f)The extension of time to review the exercise of power by a registrar in making the Consent Orders in circumstances of the withdrawal of consent to those orders would start the s 79 process afresh and enable the parties to achieve a just and equitable division of their property grounded from their actual value;
(g)The injustice to her if leave was refused was significant and substantial. The fact of the husband’s disposal at a value greater than $200,000 of his E Pty Ltd interest than recorded in the Application for Consent Orders permitted him to achieve an “overly favourable” adjustment of the party’s property;
(h)The husband’s suppression of the fact of the offers made to him by his family for the purchase of the share of the E Pty Ltd enterprise denied her the opportunity to make such further enquiries as she may choose. It adversely impacted upon the advice she received as to the justice and equity of the division of property contemplated by way of the Application for Consent Orders filed 11 November 2020. She was denied the opportunity to negotiate an alternate settlement whose terms may have reflected the difference in value of the husband’s interest in E Pty Ltd as per the December 2021 offer.
THE HUSBAND’S CASE
The husband submitted that:
(a)The wife’s application for an extension of time and review constituted an abuse of process in that:
(i)There was no error on the part of the registrar in making the Consent Orders based on the information contained in the Application for Consent Orders, in circumstances where financial disclosure had been made available to the wife prior to the filing of the Application for Consent Orders, where the Application and accompanying proposed Minute of Orders Sought by consent had been negotiated between the parties at length, each of them having been represented by solicitors during the course of negotiations, and where they had agreed to the value of their property for the purpose of the Application for Consent Orders (including the husband’s interest in E Pty Ltd), it being open to either party to obtain independent valuation evidence of property;
(ii)The statement of truth forming part of the Application for Consent Orders did not assert that the husband did not accurately represent his financial position when it was filed; and
(iii)The final Consent Orders were endorsed by the solicitors for each party as just and equitable.
(b)The prosecution by the wife of her application for leave to extend time constituted an abuse of process in circumstances where the wife had received the benefit of the Consent Orders through the cash payment of $170,000 from the husband achieving the transfer of Suburb C Property into her name on 12 February 2021 at a time when she knew of the husband’s disposal of his interest in E Pty Ltd for $1 million, having learnt that fact at the bank on 3 February 2021. It was only after completion of these transactions, having relied on the integrity of the Consent Orders that the wife sought to challenge the exercise of discretion by the registrar in making them. Although not described by counsel for the husband as some form of estoppel, in reality the gravamen of the husband’s case was that the wife ought to be held to her election to rely on and implement the Consent Orders. It was strongly submitted that her conduct in these circumstances achieving such advantage relying on the orders and then seeking their discharge would create “a concerning precedent which may undermine confidence in parties seeking to rely on final orders made by consent through an Application for Consent Orders processed by way of a delegated judicial officer”. In the alternative it was submitted that if this in itself was not an abuse of process as to she now seeking leave to extend time to review, it was a significant factor going to any exercise of discretion.
(c)The wife had not adequately explained the reasons why she implemented the Consent Orders, and then delayed in filing her Initiating Application for a period of three months and 13 days after having learnt of the husband’s disposal, until 26 May 2021.
(d)Section 67 of the FCFCOA Act and r 1.04 of the current Rules had relevance when cast against the disingenuous conduct of the wife in implementing the orders subject to challenge and thereafter seeking an indulgence of a discretion in her favour.
(e)That the fact of an offer (in December 2020) was not evidence of value.
(f)That any submission of the wife as to capital gains tax being a liability of the husband for the purpose of the Consent Orders was inappropriate notwithstanding that the crypto currency account of the husband had not been liquidated to make the $170,000 payment to the wife in implementing the Consent Orders.
(g)The pathway for review prosecuted by the wife prejudiced the husband in that it avoided any onus of proof resting with her to establish remedial relief by way of s 79A of the Act. In the event the review was granted, the husband would not have the opportunity to put evidence before the Court that as to the “top up” of $200,000 paid by his parents for his share in the E Pty Ltd, his contention being that those funds were in effect a “gift”. There would there be no testing of the evidence of the parties as to any contended non-disclosure.
(h)In circumstances of the uplift in value of the Suburb C Property from $1,250,000 to $1.5 million at the current time, the wife would not achieve any greater adjustment of property in her favour by way of any further exercise of a s 79 discretion above that she received by operation of the Consent Orders. The husband would be immensely prejudiced by way of the s 79A application being bypassed in circumstances where it was contended the wife “struggled to achieve the first hurdle” in that process arising from the judgment of the High Court in Stanford & Stanford (2012) 247 CLR 108 at [37], being as to whether it is just and equitable for the Court to make a property settlement Order, having regard to the shift in value of the property of the parties.
DISCUSSION
An Abuse of Process
Every court has an inherent power to stay or dismiss proceedings or strike out pleadings which are frivolous or vexatious or otherwise an abuse of process (Brimson v Rocla Concrete Pipes (1982) 2 NSWLR 936 at 946).
Abuse of process can take many forms including:
(a)The institution of proceedings for an improper purpose, for example, to exert pressure or to induce a favourable settlement of other proceedings or to extort money: Williams v Spautz (1992) 174 CLR 509;
(b)The bringing of concurrent proceedings in different courts relating to the same subject-matter: Moore v Inglis (1976) 50 ALJR 589;
(c)An attempt to re-litigate issues which have already been determined in previous proceedings where the principles of res judicata or issue estoppel are applicable: Stokes (by a tutor) v McCourt [2013] NSWSC 1014;
(d)An attempt to litigate issues which could and should have been litigated in previous proceedings: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589;
(e)Claims that cannot be justly determined, for example, on account of delay: Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256;
(f)Modest claims which will involve disproportionate costs and time to determine; Jameel v Dow Jones & Co Inc [2005] QB 946 at [67]–[76];
The contention of the husband as to the leave to extend the time to review sought by the wife occasioning an abuse of process was multifaceted. It is his case that the wife’s use of the operation of rules to seek an extension of time to review the exercise of power by a registrar in making the Consent Orders would be unjustifiably oppressive to him or would bring the administration of justice into dispute.
A determination that an abuse of process has occurred is not strictly a discretionary decision. Rather, it is an evaluative decision of a subjective nature, regarding an issue upon which minds may differ (Ghosh v NineMSN Pty Ltd (2015) 90 NSWLR 595). The High Court in Tomlinson v Ramsey Food Processing Pty Ltd (2015) 156 CLR 507 reaffirmed that an abuse of process may be found in subsequent litigation even where there is no issue estoppel. In Tomlinson the joint judgment of French CJ, Bell, Gageler and Keane JJ said:
[26] Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. ...
The rules identified in these reasons reflect that this Court is a federal court exercising the judicial power of the Commonwealth pursuant to s 71 of the Constitution. In those circumstances, the delegation of powers and functions performed by the Court to a registrar, judicial registrar, or senior judicial registrar of the Court will be valid only if the exercise of that delegated jurisdiction is subject to review by a judge on all issues, including findings in respect to both relevant facts and law (Harris v Caladine (1991) 172 CLR 84 at [85]).
I accept the submission of the wife that she is exercising a right at law, and that no abuse of process is occasioned by the exercise of that right. The process of review the wife has pursued ensures the validity and integrity of the powers and functions of this Court.
As to the husband’s contentions identifying s 79A of the Act, that section has been described as a “remedial section intended to overcome miscarriages of justice and certain other specific difficulties or hardships and should be construed liberally to effect its intended purpose” (Gilbert v Estate of the late Gilbert (1990) FLC 92-125 at 77,838). The judicial controversy in the leave proceedings and s 79A proceedings is substantially different. The enquiry by way of a s 79A application is as to whether there has been a miscarriage of justice by specified circumstances such that the earlier orders should be set aside. Conversely, the matters underscoring discretion to grant leave to extend time are those as identified in Gallo v Dawson and in r 15.06(1) of the current Rules. A factual matter common in either controversy in this case is the respondent’s disclosure failures.
The husband’s disclosure
By way of the old and the current rules, the obligation of disclosure of the relevant financial circumstances of a party is absolute, continuing and remains up until the conclusion of the section 79 process by way of orders being made adjusting property (see r 13.01, 13.04 and 13.07 of the old Rules, corresponding to r 6.01, 6.03 and 6.06 of the current Rules). For the purpose of this matter that obligation continued until the Consent Orders were made on 21 January 2021.
Each of the parties had the benefit of independent legal advice for the purposes of the entry into the Consent Orders. The Statements of Truth forming part of the Application for Consent Orders filed 11 November 2020, as already recorded, confirmed that each party had received legal advice as to the effect and consequences of the proposed orders and had described their interests in property in full and to the best of their knowledge, information and belief.
It is trite to observe that the consent of the wife to the entry of the proposed orders was grounded from the advice she received from her solicitor identifying the value of the property of the parties recorded in the Application for Consent Orders and how the proposed consent orders impacted upon those rights and entitlements.
The offer received by the husband in December 2020 was material to his financial circumstances. He conceded this as identified in paragraph 55 of these reasons. By reference to the Application for Consent Orders, it increased the value of the property of the parties by $200,000 or approximately 9.6 per cent of the pool of their assets, liabilities and superannuation.
The husband in submissions identified a number of authorities as to evidence of an offer not equating to evidence of value. In the circumstances of this case, this submission attracts little weight. The husband’s submission that the only evidence as to value of his E Pty Ltd interest at the time of the Consent Orders was the agreed value of the parties of $800,000 with respect misses the point.
The failure of the husband to disclose a the fact and terms of the offer received in December 2020, prior to the making of the Consent Orders, was material as to the integrity of the recorded value of the property of the parties to be adjusted. The material non-disclosure of the husband denied the wife:
(a)the opportunity to obtain accurate advice as to her rights pursuant to Part VIII of the Act; and
(b)the opportunity to withdraw her consent having regard to the specific circumstances of a million dollar disposal of the husband’s education interests subject to condition.
I am satisfied that it had a consequential impact on the reality of her consent to reach an agreement concluding that s 79 entitlement. Putting it another way, the wife could not be properly advised as to the impact on her rights by way of the Consent Orders in circumstances where that entitlement not accurately identified. Her consent to the order in those circumstances was not an informed consent.
The denial of this fundamental opportunity to enable a proper consideration and weighing of her rights impugned the delegated exercise of power of the registrar in making the Consent Orders.
As to the husband’s submissions grounded from s 67 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and r 1.04 of the current Rules, I cannot accept at this time, for the reasons identified later herein, that the wife’s claim in the event of leave is of such modesty that it will involve disproportionate costs and time to determine.
The reliance by the husband on the wife availing herself of a process proscribed by the rules of Court as an abuse of process fails.
The conduct of the wife in relying on the Consent Orders – an Abuse of Process
The husband’s submissions as to the wife’s conduct after learning of his disposal of his interest in the business by commencing to enforce the Consent Orders and subsequently challenging their integrity as an abuse of process fails. Whilst it appears counterintuitive to concepts of justice to rely on the benefit of the Consent Orders to achieve a cash payment and transfer of property and thereafter seek to review them, this is not the sole factor to be considered in the exercise of discretion to extend time. As recorded in these Reasons a review is not a re-litigation of issues where the principles of res judicata or issue estoppel apply. The rules relied upon by the wife ensure the validity of the delegation of powers and functions of the court. As is plain, the wife’s conduct in relying on the integrity of orders and then seeking to challenge them is not the sole factor to be considered in the exercise of discretion to extend time. A cast of factors requiring balance as recorded in these reasons underscore any such exercise of discretion to avoid the strict application of the Rules constituting an injustice.
This factor does attract weight in the exercise of discretion to extend time to review the making of the Consent Orders. The wife has not adequately explained why she delayed raising any concern as to the Consent Orders with the husband until after she had progressed their implementation, being during the period from 3 February 2021 to 15 February 2021. That lacuna in her evidence supports the husband’s relief on sought by his Review Application.
The wife’s delay in seeking an extension of time
I am satisfied that the wife adopted an appropriate approach subsequent to 15 February 2021 reflecting the mandates in r 1.04 of the current Rules in seeking the disclosure of further documents and information from the husband before launching into proceedings by way of review or s 79A of the Act. I do not accept the submission of the husband that the wife could not explain her delay from 15 February 2021 onwards. The evidence records that in addition to seeking further disclosure from the husband she sought to negotiate a further resolution or compromise with the husband avoiding the initiation of further proceedings. There was not a significant delay in the wife taking these actions. I attach the weight to the request of the husband made by way of letter from his newly obtained solicitors on 9 April that the wife “not take any steps until [the husband’s new solicitors] have the opportunity to correspond with [the wife’s lawyers]”.
Consequence to the parties depending on the result of the application
I do not accept the husband’s submissions that he will be prejudiced in the hearing of any s 79 case by losing the opportunity to put into evidence matters he says are only relevant for the s 79A case, such as:
(a)The value of his disposed E Pty Ltd interest in reality being $800,000; and
(b)The additional $200,000 paid to him above the $800,000 being a gift from his parent’s.
This evidence is available if relevant for the purpose of any s 79 case.
As to the husband’s contention that should the Consent Orders be set aside and the parties be obliged to reach a fresh agreement or they engaging in a defended s 79 determination will not result in the wife achieving any further adjustment of property in her favour arising from the shift in value of the property of the parties as between 11 January 2021 and the current time attracts some weight when cast against the current limited evidence as to value and liabilities. Uncertainty will exist as to the evidence as to value of property and liabilities at the time of that agreement or further determination.
At first glance, this factor may support a refusal for leave to extend time. It is uncontroversial that the home retained by the wife has increased by $250,000, the value of the husband’s realisation on his disposal of E Pty Ltd increased by $200,000, and the husband did not liquidate his cryptocurrency avoiding a $41,771 taxation liability. Dispute exists as to the range of capital gains tax payable by the husband on his on the disposal of his interest E Pty Ltd between nil and $117,795. It is not disputed that the capital gain will be returned in the 2021 taxation year by the husband. His 2021 taxation return is yet to be prepared. The husband conceded he had the option to prepare it as and from the 30 June 2021. He holds the key to disclosure on these matters. He elected not to give definitive evidence on this topic. It was available to him to him to have prepared and lodged taxation return for 30 June 2021, or disclose his draft 2021 return, prior to the hearing before me. The husband conceded that changes in the value to crypto currency and other matters in the balance sheet remain in a state of flux at the present time.
There is attraction to the wife’s submissions that the current likely range of adjustment of property between the parties on any future s 79 determination awaits further disclosure by the husband of these matters. It would be counter intuitive for disclosure failures resting with the husband as to taxation imposts and otherwise to hinder the wife’s application for leave.
This factor on balance weighs as neutral.
In the event the wife’s application for leave to extend time was refused, her s 79A claim would remain on foot. A significant quantity of evidence in that cause would replicate the evidence in the event the consent orders as set aside and the s 79 claim prosecuted anew. This factor supports the wife’s application to extend time to review.
Any costs prejudice to the husband by engaging in the s 79 case should his prophecy as to their being no warrant for further adjustment be accepted has the capacity to find solace by way of an application for costs.
CONCLUSION
In order to do justice between these parties it is proper to exercise discretion to extend the time for the wife to file a review of the registrar’s orders. I accept that strict compliance with the rules will work an injustice on the wife. While the prospects of the wife obtaining a superior or an alternate order remains somewhat clouded, it cannot be the subject of contest that the wife has merit in being fully informed as to all relevant financial circumstances for the purposes of any s 79 adjustment. Any injustice to the husband arising pursuant to the strict application of rules had its genesis in his disclosure failures.
The Review Application of the husband of the orders made by a judicial registrar on 29 November 2021 will be dismissed, and consequential orders made as identified earlier in these reasons. At the review hearing, counsel indicated they could confer, agree and submit a joint minute to manage the future for conduct of litigation.
COSTS
The wife sought in the event the husband’s Review Application was dismissed, costs in the sum of $10,040 being costs at scale being $5,877 for the hearing 29 November 2021 as reserved by the judicial registrar and $4,163 for the costs of the hearing of the husband’s Application for Review before me. In the event she was unsuccessful she contended that each party should bear their own costs.
The husband sought costs in the sum of $12,605 at scale being of the hearing before the judicial registrar on 29 November 2021 and of the review before me, irrespective as to whether his Review Application was granted or refused.
Both parties agreed that each quantum of costs were reasonable, and in the event of an order for costs being made, the quantum of costs ought to be fixed.
Section 117 of the Act sets out the basis upon which the Court is empowered to award costs. The general rule identified in s 117(1) of the Act that each party bears his or her own costs, is subject to s 117(2) whereby a party ought to pay the costs of another where there are circumstances justifying the making of such an order. The considerations set out in s 117(2A) of the Act, in so far as each is relevant, must be taken into account and balanced in deciding whether or not to order a party to pay the costs of another No one factor under s 117(2A) prevails over any other factor. It is a matter of weight that is accorded to each of the relevant factors in the Court’s discretion. Each party made submissions restricted to a limited number of the considerations identified in s 117(2A) of the Act
The primary submission of the husband was that his Review Application ought to be upheld in that the orders made by the judicial registrar on 29 November 2021 ought to be discharged. In that circumstance the wife ought to pay his costs, he being ultimately successful in opposing her application for leave to extend the time to review the exercise of power making the Consent Orders.
It was the husband’s alternate submission was that the application for leave extending the wife time to review the making of the orders by the registrar on 21 January 2021 was an indulgence and that a condition of that indulgence, if granted, ought to be that the wife pay his costs.
The husband further submitted that further confusion and costs were generated by the wife in that her Initiating Application was poorly drafted and constructed. He submitted that her conduct of the matter before the senior judicial registrar on 16 September 2021, 12 October 2021, 18 October 2021, 25 October 2021 and the judicial registrar on 29 November 2021 occasioned confusion and additional costs. I do not accept this submission. As discussed during the course of exchanges at the hearing and identified in these reasons the Consent Orders entered into by the parties on the listing before the senior judicial registrar were indicative of both parties failing to assist the court in the efficient management of the litigation.
Neither party submitted that their financial circumstances presented any barrier as to the payment of the costs sought by the other.
I accept the husband’s submission that it may be just for the indulgence of leave to carry with it a condition as to costs. That submission meets equal force from the fact of the failure of the husband to comply with his obligation of disclosure as contended by the wife being the genesis of the impugning the integrity of the Consent Orders made on 21 January 2021. Each of these matters counter balance the other such that it is not just to make a costs order against either party in respect of the wife’s application for leave to commence out time as determined by the judicial registrar on 29 November 2021. In the circumstances there is insufficient justification to depart from the usual rule that each party bear their own costs of that application and determination and the order reserving the costs of the determination on 29 November 2021 will be dismissed.
The husband was wholly unsuccessful in relation to his Review Application. The delegation of the powers to extend time limits pursuant to the rules to judicial registrars and senior judicial registrars seeks to ensure the efficient use of the Court’s resources and the efficient disposal of the Court’s overall caseload. The role of judicial registrar’s and senior judicial registrar’s undertaking interlocutory work should not be treated as an invitation to simply lodge review applications without careful consideration of the merits underscoring the conduct of the original hearing. The current process of the delegation of powers is for the benefit of all of the stakeholders in the litigation process such that litigants ought to expect costs or other consequential orders in the event they are unsuccessful on review.
An order for costs of the husband’s Review Application in favour of the wife is just in the circumstances so as to depart from the usual rule that each party bear their own costs of and incidental to that application
I will order that the husband pay the wife’s costs at scale in resisting that application in the sum of $4,163.
I certify that the preceding one hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 10 February 22
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