Chandyo and Chandyo

[2016] FamCA 887

FAMILY COURT OF AUSTRALIA

CHANDYO & CHANDYO [2016] FamCA 887

FAMILY LAW – PROPERTY – Application to set aside consent orders pursuant to Section 79A of the Family Law Act 1975 (Cth) on ground of either miscarriage of justice – Whether there is sufficient evidence to establish ground – Where parties perpetrated a falsehood as to the facts underpinning the application for consent orders – Where miscarriage of justice established – Where discussion of applicable principles – Where appropriate to exercise discretion to set aside consent orders.

Family Law Act 1975 (Cth) ss 79, 79A

Clifton & Stuart (1990) 14 Fam LR 511
Gebert & Gebert  (1990) Fam LR 62
Gilbert v. The Estate of Gilbert (1990) FLC 92-125
Harris v Caladine[1991] HCA 9; (1991) 172 CLR 84, 124
Kokl [1982] 7 Fam LR 591
Lane [2016] FamCAFC 53
Pearce & Pearce [2016] FamCAFC 14 (11 February 2016)
Suiker & Suiker (1993) FLC 92-436

APPLICANT: Ms Chandyo

RESPONDENT: Mr Chandyo

FILE NUMBER: PAC 634 of 2016

DATE DELIVERED: 21 October 2016

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 18 and 19 August 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Schonell

SOLICITOR FOR THE APPLICANT: Thurlows Family Lawyers

COUNSEL FOR THE RESPONDENT: Ms Rebehy

SOLICITOR FOR THE RESPONDENT: Yakenian Solicitors

Orders

1. That the Consent Orders made on 8 May 2012 be set aside.

2. That the husband file and serve an amended Response to the Initiating Application within one month from this date with such Response setting out with particularity the orders sought by the husband as to property adjustment. 

3. That the proceedings be listed on 7 December 2016 at 9.30am before a Registrar for case management and consideration as to whether the proceedings should be transferred to the Federal Circuit Court of Australia

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 Chandyo & Chandyo 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).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 634  of 2016

Ms Chandyo

Applicant

And

Mr Chandyo

Respondent

REASONS FOR JUDGMENT

1. The applicant wife seeks to set aside pursuant to s 79A of the Family Law Act 1975 (Cth) (“the Act”) property orders made by consent on 8 May 2012 as between herself and her former husband.

2. The applicant commenced proceedings by application filed on 12 February 2016.

3. The applicant relied upon the following documents:

   a)her affidavit filed 28 June 2016,

   b)the affidavit of Mr B Chandyo, the son of the parties filed 30 June 2016,

   c)the affidavit of Ms C, the daughter of the parties filed 30 June 2016.

4. The respondent husband filed a Response to the wife’s Initiating Application on 4 April 2016 seeking an order that the application be dismissed and that the applicant pay his costs.

5. The respondent relied upon his affidavit filed on 15 July 2016.

Context

1. The parties were married in 1985 in a religious ceremony. There are five children of the relationship ranging in age from 18 to 29.

2. The wife asserts a history of abuse and domestic violence throughout the relationship. She relevantly refers to an incident in 2008 when she was beaten by the husband with a piece of broken timber, although she made no complaint to police or any other authorities in relation to what she asserts was a significant and vicious assault. Otherwise, the wife complains that in about April 2011 the husband attempted to push her over the edge of a cliff whilst on holidays in Country D. Once again the wife made no subsequent complaint and the cohabitation between the parties continued. The husband denies such conduct. For the reasons set out below it is not necessary to determine the truth of such allegations.

3. The parties initially commenced cohabitation in a Department of Housing home at Suburb E. The wife asserts that the husband at the time of cohabitation had some savings of about $10,000.00 which were applied to furnish the home. The husband asserts he had about $15,000.00.

4. The matrimonial home at F Street, Suburb G was purchased in December 1999, some 14 years after the commencement of cohabitation. The home was purchased by the parties as joint tenants. The purchase price was $175,000.00 with borrowings of $25,000.00 and a gift of $20,000.00 from members of the husband’s family and the balance from funds available to the parties including funds from the sale of land at Suburb H purchased after marriage.

5. The wife asserts that loans from members of the husband’s family were repaid in full by April 2001. The husband asserts he did so from his later inheritance.

6. The husband, a tradesman, was the primary income earner throughout cohabitation with the wife devoting her time to the five children and the home. It appears that the wife also received supplementary government benefits during the period of cohabitation.

7. The wife asserts that there was conflict ongoing subsequent to the purchase of the home with the husband asserting that it is his home and that he wanted the wife to transfer her interest in the home to him or “I will kick you out of the house and you will never see your kids again”. The husband denies the assertion.

8. In about 2005 the wife asserts that she attended upon a solicitor to enquire as to transferring her interest in the home to her husband. After consulting the solicitor she told the husband that she had been informed by the solicitor that such an arrangement would be unfair to her.

9. In January 2009 the wife was involved in a car accident and subsequently in late September 2011 she received by way of compensation $167,692.00, being compensation for pain and suffering and future rehabilitation. Those funds were paid to her account.

10. Subsequent to receipt of the compensation funds it appears that the issue as to a transfer of the home to the husband rose again.

11. The husband asserts final separation in February 2012 at which time he moved into a granny flat at the rear of the matrimonial home. The wife remained residing in the main residence. In December 2014 the wife left the former matrimonial home and the husband has thereafter remained living there.

12. In February 2012, it appears at the time of separation, the husband said to the wife “this is my house and you have to sign it over to me, you now have money in your account to show the lawyer. You have no excuse now.”

13. The wife agreed to the husband’s request and the husband requested her to find a solicitor and said “I swear to God if you change your mind, God help you, I will kill you.”

14. The wife made enquiries as to a solicitor and made arrangements to attend upon K Lawyers, Solicitors on 23 February 2012. She was escorted by the husband to that appointment and says that she told the solicitor “I want to transfer my share of the house to [Mr Chandyo] as he has paid me my share.” The wife says that she was informed that the solicitor would draft up the documents that would facilitate a transfer and make the transfer exempt from stamp duty.

15. The solicitor Mr I was not called to give evidence. However in evidence as Exhibit “H” is the solicitor’s file. The solicitors file note of 20 February 2012 includes the following:

    Would need to enter into agreements to divide the assets of the relationship: to avoid the need to pay stamp duty

    Instructed that the parties have reached an agreement – [Mr Chandyo] has paid [Ms Chandyo] what they agreed for her share of the property

    5 children of the relationship for over 18 years: [J] (…/98) 13 years

16. Importantly the solicitor’s note continues in the following terms:

    “NOTE  [Mr Chandyo] was in attendance at conference… Advised him I would send copy of the documents – he should get his own legal advice.”

17. The husband asserts that he has no reading or writing skills in English although he can speak and understand English to some extent. He asserts he had no understanding of the application for consent orders. Yet he acknowledges that Mr I explained the documents to him in English. This would appear to be consistent with the note by Mr I.

18. Yet the inference is that he had a good understanding as to what was to be achieved by the orders.

19. Subsequently on 12 March 2012, the husband and wife attended upon Mr I, solicitor to sign the application for consent orders. To the wife’s recollection the husband attended upon Mr I first and then she was called into the conference to sign her part of the documents. The husband on 19 March 2012 paid the solicitor’s bill that the wife received for legal fees from K Lawyers.

20. Subsequently the application for consent orders was filed at the Local Court at J Town and orders were made on the 8 May 2012.

21. The Certificate of Title to the matrimonial home having been duly transferred was forwarded to the husband under cover of a letter from the solicitors dated 18 June 2012.

22. In reality the wife received no consideration for the transfer of the home to the husband as the monies that were represented to the solicitor as being payment for her half share were in fact the wife’s personal injury verdict monies, personal to her as being damages for pain and suffering and future costs for medical care.

23. The husband asserts that the wife agreed to the consent orders so that the husband would have no claim on her compensation monies that she could use for her own purposes. No such representation it appears was made to Mr I by either of the parties.

24. The application for consent orders filed at the Local Court records that the effect of property orders sought would be that the wife retains property to the value of $163,300.00 and the husband retains property to the value of $322,200.00 of which the home represented $310,000.00 approximately. Otherwise the husband had, it appears at the time of the consent orders, an expectation as to his entitlement in his late father’s estate and an expectation in relation to his mother’s estate that was not disclosed and resulted in him receiving $170,000.00 in 2013.

25. That outcome on the face of it is seemingly entirely inappropriate in any event. The substantial portion of the property to be retained by the wife was, in fact, her personal injuries verdict and not a payment from the husband to the wife as the parties represented to Mr I with that representation confirmed by him in a letter to the wife dated 23 February 2012.

The relief sought by the wife

1. The wife seeks relief under s 79A of the Act. It relevantly provides:

Setting aside of orders altering property interests

(1)Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:

(a)there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; …

…the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.

1. Section79A is a remedial section intended to overcome miscarriages of justice. As such it should be construed liberally to reflect its intended purpose (see Gilbert v. The Estate of Gilbert (1990) FLC 92-125). Even though a ground for variation or setting aside may be made out, the Court has a discretion as to whether to do so in all the circumstances.

2. Recently in Pearce & Pearce [2016] FamCAFC 14 (11 February 2016) the Full Court in considering s 79A said (footnotes omitted):

   34. In Gebert and Gebert, this Court, in the context of a s 79A application, held that “… the law fortunately still allows persons to form their own views as to the arrangement of their affairs”. More recently, the High Court has held that “[i]f both parties are competent, it can still be assumed that any necessary or desirable adjustments can be made to their property interests consensually”. The well-settled proposition that “… [a]greement to a consent order which may not adequately reflect a party’s entitlements under sec. 79 does not, of itself, show that there has been a miscarriage of justice”, derives from these precepts. Of course, “… [t]here may be cases where the order consented to is so far outside the ambit of what is just and equitable that the Court may infer that a party has acted under duress, in ignorance or as a result of incompetent advice”. It has been said that “[o]rdinarily, a failure to comply with that duty will amount to a miscarriage of justice”. Equally, however, “[i]t is not every failure of frank and full disclosure which would justify a court in setting aside an order …”.

   35. In the case of consent orders, the related propositions just discussed intersect at a point where the requisite miscarriage of justice derives from a party’s consent not being a “free and informed consent”; where there is a failure to disclose matters relevant to the decision to enter the consent orders that are “… peculiarly within [the] knowledge” of that party or omissions which knowingly engendered, or permitted, a mistaken understanding on the part of the other party. 

3. There is no doubt as to the obligation to each other of the parties to consent orders in terms of full and frank disclosure. In this matter the parties were well aware that the factual matters as to basis of their agreement put to the solicitor in the presence of both of them was a deliberate falsehood.

4. The parties perpetrated the falsehood it is to be inferred because previously the wife had received advice that the transfer of the property to the husband without consideration was unfair. They could in 2012 now falsely represent to the solicitor that funds held by the wife were a payment from the husband to her.

5. If the true circumstances had been disclosed it is to be strongly inferred that the solicitor would have proffered different advice entirely to the wife as to the appropriateness of the “agreement”. The solicitor was deliberately misled.

6. The husband and wife as parties to the application deliberately failed to disclose to the solicitor matters relevant to the decision to enter the consent orders that were “… peculiarly within [the] knowledge” of that party or omissions which knowingly engendered, or permitted, a mistaken understanding” on the part of the solicitor as to the basis of the proposed consent orders.

7. Such conduct fundamentally impugns the appropriateness of the consent orders and the process by which such orders were obtained. 

8. The words “or any other circumstance” in the section are to be given their wide natural meaning. In Kokl [1982] 7 Fam LR 591 at 599 Gee J. Said:

   The question in the present case is accordingly whether there were, “any other circumstances”, which need not be ejusdem generis with those previously mentioned in section 79A(1) but which occurred before or at the time of the making of the order… and which resulted in an order being obtained contrary to justice.

9. In  Gebert & Gebert (1990) Fam LR 62 at 67 the Full Court said:

   The important matter that must be established for an application under this part of the section to succeed is that there has been a miscarriage of justice. It is, we think, clear as counsel for the appellant argued that the words `miscarriage of justice' should not be given a restrictive meaning, particularly when coupled with the words `any other circumstance' and that justice means justice according to law.

10. In Clifton & Stuart (1990) 14 Fam LR 511 the Full Court observed that a miscarriage of justice “by any other circumstance” must relate to the integrity of the judicial process.

11. In Suiker & Suiker (1993) FLC 92-436 the Full Court said that the “judicial process” is not limited to the hearing in the Family Court:

    As regards the view expressed in Clifton and Stuart that the expression `miscarriage of justice' `relates to the integrity of the judicial process' we are of the opinion that this passage was not intended to refer only to the hearing in the Family Court, but that the expression `judicial process' can refer to a variety of matters and circumstances which had an influence on the outcome of the litigation. It is neither necessary nor desirable to attempt to define the matters which may amount to a miscarriage of justice by reason of any other circumstance in the relevant sense.

12. The Full Court in Lane [2016] FamCAFC 53 said:

    69. In Suiker and Suiker (1993) FLC 92-436, which concerned proceedings to set aside an order entered by consent and where it was asserted that there was a suppression of evidence, the Full Court said, apropos the making of orders by consent, at 80,471:

    In our opinion, the necessity for full and frank disclosure of financial matters to the Court and to the other party are basic to the process of the Court and the fundamental aims of the financial legislation contained in section 79 of the Family Law Act 1975. 

    70. That orders are made by consent does not relieve a court from compliance with the requirements of s 79(2): that the court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to do so:

    ...but it may render compliance much less demanding. Provided that a court, or a Registrar, is adequately informed, where the parties are at arm’s length and are properly represented little more than consent may be needed to establish that the requirements of the section have been met.

    (Per Dawson J in Harris v Caladine[1991] HCA 9; (1991) 172 CLR 84, 124) (Footnote omitted)

    71. Thus the accuracy of the information attested to by the parties seeking that consent orders be made, is of single importance in maintaining the integrity of the judicial process. (emphasis added)

13. It is clear that the perpetration of the falsehood that underpinned the application for consent orders is “a miscarriage of justice by…any other circumstance” as contemplated by the section. It is unnecessary to consider the further contentions on behalf of the wife as to duress and suppression of evidence (non-disclosure).

14. As noted above, the financial arrangement reflected in the consent orders is outside any reasonable view as what was just and equitable in the then circumstances. It is this conclusion that guides the Court’s discretion as to whether the orders should be set aside.

15. It is thus appropriate that the Court’s discretion be exercised in favour of the applicant.

16. The consent orders will be set aside.

I certify that the preceding forty seven (47) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 21 October 2016.

Associate:

Date:  20 October 2016