Costello and Condi & Anor (No 3)

This matter concerned an application by a judgment creditor to review a consent order made by the Family Court of Australia on 11 May 2005. The judgment creditor alleged that the consent order, which dealt with property settlement and spouse maintenance, was made in circumstances where the Court was misled, including by the non-disclosure of significant financial liabilities of the husband, the dissolution of his legal practice, and the appointment of a receiver. The judgment creditor also sought to set aside a binding financial agreement entered into between the husband and wife, alleging it was made for the purpose of defrauding or defeating his interests.

The primary legal issues before the Court were whether the consent order of 11 May 2005 should be set aside under section 79A of the Family Law Act 1975 (Cth) or on the basis of the Court's inherent jurisdiction to correct its own orders, and whether the binding financial agreement should be declared invalid or set aside. The Court was required to determine if the facts alleged by the judgment creditor warranted a full hearing, and whether the issues raised could be conveniently dealt with at the trial of the substantive matters.

The Court considered the inherent jurisdiction of superior courts to correct orders that do not truly represent what the court intended to pronounce, as affirmed in *DJL v The Central Authority*. It noted that this jurisdiction extends to correcting errors arising from oversight by legal representatives, even after an order has been drawn up and entered. The Court also examined the provisions of section 90DA of the Family Law Act concerning the requirement for a separation declaration for certain provisions of a financial agreement to take effect, and the distinction between an agreement being "binding" and having "force or effect". The Court found that the factual issues surrounding the alleged fraudulent purpose of the financial agreement and the circumstances surrounding the consent order meant that a full hearing was necessary and that a review prior to trial would not likely narrow the issues.

The Court ultimately determined that the review of the consent order should be conducted as part of the trial proceedings, rather than as a preliminary determination. It accepted that the factual disputes required a full hearing and that the issues raised by the judgment creditor, including the alleged misleading of the Court and the validity of the financial agreement, were intrinsically linked to the substantive matters to be tried. The Court indicated that it would proceed on the basis that a correction of the consent order under the slip rule was likely, subject to further argument if opposed.