Daily & Daily

[2023] FedCFamC1A 76

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

Daily & Daily [2023] FedCFamC1A 76

Appeal from:

Daily & Daily [2023] FedCFamC1F 222

Appeal number:

NAA 103 of 2023

File number:

ADC 4606 of 2018

Judgment of:

AUSTIN J

Date of judgment:

17 May 2023

Catchwords:

FAMILY LAW – APPEAL – Property – Financial Agreement – Where the primary judge set aside the spouses’ financial agreement pursuant to s 90K(1)(d) of the Family Law Act 1975 (Cth) (“the Act”) – Where the primary judge found the second respondent legal corporation was negligent and liable in damages to the husband – Where the proceedings at first instance are currently adjourned for assessment of the damages and determination of the spouses’ property settlement – Where the husband contends in the appeal the financial agreement should be set aside under a different provision of the Act – Where the husband contends successful prosecution of the appeal would bear upon the issues of causation and damages in his action against the second respondent – Where the husband sought discretionary orders be made under Part VIII of the Act to alter the spouses’ property interests – Where the appellant and second respondent’s proposal to stay the hearing of the appeal, pending finalisation of the proceedings within the original jurisdiction, is rejected – Where the cross appeal of the second respondent does not attack any judgment and is incompetent – Notice of Cross Appeal dismissed – Second respondent granted extra time to file a Notice of Contention

Legislation:

Family Law Act 1975 (Cth) Pt VIII, ss 90G, 90K, 71A

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 26, 67, 68

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 13.08

Cases cited:

Commonwealth v Bank of NSW (1949) 79 CLR 497; [1949] ALR 925

Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45; [1968] HCA 91

Number of paragraphs:

27

Date of hearing:

17 May 2023

Place:

Newcastle (via Microsoft Teams)

Counsel for the Appellant:

Ms Miller

Solicitor for the Appellant:

Jordan & Fowler

Counsel for the First Respondent:

Mr Anderson

Solicitor for the First Respondent:

Norman Waterhouse Lawyers

Counsel for the Second Respondent:

Mr Doyle KC

Solicitor for the Second Respondent:

Barry Nilsson Lawyers

ORDERS

NAA 103 of 2023
ADC 4606 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MR DAILY

Appellant

AND:

MS DAILY

First Respondent

R LAWYERS

Second Respondent

order made by:	AUSTIN J
DATE OF ORDER:	17 may 2023

THE COURT ORDERS THAT:

1.Grounds 3, 4, 5 and 6 contained within the Notice of Appeal filed on 26 April 2023 are struck out.

2.The Notice of Cross Appeal filed on 5 May 2023 is dismissed.

3.The time for the second respondent to file a Notice of Contention is extended to Friday 9 June 2023.

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).

IT IS NOTED that publication of this judgment by this Court under a pseudonym Daily & Daily has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

EX TEMPORE
REASONS FOR JUDGMENT

AUSTIN J:

1. On 31 March 2023, pursuant to s 90K(1)(d) of the Family Law Act 1975 (Cth) (“the Act”), a judge of the Federal Circuit and Family Court of Australia (Division 1) set aside a financial agreement dated 21 July 2005 executed by spouses – being the appellant husband and the first respondent wife.

2. The husband had sought a declaration that the financial agreement was binding upon the spouses. Conversely, the wife had sought a declaration under s 90G(1)(b) of the Act that the financial agreement was not binding upon them and an ancillary order that it be set under either ss 90K(1)(b), 90K(1)(d) or 90K(1)(e) of the Act.

3. The second respondent to both the original proceedings and the appeal is the legal corporation by which the husband’s former lawyers carry on practice. In the event of the financial agreement being found and declared not to be binding upon the spouses, the husband sought damages against the second respondent for his consequential loss due to breach of contract or negligence.

4. Having declared the financial agreement was not binding upon the spouses and ordered it be set aside (Order 1), the primary judge adjourned the proceedings for later assessment of the damages for which the second respondent is liable to the husband (Order 2), it being expressly contemplated that the quantum of damages will influence the ultimate division of property between the spouses (at [425]–[433]). His Honour found the second respondent was negligent and liable in damages to the husband (at [409]–[415]).

5. The husband appealed from those orders by way of Notice of Appeal filed on 26 April 2023.

6. The appeal was promptly listed to question its utility because, despite the husband having contended at first-instance for the validity of the financial agreement and appealing from the order setting it aside, if successful on the appeal, he proposed contradictory substitute remedial orders which would entrench the primary judge’s decision to set it aside and then finalise the spouses’ financial rights under Pt VIII of the Act.

7. After the appeal had been listed for directions hearing, on 5 May 2023, the second respondent filed a Notice of Cross Appeal, but it too was ripe for summary dismissal.

8. At the parties’ request, the hearing was adjourned for one week for them to consider their positions. In the interregnum, both the appellant and the second respondent filed written submissions to outline their positions.

   The Appeal

9. Supposing the appeal is allowed, the husband seeks to set aside the orders made by the primary judge and replace them with others made upon the re-exercise of discretion.

10. First, the husband proposed an order be made confirming the financial agreement is set aside, albeit under s 90K(1)(b) in lieu of s 90K(1)(d) of the Act.

11. Secondly, the husband sought discretionary orders be made under Pt VIII of the Act to alter the spouses’ property interests, which jurisdiction would be ousted by s 71A of the Act if the financial agreement is binding, even though there has not yet been any exercise of such discretion within the original jurisdiction of the Court. This was the ultimate relief sought by the wife at first instance, which the husband opposed and which has not yet been granted by the primary judge.

12. The maintenance of an application for remedial orders in those terms seems plainly inconsistent with the continued prosecution of the appeal. If the husband actually wants an outcome that is consistent with the orders already made by the primary judge and an exercise of the statutory discretion not yet undertaken by the primary judge, there is no ostensible point to the appeal.

13. The appellant conceded the application for the property settlement orders was misconceived and so foreshadowed his abandonment of that aspect of his application in the re-exercise of discretion, but maintained his confidence in the competence of his application for the substitute order setting aside the financial agreement under a different provision of the Act.

14. The appellant contended his successful prosecution of the appeal and the grant of such a remedial order would have a bearing upon the issues of “causation and damages” in his action against the second respondent and how, consequentially, “the Court might bring to account any award of damages” in the matrimonial cause between the spouses.

15. The submissions are unpersuasive, particularly in light of the appellant’s concession that the hearing of this appeal could be (if not should be) conveniently stayed until the proceedings within the original jurisdiction of the Court are complete. The concession represents implicit realisation of how this appeal is premature. The appealed order resolved only one aspect of the wider controversy between the spouses, by setting aside their financial agreement and thereby overcoming the ouster of jurisdiction under Pt VIII of the Act, with which result the husband now agrees.

16. The present findings of the primary judge underlying the appealed order may indeed affect the appellant’s prospects of success in his allied claim against the second respondent, but neither that common law cause nor the matrimonial cause has yet been determined by any “judgment”. All findings which underpin the ultimate “judgments” in the two separate causes of action against the wife and the second respondent will be amenable to challenge in any subsequent appeal. The appellant will be able to sate any dissatisfaction he feels about the ultimate outcome of those two causes by bringing an appeal from the operable orders which determine them, which tends to render this appeal redundant.

17. Undeniably, the appellant presently enjoys the right of appeal against the order setting aside the financial agreement, so the appeal cannot be regarded as incompetent. Since the appellant remains unconvinced of the apparent futility of the appeal, it ought not be summarily dismissed. Nonetheless, given the nature of the remedial relief he seeks, there will likely be a brightly burning question of costs to be considered at the conclusion of this appeal.

18. The second respondent foreshadowed the need to meet the appeal with a Notice of Contention, the time for filing of which expires 28 days after service with the Notice of Appeal (r 13.08(2) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”). The time has not yet expired, but it should be extended to give the second respondent some extra time, given the concession that the cross appeal should be dismissed. The second respondent will have until 9 June 2023 to file the Notice of Contention. It should, however, be observed that the question of the second respondent’s standing to contest an appeal as to the validity of an order made only between the spouses was not addressed.

19. The proposal, tacitly made by the appellant and the second respondent, for the hearing of the appeal to be stayed pending the finalisation of the proceedings within the original jurisdiction of the Court is rejected. If the appellant feels it is either necessary or appropriate to appeal from the declaration setting aside the financial agreement, he should prosecute it in a timely way. Subject to the question of standing, so should the second respondent be expected to meet it in a timely way. Litigation, whether brought in the original or appellate jurisdiction, must be despatched as quickly, inexpensively and efficiently as possible (s 67 and s 68 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCA Act”)).

20. Aside from the questionable utility of the appeal, some of the existing grounds of appeal are incompetent. Grounds 3, 4, 5 and 6 do not relate at all to the judgment under appeal. Instead, they all pertain to findings made by the primary judge, expressed within the reasons, which will eventually influence the judgment yet to be pronounced under Pt VIII of the Act via orders adjusting the spouses’ property interests. Appeals only lie from “judgments”; not from findings or reasons (s 26(1) of the FCFCA Act; Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45 at 64; Commonwealth v Bank of NSW (1949) 79 CLR 497 at 625). When orders are made between the spouses adjusting their property interests under Pt VIII of the Act (or dismissing any such application), that will be the “judgment” from which any appeal lies. The appellant conceded Grounds 3, 4, 5 and 6 are incompetent and should be struck out.

21. Grounds 1 and 2 permissibly attack the judgment reflected within the declaration setting aside the financial agreement (Order 1), by challenging the basis upon which it was set aside. The appellant intends to amend these grounds with further particulars.

    The Cross Appeal

22. The cross appeal is incompetent because it does not attack any “judgment” made to resolve the contractual or tortious rights as between the husband and the second respondent.

23. So far, the primary judge has only found the husband’s claim against the second respondent is not statute-barred (at [358]) and the second respondent is liable to the husband in damages for an as yet unquantified sum (at [410] and [415]). No order has yet been made to finalise the husband’s claim against the second respondent.

24. The second respondent agreed the cross appeal was incompetent and submitted to its summary dismissal. In fairness to the second respondent, it always took that view and only filed the cross appeal to avert having to later meet the appellant’s misconceived contention that its failure to appeal from the primary judge’s existing findings within 28 days of their publication would preclude any subsequent appeal against the orders yet to be made to determine the appellant’s cause of action against the second respondent.

    Disposition

25. Grounds 3, 4, 5 and 6 of the appeal will be struck out. The appellant is at liberty to amend the Notice of Appeal within the parameters of the Rules.

26. The Notice of Cross Appeal will be dismissed, though the second respondent is granted extra time within which to file a Notice of Contention.

27. No party sought costs.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Austin.

Associate:

Dated:       18 May 2023