DARCY & DARCY
[2012] FMCAfam 664
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DARCY & DARCY | [2012] FMCAfam 664 |
| FAMILY LAW – Property – full and frank disclosure – consent orders made by a registrar at a conciliation conference. PRACTICE AND PROCEDURE – Review of consent orders approved by a registrar – consent withdrawn – nature of a hearing de novo. |
| Commonwealth Constitution, ch.III Family Law Rules 2004, regs.18.06, 18.08 |
| Boutros v Santa Sabina College Ltd [2011] FCA 477 Harris v Caladine (1991) 172 CLR 84; (1991) 99 ALR 193 Q v Crest [2009] FamCA 1043 Russell v Polites Investments Pty Ltd [2011] FMCA 476 Totev v Sfar [2008] FCAFC 35; (2008) 167 FCR 193; (2008) 247 ALR 180 |
| Applicant: | MS DARCY |
| Respondent: | MR DARCY |
| File Number: | SYC 1010 of 2010 |
| Judgment of: | Monahan FM |
| Hearing date: | 3 April 2012 |
| Date of Last Submission: | 8 May 2012 |
| Delivered at: | Sydney |
| Delivered on: | 17 August 2012 |
REPRESENTATION
| Counsel for the Applicant: | Not Applicable |
| Solicitors for the Applicant: | Reid Family Lawyers |
| Counsel for the Respondent: | Not Applicable |
| Solicitors for the Respondent: | Self-represented Litigant |
ORDERS
All extant applications be adjourned to this Court on 16 October 2012 at 9:30am for mention (“the mention hearing”).
The Orders made on 19 January 2012 be discharged.
By not later than 4:00pm on 7 September 2012, the Applicant make, file and serve any Amended Initiating Application, affidavit in support and updated Financial Statement.
By not later than 4:00pm on 28 September 2012, the Respondent make, file and serve his Amended Response, affidavit in support and updated Financial Statement.
Following compliance with paragraphs three (3) and four (4) herein, the parties have liberty to apply to Chambers jointly for a further Conciliation Conference to be allocated with a Registrar other than Registrar Crawford and in that event a further mention date be allocated to follow upon the further Conciliation Conference.
AND THE COURT NOTES THAT:
(A)The purpose of the mention hearing is to:
a.make further directions;
b.consider any issues regarding disclosure that the parties have not as yet been able to resolve between themselves; and
c.subject to paragraph five (5) herein, to refer to the parties to a further Conciliation Conference.
IT IS NOTED that publication of this judgment under the pseudonym Darcy & Darcy is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 1010 of 2010
| MS DARCY |
Applicant
And
| MR DARCY |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property proceedings that were commenced by the Applicant, MS DARCY, (“the Applicant”) against the Respondent, MR DARCY, (“the Respondent”) by means of an Initiating Application filed by the Applicant on 16 September 2011.
The present application was brought by the Applicant by way of her Application for Review filed on 1 February 2012. In her Application for Review, the Applicant seeks, inter alia, the discharge of final consent orders made by Registrar Crawford on 19 January 2012 (“the Consent Orders”). The Respondent opposes the orders sought by the Applicant.
This decision relates solely to the issue of whether or not the Applicant’s application for the discharge of the Consent Orders should be granted.
Background
Following the filing of the Applicant’s Initiating Application on 16 September 2011, these proceedings first came before the Court on 23 November 2011. The Respondent filed his Response in the substantive proceedings on 9 November 2011.
On 23 November 2011, the parties consented to an Order granting the Applicant leave to commence the proceedings out of time. The Court also made an Order that the parties attend a Conciliation Conference on 19 January 2012 with Registrar Crawford.
The parties duly attended at the Conciliation Conference on 19 January 2012 and the matter settled and a consent Minute was approved by the Registrar on a final basis.
The Applicant filed an Application in a Case on 25 January 2012 seeking that the Consent Orders be set aside. Later that day, my Chambers contacted the solicitors for the Applicant and informed them that the correct document to be filed was an Application for Review and that under the Federal Magistrates Court Rules 2001 (“the FMC Rules”), the application should be that the consent orders be discharged. The Applicant’s solicitors were informed that the application could not be considered in its current form. The Applicant instead then caused an Amended Application in a Case to be filed on 27 January 2012, seeking that the consent orders be discharged. On 1 February 2012, the correct form – an Application for Review – seeking the correct order was filed by the Applicant.
On 1 February 2012, I made an Order in Chambers listing the Application for Review for mention on 8 February 2012 and directing that the Applicant serve a sealed copy of the Application for Review on the Respondent within 24 hours. I also noted the provisions of regs.20.02 and 20.03 of the FMC Rules; I will return to these below.
On 7 February 2012, following the receipt in Chambers of correspondence from the Respondent, stating that he was not able to attend Court on 8 February 2012, and from the Applicant, consenting to the vacation of the listing date, I made a Chambers Order changing the return date of the Application for Review to 15 February 2012.
When the matter came before the Court on 15 February 2012, I made the following Orders:
“1. All extant applications be adjourned to this Court on 3 April 2012 at 9:30am for mention (‘the mention hearing’).
2. The Applicant make, file and serve any further affidavits in support of her application by not later than 4:00pm on 20 March 2012
3. The parties be restrained from causing any Application in a Case filed in these proceedings from being made returnable on the [date] of the mention[.]
AND, BY CONSENT, THE COURT ORDERS THAT:
4. Within seven (7) days of the date of these Orders, the husband place the sum of $25,000.00 into a joint high interest account with Westpac Bank (‘the account’).
5. The parties be restrained until further order from making any withdrawals from the account.
AND THE COURT NOTES THAT:
A. The purpose of the mention hearing is to consider further directions regarding the Applicant's Application for Review and, in the event that the parties remain in dispute, to consider listing that Application for hearing.
B. Paragraphs four (4) and five (5) reflect the terms of a signed consent Minute, dated 15 February 2012, that was handed to the Court today.”
On 3 April 2012, the Court made Orders for the parties to each file and serve written submissions with respect to the orders sought in the Application for Review – the Respondent by 24 April 2012 and the Applicant by 8 May 2012.
Documents
In support of her application, the Applicant relies on the following documents:
·Application for Review filed on 1 February 2012;
·Amended Application in a Case filed on 27 January 2012;
·Affidavit of Ms Darcy affirmed and filed on 25 February 2012;
·Affidavit of Ms K affirmed on 30 January 2012 and filed on 1 February 2012;
·Affidavit of Ms Darcy affirmed on 2 April 2012 and filed on 3 April 2012; and
·The Applicant’s written submissions authored by Christopher Othen of Counsel dated 20 March 2012 (and handed to the Court on 2 April 2012); and
·The Applicant’s further written submissions and minute of orders sought, as attached to an email from the Applicant’s solicitors dated 8 May 2012.
The Respondent did not file any material in reply to the Application for Review, but did rely on his written submissions attached to his email dated 23 April 2012.
Submissions
Applicant’s submissions
By way of summary, the Applicant submits that:
“20. The proper approach to an application of a review [sic] of consent orders under section 79 made by a Registrar to which consent has been withdrawn is to conduct a full re-hearing of the competing section 79 applications on a contested basis.
21. Leave should be granted to the parties to adduce such further evidence as is relevant to the fresh section 79 enquiry as at the date of the hearing.
22. Discovery should be permitted, as the parties have an ongoing duty of full and frank disclosure, and information in the control of one party may be required by the other party as evidence in support of their case.”[1]
[1] Applicant’s written submissions dated 20 March 2012, paragraphs 20-23.
In support, the Applicant submits that while a registrar of the Court has the power to make consent orders under reg.20.00A of the FMC Rules, such power is delegated and is subject to judicial review. Regulation 20.03(a) of the FMC Rules provides that the “review of an exercise of power by a Registrar … must proceed by way of a hearing de novo”.
The Applicant further submits that given the decision of High Court of Australia in Harris v Caladine (1991) 172 CLR 84; (1991) 99 ALR 193, a judicial review “is not an appellate process, whereby the merits of the original decision are considered” but rather a process where “the matter is considered afresh, as if the original order had not been made”.[2] Moreover, while the Applicant concedes that the withdrawal of consent by one of the parties to an original order can be taken into account, that fact does not change the review process that occurs and the “matter must proceed contested”.[3] That said, the Applicant acknowledges that the existing order made by consent “stand until the review process is complete … [although the] order is capable of being stayed on application.”[4]
[2] Ibid, paragraphs 10-11.
[3] Ibid, paragraph 15.
[4] Ibid, paragraph 18.
Respondent’s submissions
The Respondent’s written submissions were as follows:
“I am objecting to the Applicants [sic], Ms Darcy, withdrawal of consent from [sic] the orders made on the 19th January 2012.
I believe that the agreement reached on that day was fair and just and that both parties had submitted full and frank financial disclosure prior to the conciliation hearing, in the form of a signed Financial Statement document, mine on November 9th 2011 and the Applicants [sic] on September 16th 2011.
During the conciliation hearing, both parties had the opportunity to stop proceedings if either party felt that full financial disclosure had not been given. Registrar Crawford was very clear on this and gave both parties the opportunity to cease the negotiation.
Registrar Crawford also advised both parties on the courts [sic] processes and the next steps should we not come to an agreement. Continuing on and reaching an agreement, indicated that both parties were satisfied with the information before them as well as the alternative options available.
Throughout the hearing, Registrar Crawford was offering advice on what ruling the court might make on issues such as percentage split and the likelihood of the add-back amount being taken into consideration. The 60% split in favour of the Applicant was deemed to be the maximum the court would rule on and that without sufficient records, the court would unlikely [sic] add-back the $140,000 the Applicant was claiming was not spent for the benefit of the family during the marriage.
Throughout the hearing the Applicant was represented by her solicitor.
The Applicant is claiming that her withdrawal of consent is based on my current financial situation and that on January 19th I misled the proceedings by not disclosing, the purchase of a property in Queensland and that I am a Director of a company, (omitted).
Whilst I had an interest in and was in the process of purchasing the mentioned property, I was not in ownership at the time of the hearing. I did not purchase the property in Queensland until the 1st February 2012. To finance the property I have a mortgage with Bankwest. The additional funds used to purchase the property came from a gift from my mother, for which I have a signed Statutory Declaration from her. This document can be provided to the court, if required.
Disclosing this information prior to the hearing would not have changed the asset pool as it had no value and wasn’t in my name, at the time of the conciliation hearing.
I would like to draw reference to the Applicant’s Initiating Application, submitted to the court on 16th November 2011.
Item 10 (c) stating that she has no interest in:
(c) All other property in the Husband’s name, possession or control.
It would have been fair for me to assume, at the time of the conciliation hearing, that the Applicant was not interested in any other properties that I may have an interest in post-separation and therefore I was not required to disclose my interest in the Queensland property prior to the conciliation hearing.
(omitted) is a start-up family business concept without any funds or transactional history. I have not invested a single dollar into this business. If you do an ABN search on me I also have 2 other companies registered, (omitted) and (omitted). These companies are also non-transacting and have no monetary value associated to them.
Even with this information the asset pool would not have been any different prior to the hearing.
I would like to draw reference to the Applicant’s Initiating Application, submitted to the court on 16th November 2011.
Item 10(a) stating that she has no interest in:
(a) The husband’s bank accounts
I therefore believe that there is no new information that would have altered the outcome of the conciliation hearing.
Since I began the process to reach a financial settlement, in February 2010, I have been honest and transparent with my financial position.
It has already taken over 2 years and has cost both Ms Darcy and I large sums of money. Funds we could have better spent on our on 14 year old son. We are both currently making monthly repayments to pay off his $8000 braces.
It would be a shame and I believe a continued waste of time and money to prolong this process further by going back to conciliation with the same information and to reach, in all likelihood, the same outcome.
With such a small asset pool and with the belief that I did fulfil my obligation to provide the Applicant with a full and frank financial disclosure prior to the conciliation hearing, I am asking that the court uphold the Consent Orders made at the conciliation hearing on the 19th January 2012.”
Applicant’s reply
The Applicant provided the following submissions in reply to the Respondent’s submissions:
“We respond as follows to the written submissions by the Respondent Husband, Mr Darcy, provided to the Court on 23 April 2012:
1. The written submissions by the Husband do not go to the legal argument before the Court as to the proper approach to the determination of the Applicant Wife’s Application for Review.
2. We object to the Husband’s written submissions on the basis of form. On 3 April 2012 leave was given to the Husband to file any Affidavit evidence in support of his written submissions. The proper form for the Husband’s evidence is by way of Affidavit.
3. Further, the Husband’s written submissions refer to discussions between the parties and the Registrar at the conciliation conference and are therefore subject to privilege and should not be read by His Honour.
4. In any event, it is our position that the Wife’s Application for Review is not an appellate process, whereby the merits of the original decision are considered. The matter needs to be considered afresh, as if the Orders had not been made.
5. The fact that the Wife consented to the Order under review does not change the fact that the Wife has the right to have a Magistrate exercise the original jurisdiction of the Court in circumstances where she withdraws her consent and seeks a review.
6. The Husband failed to make full financial disclosure and has acknowledged two further companies which he has an interest which were not disclosed to the Wife previously.
7. The Wife relies on the written submissions provided to the Court on 2 April 2012 and Affidavit filed on 2 April 2012 and maintains that this matter should proceed to a full hearing of the competing section 79 applications with a full consideration of all relevant matters.
8. To do this, our client, and indeed the Husband, should be able to put before the Court all relevant evidence in support of their respective claims under section 79.
9. Further, the parties should be made to provide full and frank financial disclosure.
10. We enclose a Minute of Order sought by the Applicant Wife.”
The minute of orders sought by the Applicant and referred to in paragraph 10 of her submissions is in the following terms:
“1. That the matter be listed for Final Hearing with an estimated hearing time of two days.
2. That the parties have leave to file further evidence in support of relevant matters under section 79(4) of the Family Law Act 1975.
3. That the Husband file and serve an Amended Financial Statement within fourteen days.
4. That within twenty-eight days of the date of the making of these Orders the Husband shall provide to the Wife’s solicitor the following by way of disclosure:
a) Documents that disclose details of all personal and business income earned from all and any sources by the Husband including any entity in which the Husband has had or has an interest for the last nine financial years from all sources, such documents to include but not be limited to:
i. Personal taxation returns for the years ending 30 June 2003 to 30 June 2011 inclusive;
ii. Notices of Assessment for the years ending 30 June 2010 and 30 June 2011;
iii. The Taxation Returns, Business Activity Statements and complete Financial Reports including profit and loss statements, balance sheets and notes to account for all businesses operated the Husband as sole trader, partner or in any other way, partly or fully owned by the Husband, or in which the Husband has a shareholding or interest, or is or has been an office holder including (omitted) over the financial years 2007/2008, 2008/2009, 2009/2010 and 2010/2011 together with any document or record relating to earnings subsequent to the period covered by the most recent taxation return.
b) Details of all cash received in relation to the Husband’s activities with any legal entity that either he is associated with, or either fully or partly owns or controls as a sole trader, partner or in any other capacity or in which the Husband has been an office bearer for the period from 1 July 2007 to the present date.
c) Copies of all Trust Deeds or other Deeds, tax returns, financial reports (including profit and loss statements and balance sheets) relating to any trust(s) in which the Husband has an interest as appointor, settlor, trustee, beneficiary or otherwise.
d) Details and documents relating to any interest as a beneficiary, trustee, appointee or otherwise that the Husband has in any trust(s) or which the child X or any other associated person have such an interest.
e) Copies of bank statements for all accounts held by or on behalf of the Husband including those of any and all businesses run by the Husband, associated with him or which he derives an income or to which the Husband is or was a signatory or has or had an interest including but not limited to savings, mortgage and credit card accounts and any overseas accounts from January 2003 to date.
f) A recent superannuation statement of all of the Husband’s superannuation interests including State and private UK pension statements.
g) The Husband’s last three payslips and a contract or other written confirmation from the Husband’s employer advising his annual salary, bonuses, employee share schemes, long service leave entitlements and any fringe benefits which form a component of the Husband’s salary package.
h) Records or details of any life or disability insurance including surrender values.
i) Details and transaction history of all shares including unvested shares and shares in which the Husband has an interest overseas in which the Husband has or had an interest including the name, number of shareholdings, date purchased, details of any sales and current value from July 2007 to date and recent statements evidencing any and all shares held by the Husband including unvested shares and shares in which the Husband has an interest overseas.
j) All loan applications and documents provided, including in support of the application to any financial institution(s) by the Husband or any legal entity that is associated with, partly or fully owned or controlled by the Husband or in which he is an office bearer or which he otherwise has an interest for the purchase of any real property including at Property O (‘the Property O property’).
k) Evidence of the contributions made by the Husband to the purchase of the Property O property including bank statements and any relevant correspondence.
l) Evidence of the receipt of monies by the Husband from any third party for the purchase of the Property O property.
m) Copies of any lease agreements for the Property O property.
n) Details of any interest in property, whether vested or contingent, that the Husband has, or will have, or has had, in the last three years, including such property owned by a legal entity that is associated with, partly or fully owned or controlled by the Husband or in which he is an office bearer.
o) Details and documents relating to any financial resources available to the Husband.
p) Details of any property that has been disposed of by the Husband since 1 January 2003.
q) Details of all bonuses received by the Husband or any entity in which he has an interest during the period 1 January 2007 to date.”
Law and discussion
The making of consent orders is a power that may be exercised by Registrars of this Court under s.102(2)(m) of the Federal Magistrates Act 1999 (Cth) (“the FM Act”).[5] This provision states:
[5] Corresponding provisions exist in relation to the Family Court of Australia: see s.37A(1)(g) of the Family Law Act 1975 (Cth) and reg.18.06(1) of the Family Law Rules 2004 (Cth).
“(2) The following powers of the Federal Magistrates Court may, if the Federal Magistrates Court or a Federal Magistrate so directs, be exercised by a Registrar:
…
(m) the power to make an order the terms of which have been agreed upon by all the parties to the proceedings[.]”
As acknowledged in the Applicant’s submissions, the actual delegation of this power on a general basis to the Registrars of this Court occurs pursuant to reg.20.00A of the FMC Rules under the head of power granted by s.103 of the FM Act. The power to make orders with the consent of all the parties to the proceedings falls under Item 2 of the list of powers contained in reg.20.00A(1).
To ensure that the exercise of judicial powers by quasi-judicial officers of the Court is adequately supervised by judges appointed under Chapter III of the Commonwealth Constitution, s.104 of the FM Act provides, inter alia, as follows:
“(2)A party to proceedings in which a Registrar has exercised any of the powers of the Federal Magistrates Court under subsection 102(2) or under a delegation under subsection 103(1) may:
(a) within the time prescribed by the Rules of Court; or
(b) within any further time allowed in accordance with the Rules of Court;
apply to the Federal Magistrates Court for review of that exercise of power.
(3)The Federal Magistrates Court may, on application under subsection (2) or on its own initiative, review an exercise of power by a Registrar under subsection 102(2) or under a delegation under subsection 103(1), and may make any order or orders it thinks fit in relation to the matter in respect of which the power was exercised.”
Regulation 20.01 of the FMC Rules specifies the time in which an Application for Review of a Registrar’s orders must be made:
“(1)For subsection 104 (2) of the Act, application for review of the exercise of a power by a Registrar must be made within:
(a) for the exercise of a power of the Court under the Family Law Act or Family Law Regulations mentioned in items 3 to 30 of the table in rule 20.00A -- 28 days; and
(b) otherwise -- 7 days.
(2)A time prescribed under subrule (1) may be extended in a proceeding:
(a) by the Court or a Registrar on any terms as the Court or Registrar thinks fit; or
(b) with the consent of the parties to the proceeding.”
The FMC Rules clearly set out the procedure for the filing of an Application for Review in reg.20.02:
“(1) An application for review of an exercise of power by a Registrar must be in accordance with the approved form.
(2) An application must be listed for a hearing as soon as possible and, unless impractical to do so, within 14 days after the date of filing.
(3) The applicant must serve a sealed copy of the application on each other party to the proceeding within 7 days after it is filed.
(4) Unless the Court or a Registrar otherwise orders, the application does not operate as a stay of the exercise of power under review.”
In the present case, the prescribed time period for filing the Application for Review is seven days from the date of the making of the orders by a registrar. As it turned out, the Applicant filed an Application in a Case and an Amended Application in a Case within the specified time, but the Application for Review (using the approved form) was filed on 1 February 2012, some 13 days following the date of the orders.
I also note that, under reg.18.08 of the Family Law Rules 2004, the prescribed form for a review application in the Family Court is, in fact, an Application in a Case. It is possible that it may cause some confusion in the profession when there are two different forms in use for similar purposes in this Court and the Family Court.
Given that the Applicant indicated her intention to seek a review of the relevant orders by her mis-filed Application in a Case and Amended Application in a Case and, in the absence of any objection by the Respondent, the Court sees no impediment to granting the Applicant an extension (under reg.20.01(2)(a) of the FMC Rules) of the time for filing her Application for Review.
Applications for Review generally
Once an Application for Review of orders made by a Registrar has been filed, the procedure for the review of those orders, as referred to in the Applicant’s submissions, must follow the guidelines set out in reg.20.03, which provides:
“The review of an exercise of power by a Registrar:
(a) must proceed by way of a hearing de novo; and
(b) may receive as evidence any affidavit or exhibit tendered before the Registrar; and
(c) may with leave receive further evidence; and
(d) may receive as evidence:
(i) any transcript of the proceeding before the Registrar; or
(ii) if there is no transcript, an affidavit sworn by a person who was present at the proceeding before the Registrar as a record of the proceeding.”
In the present circumstances, the orders made by Registrar Crawford were final orders settling the parties’ financial dispute and were made following a Conciliation Conference. As such, there is no transcript of the proceedings before the Registrar and even if there were, that which transpires at a Conciliation Conference occurs behind a veil of confidentiality which the eyes and ears of this Court ought not pierce.
More concerning to the Court, however, are the policy implications of a party being permitted, for any reason (or even no reason at all) to resile from final orders made on the basis of prior consent merely based on the happenstance that those orders were approved by a Registrar and not a Federal Magistrate. It would not be well for parties or practitioners to treat the review process as a de facto seven (7) day “cooling off period” on final orders approved by a registrar.
As submitted by the Applicant, the application of a provision in similar terms to reg.20.03 of the FMC Rules was the subject of consideration by the High Court of Australia in the case of Harris v Caladine (1991) 172 CLR 84; (1991) 99 ALR 193 (“Harris”).
Harris was an appeal from a decision of the Full Court of the Family Court of Australia (per Fogarty, Strauss and Nygh JJ)[6] which was in turn an appeal from a decision of Maxwell J at first instance. The High Court considered whether the delegation of judicial power to registrars was a contravention of the Commonwealth Constitution and what the mechanism for review (including for the conduct of a hearing de novo) entailed.
[6] In the Marriage of Harris & Caladine (1990) 97 FLR 224; (1990) 13 Fam LR 755; (1990) FLC 92-130.
In Harris, the parties had agreed to consent orders which were then made by a registrar of the Family Court. After the making of the orders, the wife withdrew her consent and sought to have the consent orders discharged pursuant to O.36A, r.7(4) of the iteration of Family Law Rules 1984 (Cth) that was then in force. Order 36A, rule 7(4) of the former Family Law Rules was quoted by their Honours Mason CJ and Deane J in their joint judgment as follows:
“A court reviewing an exercise of power by a Judicial Registrar or a Registrar shall proceed by way of a hearing de novo but may have regard to the proceedings, including the evidence given and any affidavit filed, before the Judicial Registrar or the Registrar, as the case requires.”[7]
[7] (1991) 99 ALR 193, at 198.
In circumstances where the existence of the order is prima facie all that emerges from the Registrar, what is to be the subject of consideration in the review by way of hearing de novo? The making of consent orders in financial proceedings requires a consideration of whether:
·the parties do, in fact, consent to the making of orders in the terms expressed;
·the distribution of property is within the range of possible outcomes attainable should the matter have proceeded to final hearing, given the evidence of the parties’ respective contributions and needs; and
·the orders are just and equitable.
While I do not take issue with the Applicant’s submission “that the nature of the enquiry the Registrar was obliged to make before making the orders might justifiably be curtailed due to the fact that the orders were made by consent”,[8] a registrar, operating under delegated authority as he or she is, is still required to take into account the same considerations that a judicial officer would in making such orders. In the words of Dawson J in Harris, “[t]he fact that an order is sought by consent does not relieve a court, or a registrar, from compliance with the requirements of [s.79], but it may render compliance much less demanding.”[9]
[8] Applicant’s written submissions dated 20 March 2012, paragraph 4.
[9] (1991) 99 ALR 193, at 219.
The question necessarily arises of whether the review process must assess the existence and nature of those factors as at the time of the making of the registrar’s decision, or the state of affairs as at the time of the hearing de novo.
It is quite clear that the review of a registrar’s decision is quite different from the usual appellate process that governs appeals from the decision of a judicial officer. In Harris, McHugh J had this to say (emphasis added):
“…appellate review is an insufficient condition of the delegation of the exercise of the [judicial] power [to registrars]; there must be a complete rehearing of the facts and the law as they exist when the justice or judge reviews the order made by the officer. Otherwise, the officer and not the justices of the court would be exercising the original jurisdiction of the court.”[10]
[10] (1991) 99 ALR 193, at 249-250.
Going into further detail, Dawson J made the following remarks:
“An order made by a registrar is reviewable by way of a hearing de novo. That means that the court reviewing the order begins afresh and exercises for itself any discretion exercised below by the registrar. The parties commence the application again, subject to any restrictions in the rules upon the calling of evidence or provisions relating to the use before the court of evidence called before the registrar. A hearing de novo involves the exercise of the original jurisdiction and ‘the informant or complainant starts again and has to make out his case and call his witnesses’: Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616 at 620 ; 14 ALR 174; see also R v Pilgrim (1870) LR 6 QB 89 at 95; Campbell, ‘Judicial Review and Appeals as Alternative Remedies’, (1982) 9 Monash University Law Review 14, n 3
A hearing de novo may be contrasted with an appeal stricto sensu and an appeal by way of rehearing. In an appeal stricto sensu the question is whether, upon the material before the tribunal below, the conclusion which was reached was correct. An appeal by way of rehearing involves the rehearing of the matter as at the date of the appeal, but upon the evidence called before the tribunal below, subject to a power to receive further evidence. On an appeal by way of rehearing the rights of the parties must be determined by reference to the circumstances, including the law, as they exist at the time of the rehearing. But an appeal by way of rehearing does not call for a fresh hearing as does a hearing de novo; the appeal court does not hear the witnesses again. See Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (CLR at 619–20); Quilter v Mapleson (1882) 9 QBD 672 at 676; and Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan, at 107–11.
It follows that in this case, upon the review of the deputy registrar's order by way of a hearing de novo, evidence was admissible (subject to any restrictions imposed by the rules) of the previous consent of the parties and of any subsequent withdrawal of consent as evidence of the satisfaction or otherwise of the requirements of s 79, just as evidence of consent was admissible for the same purpose before the registrar.”[11]
[11] Ibid, at 220.
These comments align with the view expressed by Toohey J, who, in agreeing with the conclusion of Brennan J, stated that:
“…on a review under s37A, the Family Court would be entitled to consider afresh whether an order should be made altering the proprietary interests of the parties.”[12]
[12] Ibid, at 227.
In their joint judgment, their Honours Mason CJ and Deane J opined as follows:
“The direction that the review is to be by way of hearing de novo plainly indicates that the jurisdiction of the court on review is not relevantly confined and extends not only to any issue which might have arisen before the deputy registrar but also to any issue which might properly arise in the meantime.”[13]
[13] Ibid, at 199.
Chief Justice Mason and Dean J also expressed the view that a court was within its rights to consider whether the “consent order is vitiated by fraud, duress or mistake”.[14]
[14] Ibid.
The nature of a review of a registrar’s orders was the subject of consideration by Cohen J in Q v Crest [2009] FamCA 1043. In that case, his Honour stated:
“[17]The review provided for by s 37A and the Rules of court is by way of a rehearing or, in the words of r 18.10, ‘as an original hearing’. Thus, the reasons of the deputy registrar are irrelevant to the review and the actual orders she made are only relevant to costs, to the procedural history and to whether I should make orders upholding, dismissing or varying her orders. I do not have to concern myself with whether she made any factual error or error of principle. The proceedings are interlocutory, so cross-examination was not appropriate. As they are by way of rehearing, the applicant rather than the wife was required to begin.
…
[36] …Section 37A of the Act permits delegation of the powers of the court. The power delegated by r 18.06(2) is a power vested in the court which is only capable of vesting in a deputy registrar because the judges retain effective control and supervision by way of the appellate process of rehearing. It is, therefore, more like a judicial power which has been delegated than a delegated administrative power. It is a power to make judicial decisions which the court has and can still re-exercise despite the exercise of the same power in relation to the same issue in the one proceedings by a deputy registrar despite there being no discernable error made by the Deputy Registrar. It is enough to reverse a decision of a deputy registrar if a judge decides that a different result is more appropriate (see generally, Harris v Caladine (1991) 172 CLR 84). The rehearing is not even limited to the same circumstances. Fresh evidence can be introduced without leave on the rehearing, as can previous evidence be discarded.”
In Totev v Sfar [2008] FCAFC 35; (2008) 167 FCR 193; (2008) 247 ALR 180, the Full Court of the Federal Court of Australia considered an appeal from a review conducted by a Federal Magistrate. In that case, Emmett J stated:
“[12] A hearing de novo is different from an appeal stricto sensu and is different from an appeal by way of rehearing. In the case of an appeal stricto sensu, the question would be whether, upon the material before the registrar, the conclusion reached by the registrar was correct. In an appeal by way of rehearing, the appellate court would rehear the matter as at the date of the appeal, but on the evidence called before the registrar, subject to a power to receive further evidence where appropriate: the rights of the parties would be determined by reference to the circumstances, including the law, as they existed at the time of rehearing (Harris v Caladine at 125). In each case any question concerning the exercise of discretion would be subject to the restrictions imposed on an appellate court in reviewing the exercise of a discretion (see House v R (1936) 55 CLR 499).
[13]In the case of a hearing de novo, however, the judge reviewing the order begins afresh and exercises for himself or herself any discretion exercised by the registrar. The parties commence the proceeding again, subject to any rules concerning the use of evidence adduced before the registrar. The hearing de novo involves the exercise of the original jurisdiction and the petitioner, in the case of a bankruptcy petition, must start again, call witnesses and make out the petitioner’s case (Harris v Caladine at 124).
[14]Because the hearing of an application for review of a sequestration order is a hearing de novo, it would not be sufficient for the reviewing judge to be satisfied that the registrar made no error and simply to dismiss the application for review. The judge who hears the review application must hear the petition afresh and must be satisfied as to the matters referred to in s 52 of the Bankruptcy Act.”[15]
[15] (2008) 247 ALR 180, at 183-184.
Justice Emmett’s comments were applied by Simpson FM in Russell v Polites Investments Pty Ltd [2011] FMCA 476[16] at [18], who also referred to the positive treatment accorded to that passage by Nicholas J in Boutros v Santa Sabina College Ltd [2011] FCA 477 at [21]-[22].
[16] The decision of Simpson FM was the subject of an unsuccessful appeal on unrelated grounds: see Russell v Polites Investments Pty Ltd [2012] FCA 11.
As stated, the orders in the present case were made following a Conciliation Conference and not following a traditional adversarial court event involving the strict testing of evidence. The evidence of consent, as is true in most cases where consent orders are concerned, would likely have been furnished by way of the parties’ signatures, or those of their legal representatives, being endorsed on the minute of consent orders provided to the Registrar.
I note that the Applicant claims that there was non-disclosure on the part of the Respondent prior to the making of the consent orders (and the Respondent, to his credit, has been forthright enough to acknowledge that there may have been matter which he may not have disclosed at the time due to possible misapprehensions as to their relevance). Nonetheless, the Applicant has brought her application by way of a review of the Registrar’s orders on the basis that she withdraws her consent to the making of those orders, rather than by seeking an adjustment of the orders under s.79A of the Family Law Act 1975.
The comments of the majority of the judges of the High Court in Harris, and of the learned judges in the other authorities referred to above, lead me to conclude that the mere fact of the Applicant withdrawing her consent and making her application that the consent orders be discharged brings the matter within the scope of the Court’s discretion to review the decision without the Court needing to have regard to the factors traditionally pleaded in support of an application under s.79A. The absence of the Applicant’s consent is the state of affairs as at the time of the rehearing before me.
Therefore, the bare facts may be stated as follows:
·the review by way of hearing de novo examines, at its most basic level, whether consent orders should be made at the time that the hearing de novo takes place;
·the Applicant clearly does not now consent to the making of those orders; and
·consequently, the consent orders cannot and should not now be made and the orders of the Registrar previously approving them ought to be discharged.
As the Court sees the relevant law, the reasons underlying the withdrawal of consent, while doubtless relevant in certain other contexts, are of no consequence in this Court determining the Application for Review. The review is not an appeal from, nor an evaluation of the correctness of, the orders made by the Registrar. The susceptibility of a registrar’s orders to review according to the procedure set out in the FMC Rules is a necessary condition of the delegation of judicial power by the Federal Magistrates Court to its non-judicial officers. Nonetheless, as stated previously, the policy implications in cases such as this give the Court some pause. Nevertheless, the FMC Rules and the principles enunciated in Harris and the subsequent cases are clear.
Conclusion
Having considered the evidence in light of the relevant legislation and authorities, the Court is satisfied that the Consent Orders made 19 January 2012 should be discharged. While the Court appreciates that the Respondent may be disappointed with this decision, it is clear that the Applicant was within her rights to ask for a judicial review to occur and is clearly resiling from her earlier consent.
The Court agrees with the Applicant, who maintains that this matter should be allowed to proceed to a full hearing of the competing property applications with a full consideration of all relevant matters. That said, the Court also considers that there is merit in referring the parties back to a Conciliation Conference before a registrar before considering any listing of the matter for Final Hearing.
The parties will be given an opportunity to amend their respective applications and provide further affidavit material in support including updated financial statements. The Court agrees with the Applicant that the parties should provide full and frank financial disclosure prior to any further Conciliation Conference and/or Final Hearing taking place.
Accordingly, there will be Orders that the parties make, file and serve amended pleadings together with updated affidavits and Financial Statements. The parties will also be given an opportunity to have discussions with a view to agreeing on the scope and mechanics of further full and frank disclosure. For this purpose, there will be a short adjournment before the matter next returns to Court. At the next mention, the Court will consider any outstanding disclosure issues and whether the matter remains suitable for the allocation of a further Conciliation Conference.
There will now be Orders and Notations of the Court to reflect this decision.
I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of Monahan FM
Date: 17 August 2012
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