De Santis v Aravanis

Case [2012] FCA 1258

FEDERAL COURT OF AUSTRALIA

De Santis v Aravanis [2012] FCA 1258

Citation: De Santis v Aravanis [2012] FCA 1258
Parties: LORRAINE JUNE DE SANTIS v ANDREW ARAVANIS and GEOFFRY PETER DE SANTIS
File number: NSD 1658 of 2012
Judge: COWDROY J
Date of judgment: 14 November 2012
Legislation: Administrative Decisions (Judicial Review) Act 1977 (Cth) s 11
Bankruptcy Act 1966 (Cth) s 116
Family Law Act 1975 (Cth)
Federal Court Rules 2011 (Cth) rr 36.03, 36.05
Cases cited: Comcare v A’Hearn (1993) 45 FCR 441
Davies & Davies and Anor [2012] FMCAfam 866
Dix v Crimes Compensation Tribunal [1993] 1 VR 297
Golski v Kirk (1987) 14 FCR 143
Howard v Australian Electoral Commission [2000] FCA 1767
Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344
Jess v Scott (1986) 12 FCR 187
Juratowitch v Ianotti (2009) 4 ASTLR 54
SZQGO v Minister for Immigration and Citizenship (2012) 125 ALD 449
SZQHK v Minister for Immigration and Citizenship (2012) 125 ALD 458
Date of hearing: 6 November 2012
Date of last submissions: 12 November 2012
Place: Sydney
Division: GENERAL DIVISION
Category: No Catchwords
Number of paragraphs: 32
Counsel for the Applicant: Mr D Allen
Solicitor for the Applicant: Horowitz & Bilinsky Solicitors
Counsel for the First Respondent: Mr A Combe
Solicitor for the First Respondent: Sally Nash & Co Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1658 of 2012
BETWEEN:

LORRAINE JUNE DE SANTIS
Applicant
AND:

ANDREW ARAVANIS
First Respondent

GEOFFRY PETER DE SANTIS
Second Respondent

JUDGE:

COWDROY J

DATE OF ORDER:

14 NOVEMBER 2012

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The Application for an Extension of Time in which to file a Notice of Appeal from the decision of Federal Magistrate Altobelli be granted.

2.The Applicant file its Notice of Appeal within seven days of this date.

3.The Applicant pay the First Respondent’s costs of the application.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1658 of 2012
BETWEEN:

LORRAINE JUNE DE SANTIS
Applicant
AND:

ANDREW ARAVANIS
First Respondent

GEOFFRY PETER DE SANTIS
Second Respondent

JUDGE:

COWDROY J

DATE:

14 NOVEMBER 2012

PLACE:

SYDNEY

REASONS FOR JUDGMENT

  1. By Application for an Extension of Time filed on 26 October 2012, the applicant seeks an order extending time pursuant to r 36.05 of the Federal Court Rules 2011 (Cth) (‘the Rules’) to file a Notice of Appeal from the decision of Altobelli FM delivered on 22 August 2012: see Davies & Davies and Anor [2012] FMCAfam 866. (Pursuant to s 121(9)(g) Family Law Act 1975 (Cth), the Federal Magistrate’s judgment was published under a pseudonym.) A draft Notice of Appeal is attached to the application and raises nine potential grounds of appeal. The application is supported by an affidavit of the applicant sworn on 25 October 2012.

  2. On 30 October 2012 the applicant filed an interlocutory application seeking,…

Continue reading De Santis v Aravanis

Sign in free to access the full text

Details
AGLC
De Santis v Aravanas [2012] FCA 1258
Case
[2012] FCA 1258
Decision Date

CaseChat Overview and Summary

De Santis v Aravanis is an interlocutory appeal brought by Mrs De Santis against the decision of Altobelli FM, who held that the property in question vested in the trustee, Mr Aravanis, subject to an equitable charge in favour of Mrs De Santis. The case revolves around the ownership of a residential property purchased by Mr De Santis for $670,000, which was to be held on trust for Mrs De Santis. The parties disagreed on whether the trust was express or resulting, and whether the property should vest in the trustee. Mrs De Santis appealed the decision, but she filed her Notice of Appeal in the Family Court of Australia instead of the Federal Court of Australia. The trustee opposed the appeal on the grounds of delay, and the court was required to determine whether the appeal should be granted an extension of time.

The legal issues before the court were whether the application for an extension of time to file a Notice of Appeal should be granted and whether the merits of the appeal warranted such an extension. The principles guiding the extension of time to file an appeal are well-established, and the court had to consider whether the applicant had provided an acceptable explanation for the delay and whether it was fair and equitable to extend the time. The court also had to consider the merits of the appeal and any prejudice to the respondent caused by the delay.

The court found that the applicant had provided an acceptable explanation for the delay, and it was fair and equitable to grant an extension of time. The court held that the applicant had taken action to contest the decision-maker's finality and had not rested on her rights. The court also found that the merits of the appeal warranted an extension of time, and there was no prejudice to the respondent caused by the delay. The court further held that the delay did not result in the unsettling of other people or established practices. The court granted the application for an extension of time and ordered the applicant to file her Notice of Appeal within seven days of the date of the judgment. The applicant was also ordered to pay the First Respondent's costs of the application.

Orders

Orders of the court

1. The Application for an Extension of Time in which to file a Notice of Appeal from the decision of Federal Magistrate Altobelli be granted.

2. The Applicant file its Notice of Appeal within seven days of this date.

3. The Applicant pay the First Respondent’s costs of the application.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

On 30 October 2012 the applicant filed an interlocutory application seeking, inter alia, a stay of the orders of the Federal Magistrates Court and an expedited hearing of this application.FACTS The second respondent (Mr De Santis) is the husband of the applicant. He was made bankrupt in 2000 but by resolution of creditors made in 2006 the bankruptcy was annulled. On 3 September 2006 the applicant and Mr De Santis entered into a trust agreement and in the same year Mr De Santis purchased a residential property at 28 Taylor Street, West Pennant Hills (‘the property’) for a total purchase price of $670,000. Both the applicant and Mr De Santis claimed that the property was held on trust for the applicant pursuant to their trust agreement. The purchase price was paid partly by cash provided by the applicant and the remainder, namely $595,000, was provided by way of mortgage in the husband’s name. In October 2007 Mr De Santis filed a debtor’s petition and a sequestration order was made against his estate in October 2007. The first respondent, Mr Aravanis (‘the trustee’), was appointed trustee of Mr De Santis’ bankrupt estate. Since the registered proprietor of the property was Mr De Santis, the property was vested in the trustee. The trustee determined to sell the home and to realise its value for Mr De Santis’ creditors. Such course was opposed by both the applicant and Mr De Santis. Accordingly the applicant instituted proceedings in the Federal Magistrate Court of Australia (proceedings SYC 5992 of 2010). Initially, the applicant raised claims arising under the Family Law Act 1975 (Cth). However, she abandoned those claims at the hearing before the Federal Magistrate. In her application, the applicant claimed that the property was held in trust for her by Mr De Santis at the time of his bankruptcy and accordingly fell within the provision of s 116(2)(a) of the Bankruptcy Act 1966 (Cth) (‘the Act’). Therefore, the property should not have vested in the trustee. The applicant argued that the property was held on trust either pursuant to the express trust agreement between the parties dated 3 September 2006 or pursuant to a resulting trust which arose because of the wife’s contributions to the purchase of the property. Before Altobelli FM the trustee denied the existence of the express trust and also disputed the existence of a resulting trust in favour of the applicant. The trustee further submitted that if the bankrupt was the trustee for his wife, then insofar as the bankrupt had expended monies through his own funds for the benefit of trust assets, the trustee was entitled to recoup the monies used to pay trust debts from trust assets and it was entitled to a charge or lien over the property to enforce that right. Such right of indemnity constitutes property vesting in the trustee: see Juratowitch v Ianotti (2009) 4 ASTLR 54. Altobelli FM considered the evidence surrounding the express trust agreement and found that there was an express trust pursuant to the agreement between Mr and Mrs De Santis dated 3 September 2006. His Honour found that alternatively, there was a resulting trust in favour of the applicant because of the contributions she had made to the purchase price and mortgage repayments of the property.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

His Honour found that it ‘flowed naturally’ from his decision that the property vested in the trustee, subject to an equitable charge in favour of the applicant to the extent of 32% of the equity of such property. Amongst other orders, his Honour made orders giving the trustee power of sale over the property and declaring that the trustee held the proceeds on trust, subject to the equitable interest of the applicant.EVENTS SUBSEQUENT TO DELIVERY OF THE PRINCIPAL JUDGMENT On 6 September 2012 solicitors for the applicant informed solicitors for the trustee that they would be appealing the decision of Altobelli FM. On 19 September 2012 the applicant filed a Notice of Appeal against the orders made by Altobelli FM in the Family Court of Australia’s (‘Family Court’) appeals jurisdiction. This was done under the misapprehension that the Family Court was the appropriate forum for the appeal because the matter was initially filed in the Federal Magistrates Court Family Law Division. On 24 September 2012 the Registrar of that Court acknowledged the filing of the appeal and provided information concerning the requirements for appeal books. By letter dated 25 September 2012 the applicant’s solicitors provided information to the trustee’s solicitor advising of the filing of the Notice of Appeal in the Family Court and advising that the sealed documents would be served. Such service was effected on 25 September 2012. By letter dated 28 September 2012 the trustee’s solicitors expressed their opinion that the Full Court of the Family Court was not the appropriate forum for this appeal and that instead an appeal should be made to this Court. Significantly, solicitors for the trustee wrote:We invite you within 7 days of the date of this letter to discontinue the current Appeal and commence in the Full Court of the Federal Court of Australia. If that step is taken we would consent to an appropriate extension of time for the commencement of the appeal in the Full Court of the Federal Court of Australia, being the appropriate course. On 5 October 2012 the trustee’s solicitors forwarded to the applicant’s solicitors, by way of service, documents which had been filed in the Family Court, but no sealed copies of which had been returned. Those documents included a notice of address for service, a cross-appeal and an applicant with supporting affidavit. On 11 October 2012 the applicant withdrew her appeal to the Family Court. On the same day a letter was sent by the trustee’s solicitors to the applicant’s solicitors, who had not been made aware of such withdrawal. The letter enclosed a notice of motion to strike out the appeal in the Family Court. The letter also referred to the fact of the trustee’s solicitor being aware of the applicant’s intention to discontinue their appeal in that jurisdiction. Subsequently, the trustee was informed that the appeal had been discontinued. Thereafter followed a period of two weeks between 11 October and 26 October (when the present application was filed in this Court) where the applicant’s solicitors took no steps to commence proceedings in the Federal Court. Counsel for the applicant was unable to provide any explanation for this delay.

Ratio Decidendi

Legal Principle Established

Likewise, the Court is dismayed that the trustee has elected to oppose leave being granted, given that it was previously the trustee’s position that an application would not have been opposed had the applicant met the trustee’s unilaterally imposed deadline. Although counsel for the trustee highlighted the difficulties caused by the applicant’s delay, such as the decreasing value of the equity in the property and the concern that the applicant is unable to meet mortgage payments on the property, there is little to justify the complete reversal in the trustee’s position from being amenable to resolving this application by consent to doggedly opposing it by raising complex technical issues.CONSIDERATION The principles for consideration of applications for extension of time to file an appeal are well-settled. They are set out in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 (‘Hunter Valley’) at 348-349:1. Although the section does not, in terms, place any onus of proof upon an applicant for extension an application has to be made. Special circumstances need not be shown but the court will not grant the application unless positively satisfied that it is proper so to do. The "prescribed period" of twenty-eight days is not to be ignored (Ralkon Agricultural Co. Pty Ltd v. Aboriginal Development Commission (1982) 43 A.L.R. 535 at 550). Indeed, it is the prima facie rule that proceedings commenced outside that period will not be entertained (Lucic v. Nolan (1982) 45 A.L.R. 411 at 416). It is a pre-condition to the exercise of discretion in his favour that the applicant for extension show an "acceptable explanation of the delay" and that it is "fair and equitable in the circumstances" to extend time (Duff at 485; Chapman v. Reilly unreported (Federal Court of Australia, Neaves J., 9 December 1983) at 7).2. Action taken by the applicant, other than by making an application for review under the Act, is relevant to the consideration of the question whether an acceptable explanation for the delay has been furnished. A distinction is to be made between the case of a person who, by non-curial means, has continued to make the decision-maker aware that he contests the finality of the decision (who has not "rested on his rights": per Fisher J. in Doyle v. Chief of Staff (1982) 42 A.L.R. 283 at 287) and a case where the decision-maker was allowed to believe that the matter was finally concluded. Compare Doyle, Chapman, Ralkon and Douglas v. Allen (1984) 1 F.C.R. 287[PDF] with Lucic at 414-415 and Hickey v. Australian Telecommunications Commission (1983) 47 A.L.R. 517 at 519. The reasons for this distinction are not only the "need for finality in disputes" (see Lucic at 410) but also the "fading from memory" problem referred to in Wedesweiller v. Cole (1983) 47 A.L.R. 528.3. Any prejudice to the respondent including any prejudice in defending the proceedings occasioned by the delay is a material factor militating against the grant of an extension: see Doyle at 287, Duff at 484-485, Hickey at 525-527 and Wedesweiller at 533-534.4. However, the mere absence of prejudice is not enough to justify the grant of an extension: Douglas, Lucic at 416, Hickey at 523. In this context, public considerations often intrude (Lucic, Hickey). A delay which may result, if the application is successful, in the unsettling of other people (Ralkon at 550, Becerra at 12-13) or of established practices (Douglas) is likely to prove fatal to the application.5. The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted: Lucic at 417, Chapman at 6.6. Considerations of fairness as between the applicants and other persons otherwise in a like position are relevant to the manner of exercise of the court's discretion: Wedesweiller at 534-535.