Decker & Decker
[2022] FedCFamC1F 563
Federal Circuit and Family Court of Australia
(DIVISION 1)
Decker & Decker [2022] FedCFamC1F 563
File number(s): SYC6644/2021 Judgment of: WILSON J Date of judgment: 11 August 2022 Catchwords: FAMILY LAW – MAJOR COMPLEX FINANCIAL PROCEEDINGS LIST – wife seeking orders under s 79A to set aside consent orders – husband seeking orders for the summary dismissal of the wife’s s 79A application – husband’s summary dismissal application dismissed. Legislation: Evidence Act 1995 (Cth) ss 131(1) and 131(2)(g)
Family Law Act 1975 (Cth) ss 45A, s 79 and s 79A
Cases cited: Bacall & Zagar [2020] FamCA 350
Beck v Beck (2004) 31 Fam LR 467
Bigg v Suzi (1998) 22 Fam LR 700
Dalton & Nagle [2021] FamCA 376
Dasreef Pty Ltd v Hawcher (2011) 243 CLR 588
Eaby v Speelman [2015] FamCAFC 104
Ebner v Pappas (2014) 53 Fam LR 397
Gong & Zao [2021] FamCAFC 110
Hadwich v Scaddon (2020) 61 Fam LR 202
Harford & Spalding [2021] FamCA 636
Harris v Caladine (1991) 172 CLR 84
Herbert & Herbert (No 3) [2020] FamCA 603
Herbert & Herbert [2021] FamCAFC 108
Honeysett v R (2014) 253 CLR 122
Hsiao v Fazari (2020) 270 CLR 588
In the Marriage of Gebert (1990) 14 Fam LR 62
In the Matter of Patching (1995) 18 Fam LR 675
Jaynes & Rundle [2020] FamCAFC 292
Jess & Jess (No 4) [2022] FedCFamC1F 530
Lindon v Commonwealth of Australia (No 2) (1996) 70 ALJR 541
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
Marvel v Marvel (2010) 43 Fam LR 348
Min & Orton [2021] FamCA502
Mohsen & Collings (No 2) [2021] FamCA 170
Munnings v Australian Government Solicitor (1994) 68 ALJR 169
Pelerman v Pelerman (2000) 26 Fam LR 505
Redmond v Redmond [2014] FamCAFC 155
Ritter and Ritter [2020] FamCAFC 86
SS & AH [2010] FamCAFC 13
Statvia & Statvia [2015] FamCAFC 170
The Juliana (1822) 165 ER 1560
Thorne v Kennedy ( 2017) 263 CLR 104
Webster v Lampard (1993) 177 CLR 598
Division: Division 1 First Instance Number of paragraphs: 66 Date of hearing: 12 July 2022 Place: Melbourne Counsel for the Applicant: Mr G. Dickson QC Solicitor for the Applicant: Barkus Doolan Winning Counsel for the Respondent: Mr J. Lloyd QC Solicitor for the Respondent: Uther Webster & Evans ORDERS
SYC 6644 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR DECKER
Applicant
AND: MS DECKER
Respondent
order made by:
WILSON J
DATE OF ORDER:
11 AUGUST 2022
THE COURT ORDERS THAT:
1.The husband’s summary dismissal application of the wife’s s 79A application is dismissed.
2.On or before 4:00pm on 25 August 2022 any application for costs must be filed and served with supporting evidence.
3.On or before 4:00pm on 8 September 2022 any affidavit material in opposition to the material filed pursuant to paragraph 2 hereof must be filed and served.
4.On or before 4:00pm on 22 September 2022 the parties must file and serve written submissions on costs.
5.The question of costs will be decided on the papers.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Decker & Decker is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J
Introduction
In reliance upon the summary decrees power conferred by s 45A of the Family Law Act (“the Act”) the husband sought orders for the summary dismissal of the wife’s amended initiating application filed 8 November 2021. In that amended initiating application the wife seeks orders under s 79A of the Act setting aside consent orders made on 21 November 2019 pursuant to which the wife’s application for orders under s 79 of the Act was compromised.
In essence, the husband contended that there is no merit in any of the wife’s contentions in her s 79A application and that her application should be summarily dismissed. Conversely, on behalf of the wife it was contended that the husband’s application is misconceived, significant factual disputes exist that must be determined at trial and that in the circumstances of this case, the s 79A application should be heard and determined when the s 79 application is heard. The wife said the husband’s failure to disclose key documents in the lead up to the settlement of the s 79 application on 21 November 2021 amounted to a miscarriage of justice.
These reasons explain why I am not persuaded that the husband’s application grounded in s 45A has merit with the consequence that I dismiss the summary dismissal application. I direct that by 4:00pm on 25 August 2022 the parties bring in a minute that gives effect to these orders as well as directions for the orderly conduct of this case to trial.
Legislative framework
The husband’s application is grounded in s 45A of the Act. That provision is in the following terms –
45A Summary decrees
No reasonable prospect of successfully defending proceedings
(1)The court may make a decree for one party against another in relation to the whole or any part of proceedings if:
(a)the first party is prosecuting the proceedings or that part of the proceedings; and
(b)the court is satisfied that the other party has no reasonable prospect of successfully defending the proceedings or that part of the proceedings.
No reasonable prospect of successfully prosecuting proceedings
(2)The court may make a decree for one party against another in relation to the whole or any part of a proceedings if:
(a)the first party is defending the proceedings or that part of the proceedings; and
(b)the court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceedings or that part of the proceedings.
When there is no reasonable prospect of success
(3)For the purposes of this section, a defence or proceedings or part of proceedings need not be:
(a) hopeless; or
(b) bound to fail;
to have no reasonable prospect of success.
Proceedings that are frivolous, vexatious or an abuse of process
(4)The court may dismiss all or part of proceedings at any stage if it is satisfied that the proceedings or part is frivolous, vexatious or an abuse of process.
(5)To avoid doubt, proceedings or a part of proceedings are not frivolous, vexatious or an abuse of process merely because an application relating to the proceedings or the part is made and later withdrawn.
Costs
(6)If the court makes a decree, or dismisses all or part of proceedings, under this section, the court may make such order as to costs as the court considers just.
Action by court on its own initiative or on application
(7)The court may take action under this section on its own initiative or on application by a party to the proceedings.
This section does not limit other powers
(8)This section does not limit any powers that the court has apart from this section.
Note:Part XIB also gives courts powers relating to vexatious proceedings.
The wife’s application is grounded in s 79A of the Act. Several provisions of that section fall for consideration. The first is s 79A(1)(a) which is in the following terms –
79A 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; or
…
The husband did not consent to the setting aside of the consent orders so s 79A(1A) was not relevant. Equally, no party came forward as an “other person interested” so s 79A(2) was not relevant.
Over the last two years, s 45A has been the subject of considerable judicial attention.[1] A fair distillation of the propositions for which those authorities stand may be expressed as follows –
(a)s 45A may be invoked in relation to a summary dismissal application in respect of a contravention application;[2]
(b)on a s 45A application the court takes the evidence of the person whose claims are impugned at its highest;[3]
(c)the court determines whether the applicant has no reasonable prospect of successfully prosecuting the proceeding, as s 45A(2) provides;
(d)the court looks at whether the applicant can establish his or her case and not whether the applicant has done so;[4]
(e)a cautious approach should be taken to a summary dismissal application;[5]
(f)the power to summarily dismiss an action must be rarely and sparingly used;[6] and
(g)the six-limbed test adumbrated by Kirby J in Lindon v The Commonwealth (No 2)[7] remains applicable and good law.
[1] For example, Hadwich v Scaddon (2020) 61 Fam LR 202 judgment in which was handed down on 16 July 2020, Herbert & Herbert (No 3) [2020] FamCA 603 judgment in which was handed down on 23 July 2020, Jaynes & Rundle [2020] FamCAFC 292 judgment in which was handed down on 23 November 2020, Mohsen & Collings (No 2) [2021] FamCA 170 judgment in which was handed down 30 March 2021, Dalton & Nagle [2021] FamCA 376 judgment in which was handed down on 8 June 2021, Herbert & Herbert [2021] FamCAFC 108 judgment in which was handed down on 5 July 2021, Min & Orton [2021] FamCA 502 judgment in which was handed down on 12 July 2021, Gong & Zao [2021] FamCAFC 110 judgement in which was handed down on 16 July 2021 and Harford & Spalding [2021] FamCA 636 judgment in which was handed down on 27 August 2021.
[2] Herbert & Herbert (No 3) [2020] FamCA 603.
[3] Webster & Lampard (1993) 177 CLR 598, 608, Munnings v Australian Government Solicitors (1994) 68 ALJR 169, 171 and Bigg v Suzi (1998) 22 Fam LR 700.
[4] Jaynes & Rundle [2020] FamCAFC 292.
[5] Stativa & Stativa [2015] FamCAFC 170.
[6] Pelerman v Peleman (2000) 26 Fam LR 505, Beck v Beck (2004) 31 Fam LR 467 and Ritter & Ritter [2020] FamCAFC 86.
[7] (1996) 70 ALJR 541 and see Mohsen & Collings (No 2) [2021] FamCA 170.
The husband’s case on this application
Despite the husband relying on a comprehensive submission prepared by his Senior Counsel, nowhere in that document was it stated on what material the husband relied in support of his s 45A application. That said, by his amended application in a proceeding sealed 30 March 2022 the husband sought orders as follows –
1.The proceedings commenced by the Applicant on 10 September 2021 be dismissed by way of summary judgment.
2.In the event the Court does not make an order as specified in paragraph 1 above, that there be a separate determination of the issues raised by the Applicant in her Initiating Application as amended and filed on 8 November 2021 and as particularised in her Points of Claim filed 8 November 2021, namely:
2.1.whether the Consent Orders made 21 November 2019 (as amended on 27 February 2020) should be set aside pursuant to Section 79A of the Family Law Act 1975 (Cth) on the basis that there has been a miscarriage of justice by reason of alleged:
2.1.1.failure to disclose relevant documents, as particularised at paragraphs 26 to 58 of the Applicant’s Points of Claim filed 8 November 2021;
2.1.2.false and misleading evidence concerning the activities of the [B Pty Ltd], as particularised at paragraphs 59 to 64 of her Points of Claim;
2.1.3.duress, as particularised at paragraphs 65 to 93 of her Points of Claim.
2.2.whether the wife should be granted an extension of time for the filing of an Application for Review of the decision of the Registrar on 21 November 2019 to make Consent Orders (as amended on 27 February 2020) for the reasons particularised at paragraphs 94 to 99 of her Points of Claim.
3.The Respondent be relieved of any obligation to complete and file a Financial Statement or to make financial disclosure to the Applicant until the issues in paragraph 2 are determined.
4.The Applicant pay the Respondent’s legal costs and disbursements of and incidental to these proceedings, on an indemnity basis.
He made two affidavits in this proceeding, the first sworn on 4 February 2022 and the second on 30 March 2022. In the first of those two affidavits he quoted verbatim a conversation he had with the wife in mid-February 2019 as well as a conversation on 10 June 2019 with the wife during which he purportedly recorded, verbatim and word perfectly, the conversation. I find it difficult to accept that the husband was able to narrate, in direct speak word perfectly, two separate conversations held years earlier. He did much the same thing in relation to conversations held in mid-October 2019 and November 2019.
In his affidavit made 30 March 2022, the husband deposed to events said to be relevant in his summary judgment application.[8] The following matters emerged from that affidavit –
[8] The words “affidavit re bifurcation of proceedings, summary judgment” appear above the court heading on the document.
(a)the husband and wife married in 2007, they separated in 2017, they divorced in 2019 and they have two children who live with the wife;
(b)in 1994 the husband established a construction business which now undertakes commercial construction, project management and property development;
(c)in 2019, when the husband and wife settled their proceeding, the husband owned and operated 12 companies and two trusts;
(d)pursuant to the consent orders made on 21 November 2019 the husband and wife agreed that each would keep the assets in the names of each, each would remain liable for liabilities in the names of each, the husband would pay the wife $12,800,000 in addition to sums paid to her by that date and that half of the husband’s superannuation would go to the wife;
(e)in the period between 1 July 2017 and 27 November 2019 the husband said he paid the wife over $16,560,000 as well as the appropriate superannuation split;
(f)in November 2017 B Pty Ltd lodged a development application with Council C on land formally used by the Suburb D post office leading to the incorporation of E Pty Ltd (“E Pty Ltd”);
(g)by notice of determination given by Council C on 28 November 2018, Council C refused the development application lodged by B Pty Ltd;
(h)on 17 December 2018 B Pty Ltd filed an appeal in a court against the determination of Council C;
(i)on 18 December 2018 the husband’s solicitors wrote to the wife’s solicitors informing the wife that Council C had refused B Pty Ltd’s development application and that one option was to appeal against that refusal (he said at the time he was not aware an appeal had in fact been filed as he did not have the day-to-day control of the Suburb D project);
(j)on 13 May 2019 the husband’s solicitors provided to the wife’s solicitors a copy of various documents including the notice of determination and various loan documents;
(k)the court approved the development application on 20 December 2019;
(l)the husband stated that he did in fact disclose to the wife the appeal before the court and the wife was aware of the appeal as he discussed that with the wife throughout 2018 and 2019 on several occasions; and
(m)he denied supressing evidence.
From paragraph 27 onwards in his affidavit sworn 30 March 2022, the husband deposed to negotiations. The information to which the husband deposed related to a mediation conducted before the Hon. Mr Stephen O’Ryan QC. No objection was taken by the wife to the husband adducing that evidence. It was privileged communications protected by without prejudice communications.
Paragraph 29 contained the husband’s assertion that the wife sent an inflammatory text message at 2:28pm on 30 October 2018. The wife objected on the ground of irrelevance.
The husband pressed for the inclusion of that paragraph on the basis that it was somehow connected to the wife’s allegations about the husband’s conduct towards her. Alternatively, the husband contended that it was relevant to matters pertinent to the s 79A application. The language is vulgar and has nothing to commend it by way of probative value. I will not receive it on the basis asserted by the husband.
Paragraph 30 was in the same category although in that paragraph the husband did little more than put into evidence a collection of documents. Those documents fitted into the same category as did the assertion in paragraph 29. I found the documents exhibited as exhibit MD6 to the husband’s 30 March 2022 affidavit to be of no probative value.
In paragraph 31 of his affidavit sworn 30 March 2022 the husband deposed to an offer made by the wife on 7 November 2018. The wife objected to that evidence being received on the basis that the information was privileged. The husband submitted that the information should be received in reliance upon s 131(2)(g) of the Evidence Act. In my view, the general exclusion of evidence about settlement negotiations imposed by s 131(1) and which s 131(2)(g) relaxes is not applicable here. That is because I do not consider I am likely to be misled without that correspondence being adduced. I will not receive paragraph 31 of the husband’s affidavit into evidence on the hearing of this application.
The first sentence of paragraph 32 of the husband’s 30 March 2022 affidavit was the subject of objection on the basis that the first sentence referred to privileged communications. The husband maintained his contentions that without that first sentence being admitted into evidence I was likely to be misled. While I do not accept the husband’s contentions on point, equally I do not accept that the whole of the first sentence refers to settlement negotiations. With the words “following [Ms Decker’s] offer in the preceding paragraph” being excised from paragraph 32, the balance is admissible. In that paragraph the husband asserted that B Pty Ltd did not perform as well as it had done in financial years prior to 30 June 2017. Whatever might be made of that nebulous statement remained to be seen. At all events, it tended to explain subsequent events.
The husband stated that in late November 2018 he informed the wife of his intention to liquidate B Pty Ltd (his words).[9]
[9] That seems to have been a reference to B Pty Ltd, although the husband did not describe the company by that name which I took to reflect a degree of imprecision in his evidence.
The husband then purported to address what he described as “a series of offers” made to him by the wife, to which the wife objected, relying on s 131(1) of the Evidence Act and in respect of which the husband countered in reliance upon s 131(2)(g) of the Evidence Act. I will not receive the statements made in paragraph 34 of the husband’s affidavit. It is captured by the prohibition imposed by s 131(1) of the Evidence Act and I do not consider that I will be likely misled unless that evidence is admitted into evidence.
The wife objected to the admission of the words “notwithstanding the disclosure which was being engaged (sic) at the time” in paragraph 36 of the husband’s affidavit. The husband conceded the objection. In those circumstances those words will be deleted from the husband’s affidavit. The paragraph was probative only to the extent that by reason of deficiencies of disclosure perceived by the wife, she filed an application in a case seeking certain disclosure.
The first sentence of paragraph 37 was the subject of objection. The husband’s state of distress was irrelevant. I will not accept into evidence the first sentence of paragraph 37 of the husband’s evidence. The first paragraph was similarly the subject of an objection on the basis that it was either hearsay or irrelevant. Hearsay objections on interlocutory applications rarely succeed and, consistent with that usual approach, I will not reject the third sentence for being hearsay. However, the objection was pressed on the additional ground of relevance. In the third sentence the husband asserted that his solicitors informed the wife’s solicitors that E Pty Ltd would make a loss. Precisely how solicitors were equipped to prognosticate about commercial, accounting and profit projection issues was a matter beyond their expertise as solicitors[10] so I reject the statement in the third sentence.
[10] Dasreef Pty Ltd v Hawcher (2011) 243 CLR 588, Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 and Honeysett v R (2014) 253 CLR 122.
All of paragraph 38 and 39 were the subject of objection for being irrelevant. I agree. Changes of solicitors is not probative of a fact in issue in this litigation. I reject the husband’s contention that the information about a change of solicitors was somehow relevant to the wife’s s 79A application.
The second sentence of paragraph 40 of the husband’s 30 March 2022 affidavit was the subject of objection. In that sentence the husband purported to depose to the embarrassment (to whom he did not say) caused by contacts made by banks (unidentified) and associates of his business (also unidentified) about the volume of documentation each was likely to be required to produce. The objection was put on the basis that the information in that sentence was irrelevant or it was argumentative. I agree on both counts. The husband’s assertion, advanced in an endeavour to propound the sentence, was misconceived when he asserted that the information was relevant to the husband’s application to sell his interest in B Pty Ltd. The husband’s state of mind in feeling embarrassed was irrelevant. I reject the impugned sentence.
Efforts having been made to constitute a mediation, the husband deposed to an offer by the wife on 25 September 2019. The wife relied on s 131(1) of the Evidence Act in seeking to exclude that evidence. The husband contended that without my receiving that evidence I would be likely misled. He purported to invoke s 131(2)(g) of the Evidence Act. I reject the husband’s contentions. That paragraph is inadmissible on this application by the husband to summarily dismiss the wife’s s 79A application to set aside the consent orders.
Paragraph 49 and 50 were the subjection of objection by the wife. In those paragraphs the husband purported to adduce information from text messages from the wife over 14 and 17 October 2019 when the wife was allegedly upset about the husband’s girlfriend. The information had nothing to do with this application and seemed to represent some collateral assault on the mental fabric then existing of the wife. If such an approach is to be taken by the husband, it should be done by proper medical evidence and not in the manner adopted in paragraphs 49 and 50 of the husband’s affidavit and exhibit MD7, each of which I rule inadmissible.
That portion of the paragraph 51 from “and [Ms Decker]” on the third line to the end of the paragraph was the subject of objection for being contrary to s 131(1) of the Evidence Act. The husband relied on s 131(2)(g) in propounding the evidence. I reject the evidence for impermissibly purporting to adduce evidence of settlement negotiations.
The final sentence of paragraph 52 was the subject of objection for being irrelevant or for being hearsay. In the impugned portion the husband purported to depose to his understanding of a matter without giving the basis of his understanding. Expressed in those terms, the information is inadmissible for being conclusionary or opinion. In either case it is inadmissible. I will not admit it.
Under a heading of his affidavit labelled “alleged ‘undisclosed contracts’”, the husband commenced his recital of what he put forward as responsive information to the assertions made by the wife in paragraphs 67 to 75 of her affidavit filed 8 November 2021.
In the second last sentence of the husband’s 30 March 2022 affidavit, he purports to assert that “it would be unreasonable to expect all contracts and variations to be provided by way of disclosure”. The husband conceded the inadmissibility of that assertion. It does not lie in the mouth of a lay witness to express his views about legal issues associated with strict adherence to disclosure obligations imposed by rules of this court.[11] Mr Lloyd SC’s concession on that issue was well made. A party to litigation must give disclosure, irrespective of a call being made for the production of a relevant document. Solicitors drafting affidavits for use in a proceeding in this court should be more assiduous than to draft an affidavit containing a provision to the effect that an opposite party did not call for copies of particular documents. If disclosable, the document must be disclosed, whether called for or not.
[11] Bacall & Zagar [2020] FamCA 350.
The wife objected and the husband conceded that the forth sentence of paragraph 58 should be ruled inadmissible so I accordingly delete it.
In paragraph 64 to 66 inclusive of his affidavit sworn 30 March 2022, the husband purported to produce and rely on a schedule he said had been prepared by his solicitors and employees of B Pty Ltd in respect of costs referrable to E Pty Ltd. Without explaining what those costs were, that is to say constructive expenditures to be incurred, legal costs, actual costs incurred in building activities, the schedule was largely meaningless. Further, no information was given by the husband to properly underpin and support his reliance upon the schedule to which he refers in paragraphs 64 to 66. For example, he does not say who worked on preparing the schedule, what raw information was examined from which entries on the schedule were sourced, which solicitors worked on the schedule, what role they performed, why they were involved at all, who prepared the raw information, the accuracy of it, how that accuracy was verified, and insofar as expenditures were involved, on what factual or contractual basis that expected expenditure was premised. Equally importantly, the husband gave no information by which his production of the schedule could be vouched for by him. He did not say he checked the information in the schedule and that it was correct. He did not say how his role enabled him to verify such minutely precise information, even assuming he said that at all.
The husband asserted the schedule and the information in it was highly relevant to the ambit of the dispute. If that is so, the information in the schedule should have been advanced in an admissible form. I reject paragraphs 64 to 66 of the husband’s affidavit.
In paragraph 74 and 75 of his affidavit the husband expressed his concerns about certain things. His concerns represent his heartfelt emotions, wholly inadmissible. All information in paragraphs 74 and 75 is ruled inadmissible.
Returning to what is admissible, in paragraph 70 of his affidavit the husband stated that he wishes the issue of whether a miscarriage of justice has occurred to be determined separately from whether a property settlement should be adjudicated upon.
The Wife’s Material
Authority that binds me[12] on an application under s 45A holds that a judge in my shoes should be cautious against being too ready to grant a summary disposal of a proceeding, relevantly here, a s 79A proceeding.[13] Applying those principles, here, I am required to accept the wife’s evidence at its highest before assessing whether under s 45A the wife should be prevented from going further in this litigation.
[12] Gong v Zao [2021] FamCAFC 110.
[13] Lindon v Commonwealth of Australia (No 2) (1996) 70 ALJR 541.
Having regard to the need to proceed on the basis that the wife’s evidence on the s 79A application is accepted, it became necessary to examine the wife’s case in a little detail. To that I now turn.
On 8 November 2021 the wife filed her amended initiating application in which she sought orders under s 79A setting aside the consent orders made 21 November 2019. Also on 8 November 2021 the wife filed points of claim in which she claimed –
(a)a sum of $60,000,000;
(b)the husband and wife were married for 10 years;
(c)at all relevant times the husband was the principal of a business known as B Pty Ltd;[14]
[14] Strictly speaking, the husband was the controlling shareholder and director of a series of companies as opposed to being a principal in a firm (an unincorporated entity).
(d)13 companies made up B Pty Ltd, one of which was E Pty Ltd;
(e)pursuant to consent orders made on 21 November 2019 as executed on 19 November 2019, the husband agreed to pay the wife $12,700,000 plus $100,000 within 12 months along with superannuation;
(f)the husband failed to comply with his duty of disclosure under chapter 13 of the then Family Law Rules 2004;
(g)following the incorporation of E Pty Ltd in April 2017, the directors of E Pty Ltd were the husband along with one Mr J and all the ordinary shares in the capital of E Pty Ltd were held by B Pty Ltd Entity 1 making E Pty Ltd a wholly owned subsidiary of B Pty Ltd Entity 1;
(h)in June 2017 E Pty Ltd purchased the whole of the land known as F Street, Suburb D in the state of New South Wales being the whole of the land more particularly described in folio identifier … (“the Suburb D property”);
(i)B Pty Ltd Entity 2 Pty Ltd lodged a development application with Council C in November 2017;
(j)Council C refused the development application leading to the husband, on 17 December 2018, filing an appeal to a court from the council’s refusal of the development application;
(k)the husband did not disclose to the wife at any time prior to the consent orders being signed that an appeal had been filed with the court in relation to the development of the Suburb D property;
(l)on 18 December 2018 the husband’s solicitors informed the wife’s solicitors that the development application had been rejected, the option of taking the matter to court was being considered[15] and that any proceeding thereafter would be lengthy and expensive;
[15] The appeal had been filed the day earlier.
(m)the letter dated 18 December 2018 was misleading;
(n)between 20 December 2018 and 23 April 2019 the wife’s solicitors sought disclosure from the husband in respect of specific categories of documents relevant to the Suburb D property;
(o)on 10 May 2019 the wife filed an application in a case seeking disclosure from the husband;
(p)on 13 May 2019, in purported compliance with his disclosure obligations, the husband failed to disclose any information in relation to the appeal to the court;
(q)on 10 July 2019 an expert concluded in a report of the same date that the proposed development of the Suburb D property could readily achieve compliance yet that report was not disclosed to the wife;
(r)between 8 April 2019 and 19 November 2019 the husband made disclosure on 13 separate occasions and on each he failed to disclose documents relating to the appeal to the court;
(s)the appeal was allowed by the judge;
(t)the husband deliberately and wilfully suppressed evidence given to the court, intending to mislead the wife, thereby causing a miscarriage of justice when the consent orders were signed by the wife on 19 November 2019 in ignorance of those facts;
(u)in late November 2020, the wife learned for the first time upon receiving a pamphlet in her letter box that B Pty Ltd Entity 2 was developing the Suburb D property;
(v)on 11 May 2021 the wife’s solicitors notified the husband of her intention to apply to set aside the consent orders made under s 79; and
(w)on 10 September 2021 the wife commenced a proceeding to set aside the consent orders.
In addition to those allegations, the wife also claimed in her points of claim that the husband failed to disclose contract awards in favour of B Pty Ltd Pty Ltd in relation to projects for –
(a)the renewal project at K Building;
(b)L School;
(c)M School;
(d)N School; and
(e)O School.
Further, the wife asserted that by reason of duress, her consent to the 19 November 2019 orders had been vitiated. She relied on various factors in her contentions that duress vitiated her consent, including –
(a)she had limited understanding of the parties’ financial affairs and the value of the B Pty Ltd;
(b)on 20 February 2018 a single expert valuer valued B Pty Ltd at over $80,000,000 as at 30 June 2017;
(c)the husband repeatedly threatened to liquidate B Pty Ltd as it was “going under”;
(d)in mid-2019 the wife underwent emergency surgery;
(e)after the wife’s surgery, from September 2019 the husband telephoned the wife with near daily frequency in aggressive terms demanding a resolution of their property proceeding then on foot;
(f)in September 2019 the husband’s brother telephoned the wife telling her to accept the husband’s offer and if she did not, B Pty Ltd would be wound up with her deriving nothing;
(g)the settlement conference scheduled for 15 November 2019 was cancelled by the wife on account of her ill health;
(h)at the settlement conference held on 19 November 2019 the husband for the first time provided to the wife financial statements in relation to B Pty Ltd Entity 2 and represented that the husband’s interests in that company was $15,000,000;
(i)the wife relied on those representations when signing consent orders on 19 November 2019; and
(j)the orders are vitiated by duress exerted upon the wife by the husband.
The wife sought a review of the orders of the registrar who approved the consent orders.
The points of claim were not evidence so it was more important to examine the wife’s affidavits in order to take her evidence at its highest. Her affidavit made 16 May 2022 was expressed to be a consolidation of affidavits filed “in these proceedings”.[16] The more important matters that arose from that consolidated affidavit were the following –
[16] That was an inelegant choice of words as it suggested the relevance of not only the 2021 proceeding but also the 2017 proceeding when the wife seemed to mean the 2021 proceeding.
(a)she has not been engaged in paid employment since March 2007 when she and the husband commenced cohabitation;
(b)the husband has two boys from a previous relationship in addition to having two children with the wife;
(c)a mediation held on 21 June 2018 was unsuccessful;
(d)on 19 November 2019 a round table conference was held at the offices of the husband’s solicitors which culminated in the execution of consent orders at 5:00pm, those orders later being sealed on 21 November 2019, later being re-signed because the trustee of the husband’s superannuation fund sought a minor amendment resulting in consent orders being re-executed by the parties and sealed by the court on 27 February 2020;
(e)E Pty Ltd was incorporated in April 2017 with Mr J and the husband as its directors and B Pty Ltd Entity 1 Pty Ltd is its ultimate holding company;
(f)E Pty Ltd acquired the Suburb D property for $15,500,000;
(g)on 7 November 2017 B Pty Ltd Entity 2 lodged a development application with Council C for the redevelopment of the Suburb D property;
(h)on 28 November 2018 Council C refused the development application;
(i)on 17 December 2018 B Pty Ltd Entity 2 filed an appeal against that refusal, which was not disclosed to the wife and about which she learned in 2021 based on her own research;
(j)on 18 December 2018 the husband’s solicitor sent to the wife a letter to the effect that the development application had been refused and options including an appeal were being considered;
(k)on 8 and 9 April 2019 the wife received certain disclosure concerning the Suburb D property development but nothing concerning any appeal from the council’s determination;
(l)on 28 May 2019 the wife received correspondence from the husband’s solicitor concerning the value of B Pty Ltd and, in respect of E Pty Ltd, the value was said to be $8,717,101[17] with land being valued at $5,725,000 yet no information about the appeal to the court was given;
(m)between July and November 2019 no documents had been given to the wife about an appeal from Council C in relation to the Suburb D property development;
(n)the 10 July 2019 report which stated that the proposed development could readily achieve compliance was not brought to the wife’s attention until 2021 when she made her own investigations;
(o)between 17 December 2018 and 19 November 2019 the wife received 13 different communications from the husband and his solicitors, none of which contained documentation in relation to the appeal to the court;
(p)at no stage in the lead up to the execution by the wife of the consent orders was it disclosed to her that a hearing in relation to the appeal to the court had been scheduled in December 2019 and if she had been told that, she would not have entered into the consent orders on 19 November 2019;
(q)the husband sent a text message to the wife on 22 December 2019 stating that he had “landed” some favourable deals, although he did not disclose details;
(r)towards the end of November 2020 the wife received in her letter box a pamphlet stating that B Pty Ltd Entity 2 was redeveloping the Suburb D property;
(s)on 11 May 2021 the wife’s solicitors put the husband on notice that she would make application under s 79A of the Family Law Act; and
(t)the husband rejected that statement on 24 June2021.
[17] The wife identified in paragraph 49 of her affidavit that the figure of $5,725,000 for the Suburb D property was for internal reporting purposes only.
Under a separate heading of her affidavit entitled “undisclosed contracts”, the wife deposed to having been informed by the husband’s solicitors prior to executing the consent orders that no developments were being undertaken nor were any planned. On 18 November 2019 the husband’s solicitors sent the wife’s solicitors correspondence indicating that B Pty Ltd was looking at making redundancies as it had secured only one contract in the five months to 30 November 2019. The wife deposed to conducting her own research in August 2021 which revealed B Pty Ltd had secured contracting relating to the K Building, L School, and works at M School, N School as well as O School, the total value of all those works was unstated but it exceeded $60,000,000.
The wife also addressed events under a heading titled “the balance sheet and events leading up to settlement.” So far as were relevant, the following matters emerged –
(a)she had adopted the value of B Pty Ltd as given by Mr S;
(b)she read the observations of Mr J in his affidavit made 3 August 2018 in which Mr J recommended to his co-director, that is to say, the husband, that immediate steps be taken to sell B Pty Ltd;
(c)the wife received frequent telephone messages from the husband to the effect that he would purposefully lose everything to teach the wife a lesson, that he would ensure the wife ends up on the streets and that he would continue to waste money to ensure there was none left for the wife;
(d)up to mid-May 2019 the husband continued to allege that B Pty Ltd was in financial trouble during which he sent weekly text messages to the wife in varying degree of vulgar language;[18]
[18] For further details, paragraph 85 of the wife’s affidavit sets it out.
(e)the wife said she was very stressed which, on 7 June 2019, led to her hospitalisation yet the husband, while the wife was hospitalised, said to the wife that she needed to sort this matter and that she would get nothing;
(f)in mid-June 2019 the husband made threatening telephone calls to the wife;
(g)in late August 2021 the wife deposed to spending a week in hospital with medical issues;
(h)in September 2019 the husband’s brother telephoned the wife stating that the sum of $12 million was “the offer on the table” in respect of which she had a week to consider the matter otherwise the husband could wind up the company;[19]
(i)the wife rejected the proposal;
(j)in October 2019 the wife underwent surgery;
(k)she said she was extremely ill between October 2019 to 19 November 2019;
(l)between October 2019 and 19 November 2019 the husband continued to telephone the wife in an aggressive manner stating that the two needed to come to an agreement and that the wife would “end up within nothing”;[20]
(m)the round table conference scheduled for 15 November 2019 was cancelled on account of the wife’s ailing health;
(n)on 18 November 2019 the husband provided the wife with financial statements for B Pty Ltd for the first time, of which the accounts were current to 30 June 2019;
(o)on 19 November 2019 the husband and wife participated in a round table conference at which the value of B Pty Ltd was discussed, namely $82.15 million;
(p)the husband contended that his net assets were $15 million or thereabouts; and
(q)the wife said her consent to the consent orders was not free and informed.
[19] Paragraph 96 of her 16 May 2022 affidavit.
[20] Paragraph 100 of her 16 May 2022 affidavit.
At paragraph 141 of her 16 May 2022 affidavit the wife contended that on 24 February 2022 she saw for the first time a valuation of the Suburb D property which was dated 18 September 2019 and which attributed a value of $17,040,000.
She deposed to the fact that prior to receiving that G Valuers valuation at $17,040,000, the wife had proceeded on the basis that the Suburb D property had been valued twice by H Valuers at $5,750,000. She also deposed to documents passing between B Pty Ltd and the lender P Bank indicating that conferences had taken place between experts for Council C and the husband’s experts for the provision of a joint report to be submitted to the court. The wife said those documents had not been disclosed to her as they should have been.
conflicting material
As will be evident from the foregoing narration of evidence adduced by the husband and that of the wife, in many respects and on many issues certain issues conflict in the versions given by each. Authority binding me warns that on the hearing of an interlocutory application as is this, the judge must only make findings of fact with great circumspection.[21] Based on those authorities I recognise that the factual matrix of events leading to the consent orders of November 2019 is disputed in terms of –
(a)whether the husband engaged in acts that amount in fact and in law to duress;
(b)whether prior to the entry into the consent order the husband did or did not inform the wife that an appeal had been filed with the court;
(c)whether the true value of the B Pty Ltd had been revealed to the wife prior to the consent orders, that value being in excess of $80,000,000;
(d)whether the husband had informed the wife of the value of Suburb D property as to $17 million rather than $5 million; and
(e)whether the husband had taken steps to liquidate B Pty Ltd prior to the consent orders; and
(f)whether she would have settled at all had the true facts been known.
[21] Eaby v Speelman [2015] FamCAFC 104, Marvel v Marvel (2010) 43 Fam LR 348, SS & AH [2010] FamCAFC 13 and Redmond v Redmond [2014] FamCAFC 155.
Of course, that is not an exhaustive list.
However, it serves to illustrate that a very large number of triable issues must be determined. This is likely to be a hard swearing case in which the wife’s oath on certain issues is pitted against the husband’s oath. Cross-examination will be essential to test the competing versions against which the trial judge may form a decision on contested issues on the balance of probabilities.
It must be remembered that against that factual backdrop the husband seeks the summary dismissal of her proceeding. The High Court has warned against making such orders because of six reasons articulated by Kirby J in Lindon v Commonwealth of Australia (No 2).[22] There Kirby J held as follows –
(a)it is a serious matter to deprive a person to courts of law and so the powers of summary dismissal are rarely and sparingly applied;
(b)to secure such relief, the party seeking it must show that it is clear on the face of the impugned documents, that there is no reasonable cause of action or that a claim is being advanced that is frivolous or vexatious;
(c)even a weak case is entitled to the time of the court;
(d)summary relief for absence of a reasonable cause of action, where a serious legal question is to be determined, should ordinarily be determined at trial;
(e)if it appears that a party may have a reasonable cause of action but which that party has failed to put in proper form, the court will ordinarily allow that party to reframe its pleading; and
(f)the guiding principle is doing what is just.
[22] (1996) 70 ALJR 541.
In that case Mr Lindon’s proceeding was summarily dismissed. His case was at the extreme end of cases in the nature of public interest litigation, calling into question claims for declarations as to the unlawfulness of using nuclear weapons. Self-evidently, that case has no factual parallel whatsoever to the present case but the point of legal principle as recorded immediately above represents the High Court’s treatment of summary dismissal applications.
In the specific field of family law jurisprudence the criteria is set out in s 45A of the Family LawAct and the cases that have applied the provisions in that section. Before addressing the application of the facts of this case to the relevant authorities, it is utile to synthesise the manner in which both parties cast their respective submissions. To that I now turn.
Triable issues raised in the husband’s submissions
As has already been mentioned, Mr Lloyd SC’s written submissions dated 5 July 2022 traversed in very considerable detail factual material antecedent to the negotiations that commenced on 21 June 2018 as well as events subsequent to those negotiations. My Lloyd SC submitted at paragraph 29 of his written submissions that the husband stated he (the husband) was not aware the appeal had been filed. That was to be contrasted to the wife’s trenchant denial that she had been informed of the filing of the appeal at or about that time. For that matter, she deposed to only learning of the listing before Duggan J when she began investigating the details of this case in late 2021. Whether the husband is to be believed when he stated that he was not aware of the filing of the appeal is a triable issue.
The husband’s submissions also proceed on the factual premise that the husband kept the wife appraised of the progress of the appeal to the court. The wife disputed that evidence. Again, a triable issue has been raised. If the wife’s version of events is ultimately accepted on that issue, it may go to demonstrating the existence of, or of an integer of, a miscarriage of justice for the purpose of s 79A(1)(a).
The husband’s submissions contained the statement that careful attention must be given to events including negotiations between 14 to 18 November 2019. Somewhat vaingloriously, the husband’s submissions asserted at paragraph 41 that there can be no issue about negotiations between 14 to 18 November 2019. To the extent that the details of proposals and counter proposals were exchanged in written form, Mr Lloyd may be correct that there can be no dispute what each letter says. However, the husband says nothing about the context of those proposals, especially the factual setting in which the wife’s version of those proposals was set. On her version of events she was then in poor health and the husband was telephoning her with seemingly incessant frequency and in varying degrees of directness – some threatening, some merely rude and blunt. Plus, on the wife’s version of events, the husband had repeatedly told her that she needed to settle or she would get nothing. His brother told her the same thing. In addition, she was told the group would soon be liquidated from which she would also get nothing. She was not experienced in business matters. The extent to which that environment operated on her willingness to resolve on a genuine basis, on commercial terms, and in a manner that demonstrated a just and equitable alteration of property orders is a triable issue. Further, it was only on the eve of the settlement itself that the husband provided documentation in the form of financial statements current to 30 June 2019. Yet disclosure had been gruelling for the wife to obtain, on her version. Her last known statement about the value of the Suburb D complex was $5 million. The extent to which she was uninformed by matters that went to the justice and equity that the resolution actually achieved is a triable issue.
The actual consent orders themselves where an issue. The wife gave evidence that no balance sheet accompanied them. No requisitions from the registrar emerged. Precisely how the registrar was able to independently conclude that enough information about the pool had been given to enable a decision to be reached that the consent orders were just and equitable was not stated. That too is a triable issue.[23]
[23] Harris v Caladine (1991) 172 CLR 84.
The wife additionally relied on there being a collection of contracts into which one of the husband’s corporate entities had entered and which were not disclosed to the wife. On behalf of the husband it was put that most of those contracts had come into existence subsequent to the making of the consent orders. Whether that is the case is a triable issue.
So far as duress was concerned, as a component of s 79A(1)(a), the evidence was in a presently embryonic form. Neither party made submissions on factual and legal matters integers of duress in this case. That said, in reliance upon Thorne v Kennedy,[24] in Hsiao v Fazari[25] the High Court held that a trial judge must closely scrutinise the facts to determine whether it is open to find that a transaction has been vitiated by duress. That calls for an intense examination of all relevant factors for the simple reason that equity examines every connected issue.[26]
[24] (2017) 263 CLR 104.
[25] (2020) 270 CLR 588 ( at [80]).
[26] Lord Jowett, The Juliana (1822) 165 ER 1560.
In my view, unless and until a full investigation of the facts surrounding the alleged duress is conducted, it cannot be said that the husband is entitled to the summary dismissal of the wife’s claim.
Section 45A(2) of the family law act
Section 45A(2) requires the applicant’s evidence to be taken at its highest.[27] A court exercising the powers I am invited to exercise should take a cautious approach, as was held in Statvia & Statvia.[28] An application for summary dismissal must be determined on the basis only of the material put forward by the party against whom the summary dismissal application is asserted.[29] It must not be overlooked that an order for summary dismissal is interlocutory in nature.[30] Even a weak case does not warrant termination.[31]
[27] Webster v Lampard (1993) 177 CLR 598, 608, Munnings v Australian Government Solicitor (1994) 68 ALJR 169, Bigg v Suzi (1998) 22 Fam LR 700 and Ritter and Ritter [2020] FamCAFC 86.
[28] [2015] FamCAFC 170 and Mohsen and Collings (No 2) [2021] FamCA 170.
[29] Beck v Beck (2004) 31 Fam LR 467.
[30] Ebner v Pappas (2014) 53 Fam LR 397.
[31] Pelerman v Pelerman (2000) 26 Fam LR 505 and Lindon v Commonwealth of Australia (No 2) (1996) 70 ALJR 541.
In this case I take the view that the wife’s application for relief under s 79A(1)(a) is wholly arguable. I am not in a position to conclude that the case is weak. The strength of the case will depend on how the wife survives cross-examination. She has an arguable case. It would be antithetical to the interests of justice for her case to be summarily terminated.
In her s 79A application she will be required to demonstrate the four steps that Nicholas CJ laid out in In the Matter of Patching.[32] As this is an interlocutory application it is not desirable for me to say more than is necessary in order to rule on the s 45A point.
[32] (1995) 18 Fam LR 675.
It must also be remembered that authority that I surveyed in Jess & Jess (No 4)[33] including In the Marriage of Gebert[34] has observed that “miscarriage of justice” includes matters that represent an affront to the administration of justice. It is arguable that an affront to the administration of justice has taken place and therefore that a miscarriage of justice has occurred where –
(a)approval was given by the court to a consent order compromising a s 79 proceeding;
(b)no balance sheet was proffered in support of that consent order;
(c)the duty of disclosure by one party had been purportedly discharged in an unsatisfactory manner;
(d)conduct that may have been characterised as duress, on one version of the evidence, may have been engaged in during the lead up to the making of the consent orders;
(e)on one version of the evidence, one of the corporate entities owned and controlled by the husband may have been awarded substantial contracts, the value of which may not have been divulged to the wife in the lead up to the making of the consent orders; and
(f)the wife presses her contentions that she would not have consented to the orders made in late November 2019 had the true state of affairs been revealed to her.
[33] Jess & Jess (No 4) [2022] FedCFamC1F 530,
[34] (1990) 14 Fam LR 62.
To my way of thinking, her s 79A application is arguable.
On this application I am required to take the wife’s evidence at its highest and to then assess whether her case meets the evidentiary threshold prescribed in s 45A(2). Having taken the wife’s evidence at its highest and having considered whether she should be prevented from advancing her case further, I am unable to conclude that she should be precluded from advancing her case further. To the contrary, I take the view that she has disclosed an arguable case for the relief she seeks.
outcome
I dismiss the husband’s summary judgment application.
I direct that any application for costs must be filed and served with supporting evidence by 4:00pm on 25 August 2022. Any affidavit material in opposition must be filed and served by 4:00pm on 8 September 2022.
I direct that written submissions are to be filed and served by 4:00pm on 22 September 2022. I will divide the question of costs on the papers thereafter.
I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 11 August 2022
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