Delaney and Delaney and Anor

[2020] FCCA 2960

FEDERAL CIRCUIT COURT OF AUSTRALIA

DELANEY & DELANEY & ANOR [2020] FCCA 2960

Catchwords:
FAMILY LAW – Application by husband to vary orders made by consent in May 2019 – wife strongly objecting – court functus officio – whether husband’s application seeks only machinery orders – May 2019 order reflecting compromise between the parties – husband’s application seeking substantive variation of 2019 compromise – husband’s application dismissed – wife seeking to re-litigate earlier proceedings – wife’s application clear abuse of process – application by wife’s former solicitor to be joined as a party granted.   

Legislation:

Family Law Act 1975 (Cth), s 79A

Federal Circuit Court Rules 2001 (Cth), r 11.1

Cases cited:

Molier & Van Wyk [1980] FLC 99 - 911,

Ravasini & Ravasini [1983] FLC 91 - 312

Karlsson & Karlsson [2020] FamCA 207

Gomez & The Honourable Justice Moshinsky of the Federal Court of Australia & Ors [2019] HCATrans85
Harman v Secretary of State for the Home Department [1983] 1 AC 280

Applicant: MR DELANEY

First Respondent: MS DELANEY

Second Respondent: A PTY LTD

File Number: DGC 2723 of 2020

Judgment of: Judge Burchardt

Hearing date: 22 September 2020

Date of Last Submission: 22 September 2020

Delivered at: Dandenong

Delivered on: 4 November 2020

REPRESENTATION

Counsel for the Applicant: Ms Mariole

Solicitors for the Applicant: Taussig Cherrie Fildes

Counsel for the Respondent: Self-Represented

Solicitors for the Respondent: Not applicable

Advocate for the Intervener: Ms A

ORDERS

1. That A Pty Ltd be joined as a party to the proceeding as second respondent

2. That Order 11(c) of the orders made on 1 May 2019 be complied with as soon as practicable, save that order 11(c)(ii) be amended to read:

   (A)first, to pay all costs, commissions and expenses relating to the sale;

   (B)secondly, pay B Bank such amount as required to discharge the C Street Mortgage;

   (C)thirdly, to pay the husband the sum of $332,628, together with interest at the rate prescribed by the Family Law Rules from 4 November 2020 until the day of settlement;

   (D)fourthly, the sum of $134,859.70 be held on trust by A Pty Ltd pending resolution of the extant County Court proceeding  (omitted);

   (E)fifthly, to pay to the husband 40% of the net proceeds of sale of C Street over $1,630,000; and

   (F)sixthly, the balance, if any, to the wife

3. That A Pty Ltd have leave to provide the husband’s affidavit filed … 2020 to the County Court in proceeding (omitted).

4. There be liberty to apply in respect of the implementation of these orders.

5. The contravention application listed before Judge Burchardt on 7 December 2020 at 10:00am be vacated.

6. The contravention application filed 4 September 2020 be listed before Judge O’Sullivan on 7 December 2020 at 10:30am.

IT IS NOTED that publication of this judgment under the pseudonym Delaney & Delaney & Anor is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 2723 of 2020

MR DELANEY

Applicant

And

MS DELANEY

First Respondent

And

A PTY LTD

Second Respondent

REASONS FOR JUDGMENT

Introductory

1. There are three competing allegations before the Court.  The applicant husband seeks to vary orders made by consent on 1 May 2019 (“the May orders”).  The effective outcome that he seeks is that he be given an extension of time in which to exercise an option to purchase the former matrimonial home at a price that was denoted in the May orders. 

2. The respondent wife opposes the extension of time.  Additionally, she seeks to reagitate a number of issues, which, as I will explain, involve an improper endeavour to reagitate matters that lead up to the original judgment, upon which the May orders were based.  Ms A, who seeks to be added as a party, seeks in effect to quarantine an amount of money in respect of past fees owing to her by the wife, presently secured by a caveat lodged over the former matrimonial home and indeed the subject for a warrant for possession issued by the County Court following judgment in her favour for the fees that she says she is owed. 

3. For the reasons that follow, I am going to order that the property be sold.  It will be necessary to make machinery orders to enable this to occur.  I will order that a sum sufficient to guarantee Ms A’s fees, if they are ultimately held to be payable, be held on trust pending the resolution of the proceedings underway in the County Court between Ms A and the wife. 

The History of the Matter

1. It is not possible to understand the controversy between the parties without some history of what has been a most unfortunately protracted matter. 

2. As long ago as 2014, the husband and wife commenced litigation in respect of both property and parenting issues.  Following an extensive six-day trial, Judge Small gave judgment on 2 July 2017.  That judgment was appealed to the Full Court of the Family Court, which gave judgment on 8 March 2018, upholding the appeal on a conceded, albeit it limited, ground and remitting the matter to the Federal Circuit Court.  The matter was allocated to me.  I heard the matter over four days in November 2018 and gave judgment on 18 February 2019. 

3. Relevantly, I added back $200,000 of wastage, as I found, against the husband (noting that the wife’s claims of wastage were very substantially larger) and ordered a 65 per cent division in favour of the husband of the party’s property interests, with both parties to retain their superannuation.  There are however some passages of the judgment to which it is appropriate to refer.  I noted that the wife had lived in the matrimonial home since separation in July 2014 and that the husband had paid the mortgage until judgment in 2017 before Judge Small. 

4. I noted (paragraph [92] of the judgment) that the wife was seeking the totality of the property pool and that the wife had alleged that the husband had secret bank accounts and had not given a full account of expenses and his business was more successful than he said.  I noted (paragraph [93]) that the wife complained that the husband had perjured himself on numerous occasions during the trial.  I note that the C Street property (the former matrimonial home) had an agreed value $1.6 million. 

5. I further note that paragraph [153] I found “I do not accept the wife’s assertion that the husband has concealed large amounts of money in undisclosed bank accounts.”

6. What then happened is, despite the vituperation in the party’s materials, not the subject of material contest.  As I have noted, the funds to pay the mortgage, which were held on trust by Taussig Cherrie Fildes (the husband’s solicitors) which originated from the wife’s superannuation, were applied to the mortgage until 31 March 2020.  Thereafter, the husband has deposed – and this part of his evidence does not seem challenged – to having paid $10,661 towards the mortgage. 

7. On 17 April 2020, the wife informed the husband that she could not refinance the matrimonial home.  The husband has deposed that on 13 May 2020 he informed the wife he intended to exercise the option to purchase the matrimonial home available to him in the May orders.  Although it appears he had commenced endeavours to refinance prior to that date, he was not able to refinance prior to the time provided for in the May orders, which was 21 days from the due date of 26 April 2020, i.e. 17 May 2020. 

8. On 26 June 2020 the husband’s solicitors notified the wife that he was ready to proceed with a settlement and provided her with a discharge authority in relation to this but on 3 July 2020, the wife responded that the house would need to be sold as he had missed the deadline.  This provoked the husband’s application to the Court.

The Husband’s Application

1. As earlier indicated, the husband’s application, which was filed on 10 August 2020, seeks to extend the time available for the husband to exercise the option from 21 days to six months.  In comprehensive written submissions filed in support of this application it is submitted in substance that the Court is functus officio (this being primarily raised as a defence to the wife’s application) but that the husband’s application is in effect for what is described as machinery orders.

2. At paragraph [14] the following, in my view correct, assertion is made:

   After the Court has made a final property order, it has limited power to vary said orders save:

   14.1 on appeal;

   14.2 pursuant to an application under 79A of the Family Law Act;

   14.3 for the making of machinery or consequential orders to give effect to previously made substantive final orders; 

   14.4 amendments pursuant to the slip rule (rule 16.05 of the Federal Circuit Court Rules 2001).

3. I accept that so far as the husband’s application is concerned, only the third of those exceptions may be applicable.  Given that the Court has made final orders by consent of the parties in May 2020, there can be no doubt that the Court is indeed functus officio.  The question is whether the orders sought by the husband are within the Court’s power to make and further, if they are, whether the Court ought make those orders.

4. In Molier & Van Wyk [1980] FLC 99 - 911, the Full Court of the Family Court considered the question of what might be described as machinery orders and the Court’s interrelated power of sale in that case. Although the matter arose against a different statutory backdrop, the Court’s observations are still directly applicable. At page 75,773 through the Court said.

   In Kaljo (supra), it was held that an application can be made to the Court for further orders in relation to the implementation of the substantive order if such orders are necessary to give effect to the order or to work it out to cover under the said circumstances. This principle is, in our view, capable of extension to cover further orders necessary to give effect to the clear intention of the original order, where that order has failed to cover certain eventualities, including the failure to comply with an order for the settlement of a lump sum within the time prescribed. 

5. The Full Court went on further on the same page to observe:

   Such an alteration of the terms of the original order goes some way beyond the type of machinery provisions which were considered in the case of McDonald (supra).  Nevertheless, it is an alteration which is necessary in our view to give full effect to the original order.  It is an order which can properly be made under sec 79 under the express liberty to apply contained in the order, or under the general liberty to apply available in respect of property orders. 

   There is, in any event, in our view inherent power in the Court to make the original order effective in accordance with the substance and intention of that order.  In the result, though for reasons different from those of his Honour, we dismiss that part of the appeal which challenges the power of the Court to vary the original Supreme Court order by providing for the sale of property in question.

6. The Full Court further observed in the Court in the matter of Ravasini & Ravasini [1983] FLC 91 - 312 at page 78,127:

   In determining whether or not an order may be varied as a machinery order, the inquiry must be firstly as to what part of the order is the substantive order and what part or parts of it merely follow that order as a necessary consequence.  A Court in making a property order might do no more than order that the property be sold and the proceeds equally divided.  That is the substantive order.  If the Court at that time has before it sufficient evidence of the facts and circumstances it may go on and make appropriate “consequential” orders providing the machinery whereby the substantive order is to be carried out.  If the Court at the time does not have evidence of the necessary facts and circumstances then it may reserve liberty to apply to allow the parties to come back to the Court for consequential leave if they are unable to agree as to how the substantive order should be made operative.

7. At page 78128 the Full Court went on:

   The true position then was summed up with precision by the Full Court in Molier & Van Wyk at 75,768 where it was said:

   It has been decided that while this Court has no part to vary in order for property settlement, it has power to enforce the order and to modify the machinery provisions of the order to effect its enforcement…

   Thus, as we have set out above, the substantive order cannot be varied but the enforcement provisions, the secondary orders made as a consequence of the substantive order, to give it operation and effect, can be varied.  It is therefore the construction of the order itself that is to be examined and not the basis of fact in which it was made.  The test is not whether the unchangeable or substantive order is a just or property order – that is a matter for appeal or for an application under 79A – but whether the part or parts of the order sought to be changed are part or parts of the substantive order or whether they are orders made to give efficacy to that substantive order.

8. In submissions counsel for the applicant husband was content essentially to rely upon the written submissions filed.  Counsel observed that the wife was not contributing to the mortgage, which the husband was paying.  There would be difficulties for him in paying stamp duty in the event of purchase and counsel pointed to the fact, correctly of course, that there would be no selling costs if the property was transferred to the husband.  Counsel noted that the wife admits that the value of the property has declined from $1.6 million. 

9. In oral submissions the wife traversed a broad area of the sort of materials in her various affidavits (the contents of which are themselves prolix).  Unsurprisingly given her self-representation, her submissions were not entirely easy to follow but the gravamen of her position is that she seeks the orders that she herself has sought in her response.

10. Against this background I come to the exercise that the Full Court has indicated is appropriate.  Namely to consider what are the substantive orders and what are the machinery orders. 

11. It is clear that paragraph [9] of the May Orders required the wife to pay the husband $332,628 by 26 April 2020.  That was the sum certain that the parties agreed on as the basis of the bargain that the correspondence between them clearly shows was entered into prior to the May orders being made.  It is clear that the wife did not comply with that order.

12. Pursuant to order (11) interest was to accrue on the payment and the husband had an option to pay the purchase price of $1.6 million on various terms.  It was an express term that the option be exercised within 21 days of the due date and that within 45 days of the due date he pay the wife $511,557 with minor adjustments for any increase in the mortgage and rates and taxes.  By suborder (11)(c) it was envisaged that if the option was not exercised within 22 days the property be sold, the husband receive the payment of $332.628 plus interest and 40% of any increase in the net proceeds of sale of over $1,630,000 with the balance to the wife.

13. It should be noted that while there are assertions in the correspondence between the parties as to what this represents in percentage terms, the fact is that the parties, both of whom were legally represented at the time, made this as their bargain. 

14. In my view the proper construction of the relevant terms of the agreement is that the terms in orders (9) to (11) were indeed substantive orders as to what the party’s entitlements were.  The wife had to pay the husband a fixed sum (“the payment”) and in default she had to pay interest.  The only thing that might prevent her paying the husband out according to those terms was if the husband exercised his option within a defined period of time and thereafter paid her a defined amount of money within a further defined period of time. 

15. Those were the rights and obligations that devolved to the parties and in default of payment by the husband pursuant to the option the property was to be sold with a defined nominated financial outcome for the parties (including the payment plus interest to the husband) clearly denoted in the order. 

16. True it is this conclusion is of course slightly confused by the fact that orders (9) to (11) have a number of machinery matters contained within them.  Nonetheless looking at the orders as one is required to it seems clear to me that the parties came to a definite bargain which was capable of implementation according to its terms.  The extension of the period for some six months for the husband to exercise his option is not a mere machinery provision.  Consideration of the effect of the orders the husband seeks makes that immediately plain. 

17. The net outcome of the application that the husband makes would be to extend his time to exercise his option until September 2020 and he would then have 45 days thereafter in which to pay the relevant amount.  Should he fail to do so however the position would then revert to the default sale option in order (11) pursuant to which the husband would have obtained another six month’s worth of default interest.  That would be in the circumstances a substantive and not insignificant benefit to him given the rate of interest prescribed by the Family Law Rules.

18. When one looks at the inevitable potential outcome of the orders the husband seeks it is apparent that they are alterations to the substantive position of the parties.  Accordingly it is not appropriate to grant the husband the relief he seeks, and the orders should be complied with. 

19. Having said this, it appears to be common cause that if the property is sold it is likely to achieve less than $1,600,000.  Additionally there will be selling costs.  These may not be entirely unsubstantial.  The net result will be that the wife gets almost certainly substantially less than were she to agree to allow the husband to exercise the option. 

20. Although I strongly suspect that the wife’s emotions are so engaged by this matter that she will act contrary to her own interests rather than allow the husband to actually occupy the former matrimonial home, I will give her one last chance to consider her position.  In default of the wife however consenting to the husband’s application, as I would hope she does as it is clearly in her best interests to do so, the husband’s application will simply be dismissed.   

The Wife’s Application

1. The wife’s responding application seeks that she retain the matrimonial home with the husband to discharge the mortgage and additionally give her a cash settlement of $250,000.  She seeks various ancillary orders relating to chattels.

2. The wife has filed some very extensive affidavit material about the matter.  Much of it is irrelevant being a purely a recitation of history that is now historical (including substantial references to Judge Small’s judgment which has been overturned on appeal).  I regret to say that much of it is also scandalous and/or otherwise objectionable.

3. I do not propose to dignify the wife’s materials with any detailed consideration. The applicant husband is correct to point out that there is no section 79A application before the Court. At paragraph [54] of the wife’s affidavit dated 2 September 2020 the wife refers to the appeal from the judgment of Judge Small and asserts “the appeal should not have been won by the husband”.  At paragraph (62) there is an extensive discussion of what is asserted to have been perjury on the husband’s part (these are not the only references to perjury in her materials).  At paragraph (108) of the affidavit she deposes:

   I seek a fair reassessment of the November 2018 trial material and a new judgment based on the change of circumstances presented in this affidavit.

4. At paragraph (116) of the affidavit the wife accuses Taussig Cherrie Fildes, the solicitors for the applicant husband, of colluding in the husband’s asserted perjury.

1. I notice that one of the matters said to support a re-examination of the matter is Annexure “D-1”, an apparent assessment from the Child Support Agency dated 24 July 2020 which asserts not only higher income than that found by the Court during the trial but substantially higher adjusted income for the 2018 and 2019 tax years. While these figures seem prima facie to be at variance with what I recall the Court being told during the trial, I know nothing about the circumstances that have given rise to these figures. There are no reasons for judgment attached. Taken on their own these figures do not in my view justify further investigation by the Court. Any such matter would need to be brought properly pursuant to section 79A. All the other matters raised by the wife are in my view irrelevant.

2. It is immediately apparent taking the wife’s materials as a whole that in substance she simply does not like either the original resolution that the Court produced or the bargain that she subsequently made through her solicitors. Indeed to an extent the same might fairly be said of the husband’s application to extend time.  He should have bargained for more.  As the Full Court constituted by Ainslie -Wallace J observed in Karlsson & Karlsson [2020] FamCA 207 at [44]:

   As is well known, 79A of the Act is not a provision which is intended to, or operates as an avenue for redress for a party who has, or believes he or she has, in the light of subsequent events, made a bad bargain.

3. While those observations might well come into play perhaps more fully if a section 79A application is brought by either side, the overarching consideration that in my view is dispositive is the finality of litigation. In substance, and indeed in terms, the wife seeks to reagitate the issues determined by the Court in 2019. The matter was put succinctly in my respectful view by Gordon J in Gomez & The Honourable Justice Moshinsky of the Federal Court of Australia & Ors [2019] HCATrans85:

   the plaintiff’s numerous attempts, of which the summons dated 15 April 2019 is the latest, to relitigate those issues which were concluded by this Court’s refusal to grant the plaintiff special leave to appeal from the judgment of, Moshinsky J, is an abuse of the processes of the Court.  Abuse of process is capable of application in any circumstances in which the abuse of the Court’s procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute.  Where, as here, a party attempts to raise issues in successive proceedings, that conduct may be assessed as an abuse of process if it is contrary to the principle of finality.  This fundamental principle protects parties to litigation from attempts to reagitate what has been decided. 

4. In my respectful view all of those comments are directly applicable here.  The wife simply seeks to reagitate all previous decisions that have gone against her and that is in these circumstances quite clearly an abuse of process.  Her application to the extent that it is extant in her reply must be dismissed.

Ms A’s Application

1. From the material filed by Ms A it is apparent that A Pty Ltd (effectively Ms A) has obtained judgment on 14 January 2020 in the County Court of Victoria.  The order made on that date (which is annexed to Ms Delaney’s affidavit dated 8 September 2020) shows that the plaintiff was entitled to possession and there was an order that Ms Delaney pay the total of $134,859.70 on the claim for fees, interests and costs.  A warrant of seizure and sale was subsequently issued on 10 February 2020 but has not yet been executed.  The position seems to be that Ms Delaney has sought to set aside those orders and that the matter is still under consideration by the County Court. 

2. Ms A seeks A Pty Ltd be joined to the proceeding and seeks an order by way of relief from the Harman principle (Harman v Secretary of State for the Home Department [1983] 1 AC 280 (“Harman”).  Although initially opposed, the position of the husband at the hearing before me was neither to oppose or consent to the application by Ms A.  The position of Ms Delaney is one of strong opposition.  She complains that to allow Ms A to join the proceedings would be to unfairly prejudice her position.  She makes various other complaints in her affidavit and indeed in her oral submissions.  She has sought to assert that Ms A has misconducted herself by collusion with Taussig Cherrie Fildes. 

3. In oral submissions Ms A informed the Court that her caveat was based on a charge which Ms Delaney had signed.  She would seek that the funds equivalent to her claim be paid out of the sale of the property.  She denied, as an officer of the court, any improper conduct and asserted, credibly in my opinion, that the copies of the judgment and the like that she had obtained had been properly obtained.

4. Rule 11.1 of this Court’s rules provides that any necessary party must be joined.  What the positions of the husband and wife both seem to me to rather overlook is that Ms A has an interest in the matrimonial home.  It is an interest constituted it would seem by a charge and it is protected by a caveat.  The Court does of course have power to order removal of caveats, at least of a party, but to make such an order on a non-party would be unusual. 

5. Furthermore, Ms A’s interest has not yet been set aside by the County Court and the warrant indeed remains presently enforceable, although one would doubt that the Sheriff would execute it while the original order is the subject of challenge. 

6. It is immediately apparent, that Ms A should be joined as a party.  It is also apparent, and this in my view is an entirely appropriate order in the circumstances, that a sum sufficient to defray at the very least the orders presently made in favour of Ms A be isolated from the final sale proceeds. 

7. Additionally, it is immediately clear that Ms A should have the Harman relief that she seeks.

Conclusion

1. It is readily apparent that this dispiriting case, which has been going on for some six years, is perhaps not anywhere near as much finalised as one might have hoped.  I very much feel that the parties will litigate for some time to come, not least in the County Court.  Nonetheless as between the parties, the position is that they finalised the matter in May 2019 and should be made to perform that agreement subject only to reserving, as in my view I repeat is entirely appropriate, Ms A’s funds. 

2. As earlier indicated I will give the wife one last chance to reconsider her position by delaying the operation of these orders for seven days. If however she insists upon the sale to her own detriment, as I am sure it will be, then I will make the relevant orders for that.  I will make the relevant orders which are to join A Pty Ltd and additionally to the orders in May 2020 provide that the sum sufficient to meet her debt be withheld from the final sale. There may be machinery issues arising from this outcome and I will hear from the parties as to the draft orders I have prepared. 

I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Associate:

Date: 4 November 2020