Demeny & Ogden

Case [2021] FedCFamC1A 21

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APELLATE JURISDICTION

Demeny & Ogden [2021] FedCFamC1A 21

Appeal from: Demeny & Ogden [2021] FCCA 543
Appeal number(s): SOA 15 of 2021
File number: ADC 1845 of 2013
Judgment of: STRICKLAND, AINSLIE-WALLACE &
ALDRIDGE JJ
Date of judgment: 27 September 2021
Catchwords: FAMILY LAW – APPEAL – PROPERTY – Where the primary judge varied consent orders – Impracticable to carry out – Where the consent orders provided for properties to be sold with the proceeds of sale used to repay outstanding loans – Where the proceeds of sale fell short of repaying the outstanding loans – No miscarriage of justice – Orders not impracticable and can be put into effect – Appeal allowed – Orders set aside – Enforcement application remitted for rehearing – Costs certificates granted to the parties for the appeal and rehearing.
Legislation:

Family Law Act 1975 (Cth) ss 79, 79A, 90SN

Federal Proceedings (Costs) Act 1981 (Cth)
Cases cited:

Barker v Barker (2007) 36 Fam LR 650; [2007] FamCA 13

Cawthorn v Cawthorn (1998) FLC 92-805; [1998] FamCA 37

Harris v Caladine (1991) 172 CLR 84; [1991] HCA 9

La Rocca and La Rocca (1991) FLC 92-222; [1991] FamCA 97

Molier and Van Wyk (1980) FLC 90-911; [1980] FamCA 85

Noetel and Quealey (2005) FLC 93-230; [2005] FamCA 677

Public Trustee (as executor of the estate of the late Gilbert) v Gilbert (1991) FLC 92-211; [1991] FamCA 10

Rohde and Rohde (1984) FLC 91-592; [1984] FamCA 41

Sanger & Sanger (2011) FLC 93-484; [2011] FamCAFC 210

Ullrich & Kraft [2014] FamCA 266
Number of paragraphs: 75
Date of hearing: 22 June 2021
Place: Heard in Adelaide, delivered in Sydney
Counsel for the Appellant: Mr Tredrea
Solicitor for the Appellant: Polson Legal
Counsel for the Respondent: Ms Pyke QC
Solicitor for the Respondent: Jordan & Fowler Family Lawyers

ORDERS

SOA 15 of 2021
ADC 1845 of 2013

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION
BETWEEN:

MS DEMENY

Appellant
AND:

MR OGDEN

Respondent

ORDER MADE BY:

STRICKLAND, AINSLIE-WALLACE & ALDRIDGE JJ

DATE OF ORDER:

27 SEPTEMBER 2021

THE COURT ORDERS THAT:

1.The appeal be allowed.

2.The orders made on 22 March 2021 be set aside.

3.The appellant’s application for enforcement be remitted for rehearing.

4.The respondent’s application to vary the consent orders made on 12 May 2014 be dismissed.

5.The Court grants to the appellant a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.

6.The Court grants to the respondent a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment…

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AGLC
Demeny & Ogden [2021] FedCFamC1A 21
Case
[2021] FedCFamC1A 21
Decision Date

CaseChat Overview and Summary

In the case of Demeny & Ogden, the appellant contested the variation of consent orders made on 22 March 2021 by the primary judge. The appeal hinged on whether the criteria for varying the orders under s 90SN of the Act were met and the interpretation of the consent orders regarding the allocation of the shortfall in repayments from the properties' sales. The properties in question included one in Australia, Property C, and three others in Australia and the United States. These properties were subject to four outstanding loans secured by a mortgage, and the consent orders mandated their sale. The sales did not achieve the expected prices, resulting in only one loan being repaid and a remaining debt of $110,223.73, secured by Property C.

The legal issues before the court were whether the primary judge correctly applied the criteria for varying the consent orders and accurately interpreted the intention of the parties regarding the allocation of the shortfall from the properties' sales. The appellant argued that the shortfall should be borne by the respondent alone, as per the consent orders' construction, while the respondent sought a variation to reflect the changed circumstances. The court needed to determine if the primary judge's decision to vary the orders aligned with the established criteria and if it accurately reflected the parties' intentions.

The court concluded that the primary judge's decision to vary the consent orders was incorrect. The criteria under s 90SN of the Act were not met, as the variation did not appropriately address the changed circumstances. Furthermore, the court found that the primary judge's interpretation of the consent orders did not align with the intention of the parties, which was that the shortfall should be borne by the respondent. Consequently, the appeal was allowed, the primary judge's orders were set aside, and the respondent's application to vary the consent orders was dismissed. The enforcement application would be remitted for rehearing. Costs certificates were ordered for both the appeal and the rehearing under the Federal Proceedings (Costs) Act 1981 (Cth).

Orders

Orders of the court

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Background

Background to the litigation

The subject of the appeal is the variation of the consent orders on 22 March 2021. The appellant submitted that the primary judge erred because the relevant criteria for varying the orders under s 90SN of the Act were not met and that, on the proper construction of the consent orders, the intention of the parties was that any shortfall in repayments of the loans caused by the properties that were to be sold not reaching the expected price was to be borne by the respondent alone.BACKGROUND In order to understand the appeal it is necessary to identify the relevant properties and to look at the consent orders in some detail. The respondent owned Property C which was said to have been valued at $450,000. Under the consent orders he was to retain it unless he defaulted in his obligations to pay the appellant the sum of $210,877.63 within 28 days after the sale of the second Australian property. Between them, the parties owned two properties in Australia and two in the United States. The parties had borrowed funds to obtain the properties and four loans from the Commonwealth Bank of Australia (“CBA”) were outstanding. The loans were secured by a mortgage against the properties including Property C. As we have noted, the consent orders required the sale of the properties in Australia and the United States. The properties that were to be sold took some time to sell, with the last sale being settled on 14 June 2019. The properties did not sell for their expected prices and, instead of a healthy surplus being achieved, only one loan was repaid and the sum of $110,223.73 remained owing on the other three loans. That sum was secured over Property C. The respondent took the view that this was not what was intended by the consent orders and did not pay the agreed sum of $210,877.63. The appellant commenced enforcement proceedings on 5 September 2018, that is, before the last property was sold, but after the two Australian properties had sold. The appellant sought the payment of the remaining lump sum owing to her and, in default, orders for the immediate sale of Property C. In his affidavit filed on 2 November 2018 in response to the appellant’s application, the respondent sought a variation of the consent orders under s 90SN of the Act along the lines of the orders that were ultimately made. We now turn to the consent orders themselves. We shall not refer to orders such as those dealing with superannuation and chattels, which are not relevant to the appeal. Order 1.1 required the respondent to pay the appellant $15,445.02 forthwith. This amount was paid. Orders 1.2 and 1.3 provided for the sale of the four properties in Australia and the United States. Those proceeds were to be applied to the repayment of the four loans, and then the repayment of a debt to Company B which was solely the obligation of the respondent. After the above payments were made, the balance of the proceeds of sale of the four properties was to be shared equally (Order 1.3.4). The respondent was required to pay the appellant $210,877.63 “within twenty eight (28) days of the sale of the last of the two (2) properties situated in Australia” (Order 1.4).

Evidence

Evidence Before The Court

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Decision

Reasons for decision

That makes it unnecessary to consider Ground 3, which is essentially a restatement of the other two grounds, but cast as an error in the exercise of discretion.CONCLUSION AND COSTS It follows that the appeal must be allowed, with the orders made by the primary judge set aside and the application by the respondent to vary the consent orders dismissed. The application for enforcement will be remitted for rehearing. There will be costs certificates under the Federal Proceedings (Costs) Act 1981 (Cth) for the parties for both the appeal and the rehearing.

Ratio Decidendi

Legal Principle Established

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