Dinci and Smith

[2013] FamCA 682

FAMILY COURT OF AUSTRALIA

DINCI & SMITH [2013] FamCA 682

FAMILY LAW – PROPERTY – Interim proceedings – Where the parties entered into final property orders by consent in April 2013 – Where the Husband filed an application to stay the execution of the consent Orders made in April 2013 pending determination of his application to have the consent Orders set aside pursuant to s 79A of the Family Law Act 1975 – Where the Wife filed an application to summarily dismiss the Husband’s application under s 79A of the Act – Where the Husband’s application to stay the execution of the consent Orders is dismissed – Where the Wife’s application for summary dismissal of the Husband’s s 79A application is dismissed

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

Custodio & Pinto & Ors (2006) FLC 93-279
Linden v The Commonwealth(No. 2) (1996) 70 ALJR 541

APPLICANT: Mr Dinci

RESPONDENT: Ms Smith

FILE NUMBER: BRC 10762 of 2008

DATE DELIVERED: 9 September 2013

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Kent J

HEARING DATE: 9 September 2013

REPRESENTATION

FOR THE APPLICANT: In person

COUNSEL FOR THE RESPONDENT: Mr Wilson SC

SOLICITOR FOR THE RESPONDENT: Murdoch Lawyers

Orders

IT IS ORDERED THAT

1. The Husband’s Application for a stay of the Consent Orders made on 8 April 2013 pending the determination of the Husband’s section 79A application be dismissed.

2. The Wife’s Application to summarily dismiss the Husband’s section 79A application be dismissed.

IT IS ORDERED BY CONSENT THAT

1. Order 1 of the Consent Orders made on 8 April 2013 be varied to substitute “within sixty (60) days of the date of these Orders” with “on or before 23 September 2013”.

2. Order 4 of the Consent Orders made on 8 April 2013 be varied to substitute “within sixty (60) days of the date of these Orders” with “on or before 23 September 2013”.

IT IS FURTHER ORDERED THAT

1. The effect of Order 7 of the Consent Orders made on 8 April 2013 providing for a payment to the Husband be stayed pending the determination of the Husband’s section 79A application.

2. To give effect to such stay, the Wife pay the sum of $35,000.00 referred to in Order 7 of the Consent Orders made on 8 April 2013 into the trust account of her legal representatives pending the determination of the Husband’s section 79A Application.

3. The costs of and incidental to the applications be reserved to the trial judge.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Dinci & Smith has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 10762 of 2008

Mr Dinci

Applicant

And

Ms Smith

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. The matter before me has a long and somewhat convoluted history. Proceedings between the Husband and the Wife have been before this Court and previously the Federal Magistrates Court (as it then was) since about late 2008. The Wife commenced the proceedings by way of her Initiating Application for property settlement, which was filed as long ago as 25 November 2008. Since the filing of that application it would seem there have been many interim applications. There has also been a successful appeal against an Order made by Barry J in June 2010 whereby a sum of $120,000 was to be paid to the Husband, as well as spousal maintenance being payable to him. I note that that appeal was apparently allowed by consent on 16 April 2012.

2. Relevantly, on 2 July 2012, the Husband made an application for partial property settlement in the amount of $250,000. That application came before Murphy J who dismissed it on 12 September 2012. His Honour’s ex tempore reasons for judgment are read before me on the present application. Apart from recording the history of the matter to that day in brief terms his Honour, on that occasion, addressed what his Honour identified as the fundamental obligation to make full and frank disclosure under the Family Law Rules 2004. In particular, many paragraphs of the ex tempore judgment delivered by Murphy J identified failures on the part of the Husband to address his obligations, so far as full and frank disclosure is concerned.

3. In particular, his Honour noted that the Husband had, at that point, failed to file any financial statement since 2009; had not filed a statement of assets, liabilities and financial resources, despite a specific direction by a Registrar to do so; and had not made disclosure of tax returns, bank statements or any other documents evidencing his financial position in the three years between 2009 and when his Honour heard the application in September 2012 despite the nature of the application the Husband was then bringing before the Court. In the course of his reasons his Honour referred to the voluminous material filed by the Husband but noted that notwithstanding that volume there were the fundamental deficiencies of disclosure his Honour there referred to.

4. It is not in issue that the Husband was present in Court and heard his Honour deliver the ex tempore reasons referred to. The Husband could have been in no doubt from those reasons for judgment that there were significant deficiencies in his disclosure, and that his failure to make full and frank disclosure was a significant issue that enlivened his Honour’s decision not to grant the Husband’s application to provide the litigation funding which he sought. 

5. Notably, also in his Honour’s ex tempore reasons his Honour referred to one of the grounds of defence to the Husband’s application. Namely that the reversibility or claw back issue, as it is termed, because the Husband had already had access to a line of credit and that on the case contended for by the Wife, granting the Husband any litigation funding, let alone the funding he sought, might render final relief in terms of just and equitable orders nugatory. 

6. As noted, that decision was made on 12 September 2012. Only about a week later, on 19 September 2012, his Honour Murphy J made Orders setting the matter down for trial for three days commencing on 8 April 2013. That is, some seven months were to elapse between the Order for the matter to be set down for trial and the trial itself. There is a notation recorded on the Order in the usual form, that is, that the parties then certified to Murphy J that the matter was in all respects ready for final hearing and would require the three days it had been allocated. 

7. There were also Orders made by consent by Murphy J, as attached to his Honour’s Order of 19 September 2012. Those Orders obliged the filing of material and for steps to be taken, in terms of valuations and like matters, for the matter to proceed to a trial. I interpolate here that prior to that stage an expert accounting report had been prepared by Mr H and it has assumed some prominence in the hearing before me for reasons which will be briefly discussed.

8. As at the stage of the trial when it came before me as the trial judge on 8 April 2013, the facts not in issue were that the parties had commenced cohabitation in about late 2002 or early 2003, had married in November 2003, and finally separated on 19 November 2008. Thus, the period of cohabitation was about six years. There were no children of the relationship and the cohabitation had ceased some four years or so prior to the trial.

9. The Wife had previously been married to one Mr L and there were children of that relationship. The Wife had separated from her former husband in early 2002, and proceedings in respect of that marriage had commenced in March 2003 and subsisted throughout the relationship of these parties with Baumann FM (as his Honour then was) delivering a decision in December 2008 shortly after the separation of these parties. 

10. As at 8 April 2013, the parties entered into final property Orders which were made by consent on that day. Those Orders are detailed and deal with issues including, for example, an issue concerning the animal breeding business and animals that have, again, been mentioned for the purpose of these proceedings. I delivered reasons at the time of making the consent Orders referred to, expressing my satisfaction that the Orders were just and equitable having regard to the competing contentions in the material for trial which I had read.

11. As is recorded in those brief reasons, essentially, on the Wife’s case, she had contended that she had always been a property developer and essentially had contributed substantial property to the relationship, including via settlement with her former husband, whilst on the Husband’s case, he asserted contributions made to the Wife’s property development business which she had denied. The Orders of 8 April 2013 speak for themselves but relevantly for present purposes they included an Order that the Husband receive payment of $35,000 in exchange for the transfer of certain interests he had in property there identified.

12. Within a short time of 8 April the Husband filed an application pursuant to s 79A of the Act seeking to have the relevant consent Orders set aside. One application before me is the application of the Husband to stay the execution of the consent Orders made pending the determination of his s 79A application. The evidence before me is that the consent Orders have in part been carried out, at least so far as the transfer of the animals and issues concerning the animal breeding business are concerned.

13. It is clear that the Court has an implied power, or inherent power, to stay the execution of orders or decrees upon a conclusion that such an exercise is necessary to prevent or avoid injustice.[1]

    [1] See Molier & Van Wyk (No. 2) (1981) FLC 91-001.

14. The Husband agitates in the application before me that there had been nondisclosure by the Wife prior to the consent Orders being made on 8 April 2013. He also agitates that, effectively, his solicitor Mr James Loel had done little to prosecute his claims in the property proceedings leading to the Order of 8 April 2013 and refers to “duress” that he was under as a consequence in signing or agreeing to the consent Orders made on 8 April 2013.

15. I am not satisfied that the Husband establishes any basis to conclude that the exercise of power to stay the Orders is necessary to prevent injustice as discussed and I dismiss the Husband’s application to stay the execution of the subject consent Orders. The more substantive application is the Wife’s raising the question of whether there ought be summary dismissal of the Husband’s s 79A application.

16. Rule 10.12 of Family Law Rules 2004 provides that:

    A party may apply for summary orders after a response has been filed if the party claims, in relation to the application or response, that:

    (a) the court has no jurisdiction;

    (b) the other party has no legal capacity to apply for the orders sought;

    (c) it is frivolous, vexatious or an abuse of process; or

    (d) there is no reasonable likelihood of success.

17. The authorities relevant to that rule make clear that the power for summary dismissal is to be exercised sparingly. Whilst some older authorities in this court refer to the test as “doomed to fail”, rule 10.12(d) of the Family Law Rules 2004 uses the expression “no reasonable likelihood of success”.

18. In Custodio & Pinto & Ors (2006) FLC 93-279 at paragraph 6 her Honour Finn J extracted the relevant principles from Linden v The Commonwealth (No. 2) (1996) 70 ALJR 541 at 544-5. Her Honour there noted and I quote:

    The approach to be taken by the court to [an] application for summary relief is not in doubt:

    1. It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against government and other powerful interests. That is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the Court, is rarely and sparingly provided; [General Steel Industries Inc v Commissioner for Railways(NSW) (1964) 112 CLR 125 at 128f; Dyson v Attorney General (1911) 1 KB 410 at 418.]

    2. To secure such relief, the party seeking it must show that it is clear, on the fact of the opponent’s documents, that the opponent lacks a reasonable cause of action [Munnings v Australian Government Solicitor (1994) 68 ALJR 196 at 171f, per Dawson J] or in advancing a claim that it is clearly frivolous or vexatious; [Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91.]

    3. An opinion of the Court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant termination [Coe v The Commonwealth (1979) 53 ALJR 403 at 409; Wickstead v Browne (1992) 30 NSWLR at 5-7.] Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment.

    4. Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of a demurer [Coe v The Commonwealth (1979) 53 ALJR 403 at 409.] If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts.

    5. If, notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading [Church of Scientology v Woodward (1981) 154 CLR 25 at 79.] A question has arisen as to whether O 26, r 18 applies to part of a pleading, [Northern Land Council v The Commonwealth (1986) 161 CLR 1 at 8] …

    6. The guiding principle is, as stated in O 26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the Court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.

19. More recently the Full Court in this Court considered the principles and the meaning of the expression “no reasonable likelihood of success” in Friar & Friar [2011] FamCAFC 71 where Thackray and Watts JJ dealt with the relevant principles at paragraphs 48 to 53.

20. Here the Husband points to what he says are failures of disclosure on the part of the Wife prior to the making of the consent Orders on 8 April 2013. He points to what appears in the affidavit of Mr H, the independent expert accountant, filed on 17 May 2011 in support of the proposition that there had been some failure on the part of the Wife to make proper disclosure. However, it seems to me that the matters referred to by the Husband by reference to Mr H’s report are, if they be deficiencies as such, matters which were identified by Mr H at the time of the preparation of his report and filing of his affidavit which was almost 12 months prior to the making of the consent Orders.

21. It seems to me that the only matter which gives pause for thought is, on the Husband’s case, whether it can be said that the representation he had at the time of the making of the consent Orders amounted to no real representation at all. As is referred to in the written submissions provided by Mr Wilson of Queen’s Counsel who appears for the Wife, incompetence of legal representatives will not constitute a miscarriage of justice unless it amounts to no representation at all or, of itself, affects the judicial process or the fairness of trial.[2]

    [2] In the marriage of Clifton and Stuart (1991) FLC 92-194.

22. Much can be said about the Husband’s failure to meaningfully do anything in response to the reasons for judgment delivered by Murphy J as earlier referred to in September 2012. There is no evidence in the Husband’s material filed in support of this application to identify, or attempt any definitive exercise to identify, the steps taken by the Husband himself to advance his cause for the trial set down to occur on 8 April 2013.

23. However, acting as I must in the first instance on the Husband’s material, what I am concerned about is the extent to which the Husband’s solicitor played a part in the failure of the matter to be properly prepared for trial including the late briefing of Counsel. It seems that Mr Sayers, when briefed, was immediately able to identify that the matter had not been prepared for trial.

24. I think that the Husband has an exceedingly weak case in terms of making out the proposition that he effectively had no representation at all. There are all sorts of reasons to conclude that the Husband made a tactical decision to enter into the consent Orders given his own abject failure to comply with orders and directions of the court, including the identified failures of the Husband to make disclosure. However, the fact that I am of the view that it is an exceedingly weak case is not the test. 

25. Having regard to the principles set out earlier I am not satisfied, within the meaning of the rule and consistent with the authorities, that it can be concluded on this hearing that the Husband has no reasonable likelihood of success in making out the aspect of the case I have referred to or that he is doomed to fail ultimately. I think he is unlikely to succeed but again that is not the test.

26. For these reasons I therefore do not accede to the Wife’s application to summarily dismiss the proceedings but I note, of course, that as the matter progresses and the matter is listed for a trial there is not necessarily anything to prevent the Wife from re-agitating an application for dismissal when further evidence is forthcoming in the s 79A proceedings including any evidence she might muster from the relevant legal practitioners.

27. The formal orders will therefore be that the Husband’s application to stay the execution of the consent Orders of 8 April 2013 is dismissed and to dismiss the Wife’s application for summary dismissal of the Husband’s s 79A application.

28. Consequent upon my disposal of the application of the Husband to stay the execution of the consent Orders made on 8 April 2013 and my dismissal of the Wife’s application to summarily dismiss the Husband’s application under s 79A, there is an application by the Wife that there be a stay of Order 7 of the minutes of consent Order made on 8 April 2013 at least to the extent that that Order involves the payment of money directly to the Husband in exchange for the transfers referred to in the Orders.

29. As I have earlier discussed, there is an inherent power in the Court to stay the execution of orders upon a conclusion that such exercise is necessary to prevent or avoid injustice or potential injustice. As has been discussed by me with the Husband in the recent exchanges during the hearing (and to the extent necessary I will incorporate the transcript of those discussions for the purpose of these reasons) it seems to me that the Wife legitimately has cause for concern and complaint based on the affidavit of Mr Foley which I gave leave to her to file and rely upon in terms of the costs she has incurred since the consent Orders were made and potentially will incur in respect of defending the Husband’s s 79A application.

30. As discussed in my reasons I have observed that the Husband, on the face of the evidence as it currently stands, has a very weak case but as noted in those reasons that is not the test for summary dismissal. It seems to me it is a relevant consideration, however, when it comes to the exercise of discretion so far as the existing Order is concerned. It seems to me that in circumstances where the Wife was represented by Counsel for the purpose of the consent Orders referred to and was clearly ready, willing and able to agitate a trial of the property proceedings as at 8 April this year in circumstances where these proceedings have been on foot since 2008 it would be an injustice if, consent Orders having been entered into, the Wife ultimately succeeds in defeating the Husband’s s 79A application but an order for costs in her favour is nugatory because of the Husband’s lack of financial capacity. In the event, the Husband confirmed to me during submissions that he cannot afford to buy a Lotto ticket, let alone has won Lotto, so it is clear from his own mouth that nothing much has changed in terms of his poor financial position since his financial statement was filed on 8 April 2013 at the outset of the trial.

1. For these reasons I am persuaded to exercise the power to stay the execution of paragraph 7 of the consent Orders made on 8 April. It seems to me that the consequence of giving effect to a stay would be to order the sum of money to be held by the Wife’s solicitors in their trust account for these purposes pending determination of the Husband’s s 79A application. It is not open to the Court to have the solicitors for the Husband hold the money on trust given that he is currently self-represented and does not have solicitors. I order accordingly.

2. Further, I order that the costs of and incidental to the applications be reserved to the trial judge.

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 9 September 2013.

Associate:

Date: 11 September 2013