Dowling & Dowling

[2012] FamCA 2

FAMILY COURT OF AUSTRALIA

DOWLING & DOWLING AND ANOR [2012] FamCA 2

FAMILY LAW – PRACTICE AND PROCEDURE – Application for summary dismissal

Family Law Act 1975 (Cth)

Kennon v Spry (2008) FLC 93-368
O'Toole v Charles David Pty Ltd [1990] HCA 44; (1990) 96 ALR 1
Spellson v Spellson (1989) FLC 92-046
Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118

APPLICANT: Mr Dowling

1^ST RESPONDENT: Ms Dowling in her personal capacity and as trustee of the T Farm Trust

3^RD RESPONDENT: C Pty Ltd (as trustee of the E Farm Trust)

FILE NUMBER: MLC 3686 of 2011

DATE DELIVERED: 6 January 2012

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 16 December 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr North SC

SOLICITOR FOR THE APPLICANT: Coulter Roache

COUNSEL FOR THE 1^ST RESPONDENT: Mr Dickson

SOLICITOR FOR THE 1^ST

RESPONDENT:

Nicholes Family Lawyers

COUNSEL FOR THE 3^RD RESPONDENT: Mr Wilson

SOLICITOR FOR THE 3^RD RESPONDENT Stephen Farmer & Associates

Orders by consent

1. The husband and wife jointly instruct an agreed Single Expert Valuer to value the property known as Property 1 on the following basis:

   (a)Current market value in its current state;

   (b)Current market value as though the improvements to Property 1 as set out in his Statement of Claim filed 11 November 2011 and his Affidavit sworn 29 July 2011 (the husband’s pleadings) and the reconstruction of the house since the fire of March 2010 had not been performed.

2. The Property 1 valuation be at the joint expense of the husband and wife, subject to any adjusting Order at trial.

3. The husband and Third Respondent jointly instruct an agreed Single Expert Valuer to value the property known as Property 2 on the following basis:

   (a)Current market value in its current state;

   (b)Current market value as though the improvements to Property 2 as set out in the husband’s pleadings had not been performed.

4. The Property 2’s valuation be at the shared expense of the husband, wife and Third Respondent, subject to any adjusting Order at trial.

5. The parties provide discovery of:

   (a)All documents relevant to the matters contained in the Statement of Claim and the Defences of the First and Third Respondent; and

   (b)As between the husband and wife, bank statements for all accounts in their respective names.

6. The parties attend a Conciliation Conference on 24 February 2012 at 11 a.m.

AND THE COURT NOTES:

A. The wife and the Third Respondent consent to paragraphs 1 and 3 of these Orders without conceding the improvements as asserted by the husband.

IT IS CERTIFIED:

1. That pursuant to Order 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel, including senior counsel to attend.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC3686 of 2011

Mr Dowling

Applicant

And

Ms Dowling (in her personal capacity and as Trustee of the T Farm Trust)

1^st Respondent

And

C Pty Ltd (as Trustee of the E Farm Trust)

3^rd Respondent

REASONS FOR JUDGMENT

1. In O'Toole v Charles David Pty Ltd [1990] HCA 44; (1990) 96 ALR 1, Brennan J said:

   Nowadays nobody accepts that judges simply declare the law; everybody knows that, within their area of competence and subject to the legislature, judges make law. Within the proper limits, judges seek to make the law an effective instrument of doing justice according to contemporary standards in contemporary conditions. And so the law is changed by judicial decision, especially by decision of the higher appellate courts. Thereafter, the law is taken to be and to have been in accordance with the principle which informs the new decision: the ratio decidendi. The ratio, which is expressed in or necessarily implied by reasons for judgment to which a majority of the participating judges assent, is the law. It is not merely a judicial opinion as to what the law is; it is a source of law: see Salmond on Jurisprudence, 12th ed. (1966), p 141.

   A judge who participates in the creation of a judicial precedent, no less than a judge who dissents, is bound by the precedent created so long as it remains the law. The reasons for judgment which contain the ratio are not mere records of individual judicial opinion which the author is free to repent and withdraw: the investing of the ratio with the character of law flows not from the authority of the judge but from the authority of the court. It follows that only the court can change the law so made…

2. This summary dismissal application was argued on the basis that it is possible that the Full Court of this Court or possibly in the future, the High Court of Australia, may take the view that long-standing authorities of this Court are no longer the contemporary view of the law in this country.

3. In an enticing argument, Mr North of Senior Counsel for the husband acknowledged that I was bound by the authorities of this Court but that as a result of some statements both in judgment and in argument in the High Court, I should allow the controversial issue to go to trial where it could become part of the substantive dispute.

4. In his simple response, Mr Wilson of counsel for the third party who was joined at the behest of the applicant husband, supported by Mr Dickson of counsel for the wife, pointed out that I would be bound to follow the extant authorities of the Full Court of this Court and so would the trial judge. In either event, it was submitted, if the husband wanted to show that the existing authorities were wrong by contemporary standards, he could take the point on appeal either now or later.

5. As much as the point is an interesting one, I am bound by the doctrine of stare decisis and as such, the argument of Mr North must fail.

6. This was an application by the third party for a summary dismissal of the husband's specific claim against it under s 85A of the Family Law Act 1975 (Cth) (“the Act”).

7. The substantive proceedings are between the husband and wife and relate to the division of their property. The husband joined the company as a respondent to the proceedings. It is a company which acts as the trustee of a farming trust. 

8. In proceedings before me on 31 October 2011, I ordered the husband to file further material such as would enable the third party to know exactly what claim it was to meet. A statement of claim was filed on 11 November which seeks equitable relief and also further (and in the alternative, other) relief under s 85A of the Act.

9. Both the wife and the third party company join issue with the husband on both claims.

10. By application filed 9 December 2011, the third party sought a summary dismissal only of the husband's s 85A claim and an order for costs.

11. In a helpful outline of argument, Mr Wilson for the third party pointed out that the law as it currently stands is that to bring a claim within the ambit of s 85A, there must be shown a real and relevant association between the marriage and the settlement. The nexus was a question of degree determined upon the construction of the deed (see Spellson v Spellson (1989) FLC 92-046 which had followed the earlier Full Court decision of Public Trustee (S.A.) v Keays (1985) FLC 91-651).

12. The relevant trust deed is in evidence. It discloses that the relevant trust has little (if anything) to do with the husband and the wife. The only obvious connection relates to the husband and the wife falling into a class of beneficiaries.

13. Mr Wilson submitted that an examination of the deed disclosed nothing that would enable the Court to find that the settlement was made in relation to the marriage. On the face of that evidence and the observation of the deed, the husband cannot succeed as the law currently stands.

14. If there is an alternative and perhaps more contemporary view of the law relating to s 85A, it comes from Kennon v Spry (2008) FLC 93-368 where in argument, both Gummow and Hayne JJ made remarks which might give rise to an impression that the decisions of the Full Court of this Court referred to above may have hastily dismissed 100 years of earlier trust law. Their Honours did no more than create that impression.

15. In her judgment in Kennon, Kiefel J referred to s 85A in some detail. Her Honour examined the very language of the section and referred to the post-nuptial settlement arising because each party to the marriage had contributed to the property. Mr North pointed out that if I looked at the statement of claim now filed in these proceedings, these same concepts were pleaded. In this case, the foundation for the s 85A claim is the same factual matters as pleaded in the claim for equitable relief.

16. Despite the interesting argument, Mr North conceded I was bound by the earlier decisions but said it was appropriate to acknowledge that the argument was neither fanciful nor spent. There is some force to that but much would depend upon whether the Full Court of this Court considers it appropriate to reverse its earlier decisions and whether the points made by Kiefel J when fully argued, become the law.

17. I can see merit in the argument because Kiefel J took a view which when read in the context of the Full Court decisions of this Court, appears to be not only much wider but perhaps more contemporary. Mr Wilson described the statements of Kiefel J as being a minority view but as there was no majority view, I would not describe her Honour's view that way.

18. Mr North took me through the various paragraphs of the judgment of Kiefel J and I do not propose to repeat them because I accept that, being bound by the doctrine of stare decisis, I must follow the relevant authorities. The prospect of allowing the matter to go to trial does not assist because the trial judge would also be so bound unless the Full Court took a different view in the meantime. As such, I turn to the application before me which seeks a summary dismissal of the husband's s 85A claim.

19. The approach to a summary dismissal is well known. Rule 10.12 of the Rules provides that a party may apply for summary orders after a response has been filed where it can be shown that there is no reasonable likelihood of success.

20. The accepted principles in relation to such a  summary dismissal  application were recently described by the High Court in Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118 where French CJ and Gummow J examined the Federal Court Act provision which uses similar words. Their Honours noted the words spoke for themselves but went on to say that summary disposition applied where the pleadings disclose no reasonable cause of action and the apparent deficiency was incurable.

21. Based on the principles of the decisions above which were conceded by Mr North to bind me, the pleading does not disclose a claim under s 85A which could succeed. As it stands, that cannot be cured. There is no prospect of the trial judge being in any different position.

22. The application for summary dismissal must succeed.

23. I will provide for parties to seek costs should they so wish by written submission and for that matter to be determined in chambers.

I certify that the preceding Twenty Three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 6 January 2012.

Associate: 

Date:  6 January 2012