Emmert & Quarto
[2019] FamCAFC 208
•7 November 2019
FAMILY COURT OF AUSTRALIA
| EMMERT & QUARTO | [2019] FamCAFC 208 |
| FAMILY LAW – APPEAL – LEAVE TO APPEAL – Where the respondent made an application for a property settlement order four months out of time – Where the respondent was granted leave to commence the proceedings out of time – Where the appellant appeals the primary judge’s orders – Where the respondent contends that leave to commence the proceedings was never required – Consideration of s 44(6) of the Family Law Act 1975 (Cth) – Where the respondent’s application for a property settlement order was brought within time – Where leave was not required – Whether the primary judge’s order can be amended by reference to the “slip rule” – Whether the order made reflected the primary judge’s intention – Where the order made reflected the primary judge’s intention – Where the primary judge’s order are set aside – Appeal dismissed. |
| Family Law Act 1975 (Cth) ss 44(5) and (6) Federal Circuit Court Rules 2001 r 4.05 |
| Babett & Falconer (2015) FLC 98-067; [2015] FamCAFC 124 Kuru v New South Wales (2008) 236 CLR 1; [2008] HCA 26 Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28 |
| APPELLANT: | Ms Emmert |
| RESPONDENT: | Mr Quarto |
| FILE NUMBER: | DGC | 1025 | of | 2014 |
| APPEAL NUMBER: | SOA | 61 | of | 2018 |
| DATE DELIVERED: | 7 November 2019 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Alstergren CJ, Ainslie-Wallace & Watts JJ |
| HEARING DATE: | 25 March 2019 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 27 July 2018 |
| LOWER COURT MNC: | [2018] FCCA 2058 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr O'Connor |
| SOLICITOR FOR THE APPELLANT: | MW Law |
| COUNSEL FOR THE RESPONDENT: | Mr Hutchings |
| SOLICITOR FOR THE RESPONDENT: | Peter Lynch |
Orders
Order 1 made 27 July 2018 granting leave to issue an application out of time pursuant to s 44(6) of the Family Law Act 1975 (Cth), is set aside.
The appeal against the orders of Judge Hartnett made on 27 July 2018 is otherwise dismissed.
The appellant and respondent within fourteen (14) days from the date of these orders are to file and serve any submissions as to costs limited to ten (10) pages.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Emmert & Quarto has been approved by the Chief Justice pursuant to
s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 61 of 2018
File Number: DGC 1025 of 2014
| Ms Emmert |
Appellant
and
| Mr Quarto |
Respondent
REASONS FOR JUDGMENT
This appeal commenced as a challenge to an order of Judge Hartnett (as she then was) made on 27 July 2018 in the Federal Circuit Court granting leave to Mr Quarto (“the respondent”) to commence property proceedings against Ms Emmert (“the appellant”) on the basis that the time for bringing those proceedings had elapsed. However, it was argued during the appeal, admittedly for the first time in what has indisputably been long and fraught litigation, that leave to commence the proceedings was not required because there were, and had always been, proceedings on foot in the Federal Circuit Court. The result then is, if the respondent did not require leave, the decision of Judge Hartnett and the foundation of the appeal falls away.
The relevant background
The parties began to live together in 2002. The parties never married. There are no children of the relationship.
Although the parties asserted that a separation under the one roof took place on different dates, the case was conducted on the basis that the parties separated under the one roof in August 2012.
Thus, in April 2014 when the respondent filed his initial application seeking orders for property settlement he was within the time specified in s 44(5)(a) of Family Law Act 1975 (Cth) (“the Act”).
The appellant filed a Response to that application on 22 May 2014, in which she sought extensive interim orders and as for final orders sought:
1. That there be such property settlement between the parties as deemed appropriate by this Honourable Court.
2. That the Respondent be excused from particularising her claim until such time as the Applicant has provided full and frank disclosure of all relevant financial documents to the Respondent and valuations obtained for any asset in dispute.
Interim financial orders were made by consent on 15 July 2014.
Directions were made for a Conciliation Conference which the respondent failed to attend. Further interim consent orders were made between the parties on 3 September 2014 adjourning the proceedings after the parties indicated that a resolution had been reached between them. In October 2014 orders were made preparing the matter for trial.
Eventually, in the face of continued non-compliance by both the respondent and the appellant, on 9 February 2016 the matter was listed of the Court’s motion and Judge O’Sullivan made the following order:
1. The application filed on 9 April 2014 be dismissed pursuant to Rule 13.12 of the Federal Circuit Court Rules 2001 (“the Rules”) and the proceedings be removed from the Pending Cases List.
The respondent attempted to recommence the proceedings by filing an Initiating Application on 10 August 2016 and sought leave pursuant to s 44(6) of the Act to commence the proceedings. The appellant opposed the leave being granted and sought that it be dismissed.
That application came back before Judge O’Sullivan who dismissed the application for leave to commence the proceedings out of time. In his reasons delivered 24 February 2017, his Honour observed (Quarto & Emmert [2017] FCCA 301 at [5]) that the order of 9 February 2016 was “interlocutory” in the sense that it did not finally dispose of the proceedings between the parties but he nonetheless entertained the respondent’s application for leave because the parties’ then joint position was that leave was required.
The respondent appealed his Honour’s orders, the appeal was allowed and the respondent’s application for leave remitted to the Federal Circuit Court for rehearing.
Thus it was that the matter then came before Judge Hartnett who, on 27 July 2018, granted the respondent leave to commence property proceedings out of time.
In her reasons,[1] her Honour adverted to the procedural history of the matter and having set out the order made on 9 February 2016 and after noting that no order was made in relation to the appellant’s Response, said:
11.… It appears that both the [respondent] and the [appellant] thereafter proceeded on the basis that the remaining extant application for orders sought by the [appellant] in the response filed 22 May 2014 had also been dismissed by the order made 9 February 2016…
[1]Quarto & Emmert (No.3) [2018] FCCA 2058.
The appellant appealed her Honour’s order granting the respondent leave to commence proceedings out of time.
We note in passing that whether or not it was the parties’ agreed position that leave was required, whether proceedings between the parties had not finally been disposed of in February 2016 was a fact seminal to the matter then before the Court but was not considered by either judge. However we accept that neither before Judge O’Sullivan nor Judge Hartnett was it argued that leave to commence proceedings was not required.
The Summary of Argument filed by the respondent in this appeal raised for the first time the issue of whether the respondent required leave to bring proceedings for property settlement out of time, the contention being that the order of 9 February 2016 left intact the appellant’s Response to the respondent’s Initiating Application and thus leave was not required.
Relevant statutory provisions
Relevantly, the following provision of s 44 of the Act imposes a limitation period upon persons, who have been in a de facto relationship, during which they may file an application for a property settlement order:
(5)Subject to subsection (6), a party to a de facto relationship may apply for an order under section … 90SM … only if:
(a) the application is made within the period (the standard application period) of:
(i) 2 years after the end of the de facto relationship …
and the following provision of s 44 of the Act allows for leave to be granted to file an application out of time:
(6) The court may grant the party leave to apply after the end of the standard application period if the court is satisfied that:
(a) hardship would be caused to the party or a child if leave were not granted …
Was leave required?
As we have said, the case had been conducted on the basis that the respondent’s original application for a property settlement order was brought within time and engaged the Court’s jurisdiction. Although his application was dismissed, the appellant’s Response in which she sought a property settlement order remained to be determined and the proceedings between the parties for a property settlement order were not finally determined. Thus, the respondent’s application made in August 2016 was not time barred and no leave was required.
For the appellant it was argued that her Response did not seek to invoke “any residual jurisdiction”.[2]
[2] The appellant’s further submissions, filed 16 April 2019 paragraph 12.
It is not entirely clear what is meant by “residual jurisdiction”, but the appellant’s Response filed in accordance with r 4.03 and 4.05 of the Federal Circuit Court Rules 2001 (Cth), sought an order in the same matter as that engaged by the respondent and until disposed of, the jurisdiction of the Court remained enlivened. If what is meant by the submission is that the appellant’s Response had no independent force once the respondent’s application had been dismissed, that is rejected.[3]
[3] See Hedley& Hedley (2009) FLC 93-413.
True it is that the property settlement order sought by the appellant was unparticularised, a fact acknowledged in the Response, it nevertheless clearly was an application for a property settlement order and of itself engaged the jurisdiction.[4]
[4] See Frost (Deceased) & Whooten (2018) FLC 93-860 particularly at [30].
Should the respondent be permitted to raise this issue?
It was argued and it is clearly the case, that both the respondent and the appellant conducted this litigation on the basis that the respondent required leave to bring a property application. It was the appellant’s case that the respondent should not now be permitted to argue the point.
A number of bases were advanced to support this proposition. First, it was argued that the principle of finality in litigation should prevent the respondent from now arguing this point on appeal and reference was made to the well-known authorities. It was further contended that had it been raised earlier, the appellant would have conducted her case differently although the submission did not say how that might have been.
It is indeed correct that the well-known authorities such as Metwally v University of Wollongong (1985) 60 ALR 68 and Coulton v Holcombe (1986) 162 CLR 1 stress the need for finality of litigation, but here the point is as described by Mason J in O’Brien v Komesaroff (1982) 150 CLR 310 at 319:
In some cases when a question of law is raised for the first time in an ultimate court of appeal, as for example upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is expedient in the interests of justice that the question should be argued and decided (Connecticut Fire Insurance Co. v. Kavanagh [1892] A.C. 473, at p. 480; Suttor v. Gundowda Pty. Ltd. (1950) 81 C.L.R 418, at p. 438; Green
v. Sommerville (1979) 141 C.L.R 594, at pp. 607-608)…The point raised is one of law and its existence proved by the uncontested facts. That this issue has been raised late in the cavalcade of litigation between these parties is unfortunate, however we see no foundation in the authorities cited by the appellant’s counsel which would or should prevent the point being argued. Indeed the point goes to the very heart of the subject matter of the appeal. In our view the point had to be raised and argued.
Next it was submitted that since both parties, and particularly the respondent, ran their respective cases on the basis that leave was required, the respondent should be bound by the way in which he conducted his case at trial. The power to grant leave to commence proceedings rests on an applicant being out of time. Despite how the parties and their legal advisers approached their respective cases, leave is not required and it would be to work an impermissible legal fiction to pretend that it was.
The application of the “Slip Rule”
The appellant argued that Judge O’Sullivan in making the order of 9 February 2016 “intended to dismiss the [appellant]’s response” and thus, the order should be amended pursuant to the slip rule to give effect to Judge O’Sullivan’s intentions.[5] Courts have implied jurisdiction to amend orders which do not reflect what was in fact decided or do not reflect what the Court intended.[6] It is however important to understand that the so called “slip rule” can only be used to correct an order where there is no room for reasonable dispute about the matter.
[5] Appellant’s further submissions, filed 16 April 2019 paragraph 59.3.
[6] See Pawley & Pawley (No 2) (2017) FLC 93-787; Elyard Corporation Pty Ltd v DDB Needham Sydney Pty
Ltd (1995) 61 FCR 385, 389–399; DJL v The Central Authority (2000) 201 CLR 226.
The purpose of the slip rule is to avoid injustice to litigants by ensuring that the Court’s judgment or order reflects its intention at the time the order was made or the judgment was published,[7] or reflects the intention that the Court would have had but for the failure that caused the accidental slip or omission.[8]
[7] See Gould v Vaggelas (1985) 157 CLR 215 at 274‑5.
[8]See Symes v Commonwealth (1987) 89 FLR 356 at 357.
Before recourse can be had to the slip rule it must first be established that his Honour’s order made on 9 February 2016 did not reflect his intention.
We do not accept that this is so.
His Honour provided no reasons for the order made on 9 February 2016.
However, as we have said, the respondent’s application for leave filed 10 August 2016, came before his Honour who said:[9]
5. Whilst not common ground, the order made 9 February 2016 was interlocutory in the sense that the order made under the Rules did not finally dispose of the rights of the parties (see Hall
v Nominal Defendant (1966) 117 CLR 423 & Sheill & McMurr (No. 2) (2014) FLC 93-451).The applicant did not, either in the application filed 10 August 2016 or at the hearing on 31 January 2017 seek leave to set aside the order made 9 February 2016. Rather, it is common ground that as the applicant has filed this application out of time and in order to pursue property proceedings under section 90SM the applicant must first be granted leave to do so pursuant to subsection 44(6) of the Act. Given this was the agreed position of the parties, the matter has been approached on that basis.(Emphasis added)
[9]Quarto & Emmert [2017] FCCA 301.
What seems clear from the beginning of the quoted passage is that the 9 February 2016 order was not intended finally to dispose of the proceedings between the parties nor was it intended to dismiss the appellant’s Response.
We are not persuaded that the order made by Judge O’Sullivan does not reflect his intention at the time.
In this case, an application for leave could only be granted pursuant to s 44(6) of the Act if the application for a property settlement order had not been made within two years after the end of the de facto relationship. Therefore her Honour’s order granting leave was made without jurisdiction and should be set aside and it follows that the appeal against that order is incompetent.
That conclusion effectively disposes of the appeal, and while not strictly necessary, we are conscious of the adjuration in Kuru v New South Wales (2008) 236 CLR 1 at [12] and propose to very briefly consider the arguments advanced by the appellant in challenge to her Honour’s order.[10]
[10] See also Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 at [34].
Although a number of grounds of challenge to her Honour’s order were asserted, they were argued in groups and it is expedient that we too consider them in that way. However, it is necessary to set out the factual background taken from her Honour’s reasons to give context to the remaining grounds.
The parties did not marry and thus the question of whether or not the respondent should have leave to commence property proceedings out of time was to be determined by reference to sections 44(5) and (6) of the Act.
At the date of the hearing before the primary judge, the respondent was 68 years old and the appellant, 67.
Throughout the relationship and at the time of the hearing, the respondent was
self-employed as a tradesman and his income at separation was said to be $78,000 gross per annum. He had some accumulated superannuation of about $19,000 and at the date of the hearing was apparently receiving income of $600 gross per week. He had modest savings of about $13,000, a tax debt of about $12,000 and a credit card debt of $20,000. He lived in rented accommodation above the factory in which he works and was approaching retirement.[11][11]Quarto & Emmert (No.3) [2018] FCCA 2058 at [22].
The appellant was employed during and after the relationship as a receptionist and at the time of separation was earning $38,000 gross per annum and had accumulated superannuation of $118,000. At the time of the hearing the appellant was receiving about $800 gross per week. She continued to contribute to superannuation and after receiving $130,000 from her superfund, had $44,000 in that fund and savings of $65,000. She was then living with her son and paying rent of $210 per week.[12]
[12]Quarto & Emmert (No.3) [2018] FCCA 2058 at [23].
At the time of the commencement of the relationship the appellant owned an unencumbered property, had accumulated superannuation benefits and had no liabilities. That property was eventually sold and the proceeds together with borrowed funds were used in 2004 to purchase a property which became the parties’ marital home. The property was purchased in the appellant’s sole name.
Although the subject of dispute as to the amount expended, the respondent contended that renovations were effected to that property.
The appellant drew down on the mortgage over this property in order to advance funds to the respondent’s business. In 2013 when the respondent incorporated a new business to continue to carry on from the former business, a further sum of $149,000 to assist that business was drawn down on the mortgage loan.
In 2005 the respondent received an inheritance of both an interest in real estate and cash. The property was sold and its proceeds used to purchase an investment property in New Zealand. This property was purchased in the appellant’s sole name.
The balance of the inheritance was used by the parties for expenses, holidays and renovations, although the appellant claimed that the respondent wasted some part of that money gambling.
Following the parties’ physical separation, the former marital home was sold, and after payment of the outstanding amount owing on the mortgage, each party received $190,000. An order made on 28 October 2014 provided that the balance of the proceeds of sale be invested in an interest bearing trust account in the joint names of the parties. Notwithstanding that order, in April 2016 the appellant’s new solicitor transferred to the appellant, all the funds then standing to the parties’ credit in that trust account being $294,804, and which the appellant then disbursed in various ways.
In May 2017, the appellant sold the investment property in New Zealand and made no accounting to the respondent for the funds received. The net proceeds of that sale, $146,113, were retained by the appellant and expended by her. Consequently, the appellant received about $441,000 from the disposal of the two properties.
Hardship
The first general challenge then is to Her Honour’s consideration of whether there would be hardship to the respondent if he was not granted an extension of time to bring the property proceedings.
The determination of whether leave to commence proceedings is granted is governed by s 44(6) of the Act, where, relevantly for these proceedings, the Court may grant leave where it is satisfied that hardship would be caused to a party or a child if leave were not granted.
It is well accepted that hardship of the relevant kind is not a measurement of the loss of the right to commence proceedings but the consequences of that loss. In considering whether an applicant for leave has established the necessary hardship, a court must determine whether the applicant has a “prima facie claim worth pursuing” or, put another way, “a real probability of success” in the contemplated proceedings.[13] Nevertheless, that determination is not the end of the necessary consideration because leave will not be granted if to do so would not, in the ultimate result, alleviate the identified hardship.[14]
[13]Sharp v Sharp (2011) 50 Fam LR 567 at [18] (“Sharp”).
[14] Sharp at [18]; Hedley v Hedley (2009) FLC 93-413 at [131]; Whitford & Whitford (1979) FLC 90-612,78, 144.
Here, it is asserted that the primary judge erred in a number of ways when assessing hardship.
Ground 5 contends that her Honour failed to take into account the respondent’s claim in negligence against his former solicitors. True it is that her Honour made no mention of this claim in her reasons, but in our view, this is far from being an error, given that the evidence before her Honour by the respondent amounted to him saying he believed he had an action against his solicitor and the evidence of the respondent’s solicitor to the effect that no such action had been commenced and that there was no evidence before the primary judge about what damages might be claimed. Any reliance by her Honour on what that claim might produce would have been an erroneous speculation.
The submissions for the appellant then assert that her Honour erred by failing to take into account; the nature and degree of hardship suffered; the then current assets of the parties; whether the identified hardship would be alleviated by giving an extension of time; failing to consider the consequences resulting from the respondent’s inability to bring the proceedings and, finally, by failing to assess the strengths and weaknesses of the respondent’s case.
The primary judge dealt with hardship at [38] to [40] and at [40] stated:
40. The Court is satisfied that hardship would be caused to the [respondent] if leave is not granted on the above facts for these reasons:-
a)there was an amount of 40% of the net proceeds of sale of the former matrimonial home held in trust in the joint names of the parties. Without the knowledge or consent of the [respondent], that sum, together with interest, was distributed as to 100% to the [appellant] being a sum of $294,840.37. The [respondent] had a clear claim in respect of those monies which remained outstanding despite the cessation of the Court proceedings. He sought to secure those funds post the dismissal of the proceedings. The [appellant] acted to retain the distribution of those funds solely to her;
b)the [respondent] had an interest in the real property in New Zealand by virtue of s.90SM(4) of the Act. There has been no accounting to the [respondent] in respect of this interest which was land held in the [appellant]’s name and sold by her in May 2017. The net proceeds of sale were $146,113.26. These monies have been retained by the [appellant] and expended by her on legal costs; supporting her mother; gifts to her sons; furniture; and a holiday as claimed by her;
c)both the [respondent] and [appellant] have cashed in their superannuation entitlements with the [appellant]’s entitlements considerably exceeding that of the [respondent] in an apportionment of $20,000 to the [respondent] and approximately $130,000 to the [appellant];
d)the [respondent] is approaching retirement age and has little asset security. He made a contribution as described in these reasons and of the type set out in s.90SM(4) of the Act, being contributions the Court must take into account in property settlement proceedings. The monies received by the [respondent] in the form of an inheritance during the course of the relationship were fairly similar to the monies that the [appellant] brought into the relationship at the commencement of the parties’ cohabitation; and
e)in the event the [respondent] is unable to proceed with his application out of time he will have little of the joint assets of the parties to secure in some measure his financial future and will rely almost certainly and exclusively on government Centrelink benefits.
Properly considered, the challenges to the primary judge’s findings of hardship go to the weight or importance given to the evidence by her Honour in reaching the conclusions in [40]. The assessment of weight to be given to evidence is one quintessentially for a primary judge and appellate challenges are difficult to make good.[15]
[15]Gronow v Gronow (1979) 144 CLR 513 at 519 – 520.
None of these challenges is made out. Her Honour was clearly conscious of the summary nature of the enquiry necessary for determination of this issue and, as her reasons clearly demonstrate set out the respondent’s putative claim to a property settlement order while understanding that the respondent as an applicant was not required to establish his final case at this stage.[16] Thus her Honour referred to the appellant’s assertion that the respondent wasted money gambling, her Honour quite correctly left the determination of that matter to the trial (at [45]).
[16]Hedley v Hedley (2009) FLC 93-413 at [32].
It was also argued that the primary judge failed to have regard to the future costs of the litigation. We do not accept that contention, her Honour did so albeit in a general way at [42]. In any event, the appellant conceded that no evidence was placed before her Honour in relation to future costs.
Her Honour’s task then was, as described in Edmunds & Edmunds (2018) FLC 93-847:
48. That involves a consideration, but not a final determination, of the nature of the applicant’s claim. In doing so, the Court must weigh the applicant’s case against that of the respondent’s and form a view as to whether there is in fact a prima facie case, or a real probability of success, that would, if leave were granted, alleviate hardship.
It is then plain from her reasons, that her Honour took into account the matters relevant to her decision and we do not find error in her approach.
Discretion
Next, the appeal challenges the exercise of her Honour’s discretion. Having identified the relevant hardship and that the probability of success would alleviate that hardship, the Court is required then to consider whether it ought in the exercise of its discretion grant leave to commence the proceedings.
These grounds overlap to a significant degree with the challenges to her Honour’s findings in relation to hardship and also those challenges which assert a failure to give adequate reasons.
These grounds assert that her Honour erred in the exercise of her discretion by reason of failing to give sufficient weight to various matter such as the delay, its explanation, the conduct of the respondent in not pursuing the application with greater diligence, the prejudice to the appellant for the proceedings to be brought and the grounds further contend that in assessing hardship and whether leave would alleviate that hardship, her Honour’s discretion miscarried.
The bar to appellate intervention in a challenge to the exercise of judicial discretion is properly high indeed. As Kirby J said in CDJ v VAJ (1998) 197 CLR 172 at 230:
186. … Neither this Court, nor the Full Court in relation to appeals to it, has authority to disturb a decision under appeal simply because the appellate judges, faced with the same material, would have reached a conclusion different from that under appeal. To approach the appellate function in such a way would contravene established authority. It would involve one level of the judicial hierarchy, without lawful warrant, intruding into the decisions of another. To authorise appellate disturbance, where the decision under appeal is discretionary or involves quasi-discretionary evaluation, it is necessary for those mounting the challenge to demonstrate that, in reaching the orders the subject of the appeal, the court below has acted on a wrong principle or (although the precise error of principle cannot be identified) has reached a conclusion which is plainly wrong. Obviously, what is “plainly wrong” will vary in the eyes of different beholders.
(Footnotes omitted)
This question was articulated thus in Babett & Falconer (2015) FLC 98-067:
34. However, what is at issue here is a discretionary conclusion reached from established facts none of which are challenged on appeal. An appellate court’s decision that a trial Judge’s discretionary conclusion is wrong must have a discernible proper foundation and that foundation cannot be merely that it would have reached a different decision based on the same facts…
It was further contended that the primary judge failed to take into account, in determining whether leave should be granted the respondent’s failure to act in the six months prior to August 2016. It was undisputed that there was correspondence between the solicitors for the appellant and the respondent in that period. For example:
·27 April 2016 (Annexure “Q-6” to the respondent’s affidavit filed on 10 August 2016) – A letter from the respondent’s Australian solicitors enquiring as to the attempted appointment of a liquidator which they believed to be appointed by the appellant for the winding up of Business A Pty Ltd. The letter also raises the cost of liquidation at $8,000 and suggests instead that the company be voluntarily deregistered.
·31 May 2016 (Annexure “Q-5” to the respondent’s affidavit filed on 10 August 2016) – An email from the respondent’s Australian solicitors, informing the respondent’s New Zealand solicitor’s that, given the matter between the parties remained unresolved, the respondent wished to maintain the security lodged over the New Zealand property and that until further advised the notice of claim was not to be removed.
·5 July 2016 (Annexure “E3” to the appellant’s affidavit filed on 31 August 2016) - An email from the respondent’s Australian solicitors written after the respondent had received notification from Land Information New Zealand that the appellant had applied to have the respondent’s caveat removed due to a lapse of a claim notice. The email further noted that the respondent had no objection to the sale of the property in New Zealand on the proviso that the proceeds of sale are held in a trust pending the matter being resolved. The respondent’s solicitors also noted that if the appellant did not agree to the sale of property the respondent’s solicitors would instruct the respondent to reissue proceedings. The email also seeks to confirm from the appellant’s solicitors that the balance of proceeds of sale from the sale of the former matrimonial home are held in the appellant’s trust account or in a short term deposit.
·29 July 2016 (Annexure “E3” to the appellant’s affidavit filed on 31 August 2016) - the respondent’s Australian solicitors again wrote to the appellant’s solicitors referring to previous unanswered correspondence and requesting urgent confirmation that they received the transfer of controlled monies in the amount of $294,840.37 from the previous solicitors. They also sought a trust account receipt for the funds held, confirmation that solicitors still act for the appellant and that they hold instructions to accept service on her behalf. The letter put the appellant’s solicitors on notice that if they could not confirm the receipt of funds into their firm’s trust account the respondent’s solicitors would take the matter to the Legal Services Board.
The primary judge was aware of and referred to these matters. It is not thus open to the appellant to argue that her Honour ought to have given weight to the appellant’s delay in determining whether to grant leave. Her Honour clearly recognised the delay and the prejudice to the appellant springing from it (at [42] - [44]). It was contended that her Honour failed to adequately consider the prejudice to the appellant by concluding that prejudice “can be dealt with by the trial judge” (at [45]). Her Honour’s remark follows her consideration of the matters which the appellant submitted would tend to a refusal to exercise her discretion, for example the assertions of waste through gambling and family violence. Her Honour said:
45. … These are matters which, at this stage, do not eradicate the obvious existence of a reasonable claim for property settlement to be pursued by the [the respondent]. Any prejudice to the [appellant] can be dealt with by the trial judge.
Her Honour’s comment, in its proper context, shows no error of approach.
Finally, it was asserted that her Honour’s reasons were inadequate. We disagree. Her reasons were adequate for the purpose and enable the reader to understand the intellectual path by which her Honour came to the challenged conclusions.[17]
[17]Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48].
None of the asserted challenges to the exercise of her Honour’s discretion are made out.
However, as we have said, given the existence of proceedings at the time the respondent filed his second application, he did not need leave pursuant to s 44(6) of the Act to do so. Accordingly, we will thus set aside the order granting leave and otherwise allow the appeal.
Costs
The question of costs of the appeal is complex and we will order each party to file submissions as to the costs of the appeal.
I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Alstergren CJ,
Ainslie-Wallace & Watts JJ) delivered on 7 November 2019.
Associate:
Date: 7 November 2019
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