Faldyn & Badenoch (No 2)

Case [2022] FedCFamC1A 204

Federal Circuit and Family Court of Australia

(DIVISION 1) APPELLATE JURISDICTION

Faldyn & Badenoch (No 2) [2022] FedCFamC1A 204  

Appeal from: Badenoch & Faldyn (No 2) [2022] FedCFamC2F 794
Appeal number(s): NAA 131 of 2022
File number(s): HBC 184 of 2019
Judgment of: ALDRIDGE J
Date of judgment: 8 December 2022
Catchwords:

FAMILY LAW – APPEAL – PROPERTY – Appeal from property settlement orders – Bankruptcy – Where the orders were made with the consent of the first respondent and the trustee in bankruptcy – Where there was no appearance by the appellant at the time those orders were made – Procedural fairness – Whether the appellant continued to have rights under s 79 of the Family Law Act 1975 (Cth) to obtain property settlement orders despite his bankruptcy – Where on the facts of this case, there is no basis for the appellant to pursue a claim under s 79 of the Act – No error is established – Appeal dismissed – Appellant to pay the costs of the first respondent, second respondent and third respondent in a fixed sum.

FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Where the appellant made an oral application to adduce evidence on the appeal – Where the relevant rules in respect of seeking to adduce further evidence were not complied with – The further evidence did not indicate the appellant had been misled – Where the evidence was available to be used at the hearing – Where the proposed evidence could not demonstrate error on part of the primary judge – Application dismissed.  
Legislation:

Bankruptcy Act 1966 (Cth) ss 4, 58, 60, 116

Family Law Act 1975 (Cth) Pt VIII, ss 79, 79A

Federal Circuit and Family Court of Australia (Family Law) Rules2021 (Cth) r 13.39

Cases cited:

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27

Calvin & McTier (2017) FLC 93-785; [2017] FamCAFC 125

CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67

Cummings v Claremont Petroleum NL (1996) 185 CLR 124; [1996] HCA 19

Gabel & Yardley (2008) FLC 93-386; [2008] FamCAFC 162

Kioa v West (1985) 159 CLR 550; [1985] HCA 81

Lenova & Lenova (Costs) [2011] FamCAFC 141

Sloan & Sloan [2018] FamCA 610

Number of paragraphs: 65
Date of hearing: 7 October 2022
Place: Sydney (via video link)
The Appellant: Self-represented litigant
Solicitor for the First Respondent: Murdoch Clarke Lawyers
Solicitor for the Second Respondent: Katsikaris Family Lawyers
Counsel for the Third Respondent: Mr Johnson
Solicitor for the Third Respondent: O’Neill Partners

ORDERS

NAA 131 of 2022
HBC 184 of 2019

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

MR FALDYN

Appellant
AND:

MS BADENOCH

First Respondent

MR A FALDYN

Second Respondent

MR GRAY AS THE TRUSTEE IN BANKRUPTCY

Third Respondent

order made by:

ALDRIDGE J

DATE OF ORDER:

8 december 2022

THE COURT ORDERS THAT:

1.The appellant’s oral application to adduce further evidence is dismissed.

2.The…

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AGLC
Faldyn & Badenoch (No 2) [2022] FedCFamC1A 204
Case
[2022] FedCFamC1A 204
Decision Date

CaseChat Overview and Summary

The case of Faldyn & Badenoch (No 2) involved an appeal by the appellant against a decision made by the primary judge in family law proceedings. The appellant claimed that the primary judge failed to provide procedural fairness by not allowing him to litigate the substantial money assets that the first respondent had allegedly concealed from the court. The appellant also sought to adduce new evidence during the appeal, but this application was denied by the court.

The legal issues in this case centred around whether the primary judge had erred in denying the appellant procedural fairness by not allowing him to litigate the concealed assets and whether the court should have granted the appellant's application to adduce further evidence on the appeal. The court had to consider the rules and requirements for addinguce evidence on an appeal and whether the appellant had provided sufficient reasons for not complying with these rules.

The court found that the appellant had not provided a persuasive reason for not complying with the rules regarding the addition of new evidence on appeal. The court also noted that the other parties to the appeal had not been given adequate notice of the material that the appellant sought to adduce, and that an adjournment would be required if the application was granted, leading to unnecessary costs. The court ultimately refused the appellant's application to adduce further evidence.

In conclusion, the appeal was dismissed and the appellant was ordered to pay costs to the respondents. The court found that the appeal was misconceived and that the appellant's arguments were not well-founded. The court also noted that the appellant's impecuniosity did not necessarily bar a costs order from being made, but that the appeal was still considered misconceived. The ratio of the case centred around the provisions of the Family Law Act and the Bankruptcy Act, which prevent a bankrupt party from making submissions in proceedings concerning vested bankruptcy property without leave of the court.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The appellant asserts the primary judge erred by failing to afford him procedural fairness by the wrongful termination of his rights under Part VIII of the Family Law Act 1975 (Cth) (“the Act”) “to litigate the substantial money assets [the first respondent] has persistently and unlawfully concealed from the court” (Appellant’s Summary of Argument filed on 19 August 2022, paragraph 17).Oral application to adduce evidence on the appeal At the hearing of the appeal, the appellant made an oral application to adduce evidence in the appeal. After hearing arguments from the parties, I indicated that the application would be refused. These are my reasons. Rule 13.39 of the Federal Circuit and Family Court of Australia (Family Law) Rules2021 (Cth) requires a person who seeks to adduce further evidence on the hearing of an appeal to file an application at least 14 days before the date of the commencement of the sittings in which the appeal is listed for hearing. The application must be accompanied by an affidavit which must state:(a)The facts on which the application relies;(b)The grounds of appeal to which the application relates;(c)The evidence, or at least, the nature of the evidence the applicant wants the appeal court to receive; and (d)The reason why the evidence was not adduced at the hearing. It follows that the appellant needs to be relieved of both the time limit and need to file an affidavit provided for in the rule. The appellant did not produce such an affidavit. He said that his failure to comply with the rule was because he was not aware of it. That is not a persuasive reason to grant the oral application, even for a litigant in person. One of the main purposes of the rule is to give the other parties to the appeal adequate notice of the material sought to be adduced. The appellant had served some but not all of the material on the other parties. The first respondent and the Trustee indicated that they would wish to adduce further evidence themselves if the application was to be granted. This would require the adjournment of the appeal. The appellant is not in a position to pay any costs that would be wasted if there was such an adjournment, so that the cost of it would be thrown upon the respondents to the appeal. These are powerful reasons which are sufficient in themselves to refuse the application. Although the appellant initially referred to a number of documents, he ultimately pressed for the reception of three. The first and the second are the will and grant of probate to the estate of the first respondent’s late father. They were annexed to an affidavit of the appellant made on 18 October 2021. The documents show that the first respondent’s father died in early July 2021, leaving an estate valued at $972,573.09. The first respondent is entitled to a one third share of that estate, subject to an advance of $40,000 being taken into account. The other document is an affidavit made by the appellant on 4 October 2022 in which he deposed to conducting a real property search on 3 October 2022 which showed that the first respondent had recently purchased a property. The appellant was unable to say why the search had not been done earlier.

Decision

Reasons for decision

Grounds 18 and 19 do not succeed. Conclusion and Costs The appeal will be dismissed. The appeal has been wholly unsuccessful. The appellant opposed an order for costs on the basis that he is on a disability pension. That is a matter which must be taken into account. However, impecuniosity is not necessarily a bar to a costs order being made (Lenova & Lenova (Costs) [2011] FamCAFC 141). In my opinion, the appeal was misconceived and the appropriate order is that the appellant pay the first respondent’s costs fixed in the sum of $3,999, the second respondent’s costs fixed in the sum of $1,815 and the third respondent’s fixed in the sum of $3,826.

Ratio Decidendi

Legal Principle Established

The bankruptcy also brings into operation s 79(11) of the Act which provides:Alteration of property interests…(11) If:(a)an application is made for an order under this section in proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them; and(b) either of the following subparagraphs apply to a party to the marriage:(i) when the application was made, the party was a bankrupt;(ii)after the application was made but before it is finally determined, the party became a bankrupt; and(c)the bankruptcy trustee applies to the court to be joined as a party to the proceedings; and(d)the court is satisfied that the interests of the bankrupt’s creditors may be affected by the making of an order under this section in the proceedings;the court must join the bankruptcy trustee as a party to the proceedings. Both s 79(11)(c) and s 79(11)(d) applied in this matter. Therefore, the appellant was not entitled to “make a submission to the court in connection with any vested bankruptcy” without the leave of the court (s 79(12)). Such leave is to be given only in exceptional circumstances (s 79(13)). The phrase “vested bankruptcy property” is a reference to property that has vested in the trustee under the Bankruptcy Act (s 4 of the Act). The effect of these provisions is that unless there is some property of the bankrupt that has not vested in the trustee, the bankrupt party cannot, in the absence of leave, make any submissions at all: he or she has no right to be heard at all. The division of property that takes place in relation to the vested bankruptcy property is the division of that property along with the other property of the non-bankrupt party. The bankrupt has no interest in the outcome of those proceedings. It follows that s 79(12) of the Act prevents the bankrupt party from making submissions unless he or she has leave or unless there is property of the bankrupt that has not vested, or at the least, there is non-divisible property that can be retained by the bankrupt pursuant to s 116 of the Bankruptcy Act. There is no suggestion of any such property here, so that the only division of property that can occur is that between the respondents and the Trustee, on which the appellant, absent leave, has no right to be heard. That includes any issue of “concealed property”. It is implicit in the appellant’s submissions that he has retained a right to seek orders against non-vested property, namely, other property owned by the first respondent or as he particularly put it, her “concealed property”. That is not correct. The bankrupt’s right to seek orders, that is, where proceedings have commenced, which includes seeking property orders by way of a response, is prescribed by s 60(2) of the Bankruptcy Act. The decision to maintain the proceedings is for the trustee in bankruptcy to determine, not the bankrupt. The bankrupt contended that his right to commence proceedings did not vest in the Trustee and that it followed he had a right to pursue the “concealed property”. The first point is correct (see Sloan & Sloan [2018] FamCA 610 (“Sloan”)) but the second is not.