FIELD & KINGSTON
[2020] FamCA 1126
•23 December 2020
FAMILY COURT OF AUSTRALIA
| FIELD & KINGSTON | [2020] FamCA 1126 |
| FAMILY LAW – PROPERTY – where the husband has defaulted on payment pursuant to final property orders – enforcement warrant on foot – husband seeking an extension of time to make payment pursuant to the orders – pending application for leave to appeal to the High Court – whether the time ordered to make payment is a substantive or machinery provision – order sought to be varied a substantive provision – no jurisdiction to make the orders sought by the husband – application dismissed with costs. |
| Family Law Act 1975 (Cth) ss 79A, 117B |
| Anderson & Senior [2013] FamCAFC 152 Davint & Malburon [2014] FamCAFC 3 Guinness & Guinness (No. 2) [2008] FamCAFC 100 Ravasini & Ravasini [1982] FamCA 62 Slapp & Slapp [1989] FamCA 9 |
| APPLICANT: | Mr Kingston |
| RESPONDENT: | Ms Field |
| FILE NUMBER: | PAC | 2095 | of | 2014 |
| DATE DELIVERED: | 23 December 2020 |
| PLACE DELIVERED: | Sydney via videoconference |
| PLACE HEARD: | Sydney via videoconference |
| JUDGMENT OF: | Altobelli J |
| HEARING DATE: | 22 December 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Bolger |
| SOLICITOR FOR THE APPLICANT: | Cathers Beaver & Kamiya |
| ADVOCATE FOR THE RESPONDENT: | Ms Munk |
| SOLICITOR FOR THE RESPONDENT: | Matthews Folbigg Pty Ltd |
Orders
The Applicant Husband’s Application in a Case filed on 17 December 2020 be dismissed.
The Applicant pay the Respondent’s costs of the present application as agreed or as assessed.
The matter be referred to the Listings Coordinator for the allocation of a further interim hearing date at the earliest possible time in relation to the balance of the interim orders sought in the Wife’s Response to the Application in a Case filed on 21 December 2020.
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 Field & Kingston 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).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: PAC 2095 of 2014
| MR KINGSTON |
Applicant
And
| MS FIELD |
Respondent
EX TEMPORE REASONS FOR JUDGMENT
This matter came before me yesterday as duty judge in the Sydney registry in the week leading up to Christmas 2020. I provide the following oral reasons for judgment that explain the orders that I have made in this matter.
By way of application in a case filed 17 December 2020, the applicant husband sought a number of orders which primarily relate to final orders for property settlement made by Foster J on 21 November 2019. The orders pressed on the day were, in fact, different to the orders set out in the application in a case, and one suspects that this is attributable to Counsel having been briefed. I will mark with the letter A the document entitled ‘Applicant’s Proposed Minute of Order’, and I will incorporate that document into the first schedule of these reasons.
The main order sought is that the writ of enforcement dated 25 August 2020, perhaps more accurately described as the ‘Enforcement Warrant – Seizure & Sale of Property’, be stayed on a number of conditions and that the time for compliance with order 1 made 21 November 2019 be extended to 22 January 2021. There were a number of consequential orders set out in the minute that largely flow from the orders described. In order to make sense of these orders, it is also necessary to refer to the orders made on 21 November 2019, which I will incorporate as the second schedule to these reasons. Order 1 states that within three months from the date, that is, 21 November 2019, the husband pay to the wife or as she may otherwise direct in writing the sum of $1,232,616 with interest to accrue on that sum from the due date.
By way of a response to application in a case filed 21 December 2020, the respondent wife seeks a number of orders, the relevant one for present purposes being that the husband’s application be dismissed and that he pay her costs. The said response also sought orders in relation to costs on previous occasions, as well as a range of ancillary orders to implement the enforcement warrant should it not be stayed. The husband’s application was supported by his two affidavits, the first filed 17 December 2020, and the second sworn on 21 December 2020 but not filed with the Court. The latter affidavit was accordingly marked by the Court as exhibit A1. The wife’s response was supported by her affidavit filed on 21 December 2020. The husband was represented by Mr Bolger of Counsel. The wife was represented by her solicitor, Ms Munk.
Some background is necessary in order to understand the context of what appears to be yet another round of litigation between these parties. On 21 November 2019, Foster J made final orders for property settlement and delivered detailed reasons for judgment. In short, and in return for retaining what was the former matrimonial home at Suburb B, the husband was ordered to pay the wife $1,232,616 within three months. The husband became unrepresented shortly afterwards and filed an appeal to the Full Court of the Family Court, which was unsuccessful, and then a special leave application to the High Court, which remains undetermined. Along the way, the husband had also sought a stay of the original orders, and this was granted to him on 30 April 2020 but on the condition that he pay to his wife the sum of $500,000, which he failed to do.
On the husband’s own evidence, it was not until 8 December 2020 that he sourced finance from a private lender to enable him to refinance the family home and to provide funds to pay out the wife in accordance with the orders made on 21 November 2019. Indeed, the Court is satisfied from the material before it that the husband has, in fact, secured the necessary funds to comply with order 1 made 21 November 2019.
In the meanwhile, the wife commenced enforcement proceedings by way of Enforcement Warrant filed 14 August 2020. The material before the Court indicates that the enforcement procedure is relatively well-advanced and involves the Office of the Sherriff of New South Wales. Indeed, one impression that could be formed from the material before the Court is that but for the forthcoming Christmas closure, there was a reasonable likelihood that the Sherriff would have taken possession of the home occupied by the husband in preparation for a sale pursuant to the orders made by Foster J.
It is clear from the material before the Court that the parties have been negotiating a buyout but have not reached agreement on critical terms, which seem to include the calculation of interest and payment of costs. Be that as it may, there was no suggestion that the wife had relinquished her entitlement under the orders in question either in whole or in part. Mr Bolger for the husband quite correctly conceded that his client had not complied with the orders made by Foster J but emphasised that he was now in a position to do so. He intimated that the wife’s refusal to accept his client’s proposal may be related to a belief that the property was more valuable now than at the time of the hearing last year.
With that background, the Court dismisses the husband’s application in a case filed 18 December 2020, and in the interests of clarity, the Court declines to make orders 1 to 5 of the applicant’s proposed minute of order but will make order 6, which was that the applicant husband pay the respondent wife’s costs of the application as agreed or as assessed.
There are two reasons for dismissing the husband’s application. The first reason is that despite the careful drafting of the proposed minute of order and the skilful way in which Mr Bolger presented his client’s application, when one discerns the substance of the application as opposed to its form, it is, in reality, an application for this Court to stay the orders made by Foster J, in circumstances where the Full Court on appeal declined to interfere with those orders. The difficulty confronting the husband is explained by the Full Court in Anderson & Senior [2013] FamCAFC 152 at paragraphs [21] to [23]. In short, this Court does not have jurisdiction to do what the husband is, in substance, asking it to do.
But even if the Court is wrong in regards to its first reason, the Court would still decline to make the orders sought by the husband. The Court does not accept the husband’s contention through his Counsel that order 1 made 21 November 2019 insofar as it requires payment within three months of that date is a machinery provision, sometimes referred to in the cases as a consequential order that thus can be varied. This Court has come to the view that the order is, in fact, a substantive order that can only be varied on appeal by consent or pursuant to the provisions of section 79A of the Family Law Act1975 (‘Act’). This Court is, therefore, functus, that is, its jurisdiction in this matter is exhausted.
Whilst Mr Bolger referred me to the Full Court’s decision in Davint & Malburon [2014] FamCAFC 3, a single judge decision of Strickland J sitting as the Full Court, the Court believes that a more useful authority on the issue in question is, in fact, the Full Court’s decision in Guinness & Guinness (No. 2) [2008] FamCAFC 100. The relevant passage in the joint judgment of their Honours Coleman, Boland and Thackray is found at paragraph [17]-[18], which is reproduced below:
17. The principles relevant to this application are subject of well settled law. The Court is functus officio when it has determined a case and orders are regularly entered. However the doctrine has well recognised exceptions. It has long been recognised that an accidental slip or omission or an ambiguity or infelicity of expression in an order can be amended under the so called “slip rule” (see now r 17.02 of the Family Law Rules 2004 (“the rules”)). The other exception to the doctrine is if a consequential order (referred to as a machinery order) is required to give effect to the orders made. A court is not at liberty to amend orders if the new order would affect substantive rights (a substantive order).
18. The distinction between machinery and substantive orders was discussed by Boland J in a recent appeal against an order of a Federal Magistrate (Martin & Harris [2007] FamCA 560) where her Honour set out the relevant authorities at paragraphs 48 to 50 of her reasons as follows:
In Slapp and Slapp (1989) FLC 92-022 the Full Court discussed the limitations on the power of the Court to vary an order made under s 79 and said at 77,360:
It is not open to a court to make a substantive variation to orders previously made under sec. 79. That proposition can today no longer be doubted. It is based upon the principle, endorsed by the High Court in the case of Taylor v. Taylor (1979) FLC 90-674; 5 Fam. L.R. 289, that an order under sec. 79 is a once and for all proposition.
Such an order can only be varied on appeal or, where the circumstances warrant the same, pursuant to sec. 79A. As counsel for the husband pointed out, the first extension of time can be seen as either an extension by agreement between the parties made by the very authority of the order itself, or alternatively as an exercise of the court's power to vary an order by the consent of the parties pursuant to sec. 79A(1A).
However, the orders made by his Honour on 7 October 1988 were not made by consent and the question therefore arises as to whether those orders affected the substance of the orders or were merely dealing with the machinery aspect of implementing those orders.
The applicable principles were similarly referred to by Frederico J in Cranage and Cranage (1981) FLC 91-039 as follows at 76,344:
The Family Law Act confers no power on the Court to vary an order for settlement of property (Taylor and Taylor (1977) FLC 90-226; King and King (1977) FLC 90-299; Kaljo and Kaljo (1978) FLC 90-445; Branchflower and Branchflower (1980) FLC 90-857). The Court has power to set aside a property order only on the narrow grounds set out under sec. 79A, and the parties make no application under that section. Nor has any appeal been brought against his Honour's order.
However, in McDonald and McDonald (1976) FLC 90-047, the Full Court held that “there is ample power to modify the machinery provisions of a property order provided this does not affect the substantive property rights or cause undue hardship to either party”. This view was followed in Kaljo and Kaljo (supra) and more recently in Molier and Van Wyk (1980) FLC 90-911. The Court derives such power from sec. 80 of the Family Law Act. An application might be made for the Court to exercise the power even though liberty to apply had not been reserved expressly.
The distinction between a machinery and a substantive order is extensively discussed by the Full Court in Ravasini and Ravasini (1983) FLC 91-312 at 78,126 to 78,127:
Counsel for the appellant referred to McDonald and McDonald (1976) FLC 90-047, Kaljo and Kaljo (1978) FLC 90-445 and Molier and Van Wyk (1980) FLC 90-911 as authority for the power of the Court to make what is termed a machinery order. There is no question of the power of the Court to make what we would with respect suggest is more properly called a consequential order. The real questions are what is the proper definition of a consequential or machinery order and where is the dividing line between a consequential order which may be varied or modified and a substantive order which the Act gives no power to the Court to modify or vary. Counsel for the appellant was unable to refer the Court to any authority on this point but argued the submission rather by comparison with the facts of the cases referred to.
...
It is appropriate then to look at what a consequential order is. The Shorter Oxford Dictionary defines “consequential” as meaning “Following esp. as an effect, immediate or eventual, or as a logical inference”.
The Universal English Dictionary defines the word as “Following as a consequence, on what has gone before, resultant: consequential alteration in wording of a document, those made necessary by others already made.” The same dictionary defines “consequence” as “Event which follows upon something else which is, or appears to be, the cause; a result, outcome of what has gone before.”
A consequential order then, in a property matter, would include an order following logically or of necessity from a prior substantive order.
What a consequential order is not is an order the effect of which is to vary the prior order for property settlement. It is not possible to suggest that even the slightest variation of the original order is a consequence of it. What is being submitted in this appeal is that the original order should be amended not as a consequence of that order itself, not as a necessary follow up of that original order but rather as a consequence of events which have happened in the market place since that order was made rendering the facts on which it was based no longer accurate.
The cases referred to make it very clear that a consequential order or a machinery order is not an order the effect of which is to vary the prior order for property settlement. Indeed, it is not possible to suggest that even the slightest variation of the original order is a consequence of it. The statement of the law in both of the Full Court cases referred to above is very similar. Both the Full Courts refer to the Full Court decisions in Slapp & Slapp [1989] FamCA 9 and Ravasini & Ravasini [1982] FamCA 62. In Slapp, there is a clear statement that the extension of time in an order cannot be described as merely a change of a machinery provision but rather has the effect of depriving a party of a right of substance given in the orders.
In this case, the wife is given a substantive right i.e. the right to receive $1,232,616 within three months from the date of the order. The fact that interest is expressed to accrue does not change, in the view of this Court, the fundamental character of the right given to the wife. Indeed, the reference to interest merely reflects the position at law articulated under section 117B of the Act. It must follow that the Court does not have the jurisdiction or power to make the order that the husband seeks. His application should be dismissed and, as he himself proposes in his minute of order, he should pay the respondent’s costs of this application as agreed or as assessed.
There remain issues raised by the wife in her response which are interim in nature and which require judicial determination. I considered retaining this matter, placing it in my docket and looking for an interim hearing date, but I cannot find one for several months. Hence, I will refer the matter back to the listings coordinator for allocation of an interim hearing at the earliest date that can be allocated.
I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Altobelli delivered on 23 December 2020.
Associate:
Date: 12 January 2021
schedule 1
APPLICANT'S PROPOSED MINUTE OF ORDER
Order that Writ of Enforcement dated 25 August 2020 be stayed on the following conditions:
(a)The Applicant pay to the Respondent, or as she may otherwise direct in writing, the sum of $1,232,616 as required by Order 1 made on 21 November 2019 (Judgment Sum) by 22 January 2021;
(b)The Applicant pay the Respondent, or as she may otherwise direct in writing, the sum of $67,036.12 being the interest due and payable from 21 February 2020 on the Judgment Sum by 22 January 2021 (Interest); and
(c)The Applicant continues to pay all outgoings in relation to the Property, including any loans or loan facilities up to 22 January 2021.
Order that the time for compliance with Order 1 made on 21 November 2019 be extended to 22 January 2021, save the interest on the Judgment Sum is payable from 21 February 2020.
Order that the Writ by Ms Field dealing …79 registered on the title of the Property be discharged on, or simultaneously with, the payment by the Applicant of the following on or by 22 January 2021:
(a)The Judgment Sum to the Applicant, or as she may otherwise direct in writing;
(b)The Interest to the Applicant, or as she may otherwise direct in writing; and
(c)The costs of the office of the Sheriff of NSW in respect of the Writ by Ms Field.
Order that the Respondent do all acts and things necessary to give effect to these orders and the discharge of the Writ including responding to any requisition issued by the Land Registry Services.
If the Respondent refuses, fails or neglects to execute any document necessary to put these Orders into effect after being requested to do so, and any such refusal, failure or neglect is proved by Affidavits filed and served by or on behalf of the party alleging this, the Registrar of the Family Court of Australia at Sydney be and is hereby appointed pursuant to Section 106A of the Family Law Act 1975 to execute such document in the name of such party.
Order that the Applicant pay the Respondent's costs of this application as agreed or assessed.
schedule 2
FAMILY LAW ACT 1975
IN THE FAMILY COURT OF AUSTRALIA
AT PARRAMATTA File No. (P)PAC2095/2014
BETWEEN
MS FIELD (Applicant)
AND
MR KINGSTON (Respondent)
21 November 2019
Before The Honourable Justice FOSTER
UPON APPLICATION made to the Court AND UPON HEARING Mr Campton SC appearing for and with the Applicant wife and Mr Lloyd SC appearing for and with the Respondent husband«FCA_LD221»
IT IS ORDERED THAT
That within three months from this date the husband pay to the wife, or as she may otherwise direct in writing, the sum of $1,232,616 with interest to accrue on that sum from the due date.
That the husband indemnify the wife from all or any liability arising from the CC loan facility.
That in default of the husband paying the said sum to the wife by the due date, the husband and wife shall do all things necessary to sell the property at S Street, Suburb B for the best price reasonably obtainable and after payment of selling costs and discharge of the mortgages and/or loan advances secured thereon (including CBA home loan, Viridian Line of Credit and CC facility) pay the net proceeds of sale in the following manner and priority:
(a)As to the wife 47.5 per cent of the balance remaining;
(b)As to the wife a further payment of $289,790; and
(c)As to the balance then remaining to the husband.
That pending sale of the Suburb B property, the husband pay all outgoings in relation to the property as they fall due and payable and pay as they fall due and payable principle (if any) and interest payments on the borrowings set out hereunder and maintain the balances of the said borrowings at or below the balances set out hereunder:
CC facility $151,777
CBA mortgage Suburb B $299,133
Viridian Line of Credit $264,192
That in the event that the Suburb B property is sold to facilitate the payment to the wife, and not otherwise, the wife shall reimburse the husband a sum equivalent to 47.5 per cent of any additional personal income tax assessed as against the husband by reason of an additional capital gain income being included in his, otherwise, assessable taxable income for the relevant year with such payment to be made to the husband within 28 days of the wife being provided with a copy of the husband’s personal income tax return for the relevant year and a copy of the income tax assessment notice for the relevant year with interest to accrue as and from the due date of such payment.
Liberty to apply as to implementation or enforcement of these order.
That the wife’s application for spouse maintenance be dismissed.
All outstanding applications be dismissed.
The matter be removed from the active pending cases list.
All subpoenaed documents produced and all exhibits tendered in these proceedings be returned at the expiration of one calendar month unless an appeal is lodged.
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