Field & Kingston
[2021] FedCFamC1A 66
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Field & Kingston [2021] FedCFamC1A 66
Appeal from: Field & Kingston (No. 5) [2021] FamCA 457 Appeal number(s): EAA 76 of 2021 File number(s): PAC 2095 of 2014 Judgment of: TREE, GILL & HARTNETT JJ Date of judgment: 16 November 2021 Catchwords: FAMILY LAW – APPEAL – ENFORCEMENT – Where the wife appealed from a purported enforcement order – Where the purported enforcement order did not reflect the intention of the final property settlement orders – Denial of natural justice – Where the primary judge made the order without notice to the parties – Submitting Notice – Appeal allowed – Re-exercise of the discretion – Costs ordered in favour of the wife.
FAMILY LAW – APPLICATION IN AN APPEAL – Adduce further evidence – Where the further evidence was relied upon in support of the re-exercise of discretion – Application allowed in part.
Legislation: Family Law Rules 2004 (Cth) (repealed), r 20.07 Cases cited: Bolitho and Cohen (2005) FLC 93-224; [2005] FamCA 458
Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; [2006] HCA 55
Lenova & Lenova (2011) FLC 93-467; [2011] FamCAFC 114
Robertson & Sento [2009] FamCAFC 49
Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128; [2016] NSWCA 88
U v U (2002) 211 CLR 238; [2002] HCA 36
Number of paragraphs: 27 Date of hearing: 29 September 2021 Place: Sydney Solicitor for the Appellant: Matthews Folbigg Pty Ltd Counsel for the Respondent: Mr Page QC Solicitor for the Respondent: Cathers Beaver & Kamiya ORDERS
EAA 76 of 2021
PAC 2095 of 2014FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS FIELD
Appellant
AND: MR KINGSTON
Respondent
ORDER MADE BY:
TREE, GILL & HARTNETT JJ
DATE OF ORDER:
16 NOVEMBER 2021
THE COURT ORDERS THAT:
1.The appellant wife’s Application in an Appeal filed 20 July 2021 be allowed in part.
2.The appeal be allowed.
3.The order of the primary judge made 29 June 2021 be set aside.
4.By no later than 4.00 pm on 19 November 2021, the parties do all things necessary to effect payment of $1,518,518.16 from the residual proceeds of sale of S Street, Suburb B to the appellant wife, and the balance to the respondent husband.
5.The respondent husband pay the appellant wife’s costs of $10,082.54.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Field & Kingston has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
TREE, GILL & HARTNETT JJ:
INTRODUCTION
By her Notice of Appeal filed 13 July 2021, Ms Field (“the wife”) appeals from a purported enforcement order made by the primary judge on 29 June 2021. That order required Mr Kingston (“the husband”) to pay to the wife the sum of money he had previously been ordered to pay her by orders of Foster J, made as part of a final property settlement.
The husband filed a submitting notice in relation to the appeal (but was nonetheless permitted to make submissions in relation to any re-exercise of the primary judge’s discretion which we might undertake).
For the reasons which follow, the appeal will be allowed.
BACKGROUND
The parties married in 2002 and separated in 2011. There are three children of the marriage whose ages range from 13 to 18 years, and whose care the parties share.
On 21 November 2019, Foster J made final orders effecting a property settlement between the parties. Relevantly, for the purposes of this appeal, those orders provided the following:
1.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.
2.…
3.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 [“the Suburb B property”] 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 Company C 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.
4.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:
Company C facility $151,777
CBA mortgage Suburb B $299,133
Viridian Line of Credit $264,192
5.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.
…
The husband failed to comply with Order 1 of those orders, and thus the sale of the Suburb B property was required to effect Orders 3, 4 and 5. Thereafter, various applications have been filed in the first instance proceedings in an attempt to enforce those orders, including for the sale of the Suburb B property, for the husband to vacate that property, for the assessment of any capital gains tax (“CGT”) liability from the sale, and in relation to various costs applications.
On 13 May 2021, 18 months after the property settlement orders were made, the Suburb B property sold for $3,800,000. After various payments were made, the remaining sale proceeds of $2,369,050.71 were paid into a trust account as directed by the parties. The parties have thereafter been in dispute as to how those funds should be distributed in accordance with the 21 November 2019 orders.
On 24 May 2021, the wife filed an application for enforcement of the 21 November 2019 orders which proposed orders to, amongst other things, release part of the remaining proceeds of sale of the Suburb B property to her.
Also on 24 May 2021, the husband filed an affidavit deposing to how he proposed the residual proceeds of sale of the Suburb B property should be paid to each of the parties.
On 21 and 22 June 2021, the primary judge heard the wife’s application, and on 29 June 2021, delivered reasons and made the order subject of this appeal, namely that “on or before noon on 6 July 2021 [the husband] must pay [the wife] the entire sum ordered by Foster J in paragraph 1 of his Honour’s orders made 21 November 2019.”
The wife then filed her appeal on 13 July 2021.
APPLICATION IN AN APPEAL
The wife filed an Application in an Appeal on 20 July 2021, which in part, sought to adduce further evidence in the appeal, albeit only in the event that this Court allowed the appeal and was minded to re-exercise the discretion of the primary judge.
As pressed, the only material sought to be admitted were copies of the husband’s bank statements. However, ultimately the husband conceded that, if the appeal were allowed, and the primary judge’s discretion was re-exercised, the outcome should be as the wife contended, and thus the further material proved unnecessary.
Also sought to be adduced was a letter of offer made from the wife’s solicitors to the husband’s, which the husband agreed should be admitted into evidence in relation to the issue of costs. To that extent therefore, the Application in an Appeal should be allowed.
APPEAL
Ground 2 – Procedural Fairness
This ground provides:
2.That the primary Judge erred in not affording the Appellant natural justice in circumstances whereby the Order made on the 29 June 2021 varied the section 79 adjustive Orders made by Justice Foster on 21 November 2019 to being the amount specified in Order 1 and not the percentage amount of the proceeds of sale and the further additional lump sum as ordered.
(As per the original)
An appeal ground which alleges a failure to afford natural justice is a challenge to the integrity of the administration of justice, and thus should be dealt with first (Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 at 581, 611–612, 634; Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128 at [9]–[10]).
Under this ground, the wife contends that the primary judge, in making the order that he did, varied Foster J’s orders of 21 November 2019 without notice to the parties, and thereby denied them natural justice.
As already indicated, the husband failed to comply with Order 1 of the 21 November 2019 orders and thus the consequential orders (Orders 3, 4 and 5) became operative, and Order 1 ceased to operate.
Plainly, the wife’s application before the primary judge was to enforce Orders 3, 4 and 5. Further, as is apparent from the husband’s affidavit filed 24 May 2021 and his solicitor’s submissions made before the primary judge on 21 and 22 June 2021, it was also the husband’s position that Order 1 no longer applied, but rather the orders predicated upon his default were operative. Indeed, the husband’s solicitor submitted to the primary judge that the husband agreed to pay the wife the payments referred to under Orders 3(a) and 3(b), however the gravamen of the husband’s contention was that he also sought to retain funds to cover his CGT liability contrary to Order 5 (see Transcript 22 June 2021, p.14 lines 41–45).
In making the order which his Honour did, the primary judge varied the substantive property settlement orders of 21 November 2019, as opposed to facilitating their enforcement. Plainly that was without any prior notice to the parties.
Although a judge is not bound by the proposals of the parties (U v U (2002) 211 CLR 238 at [80]), orders materially different to those sought by them ought not be made without first affording the opportunity to make submissions (Bolitho and Cohen (2005) FLC 93-224 at [85]; Lenova & Lenova (2011) FLC 93-467 at [55]; Robertson & Sento [2009] FamCAFC 49 at [138]). That is exactly what the primary judge did here, especially given the parties’ concurrence that the wife’s enforcement application related to Orders 3, 4 and 5, and not Order 1.
This ground has merit.
Other grounds
Because we have found error on the part of the primary judge, it is not necessary to traverse the remaining grounds, except to say that, even assuming that r 20.07 of the Family Law Rules 2004 (Cth) (repealed) empowered his Honour to make the order which he did, it is clear that it was founded upon a legally erroneous premise that Order 1 had continued operation at all, and its enforcement was necessary.
RE-EXERCISE OF DISCRETION OR REMITTER
Ordinarily, success of an appeal on the ground of a denial of natural justice leads to the matter being remitted for rehearing. However the husband’s concession that the amount which the wife sought be paid to her was correct, means that re-exercise is the only sensible course in this case. There will therefore be an order that the wife be paid $1,518,518.16 from the remaining sale proceeds of the Suburb B property, and the balance be released to the husband.
COSTS
The appeal succeeded in relation to an error of law, to which the husband made no contribution. Further, the husband did not significantly engage in the appeal, insofar as it pertained to the primary judge’s error, and which, even if conceded by him, would still have required the Court to be satisfied of the error, and to hear submissions as to whether it should remit or re-exercise the discretion.
However, the wife’s solicitor offered, in her letter of 14 July 2021, a sensible way forward to rectify the plain error of the primary judge, yet the husband did not agree to it. In any event, it was always open to the husband to cause payment to the wife of the ultimately conceded amount, and hence render the appeal unnecessary. He did not do so and there is no explanation for that.
We are satisfied that there should be an order for costs as sought by the wife, save that the sum payable ought be $10,082.54, reflecting that counsel was not engaged by her to argue the appeal, but rather that in those circumstances, it was reasonable for two solicitors to attend the hearing of the appeal on behalf of the wife.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Tree, Gill & Hartnett. Associate:
Dated: 16 November 2021
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