Fierro & Fierro (No 8)

Case [2023] FedCFamC1F 336

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Fierro & Fierro (No 8) [2023] FedCFamC1F 336

File number: SYC 7639 of 2021
Judgment of: CAMPTON J
Date of judgment: 5 May 2023
Catchwords:

FAMILY LAW – JURISDICTION – Application to set aside a costs order made pursuant to r 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) – Character of relief under r 10.13 – Where the challenged order is a final perfected order of this Court – Where the applicant asserts the costs order was obtained by fraud, or in the alternative, was made in his absence – Where the applicant had the burden to prove actual fraud, in the common law sense – Where the evidence to prove fraud must be fresh or newly discovered – Relief absent evidentiary foundation – Where the applicant had notice of the hearing and elected not to participate – Where the applicant did not file documents in response to the costs application – Where the making of costs order in applicant’s absence does not reflect a lack of procedural fairness – Where the applicant has attempted to mask a collateral attack on prior parenting determinations as a challenge to a costs order – Application wholly misconceived – Costs ordered in favour of the Independent Children’s Lawyer.

FAMILY LAW – PRACTICE AND PROCEDURE – Whether special circumstances exist to permit cross-examination at interlocutory hearing – Application of r 5.09 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) – The existence of factual disputes is not in itself an “exceptional circumstance” – Leave refused.

Legislation:

Evidence Act 1905 (Cth) s 140

Family Law Act 1975 (Cth) ss 45A, 102QB, 117

Federal Circuit and Family Court of Australia (Family Law) Act 2021 (Cth) s 67

Federal Circuit and Family Court of Australia (Family Law) Act 2021 (Cth) ch 2, 5, rr 1.04, 5.08, 5.09, 10.13

Family Law Rules 2004 (Cth) r 17.02
Cases cited:

Bienstein v Bienstein (2003) 195 ALR 225; [2003] HCA 7

Clone Pty Ltd v Players Pty Ltd (In Liq) (2018) 264 CLR 165; [2018] HCA 12

Cooke & Morton (2018) FLC 93-820; [2018] FamCAFC 9

Fierro & Fierro (No 2) [2022] FedCFamC1A 114

Fierro & Fierro (No 2) [2022] FedCFamC1F 344

Fierro & Fierro (No 4) [2022] FedCFamC1A 208

Fierro & Fierro (No 4) [2022] FedCFamC1F 687

Fierro & Fierro (No 6) [2022] FedCFamC1F 1006

Fierro & Fierro (No 7) [2023] FedCFamC1A 24

Fierro & Fierro [2022] FedCFamC1A 72

Fierro v Fierro & Ors [2023] HCASL 52

Gamser v Nominal Defendant (1977) 136 CLR 145; [1977] HCA 7

Hip Foong Hong v H Neotia & Co [1918] AC 888

McDonald v McDonald (1965) 113 CLR 529; [1965] HCA 45

Patch v Ward (1867) LR 3 Ch App 203

SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189; [2007] HCA 35

Taylor v Taylor (1979) 143 CLR 1; [1979] HCA…

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AGLC
Fierro & Fierro (No 8) [2023] FedCFamC1F 336
Case
[2023] FedCFamC1F 336
Decision Date

CaseChat Overview and Summary

The case of Fierro & Fierro (No 8) involves the applicant seeking to challenge a costs order made in a family law matter, claiming it was obtained by fraud. The respondents to the application are the Independent Children's Lawyer (ICL) and two parties who obtained the benefit of the costs order. The legal issues central to this case revolve around the scope and definition of fraud in the context of family law proceedings and the circumstances under which a court may set aside a final order based on fraud. Specifically, the court needed to determine whether the applicant had sufficiently demonstrated actual fraud in the common law sense, as opposed to mere constructive fraud, to warrant setting aside the costs order.

The court meticulously reviewed the applicant's evidence and submissions to assess whether the fraud alleged was of the requisite nature to justify setting aside the costs order. The court found that the applicant had not provided particulars of fraud as required by law, particularly in light of the strict onus of proof in actions based on fraud. The High Court's decision in Clone Pty Ltd v Players Pty Ltd (In Liq) was cited to clarify that actual fraud involves a meditated and intentional contrivance to deceive the court, which the applicant's allegations did not meet. The court also highlighted that the narrow scope of common law fraud does not encompass equitable fraud, lack of frankness, or other forms of misconduct that do not involve intentional deceit.

Consequently, the court refused the applicant's application to set aside the costs order, finding that the applicant had not discharged the onus of proving actual fraud in the common law sense. The applicant's allegations, though detailed, did not meet the stringent criteria established by the High Court and were therefore insufficient to justify reopening a final order. The court emphasised the importance of the finality of court judgments and orders, recognising that exceptions to this principle are rare and only permissible in exceptional circumstances, such as when an order was obtained by fraud.

The court's decision underscores the high threshold for alleging fraud in family law proceedings and the necessity for clear and convincing evidence to support such claims. The applicant's application was dismissed, and the costs order remained in place, reflecting the court's commitment to upholding the integrity and finality of its judgments.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

In Clone Pty Ltd v Players Pty Ltd (In Liq) (2018) 264 CLR 165 (“Clone v Players”), the High Court described the scope of this power as “significantly circumscribed” (at [52]) in that it is contingent on proof of actual fraud in the common law sense (at [54]). So that it is clear, what is commonly understood by the lay person as fraudulent conduct is not the same thing as obtaining a judgment by fraud. Rather, what is required to be shown is: 55.…actual positive fraud, a meditated and intentional contrivance to keep the parties and the Court in ignorance of the real facts of the case, and obtaining that decree by that contrivance. Mere constructive fraud not originating in actual contrivance, but consisting of acts tending possibly to deceive or mislead without any such intention or contrivance, would probably not be sufficient…(Clone v Players at [55], citing Patch v Ward (1867) LR 3 Ch App 203)(Emphasis added) Although this application is made pursuant to r 10.13(b), there is nothing in that rule to suggest that the discretion thereby conferred is to be exercised on a different basis from that applicable in the case of implied (or inherent) jurisdiction as discussed by the High Court in Clone v Players. The narrow scope of common law fraud does not extend to misconduct, accident, surprise or mistake. It does not extend to equitable fraud, lack of frankness or conducting a proceeding with an ulterior motive. Except in very exceptional cases, it does not extend to fraud by perjury of a witness or witnesses acting in concert (see SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189 at [16]). The contended fraud must have “tainted and affected” the previous proceedings (See Hip Foong Hong v H Neotia & Co [1918] AC 888, cited with approval in McDonald v McDonald (1965) 113 CLR 529). A judgment will only be affected by fraud if the fraud is “material” (Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 (“Wentworth v Rogers”). The applicant therefore carries the onus of proof of:(a)Establishing the existence of fraud on the Court; and (b)Of the materiality of the fraud in procuring the determination under challenge. As in all actions based on fraud, particulars of the fraud claimed must be exactly given and, given the seriousness of the allegation, must be established by a strict application of the onus of proof set out at s 140(2) of the Evidence Act 1995 (Cth). The applicant said his relief as to the costs order made benefiting the ICL was restricted to that identified in r 10.13(1)(a) and that he “had never alleged fraud by the ICL”. He contended that the relevant fraud was occasioned by both the first and second respondents, notwithstanding that only the second respondent had obtained the benefit of the costs order. It is a fundamental rule of natural justice that when an order is to be made which will deprive a person of some right or interest or the legitimate expectation of a benefit, he or she is entitled to know the case sought to be made against him and to be given an opportunity of replying to it. As a matter of fairness, the applicant was required to provide particulars of the fraud contended to be occasioned by the first and second respondents. During submissions, he particularised five grounds of fraud, being that:(a)The first and second respondents conveyed to Berman J that the applicant was a threat to the child and to each of them; and(b)The first and second respondents conveyed to Berman J that the applicant was a stranger to the child and each of them; and(c)The first and second respondents conveyed to the Berman J that each of them, and the child wanted nothing further to do with the applicant, this being “a fiction created by my father”. As to this particular, the applicant accepted that this was currently “the reality” but says that it was a circumstance that was “created for the trial”; and(d)The second respondent was fraudulent in obtaining the “second apprehended violence order” in mid-2022, in the Magistrates Court; and(e)The first respondent had “hijacked everything since [the second respondent] ceased to have her own solicitor” in that he had drafted the second respondent’s affidavits, and that the litigation was “driven by [the first respondent]”.

Evidence

Evidence Before The Court

For those reasons, the applicant’s application for leave to cross-examine the ICL and the first and second respondents at the hearing was refused, and paragraphs 2 and 3 of the Amended Application in a Proceeding filed 28 March 2023 were dismissed. THE EVIDENCE The applicant relied upon the following documents:(f)His Amended Application in a Proceeding filed 28 March 2023; (g)His affidavit filed 23 February 2023; (h)His affidavit filed 22 February 2022 in the appeal proceedings number NAA12/2023, and the annexures thereto; (i)Seven digital audio files referred to in his affidavit filed on 22 February 2023 in the appeal proceedings number NAA12/2023 (Exhibit 2); (j)His 40-page tender bundle (Exhibit 3). This included the costs affidavit of the second respondent filed on 10 October 2022; and(k)An email from the applicant’s barrister dated 14 November 2022 (Exhibit 6). The first respondent did not rely on any documents. The second respondent relied upon the following documents:(a)Her Response to an Application in a Proceeding filed 14 April 2023; and(b)Her Affidavit filed 14 April 2023. The ICL relied upon the following documents:(a)Her Response to an Application in a Proceeding filed 14 April 2023; (b)Her Affidavit filed 20 April 2023; (c)Outline of case document filed 18 April 2023 (Exhibit 4); and(d)Costs notice filed 14 April 2023 (Exhibit 5).THE LAW AND CONSIDERATION Rule 10.13 of the Rules provides as follows:10.13 Varying or setting aside orders(1) The court may at any time vary or set aside an order, if:(a) it was made in the absence of a party; or(b) it was obtained by fraud; or… This rule is the successor to the formerly applicable r 17.02 of the Family Law Rules 2004 (Cth) (“the old rules”). Rule 10.13 of the Rules and r 17.02 of the old rules exactly mirror the other. The rule does not prescribe a time limitation as to when the application to vary or set aside is to be made. Different considerations apply dependant on the foundation of the challenge pursuant to the rule.Relief grounded from fraud to set aside the judgment of 16 December 2022 pursuant to r 10.13(1)(b) The costs order made on 16 December 2022 was a perfected final order of this Court. A high value is placed on the finality of court judgments and orders. It has been long established that when a proceeding has been finally disposed of, a court as a general rule has no inherent power to reopen the case on an application made after the final order has been made (see for example, Gamser v Nominal Defendant (1977) 136 CLR 145 at 153). Exceptions to that rule are few and far between and arise in only the most exceptional circumstances, including where the order was made in breach of a fundamental principle of natural justice. Fraud goes to the heart of the administration of justice within the judicial process. It is therefore a “tolerable” exception to finality, in that it is inconsistent with the Court’s character in administering justice. It has therefore been recognised that it is within this Court’s powers to set aside its own orders obtained by fraud (as articulated in r 10.13(2), and considered by the Full Court in Vadisanis & Vadisanis (2015) FLC 93-671 at [31]–[39]).

Decision

Reasons for decision

This rule is the successor to the formerly applicable r 17.02 of the Family Law Rules 2004 (Cth) (“the old rules”). Rule 10.13 of the Rules and r 17.02 of the old rules exactly mirror the other. The rule does not prescribe a time limitation as to when the application to vary or set aside is to be made. Different considerations apply dependant on the foundation of the challenge pursuant to the rule.Relief grounded from fraud to set aside the judgment of 16 December 2022 pursuant to r 10.13(1)(b) The costs order made on 16 December 2022 was a perfected final order of this Court. A high value is placed on the finality of court judgments and orders. It has been long established that when a proceeding has been finally disposed of, a court as a general rule has no inherent power to reopen the case on an application made after the final order has been made (see for example, Gamser v Nominal Defendant (1977) 136 CLR 145 at 153). Exceptions to that rule are few and far between and arise in only the most exceptional circumstances, including where the order was made in breach of a fundamental principle of natural justice. Fraud goes to the heart of the administration of justice within the judicial process. It is therefore a “tolerable” exception to finality, in that it is inconsistent with the Court’s character in administering justice. It has therefore been recognised that it is within this Court’s powers to set aside its own orders obtained by fraud (as articulated in r 10.13(2), and considered by the Full Court in Vadisanis & Vadisanis (2015) FLC 93-671 at [31]–[39]). In Clone Pty Ltd v Players Pty Ltd (In Liq) (2018) 264 CLR 165 (“Clone v Players”), the High Court described the scope of this power as “significantly circumscribed” (at [52]) in that it is contingent on proof of actual fraud in the common law sense (at [54]). So that it is clear, what is commonly understood by the lay person as fraudulent conduct is not the same thing as obtaining a judgment by fraud. Rather, what is required to be shown is: 55.…actual positive fraud, a meditated and intentional contrivance to keep the parties and the Court in ignorance of the real facts of the case, and obtaining that decree by that contrivance. Mere constructive fraud not originating in actual contrivance, but consisting of acts tending possibly to deceive or mislead without any such intention or contrivance, would probably not be sufficient…(Clone v Players at [55], citing Patch v Ward (1867) LR 3 Ch App 203)(Emphasis added) Although this application is made pursuant to r 10.13(b), there is nothing in that rule to suggest that the discretion thereby conferred is to be exercised on a different basis from that applicable in the case of implied (or inherent) jurisdiction as discussed by the High Court in Clone v Players. The narrow scope of common law fraud does not extend to misconduct, accident, surprise or mistake. It does not extend to equitable fraud, lack of frankness or conducting a proceeding with an ulterior motive. Except in very exceptional cases, it does not extend to fraud by perjury of a witness or witnesses acting in concert (see SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189 at [16]).

Ratio Decidendi

Legal Principle Established

The ICL relied upon the following documents:(a)Her Response to an Application in a Proceeding filed 14 April 2023; (b)Her Affidavit filed 20 April 2023; (c)Outline of case document filed 18 April 2023 (Exhibit 4); and(d)Costs notice filed 14 April 2023 (Exhibit 5).THE LAW AND CONSIDERATION Rule 10.13 of the Rules provides as follows:10.13 Varying or setting aside orders(1) The court may at any time vary or set aside an order, if:(a) it was made in the absence of a party; or(b) it was obtained by fraud; or… This rule is the successor to the formerly applicable r 17.02 of the Family Law Rules 2004 (Cth) (“the old rules”). Rule 10.13 of the Rules and r 17.02 of the old rules exactly mirror the other. The rule does not prescribe a time limitation as to when the application to vary or set aside is to be made. Different considerations apply dependant on the foundation of the challenge pursuant to the rule.Relief grounded from fraud to set aside the judgment of 16 December 2022 pursuant to r 10.13(1)(b) The costs order made on 16 December 2022 was a perfected final order of this Court. A high value is placed on the finality of court judgments and orders. It has been long established that when a proceeding has been finally disposed of, a court as a general rule has no inherent power to reopen the case on an application made after the final order has been made (see for example, Gamser v Nominal Defendant (1977) 136 CLR 145 at 153). Exceptions to that rule are few and far between and arise in only the most exceptional circumstances, including where the order was made in breach of a fundamental principle of natural justice. Fraud goes to the heart of the administration of justice within the judicial process. It is therefore a “tolerable” exception to finality, in that it is inconsistent with the Court’s character in administering justice. It has therefore been recognised that it is within this Court’s powers to set aside its own orders obtained by fraud (as articulated in r 10.13(2), and considered by the Full Court in Vadisanis & Vadisanis (2015) FLC 93-671 at [31]–[39]). In Clone Pty Ltd v Players Pty Ltd (In Liq) (2018) 264 CLR 165 (“Clone v Players”), the High Court described the scope of this power as “significantly circumscribed” (at [52]) in that it is contingent on proof of actual fraud in the common law sense (at [54]). So that it is clear, what is commonly understood by the lay person as fraudulent conduct is not the same thing as obtaining a judgment by fraud. Rather, what is required to be shown is: 55.…actual positive fraud, a meditated and intentional contrivance to keep the parties and the Court in ignorance of the real facts of the case, and obtaining that decree by that contrivance. Mere constructive fraud not originating in actual contrivance, but consisting of acts tending possibly to deceive or mislead without any such intention or contrivance, would probably not be sufficient…(Clone v Players at [55], citing Patch v Ward (1867) LR 3 Ch App 203)(Emphasis added)