Freitag & Pymer
[2022] FedCFamC2F 424
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Freitag & Pymer [2022] FedCFamC2F 424
File number(s): ADC 4304 of 2021 Judgment of: JUDGE JENKINS Date of judgment: 8 April 2022 Catchwords:
1 FAMILY LAW – Property – Application for Final Orders to be set aside pursuant to s 79A (1)(a) of the Family Law Act1975 (Cth) – Whether there was implied consent to set aside the Final Orders pursuant to s 79A (1A) – Where the respondent made an oral application for summary dismissal and an alternative application for bifurcation of the s 79A proceedings – Application for summary dismissal refused – Application for bifurcation granted.
Legislation: Family Law Act 1975 (Cth) ss 79, 79A (1)(a), 79A (1A)
Family Law (Fees) Regulation 2012 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 12.14, 10.09, 1.31
Cases cited: Gitane & Velacruz (2007) FLC 93-309; [2007] FamCA 183
Lancer & Lancer [2008] FamCAFC 112
Oastler & Oastler (1993) FLC 92-390; [1989] FamCA 100
Riley & Pateman [2000] FamCA 1296 (unreported)
Waterman & Waterman [2017] FamCAFC 23
Division: Division 2 Family Law Number of paragraphs: 48 Date of hearing: 22 March 2022 Place: Adelaide Counsel for the Applicant: Mr McQuade Solicitor for the Applicant: The Family Law Project Counsel for the Respondent: Ms Horvat Solicitor for the Respondent: Andersons Solicitors ORDERS
ADC 4304 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR FREITAG
Applicant
AND: MS PYMER
Respondent
ORDER MADE BY:
JUDGE JENKINS
DATE OF ORDER:
8 APRIL 2022
THE COURT ORDERS THAT:
1.The wife's oral application for summary dismissal of the husband's Initiating Application filed 3 September 2021 (“the husband’s application”) made on 22 March 2022 is refused.
2.The wife's application to bifurcate the hearing of the husband's application is granted.
3.The matter be listed for a two day trial on 17 and 18 October 2022 at 10.00am on the issues of:
(a)whether the husband has a ground pursuant to section 79A (1)(a) of the Family Law Act1975 (Cth) to set aside the final orders made 6 April 2017 (“the final orders”) and if so, whether there has been a miscarriage of justice; and
(b)whether there was otherwise implied consent to set aside the final orders pursuant to section 79A (1A).
4.On or before 28 days prior to trial, the applicant pay the setting down fee and the respondent pay such further daily hearing fee as required pursuant to the Family Law (Fees) Regulation 2012 (Cth).
5.No later than 28 days prior to the trial date, the applicant file and serve the following:
(a)any Amended Initiating Application setting out, with particularity, the precise final orders sought;
(b)an updated single consolidated trial affidavit;
(c)other witness affidavits upon which they intend to rely; and
6.No later than 14 days prior to the trial date, the respondent file and serve the following:
(a)any Amended Response setting out, with particularity, the precise final orders sought;
(b)an updated single consolidated trial affidavit;
(c)other witness affidavits upon which they intend to rely; and
7.No later than 14 days prior to the trial date the applicant file and serve any affidavit(s) in reply addressing only the evidence presented in the respondent's affidavits.
8.Each party is permitted to rely on one consolidated trial affidavit and one affidavit in reply (if applicable) only noting reliance on earlier or additional affidavits will not be permitted.
9.Pursuant to Rule 12.14 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), not later than seven days prior to trial, the lawyer for each party must give the other party a written notice of:
(a)the party's actual costs, both paid and owing up to and including the trial;
(b)any expenses paid or payable to an expert witness or, if those expenses are not known, an estimate of the expenses; and
(c)on the first day of trial: a party's lawyer must give to the Court and each other party a copy of the said notice given to the party.
10.No later than two days prior to the trial date, all parties are to file and serve a Case Outline document in the approved form which shall not, without leave, exceed five pages in respect of parenting issues and five pages in respect of financial issues and shall include:
(a)a list of the material relied upon;
(b)a brief chronology listing significant events that are relevant to the issues to be determined by the Court; and
11.Not later than two days prior to the hearing, lists of authorities on which the parties intend to rely during the presentation of any argument, together with copies of any unreported decisions to which it is intended that reference shall be made, should be filed and served.
12.All documents required to be filed and all other documents sought to be relied upon (including any court books or tender books) must be filed or provided (as applicable) in electronic format to the Court and to each other party.
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 Freitag & Pymer has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE JENKINS
The husband filed an Initiating Application on 3 September 2021 seeking that the final property orders made on 6 April 2017 (“the final orders”) be varied pursuant to section 79A (1A) of the Family Law Act 1975 (Cth) (“the Act”) or in the alternative the final orders be set aside pursuant to section 79A (1)(a) of the Act.
The wife seeks to have the husband’s Initiating Application summarily dismissed or in the alternative that there be a bifurcation of the section 79A proceeding.
Counsel for the husband submitted that the Court should not hear the wife’s oral application for summary dismissal on the basis that the wife has not filed a formal application but relies instead on an outline served on the husband on the Friday prior to the hearing and an oral application made on the day of this interim hearing.
BACKGROUND
The husband and wife are both aged 47 years.
The husband says the parties’ commenced cohabitation in 2010. The wife denies the relationship commenced at that time. Rather she says the husband stayed with her “on and off”, because he had nowhere else to stay, until 2011 from which time she considers they were in a committed relationship.
The parties were married in late 2013.
There are no children of the relationship.
In or about October 2013 the parties purchased a property at B Street, Suburb C, South Australia (“the Suburb C property”) for $550,000. It is common ground that the wife’s parents lent the parties $500,000 towards the purchase, which left a shortfall of approximately $80,000. The husband and wife attempted to obtain a loan for the balance however their loan application was declined. The wife’s parents then agreed to be guarantors to enable the parties to borrow the remaining funds.
Accordingly, the title to the Suburb C property was placed in the name of the wife’s mother, the husband and the wife. The mortgage was obtained in the name of both the wife’s parents, the husband and the wife.
The parties are in dispute as to whether there was a period of separation between April 2016 and February 2018.
The wife’s case is that the parties separated in or about April 2016 when she discovered the husband was seeing another woman and she then told the husband the marriage was over. The wife’s evidence is that she cancelled birthday plans and told her friends that she had made the decision to separate.
Curiously the husband is entirely silent about the wife’s assertion of another relationship.
The wife’s evidence is that the parties agreed at that time to separate their finances and that the husband’s name was to be removed from the title of the Suburb C property. In keeping with this, in or about June/July 2016, the Suburb C property was transferred into the names of the wife’s mother and the wife and the mortgage was refinanced to remove the husband’s name.
The wife instructed Andersons Solicitors to prepare consent orders to reflect this agreement. She says the documents were provided to the husband for review. The wife understood the husband had spoken to a solicitor by the name of Mr D. Counsel for the wife, quite appropriately advised the Court during the hearing, that enquiries had been made with the firm employing Mr D and it would appear that the firm had no record of taking any instructions from the husband.
Nonetheless, the wife says the husband was prepared to sign the consent orders and the consent orders were witnessed by a Justice of the Peace. The orders were then filed with the Court on 15 March 2017 and the final orders were made by a Registrar on 6 April 2017.
It is noted in the final orders that the husband was aware of his right to obtain independent legal advice but chose not to obtain any.
The wife’s case is that the parties remained in contact and that in or about Christmas/New Year 2017/2018, the parties began to discuss reconciliation.
The wife says that in February 2018 she agreed for the husband to move back in to the Suburb C property on the basis that the parties would continue to keep their finances separate and that the husband make payments towards his day to day living costs.
The husband’s case is that the parties did not separate in April 2016. His evidence is that the relationship became troubled in April 2016. The husband says that as a consequence of these troubles, as well as some “financial and employment” reasons and in order to care for his father who had suffered a stroke, he commenced working in Suburb E (where his parents lived) on a week about basis. Although he says the parties did not separate, he did obtain a share house in Suburb F which he used for the weeks when he was in Adelaide. He confirms at paragraph 60 of his affidavit, filed 3 September 2021, that upon signing the consent orders he maintained the same arrangement, and that it was not until February 2018 that he “gave up the share house accommodation and recommenced living exclusively in the Suburb C property” (at [63]). Although I note at paragraph 18.3 of the same affidavit, that in contradiction to this, the husband says he returned to live in the former matrimonial home fulltime in March 2017.
In regard to the consent orders, the husband’s evidence is that the wife put pressure on him to agree to the orders to protect her from the liabilities he had accrued and that she promised him “almost daily” in early 2017 that if he signed the orders he would be able to move back into the Suburb C property. It is noted however that although the orders were made in April 2017, on one version of the husband’s evidence, he says that he maintained the same living arrangements including a shared house until almost a year later.
The husband’s evidence is that subsequent to signing the final orders he carried out various works to the Suburb C property.
I understand the wife’s case is that the husband did not contribute any more to the Suburb C property, by way of upkeep, maintenance or improvement, than she did during the same period.
The husband’s evidence is that he also made payments to the wife totalling $44,402.50 by way of school fees for the wife’s son. It is unclear to what extent the husband says he also paid for the day to day expenses of the parties at that time, in particular by way of mortgage payments/rent, food expenses, utilities and the like. It is also unclear how he could afford to pay school fees, as well as paying for renovations to the home and/or for the day to day expenses. The husband could presumably have provided bank statements and other source documents to corroborate this claim but that evidence is not before the Court.
The wife’s evidence is that she does not understand why the husband’s payments were marked as school fees as her understanding was that these payments were for the husband’s living expenses. It was submitted on behalf of the wife that the total amount paid by the husband averaged out to approximately $500 a week.
The wife’s case is that in June 2019 she discovered messages on the husband’s phone that suggested he had recommenced the previous relationship. Accordingly she told the husband their attempt to reconcile was over. The husband is again completely silent as to the circumstance of the second separation.
SUMMARY DISMISSAL
Rule 10.09 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the rules”) state as follows:
10.09 Application for summary orders
(1)A party may apply for summary orders after a response has been filed if the party claims, in relation to the application or response, that:
(a) the court has no jurisdiction; or
(b) the other party has no legal capacity to apply for the orders sought; or
(c) it is frivolous, vexations or an abuse of process; or
(d) there is no reasonable likelihood of success.
(2)An application under this rule must be made by filing an application in accordance with the approved form.
This rule makes it clear that an applicant must file an application in accordance with the approved form.
I am aware that pursuant to part 1.3 of the rules, in particular rule 1.31, the Court has the discretion to dispense with the rules.
However, I accept the submission of the husband that it is a serious matter to deprive a person of access to the Courts. I also accept the husband had very little notice of the application for summary dismissal. Further to this, given the consequence of summary dismissal in this matter, I do not propose in this case to dispense with the rules and accordingly the respondent’s oral application for summary dismissal is refused.
BIFURCATION
The Full Court in Oastler & Oastler (1993) FLC 92-390 (at page 5), held as follows:
Whilst it is not necessary to lay down as an inflexible rule that such a course cannot be followed, prima facie at least the course adopted does not appear to be consistent with what the section envisages. The section provides that "the court may, in its discretion, vary the order or set it aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside." The power granted to the court hearing the application under section 79A to vary the existing order strongly suggests that there should be one proceeding only in which the proceedings to vary or set aside the order and if appropriate, to make another Order, should be disposed of.
Nonetheless, there are cases where bifurcation is appropriate and the Court has adopted a two-step process. See for example Gitane & Velacruz (2007) FLC 93-309. In that case the Full Court set out the following at paragraph 16:
… The 79A application required two steps to be taken. Firstly a ground for setting aside has to be shown to exist and then secondly, the Court needs to decide whether, if the ground is found to be proven, to set the order aside and to make an order in substitution for the original order. It was the submission being made that if the first step could not succeed it would be inappropriate to put the parties to the expense of having to prepare what would be a fresh s 79 case. A recent example of the application of that principle can be seen in an unreported Full Court decision of G v G [2005] FamCA 1171.
SECTION 79A
Section 79A of the Act states as follows:
Setting aside of property interests
(1)Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a)there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance;
(b)in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or
(c)a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or
(d)in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order; or
(e)a proceeds of crime order has been made covering property of the parties to the marriage or either of them, or a proceeds of crime order has been made against a party to the marriage;
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
Jordan J stated in Riley & Pateman [2000] FamCA 1296 (at page 7) that this involves four distinct steps as follows:
(1)Whether one of the grounds has been established…
If such a ground is established, then the next inquiry is:
(2) Whether that ground gave rise to a miscarriage of justice, and if so
(3) Whether the Court in its discretion should vary or set aside the order, and if so
(4)What order should be made applying the provisions of section 79 and section 75(2).
The Full Court in Lancer & Lancer [2008] FamCAFC 112 (“Lancer”) (at paragraph 18) said as follows:
In addressing the question of whether or not to bifurcate the hearing of a section 79A application, a judge is likely to examine the degree of connection between the ground and the other questions which might need to be addressed, namely whether there has been a miscarriage of justice in the circumstances and whether the order should be varied or set aside, if so, to what extent it ought be varied or what order ought be made, if any, in lieu. That connection or degree of connection will vary from case to case.
At paragraph 20 in Lancer the Court observed that there are situations where a ground such as suppression of evidence would constitute a miscarriage of justice “whatever the current financial circumstances of the parties and whatever the history of the contributions”.
The husband’s Counsel argued that it was necessary in this case for the Court to be aware of the parties’ actions subsequent to the making of the final orders, including any contributions, in order to determine whether there had been a miscarriage of justice. Further to this, that it was necessary for the wife to disclose her current financial situation because it would be clear from this information that she had been “unjustly enriched”.
IMPLIED CONSENT
Section 79A (1A) of the Act states as follows:
A court may, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, and with the consent of all the parties to the proceedings in which the order was made, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
In Waterman & Waterman [2017] FamCAFC 23 (at paragraph 66) the Full Court said:
Reconciliation is not, of itself, sufficient for a finding that the parties had impliedly consented to the setting aside of an s 79 consent order. Rather, any such finding is made by reference to the miscellany of circumstances pertaining to the parties’ relationship by which the relevant intention is to be inferred.
And at paragraph 69:
In concluding, at [68] and [69], that the wife had not established that the parties impliedly consented to the setting aside of the orders, his Honour relied upon the following passage from the decision of the Full Court in McCabe, above:
In cases of this nature conclusions about intention which should be attributed to the parties will depend upon the particular circumstances of each case. That material would not necessarily be confined to the initial decision to reconcile or, as in this case, to write to the Court. Their intention may crystallize into a more precise form as time progresses and as the parties’ reconciliation continues and they conduct their lives together, including their financial affairs, so that it becomes inconsistent with any other conclusion.
At paragraphs 102–104, Bryant CJ added the following:
102…s 79A (1A) does not include as part of its requirement that there be a miscarriage of justice. The section refers to the Court having the ability, with the consent of the parties, to set aside or vary the order…
103… [T]he inability of the wife, after a long period of time and making of contributions, to have access to a remedy does not need to present itself as a miscarriage of justice. It is rather one of the circumstances to which the Court should have regard, in my view, when considering whether consent can be implied. In my view, the Court is required to consider all of the circumstances of the behaviour of the parties which might reasonably lead it to imply consent and the circumstances that the mutuality of the financial agreement between the husband and wife to each make contributions as outlined by Murphy J is one of those matters.
104It would be, in my view, unreasonable or unconscionable for the Court not to take account of the fact that without any remaining remedy, the contributions which both parties made, and particularly the wife, with the agreement of each of them during their cohabitation, would be unrecognised…
DISCUSSION
Prima facie, the wife should be able to rely on the final orders and the finality as intended by the Act with respect to orders made under section 79.
The onus is then clearly on the husband to demonstrate that there is a ground to vary or set aside the orders (as a first step) or that there was implied consent to set them aside.
It is my view that there are a number of inconsistencies in the husband’s own evidence with respect to showing that there is firstly a ground to set aside the final orders and/or secondly in showing there was implied consent to set aside the final orders.
In regard to section 79A (1)(a) the husband appears to rely upon the ground of duress in that he asserts he was pressured into signing the final orders in March 2017 with the promise he would be allowed to move back into the Suburb C property. However, his evidence contradicts itself as to exactly when he moved back, despite this seemingly being key to his argument. If in fact he did not move back in until nearly a year later it is hard to see how this is consistent with duress.
The husband also appears to rely on the ground of “any other circumstance” namely that he believed the purpose of signing the consent orders was to protect the wife from his debts and that he did not understand he was forfeiting his right to “any proportion of the property pool”. Given the husband’s evidence is that he was the sole director and personal guarantor for the company responsible for most of the debts it is unclear why the wife felt she needed this protection.
In regard to section 79A (1A) the husband says that by virtue of his substantial contributions, both financial and non-financial, the Court should find that there was implied consent to set aside the orders. There is little evidence to corroborate the husband’s assertions, including evidence such as his own bank accounts which it would seem could easily be obtained. Further to this, it is difficult to understand how he could have afforded to make the “school fee” payments as well as pay for renovations and/or contribute to his day to day expenses. This is unless the husband’s income had been substantially higher at that time, than the income evidenced in his current financial statement. The husband has provided no evidence of his income during the period he asserts he made financial contributions to the Suburb C property.
In this case, whilst there is a significant degree of commonality between the evidence required for the section 79A arguments and the evidence required to vary or make new orders in the event one of those arguments is successful, I accept that there is still likely to be an additional cost to the parties of further disclosure and negotiations and potentially the cost of additional witnesses if the matter is not bifurcated. I have also factored in that if the section 79A argument is heard separately and is successful, that any negotiations thereafter are more likely to lead to overall resolution.
In my view, until the husband has established either a ground pursuant to section 79A (1)(a) (and if so that there was also a miscarriage of justice) or that he can demonstrate substantial contributions or other circumstances such as to satisfy the Court that there was implied consent to set aside the orders, neither party should be put to the likely additional expense, both financial and emotional, of preparing for a combined hearing. This is especially the case considering the husband’s precarious financial position as set out in his financial statement filed 3 September 2021 and the modest funds received by the wife as a result of the sale of the Suburb C property.
Finally, it is my view that the husband does not need to know the wife’s current financial situation in order to prove his case. He is able to obtain by way of discovery, any material which he says goes to his contributions, which is not otherwise in his possession or control. It is also common knowledge as to the sale price of the Suburb C property and thus the funds which were available to the wife at the time of sale. I fail to see how the way in which she has applied those funds since that time is relevant to the determination of the preliminary issues under section 79A. Accordingly, I will not require the wife to file a financial statement at this time.
For all of the foregoing reasons, I make the orders as are set out.
I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Jenkins. Associate:
Dated: 8 April 2022
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