Ganakis & Ganakis
[2022] FedCFamC1F 262
•22 April 2022
Federal Circuit and Family Court of Australia
(DIVISION 1)
Ganakis & Ganakis [2022] FedCFamC1F 262
File number(s): SYC 7736 of 2020 Judgment of: SCHONELL J Date of judgment: 22 April 2022 Catchwords: FAMILY LAW – PARENTING AND FINANCIAL – Where the husband sought a permanent stay of the wife’s Initiating Application on the grounds of claim or issue estoppel, or alternatively abuse of process – Where the husband contended that final orders were made in Country B – Where the wife contended that the proceedings should not be stayed on the grounds of estoppel and that the husband’s unconscionable conduct needed to be taken into account – Where it was found that the principles of estoppel do not apply to parenting proceedings – Where it was determined that the spousal maintenance orders and child support orders were not final orders incapable of variation – Application for stay of proceedings dismissed other than in relation to property orders. Legislation: Child Support (Assessment) Act 1989 (Cth) s 121
Family Law Act 1975 (Cth) s 83
Cases cited: Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502; [1988] HCA 21
Clayton v Bant (2020) 385 ALR 41; [2020] HCA 44
Elmi & Munro (2019) FLC 93-912; [2019] FamCAFC 138
Federal Treasury Enterprises (FKP) Sojuzplodoimport & Anor v Spirits International BV (2021) 389 ALR 612; [2021] FCAFC 777
Mehta & Crimmins (2021) FLC 94-062; [2021] FedCFamC1A 73
Tomilson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28
Division: Division 1 First Instance Number of paragraphs: 72 Date of hearing: 14 April 2022 Place: Sydney Counsel for the Applicant: Ms Vohra SC Solicitor for the Applicant: Katsikaris Family Lawyers Senior Counsel for the Respondent: Mr Beaumont SC Junior Counsel for the Respondent: Ms Hughes Solicitor for the Respondent: Blanchfield Nicholls ORDERS
SYC 7736 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GANAKIS
Applicant
AND: MR GANAKIS
Respondent
order made by:
SCHONELL J
DATE OF ORDER:
22 APRIL 2022
THE COURT ORDERS THAT:
1.The Initiating Application filed in this matter by the wife on 2 November 2020 be permanently stayed in so far as it relates to property settlement orders (Orders 1–13 of the Initiating Application).
2.The husband’s application for a permanent stay of the proceedings is otherwise dismissed.
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 Ganakis & Ganakis has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
SCHONELL J:
This is an application brought by the husband seeking orders to permanently stay the Initiating Application filed by the wife on 2 November 2020, which sought both interim and final orders as to property settlement, spousal maintenance, child maintenance and parenting.
The husband’s application arises in the context of consent orders having been made by the Family Court of Country B (“the Country B Court”).
The wife opposed the husband’s relief and by implication sought to continue to prosecute her Initiating Application.
During the course of the hearing, each of the parties made appropriate concessions and therefore, the ultimate relief varied somewhat from the positions at the commencement of the hearing.
Following the conclusion of the hearing, the husband submitted an Amended Minute of Order seeking the following:
1.That the Initiating Application filed in this matter by the Wife on 2 November 2020 be permanently stayed in so far as it relates to property settlement orders sought (orders 1- 13 of the Initiating Application).
2.In the alternative to order 1 above, that the Initiating Application filed in this matter by the Wife on 2 November 2020 be summarily dismissed in so far as it relates to property settlement orders sought (order 1- 13 of the Initiating Application).
3.That the Initiating Application filed in this matter by the Wife on 2 November 2020 be permanently stayed in so far as it relates to spouse maintenance orders sought (order 17 of the Initiating Application).
4.In the alternative to order 3 above, that the Initiating Application filed in this matter by the Wife on 2 November 2020 be summarily dismissed in so far as it relates to spouse maintenance orders sought (order 17 of the Initiating Application).
5.That the Initiating Application filed in this matter by the Wife on 2 November 2020 be permanently stayed in so far as it relates to child maintenance orders sought (orders 18 and 19 of the Initiating Application).
6.In the alternative to Order 5 above, that the Initiating Application filed in this matter by the Wife on 2 November 2020 be summarily dismissed in so far as it relates to child maintenance orders sought (orders 18 and 19 of the Initiating Application).
7.Insofar as the Initiating Application seeks parenting orders set out in paragraphs 14-16, those paragraphs of the Initiating Application be summarily dismissed.
8.Costs.
The husband, who carried the onus of proof, was represented by Mr Beaumont SC and Ms Hughes of counsel. The wife was represented by Ms Vohra SC. The presentation of the case, in both written and oral form, by each of the respective counsel, was a masterclass in advocacy. Each counsel focused on the issues, did not trouble the Court with irrelevancies, made appropriate concessions in relation to the case, and conducted the hearing on behalf of their clients with the utmost professionalism.
The husband relied upon the following documents:
(1)Amended Response to the Initiating Application filed 7 April 2022;
(2)Affidavit of husband filed 25 August 2021;
(3)Affidavit of the single expert Ms C filed 11 April 2022; and
(4)Case Outline document.
The wife relied upon the following documents:
(1)Initiating Application filed 2 November 2020;
(2)Affidavit of wife filed 30 October 2020 (paragraphs 16–24 only);
(3)Affidavit of wife filed 23 September 2021;
(4)Affidavit of the single expert Ms C filed 11 April 2022; and
(5)Case Outline document.
Background facts
Both parties were born in Australia. The husband is currently aged 52 years, and the wife is currently aged 51 years.
The parties married and commenced cohabitation in 1999.
The parties have two children, X currently aged 14, and Y currently aged 13.
In 2015, the parties along with their two children relocated to Country B for the husband's employment. The wife was the primary carer of the children and remained financially dependent on the husband.
In or around October 2018, the parties separated but remained living under the one roof until late 2020, when the wife and children returned to Australia.
Between May/June 2020 and July 2020, the parties attended three joint mediation sessions. The husband says that they discussed parenting and financial arrangements for the children. The wife says that property settlement and/or spousal maintenance was not discussed in these sessions.
The wife contends that despite not reaching a final settlement on all issues, the parties reached an agreement in mid-2020 that the wife would return to Sydney with the children.
In late 2020, the husband commenced proceedings in the Country B Court seeking a divorce, parenting orders, property settlement and that no spousal maintenance be payable to the wife. The wife contends that the husband commenced proceedings without any prior notice to her.
About a week later, the wife contends that she transferred $165,000 from the parties joint account to an account in her name because the husband had stopped depositing his income into the joint account. The wife says that following this, the husband threatened to report her to the police if she did not return the money, and that he became increasingly hostile.
About a week later, the wife commenced proceedings in the Family Court of Australia (as it was then). The wife's lawyer in Country B also filed a Memorandum of Appearance in the Country B Court with the intention of challenging the Country B Court’s jurisdiction.
About a week later, the wife was advised by the husband's lawyer that he had removed the children's passports, and that the husband did not consent to the children returning to Sydney without an agreement or court order.
A week later, the wife filed a Summons for Stay of Proceedings in the Country B Court on the basis of forum non conveniens.
The next month, the wife signed draft Country B Court consent orders. The husband contends that the wife subsequently terminated her retainer with her Country B lawyer. The wife contends that on that day, she had no legal representation as her Country B lawyer had ceased acting for her on that day and her Australian lawyer was on leave. She contends that she signed the Country B consent orders because the husband was exerting extreme pressure on her and she was desperate to get away from him. The wife says that the husband's lawyer arranged for a witness, and that she felt that she no choice but to sign.
Two days later, the wife emailed the Country B Court to inform them that a global settlement had been reached, that she had signed draft consent orders, and that she wished to withdraw her application for a stay of proceedings.
On the same day, the draft consent orders were filed with the Country B Court.
The next day, the wife and children returned to Sydney.
On 11 January 2021, the wife emailed the husband's lawyer to inform them that despite being legally represented, she felt pressured to sign the consent orders, but that she did not intend to contest the orders.
On 12 January 2021, a directions hearing took place for the Australian proceedings. The Court noted that consent orders were being finalised in Country B and that the parties were hopeful that mirror documents would be filed in the Family Court of Australia (as it then was). The husband contends that during this hearing, the wife did not raise any issues associated with the Country B consent orders.
In early 2021, during a case conference in the Country B Court, the husband contends that the wife informed the Court that a settlement had been reached and that she consented to withdrawing her stay application.
In early 2021, interim orders were made in accordance with the Country B consent orders.
On 2 February 2021, following a further directions hearing, the Court noted that the parties appeared to have reached a settlement, that consent orders were being filed in Country B, and that mirror consent orders would be filed in Australia. The husband contends that the wife once again did not raise any issues regarding the Country B consent orders.
In mid-2021, final orders were made in Country B.
On 25 May 2021, the husband's lawyer sent a letter to the wife's lawyer seeking confirmation that the wife would withdraw the Australian proceedings as final orders had been made in Country B. The wife's lawyer responded on 1 June 2021 to say that the wife did not consent to the ‘mirror orders’ and that the husband should file a response to the Initiating Application filed on 2 November 2020.
On 3 June 2021, at a directions hearing, the Court noted that the proceedings in Country B were finalised, but the wife wished to pursue her application before this Court, while the husband intended to seek a summary dismissal of her application. Directions were made for the filing of documents.
On 7 April 2022, the husband filed an amended Response seeking that the wife’s application filed 2 November 2020 be permanently stayed.
The hearing of that Amended Response took place on 14 April 2022.
Applicable Law
The husband’s application for a permanent stay arises by operation of the principles of claim or issue estoppel and, in the alternative, by way of abuse of process. Put simply, the husband contends that the Country B Court, when it made orders in early 2021 (initially by way of interim orders that became final in mid-2021), finally determined the same rights and obligations, which were the subject matter of claims that were before this Court by way of the wife’s Initiating Application filed 2 November 2020.
In Tomilson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507, the plurality said relevantly for the purposes of these proceedings:
21.Estoppel in relation to judicial determinations is of a different nature. It is a common law doctrine informed, in its relevant application, by similar considerations of finality and fairness. Yet its operation is not confined to an exercise of judicial power; it also operates in the context of a final judgment having been rendered in other adversarial proceedings. It operates in such a context as estoppel operates in other contexts: as a rule of law, to preclude the assertion of a right or obligation or the raising of an issue of fact or law.
22. Three forms of estoppel have now been recognised by the common law of Australia as having the potential to result from the rendering of a final judgment in an adversarial proceeding. The first is sometimes referred to as “cause of action estoppel”. Estoppel in that form operates to preclude assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the proceeding and which was determined by the judgment. It is largely redundant where the final judgment was rendered in the exercise of judicial power, and where res judicata in the strict sense therefore applies to result in the merger of the right or obligation in the judgment. The second form of estoppel is almost always now referred to as “issue estoppel”. Estoppel in that form operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment. The classic expression of the primary consequence of its operation is that a “judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies”. The third form of estoppel is now most often referred to as “Anshun estoppel”, although it is still sometimes referred to as the “extended principle” in Henderson v Henderson. That third form of estoppel is an extension of the first and of the second. Estoppel in that extended form operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding. The extended form has been treated in Australia as a “true estoppel” and not as a form of res judicata in the strict sense. Considerations similar to those which underpin this form of estoppel may support a preclusive abuse of process argument.
23.The present significance of the recognition of those three forms of estoppel is that each has the potential to preclude assertion of a right or obligation, or the raising of an issue of fact or law, between parties to a proceeding or their privies. Absent a principled basis for distinction – and none has been suggested – one principle must govern the identification of privies for the purpose of all forms of estoppel which result from the rendering of a final judgment in an adversarial proceeding.
(Footnotes omitted)
In Clayton v Bant (2020) 385 ALR 41 (“Clayton v Bant”), the High Court returned to the application of estoppel, this time in so far as it related to family law litigation. In that decision the plurality observed as follows:
16.The husband applied to the Family Court for a permanent stay of the property settlement proceedings and spousal maintenance proceedings on the basis that the ruling of the Dubai Court “operates as a bar” to those proceedings “by virtue of the operation of the principles of res judicata/cause of action estoppel”.
…
21.Before turning to the identification and operation of potentially applicable principles of preclusion, there is a need to identify with precision the jurisdiction of the Family Court to hear and determine the property settlement proceedings and the spousal maintenance proceedings instituted by the wife against the husband. Precision in that respect is necessary in order to be clear about the source and nature of the rights in issue in those proceedings.
…
25.Thus, the right in issue in each of the property settlement proceedings and the spousal maintenance proceedings is a right that is created by a statutory provision which confers a discretionary power on the Family Court to make an order of the kind that is sought. The justiciable controversy as to whether such an order should be made constitutes the matter defining the jurisdiction of the Family Court.
The principles of preclusion and their application
26. Once it is appreciated that the rights in issue in the property settlement proceedings and in the spousal maintenance proceedings are the statutory rights of the wife to seek orders under ss 74(1) and 79(1) of the Act, it is apparent that the ruling made by the Dubai Court cannot give rise to a res judicata in the strict sense in which that term continues to be used in Australia. The rights created by ss 74(1) and 79(1) cannot “merge” in any judicial orders other than final orders of a court having jurisdiction under the Act to make orders under those sections. The rights of the wife to seek orders under ss 74(1) and 79(1) continue to have separate existence unless and until the powers to make those orders are exercised on a final basis and thereby exhausted.
27.For the ruling made by the Dubai Court to preclude the wife from pursuing the property settlement proceedings and the spousal maintenance proceedings, that preclusion can occur, if at all, through the operation of the common law doctrine of estoppel. No argument is made that the operation of that common law doctrine is excluded by the scheme of the Act.
28. Two forms of estoppel are potentially applicable. One is that sometimes referred to as “cause of action” estoppel. The terminology has been recognised as problematic given the range of senses in which the expression “cause of action” tends to be used. The relevant sense is that of title to the legal right established or claimed. Especially in a statutory context such as the present, the form of estoppel would be better referred to by the more generic description of “claim” estoppel. The other form of estoppel is most commonly referred to in Australia as “Anshun estoppel”, after Anshun, although the Full Court chose to refer to it as the “Henderson extension”.
29. Both of those potentially applicable forms of estoppel operate to preclude assertion of rights by parties to proceedings. But they do so in ways not adequately differentiated in the reasoning of the Full Court. In the context of the property settlement proceedings and the spousal maintenance proceedings, claim estoppel would operate to preclude assertion by the wife of any right non-existence of which was asserted by the husband in the Dubai proceedings and finally determined by the ruling of the Dubai Court. Anshun estoppel would preclude assertion by the wife of any right which she could have asserted in the Dubai proceedings but which she chose to refrain from asserting in circumstances which made that choice unreasonable in the context of the Dubai proceedings.
30. As the party seeking the permanent stay in the Family Court, the husband bore the onus of establishing a factual foundation for the operation of one or other of those forms of estoppel. That required him to prove that the ruling of the Dubai Court had the meaning and determinative operation for which he contended. For that purpose, it required him to prove the content of applicable UAE law. In the case of Anshun estoppel, establishing a basis for the relief he sought also required him to prove the unreasonableness in all the circumstances of the choice made by the wife to refrain from asserting such rights as were legally available to be asserted by her in the Dubai proceedings.
…
34.Founded on the twin policies of ensuring finality in litigation (thereby promoting respect for and efficient use of courts as well as avoiding inconsistent judgments) and of ensuring fairness to litigants (by sparing them the stress and expense of duplicative proceedings), the focus of the common law doctrine of estoppel is on “substance rather than form”. The doctrine looks not for absolute identity between the sources and incidents of rights asserted or capable of being asserted in consecutive proceedings. The doctrine looks rather for substantial correspondence between those rights. Enough for its operation is that the rights are of a substantially equivalent nature and cover substantially the same subject matter. A common law right to damages for negligent misstatement has been held to correspond to a statutory right to damages for misleading and deceptive conduct, for example, whereas a common law right to damages for personal injury has been held not to correspond to a common law right to damages for property damage arising from the same negligent conduct given that damage is a necessary element of a cause of action in negligence.
(Footnotes omitted)
While Gordon J in Clayton v Bant identified the relevant components to be as follows:
52. This appeal concerns a foreign judgment. Common to all forms of preclusion concerning a foreign judgment, it is necessary to show that the foreign judgment relied on: (a) was by a court of competent jurisdiction; (b) was final and conclusive; (c) was on the merits; (d) was between the same parties (or their privies); and (e) either quelled the same controversy (res judicata), determined the same cause of action (cause of action estoppel) or determined an issue that was raised, or that it would have been unreasonable not to have raised, in the proceeding (issue estoppel and Anshun estoppel). In this case, attention can be confined to the last requirement.
(Footnotes omitted)
The orders made by the Country B Court with the consent of the parties addressed a suite of issues including parenting orders, property settlement, child maintenance, spousal maintenance and divorce. With the exception of a divorce, the wife sought by her Initiating Application, the same broad suite of orders, albeit under a different set of statutory considerations.
The husband’s counsel addressed his application for a permanent stay through the rubric of considerations identified by Gordon J in Clayton v Bant, being:
(1)Was the foreign judgment made by a court of competent jurisdiction?
(2)Was the foreign judgment final and conclusive?
(3)Was the foreign judgment on the merits?
(4)Was the foreign judgment between the same parties?
(5)Did the foreign judgment either determine substantially corresponding claims or, determine an issue that was raised or that would have been unreasonable not to have been raised in the proceedings?
As a consequence of the making of the Country B Court orders covering parenting, property settlement, spousal and child maintenance, the husband contended that the answer to each of the posed questions was in the affirmative.
Senior counsel for the wife conceded that the Country B Court was a court of competent jurisdiction, that it made a determination on the merits, that the determination was between the same parties, and that the orders determined substantially corresponding claims.
Senior counsel for the wife, however, contended that there could not be a permanent stay of parenting proceedings on the grounds of estoppel. In relation to the orders for spousal and child maintenance, she contended they could not properly be characterised as final orders and were always amenable to variation. Where an order is capable of variation, she said it cannot be final, and as such, an application based on claims or issue estoppel must fail. Senior counsel for the wife in her Case Outline also contended that the wife’s consent to the orders more generally needed to be viewed in the context in which the wife found herself in Country B. In that respect it was said as follows:
8. The situation the Wife found herself in, reliant entirely upon the Husband’s consent to leave [Country B] with the children, and him withholding that consent until she signed orders in terms he agreed with, is akin to the situation of special disadvantage as described in Thorne v Kennedy. The Husband engaged in unconscionable conduct in taking advantage of the Wife’s position of special disadvantage.
9. As such, it is respectfully submitted, the Wife’s failure to proceed with any stay application in [Country B] or to do anything other than accede to its jurisdiction to make the [Country B] Orders, as the only means for her and the children to leave the country by [late] 2020, is entirely reasonable and Anshun estoppel cannot be argued against her.
10. Issue estoppel ought not apply given the lack of any judgment of the merits of the [Country B] orders and the undue advantage taken by the Wife of the Husband. Issue estoppel is in any event not absolute and will not be applied if an injustice will result. It is respectfully submitted that to hold the Wife to the [Country B] Orders, agreed to by her when she was under significant and undue pressure, and which do not afford her or the children a just outcome, would be rendering an injustice.
(Footnote omitted)
Given the ambit of dispute as articulated in the Case Outlines and the initial concessions by each counsel, the issues became:
(1)Do the principles of claims or issue estoppel apply to parenting proceedings?
(2)Were the orders vitiated by the husband’s conduct such that they were not amenable to the application of claims based or issue estoppel?
(3)Were the spousal and child maintenance orders as made by the Country B Court final orders, and as such, subject to the satisfaction of the other criteria amenable to the application of the principles of claims or issue estoppel?
(4)In the alternative, should the wife’s application be stayed as an abuse of process?
The husband’s case, as initially presented, sought a permanent stay of the parenting aspect of the Australian proceedings on the grounds of claims or issue estoppel. It was said that the orders sought in Australia related to the same issues as made by the Country B Court, and that the evidence of the single expert was that the Country B Court must consider the welfare of the child as the paramount consideration.
In his Case Outline, the husband’s senior counsel said that there was:
70. … a substantial, and close, correspondence between the rights already asserted and determined in [Country B], and the rights now asserted in Australia and claimed in Orders 14 and 16 of the Wife’s initiating application.
71. The Orders made in [Country B] provided for the children’s relocation to Australia and the time the children would spend with the father whilst he is in Australia. In essence, in these proceedings, the wife seeks to revisit the time spent by the children with the father agreed between the parties and recorded in Orders 3(f) in the [Country B] orders of 1 February 2021.
72. Again, the grounds for an estoppel are clear.
The Country B Court orders do not give rise to a permanent stay of the wife’s parenting application on the grounds of issue or claims estoppel. As much is plain by the Full Court in Elmi & Munro (2019) FLC 93-912, where their Honours observed, in the context of a Rice and Asplund determination, as follows:
27. The concept of res judicata or issue estoppel does not apply to parenting cases.
28.In Newling, Nygh J, with the concurrence of Barblett and Fogarty JJ, said at 76,467:
Since the principle that the welfare of the child is the paramount consideration applies in all matters affecting children, it is, in my view, not appropriate to speak of cause of action estoppel. What this rule really illustrates is that it is, generally speaking, not in the interests of the child to have repeated applications concerning its custody and access before the Court. There must, in other words, be an end to litigation.
29.This was made clear in Miller & Harrington, where the Full Court (Warnick, Boland & Murphy JJ) said:
100.The language of “issue estoppel” or, “res judicata” is not appropriate because the judicial determination of what is in a child’s best interests, although bringing the then proceedings to an end, does not dispose “once and for all” of that issue.
(Citations omitted)
30.The trial judge commenced his discussion of the principles of res judicata and his survey of authority by quoting the well-known definition set out in George Spencer Bower and Kenneth R Handley, Spencer Bower and Handley: Res Judicata (LexisNexis Butterworths, 4th edition, 2009) at page 1. His Honour did not refer to paragraph 15.19 of the same text where the authors opine that:
Issue estoppels are not binding in proceedings for the care or custody of children because the court’s overriding duty is to have regard to the welfare of the child, and there is no estoppel in a changing situation.
31.In Australia, contrary to the opinion of the trial judge, the position is made perfectly plain by the provisions of Part VII of the Family Law Act 1975 (Cth) (“the Act”).
32.Firstly, s 60CA of the Act requires that a court, in deciding whether to make a particular parenting order in relation to a child, must regard the best interests of the child as the paramount consideration.
33.It is obvious that what particular order is in the best interests of a child may change as time passes and as circumstances change. Indeed, the decision in Rice and Asplund accepts this but places a brake on repeated applications by insisting that the change in circumstances must be such as to warrant a reconsideration of the orders.
34.Secondly, again, contrary to the opinion of the trial judge, the Act specifically authorises reconsideration of parenting orders. Section 65D provides:
65D Court’s power to make parenting order
(1)In proceedings for a parenting order, the court may, subject to sections 61DA (presumption of equal shared parental responsibility when making parenting orders) and 65DAB (parenting plans) and this Division, make such parenting orders as it thinks proper.
(2)Without limiting the generality of subsection (1) and subject to section 61DA (presumption of equal shared parental responsibility when making parenting orders) and 65DAB (parenting plans) and this Division, a court may make a parenting order that discharges, varies, suspends or revives some or all of an earlier parenting order.
The husband’s application as framed for a permanent stay of the wife’s application for parenting orders based on an estoppel must fail. In the alternative, the husband’s senior counsel pressed for a stay based on abuse of process principles.
In support of such a position, the husband contended that there was a remarkable similarity between the orders that the wife sought in Australia and those made by the Country B Court, and as such, as no change in circumstances was established by the wife, the application was therefore capable of being summarily dismissed as an abuse of process.
The wife’s senior counsel contended that there was a change of circumstances since the making of the Country B orders in that the husband has not returned to Australia, which was something that was anticipated and expected. The husband’s senior counsel did not put this fact in issue or suggest that its basis was factually incorrect. I am satisfied that if it was contemplated that the husband would return to Australia and he has not as was expected that he would, that does amount, at a prima facie level, to a change of circumstances, and accordingly I would not summarily dismiss the wife’s application on that basis.
I am not satisfied that the husband has discharged the onus he carries to be able to contend that the wife’s application, in so far as it seeks parenting orders, constitutes an abuse of process such that it should be summarily dismissed.
In relation to the wife’s assertions as to unconscionable conduct, I accept senior counsel for the husband’s submission, that the concept of issue or claims estoppel admits of no exceptions for injustice or vitiating factors such as unconscionable conduct. It is not a matter of discretion.
In Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502, the High Court observed as follows, at 276:
The point of the present appeal is that the respondent brought an action against the appellant and recovered judgment against him. He obtained a judgment of the Court in which the cause of action upon which he relied merged, thereby destroying its independent existence so long as that judgment stood. And, so long as that judgment stands, it is not competent for the respondent to bring further proceedings in respect of the same cause of action. It is no answer to say that the Court might, if appropriate, stay the second action as an abuse of process. … So long as the respondent chooses, as he does, to take no step to set aside the judgment and to raise no issue in the second action as to the circumstances in which that judgment was obtained, he must accept the consequences of res judicata. There is nothing in the Act or arising from the position of the respondent as a public officer that precludes the operation of that doctrine. The matter is not one for the discretion of the Court; by operation of law the cause of action relied upon by the respondent has ceased to exist.
In Federal Treasury Enterprises (FKP) Sojuzplodoimport & Anor v Spirits International BV (2021) 389 ALR 612, the Full Court of the Federal Court held as follows:
335.Third, his Honour at [20]–[23] accepted the application of the Arnold principle. In our view, he ought not to have done so.
336.It is important to be clear about what the principle in Arnold stands for.
337.Lord Keith referred to three concepts, namely:
(a) cause of action estoppel;
(b)issue estoppel of a type that arises where “a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to re-open that issue” (at 105); and (c) issue estoppel of a type “where in the subsequent proceedings it is sought to raise a point which might have been but was not raised in the earlier” (at 106).
338.Now under Australian law, (a) would be described as a res judicata and (c) would be described as an Anshun estoppel. In the present case we are only dealing with (b), not (a) or (c).
339.Lord Keith envisaged that “there may be special circumstances where estoppel does not operate”. If his Lordship is to be taken as permitting of such an exception in an Anshun estoppel situation, we have no difficulty with it. But if he is intending to apply it to what we would consider to be a res judicata or a true issue estoppel (see (b) above), we would disagree. There is no such principle under Australian law. The High Court has not in any ratio or considered majority dicta ever gone so far. And it is not appropriate for an intermediate appellate court to so innovate (see also Commonwealth v Cockatoo Dockyard Pty Ltd [2006] NSWCA 322 at [487] per Tobias JA).
I accept the submissions of senior counsel for the husband. The remedy for the wife seeking to agitate relief reliant upon what is said to be the unconscionable conduct of the husband is to approach not this Court, but the Country B Court.
The wife did not advance any alternate argument in relation to the property settlement orders other than one based on the alleged unconscionable conduct of the husband.
I am satisfied that the husband has made a case that there should be a permanent stay of the wife’s application in so far as it seeks orders in relation to property settlement.
In relation to the spousal and child maintenance orders, the husband argued that they constituted final orders, and therefore, were amenable to a permanent stay.
The husband relied upon the single expert’s evidence, where the expert said:
10. …
(2)… the Final Judgment does not make Orders 3(a) to 3(n) of the Order of Court ‘final’. These ancillary matters Orders were already ‘final’ as contained in the Order of Court. The Final Judgment makes final the Interim Judgment dissolving the marriage. …
And further:
11. …
The Final Judgment of [mid-2021] ‘finalised’ the Interim Judgment (which was the pronouncement that the Parties’ marriage was dissolved). The Final Judgment is binding on the Parties in this regard.
(Affidavit of Ms C filed 11 April 2022, List of Questions: List B marked Exhibit MC‑4)
The single expert opined as to the law in relation to spousal and child maintenance as follows:
(21)The bar to varying consent orders in relation to maintenance is, generally, not as high as that to vary consent orders in relation to the division of matrimonial assets. This is largely because the [Country B] Court is empowered to vary all maintenance orders – whether made by consent or otherwise – if a material change in the circumstances warrants the variation. As well, in the context of child maintenance orders, if the needs of the child (which are paramount) require or justify the variation.
(22) Section 119 of the [relevant Country B law] empowers the [Country B] Court to vary the terms of an agreement as to spousal maintenance. It provides as follows:-
[Quote omitted]
(23) We also refer to Section 118 of the [Country B law], which allows the variation of an order for spousal maintenance (which was made by an agreement or otherwise), which reads as follows:-
[Quote omitted]
(24) Further, Section 73 of the [Country B law] empowers the [Country B] Court to vary the terms of an agreement as to children’s maintenance. It provides as follows:-
[Quote omitted]
(25) In addition, Section 72(1) of the [Country B law] allows variation of an order relating to children’s maintenance (which was made by agreement or otherwise). It provides as follows:-
[Quote omitted]
(Emphasis in original)
(Footnotes omitted)
(Affidavit of Ms C filed 11 April 2022, List of Questions: List A marked Exhibit MC‑3)
Senior counsel for the husband, in support of his submission as to the orders for spousal and child maintenance, also referenced the observations of the plurality in Clayton v Bant.
The husband’s senior counsel submitted that an order that may be prospectively varied does not change the character of it being a final order but conceded that if it can be retrospectively varied, then it is not a final order. Senior counsel for the husband also referenced the textbook ‘Nygh’s Conflict of Laws in Australia’ as follows:
40.32… Similarly, the possibility that the final order of the foreign court may subsequently be varied in the event of default of a party carrying out its terms or in separate anti-enforcement proceedings does not affect the finality of the order. …
40.33… Until steps are taken to set the judgment aside, the judgment is enforceable as a final and conclusive judgment. That is so even if the defendant is entitled to have the judgment set aside, although there are dicta in older cases to the effect that where the defendant can demand that the judgment be set aside as of right within a set period, the judgment cannot be regarded as final and conclusive until that period has expired. Where the judgment may be set aside only upon cause being shown by the defendant, the judgment should be treated as final and conclusive until actually set aside.
…
40.35In many countries an order for spousal or child maintenance can be varied or set aside with retrospective effect by the court that made it. Such orders are, therefore, not final and conclusive and cannot be enforced in Australia, except as provided by statute. If, as is the case in some American jurisdictions, the 1naintenance order can only be varied with prospective effect, Australian courts will enforce a claim at common law for the arrears accumulated under such an order.
(Footnotes omitted)
(Martin Davies et al, Nygh’s Conflict of Laws in Australia (Lexis Nexis Australia, 10th ed, 2019) 969)
The husband submitted, based on the above, that the form of the order together with the expert’s evidence demonstrated that the orders were final.
The wife’s senior counsel submitted that the spousal and child maintenance orders are not final orders as they are amenable to variation. In that respect, she referenced s 83 of the Family Law Act 1975 (Cth) and the capacity to vary an order as well as s 121 of the Child Support (Assessment) Act 1989 (Cth).
I am not satisfied that the spousal and child maintenance orders could be regarded as final orders incapable of variation.
Recognising as I do that foreign law is a matter of expert evidence, I note that the language referenced in the various sections of the Country B law speak of a discretion to vary that does not seem to limit such variation to purely one that is prospective. I note that in relation to the spousal maintenance orders, the legislation records [quote omitted] (affidavit of Ms C filed 11 April 2022, List of Questions: List B marked Exhibit MC-4, paragraph 23). Likewise, in relation to child maintenance orders, the single expert’s report refers to section 72(1) of the Country B law (affidavit of Ms C filed 11 April 2022, List of Questions: List B marked Exhibit MC-4, paragraph 25). I make these observations purely in passing rather than as determinative of the husband’s case.
I note, however, that the single expert did not say that the orders could not be varied retrospectively. It bears repeating what she said, namely that:
(21)The bar to varying consent orders in relation to maintenance is, generally, not as high as that to vary consent orders in relation to the division of matrimonial assets. This is largely because the [Country B] Court is empowered to vary all maintenance orders – whether made by consent or otherwise – if a material change in the circumstances warrants the variation. As well, in the context of child maintenance orders, if the needs of the child (which are paramount) require or justify the variation.
(Affidavit of Ms C filed 11 April 2022, List of Questions: List A marked Exhibit MC‑3)
That does not in any way suggest that orders can only be varied prospectively.
I also note the Full Court in Mehta & Crimmins (2021) FLC 94-062, observed:
31The right to spouse maintenance is created by the provision of statute which confers on the Federal Circuit and Family Court of Australia the power to make orders for spouse maintenance. Whether the Court should exercise its discretion and make an order constitutes the justiciable controversy.
32In Clayton, the plurality said in relation to res judicata in spouse maintenance:
26. … The rights created by ss 79(1) and 74(1) cannot “merge” in any judicial orders other than final orders of a court having jurisdiction under the Act to make orders under those sections. The rights of the wife to seek orders under ss 79(1) and 74(1) continue to have separate existence unless and until the powers to make those orders are exercised on a final basis and thereby exhausted.
(Footnote omitted)
33We do not accept that in the circumstances of this case the Court’s jurisdiction to make spouse maintenance orders has been exhausted and no res judicata arises.
34 In relation to claim estoppel, as Edelman J said:
68.The best approach is to recognise that both the legal right claimed and decided and the pleaded or asserted facts are relevant: “cause of action normally means a right alleged to flow from the facts pleaded”. The focus is upon the whole claim, including the right and the essential facts upon which the right depends…
(Footnotes omitted)
35We do not accept that the wife was precluded from advancing the claim for spouse maintenance in the November 2020 application because of claim estoppel. The reasons for our conclusion lie in the terms of the Act.
Spouse Maintenance
36 Section 72(1) of the Act says:
A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately…
37The section continues and sets out the circumstances in which the liability to maintain the other party might arise. These matters are expressed in the present tense.
38Once those two conditions precedent to the order being made are established, s 74 of the Act empowers the Court to make an order for the maintenance of a party as it considers proper. The consideration of these matters must be as at the date of the determination of the application.
39It is not suggested that a party’s liability to support the other party ceases on the conclusion of property settlement proceedings by orders nor by the dissolution of the marriage. Indeed s 83 of the Act (while not relevant here) contemplates the revival, variation or dismissal of existing orders for maintenance.
40Section 44(3) of the Act provides that an application for spouse maintenance must not be brought more than 12 months of the date of divorce without leave.
41Unlike final orders for property settlement which can only be varied or set aside pursuant to s 79A of the Act, a party’s right to seek spouse maintenance is capable of being exercised many times and subject to leave, over many years. So much is apparent from the terms of the sections themselves. The exercise of the Court’s discretion in making a proper order for spouse maintenance falls to a consideration of the needs and ability of the applicant to support herself or himself adequately and the reasonable ability of the respondent to maintain the other party. The circumstances supporting either of those preconditions will change from time to time.
42As the written submissions filed 10 December 2020 on behalf of the wife to the primary judge contended, on receipt of the funds ordered on 25 July 2019, the wife could not assert she was unable to support herself adequately. The submission continued:
13. … [The wife’s] inability to do so in July 2019 cannot, in law or logic, estop the [wife] from successfully contending in December 2020 that s72 and s74 are enlivened.
43It matters not in this case which of the two preclusionary principles were said to apply because in our opinion the dismissal of the wife’s earlier application did not quell any controversy nor finally resolve a conflict of the existence of a right of the wife to spouse maintenance.
The observations of the Full Court in relation to spousal maintenance are equally apposite to child maintenance or child support, albeit under different sections and with different threshold requirements.
The husband’s application for a permanent stay of the spousal and child maintenance orders on the basis of claims or issue estoppel, or an abuse of process is not made out.
For the above reasons, I am not satisfied that the husband has established a case to permanently stay the wife’s Initiating Application on the basis of claims or issue estoppel, or on the basis of an abuse of process other than in relation to the final property orders sought under s 79 of the Family Law Act 1975 (Cth).
Accordingly, I will make orders to that effect.
I certify that the preceding seventy-two (72) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 22 April 2022
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