Giacobetti & Giacobetti (No 5)
[2024] FedCFamC1F 379
•4 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Giacobetti & Giacobetti (No 5) [2024] FedCFamC1F 379
File number(s): SYC 5998 of 2021 Judgment of: CURRAN J Date of judgment: 4 June 2024 Catchwords: FAMILY LAW – PRACTICE & PROCEDURE – Application in a Proceeding – Application to vary final orders under the slip rule – Where orders are not able to be varied under slip rule – Where order sought not considered at final hearing or in final judgment – Application refused Legislation: Family Law Act 1975 (Cth) ss 75, 79, 90AE, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10.13
Cases cited: Bailey & Bailey (1990) FLC 92-145
Burrell v The Queen (2008) 238 CLR 218
Giacobetti & Giacobetti(No 3) [2023] FedCFamC1F 1126
Giacobetti & Giacobetti (No 4) [2024] FedCFamC1F 43
Gludau & Gludau (No 2) (2013) FLC 93-562
Gould v Vaggelas (1985) 157 CLR 215
Newmont Yandal Operations Pty Ltd v The J Aron Co and The Goldman Sachs Group Inc and Ors (2007) 70 NSWLR 411
Owston Nominees No. 2 Pty Ltd and Anor v Branir Pty Ltd and Ors (2003) 129 FCR 558
Division: Division 1 First Instance Number of paragraphs: 87 Date of hearing: 29 May 2024 Place: Sydney Counsel for the Applicant: Mr Harper Solicitor for the Applicant: Uther Webster & Evans Counsel for the Respondent: Mr Othen Solicitor for the Respondent: Newnhams Solicitors ORDERS
SYC 5998 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GIACOBETTI
Applicant
AND: MR GIACOBETTI
Respondent
ORDER MADE BY:
CURRAN J
DATE OF ORDER:
4 JUNE 2024
THE COURT ORDERS THAT:
1.The application to amend the orders pursuant to the slip rule as set out in paragraph 3(a) is refused.
2.The application to amend the orders pursuant to the slip rule as set out in paragraph 3(d) is refused.
3.The balance of the orders sought were withdrawn and are dismissed.
4.The costs application made by counsel for L Holdings is refused.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 Giacobetti & Giacobetti has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CURRAN J:
The primary proceedings sought the alteration of property interests under the Family Law Act 1975 (Cth) (“the Act”) following the end of the parties’ 26-year relationship. Each party sought orders for property adjustment.
The final hearing of this matter was heard on 15 and 18-20 December 2023.
The most contentious issue at the final hearing of this matter was the value of the shares in B Pty Ltd, an unlisted public company, held by a discretionary trust controlled by the husband through the Giacobetti Family Trust. Ms D (“the single expert”) opined that the shares were worth between $34,217 and $10,259,822 and the extent of the liability encumbering the shares was up to $461,667.
On the third day of the final hearing, counsel for the wife made an oral application for leave to amend her application to include an order to adjourn the determination of the issue of the treatment of the shares in B Pty Ltd to 3 February 2025 for directions, pursuant to ss 79(5) and (6) the Act. I refused leave to make an oral application and directed that the precise orders sought should be articulated in writing for clarity.
The husband opposed the application for leave to amend.
The wife then tendered a minute of orders sought dated 19 December 2023, Exhibit 21.
In the wife’s case outline document in the trial, Exhibit 1, she sought the following orders:
7) That within 14 days the Husband do all acts and things necessary to cause to be transferred to the Wife 65% of the shares held in [B Pty Ltd], together with any right or entitlement to any shares or instruments granting a right to acquire or receive any shares in any company incorporated in or outside Australia as consideration on for the transfer or assignment of any interest in [B Pty Ltd], or direct or indirect technology or intellectual property owned, developed or licenced to or by [B Pty Ltd].
8) That pursuant to s90AE(1)(a), that the liability of [Giacobetti Investments Pty Ltd] ATF the [Giacobetti Family Trust] in the company [B Pty Ltd] in favour of [L Holdings] pursuant to the terms of the Deed of Acknowledgement of Debt dated 24 July 2021, Specific Security Deed dated 24 July 2021 and Deed of Variation dated 29 September 2021 (‘the Deeds’) , be transferred to the Wife, [Ms Giacobetti], to the extent of, and in proportion to, any such shares transferred to the Wife, [Ms Giacobetti], in accordance with these Orders.
The amended minute of orders sought (Exhibit 21) did not include these two orders and provided no alternative to the adjournment application. However, in oral submissions the wife’s counsel made clear that in the event the adjournment application failed that she sought the orders as set out in her case outline in addition to the amended orders contained in exhibit 21, noting the change in the application sought an adjustment of 55 per cent rather than the previously sought 65 per cent, and an order for the sale of Motor Vehicle 6 motor vehicle.
For the reasons set out in Giacobetti & Giacobetti (No 3) [2023] FedCFamC1F 1126, I refused the application for leave to amend the orders sought in so far as it sought orders pursuant to s 79(5) and 79(6).
On the final day of the final hearing, judgment was reserved.
Final orders were made and judgment was delivered in this matter on 6 February 2024 (see Giacobetti & Giacobetti (No 4) [2024] FedCFamC1F 43).
Relevantly, at orders 5 and 6 of the final orders dated 6 February 2024, it is stated:
5. The husband transfer to the wife 40% of the shares held in [B Pty Ltd] within 14 days.
6. The husband do all acts and things within his power to cause the share transfer pursuant to order 5 to be registered.
THE APPLICATION
On 19 February 2024, the wife filed an Application in a Proceeding.
This application sought that order 5 of the orders dated 6 February 2024 be varied pursuant rule 10.13(e), (g) and/or (h) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), so as to reflect the intention of the Court. It sought specifically that:
Order pursuant to s90AE(1 )(a) of the Family Law Act 1975 (Cth), that the liability of [Giacobetti Investments Pty Ltd] ATF the [Giacobetti Family Trust] in the company [B Pty Ltd] in favour or [L Holdings] pursuant to the terms of the Deed of Acknowledgement of Debt dated 24 July 2021, Specific Security Deed dated 24 July 2021 and Deed of Variation dated 29 September 2021 ('the Deeds'), be transferred to the Wife, [Ms Giacobetti], to the extent of, and in proportion to, the shares transferred to the Wife, [Ms Giacobetti], in accordance with order 5 of the orders made on 6 February 2024.
The application further sought the joinder of L Holdings, and that pending further order, L Holdings be restrained by injunction from dealing with the shareholding of Giacobetti Investments Pty Ltd in B Pty Ltd.
A stay was ordered by consent on 20 February 2024 and again on 1 March 2024. The parties were engaged in attempts to resolve the dispute.
On 18 April 2024, the wife filed a Case Outline Document in which she varied the orders initially sought in the application filed on 19 February 2024, and identified that she only sought orders as set out at paragraphs 3(a) and 3(d) from the Application in the Proceeding filed on 19 February 2024 as follows:
3.Pursuant to rule 10.13(e), (g) and/or (h) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, Order 5 of the orders made on 6 February 2024 be varied and the following orders be made consequentially:
(a)Order pursuant to s90AE(1)(a) of the Family Law Act 1975 (Cth), that the liability of [Giacobetti Investments Pty Ltd] ATF the [Giacobetti Family Trust] in the company [B Pty Ltd] in favour of [L Holdings] pursuant to the terms of the Deed of Acknowledgement of Debt dated 24 July 2021, Specific Security Deed dated 24 July 2021 and Deed of Variation dated 29 September 2021 (‘the Deeds’), be transferred to the Wife, [Ms Giacobetti], to the extent of, and in proportion to, the shares transferred to the Wife, [Ms Giacobetti], in accordance with order 5 of the orders made on 6 February 2024.
(d)…[W]ithin 45 days of these orders, the husband do all acts and things to assign to the benefit of the wife 40% of the loan from to [B Pty Ltd] to from [Giacobetti Investments Pty Ltd] ATF the [Giacobetti Family Trust] as described within pool one at paragraph 251 in the reasons for judgment dated 6 February 2024, to give effect to the division of 60% to the husband and 40% to the wife of pool one.
The wife’s submissions
The wife relied on detailed written and oral submissions to which I have had regard.
In essence the application relies upon the finding that a proper reading of the reasons would leave it clear that the Court intended to make both of the orders now sought pursuant to the slip rule.
The response filed by the husband identified that the order sought at 3(a) is neither consented to nor opposed, however, the effect of the subsequent written and oral submissions was that the husband was opposed to the order being made. There is no dispute that the proposed order 3(a) is in exactly the terms sought at the commencement and conclusion of the hearing. Order 3(d) was opposed.
The husband filed written submissions on 19 December 2023. At paragraph 27 of his submissions, he addressed the application made for the making of an order under s 90AE(1)(a). His submission was, in essence, that making such an order was futile as it did not prevent the triggering of rights under the deeds. No application had been made to join the third party. No application was made to set aside the deeds. The husband was on notice of the order sought and its terms.
The wife contends that when the orders are read with the judgment it is clear that the Court intended that the liability (under the three documents referred to, being the Specific Security Deed and deeds of variation) passed to the wife. There was no other proposal or alternative mechanism for that to happen.
In response, the husband contends that the reasons failed to address the relevant s 90AE(1) criteria, indicating they had not in fact been considered. It was contended by counsel for the wife that the Court must only give reasons for matters that are in dispute or are necessary to quell the justiciable controversy, and as such that there was not a need to give reasons specific to the issue.
In respect of the proposed order 3(d), the wife contended that the failure to make an order addressing the transfer of the company loan was clearly, on the face of the reasons, not the intention of the Court.
It was correctly identified that the Court adopted a two-pool approach. The first pool was identified at paragraph 251 of the reasons as including the shares, the liability on the shares and the company loan.
The wife contended that the only way to implement a 60/40 split of that pool, as intended, is to have split all of the identified items in pool one, which must have included the asset of the company loan identified at item 2, also identified as item 17/18 in the joint balance sheet.
It is on that basis that the wife contends that order 3(d) should be made under the slip rule.
It was accepted by her counsel there was not a specific order sought in respect of that asset at the final hearing, despite its inclusion in the balance sheet. It was contended, however, that the wife sought an overall division of the assets of the parties, which included the loan balance of $131,249, and that this order is necessary to implement an overall division of the assets. Failing such an order the husband will retain the entire benefit of the asset as it is not otherwise dealt with.
The wife contended that she sought a percentage division of all assets thus it was argued, considered, and decided. That the Court adopted a two-pool approach as proposed by the wife does not support the conclusion that the Court intended to leave the company loan, an asset with an agreed value of $131,249, with the husband. The percentage was argued, considered, and decided, but no specific order was sought in relation to treatment or division of that specific asset other than by the husband who sought it be, in essence, not included in the assets but adjusted in an overall s 75(2)(o) consideration.
The wife contended that reasonable minds could not differ in respect of either order sought pursuant to the slip rule, that neither included an exercise of discretion, and the application was not for a re-opening but that the application was simply about correcting an error. The wife accepted, correctly, that in the absence of the slip rule being applied, the Court was functus officio.
The question boils down simply to whether the Court intended to make the orders sought, in which case it is a slip, or did not, in which case it is not a slip.
The husband’s submissions
The husband relied on detailed written and oral submissions to which I have had regard.
In respect of the order sought at paragraph 3(a), it was agreed that the husband was on notice of the order sought and that it was sought in those specific terms. The husband’s counsel in oral submissions accepted that at paragraph 130 of the judgment, the Court intended to transfer the liability as between the husband and wife. The husband contended that by the orders that were made, which was an order for the transfer of 40 per cent of the shares, the Court did transfer that liability as between the husband and the wife.
The husband agreed that the crux of the application for correction under the slip rule was to answer the question – did the Court intend to go further and also make the order at pursuant s 90AE? Or to put it in the alternative – was it clear from the reasons that the Court intended to make an order directed to a creditor of the parties?
The husband contended that as there is no reference in the reasons or the orders to s 90AE that this could not be a slip, and that the reasons why such an order were not made are simply not addressed. The fact that they are not addressed, it was submitted, is fatal to any slip rule application, as the terms of s 90AE(3) are clear that the Court may only make an order under that section if the Court is satisfied of certain matters. The Court had not considered any of the matters on the face of the reasons, and accordingly, there is not a basis in the reasons to conclude the Court had that intention. Further, had the Court had that intention it would have gone through s 90AE and would have considered those matters in the reasons. It was stressed that there was no consent to rectify this aspect.
In respect of the order sought at paragraph 3(d), the husband contended that the order sought was not aired at the hearing nor determined by the Court. Had it been so, it would be obvious from the reasons, which it is not.
The husband contended that if you do not seek an order and you do not seek the relief, and it is not considered by anybody, and it was never raised before the Court in any form, it is impossible to say afterwards “I wish I had sought it.” The husband contended that it is a substantive matter that could not fit within the rubric of the slip rule.
The husband contended that, as it is not an order that was sought and not a matter that appears to have been considered, absent consent, the Court is functus officio.
Legal Principles – Slip rule
As a general rule, once a judge has made an order, that judge is functus officio and cannot add to, amend or detract from it. In Burrell v The Queen (2008) 238 CLR 218, Gummow A-CJ; Hayne, Heydon, Crennan and Kiefel JJ said:
The power to correct the record so that it truly does represent what the court pronounced or intended to pronounce as its order [L Shaddock & Associates Pty Ltd v Parramatta City Council [No 2] (1982) 151 CLR 590 at 594-595] provides no substantial qualification to that rule. The power to correct an error arising from accidental slip or omission, whether under a specific rule of court or otherwise, directs attention to what the court whose record is to be corrected did or intended to do. It does not permit reconsideration, let alone alteration, of the substance of the result that was reached and recorded.
(emphasis added)
The Court has implied jurisdiction to correct orders which do not reflect the Court's intention at the time the order was made or, in some circumstances, what the Court would have decided apart from an accidental slip or omission.
This jurisdiction is encapsulated in r 10.13(1)(e) and (h) of the Rules which are as follows:
(1) The court may at any time vary or set aside an order , if:
…
(e) it does not reflect the intention of the court; or
…
(h) there is an error arising in the order from an accidental slip or omission.
The overall purpose of the slip rule is to avoid injustice to litigants (Gould v Vaggelas (1985) 157 CLR 215 at 274-276).
The most common application of the slip rule involves an amendment to an order where it is plain that it does not reflect the judicial intention at the time the order was made.
When assessing that judicial intention, it is necessary to look at the surrounding circumstances including the reasons for judgment, the applications made and, if necessary, the evidence and how the case was conducted (Owston Nominees No. 2 Pty Ltd and Anor v Branir Pty Ltd and Ors (2003) 129 FCR 558 at [27]).
A retrospective recollection by a primary judge of the order the primary judge intended to make is not conclusive. In Newmont Yandal Operations Pty Ltd v The J Aron Co and The Goldman Sachs Group Inc and Ors (2007) 70 NSWLR 411 Spigelman CJ said at [95]:
... the relevant question is what the Court intended to do and/or what the Court would have done, if the issue had arisen at the time the orders were made. Anything a judge, even the same judge, says about what s/he would do to correct the original orders is no more than evidentiary and may not even be admissible over objection...
The Full Court of the Family Court canvassed the issue in the matter of Gludau & Gludau (No 2) (2013) FLC 93-562. Murphy J (with the agreement of May and Hogan JJ) at [21]:
The current rule might, then, be argued to be reflective of the concern that the Rules must embody the fact that this court is a creature of statute within a constitutional framework and its powers on appeal derive from statute. In particular, while the 'slip rule' might be used to correct obvious errors (perhaps what Kirby J referred to in DJL as 'accidental mistakes or omissions of no substantive significance' or an 'accidental slip or omission' as the plurality in Burrell referred to), care must be taken when the nature of the asserted error is substantive, as that may in fact involve the exercise of a power to reopen proceedings that are contemplated by a perfected order and that is a power which the court does not have (see DJL v The Central Authority (2000) FLC 93-015).
In Bailey & Bailey (1990) FLC 92-145 (“Bailey & Bailey”), Mullane J states, in relation to varying orders, at 78,009: “But that power does not extend to supplementing the orders made by a further order on a point which was not argued, considered or decided at the hearing…”.
The facts of this case
It was an agreed fact that a liability attached to the B Pty Ltd shares. There was a dispute as to the extent of the liability. In the joint balance sheet, the husband contended that the liability was nil. The wife contended that the liability was $45,000. The single expert opined that the liability could have been as much as up to $461,667, however it was contingent on various matters which were unknown.
The parties agreed there was a loan account with an agreed value of $131,249, although incorrectly described, it was an asset and treated as such.
It was the wife’s case that an order should be made transferring the shares to the wife and that the liability should be borne in the same proportions. The proportion she sought was 65 per cent. The orders sought included the apportionment of the debt in the same proportions as the allocation of the shares and that such an order should be made pursuant to s 90AE(1)(a).
It was the husband’s case that the shares had little, if any, value and that the liability should remain with the shares. It was his case that the shares, the liability and the loan account should not have a value placed on them but should be taken into account as a s 75(2)(o) factor.
When asked what proportion of the shares should be transferred if it was determined that a transfer of shares was to be ordered, although opposed, it was contended that no more than 10 per cent of the shares should be transferred. The husband's submissions at page 224 of the transcript were:
if you decide to do something with those shares and transfer them to the wife, then , in my respectful submission, whatever you do with them, it ceases to be a matter of section 75(2)..In terms of the justice and equity of any transfer…why it wouldn't be just and equitable to give the wife a massive proportion of the company …if your honour determines a transfer of shares is just and equitable the number we would put on it is 10 per cent…
No submission was made by the husband as to the treatment of the liability to L Holdings in the case of a share transfer. No submission was made by the husband as to the treatment of the loan account other than the shares and liability, together with the loan account, should be assigned no value.
It was contended that, if I came to a conclusion not to ascribe a value to the shares, it was submitted that I should “remove item 17. You would have to remove item 18 as well because that's the husband's loan account in the company. And you would remove item 27.”
It was further contended that no value would be assigned to those entries, despite the loan account having an agreed value of $131,249. This submission effectively grouped together the assets and liabilities associated with the shares and the company. This grouping of items 17, 18 and 27 from the joint balance sheet became pool one.
Item 17 on the balance sheet was the assets of Giacobetti Investments Pty Ltd, the values of which were contended by the wife to be $10,259,822 and the husband contended to be $43,315. Item 18 was the loan account in the company B Pty Ltd, with an agreed value of $131,249. Item 27 was the liability to L Holdings, the liability which was contended by the wife to be nil and by the husband was contended to be $45,315.
Pool one was referred to as the B Pty Ltd shares pool at paragraph 188. At paragraph 189 it is stated that:
For the reasons set out at [235] there should be a 5 per cent s 75(2) adjustment in favour of the wife in respect of the second pool. In circumstances where the value of pool one may be from effectively nil through to $10,000,000 or some figure in between, that is the best that can be done to arrive at a just and equitable outcome overall where the shares will be retained 60 per cent to the husband and 40 per cent to the wife.
The question becomes whether it is clear that what was intended was to reference the “[B Pty Ltd] share pool” or “pool one” rather than simply referring to the “shares” to be retained 60 per cent to the husband and 40 per cent to the wife.
The judgment stated that the orders ensure that the debt be apportioned in the same proportions as the shares. Paragraphs 130 and 131 say:
130.The orders sought by the wife seek that the husband transfer the wife 55 per cent of the shares held in [B Pty Ltd]. Given the liability may be called in by a third party who is not a party to these proceedings, the orders ensure that the liability is borne by the parties in the same proportions as their ownership.
131.I find that the first pool is comprised 12,070,379 shares with a value that I am unable to determine that ranges between nil and $10,258,822. I find that there is a liability of up to $461,667.
At paragraph 250, two pools were identified which included the liability to L Holdings as “J joint liability”, and that it was less than or equal to the sum of $461,667. It formed part of pool one, where the values were not able to be determined. The director’s loan was referred to at the table in paragraph 250, but was not identified as part of pool one in the balance of the judgment.
The wife’s order sought at 3(a) – Order pursuant to s 90AE(1)
The wife sought that the order be varied under the slip rule to include the order sought by the wife in the terms set out pursuant to s 90AE(1). As articulated above, the face of the record, the reasons, the surrounding circumstances, the evidence and how the case was conducted, may all be relevant in determining the intention of the Court.
Counsel for the husband contended that as the relevant s 90AE criteria had not been specifically addressed in the reasons that the Court could not have considered such an order and accordingly such an order could not be made under the slip rule.
Section 90AE of the Act provides for the Court to make an order under s 79 of the Act binding on a third party who is not a party to the marriage. In particular, in proceedings under s 79, s 90AE(1)(a) provides for the Court to make an order that directs a creditor of the parties to the marriage to do a thing in relation to the property of a party to the marriage, and s 90AE(2)(b) provides that in proceedings under s 79 the Court can make an order that alters the rights, liabilities or property interests of a third party in relation to the marriage.
The Court can only make such an order though if the making of the order is reasonably necessary, or reasonably appropriate and adapted to effect a division of property between the parties to the marriage, if the third party has been accorded procedural fairness in relation to the making of the order, if the Court is satisfied that in all the circumstances it is just and equitable to make the order, and the Court is satisfied that the order takes into account the matters mentioned in sub-section (4). The matters referred to in sub-section (4) include a variety of factors such as the taxation effects of the order on the parties to the marriage and on the third party.
The wife contended that it is not necessary to specifically give reasons if matters are not in contention or do not form part of the justiciable controversy. This is undoubtedly true. However, in order to make orders under s 90AE, the provision is clear that the Court must be satisfied of certain matters. While not referring specifically to the sections, consideration was given to aspects that would be required to be considered under s 90AE(3), for example, that that the third party has been accorded procedural fairness.
I do not accept that the specific factors listed in s 90AE are required to be articulated in the way contended by the husband in the reasons in order for the Court to be satisfied that the making of an order is appropriate.
However, the wife sought to enliven the powers under s 90AE, and in order to do so the Court must be apprised of and be satisfied as to the relevant statutory considerations, including the s 90AE(4) factors. There was no consideration by the Court of the relevant s 90AE(4) factors and no evidence was relied upon in respect of the identified considerations at s 90AE(4). The wife led no evidence at the final hearing as to the taxation effects of the proposed orders. It is the case that in fact there may be no taxation effects of the proposed orders, but as it is a factor the Court must have considered, in the absence of any evidence, the Court could not know or be satisfied that the proposed orders took into account the relevant considerations. This alone would prevent the Court from making orders pursuant to s 90AE(2).
Having not been addressed by any party on relevant matters identified in the section as required to be considered, and having thereafter in the reasons not identified the matters required to have been considered, there is no basis to find the failure to make the orders in the terms sought by the wife can be a slip.
Accordingly, in considering the evidence and how the case was conducted it cannot be concluded that the proposed order was not made due to a slip or omission.
The wife’s order sought at paragraph 3(d)
The wife further sought at 3(d) an order to cause the division of the $131,249 loan asset as identified in pool one. The loan account was incorrectly identified in the joint balance sheet, but there was no dispute that it represented an asset.
There was no evidence and no submission as to when that asset would be realised, nor was any relevant order sought specifically in respect of the loan account. The submission made by the husband was that the shares and the relevant liability, together with the loan account, should be excluded from consideration. The wife sought an overall percentage adjustment of all assets.
Appendix 5 of the single expert’s report was a statement of financial position of 20 June 2023 from B Pty Ltd and included the details of shareholder loans of $131,249 or $131,250 in relation to three of the shareholders including, Giacobetti Investments Pty Ltd ATF The Giacobetti Family Trust. There was an agreed position as to the genesis and value of the loan account. It was accepted as an asset by both parties.
No party sought any specific orders in relation to the treatment of the $131,249. The wife sought that it be included in the assets and divided overall to achieve a 55 per cent adjustment to her. The husband sought it not be included at all, but sought that the assets of the parties otherwise be divided 60 per cent in his favour.
The question as to whether the Court intended to also divide the loan account in the same proportions as the shares can be assessed by considering whether on the face of the record, the reasons, the surrounding circumstances, the evidence or how the case was conducted it demonstrates such intention.
Although the loan account was described within pool one at paragraph 251 in the reasons for judgment, it was not further considered or described as forming part of pool one. There is no basis to conclude from the reasons or how the case was conducted that it was considered in arriving at a conclusion that it would be just and equitable to give effect to the division of 40 per cent of that asset to the wife.
To put it in the words of Mullane J in Bailey & Bailey, the power to extend the slip rule to that identified asset cannot extend to supplementing orders made by a further order on a point which was not considered or decided at the hearing.
The orders sought by the wife would require a further exercise of discretion and therefore cannot fall under the slip rule.
I decline the application to further vary the orders pursuant to the slip rule to include the order sought at 3(d).
The balance of the applications identified in the initial application were either interlocutory or were not pressed.
The Potential Third Party
The application to join L Holdings as a party was not pressed.
They were not a party to the proceedings, having not been joined. They were on notice and by correspondence twice indicated that they neither consented to nor opposed the transfer of shares but reserved its rights under the security arrangements.
The matters that were raised by the third party on this application, that were said to arise on the slip rule application, may have been relevant at the final trial but have no apparent relevance to this application. It was contended that the orders sought did not provide L Holdings “equivalency in respect to remedies and protections it has under the relevant deeds.”
It was a forensic decision that neither party sought to join L Holdings. The parties were well on notice that the outcome might have been “mutually assured destruction” if there was not co‑operation. The prospect was understood as was submitted at the final hearing by counsel for the wife:
It could be that the whole house of cards come falling down and that [L Holdings] takes advantage of the situation and effectively exercises his rights and takes all of the shares. That’s a possibility.
It was clear from the Case Outline filed 18 April 2024 that the wife did not seek any relief as against the potential third party, that they were on notice of this fact from 18 April 2024, and there was no need for their ongoing participation in the application. Notwithstanding this position, counsel appeared at the interim hearing in respect of the slip rule.
After hearing the oral submissions of the applicant, counsel was asked whether he still sought to be heard, which he did. They were not a party. They had indicated they neither consented nor opposed the orders sought. They chose to attend and sought to be heard. It was not necessary. They sought costs as the “innocent party.”
Section 117 of the Act sets out that each party should ordinarily bear their own costs.
Submissions were made in effect that they were an innocent party and should have their costs paid. They were not a party. No other factors in s 117 of the Act were identified as relevant considerations. I am not satisfied that there is a basis to order costs as sought. The application of L Holdings for costs is refused.
I certify that the preceding eighty-seven (87) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Curran. Associate:
Dated: 4 June 2024
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