Gitane & Velacruz
[2007] FamCA 183
•7 February 2007
FAMILY COURT OF AUSTRALIA
GITANE & VELACRUZ [2007] FamCA 183
APPEAL – PROPERTY – Attempt to resist enforcement of stale order – Summary dismissal of application – In 1998 husband ordered to organize sale of one property and pay wife $120,000, upon which she was transfer to him her interest in another property – For each month the property remained unsold the wife was to receive an additional $1,000 on top of her share – Property did not sell and in 2000 the wife obtained an order enabling her to take over sale – Property sold for less than envisaged – Wife demanded husband repay her the additional amount owing under the orders – Husband refused – Eventually in 2001 the wife transferred the property anyway – In late 2005 husband received demand by the wife for payment of the monies allegedly owing, with threat of sale of the second property – Wife then obtained an enforcement order from a Registrar – Husband sought orders discharging earlier orders and restraining the wife from enforcement, and also sought additional monies from the wife pursuant to s 79A of the Family Law Act 1975 – Wife applied to bifurcate the husband’s s79A application to determine if there existed any grounds to set aside the original order – Trial judge appeared to conclude that bifurcation was appropriate but then dealt with a summary dismissal application, although such application was not pending at that time – The trial Judge summarily dismissed the husband’s application – Trial judge should not have concluded that husband’s case to resist the enforcement of the order for the balance of moneys after many years doomed to failure – Appeal allowed and remitted for further hearing.
Family Law Act 1975 (Cth) Bigg v Suzi (1998) FLC 92 799
G v G [2005] FamCA 1171
Lyndon v Commonwealth No 2, (1996) 70 ALJR 541
McCabe (1995) 19 Fam LR 579; (1995) FLC 92-634
Ramsay (1983) FLC 91-323
APPELLANT: MR GITANE
RESPONDENT: MS VELACRUZ
FILE NUMBER: HBF 851 of 1997
APPEAL NUMBER: SA 59 of 2006
DATE DELIVERED: 7 FEBRUARY 2007
PLACE DELIVERED: Hobart
JUDGMENT OF: KAY, COLEMAN & BOLAND JJ
HEARING DATE: 7 FEBRUARY 2007
LOWER COURT JURISDICTION: Family Court of Australia
LOWER COURT JUDGMENT DATE: 7 AUGUST 2006
LOWER COURT MNC: [2006] FamCA 1124 REPRESENTATION
COUNSEL FOR THE APPELLANT: MR WILLIAMS WITH MR CANN
SOLICITORS FOR THE APPELLANT: CANN LEGAL
COUNSEL FOR THE RESPONDENT: MS BAKER
SOLICITORS FOR THE RESPONDENT: MCVEITY & ASSOCIATES Orders
(1) The appeal be allowed;
(2) the orders made by Benjamin J, 17 August 2006 be set aside;
(3)the husband's application filed 31 March 2006 be remitted to a judge at first instance other than Benjamin J;
(4)The registrar at Hobart be requested to make further directions for the filing of material.
(5)That the Court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.
(6)That the Court grants to the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by the respondent in relation to the appeal.
IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Gitane & Velacruz
THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT HOBART
Appeal Number: SA 59 of 2006
File Number: HBF 851 of 1997
MR GITANE Appellant
And
MS VELACRUZ Respondent
REASONS FOR JUDGMENT
1.KAY J: We have before us an appeal against orders made by Benjamin J on 7 August 2006 wherein his Honour ordered:
(1)that the application made under s 79A by the husband on 31 March 2006 be dismissed;
(2) that the stay made by this Court on 6 February 2006 be vacated.
2.The orders went on to provide a notation that the dismissal of the application was a summary dismissal. There were then further orders dismissing the wife's application for costs and importantly ordering that this matter be removed from the list of cases requiring determination.
3.The background appears that the parties marriage had long been broken down. In August 1998 consent orders were entered into before Hannon J, providing for a sale of a property with the wife to receive $120,000 from the sale.
4.The husband was to organise the sale and in the event that the property had not been sold within eight months then the parties were to make arrangements for a public auction of the property.
5.If it had not been sold by 5 November 1998, then in addition to the $120,000 payable to the wife there was $1000 to be added each month, equivalent to a 10 per cent annual interest rate calculated on a monthly basis.
6.When the payment was made the wife was to transfer to the husband a property at T in Tasmania and other orders were made about the parties retaining their chattels and the like.
7.The sale never took place on the terms envisaged by the orders and eventually the wife made application to the Court, it would appear, some time in 2000 for an order that enabled her to take over the control of the sale. Eventually she negotiated a sale of the property. According to the husband's material, he believed the property was sold for $140,500 when he had envisaged it would originally sell for $180,000 when the consent orders were negotiated.
8.The net effect of that seems to be that there was a mortgage to be paid out, there were costs attendant upon the sale and the wife would have received something less than $90,000. According to the husband's affidavit sworn in January 2006 the wife then demanded the balance of payment due to her under the orders before she would transfer the T property but the husband declined to make that payment saying he did not have the capacity to do so.
9.He then heard nothing from the wife until May 2001 when she told him to go to her solicitor's office and pick up the transfer of the T property, that she was going against her solicitor's advice but had decided to sign the transfer because she wanted the matter to be finished and she did not want to have anything more to do with him.
10.He went to the solicitor's office, collected the transfer, there were some problems lodging the transfer, he returned it to the solicitors who had it altered, gave it back to him to lodge and it was subsequently lodged.
11.He says the next thing he heard was some four and a half years later in November 2005 when he received a demand for the payment of the balance of the moneys with a threat that his own property - the T property - would be sold to obtain the money that he allegedly owned Ms Velacruz. That was as a result, it would appear, of some enforcement orders that were made by a registrar of this Court some time in 2005. It is not apparent from the appeal book when those orders were made. They do not appear in the appeal book.
12.That prompted the husband to commence some proceedings to try to resist the execution of the enforcement orders and the proceeding that eventually came to light was an application filed on 31 March 2006 by the husband, returnable in July 2006, that sought orders as follows:
1.That Orders 9 to 12 of the orders made in the Family Court of Australia at Hobart on the 5th day of August 1998 ("the Orders") be set aside discharged and declared to be of no further effect pursuant to section 79A of the Family Law Act 1975.
2.That the Respondent be permanently restrained from taking any steps to enforce or procure the sale of the Applicant’s property situated at [T] being the property more particularly described in Certificate of Title […] ("the property") and without limiting this restraint that any warrant, writ or other executory order or notice be declared void and of no effect.
3.That pursuant to section 79A of the Family Law Act 1975 the Court order the Respondent pay to the Applicant the sum of $25,000.00 in substitution of the Orders.
4.That the registered dealing number C680328 being a Writ of Fieri Facias lodged against the folio of the register for the property be removed by the Respondent at her expense.
5.That the wife pay the husband’s costs of and incidental to these proceedings.
13.It can be seen that orders 1 and 3 seek to invoke an exercise of discretion under s 79A to set aside the original orders. Orders 2 and 4 seem to invoke some other jurisdiction of the Court to review the enforcement orders and have the Court resist, in the exercise of its discretion, any attempt to enforce the 1998 orders.
14.That application was made the subject of directions by Registrar Weidmann on 6 July 2006 that each party file and serve affidavits and statements of financial circumstances by 22 September 2006.
15.Prior to that date an application was then filed by the wife on 13 July 2006 in which she asked for the husband's application to be dealt with as follows:
1.That the applicant's application for orders numbered 1, 2 and 4 and sought in his application for final orders filed on 31 March 2006 be heard separately and prior to the hearing of the balance of the hearing of that said application and
2.That at the prior hearing that orders 1, 2 and 4 of the applicant's application be dismissed.
16.Effectively that application was for bifurcation of the s 79A application. 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.
17.The form of the application in fact envisaged that the application for summary dismissal take place at the “first-step” hearing if the bifurcation application was successful.
18.The application for bifurcation effectively came on before Benjamin J on 7 August with Mr McVeity and Mr Williams appearing. There was a cross-application made for some further financial discovery from the wife. His Honour heard submissions from the parties and effectively, in the course of argument, seemed to make it abundantly clear that it was a case in which bifurcation was appropriate but then moved to deal with what was said to be a summary dismissal application although, on a strict reading of the written application that was before him, there was, on that return that day no such application pending.
19.Having heard submissions relating to it, most of which were in defence of the ultimate outcome, his Honour seemed to focus on the argument that surrounded the provision in the original orders for the payment of $1000 a month in addition to the $120,000. It is what I will term to be “the interest argument”. The submission was that because this really was a penalty clause the whole of the orders would have to fail and that they were inherently inappropriate and there had been a miscarriage of justice within the meaning of s 79A(1)(a). That is of course only one of the bases upon which a s 79A application to set aside an existing order can be granted.
20.One of the other orders that seems to me to be basis for the proper application of s 79A, at least arguably, may well have been 79A(1A) that the parties should be seen to have consented to the orders being set aside. It has been held in previous decisions of this Court, particularly McCabe (1995) 19 Fam LR 579; (1995) FLC 92-634, that the parties’ consent can be implied by their conduct.
21.In the course of his Honour's reasons for judgment in summarily dismissing the application, his Honour identified the 79A application itself as being a two-fold application. The first of those, as his Honour said at paragraph 5, was the provision of order 12 - that is the interest provision - and the second he identified as circumstances that made it impractical for the order to be carried out following the enforcement order made in 2000 by Hannon J
22.With respect to his Honour and perhaps explicable by the rather confused situation in which the case was in fact presented to him orally, that overlooks the matters that I have already referred to as arising out of the husband's affidavit which was before his Honour on that day. A whole series of events had taken place in 2000 and 2001 that led to the wife allegedly saying “here is your property, I have got enough and it is all over” and then doing nothing for the next four years. It may well be, in those circumstances, at least arguably once the facts have been determined, that does amount to a circumstance within the meaning of s 79A that would make it appropriate for the orders to be set aside.
23.Further, of course, the application, although not as felicitously worded as it ought to have, sought relief from the effects of the enforcement orders that were made, not by Hannon J in 2000 but by the Registrar's orders that permitted execution to take place, that were made some time later, either late in 2005 or some time in 2006. The relief that was sought also seems to have just been summarily dismissed without paying any particular attention to the ramifications of making that order.
24.The principles to be applied in an application to strike out for summarily dismiss have been discussed in a number of cases by this Court and in particular the words of Kirby J in Lyndon v Commonwealth No 2, (1996) 70 ALJR 541 at 544 and 5 have been applied. I refer, amongst other decisions, to the decision of Bigg v Suzi (1998) FLC 92 799 at paragraph 510.
25.I paraphrase the salient points as follows:
(1)that relief for summary dismissal is rarely and sparingly provided;
(2)that it is only available if it is clear on the face of the documents of the person asserting a cause of action that there is no reasonable cause of action or that it is a frivolous or vexatious one;
(3)that it is not enough to attain summary dismissal to show that it is a weak case;
(4)that there is a defect in the pleading and it appears that the party still has a reasonable cause of action, the Court will allow the party to reframe its pleading; and
(5)that one only summarily dismisses if it is clear that the case is doomed to fail.
26.Looking at the case outlined on the husband's material I cannot conclude that his case is doomed to fail nor do I think it was appropriate that Benjamin J should have reached that conclusion. To that end, in my view, the orders made by Benjamin J in the circumstances were made in error.
27.It may be that ultimately the husband's case is found to be without merit. It may be that it has appropriate merit. It may be that his case under 79A has no merit but that there are appropriate reasons to set aside the enforcement orders that have been put in place having regard to general equitable principles and a discretion that the Court undoubtedly has to resist an application for enforcement. See Ramsay (1983) FLC 91-323 as authority for the proposition that such a discretion exists.
28.In the circumstances I would allow the appeal and make orders that would remit the further consideration of the husband's application of 31 March 2006 to a judge other than Benjamin J.
29.The orders that I would propose making are:
(1) The appeal be allowed;
(2) the orders made by Benjamin J, 17 August 2006 be set aside;
(3)the husband's application filed 31 March 2006 be remitted to a judge at first instance other than Benjamin J;
(4)The registrar at Hobart be requested to make further directions for the filing of material.
30.COLEMAN J: I agree with the orders proposed by the presiding judge and the reasons for making those orders, I have nothing to add.
31.BOLAND J: I agree with the reasons of the presiding judge and the orders he proposes. I would emphasise only two matters. In the light of authority, I would doubt the availability of s 79(1)(c) for the relief that the husband may seek, because he is relying on his own default.
32.I also note the comments of the Full Court in McCabe (supra) at page 82-369 that the most likely basis of relief may be s 79A(1A) rather than s 79A(1). I agree with the conclusions, both in relation to the summary dismissal and also the dismissal of the enforcement application.
33.KAY J: I would like to add to my reasons for judgment a matter that Coleman J drew attention to in the course of argument namely that s 79A applications have a way of spiralling out of control. These parties on the material before us at the moment are parties of extremely modest circumstances and I think it is incumbent upon the legal practitioners to bear those matters in mind in determining the advice they give to their respective clients and as to the manner in which this litigation should be conducted in the future, particularly given the great passage of time since the marriage has come to an end for practical purposes. I trust counsel will take these remarks back to those who have not been able to attend here today
34.KAY J: I make the usual order for s 6 and 9 certificates.
I certify that the preceding thirty four (34) paragraphs are a true copy of the reasons for judgment of this Honourable Full Court
Associate:
Date: 6 March 2007
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