Gitane & Velacruz
[2008] FamCAFC 86
•25 June 2008
FAMILY COURT OF AUSTRALIA
| GITANE & VELACRUZ | [2008] FamCAFC 86 |
| FAMILY LAW - APPEAL – SECTION 79A – Where trial Judge found an implied consent to variation of previous consent orders – Whether trial Judge erred in making orders which effectively gave the same result as enforcement of the consent orders – Whether s 79A required the trial Judge to vary the consent orders in strict accordance with the implied agreement of the parties – Whether trial Judge was required to set aside the consent orders before re-adjusting the parties’ property entitlements under s 79 – Whether s 79A(1A) needs only a two step examination of whether the consent was made out and then consideration of all other matters to decide whether to vary or set aside orders - Whether trial Judge erred in bifurcating the discretionary element of the s 79A determination – Where overall, a correct approach was achieved – No error by trial Judge - Trial Judge was not required to vary the consent orders in strict accordance with the implied agreement of the parties - Trial Judge was not required to set aside consent orders prior to re-adjusting the parties’ property entitlements – Discussion of the extent of the discretion to vary orders under s 79A(1) and s 79A(1A) – Trial Judge did not err in the exercise of his discretion - Appeal dismissed. FAMILY LAW - COSTS – Where offers possibly made by parties - Time-table set for the filing of written submissions in respect of the costs of the appeal. |
| Family Law Act 1975 (Cth), s 75(2), s 79, s 79(1), s 79(2), s 79A, s 79A(1A) |
| Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All ER 343 In the Marriage of Arpas (1989) FLC 92-042 In the Marriage of Patching (1995) FLC 92-585 In the Marriage of Prowse (1995) FLC 92-557 |
| APPELLANT: | Mr Gitane |
| RESPONDENT: | Ms Velacruz |
| FILE NUMBER: | HBF | 851 | of | 1997 |
| APPEAL NUMBER: | SA | 104 | of | 2007 |
| DATE DELIVERED: | 25 June 2008 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Bryant CJ, Warnick and Boland JJ |
| HEARING DATE: | 7 May 2008 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 30 October 2007 |
| LOWER COURT MNC: | [2007] FamCA 1277 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Williams by video link |
| SOLICITOR FOR THE APPELLANT: | Cann Legal |
| COUNSEL FOR THE RESPONDENT: | Mr McVeity |
| SOLICITOR FOR THE RESPONDENT: | McVeity & Associates |
Orders
That the appeal be dismissed.
That either party be at liberty to make an application by way of written submissions in respect of costs incurred by him or her in relation to the appeal by filing such submissions at the Melbourne Registry of the Family Court and serving them on the other party within 21 days of the date hereof.
That the other party have a further 14 days in which to make written submissions in answer thereto by filing such submissions at the Melbourne Registry of the Family Court and serving them on the other party.
That either party be at liberty to reply to an answer by way of written submissions by filing such reply at the Melbourne Registry of the Family Court and serving it on the other party within a further 7 days.
That each party endorse on the cover sheet the date on which a copy of that submission was served on the other party.
IT IS NOTED that publication of this judgment under the pseudonym Gitane & Velacruz is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SA 104 of 2007
File Number: HBF 851 of 1997
| Mr Gitane |
Appellant
And
| Ms Velacruz |
Respondent
REASONS FOR JUDGMENT
In 1998, following the breakdown of their marriage, Mr Gitane and Ms Velacruz obtained, by consent, final orders for alteration of property interests. However, the husband then partially defaulted on an obligation to pay the wife monies. Discussions between the parties occurred and certain steps envisaged by the orders were taken by the wife. Years later, the wife brought enforcement proceedings and, in response, the husband sought to vary or set aside the pertinent orders for property settlement.
Following a trial of the husband’s application in October 2007, Rose J said in his reasons for judgment:
77.… that the wife provided an implied consent to variation of Orders 9 and 13 of the consent orders to the effect that the husband was no longer liable pursuant to those orders to pay her the balance of monies payable, namely in this particular case the sum of $31,260.00. Implicitly, that implied consent was also given to the setting aside of Order 12.
However, Rose J subsequently addressed other matters and on account of them exercised a discretion to make orders requiring the husband to pay the wife the balance of the monies owing under Order 9 of the initial property settlement orders.
In this, the husband’s appeal against that result, the central argument is that, Rose J having found an implied consent to vary the property orders in a specific way, the relevant section of the Family Law Act 1975 (Cth) as amended, (“the Act”) namely s 79A(1A), left him no discretion to do as he did. That was, as Mr Williams, counsel for the husband put it, to effectively embark on a fresh property settlement assessment pursuant to s 79 of the Act and to vary the 1998 order to provide for what he concluded was the just and equitable order, in accordance with s 79(2) of the Act. Mr Williams argued that the terms of the section required Rose J to vary the order in strict accordance with the implied agreement of the parties or otherwise if he re-adjusted the parties’ property entitlements having regard to their circumstances at the date of hearing, he was required to first set aside the 1998 orders.
There are four grounds of appeal. The first two enshrine the central argument, but also, some related arguments arising from the expression by Rose J of his approach under s 79A(1A). The last two were presented in the alternative which, for the purposes of argument, conceded a discretion, but asserted that the discretion was wrongly exercised.
Short background
The parties separated in February 1997. The consent orders of 5 August 1998 included the following:
9.THAT the respondent husband pay to the applicant wife upon the sale of the Queensland property […] (“the property”) the sum of $120,000.
…
12.THAT In the event that the property is not sold by the 5 November 1998 on the 5 day of each month thereafter there is to be added to the figure of $120,000 referred to in paragraph 9 hereof the figure of $1,000.
13.THAT contemporaneously with the payment in Order 9 the wife do all such acts and sign all such documents as may be required to transfer to the husband all of her interest in the real property known as […] Northern Beach being the whole of the land more particularly described in Certificate of Title Volume […].
In further proceedings, orders for sale were made on 29 July 1999 and 7 February 2000 and the property was eventually sold on 15 March 2000. The wife received the entire net proceeds of $88,740.73. Subsequently, the husband and wife discussed the husband’s outstanding liability, these conversations being significant to Rose J’s conclusion that the wife had impliedly agreed to discharge the husband from further liability. Also of importance to that conclusion was the fact that in May 2001, the wife transferred to the husband her interest in the […] Northern Beach property. Notwithstanding that action, on 17 August 2005, the wife issued an enforcement summons. The husband responded with a s 79A application, which in August 2006, Benjamin J summarily dismissed. An appeal against that decision was allowed and the matter was remitted, thus coming before Rose J.
Grounds 1 and 2
These grounds read:
1.That the learned Trial Judge having exercised his discretion to vary Order 9 of the Orders made on the 5th August 1998 (“Order 9”) so as to discharge the Husband’s liability to pay the balance of money payable to the wife pursuant to that Order erred by varying Order 9 to provide for the payment to the wife by the Husband of the sum of $31,260.00.
2.That it was not open to the Trial Judge under section 79A(1A) of the Family Law Act 1975 (“the Act”) to make a further order under section 79 of the Act once the Trial Judge had exercised his discretion to vary and not set aside Order 9 pursuant to section 79A(1A) of the Act.
These grounds and the central argument presented are not entirely consistent. The grounds refer to (but do not challenge) the trial Judge “having exercised his discretion to vary” whereas, as seen, the central argument is that, following certain findings of fact, no discretion was left to the trial Judge. However, the wording in the grounds of appeal and the ancillary arguments presented for the husband derive from several paragraphs of Rose J’s reasons, as follows:
83.I do not accept those submissions and will exercise the discretion to vary the Orders 9 and 13 of the consent orders so as to discharge the husband’s liability to pay the balance of the monies payable by him pursuant to those orders for the following reasons:
(a) The actions of the wife following the receipt by her of legal advice resulted in her signing the transfer, making it available for the husband to lodge for registration, the registration of the transfer without any terms or conditions, and the failure by the wife to preserve her interest by the lodgement of a caveat.
(b) Transfer of the wife’s interest in the […] Northern Beach property was a material transaction to her detriment having regard to the terms of Orders 9 and 13 of the consent orders.
(c) The action by the husband whereby he mortgaged his interest in the […] Northern Beach property albeit, that to do so enabled him to provide security for a loan to satisfy outstanding legal costs.
(d) The wife’s silence for a considerable period of time, namely a little over three years, and implicitly not evidencing any intention to seek recovery of the balance of monies payable to her pursuant to the consent orders.
(e) The failure by the wife to make an application for enforcement of the consent orders for payment to her of the balance of monies outstanding by the husband at the time when she filed her application in 2004 seeking orders to enable the child to travel with her to Colombia.
(f) The evidence of the wife that she was only motivated to take further steps for seeking recovery of the monies payable to her pursuant to the consent orders due to a comment made to her by the child subsequent to orders having been made to enable him to travel with her to Colombia.
(g) The absence of evidence of hardship to the wife should the discretion be exercised in favour of the husband. No submission was made in that regard. (emphasis added)
As seen, in the first part of this paragraph, Rose J said that he would vary the orders “…so as to discharge the husband’s liability to pay the balance of the monies…”. But this he did not ultimately do. Taken alone, this paragraph seems to support the complaint expressed in at least ground 1. In turn, that led to the argument that the trial Judge had made a mathematical error and, to give effect to his stated intention, should have varied Order 9 to require the husband to pay to the wife $88,740.73, which, since she had already received that amount, would have effectively discharged the husband from further liability. However, there is no merit in this argument. The explanation for the orders made, notwithstanding what Rose J said in paragraph 83, is clear from what he said in paragraph 97:
97.It was of course accepted by counsel for the parties that in the event that the ground of consent was established pursuant to s 79A(1A) and the discretionary power to set aside or vary relevant property settlement orders was exercised, then it was necessary for me to proceed to the next stage. That stage is whether or not it is appropriate to make new orders for property settlement having regard to the provision of s 79(1), s 79(2) and s 79(4) which are required to be just and equitable.
However, while the content of the paragraph just quoted makes it clear that his Honour’s position struck in paragraph 83 was only the first step or the first two steps, of more, his Honour in paragraph 97 described as three steps what was probably only two steps.
Section 79A(1A) provides:
A court may, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, and with the consent of all the parties to the proceedings in which the order was made, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
We opine that an application under s 79A(1A) involves an examination of whether the ground – a consent – is made out – the first step – and then, a consideration of all other matters that bear upon the question of whether to vary or set aside - the second and final step. However, an alternative view is that, after making the decision to vary or set aside, the court must decide how to vary, or, if setting aside, what, if any, new s 79 order to make. Our own view is that all the discretionary factors, including how to vary, if at all, or what new order to make, if any, after setting aside the initial order, can be considered in the one step. Otherwise one could encounter the oddity of a decision to vary (based on some discretionary factors) followed by an ultimate conclusion not to vary (based on other discretionary factors).
In this case, Rose J took the alternative approach. This is demonstrated not only by what he said in the paragraphs quoted thus far, but also the form of the orders, which was:
Orders pursuant to section 79A(1A)
1.That Order 9 made 5 August 1998 is varied by omitting the amount of “$120,000.00” and substituting the amount of $31,260.00.
2.That Order 12 made 5 August 1998 be set aside.
Pursuant to section 79(1)
3.That the husband pay to the wife the sum of $31,269.00 on or before 29 February 2008.
We think that Order 9 of the consent orders might have been equally, or perhaps more cogently varied, by simply deleting Order 3 of Rose J’s order and the heading preceding it, and including the date for payment of the $31,260.00 in Order 1.
However, we do not consider that in bifurcating the discretionary part of the exercise, Rose J fell into appealable error. Not only do the paragraphs so far quoted show that, overall, a correct approach was achieved, but earlier paragraphs demonstrate that his Honour had well in mind the essential nature of the exercise. These were:
77.Consequently, I find that the wife provided an implied consent to variation of Orders 9 and 13 of the consent orders to the effect that the husband was no longer liable pursuant to those orders to pay her the balance of monies payable, namely in this particular case the sum of $31,260.00. Implicitly, that implied consent was also given to the setting aside of Order 12.
…
79.However, the establishment of the ground relied upon pursuant to s 79A(1A) does not represent an end to the matter. As was emphasised by the Full Court in Morrison the exercise of discretion to vary or set aside the relevant orders then arises for consideration. (footnote omitted)
As to the central argument, that the terms of the section required Rose J to vary the order in strict accordance with the implied agreement of the parties or otherwise if he re-adjusted the parties’ property entitlements having regard to their circumstances at the date of hearing, he was required to first set aside the 1998 orders, we reject it for the several reasons that follow.
The very words in s 79A(1A), namely “a court may…vary or set aside” convey the discretionary nature of the ultimate decision, whether that is variation or not.
The critical wording in s 79A(1A) compares with that in s 79A(1) which provides as follows:
Where…the court is satisfied that…the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in satisfaction for the order so set aside.
While in s 79A(1) the grounds as to which a court might be satisfied differ from the ground in s 79A(1A), it has never been held in respect of applications under s 79A(1) that in some circumstances, the discretion to vary might not arise, because of the facts found in respect of a ground.
To the contrary, as the Full Court of the Family Court indicated in In the Marriage of Prowse (1995) FLC 92-557 (at 81,565), establishing a “miscarriage of justice” within s 79A will not necessarily lead to the setting aside of the order:
If that were so, there would appear to be no scope for any exercise of discretion adverse to an applicant under s 79A once a “miscarriage of justice” within the section has been established. But the legislature clearly gave the court such a discretion, and it follows that what the legislature has given the court cannot take away.
However, we do not think it would be correct to say that there is even a prima facie entitlement to have the consent orders set aside once a miscarriage of justice has been established, because to do so would be to limit the discretion of a court and to place an onus on the respondent to show circumstances why the order should not be made. The better view, in our opinion, is that an applicant for an order under s 79A(1) bears the onus of satisfying the court that the original orders should be set aside or varied, and that includes the onus of satisfying a court not just that there has been a “miscarriage of justice” but also that the appropriate exercise of the discretion is to so order.
(iii)The argument for the husband refers to certain key words, being those emphasised in the following part of s 79A(1A):
…vary the order or set the order aside and, if it considers appropriate, make another order under s 79 in substitute for the order so set aside.
The argument focuses on the absence of the key words, following the reference to the power to vary, in contrast to the presence of those words, after the reference to the power to set aside.
However, the explanation for the difference is obvious and does not support the argument for the husband. There may only be one final property order. If an initial final order is varied, there will still be only one order. In the making of a variation, s 79 principles would necessarily apply as the order retains its essential character – a final order made under s 79.
However, if an initial order is set aside, then there is no existing exercise of the power and the legislation has merely made it clear that the power may be re-exercised.
The category of factors that may bear on an exercise of discretion under s 79A is not closed, but all expressions of those factors, of which we are aware, whether a variation or a setting aside and a new order is proposed, include a reference to factors that are relevant under s 79. In In the Marriage of Patching (1995) FLC 92-585 (at 81,797) the Full Court said:
…even if the Court concludes that there have been circumstances which amount to a miscarriage of justice it must then consider whether in all the circumstances it should exercise its discretion to vary or set aside the orders and/or make a new s. 79 order. In exercising that discretion it will have regard to, inter alia, the degree and nature of the miscarriage in question, any delay, alterations in the parties’ positions in the meantime, and the extent to which, if at all, it is now appropriate to vary the original orders… (emphasis added)
In In the Marriage of Arpas (1989) FLC 92-042, Mullane J said (at 77,495):
…the power under sec. 79A to vary or set aside a sec. 79 order involves …more than considering contributions under subsec. 79(4) and 75(2) factors (albeit in this case of three persons rather than two). It also involves a specific discretionary power as to whether to set aside the sec. 79 order already made. Exercise of the discretion means doing justice between all the parties. That involves consideration of matters outside the provisions of subsec. 79(4) and subsec. 75(2). (emphasis added)
(v)The interpretation urged for the husband could produce inconsistencies:
· The trial Judge, on the argument put, prevented from varying, could have achieved the same result as is contained in his orders by setting aside the orders and making new orders.
· On Mr Williams’ argument, an absence of discretion would prevent any solution if there was a clear agreement that orders be varied but the parties did not agree on the manner in which they be varied. While under contract law it might be that the result of that failure meant that there was no agreement at all, it is at least arguable that such findings would constitute a ground under s 79A(1A), particularly where there have been many cases in which there has been an implied consent to set aside found, notwithstanding no agreement on the orders that might then be made to replace the original orders.
· It is clear law that when an order under s 79 is presented to a court by consent, the court retains a discretion as to whether or not to make the order, having regard to the factors set out in s 79 of the Act. This position supports the view that if parties present under s 79A(1A) with consent (express or implied) to vary or set aside a property order, the court retains a discretion. However, Mr Williams submitted that a difference which affected the validity of the analogy was that the consent referred to in s 79A(1A) related, not to an initial property order, but to a subsequent one. We see no reason why that renders the analogy less powerful.
The attack on the exercise of discretion
Grounds 3 and 4 are:
3.That further or in the alternative the learned Trial Judge erred in law in that he failed to consider or determine whether it was appropriate to make a further order under section 79 in substitution for the Order 9 as required by section 79A(1A) of the Act.
4.That further or in the alternative it was not appropriate under to [sic] section 79A(1A) for the Trial Judge to make a further order under section 79 of the Act.
The argument in support of these grounds was simply that Rose J’s finding as to the wife’s consent to discharge the husband from any further liability under the 1998 orders should have overwhelmed all other discretionary considerations. We are not satisfied that is so.
Rose J was, of course, assessing s 79 factors as at the end of 2007, whereas the order was made in 1998. Significant findings made by Rose J included:
129.However, in the period of 10 ½ years since the parties separated the contributions made by the wife have greatly exceeded those made by the husband.
130.At the time of the parties’ separation the child was 6 ½ years of age. Since that time the wife has made the substantial contribution in the role of homemaker and parent given that the husband has not made any contribution in that regard since during 2002.
131.In addition, the wife has provided the financial support for the child with negligible financial contributions made by the husband. I refer to my earlier findings in that regard.
Moreover, as seen, the wife did not receive payment even of the reduced sum, until 15 or 16 months after it was due. As his Honour assessed relevant s 79 and s 75(2) factors, before considering the justice and equity of his proposed orders, the wife would have received $58, 407.50.
Another judge might have varied the initial order to discharge the husband from further liability, but, as was said by Asquith J in Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All ER 343 at 345:
… It is, of course, not enough for the wife to establish that this court might, or would, have made a different order. We are here concerned with a judicial discretion, and it is of the essence of such a discretion that on the same evidence two different minds might reach widely different decisions without either being appealable. It is only where the decision exceeds the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong, that an appellate body is entitled to interfere.
Having regard to the width of the discretion, we are not satisfied that his Honour’s exercise of it was wrong in the appellate sense.
Conclusions overall
We find no merit in any of the grounds. The appeal should be dismissed.
Costs
Upon indication that consideration of costs may be affected by offers, we proposed that we provide for written submissions as to costs.
I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court
Associate:
Date: 25 June 2008
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