Goey & Goey
[2022] FedCFamC1F 48
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Goey & Goey [2022] FedCFamC1F 48
File number(s): ADC 652 of 2018 Judgment of: BERMAN J Date of judgment: 9 February 2022 Catchwords: FAMILY LAW – ORDERS – Variation – Where final orders were made – Where both parties seek a variation to the final orders – Where the husband considers the final orders should be set aside on the basis of impracticability – Where the wife considers the final orders should be set aside on the basis of a miscarriage of justice – Where the wife was to retain a certain property as part of the final settlement – Where the final orders are silent on the transfer of the husband’s interest in that property to the wife – Where the wife seeks the transfer of the husband’s interest in the property on an interim basis – Where the husband opposes the transfer due to another property not yet being sold – Where the interim application cannot be severed from the substantive orders sought – Where it is not possible to rectify the final orders on an interim basis – Interim application dismissed. Legislation: Family Law Act 1975 (Cth) ss 79A(1)(a), 79A(1)(b), 79A(1A) Cases cited: Demeny & Ogden [2021] FedCFamC1A 21
La Rocca & La Rocca (1991) FLC 92-222
Public Trustee (as executor of the estate of the late Gilbert) v Gilbert (1991) FLC 92-211
Rohde & Rohde (1984) FLC 91-592
Division: Division 1 First Instance Number of paragraphs: 54 Date of hearing: 20 and 21 December 2021 Place: Darwin Counsel for the Applicant: Mr Richards Solicitor for the Applicant: David Burrell & Co. Counsel for the Respondent: Mr Anderson Solicitor for the Respondent: Clelands Lawyers Adelaide Pty Ltd ORDERS
ADC 652 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR GOEY
Applicant
AND: MS GOEY
Respondent
ORDER MADE BY:
BERMAN J
DATE OF ORDER:
9 FEBRUARY 2022
THE COURT ORDERS THAT:
1.The interim application as appears in the Response to Initiating Application filed 14 December 2021 is 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 Goey & Goey is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BERMAN J
INTRODUCTION
By Initiating Application filed 15 October 2021, Mr Goey (“the husband”) seeks to set aside final orders made for settlement of property on 20 December 2019 (“the final order”) pursuant to s 79A(1)(b) of the Family Law Act 1975 (Cth) (“the Act”) and if successful, seeks orders varying the final order as set out in annexure “A” to the Initiating Application.
By Response to Initiating Application (“the Response”) filed 14 December 2021, Ms Goey (“the wife”) also seeks that the final order be set aside pursuant to s 79A(1)(a) of the Act, although it is likely that the section referred to in paragraph 1 of the final orders sought in the Response is a typographical error and should have read s 79A(1A).
The wife also seeks an amendment to paragraph 2.12 of the final order pursuant to s 79A(1)(b) of the Act.
In addition to the final orders sought in the Response, the wife seeks the following interim orders:
1. That the husband forthwith transfer the whole of his interest in both law and equity in the Suburb R property to the wife at her cost.
2.That paragraph 2.15.1 of the Final Order be varied to also include reference to the properties at S Street Suburb L, SA and 1, 2 and 3 V Street, Suburb K, SA.
3.That the husband forthwith pay to the wife the sum of $21,147.23 by way of unpaid spousal maintenance.
4.That the requirement that the wife file a Financial Statement and Financial Questionnaire be dispensed with.
At the commencement of the interlocutory hearing, the parties advised that agreement had been reached as to the payment of an amount acceptable to the wife in discharge of the husband’s obligation to pay expenses to the wife.
For reasons that will be discussed, the interim proceedings focused on the order sought by the wife for the transfer of the husband’s interest in the property situate at T Street, Suburb R, NSW (“the Suburb R property”). To give context to the interim proceedings, it is necessary to consider the background to the proceedings and in particular the final order.
BACKGROUND
The parties met in 1975. The husband came to Australia in 1978 and after completing his secondary school education entered medical school in 1980 and ultimately graduated with a degree in medicine.
The parties were married in 1987 and separated on or about July 2017.
The parties were married for over thirty years and there are three adult children of the relationship.
The husband worked as a health professional and provided financial support for the family. The wife provided primary care for the children and it is not controversial that she made significant non-financial contributions in her capacity as a homemaker.
The proceedings were complex and the conflict between the parties was high. There were allegations made by each of the parties that property had been disbursed, transferred or disposed of by the other.
The husband also asserted that the wife held property in Country G. During the course of the litigation, there remained an inability to agree the value of any interest held by the wife in property situate in Country G.
A concern of the parties and of the Court was that the legal fees that were likely to be generated by the ongoing and unrelenting litigation would have represented a significant proportion of the net property of the parties.
THE FINAL ORDER
The final order was made by consent following nearly four days of evidence taken during the proceedings. The construct of the final order is to set out and identify the property of each of the parties, in particular the Suburb R property valued at $1,000,000, and the wife’s property in Country G (“the Country G property”) with an estimate of $550,000 but with a note that the Country G property was to be sold.
At the time of making the final order, there was agreement that the gross total property of the parties was valued at $8,015,000, with gross total liabilities of $5,036,502. Net assets were in the sum of $2,929,088, with the value being attributed to the husband and wife’s entitlement in their self-managed superannuation fund (“SMSF”) as at 30 June 2018 of $1,602,038.
Notation B to the orders is in the following terms:
B.The parties agree that this Order has the effect of making a 65/35 split of the above non-superannuation asset pool and an equal division of the superannuation entitlements of the parties.
By way of example, notation C sets out the property to be retained by each of the parties which would provide for the husband to retain $952,098 and the wife to retain $1,926,990, principally comprising the Suburb R property at $1,000,000, a small holding of shares at $35,000 and the former matrimonial home at S Street, Suburb L, SA valued at $1,400,000, in the total sum of $2,435,000.
The liabilities to be retained by the wife is a mortgage in respect of the Suburb R property of $474,000 and capital gains tax of $75,000, totalling $549,000.
The final order refers to a previous order made on 7 December 2018 which provided for the sale of the shares and the Country G property. The sale of the shares is irrelevant to the current dispute. It is not controversial that the Country G property has not sold. What is not agreed is the reason why there has not been a sale and how the matter can go forward until and unless a sale takes place.
The significance of the sale of the Country G property is better understood by reference to paragraphs 2.2 and 2.3 of the final order:
2.2That the sale of the Country G property continue to be effected by such agent or agents and upon such terms and conditions as specified in paragraph 1(a) of the Orders of 14 December 2018
2.3 That the net proceeds of the Country G property shall be paid:
2.3.1 Firstly in payment of all costs, commissions and expenses of the sale;
2.3.2Secondly, to the joint Westpac account established pursuant to paragraph 1(b) of the Order dated 25 September 2018 (“the joint Westpac account”) an amount equal to the capital gains tax that shall be calculated as to be reasonably anticipated to be payable in respect of the sale of the Country G property;
2.3.3Thirdly, in discharge of any loans secured by registered mortgage over the Suburb R property;
2.3.4Fourthly, in discharge of any loans secured by registered mortgage against the Suburb L property; and
2.3.5 Fifthly, the balance (if any) to the husband.
The final order also agrees for the sale of two properties situate at N Street, Suburb P (“the N Street property”) and at W Street, Suburb X, NSW (“the Suburb X property”). From the sale of the N Street and Suburb X properties, any loan remaining secured over the Suburb R property is to be discharged.
The Suburb R property is again referred to in paragraph 2.10 of the final order in that if the net proceeds of sale of the Country G, N Street and Suburb X properties is insufficient to discharge the registered mortgage over the Suburb L property and the Suburb R property then the husband will pay such amount necessary to discharge the loans.
The parties agree that the property settlement was to give effect to a 65/35 per cent division in favour of the wife.
Paragraph 2.11 provides:
That the wife shall pay to the husband such sum as shall be calculated as follows:
2.11.1Step 1, the net proceeds of sale and the capital gains tax payable arising from the sale of the Country G, N Street and Suburb X properties only shall be substituted into the table of the non-superannuation assets in Notation A above;
2.11.2Step 2, 35% of the non-superannuation assets in the table in Notation C as modified by the substitution in paragraph 2.11.1 above shall then be calculated;
2.11.3Step 3, the value of the non-superannuation assets that the husband is retaining shall then be deducted from the 35% figure at Step 2 and the balance making up the 35% shall be the amount the wife pays the husband pursuant to this Order.
Paragraph 2.13 provides:
That upon payment of the sum calculated pursuant to paragraph 2.11, the husband do all things and execute all documents that transfer to the wife the whole of his interest both in law and in equity in the Suburb L property to the wife.
The final order provides for the transfer of the wife’s interest in properties at Suburb Q and Rostrevor to the husband, however it is silent as to the transfer of the husband’s interest in the Suburb R property.
It is likely that the reference to the Suburb R property was omitted from the provisions of paragraph 2.13.
The relevance of the Suburb R property is also to be found in the default provisions as provided for in paragraphs 2.14.2 and in 3.1 of the final order, the latter of which provides for the husband to pay the wife spousal maintenance:
3.1For the period from 12 February 2020 until the date upon which he discharges in full the loans encumbering and mortgage registered against the Suburb R property:
3.1.1 The amount of $1,050.00 per week;
3.1.2 The first such weekly payment on 12 February 2020; and
3.1.3All additional amounts pursuant to paragraph 1.3 of the Order dated 24 April 2018.
The husband has now caused the mortgage over the Suburb R property to be discharged and as such is no longer obliged to pay the wife spousal maintenance.
The intention was that upon transfer of the Suburb R property to the wife, she would be entitled to the rental payments arising from the tenancy of the Suburb R property. The husband is now not prepared to transfer his interest in the Suburb R property to the wife but agreement has been reached that she will be entitled to the rental income.
The reluctance and current refusal of the husband to transfer his interest in the Suburb R property to the wife arises, at least in part, from his assertion that the wife has not used her best endeavours to sell the Country G property. There is mistrust between the parties and the husband’s contention is that notwithstanding the long standing obligation for the wife to sell the Country G property, she has not done so.
For her part, the wife contends that she has done all that she can but that the circumstances in Country G and the inability of the wife to travel to Country G to be involved personally in the marketing, sale and transfer of interest in the Country G property has not been possible.
THE HUSBAND’S APPLICATION
The husband does not pursue interim orders other than to oppose the wife’s application for the transfer of his interest in the Suburb R property to her.
The husband seeks that consequent upon a finding pursuant to s 79A(1)(b) of the Act, namely that:
in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out…
paragraph 2.3 of the final order, providing for the disbursement of the net proceeds of the sale of the Country G property, be discharged and in effect the final order should be varied such that the balance of the final order is dependent upon the sale of the Country G property and upon its eventual sale, the net proceeds to be divided 65/35 in favour of the wife.
According to the proposal of the husband, if the matter was to be resolved on that basis, the practical effect would be a payment by the wife to the husband of $797,783 which then in part would be used by the husband to discharge the mortgage liability over Suburb L. The issue for the husband is the extent to which the purported conduct of the wife in not effecting a sale of the Country G property is likely to satisfy the test required pursuant to s 79A(1)(b), that is, that it is now impracticable for the order to be carried out.
In Rohde & Rohde (1984) FLC 91-592, Gee J discussed the meaning of “impracticable”. At 79,768 his Honour made the following observations:
(a)It is not enough that circumstances have arisen since the order was made which make it unjust for the order or part of the order to be carried out; the onus is upon the applicant to establish to the reasonable satisfaction of the Court, that in the circumstances that have arisen since 12 March 1982 it is impracticable for the order or part of the order to be carried out.
(b)The word “impracticable” means, gleaning a definition from the Shorter Oxford Dictionary, “not practicable”; “that cannot be carried out or done”; “practically impossible”; “unmanageable”; “intractable”.
(c)‘“Impracticability’ is a conception different from that of ‘impossibility’; the latter is absolute, the former introduces at all events some degree of reason and involves some regard for practice” (per Veale J. in Jayne v. National Coal Board (1963) 2 All E.R. 220).
(d)Provided that more than one circumstance exists, and that the circumstances have arisen since 12 March 1982, it does not matter what the circumstances are or by whom they are brought about.
(Emphasis in original)
In La Rocca & La Rocca (1991) FLC 92-222 (“La Rocca”) at 78,536, Kay J noted that in examining the meaning of impracticable, Gee J had “concluded that it was something different from impossible”. In La Rocca, Kay J adopted the view that s 79A(1)(b) should be interpreted narrowly. His Honour held the view that impracticability was similar to the application of the doctrine of frustration. In his concluding remarks at 78,539, Kay J said:
it is not sufficient that it is impracticable, but that as a result of that impracticability the Court ought not exercise its discretion unless a serious inequity has arisen bearing in mind that judgments are basically final in property matters.
At this stage, I am not obliged to make a determination as to whether there is or is not merit in the husband’s application. A determination as to whether the orders are impracticable would depend upon circumstances and the evidence that the husband seeks to rely upon.
THE WIFE’S APPLICATION
The interim application of the wife is based on what she considers to be a concession made by the husband in his affidavit filed 15 October 2021 as to the following:
22.Having paid out the loan in full for the Suburb R property, my obligation pursuant to the Final Order with respect to the payment of maintenance to the wife, have now ceased.
23. …
24.The Suburb R property can now be transferred to the wife. At the time of entering into the Final Order, an order providing for the transfer of same was omitted. Hence, I seek an order for the transfer of the Suburb R property to the wife, on the basis set out below.
It is not in dispute that the intention of the parties was that the husband’s interest in the Suburb R property is to be transferred to the wife. To that extent, although not necessarily an agreement as to drafting of the omitted provision as to transfer, the husband contends that given his application seeking to vary the orders on the basis that the non-sale of the Country G properties renders the orders impracticable, he contends it would not be a just and equitable outcome if the current final order was amended to reflect the transfer of the Suburb R property to the wife.
The wife seeks that the husband’s interest in the Suburb R property be transferred to her.
The difficulty is to identify the source of power to give effect to such an order. Given that there is no consent, it cannot be said that the wife’s interim application is by way of enforcement.
What the wife seeks in reality is that the final order be rectified to include a provision not dissimilar to paragraph 2.13 of the final order which provides for the husband to transfer his interest, both in law and in equity, in the Suburb L property to the wife.
Of course, the final order is not a contract or deed between the parties.
Whilst there is some uncertainty as to the basis upon which the wife now seeks to amend the final order, it seems that if it can occur, the first consideration is whether it can be given effect pursuant to s 79A(1)(a) which provides as follows:
(1)Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a)There has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or
(b)…
(c)…
(d)…
(e)…
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
The question therefore is whether there has been a miscarriage of justice.
The Full Court in Demeny & Ogden [2021] FedCFamC1A 21 (“Demeny”) considered the scope of s 79A(1)(a), but in particular the reference to “or any other circumstance”. The Full Court considered the jurisprudence relevant to the scope of s 79A(1)(a) and the words “miscarriage of justice” and in the decision of Public Trustee (as executor of the estate of the late Gilbert) v Gilbert (1991) FLC 92-211 at 78,427 confirmed that the term miscarriage of justice “relates to the judicial process which resulted in the order sought to be set aside. Its integrity cannot be put into question by something that happened after that process was completed”.
At [35] of Demeny, the Full Court also considered the approach adopted by Kent J in Ullrich & Kraft [2014] FamCA 266 where his Honour “found that a miscarriage of justice ‘occurred in the judicial process given the extent of the difference between the intended effect of the orders and their actual effect.’”
CONCLUSION
There is agreement that the Suburb R property was intended to be transferred to the wife but even if a variation to the final order was made pursuant to s 79A(1A) of the Act, the orders sought in the husband’s Initiating Application would likely invite a stay of the operation until such time as the husband’s application for substantive relief pursuant to s 79A has been determined.
Similarly, the wife’s interim application cannot be severed from the substantive orders that she seeks in her Response until the source of power to do so has been determined.
The obvious way forward is for the parties to put aside their differences and to resolve the matter, noting that the litigation has been on foot now for three years and the ever increasing cost of litigation may well result in a pyrrhic outcome for the parties.
Accordingly, in circumstances where each of the parties seek to set aside or vary the final order pursuant to s 79A of the Act, it is not possible to rectify the orders on an interim basis.
For these reasons, the interim orders sought by the wife in her Response will be dismissed.
I make the order as appears at the commencement of these reasons.
I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 9 February 2022
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