Goldsmith & Stinson (No 2)

Case

[2023] FedCFamC1A 25


Federal Circuit and Family Court of Australia

(DIVISION 1) APPELLATE JURISDICTION

Goldsmith & Stinson (No 2) [2023] FedCFamC1A 25

Appeal from: Stinson & Goldsmith [2022] FedCFamC1F 524
Appeal number(s): NAA 158 of 2022
File number(s): BRC 397 of 2018
Judgment of: MCCLELLAND DCJ, RIETHMULLER & STRUM JJ
Date of judgment: 15 March 2023
Catchwords: FAMILY LAW – APPEAL – LEAVE TO APPEAL – PROPERTY – Whether the orders the subject of appeal are final or interlocutory and require leave to appeal – Leave to appeal required – Whether or not the primary judge had power to alter the time for compliance with final orders – Orders requiring the appellant to make a payment to the respondent and retain property – Where the appellant did not do so and applied for a stay of the operation of those orders – Whether relevant provisions of final orders were substantive or machinery/consequential – The orders did not grant the respondent a substantive right to the property on default – Whether a stay of the final orders operated nunc pro tunc or retrospectively from the date of filing a Notice of Appeal – No error in primary judge’s amendment of the final orders – Application for leave to appeal dismissed – Respondent to pay appellant’s costs of the appeal in fixed sum.
Legislation:

Family Law Act 1975 (Cth) ss 79, 79A

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 10.19, 13.05, 13.12

County Court Act 1958 (Vic) s 49

County Court Civil Procedure Rules 2008 (Vic) r 66.14

Cases cited:

Athens v Randwick City Council (2005) 64 NSWLR 58; [2005] NSWCA 317

Australian Energy Ltd v Lennard Oil NL (No 2) [1988] 2 Qd R 230

Ayre & Ayre [2018] FamCAFC 93

Bailey & Bailey (No 2) [2018] FamCA 632

Bebbington & Bebbington (2017) FLC 93-765; [2017] FamCAFC 31

Bray & Bray (1988) FLC 91-968; [1988] FamCA 22

Cranage & Cranage (1981) FLC 91-039

Davint & Malburon [2014] FamCAFC 3

DHL Supply Chain (Australia) Pty Ltd v United Workers’ Union (No 2) [2021] FCA 1401

Ebner & Pappas (2014) FLC 93-619; [2014] FamCAFC 229

Field & Kingston [2020] FamCA 1126

Field & Kingston [2021] FedCFamC1F 353

Gamser v Nominal Defendant (1977) 136 CLR 145; [1977] HCA 7

Goldsmith & Stinson [2022] FedCFamC1A 96

Guinness & Guinness (No 2) [2008] FamCAFC 100

Harford & Spalding [2022] FedCFamC1A 78

Kaljo & Kaljo (1978) FLC 90-445; [1978] FamCA 46

Kwikspan Purlin System Pty Ltd v Federal Commissioner of Taxation (1986) 93 FLR 263

Lasso & Malaka (2022) 65 Fam LR 423; [2022] FedCFamC1A 130

Lawstrane Pty Ltd and Another v Ruttmar (2013) 37 VR 320; [2013] VSCA 57

Lenova & Lenova (2011) FLC 93-467; [2011] FamCAFC 114

Linprint Pty Ltd v Hexham Textiles Pty Ltd (1991) 23 NSWLR 508

Martin & Harris [2007] FamCA 560

Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34

Molier & Van Wyk (1980) FLC 90-911; [1980] FamCA 85

Moy & Pao (2022) FLC 94-073; [2022] FedCFamC1A 17

Perlman v Perlman (1984) 155 CLR 474; [1984] HCA 4

Polyaire Pty Ltd v K-Aire Pty Ltd & Ors (No 4) [2007] SASC 36

Ravasini & Ravasini (1983) FLC 91-312; [1982] FamCA 62

Slapp & Slapp (1989) FLC 92-022; [1989] FamCA 9

Taylor v Taylor (1979) 143 CLR 1; [1979] HCA 38

Turagadamudamu v PMP Ltd (2009) 75 NSWLR 397; [2009] NSWCA 120

Number of paragraphs: 144
Date of hearing: 2 November 2022
Place: Heard in Brisbane, delivered in Sydney
Counsel for the Applicant: Mr Wilson KC
Solicitor for the Applicant: Pippa Colman & Associates Law Practice
Counsel for the Respondent: Mr Sullivan KC
Solicitor for the Respondent: Phillips Family Law

ORDERS

NAA 158 of 2022
BRC 397 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MS GOLDSMITH

Applicant

AND:

MR STINSON

Respondent

order made by:

MCCLELLAND DCJ, RIETHMULLER & STRUM JJ

DATE OF ORDER:

15 March 2023

THE COURT ORDERS THAT:

1.The wife’s Notice of Appeal filed 28 July 2022 be dismissed.

2.The wife pay the husband’s costs of and incidental to the appeal, fixed in the sum of $30,987.24.

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 Goldsmith & Stinson has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

MCCLELLAND DCJ & STRUM J:

  1. By way of Notice of Appeal filed on 28 July 2022, the applicant/appellant, Ms Goldsmith (“the wife”), seeks leave to appeal and/or to appeal from orders made on 22 July 2022 by a judge of the Federal Circuit and Family Court of Australia (Division 1). Those orders amended certain paragraphs of final property orders previously made by the primary judge.

  2. For the following reasons, we dismiss the wife’s application for leave to appeal.

    BACKGROUND

  3. These are the third appellate proceedings instituted by the wife. After she successfully appealed in 2019 from a final property order made by a judge of the (then) Federal Circuit Court of Australia (“the first appeal”), the proceedings were remitted for rehearing and then transferred to the (then) Family Court of Australia. The proceedings were re-heard by the primary judge and a final property order was made on 23 July 2021 (“the final order”). That order was the subject of a second appeal by the wife (“the second appeal”), which was dismissed by the Full Court of the Federal Circuit and Family Court of Australia on 30 June 2022.

  4. In July 2022, after the dismissal of the second appeal, the parties filed competing enforcement applications in relation to the final order, which were heard by the primary judge on 21 July 2022. Alternatively, the husband sought an extension of time to comply with the provisions of the final order pursuant to a “liberty to apply” provision. Her Honour made orders and delivered ex tempore reasons for judgment the following day, being 22 July 2022 (“July 2022 orders”). It is from those orders that the wife now seeks leave to appeal and/or to appeal.

  5. The final order required, inter alia, the husband and wife to transfer their joint interest in a farming property (“Property E”) to the husband and, contemporaneously therewith, the husband to refinance the mortgage secured by that property into his sole name and to pay to the wife the sum of $602,415 (paragraphs 17, 18 and 21). Those transactions were to occur within 60 days of the final order, namely, by 21 September 2021. In preparation for complying with the final order, the husband sold two investment properties and made arrangements to borrow the balance of the payment required to be made by him to the wife.

  6. However, on 20 August 2021, before the time for compliance with the final order, the wife instituted her second appeal but did not serve her Notice of Appeal on the husband until 1 September 2021. Rule 13.05 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) only requires that a copy of a Notice of Appeal be served within 14 days after it is filed. Nevertheless, there does not appear to have been any explanation why the wife, who is an officer of the court, waited 12 days before serving the husband in circumstances where she knew, or ought to have known, that time for compliance with his obligations under the final order (the subject of that second appeal) was running.

  7. On 7 September 2021, the husband sought the wife’s consent for a stay of part of the final order, including the paragraphs relating to the transfer of Property E to him and the payment by him to her, pending the outcome of her second appeal. The wife was in the process of instructing new lawyers and the husband’s indulgence was requested and sensibly granted. Accordingly, and possibly understandably, the husband took no further steps in relation to seeking a stay at that time.

  8. On 13 September 2021, the wife refused the stay and indicated that she was ready to settle, but offered an undertaking to hold on trust all but $100,000 of the sum required to be paid by the husband, pending the outcome of her second appeal. That offer was rejected by the husband, who contended that borrowing costs of about $23,000 and interest on servicing the loan would be lost in the event that the wife’s second appeal succeeded. Further, he contended that, if the wife was successful in the order she sought on the second appeal, namely, to retain or receive 60 per cent of the property pool, he would be unable to fund the balance required to buy her out.

  9. Accordingly, on 17 September 2021, the husband filed an application to stay the operation of part of the final order (including paragraphs 17, 18 and 21) and requested an urgent listing date from the Court. However, for reasons which are not apparent but were necessarily beyond the control of the husband, the Court registry did not immediately allocate a hearing date and, when a date was allocated, it was not until 1 October 2021, being after the time for compliance by the husband with the final order, on 21 September 2021.

  10. On 20 September 2021, not having heard from the Court registry despite numerous communications, the husband requested that the wife consent to him contacting the primary judge’s chambers to seek an urgent listing. The wife refused his request, notwithstanding the indulgence previously granted by him to her; that she had inexplicably delayed serving the Notice of Appeal upon him; that he had promptly filed his stay application after her refusal to agree thereto; and that the Court had delayed in allocating a hearing date which, when allocated, was after the compliance date which fell on the following day. The primary judge, in her reasons for judgment, noted that, despite the urgency, the husband did not unilaterally contact her chambers, as he would have been permitted to do. We agree but, like her Honour, we are not critical of him for not so doing.

  11. The husband’s stay application was heard by the primary judge on 1 October 2021, by which time the husband was already in default of his obligations under the final order. The primary judge reserved judgment.

  12. On 8 October 2021, prior to a decision on the stay application being handed down, the parties consented to an order (“stay order”) that “the operation of paragraphs 17, 18, 19, 21, 22, 23, and 24 of the Orders made by the [primary judge] on 23 July 2021 … be stayed pending the outcome of the Wife’s Appeal … / the wife’s discontinuing the appeal” (emphasis added) but requiring the husband to make a payment of $100,000 to the wife. The stay order provided that the payment was made by the husband and accepted by the wife on the basis that:

    3.1The husband contends that the $100,000 is part payment of his obligation pursuant to clause 21 of the Orders, however the wife contends that she is entitled to [Property D], as a result of the husband’s non compliance [sic] with clause 21 of the Orders and the sum is treated as a part payment of property settlement to be credited against the husband’s liability to pay a sum to the wife pursuant to Order 21 of the Orders made by the [primary judge] on 23 July 2021 in the event that the stay of those orders is ended by the appeal being determined / discontinued; or

    3.2the sum is to be repaid by the wife to the husband in addition to the sum payable by the wife to the husband in the event that the wife is able to rely on Order 22 of the Orders made by the [primary judge] on 23 July 2021.

  13. To our minds, nothing turns on sub-paragraphs 3.1 and 3.2 of the stay order; it was a reservation by the parties of their respective positions and may more appropriately have been the subject of a notation to, rather than contained within, the stay order. However, it is the nature of the stay order which is relevant for the purposes of this application for leave to appeal and any consequent appeal.

  14. Paragraph 17 of the final order provided for the parties to transfer Property E to the husband.

  15. Paragraph 19 was a default provision requiring the sale of Property E in the event the husband did not refinance the mortgage as required by paragraph 18, namely, within 60 days (i.e. by 21 September 2021), and the net proceeds of sale to be paid to the husband.

  16. Paragraph 20 provided that, subject to paragraph 21, which required the husband to pay to the wife the sum of $602,415 also by 21 September 2021 (i.e. within 60 days), he was to retain the other farming properties (Property D and Property P).

  17. Paragraph 22 was also a default provision requiring the transfer of Property D to the wife in the event that the husband did not pay her the sum of $602,415 within 60 days, as required by paragraph 21, in which case she was to pay the sum of $447,585 to him within a further 60 days.

  18. Paragraph 23 required the husband to provide to the wife a right of carriageway through Property P, in the event that he was required to transfer Property D to her.

  19. Paragraph 24 was a further default provision in the event of the wife failing to pay the sum of $447,585 to the husband.

  20. Paragraph 27 reserved liberty to each party to apply, upon the giving of 14 days’ notice in writing, in relation to the implementation of the final order.

  21. It was common ground before the primary judge that the sum of $100,000 already paid by the husband to the wife pursuant to the stay order should be taken into account, whatever the outcome of the competing applications before her Honour. That is, if the husband was required to make a payment to her, he should pay the sum of $502,415 and, if she was required to make a payment to him, she should pay the sum of $547,585.

  22. On 30 June 2022, the wife’s second appeal was dismissed.

  23. On 4 July 2022, the husband sought to arrange settlement with the wife to fulfil his obligations under the final order.

  24. On 5 July 2022, the wife enquired whether the husband’s finance had been approved and suggested settlement within seven days. The primary judge, in her reasons for judgment, observed that this “was a clear indication by the wife that, despite the husband’s default, she was prepared to proceed with the intent of paragraphs 17, 18 and 21 of the final order” (at [18]). We agree with her Honour’s observation that this was a clear indication by the wife that she was prepared to proceed with paragraphs 17, 18 and 21, but not necessarily that her preparedness was despite the husband’s default. Whether or not he was in default is a matter which we consider below.

  25. On 6 July 2022, the husband informed the wife that his bank had indicated it would be able to settle on 15 July 2022.

  26. Contrary to the indication given by the wife a few days earlier, on 8 July 2022 she sought to rely upon what she asserted to be the husband’s default under the final order and, in turn, to invoke the default provisions therein, which would see Property E sold and Property D transferred to her (together with a right of carriageway through Property P to her) and a payment by her to him.

  27. On 15 July 2022, the husband filed an application to enforce or vary the time for compliance with paragraphs 17, 18 and 21 of the final order.

  28. On 20 July 2022, the wife filed an application to enforce paragraphs 19, 22 and 23, namely, the default provisions of the final order.

  29. At the hearing of the competing applications on 21 July 2022, it was common ground that, if the primary judge amended the final order pursuant to the liberty to apply provision, as sought by the husband, both enforcement applications should be dismissed.

    The July 2022 orders and judgment

  30. Paragraph 1 of the July 2022 orders, which are the subject of this application for leave to appeal and any consequent appeal, provides:

    Pursuant to the liberty to apply provision in paragraph 27 of the Order made on 23 July 2021, paragraphs 17, 18 and 21 be amended such that the words “within 60 days of the date of this Order” be replaced with the words “within 14 days of the date of the Order made 22 July 2022” and that the sum of “$602,415” in paragraph 21 of the Order made on 23 July 2021 be replaced with the sum of “$502,415”.

    (Bold emphasis added)

  31. The primary judge otherwise considered, in the event that she was wrong in that determination, the parties’ competing enforcement applications. Her Honour said at [50]–[52]:

    50The final order included a substantive order providing for the husband to retain the farming properties. The final order also included time frames for compliance, and default provisions which are the “secondary orders made as a consequence of the substantive order, to give it operation and effect” and, as such, that part of the final order can be varied by way of enforcement.

    51I am persuaded that paragraphs 17, 18 and 21 should be enforced. As the time for compliance with paragraphs 17, 18 and 21 has passed, it will be necessary to include a time frame in aid of the enforcement of the obligations created by those provisions. As already indicated, I propose to provide 14 days subject to an indication from the parties that 14 days is not required and that seven is sufficient.

    52It follows, that the wife’s application for enforcement will be dismissed.

    (Footnotes omitted)

  32. Her Honour ordered the wife to pay the husband’s costs of and incidental to his application, fixed in the sum of $5,500.

  33. Her Honour correctly noted at [24] that the power to “amend, vary, alter or modify” a final order made pursuant to s 79 of the Family Law Act 1975 (Cth) (“Act”) is confined to circumstances coming within s 79A of the Act (which was not applicable in this case) or where the amendments affect machinery, rather than substantive, provisions of an order.

  34. At [26]–[28], her Honour referred to the decisions of the Full Court in Molier & Van Wyk (1980) FLC 90-911 (“Molier & Van Wyk”) and Ravasini & Ravasini (1983) FLC 91-312 (“Ravasini”), in which the dichotomy between machinery and substantive provisions of orders was considered.

  35. The husband submitted at first instance that the amendments sought by him were machinery provisions, whilst the wife submitted that the effect of the amendments would be to vary the substantive provisions of the final order, in that, once the default provisions were triggered (namely, after the expiration of 60 days of the date of the final order), substantive rights for her in Property D were created. She argued that the amendments sought by the husband, namely, to extend the time for him to comply with the final order (to within seven days of the date of the primary judge’s order on the parties’ competing enforcement applications), would affect her substantive rights because she had a current entitlement by virtue of paragraph 22 of the final order to acquire Property D from the husband for the sum specified.

  36. At [35], the primary judge rejected the submission by the wife that the amendments proposed by the husband were other than machinery or consequential provisions of the final order, put in place by her Honour to implement the clear intention of that order, namely, for the husband retain the farming properties unless he could not raise sufficient funds to buy out the wife’s interest and refinance the existing mortgage secured on Property E. Her Honour said there could be no doubt about the intention of the final order when regard was had to [91] and [92] of her reasons for judgment delivered on 23 July 2021, which accompanied that order and to which we refer below.

  1. The primary judge concluded at [37]–[38]:

    37If the final order is not amended, not only would the result defeat what was accepted at trial as common ground i.e. that the farming properties were always intended to one day be the husband’s property, but it would also defeat the clear intention to avoid the parties being neighbours.

    38The unforeseen eventualities that occurred in this case i.e. the wife’s appeal and delay in service, the wife’s refusal of a stay of the final order and the difficulties in obtaining a listing for the stay application, all contributed to the final order not being implemented. In my view, the husband took all reasonable steps to implement the final order (until advised of the wife’s appeal), and thereafter to apply for a stay. I do not regard his failure to unilaterally contact my Chambers on 20 September 2021 as fatal. Nor do I regard the husband’s refusal to pay the $602,415 to the wife, to have been unreasonable, in the circumstances. I accept that the potential detriment to him was not insignificant and I am not persuaded that the detriment could necessarily have been addressed by the Full Court in the event the wife’s appeal had succeeded.

  2. As we have referred to above, notwithstanding having earlier noted that it was common ground between the parties that, if the final order was amended pursuant to the liberty to apply provision (as sought by the husband and to which her Honour acceded), both enforcement applications should be dismissed, the primary judge nevertheless proceeded to consider those competing applications. Her Honour said that she did so in the event that she was wrong in her determination to amend paragraphs 17, 18 and 21 of the final order pursuant to a general power to amend machinery or consequential provisions of an order to enable implementation. As a result, the wife’s enforcement application was dismissed and she was ordered to pay costs.

    GROUNDS OF APPEAL

  3. The wife’s Notice of Appeal contains seven grounds of appeal. Sensibly, in her summary of argument and at trial, the grounds were addressed thematically, rather than seriatim, and we shall do likewise. Grounds 1, 2, 3 and 4 address the Court’s power to alter the times in orders 17, 18 and 21 of the final orders. Grounds 5 and 6 address the wife’s enforcement application. Ground 7 addresses the costs order against the wife.

  4. By his Notice of Contention dated 1 November 2022, the husband contends that, on the proper construction of the stay order, it operated retrospectively from the date of the second appeal.

  5. However, we turn first to consider whether leave to appeal from the July 2022 order is required.

    Leave to Appeal

  6. In her Notice of Appeal, the wife did not seek leave to appeal. In her summary of argument, she contends that each of the orders the subject of her Notice of Appeal (other than “perhaps” [sic] the order for costs) are final orders, finally disposing of the rights of the parties such that there was no requirement for leave to appeal. In the alternative, if leave is required, the wife contends that it ought to be granted.

  7. In his summary of argument, the husband contends that the orders the subject of the Notice of Appeal are interlocutory, such that leave to appeal is required. However, he accepts that, in relation to the variation of the time periods, the answer to the question of whether leave is required may ultimately depend on the Court’s determination of that issue, such that whether or not leave is required for part or all of the Notice of Appeal will ultimately have to be answered consistently with our determination of the relevant grounds of appeal.

  8. A useful articulation of the principles involved in determining whether an order is final or not may be found in Lasso & Malaka [2022] FedCFamC1A 130 (“Lasso & Malaka”) at [16]–[17], where the Full Court said:

    16The parties dispute whether leave to appeal is required to appeal from the April 2022 orders. The appellant contended leave to appeal is not required because the orders are final. The respondent contended leave is required because Orders 1-13 of the April 2022 orders involved an exercise of power pursuant to r 11.07 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), which does not independently create rights or obligations. It was further contended as the orders recalibrate a timetable and are to aid compliance, they are interlocutory and leave to appeal is required.

    17Whether an order is final or interlocutory is determined by applying the test: does the judgment or order, as made, finally dispose of the rights of the parties (Licul v Corney [1976] HCA 6; (1976) 180 CLR 213 at 225). In applying that test, regard must be had to the “legal rather than practical effect of the judgment” (Carr v Finance Corporation of Australia Ltd [1981] HCA 20; (1981) 147 CLR 246 at 248).

  9. If leave to appeal is required, the test adopted in this Court is a conjunctive one, namely, whether the decision of the primary judge is attended by sufficient doubt so as to warrant its reconsideration by the Full Court and, if so, whether a substantial injustice would occur if leave were not granted: Medlow & Medlow (2016) FLC 93-692 at [57]; Moy & Pao (2022) FLC 94-073 at [11]. The merits of the proposed appeal are relevant to the success of an application for leave to appeal: Ebner & Pappas (2014) FLC 93-619 at [39]; Harford & Spalding [2022] FedCFamC1A 78 at [16].

  10. Given the way we have decided this matter, we conclude that the orders the subject of the Notice of Appeal are interlocutory and leave is required.

    The Court’s power to alter time for compliance

  11. Grounds 1, 2, 3 and 4 contend as follows:

    1.The learned primary judge erred in finding that she had the power to amend orders 17, 18 and 21 made on 23 July 2021.

    2.The learned primary judge erred in finding that order 27 (liberty to apply) made on 23 July 2021 permitted an amendment of orders 17, 18 and 21, the time for compliance with which had expired on 21 September 2021.

    3.The learned primary judge erred in finding that the time for compliance with orders 17, 18 and 21 made on 23 July 2021 was a machinery or consequential order rather than an order that affected substantive rights, when regard is had to orders 19, 22 and 23 made on 23 July 2021 (Reasons 35).

    4.The learned primary judge erred in concluding (Reasons [50]) that orders 19 and 22 were default provisions which were secondary orders made as a consequence of a substantive order to give it operation and effect, rather than orders that conferred substantive rights on the Appellant.

    (As per the original)

  12. In Molier & Van Wyk at 75,771, the Full Court held that:

    When the court has made an order (… under s 79) settling or altering interests in property, it is established that the order may not be varied as to its substance, but only in regard to the machinery provisions which give it effect. The court can, under general liberty to apply (or otherwise), makes [sic] orders to give effect to its original order, by clarifying the intent of that order, or by altering its provisions in some manner which does not affect the parties’ substantive rights.

  13. At 75,773, the Full Court further held that additional or consequential orders may be made if:

    … necessary to give effect to the clear intention of the original order, where that order failed to cover certain eventualities, including the failure to comply with an order for the settlement of a lump sum within the prescribed time.

  14. Subsequently, in Ravasini, a differently constituted Full Court preferred the descriptor “consequential” to “machinery” and held at 78,127 that:

    In determining whether or not an order may be varied as a machinery order, the enquiry must be firstly as to what part of the order is the substantive order and what part or parts of it merely follow that order as a necessary consequence. A Court in making a property order might do no more than order that the property be sold and the proceeds equally divided. That is the substantive order. If the Court at that time has before it sufficient evidence of the facts and circumstances it may go on and make appropriate “consequential” orders providing the machinery whereby the substantive order is to be carried out. If the Court at the time does not have evidence of the necessary facts and circumstances then it may reserve liberty to apply to allow the parties to come back to the Court for consequential relief if they are unable to agree as to how the substantive order should be made operative.

  15. In Bray & Bray (1988) FLC 91-968 (“Bray & Bray”), Lindenmayer J (with whom Nygh and Graham JJ agreed) said at 76,999 that:

    … the question whether a particular part of an order of this Court made at first instance is a substantive order or, by contrast, a consequential or machinery order, has to be determined by the construction of the entire order, and not by reference to part only of that order …

  16. Lindenmayer J distinguished Molier & Van Wyk, saying at 77,000:

    In my opinion, that was a very special case. In that case there were clear omissions from the original order so that the order did not of itself cover the circumstances which had arisen, and in those circumstances the Court was able to conclude that it was possible, exercising the power of the Court to vary machinery provisions or to make consequential orders, to make the orders operative when they would not otherwise have been so.

  17. Also at 77,000, Lindenmayer J referred to Cranage & Cranage (1981) FLC 91-039, saying:

    Again, that was a case where the order in question made no provision as to what should happen if the events described in the orders did not, in fact, occur.

  18. His Honour similarly distinguished that case because the orders the subject of appeal in Bray & Bray clearly prescribed what was to occur in the event that the appellant did not pay the sum ordered within the specified period.

  19. Nygh J in Bray & Bray added at 77,001 that:

    … the appropriate test in determining whether or not a provision in an order is one of substance or one of machinery must depend upon the nature and context of the order itself, and not … on the nature or extent of the variation sought.

  20. Nygh J continued, holding that what is required is an enquiry as to whether the order vests a right in a party and that each set of orders in each case must be analysed on its own, in its own right.

  21. Similarly, Graham J said at 77,001 that the real question is what part of an order is the substantive part, and what part merely follows as a machinery consequence:

    One must examine the construction of the order itself, and not the basis of fact on which it was made. The question must be asked, whether the part of the order sought to be changed is part of the substantive order or whether it is an order merely made to give efficacy to it.

  22. The wife submits, citing the decision of the Full Court in Lasso & Malaka, that a default order is not, by reason of that fact alone, incapable of conferring substantive rights. However, in that case, the Full Court said at [34]:

    The due date for refinance pursuant to the award was 12 October 2021. Because of the respondent’s failure to comply with her obligations, the appellant contended he exercised the rights conferred on him by paragraph 5 of the decree and paid the respondent $325,000 on 13 October 2021, which vested his rights to retain the Suburb H property. It was submitted the April 2022 orders altered the times for compliance with the decree, and imposed further obligations on the parties, which affected the appellant’s substantive vested right to retain the property.

    (Emphasis added)

  23. Accordingly, in Lasso & Malaka, the Full Court held at [39] and [40] that the “April 2022 orders [did] not simply impose new dates to give effect to the decree. The orders impose[d] completely different rights and obligations on the parties and, in some instances…, were already redundant at the time the orders were made”, such that those orders “impermissibly substantially vary the terms of the decree and the vested rights of the appellant”.

  24. Unlike in Lasso & Malaka, the extent of the amendments made by the primary judge in the July 2022 orders (adopting the wording of the Full Court in that case) simply imposed new dates to give effect to her Honour’s decree but did not impose completely different rights and obligations on the parties. However, in issue here is whether those were impermissible amendments to a substantive order or permissible amendments to a machinery or consequential order.

  25. The gravamen of the wife’s argument in this regard is that the primary judge erred in concluding that the only substantive order was for the husband to retain the farming properties, and that the default orders (namely, paragraphs 19, 22 and 23) were secondary orders, made as a consequence of the substantive order, to give it operation and effect. Rather, it is submitted by her, that each of those orders conferred substantive rights on her if the husband defaulted in his obligations. More particularly, it is submitted that, on 22 September 2021, the wife acquired the right to have Property E sold and, “subject to the payment of the stipulated price”, to the transfer of Property D into her name.

  26. In response, the husband submits that the primary judge’s approach in determining whether the orders were substantive or machinery/consequential was, correctly, to read the final order as a whole, with the contextual benefit of the reasons.

  27. In this regard, we are reminded of the passage from the judgment of Wilson J in Perlman v Perlman (1984) 155 CLR 474 at [11], where his Honour said, albeit in a different context:

    In a final effort to bring the wife’s proceeding within the definition of “matrimonial cause”, Mr. Bennett submits that it falls within par. (e), as being “proceedings between the parties to a marriage for an order or injunction in circumstances arising out of the marital relationship”. It is neither necessary nor helpful to attempt any abstract definition of the limits of this paragraph. If such a definition were attempted there may well be difficulty in drawing the line but a solution will often be found in a particular case by recalling “the answer of a great judge that, though he knew not when day ended and night began, he knew that midday was day and midnight was night”: per Lord Simonds L.C., in Chapman v. Chapman [1954] UKHL 1; (1954) AC 429, at pp 445-446.

  28. In some cases, it will be readily apparent whether an order is substantive or is machinery or consequential in nature; in other cases, it will be less so. In Polyaire Pty Ltd v K-Aire Pty Ltd & Ors (No 4) [2007] SASC 36 (“Polyaire”), Besanko J considered the circumstances in which extrinsic material may be considered in construing orders. His Honour reviewed a number of authorities on point.

  29. At [37], Besanko J referred to Kwikspan Purlin System Pty Ltd v Federal Commissioner of Taxation (1986) 93 FLR 263 (“Kwikspan Purlin System”), in which Macrossan J considered that, in construing a court order, he could have regard not only to the order itself but also to the reasons for judgment which lay behind the order.

  30. At [38], Besanko J referred to Australian Energy Ltd v Lennard Oil NL (No 2) [1988] 2 Qd R 230 (“Australian Energy v Lennard Oil”), where the proper construction of a declaration made by McPherson J was in issue. Andrews CJ (with whom Kelly SPJ agreed) considered that it was appropriate to construe the declaration in its context and that context included, inter alia, the reasons for judgment and, in that case, the agreement to which the declaration related. Andrews CJ said at [232] that it was:

    … necessary in order for the two understand the effect of the declaration to examine the reasons expressed by McPherson J in coming to his decision and the extrinsic evidence and surrounding circumstances relied upon by him. This is not so much to construe the words of the declaration as to understand its place in the context of the matter and thus give it its true construction. Although the circumstantial background of Kwikspan Purlin System Pty Ltd v Federal Commissioner of Taxation (1986) 86 ATC 4062 is different from that of this case, I would respectfully deem correct and apposite here the ruling of Macrossan J to the effect that the meaning of words in an order should in an appropriate case be considered in, inter alia, the wider context of the reasons for judgement.

  31. At [39], Besanko J also referred to the judgment of Thomas J in Australian Energy v Lennard Oil at [243]–[244] where Thomas J similarly said that reasons for judgment may be referred to, as a form of extrinsic evidence and as relevant surrounding circumstances, in construing an order, but not to fill a gap or to supply a casus omissus, nor to give a different meaning to words that on their face are not susceptible of more than one meaning.

  32. At [40], Besanko J referred to Athens v Randwick City Council (2005) 64 NSWLR 58, where Santow J similarly said at [78]–[79], after referring inter alia to Australian Energy v Lennard Oil and Kwikspan Purlin System:

    Ambiguity in orders is resolved primarily by reference to the originating judgment. The premise for doing so is that the judicial officer making the orders must be taken thereby to have intended to give effect to that judgment. …

  33. At [41], Besanko J concluded:

    In my opinion, it would be a very rare case in which, in construing orders of the Court, it would not be appropriate to consider at least the reasons for judgment. If on considering the orders in light of the reasons for judgment the meaning of the words is clear then effect must be given to those words. …

  34. His Honour continued at [44]:

    If the orders are ambiguous then that ambiguity must be resolved by the usual process of construction, having regard to such extrinsic material as may be relevant. That material would include not only the reasons for judgment, but also the pleadings, the course of the trial and the submissions of the parties prior to the making of the orders.

  35. The husband submits that the primary judge was correct to find, at [35] of her reasons for judgment, that the relevant time requirements in paragraphs 17, 18 and 21 of the final order were “machinery or consequential provisions of the final order put in place to implement the clear intention of the final order, namely for the husband to retain the farming properties unless he could not raise sufficient funds to buy out the wife’s interest and refinance the existing mortgage secured on [Property E]”.

  36. In addition, it is said, a further contextual indicator which supports that those time provisions were mechanical or consequential is paragraph 27 of the final order which provided “that each party have liberty to apply upon the giving of 14 days’ notice in writing in relation to the implementation of this order”. The husband submits this paragraph contemplated that the primary judge was reserving the ability to make future orders in respect of the implementation of the final orders and that an “obvious implementation issue” in respect of the final order would have been the timeframes within paragraphs 17, 18 and 21 thereof, allowing her Honour to deal with any exigencies which may have arisen.

  37. The husband further submits that, “for the good reasons that the Judge explained in her Reasons at the trial”, the relevant substantive order was for the husband to retain the properties if he could raise finance. He contends that the primary judge found at [38] that the unforeseen eventualities that occurred in this case all contributed to the final order not being implemented, such that her Honour did not err in varying what are said to be the mechanical timeframes in paragraphs 17, 18 and 21 of the final order.

  38. In Bray & Bray, in the first instance proceedings between parties pursuant to s 79 of the Act, the primary judge, in that case, had made orders inter alia requiring the wife to pay the husband a specified sum within three months of the date of the orders and, contemporaneously, the husband to transfer a real property to her. If she failed to pay the sum within that time, the property was to be sold and the proceeds divided between the husband and wife in specified proportions. The wife was unable to pay the sum within the time specified and she brought an application before the primary judge for an order extending the period specified in the original orders. The primary judge dismissed the application on the basis that it was a substantive order which he had no power to vary, except under s 79A.

  1. The Full Court dismissed the wife’s subsequent appeal, holding that the orders made specific provision for what should occur if the wife failed to make the payment to the husband within the time specified, in which case a substantive right was created “in the husband, and, for that matter, in the wife, to receive, in that event, in the husband’s case not a fixed sum of money but a fixed percentage of the proceeds of sale of the matrimonial home” (at 77,000). Lindenmayer J went on to state that, in his view, that was “an entirely different right … and it cannot be said, in my opinion, that the requirement for the payment within a period of three months was merely a machinery provision”. Whilst, with respect, we are not necessarily persuaded of the correctness of that earlier decision of the Full Court, this is not an appropriate vehicle by which to reconsider it. Rather, the decision in Bray & Bray may be partly distinguished from the present case on the basis that, by reason of the orders in that case, in the event of default, there would be a different monetary outcome; rather than the wife receiving the property with an adjustive payment to the husband, the parties were to sell the property “at the best possible market price, and, after certain deductions, that the net proceeds of that sale should be divided between them in the proportions of 66 per cent to the wife and 34 per cent to the husband” (at [564]). However, to the contrary, see also Slapp & Slapp (1989) Fam LR 158 (“Slapp & Slapp”) and Field & Kingston [2020] FamCA 1126 (“Field & Kingston”) (per Altobelli J).

  2. Cases involving machinery or consequential orders include:

    (a)Bebbington & Bebbington (2017) FLC 93-765 (“Bebbington & Bebbington”), where Kent J held at 77,122 that, in the context of substantive orders for the transfer of property, release of the mortgage and payment of money, “the mechanisms as to timing and steps were purely machinery or consequential provisions to effect the substantive alterations of property interests being carried out”.

    (b)Bailey & Bailey (No 2) [2018] FamCA 632 (“Bailey & Bailey”), where Benjamin J held that a short extension of time under a final s 79 order, because of circumstances beyond a party’s control, to settle when refinancing a mortgage was permissible. After considering, inter alia, Bray & Bray, Slapp & Slapp and Bebbington & Bebbington, his Honour said at [43]–[47] and [49] as follows:

    43.It is, in its essence, a question of construction as to whether, the failure of the settlement on 9 or 10 July 2018 is such as to presumably vest the interest in the Suburb T property into the husband, or whether it is as a consequential order and, using the words of counsel for the wife, where time is not of the essence.

    CONCLUSION

    44.In my view, the circumstances in this case differ from those in Slapp (supra) and in Bray (supra). In this case, the wife had clearly made her election to acquire the Suburb T property. In doing so, she acquired the equity in the Suburb T property upon making that election. She put in place arrangements to finance the acquisition of that property. It may well be that those arrangements are not the best in the world or not the worst in the world, but they were the arrangements which the wife put in place. The arrangements were to acquire the property, and to enter into some form of arrangement with her brother, including a written agreement to sell the property to him so that she and her three children would have a home to live in which was, in essence, one of the significant features of her application. Her desire for the right to acquire the Suburb T property was contained in the case outline that was submitted, although in a much greater context on final hearing.

    45.This is not a matter where finance had been rejected or had not been made available. I am satisfied that arrangements for finance were in place. Further, I am satisfied, on the evidence, that finance would have been available to settle the matter later in the week.

    46.I am satisfied that the Court must have, in those circumstances, the power to make consequential orders or machinery orders when events such as that occur to enable the arrangements to be put in place.

    47.It was put to me by senior counsel for the husband that the time was an absolute time. It was put to me by counsel for the wife that the time was not absolute and could not be readily regarded as being of the essence. For the purpose of these parties in their circumstances, I am satisfied that the extension of time for a mere two or three days was simply consequential or mechanical. It is not, as was asserted by senior counsel for the husband, as the edge of the cliff.

    49.Therefore, I find the 60 days in the circumstance of this case to be mechanical or consequential. I find that it is not substantive.

  3. Further, through paragraph 27 of the final order, the primary judge provided that “each party have liberty to apply upon the giving of 14 days’ notice in writing in relation to the implementation of this order”. In Kaljo & Kaljo (1978) FLC 90-445, the Full Court said at 77,275:

    The meaning and effect of “liberty to apply” has been considered by the Courts in England and in New South Wales. In Cristel v. Cristel (1951) 2 K.B. 725 the Court of Appeal dealt with the meaning of the term “liberty to apply”. Somerwell L.J. was of the opinion that:

    Prima facie ‘liberty to apply’ is expressed very often — and, if it is not expressed, it will be implied — where the order that is drawn up requires working out and the working out involves matters on which it may be necessary to get the decision of the court. Prima facie, certainly, it does not entitle people to come and ask that the order itself shall be varied.”

    In that case the husband under the original consent order had to provide the wife with a house or bungalow and it was held that the Court could not add “or flat” as an alteration.

    In Nicholson v. Nicholson (1974) 2 N.S.W.L.R. 59 Mr. Justice Jenkyn considered the meaning of “liberty to apply” (p. 63)

    “On the authorities, the latter words are not intended to reserve to a court making such an order a right to either set aside or vary in any material respect the operative and substantive part of the order. ‘Liberty to apply’ is simply a device by which further orders may be made when necessary for the purpose of implementing and giving effect to the principal relief already pronounced.”

    These cases suggest that an application can be made to the Court for further orders in relation to the implementation of the substantive order even though liberty to apply is not expressly reserved, if the orders are necessary to give effect to the order or to work it out to cover unforeseen circumstances. The Court sometimes refrains from spelling out the detailed machinery of a property order to enable the parties some flexibility in giving effect to the substantive provisions. It is also clear that the “liberty to apply” does not enable the Court to vary the substantive provisions of its order.

  4. In Ayre & Ayre [2018] FamCAFC 93, Strickland J said at [18] that “all that liberty to apply could permit was addressing the machinery provisions of his Honour’s order, and could not permit the parties to seek to have any of the substantive provisions of that order alternate”, citing both Ravasini and Lenova & Lenova (2011) FLC 93-467.

  5. There is, at first blush, a degree of tension between the decision of the Full Court of this Court in Bray & Bray and the decision of Besanko J in Polyaire and, in turn, the decisions referred to therein. In Bray & Bray, the members of the Full Court referred to the construction of a particular part of an order by reference to the nature and context of the entire order. Insofar as Graham J, in that case, said that one must examine the construction of the order itself and not the basis of fact on which it was made, we are of the view that would not preclude regard to the reasons for judgment which lie behind the order, as was made clear in Polyaire and the decisions referred to therein. As Andrews CJ said in Australian Energy v Lennard Oil at [232], to which Besanko J referred in that case, this is not so much to construe the words of the declaration or order, as to understand its place in the context of the matter and thus give it its true construction.

  6. In the primary judge’s reasons for judgment delivered on 23 July 2021, which accompanied the final orders, her Honour said at [4]:

    For the reasons which follow, the property of the parties or either of them will be divided in the proportion 57.5% to the husband and 42.5% to the wife. The husband will retain the farming properties on condition he pays to the wife the sum of $602,415. In default of payment the husband will be required to transfer to the wife [Property D] and she will be required to pay to the husband the sum of $447,585.

  7. Among the issues identified by her Honour as requiring determination was: “should the wife be able to retain one or more of the rural blocks as part of the property settlement or should they all remain with the husband?” (at [5.5]).

  8. In addressing the orders sought by each of the parties at trial, her Honour noted that the husband sought to retain all the farming properties, whereas the wife proposed that she retain some of them (at [7]–[8]). Further, her Honour referred to the husband being a self-employed farmer who hopes to make his farming enterprise profitable (at [13]).

  9. At [14], her Honour said:

    Four years prior to the commencement of cohabitation, the husband’s father acquired [Property D] and told the husband to treat it as his own. The husband did so from that date and throughout the marriage. He ran [livestock] on the property, maintained it, and in the period 2007 - 2008 he and the wife built a home on it, in which they lived until the wife left in 2019. An adjoining property known as [Property P] was also acquired by the husband’s father in 2000 and likewise this property was treated as though it were the husband’s from the time of acquisition. The husband’s father continued to pay the rates and insurances on [Property D] and [Property P] and did not charge the husband and wife any rent for living on [Property D] after they completed construction of their home in early 2008 nor any adjustment fees for the [livestock] they ran on the properties.

  10. At [23], the primary judge referred to the acquisition by the parties, via their partnership known as the Stinson & Goldsmith Partnership, of Property E in 2012 for about $450,000, for which they obtained a joint loan of about $225,000 and to which the wife contributed $253,600 from the sale proceeds of a property owned by her at the commencement of cohabitation (at [56]). Her Honour found at [23] that the property “was improved after purchase, using the husband’s business for material and labour” and that the husband “undertook significant work to the property and through his business he supplied significant materials and labour at no cost to the partnership” (at [56]).

  11. In her consideration of the parties’ respective contributions, the primary judge found inter alia that the husband “worked long hours … on the farming properties and in the operation of the partnership” and that “[o]n any view, the wife’s assistance on the farms could only have been minimal given her other commitments” (at [61]).

  12. At [26] of the reasons, her Honour also referred to the fact that, after the husband’s father died in November 2018, the husband inherited Property D and Property P.

  13. At [64], her Honour said:

    The husband and wife had the use of [Property D] on which they built their home in late 2007 and operated farming activities in partnership from 2010 on this property and on [Property P]. The husband’s father maintained ownership of the properties and paid the rates and insurances over the 18 years from the time of purchase in 2000 until his death in 2018. The parties did not pay rent for their accommodation of [Property D] which commenced in early 2008, but maintained and improved the properties. …

  14. At [66], her Honour found that the husband had held the benefit of continuing to live at Property D, maintained the farming properties and continued to operate the partnership after separation.

  15. At [69], her Honour referred to the husband’s inheritance of, inter alia, Property D and Property P after separation which, together with another inherited real property, had a total value of $1.94 million at trial, which included the value of the former matrimonial home built by the parties on Property D.

  16. In relation to whether the wife should be able to retain one or more of the farming properties, or whether they should all remain with the husband, the primary judge said at [75]–[80]:

    75The husband sold [Business G] in 2018 and signed a restraint of trade which does not expire until 2023. He did so without consultation with the wife but argues that he should be given the opportunity to pursue his lifelong dream to pursue his farming interests full time, which he contends can only be viably done if he retains all of the farming properties. I have no reason to doubt that the husband has spent a lifetime preparing for the time when he can pursue farming full time. He commenced farm work as a child and when he returned to [Town A] in 1980 he worked on his father’s farms whenever needed. He fixed machinery and did repairs at no cost to his father.

    76The farming operations have not to date been profitable but the husband is optimistic. It is acknowledged by the wife that the husband has a special connection to at least [Property Q] and agreement has been reached that the husband retain that property.

    77If the wife retains any of the farming properties she does not propose to farm the properties herself but rather would contract most of the work out to third parties. If [Property D] is transferred to her she would live in the former matrimonial home with the children. The wife is confident she could produce an income for herself from the farming properties but to do so the husband and wife would have to be neighbours. There are complications with access to [Property E] and [Property D] which have historically maintained access through ‘gentleman’s agreements’. The parties agree that if they are to be neighbours, something more formal would be required to guarantee access. The cost and time frame for completion of a formal carriageway is unknown.

    78The wife has only recently been successful in obtaining employment and is subject to a six month probation period. The wife is constrained in her employment opportunities by having to remain in the [Town A] area to enable the children to live in a shared care arrangement and continue to attend the school they enjoy. Hence, the wife’s wish to retain at least one of the farming properties from which she hopes to earn an income. Now that the wife has secured employment there is some reduced pressure for her retaining farming properties to produce an income, although I am nevertheless conscious that there may be some uncertainty about her employment long term.

    79The parties have no relationship. Their communication is limited to texts about the children and while their communications are civil, I consider it preferable for them not to be neighbours if at all possible. Whether or not it is possible will depend on the husband’s ability to raise sufficient funds to pay out the wife.

    80If the husband can buy out the wife that would better achieve the aims of the legislation to finalise parties’ financial relationship and avoid the prospect of further litigation or dispute.

    (Emphasis added)

  17. Having assessed the parties’ s 79(4)(a)-(c) contributions and their s 75(2) factors at 57.5 per cent to the husband and 42.5 per cent to the wife, in her consideration of what form of property order was just and equitable, her Honour said at [90]–[92]:

    90If the husband retains the joint property and the property in his name, he has net assets of $3,623,904 so a cash adjustment will need to be made to the wife of $602,415. The husband will have 60 days to raise the funds, failing which [Property D] is to be transferred to the wife unencumbered and the wife will be required to pay the husband $447,585.

    91Other than if the wife defaults in her payment to the husband (and that will only arise if the husband defaults on his payment to the wife), I do not intend to provide for the wife to retain any of the farming properties. It is common ground that the farming properties were always intended to one day be the husband’s property and that he largely conducted the farming enterprises throughout the marriage and subsequent to separation. His long time aim has been to devote his full time attention to farming.

    92I am not at all attracted to the prospect of the parties becoming neighbours given the tensions between them and limited capacity to communicate. They also have young children and being exposed to unnecessary tension should be avoided if at all possible. Therefore the husband will have the opportunity to retain all the farming properties and pay out the wife. There seems to be some prospect of him being able to borrow sufficient funds to do so.

  18. Given, in particular, these reasons for judgment of the primary judge, including (but certainly not limited to) her Honour’s reference at [80] to a retention by the husband of the farming properties better achieving the aims of the Act to finalise the parties’ financial relationship and avoiding the prospect of further litigation or dispute, together with the specific reservation of liberty to apply in relation to the “implementation” of the final order, we are of the view that, when considered in this context, the 60 day timeframes may be consequential or machinery provisions, capable of subsequent amendment. Certainly, there was no suggestion that the husband could not fund his financial obligations under the final order.

  19. For the reasons which follow, it is not strictly necessary for us to determine this issue. However, we are troubled by the prospect that, but for the husband’s Notice of Contention and our conclusion in relation thereto, he may have been shut out of relief in the circumstances of this case, including the wife’s conduct, if the default provisions of the final orders were incapable of variation.

    Notice of Contention

  20. By Notice of Contention dated the eve of the hearing before us, the husband contends that, on the proper construction of the stay order made by consent on 8 October 2021, it operated retrospectively from the date of the Notice of Appeal, so that the wife was not ready, willing and able to perform paragraphs 18, 19 and 21 of the final orders. However, that contention had already been raised in the husband’s previously filed written submissions where it was submitted at paragraph 3 as follows:

    Further in the alternative, her Honour’s decision is also sustainable by reference to the effect of the stay order of 8 October 2021. Clearly enough order 2 stayed paragraphs 17, 18, 19, 22, 23 and 24 of the final orders of 23 July 2021. It is the wife’s case that by 8 October 2021 the time for performance of paragraphs 17, 18 and 21 of the order had expired. Accordingly, the order of 8 October 2021 should be construed as operating retrospectively from the date of the appeal.

  21. We granted the husband leave to file and rely upon the Notice of Contention at the hearing before us and reserved our reasons for so doing. In circumstances where the wife was already on notice of this contention, there was no appreciable detriment to her by the late-filed notice. Further, we were then of the opinion that the contention might, and we now find it does, resolve the matter before us.

  22. If the husband is correct in regard to his contention, senior counsel for the wife conceded before us that it would not be necessary to resolve whether the relevant provisions of the final order were substantive, as contended by the wife, or machinery or consequential, as contended by the husband. We therefore turn to the husband’s Notice of Contention.

  1. It was submitted by the husband that the Federal Circuit and Family Court of Australia (Division 1), as a superior court of record, has power, both from its inherent jurisdiction and pursuant to r 13.12 of the Rules, to grant a stay which has retrospective operation.

  2. Subrules (1) and (2) of r 13.12 relevantly provide:

    (1)The filing of a Notice of Appeal does not stay the operation or enforcement of the order appealed from, unless otherwise provided by a legislative provision.

    (2)If an appeal has been started, or a party has applied for leave to appeal against an order, any party may apply for an order staying the operation or enforcement of all, or part, of the order to which the appeal or application relates.

  3. Although the husband contends that, on its proper construction, the stay order made on 8 October 2021 operated retrospectively from the date of the appeal, namely, 20 August 2021, it is equally, if not more, arguable that it operated nunc pro tunc from the date of the final order made on 23 July 2021.

  4. Both rr 13.12(1) and 13.12(2) refer to stays of “the operation or enforcement” of an order or part of an order the subject of an appeal.

  5. In Turagadamudamu v PMP Ltd [2009] NSWCA 120 at [48], the New South Wales Court of Appeal said:

    Nunc pro tunc means, literally, “now instead of then”. ERH Ivamy, Mozley and Whiteley’s Law Dictionary, 11th ed (1993) Butterworths, at 184, defines nunc pro tunc as:

    “Now instead of then; meaning that a judgment is entered, or document enrolled, so as to have the same legal force and effect as if it had been entered or enrolled on an earlier day.”

  6. In Lawstrane Pty Ltd and Another v Ruttmar (2013) 37 VR 320 (“Lawstrane), the Victorian Court of Appeal held that the County Court of Victoria had an implied power and also the power conferred by s 49 of the County Court Act 1958 (Vic) and r 66.14 of the County Court Civil Procedure Rules 2008 (Vic) to order a stay of a judgment and to pronounce such an order nunc pro tunc.

  7. The Court of Appeal said at [11]:

    Although the County Court is not a superior court of record, has no inherent powers independent of its statutory jurisdiction and does not have unlimited jurisdiction, it has, by implication, incidental powers necessary to enable it to act effectively within its jurisdiction. …

    (Footnotes omitted)

  8. Save that the Federal Circuit and Family Court of Australia (Division 1) (and, previously, the Family Court of Australia) is a superior court of record, similar observations may be made regarding it and its implied incidental powers necessary to enable it to act effectively within its jurisdiction.

  9. At [15] in Lawstrane, the Court of Appeal referred to Linprint Pty Ltd v Hexham Textiles Pty Ltd (1991) 23 NSWLR 508 at 515, where Kirby P (as he then was) referred to the “incidental statutory powers” of a court that may not be expressly stated in the statute but are necessarily conferred by statute by the very fact of creating a court.

  10. The Court of Appeal continued at [17]:

    The rule that a court, once functus officio following the regular entry of a judgment or order may not re-open, change or rescind that judgment or order (subject to certain exceptions) has no application to a stay order, the legal effect of which is only to suspend the operation of the judgment. The effect of her Honour’s order was not to vary or rescind the judgment, but to suspend the operation of the judgment, such that the ‘determination date’ brought into effect by s 134AB(37) of the AC Act was not triggered.

    (Footnotes omitted)

  11. At [18], the Court of Appeal said that a court with inherent jurisdiction may grant a stay of proceedings to preserve the subject matter of litigation.

  12. The Court of Appeal highlighted the distinction between the grant of a stay of execution of a judgment and the grant of a stay of a judgment, saying at [24]:

    A stay of execution suspends the right of the person entitled under the judgment from immediately enforcing the judgment as distinct from suspending the judgment itself. However, the legal effect of both is to suspend enforcement of the judgment….

    (Footnotes omitted)

  13. In DHL Supply Chain (Australia) Pty Ltd v United Workers’ Union (No 2) [2021] FCA 1401, Snaden J said at [31]–[32]:

    31The court enjoys a discretion to vary or revoke its own orders nunc pro tunc: Robson as former trustee of the estate of Samsakopoulos v Body Corporate for Sanderling and Kings Beach CTS 2942 [2021] FCAFC 143, [85] (Colvin J, with whom Allsop CJ, Markovic, Derrington and Anastassiou JJ relevantly agreed). It has been described as “...a broad power...capable of adaptation to suit the circumstances arising in any particular case”: Hartley Poynton Ltd v Ali [2005] VSCA 53; (2005) 11 VR 568, 609 [80] (Ormiston JA, with whom Buchanan and Eames JJA agreed).

    32Various factors bear upon the exercise of the court’s discretion. Of significance is the nature of the non-compliance in respect of which it is requested. The discretion will more readily be deployed in respect of non-compliance that is the result of inadvertence or oversight, or that is of trivial or marginal consequence, than it will be in respect of non-compliance that is deliberate or otherwise less easily defended: Australian Rail, Tram and Bus Industry Union v Metro Trains Melbourne Pty Ltd [2020] FCAFC 81; (2020) 276 FCR 172, 195 [101] (Anastassiou J) (hereafter, “Metro”). Similarly, it will be more readily used to address consequences that are disproportionately unjust, or to avoid situations in which the court’s powers might otherwise serve as “a mask for injustice” (Emanuele v Australian Securities Commission [1997] HCA 20; (1997) 188 CLR 114, 152-153 (Kirby J)) or to confer “coincidental good fortune arising from someone else’s failure: Metro, 195 [99] (Anastassiou J).

  14. Snaden J further said at [36] that the Court’s power to amend (albeit interlocutory) orders nunc pro tunc is one that should be exercised sparingly and only when clearly warranted. In that respect, his Honour continued:

    Such a power should be exercised “...cautiously and only where there has been something exceptional in the facts to justify the making of such an order”: Bingham v England (1996) 17 WAR 226, 234 (Kennedy ACJ, Pidgeon and Ipp JJ). Although, inevitably (as here), many variables will bear upon its assessment, the task for the court asked to vary orders nunc pro tunc is to evaluate whether the circumstances accumulate to a point at which the requirements of justice mandate the relief sought. Typically, that involves a process of assessing the circumstances that led to the default that the application is designed to rectify, the impact that such rectification will have on other litigants and the impact that the default, if not regularised, will visit upon the party making the application.

  15. As noted above, r 13.12(2) provides for orders staying “the operation or enforcement” of all, or part, of the order to which an appeal or application for leave to appeal relates: Lawstrane at [24]. The stay order, to which the parties (who were legally represented) consented, provided for “the operation of paragraphs 17, 18, 19, 21, 22, 23 and 24 of the final order to be stayed pending the outcome (or discontinuation) of her appeal”. It does not provide for a stay of the enforcement of those paragraphs of the final order, albeit that it could have done so in the event (admittedly unlikely in the case of the husband) that the parties had consented thereto. If the wife wished to preserve her rights under paragraphs 19, 22 and 23, which she submits became vested in her on 22 September 2021, prior to the stay order, she could have insisted that only the enforcement of those provisions be stayed. She did not do so.

  16. We are fortified in coming to this conclusion by the provisions of r 10.19. Subrule 10.19(1)(a) provides that an order is made in a hearing or trial when it is pronounced in Court by the judicial officer. Subrule 10.19(2) provides that “an order takes effect on the date it is made, unless otherwise stated”. There is no substantive difference between an order taking effect and an order coming into operation.

  17. In our view, properly understood, the effect of the stay of the operation (as opposed to the execution) of paragraphs 17, 18, 19, 21, 22, 23 and 24 of the final order is that, of necessity, it operated retrospectively. Whilst the husband contends that it operated retrospectively from the date of the appeal, we are of the better view that it operated nunc pro tunc from the date of the final order, including because r 13.12(1) provides that the filing of a Notice of Appeal does not stay the operation or enforcement of the order appealed from. However, the practical effect is no different. If the stay order operated nunc pro tunc from the date of the final order, then, by reason thereof, the period of 60 days for the husband to do the acts required of him in paragraphs 18, 19 and 21 did not commence to run until the dismissal of the wife’s second appeal on 30 June 2022 and would have expired on 29 August 2022. If the stay order operated from the date of the filing of the Notice of Appeal on 20 August 2021, then the remaining period of 32 days would have recommenced to run on 30 June 2022 and expired on 1 August 2022. On either scenario, the July 2022 orders the subject of this application for leave to appeal were made before rights, if any, became vested in the wife. Those orders relevantly amended paragraphs 17, 18 and 21 of the final order, such that the words “within 60 days of this order” were replaced with the words “within 14 days of the date of the Order made 22 July 2022”, namely, by 5 August 2022. However, prior to that date, on 28 July 2022, the wife filed her Notice of Appeal in this third appellate proceeding and, as the husband contends in his Notice of Contention, with which we agree, the wife for her part has not been ready, willing and able to perform paragraphs 18, 19 and 21 of the final orders, as amended.

  18. Senior counsel for the wife conceded at the hearing before us that, if the stay operated nunc pro tunc (and presumably from the date of the filing of her Notice of Appeal), no rights accrued to or vested in the wife as at the date of the July 2022 orders.

  19. In the circumstances, there was no error of law by the primary judge in the making of the July 2022 orders, contrary to Grounds 1, 2, 3 and 4 of the wife’s Notice of Appeal.

    Enforcement applications

  20. Grounds 5 and 6 contend as follows:

    5.The learned primary judge erred in dismissing the Appellant’s application to enforce orders 19, 22 and 23 made on 23 July 2021, in circumstances where:

    (a)It was accepted (at Reasons [10]) that the Respondent was in default of orders 17, 18 and 21 of the orders made on 23 July 2021;

    (b)Each of the orders conferred substantive rights on the Appellant;

    (c)The Respondent had not discharged the onus of establishing that it would be inequitable to enforce the orders.

    6.        The learned primary judge ought to have:

    (a)Found that she had no power to vary order 17, 18 and 21 made on 23 July 2021;

    (b)Found that the Appellant had the rights conferred by orders 19, 22 and 23 made on 23 July 2021;

    (c)Found that there was no reason why such orders should not be enforced as sought by the Appellant.

    (As per the original)

  21. By reason of the concessions:

    (a)at first instance by both parties that, if the final order was amended pursuant to the liberty to apply provision, then their respective enforcement applications should be dismissed; and

    (b)before us by the wife that, if the stay order operated retrospectively from the date of the appeal or the date of the final order, her appeal would fail;

    and our reasons above, it is not necessary for us to address the wife’s grounds of appeal which relate to the dismissal of her enforcement application.

    Disposition

  22. Given the way in which we have decided Grounds 1, 2, 3 and 4 of the Notice of Appeal, Order 1 of the July 2022 orders, so understood, was interlocutory in nature and leave to appeal is required. The application for leave is dismissed.

    Costs

  23. Ground 7 contends:

    In the circumstances set out in paragraph 6 hereof, the learned primary judge erred in ordering that the Appellant pay the Respondent’s costs in terms of order 3 made on 22 July 2022.

  24. Given the way we have decided the application for leave to appeal, Ground 7 of the Notice of Appeal is therefore otiose.

  25. At the hearing before us, senior counsel for the husband submitted that if he were successful in resisting the application for leave to appeal and/or the appeal, an order for indemnity costs should be made in his favour in the sum of $50,182.79, charged pursuant to a costs agreement with his lawyers. Senior counsel for the wife conceded that, if she were unsuccessful, an order for costs should be made in favour of the husband, albeit not indemnity costs but rather at the lower end of the range particularised by him, namely, $30,987.24.

  26. Whilst, in the course of the hearing before us, we voiced our observation to senior counsel for the wife that the conduct of the wife since the making of the final order, especially in circumstances where she is an officer of the court, might on one view be described as somewhat “sharp”, we are not satisfied that, in all the circumstances, an order for indemnity costs is warranted and an order shall be made fixed in the sum of $30,987.24.

    Riethmuller J:

  27. I agree with the orders proposed by McClelland DCJ and Strum J for the reasons they give with respect to the Notice of Contention, and gratefully adopt their summary of the relevant facts and circumstances of the case. However, in my view, this is not a case where it “may” have been open to the primary judge to alter the property settlement orders, if those orders had not been the subject of a stay order.

  28. The primary judge made final property settlement orders on 23 July 2021. Those orders provided for the husband to retain the property known as Property E, refinance the mortgage into his sole name and pay the wife a significant sum, all within 60 days. The property settlement orders made secondary provisions, dealing with the possibility that the husband was unable or unwilling to comply with the primary provisions. The relevant parts of the property settlement orders (for present purposes) are in the following terms:

    17. That within 60 days of the date of this Order the parties transfer to the husband all their right, title and interest in [Property E] and for that purpose the following shall apply:

    (a)If the husband requires the return of the transfer for stamping purposes, then … :

    18.That within 60 days of the date of this Order and contemporaneously with the transfer of [Property E] pursuant to paragraph 17 herein, the husband refinance into his sole name the joint [EE Bank] loan being mortgage …

    19. That in default of the husband complying with paragraph 18 herein the parties are to forthwith do all things necessary to sell [Property E] at a price agreed and failing agreement for $700,000 with the net proceeds of sale paid to the husband.

    [Property D and Property P]

    20. That subject to paragraph 21 herein, the husband retain [Property D] and [Property P].

    21. That the husband pay to the wife within 60 days of the date of this Order the sum of $602,415.

    22. That in default of the husband complying with paragraph 21 herein the husband shall transfer all his right title and interest in [Property D] to the wife free of encumbrance and the wife is to pay the husband within a further 60 days the sum of $447,585. 21.

  29. The property settlement orders were the subject of an appeal by the wife.

  30. A stay order, which was ultimately granted by consent on 8 October 2021 (after the 60 days provided for in the orders had passed), relevantly provided:

    2.That the operation of paragraphs 17, 18, 19, 21, 22, 23, and 24 of the Orders made … on 23 July 2021 (“the Orders”) be stayed pending the outcome of the Wife’s Appeal (NOA 47/2021) (“the appeal”) / the wife’s discontinuing the appeal.

  31. The wife’s appeal against the property settlement orders was subsequently dismissed: see Goldsmith & Stinson [2022] FedCFamC1A 96.

  32. Following the dismissal of the appeal, the husband sought to enforce the original property settlement orders and retain Property E. This was opposed by the wife who argued that: first, the secondary provisions of the order had taken effect; and secondly, as the property settlement orders were final orders it was not open to the primary judge to make subsequent orders for the husband to retain Property E. The primary judge found that the secondary provisions of the property settlement orders (which took effect if the husband failed to carry out the requirements of Orders 17, 18 and 21 within the time provided) could be varied after the time expired, as the orders also provided for liberty to apply (or alternatively on the basis that the relevant orders were effectively machinery or consequential orders). Thus, it was reasoned, the property settlement orders were able to be altered without recourse to the power in s 79A of the Act. As a result, the primary judge made orders on 23 July 2021 providing the husband with a further 14 days to comply with the primary provisions of the property settlement orders.

  33. For the reasons given by McClelland DCJ and Strum J, it is apparent that the husband (who was always able to comply with the property settlement orders) sought a stay for sensible and practical reasons. Whilst the husband did not obtain the stay orders until after the time for compliance had passed, the delay was through no real fault on his part. If there was a discretion to alter the time for complying with the primary provisions, there appeared to be no fact or circumstance of significance that weighed against exercising the discretion in the husband’s favour.

  34. Whether the property settlement orders made provision for “liberty to apply” is of no real consequence, as such “liberty” is limited to consequential orders and the parties have an implied liberty to apply in this regard in any event (as explained in the reasons of McClelland DCJ and Strum J). The relevant question is whether, if the orders were not stayed, the secondary provisions were substantive orders or consequential orders.  If they were substantive provisions of final orders, then the Court cannot alter them after they have been entered into the record (see Gamser v Nominal Defendant (1977) 136 CLR 145), save by recourse to limited recognised exceptions (which do not apply here). The only other power to vary final property settlement orders is that in s 79A of the Act: see Taylor v Taylor (1979) 143 CLR 1.

  35. The availability of the power to make consequential orders, following final property settlement orders, is limited to orders that do not “affect the parties’ substantive rights”: see Molier & Van Wyk at 75,771 (unless one has recourse to the power in s 79A of the Act, which was not relied upon in these proceedings). Thus, in Molier & Van Wyk, consequential orders were made to enable the wife to force the sale of a home in circumstances where the husband was to retain the home and pay a sum to the wife, but he had failed to make such payment. The property settlement orders contained no mechanism for the wife to effect the sale of the home in the event of the husband’s default. Thus, consequential orders were required.

  36. In Ravasini, the Full Court set aside an order varying final property settlement orders to account for market fluctuations that occurred after the final orders were made, confirming that a consequential order is not able to vary the effect of a final order. Similarly, in Bray & Bray, the Full Court found that the time provided for one spouse to pay out the other in exchange for their interest in a property could not be extended after the time had expired, as the original orders made automatic provision for such an eventuality and vested substantive rights in the other spouse when the time expired. Importantly, Nygh J noted that “the appropriate test in determining whether or not a provision in an order was one of substance or one of machinery must depend upon the nature and context of the order itself and not on the nature or extent of the variation sought”.

  1. In Slapp & Slapp, the Full Court set aside subsequent orders varying the time for compliance by the husband to make a payment to the wife, after the wife was appointed trustee pursuant to other orders. The effect of the subsequent orders was to remove a substantive right that had vested in the wife upon the husband’s failure to pay the sum owed. The principles have been consistently applied in subsequent cases: see, for example, Martin & Harris [2007] FamCA 560; Guinness & Guinness (No 2) [2008] FamCAFC 100; and Davint & Malburon [2014] FamCAFC 3. Similarly, in Field & Kingston, an application by the husband for an extension of time to pay the wife her entitlements under final property settlement orders was refused, as the effect of the orders were to vest in the wife a substantive right to share in the sale proceeds of the property.

  2. Most recently, in Lasso & Malaka, the Full Court again confirmed that secondary provisions in property settlement orders may confer substantive rights. The orders altering the secondary provisions of the final property settlement orders were set aside.

  3. Two of the cases that have been referred to in the above reasons of McClelland DCJ and Strum J require careful review. In Bebbington & Bebbington, it was found that the property settlement orders did not provide a clear time limit, the expiration of which would result in other substantive rights arising automatically. However, in the reasons the phase “time was of the essence” was used. It does not appear that this phrase was intended to invoke the principles of contract law, but is merely descriptive of that fact that there was no clearly operative time, the expiration of which vested substantive rights in the other spouse. The use of this phrase from contract law appears to have resulted in a particularly novel approach in Bailey & Bailey, where a spouse was unable to comply with final orders in the time provided.

  4. In Bailey & Bailey, like the present case, the automatic effect of the secondary provisions appeared harsh. It was reasoned that the time frame in the orders should be interpreted by analogy to a time limit in a contract, such that time was not taken to be “of the essence”. This argument overlooks the fact that Court orders are not simply an agreement of the parties, but the specific exercise of curial power determining the dispute such that the antecedent rights of the parties merge in the judgment (the very reason that the wife could not force the sale of the home in Molier & Van Wyk, despite being a title holder, as the property settlement orders had merged her interest as a joint title holder and thus she required consequential orders). It is not open to treat time frames in final orders (the passing of which have given rise to substantial rights) other than as strict requirements: orders are not mere guidelines that take effect only if the other party gives notice that “time is to be of the essence”. For these reasons, Bailey & Bailey must be doubted.

  5. The subsequent orders of the primary judge in the present appeal would have denied the wife the right to the property known as Property D, a substantive right which would have accrued on the expiration of the time for the husband to fulfil orders had the orders not been stayed.  For this reason, the subsequent orders cannot be considered merely consequential orders.

  6. In the present case, there was no ambiguity in the property settlement orders, nor did they effect an outcome different to that intended by the primary judge: it was always intended to provide the husband with a limited right to retain properties in a particular form, together with secondary provisions to provide specific property to the wife if the husband was unable or unwilling to take up the first option provided by the orders. Indeed, had the orders not reflected the primary judge’s true intention, they could have been altered pursuant to the slip rule. As the orders were clear, there is no need to have regard to the reasons for judgment. Thus, it is unnecessary to consider the reasons for judgment with respect to the property settlement orders in this case.

  7. The problem that arose in this case is a consequence of the orders being framed to take effect automatically, without needing to consider whether the time provided to the husband should be extended, at least once that time had elapsed (a risk inherent in all “guillotine” style orders). Whilst, in this case, the effect appeared harsh (had there not been a stay order), one must not lose sight of the practical benefit of such orders in saving the parties the costs of further Court applications. In this regard, Field & Kingston is a poignant example of the real benefits of orders of this type, given the extensive litigation between the parties in that dispute (see the summary of the litigation in the subsequent decision in Field & Kingston [2021] FedCFamC1F 353).

  8. The argument that the primary judge had merely altered consequential orders by altering the times in the property settlement orders ignores the fact that (absent a stay of the orders) the secondary provisions would have already vested significant rights in the wife. Upon the expiration of the time provided, the orders automatically vested rights in the wife and therefore any alteration after the time expired would have effected an alteration of a substantive order. It was not only the times provided in the property settlement orders that would have been altered, but the wife's substantive rights that would have accrued as a result of the husband’s failure to comply with the property settlement orders.

  9. As a result, I do not agree that “the 60 day timeframes may be consequential or machinery provisions, capable of subsequent amendment” (at para [92] above), if the property settlement orders had not been stayed.

  10. However, for the reasons given by McClelland DCJ and Strum J concerning the effect of the stay orders, with which I agree, the stay orders took effect nunc pro tunc. The ability of stay orders to take effect nunc pro tunc must be the correct position, otherwise a stay could not prevent orders that take effect immediately or soon after judgment, potentially rendering appeals nugatory. Thus, at the time of the orders the subject of this appeal, no substantive rights had been conferred on the wife by the operation of the secondary provisions of the property settlement orders due to the effect of the stay orders. Therefore, it was open to the primary judge to alter the time limits set in the property settlement orders, as they would not be taken to have expired (due to being stayed).

  11. As a result, I agree that the primary judge did have power to alter the times provided for in the property settlement orders. As there was no challenge to the exercise of the primary judge’s discretion (with respect to which there could be no real doubt, given the wife’s conduct), it follows that the primary judge had power to make the orders that she did, that the orders were consequential orders (but only due to the effect of the stay order), and that the orders the subject of this appeal were well within the ambit of the primary judge’s discretion.

  12. The wife’s appeal should be dismissed and orders made as proposed by McClelland DCJ and Strum J.

I certify that the preceding one hundred and forty-four (144) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland and Justices Riethmuller & Strum.

Associate:

Dated:       15 March 2023

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Cases Citing This Decision

1

Hannegan & Orlando [2023] FedCFamC2F 516
Cases Cited

28

Statutory Material Cited

0

Lasso v Malaka [2022] FedCFamC1A 130
Licul v Corney [1976] HCA 6