Greta and Greta and Anor - [2007] FamCA 1404

FAMILY COURT OF AUSTRALIA

GRETA & GRETA AND ANOR

[2007] FamCA 1404

FAMILY LAW – PRACTICE AND PROCEDURE – SUMMARY DISMISSAL – Substantive application under s 79A – Rulings as to relevance of “person affected” within the meaning of s 79A – Question of the validity of orders made by consent made some years after initiating application had been marked “withdrawn” by a judge – Jurisdiction to make orders by consent thereafter when one party dies as well as issues associated with a decree nisi having become absolute – Applicants for summary dismissal unsuccessful on the basis of at least an arguable case

Family Law Act 1975 (Cth)

Allesch & Maunz [2000] 203 CLR 136
Bennett & Bennett (1985) FLC 91-617
Child Support Registrar & Nicholls (2007) 36 Fam LR 571
Licul and Ors & Corney (1976) 8 ALR 437
Lindon & Commonwealth (1996) 70 ALJR 541
Schoormans & Schoormans (1990) FLC 92-163; (1990) 14 FamLR 272
Tudor & Tudor (1992) FLC 92-273; (1992) 15 Fam LR 165; (1991) 105 FLR 246

APPLICANT:

Mr D Greta

RESPONDENTS:

Ms H Greta & Ms J Greta

FILE NUMBER:

SYC

3446

2007

DATE DELIVERED:

20 November 2007

PLACE DELIVERED:

Albury

PLACE HEARD:

Sydney

JUDGMENT OF:

Cronin J

HEARING DATE:

1 & 2 November 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Williams SC with Mr Goodman

SOLICITOR FOR THE APPLICANT:	Premium Advisory
COUNSEL FOR THE RESPONDENTS:	Mr Maiden SC with Mr Condon

SOLICITOR FOR THE RESPONDENTS:

Clinch Neville Long Letherbarrow

Orders

That the applications in a case (Form 2) filed on 29 June 2007 and 6 September 2007 be dismissed.
That the substantive proceedings be listed on a date to be fixed as may be determined by the case management judge or his delegate.
Any application by either party for costs arising out of these orders be made in written submission form and filed with the Associate to Cronin J by 4.00pm on 10 December 2007 and any response to such application by either party be in written form in the same way by no later than 4.00pm on 17 December 2007 and the determination of such submissions be in chambers to the extent that they can be.

IT IS CERTIFIED:

That pursuant to Order 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel, including Senior Counsel to attend.

AND THE COURT NOTES the substantive application for determination under s 79A of the Family Law Act1975 (Cth) is currently the subject of an application by the applicant in the Supreme Court of New South Wales before Brereton J which is listed at the end of November 2007 and which is part of a substantial litigation in that court.

IT IS NOTED that publication of this judgment under the pseudonym Greta & Greta is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 3446 OF 2007

MR D GRETA

Applicant

And

MS H GRETA & MS J GRETA

Respondents

REASONS FOR JUDGMENT

These are my reasons for judgment in a summary dismissal application.
The circumstances are most unusual.
Mr D Greta is the son of Mr C Greta and Ms J Greta. He is the brother of Ms H Greta.
Because of the fact that all of the parties have either similar or identical surnames, and without intending to be disrespectful to any of them, I propose to refer to them by first names.
C and J married in 1969.
H was born in February 1972 and D was born in April 1975.
C and J separated and in 1988, J commenced proceedings in the Court. On 10 May 1988 the Court granted a decree nisi of dissolution of marriage which became absolute on 11 July 1988.
In September 1992, C died. In January 1993, letters of administration with the will annexed were granted to H.
On 18 May 1995, a registrar of the Court made orders by consent. The parties consenting were J as the wife and H in her capacity as the representative of the estate of C.
On 14 May 2007, D made an application under s 79A of the Family Law Act1975 (Cth) (“the Act”) to set aside the 1995 orders.
On 6 September 2007, J (and presumably H) made an application that D’s substantive application under s 79A of the Act be summarily dismissed. That is the application that I have been asked to determine.
Before dealing with the matter in greater detail, it is important to fill in the other salient points in that potted history.
On 25 May 1988, C made his final will under which he appointed a Mr S as sole executor and trustee.
In his will, C left inter alia, his shares in Greta Pty Ltd and R Pty Ltd. The residue of his estate was left to D.
It is common ground that there were arguments about who was to be executor and as it now transpires, on 9 February 1993, H was granted letters of administration (with the will annexed), Mr S having renounced probate.
I have mentioned the divorce. On 10 May 1988, the decree nisi was granted. On 25 May 1988, C made the will to which I have referred. On 11 June 1988 the decree became absolute. That may become an issue in the proceedings.
In June 1988 C became very ill.
On 9 June 1989 J filed an application for property settlement seeking specifically an order that C’s interest in the former matrimonial home be transferred to her along with shares in companies which included R Pty Ltd and Greta Pty Ltd.
It is important to note that that application did not seek any order in relation to a property that was then owned by C at B nor some shares held by him in N Holdings Pty Ltd.
The next significant event in the chain of events was that on 7 September 1990 Ross-Jones J ordered that the proceedings be stood over for mention before him on 22 February 1991. On 22 February 1991, the matter came before Ross-Jones J again. Both husband and wife were represented as was H. A number of orders were made but the significant one was:
I give leave to the wife to withdraw her application for property settlement on the basis that the former husband is living with her together with the children of the marriage.
Other orders were made but they do not affect the decision that I have to make. What was clear on the face of the record was that the “matter” was removed from the Active Pending Cases List.
The file remained dormant.
In September 1992, C died. According to D, the property of the estate over which the administrator H was responsible included shares in N Holdings and most importantly, the B property.
On 16 January 1995, D signed some share transfer forms under which both J and H received 667 shares out of a total of 2003 in N Holdings. That apparently is the contentious issue in proceedings to which I shall refer in a moment.
On 5 May 1995, J and H approached the Court and filed what appears to be an application for consent orders and presumably a minute of the orders that they were seeking. By consent of the parties, I was given a document which is headed “In Chambers” “Outcomes”. Of what significance the document is I am not sure but it appears to be a working document of the registrar because it bears similar writing and similar dates to the orders that were ultimately signed on 18 May 1995. The significance of the document is that it makes a reference to “O.11 considered” and “O’Toole (1992) FLC 92-285 followed”. If the notes were made at that time, then the registrar who made the orders on 18 May 1995 seemed to have been considering the fact that the application by J had been “withdrawn” by virtue of the order of Ross-Jones J and of course, the parties had divorced in the meantime. Needless to say, the orders were made.
The orders of 18 May 1995 included the substitution of the husband with H in her capacity as the administrator of her estate, the restoration of the property application which Ross-Jones J had given leave to have withdrawn and then more importantly, a transfer by H to J of the B property and the 667 shares in N Holdings Pty Ltd.
According to the affidavit of D sworn 28 July 2007 and filed on 29 July 2007, he was unaware that the orders had been made and certainly not aware of their effect until 2006. He then sprang into action because in November 2006, he commenced Supreme Court proceedings.
In January 2007, Brereton J of the Supreme Court of New South Wales made some observations about whether or not the Family Court had had jurisdiction to make the orders in 1995.
It will be then seen that D filed the application in this Court seeking to set aside the orders on the basis of s 79A of the Act on the ground of miscarriage of justice, he being a person affected by the order.
Also in the background is a cross-vesting application. The shares and the B property to which I have referred are also part of the significant dispute in the Supreme Court of New South Wales and an application has been made for that court to exercise its cross-vesting powers to determine the dispute under s 79A of the Act. I was handed a copy of the amended pleading which seeks to have the Supreme Court undertake that task. That matter is listed before Brereton J at the end of November 2007.
Consistent with all of the authorities, it was agreed by all parties that I was only to read the material of D, he being the respondent to the application for summary dismissal and that is the course that I have taken.
There are two issues for my consideration here each of which affects the application for summary dismissal. The first is that the applicants for summary dismissal assert that D cannot succeed under s 79A because he is not a person “affected” by an order before any consideration of a miscarriage of justice arises. The second is that the orders made by the registrar in 1995 were a valid exercise of power because although Ross-Jones J granted leave in 1991 for the wife to withdraw her application, that order was never entered.
The applicants assert that D cannot be a person affected by an order because he was not a party to the marriage nor was he a creditor of the parties to the marriage. As for D’s claim that the orders affected his entitlement to the property claim by him, it is argued by the applicants that although probate was granted on 9 February 1993, that is, two years before the orders were made, the estate was not then fully administered and as such, D had no beneficial interest in the assets of the estate.
D asserts that he was the principal beneficiary of the estate and as such, the orders had the effect of depleting the estate of assets he would have expected to receive. It is said that his right arises notwithstanding that the estate was unadministered because a beneficiary has a right to compel the legal personal representative to administer the estate and to the extent that it should be necessary to do so, D had the right to obtain the assistance of a court of equity if he needed it. In addition, D had at least, an equitable interest. In essence, D says that he would have been entitled to valuable property.
D also argues that in relation to the jurisdictional issue about the 1995 orders, there is no legislative or judicial pronouncement which could be said to support the argument of the applicants. The Family Law Act and Rules had no definition of the completion of proceedings.
Most of the decisions of this Court about non-parties becoming involved in proceedings under s 79A relate to creditors. All of them however accepted the fact that the creditor was a person affected by an order on the basis that something was done between the husband and wife which would have the effect of prejudicing the rights of the non-party. A recent example of that was in Child Support Registrar & Nicholls (2007) 36 Fam LR 571 a decision of the Full Court decided on 2 February 2007. The husband had a child support debt from his first relationship and was being pursued (albeit without vigour) by the registrar. He entered into consent orders with his wife of the second relationship without notice to the registrar and more importantly to the court. A federal magistrate found that a failure to tell the court debt was a material suppression of evidence but ultimately exercised his discretion to decline to set aside the order. The Full Court (Finn, Holden and Warnick JJ) said:
48.We add that we do not accept, as we understood to be submitted by the respondents, that a distinction should be drawn between a party to the proceedings as opposed to a third party. As was said by the full Court in Official Trustee in Bankruptcy v Donovan and Donovan and Stevens (1996) FLC 92-703 (and as recognised by Baumann FM in paragraph 27 of his reasons):
This Court has, on numerous occasions, emphasised the obligation of full disclosure of third party interests to the Court and the responsibility of notification to third parties. See Chemaisse and Chemaisse; Federal Commissioner of Taxation (supra), Re Chemaisse; Federal Commissioner of Taxation (Intervener) (supra), Deputy Commissioner of Taxation (WA) v Spanjich (supra), Rowell and Rowell; Deputy Federal Commissioner of Taxation (Intervener) (supra), Re Bailey and Bailey (supra), Semmens v Commonwealth of Australia and Collector of Customs (SA) (supra) and Biltoft and Biltoft (supra). The only finding open to the trial Judge on the evidence was that neither the Law Society, the Receiver of the husband's practice, nor the persons whose funds were misappropriated by the husband were notified of the return date of the relevant proceedings or that the parties intended, if possible, to seek that the duty Judge make final orders in relation to the wife's claim under s 79 on that return date, namely, 7 February 1986. Clearly, on the evidence, the ability of a claimant to recover a debt arising out of the husband's misappropriation was likely to be affected by the making of the final orders which were in fact made.
In our judgment, in the circumstances of this case, there was an obligation to notify, and given the relevant statutory scheme, to notify the Law Society of the proceedings, the return date of those proceedings and that, if possible, final orders would be sought on that return day to enable the Law Society, if it so desired, to seek to intervene in the proceedings, or a stay of the proceedings or some other appropriate order. That obligation was not discharged by placing the relevant material before the Court.
In the circumstances of this case, the failure to so notify amounts to a miscarriage of justice within the meaning of s 79A(1)(a).
That being so, the Full Court returned to what was said by the High Court of Australia in Allesch & Maunz [2000] 203 CLR 136 in relation to the operation of s 79A which related to the setting aside of orders made in the absence of a party.
27.In Taylor [1978-1979] 143 CLR 1, Gibbs J, with whom Stephen J agreed, and Mason J, with whom Aickin J agreed, each viewed the discretion to set aside an order made in the absence of a party as a corollary to the requirement that, before a person can be adversely affected by a judicial order, he or she must be afforded an adequate opportunity of being heard. In that case the party's failure to appear was due to no fault of his own and Mason J expressed the view that the discretion to set aside the order made in his absence should have been approached ``on the footing that it was prima facie the right of each party to have the proceedings heard in his or her presence and that justice to both parties required that each party should be entitled to present his or her case.'' Murphy J saw the discretion to reopen as an aspect of federal judicial power which was to be exercised ``only with caution.'' The factors to be considered, in his Honour's view, were ``the presence or absence of some real explanation for failure to use the opportunity to be heard, delay, acquiescence, [and] prejudice to the other party.'' However, nothing presently turns on whether the inherent power to set aside an order made in the absence of a party is a corollary to the right of a party to be heard or is an aspect of federal judicial power.
28.The consideration which informs the power conferred by s 79A of the Act is that the court be satisfied that there was ``a miscarriage of justice''. And whether exercising inherent power or a power of the kind conferred by s 79A of the Act, a court will, ordinarily, be satisfied that there has been a miscarriage of justice if a person has suffered an adverse order in circumstances where his or her failure to appear is adequately explained unless it also appears that no different result would be reached on a rehearing or that a rehearing would work an irremediable injustice to the other side. In this last regard, it should be noted that injustice will often be capable of remedy by the imposition of terms as to costs. However, where, as here, orders have been carried into effect, injustice may not be capable of remedy except on terms that those orders stand and that the matter be reopened only to a limited extent. [Footnotes omitted].
The Full Court in Nicholls having determined that there was no distinction between a party and a third party, said:
47. However, given the emphasis placed by the High Court in both Taylor and Allesch v Maunz on the right of a party to be heard when an order is to be made affecting that party, we accept that where a party has not been given notice of the proceedings in which the order was made, and thus not been heard on the making of the order, that that is a matter which should be given very significant weight in the exercise of the discretion to set aside the order. As his Honour did not refer to the fact that the order had been made without notice to the Registrar, it has to be assumed that he gave this fact no weight, and thus his discretion must be regarded as having miscarried on account of his failure to have regard to this important matter.
In my view therefore it matters little that D was not a creditor. What he has to show is that a miscarriage of justice has occurred and that he has been affected by the order. For the purposes of a summary dismissal application, D only has to show that he has an arguable case and that it is open on the facts for the possibility that the Court’s discretion could be exercised in his favour.
In respect of the jurisdiction argument, my attention was also drawn to a question raised by Brereton J in the Supreme Court of New South Wales in the concurrent proceedings about whether the orders of this Court made in 1995 were validly made.
I have examined the Family Law Rules now and those applicable in 1995 and find that they are of little assistance. Much depends upon what “leave to withdraw” means. Some assistance is provided in Bennett and Bennett (1985) FLC 91-617. That case was about “striking out”.
In Bennett, the wife filed an application for property settlement and the payment of arrears of spousal maintenance within the 12 month period in accordance with s 44(3). Neither party was represented at a call-over and the matter was struck out. Due to the incompetence of the wife’s then solicitors, the wife only discovered that the matter had been struck out more than a year after the fact. She then changed solicitors and sought reinstatement of her application. The husband sought that the wife’s application for reinstatement be dismissed.
At first instance, Fogarty J dismissed the wife’s application. The wife appealed to the Full Court.
The Full Court unanimously allowed the wife’s appeal. Nygh J, with whom Dovey and Strauss JJ agreed, held that the trial judge erred in treating the wife’s application as an application for leave under s 44(3), saying at 79,994:
In my view this approach was misconceived. In the first place, it is obvious that the wife did not require any leave to institute her proceedings. As mentioned earlier, they had been instituted within the time laid down by sec. 44(3).
Secondly, it is difficult to discern any analogy between sec. 44(3) and an application for reinstatement. It appears that in the Melbourne Registry an application for reinstatement is viewed as a substantial application to be decided by a judge upon evidence. On the other hand in the Canberra and Sydney Registries, the question of reinstatement is purely an administrative matter handled by the registrar, who then determines what priority, if any, the matter so reinstated should have in relation to the business of the Court.
The latter practice appears to be the correct one.

Nygh J held that the application was an administrative matter since the striking out of an application does not dismiss the application, it simply removes the matter from the list leaving the substantive proceedings active. His Honour stated at 79,994:
As Mr Justice Fogarty rightly pointed out the striking of a matter out of a list is not a dismissal of the application: it is merely the removal of a matter from the list of cases which are pending for hearing in a particular court. Similar remarks were made by Mr Justice Kaye in the case of R. v. McGowan (1984) V.R. 1000. If it is desired to prevent the matter from ever being listed for hearing, the appropriate method is to apply that the application be dismissed or permanently stayed for want of prosecution. In that case, the onus rests upon the party applying for the dismissal or stay.
In Tudor & Tudor (1992) FLC 92-273; (1992) 15 Fam LR 165; (1991) 105 FLR 246 (per Baker, Nygh and Bulley JJ) the wife commenced proceedings for property settlement in 1982, some months before the decree nisi dissolving the marriage became absolute. After many interlocutory applications and the vacation of several hearing dates, the matter was listed for hearing in 1989. The matter was adjourned on the wife’s application as she was about to commence proceedings in the Equity Division of the Supreme Court in relation to a family trust, and, pursuant to legal advice, sought to transfer the s 79 proceedings to the Supreme Court once these proceedings were instituted.
In 1990 the husband filed an application to dismiss the proceedings for want of prosecution. The wife could not offer any reasonable explanation for the delay in taking the necessary steps, notwithstanding previous assurances made to the court that such steps would be taken.
The trial judge struck out the matter, indicating that this action and not dismissal was appropriate “to ensure that the wife’s right to commence proceedings again, eventually would not be affected, subject to the requirement of leave under s 44(3) of the Family Law Act” (79,025 of Full Court judgment).
The wife appealed to the Full Court on the grounds that the trial judge’s decision constituted a denial of natural justice.
The Full Court noted that “the first issue to be considered is the nature of the order appealed from”, that is to determine whether the order is final or interlocutory. In determining this question, the Court adopted the formula laid down by the High Court in Licul and Ors & Corney (1976) 8 ALR 437 and reaffirmed by the High Court in Carr and Anor & Finance Corporation of Australia Limited (No 1) (1981) 147 CLR 246. Their Honours summed up the law on this issue at 79,026:
…an order will be interlocutory if it leaves open the legal possibility of the application which it deals with being renewed, even though for all practical purposes, such an application is unlikely to succeed.
Their Honours then observed, at 79,026, that:
[The trial judge] did not make an order for the dismissal of the wife's application (which may or may not have been of a final character since in any event it was not based on a decision on the merits: see Southern Cross Exploration NL & Ors v. Fire and All Risks Insurance Company Ltd & Ors [No. 2] (1990) 21 NSWLR 200) but struck out the wife's application.
The Full Court applied Bennett (supra) and held at 79,026 that:
[T]he striking out of a matter is not a dismissal of the application, but merely the removal of a matter from the list of cases pending for hearing in a particular court.
…
It follows that the wife's application may be reinstated in the list for trial without the need for the leave of the Court pursuant to sec 44(3) of the Family Law Act 1975.
In comparing the difference between the striking out of an application and the dismissal of an application, the Full Court observed at 79,027:
The striking out of an application is of far lesser consequence. It is a sanction which is properly applied in a situation, such as the present, where a party has failed to comply with the directions of the Court and cannot offer any adequate explanation for such failure. In such a case the party in default can at any time make an application to restore the matter to the list on condition that the defect has been or will be remedied and the party concerned will expeditiously proceed to prepare the matter for hearing.
Schoormans & Schoormans (1990) FLC 92-163; (1990) 14 Fam LR 272, a decision of Hase J involved the review of a Registrar’s decision to strike out the wife’s property application for failing to properly identify the property of the husband.
Hase J referred to Bennett & Bennett (supra), saying at 78-128:
The Full Court stated clearly that the order [to strike out an application] had only an administrative effect which merely called for an administrative decision to reinstate the case in the list.
His Honour continued at 78,128:
As a result of the inclusion of an application in the definition of ``pleading'' in our Rules, there is a possibility that it could be argued that there are no proceedings in existence if an application is struck out.
It is unlikely, in my view, that such an argument would be upheld, and it is likely, in my view, that the proceedings continue to exist, despite the fact that there has been an order striking out the application.
This, of course, is quite different from the position which exists if an order is made dismissing the application or staying it. It would appear that the concept of striking out should be confined to the endorsement on the application so that there is no threat to the continuation of the existence of the proceedings.
The distinction between dismissal and striking out is of assistance in relation to withdrawal of proceedings. The important consideration is whether the proceedings have been concluded such as would require the exercise of some statutory power to be allowed to litigate again as distinct from the exercise of some administrative permission to get back into the litigation stream. Even if there was a rule of court setting out the process one way or the other, the Court would still have to look at the statutory jurisdictional basis to determine whether or not to exclude a litigant.
Ross-Jones J granted leave to the wife to withdraw. That could mean withdraw the proceedings or withdraw the application which commenced the proceedings. The words of his Honour’s orders thereafter may give some clue to the intention namely that there was a reconciliation in the throes of taking place and that as such, the proceedings as distinct from the application, were no longer necessary or continuing. Even that leaves open the same question of whether, for example, an application to start again after a withdrawal of proceedings requires permission under s 44(3). It must be arguable that the jurisdiction under Part VIII of the Act had been activated but because of the reconciliation, the Court’s jurisdiction was not needed at that time.
I do not have to decide that issue. I am dealing with a summary dismissal application in which the applicant has to show that the respondent’s case is doomed to fail. On any view of the authorities to which I have just referred, there is at least an arguable case.
The words of Kirby J in Lindon & Commonwealth (1996) 70 ALJR 541 in this case are apt. His Honour said:
The approach to be taken by the Court to the Commonwealth’s application for summary relief is not in doubt:
1.It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against Government and other powerful interests. This is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the Court, is rarely and sparingly provided;
2.To secure such relief, the party seeking it must show that it is clear, on the face of the opponent’s documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious;
3.An opinion of the Court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment;
4.Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of demurrer. If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts;
5.If, notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading. A question has arisen as to whether O 26, r 18 applies to part only of a pleading. However, it is unnecessary in this case to consider that question because the Commonwealth’s attack was upon the entirety of Mr Lindon’s statement of claim; and
6.The guiding principle is, as stated in O 26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the Court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the Court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.
The applicants for summary dismissal therefore, cannot succeed.
There was also an application for transfer of the proceedings under s 79A to the Supreme Court of New South Wales for that court to exercise its accrued jurisdictional powers. The pleading of D has been amended to provide for that. D’s counsel provided written submissions in relation to that issue. Brereton J has now indicated that he will determine that issue in his court at the end of November 2007. Accordingly, I do not have to determine that issue save as to a flagged issue of costs should the application so arise.
I raised with the parties the prospect of determining any potential costs application on the papers and there was agreement that I should do so. I have provided for those orders accordingly.

I certify that the preceding Sixty Three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin.

Associate

Date: 19 November 2007