Hamer and Hamer

[2011] FamCA 1010

FAMILY COURT OF AUSTRALIA

HAMER & HAMER [2011] FamCA 1010

FAMILY LAW – ENFORCEMENT OF ORDERS - Recovery of overpayment made under an order – Consideration of word “obligation”

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662
Porter v Latec Finance (Qld) Pty Ltd (1964) 111 CLR 177

APPLICANT: Mr Hamer

RESPONDENT: Ms Hamer

FILE NUMBER: MLC 8840 of 2007

DATE DELIVERED: 16 November 2011

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 31 October 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Melilli

SOLICITOR FOR THE APPLICANT: Lander & Rogers

COUNSEL FOR THE RESPONDENT: Mr Kiernan

SOLICITOR FOR THE RESPONDENT: D Nelson

Orders

1. That the wife pay to the husband the sum of $20,000.00 forthwith.

2. That the wife pay the husband’s costs of these proceedings as agreed between the parties and failing agreement, as assessed.

3. It is certified that it was reasonable in the circumstances to brief counsel to attend.

4. That the application in a case filed by the husband on 5 September 2011 and the response thereto filed 31 October 2011 are otherwise dismissed.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 8840 of 2007

Mr Hamer

Applicant

And

Ms Hamer

Respondent

REASONS FOR JUDGMENT

1. On 18 May 2005, Kay J made final orders between the parties that required the husband to pay to the wife regular payments. 

2. By process of effluxion of time, the last payment fell due in 2010.  The payments were made by direct debit from the husband’s bank account to that of the wife.  Despite the obligation having been fulfilled, four further payments totalling $20,000 were made in October 2010, January 2011, April 2011 and July 2011.  It was at that point the mistake was discovered.

3. The husband seeks a recovery from the wife for the over-payment.  The wife resists the application on the basis that there is no jurisdiction of the Court to make any orders as it was functus officio in 2005 and that this application thus cannot be said to be the enforcement of any order because the order has been executed and completed.

4. The argument of each of the parties was limited.  The facts were not really in dispute.  The wife conceded she received the money.  Her Counsel conceded that it might be a matter for another court but her argument related to the jurisdiction and power of the Family Court to make any orders at all.

5. The husband’s argument was that there was an obligation under the orders for the husband to pay the wife, that that obligation had been over-paid, and therefore that the obligation fell on the wife to repay the money to the husband.

6. There is no provision in the Family Law Act 1975 nor in the Family Law Rules 2004 that specifically provides for one party to repay the other money that is over-paid.

7. At common law, money that is paid under a fundamental mistake gives rise to a cause of action known as money had and received.  Money paid under a fundamental mistake is recoverable by the payer (see Porter v Latec Finance (Qld) Pty Ltd (1964) 111 CLR 177).

8. The basis of the action money had and received lies in restitution or unjust enrichment not implied contract (see Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662).

9. The receipt of monies paid under a fundamental mistake gives rise to a prima facie obligation to make restitution.  It is conceivable as an alternative that the receipt of such funds gives rise to a resulting trust or that a court may grant relief by way of a constructive trust. 

10. All of these are common law actions for recovery of the value of the unjust enrichment rather than the money itself.  The liability to make restitution is imposed by the law on the person who has been unjustly enriched (see ANZ v Westpac supra).

11. It is implicit in the wife’s argument that should the husband wish to recover the money over-paid, he would have to take the common law action just foreshadowed.  In her affidavit of evidence, the wife made something of a counterclaim in relation to arrears of spousal maintenance from years ago.  That issue was not seriously argued and I did not understand it to be the basis upon which any action by the husband was to be defended.  The issue in this case is whether or not the Court has power to make the order sought by the husband. 

12. If the unjust enrichment action was brought by the husband in another jurisdiction, the parties would have to consider whether or not there was a defence of absence of jurisdiction by virtue of it being a matrimonial cause if it is accepted that ss 119 and 120 of the Family Law Act only effectively permit actions in contract and tort as between spouses.  It is therefore necessary to look at whether the application by the husband is within power by virtue of being a matrimonial cause.

13. Section 39 of the Family Law Act gives jurisdiction to the Court if the action is a matrimonial cause.

14. Section 4 of the Act provides that a matrimonial cause includes any proceedings “with respect to” the enforcement of a decree including “in relation to” completed proceedings.

15. There can be no doubt in this case that the argument is about whether or not there is capacity to enforce the decree made in what are otherwise completed proceedings.

16. Section 105 of the Act provides that all decrees made by the Court may be enforced providing there is jurisdiction under the Act.

17. Section 109A provides power for the Court to make rules in relation to or for or in relation to anything incidental to, the enforcement by the Court of an order under the Act.

18. Section 123 of the Act empowers the Judges of the Court to make rules as to practice and procedure generally.  The rules therefore in relation to enforcement stem from s 109A.

19. Chapter 20 of the Family Law Rules 2004 provides for the enforcement of obligations under the Act. Under the Rules, an obligation to pay money may be enforced, including an obligation for payment of money under an order. The definition of “obligation” is not confined to the matters set out in the Rules. An obligation must be read widely to include the repayment of an over-payment made in connection with an order to ensure consistency with the unjust enrichment principles at common law. For the reasons earlier mentioned, money paid under a fundamental mistake requires the payee to repay the money. There is no stronger argument for a requirement of repayment than where the over-payment is acknowledged as having been received and more so where it is received under a fundamental mistake.

20. The husband’s claim thus falls within the definition of a matrimonial cause, being in respect to the enforcement of an obligation in otherwise concluded proceedings, and the power of the Court arising from the Rules comes from s 109A of the Act.

21. Even if there is some doubt about that, Rule 1.09 provides that if a court is satisfied that the legislative provision does not provide a practice or procedure or that a difficulty arises or doubt exists in relation to a matter of practice or procedure, the court may make such orders as it considers necessary. On any view, the definition in Chapter 20 as to obligations is unconfined. The husband’s application is clearly a matrimonial cause arising out of a completed proceeding under which the obligation under the order is for the wife to receive her just entitlement and any more paid under a fundamental mistake of fact must be repaid.

22. An order should therefore be made in favour of the husband.

23. In his application, the husband also sought interest at 12% on each of the payments made. That issue was not really argued but I cannot see a basis upon which I could grant such a rate. S 117B of the Act provides that interest is payable at the prescribed rate from the date of the order or from the date upon which the order takes effect. The only order to which that provision could apply is that which I am about to make. It may be argued (but was not) that interest could be paid under the unjust enrichment principle but here, the order mentioned in paragraph 1 above is the order being enforced. Even if there was some argument about that, having regard to the fact that it was the husband’s mistake in the first place, pursuant to s 117B(2), I would not make an order for the payment of interest.

24. These orders give rise to the question of costs of these proceedings.

25. In discussions at the conclusion of the case, each party conceded that rather than return for a further hearing, as each would be seeking costs in the event of being successful, I should make an order in favour of the successful party.  Despite that, it is still important to consider s 117 of the Act.

26. Section 117 of the Act requires that each party pay their own costs unless the circumstances justify departure from that principle.  If the Court is contemplating departing from that principle, it must take into account the matters set out in s 117(2A) of the Act.

27. In this case, albeit there is a vague suggestion of some arrears from a long time ago, there really was no dispute that the husband paid the money under a fundamental mistake and the wife knew that she was receiving it.  Letters of demand were sent to her which she ignored.  That seems to me to be a good example of where there is a justifiable circumstance for making an order for costs because the husband had no choice but to issue proceedings to recover the money.  Had he pursued the action in the common law courts, the question of costs would presumably follow the cause.  In this case, large amounts of money were paid and each party was represented by legal practitioners so I am entitled to presume that neither is impecunious.  Whilst there is some doubt about the jurisdiction and cause of action issue in this court, again I point to the fact that there is no dispute that the money was paid as alleged by the husband.  There are no legal aid considerations of which I am aware and the wife has been wholly unsuccessful.  In those circumstances, the husband should have his costs by agreement and failing agreement as assessed.

I certify that the preceding Twenty Seven
(27) paragraphs are a true copy of the reasons
for judgment of the Honourable Justice Cronin
 delivered on 16 November 2011

Associate: ……………………………………………………………

Date:  …………………………………………………………………