Harford & Spalding

Case [2021] FamCA 636

FAMILY COURT OF AUSTRALIA

Harford & Spalding [2021] FamCA 636

File number(s): SYC 3026 of 2020
Judgment of: HENDERSON J
Date of judgment: 27 August 2021
Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Application for summary dismissal of the husband’s application seeking to set aside consent orders pursuant to section 79A(1) and a Binding Financial Agreement pursuant to section 90K of the Family Law Act 1975 (Cth) – Discussion of principles applying to applications for summary dismissal – Where the husband has an arguable case to set the consent orders aside pursuant to section 79A(1) of the Act and to set aside the BFA under section 90K of the Act on the basis of the wife’s failure to disclose the value of some assets in her possession or misleading the Court – Application for summary dismissal dismissed.
Legislation:

Family Law Act 1975 (Cth) ss 45A, 79A(1)(a), 79A(1)(b), 90K

Family Law Rules2004 r 10.12

Cases cited:

Beck & Beck (2004) FLC 93-181

Bigg v Suzi (1998) FLC 92-799

Ebner & Pappas (2014) FLC 93-619

Gong & Zao [2021] FamCAFC 110

Lindon v The Commonwealth (No. 2) (1996) 136 ALR 251

Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27

Pelerman v Pelerman (2000) FLC 93-037

Ritter & Ritter (2020) FLC 93-957

Spencer v Commonwealth of Australia (2010) 241 CLR 118

Number of paragraphs: 143
Date of hearing: 23 June 2021
Place: Sydney
Counsel for the Applicant: Ms Christie SC
Solicitor for the Applicant: Newnhams Solicitors
Counsel for the Respondent: Mr Friedlander
Solicitor for the Respondent: Licardy & Co Solicitors

ORDERS

SYC 3026 of 2020
BETWEEN:

MS HARFORD

Applicant
AND:

MR SPALDING

Respondent

ORDER MADE BY:

HENDERSON J

DATE OF ORDER:

27 AUGUST 2021

THE COURT ORDERS THAT:

1.The wife’s Application in a Case filed 21 January 2021 for summary dismissal of the husband’s Initiating Application filed 27 November 2020 and Amended Initiating Application filed 11 March 2021 is dismissed.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Harford & Spalding has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

  1. This is an application by Ms Harford (“the wife”) seeking to summarily dismiss an Initiating Application filed on 27 November 2020 and amended on 11 March 2021 by Mr Spalding (“the husband”) seeking the following orders: 

    1.That the property Orders made on 29 May 2020…be set aside and/or varied pursuant to section 79A(1)(a) and section 79A(1)(b) and a different order be made/substituted as follows;

    2That Order 2 made 29 May 2020 be set…

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Details
AGLC
Harford & Spalding [2021] FamCA 636
Case
[2021] FamCA 636
Decision Date

CaseChat Overview and Summary

In *Harford & Spalding*, Henderson J of the Federal Circuit and Family Court of Australia considered an application by the wife for the summary dismissal of the husband's initiating application. The husband sought to set aside consent orders made in relation to the division of the parties' property, including a self-managed superannuation fund of which the wife was trustee, and a Binding Financial Agreement concerning spouse maintenance. The husband's grounds for setting aside these orders and the agreement were based on allegations of the wife's failure to disclose the true value of certain assets, specifically clothing and accessories, and misleading the Court.

The central legal issue before the court was whether the husband had an arguable case to set aside the consent orders pursuant to section 79A(1) of the *Family Law Act 1975* (Cth) and the Binding Financial Agreement under section 90K of the Act. The wife contended that the husband's claims lacked merit and should be dismissed summarily, without proceeding to a full hearing.

Henderson J reasoned that for summary dismissal to be granted, the husband's case must be demonstrably without merit or so weak that it could not succeed. The husband's case, as presented, alleged that the wife had provided false and misleading valuations of designer clothing and items from J Company, and had failed to disclose their true value in her financial statement and the balance sheet presented to the court. He further argued that the wife's subsequent actions, such as listing items for auction with significant prospective value, were inconsistent with her previous representations and indicated a deliberate suppression of evidence. The court found that these allegations, if proven, could establish grounds for setting aside the consent orders and the Binding Financial Agreement due to a miscarriage of justice.

Consequently, Henderson J dismissed the wife's application for summary dismissal. The court concluded that the husband had presented an arguable case, meaning that his claims were not so obviously unsustainable as to warrant dismissal without a full hearing. The matter was therefore to proceed to a trial to determine the merits of the husband's allegations.

Orders

Orders of the court

SYC 3026 of 2020

BETWEEN:

MS HARFORD

Applicant

AND:

MR SPALDING

Respondent

ORDER MADE BY:

HENDERSON J

DATE OF ORDER:

27 AUGUST 2021

THE COURT ORDERS THAT:

1. The wife’s Application in a Case filed 21 January 2021 for summary dismissal of the husband’s Initiating Application filed 27 November 2020 and Amended Initiating Application filed 11 March 2021 is dismissed.

Note: The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

Background

Background to the litigation

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Evidence

Evidence Before The Court

The Binding Financial Agreement deals with the parties’ rights and obligations in relation to spouse maintenance and each gave away that right pursuant to the terms of the BFA. The consent orders deal with the division of their property, including a division of their superannuation, which is a self-managed superannuation fund of which the wife was the trustee.HUSBAND’S EVIDENCE The evidence to support the husband’s case in relation to the s 79A application and to set aside the BFA is contained in the following documents: (1)Initiating Application of the husband filed 27 November 2020; (2)Amended Initiating Application of the husband filed 11 March 2021;(3)Response to an Application in a Case filed by the husband on 24 February 2021;(4)Affidavits of the husband filed 24 February 2021 and 22 April 2021;(5)Financial Statement of the husband filed 16 November 2021;(6)Written and oral submissions;(7)The balance sheet tendered before Justice Loughnan at the time of making the consent orders which document appears at page 65 of the wife’s tender bundle; (8)Paragraph 8.4 of the wife’s affidavit of 18 May 2021; and(9)The COE letter from J Company. I do not have the transcript of the proceedings before his Honour before me as the husband did not rely upon this transcript.INABILITY TO CARRY OUT THE ORDERS The husband asserts he cannot set up a new self-managed superannuation fund as was contemplated by the consent orders and that this is a ground for setting those orders aside. That argument went nowhere as the evidence he provided to support that assertion, being a report from M Accountants dated 18 August 2020 and annexed to his affidavit at annexure “S”, did not support an inability to do this, rather that it was not financially advantageous for him so to do, and that is a very different thing. At page five of the report the summary of advice to the husband is “Do not establish a SMSF”. At page 6 of the advice, “[a]fter careful consideration we do not believe a SMSF is in your best interest due to the following reasons…” The advice sets out 11 reasons why not to establish such a fund and that in not establishing a fund the husband will avoid additional administrative requirements, legal obligations and save costs. However the advice does not state the husband is unable to set up such a fund. That ground was effectively abandoned at the hearing by Mr Friedlander.CLAIM PURSUANT TO SECTION 79A(1)(A) OF THE ACT Following the pathway set out in Ritter, what is the husband’s arguable case to support his claim that the consent orders ought to be set aside under section 79A of the Act? His case is based on the following: (1)The husband accepted the value attributed by the wife to the clothing and accessories in her possession, including international designer clothing and J Company clothing, and that the wife’s values of the international designer clothing and J Company items in her possession and disclosed by her were false and misleading and that the wife’s Financial Statement of 15 May 2020 made no reference to those items;(2)That the wife refused to provide him with a schedule of her J Company and other designer clothing in her possession and that at paragraph 4 of his affidavit of 24 February 2021:It is now known after making the Final property Orders [on] 29 May 2020 that the clothing is of significant value as some have been sold and she has taken steps to list some other items of her clothing including J Company items for auction with a significant prospective value(3)He accepted that as an employee of J Company she was unable to on-sell items she had bought at a significant discount from her employer whilst still employed and had accepted the truth of the COE letter she had provided to him on this issue which affected the value of those items in the wife’s possession and that this was false and misleading;(4)That the wife has set about on a course of conduct post the making of the consent orders and signing of the BFA to sell some of her J Company items which is inconsistent with the prohibition on her of selling those items and is evidence of misleading the Court; (5)The Court has approved the consent orders on a misapprehension of the parties’ financial positions and due to the wife’s failure to disclose, the giving of false and misleading evidence and her suppression of relevant evidence this has resulted in a miscarriage of justice; and(6)That the wife perpetrated a fraud on the Court by her false assertion of the value of some of her fashion items, including J Company items, in the balance sheet as nil and that this is grounds for setting aside the BFA.SETTING ASIDE ORDERS

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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