Harford & Spalding

Case [2022] FedCFamC1A 78

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

Harford & Spalding [2022] FedCFamC1A 78

Appeal from: Harford & Spalding [2021] FamCA 636
Appeal number(s): NAA 20 of 2021
File number(s): SYC 3026 of 2020
Judgment of: MCCLELLAND DCJ, TREE & WILLIAMS JJ
Date of judgment: 26 May 2022
Catchwords: FAMILY LAW – APPEAL – SUMMARY DISMISSAL – Appeal from orders dismissing an application for summary dismissal – Where the application sought to summarily dismiss the husband’s claims pursuant to ss 79A and 90K of the Family Law Act 1975 (Cth) – Leave to appeal required – Whether the primary judge erred in not having regard to relevant transcript – Whether the primary judge’s reasons for judgment were adequate – Where there is merit to the appeal – Where substantial injustice would ensue if leave were refused – Leave to appeal granted – Appeal allowed – Matter remitted for rehearing – Costs ordered in favour of the wife.
Legislation:

Family Law Act 1975 (Cth) ss 79A, 90C, 90K

Succession Act 2006 (NSW) s 95
Cases cited:

Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148

Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49

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

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

Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25

Sun Alliance Insurance Ltd v Massoud [1989] VR 8
Number of paragraphs: 34
Date of hearing: 2 May 2022
Place: Sydney
Counsel for the Appellant: Mr Kearney SC
Solicitor for the Appellant: Newnhams Solicitors
Counsel for the Respondent: Mr Richardson SC
Solicitor for the Respondent: Licardy & Co Solicitors

ORDERS

NAA 20 of 2021
SYC 3026 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION
BETWEEN:

MS HARFORD

Appellant
AND:

MR SPALDING

Respondent

ORDER MADE BY:

MCCLELLAND DCJ, TREE & WILLIAMS JJ

DATE OF ORDER:

26 MAY 2022

THE COURT ORDERS THAT:

1.The appeal be allowed.

2.The orders of the primary judge made 27 August 2021 be set aside.

3.The matter be remitted for rehearing before a judge of the Federal Circuit and Family Court of Australia (Division 1) other than the primary judge.

4.Within 28 days of these orders, the husband is to pay the wife’s costs of the appeal in the sum of $38,342.90.

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…

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AGLC
Harford & Spalding [2022] FedCFamC1A 78
Case
[2022] FedCFamC1A 78
Decision Date

CaseChat Overview and Summary

This appeal concerns an application for summary dismissal of a husband's claims for property settlement and spousal maintenance brought under the Family Law Act 1975 (Cth). The appeal was heard by McClelland DCJ, Tree and Williams JJ in the Federal Circuit and Family Court of Australia. The husband's application to set aside property settlement orders made by Loughnan J in 2020 was dismissed by the primary judge on 27 August 2021. The wife then appealed against the primary judge's decision. The legal issues before the Court were whether the primary judge erred in not having regard to the relevant transcript and whether the primary judge's reasons for judgment were adequate. The Court found that there was merit in the appeal and that substantial injustice would ensue if leave to appeal was refused. The Court held that the primary judge erred in not having regard to the relevant transcript and that the reasons provided by the primary judge were inadequate. The appeal was allowed, and the matter was remitted for rehearing before a different judge. The Court also ordered the husband to pay the wife's costs of the appeal in the sum of $38,342.90.
The parties had been in a de facto relationship since 1988, married in 1990 and separated in February 2017. The wife commenced property settlement proceedings in May 2020, but the parties continued to negotiate until they signed proposed consent orders on 28 May 2020. The consent orders provided for the wife to pay the husband $700,000 and for a superannuation split of $205,000 from the wife to the husband. The husband filed an Initiating Application in May 2020 seeking to set aside or vary the consent orders and the Binding Financial Agreement made by the parties. The wife filed an application seeking to summarily dismiss the husband's Initiating Application, which was dismissed by the primary judge on 27 August 2021. The wife appealed against the primary judge's decision. The Court found that the primary judge erred in not having regard to the relevant transcript and that the reasons provided by the primary judge were inadequate. The appeal was allowed, and the matter was remitted for rehearing before a different judge. The Court also ordered the husband to pay the wife's costs of the appeal in the sum of $38,342.90.

Orders

Orders of the court

NAA 20 of 2021

SYC 3026 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MS HARFORD

Appellant

AND:

MR SPALDING

Respondent

ORDER MADE BY:

MCCLELLAND DCJ, TREE & WILLIAMS JJ

DATE OF ORDER:

26 MAY 2022

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. The orders of the primary judge made 27 August 2021 be set aside.

3. The matter be remitted for rehearing before a judge of the Federal Circuit and Family Court of Australia (Division 1) other than the primary judge.

4. Within 28 days of these orders, the husband is to pay the wife’s costs of the appeal in the sum of $38,342.90.

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.

Background

Background to the litigation

For the reasons which follow, leave to appeal will be granted and the appeal allowed.BACKGROUND The parties commenced cohabitation in 1988, were married in 1990 and separated in February 2017, albeit remaining under the one roof until December 2019. Following an unsuccessful mediation conducted on 23 March 2020, the wife commenced property settlement proceedings on 15 May 2020. However thereafter the parties continued to engage in settlement negotiations which, on 28 May 2020, resulted in them signing proposed property settlement consent orders, entering into a Binding Financial Agreement (“BFA”) pursuant to s 90C of the Family Law Act 1975 (Cth) (“the Act”) and the husband signing a release under s 95 of the Succession Act 2006 (NSW). The consent orders provided for the wife to pay the sum of $700,000 to the husband, and for a superannuation split of $205,000 from the wife to the husband, but otherwise each party would retain the assets held in their name or possession. The BFA essentially provided for mutual releases in respect of claims for spousal maintenance. On 29 May 2020, Loughnan J made orders (“the 2020 orders”) in accordance with the proposed consent orders signed by the parties, after hearing submissions from each party’s counsel and the tender of a joint balance sheet. On 27 November 2020, the husband filed an Initiating Application (subsequently amended on 11 March 2021) seeking to set aside or vary the 2020 orders pursuant to s 79A of the Act and to set aside the BFA pursuant to s 90K(1) of the Act on a number of different bases. On 22 January 2021, the wife filed an application seeking to summarily dismiss the husband’s Initiating Application, which was heard on 23 June 2021. On 27 August 2021, the primary judge dismissed the wife’s application for summary dismissal for reasons then delivered.THE REASONS FOR JUDGMENT At [61]–[73] the primary judge discussed the balance sheet listing the parties’ assets and liabilities, including designer clothing owned by the wife, which had been before Loughnan J and, in particular, the difference in the values which each party contended should be attributed to that clothing; the husband contended a value of $1,162,000 whereas the wife contended a value of nil. At [65]–[67] her Honour noted the parties’ respective explanations for their contended values of the designer clothing as contained at note 2 to the balance sheet. The primary judge said as follows in relation to the husband’s claim (which ultimately failed) that he relied upon the wife’s nil value when entering into the consent orders:91.It is clear from these paragraphs of the husband’s affidavit that he had come to his own assessment of the value and quantity of the wife’s international and designer clothing, including J Company clothing, in her possession before entering into the consent orders given this is the basis of how he reached his value for those items in her possession. It is clear from the husband’s own material, the balance sheet and the husband’s notes to the balance sheet that he was aware of the extent of the wife’s clothing and had formed a view as to its value and quantity. 92.The husband now says to the Court that he accepted the wife’s value of the items in her possession at that time and entered into the consent orders on this basis.93.However this case is inconsistent with the evidence which is that he did not accept her values when entering into the consent orders. The husband put forward his own values and then entered into the consent orders despite the significant difference in those values. 94.Accepting his case on this issue at its highest, the evidence is that:(1)He accepted the wife’s values given her expertise in the industry;(2)This was a decision he took in light of what he knew at the time which was that he disputed the value of her items and the quantity of items she had disclosed;(3)That he tendered a document to the Court with the dispute as to values clearly shown; and(4)He entered into the orders notwithstanding these disputes. 95.The husband had equal input with the wife into the creation of the balance sheet and each were legally represented before his Honour and at the mediation. There is no evidence of any valuations by independent sources of these contested items and the husband was at liberty to obtain his own independent valuations. His evidence that he accepted the wife’s values when entering into the consent orders given her expertise in the industry is inherently unbelievable and unreliable given the evidence he relied upon when the orders were made in Court. 96.The husband had an opportunity to question all the items the wife put on the balance sheet and the value she ascribed thereto and if he disagreed with the figures or quantity disclosed by the wife, as he clearly did from a reading of the joint balance sheet, he had his remedies including withdrawing his consent to the making of the orders. The husband has no reasonable prospects of successfully prosecuting a case pursuant to section 79A of the Act to set the orders aside on the basis that he relied upon the wife’s values when entering into the consent orders.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

On 27 August 2021, the primary judge dismissed the wife’s application for summary dismissal for reasons then delivered.THE REASONS FOR JUDGMENT At [61]–[73] the primary judge discussed the balance sheet listing the parties’ assets and liabilities, including designer clothing owned by the wife, which had been before Loughnan J and, in particular, the difference in the values which each party contended should be attributed to that clothing; the husband contended a value of $1,162,000 whereas the wife contended a value of nil. At [65]–[67] her Honour noted the parties’ respective explanations for their contended values of the designer clothing as contained at note 2 to the balance sheet. The primary judge said as follows in relation to the husband’s claim (which ultimately failed) that he relied upon the wife’s nil value when entering into the consent orders:91.It is clear from these paragraphs of the husband’s affidavit that he had come to his own assessment of the value and quantity of the wife’s international and designer clothing, including J Company clothing, in her possession before entering into the consent orders given this is the basis of how he reached his value for those items in her possession. It is clear from the husband’s own material, the balance sheet and the husband’s notes to the balance sheet that he was aware of the extent of the wife’s clothing and had formed a view as to its value and quantity. 92.The husband now says to the Court that he accepted the wife’s value of the items in her possession at that time and entered into the consent orders on this basis.93.However this case is inconsistent with the evidence which is that he did not accept her values when entering into the consent orders. The husband put forward his own values and then entered into the consent orders despite the significant difference in those values. 94.Accepting his case on this issue at its highest, the evidence is that:(1)He accepted the wife’s values given her expertise in the industry;(2)This was a decision he took in light of what he knew at the time which was that he disputed the value of her items and the quantity of items she had disclosed;(3)That he tendered a document to the Court with the dispute as to values clearly shown; and(4)He entered into the orders notwithstanding these disputes. 95.The husband had equal input with the wife into the creation of the balance sheet and each were legally represented before his Honour and at the mediation. There is no evidence of any valuations by independent sources of these contested items and the husband was at liberty to obtain his own independent valuations. His evidence that he accepted the wife’s values when entering into the consent orders given her expertise in the industry is inherently unbelievable and unreliable given the evidence he relied upon when the orders were made in Court. 96.The husband had an opportunity to question all the items the wife put on the balance sheet and the value she ascribed thereto and if he disagreed with the figures or quantity disclosed by the wife, as he clearly did from a reading of the joint balance sheet, he had his remedies including withdrawing his consent to the making of the orders. The husband has no reasonable prospects of successfully prosecuting a case pursuant to section 79A of the Act to set the orders aside on the basis that he relied upon the wife’s values when entering into the consent orders.

Ratio Decidendi

Legal Principle Established

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