Harford & Spalding

Case [2023] FedCFamC1F 5

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Harford & Spalding [2023] FedCFamC1F 5

File number(s): SYC 3026 of 2020
Judgment of: ALTOBELLI J
Date of judgment: 17 January 2023
Catchwords: FAMILY LAW – PROPERTY – Where the husband seeks to set aside consent orders pursuant to s 79A(1)(a) and (b) of the Family Law Act 1975 (Cth) – Husband contends nondisclosure of existence and value of designer items renders the consent orders unjust and inequitable – Husband asserts a miscarriage of justice – Purported Notice to Produce issued by the husband’s solicitors a week prior to the hearing date – Notice to Produce was an abuse of process – Husband entered into consent orders despite the parties’ disagreement regarding valuation of the designer items – A party cannot resurrect an unsuccessful argument without leading any new evidence – No reasonable prospects of success – No miscarriage of justice – Husband’s application dismissed.
Legislation:

Family Law Act 1975 (Cth) ss 45A, 79, 79A

Federal Court of Australia Act s 31A

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 46

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.04, 6.42

Cases cited:

Arthurman v Arthurman (2019) FLC 93-926; [2019] FamCAFC 214

Barker & Barker (2007) 36 Fam LR 650; [2007] FamCA 13

Colburn & Cleese [2022] FedCFamC1A 147

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 3) [2012] FCA 61

Eames v Eames (2018) FLC 93-866; [2018] FamCAFC 204

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69

Gong & Zao (2021) 363 FLR 1; [2021] FamCAFC 110

Harford & Spalding [2021] FamCA 636

Karlsson v Karlsson [2020] FamCAFC 207

Klearchos & Klearchos [2021] FamCA 375

Lane & Lane (2016) FLC 93-699; [2016] FamCAFC 53

Massalski & Riley (2022) 65 Fam LR 73; [2022] FedCFamC1F 36

Ritter & Ritter (2020) FLC 93-957; [2020] FamCAFC 86

Spencer v The Commonwealth (2010) 241 CLR 118; [2010] HCA 28

Williams v Spautz (1992) 174 CLR 509; [1992] HCA 34

Division: Division 1 First Instance
Number of paragraphs: 47
Date of hearing: 21 September 2022
Place: Sydney
Counsel for the Applicant: Mr Beaumont SC with Ms Carter
Solicitor for the Applicant: Newnhams Solicitors
Counsel for the Respondent: Mr Friedlander
Solicitor for the Respondent: Deutsch Partners

ORDERS

SYC 3026 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS HARFORD

Applicant
AND:

MR SPALDING

Respondent

order made by:

ALTOBELLI J

DATE OF ORDER:

17 JANUARY 2023

THE COURT ORDERS THAT:

1.The Respondent husband’s Amended Initiating Application filed 11 March 2021 be dismissed.

THE COURT NOTES THAT:

A.In the event that a party notifies chambers of an intention to seek costs arising from this application, directions will be made for such a costs application to proceed by way of written submissions.

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

Note: This copy…

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AGLC
Harford & Spalding [2023] FedCFamC1F 5
Case
[2023] FedCFamC1F 5
Decision Date

CaseChat Overview and Summary

The Federal Circuit and Family Court of Australia dealt with the case of Harford & Spalding, where Mr Spalding sought to set aside consent orders that he had entered into with Ms Harford. The husband argued that the wife had failed to disclose the existence and value of designer items in her possession, rendering the consent orders unjust and inequitable. The wife maintained that she had disclosed the designer items in the joint balance sheet tendered to the Court and that the husband had himself attributed a value to those items. The central legal issue was whether the husband's application to set aside the consent orders should succeed under s 79A(1)(a) and (b) of the Family Law Act 1975 (Cth).

The Court found that the husband had not presented a reasonable prospect of success in his application to set aside the consent orders. The Court noted that both parties had sought the consent orders despite their disagreement on the valuation of the designer items, and that the husband had entered into the consent orders knowingly and voluntarily. The Court also found that the Notice to Produce issued by the husband's solicitors was an abuse of process and that the husband had failed to resurrect an unsuccessful argument without leading any new evidence. The Court concluded that there was no miscarriage of justice and dismissed the husband's application.

The Court further held that if the s 79A claim failed, the claim to set aside the Binding Financial Agreement also failed. The Court noted that the wife's appeal against the earlier dismissal of her application for summary dismissal had been allowed and the matter had been remitted for rehearing. The Court observed that the Full Court's observations were apposite and that the husband had failed to have regard to the transcript and submissions made by each party's counsel before Loughnan J in seeking the 2020 orders.

The Court ordered that the husband's Amended Initiating Application filed on 11 March 2021 be dismissed. The Court noted that in the event that a party notifies chambers of an intention to seek costs arising from this application, directions will be made for such a costs application to proceed by way of written submissions. The form of the order is subject to the entry in the Court's records, and this copy of the Court's Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors or to record a variation to the order.

Orders

Orders of the court

SYC 3026 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS HARFORD

Applicant

AND:

MR SPALDING

Respondent

order made by:

ALTOBELLI J

DATE OF ORDER:

17 JANUARY 2023

THE COURT ORDERS THAT:

1. The Respondent husband’s Amended Initiating Application filed 11 March 2021 be dismissed.

THE COURT NOTES THAT:

A. In the event that a party notifies chambers of an intention to seek costs arising from this application, directions will be made for such a costs application to proceed by way of written submissions.

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

These reasons for judgment explain why the Court has ordered that the Amended Initiating Application, filed 11 March 2021 by the respondent Mr Spalding (“the husband”), be dismissed.BACKGROUND The husband and Ms Harford (“the wife”), the applicant in this matter, commenced cohabitation in 1986, married in 1990 and separated in February 2017. In 2020, the parties settled all financial matters between them by entering into a Binding Financial Agreement dealing with spousal maintenance issues on 28 May 2020, and entering into consent orders that were made by Loughnan J on 29 May 2020. On 27 November 2020, the husband filed an Initiating Application seeking, in effect, that both the consent orders and the Binding Financial Agreement be set aside. The wife’s Response filed on 23 December 2020 sought an order that the Financial Agreement be declared binding and that the husband’s application be otherwise dismissed. On 21 January 2021, the wife filed an Application in a Case seeking summary dismissal of the husband’s application. In response to this, on 11 March 2021, the husband filed an Amended Initiating Application particularising the orders sought to clarify that he was relying on s 79A(1)(a) and (b) of the Family Law Act 1975 (Cth) (“the Act”). On 23 June 2021, Henderson J heard the wife’s application for summary dismissal and, subsequently on 27 August 2021, dismissed that application. The wife’s appeal against that dismissal was heard on 2 May 2022 and, on 28 May 2022, the Full Court allowed the appeal and remitted the matter for rehearing. The matter came before me on 21 September 2022. At the heart of the dispute between the parties is the husband’s contention that the wife failed to disclose valuable designer items in her possession and thus, in effect, the consent orders made were not just and equitable and there was a miscarriage of justice. In essence, the wife’s case is that she not only disclosed the designer items to which the husband refers, but included them in the joint balance sheet that was tendered to Loughnan J. Moreover, the wife contends that in the said balance sheet, the husband had attributed a value to those designer items of $1,162,000. Thus, there was no miscarriage of justice and the husband had no reasonable prospect of success under s 79A of the Act. If the s 79A claim fails, the claim to set aside the Binding Financial Agreement also fails.PRELIMINARY ISSUE: NOTICE TO PRODUCE A preliminary issue arises in this case relating to a Notice to Produce issued by the solicitors for the husband to the solicitors for the wife on 13 September 2022, the week before this matter was heard on 21 September 2022. The wife’s solicitors opposed production on a number of grounds including that it was, in substance, a belated attempt to seek discovery and thus an abuse of process. Issues were also raised about relevance and the Notice to Produce amounting to a fishing expedition. The documents sought in the Notice to Produce were as follows:All statements and/or records, digital or otherwise, relating to accounts and/or deposits and/or funds held with any bank and/or any other financial institution, outside of Australia, by the applicant wife in her sole name and/or jointly with any other entity, and/or by any other entity in which she has a beneficial interest as a shareholder or otherwise as a trustee or beneficiary of a trust for the period 1 January 2019 to 30 June 2020.All lists and/or schedules and/or records, digital or otherwise, created by or on behalf the applicant wife in the proceedings herein from time to time of clothes, bags, coats, shoes, fashion accessories in her possession and/or control, or any one or more of those items, for the period 1 January 2015 to 30 June 2020.(As per the original)

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The transcript of the submissions before his Honour was before this Court, as well as the Full Court, whose observations are apposite. At [22]–[24] their Honours state:In thereafter failing to have regard to the transcript and, particularly, the submissions made by each party’s counsel before Loughnan J in seeking the 2020 orders, her Honour further erred. That is because the transcript of 29 May 2020 clearly demonstrates that both counsel made the submission that, notwithstanding the unresolved issue of the value of the wife’s designer clothing, each party nonetheless sought that the consent orders be made. Thus at the hearing before Loughnan J, then senior counsel for the wife said: [COUNSEL FOR THE WIFE]:… We run into some difficulties when we come to the question of valuation of my client’s personal property and there’s a substantial difference as between the parties. The short reason for that being that my client is not permitted to sell items which she has received, subject to the policy of her employer, whilst employed by her employer which we say affects their market value. Both parties have come to a commercial decision to resolve that. The husband will retain some of my client’s personal property but your Honour will have seen the restraint on him using her name to sell that… (Transcript 29 May 2020, p.2 lines 29–38) (Emphasis added) Likewise, then counsel for the husband said: [COUNSEL FOR THE HUSBAND]: … It is my client’s decision, after having the benefit of legal advice, to proceed with this settlement. Your Honour may take comfort in knowing that the parties participated in a mediation … on 23 March. It was a long mediation. They were both represented. I was in attendance with my client and the wife was represented by her lawyer. That mediation went for some 10 hours and whilst this resolution doesn’t precisely arise from the matters that were resolved at the mediation, it has been an ongoing discussion between the parties, directly for the most part, in recent weeks to resolve the matter. Your Honour quite rightly notes the very different contentions by each party in relation to the balance sheet. We ultimately could not agree on the appointment of a valuer and a valuation process for items that my client would say are very valuable. The wife has a different view about the value that should be attributed, based on the limitation she says her employer places on what she can do with these items and how she can use them and the fact that she contends she can’t sell them. HIS HONOUR: Yes. [COUNSEL FOR THE HUSBAND]: But having regard to all of the circumstances, my client instructs me very clearly – and I met with him in person yesterday – that he wants to go ahead with this settlement and is completely aware of the process that the legislation provides for for [sic] property settlement. He is aware of his rights in relation to spousal maintenance… (Transcript 29 May 2020, p.3 line 34 to p.4 line 10) (Emphasis added)

Ratio Decidendi

Legal Principle Established

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