Harradine and Hermsely-Lane

[2018] FamCA 260

FAMILY COURT OF AUSTRALIA

HARRADINE & HERMSELY-LANE [2018] FamCA 260

FAMILY LAW – SETTING ASIDE – whether miscarriage of justice - whether “any other circumstance” – whether implied consent to variation or setting aside

Family Law Act 1975 (Cth) ss 75(2), 79, 79A(1)(a), 79A(1A)

Badawi & Badawi (2017) FLC 93-784
In the Marriage of Fagan and Fagan (1985) FLC 91-607
In the Marriage of Gilbert & Estate of Gilbert (decd) (1990) FLC 92-125
In the Marriage of N W and S F McCabe (1995) FLC 92-634
SH v DH (No 1) (2003) 202 ALR 660
Simpson v Hamlin (1984) FLC 91-576

Waterman & Waterman [2017] FamCAFC 23

APPLICANT: Mr Harradine

RESPONDENT: Ms Hermsely-Lane

FILE NUMBER: SYC 6418 of 2015

DATE DELIVERED: 27 April 2018

PLACE DELIVERED: Canberra

PLACE HEARD: Sydney

JUDGMENT OF: Gill J

HEARING DATE: 9-10 April 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Jackson

SOLICITOR FOR THE APPLICANT: Access Law Group

COUNSEL FOR THE RESPONDENT: Mr Ford

SOLICITOR FOR THE RESPONDENT: Kells The Lawyers

Orders

1. The Applicant’s Initiating Application filed 4 May 2017 is dismissed.

2. If either party wishes to seek costs they are to file written submissions and further evidence to be relied upon directed to the issue of whether a costs order ought to be made and if so, in what terms, within a period of a further 14 days from the date of these Orders.

3. If either party resists any such order, they are to file written submissions and further evidence to be relied upon directed to the issue of whether a costs order ought to be made and if so, in what terms, within a period of a further 14 days.

4. Unless either party identifies at the commencement of their written submissions that an oral hearing is sought in relation to costs, the matter will be determined without oral hearing.

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

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

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 r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: SYC 6418 of 2015

Mr Harradine

Applicant

And

Ms Hermsely-Lane

Respondent

REASONS FOR JUDGMENT

Background

1. The husband in these proceedings is Mr Harradine, the Respondent wife is Ms Hermsely-Lane. The husband has had a case guardian appointed, Ms B, who is the husband’s niece.

2. The parties met in 1993, and lived together for a period before being married in 1995.

3. In 2004 the husband was incarcerated following conviction in the New South Wales District Court. The parties are in dispute about whether they separated at about this time.  The husband was released on 21 January 2006. Property division orders were made the same day, ostensibly by consent, based on terms executed while the husband was in gaol.  Upon his release the husband returned to living with the Respondent. The parties are in dispute as to whether this involved a resumption of a marital relationship.

4. The parties ceased sharing the home when the husband was admitted to hospital on 4 June 2014, and the husband filed for divorce on 29 September 2015, finalising on 2 February 2016.

5. The husband is seeking to set aside the property division orders made by the Local Court at Wollongong on 21 January 2006, pursuant to s 79A(1)(a) of the Family Law Act 1975 (Cth).

6. Whilst the husband conceded that his signature is present on the documents, he states that he does not recall ever signing the documents in question, and does not recall the witness, Mr C, having attended on him for the purpose of witnessing the signatures. His capacity is questioned, as is whether he in truth consented to the orders.

7. In the alternative, the Applicant is seeking that the orders be set aside on the basis that the parties have consented to the variation or setting aside of the Orders under s 79A(1A), with consent being implied from the parties resumption of cohabitation after the Applicant’s release from gaol, and the circumstances of that cohabitation.

Section 79A Principles

1. In this matter the Applicant seeks relief under ss 79A(1)(a) and 79A(1A) of the Family Law Act 1975. These sections provide that:

   Setting aside of orders altering property interests

   (1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:

   (a)  there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or

   …

2. As stated in Badawi & Badawi (2017) FLC 93-784:

   It is well established that whilst the words “any other circumstance” are not limited by the sub-clauses that precede them, they are not of unlimited width and must relate to a miscarriage of justice. “Justice” in this context means justice according to the law and the subsection is particularly directed to the integrity of the judicial process.

3. In discussing what is meant by “the integrity of the judicial process”, the Full Court contrasted s 79A applications with appeals, quoting from In the Marriage of Fagan and Fagan (1985) FLC 91-607 at 79,931:

   The fields covered by sec. 79A(1)(a) and by sec. 94 are different from each other. Section 94 provides for an appeal to the Full Court which will interfere with a judgment of a single judge only where it is established that that judge fell into error. As a general rule the error must be established on the record.

   Where no error appears on the part of a trial judge but there has been a miscarriage of justice by reason of some element beyond what appeared on the record or in the evidence so that the trial judge cannot have been fully aware of all the relevant circumstances, then a single judge of the Family Court may in his discretion set aside an order made at the trial. (Emphasis added).

4. Given that s 79A is a remedial section designed to overcome miscarriages of justice, it should be construed liberally to give effect to its intended purpose (see In the Marriage of Gilbert v Estate of Gilbert (decd) (1990) FLC 92-125). That being said, the importance of bringing an end to litigation is an important and significant consideration (Simpson v Hamlin (1984) FLC 91-576).

5. In SH v DH (No 1) (2003) 202 ALR 660, Ryan FM (as her Honour then was) set out an effective four-stage structure for approaching s 79A applications, being:

   1.    Whether a ground, such as duress, under the section is established;

   2.    whether the existence of that ground amounted to a miscarriage of justice;

   3.    whether the court in its discretion should vary or set aside the order; and

   4. whether the court should make another order under s 79.

6. The argument put by the Applicant for the husband centred around a lack of true consent to the orders, founded upon a lack of capacity, inadequate legal advice and a lack of understanding of the orders.  These, in turn, are connected to the circumstances of his signing of the applications and terms for consent orders regarding the division of property. 

7. The husband's signature appears on applications for consent orders, amended consent orders, terms and an application for the transfer of the D Town property to the wife.  The husband does not dispute that the signatures are his signatures (by concession through his counsel). He, however, says that he does not remember either signing the documents (which must have occurred while he was in gaol) or having his solicitor, Mr C, attend on him for the purpose of signing the documents.  He further says that he was not aware of the effect of the orders, that is, that he was no longer the owner of the D Town property, until 2014.

8. Allied to the lack of memory, the husband points to the mental health issues that he was having around the time of the signing of the documents as undermining the notion that he gave real consent to the orders being made.

9. Although the fact of mental health problems was not the subject of dispute, the severity was.  In support of the idea that the husband lacked capacity the Applicant called in aid her, and her mother’s, observations of the husband, along with a psychiatric assessment conducted while the husband was in custody.

10. Dr E, a forensic psychiatrist, provided an assessment of the husband for the purposes of the Court of Criminal Appeal severity proceedings.[1]  That report was prepared on 8 April 2005, approximately three months prior to when Mr C says that he received instructions from the husband to effect the settlement and four months prior to the execution of the first set of terms.  His assessment at that time moved from an earlier assessment of Major Depression and high risk of suicide, to an improved state, although still depressed, with a lessening of the risk of suicide.  The report does not directly address issues related to capacity such as may be relevant to the execution of consent terms, nor does it contain material from which it should be inferred that the mental health issues faced by the husband at that time may have rendered him as lacking in capacity to understand and consent to what he executed.

    [1] At Annexure G of the Wife’s affidavit dated 26.5.17.

11. The observations made by the Applicant described the husband as “less than coherent” when they visited him in custody.  The Applicant’s mother, Ms F, described the husband as “very much withdrawn,” and often non-responsive when questioned about how he was and about issues that he may be experiencing, while in gaol.  Neither the Applicant nor Ms F have a relevant expertise to assess the husband’s capacity.  Although their observations may raise questions about his mental health at the time they do not take the matter any further than that.

12. Further, in support of the notion of a lack of capacity, the case guardian points to the husband not telling her or Ms F of the settlement, nor of the ending of the relationship between he and the wife.  Presumably this was to suggest that either the husband was unaware of having entered the terms, or that the state of affairs, that the marriage was over, did not exist.  However, the not telling is also consistent both with the husband simply not wishing to tell his niece and sister about those matters at the time.  In a context where the husband denied memory, such matters were unable to be tested.

13. Against the notion that the husband did not give true consent, the wife relies upon evidence from the husband’s then solicitor, Mr C.  His signature appears as the witnessing signature for each of the applications for consent orders.  He is a solicitor admitted to practice in New South Wales, who acted for the husband in relation to his criminal proceedings, family law proceedings and other proceedings concerning the Australian Taxation Office (the ATO).  He says that he personally attended upon the husband and witnessed each of the signatures.  While he does not have a precise recollection of the details of his attendances he is able to recall attending the jail on 1 August 2005 and 27 December 2005, at which time he witnessed the signatures.  He says that he did so because he had received instructions from the husband to prepare the application for consent orders on the basis that the husband said to him “I do not know what could happen to me.  I want [Ms Hermsely-Lane] to have the farm and I will take [G Town]."  He further sets out the details of his second attendance at gaol in order to execute the application for an amendment of the consent terms.[2]   The terms of that recalled conversation indicate that the husband was aware that the terms involved a transfer of title of property. 

    [2] At [29] of Mr C’s affidavit dated 16.6.2017.

14. The Applicant challenged the evidence of Mr C on a number of bases.  Firstly, there are no file notes evidencing the instructions being taken, no billing for the attendances and, in response to a subpoena, the gaol authorities asserted that Mr C had not attended on the relevant dates (see Exhibit H1).  Those records were produced in the context of Regulations requiring the collection of such records.

15. In response to the issue regarding the file notes, Mr C was unable to say whether a file had been opened for the family law matter, but if it had, it may not have been retained.  In any event, the instructions taken by telephone were simple enough to be readily converted into the terms that were executed.  As far as a written record goes, Mr C said that he regarded the terms as constituting the written record of the instruction that he received.  While this did not represent good practice, it was a reasonable and believable explanation for the lack of other file notes in the context of the other matters in relation to which Mr C was acting for the husband.

16. In respect of the failure to bill the husband, Mr C noted that he engaged in a practice of global billing, that he had otherwise been well remunerated for the proceedings that he had been conducting on behalf of the husband, and that he had developed a friendship with the husband.  This adequately explained the lack of specific billing.

17. Regarding the records from gaol, Mr C deposed that he attended both.  Although business records were produced to assert that no visit took place, in the absence of evidence as to the manner of keeping and retention of those records, and hence an ability to assess the reliability of those records, weight should not be placed upon them.

18. Rather, I accept the account given by Mr C of his dealings with, and instructions taken from, the husband regarding the property settlement and transfer.

19. The fact that the husband does not recall singing the orders may be a matter that goes toward the question of consent, but a lack of recollection does not equate to a lack of consent. The fact of the execution of the documents speaks strongly of consent.

20. From Mr C’s account, however, further criticism was made, directed to the scope of the legal advice that was given.  In a context where the husband had brought unencumbered into the relationship the real property, while the wife entered into the relationship as a bankrupt, it was asserted that the approximately 70-30 split in her favour was outside the bounds of a just and equitable disposition. 

21. Mr C was cross-examined as to whether he had broken down, for the husband, an assessment of, and advice regarding, the s79 and s75(2) factors. He had not. The extent of the advice given was that the husband’s position as to the distribution that he sought was “generous” and that it was not something that he was required to do. Leaving aside, for the moment, the question of the adequacy of this as advice as to rights, this advice was simple and directed to the husband understanding the scope of what he was agreeing to. The settlement itself to distribute the property was not complex. The notion that the husband was giving over more than was necessary was a simple communication of a basic fact to the husband. It does not, if it relevantly constituted a lack of advice, undermine the notion that the husband understood the nature of the transaction that he was engaging in and further, that it was potentially not in his interests.

22. It should not be accepted that the husband gave no true consent to the orders being made, or that he failed to understand the orders or their consequences.

23. Late in the proceedings it was suggested that the level of legal advice offered by Mr C was such that it constituted a basis to set the orders aside as a miscarriage of justice.  However, the essential terms of the advice, that the proposed settlement was generous, and that the husband did not need to do it, communicated that, at least potentially, the orders sought by the husband went beyond what he would be obliged by a court to transfer.  While the advice may not have referred to percentages and provisions of the Act, it communicated what was important for the husband to know. It could not be said to have misled the husband by suggesting to him that the settlement was advantageous to him or somehow in his interests.

24. Turning then to the first of the four stages, as supported by the structure of the provision and as identified by Ryan FM (as her Honour then was) in SH v DH (No 1) (2003) 202 ALR 660, the Applicant has failed to establish the existence of a relevant ground, in this case that there is “any other circumstance.” The failure to establish a relevant circumstance means that it is not necessary to consider the balance of the stages identified in that case.

Section 79A(1A)

1. Section 79A(1A) provides as follows:

   (1A) A court may, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, and with the consent of all the parties to the proceedings in which the order was made, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.

2. The key element to setting aside under this provision is that it be by consent, and it is settled law that the consent required under s 79A(1A) need not be communicated explicitly but may be inferred from the conduct of the parties. In the Marriage of N W and S F McCabe (1995) FLC 92-634 concerned a married couple who separated, entered into property consent orders and shortly thereafter reconciled. There, upon reconciliation, neither party took steps to implement the terms of those consent orders. With respect to whether the trial judge rightly held that the parties’ conduct evinced an agreement to set aside the previous consent orders, the court commented:

   [i]n cases of this nature conclusions about intention which should be attributed to the parties will depend upon the particular circumstances of each case. That material would not necessarily be confined to the initial decision to reconcile … Their intention may crystallise into a more precise form as time progresses and as the parties’ reconciliation continues and they conduct their lives together, including their financial affairs, so that it becomes inconsistent with any other conclusion.

3. In Waterman & Waterman [2017] FamCAFC 23 a couple whose relationship spanned a period of nearly thirty years separated for 18 months. After this initial separation, the parties entered into consent orders relating to property. Subsequently, the parties resumed cohabitation and reconciled. When considering the nature of consent, Murphy J stated that:

   [t]he relevant inquiry … is whether the post-reconciliation circumstances over the time frame of the reconciliation establish an inference that the parties intend the orders to not bring an end to their financial relationships, and, consequently, an end to a later determination of later contributions made within that relationship.

4. The second limb of the husband's application was based on the notion that the parties had resumed their relationship following his release from prison (if in fact the relationship ceased during the period of imprisonment) and acted in such a manner as to be inconsistent with reliance upon the consent terms. 

5. The parties had differing accounts as to the status of their relationship both prior to, and following, the release from prison.  The Respondent asserted that the parties separated for a period commencing in 2000, at which stage she moved into the house at G Town.  She accepted that sometime after that, and prior to the husband's incarceration, they had reconciled the relationship.  She says that the relationship again ended at about the time that the husband was jailed by Judge Latham on 22 November 2004.  He remained in jail until 21 January 2006.  During this time the Respondent frequently visited him.  She visited him at the correctional complex, then visited in H Town while the husband was located there for approximately one month.  This involved four hour trips in each direction and an overnight stay each weekend so that visits could be made on sequential days.  She then frequently visited him while he was incarcerated at gaol, visits involving one and a half hours travel in each direction.  These visits occurred at least weekly.  While this undermined the idea that the parties were separated during the incarceration, the entry into terms for the division of property was supportive of the Respondent’s position that they had ended the marital relationship.  Although there was some suggestion that the transfer of the D Town property may have been for the ulterior purpose of securing that property from the Australian Taxation Office in the context of a dispute between the husband and that office, no clear evidence was brought to establish this to be the case.

1. In support of her contention that the parties were separated from this point, the Respondent also relies upon the husband's application for divorce, which records their date of separation as June 2004 (see exhibit W4).  This was a document executed by the husband on 29 September 2015.  At question 14 he sets out the date of separation as June 2004 but subsequently at question 16A, in response to the question as to whether or not he and the Respondent had lived in the same home since separation, but not as husband and wife, answered no.  It should be noted that it was not the Respondent's position that they had separated in June 2004.  It was otherwise the husband's position that they had separated in June 2014.  The date on the application for divorce is consistent with typographical error.  It should be noted that if it was meant to purport the date of separation as being June 2004 then the response to whether or not they had lived under the same roof since separation was wrong on both accounts.  If it was in fact a typographical error then it matched the date that the husband asserts they had separated and also matched both of their accounts in terms of living together until June 2014.

2. The Respondent also relied upon an application to Centrelink (produced during the proceedings by the Applicant) relating to the parties being separated under the one roof, signed by the husband on 10 November 2008.  Although initially denying it, the Respondent accepted that she filled out the document for the husband.  Her involvement in filling out the form is shown on the form, and was explained to be because the husband was suffering from depression and dementia.  The date of separation recorded on that form is November 2004, equating to about the time of the husband’s incarceration.  The document records that the Respondent cares for the husband, but that they do not have the emotional attachment of a married couple.  It sets out that the husband intends to continue to remain at the home indefinitely.  It also records that the property settlement proceedings had occurred in 2006 and that the D Town property had been settled at that time.  The form records the parties as sharing living expenses and meals, but as not using the same bedroom or bathroom.  It also records that “some” friends or family do not know of the situation because they had not been told.

3. The husband relies on the fact that following his release from prison he returned to live at the D Town property.  This was shortly after the signing of the second set of consent terms, and shortly before the making of the orders by the Local Court.   The Respondent says that this was in order to provide the husband with a safe haven.  He could not go and live at the other property that he owned at G Town as that was located close to child-related facilities.  Conditions of his parole meant that he was unable to approach preschools or schools and so the property at G Town was an inappropriate place for him to stay following his release.

4. The Respondent asserts that they had separate bedrooms from this time.  The husband denies this and says that they continued to share the same bedroom.  The case guardian says that she occasionally visited the property at D Town.  This was a contested matter, although it appears likely that she did make rare visits, for example, when her children were having driving lessons.  She alleges that her observation was that the husband and Respondent shared the same bedroom, although it was not clear how she had formed this conclusion, as she did not set out her basis for believing that this was the case.  She also says that she observed no change in their relationship as opposed to before the husband was incarcerated.  The Applicant and the Respondent gave conflicting evidence as to whether they had discussions about the end of the relationship and the property settlement.

5. The Respondent’s son, Mr J, gave evidence, including that he frequently visited his mother at the D Town property.  He said that he was aware of the transfer of the D Town property, and witnessed the husband’s signature for the transfer.  He further described the Respondent’s relationship with the husband as “carer” although the basis was not set out.  He was not required for cross-examination.

6. When asked about the circumstances of the relationship following his release from prison, the husband accepted that he and the Respondent had no bank accounts in common and did not merge their finances.  He said that it was not true to suggest that they no longer shared a bedroom at that time.  He was asked about whether they had a sexual relationship after his release from prison and answered, firstly, that they shared a bedroom and, when pressed, that he did not “know” about sex.

7. The onus lies upon the husband to establish that the conduct between the parties after the entry into the consent orders is such as to establish the consent that is required under s79A(1A). A factor which can most loudly speak to such a consent is the resumption of the marital relationship, although the mere resumption of such a relationship does not necessarily result in such a conclusion. Absent such a resumption of relationship it is a difficult task to establish consent.

8. I am not satisfied that the relationship was in fact resumed by the parties, although I accept that there is some doubt about the matter.  Absent the proof of that resumption, there are insufficient circumstances in this case by which it may be established that the Respondent had consented to the setting aside of the orders and the application fails.

I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 27 April 2018.

Associate: 

Date:  27 April 2018