HAYKAL & KRAWIEC
[2015] FamCA 74
•17 February 2015
FAMILY COURT OF AUSTRALIA
| HAYKAL & KRAWIEC | [2015] FamCA 74 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Review of decision of Registrar – Where the husband sought to make application for spousal maintenance out of time – Where it is found that hardship would not be caused to the husband if leave is not granted – Where the husband does not meet the conditions set out in s 44(4) of the Family Law Act 1975 (Cth) – Where the husband has not provided an acceptable explanation as to why he took so long to bring a spousal maintenance application – Where it is found that the husband’s application for spousal maintenance is weak – Where the husband continues to assert the wife has failed to provide frank disclosure in relation to her business and the husband has brought proceedings relying upon this argument numerous times – Where on consideration of the history of the proceedings, the merits of the application, the prospect of the husband’s success, the prejudice to the wife in allowing the husband to pursue the application and the desirability to finalise litigation, the application for leave, pursuant to s 44(3) to bring a spousal maintenance application, is dismissed. FAMILY LAW – COSTS – Where the wife seeks costs on an indemnity basis – Where the husband already owes substantial costs which the wife has not been able to recover – Where the wife is a litigant in person – Where the wife has not indicated what recoverable costs she has incurred –Where the wife’s application for costs is dismissed. FAMILY LAW – VEXATIOUS PROCEEDING –Where the wife seeks that the court make a vexatious proceeding order against the husband on its own initiative – Where a prima facie case is made out – Order made that the husband be given the right to be heard on this application under s 102QB(4) of the Act. |
| Family Law Act 1975 (Cth) |
| The Marriage of Neocleous (1993) FLC 92-377 Krawiec v Haykal [2013] FCCA 1957 |
| APPLICANT: | Mr Haykal |
| RESPONDENT: | Ms Krawiec |
| FILE NUMBER: | SYC | 731 | of | 2009 |
| DATE DELIVERED: | 17 February 2015 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Watts J |
| HEARING DATE: | 2 February 2015 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Litigant in person |
| SOLICITOR FOR THE RESPONDENT: | Litigant in person |
Orders
The Application in a Case filed by the husband on 24 November 2014 be dismissed.
It is noted that the effect of this order is that the husband’s application filed 30 July 2014 for leave pursuant to s 44(3) Family Law Act (Cth) (“the Act”) to bring spousal maintenance proceedings against the wife is dismissed.
The matter is to be listed on 30 March 2015 at 10.30am before Watts J for the husband to have an opportunity to be heard as to why the following order should not be made pursuant to s 102QB(2)(b) of the Act:
The husband be prohibited from instituting proceedings of a type referred to in paragraph (c) (maintenance of one of the parties) and (ca) (proceedings between the parties with respect to property of the parties) and other proceedings in relation to completed proceedings of a kind referred to in paragraphs (c) and (ca) of the definition of “matrimonial cause” in ss 4(1) of the Act.
I note that the effect of making the order proposed in order 3 would be to require the husband to seek leave to institute any future proceedings in relation to financial matters between himself and his former wife (see s 102QE(3) of the Act).
In the event the husband opposes an order being made pursuant to s 102QB(2)(b) of the Act, the husband file and serve any evidence upon which he seeks to rely by 9 March 2015.
The wife file and serve any evidence in reply by 23 March 2015.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Haykal & Krawiec has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 731 of 2009
| Mr Haykal |
Applicant
And
| Ms Krawiec |
Respondent
REASONS FOR JUDGMENT
APPLICATIONS AND EVIDENCE RELIED UPON
By way of an Application in a Case filed 24 November 2014, the husband seeks to review an order made by a Registrar on 10 November 2014.
That order dismissed the husband’s Application in a Case filed 30 July 2014 in circumstances where the husband did not appear before the Registrar at the appointed time for the hearing of that matter.
The husband’s Application in a Case filed 30 July 2014 was in the following form (errors in original):
1. LEAVE TO APPLY OUT OF TIME FOR SPOUSE MAINTENANCE FOR THE APPLICANT HUSSBAND.
2. THE FAMILY COURT TO DETERMINE THE AMOUNT SHOULD BE PAYABLE BY THE RESPONDENT EX-WIFE IN ACCORDANCE WITH THE FINICIAL STATEMENT FILED WITH THIS APPLICATION.
3. URGENT ITREIM ORDERS NEEDED TO BE MADE AS RESULT OF HIGH LEVEL OF FINANCIAL HARDSHIP INCURRED BY THE APPLICANT AS RESULT OF LENTHY COURT PROCEEDINGS.
4. MAINTENANCE INTRIM ORDERS TO BE IN PLACE TILL THE PROPERTY APPLICATION UNDER S 79A ON FOOT AT THE FAMILY COURT IS FINALAISED.
The re-hearing of the determination of the Registrar is a hearing de novo.
The husband primarily relies upon the affidavit which he filed on 30 July 2014. I have ignored some parts of the husband’s affidavit which are scandalous and argumentative. For example, in [15] of his affidavit, the husband writes that the wife “has got blood on her hands”. Examples of other objectionable material can be found in parts of [24] to [27]. The husband also relies upon an affidavit filed 24 November 2014 and two financial statements filed 22 January 2014 and 2 February 2015 respectively.
In [3] of the husband’s affidavit filed 30 July 2014, the husband also refers to four other affidavits that have been filed by him in previous proceedings. The evidence contained in these affidavits primarily relates to the history of the marriage, the establishment of the wife’s business (including finances of the business) and matters relating to the wife’s non-disclosure. The affidavits appear to relate to applications by the husband to set aside property orders under s 79A of the Act. The husband continues to assert that he was not given the opportunity to view documents in respect of the wife’s financial position (including that of her company) prior to final property orders being made on 12 August 2010. As I discuss later, the husband’s allegations were analysed in the bankruptcy proceedings heard before Judge Raphael. Judge Raphael delivered judgment on 19 November 2013. The fourth of the affidavits (filed 21 November 2013), was filed by the husband in this court some two days after Judge Raphael delivered judgment, and reiterated allegations made in previous s 79A applications. The November 2013 affidavit makes claims against the wife’s for the concealment of company and personal income. He asserts she has underestimated her income from the business and complains of monies the wife had over the course of the marriage redrawn from the mortgage over the former matrimonial home. The husband did not specifically refer to any parts of these affidavits, but it seems the husband wished to rely upon that material to give the court evidence about the history of the litigation between the parties.
In her Response filed 4 November 2014 the wife seeks that the husband’s Application in a Case be dismissed. The wife relies upon an affidavit filed by her on 4 November 2014 together with a financial statement filed 4 November 2014. In [62] of her affidavit, the wife also seeks that the court, upon its own initiative, make a vexatious proceedings order against the husband.
BACKGROUND
The husband is an undischarged bankrupt. The husband’s trustee in bankruptcy has not applied to be joined to be a party to these proceedings (see annexure to the wife’s affidavit at page 69).
The husband was born in 1962 and is currently 52 years of age. The wife was born in 1964 and is currently 50 years of age.
The parties commenced to live together in December 1994 and were married in 1995. The parties separated in August 2008. A divorce order was made on 22 July 2010 and took effect on 23 August 2010.
There are two children of the marriage who are currently aged 18 and 12 years old.
There has been litigation between the parties, primarily instigated and maintained by the husband over a six year period in the Family Court, the Federal Circuit Court (General Division), the Federal Court, the Full Court of the Family Court and the High Court (on two occasions).
There was a four day hearing before a Federal Magistrate in February 2011 where final parenting orders were made. In October 2011 the husband commenced proceedings to discharge or vary those final parenting orders and in May 2012, Justice Murphy summarily dismissed the husband’s application and on 30 August 2012 ordered indemnity costs against the husband which were ultimately assessed by a Registrar in the sum of $71,668.05. The husband’s bankruptcy came about as a result of the wife filing an application for a sequestration order against the estate of the husband, based upon the underlying debt which arose from Justice Murphy’s costs order. A creditor’s petition was issued on 12 August 2013. The husband made a cross claim against the wife in relation to some monies that he asserts were still owing as a result of the August 2010 orders and some money which is owed to him because the wife retained furniture. The husband however has not made any payment to the wife in relation to the indemnity costs order which was confirmed by the Full Court (with special leave to the High Court refused).
As a result of what the wife says is a refusal by the youngest child to see his father at all, she commenced fresh parenting proceedings in February 2014 seeking to discharge and vary the parenting orders and those proceedings have now been set down for final hearing before Justice Johnston later this year.
The first order for property settlement between the parties was made on 17 July 2009. Under that order, the wife was to receive the former matrimonial home, retain her business, and the wife was to pay to the husband the sum of $560,000.
It seems that the wife had not made any payment to the husband before the husband filed a s 79A application in relation to the orders (the first s 79A application).
On 12 August 2010, with both parties represented by senior counsel and there having been extensive discovery of financial material, the first s 79A application was resolved when an order was made varying the amount which the wife was to pay the husband from $560,000 to $725,000. The amount of $85,000 was to be paid to the husband within 14 days with the balance of the $725,000 to be paid within four months. The husband says a payment was made to the husband by the wife of $705,000 in August 2010. The wife asserts the order is fully paid.
The second s 79A application filed by the husband in March 2011 sought to set aside the orders made on 12 August 2010. That application was withdrawn by the husband and dismissed by the court on 17 May 2012 together with all other outstanding applications in respect of financial matters. On that day the husband was represented by experienced lawyers.
The husband filed a third s 79A application on 2 July 2013. That application reiterated allegations made in the second s 79A application. So far as I understand, that application was finalised when the husband’s trustee in bankruptcy filed a Notice of Discontinuance on 4 December 2013 There apparently was some doubt about the efficacy of the Notice of Discontinuance given that the husband had challenged the sequestration order, by way of special leave application in the High Court. I was informed during these proceedings that the High Court have dismissed the husband’s application for special leave. The Notice of Discontinuance is consequently effective in determining the third s 79A application.
The financial orders made in August 2010 did not include any order for spousal maintenance, either in favour of the husband or in favour of the wife. So far as I am aware, the current application is the first application in which the husband has sought spousal maintenance against the wife.
RELEVANT STATUTORY PROVISIONS
Section 81 Family Law Act 1975 (Cth) (“the Act”) provides:
Duty of court to end financial relations
In proceedings under this Part, other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage, the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.
Section 44(3) and (4) of the Act states:
Institution of proceedings
(3) Where, whether before or after the commencement of section 21 of the Family Law Amendment Act 1983:
(a) a divorce order has taken effect; or
(b) a decree of nullity of marriage has been made;
proceedings of a kind referred to in paragraph (c), (caa), (ca) or (cb) of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 or 79A or proceedings seeking the discharge, suspension, revival or variation of an order previously made in proceedings with respect to the maintenance of a party) shall not be instituted, except by leave of the court in which the proceedings are to be instituted or with the consent of both of the parties to the marriage, after the expiration of 12 months after:
(c) in a case referred to in paragraph (a)—the date on which the divorce order took effect; or
(d) in a case referred to in paragraph (b)—the date of the making of the decree.
The court may grant such leave at any time, even if the proceedings have already been instituted.
....
(4) The court shall not grant leave under subsection (3) .... unless it is satisfied:
(a) that hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or
(b) in the case of proceedings in relation to the maintenance of a party to a marriage—that, at the end of the period within which the proceedings could have been instituted without the leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.
Section 72(1) of the Act states:
72 Right of spouse to maintenance
(1) A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
Section 74(1) of the Act states:
74 Power of court in spousal maintenance proceedings
(1) In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.
HARDSHIP
Hardship is caused by the inability of the husband to pursue a claim which in the circumstances of the case appears on the prima facie evidence to be substantive and not merely trifling (per Fogarty and Nygh JJ In the Marriage of Neocleous (1993) FLC 92-377). The husband has to establish “a substantial detriment” to himself.
The husband asserts that he is unable to adequately support himself and that the wife is reasonably able to.
The husband’s sole source of income is Newstart allowance.
The husband makes the assertion that “I have became [sic] unemployed and Unable [sic] to find any work and cant....”. The husband has provided no evidence to support this assertion.
During the marriage the husband worked as a tradesman. The husband makes the following curious statement at [5] of annexure D to his financial statement filed 2 February 2015, “My work as [a tradesman] will not earn me more than $35,000 a year taxable”.
The wife gave evidence that during the many occasions when she has had contact with the husband in court proceedings in recent times, the husband has presented as alert, energetic and in good health. He presented that way to myself. Certainly the husband has the ability to prepare and present complicated material (see comments of Judge Raphael in [2013] FCCA 1957at [21], last sentence).
The husband asserted he has health issues sufficient to disenable him from working but not sufficient to disenable him from having the capacity to care for N.
Up until 2013, the husband held a tradesman’s licence.
The husband’s current financial statement indicates that his expenses on a weekly basis are about $818 ($360 + $29 + $19 + $140).
The husband accepts that in 2010 he received at least $705,000 from the wife in accordance with the final property orders that were made on 12 August 2010. The husband says that he had debts for legal fees of “over” $200,000 and unspecified credit card debts. Paragraph 7 of his affidavit is ambiguous. It is unclear as to whether the husband had $130,000 or $230,000 remaining after the payment of legal fees, although the wife records at [56] of her affidavit that as at 7 March 2012 the husband filed a financial statement indicating that he had a bank account with Westpac which had a balance of $295,708.
At [29] of her affidavit, the wife notes that the husband is not paying any costs at the moment in relation to N. N is not seeing her father at the current time. The husband’s financial statement confirms that he is currently not paying any money in relation to N.
The husband is still an undischarged bankrupt.
The husband’s two financial statements indicate that he had $1,500 in a bank account on 22 January 2014 which had reduced to $400 about a year later (2 February 2015).
The husband does not have a liability to pay child support.
Given the uncertainty about the husband’s earning capacity, I am unable to find that hardship would be caused to the husband if leave is not granted. The husband does not meet the condition set out in s 44(4)(a) of the Act.
Section 44(4)(b) of the Act
The husband has not sought to suggest that the provisions of s 44(4)(b) of the Act are activated. There is no evidence to support a contention that the husband would have been unable to support himself without an income test of pension allowance or benefit as at 23 August 2010. In fact, prior to that date, the husband had an order made in his favour for the wife to pay $725,000 in cash to him, some of it within 14 days and the balance within four months. Even on the husband’s case, the wife substantially complied with the order to pay him those monies.
EXERCISE OF DISCRETION
In the event I am incorrect about neither s 44(4)(a) or (b) of the Act being satisfied, it is necessary to consider whether, in the exercise of discretion, leave should be granted for the husband to institute proceedings. The wife asserts that the husband’s application and the affidavit in support of the application disclosed no reasonable cause of action. The wife seeks that the application be dismissed.
The husband has not provided any acceptable explanation as to why he has taken so long after the expiration of the statutory period to seek to bring a spousal maintenance application.
The basis of the husband’s application under s 72 and s 74 of the Act if leave is granted
I have concluded above that the husband’s ability to establish that he does not have the capacity to adequately support himself is weak.
The wife’s financial statement indicates that her current weekly income is in the sum of $2,884 gross per week. In addition, there is a $274 a week compulsory superannuation contribution made by the company. Even after eliminating item 30 (which is a double counting by way of a repayment of a credit card which the wife uses to pay periodic personal expenses), the wife’s evidence is that her weekly expenses exceed her income.
The wife makes periodic payments on the mortgage on the former matrimonial home (including the borrowing used to pay in excess of $700,000 to the husband) and has the primary responsibility for the maintenance of the children. N attends a private school.
Again, on the available evidence, the husband would not be able to establish the wife is reasonably able to support the husband.
Given that I have found that the husband has failed, upon his own evidence, to establish the pre-requisites in s 72(1) of the Act, it follows the husband’s application for spousal maintenance is weak.
The husband’s assertions about the wife’s lack of financial disclosure
The husband continues to assert that the wife failed in her duty to provide frank disclosure which led to an undervaluation of her business in August 2010.
There must be a limit for the number of times that the husband can regurgitate this argument. The wife’s affidavit provides details of proceedings between the parties in the Federal Circuit Court before Judge Raphael; [2013] FCCA 1957. That court was dealing with the wife’s creditor’s petition in which she sought a sequestration order against the husband’s estate. The husband had applied for an adjournment on the basis of the then extant third s 79A application in this court. In a thoughtful and thorough judgment, Judge Raphael dealt in some detail with the assertions made by the husband that the wife had failed to give full and frank disclosure prior to the August 2010 property settlement orders being made. His Honour endorsed the submission that the husband’s third s 79A proceedings were yet another futile application by the husband which had no prospects of success. The relevant parts of Judge Raphael’s judgment are [4] to [11] (see pages 42 to 45 of the annexures to the wife’s affidavit filed 4 November 2014).
The husband in his most recent affidavit has attempted to re-agitate these arguments. However, when comparing what is at annexure A, pages 22 and 23, with what is at annexure C, pages 31 and 32 of the husband’s affidavit, it is difficult to do anything other than agree with the conclusion already reached by Judge Raphael.
Given that these issues were extensively ventilated before Judge Raphael by the current parties to these proceedings and Judge Raphael made findings about them, the husband may well be estopped from continuing to raise these contentions.
The husband is using this application as a means of having another bite of the financial cherry in circumstances where his rights in relation to making an application against the wife for spousal maintenance were concluded 12 months after the date on which the divorce order took effect (which is now in excess of three years ago).
Taking into account the history of the proceedings between the parties, the merits of this particular application, particularly having regard to the absence of any or any adequate explanation by the husband as to why it has taken so long to bring a spousal maintenance application; the prospect of the husband’s succeeding in relation to any application for maintenance against the wife; the prejudice to the wife in allowing the husband to pursue this application and the desirability of finalising litigation (see s 81 of the Act), this is not a case where leave should be granted. I dismiss the application.
COSTS
The wife at [64] of her affidavit seeks costs on an indemnity basis.
Both parties represented themselves. The husband already owes the wife substantial costs which she has not been able to recover from the husband and have led to his bankruptcy. On the face of the untested material, the wife is in a stronger financial position than the husband.
The wife has not indicated what recoverable costs she has incurred as a litigant in person.
Sometimes a costs order might provide a disincentive to a party to bring fresh applications. I do not place great weight upon that consideration in this case. The wife has asked the court of its own initiative to make a vexatious proceedings order against the husband and I have concluded, subject to the husband being given the right to be heard, that there may be merit in considering to do so.
Whilst there might be some theoretical justice in making a costs order in the wife’s favour, I find there is little utility in doing so, so I will not.
VEXATIOUS PROCEEDING
In s 102Q(1) of the Act, “vexatious proceedings” includes:
(c) proceedings instituted or pursued in a court or tribunal without reasonable ground;
Section 102QB(1)(a) provides that a vexatious proceedings order can be made if the court is satisfied:
(a) a person has frequently instituted or conducted vexatious proceedings in Australian courts or tribunals;
Section 102QB(2)(b) provides the court can make the following order:
(b) an order prohibiting the person from instituting proceedings, or proceedings of a particular type, under this Act in a court having jurisdiction under this Act;
Section 102QB(3) of the Act provides that a court may make a vexatious proceedings order on its own initiative. The wife has invited the court to do so.
Both parties have spent large sums on legal fees. The husband’s estimate is that combined, the parties have spent $1.3 million in legal fees (him paying $600,000 and the wife paying $700,000). The wife’s actual evidence is that she has expended in the order of $450,000 on legal fees between September 2011 and October 2014.
In his judgment (at [18]), Judge Raphael endorsed a submission that the husband since February 2009 had filed 27 applications, 30 affidavits and 29 subpoenas, including three s 79A applications.
Page 50 of the wife’s affidavit sets out the extensive number of documents and applications that have been filed through the Commonwealth portal in the proceedings between the parties in this court. The husband had been legally represented until March 2013.
The husband indicated from the bar table that when he was ultimately discharged from his bankruptcy, he believed that he would again be at liberty to file a fourth s 79A application.
The husband at [24] of his affidavit filed 30 July 2014 says:
... neither the respondent Nor the trustee will be able to stop my court proceedings which are on foot in every court that is, i will do every thing under the law to make this happen, this is my lively hood and i wont allow no one by the law [errors in the original]
At [26], the husband calls for proper discovery. The tenure of what the husband has written in his affidavit would indicate that he does not have any intention of ceasing to file further applications.
These proceedings were presented in a busy duty list. There was not adequate time on that day for me to properly consider all the material that each party had filed and I reserved my decision in relation to the question of whether or not the husband was granted leave to bring spousal maintenance proceedings.
Prima facie, it would seem this application, the husband’s parenting application before Murphy J, and the second and third s 79A applications, were all brought without reasonable grounds and that those proceedings consequently could be described as “vexatious proceedings” (see s 102Q(1), definition (c)). If that is correct, the provisions of s 102QB(1)(a) and s 102QB(2)(b) have been attracted.
Section 102QB(4) of the Act requires the husband to be given the right to be heard.
The matter is to be listed on 30 March 2015 before me for the husband to have an opportunity to be heard as to why the following order should not be made pursuant to s 102QB(2)(b) of the Act:
The husband be prohibited from instituting proceedings of a type referred to in paragraph (c) (maintenance of one of the parties) and (ca) (proceedings between the parties with respect to property of the parties) and other proceedings in relation to completed proceedings of a kind referred to in paragraphs (c) and (ca) of the definition of “matrimonial cause” in ss 4(1) of the Act.
I note that the effect of making that order would be to require the husband to seek leave to institute any further proceedings in relation to financial matters between himself and his former wife (see s 102QE(2) of the Act).
I certify that the preceding seventy-three (73) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 17 February 2015.
Associate: H. Pickering
Date: 17.2.2015
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