K Ltd & Naiman - [2022] FedCFamC1A 24

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
K Ltd & Naiman [2022] FedCFamC1A 24

Appeal from: Naiman & Naiman [2021] FedCFamC2F 638

Appeal number(s): NAA 95 of 2021

File number(s): SYC 6945 of 2018

Judgment of: AUSTIN J

Date of judgment: 23 February 2022

Catchwords: FAMILY LAW – APPEAL – JURISDICTION – Where the costs of an interim dispute in the Federal Circuit Court of Australia were reserved – Where the primary judge later transferred the proceedings to the Federal Circuit and Family Court of Australia (Division 1) before giving judgment in the reserved dispute – Where the primary judge later ordered costs in the reserved dispute, which orders are the subject of the appeal – Where the appeal proceedings were listed to afford the respondents the opportunity to be heard as to how the appeal could be resisted for absence of jurisdiction – Where it was contended s 138 of the Federal Circuit and Family Court of Australia Act (Cth) may save the appealed order from invalidity – Where the provision does not save defective orders from being set aside on appeal – Where the appealed orders were made in excess of jurisdiction and the appeal must be allowed – Appeal allowed – Costs certificates granted in relation to the appeal.

Legislation:
Family Law Act 1975 (Cth) Pt VII, s 117

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 28, 46, 138

Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 9

Federal Court and Federal Circuit and Family Court Regulations 2012 (Cth) reg 4.02

Cases cited: Janssen & Janssen (2015) FLC 93-665; [2015] FamCAFC 168

Number of paragraphs: 15

Date of hearing: 23 February 2022

Place: Sydney (via video link)

Counsel for the Appellant: Mr Sansom SC

Solicitor for the Appellant: Lander & Rogers

Counsel for the First Respondent: Ms Hamilton

Solicitor for the First Respondent: Consort Family Law

Solicitor for the Second Respondent: Barkus Doolan

The Independent Children's Lawyer: Did not participate
ORDERS

NAA 95 of 2021
SYC 6945 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION

BETWEEN:
K LTD AS TRUSTEE FOR THE K TRUST

Appellant

AND:
MR NAIMAN

First Respondent

MS NAIMAN

Second Respondent

INDEPENDENT CHILDREN'S LAWYER

ORDER MADE BY:

AUSTIN J

DATE OF ORDER:

23 FEBRUARY 2022

THE COURT ORDERS THAT:
1.The appeal is allowed.
2.The orders made by the Federal Circuit and Family Court of Australia (Division 2) on 2 December 2021 are set aside.
3.The appellant is granted a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by it in relation to the appeal.
4.
The first respondent is granted a costs certificate pursuant to the provisions of

s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading K Ltd & Naiman

Details

AGLC: K Ltd & Naiman [2022] FedCFamC1A 24
Case: [2022] FedCFamC1A 24
Decision Date: 23 February 2022

CaseChat Overview and Summary

In this case, K Ltd & Naiman, the appellant, K Ltd, sought to appeal orders made by the Federal Circuit and Family Court of Australia (Division 2) concerning costs reserved from an interim dispute in the Federal Circuit Court of Australia. The primary judge had transferred the proceedings to the Federal Circuit and Family Court of Australia (Division 1) before giving judgment on the reserved costs dispute, subsequently ordering costs in that dispute. The appeal against the costs orders was brought before the court, which listed the appeal proceedings to allow the respondents an opportunity to be heard regarding how the appeal could be resisted for absence of jurisdiction. The central legal issue was whether section 138 of the Federal Circuit and Family Court of Australia Act could potentially validate the appealed orders despite their creation in excess of jurisdiction.

The court found that section 138 does not rescue defective orders from being set aside on appeal, as appeals are the mechanism by which such defects are identified and corrected. This interpretation aligns with the explanatory memorandum to the FCFCA Bill, which indicates that while orders made by the Federal Circuit and Family Court of Australia (Division 2) are valid and binding until set aside, an appeal is the means to challenge their validity. The court concluded that the appealed orders were indeed made in excess of jurisdiction and that the appeal had to be allowed. Since the appellant had only appealed from Order 1, but the other orders were similarly defective, the court had the authority to set them aside as part of the re-hearing process. As the primary judge lost jurisdiction upon transferring the proceedings, the costs orders were final and not interlocutory, making the grant of leave to appeal unnecessary.

The court granted the appeal, set aside the orders made by the Federal Circuit and Family Court of Australia (Division 2), and issued costs certificates under the Federal Proceedings (Costs) Act 1981 (Cth) for both the appellant and the first respondent. This decision ensures that the procedural integrity of the court is upheld, and the appellant is compensated for the costs incurred during the appeal.

Orders

Orders of the court

NAA 95 of 2021

SYC 6945 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

K LTD AS TRUSTEE FOR THE K TRUST

Appellant

AND:

MR NAIMAN

First Respondent

MS NAIMAN

Second Respondent

INDEPENDENT CHILDREN'S LAWYER

ORDER MADE BY:

AUSTIN J

DATE OF ORDER:

23 FEBRUARY 2022

THE COURT ORDERS THAT:

1. The appeal is allowed.

2. The orders made by the Federal Circuit and Family Court of Australia (Division 2) on 2 December 2021 are set aside.

3. The appellant is granted a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by it in relation to the appeal.

The first respondent is granted a costs certificate pursuant to the provisions of

s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to him in respect of the costs incurred by him in relation to the appeal.

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).

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

It was contended that, since the FCFCA Act was enacted after the Full Court determined Janssen & Janssen, s 138 therefore “may” now save the appealed orders from invalidity. The submission is rejected. The new statutory provision only saves defective orders made by the Federal Circuit and Family Court of Australia (Division 2) from collateral attack for nullity in other proceedings under the Act within original jurisdiction, but does not save defective orders from being set aside on appeal, since an appeal is the very vehicle by which defective orders are identified and discharged. That is evident from the Explanatory Memorandum to the FCFCA Bill, which provides:Clause 138 – Decisions to be final537.Clause 138 provides that a prospective judgment or decision in the FCFC (Division 2) is valid and binding until set aside, even if it is made in excess of the FCFC (Division 2)’s jurisdiction.538.Under clause 10, the FCFC (Division 2) is a court of record. This is consistent with the Federal Circuit Court’s status as a court of record under section 8 of the Federal Circuit Court Act. The designation of the FCFC (Division 2) as a “court of record” rather than a “superior court of record” (as the FCFC (Division 1) is under clause 9), may lead to orders made by the FCFC (Division 2) being regarded as having the status of orders made by an inferior court, and as such, when made in jurisdictional error, would be void ab initio. In Janssen and Janssen, the Full Court of the Family Court stated that the significance of not designating a Court to be a superior court of record is that “unless [the Act] or another legislative provision provides that an order of that court made in excess of jurisdiction until it is set aside, the order is a nullity”.539.This may be a particular issue in the context of enforcement of financial orders and obligations in family law and child support proceedings. Clause 138 makes clear that the legislative intention is for prospective orders made by the FCFC (Division 2), even if tainted by jurisdictional error, to not be void ab initio, and instead be valid and binding until set aside.(Footnote removed) The appealed order was made in excess of jurisdiction and the appeal must be allowed pursuant to s 46(1) of the FCFCA Act. The appellant only brought the appeal from Order 1, but for the same reason, Orders 2 and 3 must also be set aside. Although those orders were not appealed, this Court has power to set them aside as the appeal is conducted by way of re-hearing and any patent appealable error must be corrected. Once the primary judge transferred the proceedings to another Court, his Honour divested himself of jurisdiction to entertain and decide the outstanding costs dispute. Although the appellant sought leave to appeal from only the order adversely affecting it, the grant of leave is unnecessary since the costs order was final; not interlocutory (s 28(1)(b) of the FCFCA Act; reg 4.02(1)(a) of the Federal Court and Federal Circuit and Family Court Regulations 2012 (Cth)).

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

NAA 95 of 2021 SYC 6945 of 2018
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA DIVISION 1 APPELLATE JURISDICTION
BETWEEN:	K LTD AS TRUSTEE FOR THE K TRUST Appellant
AND:	MR NAIMAN First Respondent MS NAIMAN Second Respondent
INDEPENDENT CHILDREN'S LAWYER

Appeal from:	Naiman & Naiman [2021] FedCFamC2F 638
Appeal number(s):	NAA 95 of 2021
File number(s):	SYC 6945 of 2018
Judgment of:	AUSTIN J
Date of judgment:	23 February 2022
Catchwords:	FAMILY LAW – APPEAL – JURISDICTION – Where the costs of an interim dispute in the Federal Circuit Court of Australia were reserved – Where the primary judge later transferred the proceedings to the Federal Circuit and Family Court of Australia (Division 1) before giving judgment in the reserved dispute – Where the primary judge later ordered costs in the reserved dispute, which orders are the subject of the appeal – Where the appeal proceedings were listed to afford the respondents the opportunity to be heard as to how the appeal could be resisted for absence of jurisdiction – Where it was contended s 138 of the Federal Circuit and Family Court of Australia Act (Cth) may save the appealed order from invalidity – Where the provision does not save defective orders from being set aside on appeal – Where the appealed orders were made in excess of jurisdiction and the appeal must be allowed – Appeal allowed – Costs certificates granted in relation to the appeal.
Legislation:	Family Law Act 1975 (Cth) Pt VII, s 117 Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 28, 46, 138 Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 9 Federal Court and Federal Circuit and Family Court Regulations 2012 (Cth) reg 4.02
Cases cited:	Janssen & Janssen (2015) FLC 93-665; [2015] FamCAFC 168
Number of paragraphs:	15
Date of hearing:	23 February 2022
Place:	Sydney (via video link)
Counsel for the Appellant:	Mr Sansom SC
Solicitor for the Appellant:	Lander & Rogers
Counsel for the First Respondent:	Ms Hamilton
Solicitor for the First Respondent:	Consort Family Law
Solicitor for the Second Respondent:	Barkus Doolan
The Independent Children's Lawyer:	Did not participate

ORDER MADE BY:	AUSTIN J
DATE OF ORDER:	23 FEBRUARY 2022