KALE & KARMEL

[2011] FamCA 925

FAMILY COURT OF AUSTRALIA

KALE & KARMEL [2011] FamCA 925

FAMILY LAW – DE FACTO RELATIONSHIP – PROPERTY PROCEEDINGS – PROCEDURE – where property settlement sought pursuant to s 90SM of the Family Law Act 1975 – where matter referred to the Family Court from the Federal Magistrates Court – where both parties opposed the transfer – where before transferring the matter, the Federal Magistrate made an order ostensibly pursuant to s 90SM, that a property be put up for auction – where that order was made prior to the commencement of any process referable to s 90SM – where each party consents to an alteration pursuant to s 90SN(2) by way of setting aside the Federal Magistrate’s order to put the property up for auction – whether such an order should be made – order made pursuant to s 90SN(2) setting aside the Federal Magistrate’s order.

Family Law Act 1975 (Cth)

APPLICANT: M Kale

RESPONDENT: Ms Karmel

FILE NUMBER: BRC 1093 of 2011

DATE DELIVERED: 22 November 2011

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Murphy J

HEARING DATE: 22 November 2011

REPRESENTATION

FOR THE APPLICANT: Mr Cooper (solicitor)

SOLICITOR FOR THE APPLICANT: Charles Cooper Lawyers

FOR THE RESPONDENT: Mr Murphy (solicitor)

SOLICITOR FOR THE RESPONDENT: Redmond + Redmond

IT IS ORDERED THAT

1. The final hearing of the matter be set down before Justice Forrest for 2 days commencing at 10.00am on 21 May 2012 in the Brisbane Registry of the Family Court of Australia.

2. The applicant pay the hearing fee by 4.00pm 14 days prior to the commencement of the final hearing unless a reduction of the fee is obtained beforehand.

   AND IT IS NOTED THAT the parties certify that (a) the matter is in all respects ready for final hearing; (b) it will require the number of days allocated; and (c) settlement discussions have taken place and been unproductive but in the event that consent is reached prior to the final hearing, the Court will be notified at the earliest possible time.

IT IS ORDERED BY CONSENT THAT

1. Paragraph 3 of the Orders made by Federal Magistrate Purdon-Sully on 15 September 2011 be set aside.

IT IS NOTED that publication of this judgment under the pseudonym Kale & Karmel is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER:  BRC 1093 of 2011

Mr Kale

Applicant

And

Ms Karmel

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. On 15 September 2011, Purdon-Sully FM made an order dismissing an application in a case brought by the applicant who, for convenience only, I will describe as “the husband” in respect of valuation issues pertaining to the asset that comprises the most significant asset in the property of the parties or either of them within the meaning of section 79[1] of the Family Law Act 1975 (Cth) (“the Act”).

   [1] The original oral reasons refer, plainly incorrectly, to s 79. The parties were in a de facto relationship. The correct reference should, of course, be to s 90SM. That alteration has occurred in these edited reasons.

2. Ultimately that application was dismissed by consent. Her Honour then made an order that that specific property be auctioned but that the auction not occur until after there had been a trial and orders made in respect of the central s 90SM[2] dispute between the parties. 

   [2] Ibid.

3. Nowhere in the Orders, nor in the transcript, is it revealed what power the Federal Magistrate was relying upon in making that order.  That is a troubling circumstance. The trial of the property proceedings did not occur before the Federal Magistrate; this matter was not reached because it was necessary for the Federal Magistrate to deal with another trial.

4. It seems from what both Mr Murphy, who appears today for the party who I will conveniently call “the wife”, and from Mr Cooper, who appears for “the husband”, that both parties indicated to her Honour that they did not want the matter transferred to this Court. Rather they submitted that the matter should be heard and determined as soon as possible in the Federal Magistrates Court. 

5. So much is understandable, the application was filed in that Court in February 2011, and in September of that year, the parties were hopeful of having the matter finally heard and determined. 

6. What occurred then is not entirely clear.  It seems that there was a discussion about the fact that the valuation of the main asset was problematical (in a manner that is not necessary to address for present purposes).  There was some discussion about that issue, which formed the basis of the application in a case brought by the husband.  Her Honour, in discussion with Mr Cooper and Mr George, who was then appearing as counsel for the wife, said towards the end of that discussion and shortly prior to an adjournment:

   Well, then you better go and problem solve, all of you, because there’s no guarantee if I made an order that this property be auctioned that it’s going to be auctioned by the end of next month, and in any event, I agree with what Mr George has said.  It doesn’t need to be auctioned.  If the only property we’re dealing with here is this property plus some bits and pieces and your client wants to retain it, then, and no one can get a valuation of this property without spending, it seems to me, money that possibly is not warranted in the circumstances, then we just do it the way Mr George says. 

   I just hear all of the evidence at trial, then determine based on percentages who gets what, and the property can then go to auction.  If you decide that it’s not listed for auction or put up for auction straightaway and the wife then gets a percentage and your client can bid at the auction. [Emphasis added]

7. So much of what the Federal Magistrate said is, as it seems to me, unexceptional.  In the context of the issues before her Honour, it seems to me clear that her Honour was simply saying that if the state of the evidence at a trial was such that the Federal Magistrate could not make a decision as to the value of the property or if it was determined by the Federal Magistrate that it was otherwise not just and equitable to attribute a value to the property and ascertain the respective interests of the parties by reference to that value, then the Federal Magistrate could and, indeed, likely would make an order that the property be sold at an auction with each of the parties having liberty to bid thereat.

8. So much is unexceptional, but only in so far as it is an exercise of the section s 90SM [3] power in circumstances where at a trial (in circumstances where in proceedings between the parties with respect to that form of relief) there is the opportunity for the parties to be heard and to make all such submissions as might be open on the evidence before the Court as to whether either of the parties ought retain the property or, that it be sold, whether by auction or otherwise.

   [3] Ibid.

9. However, that is, not what seems to have occurred here. 

10. Ultimately, her Honour adjourned the matter.  The parties agreed that the Application in a Case filed by the husband would be dismissed with an order that the costs be reserved.  The parties were not agreed as to what should happen in respect of the property otherwise, including its valuation.

11. It is in those circumstances that her Honour thereafter went on to make an order that the property be auctioned but not until such time as the Orders had been made by the Court and the respective interests of the parties determined. It seems to me that the only basis that her Honour had for making that order was by reference to s 90SM [4] of the Act and the Orders outlined in s 90SS[5] of the Act.

    [4] Ibid.

    [5] The original oral reasons refer, plainly incorrectly, to s 80. The parties were in a de facto relationship. The correct reference should, of course, be to s 90SS. That alteration has occurred in these edited reasons.

12. At that hearing, each of the parties submitted, as I have said, that the matter ought not be transferred to the Family Court but ought remain in the Federal Magistrates Court.  I am told by the solicitors who appear for each of the parties today that subsequent to that appearance and notwithstanding the submissions to which I have just referred, her Honour determined in chambers to transfer the matter to this Court. 

13. Her Honour made an order to that effect.  Subsequent to making that order, the parties were requested to attend a directions hearing.  At that directions hearing, I’m told that each of the parties submitted that the matter should remain in the Federal Magistrates Court and be heard and determined by that Court.  It might be observed that those submissions were made after the order for transfer had been made.  One might think that this is a surprising circumstance.

14. The order for transfer remained. The matter was listed before me at the callover of matters to be heard and determined by this Court. I raised with each of the parties what seems to me to be a significant issue. The order made by the Federal Magistrate seems to me to be an exercise of the s 90SM [6] power. What her Honour was transferring, as it seems to me, were proceedings which had in part already been determined. It is by no means apparent to me how her Honour was entitled to do so, having exercised a significant component of the s 90SM[7] power. 

    [6] See note 1.

    [7] Ibid.

15. I repeat in that context that each of the parties contend within the context of the s 90SM [8] proceedings that they ought be entitled to retain the property.  Those two possibilities, then, form part of at least three permutations of orders that the Court will be asked to make as being just and equitable as between the parties.  A third permutation is that the property be sold. 

    [8] Ibid.

16. Thus, a central issue between the parties has, as it seems to me, purportedly been determined notwithstanding the fact that the Federal Magistrates Court did not commence any trial process or, indeed, any process referable to the s 90SM[9] power. 

    [9] Ibid.

17. Furthermore, it is by no means clear to me what proceedings could be, or should be, determined by the Family Court in circumstances where part, at least, of the s 90SM[10] power has purportedly been exercised (if, indeed, such a course of action could, in any event, have occurred). 

    [10] Ibid.

18. In discussion with the solicitors for each of the parties today, they have ultimately indicated that they would each consent to an order being made pursuant to s 90SN(2)[11] of the Act. If I am right in what I have said about the Federal Magistrate purporting to exercise power pursuant to s 90SM[12], the alternative to that course of action is unattractive in terms of these proceedings being heard with expedition.  It would be necessary for the “husband”, who says that the order ought not apply, to make application pursuant to s 90SN[13] of the Act and to assert that the evidence before the Court is such that one or more of the grounds contained in that section is made out. An alternative course of action for the husband would be to appeal. Both parties are, plainly, desirous of having the issues between them heard and determined at the earliest opportunity.

    [11] The original oral reasons refer, plainly incorrectly, to s 79A(1A). The parties were in a de facto relationship. The correct reference should, of course, be to s 90SN(2). That alteration has occurred in these edited reasons.

    [12] See note 1.

    [13] See note 11.

19. I have indicated to the parties that if the issues between the parties are clear, then trial dates can be provided on 21 and 22 May before Forrest J.  In those circumstances, the parties have agreed to each seek an order pursuant to section s 90SN(2)[14] setting aside paragraph 3 of the orders made by Purdon-Sully FM on 15 September 2011. 

    [14] Ibid.

20. It is necessary to canvass the issues ultimately resulting in that consent in the manner that I have, because the Court must itself exercise appropriate caution in making such an order if an order has been made, as I believe it has, pursuant to s 79[15] of the Act. The facts and circumstances of this case, in my view, plainly point to the consent setting aside of that order being appropriate and just and equitable as between them.

    [15] See note 1.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 22 November 2011.

Associate:

Date:  9 December 2011