FAMILY LAW – PROPERTY – application pursuant to s 79A of the Family Law Act 1975 – threshold application – admissibility of purported expert report – whether there has been suppression of evidence or failure to disclose information – compliance with a party’s obligation of full and frank disclosure – whether there has been miscarriage of justice – whether impugned orders be varied or set aside – application for summary dismissal – whether application be permanently stayed or summarily dismissed – whether the application has reasonable prospects of success – whether there is a serious question to be tried – abuse of process – application dismissed.
[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.
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AGLC
Klearchos & Klearchos [2021] FamCA 375
Case
[2021] FamCA 375
Decision Date
CaseChat Overview and Summary
In *Klearchos & Klearchos*, the wife sought to set aside property consent orders made in 2017 pursuant to section 79A of the *Family Law Act 1975* (Cth). The wife alleged that the husband had failed to provide full and frank financial disclosure, leading her to agree to orders that were substantially different from what she would have received had full disclosure been made. The husband sought to have the wife's application permanently stayed or summarily dismissed.
The central legal issues before the Court were whether the wife's application had reasonable prospects of success, whether there was a serious question to be tried, and whether the alleged suppression of evidence or failure to disclose information amounted to a miscarriage of justice, thereby justifying the setting aside of the consent orders. The Court was required to determine if the wife's application constituted an abuse of process.
Altobelli J reasoned that for an application under section 79A to succeed, the Court must be satisfied that a miscarriage of justice has occurred. The Court applied the principles from *Barker & Barker* and *Livesey v Jenkins*, which establish that it is not sufficient to merely demonstrate a failure to disclose; the non-disclosure must have led to the Court making an order substantially different from what it would have made had full disclosure occurred. The Court found no evidence that the husband had suppressed evidence or failed to provide full disclosure, nor that any alleged non-disclosure led to a miscarriage of justice.
Consequently, the Court dismissed the wife's amended initiating application seeking to set aside the consent orders. The Court also adjourned the wife's application seeking a review of a subsequent order and dismissed all other extant interim applications. The parties were given a period to make any applications for costs.
Orders
Orders of the court
SYC 2977 of 2013
BETWEEN:
MS KLEARCHOS
Applicant
AND:
MR KLEARCHOS
Respondent
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
8 JUNE 2021
THE COURT ORDERS THAT:
1. The Amended Initiating Application filed by the wife on 14 February 2020 be dismissed.
2. The Application in a Case filed on 22 December 2020 seeking review of order 1 of the order made by Registrar Aitken on 17 December 2020 be adjourned to a date to be fixed by the Court.
3. All other extant interim applications be otherwise dismissed.
4. Any application for costs be made within 42 days of the date of this order, and that:
(a) Any Affidavit, Financial Statement and written submissions in support of said application be filed and served contemporaneously with the application for costs;
(b) Within 28 days thereafter, the Respondent to said application file and serve a Response, any Affidavit material, a Financial Statement and written submissions; and
(c) Within 7 days thereafter, the Applicant file any submissions in reply, such submissions not to exceed 500 words in length.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
Background
Background to the litigation
These reasons for judgment explain the decision that the Court has made in relation to a contested interlocutory application pertaining to the Applicant wife’s application to set aside property consent orders made on 30 March 2017. BACKGROUND On 30 March 2017, Loughnan J made consent orders in proceedings initiated by the wife against the husband and five other Respondents. The consent orders are complex and do not need to be described in detail in the present context. Those orders are reproduced in the first schedule to these reasons for judgment. The effect of the orders is that one of the corporate Respondents pay to the wife the sum of $10 million. There was a consequential deed of release that was entered into between the wife, two named individuals, and a number of corporate entities. By way of an Amended Initiating Application filed 14 February 2020, the wife seeks a number of orders against the husband and three named corporate Respondents. By way of substantive relief, she seeks an order under s 79A of the Family Law Act 1975 (‘Act’) setting aside the 30 March 2017 orders. She then seeks an order for payment to her by way of alteration of property interests. By way of interim relief, she seeks spousal maintenance and various orders for financial disclosure. The Court notes that the wife was ordered to file Points of Claim on 15 November 2019. This document was annexed to the wife’s Affidavit filed 11 February 2020. It details the wife’s claim under s 79A against the husband, and the named corporate Respondents. On 29 June 2020 the husband filed an Application in a Case in which he seeks a number of orders. In the first instance, he seeks an order that the wife’s application be permanently stayed and the final orders sought by her refused. In the alternative, and if that order is refused, the proceedings commenced by the wife be summarily dismissed. In the alternative, and only in the event that both the preceding orders are refused, he sought an order that the wife pay security for costs in the sum of $200,000 in relation to these proceedings. Until payment, the proceedings would be stayed. By way of the wife’s Response to Application in a Case filed 11 December 2020, she asks the Court to dismiss the husband’s Application in a Case. Having regard to these competing applications, the Court must decide whether to permanently stay the wife’s application, or summarily dismiss the same, or make an order for security for costs. The husband is 70 years old and lives in Country J. The wife is 50 years old and lives in Sydney. They cohabited from 1997 to sometime between 2010 and 2013. They married in 2000 and were divorced in September 2014. They have two children who are now aged 20 and 17. The children live with the wife, and holiday with their father twice a year. On any account of the substantive proceedings between the parties that led to the consent orders made 30 March 2017, the proceedings were complex, drawn-out, and very expensive. The wife’s persistent motif or theme of that litigation, indeed of this round of litigation also, was that the husband had failed to provide full and frank financial disclosure, and thus it was never possible for her to have a meaningful appreciation of the pool of assets available for distribution between them.
Evidence
Evidence Before The Court
There is nothing in either the report of Dr AB or the evidence led by the wife that leads the Court to conclude that the Husband suppressed evidence or failed to provide full disclosure. This will become evident below. However, if the Court is wrong in this conclusion, it would nonetheless conclude that there was no miscarriage of justice, for reasons set out below.Has the suppression of evidence or failure to disclosure information amounted to a miscarriage of justice? The wife says, at paragraph 18.3 of the Points of Claim, that “the husband’s non-disclosure, in particular, the non-disclosure of the entities AD Pty Ltd and AJ Ltd amounts to a miscarriage of justice”. She fails to meaningfully elaborate or particularise in her Points of Claim what it is that constitutes the miscarriage of justice that she complains of. Inferentially, her claim is that the miscarriage of justice arises in circumstances where the husband’s non-disclosure led her to enter into consent orders in which she accepted a percentage division of an intentionally deflated and deceitful asset pool, and one that was substantially less than its true value. Relevantly, the Full Court in Barker & Barker (2007) 36 Fam LR 650 has aptly summarised the position as follows:[123] …in order for a claim under s 79A(1) to succeed, the Court must be satisfied that a miscarriage of justice has resulted. It is not sufficient to merely establish the existence of one or more of the stated grounds, such as suppression of evidence. In Livesey v Jenkins, Brandon LJ had this to say about the nexus between non-disclosure and setting an order aside (at 445-6):I would end with an emphatic word of warning. It is not every failure of frank and full disclosure which would justify a court in setting aside an order of the kind concerned in this appeal. On the contrary, it will only be in cases when the absence of full and frank disclosure has led to the court making, either in contested proceedings or by consent, an order which is substantially different from the order which it would have made if such disclosure had taken place that a case for setting aside can possibly be made good. Parties who apply to set aside orders on the ground of failure to disclose some relatively minor matter or matters, the disclosure of which would not have made any substantial difference to the order which the court would have made or approved, are likely to find their applications being summarily dismissed, with costs against them, or, if they are legally aided, against the legal aid fund.We agree with this statement.[124] But s 79A is a remedial section designed to avoid a miscarriage of justice. Where there is some intervening factor known to one party, but not the other, this may lead to a result which is unfair and unjust and can be characterised as a flaw in the judicial process by which the orders were made. There may also be circumstances in which the judicial process could be impugned by a sale after orders were made and in the absence of bad faith by either party or suppression of some relevant fact, if it led to a significant miscarriage of justice.