Klinger & Rothmann
[2023] FedCFamC2F 1324
•13 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Klinger & Rothmann [2023] FedCFamC2F 1324
File number(s): ADC 4965 of 2022 Judgment of: JUDGE MCGINN Date of judgment: 13 October 2023 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT PROCEEDINGS – Summary dismissal – Final orders made February 2023 – Proposed 79A application – Limited pool – Application allowed in part – Limiting of issues – Interim injunctions – No evidence of realistic risk – Application refused
FAMILY LAW – SECURITY FOR COSTS – Weak case – Order made – Costs of interim application – Just that such order be made for a limited amount
FAMILY LAW – PRACTICE AND PROCEDURE – In relation to case development – Made prior to financial conciliation conference
Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia Act 2021 (Cth)
Family Law (Fees) Regulations 2012 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021
Cases cited: Banham & Banham [2021] FamCAFC 132
Colburn & Cleese [2022] FedCFam1A 147
Ebner & Pappas [2014] FamCAFC 229; (2014) FLC 93-619
Fooks and Clark (2004) FLC 93-183
Gong & Zao [2021] FamCAFC 110
Karlsson & Karlsson [2020] FamCAFC 207
Kowaliw & Kowaliw (1981) FLC 91-092
Lindon v Commonwealth of Australia (No 2) [1996] HCA 14; (1996) 136 ALR 251
Luadaka & Luadaka (1998) FLC 92-830
Lysaght Building Solutions Pty Ltd (trading as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158
Maxwell & Militiadis [2015] FamCAFC 40; (2015) FLC 93-644
Ritter & Ritter & Anor [2020] FamCAFC 86
Tomaras & Tomaras [2021] FamCAFC 4
Tsiang & Wu and Ors [2019] FamCAFC 128; (2019) FLC 93-911
Warbrick & Warbrick [2021] FamCAFC 60; (2021) FLC 94-016
Division: Division 2 Family Law Number of paragraphs: 150 Date of hearing: 9 October 2023 Place: Adelaide Counsel for the Applicant: Mr Praolini Solicitor for the Applicant: KD & Co Lawyers Counsel for the Respondent: Ms Lewis Solicitor for the Respondent: All Family Law ORDERS
ADC 4965 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR KLINGER
Applicant
AND: MS ROTHMANN
Respondent
ORDER MADE BY:
JUDGE MCGINN
DATE OF ORDER:
13 OCTOBER 2023
IT IS ORDERED:
1.That within 7 days the husband file and serve an Amended Initiating Application setting out the orders he seeks pursuant to s 79A of the Family Law Act 1975 (Cth) (“the Act”) in reliance upon s 79A(1)(c) of the Act.
2.That, pursuant to s 192(4) of the Federal Circuit and Family Court Act 2021 (Cth), without leave of the Court first had and obtained, the husband’s claim be limited to that set out in order 1.
3.Pursuant to s 45A of the Act and Rule 10.09 the applicant husband’s applications for orders to be made pursuant to s 79A(1)(a) and s 79(1)(b) of the Act do stand dismissed.
4.Pursuant to s 117 of the Act on or before 4:00pm (Adelaide time), Monday, 22 November 2023 the husband do pay the wife’s costs of the interim proceedings argued before this Court on, Monday, 9 October 2023 in the sum of $3,000, inclusive of GST, to the wife solicitors’ trust account for and on behalf of the wife.
5.Pursuant to s117 of the Act and by way of security for the wife’s costs, that on or before 4;00pm (Adelaide time), 7 December 2023, the husband pay $17,500 into his solicitors’ trust account to be held by way of security for the wife’s costs and to otherwise abide further order of this Court PROVIDED THAT if the husband has no solicitors acting for him at the time of such payment then such payment be made into the wife’s solicitors’ trust account to be held upon the same terms as if the monies had been paid to the husband’s solicitors’ trust account pursuant to this order.
6.Pursuant to Rule 12.03, in the event that the payment referred to in order 5 has not been made in accordance with that order then and in such event the husband’s Initiating Application sealed 26 April 2023 and/or filed pursuant to order 1 be and do stand stayed.
7.For the purposes of the husband openly particularising his position, the husband is to serve, but not file, upon the wife’s solicitor by 4:00pm (Adelaide time), Thursday, 16 November 2023,
(a)a copy of all valuations as at the date of the property settlement orders and at the present time that he intends to rely for the purposes of his application pursuant to s79A(1)(c);
(b)a statement of the amount of “damage’ for each item of property for which the husband says he entitled to claim and identifying the specific documents said to establish such damage and the amount thereof;
(c)a copy of a written calculation of the effect of property orders that he would now seek based upon current valuations indicating what he and the wife would be retaining and the value of each parties’ proposed entitlement; and
(d)a written statement of the name of each witnesses he would be calling at trial of this matter and a summary of the evidence that each witness would be giving.
8.The husband and wife each file and serve by 4:00pm (Adelaide time), Thursday, 16 November 2023, a costs notice and undertaking as to disclosure that comply with the Rules.
9.The parties and their legal representatives attend a financial conciliation conference in this matter on 22 November 2023 at 9:00am (Adelaide time) at the Adelaide Registry of this Court.
10.The husband, unless he obtains an exemption of the financial conciliation conference fee in Accordance with the Family Law (Fees) Regulations 2012 (Cth), is to pay the financial conciliation conference fee by 4:00pm (Adelaide time), 27 October 2023.
11.For the purposes of the conference each party is to provide on or before 4:00pm (Adelaide time), 20 November 2023, to the Court and to each other a Confidential Case Outline (Dispute Resolution), noting that each such document is a confidential without prejudice document for the purpose of the conference only.
12.That all other interim applications whether by way of Initiating Application, Response to the Application or Case Outlines sealed on or before 15 September 2023 do otherwise stand dismissed.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE McGINN
Before the Court is the husband’s Initiating Application filed 26 April 2023 seeking, by its terms, further orders for property settlement.
Certain interim orders are sought by each of the parties in respect of that application.
For the reasons that follow, I would dismiss that part of that application insofar as it was agitated pursuant to s 79A(1)(a) and (b) of the Family Law Act 1975 (Cth) (“the Act”), make orders for costs (including an order for security for costs), limit the husband’s claim going forward, refuse the husband’s application for an interim injunction, and make further orders to move this matter towards a financial conciliation conference.
Final orders for property settlement were made with the consent of the parties on 22 February 2023 (“the property settlement orders”).
The property settlement orders finalised property settlement proceedings between the parties which were initiated on 31 October 2022 and concluded with the making of those orders on 22 February 2023.
The property settlement orders made with the consent of the parties who were both legally represented at that time and following the parties’ participation in a financial conciliation conference.
In the lead up to that conference the parties on 5 December 2022 had been ordered, amongst other things, to appoint a single expert to value any asset the value of which was in dispute and provide to the Court valuations or market appraisals of assets the value of which were in dispute.
The present application of the husband although not expressed to be pursuant to section 79A of the Act in his Initiating Application, is now understood by each of the parties and this Court to be so brought.
Despite what was contained in his Outline of Case Documents, husband agitates that Application on the basis of s 79A(1)(a) and, alternatively, s 79A(1)(c) of the Act.
Each of those bases are said to arise out of the lack of performance of order 1f of the property settlement orders.
Order 1f of the property settlement orders provided:
That contemporaneously with the transfer in paragraph 1a hereof the Husband arrange for a third party to collect from the former matrimonial home the [Motor Vehicle 1] and [Motor Vehicle 2], the [Motor Vehicle 3], the [Motor Vehicle 4], [Motor Vehicle 5], Golf clubs, fishing gear, remaining clothes (upon noting the Husband obtained his clothing a week following separation with the assistance of a standby breach of the peace), helmet, DVDs, record, [tools], a computer, printer, and hose and tools which are contained therein and work light.
The application pursuant to s 79A(1)(a) is maintained on the basis that the wife misrepresented the state of certain items of personalty that were to be delivered up to the husband pursuant to order 1f of the property settlement orders as she had allegedly changed items by damage or removal of components from items before orders were made.
The husband says he has learned of this from examination the items delivered up to his agents pursuant to the property settlement order.
The circumstances under which and when the items came to be delivered up, including the lateness of that delivery, is of no significance. In particular, the timing of delivery, whilst not in compliance with the scheduling provided in orders, did not displace the need for items to be otherwise delivered up in accordance the property settlement orders.
The application pursuant to section 79A(1)(c) is maintained on the basis that the wife had defaulted in the obligations created by order 1f of the property settlement order and that it is just and equitable to vary or set aside the order and make another order in substitution.
A third ground, said to be pursuant to s 79A(1)(b) and raised in the husband’s written case outline, was abandoned by him at the hearing.
The husband also seeks an injunction against the wife precluding her from dealing with the residential property in which she resides and has retained under the property settlement orders.
The husband also seeks orders in relation to costs.
The wife seeks summary dismissal of the husband’s Initiating Application filed 24 April 2023 and, in the alternative, orders for security for costs and a further order for costs of the present interim applications.
DOCUMENTS RELIED UPON
The husband relied upon his Initiating Application and affidavit filed 26 April 2023 and Outline of Case Document of 25 August 2023.
The wife relied upon her Response to an Initiating Application and affidavit filed 9 June 2023 and two case outlines of 4 August 2023 and 15 September 2023.
Each party also made oral submissions.
CONSIDERATION OF PARTIES’ CASES
Given the wife’s application pursuant to s 45A of the Act and pursuant to Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) 10.09, it is appropriate to consider that application first.
The wife seeks the summary dismissal of the husband’s application in its entirety on the basis that the husband’s claim for orders under s 79A is frivolous, vexatious or an abuse of process and/or that there is no reasonable likelihood of success.
Rule 10.09 serves to articulate those grounds that a Court must find to exist to enable it to make orders under s 45A.
The Full Court of the Family Court in Karlsson & Karlsson [2020] FamCAFC 207 at paragraphs 38 to 42 gave emphasis to the fact that a summary dismissal of proceedings serves the interests of justice in that defendants are spared being further troubled, plaintiffs spared from further costs and disappointments and courts spared the burden of wasted time that could otherwise be applied to the hearing of legally meritorious matters.
In that case the Court provided a summary of principles to be considered in seeking a summary dismissal[1] as being:
•it is a serious matter to deprive a party of access to the courts and the power to do so should be rarely and sparingly used;
•the party seeking summary dismissal must show that it is clear on the face of the other party’s documents that the other party lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious;
•that a case appears weak and unlikely to succeed is of itself not sufficient to satisfy summary dismissal;
•if there is a serious legal question to be tried, then it should ordinarily be determined at a trial of the issues;
•where, notwithstanding a defect in the pleadings, if it appears that a party may have a reasonable cause of action which has not been put in proper form, a court will ordinarily allow that party to reframe the pleadings; and
•the “guiding principle” is doing what is “just”.
[1] Karlsson & Karlsson [2020] FamCAFC 207 at [38].
That summary was provided by reference to decisions decided before the introduction of s 45A of the Act. Section 45A introduced a test that permitted a court to end proceedings in favour of a party where proceedings have no reasonable prospect of success. Such a determination does not require the proceedings in question to be hopeless or bound to fail.
Whilst the test under s 45A is less stringent and involves a different enquiry from that which existed previously, the cautious approach remains relevant.[2]
[2] Gong & Zao [2021] FamCAFC 110 [14] – [15].
In Ebner & Pappas [2014] FamCAFC 229; (2014) FLC 93-619 the Full Court of the Family Court of Australia cited at paragraphs 62 and 63 with apparent approval the judgment of the majority in Lysaght Building Solutions Pty Ltd (trading as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158 at paragraphs 27 and 35. The Full Court in doing so gave emphasis, in my respectful view, that the power to summarily dismiss should be exercised with caution and where there is no real or only a fanciful chance of success.
It was properly submitted by the wife that in considering her application the husband’s evidence in support of the applications under challenge is to be taken at its highest.[3]
[3] Banham & Banham [2021] FamCAFC 132 at [46-47]
In this regard it is also to be noted that only the husband’s evidence is to be considered unless it is inherently incredible or unreliable.[4] This requirement does not, in the circumstances of the present matter preclude consideration of matters of the Court’s record such as the date of filing of applications and orders made.
[4] Ritter & Ritter & Anor [2020] FamCAFC 86 at [66]
THE EFFECT OF THE PROPERTY SETTLEMENT ORDER
Despite orders having been made on 5 December 2022, no single expert valuations were obtained before the making of the property settlement order.
Subsequent to that order, the husband received correspondence from the wife’s solicitors on or about 24 January 2023 which was tendered into evidence as Exhibit 1. That letter set out the wife’s view of the value of various items of property held by each of the parties and enquiring of the husband if he disputed any of those proposed valuations and what valuations were to be obtained for the financial conciliation conference to occur on 22 February 2023.
There was no opposition to that tender and the material came before the Court with the consent of the husband.
The husband did not respond to that letter and no valuations were obtained.
There appears at paragraph 4 of the husband’s affidavit of 26 April 2023 a tabular statement of the property pool as was estimated by each of the parties.
In those estimates provided in respect of the items to be delivered up pursuant to order 1f the Motor Vehicle 1 and Motor Vehicle 2 are located at item 3, the Motor Vehicle 3 is located at item 8, the Motor Vehicle 4 is located at item 12 and the Motor Vehicle 5 is located at item 13.
In respect of those items listed in the previous paragraph, the husband estimated the value to be a total of $41,000 whereas the wife estimated the total value to be somewhere between $24,500 to $29,500.
In respect of “tools, computers and parts” these were identified at item 22 in the tabular statement by the applicant husband as having no value whereas the wife assigned $4,000 to those items.
Items 3, 8, 12, 13 and 22 appear to account for that which appears in order 1f of the property settlement orders.
The difference in the parties’ respective positions on these items appears to be between $7,500 and $12,500.
The husband’s own evidence discloses that at least in terms of the parties’ estimates of the value of the items that ultimately came to be referred to in order 1f there was a dispute between them as to their value.
The husband does not dispute that he consented to the property settlement orders.
In so consenting, any argument that the parties may have had about value was subsumed by and merged into the consent orders.[5]
[5] Maxwell & Militiadis [2015] FamCAFC 40; (2015) FLC 93-644 at 80,219.
Further, the husband effectively represented to the Court that despite whatever differences existed in the parties’ respective positions the outcome represented by the orders was just and equitable.
He cannot now assert that the items did not have the value (or lack of value) that he asserted to the Court at the time that the property settlement orders were made.
The husband now appears to assert that those items - as he would have the Court understand that he thought them to be - would have had a value of at least $85,000 indicating that his figure put to the Court at the time of the making of the property settlement orders were deliberately understated and that his complaint is, he did not receive the value he was expecting in receiving the item identified in order 1f.
It also suggests that the property in an allegedly diminished state is worth more than it was in its undiminished state.
At the time of the making of the consent orders I infer that each party, properly advised, had sufficient opportunity to articulate their respective positions as to how the terms of the consent orders were to be expressed and, in so doing, gave consideration to the possible benefits and shortcomings of expressions to be used in the orders.
It was not put to me that the parties were at cross-purposes at the time the consent orders were made, nor can I find evidence that at the time of the making of the orders the husband was precluded by any action on behalf of the wife from bringing forward any other position on his behalf as to the wording of the orders.
There was no reference in the terms of the orders as to the state of the items of property to be delivered to the husband pursuant to order 1f such as a requirement that they be “in good order and repair”.
Given that, generally speaking, the construction of orders is not a matter of giving consideration to the parties’ respective subjective intentions but rather, is an objective exercise,[6] the very terms of property settlement orders should inform the type and nature of property to be delivered up.
[6] Fooks and Clark (2004) FLC 93-183 at [22 – 24]
A general assumption of items permits a general response by way of delivery in satisfaction of that description.
The orders having been made, the husband then caused his associates to collect the items in compliance with order 1f and, in doing so, provided to his associates a list which he anticipated would comprise the items that would be collected on his behalf.
The detail and length of his anticipated list does not correspond with the description set out in order 1f. He referred to that anticipated list’s content at annexure “3” of his supporting affidavit.
That list goes beyond the detail of items contained in order 1f.
There is no evidence before me which satisfies me that the agreement of the parties giving rise to order 1f was intended to cover each and every item appearing in annexure “3”.
The lack of fulfilment of the husband’s expectations of what was to be delivered up to his associates was not the result of any action on behalf of the wife.
The husband did not take up the opportunity to comply with his obligation to value items which were in dispute and, in the course of so doing, likely to have those items inspected and described in their then present state.
The husband represented to the Court and the wife that despite the lack of the ordered valuations the property settlement orders int the terms cast were just and equitable.
He cannot now claim otherwise and is estopped from doing so.[7]
[7] Colburn & Cleese [2022] FedCFam1A 147.
I would reject the claim that the wife misrepresented the value of the items referred to in item 1f and that any representation of the value of them caused the husband to give his consent to the property settlement orders against his interests.
THE RELEVANCE OF VALUE AS OPPOSED TO “STATE” OF PROPERTY
It is said on the husband’s behalf that the wife misrepresented the value of the items to be retained by the husband pursuant to order 1f in that she did not provide disclosure of relevant information as to the significant changes in the condition of assets.
A related submission was that the wife’s assertion of the value of those items led the husband to assume that she had kept the items in the same state that he had left them.
This argument is based upon a false premise that the wife’s estimate of value carried with it some understanding of the value of the property that the husband should have to follow or adopt and he was not independent in expressing his view about such matters to the Court.
I reject such an argument.
The husband had an independent view of the value of the property, and he expressed them. He had independent advice about the question of property settlement which must be based upon his notions of value. The husband had available to him the facility of obtaining valuations.
There is no evidence of the wife having made a misrepresentation by way of a statement or action to the husband that her evaluative opinions should be adopted by him or that they were in any way superior or expressed with reference to a particular condition of the items. In this sense, she may be regarded as being silent on the issue of the state of the items.
The second ground the husband promotes is that, in the absence of any act of misrepresentation by the wife, her silence about the state of the items could constitute a misrepresentation on account of her having a duty to disclose the state of the items and, as the husband claims it to be, to disclose the failure to properly keep or to have damaged the items. In other words, the wife’s silence was a misrepresentation that there was nothing to disclose under the obligation to disclose.
The duty of disclosure is set out in Rule 6.01 as a duty to the Court and to each other party to give full and frank disclosure of all information relevant to the proceeding in a timely manner.
What is to be disclosed is relevant information.
The relevant information in the present circumstances is the value of items of property.
I reject that relevant information comprised the state of the property as opposed to or distinct from its value. There is no material which I have been taken to that shows that in the proceedings leading up to the making of consent orders the state or condition of the property was an issue or that it was to be a condition included in the terms of settlement or that the state or condition was otherwise forensically significant.
What was forensically significant was the value of the property and the husband was afforded the means and had, in my view, the ability to explore and pursue that issue in the course of the proceedings. He chose not to do so. Neither the wife’s actions nor silence compromised the husband’s ability to explore the issue.
The husband had the opportunity to consider, explore and raise any arguments as to “wastage” [8] and there is no evidence that any of the wife’s actions so precluded him.
[8] Kowaliw & Kowaliw (1981) FLC 91-092; Warbrick & Warbrick [2021] FamCAFC 60; (2021) FLC 94-016 at [28]
The husband made a decision to have the items remain at the former matrimonial home following the parties’ separation and I reject that the husband was either required to leave the items at the home or that he was forced to have to rely on the wife to keep the items in the state in which he says he left them at that home. The husband was not prevented by any action on behalf of the wife to bring an application for inspection[9] or return of items on an interlocutory basis.
[9] Rule 5.16
The husband, through his case outline, contends that he relied upon the wife to ensure that the items were kept in the same state in which he had left them at separation in May 2021 and that based on the values attributed by the wife to items, she had maintained the items in the state that they were in at the time the parties separated. That was an assumption he was entitled to adopt but its adoption was his choice and not the result of any representation made either actively or “silently” by the wife.
DETERMINATION OF THE HUSBAND’S CLAIM UNDER S79A(1)(A)
Section 79A(1)(a) is directed to the process by which orders come to be made. My analysis of the material brought forward and the submissions made on behalf of the husband demonstrates that:
(a)the husband’s complaint of there having been a misrepresentation by the wife enjoys no reasonable prospect of success; and
(b)there does not exist on the material and submissions placed before me the possibility that the husband can amend the case that he has brought forward so that it might be understood to otherwise enjoy a reasonable likelihood of success.
Accordingly, I would dismiss the husband’s application in so far as it brought pursuant to s79A(1)(a) as having no reasonable prospect of success.
Given that determination, there is no need for me to consider whether the application to set aside the property settlement order pursuant to s79A(1)(a) is frivolous and vexatious.
DETERMINATION OF THE HUSBAND’S CALIM UNDER S79A(1)(C)
Section 79A(1)(c) in this case requires that it be shown that:
(a)there is an obligation under the property settlement order; and
(b)that the wife has defaulted in respect of that obligation; and
(c)that there are circumstances resulting from the wife’s default that make it just and equitable to vary or set aside the property settlement and make another order in substitution for the property settlement; and
(d)the court should otherwise exercise its discretion to vary or set aside the property settlement order.
The husband’s case outline does not expressly address the latter two of these issues.
However, it was submitted in the course of the husband’s oral submissions that the default of an obligation that was alleged to have arisen was on account of:
(a)the wife’s asserted failure, following the making of orders, to refrain from dismantling or damaging items to be made available for delivery up;
(b)the breach of an obligation to both make available those items for collection: and
(c)to make the items available in a condition that is, to be implied from the terms of the property settlement orders, consistent with the items’ condition as they were prior to making of orders.
The last of those alleged requirements I understood to be a reference to the condition of items just prior to and at the time of making of orders.
If it were a matter of items simply being missing (in the sense of having been dismantled and withheld since the making of orders) from the delivery up, then the husband’s simplest remedy would appear to be to seek an order for delivery of the missing property.[10]
[10] See Rules 11.55(c) and 11.57
The husband’s Initiating Application and affidavit evidence is that he seeks an “adjustment” or “reimbursement” for damage, missing parts and unreturned items.
The husband’s estimate of that adjustment from his supporting affidavit appears to be about $85,000.
As indicated above, this estimated sum exceeds the value of items asserted by the husband at the time of making of the property settlement orders.
No submission was received that the husband’s evidence in this regard was to be considered incredible or unreliable.
The husband reckoned the net pool of property at the time of making of orders to be about $478,000.
The extent of the now claimed adjustment sought is significant.
There is a factual dispute between the parties as to what has been delivered up including the items’ condition and worth.
The extent to which those disputed facts may need to be determined may well be shaped by legal argument as to the meaning to be ascribed to the various terms found in order 1f of the property settlement orders and remains a matter for another time.
No submissions were received on behalf of the husband as to how the alleged non-compliance with the property settlement orders in respect of failure to deliver up items would lead to it being considered just and equitable for the property settlement order to be varied or set aside or for another order to be to be made in substitution and as to how the Court might otherwise be satisfied that it would be appropriate for an order to be made under s 79 of the Act. These other matters requiring justice and equity did not appear to be addressed by the husband.
It appeared from the lack of submission on these issues that by implication these other matters were to be taken as self-evident and, in effect automatically follow, as it were, from the fact of default. This is not, and would not be in the circumstances of this case at this stage of the proceedings, something I would be willing to infer.
Allowing for a prospect of amendment,[11]Such a gap in the husband’s case in respect of s 79A exposes it as weak but not unarguable.
[11] Lindon v Commonwealth of Australia (No 2) [1996] HCA 14; (1996) 136 ALR 251 at [14], point 5.
On balance, I am not persuaded that the husband could not advance evidence and arguments in future that might see these other matters be able to be established.
A Court in considering application for summary dismissal must:
(a)determine the matter on the basis of the respondent’s evidence (to that dismissal application, in this case, that of the husband);
(b)take that evidence at its highest;
(c)be cautious in proceeding to summarily dismiss an application (including be aware of the prospect of amending a case to be brought forward that is otherwise sought to be dismissed);
(d)recognise that even apparently weak cases should not be dismissed.
As such, the existence of the factual dispute should for the purposes of the present application for dismissal be regarded from the perspective that the husband’s evidence is capable of forming (although ultimately it may be found not form) a legitimate basis for the husband to bring forward his claim.
I do not find that the husband’s evidence, such as it is, is to be regarded as incredible or unreliable so as to permit it to be disregarded.
As his case is arguable, I do not consider it to be frivolous or vexatious and would not dismiss it on that basis.
Accordingly, I would decline the wife’s application for summary dismissal in respect of the husband’s claim pursuant to s 79A(1)(c).
I should for the sake of completeness state that the husband’s application for interlocutory orders at paragraph 2 of his Initiating Application seeking as an interlocutory order that the property settlement be set aside is not an interlocutory order that should be made in this matter as, absent consent of the parties, the setting aside or variation of the order is a matter for trial and that application should stand dismissed.
THE HUSBAND’S APPLICATION FOR AN INJUNCTION
The husband has sought an interlocutory order by way of injunction restraining the wife from selling, encumbering or otherwise disposing of the house property in which she lives and was, subject to payment, to retain under the property settlement orders.
It was properly conceded on behalf of the husband that there was no evidence before the Court of the wife attempting to deal with the house property or to otherwise dissipate the equity in that property. This lack of evidentiary basis leaves me with the view that any risk of dissipation of the home or its equity by the wife is merely theoretical and not real.[12]
[12] Tsiang & Wu and Ors [2019] FamCAFC 128; (2019) FLC 93-911 at [20 – 27]
Given the lack of evidence, the risk is not real.
Even if I were wrong in that view, I would not, in the circumstances of this case, exercise my discretion to otherwise grant the injunctive order sought in the absence of the so called “usual” undertaking as to damages or compensation.[13]
[13] See Rule 10.18(5)
Accordingly, I would dismiss the husband’s application for injunction as sought at paragraph 3 of the interlocutory orders sought in his Initiating Application filed 26 April 2023.
THE WIFE’S APPLICATION FOR SECURITY FOR COSTS
The wife sought her costs of the present interim applications as did the husband and, although not expressed in the wife’s formal Response to Application in a Proceeding sealed 9 June 2023, the wife also sought an order for security for costs in the amount of $20,000.
Despite the lack of formal application, the husband through his Case Outline and submissions was in a position to join issue with the application for security for costs.
Many of the matters that need to be considered in respect of each of the applications overlap as they require a consideration under the provisions of s 117 of the Act.
To assist in considering those applications, I directed cost notices to be filed within 48 hours of the hearing as they had not otherwise been filed.
The wife complied with the direction.
The wife’s costs from 1 April to 11 October 2023 were said to be inclusive of GST and work in progress) $12,967 with $8,831 held in trust.
The wife’s costs beyond that date were estimated to be $43,300.
The husband did not comply with the Court’s direction.
I will deal with the wife’s application for security for costs before dealing with the costs of the interim applications.
SECURITY FOR COSTS
The criteria for an application for security for costs as set out in Rule12.02(2). The criteria therein listed are identifiable from a consideration of case authorities on the topic of the making of orders for security for costs.[14]
[14] See Luadaka & Luadaka (1998) FLC 92-830; Tomaras & Tomaras [2021] FamCAFC 4 at [25]
The provisions of the Rules must be applied consistently with and subject to the provisions of s 117 of the Act.
Bearing in mind the general position set in s 117(1), I turn my mind to the matters set out in s 117(2) and (2A).
Each party has filed a Financial Statement in this matter since April 2023.
Those Financial Statements show that each of the parties’ financial circumstances are, with respect to each of them, modest.
The impact of a further set of legal costs upon each of them will be significant and is likely to cause significant financial hardship. There is a patent need in this matter for costs to be confined as much as possible and for the parties and their legal advisers to be mindful at all times of the need for costs to be “proportionately incurred”[15] which will demand some precision to be exercised in taking the matter forward.
[15] Rule 12.08
I shall make some directions to assist the parties in that regard and will exercise power under s 192(4) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) to limit the husband’s application going forward to that which is agitated under s 79A(1)(c) and that the husband file and serve an Amended Initiating application in that regard within 7 days.
The wife’s estimated future costs in this matter have been put forward to her as being in the vicinity of $43,000. This will be in addition to about $19,000 said to have been spent in the proceeding to obtain the property settlement order for which there now exists at least a prospect of needing to be reviewed.
I have no reason to think that the husband’s costs might not be dissimilar.
Neither party is in receipt of legal aid so the costs will be borne by each of them.
The modest financial circumstance of each of the parties is a matter which I bring to account but does not and should not in the circumstances of this matter preclude the making of an order for costs.
It is of significance that:
(a)the husband has sought to set aside the property settlement orders recently made;
(b)his application has lacked appropriate formality;
(c)one of the grounds upon which he seeks to set aside the property settlement orders has been abandoned and another summarily dismissed; and
(d)the remaining ground is to be regarded at this stage as weak and the prospects of success of it as limited.
The question of whether these particular proceedings have been necessitated by the wife’s failure to comply with the property settlement orders is yet to be determined.
I also bear in mind that the husband’s application for interim injunction was unsuccessful and that the wife was not entirely successful in her application.
I also take into account that the husband has elected to seek a setting aside of the property settlement order as opposed to pursuing other enforcement remedies.
Pursuant to s 117(2) I am of the opinion that in all of the circumstances an order as to costs should be made in favour of the wife and that order should be by way of security for costs.
There is no evidence which satisfies me that the amount sought by the wife should be $20,000 as stated in her case outline.
The costs advice of the wife indicates that amount of up to $43,000 is anticipated to be payable. That amount would appear to be reckoned on a solicitor/client basis if not an indemnity basis.
If one were to anticipate at this stage a two-day hearing following a financial conciliation conference, valuations and disclosure processes by reference to Schedule 3 of the Rules would indicate costs of at least $17,500 might be anticipated.
I consider that Schedule to properly inform the quantum of any security for costs.
I consider that it would be just that the husband pay such an amount into his solicitors’ trust account to be held by way of security for costs and to otherwise abide further order of this Court with such amount to be paid into his solicitor’s trust account within 14 days of the conclusion of the financial conciliation conference and if he has no solicitors acting for him, into the wife’s solicitors’ trust account to be held upon the same terms as if the monies had been paid to the husband’s solicitors trust account.
Such an amount would not in my view stifle the husband proceeding with his application although he may need to raise finance or sell items to accommodate that order.
COSTS OF THE PRESENT INTERIM APPLICATIONS
Lastly, the wife sought costs in relation to the present proceedings. The amount specified in the wife’s case outline was $5,358 (cents being ignored) inclusive of GST.
Taking into account the matters that I referred to in relation to the making of a security for costs and not repeating them here, I am of the opinion that it is just pursuant to s117(2), taking into account the matters under s117(2A) referred to above, to make an order that the husband do pay the wife’s costs of the present interim proceedings now to otherwise be dismissed in the sum of $3,000 inclusive of GST payable on or before 4:00 pm on Monday 22 November 2023 by payment to the wife’s solicitors’ trust account for and on behalf of the wife.
I am not persuaded that any order for costs should be made in favour of the husband and his application for costs of these interim proceedings should stand dismissed.
FURTHER DIRECTIONS
In the circumstances of this matter there should be a financial conciliation conference. Such a conference can occur on 22 November 2023 at 9:00 am (Adelaide time) at the Adelaide Registry.
For the purposes of endeavouring to confine the parties’ costs and to best ensure proper development of the father’s case I consider that certain orders and directions should be made as to what the husband should present to the wife prior to the financial conciliation conference. I consider that such orders and directions can be made pursuant to Rule 1.06.
For the purposes of the husband openly particularising his position, the husband is to serve upon the wife’s solicitor by 4:00pm (Adelaide time), Thursday, 16 November 2023:
(a)a copy of all valuations as at the date of the property settlement orders and at the present time that he intends to rely on for the purposes of his application pursuant to s 79A(1)(c);
(b)a statement of the amount of “damage” each item of property for which the husband says he is entitled to make a claim and identifying the specific documents said to establish such damage and the amount thereof;
(c)a copy of a written calculation of the effect of property orders based upon those valuations that he would now seek indicating what he and the wife would be retaining and the value of each parties’ proposed entitlement;
(d)a written statement with the name of each witness he would be calling at trial of this matter; and
(e)a summary of the evidence that each witness would be giving.
This written information is to be way of open correspondence so as to be able to be relied upon by either party in subsequent proceedings in Court.
I would also direct that the husband is to file and serve by 4:00pm (Adelaide time), Thursday, 16 November 2023, a costs notice and undertaking as to disclosure that complies with the Rules and that the wife is to file an updated costs notice by the same date.
The husband, unless he obtains an exemption of the financial conciliation conference fee in Accordance with the Family Law (Fees) Regulations 2012 (Cth) is to pay the financial conciliation conference fee by 4:00pm (Adelaide time), 27 October 2023.
For all of these reasons, there will be orders as appear at the beginning of this judgment.
I certify that the preceding one hundred and fifty (150) numbered paragraphs are a true copy of the Reasons for Judgment of Judge McGinn. Associate:
Dated: 13 October 2023
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