Lane and Owen

[2012] FamCA 1007

FAMILY COURT OF AUSTRALIA

LANE & OWEN [2012] FamCA 1007

FAMILY LAW – PROPERTY

APPLICANT: Mr Lane

RESPONDENT: Ms Owen

FILE NUMBER: SYC 6078 of 2008

DATE DELIVERED: 10 October 2012

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 10 October 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Tockar

SOLICITOR FOR THE APPLICANT: Uther Webster & Evans

FOR THE RESPONDENT: Ms Owen in Person

Orders

IT IS ORDERED BY CONSENT THAT

1. The husband and the wife take all steps necessary including signing all documents necessary to cause the sum of $8,160 to be released to the wife as soon as possible from the Macquarie Bank Controlled Funds Account, such payment to the wife to be partial property division in the property division proceedings between the husband and the wife currently being determined.

IT IS FURTHER ORDERED THAT

1. The trial of the competing property division applications of the husband and the wife is reopened and pursuant to s 79(5) of the Family Law Act adjourned for further hearing on a date to be fixed, such date not to be before the determination of the proceedings currently pending in the New South Wales Consumer Trader and Tenancy Tribunal.

1. The solicitors for the husband shall keep this Court informed from time to time, at the same time copying in the wife, as to the expected date of determination of the proceedings currently pending against the husband and the wife in the New South Wales CTTT and, particularly, immediately after those proceedings are concluded.

2. The matter shall be listed for further directions before Justice Forrest at a time and a date to be fixed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lane & Owen 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 BRISBANE

FILE NUMBER: SYC 6078 of 2008

Mr Lane

Applicant

And

Ms Owen

Respondent

REASONS FOR JUDGMENT

1. On 12, 13, 14 March 2012, in the Sydney Registry of this Court, I heard proceedings between the parties Ms Owen and Mr Lane, in respect of competing applications for property division pursuant to s 79 of the Family Law Act arising out of the breakdown of their marriage. Indeed, the proceedings were heard by me by way of a review arising from a prior decision made by Loughnan J of this Court who, prior to being appointed as a Judge of this Court held the office of Judicial Registrar. Whilst holding that office, his Honour had determined s 79 property division proceedings between the parties following a similarly lengthy trial in the Sydney Registry of this Court.

2. At the conclusion of the hearing before me, in March this year, I reserved my decision.  Regrettably, and unfortunately for all concerned, I have not before this date been able to finalise and deliver my judgment.  That can only be attributed to the fact that the demands upon the judicial resources of this Court continue to increase, leaving me and my fellow judges with little time between hearing cases to put together our reserved decisions in respect of the matters that we have already heard.  On 2 August 2012, whilst I am still reserved in this matter, Ms Owen has filed an application in a case in which she seeks a payment to her of the sum of $8,160 out of certain funds that are described as “controlled funds” that are held effectively in trust on behalf of the two parties by the solicitors for the husband.

3. Ms Owen sought this release of funds on the basis of asserted financial difficulty and particularly because of the fact that she is in such difficulty whilst still awaiting the outcome of the just and equitable property division application and because she is incurring rent on an ongoing basis whilst continuing studies and being dependent upon a very meagre income in the form of Commonwealth assistance.  Soon after the application in a case was filed by Ms Owen, an application in a case was also filed on behalf of the husband, Mr Lane.

4. Mr Lane has made application for the final judgment in respect of this matter to be adjourned pending the resolution, either by consent between the parties or as a result of the decision of the Consumer, Trader and Tenancy Tribunal, of a dispute involving the husband and the wife and purchasers of the properties situated at B Street, Suburb C. Those are two properties that resulted from a subdivision of the former matrimonial home of the parties, undertaken and carried out by the parties during the course of their marriage and before their separation.  The husband’s application includes an application for an order that in the event that the applicant husband and/or the respondent wife are ordered to effect and pay for remedial works to those properties pursuant to the CTTT claim that such money be paid out of the controlled moneys account.

5. I understand that there is no dispute between the parties that the controlled moneys account has some $212,000 or thereabouts in it at the moment and that it really is the principal financial asset of the parties remaining from the property that they had at the end of their marriage.  Today at the commencement of the hearing of these competing applications Mr Tockar of Senior Counsel, who appears for the husband, informed the court that the husband would agree to the Court making an order that the sum of $8,160 be paid from the controlled funds account to the wife as she asks for, conditioned upon it being characterised as an order for partial property division that would then necessitate it being included as partial property division already received by the wife in the ultimate division of property as determined by me when I hand down the decision in this case.

6. Ms Owen accepted that proposal and informed me, on a couple of occasions when I asked her, that she consented to an order that the sum of $8,160 be released to her and characterised as partial property division.  So, at the end of these reasons, I intend to make such order by consent. 

7. That leaves only for determination by me the question raised by the husband’s application in a case. When Mr Tockar began his submissions in respect of that, I raised with him the proposition that in actual fact his client’s application is for a reopening of the case and then, upon the reopening of the case, for the case to be adjourned pursuant to section 79(5) of the Family Law Act, until such time as the portended significant change in financial circumstances actually occurs, whereupon it will be relisted with the parties being then allowed to put further evidence before the court, potentially cross-examine again and then make submissions as to the impact of any such evidence upon the just and equitable determination that is to be made by the court.

8. Mr Tockar, to his credit I respectfully say, quickly accepted that that is an appropriate way to characterise his client’s application in this case, conceding that, initially, he perhaps thought that it was a little bit easier or more straightforward than that.  Mr Tockar submits that the evidence establishes that there has been a significant claim filed or made against the parties by way of a commencement of proceedings in the New South Wales CTTT, (the Consumer, Trader and Tenancy Tribunal), in which the purchasers of the two properties that were the subdivided properties in Suburb C actually claim as against the parties a total of $480,000 in respect of the cost of necessary remedial works at the site that they attribute, at law, is a responsibility of Mr Lane and Ms Owen, who were the vendors of that property, and Mr Lane who was the owner/builder of the subdivision.

9. Mr Tockar submits that the evidence is that such proceedings are underway and that therefore it is effectively beyond argument that potentially the financial circumstances of the parties could substantially change.  In effect, his submission is that his instructions from Mr Lane, supported by evidence that is led by Mr Lane in his affidavit that was filed in support of the application, are that Mr Lane himself expects the totality of the liability that he and Ms Owen ultimately are responsible for to be somewhere around $100,000 to $120,000. 

10. As I indicated during the course of argument, on a without prejudice basis for Mr Lane, that is without prejudice to his rights to argue to the contrary in the CTTT, it seems that he is of the view that there might very well be a real liability to these parties and that he is hoping to see it limited to that figure of $100,000 to $120,000.  Mr Tockar submits that that evidence, along with the evidence that this is, if it is a liability of the parties, one that arose out of circumstances that the parties were both involved in whilst married and prior to their separation, is such that the Court would determine that in the exercise of its discretion the interests of justice require that the trial be reopened and adjourned in the way that I have previously discussed.

11. In opposition to the husband’s application, Ms Owen submits, and she relies on an affidavit of evidence that she has filed in response that was filed on 28 September 2012, that she is confident that there is no substance to the claim that has been made against them by the two separate purchasers of the said properties.  However, having said that, she was quite prepared to acknowledge and accept that, indeed, claims have been commenced against her and Mr Lane by two sets of purchasers who she accepts were involved in arms length purchases of the two properties from she and Mr Lane.  So, in essence, Ms Owen’s position is  that yes, there is a claim against Mr Lane and her and that yes, it is for a significant amount, that yes, if it is ultimately successful it would indeed make a substantial difference to the financial position of the parties.  By “the financial position of the parties” I mean the property of the parties or either of them that is to be divided between the two of them by order of this Court that is ultimately determined to be just and equitable. 

12. However, despite that, Ms Owen’s position is primarily that there is no substance to the case against them.  She informs the Court that she intends to defend it but that, in any event, even if she does, she is confident that her insurance that she has will cover her. 

13. Ms Owen makes a submission that because she believes that there is no substance in the case against her and Mr Lane, that I should, on the basis of that, determine that there is no reason to reopen the case and adjourn the proceedings to await the outcome.  That seems to be based on some confidence that I would immediately accept the accuracy and bona fides of her position that there is nothing in the third parties’ claim. 

14. With respect to Ms Owen, I do not consider that this matter can be determined by simply saying, "I accept [Ms Owen's] assertion that there is nothing in the claim and that she and [Mr Lane] have nothing to worry about. Therefore, there will be no change in their financial position that requires me to reopen the case and adjourn the proceedings and I should just simply go on and make the property division orders now." 

15. What are the applicable principles in an application like this?  I get substantial assistance from a judgment of my colleague, Murphy J, in a case that is anonymised as Summitt & Summitt (reopening) (2009) FamCA 365 that was delivered by Murphy J on 8 May 2009.

16. When the parties ultimately obtain a copy of this judgment, it will be seen that I, as counsel at the Bar here in Queensland before my appointment, appeared for the second and third respondents in that case.  By way of brief outline, that case was one where a husband and wife were the parties.  The second and third respondents were the parents of the husband who had joined in the proceedings because of their business relationships with the husband and the wife.  I was counsel for the parents of the husband who were the second and third respondents.  The matter went to trial.  It was reserved and whilst reserved the first respondent husband made application for a reopening of the trial and for further evidence to be led in the form of valuation evidence obtained post-trial that reflected an asserted change in value of real properties.  Murphy J, in a considered judgment, dismissed the application.

17. From paragraphs 14 through to 24, on page 3 to page 5, of his Honour's reasons, he discusses the applicable principles.  I refer to those, and I will quote them.  From paragraph 14:

    In a case involving an application for settlement of property, it can broadly be said that common law principles govern applications to reopen in this court.  Those principles make it clear that the granting of leave to reopen is discretionary.  That discretion is guided by the interests of justice.  The essential question is:  is the court more able to do justice in the facts and circumstances of the particular case if the application (to reopen) is granted.

    In cases where reasons for judgment have not been delivered, the High Court has held that the primary consideration should be the embarrassment or prejudice to the other side. 

    A recent decision of the Supreme Court of Queensland in EB v CT (No.2) [2008] QSC 306 was referred to by both counsel for the husband and wife. That case involved an application for property division under…. State law with respect to a de facto relationship. In that case, Applegarth J summarised ... the ( common law) principles applicable to a reopening.

18. Murphy J quoted, then, from Applegarth Js decision in which he said:

    The guiding principle in deciding whether to grant leave to reopen is whether or not the interests of justice are better served by allowing or rejecting the application. 

    …….

    The criteria governing the exercise of the discretionary power to reopen a case to admit further evidence where the hearing has concluded but judgment has not been delivered was said to be as follows:

    (a) that the further evidence is so material that the interests of justice require its admission;

    (b) the further evidence, if accepted, would most probably affect the result of the case;

    (c) the further evidence could not by reasonable diligence have been discovered earlier;

    (d) no prejudice would ensue to the other party by reason of the late admission of the further evidence.

19. In this particular case, the application is made just that more complex or difficult because not only is it an application for the reopening of a case to admit further evidence, but it is made in conjunction with an application that, once reopened, the matter be adjourned pursuant to section 79(5) of the Family Law Act so that the portended significant change in financial circumstances can actually take its course, however long that might be, enabling the parties' financial position to be then more appropriately ascertained, so that justice and equity can actually be done between them. In respect of that particular consideration, I am mindful that one of the matters to consider, particularly having regard to the fact that Ms Owen opposes the application, is the impact, prejudice and embarrassment that might be caused to Ms Owen by the application being granted.

20. I take that into consideration, but I am most influenced in that regard by the acknowledgment and acceptance of Ms Owen that a significant claim has been made against both parties and that it arises from circumstances that existed or that were put in place by both parties prior to the end of their relationship.  I am satisfied on the evidence that the position put forward by the husband, accepted by the wife, that there is a substantial claim made against both of them that potentially gives rise to a substantial liability being incurred by both of them which, optimistically on the part of the husband may be limited to $100,000 to $120,000, but which at worst case could be as high as $480,000, is so material that the interests of justice do require the reopening of the case so that evidence once ultimately available as to exactly what that liability is going to be can be admitted. 

21. I am quite satisfied at this point in time that at least from the husband's point of view, on even his most optimistic perception of the case, that the further evidence, if it is accepted in the proceedings, could very probably have an affect on the outcome of the case, notwithstanding the fact that Ms Owen at this stage confidently asserts that it will not and should not, in any event.  As to the question of whether the evidence could have been found with reasonable diligence earlier, it is clear that what has now emerged is the fact that a potential claim as known to the parties prior to the property division has now turned into an actual claim that has actually been filed in the New South Wales CTTT. Those proceedings are now on foot and a directions hearing is scheduled for the near future. 

22. I, therefore, am satisfied that the likelihood of this claim being made is not something that the parties could have confidently predicted at the time the proceedings were heard by me.  However, at this point in time, that likelihood has actually turned into real proceedings being commenced against them.

23. I have already acknowledged that Ms Owen definitely has an interest in achieving finality in the litigation that is underway between the parties. However, in my considered opinion, the interests of justice as between both of the parties in this case demand that the matter be reopened and the proceedings adjourned until the determination of the extent of the further liability of the parties in these proceedings has been made, whenever that might be. Accordingly, I am persuaded that the husband's application to reopen proceedings and then to adjourn them pursuant to section 79(5), until the determination of the parties' liability should be granted, and I intend to so order.

I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 10 October 2012.

Associate:

Date:  3 December 2011