LFDB v SM

Case [2017] FCAFC 178

FEDERAL COURT OF AUSTRALIA

LFDB v SM [2017] FCAFC 178

Appeal from: LFDB v SM (No 3) [2017] FCA 80
File number: NSD 301 of 2017
Judges: BESANKO, JAGOT AND LEE JJ
Date of judgment: 15 November 2017
Catchwords: PRIVATE INTERNATIONAL LAW – appeal from the dismissal by the primary judge of an application under s 72(1) of the Trans-Tasman Proceedings Act 2010 (Cth) to set aside the registration of a judgment of the High Court of New Zealand in relation to proceedings under the Property (Relationships) Act 1976 (NZ) – whether enforcement of judgment would be contrary to public policy in Australia
Legislation:

Constitution, s 51(xxxvii)

Acts Interpretation Act 1901 (Cth), s 21(1)(b)

Family Law Act 1975 (Cth), Pts IV, V, ss 4, 31, 31(1)(aa), 33, 39(1), 39A(5), 39B

Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth)

Federal Court of Australia Act 1976 (Cth), s 37M(1)

Trans-Tasman Proceedings Act 2010 (Cth), ss 66(2)(i), 68, 72(1), 72(1)(a), 72(1)(b), 72(1)(c)

Property (Relationships) Act 1976 (NZ)
Cases cited:

Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd [2005] FCA 153

Bouton v Labiche (1994) 33 NSWLR 225

Brocx v Hughes [2010] WASCA 57; (2010) 41 WAR 84

Deangrove Pty Ltd (Receivers and Managers Appointed) v Commonwealth Bank of Australia [2001] FCA 173; (2001) 108 FCR 77

De Santis v Russo [2000] QSC 65; (2001) 27 Fam LR 414

FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268

Hutchinson v Comcare [2017] FCA 136

Kioa v West [1985] HCA 81; (1985) 159 CLR 550

LFDB v SM [2014] NZSC 197; (2014) 22 PRNZ 262

LFDB v SM [2015] FCA 725; (2015) 239 FCR 262

LFDB v SM (No 3) [2017] FCA 80

Loucks v Standard Oil Co of New York (1918) 224 NY 99; (1918) 120 NE 198

Lowe v Mack Trucks Australia Pty Ltd [2001] FCA 388

Nucoorilma Clan of the Gamilaaroy Aboriginal People v NSW Minister for Land & Water Conservation [2009] FCA 1043

Pemberton v Hughes [1899] 1 Ch 781

Sammy Russo Meat Supplies Pty Ltd v Australian Safeway Stores Pty Ltd [1999] FCA 1381

Skahill v Kestral Holdings Pty Ltd (in liq) [2000] WASCA 185

Skinner v Commonwealth of Australia [2012] FCA 1194

SM v LFDB [2012] NZHC 1152

SM v LFDB [2013] NZHC 3105

SM v LFDB [2014] NZCA 326; [2014] 3 NZLR 494

SM v LFDB [2015] NZHC 2630

Stern v National Australia Bank [1999] FCA 1421

Wiri People #2 v State of Queensland [2006] FCA 1069
Date of hearing: 31 July 2017
Date of last submissions: 5 October 2017
Registry: New South Wales
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Category: Catchwords
Number of paragraphs: 64
Counsel for the Appellants: Mr G Page QC
Solicitor for the Appellants: Knight Family Lawyers
Counsel for the Respondent: Dr C S Ward SC and Dr S Tully
Solicitor for the…

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Details
AGLC
LFDB v SM [2017] FCAFC 178
Case
[2017] FCAFC 178
Decision Date

CaseChat Overview and Summary

The matter before the court was an appeal against the dismissal of an application to set aside the registration of a judgment of the High Court of New Zealand in relation to proceedings under the Property (Relationships) Act 1976 (NZ). The appellants, LFDB and associated companies, sought to challenge the registration of the judgment on the basis that its enforcement would be contrary to public policy in Australia. The respondents, SM and associated entities, opposed the application, arguing that the appellants had no valid grounds to contest the registration.

The court was required to determine whether the enforcement of the New Zealand judgment in Australia would contravene Australian public policy. Additionally, the court needed to address the argument that the registration of the judgment constituted a de facto financial cause under the Family Law Act 1975 (Cth), which could potentially impact proceedings in the Federal Circuit and Family Court of Australia. The court also needed to consider if there was any jurisdictional issue with the primary judge's handling of the application.

The court found that the registration of the New Zealand judgment in Australia did not constitute a de facto financial cause under the Family Law Act. The court further determined that the jurisdictional argument presented by the appellants lacked merit. The primary judge's decision to dismiss the application was upheld as the arguments presented were not substantiated either legally or factually. Consequently, the appeal and the interlocutory application were dismissed. The court directed the parties to submit their positions on costs within a specified timeframe.

The court issued orders dismissing the appeal and the interlocutory application. The parties were instructed to file and serve submissions, limited to two pages, regarding the terms of the costs order they contend for. The court would subsequently determine the issue of costs based on the submissions received.

Orders

Orders of the court

1. The appeal be dismissed.

2. The interlocutory application dated 17 August 2017 be dismissed.

3. Within seven days from the date of this order the parties file and serve any submissions, limited to two pages, as to the terms of the costs order for which they contend.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Neither of these arguments was dealt with, in terms, by the primary judge. This is hardly surprising as neither argument was advanced, in terms, before his Honour. The question of how it could be said that his Honour fell into error in rejecting an argument when it was not advanced before him was never referred to (let alone grappled with) by the appellants but, in any event, it does not matter as both arguments, for reasons detailed below, are misconceived both legally and factually. In order to understand the context in which the arguments arise, it is useful initially to canvass some limited aspects of the litigious saga between the parties and also some relevant aspects of the reasoning of the primary judge. C RELEVANT BACKGROUND LFDB and SM lived together in a domestic relationship in Australia and New Zealand for some time until they separated in early 2009. As noted at [2(a)] above, the second to fifth appellants are companies associated with LFDB. In March 2009, SM commenced an action against LFDB in the Family Court of New Zealand seeking division of property under the NZ Act. In October 2011, the proceeding was transferred to the High Court of New Zealand. By this time, remarkably, the parties “had indulged in 23 interlocutory applications, 53 affidavits, 7 court judgments (all directions), 5 judicial conferences and a hearing, one appeal to the High Court, a High Court application and hearing, and further High Court proceedings involving a mortgagee sale”: see SM v LFDB [2012] NZHC 1152 at [7] per Priestley J. This litigious saga had costs consequences for LFDB and after a failure to pay adverse costs orders dating back to January 2010, described by Priestley J as “longstanding and conspicuous”, an order was made in September 2012 providing that unless the costs ordered were paid by LFDB, then he was “to be barred from taking any further part in the proceedings currently before this Court”. Apparently, at the heel of the hunt, on the last day before this self-executing order took effect, the relevant costs were paid: see SM v LFDB [2014] NZCA 326; [2014] 3 NZLR 494 at 497 [10] (Court of Appeal of New Zealand). In July 2013, after another unsuccessful stage of the litigation, LFDB was ordered to pay a further fixed sum for adverse costs plus interest within seven working days. The judge making the order (Ellis J) gave SM leave “to seek unless orders in the event that [LFDB] fails to pay any part of those amounts as directed”. Payment was not made and in August 2013, Ellis J ordered:If LFDB does not pay to SM’s solicitors by 5:00pm on Monday, 9 September 2013 (New Zealand time) the sum of $24,435.08 plus interest accrued due at 5% per annum from 10 May 2013 to date of payment:LFDB shall be debarred from taking any further part in the proceedings presently before this Court... Ellis J, in her reasons for making this second self-executing order (Unless Order), explained that the order: …in question was made principally because of my view that SM’s preparation for the trial in February was being unduly and unfairly prejudiced by her comparative lack of access to funds (a considerable proportion of which is said by her to constitute relationship property)… The effect of LFDB’s failure to meet the costs awards, in circumstances where I had formed the view that he had the means to do so, was therefore particularly acute.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The registration of the Relevant Judgment and the Costs Judgment under the Act was not a de facto financial cause as that expression is used in Division 2 of Part V of the FLA. The jurisdictional argument has no merit.H CONCLUSION AND ORDERS It follows that the interlocutory application dated 17 August 2017, and the appeal, must be dismissed. SM has sought a special costs order. Both parties should file within seven days a submission, limited to two pages, as to the terms of the costs order for which they contend. The Court will then determine the issue of costs on the papers.

Ratio Decidendi

Legal Principle Established

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