M and M - [2001] FMCAfam 293

FEDERAL MAGISTRATES COURT OF AUSTRALIA

M & M

[2001] FMCAfam 293

PROPERTY SETTLEMENT – Section 79A – Application to have separate hearing.

Applicant:

P M

Respondent:

K A M

File No:

ZH 2081 of 2001

Delivered on:

14 December 2001

Delivered at:

Hobart

Hearing Date:

11 December 2001

Judgment of:

Roberts FM

REPRESENTATION

Counsel for the Applicant:

Mr. Hay

Solicitors for the Applicant:

Clerk Walker & Stops

Counsel for the Respondent:

Ms. Badenach

Solicitors for the Respondent:

Ogilvie Jennings

ORDERS

That save as to questions of costs, the Application filed on behalf of the Husband on 7^th November, 2001 be dismissed.
That the Court declares that it is appropriate in the administration of justice in this case to allow discovery.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
HOBART

ZH 2081 of 2001

P M

Applicant

And

K A M

Respondent

REASONS FOR JUDGMENT

Background and applications

The parties to this action are P M (“the Husband”) and K A M (“the Wife”). They were married on 17^th March, 1994 and their divorce became absolute on 22^nd October, 1998.
The Wife’s original Application pursuant to Section 79A of the Family Law Act 1975 was filed on 9^th February, 2001 and there have been three interlocutory hearings before me. Many of the relevant facts have been set out in my earlier Judgments in relation to those three interlocutory applications. I shall not repeat all the background facts.
The Wife has amended her Application on more than one occasion and the latest Amended Application was filed on 22^nd November, 2001. I note however that the document is incorrectly shown to be an Amended Response. Notwithstanding this, however, it is clear that the Wife bases her Application upon paragraphs (a) and (d) of subsection (1) of Section 79 of the Family Law Act 1975.
The Wife also seeks leave pursuant to Section 44(3)(a) of the Act to file an application for spousal maintenance.
The Application currently before the Court is an Application filed on behalf of the Husband on 7^th November, 2001 seeking Orders that the Wife’s Application pursuant to Section 79A and Section 44(3)(a) of the Act be divided into two parts. Those two parts are as follows:
a)Firstly,
i)A hearing as to whether or not the Wife has established a miscarriage of justice and whether the existing Orders dated 3^rd November, 1995 should be set aside in the exercise of the trial Judge’s discretion pursuant to Section 79A, and
ii)A hearing to determine whether time should be extended to allow the Wife to bring a claim for spousal maintenance, and
b)Secondly, and in the event that the Wife is successful in the hearing as to whether the existing Orders should be set aside and/or in seeking an extension of time to bring a claim for spousal maintenance, a hearing as to what Orders, if any, should be made by way of alteration of property pursuant to Section 79 of the act (sic) and/or a hearing as to what, if any, spousal maintenance should be paid by the husband to the wife.
The Husband’s Application was supported by a lengthy affidavit sworn by him and filed on 7^th November, 2001.
The Wife’s solicitors filed a Response seeking that the Application be dismissed and that there be a declaration made pursuant to Rule 14.01 of the Federal Magistrate Court Rules that the Specific Questions filed on 31^st October, 2001 be answered by the Husband within fourteen days. That Response was not supported by any affidavit material.

The law and findings

Section 79A(1) of the Act provides:
“Where, on application by a person affected by an order made by a court under section 79 in proceedings with respect to the property of the parties to a marriage or either of them, the court is satisfied that –
(a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance;
(b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out;
(c) a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or
(d) in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection [1AA] ), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order,
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.”
I was greatly assisted by the submissions of both Mr. Hay and Ms. Badenach in support of their clients’ cases.
Making his submission for the Husband, Mr. Hay conceded early that most of the authorities were against him, in that most authorities state that it is preferable that there be just one hearing.
In the unreported decision of Clarkson handed down in the Family Court of Australia on 18^th January 1999 (Ref. ML 4611 of 1996) Guest J said:
“There is involved a four step process in proceedings such as the one before me, namely:
·whether there had been (a named ground) or “other circumstance” as claimed by the wife,
·whether that amounted to a “miscarriage of justice”,
·whether the court, in its discretion, should “vary the order or set the order aside” and
·whether it should make another order under sec.79 of the Act.”
He referred to Patching (1995) FLC ¶92-585 at p.81,797.
Mr. Hay (who provided me with a copy of the decision in Clarkson) pointed out that there are a number of similarities between the claims made on behalf of the Applicant in that case and the claims by the Wife in this case. Those similarities included the Wife’s claim that she did not receive proper legal advice at the time of the making of the consent Orders and that her consent was not real because of psychological impairment.
Counsel for the Husband argued that it will save the parties significant costs if there is a preliminary hearing to determine the first two steps in the four step process referred to in Clarkson above where if the result is that the matter should proceed no further. In this regard, he argued that there will be substantial costs incurred by both parties in relation to valuations and other expert evidence. He indicated that valuations of property at the time of the making of the Consent Orders and now would need to be obtained. Further, it may be necessary to obtain expert evidence about the economic conditions existing at the time of separation.
Counsel for the Husband suggested that both parties’ affairs are more complex now than they were at the time of separation. In this regard, he referred with his client’s financial involvement with his de facto wife. His affidavit states that in October 1997 he and his de facto wife increased the mortgage liability to the A.N.Z. Bank from $104,000.00 to $124,000.00 in order to complete and improve the former matrimonial home. He states that his de facto wife became “a joint lender/debtor for the entire amount”. I presume that he means that he and his de facto wife are jointly and severally liable for that amount, as is usual with documentation prepared by banks.
Counsel for the Husband also relied upon the fact that the Wife’s own mortgage is also jointly in the names of herself and a male friend.
It seems to me that in essence, the arguments on behalf of the Husband can be summarised as follows:
a)If the Court determines the first two steps of the four step process separately and decides in favour of the Husband, there will be massive savings in costs to both parties;
b)If the Court decides in favour of the Wife and it is necessary to proceed further, then little harm will be done (indeed, his counsel: “nothing will be lost, other than time.”
The first flaw in that argument is that it appears to ignore the interests of the Husband’s own de fact wife and the male friend of the Wife who is apparently a joint mortgagor with her.
Sub-section (2) of section 79A states that, in the exercise of its powers under inter alia sub-section (1), the Court “shall have regard to the interests of, and shall make any order proper for the protection of, a bona fide purchaser or other person interested”.
In Oastler (1993) FLC ¶92-390 the Full Court of the Family Court said:
“About the commencement of the hearing a discussion took place as to what the nature and conduct of the proceedings with which his Honour was to deal should be. The understanding reached was that his Honour should only deal with the question whether the order should be set aside, and that the question what orders if any should be substituted should be considered in separate proceedings. Whilst it is not necessary to lay down as an inflexible rule that such a course cannot be followed, prima facie at least the course adopted does not appear to be consistent with what the section envisages. The section provides that ''the court may, in its discretion, vary the order or set it aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside''. The power granted to the court hearing the application under section 79A to vary the existing order strongly suggests that there should be one proceeding only in which the proceedings to vary or set aside the order and if appropriate, to make another order, should be disposed of. It would be within the court's discretion to refuse to set aside an order even if that was the only relief sought and to order that an existing order be varied. Further support for the view that prima facie at least the whole matter should be dealt with in one proceeding derives from section 79A(2) ... It seems unlikely that the legislature intended that the court should have regard to the interests and should make orders for the protection of a bona fide purchaser or other person interested in several and separate proceedings.”
It seems to me to be impossible to take account of other interested persons without looking at the situation as it is today and how that came about. It seems to me that the evidence in relation to that will be in extricably linked with the other evidence that the Husband is seeking to avoid at this stage.
The second floor in the arguments put forward on behalf of the Husband is that it does not take account of the fact the Wife is also relying upon paragraph (d) of subsection 1 of Section 79A.

A reference to that paragraph, which is set out above, shows that the Court must have regard to “circumstances that have arisen since the making of the order”. Again, it would appear that at least in relation to the children, the events between the making of the Consent Orders and today will be relevant.
I fully accept that it is not an inflexible rule that there should be only one hearing. In Patching (supra), the Full Court said at page 81,797:
“Of course there will be cases where it is convenient to divide the procedure into several hearings; for example, where there is a discrete issue under the first and/or second step and the property circumstances of the parties are complex.”
However, in this case, I can see no reason why there should be any variation from the general preference to deal with all of the steps in one hearing. In Patching the Full Court said:
“The reasons for that are obvious, namely that even if the Court concludes that there have been circumstances which amount to a miscarriage of justice it must then consider whether in all the circumstances it should exercise its discretion to vary or set aside the orders and/or make a new s. 79 order. In exercising that discretion it will have regard to, inter alia, the degree and nature of the miscarriage in question, any delay, alterations in the parties’ positions in the meantime, and the extent to which, if at all, it is now appropriate to vary the original orders.”
In the circumstances, save as to questions of costs, I shall be dismissing the Application filed on behalf of the Husband on 7^th November, 2001.
I need to deal with the remaining issue in the Response filed on behalf of the Wife on 22^nd November 2001, that being the Application that the Husband should answer with Specific Questions within fourteen days.
It is clear from the Husband’s affidavit that a Request for Answers to Specific Questions was delivered to his solicitors. It is quite clear that those Specific Questions are extensive. In his affidavit, the only objection to answering those questions appears to be the time and expense involved.
Rule 14.01 of the Federal Magistrates Court Rules states that a declaration may be made under subsection 45(1) of the Federal Magistrates Act 1999 to allow interrogatories on the application of the party or on the Court’s own motion. If such a declaration is made, the Court may make appropriate orders in relation to the answers to specific Questions, having regard to any relevant Family Law Rules. The relevant rules are to be found in Order 19 of the Family Law Rules. It is clear from Order 19 that a party to proceedings may serve on the other party a request for answers to specific questions and that, unless the Court otherwise orders, a party may only request the other party to answer specific questions once in relation to an application.
It is also clear from Order 19 Rule 5 that, unless the Court otherwise orders a party is not required to answer specific questions before the time specified in a request for discovery or an order for discovery has expired.
In this particular case, neither the Wife nor her solicitors have filed any affidavit material, so I do not know whether there has been any request for discovery. However, Section 45 of the Federal Magistrates Act 1999 provides that discovery is not allowed unless the Court declares that it is appropriate in the administration of justice. To date, no such declaration has been made. However, it seems to me to be clear that given the complexity of this matter, the discovery process is appropriate. Consequently, I will make such a declaration in relation to discovery.
However, that declaration may be somewhat academic. This is because I need to give serious consideration to whether this matter should be transferred to the Family Court of Australia. If that happens, Section 45 of the Federal Magistrates Act 1999 becomes irrelevant.
It is clear that this Court was established to handle less complex matters in family law and other jurisdictions. In relation to the former, one of the criteria for assessing the complexity of the matter is the length of the hearing. There is a general (but flexible) rule that a hearing that exceeds two days justifies a transfer from this Court to the Family court of Australia. It seems clear to me that both counsel are of the view that if there is to be one hearing, then that hearing will occupy more than two days. It is my own view that such a hearing will occupy significantly more than two days. So far, the parties have strenuously opposed each other in relation to no less four interlocutory applications that have required adjudication by the Court. It is quite clear, that there is very little that can be agreed between the parties.
In the circumstances, it is my preliminary view that this matter should be transferred to the Family Court of Australia, however, I will hear from counsel in relation to that.
Further, even if I do transfer this matter to the Family Court of Australia, there are costs issues that the parties may wish to determine before any such transfer is made. I wish to hear from counsel in relation to that also.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Roberts FM

Associate:

Date: 14^th December, 2001