M & M

[2009] FamCA 380

FAMILY COURT OF AUSTRALIA

M & M [2009] FamCA 380

FAMILY LAW – PRACTICE AND PROCEDURE – Orders of Deputy Registrar declared null and void ab initio – Delegation of power to Deputy Registrars

APPLICANT: Ms M

RESPONDENT: Mr M

FILE NUMBER: SYC 1296 of 2008

DATE DELIVERED: 12 May 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Cohen J

HEARING DATE: 12 May 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Terence Lynch

SOLICITOR FOR THE APPLICANT: Glynns Lawyers

COUNSEL FOR THE RESPONDENT: Mr Batey

SOLICITOR FOR THE RESPONDENT: Gayle Meredith and Associates

Orders

1. That it is hereby declared that the orders of the Deputy Registrar called in the orders ‘Registrar’ made herein on 26 March 2008 are null and void ab initio.

2. That the husband’s application for a stay and for an order postponing the operation of Order 1. is refused.

3. That the husband’s application to restrain the wife from proceeding with her section 79 application until further order is hereby refused.

4. That the costs of this application shall be costs in the cause to be reserved for determination by the Judicial Officer/s who finally determine the principal proceedings.

IT IS NOTED that publication of this judgment under the pseudonym M & M is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1296 of 2008

MS M

Applicant

And

MS M

Respondent

REASONS FOR JUDGMENT

1. Before me is an application by the wife for leave to extend time to review orders made by a Deputy Registrar, called in the orders “Registrar”, on 26 March 2008. As an alternative, she seeks in her application filed 16 December 2008 to set aside the orders made in March 2008 pursuant to s 79A of the Family Law Act and for the Court to make final orders pursuant to s 79 of the Act.  As can be discerned from what has been said above, the orders made in March 2008 purport to be final property orders.

2. When the matter commenced this morning I had read all the papers in the file and had formed a tentative view that there would be no need to make either of the abovementioned orders because the Deputy Registrar did not have power to make consent final property orders.  On informing counsel of this, I was told by Mr Batey, counsel for the husband, that he had been informed by Mr Terrence Lynch, the wife's barrister, some days ago that the wife intended to argue the same point.  It was a remarkable coincidence in view of the fact that the present Rules of Court have been in force for about five years and, to my knowledge, this point has not previously been taken despite the widespread practice in the Court of deputy registrars making consent final orders, including property orders.

3. Section 37A of the Act provides for the power in a majority of the Judges of this Court to delegate to registrars certain of the Court's powers by way of Rules of Court.  "Registrar" in this section includes a deputy registrar (s 4(1)).  Section 37A(1)(g) gives the Court power to delegate to registrars "The power to make, in proceedings under this Act, an order the terms of which have been agreed upon by all the parties to the proceedings."

4. This ability to delegate is, to say the least, clearly and unambiguously expressed.  Section 26B(1) of the Act makes similar provision for delegating powers of the Court to judicial registrars.  It is quite significant that rr 18.02(1)(c) and 18.02(3)(c) delegate to judicial registrars the power to make orders for final property settlement pursuant to s 79 "made with the consent of all the parties to the case".  These rules have made it perfectly clear that judicial registrars can make consent final property orders.  There is no uncertainty that I can discern in the vesting of this power in them.

5. In Harris v Caladine (1991) 172 CLR 84 the majority of the High Court of Australia unequivocally found that a delegation of judicial power by the Family Court of Australia to a deputy registrar made under the Rules of Court pursuant to s 37A of the Act to make consent final property orders was valid. However, that delegation was made pursuant to O. 36A, r 2(1)(m) of the Rules of Court which have been in force since 1988 but which have since been repealed in respect of cases commencing on or after 29 March 2004 and replaced by the Family Law Rules 2004 which commenced on that date. The proceedings before me were commenced by the filing of an application for consent orders on 6 March 2008, so are governed by the 2004 rules. On repeal of the old rules, O. 36A ceased to be in force and the delegation by it of powers to deputy registrars ceased for matters commencing on 29 March 2004 or afterwards. Deputy registrars thereby lost the powers which it had delegated to them except in matters commenced before 29 March 2004.

6. It is nevertheless quite instructive to examine the terms of the relevant delegation by O. 36A.The delegation by O. 36A, r 2(1A)(m) was "The power to make an order the terms of which have been agreed upon by all the parties to proceedings."

   It is identical in wording and extent to the power given by s 37A(1)(g) of the Act to judges to delegate to registrars.  The delegation to deputy registrars could have been made in those terms under the rules if the Court intended to delegate these powers.

7. Under the 2004 Rules of Court the situation is quite different.  The most recent amendment of the rules which might affect these proceedings took effect on 1 March 2009, well after the proceedings were commenced or the Deputy Registrar purported to make the orders. The Rules of Court which are usually to be applied in any case are those rules in existence at the time they are to be applied.  Here one could not regard any delegation made after the event, if it is not expressed to apply to it ex post facto, and probably even if it is so expressed, to apply as validating orders by giving a power to make them when at the time they were made there was no power.  Thus, I regard the Rules of Court which were in force on 26 March 2008 as applicable to the issue of the validity of the purported orders of that date.  It does not really matter whether I rely on the current rules or those in force on 26 March 2008 because the rules in force on 26 March were not relevantly altered by the 1 March 2009 amendments except that the numbering and arrangement of the rules has been slightly altered in some instances. There has been no alteration to their effect.  I shall refer to the rules which I regard as applicable by the identification which was used in the version which was in force on 26 March 2008.

8. Pt 10.4 of the Rules of Court provides for some of the procedures needed to obtain consent orders.  By r 10.17(a) “the court may…..make an order in accordance with the orders sought” if a party applies for consent orders.  This is the only rule in this part which could be relevant to the issue here.  By the dictionary which is part of the rules, "court" means "a court that ... is presided over by a judicial officer who has, or has been delegated, the power to exercise the jurisdiction." Thus there is circularity and therefore doubt about whether Pt 10.4 does in itself delegate any power to a deputy registrar.  The definition of "court" in the definition section and the use of "court" in r. 10.17 seem to indicate that the delegation must be made by another rule.

9. Rule 18.06(1) provides a table of each power of the Court which is delegated to the deputy registrars.  There is nothing in this table, and Mr Batey conceded this to be so, which affects a delegation of the power to make consent final property orders to the deputy registrars.  Rule 18.06(2), however, provides that "Each power vested in the court by these Rules and mentioned in an item of Table 18.5 is delegated to each Deputy Registrar."

10. Superficially it might seem that the rules cannot vest any power in the Court.  It is the Family Law Act and other specific Acts only which can have this effect.  However, because of the definition in the dictionary of "court", the power vested in the "court" referred to in r. 18.06(2) is the power vested in a judicial officer who has been delegated the power, and by r 10.17(a) the Court, meaning a judicial officer who has been delegated the power, may make consent orders.  This seems to me to create a ridiculous situation.  There has not been any actual delegation of power to a deputy registrar because the definition of "court", as it is used in r 10.17(a). Therefore Pt 10.4 is reliant on some other specifically stated delegation of power to a deputy registrar, and r. 18.06(2) does the same. 

11. Nevertheless, r. 18.06(2) could be an attempt to delegate a relevant power to the deputy registrars.  By item 11., Pt 10.4 is nominated as a provision of the rules where a power is delegated to deputy registrars.  But the power delegated is, if plain English is used to interpret the power which is delegated, not to make consent orders, it is the "power to make an order in relation to a consent order". That leads to no conclusion but that the delegation excludes the actual making of a consent order.  If an order is only related to a consent order, it is not a consent order of the type specified in r 10.17(a).

12. Mr Batey submitted that item 11. includes a consent final property order, it being a consent order.  I do not accept that submission.  The Court, with the greatest of ease, could have made a clear and unambiguous delegation, as it has made to the judicial registrars.  The delegation of powers is a matter of great seriousness and moment.  If the orders contain an attempt to accomplish such a delegation, this end has not been achieved.  At best, because of the circularity created by the definition of "court" in the dictionary and the terms of Pt 10.4 and r 18.06(2), the actual intention of the Court about its delegation is quite uncertain.  One does not know if any power has actually been delegated by the rules and, because of the terms of item 11. in r 18.06(2), it is even less likely that there has been any intention to delegate the specific power to make a consent order. 

13. It is not fanciful to believe that the Court by a majority did not wish the deputy registrars to have power to make final consent orders. Section 79(2) provides that the Court shall not make property settlement orders unless it is satisfied they are just and equitable.  Such satisfaction is often not just a simple matter.  It may have been thought to be suited to a judicial officer or even when small matters are involved a judicial registrar; the latter's jurisdiction being generally restricted to matters involving $2 million or less, when the rules were promulgated and approved by the majority of this court.

14. The matter before me is an example of the need to be diligent, diligence which may have been thought to be more appropriately exercised by a judge.  Here, no complete statement of financial circumstances has ever been filed by the husband.  The information which has been filed as part of the Application for Consent Orders is quite deficient.  Although sworn by the husband to be given in good faith, it is not sworn to be true or accurate.  There is a substantial deficiency in relation to the valuation of property in the document and the wife now says she did not appreciate the value of some of it and, by the orders, was given far too little in view of cohabitation having lasted more than 30 years, during which she worked full-time for about 19 years and part-time for some of the balance as well as being the principal carer of the parties' three children.

15. The gross property, not including superannuation, is said in one part of this document to be $9.4 million without superannuation worth an additional $3.696 million, a total of $13.096 million.  This part suggests that the wife would receive about $5.099 million in all under the terms; that is, about 38.9 per cent of the total property.  Yet, in another part of the same document, the combined property of the parties is said to be $8.146 million plus $4.2 million in superannuation and $1.545 million in resources, which is a total of 13.891 million.  No attempt was made to discover the real situation; that is, what the parties would actually receive under the orders before these orders were made by the Deputy Registrar, so this is a case where one might expect it to be appropriate for a Judge in Court to decide whether the division is just and equitable before making consent orders which are of a nature which, among other things, make provision for a proposed sale of a substantial property at some time in the future where its value is uncertain despite the fact that the proceeds were to be divided and thereby do not fully and finally end the relationship between the parties.

16. I am quite lacking in satisfaction that the power to make the orders has been delegated to the Deputy Registrar and, accordingly, shall declare the orders she made on 26 March 2008 to be null and void ab initio.

17. I have now been asked by Mr Batey for a stay or to suspend the operation of the declaration.  Mr Lynch in response says there is no power to order a stay of a declaration and because of the very nature of a declaration it is inimical to such an exercise of judicial power to suspend its operation.  On balance, I think he is correct and I refuse the application.

18. In these proceedings there is an application for costs by the wife, to which Mr Batey's response is that the usual thrust of s. 117; that is, s.117(1) which provides that the parties should bear their own costs, should be upheld and therefore there should be no order as to costs.

19. My tentative view has been that there should be a costs order but it should be reserved so those costs can be regarded as costs in the cause and dealt with if otherwise an order for costs is necessary.  I come to that view particularly because there is little doubt that Mr Batey's client will appeal and that, therefore, the Full Court ought to be put in a position where they can hear an appeal on the issue of costs as well, although presumably they could hear an appeal on a decision by me to make no order for costs.

20. Having to consider all of the matters that s 117 provides for, I am of the view that this matter is far from a run-of-the-mill matter and that it is a case where the circumstances may, after consideration of the matters required to be brought into consideration under s 117(2A), warrant an order for costs. Certainly it is warranted to assume that an order can be made because of the unusual circumstances. 

21. Applying s 117(2A) is simple because few of the provisions of that section can be applied.  There has been no failure on either party's part to comply with orders of the Court or anything like inappropriate conduct of the proceedings.  There has been no legal aid granted to either party and no relevant written offer.

22. Mr Batey has submitted that the husband did not fail completely in his response to the wife's application by opposing it because I did not make the orders which the wife initially sought in her application of December 2008. I am of the view that although that is true, because these proceedings resulted in orders which put the wife in precisely the same position she would have been in had an order extending time for appeal as of right by way of rehearing or by setting aside the current orders pursuant to s. 79A, she has been put in precisely the same position by the declaration that the consent orders are null and void ab initio and that therefore has succeeded. The question is: Has the husband wholly failed?

23. In determining that, I take into account the fact that although it has not been pleaded, the basis upon which the wife succeeded was argued by the wife and that the husband, through his lawyers, was informed some time ago and in sufficient time to withdraw his opposition to the orders that the wife seeks or to file consent orders, yet has failed to do so.  In my view, in those circumstances the husband has wholly failed in his defence to the orders the wife has sought because it was actually argued that the original orders were null and void ab initio. 

24. Nevertheless, as I said in argument, this matter is one which might come as a surprise to any litigant or any lawyers who practise regularly in this Court and the husband cannot be blamed for assuming, until Mr Lynch informed Mr Batey to the contrary, that there was absolutely nothing wrong with the making of the original orders.  In those circumstances, I am not of the view that a costs order should immediately be made against him.

25. However, I am also not of the view that there should merely be a case where the husband should have the benefit of a refusal to make any costs order, that is, of  the application of s. 117(1).  The parties can each well and truly afford, in view of the fact that the costs are not likely to be very great in this application, to either bear their own costs or bear the other party's costs.  As I have said in the principal judgment, they have assets of more than 10 million by the look of things and that even if the wife gets only what the orders which are void would purport to give her; something in the high 30 percentile range, she would still easily be able to afford to meet her own costs or pay the costs of the husband.

26. I bear in mind the fact that these proceedings, although they may be bound to go a lot further and involve a lot more costs, are still at an early stage so far as litigation is concerned and that it is not in the interests of the parties to impose upon one or the other at this stage an order for costs because such an order will tend to make the conflict greater and, therefore, the likelihood of a compromise between them, which is in their best interests and in the interests of the community, less likely.  I am of the view that the order which will best serve the parties' interests and best do justice at this stage is to leave the question of costs of these proceedings to the Court which finally determines the other outstanding issues between the parties, whether they be limited to matters on appeal, that is, if the appeal is successful, or have to go to a hearing on the issue of property settlement.  It is such an order which in my view is most likely to encourage the parties to go down the path of compromise and settlement of their property.  Their emails, which I have read as part of the evidence, indicate that both are conscious of the prospect that costs in these proceedings will be high.  I have no doubt whatsoever that they will be shocked by the extent of those costs if they follow this litigation to its conclusion without any compromise between them; in other words, without settling.  I am also conscious of the fact that they have, to date, shown by the failed orders the capacity to compromise and that, therefore, I should make orders that maintain that capacity or are best in the circumstances to not undermine that capacity. But the prospect of a costs order against one or the other should remain.

27. In my view there are no other matters of relevance that I should consider. The order which I should make is that costs of the application before me should be costs in the cause and therefore it shall be available for a Judge who in future deals with the matter to determine whether or not one party or the other or neither should bear those costs, and that is the order I shall make.

28. In these proceedings Mr Batey has asked me to make an order restraining the wife from continuing with either the s 79A proceedings or the s 79 proceedings. In effect, my orders end the s 79A proceedings because they are nugatory. All that is outstanding, it seems to me in view of the application which was filed in December 2008, is a s 79 application by the wife. It seems to me that if I stay that, the usual procedures relating to conciliation will not commence. Presumably, I could stay taking proceedings of a nature other than the conciliation proceedings, but that is not appropriate and will not encourage the conciliation as much. I am conscious of the fact that there will be an appeal. However, I can see no reason why the conciliation proceedings should not proceed anyway and for that reason should refuse to restrain the wife from continuing the s 79 application. I am also conscious of the fact that because there has been a degree of performance of the orders which I have declared null and void, both sides will need to act with some care and consideration in relation to future proceedings, future actions and future orders and I think that I should give both parties the opportunity to consider those issues without any impediment on the wife in continuing with the s. 79 proceedings. The problem might be that any restraint on her might prevent her from being able to take steps that she might really need to take to protect her situation in view of the partial performance or even in relation to matters which have not been the subject of performance, so I shall refuse the application.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen

Associate: 

Date:  13 May 2009