M & M
[2006] FamCA 1453
•20 December 2006
[2006] FamCA 1453
FAMILY LAW ACT 1975
IN THE FAMILY COURT OF AUSTRALIA
AT BRISBANE No. (P) BRF 4921 of 1994
BETWEEN:
M
Applicant Wife
AND:
M
Respondent Husband
REASONS FOR JUDGMENT
BEFORE THE HONOURABLE JUSTICE CARMODY
Date of Hearing: 29th November 2006
Date of Judgment: 20th December 2006
Appearances: Mr Baston of Counsel, appeared on a direct brief from the Applicant Wife
Mr Hackett of Counsel, instructed by Berck & Associates, appeared on behalf of the Respondent Husband
CATCHWORDS:
FAMILY LAW – PROPERTY SETTLEMENT – Set aside consent orders
CASES CONSIDERED
Sommerville (2000) FLC 93-042
Bourke (No 2) (1994) FLC 92-479
McCabe (1995) FLC 92-634
Ryan (EA69 of 2001, 12 November 2001)
Smith and Wilson (475 of 1996 unreported 7 February 2002)
White and Chung (5737 of 2000, unreported 30 May 2003)
Kowalski (1993) FLC 92-342
The issue
This is a defended application by the wife to set aside final property settlement orders under s 79A(1A) of the Family Law Act 1975. The power conferred by that section can only be exercised with the consent of all the parties to the proceedings in which the order in question was made.
The husband concedes the wife’s status as a “person affected” within the meaning of the subsection, but submits that her application should be summarily dismissed because it is not brought with his consent and therefore cannot possibly succeed.
The wife contends, however, that the consent of the parties can be inferred or implied from their past conduct.
The facts
The parties married in 1983. They initially separated in 1994. At that time, real property at S, was jointly owned and a family trust ran the husband’s private practice as a legal professional. Both were shareholders and directors of the corporate trustee. The husband also owned and operated X Farm and had acquired a property at T.
A Registrar made property adjustment orders by consent on 15 August 1994.
The couple reconciled and resumed cohabitation without divorcing shortly after the terms of the consent order were fulfilled.
The wife purchased Y property, with settlement funds.
The parties lived together with their three school age children at X Farm from 1995 to 1998. The family lived off joint earnings. The husband was the main bread winner, but paid the wife to manage the farm. Otherwise the parties maintained separate bank and credit card accounts.
The wife rented out Y property until it was sold in 1996 for $170,000. She used all the proceeds to buy out the husband’s interest in T property in 1997 so that a new home could be constructed on it by the husband to accommodate the family after 1998. He employed the wife as his practice manager.
The farm was sold in 2004. A self-managed superannuation fund was established with the proceeds. Both the husband and wife are trustees of the fund and each of them rolled existing superannuation entitlements into it.
The parties jointly purchased a rental property in February 2005 with borrowed funds. The rent was directly credited against the mortgage account and any additional expenses were met out of the husband’s income.
The parties separated under the one roof late last year. The wife left the family home, bringing the marital relationship to an end, earlier this year.
On 6th March 2006 the husband filed Supreme Court proceedings for a declaration that the wife holds 77 per cent of the legal title in the T property on trust for him and an injunction restraining her from disposing of the property pending further order.
The wife initiated s 79 proceedings in this Court on 17th March 2006.
On 29th May 2006 the wife filed an amended Form 1 adding a claim to set aside (or review) the 1994 consent orders and for new property orders to be substituted.
The husband is restrained from further prosecuting his Supreme Court action pending the outcome of this hearing.
The wife’s case
The wife claims that there are “strong grounds for concluding that the parties, by their conduct, consented to the setting aside of the original order”.
She alleges that the 1994 property order was part of a reconciliation ‘deal’. The husband rejects this suggestion and relies on exhibit TM18 to contradict it.
The circumstances relied upon by the wife as proof of the parties’ consent to set aside the 1994 order are:
a.the lengthy resumption of marital relations and the parties’ mutual decision not to formally dissolve their marriage after the initial separation;
b.the mixing of their financial affairs after they reunited and the family’s subsequent dependence on the husband’s income;
c.their “co-ownership” of T property and the 2005 investment property; and
d.their joint management of the private superannuation fund since 2004.
She asserts and the husband denies that:
a.she was involved in ‘all significant financial decisions’ up to January
2006;
b.they jointly consulted accountants on financial matters;
c.signed guarantees and security documents for joint commercial purposes;
d.maintained joint bank accounts; and
e.discussed putting the farm proceeds into the super fund.
Mr Hackett, concedes on behalf of the husband, some intermingling of incomes and economic resources between 1995 to 2005 but says this is insufficient to satisfy the relevant legal test for setting aside final property orders under s 79A(1A). He submits that the husband’s failure to overtly disown the 1994 orders is irrelevant and to give it any weight at all would amount to an illegitimate reversal of the onus of proof. He points out that there is no documentary evidence corroborating the wife’s “vague” and “meaningless” assertion that she has been involved in all significant financial decisions up to January 2006.
The husband agrees that he has never expressly told the wife that he regards the 1994 orders as ‘still binding’. Nor has he explicitly disavowed the wife’s alleged interest in assets acquired after the resumption of cohabitation. He concedes that the T property building contract and development application were in the wife’s name but says that that this was simply because she was the sole registered proprietor of the land.
The husband’s accountant and personal assistant both confirm that the parties stopped operating joint bank accounts in 1999 and deny having superannuation related discussions with the wife except for one occasion in 1999.
The accountant, Mr N, swears that the husband kept his financial affairs separate from the wife’s save in accordance with his advice to purchase the rental property in 2005 to achieve tax advantages.
The husband disagrees that the wife signed guarantees and security documents for the unspecified ‘joint financial purposes’ referred to in the wife’s affidavit which is uncorroborated.
The finality principle
There are strong legal policy reasons for not re-opening property adjustment orders after time for appeal has elapsed and ample authority can be found for the proposition that the Court’s power to adjust property interests under s 79 must be exercised once and for all: see, for example, Hickey and Hickey v The Attorney-General for the Commonwealth (2003) FLC 93-143, cf Harris (1993) FLC 92-378 and Bassi v Mass (1999) FLC 92-867.
The importance of bringing an end to litigation underpins s 81 of the Act: Simpson and Hamlin (1984) FLC 91-576.
Section 79A(1A) authorises the Court to set aside a previous property adjustment order with the consent of the parties and substitute another one if it considers it appropriate to do so.
This reflects the common law position that a final consent judgment can be discharged with the approval of all those affected.
Section 79A(1A) was apparently inserted into the Act in 1983 to overcome the deficiency identified in Scarborough (1978) FLC 90-501 at 77,622-623 and to allow consenting parties to discharge an otherwise valid property settlement to overcome unintended economic hardships or cater for unforeseen changes in the circumstances of the parties after the making of the original orders without the necessity for a “miscarriage of justice” finding in relation to the first set of orders.
The nature of consent
The Court has no power to even consider making a new order altering the current property interests of the parties without relief under s 79A(1A) being granted with the consent of both parties.
The relevant concept of ‘consent’ is not confined to a subsisting agreement as at the date of hearing but may be established by evidence of a prior express written or oral statement of intention which remains binding or inferred from conduct: Bourke (No 2) (1994) FLC 92-479. The consent required by subsection (1A) is simply to have a pre-existing s 79 order set aside. It does not have to relate to the making of a new one.
Used in this context consent means concurrence not consensus. It implies authority, approval or permission and denotes something more than merely acquiescing in or accepting a settled situation. It may include but is more than submission.
The term ‘consent’ suggests that the consenting party knows what is being consented to and the consequences of doing so. It involves a deliberate choice demonstrated in some positive or affirmative way either by what is said or done which clearly conveys the impression, to an objective onlooker, that consent has been given.
While both parties must consent they do not have to do so in the same way, at the same time or for the same reasons.
Where conduct is relied on as proof it must be obvious and overt. It must be unequivocally referable to consent and equally inconsistent with refusal.
It is often said that actions speak louder than words but “… silence and inaction may manifest consent where a reasonable person would speak if he objected”: W Page Keeton, Prosser and Keaton on the Law of Torts (5th ed), West Pub.Co, USA, 1984.
The consent must be real and not merely apparent. However, “circumstantial consent” as Justice Peter Young calls it in his text book The Law of Consent [1], that is, consent by inference from proved circumstances can be unreliable because it is based on an objective interpretation of a subjective fact viz. a state of mind.
[1] P W Young, The Law of Consent, Law Book Co, Sydney, 1986 at 25
Unresolved factual disputes between the parties do not assist in this process and consequently have not been considered.
While there is no logical reason why a consent to set aside cannot later be revoked or withdrawn, equity will not normally permit retraction where the property rights or interests of another party would be prejudiced.
There is no principled objection in the context of an application for relief under s 79A(1A) to consent operating retrospectively. Thus, consenting parties can abandon or renounce property rights or interests obtained by virtue of a final order even though it has been fully executed: Sommerville (2000) FLC 93-042. Past performance does not mean that affected parties cannot subsequently consent by conduct not to take advantage of the benefits or bear the burden of obligations acquired under the terms of a previous consent order. While what has been done cannot be undone the phrase “consent to set aside” in s79A(1A) is apt to include a decision not to invoke the finality principle against the other party in future proceedings.
The authorities
Section 79A(1A) is one of the least used provisions in Australian family law[2].
[2] Kearney, M. Implied consent to setting aside final property orders. s79A(1A): two bites of the cherry? (2003) 9 CFL 72
Since its introduction in 1983 there have only been three reported cases about its scope and application.
In Bourke (No 2) (1994) FLC 92-479 a 30 year marriage ended in separation and the making of final property orders by consent in 1990. The parties did not divorce and reconciled and resumed cohabitation without either of them taking any steps to implement the terms of the property settlement. A few months later the wife applied to set aside the original property orders under s 79A on the basis of an alleged miscarriage of justice. The parties signed minutes of orders to enable the court to act under s 79A(1A). The wife died shortly after final separation and before her application to set aside was finalised.
The wife’s estate sought to enforce the original orders against the husband.
The Full Court held that the parties had entered into a binding and unconditional agreement to set aside the consent orders which should have been given effect. The wife’s executrix was not allowed to posthumously withdraw the wife’s consent which was given to correct what both parties agreed were unjust and inappropriate property adjustment orders.
The Full Court (Ellis, Lindenmayer and Holden JJ) ruled that failed reconciliation was without prejudice to the original orders and did not vitiate the mutual intention to set aside and did not waive, renounce or make it inequitable for the court to enforce the rights acquired under them.
A differently constituted Full Court (Fogarty, Finn and Kay JJ) in McCabe (1995) FLC 92 – 634 upheld a trial judge’s refusal to summarily dismiss the wife’s application to set aside executory property adjustment orders on the basis that the parties conduct of their financial affairs during a five year reconciliation could be construed as a consensual discharge of the original orders.
Importantly, the Court was not asked to and did not decide whether the circumstances actually did disclose such an intention but their Honours made the observation that an applicant was not necessarily confined to the initial decision to reconcile because the requisite intention may crystallise into a more precise form as time progresses and as the parties’ reconciliation continues as they conduct their lives together, including their financial affairs, so that it becomes inconsistent with any other conclusion.
The Court also noted (without expressing any concluded view) the wife’s argument of “last resort” based on remarks made in Taylor v Taylor (1979) 143 CLR 1 to the effect, that the Family Court of Australia had inherent, as well as statutory power, to set aside final property orders on the basis of reconciliation alone because it would be unconscionable and contrary to public policy for a spouse to enforce s79 orders after a revival of the marital relationship.
The only other reported case on the ambit of s 79A(1A) is the single judge decision of Sommerville (2000) FLC 93 – 042 where Nicholson CJ applied the principles in McCabe to find that a 4½ year reconciliation and related events gave rise to an inference of implied consent to property orders made in 1991 being set aside even though the matrimonial property had already been divided and no longer remained in possession of the parties in the same form.
His Honour identified the grounds for this conclusion at [122] – [126] of his reasons as including the sale of two properties (one of which was the former matrimonial home transferred to the wife under the original order and the other acquired by the husband with his share of the property settlement) to apply the proceeds to the purchase of land for the construction of a new family home in joint names. The parties also conducted a business together for 12 months and used the income derived from it for the purposes of the marriage. The only property subject of the original order held separately after reconciliation was an unprofitable business and a specific sum earmarked for a tax liability which was later applied towards the construction of the jointly owned matrimonial home.
The Chief Justice went on to say at [127]:
Against this background the consequence of any other finding would leave the wife as a victim of a considerable injustice for the reasons pointed out by Fogarty J in Drew’s case. The injustice of course is associated with her having applied the proceeds of the property settlement for joint purposes when the reconciliation occurred and being left without a remedy despite her contributions to the marriage following reconciliation. This is not an injustice related to the making of the original order but … with what occurred thereafter.
The wife’s s 79A(1A) application succeeded because it was concluded that the parties, by their conduct, had consented to the discharge of the original order but his Honour made it clear that the events that occurred subsequent to the making of that order did not, of themselves, provide a sufficient basis for the exercise of the statutory or any inherent discretion.
Drew (1985) FLC 91-601 involved an approved s 87 financial agreement which were fully carried out by each party followed by a four year resumption of cohabitation in which the parties engaged in a number of joint financial transactions and co-owned property. The s 87 agreement could not be revoked except in limited circumstances which did not include the events occurring after its execution including reconciliation.
Fogarty J recognised (at 79,862) that the result was a curious and, in relation to parties who have remained married throughout, potentially unfair one because an affected party may not be able to institute property proceedings elsewhere due to the exclusivity of the family court in “matrimonial causes”.
His Honour noted that different considerations may apply in a case where the parties resumed cohabitation after divorce and had not remarried because the financial issues may not be referrable to the marital relationship, but to the later de facto relationship and therefore may not be a matrimonial cause and ought to be determined by the state law.
The agreement was approved on the basis of the assumption that the parties had terminated the marital relationship and the financial obligations arising out of the marriage would be determined finally by that agreement once and for all. The reconciliation of the parties was neither contemplated nor provided for but the later revival of their financial relations, including the conduct of their household and acquisition of properties together, led to the inference, and was inconsistent with any other conclusion other than, that insofar as the agreement was to govern their future financial relationship it was to be abandoned or rescinded by mutual agreement.
His Honour found that conduct of the parties over the years from 1980 to 1984 amounted to an implied agreement by them to rescind the contract to the extent that it remained executory or to repudiate it as a contract binding upon them. Each contributed moneys, derived (either directly or indirectly) from the approved agreement to the purchase of a new home. They intermingled their financial affairs as well as buying and selling property together.
Fogarty J also suggested that the doctrine of equitable or promissory estoppel may apply to bar the husband from denying that his conduct amounted to a representation to the wife that he would no longer seek to rely upon the outstanding terms of the agreement and the wife to her detriment has acted upon that representation.
This, however, is not some universal rule applicable to all cases where there is a subsequent resumption of cohabitation between the parties to an s 87 agreement. The parties in such circumstances may either expressly or by their conduct make it clear that they intend the agreement to continue to have force. They might, for example, keep their financial dealings quite separate whilst otherwise continuing the marriage,
In the unreported decision of Ryan (EA69 of 2001, 12 November 2001) Coleman J allowed an appeal against an order of a Federal Magistrate setting aside property orders pursuant to s 79A(1A) on the basis that “a resumption of cohabitation for over three years could only be seen as consent” to the earlier property orders being set aside. At par 19 his Honour said:
It seems clear that if a court is satisfied that ‘at some stage’ the parties formed the requisite intention, then prima facie the provisions of (s 79A(1A) could be attracted.
The appeal was allowed because of a faulty reasoning process and because the reasons given were inadequate to justify the conclusion. A number of other factors in the circumstances of the case needed to be considered and though stated the correct legal principles were not applied. One fact or circumstance and one alone was erroneously regarded as sufficient and a finding that the resumption of cohabitation for a substantial period could “only” be seen as a consent was held not to be open.
At [35] – [36] his Honour said:
… as was discussed during the course of debate with counsel, there could well be a case where the resumption of cohabitation may have been for a matter of weeks of days but the facts and circumstances surrounding that presumption was such as to render it abundantly clear that the parties intended to consent to old settlements of property being set aside or orders discharged.
Conversely it is quite conceivable that parties could resume cohabitation for decades, conduct their financial in entirely separate ways consistent with the terms and conditions of the previous settlement of property. With respect, the test is not how long parties resume cohabitation but clearly, that is a fact or circumstance. The absence of any consideration or conclusion in relation to financial matters as indicative of the intention required by the section, being implied or attributed, is, in my view, a fatal flaw in the reasoning.
As his Honour pointed out at [32] financial transactions could have been found to have been consistent with either an intention to disregard a previous property settlement or to act in accordance with it. The Federal Magistrate’s failure to weigh up the effect of financial transactions on the mental element aspect of s 79A(1A) and limiting consideration solely to the reconciliation aspect was held to invalidate the result.
In S & W (475 of 1996 unreported 7 February 2002), Warnick J concluded that parties impliedly consented to a rescission of s 79 orders made in 1996 and ought not to be permitted to assert otherwise. His Honour also found the earlier orders were liable to be set aside because they constituted a miscarriage of justice due to the grossly unequal bargaining position of the parties.
His Honour found at [110] that the resumption of cohabitation in 1997 had been negotiated on the basis of financial considerations and that there was some intermingling and interdependence of financial affairs particularly on the part of the wife. His Honour accepted at [112] the wife had changed her economic position (including selling a motor car and renovating a property) in reliance on the husband’s repeated assurances that they were working as a partnership building up assets for their mutual benefit and future financial security.
His Honour took the view that “… if an objective observer of the circumstances of resumption of cohabitation was asked ‘what did the parties intend in relation to the orders of 30 April 1996?’ that observer would answer ‘that they no longer govern the parties’.”
In W and C (unreported 30 May 2003) the wife sought relief under s 79A(1A) on the basis of resumed cohabitation for four years at least on a part-time basis during which they commenced and conducted a business together, each made further significant wealth and welfare contributions (described in details at [133]) and the wife used the proceeds of the property settlement to purchase a property and vehicle which were used for the benefit of both parties.
The husband submitted that not only had the terms of the property consent orders already been carried out “to the letter” but the parties maintained completely separate financial affairs during the course of their reconciliation.
He argued that, despite its duration, the fact of reconciliation alone was not enough and that there was no authority for the proposition that consent could be implied merely from contributions to the renewed relationship.
In that case there were no joint bank accounts, no property was purchased together, no moneys paid by the wife to the husband to acquire property and no loans repaid. There was absolutely no mingling of finances after the initial separation.
The husband placed considerable reliance on a statement by Evatt CJ in Banhidy (1983) FLC 91-302:
It is my opinion that the subsequent events were equally consistent with the maintenance agreement being the starting point of the subsequent financial relationships between the parties. It seems to me that there is no evidence to establish that the subsequent financial arrangements were necessarily or impliedly premised on the basis that the parties were reverting to their position prior to the maintenance agreement. Rather, it seems to me that the wife dealt with her property that she received as a result of the maintenance agreement being carried into effect.
Coleman J held at [135] that although cohabitation continued from 1997 until 2000 the fact that it was less than “full time” did not deny the wife the opportunity to rely on it as a consent factor.
At [139] his Honour held that:
Where parties resume cohabitation, maintaining their finances separately, contributing directly and indirectly, financially and non-financially, to their union, without apparent regard to the terms of court orders they have previously entered into, no intention can necessarily be implied. The evidence in this case suggests that the parties did not, at least at a conscious level, consider the terms and conditions of their reconciliation, much less the impact of them on the 1996 consent orders, or of those orders on their legal rights with respect to each other or their assets during their further cohabitation. They simply reconciled and that was that.
After referring to the comments of Fogarty J Drew’s case about the parties being unable to sever joint ownership of assets because of the unavailability of s 79A in relation to joint assets acquired in the post separation period, his Honour said at par 140:
The question is whether the injustice to the wife of being denied the opportunity to pursue a claim for property settlement in reliance upon the resumed period of cohabitation of approximately 2½ years is such as to enable the court to be satisfied that the husband should be estopped from denying that there was an implied consent to the orders being set aside. Similarly, the 1996 orders, having been fully complied with, no question of unenforceable orders remaining on foot would arise in the event of the wife’s application being refused.
Coleman J concluded at [141] that each party, by his or her conduct, evinced an intention not to rely on the rights conferred or confirmed by the 1996 orders to defeat any claim for financial benefits based on their further cohabitation and that it would be unjust to refuse the wife the opportunity to seek an order for settlement of property in reliance on cohabitation extending over a two and a half year period.
His Honour went on to say:
Indeed whilst neither party suggested that the orders were other than “final” when made, there is no evidence as to their understanding of the implications of those orders so far as their further cohabitation was concerned. The Court is accordingly satisfied that the parties are, in the circumstances, estopped from denying that they consented to the 1996 orders being set aside or varied thus enlivening the provisions of s 79A(1A) of the Act.
The decision in Kowalski (1993) FLC 92-342, resolved the question raised but left unanswered by Fogarty J in Drew. The parties were married for less than six months before divorcing in 1976. They resumed co-habitation without remarrying in 1980. When the husband became seriously ill two years later, the wife sought leave to institute property settlement proceedings out of time pursuant to s44.
It was conceded on the wife’s behalf, that if adjustment proceedings had been commenced after the initial separation in 1976, she would not have received much, if anything, by way of property settlement.
The primary issue (whether the wife’s claim arose out of the de facto relationship established after divorce centred on or out of the initial marital relationship) the meaning of par (ca)(i) of the definition of “matrimonial cause”.
It was held that a resumption of cohabitation after dissolution between parties who had previously been married to each other was clearly distinguishable from a de facto relationship, where the parties had never been married to each other.
Thus, according to the Full Court in Kowalski once parties have or had been married, any financial dealings, no matter how far they pre or post-date that marriage, are within the ambit of Part VIII of the Family Law Act 1975 and proceedings cannot be commenced in relation to property of either spouse in any other court.
This probably explains the generous approach to the broad interpretation of s 79A(1A) in McCabe, Sommerville, and W & C and to a lesser extent S & W.
In Beneke (1996) FLC 92-698 at 88,361, however, Fogarty and Finn JJ expressed reservations about the construction of “matrimonial cause” in Kowalski suggesting that it may be too wide.
In Bush v Hanlon (1998) NSW FC 326 Young J considered that the broad proposition in Kowalski, that once a marriage had been celebrated, the entire relationship arises out of a marital relationship ‘cannot be correct’ because, if it was, there would be no reason for the legislature to add the words ‘arising out of the marital relationship’, which implies that there must be some property matters ‘not so arising’.
However, the phrase ‘arising out of the marital relationship’ may simply distinguish other types of relationship from a marriage. For instance, the Family Court does not have exclusive jurisdiction over disputes between a married couple with respect to their business property.
Nonetheless the New South Wales Supreme Court has heard and determined a husband’s application for relief under the de facto property legislation in Sullman [2002] NSW FC 169 without apparent challenge in circumstances where the parties were married in 1979 and after divorcing in 1993 had final orders as to property settlement entered. The parties then reconciled (after the wife had remarried) and resided together in a de facto relationship for two years.
Thus, the assumptions made in family court authorities on the application of s 791(1A) about the unavailability of any alternative remedy where married parties to a s 79 order reconcile without divorcing, may very well be misplaced because of the suggested concurrent jurisdiction of the State civil courts to divide matrimonial property in that situation.
That said, unless and until it is overturned Kowalski is binding on me and must be applied. However, it is important to bear in mind that though a superior court of record, the Family Court is not a court of “law and equity” in the common law tradition. Its powers, whether statutory or inherent, are to be used only “… as may be necessary to do justice within the limits of the jurisdiction the act confers on it”: Taylor and Taylor (1979) 143 CLR 1.
In Harris v Caladine (1991) 172 CLR 84 at 136 the High Court said:
The distinction between jurisdiction and power is often blurred, particularly in the context of “inherent jurisdiction”. But the distinction may at times be important. Jurisdiction is the authority which a court has to decide the range of matters that can be litigated before it; in the exercise of that jurisdiction the court has powers expressly or impliedly conferred by the legislation governing the court and “such powers as are incidental and necessary to the exercise of the jurisdiction or the powers so conferred.”
Thus, “unjust acts and omissions may be incapable of being remedied by a court lacking jurisdiction”: Carl Pelechowski v the Registrar, Court of Appeal (1999) 162 ALR 336.
Making orders for which there is no legislative foundation simply on the basis that doing so relieves against hardship or prevents injustice is a temptation to be scrupulously avoided by a judge because it is beyond jurisdiction and power. It is, as the Full Court observed in N & N [2000] FamCA 688 difficult to see how the making of such an order “ … is ultimately any less of an injustice ...”.
Section 79A(1A) is a remedial section to be construed liberally so as to ensure that it achieves its object but it “… cannot be used to circumvent the basic principle that there can only be one property settlement between parties to a marriage”: Kowalski (1993) FLC 92-342 at 79,627.
The conclusion
The question here is whether the respondent husband actually consented to the 1994 orders being set aside. It is not whether the applicant genuinely believes that he did. The fact of consent must be established by the wife, as the alleging party, to the civil standard fixed by Section 140(1) of the Commonwealth Evidence Act. The court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities having regard to the nature of the cause of action and the subject matter and the gravity of the allegation.
Where the party bearing the onus of proof in a civil case relies on circumstantial – as distinct from direct - evidence, all the facts have to be considered together at the final stage of the reasoning process and it is sufficient if the evidentiary circumstances must give rise to “a reasonable and definite inference”: Luxton v Vines (1952) 85 CLR 352 at 358.
The truth of the allegation has to be a not the only rational explanation in the circumstances.
Where the competing possibilities are of equal likelihood, or the choice between them can only be resolved by conjecture, the allegation is not proved: Palmer v Dolman [2005] NSWCA 361 per Ipp J.A. at [33] – [41].
Did the husband consent to alter their financial positions from those provided for in the property orders because they had reconciled?
Just by resuming married life where they left off does not mean that the husband consented to relinquishing the rights and interests he acquired by virtue of the 1994 consent order but by renewing and continuing the marital relationship with his wife for ten years, raising children, sharing necessary living expenses and doing for each other the sorts of things that marriage partners do together, implies to me that these parties no longer intended to rely of the rights and interests conferred by the earlier property order and their conduct is inconsistent with the contrary conclusion.
While the early years of resumed cohabitation may have been characterised and distinguished by a determination on the husband’s part to follow sound advice from his accountant to keep his property and financial affairs separate and retain the advantages derived from the consent order, his commitment to this stance appears to have weakened as the duration of the reconciliation lengthened and his dedication to family responsibilities increased.
I find that whatever his previous attitude was by 2005 the husband had abandoned or relinquished the tactical and material advantages he acquired under the 1994 order and cannot resile from that position now.
The circumstances relied on by the wife identified at par 19 above support the inference she contends for viz., that both parties consented by their conduct between 1995 and 2005 to set aside the 1994 property orders and by extension not to invoke the finality principle against the other in any subsequent litigation concerning their property.
Thus the parties may (not must) be entitled to the benefit of a substitute s 79 property adjustment based on justice and equity considerations and not merely a declaration of legal rights under s 78.
The husband’s application is dismissed and the question whether the Court should exercise its discretion to set aside the earlier property order and replace it with another one under s 79 will be adjourned to a date to be advised.
I certify that the preceding 106 paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Carmody
…………………………………
Associate Date: 20 December 2006
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