Macarthur and Brogden

[2016] FCCA 739

FEDERAL CIRCUIT COURT OF AUSTRALIA

MACARTHUR & BROGDEN [2016] FCCA 739

Catchwords:
FAMILY LAW – Property – Interim Orders – application to vary interim orders – whether applicant precluded from applying to vary by reason of the operation of Family Law Act 1975 (Cth), s.79A – whether applicant should have appealed against earlier orders.

Legislation:

Family Law Act 1975 (Cth), ss.79, 79A, 80

Family Law Rules 2004, r.22.03
Federal Circuit Court Rules 2001, rr.1.04, 5.08, 16.05

Cases cited:
Appleton Papers Inc v Thomaseti Paper Pty Limited [1983] 3 NSWLR 208
Douglas v John Fairfax & Sons Ltd [1983] 3 NSWLR 126
Gabel & Yardley [2008] FamCAFC 162; (2008) 221 FLR 270; 40 Fam LR 66; FLC 93-386
Hutchinson v Nominal Defendant [1972] 1NSWLR 443
La Rocca & La Rocca (1991) 14 Fam LR 715; FLC 92-222
MacArthur & Brogden [2015] FCCA 1544
Mullane & Mullane [HCA 4]; (1983) 158 CLR 436; FLC 91-303
Patrick Stevedores Operations No.2 Pty Limited v Maritime Union of Australia (1998) 195 CLR 1
Prowse & Prowse (1994) 118 FLR 135; 18 Fam LR 348; (1995) FLC 92-557
Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166; (2009) 241 FLR 1; 42 Fam LR 203; (2011) FLC 93-466
Toft & Royce [2013] FamCA 372

Applicant: MR MACARTHUR

Respondent: MS BROGDEN

File Number: SYC 5006 of 2014

Judgment of: Judge Scarlett

Hearing date: 4 February 2016

Date of Last Submission: 4 February 2016

Delivered at: Sydney

Delivered on: 7 April 2016

REPRESENTATION

Solicitor for the Applicant: Ms Dorter

Solicitors for the Applicant: Rebekah Dorter Family Lawyer

Counsel for the Respondent: Mr Heazlewood (direct brief)

ORDERS

UNTIL FURTHER ORDER

1. Order (7) made on 27 May 2015 is varied by deleting the words “1 February 2016” and inserting “31 December 2016”.

2. The Response to an Application in a Case filed on 1 February 2016 is dismissed.

3. For the avoidance of doubt, all other Orders made on 27 May 2015 remain in force.

4. The substantive Application is transferred to the docket of Judge Boyle to be listed for further mention at a time and on a date to be fixed by Judge Boyle.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 5006 of 2014

MR MACARTHUR

Applicant

And

MS BROGDEN

Respondent

REASONS FOR JUDGMENT

Application in a Case

1. This is an Application by the Wife, who is the Respondent in the substantive proceedings, to vary interim Orders that were made after an interim hearing last year (MacArthur & Brogden[1]). The Order sought to be varied is Order (7), which provided that:

   On or before 1 February 2016 the Applicant and the Respondent must do all acts and things and sign all documents necessary to place the said property at Property C in the State of New South Wales being the whole of the land in folio identifier (omitted) upon the market for sale by private treaty.

   [1] [2015] FCCA 1544

2. It follows that the Wife is also seeking that Order (3), an order that she should have exclusive occupation of the former matrimonial home, should remain in force.

3. In the alternative, if the Court is not prepared to make the orders sought, the Wife seeks an order for spousal maintenance in the sum of $600.00 per week.

4. The Application is opposed by the Husband, who seeks orders that the Application in a Case should be dismissed.

5. In his Response to an Application in a Case, filed on 1^st February 2016, the husband seeks these orders:

   1. That orders 1-4 of the applicant Wife’s Application in a Case filed 25 November 2015 be dismissed.

   2. Order 7 of the Orders of Judge Scarlett made 27 May 2015 be varied so that the words ‘private treaty’ are removed and replaced by the word ‘Auction’.

   3. That on or before 1 February 2016 the wife immediately select one of the following real estate agents to act upon the sale of Property C (‘Property C Property”):

   3.1Mr J of (omitted) Real Estate Agents; or

   3.2Mr D of (omitted) Real Estate; or

   3.3Mr R of (omitted) Real Estate.

   4. That the sale or reserve price for the Property C Property shall be agreed by both the husband and wife, but failing agreement, is to be determined by the appointed real estate agent, and must be not less than $1,350,000.

   5. That on or before 1 February 2016 the applicant wife do all things and sign all documents necessary to appoint Mr Angelo D’agata of Alidenes Solicitors to prepare a contract of sale, and act on the conveyancing (of) the Property C Property.

   6. That Order 9 of the orders made on 27 May 2015 be varied so that upon the completion of sale of the Property C property, and after payment of all relevant disbursements in orders 9(a)-(c), the proceeds of sale shall be distributed in the following manner and priority:

   6.1The husband and wife shall each be paid $100,000 by way of partial property settlement;

   6.2The balance shall be held in the controlled monies account by the solicitor acting on the sale of the Property C property, pending further orders of the Court.

   7. That the husband and wife shall be at liberty to undertake minor repairs in preparation for the sale of the Property C property, conditional upon the following:

   7.1The works be required by the appointed agent for the purpose of sale and be agreed to in writing by both the husband and wife; and

   7.2The total costs of repairs shall not be more than $10,000, and must be paid for equally by the parties.            

Background

1. The Interim Orders of 27^th May 2015 were made in circumstances where it was clear that I would not have the time to hear the property proceedings to finality due to my forthcoming retirement. It was the case that another Judge had retired at the end of January 2015 and it was anticipated that an announcement would be made as to her replacement within a short period of time.

2. In the decision of 27^th May 2015 I said at [9]:

   At this stage I am not in a position to give the proceedings a hearing date. The matters in my docket are such that I have no hearing dates left. I propose to place the matter in a call over list on 7 September by which stage it is hoped that the Court will have received a further appointment to replace a judge who retired some months ago, and a hearing date can be allocated after as a result of the call over.[2]

   [2] [2015] FCCA 1544 at paragraph [9]

3. As it turned out, by the time of the hearing on 4^th February 2016 the Court had not been informed of the appointment to replace the judge who had retired in January 2015. Since then, an announcement has been made and there is to be a ceremonial sitting to welcome the newly appointed judge on 6^th April. 

Evidence and Submissions

1. The Wife relied on her affidavits of 24^th November 2015 and 5^th February 2016.

2. The Husband relied on his affidavits of 28^th January and 8^th February 2016.

3. Counsel for the Wife and the solicitor for the Husband each prepared a Case Outline document.

4. Mr Heazlewood of Counsel, who appeared for the Wife, submitted that the Rules provide that the Court may vary or set aside any Order after it has been entered if:

   a)the Order is interlocutory; or

   b)the order does not reflect the intention of the Court.[3]

   [3] Rule 16.05(2)

5. The Court may vary or terminate the operation of an order by a further order.[4]

   [4] Rule 16.05(3)

6. At common law, in appropriate circumstances and as a general principle, interlocutory orders may be varied[5]. However, the Court ought not to alter an interlocutory order unless there has been a material change in circumstances.

   [5] Hutchinson v Nominal Defendant [1972] 1 NSWLR 443; Douglas v John Fairfax & Sons Ltd [1983] 3 NSWLR 126

7. The Court is cautioned, when considering whether to make an interim order[6] to bear in mind the main purpose of the Rules, which is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the Court that is reasonable in the circumstances of the case[7].

   [6] Rule 5.08

   [7] Rule 1.04

8. The general principle justifying the grant of interlocutory relief is of ensuring the effective exercise of the Court’s jurisdiction[8]. The Court is obliged to exercise its discretion in the manner best calculated to achieve justice between the parties (Appleton Papers Inc v Thomaseti Pty Limited[9]).

   [8] Patrick Stevedores Operations No.2 Limited v Maritime Union of Australia (1998) 195 CLR 1

   [9] [1983] 3 NSWLR 208

9. Power under s.79 of the Family Law Act 1979 (Cth) to alter interests in property can be made on an interim basis (Strahan & Strahan (Interim Property Orders))[10] and an order for the sale of a property is such an order. The exercise of power under s.79 remains one single exercise, although it can be made through a succession of orders until the power is exhausted (Gabel & Yardley[11]).

   [10] [2009] FamCAFC 166; (2009) 241 FLR 1; 42 Fam LR 203; (2011) FLC 93-466

   [11] [2008] FamCAFC 162; (2008) 221 FLR 270; 40 Fam LR 66; FLC 93-386

10. The question before the Court, Mr Heazlewood submitted, is whether in the circumstances at the time of the hearing, it would be just and equitable to make an order to distribute the property (see Toft & Royce[12] at [12]).

    [12] [2013] FamCA 372

11. It was submitted that there are two separate thrusts to the Wife’s application:

    a)The justice and equity of the factual scenario must take into account that a likely hearing of the final property application, initially contemplated for about February 2016, may not now take place until well into 2017;

    b)The second just and equitable argument is that the wife is in comparatively impoverished circumstances, receiving Centrelink benefits of $584.00 per week and child support of $182.00 per week.

12. Ms Dorter, the solicitor for the Wife, submitted that it is not open to vary the Orders of 27^th May 2015, as such an application is governed by s.79A of the Family Law Act 1975. The Wife seeks a variation of the earlier Orders requiring her to submit the property for sale due to the delay in hearing dates becoming available.

13. It was submitted that the Wife is precluded by s.79A in making the application as:

    a)There are no circumstances which have arisen making the sale of the property impracticable[13];

    b)There are no circumstances which have arisen of an exceptional nature relating to the care, welfare or development since the making of the order[14];

    c)A variation of the orders to delay the sale will impede a settlement, the Wife having no incentive to resolve the proceedings whilst she lives virtually rent free in the family home;

    d)The Wife unreasonably waited 6 months to file any document indicating her intention to have the orders of 27^th May 2015 varied;

    e)A variation of the orders to delay the sale will “open the flood gates” for further applications by other parties;

    f)The Court has already delivered judgment and the Wife’s application should be via an appeal, not an Application in a Case (see Mullane & Mullane[15] at 78,068); and

    g)A grant of a stay application would cause the Husband undue hardship, as he receives no benefit from his ownership of the Property C property, given the sole occupation order, and the minimal mortgage repayments paid by the Wife compared with the Husband’s rent, and in circumstances where it was the Husband’s inheritance which reduced the mortgage so drastically.

    [13] S.79A(1)(b)

    [14] S.79A(1)(d)

    [15] [1983] HCA 4; (1983) 158 CLR 436; FLC 91-303

14. It was further submitted that, even if the Wife had filed a Notice of Appeal, the Court should not exercise its jurisdiction in granting a stay for the following reasons:

    a)Even if the Applicant wife filed a Notice of Appeal, there is no automatic right to a stay of an order;

    b)The Wife has failed to file any notice of appeal within the requisite 28 days after 27^th May 2015 in accordance with Rule 22.03 of the Family Law Rules 2004;

    c)The Wife unreasonably waited 6 months to file any document indicating her intention to have the Orders of 27^th May 2015 varied; and

    d)A grant of a stay application would cause the Husband undue hardship, as he receives no benefit from his ownership of the Property C property, given the sole occupation order, and the minimal mortgage repayments paid by the Wife compared with the Husband’s rent, and in circumstances where it was the Husband’s inheritance which reduced the mortgage so drastically.

15. As well as the decision in Mullane & Mullane, the husband relied on the decisions of La Rocca & La Rocca[16] and Prowse & Prowse[17].

    [16] (1991) 14 Fam LR 715; FLC 92-222

    [17] (1994) 118 FLR 135; 18 Fam LR 348; (1995) FLC 92-557

Consideration

1. The interim Orders were made on 27^th May 2015 in the belief that by early September of last year either a new Judge would have been appointed or, at least, a new appointment would have been announced. That was not to be. A new Judge has only just commenced to sit, some fourteen months after her predecessor retired. This delay has caused great inconvenience to litigants, to the legal profession and to the Court itself. The aim of the earlier orders was to put the Wife in the position where she and the Husband would be making arrangements to submit the former matrimonial home for sale at around the time that final property orders were being considered by the Court.

2. This aim was thwarted by the lengthy delay in appointing a new judge to fill a vacancy in one of the busiest Registries in the whole Court. What the Wife is effectively doing is seeking an extension of time so that the original intention of the earlier decision of the Court can be put into effect.

3. The argument of the Husband is that the Court does not have the jurisdiction to vary the earlier Orders because no appropriate condition of s.79A(1) has been met. This argument is misconceived.

4. The Orders of 27^th May 2015 were not final Orders altering property interests; they were Orders until further Order. The relevant Orders were made under s.80(1) of the Act. Paragraph (h) of subsection 80(1) empowers the Court to:

   make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order.

5. The Court retains the power to vary the earlier Orders without recourse to the provisions of s.79A of the Act.

Conclusions

1. It is my view that not to extend the time for the Wife to reside in the former matrimonial home would allow the earlier decision of the Court to be thwarted by events out of the Court’s control. This would not be just and equitable to the wife. It is regrettable that the final disposition of the proceedings has been delayed, but that is beyond the control of the Court.

2. This does not mean that the Wife can remain in the premises indefinitely, nor does it mean that she and the Husband should not consider a just and equitable settlement of the matter. The property is going to have to be sold.

3. I propose to extend the Wife’s time in the former matrimonial home until the end of the year, but by 31^st December 2016 the property at Property C must be put on the market.

4. I do not consider it appropriate to make any of the Orders sought in the Response to the Application in a Case.

5. The proceedings will be transferred to the docket of Judge Boyle to be listed for directions for final hearing at a time to be fixed by her Honour.          

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

Date: 7 April 2016