Macdermott & Grant - [2022] FedCFamC1F 997

Federal Circuit and Family Court of Australia
(DIVISION 1)
Macdermott & Grant [2022] FedCFamC1F 997

File number(s): ADC 5291 of 2019

Judgment of: BERMAN J

Date of judgment: 15 December 2022

Catchwords:
FAMILY LAW – APPLICATION IN A PROCEEDING – Where the respondent is a bankrupt – Where the respondent had no knowledge of the final orders made in Chambers – Where the respondent brought an Application in a Proceeding seeking to set aside final orders –Consideration of whether the respondent had a right to be heard under s 79 of the Family Law Act – Consideration of s 79(12) and s 79(13) of the Family Law Act – Where following the discharge in bankruptcy, there is more than $1 million surplus – Where the final orders do not deal with superannuation – Where the final orders provide that the respondent receives nothing – Consideration of exceptional circumstances – Orders.

FAMILY LAW – PRACTICE AND PROCEDURE –Final orders – Where proceedings commenced prior to the respondent being declared a bankrupt – Where the applicant and the second respondent trustee reached agreement – Where final orders were made in Chambers with no need for appearances – Where the respondent seeks to set aside final orders – Where the respondent was not given the opportunity to be heard – Consideration of Taylor v Taylor (1979) 143 CLR 1 – Consideration of the Court’s ability to set aside an order where a person has not been given the opportunity to appear and present his/her case – Orders.

Legislation:
Bankruptcy Act 1966 ss 58, 60, 60(2), 60(3), 60(4), 116, 116(2)

Family Law Act 1975 (Cth) part VIIAA, ss 75(2)(ha), 79, 79(1), 79(1)(b), 79(12), 79(13), 79A

Federal Circuit and Family Court of Australia(Family Law) Rules 2021 (Cth) r 10.13

Cases cited:
Badenoch & Faldyn (No 2) [2022] FedCFamC2F 794

Cummings v Claremont PetroleumNL (1996) 185 CLR 124

O’Neill v O’Neill & Ors (1998) FLC 92-811

Sloan & Sloan [2018] FamCA 610

Taylor v Taylor (1979) 143 CLR 1

Wallmann & Wallmann (1982) FLC 91-204

Yunghanns & Yunghanns & Ors (1999) FLC 92-836

Division: Division 1 First Instance

Number of paragraphs: 83

Date of hearing: 7 December 2022

Place: Adelaide

Counsel for the Applicant: Mr Tredrea

Solicitor for the Applicant: C M Tucker & Associates

Counsel for the First Respondent: Ms Anderson

Solicitor for the First Respondent: Withnalls Lawyers

Counsel for the Second Respondent: Mr Craven

Solicitor for the Second Respondent: Andreyev Lawyers
ORDERS

ADC 5291 of 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:
MS MACDERMOTT

Applicant

AND:
MR GRANT

First Respondent

MR INNES (AS TRUSTEE FOR THE BANKRUPT ESTATE OF MR GRANT)

Second Respondent

order made by:

BERMAN J

DATE OF ORDER:

15 december 2022

THE COURT ORDERS THAT:
1.The final orders made on 4 October 2022 be set aside.
2.The Amended Application in a Proceeding filed 28 November 2022 and the Response to Application in a Proceeding filed 6 December 2022 be dismissed.

Note: The form of the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Macdermott & Grant

Details

AGLC: Macdermott & Grant [2022] FedCFamC1F 997
Case: [2022] FedCFamC1F 997
Decision Date

CaseChat Overview and Summary

The case of Macdermott & Grant involves a dispute between the applicant, Ms Macdermott, and the respondent, Mr Grant. The core of the disagreement revolves around the allocation of liabilities incurred during their marriage, with Ms Macdermott asserting that Mr Grant should bear these liabilities alone. Conversely, Mr Grant contends that these liabilities should be shared between the parties. The matter was heard in the Family Court of Australia.

The primary legal issues that the court had to address were whether the liabilities incurred during the marriage should be considered solely the responsibility of Mr Grant, as Ms Macdermott argued, or if they should be treated as joint liabilities, as Mr Grant asserted. Additionally, the court had to consider whether the orders made in the absence of Mr Grant were valid and if they should be set aside or varied under Rule 10.13 (1)(a) of the Family Law Rules.

In addressing these issues, the court found that Mr Grant was not informed of the final orders made in his absence and did not consent to these orders. The court acknowledged that Rule 10.13 (1)(a) allows for the variation or setting aside of an order made in the absence of a party. Given that Mr Grant was not aware of the proceedings and had not consented to the orders, the court considered it appropriate to relist the matter for further consideration of the application. The court concluded that the orders made in the absence of Mr Grant should be set aside, and the matter should be relisted to ensure that Mr Grant had the opportunity to be heard.

As a result, the court made an order that the final orders made on 4 October 2022 be set aside, and the matter be relisted for further consideration of the application in a proceeding. The court also noted the importance of ensuring that all parties are properly informed and have the opportunity to participate in the proceedings.

Orders

Orders of the court

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Background

Background to the litigation

In summary, the agreement struck between the applicant and the trustee is founded upon a view that the respondent should bear responsibility for the liabilities that he purportedly incurred. As discussed, the respondent holds an opposite view and considers that the various liabilities should be treated as joint liabilities of the parties.Background As a consequence of the correspondence received, consideration was given to the orders being made in chambers and final orders were made in terms of the proposed orders on 4 October 2022 (“the final orders”). By email communication on 5 October 2022 at 1.17 pm, chambers was advised of the following:Dear Associate,We act for [Mr Grant], the respondent husband, in the above matter.An Application in a Proceeding was filed on behalf of our client on Wednesday 21 September 2022. Given the two public holidays, our client had been waiting for the Application to be allocated a date.On checking the Courts Portal this morning, the matter has been closed and final orders made in Chambers 04 October 2022 following an application by the applicant wife [Ms Macdermott] and second respondent [Mr Innes] (in his capacity as trustee for the bankrupt estate of [Mr Grant]). The Application in a Proceeding has not been listed or heard.[Mr Grant] is a party to the proceedings and did not consent or sign any application for final orders, nor was he made aware of the final orders. He did not consent to the making of any order in his absence.Rule 10.13 (1)(a) allows the Court to vary or set aside an Order if it was made in the absence of a party.In the circumstances we seek urgent liberty for the matter to be relisted for consideration of the Application in a Proceeding.Kind regards,Shelley Anderson The respondent’s solicitors filed an Application in a Proceeding sealed on 4 October 2022 at 4.44 pm. There had apparently been a delay in the sealing of the Application given that it was signed on 21 September 2022. The orders sought in the Application in a Proceeding seek that various liabilities be paid but in particular, a sum as may be required to annul the respondent’s bankruptcy. The respondent’s affidavit filed in support of the Application in a Proceeding refers to an “Update Report to Creditors from [X Accounting], the trustee in bankruptcy”[1] dated 1 September 2022. The report referred to an agreement that had been reached between the trustee and the applicant such that she would receive 40 per cent of the matrimonial property (exclusive of superannuation) with the balance to be used to payout the creditors and the trustees’ fees.[1] Respondent’s affidavit filed 12 September 2022, paragraph 7. The respondent makes significant complaint in his affidavit that the liabilities the applicant seeks to be the responsibility of the respondent, should be considered as the joint liabilities of the parties. The respondent further complains of concerns as to the manner in which the property was sold and how funds received were disbursed.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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File number(s):	ADC 5291 of 2019
Judgment of:	BERMAN J
Date of judgment:	15 December 2022
Catchwords:	FAMILY LAW – APPLICATION IN A PROCEEDING – Where the respondent is a bankrupt – Where the respondent had no knowledge of the final orders made in Chambers – Where the respondent brought an Application in a Proceeding seeking to set aside final orders –Consideration of whether the respondent had a right to be heard under s 79 of the Family Law Act – Consideration of s 79(12) and s 79(13) of the Family Law Act – Where following the discharge in bankruptcy, there is more than $1 million surplus – Where the final orders do not deal with superannuation – Where the final orders provide that the respondent receives nothing – Consideration of exceptional circumstances – Orders. FAMILY LAW – PRACTICE AND PROCEDURE –Final orders – Where proceedings commenced prior to the respondent being declared a bankrupt – Where the applicant and the second respondent trustee reached agreement – Where final orders were made in Chambers with no need for appearances – Where the respondent seeks to set aside final orders – Where the respondent was not given the opportunity to be heard – Consideration of Taylor v Taylor (1979) 143 CLR 1 – Consideration of the Court’s ability to set aside an order where a person has not been given the opportunity to appear and present his/her case – Orders.
Legislation:	Bankruptcy Act 1966 ss 58, 60, 60(2), 60(3), 60(4), 116, 116(2) Family Law Act 1975 (Cth) part VIIAA, ss 75(2)(ha), 79, 79(1), 79(1)(b), 79(12), 79(13), 79A Federal Circuit and Family Court of Australia(Family Law) Rules 2021 (Cth) r 10.13
Cases cited:	Badenoch & Faldyn (No 2) [2022] FedCFamC2F 794 Cummings v Claremont PetroleumNL (1996) 185 CLR 124 O’Neill v O’Neill & Ors (1998) FLC 92-811 Sloan & Sloan [2018] FamCA 610 Taylor v Taylor (1979) 143 CLR 1 Wallmann & Wallmann (1982) FLC 91-204 Yunghanns & Yunghanns & Ors (1999) FLC 92-836
Division:	Division 1 First Instance
Number of paragraphs:	83
Date of hearing:	7 December 2022
Place:	Adelaide
Counsel for the Applicant:	Mr Tredrea
Solicitor for the Applicant:	C M Tucker & Associates
Counsel for the First Respondent:	Ms Anderson
Solicitor for the First Respondent:	Withnalls Lawyers
Counsel for the Second Respondent:	Mr Craven
Solicitor for the Second Respondent:	Andreyev Lawyers

ADC 5291 of 2019
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MS MACDERMOTT Applicant
AND:	MR GRANT First Respondent MR INNES (AS TRUSTEE FOR THE BANKRUPT ESTATE OF MR GRANT) Second Respondent

order made by:	BERMAN J
DATE OF ORDER:	15 december 2022