Marello and Marello (No 2)

Case [2011] FamCA 799

FAMILY COURT OF AUSTRALIA

MARELLO & MARELLO (NO 2) [2011] FamCA 799
FAMILY LAW - PROPERTY – INTERIM PROPERTY ORDER – Approach to application to discharge interim undertaking in a financial case – Relevance of mutual undertakings to discretion to discharge – Grounds for discharge and proof of injustice
Family Law Act 1975 (Cth)
Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Alford v Ebbage [2003] 1 Qd R 343
AMP Investments Pty Ltd v Trade Practices Commission (1983) 49 ALR 475
Mitty v Mitty & Ors (2010) 45 Fam LR 20
Penfold & Penfold (1980) 144 CLR 311
APPLICANT: Mr Marello
RESPONDENT: Ms Marello
FILE NUMBER: BRC 11438 of 2010
DATE DELIVERED: 18 October 2011
PLACE DELIVERED: Melbourne
PLACE HEARD: Brisbane
JUDGMENT OF: Kent J
HEARING DATE: 8 August 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms J Hogan
SOLICITOR FOR THE APPLICANT: Hopgood Ganim
COUNSEL FOR THE RESPONDENT: Mr T North SC
SOLICITOR FOR THE RESPONDENT: Murdoch Lawyers

Orders

  1. The Husband’s Application in a Case filed 4 July 2011 is dismissed.

  2. The Husband pay the Wife’s costs of and incidental to the application on a party and party basis in a sum agreed or, failing agreement, to be taxed.

  3. Within thirty (30) days, the Wife remedy her breach of her undertaking in the amount admitted by her (if she has not already so done) and the issue of quantum of the breach otherwise be reserved to the trial of the substantive proceedings.

IT IS NOTED that publication of this judgment under the pseudonym Marello & Marello (No 2) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 11438 of 2010

Ms Marello

Applicant

And

Mr Marello

Respondent

REASONS FOR JUDGMENT

Introduction

  1. This interlocutory dispute revolves around the mutual undertakings given by both the Applicant, Ms Marello (“the Wife”), and the Respondent, Mr Marello (“the Husband”), at the commencement of the substantive proceedings for final financial orders.

  2. In those undertakings, namely one filed on 21 January 2011 (the “Wife’s undertaking”) and one filed on 6 December 2010 (the “Husband’s undertaking”), each party made a series of commitments in relation to their interlinked financial situations, “pending a final property division order”. Those commitments include to not substantially alter the position of companies of which they were both directors or trustees; to provide information to each other about their personal and their companies’ and trusts’ financial circumstances; and to ensure the availability of funds for the maintenance of the Wife, the children and the family home, pending a final property division order.

  3. The Husband now seeks the release of certain aspects of both undertakings in order to refinance two loans; sell a Landrover motor vehicle and to remove the Wife’s access to a joint credit card account. He also claims monies from the Wife in respect of withdrawals from the joint credit card account which both parties agree exceeded the limit…

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Details
AGLC
Marello and Marello (No 2) [2011] FamCA 799
Case
[2011] FamCA 799
Decision Date

CaseChat Overview and Summary

This matter concerned an application by the Husband to discharge an interlocutory undertaking given by the Wife. The dispute arose in the context of family law proceedings, with Kent J presiding.

The central legal issue before the court was whether it possessed the power to release a party from an interlocutory undertaking, particularly in the absence of the other party's consent or a mistake operative at the time the undertaking was given. The court was required to consider the principles governing the discharge or modification of such undertakings, and the circumstances under which such relief might be granted.

Kent J, applying the principles established in *Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc* and followed in subsequent authorities such as *Mitty v Mitty & Ors*, affirmed that a court retains control over its interlocutory orders, including those based on undertakings. The court has the power to discharge or modify an undertaking if new facts emerge or are discovered that render its enforcement unjust, or if good grounds are shown. This power is not limited to cases of mistake, but rather reflects the court's ongoing discretion to make orders that are just and equitable. The court noted that such an application is not an attempt to set aside a contract, but rather an exercise of a right reserved by the terms of the undertaking itself. However, a party cannot relitigate a matter already decided unless there has been a significant change in circumstances or new facts have become known.

The Husband's application was dismissed. The Wife was ordered to pay the Husband's costs of the application on a party and party basis. Furthermore, the Wife was directed to remedy her admitted breach of undertaking within thirty days, with the quantum of any further breach to be reserved for the trial of the substantive proceedings.

Orders

Orders of the court

1.

The Husband’s Application in a Case filed 4 July 2011 is dismissed.

2.

The Husband pay the Wife’s costs of and incidental to the application on a party and party basis in a sum agreed or, failing agreement, to be taxed.

3.

Within thirty (30) days, the Wife remedy her breach of her undertaking in the amount admitted by her (if she has not already so done) and the issue of quantum of the breach otherwise be reserved to the trial of the substantive proceedings.

Background

Background to the litigation

As set out in the Mother’s written submissions filed 31 August 2011, the leading authority is Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (supra). In that case, the High Court held at 177-178 that the proper approach to a question of discharging an interlocutory undertaking is as follows:…Considerable argument was directed to the question whether a court has power, otherwise than in the case of mistake operative at the time of giving it to release a party from an undertaking, at least in the absence of the consent of the other party. But in our opinion a court undoubtedly has such a power. Just as an interlocutory injunction continues “until further order”, so must an interlocutory order based on an undertaking. A court must remain in control of its interlocutory orders. A further order will be appropriate whenever, inter alia, new facts come into existence or are discovered which render its enforcement unjust: cf. Woods v Sheriff of Queensland; Hutchinson v Nominal Defendant; Chanel Ltd v F.W. Woolworth & Co Ltd. Of course, the changed circumstances must be established by evidence: Cutler v Wandsworth Stadium Ltd.(footnotes omitted, emphasis added) This approach (albeit in the context of an appeal against a decision to discharge an interim undertaking) has been followed as recently as 2010 by the Full Court of this Court in Mitty v Mitty & Ors (2010) 45 Fam LR 20. Although the authority of this decision itself is not contested by the Husband, it is contended in submissions on his behalf that any inference that this case imposes some sort of “threshold” test would be incorrect. Instead, the Husband submits that this case simply reflects the Court’s broader discretion to make Orders which are, “…just and equitable as between the parties… ” Adam P Brown (supra) has been applied and discussed in numerous subsequent authorities including, for example, in AMP Investments Pty Ltd v Trade Practices Commission (1983) 49 ALR 475 (Full Court of the Federal Court), referred to in the written submissions on behalf of the respondent Wife, and in Alford v Ebbage [2003] 1 Qd R 343 (Queensland Court of Appeal). As is recorded in paragraph 7 of the written submissions on behalf of the Wife, in AMP Investments Pty Ltd v Trade Practices Commission (supra), Smithers J said the following at 489:Reliance was placed by the FLC on the provision in the undertakings that they were to operate ‘until further order’. The observations of Buckley LJ in Chanel Ltd v F.W. Woolworth and Co Ltd [1981] 1 WLR 485 at 493 are in point. His Lordship said:In my judgment, an order or an undertaking to the court expressed to be until further order by implication gives a right to the party bound by the order or undertaking to apply to the court to have the order or undertaking discharged or modified if good grounds for doing so are shown. Such an application is not an application to set aside or modify any contract implicit in the order or undertaking. It is an application in accordance with such contract, being an exercise of a right reserved by the contract to the party bound the terms of the order or undertaking.Even in interlocutory matters a party cannot fight over again a battle which has already been fought unless there has been some significant change in circumstances, or the party has become aware of facts which eh could not reasonably have known or found out, in time for the first encounter.Accordingly, the application by FLC which was heard on 17 August 1983 was authorised by the terms of its undertaking, even if there were elements of contract in the arrangements under which it and AMP’s reciprocal undertaking was given. But on the question of whether the application should be granted, the circumstance that there was such an element of contract would be relevant. The weight to be given to that element would depend upon circumstances, in particular, what each party had gained from the contract or arrangement and what each party had suffered thereby. Inevitably, on considerations of justice, the relief of the suffering of one or some of the parties while one or others continue to suffer would be unfavourably regarded, and, in most cases, one would think, decisive. To justify the release of a party, circumstances such as those referred to by Buckley LJ in the observations last sighted would be necessary…

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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