Martin & Harris - [2007] FamCA 560

FAMILY COURT OF AUSTRALIA

MARTIN & HARRIS

[2007] FamCA 560

FAMILY LAW - APPEAL – PROPERTY - From decision of Federal Magistrate - Whether orders sought by appellant were machinery or substantive orders – Whether, on basis orders capable of enforcement, Federal Magistrate’s discretion miscarried in refusing to proceed with application as one for enforcement - Whether Federal Magistrate failed to afford appellant procedural fairness - Parties varied consent orders by reason of their own actions since the making of the orders – Orders now sought not a necessary follow up to the consent orders – No error by Federal Magistrate – As no error by Federal Magistrate, unnecessary to consider remaining grounds of appeal. Appeal dismissed.

FAMILY LAW - APPLICATION – TO ADDUCE FURTHER EVIDENCE – Contentious material contained in affidavit sought to be adduced – Further evidence sought to be adduced on the appeal available and could have been placed before the Federal Magistrate – No basis for admission of any of the further evidence. Application dismissed.

FAMILY LAW - COSTS – COSTS OF APPEAL – Circumstances do not warrant departure from s 117(1) – Each party to pay own costs of and incidental to appeal.

Family Law Act 1975 (Cth), ss 79 and 94AAA(3)

Allesch v Maunz (2000) 203 CLR 172; (2000) FLC 93-033
CDJ v VAJ (1998) 197 CLR 172; (1998) FLC 92-828
Cranage and Cranage (1981) FLC 91-039
Harvey and Cresswell (1991) FLC 92-232
Ravasini and Ravasini (1983) FLC 93-312
Slapp and Slapp (1989) FLC 92-022

APPELLANT:

Ms Martin

RESPONDENT:

Mr Harris

FILE NUMBER:

SYC

1251

2007

APPEAL NUMBER:

2007

DATE DELIVERED:

8 June 2007

PLACE DELIVERED:

Sydney

JUDGMENT OF:

Boland J

HEARING DATE:

8 May 2007 and 21 May 2007

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

8 March 2007

LOWER COURT MNC:

[2007] FMCAfam 237

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Broun, QC

SOLICITOR FOR THE APPELLANT:

Broun Abrahams Burreket

SOLICITOR FOR THE RESPONDENT:

Mr Gallego

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Martin v Harris.

Orders

The appeal is dismissed.
That each party pay his or her own costs of and incidental to the appeal.
That the appellant’s Application in a Case filed 27 April 2007 is dismissed.

FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 34 of 2007
File Number: SYC 1251 of 2007

Ms Martin

Appellant

And

Mr Harris

Respondent

REASONS FOR JUDGMENT

Introduction

This is an appeal by the wife against orders made by Federal Magistrate Sexton on 8 March 2007. The effect of her Honour’s decision was to dismiss an application brought by the wife against the husband seeking orders to facilitate enforcement of some provisions of consent orders made under s 79 of the Family Law Act 1975 (Cth) (“the Act”) in 2004.
The appeal was heard by me as a single Judge pursuant to directions made by Acting Chief Justice Faulks under s 94AAA(3) of the Act on 21 March 2007.
The appeal potentially raises four issues for determination:
·were the orders sought by the wife in her application before the Federal Magistrate merely machinery orders necessary to facilitate the substantive consent orders (and was the Federal Magistrate in error in rejecting this interpretation of the orders sought); or
·was the application an application for enforcement of the consent orders; and
·if the application was an enforcement application did the Federal Magistrate err in the exercise of her discretion in dismissing the application, thus refusing enforcement of all orders, not just the orders relating to the sale of the former matrimonial home; and
·did the Federal Magistrate fail to afford the wife procedural fairness.
By Application in a Case filed 27 April 2007 the wife sought to adduce further evidence on the appeal that evidence being an affidavit of the wife affirmed 26 April 2007 and an affidavit of Ms M sworn 18 April 2007. She also sought to adduce a contract of sale in respect of the matrimonial home at the hearing.
The appeal was listed for hearing on 8 May 2007. On that day I granted leave to the husband to make an oral application to adduce further evidence on the appeal. The appeal was adjourned, and at the resumed hearing, the wife sought to adduce yet further evidence by way of her affidavit affirmed 21 May 2007. The husband’s solicitor consented to the reception of the wife’s affidavit sworn 21 May 2007, but objected to the reception of evidence contained in the two earlier affidavits filed on behalf of the wife. I indicated I would publish my reasons in respect of the further evidence application with these reasons.

Background

The background to this matter is set out in the Federal Magistrate’s reasons and the Court record, and was not subject of controversy before me.
The wife was born in 1952 and the husband was born in 1949.
On 25 February 2004 I made orders by consent adjusting the parties’ property under s 79 of the Act (“the consent orders”).
Order 1 of the consent orders required the husband to pay to the wife’s solicitors the sum of $65,000.00 by instalments, the last instalment to be paid by 25 May 2005. Order 2 of the orders provided that if the husband defaulted in making the payment of $65,000.00, or any instalment thereof, then the matrimonial home was to be sold by public auction and the sale proceeds distributed in payment of expenses of the sale, discharge of the mortgage to a maximum of $1,015,000.00, payment of the sum due to the wife under Order 1 plus interest, payment of specified liabilities subject to proof of those liabilities by the husband to the wife, reimbursement to the husband for certain liabilities, 50 per cent of the then balance to the wife, payment to the wife’s solicitors of estimated capital gains tax payable by the wife on the sale as a consequence of the husband vacating the property, and the balance then remaining to the husband.
The consent orders also provided, in the event the husband complied with Order 1, that on or before 28 February 2009 the parties appoint a valuer to value the matrimonial home, the husband pay the wife a sum equivalent to one half of the net equity (which was to be calculated taking into account the criteria provided for the distribution of sale proceeds in Order 2), and the wife would transfer her interest in the matrimonial home to the husband. The husband was to refinance the mortgage secured over the property. The consent orders provided a further default provision for the sale of the matrimonial home in the event the husband did not pay the sum calculated pursuant to the valuation.
Order 10 of the consent orders provided the parties were to sell by auction a large number of chattels and the proceeds of sale of such chattels were to be paid into a cash management account and applied to reduce their liabilities, which included credit card liabilities and other loans. Order 11 contained a proviso that either party could obtain a valuation and purchase any chattel paying the purchase price into the cash management account.
Order 12 of the orders provided for the parties to authorise the sale of a motor vessel with a broker at a sale price of $250,000.00, or other agreed price, with the wife at first instance to have responsibility for the sale, and if not sold within five months of the orders, the motor vessel was then to be offered for sale by the wife by auction within six months at a reserve price of $200,000.00.
Order 13 provided if the motor vessel had not been sold within six months for the parties to sell the motor vessel with a reduced sale price, and in the event of no sale after 11 months, then the husband was to sell the motor vessel by auction at a reserve price of $100,000.00 with such auction to take place within 12 months of the orders (25 February 2005).
Order 14 provided in the event the motor vessel was not sold after two auctions then the wife was to transfer her interest in the motor vessel to the husband, and he was to indemnify her in respect of any liabilities owing in respect of the motor vessel.
If the motor vessel was sold, the orders made provision for payment of sale expenses, discharge of any liability encumbering the motor vessel to a maximum of $72,000.00, reimbursement of any fees and charges, thereafter reduction of the parties’ credit card and loan liabilities, and the remaining balance, if any, to be divided between the parties.
The consent orders also provided for transfer of a motor vehicle to the husband, and after the payment by the husband to the wife the sum of $65,000.00 as provided in Order 1, the wife would return a Holden Commodore motor vehicle to the husband.
The balance of the orders provided for indemnities, and that each party retain all other property or chattels in their respective possession.
Following the making of the consent orders the parties agreed to sell a portion of the land (“the strip”) on which the matrimonial home is erected to neighbours, Mr and Mrs B, for a sale price of $120,000.00. The National Australia Bank (“NAB”) consented to the sale subject to payment of the then “overlimit amount” and other costs totalling $85,000.00 as at 28 November 2005.
On 14 February 2006 the husband signed an irrevocable authority to pay to the wife the whole of the proceeds of sale of the strip, less expenses, and payment of arrears due to the NAB.
The completion of the sale of the strip has not yet occurred.
Before the Federal Magistrate the wife sought orders for the sale of the matrimonial home, minus the strip, to a Mr and Mrs S for $1,320,000.00. The husband proposed orders to sell the matrimonial home, including the strip, for $1,400,000.00 to a Mr N, and to negotiate rescission of the contract to Mr and Mrs B.
At the resumed hearing of the appeal the husband’s solicitor did not oppose the tender of an executed contract for sale of the matrimonial home excluding the strip, for $1,400,000.00 to Mr T which contract was to be exchanged that day. I was informed the NAB consented to the sale. The contract for sale of the matrimonial home became Exhibit “A” in the appeal and the contract for sale of the strip became Exhibit “B”.

The applications and evidence before the federal magistrate

The wife, having registered the orders made in the Family Court of Australia in the Federal Magistrates Court, filed an application in the Federal Magistrates Court on 22 February 2007. That application was amended by an amended application filed in Court on 8 March 2007
The orders sought by the wife in her amended application were:
1.By way of machinery provision in place of Orders of 25 February 2004 (“the Original Orders”):
1.1In Order 2, the words “in accordance with the terms set out in Annexure C to these Orders” are deleted;
1.2Order No. 4 of the Original Orders is amended by deleting Order 4.1 (providing for a valuation); and deleting Order 4.2 (providing for a payment to the wife within 3 months of the valuation of half of the net equity of the property as defined in Order 4.2); and that Order 4.3 be deleted (as to how the net equity payment to the wife is to be calculated);
1.3Order No. 5 of the Original Orders as to the wife transferring her interest in the property to the husband upon payment to her of her entitlement under the previous orders be deleted;
1.4Order No. 7 of the Original Orders is deleted.
1.5Order No. 9 of the Original Orders is deleted.
1.6Order No. 17 of the Original Orders is deleted.
2.In lieu of those machinery provisions as to the sale of the property or the transfer of the property or valuation of the property, and other items the following clauses are substituted and added:
7A.(a) The husband and the wife are to confirm the contract for sale of the strip of land referred to in the contract dated 15 March 2006 between the parties as vendors and Mr and Mrs [B] as purchasers;
(b)The parties are to join in and to execute all documents whatever is necessary to carry out effectively and as promptly as possible the completion of that sale to [Mr and Mrs B];
(c)The proceeds of that sale of the strip (fixed by the contract to be $100,000) is to be applied in reduction of the parties’ obligations under their existing mortgage to NAB;
(d)The husband and the wife are ordered to sign as vendors a Contract for Sale of the balance of the property by the parties as vendors to Mr [S] and [Ms M] in accordance with the contract identified in the cover sheet and special conditions attached as Annexure D to the Affidavit of [the wife’s solicitor] sworn 1 March 2007 and sign all necessary documents and give all necessary assistance to complete the sale of the rest of the property promptly and in accordance with the contract;
(e)That the proceeds of sale of the property to Mr and Mrs [S] be disbursed as follows:
(i)In payment of the full remaining amount now payable to NAB secured by the mortgage over the property, presently estimated to be $1,194,317.75;
(ii)Any arrears of municipal rates, water charges or other liabilities secured over the property;
(iii)The legal costs already incurred in relation to the preparation of the contract;
(iv)The legal costs of the sale by a solicitor to act on the sale on behalf or the vendors not including the preparation of the contract, being a solicitor approved by the husband and the wife jointly or in the absence of agreement as to the solicitor to act for the vendors, a solicitor to be appointed by the President for the time being of the Law Society of NSW being a solicitor experienced in conveyancing and particularly experienced, if possible, in conveyancing of [the matrimonial home];
(v)
Any proper agents commission or advertising expenses in respect of the sale of the property payable by the vendors in respect of the sale to

[Mr S] and [Ms M];
(vi)50% of the then remaining amount payable to the wife;
(vii)$65,000 payable to the wife pursuant to Order No. 1 of the Original Orders and all interest that has accumulated thereon;
(viii)The payment of $1,200 per week payable by the purchasers Mr and Mrs [S] pursuant to the special conditions of the contract is to be paid to NAB on behalf of the vendors to be credited in respect of the mortgage liability to the NAB;
(ix)Any remaining money from the proceeds of sale to be held by [the wife’s] solicitors, in trust pending a decision by this Honourable Court as to how much the husband owes to the wife pursuant to the Original Orders relating to:
(a)The sale of the boat (Original Order Number 12);
(b)Artworks and furniture (Order Number 10);
(c)In payment of the liabilities still remaining pursuant to Order 9.5, or if the wife has paid any of those liabilities in reimbursement to the wife;
(d)Income derived from the property including weekend rental of the boathouse and the rental or licence fee of rooms in the house since the date of the Original Orders.
(e)Amounts due under Order 24 (services).
24.The husband to pay any arrears of insurance premiums over the property that are still payable and any electricity or telephone charges payable in respect of arrears or charges of any services to the property which have not been met, and the amount of municipal rates and water charges in respect of the property as from 3 months after the date of the Original Orders.
25.Pursuant to Section 106A of the Family Law Act 1975 in the event that the husband fails to execute any documents required pursuant to these orders for a period of 10 days the Registrar of the Court is appointed to sign any such documents on behalf of the husband.
Before the Federal Magistrate the wife relied on two affidavits affirmed by her on 22 February 2007, and an affidavit filed in Court on 8 March 2007. She also relied on an affidavit of her solicitor sworn 1 March 2007.
In a response filed in Court on 8 March 2007 the husband sought the following orders:
1.The Applicant’s proposed Orders are not in the interests of the Parties or either of them and the Orders sought by the Applicant ex-wife are inappropriate in all the circumstances.
2.The Husband seeks an Order in the following terms:
“That the Applicant executes within 2 (two) workings days of submission to her solicitors an Authority and Release in favour of the National Australia Bank to enable the Bank to sell the property known as [the matrimonial home] to Mr [N] for the purchase price of $1.4 million.”
on the grounds set forth within the Affidavit of Respondent Husband signed 2 March 2007.
The husband relied on an affidavit filed in Court on 8 March 2007.
I will return to discuss, where relevant, the affidavit evidence. There is no dispute that the matter proceeded before the Federal Magistrate on 2 March 2007 and concluded on 8 March 2007 with a hearing “on the papers” with no objection taken to any affidavit material. Neither party gave evidence or was cross examined.

The grounds of appeal

The wife relied on her Notice of Appeal filed 16 March 2007. The grounds of appeal are:
1.The Magistrate erred in the exercise of the Court’s discretion in refusing the Application for Enforcement.
2.The Magistrate erred in failing to treat the Enforcement Application on the basis that the substance of the orders to be enforced required substantial adjustment in the machinery provisions.
3.The Magistrate erred in declining to give the parties an opportunity to consider any further or different application by indicating the Court’s concerns in relation to the orders proposed.
In my discussion of the grounds of appeal I propose firstly to consider whether the orders sought were machinery or substantive orders, thereafter on the basis that the orders were capable of enforcement I will consider whether or not the Federal Magistrate’s discretion miscarried in refusing to proceed with the application as one for enforcement. I will finally, if necessary, deal with the procedural fairness ground in ground 3, including the challenge articulated before me that the Federal Magistrate had failed to deal with all of the orders sought in the application particularly those dealing with the chattels and motor vessel when she dismissed the application.

The Federal Magistrate’s reasons for judgment

Having noted the application before her was one for enforcement, Federal Magistrate Sexton referred to the consent orders and said “[i]t is clear the wife knew within only eight days of the order, that is in early March 2004, that the husband had not complied with those orders” (paragraph 3).
Thereafter the Federal Magistrate summarised the provisions of Order 1 and set out in full Order 2 of the consent orders. Her Honour said:
In other words the orders provided for a self executing regime in the event the husband did not comply. The parties did not comply with those orders. They did not forthwith sell the [matrimonial home] when the husband did not comply with Order 1. Instead, the parties did something else. Approximately a year after the making of the original orders they agreed to sell part of the property to a third party. They exchanged contracts in relation to that sale of part of the property earlier in 2006. In taking the course they did the parties created new rights in third parties. Now the wife, three years after the orders were made, comes to this Court seeking a remedy for a problem created by the parties themselves in not complying with the orders of February 2004. (paragraph 7)
The Federal Magistrate referred to correspondence from the NAB, who held a mortgage over the matrimonial home by way of security for borrowings, which disclosed there had been default on the home loan facility since about November 2004, and considered matters relevant to the exercise of discretion in enforcement of property orders referring to the judgment of Finn J in Harvey and Cresswell (1991) FLC 92-232. She detailed the parties’ actions since the making of the consent orders in the following terms:
I have regard to what has happened between the time of the orders and the time these proceedings have been initiated. The parties have interfered [sic] with the orders. They have not paid the mortgage instalments, they have not followed the self executing regime they created themselves to deal with the problem of non compliance. They have created rights in third parties. The orders I am being asked to make in accordance with the wife's amended application are not recognisable as the orders made in February 2004. (paragraph 9)

Thereafter the Federal Magistrate turned to consider the authorities on which senior counsel for the wife relied to support his assertion the orders sought were machinery.
Her Honour then set out her conclusions as follows:
11.I do not accept that I am being asked simply to modify or clarify the machinery provisions of the orders to effect enforcement. I am faced with a situation in which the parties by not complying with the original orders have created something quite different including third party rights.
12.Each party is asking the Court to make orders requiring the property to be sold to different parties on different terms, while third parties hold an enforceable right in relation to part of the parties' property. The parties have defaulted on their home loan and the bank's rights are also affected. None of this was contemplated by the original orders.
13.As stated by the Full Court in Sahari & Sahari (1976) FLC 90-086 and re-stated by his Honour Warnick J in In the marriage of Ebbage [2000] FamCA 1470 all enforcement powers in the Act are discretionary and for the reasons outlined I dismiss the wife's application and the husband’s response.

Were the orders sought in the application machinery or substantive orders?

The parties’ submissions

Senior counsel for the wife, having regard to the pending sale of the strip, and the proposed sale of the remaining land, submitted:
On behalf of the wife, it is submitted that it is unnecessarily cumbersome to set aside the whole of the Original Orders and to re-do them again to deal with the problem arising from the [Mr and Mrs B] contract. (wife’s submissions, page 11, paragraph 28)
The wife’s senior counsel then referred to a number of authorities discussing principles to be applied in determining whether or not an order is a machinery order. He submitted that “[t]he substantive orders ... can be readily identified” (wife’s submissions, page 11, paragraph 33).
Senior counsel further submitted:
The other orders that clearly [sic] the substantive operative orders (see particularly Order 4.2) of the Original Orders was that the substance was that the wife was to get $65,000 and 50% of the net equity in the property after sale in addition to that $65,000. The Original Orders 4, 5 and 6 are typically machinery provisions which do not have direct impact on the substantive rights of the parties. (Wife’s submissions, page 12, paragraph 34)
...
It is entirely clear that the substantive provision for sale and division of the proceeds is the main thrust of the Original Orders. The way in which the orders were to be carried out was a process of machinery, particularly specified in Annexure “C” to the Orders which provides for machinery which is now quite inappropriate when the property has to be sold under the direction or supervision of the bank. It is respectfully submitted that it is a matter of machinery as to whether the sale should be carried into effect by a single contract for sale or by two contracts of sales of different parts. (wife’s submissions, page 12, paragraph 37)
No outline of argument was provided by the husband. However in his oral submissions the husband’s solicitor submitted that the learned Federal Magistrate was correct in rejecting the wife’s application on the basis the parties had, by their actions, varied the contract, and the orders should not be enforced. This submission was of a different nature to the submissions made before the Federal Magistrate where the husband himself sought orders compelling the sale of the matrimonial home, including the strip, to Mr N.
I have already set out the orders sought by the wife in her amended application. It is appropriate to note that the majority of the submissions in this matter were made to the Federal Magistrate on 2 March 2007 prior to the filing of the amended application. In her original application the wife sought an order that the parties instruct a solicitor to draw a contract and complete a sale of the matrimonial home to Mr and Mrs S, and if the husband failed to comply with such an order, a Registrar be appointed to execute a contract in his stead.
The wife’s senior counsel foreshadowed the amended application after discussion with the Federal Magistrate when he submitted there was no change to the orders, rather the land was being sold “in two bits”, rather than as a single parcel of land.
I turn to consider the effect of the proposed changes sought to the orders.
It is convenient to deal firstly with the contract to Mr and Mrs B. I note that Exhibit “B” which is a stamped copy of the contract discloses the sale price was $120,000.00 not $100,000.00 as provided in the proposed orders. The contract is dated 5 March 2006. The contract was executed because the NAB agreed to exchange on condition the bank receive its “overlimit” repayment from the settlement sum. The husband provided an irrevocable authority to the wife which provided for the wife to receive the whole of the proceeds of sale of the strip, except the arrears due to the Bank.
It is also relevant to note the significant change of circumstance which occurred after the hearing before the Federal Magistrate, namely that the parties fortunately were able to secure another purchaser for the matrimonial home, subject to the strip contract, at a purchase price of $1,400,000.00 and the NAB consented to the sale and agreed to defer recovery action. Unfortunately it appears that notwithstanding the substantial issue which was sought to be agitated before the Federal Magistrate was resolved, the parties had, by the time of the adjourned hearing before me, been unable to reach an overall compromise to conclude what appeared to be relatively minor matters in issue. At the hearing of the appeal, I noted with concern issues of proportionality given the cost of these proceedings, and the amount in issue. Nevertheless, the parties determined to proceed with the appeal.
The orders now proposed, in summary, are to retain the husband’s obligation to pay $65,000.00, in respect of which sum the wife asserted no amount had been paid (wife’s affidavit affirmed 22 February 2007, paragraph 5) and the husband deposed to payment to the wife of $4,500.00 pursuant to Order 1 of the consent orders (husband’s affidavit filed 8 March 2007, paragraph 22).
The wife seeks that the whole of Order 4 which dealt with the distribution of proceeds of sale of the matrimonial home (prior to the contract to sell the strip) be deleted. She also seeks the provisions in the orders for the husband to acquire the wife’s interest in the property, subject to the payments to her, be deleted, and her obligation to return the Holden Commodore motor vehicle to the husband on payment to her of $65,000.00 be deleted
The wife also seeks new provisions for selling firstly the strip, and secondly the matrimonial home (minus the strip). The proposed order provides for the proceeds of sale of the strip (fixed by contract to be $100,000.00) (semble $120,000.00) to be applied to the NAB mortgage. Thereafter the proposed order provides for a sale to Mr and Mrs S (rather than the actual purchasers) (I will assume the wife’s legal representatives overlooked amending the proposed order to insert the actual purchasers), and thereafter for a discharge of the mortgage estimated to be $1,194,317.75 and after expenses of the sale, 50 per cent of the balance to the wife, then $65,000.00 plus interest to the wife, then payment of sums to Mr and Mrs S (which for present purposes I will ignore) and finally the balance to be held by the wife’s solicitors conditional on an accounting of other obligations under the orders including Order 9.5 (notwithstanding proposed Order 1.5 seeks the whole of Order 9 of the consent orders is deleted). The proposed orders contain no provision for any payment to the husband.

Relevant law

In Slapp and Slapp (1989) FLC 92-022 the Full Court discussed the limitations on the power of the Court to vary an order made under s 79 and said at 77,360:
It is not open to a court to make a substantive variation to orders previously made under sec. 79. That proposition can today no longer be doubted. It is based upon the principle, endorsed by the High Court in the case of Taylor v. Taylor (1979) FLC ¶90-674; 5 Fam. L.R. 289, that an order under sec. 79 is a once and for all proposition.
Such an order can only be varied on appeal or, where the circumstances warrant the same, pursuant to sec. 79A. As counsel for the husband pointed out, the first extension of time can be seen as either an extension by agreement between the parties made by the very authority of the order itself, or alternatively as an exercise of the court's power to vary an order by the consent of the parties pursuant to sec. 79A(1A).
However, the orders made by his Honour on 7 October 1988 were not made by consent and the question therefore arises as to whether those orders affected the substance of the orders or were merely dealing with the machinery aspect of implementing those orders.
The applicable principles were similarly referred to by Frederico J in Cranage and Cranage (1981) FLC 91-039 as follows at 76,344:
The Family Law Act confers no power on the Court to vary an order for settlement of property (Taylor and Taylor (1977) FLC ¶90-226; King and King (1977) FLC ¶90-299; Kaljo and Kaljo (1978) FLC ¶90-445; Branchflower and Branchflower (1980) FLC ¶90-857). The Court has power to set aside a property order only on the narrow grounds set out under sec. 79A, and the parties make no application under that section. Nor has any appeal been brought against his Honour's order.
However, in McDonald and McDonald (1976) FLC ¶90-047, the Full Court held that “there is ample power to modify the machinery provisions of a property order provided this does not affect the substantive property rights or cause undue hardship to either party”. This view was followed in Kaljo and Kaljo (supra) and more recently in Molier and Van Wyk (1980) FLC ¶90-911. The Court derives such power from sec. 80 of the Family Law Act. An application might be made for the Court to exercise the power even though liberty to apply had not been reserved expressly.
The distinction between a machinery and a substantive order is extensively discussed by the Full Court in Ravasini and Ravasini (1983) FLC 93-312 at 78,126 to 78,127:
Counsel for the appellant referred to McDonald and McDonald (1976) FLC ¶90-047, Kaljo and Kaljo (1978) FLC ¶90-445 and Molier and Van Wyk (1980) FLC ¶90-911 as authority for the power of the Court to make what is termed a machinery order. There is no question of the power of the Court to make what we would with respect suggest is more properly called a consequential order. The real questions are what is the proper definition of a consequential or machinery order and where is the dividing line between a consequential order which may be varied or modified and a substantive order which the Act gives no power to the Court to modify or vary. Counsel for the appellant was unable to refer the Court to any authority on this point but argued the submission rather by comparison with the facts of the cases referred to.
...
It is appropriate then to look at what a consequential order is. The Shorter Oxford Dictionary defines “consequential” as meaning “Following esp. as an effect, immediate or eventual, or as a logical inference”.
The Universal English Dictionary defines the word as “Following as a consequence, on what has gone before, resultant: consequential alteration in wording of a document, those made necessary by others already made.” The same dictionary defines “consequence” as “Event which follows upon something else which is, or appears to be, the cause; a result, outcome of what has gone before.”
A consequential order then, in a property matter, would include an order following logically or of necessity from a prior substantive order.
What a consequential order is not is an order the effect of which is to vary the prior order for property settlement. It is not possible to suggest that even the slightest variation of the original order is a consequence of it. What is being submitted in this appeal is that the original order should be amended not as a consequence of that order itself, not as a necessary follow up of that original order but rather as a consequence of events which have happened in the market place since that order was made rendering the facts on which it was based no longer accurate.
It appears to me that what the wife now seeks is not a consequential order. The parties’ agreement to sell the strip, and their informal agreement for disbursement of the proceeds of sale of the strip documented in the husband’s irrevocable authority fundamentally changed the nature of the consent orders.
Further, the so called machinery orders as to the distribution of proceeds of sale of the strip, and the matrimonial home, do not accord with the tenor of the consent orders, thus changing the nature of the parties’ entitlements. For example, in the consent orders on default by the husband the matrimonial home was to be sold, and after payment of legal expenses, the mortgage “to a maximum amount of $1,015,000” was to be discharged, thereafter the wife was to receive the first $65,000.00, then other liabilities were to be paid out, thereafter reimbursement to the husband of liabilities he had paid, then 50 per cent of the balance was payable to the wife. The proposed machinery order seeks (ignoring provisions for Mr and Mrs S):
1.the whole of the strip proceeds (which are not defined) are to be paid to the NAB (leaving unresolved the expenses associated with the subdivision);
2.on completion of sale of the matrimonial home, minus the strip, the full amount payable to the NAB estimated at $1,194,317.75 is to be paid to that Bank;
3.payment of legal expenses incurred on the sale;
4.then 50 per cent to the wife, and thereafter payment to her of $65,000.00 (a reversal of the earlier Order 9.4);
5.the balance to be held by the wife’s solicitors pending determination of how much is owed to the wife from the sale of the boat and artworks, taking into account rental of the property (the latter being a completely new term);
6.no provision for return of the Holden Commodore to the husband; and
7.no provision for an entitlement of the husband to any part of the proceeds of sale of either the strip or the matrimonial home from the remaining balance.
I am satisfied, as found by the Federal Magistrate, the parties varied the consent orders by their agreement to subdivide the land, not proceeding with the detailed sale provisions for chattels and sale of the motor vessel, and by the wife not seeking to enforce the terms of the consent orders in a timely manner thus permitting increased liability to the NAB.
It appears to me the orders now sought are not as a necessary follow up to the consent orders, but consequence of events which have happened since the making of the orders by reason of the parties own actions, particularly the agreement to sell the strip. The parties’ remedy is s 79A of the Act, or by further consent orders under s 79A(1A).
I am satisfied there was no error by the learned Federal Magistrate in her conclusion that what she was being asked to do was not to “modify or clarify the machinery provisions of the orders”.
The unfortunate consequence of the parties’ own actions is the need for further consent orders, or proceedings under the Act.
There being no error demonstrated by the learned Federal Magistrate in dismissing the application of the wife it is unnecessary to consider the remaining grounds of appeal. I note however that even if the orders had been machinery orders it was within the learned Federal Magistrate’s discretion, in the circumstances of this case, to refuse to enforce all of the orders. The Federal Magistrate made her preliminary views on that issue abundantly clear (see transcript, 2 March 2007, page 10).

Further evidence application

I have already noted the consent to the admission of the wife’s affidavit affirmed 21 May 2007. I accept that part of her evidence updates the position since the matter was before the Federal Magistrate. However material in the affidavit is contentious (paragraphs 9 and 10). I already had the best evidence before me of the sale of both the strip, and the matrimonial home excluding the strip (Exhibits “A” and “B”). The wife also sought to adduce further evidence on the appeal essentially of correspondence between the parties’ respective solicitors going to appointment of valuers, and the like after the making of the consent orders. Her senior counsel conceded that the evidence was available and could have been placed before the Federal Magistrate. I find no basis for the admission of any of the further evidence (see CDJ v VAJ (1998) 197 CLR 172; (1998) FLC 92-828; Allesch v Maunz (2000) 203 CLR 172; (2000) FLC 93-033).

Costs

At the conclusion of the appeal I sought submissions in respect of costs. Senior counsel for the wife submitted in the event the appeal was dismissed each party should pay his or her own costs. The husband’s solicitor submitted in the event the appeal was dismissed the wife should pay the husband’s costs.
There is little evidence before me of either party’s present financial circumstances. I have regard to the fact that whilst the wife has been wholly unsuccessful in respect of the appeal, that the husband’s application before the Federal Magistrate sought similar relief by way of a sale to a different purchaser. In the circumstances of this case I am not satisfied a departure from s 117(1) is warranted. Accordingly I propose to order that each party pay their own costs of and incidental to the appeal.

I certify that the preceding fifty nine (59) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Boland.

Associate:

Date: 8 June 2007