Medlow & Medlow (No 2) - [2016] FamCAFC 63

FAMILY COURT OF AUSTRALIA

MEDLOW & MEDLOW (NO. 2)

[2016] FamCAFC 63

FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – AMENDMENT OF ORDERS – Where the appellant seeks to have orders amended under the slip rule in r 17.02 of the Family Law Rules 2004 (Cth) – Where the appellant seeks an order for payment from a joint bank account – Whether the Full Court inadvertently omitted to make such an order – Whether the slip rule applies to the order sought – Whether the order sought is an order for interim property settlement – Where the Full Court did not intend to make an order for payment – Application in an Appeal dismissed.

FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – COSTS – Where the Application in an Appeal was unsuccessful – Whether conduct of the respondent warrants no costs order being made – Where no order made as to costs.

Family Law Act 1975 (Cth) ss 79, 94(2), 117

Family Law Rules 2004 (Cth) rr 1.04, 1.08, 17.02

Gludau & Gludau (No. 2) (2013) FLC 93-562

APPELLANT:

Ms Medlow

RESPONDENT:

Mr Medlow

FILE NUMBER:

SYC

7742

2010

APPEAL NUMBER:

106

2014

DATE DELIVERED:

28 April 2016

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

May, Ryan & Aldridge JJ

HEARING DATE:

5 April 2016

LOWER COURT JURISDICTION:

Full Court of the Family Court of Australia

LOWER COURT JUDGMENT DATE:

8 March 2016

LOWER COURT MNC:

[2016] FamCAFC 34

REPRESENTATION

SOLICITOR FOR THE APPELLANT:

Ms Morozov of Barkus Doolan

COUNSEL FOR THE RESPONDENT:

Mr Gould

SOLICITOR FOR THE RESPONDENT:

Watts McCray

Orders

The Application in an Appeal filed on 23 March 2016 is dismissed.
There be no order as to costs.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Medlow & Medlow has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 106 of 2014
File Number: SYC 7742 of 2010

Ms Medlow

Appellant

and

Mr Medlow

Respondent

REASONS FOR JUDGMENT

Introduction

By an Application in an Appeal filed on 23 March 2016 Ms Medlow (“the wife”) seeks the following order:
1.Pursuant to Rule 17.02 of the Family Law Rules 2004 that the Orders made on 8 March 2016 be amended to include the following additional order:
“7.That the parties do all acts and things and sign all documents as are necessary to disburse the funds held in the parties’ joint names with St George Bank, account number … in the following manner and priority:
7.1Subject to any further order of this Court and without admission as to the appropriateness of the sum and without prejudice to the right of the wife to bring such further application as may be considered appropriate and or necessary, the sum of $15,500,000 to be held in an interest bearing account in the name of the parties, in compliance with paragraph 1(c) of the Orders made in the Supreme Court of NSW on … 2011, being case number … between [Medlow Pty Ltd] and [D Pty Ltd], such funds not to be disbursed expect [sic] by further order of this Court;
7.2The balance to the wife”.
On 8 March 2016 the Full Court made orders allowing the wife’s appeal against interim property orders made in favour of Mr Medlow (“the husband”). The parties had sold a property at Suburb C resulting in net proceeds of $31 million. Each party was entitled to half of the proceeds. The husband had consented to orders in litigation in the Supreme Court of New South Wales which required him to preserve his share of the proceeds pending determination of that litigation. The primary judge made an order for the payment of an interim property settlement of $2.9 million to the husband from the proceeds of sale. This payment could only have been made from the wife’s share.
We found that the order for payment to the husband should not have been made. The position is significantly more complicated than this brief description suggests and reference needs to be made to the entire judgment to understand the basis for our order.
The orders made were:
(1)Leave to appeal against Orders (1)6, (3), (4) and (5) of the orders made by Loughnan J on 18 July 2014 be granted in EA 106 of 2014 filed on 6 November 2014.
(2)The appeal filed by the wife on 6 November 2014 being proceedings EA 106 of 2014 be allowed.
(3)The Orders (1)6, (3), (4) and (5) made on 18 July 2014 be discharged.
(4)The oral application of the wife for a stay be dismissed.
(5)The application for leave to appeal in EA 140 of 2014 filed on 6 November 2014 is dismissed.
(6)The husband pay the wife’s costs of and incidental to the appeals being appeal numbers EA 106 of 2014 and EA 140 of 2014 as agreed or in default of agreement as assessed, including the costs of the Application in an Appeal dated 2 October 2015.
It is to be observed that those orders simply discharged the orders of the primary judge which, in our opinion, ought not to have been made.
In the course of discussing the nature of the wife’s interest in the proceeds of the sale of the property we said:
105.The wife’s application was for the payment of the balance of the [Suburb C] property proceeds to her. That payment was described by her as being “by way of interim property settlement”. That phrase is repeated in these grounds of appeal. It is difficult, therefore, to be critical of the primary judge who described her application by using the same phraseology. However, it is apparent from what we have said already that we accept that the wife was simply seeking an order that she receive the interest to which she was legally entitled and was not seeking an interim order intending to alter property rights.
106.As to refusing the payment to the wife the primary judge said at [75]:
75.Lastly, the wife seeks that the balance of the net proceeds of the [sale of the Suburb C property] be paid to her. No justification was advanced for such an order. The balance of the proceeds will be held as the parties agreed in April with any further disbursements to be by written agreement or further order of the Court.
107.The justification advanced by the wife was that the funds were, in fact, her funds. The order was therefore a restraint on her receiving her own assets. Of course, in appropriate cases, such orders are commonly made. In his Application in a Case filed 21 August 2014, the husband sought an order that the wife be restrained from disposing of, encumbering, charging, selling or otherwise dealing with personalty in her possession or control without written consent of the husband, however, the primary judge declined to make such an order (at [28] of the reasons of 11 September 2014). No challenge is made against his Honour’s refusal to grant that injunction. In those circumstances, it is clear that the funds should have been paid to the wife.
…
110.The wife has established that there were fundamental errors by the primary judge which led to the orders being made from which she appeals. It follows that leave to appeal should be granted. The appeal should be allowed. The orders of the Court below must be discharged. In our view the primary judge should have ordered that the proceeds of the sale of the [Suburb C] property be disbursed by paying $15.5 million into the joint account as ordered by the primary judge, $15.5 million to the wife and the balance, if any, divided equally between the parties. This order simply gives effect to the parties’ legal interests in that property.
The wife relies on these passages to support the orders she now seeks. The effect of those orders, if made, is that the wife would receive a payment from the joint account in which the proceeds of sale are currently being held, of what remains of her half share of the proceeds.
The wife sought such an order in her Response to the husband’s Application in a Case which he filed on 14 July 2014, but described the payment sought by her as being “by way of interim property order”.
In her Amended Notice of Appeal filed on 6 November 2014 the wife sought the following order:
5.That the proceeds of the sale of the [B Street, Suburb C] be paid and/or applied in the following manner or priority:
5.1Subject to any further order of this Court and without admission as to the appropriateness of the sum and without prejudice to the right of the applicant to bring such further application as may be considered appropriate and or necessary, the sum of $15,500,000 to be held in an interest bearing account in the name of the parties, in compliance with paragraph 1(c) of the Orders made in the Supreme Court of NSW on … 2011, being case number … between [Medlow Pty Ltd] and [D Pty Ltd], such funds not to be disbursed expect [sic] by further order of this Court other than the interest earned on such deposit which shall be paid equally to the applicant and the respondent;
5.2The balance to the applicant by way of interim property settlement.
Again the wife proposed that she receive those funds by way of an interim property settlement.
The order sought pursuant to r 17.02 of the Family Law Rules 2004 (Cth) (“the Rules”) is not expressed to be by way of interim property settlement but, as we said in our earlier reasons, the wife is simply seeking payment to her of her own funds. There is a significant difference between the two orders. The making of an interim property order under s 79 of the Family Law Act 1975 (Cth) (“the Act”) involves the exercise of a discretion in accordance with that section, taking into account all relevant considerations raised by that section. The return of property to its owner does not involve such an exercise although, in circumstances such as this, another party may wish to seek an order to freeze the payment or restrict the use of the funds pending the final hearing. In either case, however, the court would take into account all relevant matters as at the date of making the order.
The newly amended rule 17.02, which came into effect on 1 January 2016, provides:
(1)       The court may at any time vary or set aside an order, if:
(a) it was made in the absence of a party; or
(b) it was obtained by fraud; or
(c)   it is interlocutory; or
(d)   it is an injunction or for the appointment of a receiver; or
(e)   it does not reflect the intention of the court; or
(f) the party in whose favour it was made consents; or
(g)   there is a clerical mistake in the order; or
(h) there is an error arising in the order from an accidental slip or omission.
(2) Subrule (1) does not affect the power of the court to vary or terminate the operation of an order by a further order.
In Gludau & Gludau (No. 2) (2013) FLC 93-562 the Full Court, speaking of the earlier version of the rule, said at 87,537:
20. The rule in its current form, particularly when regard is given to its accompanying note, is arguably significantly more restrictive of the “slip rule” powers exercisable by a judge of this court than those to which the High Court referred in DJL. Indeed, as the High Court said more recently in Burrell v The Queen (2008) 238 CLR 218, at 224 – 225 per Gummow A-CJ; Hayne, Heydon, Crennan and Kiefel JJ:
20.Identifying the formal recording of the order of a superior court of record as the point at which that court’s power to reconsider the matter is at an end provides a readily ascertainable and easily applied criterion. But more than that, identifying the formal recording of the order as the watershed both marks the end of the litigation in that court, and provides conclusive certainty about what was the end result in that court.
21.The power to correct the record so that it truly does represent what the court pronounced or intended to pronounce as its order [L Shaddock & Associates Pty Ltd v Parramatta City Council [No 2] (1982) 151 CLR 590 at 594-595] provides no substantial qualification to that rule. The power to correct an error arising from accidental slip or omission, whether under a specific rule of court or otherwise, directs attention to what the court whose record is to be corrected did or intended to do. It does not permit reconsideration, let alone alteration, of the substance of the result that was reached and recorded.
21. The current rule might, then, be argued to be reflective of the concern that the Rules must embody the fact that this court is a creature of statute within a constitutional framework and its powers on appeal derive from statute. In particular, while the “slip rule” might be used to correct obvious errors (perhaps what Kirby J referred to in DJL as “accidental mistakes or omissions of no substantive significance” or an “accidental slip or omission” as the plurality in Burrell referred to), care must be taken when the nature of the asserted error is substantive, as that may in fact involve the exercise of a power to reopen proceedings that are completed by a perfected order and that is a power which this court does not have (see, DJL).
(Emphasis as per the original)
Notwithstanding the new form of the rule those remarks (excluding the first sentence of Gludau at [20], which does not apply to the current iteration of r 17.02) remain pertinent.
As we will now explain we are of the opinion that r 17.02 has no application and that the Application in an Appeal should be dismissed.
We commence by pointing out that an appellate court is not bound to make, or even consider making, all of the orders sought by the appellant in the event the appeal is successful.
The passages of the judgment relied upon by the wife were part of a discussion as to whether the order made on 18 July 2014 for the payment of $2.9 million to the husband by way of interim property settlement should have been made. The discussion was primarily concerned with the source of funds for that payment. There was no consideration of whether there should have been an interim property settlement to the wife or whether any other order for payment to her should now be made. The Court simply noted that the wife had a legal interest in the funds and, in the ordinary course, that she had an entitlement to payment. There was thus no intention to make an order for payment of any funds to the wife.
We note that neither party addressed any submissions to us in the hearing of the appeal on the exercise, or re-exercise, of any discretion or power to make an order in favour of the wife or adduced any updating evidence in support of such a determination.
Insofar as the wife submits that the order she now seeks is simply to provide for the payment of her funds to her, the difficulty is that such an order would take effect on the day on which it was made. In other words, it is not an order that clearly and obviously ought to have been made on 18 July 2014 (s 94(2)). It is a fresh order the making of which would require specific consideration.
There was no consideration by us of what orders should properly be made as at 8 March 2016 and it is now not permissible to undertake such a step.
A second difficulty is that there might now be a proper basis for there being some restriction on the payment to her or fetter on the use of the funds by her if they are released. We do not say that there is such a basis but if there is to be such a consideration that is very much a matter for consideration by a judge at first instance.
The orders made by us correctly gave effect to the court’s intention. No order was inadvertently omitted. The Application in an Appeal will be dismissed.

Costs

The husband sought an order for costs of the application in the event it was dismissed. The wife proposed there should be no order as to costs. The solicitor for the wife submitted that the conduct of the husband in relation to the application justified such an approach and referred the Court to correspondence that had passed between the parties.
On 8 March 2016, the day our orders were made, the wife’s solicitor sent a letter to the husband’s solicitor seeking the husband’s consent to an order providing for a payment to the wife of the balance of the funds held in the term deposit after allowing for the retention of $15.5 million to satisfy the husband’s obligations under the Supreme Court orders. No response was received from the husband’s solicitors.
On 21 March 2016 the husband filed an Amended Application in a Case seeking a number of orders including an order that the wife be paid $15.5 million. That payment was conditional upon a number of other orders being made and the husband being permitted to take certain steps in relation to a trust.
On 23 March 2016 the wife’s solicitor provided the husband’s solicitor with unsealed copies of the Application in an Appeal and the Affidavit of the wife which had been lodged for filing. The husband was again invited to consent to the orders particularly in the light of his Amended Application in a Case.
On 30 March 2016 the wife’s solicitors sent the husband’s solicitors a letter enclosing, by way of service, the filed copies of the Application in an Appeal and Affidavit. Once again the husband was invited to consent to the orders. No response was received to any of those letters.
Rule 1.04 of the Rules provides:
The main purpose of these Rules 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.
Rule 1.08 provides a party and their lawyers, as far as possible, have a responsibility to promote and achieve the main purpose of the Rules including the responsibility to assist with the just, timely and cost effective disposal of cases and identifying the issues genuinely in dispute. (Rule 1.08(g) and (h).) Those rules, and indeed ordinary professional practice and courtesy, required the husband’s solicitor to indicate, at the least, their client’s attitude to the proposed application. It is no answer to say that, as the reply would have been that the application is opposed, the wife has incurred no costs as a consequence of the failure to reply. The obligations outlined remain.
Costs are governed by s 117 of the Act. In the ordinary course each party is to bear their own costs but the court may make such order that it thinks appropriate if the circumstances justify doing so. In considering making another order the court is to have regard to the factors set out in s 117(2A). Two considerations are particularly relevant here. The wife has been wholly unsuccessful in her application and ordinarily, in an Appeal, that would point to the making of a costs order against her. However, we are persuaded that the conduct of the husband in relation to the application is an equally powerful countervailing consideration.
Therefore, on balance, there will be no order as to costs.

I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (May, Ryan & Aldridge JJ) delivered on 28 April 2016.

Associate:

Date: 28 April 2016