Mehta & Crimmins
[2021] FCCA 1545
•21 June 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Mehta & Crimmins [2021] FCCA 1545
File number(s): PAC 6104 of 2017 Judgment of: JUDGE MYERS Date of judgment: 21 June 2021 Catchwords: FAMILY LAW – application of res judicata in spousal maintenance application – application for summary dismissal – permanent stay of proceedings – spousal maintenance application.
Short term marriage with no children where previous spousal maintenance application of wife was dismissed by consent at time of making final property orders. Wife now seeks spousal maintenance inter alia for the costs of obtaining a law degree.
Legislation: Family Law Act 1975 (Cth) ss 44(3), 60CA, 74, 75(3), 77A, 77A(1)(c), 77A(1)(d), 79, 79A, 81, 83, 117A(2)(b)
Federal Circuit Court Act 1999 (Cth) ss 17A, 17A(3)
Federal Circuit Court Rules 2001 (Cth) r 13.10
Cases cited: Atkins v Hunt [2016] FamCAFC 230
Blair v Curran (1939) 62 CLR 464
Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502
Clayton v Bant [2020] HCA 44
Henderson v Henderson (1843) 67 ER 313
Isaacs v Ocean Accident and Guarantee Corporation [1958] SR NSW 69
Jackson v Goldsmith (1950) 81 CLR 446
Marginson v Blackburn Borough Council (1939) 2 K.B 426
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Reid v Lynch (2010) FLC 93-448
Rogers v Legal Services Commissioner of South Australia [1995] 64 SASR 572
Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46
Other:
Kenneth Handley and George Spencer, Res Judicata (LexisNexis Butterworths, 4th ed, 2009 UK)
Number of paragraphs: 103 Date of hearing: 5 March 2021 Place: Parramatta Counsel for the Applicant: Mr O’Brien Counsel for the Respondent: Mr Lawrence ORDERS
PAC 6104 of 2017 BETWEEN: MS MEHTA
Applicant
AND: MR CRIMMINS
Respondent
ORDER MADE BY:
JUDGE MYERS
DATE OF ORDER:
21 JUNE 2021
THE COURT ORDERS THAT:
JUDGE MYERS:
1.That the proceedings between Ms Mehta and Mr Crimmins, file number PAC6104/2017, be permanently stayed.
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment under the pseudonym Mehta & Crimmins is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
.
ORAL REASONS FOR JUDGMENT
This is a decision relating to an application for summary dismissal made in the matter of Mehta & Crimmins. The application is made by the Respondent Husband (Respondent) in respect of a spousal maintenance application brought by the Applicant Wife (Applicant). The application for summary dismissal is resisted by the Applicant.
The application that is sought to be summarily dismissed is that contained within the Applicant’s Amended Initiating Application filed on 19 November 2020, where the Applicant seeks Final Orders that, pursuant to section 74 of the Family Law Act 1975 (Cth) (‘the Act’),[1] the Respondent pay to the Applicant a lump sum of $195,000 and costs. The Applicant also seeks Interim Orders that the Respondent pay $760 per week for the Applicant’s living expenses, and urgent spousal maintenance of $6,138 for the Applicant’s summer semester university fees, and a further sum of $24,552 for the Applicant’s autumn semester university fees. A further sum of $100,000 is sought by the Applicant to be paid to the Applicant’s solicitor’s trust account for security of costs.
[1] Family Law Act 1975 (Cth) s 74 (‘Family Law Act’).
Additionally, injunctive orders were sought that would prevent the Respondent transferring funds to his business that exceeds $5,000 without the Applicant’s consent. Further, that the Respondent and/or associates/agents be restrained from removing and/or transferring from Australia, or in any way disposing of, dealing with or diminishing the value of any asset, including cash from the Respondent’s business, that exceeds $5,000, other than to pay for legitimate and bona fide business expenses, unless with the express written permission of the Applicant. The Applicant also seeks costs.
By way of background, this case involves a very short relationship. The Respondent contends it was 3.5 months, where the Parties commenced living together in April 2017, upon marriage, and separated on 1 August 2017. The Applicant suggests that the parties married in Country B in December 2016 after the Respondent had converted to Islam, married in Australia in April 2017, and separated on 9 September 2017. There are no children of the relationship.
On 6 December 2017, the Applicant commenced proceedings before the Family Court of Australia.
On 11 December 2017, Foster J determined the matter and made an Order for spousal maintenance in the sum of $1,070 per week, and a lump sum Order in the sum of $1,800 to be paid by the Respondent to the Applicant for a rental bond.
On 20 April 2018, the Applicant filed an Amended Initiating Application in which she sought, at proposed Order 5, that the Respondent pay to the Applicant the sum of $2,000 per week, for a period of five years, by way of spousal maintenance.
The Applicant also sought Interim Orders for urgent spousal maintenance in the sum of $1,000 per week for living expenses, a further sum of $450 per week for rental expenses, a lump sum of $1,800 for a rental bond, and the sum of $100,000 to be placed into the Applicant’s solicitor’s trust account for security of costs.
On 4 May 2018, Foster J heard the Applicant’s application for spousal maintenance and reserved his decision.
On 1 June 2018, Foster J delivered his decision and made the following Orders:
1)That the order for interim spouse maintenance Order made on 11 December 2017 be discharged.
2)That pending further order the husband pay to the wife interim spousal maintenance in the sum of $1,500 per week.
3)That the Husband pay to the Wife the sum of $15,000 by way of lump sum spousal maintenance.
4)That within 42 days, the Husband pay to the Wife $67,000, with the characterisation of such payment to be reserved to final hearing.
Foster J made a further Order dismissing the summary dismissal application of the Respondent, and also made Orders setting out a timetable in relation to the issue of costs.
On 25 July 2019, Registrar Tran of the Family Court of Australia made Final Orders by Consent in accordance with Minutes attached to those Orders marked “Ex 1”. Those Orders provided that:
The Respondent pay to the Applicant the sum of $170,000 by way of the following instalments:
a)On or before 25 August 2019, $100,000.
b)On or before 25 October 2019, $20,000.
c)On or before 25 December 2019, $20,000.
d)On or before 25 February 2020, $20,000.
e)On or before 25 April 2020, $10,000.
The orders further provided, in Order 3:
Except as otherwise provided for in these orders, the Applicant be declared to be the sole legal and beneficial owner of her right, title and interest in and to:
(a) all cash at banks and monies held in the Applicant’s sole name; and
(b) any real and personal property including but not limited to, motor vehicles, furniture and jewellery and superannuation entitlements in her name, control or possession at the time of these orders
Order 4 provided that:
Except as otherwise provided by these orders, the Respondent be declared to be the sole legal and beneficial owner of her right, title and interest in and to:
(a) all cash at banks and monies held in the Respondent’s sole name; and
(b) any personal property including but not limited to motor vehicles, furniture and jewellery and superannuation entitlements in his name, control or possession at the time of these orders.
Whilst Order 4 refers to “her right” the Court accepts that it is either a typographical error, or an error that should be amended pursuant to the Slip Rule, and should have read “sole and legal beneficial owner of his right, title, interest in and to:”. Nothing turns on the issue or the mistake.
Order 5 provided that:
The Respondent and Applicant remain liable for any debts in their personal names and indemnify the other against all claims, costs, demands, suits, actions and proceedings which may be made against the other in respect of the said debts.
Order 6 provided that:
The parties shall each be liable for and indemnify the other against any claim made against them in regard to any debts or liabilities in each parties’ sole name including but not limited to credit card debts, personal loans, hire purchase, legal fees and car loans.
Order 7 provided that:
Each of the Applicant and the Respondent release the other from all debts owing from one to the other.
Order 8 provided that:
These Orders shall, as far as practicable, release each other from his or her rights to make an application in relation to the Estate of the other.
Order 9 provided that:
In the event that any party fails to sign any document or instrument or do any acts required or contemplated by these orders to be done with such failure continuing for 14 days then the Registrar or the Deputy Registrar of the Federal Circuit Court of Australia in pursuance of the orders conferred upon him or her under section 106A of the Act, as amended, shall have the power to execute any document or instrument in the name of the person who has refused or neglected to sign any necessary documents or instrument or to do any act required or contemplated by these orders.
Order 10 provided that:
All interim spousal maintenance orders are discharged and to the date they stand paid.
Order 11 provided that:
All extant applications be dismissed with no order as to costs with the intention that each party bear their own costs.
Order 12 provided that:
There be no order as to costs with the intention that each party bear their own costs
Under the heading, “The Court notes that” it provides:
A. Pursuant to section 81 of the Act, the parties acknowledge that these Orders are intended to operate so as to finally determine the financial relationship between the parties to the marriage and avoid further proceedings between them.
B. The Applicant and Respondent shall within 28 days of being called upon by the other do all acts and things and sign all documents as are necessary to join any application by the other to the Supreme Court of New South Wales for the approval of release of the rights of each party with respect to the estate of the other pursuant to s 95 Succession Act 2006 (NSW) with the party seeking the release to meet the costs of both parties of the application.
It is important to note that Order 10 provided that all interim spousal maintenance orders are discharged, and to the date they stand paid, and that Order 11 provided that all extant applications be dismissed with no order as to costs with the intention that each party bear their own costs.
For the purposes of understanding the effect of Order 11, it is helpful to consider the meaning of “extant applications”. The Macquarie Dictionary defines “extant” as an adjective meaning:
In existence; still existing; not destroyed or lost.
One of the extant applications still existing at the time that the Final Orders were made by Consent was that of the spousal maintenance application as contained in the Applicant’s Amended Initiating Application filed on 20 April 2018.
The Court notes, with importance, that the extant spousal maintenance application was, in accordance with Order 11, dismissed.
Mr Lawrence, as Counsel for the Respondent, made the following submission during the Hearing on the issue of the dismissal at Order 11, found at page 12, lines 25 to 41 of the transcript, that reads:
MR LAWRENCE: That is correct. And that was part of the settlement deal that was struck by the parties. But, more relevantly for present purposes, it was an order that was made by the court. As the authorities say, we don’t need a hearing on the merits to determine that, but it has the same effect. It’s not an order that all extant applications are withdrawn. It’s not expressed in any other way. The effect of that order is that if there was a hearing on the merits - it is the same as if there was a hearing on the merits before a judge - at that time I think of the Family Court - and as a result of that hearing on the merits that application for spousal maintenance was dismissed, that would bring finality to that issue.
And, in my submission, res judicata dictates that an applicant would not be entitled to revisit that issue in fresh proceedings. Even though the relief might be slightly different framed as a lump sum order instead of a periodic order, it nevertheless is relief of the same character as the High Court discussed in Clayton.HIS HONOUR: Mr Lawrence, just so I can consolidate –
Whilst the transcript records me as saying consolidate I don’t accept that I said “consolidate” – The transcript is incorrect and it should have actually read “consider” –
HIS HONOUR: …just so that I can consider and understand the submission, the point is that the application wasn’t withdrawn, the application was dismissed.
MR LAWRENCE: Yes.
At paragraphs 14 to 16 of the Applicant’s submissions it is put:
14. Paragraph [36] of the Husband’s Affidavit filed 21 May 2020 acknowledges that on the day that the Consent Orders were signed, the Husband was represented by his instructing solicitors and Counsel, while the Wife was represented by an Accredited Specialist in Family Law.
15. The Applicant Wife submits that had the parties intended to oust the Court’s jurisdiction in relation to future maintenance, a number of possible avenues existed for the consideration of the parties, including
15.1 Entering into a Binding Financial Agreement;
15.2 Entering into a Maintenance Agreement;
15.3 Providing an additional lump sum payment pursuant to section 74;
15.4 Having consideration to section 77A of the Act;
15.5 Supplementing the Consent Orders with recitals which clarify the intention of the parties in relation to Spousal Maintenance.
16. The Applicant Wife submits that the failure of the parties to consider any of these avenues reflects their intention not to oust the Court’s jurisdiction in relation to Spousal Maintenance.
Conversely, it might be suggested by the court that had the Applicant intended that her right to further pursue the then extant spousal maintenance application, the provisions in Order 11, would have reflected the spousal maintenance application being withdrawn rather than dismissed.
The Court considers whether the current spousal maintenance application is the same, in substance, as the extant spousal maintenance application that was dismissed by Orders made on 25 July 2019 in the Family Court of Australia.
In submissions on that question found at page 11, lines 12 to 25 of the transcript, Mr Lawrence, as Counsel for the Respondent, put:
Moreover, in this matter in the present proceedings, it arises from the same factual circumstances and the same grounds are advanced. Some of the figures might have changed as things have developed over time, but the applicant wife asserts that her need is based on the fact that she is studying a law degree, it’s the same law degree, the same university, the same type of expenses, the same periods of time that she put into evidence in support of her previous spouse maintenance application. So my overarching submission is she is, in effect, revisiting or reopening her previous application. And your Honour will see that in paragraph 9 on page 10 of the case outline document, it has been identified where the grounds of her current spousal maintenance are found. And the similarities are striking; they’re almost identical. It certainly couldn’t be said, with respect, that her application is put on different grounds.
When considering the Applicant’s evidence at its highest, the extant application dismissed on 25 July 2019 and the current spousal maintenance application have the following commonalities and same substance.
On 20 April 2018, the Applicant filed an Amended Initiating Application relevantly seeking the following by way of final relief:
•That the Respondent Husband pay to the Applicant Wife the sum of $1,300,000.00 by way of final property settlement, within 30 days of these Orders.
•That the Respondent Husband pay to the Applicant Wife the sum of $2,000.00 per week for a period of five (5) years by way of spousal maintenance.
•That the Respondent Husband pay the Applicant Wife’s costs of and incidental to these proceedings.
During the first proceedings the Applicant relied upon the following matters ostensibly in support of the relief sought by her on a final basis:
•Her English was “not well”;
•In June 2019 she had completed an English course, being a Certificate IV English Course;
•The Applicant had applied to study a Juris Doctor course through G University and has accepted an offer from that University;
•The Applicant anticipated starting the Juris Doctor course in late July to early August; and
•The costs associated with the Juris Doctor course was estimated to be $143,086.15.
The evidence of the Applicant in support of the current spousal maintenance application is contained at paragraphs 14 to 24 of her Affidavit filed 4 March 2020. The critical matters to be drawn from that evidence are the following:
•The Applicant asserts English is the Applicant’s second language.
•The Applicant is studying law at G University for which she asserts she pays approximately $23,600 per semester and approximately $105,000 remains outstanding.
•The Applicant asserts she has no other source of income.
•The Applicant asserts her weekly expenditure is $1,656.25 per week (out of which $900 per week is to meet the costs of university tuition).
•The Applicant says that she seeks Spousal Maintenance for a period to the date that she is expected to complete College of Law after having graduated from University, which will provide her the opportunity to find full-time employment and support herself.
The question of characterisation of both claims rests on substance, not form, and it is the Court’s view that the substance of the claims leads to the view that the characterisation is such that both claims are, in effect, the same.
The Respondent’s argument for summary dismissal is reliant upon the principle of res judicata.
At paragraph 3 of the Respondent’s written submission, blunt submissions are put that Application is doomed to fail on the following basis:
(a) The Applicant is estopped by reason of res judicata from pursuing the relief sought.
Res judicata is a Latin term meaning “a thing adjudged”.
The elements of the doctrine of res judicata are derived from the decision in Marginson v Blackburn Borough Council (1939) 2 K.B 426,[2] and provide that parties are prevented from proceeding with the subsequent claim where the following elements are met:
•The decision was judicial;
•The decision was, in fact, pronounced;
•The Court had jurisdiction over the parties and the subject matter;
•The decision was final and on the merits;
•The decision determined the same question as raised in the subsequent litigation; and
•The parties to the subsequent litigation were the same parties to the previous litigation.
[2] Marginson v Blackburn Borough Council (1939) 2 K.B 426.
The text Res Judicata by Spencer Bower and Handley[3] describes res judicata as:
…a decision, pronounced by a judicial tribunal having jurisdiction over the cause and the parties, that disposes once and for all the matter(s) so decided, so that except on appeal it cannot be relitigated between the parties or their privies.
[3] Kenneth Handley and George Spencer, Res Judicata (LexisNexis Butterworths, 4th ed, 209).
The Courts of the United Kingdom have, in large part, referred to res judicata as a form of principle as opposed to estoppel. The treatment of the issue of res judicata by the Courts in the United Kingdom is found in the decision of Lord Sumpton in the United Kingdom Supreme Court in the matter of Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46 (‘Virgin Atlantic’), where he described res judicata as “a portmanteau term, which is used to describe a number of different legal principles with different judicial origins.” [4]
[4] Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46 [17] (‘Virgin Atlantic’).
In the decision, Lord Sumpton went on to set out six principles of res judicata.[5] Namely:
(1)A party is prevented from bringing subsequent proceedings to challenge an outcome that has already been decided (cause of action estoppel).
(2)If a claimant succeeds in the first action and does not appeal the outcome he may not bring a subsequent action on the same cause of action, (i.e., to recover further damages).
(3)The doctrine of merger treats the cause of action as having been extinguished once judgment has been provided, and accordingly, the claimant’s only right is the judgment itself.
(4)A party may not bring subsequent proceedings on an issue that has already been determined (issue estoppel).
(5)A party may not bring subsequent proceedings which should and could have been dealt with in earlier proceedings (the ‘Henderson v Henderson’[6] principle).
(6)There is a general procedural rule against abusive proceedings.
[5] Ibid.
[6] Henderson v Henderson (1843) 67 ER 313 (‘Henderson v Henderson’).
At paragraph 4, page 9 of the Respondent’s Amended Outline of Case, it is submitted:
…the application cannot succeed, and is estopped by operation of res judicata from maintaining her claim.
The early treatment by Australian Courts, while similar to that of the United Kingdom Courts did not adopt res judicata as an estoppel.
In Rogers v Legal Services Commissioner of South Australia (1995) 64 SASR 572, Lander J considered the principles of res judicata and nature of estoppel at 38:[7]
[7] Rogers v Legal Services Commissioner of South Australia (1995) 64 SASR 572 [38].
In G S Bower and A K Turner, The Doctrine of Res Judicata (2nd ed, 1969), the authors say this:
The rule of estoppel by res judicata, which, like that of estoppel by representation, is a rule of evidence, may thus be stated:
where a final judicial decision has been pronounced by either an English, or (with certain exceptions) a foreign, judicial tribunal of competent jurisdiction over the parties to, and the subject matter of, the litigation, any party or privy to such litigation, as against any other party or privy thereto, and in the case of the decision in rem, any person whatsoever, as against any other person, is estopped in any subsequent litigation from disputing or questioning such decision on the merits, whether it be used as a foundation of an action, or relied upon as a bar to any claim, indictment or complaint, or to any affirmative defence, case, or allegation, if, but not unless, the party interested raises the point of estoppel at the proper time and in the proper manner.The principle is based upon two premises. The first is that it is in the public interest that there be an end to litigation and the finality and conclusiveness of a judicial decision is recognised. The second is the private right of an individual to be protected from vexatious and oppressive suits arising out of the same circumstances.
The Australian Courts have been careful to distinguish between the doctrine of res judicata, and a plea of issue estoppel. In Blair v Curran (1939) 62 CLR 464 at 532, Dixon J said:
The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.”
In Jackson v Goldsmith (1950) 81 CLR 446, Fullagar J discussed the principles of res judicata. Although he dissented in that case, it was only as to the application of the principles to the facts. He said at 466:
The rule as to res judicata can be stated sufficiently for present purposes by saying that, where an action has been brought and judgment has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action. This rule is not, to my mind, correctly classified under the heading of estoppel at all. It is a broad rule of public policy based on the principles expressed in the maxims ‘interest reipublicae ut sit finis litium’ and ‘nemo debet bis vexari pro eadem causa’.
He said at 467:
In the second place, it follows from the very nature of the difference between the plea of res judicata and the plea of issue estoppel, that different materials are relevant in each case. Where the plea is of res judicata, only the actual record is relevant. Where the plea is of issue estoppel, any material may be looked at which will show what issues were raised and decided. Reasons given for the judgment pronounced are likely to be particularly important for this purpose: see Ord v Ord [1923] 2 KB 432 at 440, and Marginson v Blackburn Borough Council [1939] 2 KB 426 at 437. Both those cases were cases of issue estoppel and were clearly treated as such, though I think, with great respect, that they both illustrate the unfortunate absence of clear legal terminology, to which I have already referred.
It has been recognised that there is a clear distinction between issue estoppel and res judicata: see also Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 and Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502.
In considering a plea of res judicata the question that must be determined is whether the cause of action which is raised in the second proceedings has already merged into the judgment in the first proceedings: Chamberlain v Deputy Commissioner of Taxation (at 274), per Deane, Toohey and Gaudron JJ.
In the ordinary course of events where a trial has taken place and a judgment entered, it is not difficult to determine whether the cause of action, the subject matter of a current set of proceedings, has been previously disposed of by a tribunal in circumstances which would give rise to a plea of res judicata.
[Footnotes omitted]
The High Court recently revisited the doctrine of res judicata in Clayton v Bant [2020] HCA 44 (‘Clayton’). [8] The plurality at paragraphs 50 to 51 identify the consequences of rending a final judgment in adversarial proceedings and discussed the doctrine of res judicata as it applies in Australia.[9] Edelman J at paragraphs 65 to 70 discusses the four rules of finality relevant to Clayton, namely res judicata, cause of action or claims estoppel, issue estoppel and Anshun estoppel.[10]
[8] Clayton v Bant [2020] HCA 44 (‘Clayton’).
[9] Ibid [50]-[51].
[10] Clayton (n 8) [65]-[70]; Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589.
The plurality in Clayton at paragraph 53 said that:
It is necessary to say something further about res judicata. In a case where there is no foreign element, the application of the doctrine of res judicata hinges on the controversy that has been quelled in the earlier proceeding. That controversy may or may not be sufficiently identified by looking only to whether the claim was framed by reference to a particular statutory provision. There will be cases where the quelling of the controversy necessarily determines rights and, in relation to that controversy, “creates a new character by reference to which the question is in future to be decided”.[11]
[11] Clayton (n 8) [53].
While Edelman J at paragraph 76 in Clayton held the following:
The application of cause of action or claim estoppel reduces here to the question of the characterisation. As explained above, the question of characterisation is one of substance, not form, and much will depend upon the level of generality at which the claim is characterised.[12]
[12] Ibid [76].
It is noted by the Court that the Respondent relies upon the final orders made by consent on 25 July 2019, as a decision of the Court that would give rise to res judicata.
Any question is to whether final orders or final judgment made by consent will give rise to res judicata was settled by the High Court in Chamberlain v the Deputy Commissioner of Taxation (1988) 164 CLR (‘Chamberlain’), [13] where Chamberlain and the Deputy Commissioner of Taxation had settled proceedings in the Supreme Court of the Australian Capital Territory where the Deputy Commissioner of Taxation had sued Chamberlain for unpaid taxes. Ultimately, Chamberlain and the Deputy Commissioner of Taxation reached a settlement. Terms of settlement were lodged and judgment was entered in favour of the Deputy Commissioner to give effect to those terms.
[13] Chamberlain v the Deputy Commissioner of Taxation (1988) 164 CLR (‘Chamberlain’).
The terms of settlement were expressed in these words:
“By consent and without admission of liability: -
(1) Judgment for the Plaintiff in the sum of $25,557.92 together with costs to be assessed and agreed at $115.00.
(2) The settlement money is to be paid by the Defendant to the plaintiff forthwith.”[14]
[14] Ibid [15].
Judgement was entered in these terms:
Terms of settlement, having been filed herein it is this day adjudged that the Plaintiff recover against the Defendant the sum of $25,557.92 for debt and $115.00 for costs.[15]
[15] Chamberlain (n 13) [2].
The Deputy Commissioner of Taxation subsequently commenced further proceedings against Chamberlain for unpaid taxes. At paragraph 15, Dean Toohey & Gaudron JJ held:
The fact that a judgment is entered by consent may, on occasion, make it hard to say what was necessarily decided by the judgment, especially where it is the defendant who wishes to bring action at a later date: Isaacs v Ocean Accident and Guarantee Corporation [1958] SR NSW 69 per Street CJ, and Roper CJ in Equity at paragraph 79; cf. Owen J at pp 79 – 80. But the principle of res judicata holds good in such a case.[16]
[16] Ibid [15].
In Reid v Lynch (2010) FLC 93 448 (‘Reid v Lynch’), [17] the Full Court of the Family Court of Australia comprising Finn, O’Ryan and Strickland JJ at 229 considered the effect of a Consent judgment on res judicata and adopted the position of the High Court of Australia in Chamberlain and held:
A consent judgment intended by the parties to dispose finally of the substantive proceedings between them will give rise to res judicata: see Chamberlain v the Deputy Commissioner of Taxation at 508. The operation of Consent Orders working as estoppel, is an exception to the principle that there must be a decision on the merits. Consent Orders absolve the Court from the duty to make a decision on the merits and convert an agreement into a judicial decision.[18]
[17] Reid v Lynch (2010) FLC 93 448 (‘Reid v Lynch’).
[18] Ibid [229].
The Court accepts that the consent judgment made on 25 July 2019 in the Family Court of Australia is sufficient to allow a consideration of res judicata.
The Court now considers whether the legislative provisions contained in the Act vitiate the principle and application of res judicata in the context of spousal maintenance.
The submissions made in reply by Mr O’Brien, counsel for the Applicant, put this issue into prominence.
The transcript at lines 35 to 45 at page 14, and lines 1 to 17 at page 15, set out Mr O’Brien’s submissions on this point:
Second, what my friend is asking you to do – what the respondent asked this court to do is to peek behind the orders made in July 2019, to peek behind those orders which are final and to recalibrate, to recategorize what those orders are pursuant to section 77A when that is not what the parties chose to do when they entered into the orders on that date. Both parties were represented by experienced legal practitioners and legal practitioners who have experience in the area. The Act is quite clear under section 77A that when one party seeks the benefit to protect themself from – and these are my words, not the words of the Act – where a party seeks to protect themselves from future spousal maintenance claims, if that is possible, one step is to categorised the payments that are being made pursuant to section 77A of the Act.
Another way to do that is, of course, by way of entering into a binding agreement. There’s no evidence before the Court that that has occurred. That of course would have been another impediment or another way of protecting the respondent from further spousal maintenance claims if that had been his intention. There is nothing on the facts before you that indicate that those things have been attended to; because they have not. And what your Honour is being asked to do is – impliedly, I might say, your Honour is being invited to treat the section 79 orders as if this court and as if we as parties can then come back and recategorize those as something which they are not, particularly where there is a mechanism by the Act which tells the Court in section 77A that if those payments are to be treated like that, at section 77A(1)(b):
…the Court shall express the order to be an order to which this section applies; and specify the portion of the payment or the value of the portion of the property, attributable to the provisions of maintenance for the party.
That has not been done. So, respectfully, that aspect of my learned friend’s argument which underpins his argument for estoppel is, in my respectful submission, not available to him by specific operation of the Act.
[Footnotes omitted]
The Full Court of the Family Court of Australia, in the previously referred to decision in Reid v Lynch, specifically acknowledged at paragraph 230 that the legislative provisions in the Act at section 60CA[19] that require the Court to regard the best interests of the child as the paramount consideration override the application of res judicata, where Finn, O’Ryan and Strickland JJ stated:
Res judicata, however, does not apply in relation to a final judgment with respect to the parenting of children.[20]
[19] Family Law Act (n 1) s 60CA.
[20] Reid v Lynch (n 17) [230].
And while the Full Court of the Family Court of Australia did not go on to list other legislative provisions within the Act that would override or displace the application for res judicata, there are other examples of legislative provisions within the Act that have the effect of overriding or displacing the application for res judicata to earlier proceedings.
The Court notes proceedings commenced under section 79A to vary or set aside a final order made pursuant to section 79 is one example, and an example where the legislative provisions at section 79A are made without statute of limitation on commencement.[21] Another provision is that found at section 44(3).[22] The Court will later discuss that provision in greater detail.
[21] Family Law Act (n 1) ss 79A; 79; 79A.
[22] Family Law Act (n 1) s 44(3).
When considering the issue of legislative displacement of res judicata in these proceedings, it is important to consider those sections of the Act that are triggered by the wording of the consent judgment entered by the Family Court of Australia on the 25th of July 2019.
The Court firstly considers Notation “A” to the Orders that provides:
Pursuant to section 81 of the Act, the parties acknowledge that these orders are intended to operate so as to finally determine the financial relationship between the parties to the marriage and to avoid further proceedings between them.
The question to be asked by the court is whether section 81 is a legislative enshrinement of the principles of res judicata, and specifically in respect of spousal maintenance.[23]
[23] Ibid s 81.
As opposed to a statement of principle regarding the finality of a property judgment, section 81 provides an obligation on the Court to put an end the financial relationship between married parties, and to avoid further proceedings between them.[24]
[24] Ibid.
This obligation is weighed against public policy considerations of limiting the burden on the public purse where a spouse seeks government support in the form of a pension or benefit without the benefit of spousal maintenance.
This specific public policy consideration by the legislature finds its way into the prescriptive considerations that are taken into account when determining an application for spousal maintenance and in particular at section 75(3), that provides:
In exercising its jurisdiction under section 74, the Court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension or benefit.[25]
[25] Ibid s 75(3).
This public policy consideration remains clear where the obligations imposed on the Court at section 81 are drafted so as to specifically exclude from those obligations a requirements to put to an end financial relations and avoid further proceedings in respect of spousal maintenance where section 81 provides:
In proceedings under this Part, other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage, the Court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.[26]
[26] Family Law Act (n 1) s 81.
The obligation of the Court created by section 81 has no application as a bar to further proceedings for spousal maintenance.
When considering the Applicant’s submissions, the Court asks itself this question: does the failure by the parties to proportion any of the monies payable by the Respondent to the Applicant in the judgment of the Family Court of Australia entered on 25 July 2019, as being attributable to spousal maintenance in accordance with the provisions of section 77A, have the effect that any argument for estoppel by virtue of res judicata, in the words of Mr O’Brien, are not available to him by specific operation of the Act?
Orders made in respect to payments for spousal maintenance purposes are dealt with at section 77A of the Act.[27]
[27] Ibid s 77A.
Section 77A provides:[28]
[28] Ibid s 77A.
(1)Where:
(a)a Court makes an order under this Act (whether or not the order is made in proceedings in relation to maintenance of a party to a marriage, is made by consent or varies an earlier order), and the order has the effect of requiring:
(i)payment of a lump sum, whether in one amount or by instalments; or
(ii)the transfer or settlement of property; and
(b)the purpose, or one of the purposes, of the payment, transfer or settlement is to make provision for the maintenance of a party to a marriage;
the Court shall:
(c)express the order to be an order to which this section applies; and
(d)specify the portion of the payment, or the value of the portion of the property, attributable to the provision of maintenance for the party.
(2)Where:
(a)a court makes an order of a kind referred to in paragraph (1)(a); and (b) the order:
(i)is not expressed to be an order to which this section applies; or
(ii)is expressed to be an order to which this section applies, but not comply with paragraph (1)(d);
any payment, transfer or settlement of a kind referred to in paragraph (1)(a), that the order has the effect of requiring, shall be taken not to make provision for the maintenance of a party to the relevant marriage.
The parties made no provisions within the consent orders entered as a judgment on 25 July 2019. Those consent orders were, in fact, clear as to exclude any inference that monies payable were to be apportioned as being attributable towards spousal maintenance.
The wording of the consent orders recorded at Order 1 specifically defines those orders that are made pursuant to section 79 of the Act,[29] being those at orders 1 to 9.
[29] Family Law Act (n 1) s 79.
Order 2 is that order that requires payment by the Respondent to the Applicant in the sum of $170,000 by way of five unequal instalments.
As set out previously, Order 11, being an order not covered by Order 1, provides that all extant applications be dismissed with no order as to costs with the intention that each party bear their own costs. For reasons discussed earlier in this decision, the extant application at the time judgement was entered by the Court on 25 July 2019 was the Applicant’s spousal maintenance application.
Lest there be any argument that by some feat an apportionment of monies towards spousal maintenance might be implied, sections 77A(1)(c) and 77A(1)(d) requires any order made for apportionment to be expressed as an order made pursuant to section 77A, and must specify the portion of the payment attributable.[30] Where there is a failure to comply with sections 77A(1)(c) and 77A(1)(d) then the provision of section 117A(2)(b) is clear, any payment, transfer or settlement shall be taken not to make provision for maintenance.[31]
[30] Ibid ss 77A(1)(c), 77A(1)(d), 77A.
[31] Family Law Act (n 1) ss 77A(1)(c), 77A(1)(d), 117A(2)(b).
Mr O’Brien was clear as to the Applicant’s submissions. He saw the failure to make an apportionment of monies pursuant to section 77A fatal to any argument of res judicata.[32] Far from being correct, that the reverse is actually true.
[32] Family Law Act (n 1) s 77A.
Had the parties sought to have apportioned a payment pursuant to section 77A as being a payment towards spousal maintenance, such a payment would have had the effect of creating a spousal maintenance order. Further, had a spousal maintenance order been made apportioning payment pursuant according to section 77A, then proceedings could have been commenced to discharge, suspend, revive or vary, pursuant to section 44(3), even after 12 months had elapsed from the date of the decree of a divorce.[33]
[33] Ibid ss 77A, 44(3).
Section 44(3) is, in the view of the Court, one of those statutory provisions within the Act that has the effect of overriding or displacing the application of res judicata in the context of commencing spousal maintenance proceedings.[34]
[34] Family Law Act (n 1) s 44(3).
Similarly, section 83 of the Act provides for the modification of spousal maintenance orders and would have allowed the Applicant a right to have commenced proceedings where an apportionment payment had been made in the orders pursuant to section 77A.[35]
[35] Ibid ss 83, 77A.
Section 83 is a statutory provision within the Act that also has the effect of overriding or displacing the application for res judicata in spousal maintenance proceedings.[36]
[36] Family Law Act (n 1) s 83.
Section 44(3) and section 83 of the Act have remarkably similar, but different, requirements in order that they be invoked.[37] Section 44(3) requires that an order had previously been made with respect to the maintenance where a party seeks the discharge, suspension, revival or variation of that order previously made.[38] That is the order not need be currently in force. The effect of section 44(3) is that such proceedings can be commenced with leave of the Court if 12 months have elapsed after a divorce order has taken effect.[39]
[37] Ibid ss 44(3), 83.
[38] Family Law Act (n 1) s 44(3).
[39] Ibid.
While section 83 provides that there must be in force an order with respect to the maintenance of a party to a marriage, if the Court is to discharge, suspend in whole or in part, revive in whole or in part, or vary so as to increase or decrease any amount ordered to be paid.[40]
[40] Family Law Act (n 1) s 83.
The provision of an order for apportionment of monies towards spousal maintenance, pursuant to section 77A,[41] would have allowed commencement of proceedings pursuant to section 44(3),[42] after an ordinary statutory period and modification pursuant to section 83.[43]
[41] Ibid s 77A.
[42] Ibid s 44(3).
[43] Ibid s 83.
While Order 11 had the effect of dismissing the extant spousal maintenance application, no order for spousal maintenance existed in the judgment made by the Court on 25 July 2019. Rather, the spousal maintenance claim was dismissed.
While there may be an argument made on review of this decision that section 44(3) does not require there to be an order in force but, rather, an order previously made in proceedings with respect to maintenance, such as the earlier interim spousal maintenance orders that were discharged, section 44(3) should only be read as allowing the commencement of proceedings with leave in certain circumstances and of its own, section 44(3) does not actually vest the Court with jurisdiction to discharge, suspend, revoke or vary.[44]
[44] Ibid s 44(3).
When examining the intersection of section 77A, section 44(3) and section 83 of the Act,[45] the proposition contained within the submissions of Mr O’Brien at page 14 of the transcript, states:
Where a party seeks to protect themselves from future spousal maintenance claims, if that is possible, one step is to categorise the payments that are being made pursuant to section 77A of the Act.[46]
[45] Ibid ss 77A, 44(3), 83.
[46] Family Law Act (n 1) s 77A.
While not manifestly wrong, a failure to do so does not prevent a party raising res judicata, but the making of an order pursuant to section 77A would.[47]
[47] Ibid s 77A.
The Applicant relies upon the decision in Atkins v Hunt [2016] FamCAFC 230 where Murphy J held, at paragraph 52:
First, and centrally, the liability for spousal maintenance does not come to an end upon the end of the marriage, nor necessarily when orders are made pursuant to Part VIII of the Act. While the court is required, as far as practicable to effect a “clean break” – to “make such orders as will finally determine the financial relationships between the parties… and avoid further proceedings between them” – the liability for spouse maintenance is that of a “party to the marriage”. The latter expression is defined as including a person who was a party to a marriage now ended by death, divorce or annulment. That new spouse maintenance orders can be made in circumstances where the initial order is properly made within time is entirely consistent with a liability for spousal maintenance persisting despite the formal end of the marriage or other financial orders having been made.[48]
[48] Atkins v Hunt [2016] FamCAFC 230 [52].
The Court accepts that the Applicant retains a right to commence proceedings pursuant to section 74 of the Act in other circumstances where the substance and the characterisation of which are not the same as these proceedings.[49] What the Applicant cannot do is maintain these proceedings.
[49] Family Law Act (n 1) s 74.
The controversy in these proceedings was quelled in the earlier spousal maintenance proceedings that were dismissed by judgment entered on 25 July 2019. The characterisation by way of the substance of these proceedings as compared to the earlier proceedings are such that the cause of action referred to in these proceedings, being the second or subsequent proceedings, has already merged into the judgment of the first proceedings.
As such, res judicata arises and the Applicant is estopped from pursuing these subsequent proceedings, by reason of the earlier claim for spousal maintenance having been dismissed.
While much in this case turns upon the framing of Order 11 made on 25 July 2019 as all extant applications being dismissed, the Court cannot rule out the possibility that had Order 11 provided that all extant applications be withdrawn, these proceedings would have also been estopped when considering what Lord Sumpton said in Virgin Atlantic,[50] numbered principle 5 of res judicata where, pursuant to the Henderson v Henderson principle,[51] a party may not bring subsequent proceedings which should and could have been dealt with in earlier proceedings.
[50] Virgin Atlantic (n 4).
[51] Henderson v Henderson (n 6).
The application of such principle was explored by the High Court in Clayton, and referred to as cause of action estoppel or Anshun estoppel.[52]
[52] Clayton (n 8); Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589.
The Applicant chose to compromise the first proceedings. The Applicant cannot now maintain proceedings on the same basis.
Section 17A of the Federal Circuit Court Act 1999 (Cth) provides this Court jurisdiction to give judgment for one party against another in relation to the whole or any part of a proceedings, if the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceedings, or that of part of the proceedings.[53]
[53] Federal Circuit Court Act 1999 (Cth) s 17A.
Section 17A(3) of the Federal Circuit Court Act 1999 (Cth) provides that the proceedings need not be hopeless or bound to fail for it to have no reasonable prospect of success.[54]
[54] Ibid s 17A(3).
Rule 13.10 of the Federal Circuit Court Rules 2001 (Cth)[55] provides that the Court may order that proceedings be stayed, or dismissed generally or in relation to any claim for relief in the proceedings if the Court is satisfied that:
a)the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
b)the proceedings or claim for relief is frivolous of vexatious; or
c)the proceedings or claim for relief is an abuse of the process of the Court.
[55] Federal Circuit Court Rules 2001 (Cth) r 13.10.
This is a case where the Applicant has no reasonable prospect of successfully prosecuting the proceedings by virtue of res judicata, and the Applicant is estopped from prosecuting these proceedings. The relief to be granted in such a situation is a permanent stay.
I certify that the preceding one hundred and three (103) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Myers. Associate:
Date: 8 September 2021
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