Mehta & Crimmins
[2021] FedCFamC1A 73
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Mehta & Crimmins [2021] FedCFamC1A 73
Appeal from: Mehta & Crimmins [2021] FCCA 1545 Appeal number(s): EAA 80 of 2021 File number(s): PAC 6104 of 2017 Judgment of: AINSLIE-WALLACE, ALDRIDGE & REES JJ Date of judgment: 29 November 2021 Catchwords: FAMILY LAW – APPEAL – PROPERTY AND SPOUSAL MAINTENANCE – Appeal against an order made permanently staying the wife’s application for property settlement and spousal maintenance – Whether the wrong principle was applied – Whether all the evidence was taken into account – Doctrine of res judicata – Where the primary judge erred in principle in making the order for the permanent stay – Appeal allowed – Order set aside – Matter remitted for rehearing – Costs certificates granted for the appeal and rehearing. Legislation: Family Law Act 1975 (Cth) ss 44(3), 72, 74, 75(2), 79, 79A, 83 Cases cited: Chamberlain v Deputy Commission of Taxation (1988) 164 CLR 502; [1988] HCA 21
Clayton v Bant (2020) 95 ALJR 34; [2020] HCA 44
Mehta & Crimmins [2018] FamCA 398
Number of paragraphs: 46 Date of hearing: 22 October 2021 Place: Sydney (via video link) Counsel for the Appellant: Mr O’Brien Solicitor for the Appellant: Justice Family Lawyers Counsel for the Respondent: Mr Richardson SC with Mr Lawrence Solicitor for the Respondent: Etheringtons Solicitors ORDERS
EAA 80 of 2021
PAC 6104 of 2017FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS MEHTA
Appellant
AND: MR CRIMMINS
Respondent
ORDER MADE BY:
AINSLIE-WALLACE, ALDRIDGE & REES JJ
DATE OF ORDER:
29 NOVEMBER 2021
THE COURT ORDERS THAT:
1.The appeal against the order of a judge of the Federal Circuit and Family Court of Australia (Division 2) made on 21 June 2021 is allowed and that order is set aside.
2.The application for summary dismissal is remitted to the Federal Circuit and Family Court of Australia (Division 2) for hearing by a judge other than the primary judge.
3.The Court grants to the appellant wife a costs certificate pursuant to the provisions of
s 9 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by her in relation to the appeal.4.The Court grants to the respondent husband a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by him in relation to the appeal.
5.The Court grants to each of the parties a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each of the parties in respect of the costs incurred by the appellant and respondent in relation to the rehearing of the application.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Mehta & Crimmins has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
AINSLIE-WALLCE, ALDRIDGE & REES JJ:
Ms Mehta (“the wife”) by her Notice of Appeal filed 19 July 2021 appeals against an order made by a judge of the Federal Circuit Court of Australia (now the Federal Circuit and Family Court of Australia (Division 2)) on 21 June 2021 in property settlement and spousal maintenance proceedings between her and Mr Crimmins (“the husband”) by which her application for spouse maintenance was permanently stayed.
BACKGROUND
The parties commenced living together in April 2017 around the time they married, and they separated on 1 August 2017. While there was a dispute about when the parties married it is not relevant to determine that issue for these purposes. They were divorced on 6 March 2019.
On 6 December 2017, the wife commenced proceedings in the Family Court of Australia (as it was then known) seeking final property settlement orders and both interim and final spouse maintenance orders.
On 11 December 2017, a judge of the Family Court made interim orders providing for the husband to pay the wife spouse maintenance of $1,070 per week together with a payment of $1,800 to be applied to a rental bond.
On 13 April 2018, the wife filed an Application in a Case seeking spouse maintenance orders of $1,515 per week, $450 per week towards rental expenses and $13,950 to assist her with setting up rental accommodation, dental and medical expenses and a further $1,280 to assist her to repay a debt incurred for her living expenses. She further sought $10,000 being her costs of proceedings in relation to a property dispute in City A and $100,000 on account of her legal fees in the family law proceedings.[1]
[1] Mehta& Crimmins [2018] FamCA 398.
This application came before a judge of the Family Court on 4 May 2018. On 1 June 2018, the judge ordered the husband to pay the wife spouse maintenance of $1,500 per week and to pay $15,000 as a lump sum.
In coming to that decision, the judge had regard to the fact that the wife was then living in Australia on a bridging visa, the husband having cancelled his sponsorship of her spouse visa. She was not then working and ineligible for government support. The Family Court judge found that the wife was unable to support herself and was in need of support until she was able to obtain gainful employment.[2] The Family Court judge found that the husband had the capacity to meet “an ongoing but interim obligation for spousal maintenance”.[3]
[2] Mehta& Crimmins [2018] FamCA 398 at [44] and [47].
[3] Mehta& Crimmins [2018] FamCA 398 at [49].
As to “interim costs” the Family Court judge noted the wife’s claim for a lump sum property settlement and while expressing no view about the prospects of that application, the judge said that the wife had “significant s 75(2) considerations in her favour particularly as she is precluded from employment”.[4] Referring to the husband’s superior financial position, the Family Court judge ordered a lump sum payment to the wife of $67,000 to meet her costs of the proceedings and said the characterisation of the payment would be made at the final hearing.
[4] Mehta& Crimmins [2018] FamCA 398 at [61].
The Family Court judge also made orders from time to time for the further progress of the case, adjourning the application for a case assessment conference and the like.
On 20 April 2018, the wife amended her Initiating Application and sought a lump sum payment of $1.3 million as property settlement. As a final maintenance order, the wife sought that the husband pay $2,000 per week for a period of five years. In the interim and as urgent spouse maintenance, the wife sought payment of $1,000 per week; $450 per week for rental expenses; $1,800 to be applied to a rental bond and $100,000 to be paid to her lawyers as “security of costs for the Applicant Wife’s legal fees”.
The application never came to a hearing.
On 25 July 2019, consent orders were made which provided that the husband would pay the wife a lump sum of $170,000 in five tranches. The order for the payment of the lump sum was expressed to be an order pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
Orders 10 and 11 made that day took on some importance in the appeal.
Orders 10 and 11 made on 25 July 2019 provided that:
10. All interim spousal maintenance orders are discharged and to the date they stand paid.
11. All extant applications be dismissed with no order as to costs with the intention that each party bear their own costs.
At the time the consent orders were made, the “extant applications” included the wife’s claims for spouse maintenance in her Amended Initiating Application filed 20 April 2018. It is accepted that the effect of Order 11 was to dismiss that application.
On 4 March 2020, the wife brought an application seeking $195,000 as lump sum spouse maintenance and interim orders for a payment of $100,000 for her “security of costs”. She sought injunctions to prevent the husband from transferring funds and transferring or diminishing assets.
That application was amended on 19 November 2020 by which additional orders were sought by the wife that the husband pay her $760 per week as living expenses, $6,138 being her university tuition fees for the summer semester and a further sum of $24,552 for the autumn semester university tuition fees.
The husband sought that the wife’s amended application filed 19 November 2020 be summarily dismissed. The application was heard by the primary judge as a discrete issue on 5 March 2021 and determined on 21 June 2021.
The primary judge found that the wife was precluded from continuing the application of 19 November 2020 by operation of res judicata because of the dismissal of the earlier claim for maintenance. His Honour then permanently stayed the wife’s application.
THE APPEAL
Two grounds of appeal were contended. First that the primary judge applied the wrong principle in coming to the conclusion that the wife was precluded from continuing the application. Secondly it was asserted that the primary judge erred by failing to take into account all of the evidence relevant to the application before him.
There is no need to consider the second ground because the first ground will succeed as the primary judge erred in principle in making the order for the permanent stay.
While not raised as a ground of appeal, we note that the primary judge was not asked to permanently stay the wife’s application although that was the order he made. It was not appropriate to make that order. As the plurality of the High Court said in Chamberlain v Deputy Commission of Taxation (1988) 164 CLR 502 at 510–511:
… It is no answer to say that the Court might, if appropriate stay the second action as an abuse of process. The impediment goes deeper than that; res judicata may sustain a plea of abuse of process but in that case the appropriate remedy is to strike out the later action.
(Citations omitted)
WHAT PRINCIPLE WAS INVOKED?
At trial, counsel for the husband contended that the wife’s application of 19 November 2020 should be summarily dismissed by operation of res judicata. While not specifically articulated by counsel then appearing for the husband, the “res” said to have been adjudicated was the wife’s right to seek a spouse maintenance order. The argument continued and counsel said that the application of 19 November 2020 seeks “the same relief, or very similar relief arising from the same relationship”.[5] The difference in relief being that the claim in the 19 November 2020 application was for a lump sum as opposed to the earlier claim which was for periodical payments. The argument was expanded upon with counsel for the husband saying that the wife relied on the same factual circumstances and the same grounds in the earlier application as in the November 2020 application.
[5] Transcript 5 March 2021, p.10 line 36.
Thus it was submitted that by Order 11 of the 25 July 2019 consent orders, all “extant applications” were dismissed which included the wife’s application for final and interim spousal maintenance orders. Counsel for the husband submitted that as a result “finality” was brought to the issue of spouse maintenance and “res judicata dictates that an applicant would not be entitled to revisit that issue in fresh proceedings”.[6]
[6] Transcript 5 March 2021, p.12 lines 33–36.
At [94] of the primary judge’s reasons his Honour said:
94.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. What the Applicant cannot do is maintain these proceedings.
(Footnotes omitted)
Senior counsel for the husband on appeal did not adhere to the res judicata argument. He argued that the dismissal of the wife’s earlier maintenance applications, consequent on the entering of the consent orders, permitted her to bring another application based on different circumstances but not, as here, where he submitted the wife was advancing the same claim.[7]
[7] Transcript 22 October 2021, p.15 lines 25–28.
Senior counsel for the husband conceded that the primary judge’s reasons demonstrate of some confusion as to the various principles and their application, but argued nevertheless that the primary judge accurately identified the point at [94] being that the wife was in effect agitating the same claim in the November 2020 application as she did in the April 2018 application which was dismissed on 25 July 2019.
The submissions on appeal relied on “cause of action estoppel” although the plurality in Clayton v Bant (2020) 95 ALJR 34 (“Clayton”) preferred the title “claim estoppel” as being a more accurate description of the principle and which it was said sits more comfortably within a statutory context such as here.[8] The operation of the preclusionary principle was described by Edelman J in Clayton as:
67.… if the judgment finally resolved a conflict about the existence or extent of a “cause of action” then the parties to that proceeding, or their privies, will be precluded from relitigating that cause of action.
[8] Clayton v Bant (2020) 95 ALJR 34 at [28].
Whether claim estoppel arises depends on the characterisation of the causes, the examination looks for substantial correspondence between those asserted rights. At [34] in Clayton the plurality said:
34.… Enough for its operation is that the rights are of a substantially equivalent nature and cover substantially the same subject matter.
Thus the nub of the husband’s assertion is that the wife’s claim for maintenance made in 2018 and dismissed by the July 2019 consent orders was substantially the same as that sought to be advanced in the November 2020 application.
In what circumstances can a party be precluded from seeking spouse maintenance?
The right to spouse maintenance is created by the provision of statute which confers on the Federal Circuit and Family Court of Australia the power to make orders for spouse maintenance. Whether the Court should exercise its discretion and make an order constitutes the justiciable controversy.
In Clayton, the plurality said in relation to res judicata in spouse maintenance:
26. … The rights created by ss 79(1) and 74(1) cannot “merge” in any judicial orders other than final orders of a court having jurisdiction under the Act to make orders under those sections. The rights of the wife to seek orders under ss 79(1) and 74(1) continue to have separate existence unless and until the powers to make those orders are exercised on a final basis and thereby exhausted.
(Footnote omitted)
We do not accept that in the circumstances of this case the Court’s jurisdiction to make spouse maintenance orders has been exhausted and no res judicata arises.
In relation to claim estoppel, as Edelman J said:
68.The best approach is to recognise that both the legal right claimed and decided and the pleaded or asserted facts are relevant: “cause of action normally means a right alleged to flow from the facts pleaded”. The focus is upon the whole claim, including the right and the essential facts upon which the right depends…
(Footnotes omitted)
We do not accept that the wife was precluded from advancing the claim for spouse maintenance in the November 2020 application because of claim estoppel. The reasons for our conclusion lie in the terms of the Act.
Spouse Maintenance
Section 72(1) of the Act says:
A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately…
The section continues and sets out the circumstances in which the liability to maintain the other party might arise. These matters are expressed in the present tense.
Once those two conditions precedent to the order being made are established, s 74 of the Act empowers the Court to make an order for the maintenance of a party as it considers proper. The consideration of these matters must be as at the date of the determination of the application.
It is not suggested that a party’s liability to support the other party ceases on the conclusion of property settlement proceedings by orders nor by the dissolution of the marriage. Indeed s 83 of the Act (while not relevant here) contemplates the revival, variation or dismissal of existing orders for maintenance.
Section 44(3) of the Act provides that an application for spouse maintenance must not be brought more than 12 months of the date of divorce without leave.
Unlike final orders for property settlement which can only be varied or set aside pursuant to
s 79A of the Act, a party’s right to seek spouse maintenance is capable of being exercised many times and subject to leave, over many years. So much is apparent from the terms of the sections themselves. The exercise of the Court’s discretion in making a proper order for spouse maintenance falls to a consideration of the needs and ability of the applicant to support herself or himself adequately and the reasonable ability of the respondent to maintain the other party. The circumstances supporting either of those preconditions will change from time to time.
As the written submissions filed 10 December 2020 on behalf of the wife to the primary judge contended, on receipt of the funds ordered on 25 July 2019, the wife could not assert she was unable to support herself adequately. The submission continued:
13. … [The wife’s] inability to do so in July 2019 cannot, in law or logic, estop the [wife] from successfully contending in December 2020 that s72 and s74 are enlivened.
It matters not in this case which of the two preclusionary principles were said to apply because in our opinion the dismissal of the wife’s earlier application did not quell any controversy nor finally resolve a conflict of the existence of a right of the wife to spouse maintenance.
The appeal will thus be allowed and the primary judge’s order set aside.
DISPOSITION OF THE APPEAL
It was agreed that should the appeal be allowed, the husband’s application for summary dismissal should be remitted to be heard by another judge of the Federal Circuit and Family Court of Australia (Division 2).
COSTS
In the event that the appeal succeeded both parties sought orders for costs certificates both for the appeal and the rehearing. This appeal has succeeded by reason of an error of law in the primary judge and it is appropriate that orders for costs certificates be made.
I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Ainslie-Wallace, Aldridge & Rees. Associate:
Dated: 29 November 20201
3
0