Michelaki & Michelaki
[2024] FedCFamC1F 818
•28 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Michelaki & Michelaki [2024] FedCFamC1F 818
File number(s): BRC 10946 of 2020 Judgment of: HOGAN J Date of judgment: 28 November 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – APPLICATION FOR REVIEW – Where the applicant contended a Registrar did not have power to make injunctive orders by consent – Where delegations of power need to be considered with an eye to the purpose of the same – Where the orders made by consent were within the Judicial Registrar’s power
FAMILY LAW – PRACTICE AND PROCEDURE – Where the third respondent sought specific performance of a contract entered into between him and the first respondent – Where the first respondent did not have consent from the applicant to enter the contract despite court orders requiring that – Where settlement was previously unable to occur due to a caveat lodged by the applicant over the property – Where the applicant contended the contract was invalid – Where the third respondent held the belief that the first respondent entered the contract with consent – Where the third respondent has attributed special value to the property – Where orders are made for the contract of sale to be executed within five business days
Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia Act 2021 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Dougan v Ley (1946) 71 CLR 142; [1946] HCA 3
Dowsett v Reid (1912) 15 CLR 695; [1912] HCA 75
Fullers Theatres Ltd v Musgrove (1923) 31 CLR 524; [1923] HCA 12
Harris v Caladine (1991) 172 CLR 84; [1991] HCA 9
Selen & Selen and Anor [2011] FamCA 310
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35
Division: First Instance Number of paragraphs: 28 Date of last submission/s: 22 July 2024, sealed 24 July 2024 Date of hearing: 23 July 2024 Place: Brisbane Counsel for the Applicant: Dr Ingelby of Counsel with Mr Pollock of Counsel Solicitor for the Applicant: Hopgood Ganim Lawyers Counsel for the First Respondent: Mr Cummings of Senior Counsel with Ms Chesterman Solicitor for the First Respondent: Hartley Family Law Second Respondent: No appearance Counsel for the Third Respondent: Mr Alexander of Counsel with Ms Tree of Counsel Solicitor for the Third Respondent: Brennans Solicitors and Migration Agents Counsel for the Fourth Respondent: Mr Sansom of Senior Counsel Solicitor for the Fourth Respondent: Lander & Rogers ORDERS
BRC 10946 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MICHELAKI
Applicant
AND: MR MICHELAKI
First Respondent
C PTY LTD
Second Respondent
MR DRESDNER AS TRUSTEE FOR THE H TRUST (and another named in the Schedule)
Third Respondent
ORDER MADE BY:
HOGAN J
DATE OF ORDER:
28 NOVEMBER 2024 Amended on 2 December 2024 pursuant to Rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed by leave on 23 July 2024 is dismissed.
2.The First Respondent, Mr Michelaki, cause the contract for the sale of B Street, Suburb D, Queensland, entered into between the First Respondent (as the vendor) and the Third Respondent, Mr Dresdner as Trustee for the H Trust (as the purchaser), to be completed within five (5) business days from the date of this order.
AND IT IS FURTHER ORDERED THAT:
3.In the event that any party seeks an order that another party pay the costs of and incidental to the Applications in a Proceeding filed on 12 July 2024 by leave on 23 July 2024:
(a)any such party shall, within twenty-eight (28) days of the date of this Order, file and serve:
(i)any affidavit necessary to support such application; and
(ii)written submissions in support of such application for costs; and
(b)the party against whom an order for costs is sought shall, within a further fourteen (14) days thereafter, file and serve:
(i)any affidavit necessary for the determination of any such application for costs; and
(ii)any written submissions in answer to the submissions filed and served by the party seeking an order for costs; and
(c)the party seeking an order for costs shall, within seven (7) days of being served with the submissions relied on by the party against whom an order for costs is sought, file and serve any further written submissions, strictly in reply, to the submissions served by the party against whom an order for costs is sought,
and any such application for costs shall be considered in Chambers.
IT IS NOTED THAT:
A.There is no Court known by the name “Federal Circuit and Family Court of Australia”.
B.The design of the seal affixed to this order issued by the Federal Circuit and Family Court of Australia (Division 1) has been determined by the Attorney-General pursuant to the undated Federal Circuit and Family Court of Australia (Seal) Determination 2021 signed by the Attorney-General.
NOTATION:
C.This Order has been amended pursuant to Rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) by amending Order 3 to include the Application in a Proceeding filed on 24 July 2024, which was omitted, and to correct a typographical error.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Michelaki & Michelaki has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J:
The First Respondent (the husband) in the property settlement proceedings commenced by the Applicant (the wife) now seeks an extension of time within which to review[1] and, upon review, to have orders made discharging:
(a)Orders 2, 4, 6b, 6c, 6d and 6e of the orders made by a Registrar[2] by consent on 4 October 2022 (the October 2022 orders); and
(b)Orders 1, 2, 3, 4 and 6 of the orders made by a Judicial Registrar by consent on 27 January 2023 (the January 2023 orders).[3]
[1] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), Rules 14.05(1) and 15.06.
[2]who should, for the purposes of interpreting Schedule 4 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), be regarded as being a “Judicial Registrar”.
[3]Application in a Proceeding filed by leave 23 July 2024; Application for Review (in relation to the Order made 22 October 2022) filed by leave 23 July 2024; Application for Review in relation to the Order made 27 January 2023) filed by leave 23 July 2024.
The husband’s contention is that, as the only head of power under which such orders could have been made is that provided by s 114 of the Family Law Act 1975 (Cth) (the Act) and such power has not been delegated to the Judicial Registrar, it consequently cannot be taken, for all purposes, to have been exercised by the Court or by a Judge of the Court[4] – instead, it was submitted, the consent orders were made without power.
[4] Federal Circuit and Family Court of Australia Act 2021 (Cth), s 98(4).
The nature of the relevant orders
The orders the subject of this application for discharge may conveniently be categorised as being:
(a)those by which the husband “irrevocably instructed” a third party to take certain prescribed actions – namely: Orders 2a, 2b, 6b, 6d of the October 2022 orders and Order 1 of the January 2023 order; and
(b)those by which the husband was required to do specified acts – namely: Orders 2c, 2e (in part) and 6c of the October 2022 orders and Orders 2, 3, 4c, 4d and 4e of the January 2023 orders; and
(c)those by which the husband was restrained from doing specified acts other than with the written agreement of the wife – namely: Orders 2e (in part), 4 and 6e of the October 2022 orders and Order 4b of the January 2023 orders; and
(d)those by which the parties agreed that specified payments be characterised in a particular way – namely: Order 2d of the October 2022 orders and Order 6 of the January 2023 orders; and
(e)that which permitted the husband to act in a specific way – namely: Order 4a of the January 2023 orders.
The delegation issue
At the time each of the October 2022 and the January 2023 orders were made:
(a)the Chief Justice of the Federal Circuit and Family Court of Australia (Division 1) (the Court) was empowered, by s 98(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (the FCFCOA), to make Rules of Court delegating any of the Court’s powers to a delegate or prescribed class of delegates,[5] including in terms which, in relation to a power delegated by the same, limited or specified the circumstances in which the power may be exercised by a delegate;[6] and
[5] Federal Circuit and Family Court of Australia Act 2021 (Cth), s 98(1).
[6] Federal Circuit and Family Court of Australia Act 2021 (Cth), s 98(8).
(b)the term “delegate” was[7] relevantly defined in the FCFCOA to mean “a Senior Registrar or Registrar of the Federal Circuit and Family Court of Australia (Division 1)”;[8] and
[7] And remains.
[8] Federal Circuit and Family Court of Australia Act 2021 (Cth), s 7.
(c)the term “Registrar” was relevantly defined in the FCFCOA to mean “a Senior Registrar or Registrar of the Federal Circuit and Family Court of Australia (Division 1)”;[9] and
[9] Federal Circuit and Family Court of Australia Act 2021 (Cth), s 7.
(d)the kinds of powers of the Court which could be delegated by the Rules included those set out in s 98(2) of the FCFCOA – in particular:
(i)the power to make orders in relation to discovery, inspection and production of documents in the possession, power or custody of a party to the proceedings in the Court or of any other person;[10] and
[10] Federal Circuit and Family Court of Australia Act 2021 (Cth), s 98(2)(f).
(ii)a power of the Court prescribed by the Rules of Court;[11] and
[11] Federal Circuit and Family Court of Australia Act 2021 (Cth), s 98(2)(l).
(iii)the power in family law or child support proceedings to direct a party to the proceedings to answer particular questions;[12] and
(iv)the power to make an order the terms of which have been agreed upon by all the parties to the proceedings.[13]
(e)the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (the Rules) had been made and:
(i)relevantly defined, unless the context otherwise required, the term “Judicial Registrar” to mean “a Registrar of the Court” and the term “Senior Judicial Registrar” to relevantly mean “a Senior Registrar of the Court”;[14] and
(ii)provided that each power of the Court referred to in column 1 of an item of the table in clause 2 of Schedule 4 (the Schedule) and:
(A)marked with a tick in column 3 of that item is delegated to each Senior Judicial Registrar of the Court;[15] or
(B)marked with a tick in column 4 of that item is delegated to each Judicial Registrar of the Court.[16]
[12] Federal Circuit and Family Court of Australia Act 2021 (Cth), s 98(2)(m).
[13] Federal Circuit and Family Court of Australia Act 2021 (Cth), s 98(2)(q).
[14] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), rule 14.01.
[15] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), rule 14.03(1).
[16] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), rule 14.03(2).
Point 2 of Schedule 4 of the Rules provides that the table which follows it sets out the powers of the Court that are delegated to Senior Judicial Registrars and Judicial Registrars; it also provides that the description of the power contained in column 2 of an item of the table is for information only.
How to interpret Part 2 – Consent Orders and Part 11 – Injunctions of Schedule 4 to the Rules?
Item 2.1 of Part 2 delegates to both Senior Judicial Registrars and Judicial Registrars of the Court, without limitation or the requirement to establish the existence of prescribed pre‑conditions, the power to make an order the terms of which have been agreed on by all parties to the proceedings.
Similarly, Item 2.2 of Part 2 delegates to both Senior Judicial Registrars and Judicial Registrars of the Court, without limitation or the requirement to establish the existence of prescribed pre‑conditions, the power accorded to the Court by Part 10.2 of the Rules to deal with applications for consent orders.
However, Item 11.2 of Part 11 of the Schedule delegates the powers accorded to the Court by ss 114(1), (2A) and (3) of the Act only to Senior Judicial Registrars if:
(a)the order is an order until further order; or
(b)the order is made in undefended proceedings; or
(c)the power is exercised with the consent of all the parties to the proceedings.
The respective contentions
The husband contended that, given that Item 11.2 of Schedule 4 of the Rules delegates the Court’s power pursuant to ss 114(1), (2A) and (3) only to Senior Judicial Registrars and not to Judicial Registrars, the particularised aspects of the October 2022 and the January 2023 orders were beyond the power of the Judicial Registrar who made them. It was submitted that the Rules clearly delineate between the powers delegated to Judicial Registrars and the powers delegated to Senior Judicial Registrars and that, had it been intended to delegate the injunctive power to Judicial Registrars, then the Rules would have made that clear – but, instead, they provide only that a Senior Judicial Registrar has the power to make an injunction, either by consent or in cases where either of the other two preconditions are established.
The husband submitted that, whilst r 10.07 of the Rules provide that Judicial Registrars have the power to determine an application for consent orders, such power is limited to circumstances in which the power to make the order in the terms sought has itself been delegated to Judicial Registrars. It was submitted that Part 11 of Schedule 4 of the Rules makes it plain that Judicial Registrars do not have the delegated authority to make injunctions by consent and that all a delegated authority to make consent orders does is to provide a mechanism by which the making of orders by consent can occur: it does not empower Judicial Registrars to make orders they do not otherwise have the delegated authority to make.
The wife contended that the Judicial Registrar had the delegated power to make an order by consent and that it would be wrong to accept the husband’s contention that a Judicial Registrar has no delegated power to make a consent order for injunctive relief; it was also submitted that the consent referred to in Part 11 of the Rules is the consent to exercise jurisdiction, rather than consent in relation to the terms of the order – further, in essence, because Judicial Registrars make interim orders by consent on a daily basis around the country, mayhem would occur if the court adopted the interpretation urged by the husband.
Discussion and conclusions
One of the purposes underpinning the exercise by a court of the power to delegate specified powers to be exercised by persons other than the Judges of that court is, it seems to me, to enable its Judges to receive assistance in the exercise of the court’s jurisdiction, powers and functions by having delegates undertake matters which are, in a sense, subsidiary to those matters which remain amenable only to the exercise of judicial power by a Judge.
Such purpose and the system within which it exists, is, I consider, relevant to the consideration of whether the power to make the orders the subject of review and challenge has been validly delegated or not. It is, I think, clear that the power to make orders by consent which may be delegated pursuant to s 98(2)(q) of the FCFCOA – which specifically refers to the power to delegate the power to make orders by consent without limitation as to the scope of the matter considered – is a separate power to the delegated power to make orders of an injunctive nature under s 114 of the Act.
I consider that the apparent conflict within the Schedule can be overcome if the delegated powers are considered in the following way:
(a)the power to make orders in terms which are agreed between the parties to proceedings is delegated to Senior Judicial Registrars and to Judicial Registrars, without limitation or the requirement to satisfy prescribed pre-conditions; but
(b)where there is a contest about the terms of orders to be made, only Senior Judicial Registrars have the delegated power to make an order of an injunctive kind and only if the order is made until further order and the power to order an injunction is exercised with the consent of all of the parties to the proceedings; and
(c)only Senior Judicial Registrars have delegated power to make orders of an injunctive kind in uncontested proceedings because, as these cannot be the subject of a consent order, restricting the delegated power to only them makes sense from a public policy perspective because, unlike the circumstances where the parties to the proceedings have sought that an order be made by consent, there is no contradictor.
On the basis of this reasoning, I am not persuaded that the October 2022 or January 2023 orders made by the Judicial Registrar by consent were beyond power; instead, I consider them to have been validly made within delegated power because the parties to the proceedings all participated and sought that the same be made and the review process remains by way of the required oversight.[17]
[17] Harris v Caladine (1991) 172 CLR 84.
Consequently, I decline to extend the time for the filing of an Application for Review in relation to each of these consent orders; I decline to grant leave to the husband to proceed out of time in relation to the foreshadowed applications for review. The Application in a Proceeding filed by leave on 23 July 2024 will be dismissed.
Specific Performance[18]
[18] Outline of submissions of the third respondent dated 22 July 2024, sealed 24 July 2024.
The third respondent sought[19] orders that, upon the wife’s removal of caveat number … from the Queensland Titles Register,[20] the husband cause the contract for the sale of real property situated at B Street, Suburb D in the State of Queensland (the property), to be completed within five (5) business days of the making of the order.
[19]Application in a Proceeding deemed filed on 12 July 2024, following an Order made by Howard J on 16 July 2024.
[20]An order for which was made by Howard J on 16 July 2024 (see Order 4).
The husband supported the application; the wife opposed it.
In the circumstances which exist, I am easily persuaded that the court has jurisdiction to hear and determine the third respondent’s application for specific performance and that it is appropriate to exercise that jurisdiction.
Some relevant matters
The property is owned by E Pty Ltd – a company in which the husband holds a 50 per cent shareholding by way of F Pty Ltd. The wife sought, by way of final property order,[21] to receive the husband’s interest in E Pty Ltd; she also sought that E Pty Ltd retain the property. Whilst the other shareholders of E Pty Ltd are not parties to these proceedings, the wife provided emails from two shareholders (whose holdings equate to 30 per cent) who have more recently expressed a desire to no longer sell the property.[22]
[21] Amended Application for Final Orders sealed 22 July 2024.
[22] Affidavit of the applicant sealed 22 July 2024, paragraphs 53-56; annexures MM-26 and MM-27.
The October 2022 order restrained both parties from, amongst other things, selling, mortgaging, transferring, assigning, dissipating or otherwise dealing with any of the assets of the parties or assets owned by the entities (being entities in which the parties have an interest) that are over the value of $10,000.00, without the written agreement of the other party.[23]
[23] Order 4d made 4 October 2022.
It seems to me that the evidence establishes the following:
(a)on 20 June 2023, the third respondent signed a “subject to contract” Heads of Agreement with the husband in relation to the property in terms which included, in effect, that a formal REIQ contract could not be presented for signing until the husband had completed arbitration with a third party;[24] and
[24] Affidavit of the third respondent sworn 12 July 2024, paragraph 14; annexure 7.
(b)on 19 July 2023, a contract for the sale of the property as between the husband (as the vendor) and the third respondent (as the purchaser) for a purchase price of $1,700,000 – being in the order of $250,000 more than the joint valuation obtained by the parties from G Real Estate on 11 August 2022[25] for the purpose of these proceedings – was signed by the third respondent who then subsequently paid a deposit of $25,000 into the agent’s trust account;[26] and
[25] Affidavit of the husband sworn 16 July 2024, paragraph 9; annexure MM-03.
[26] Affidavit of the third respondent sworn 12 July 2024, paragraph 4-5; annexures 1 and 2.
(c)on 24 July 2023, the third respondent received an email from the agent which set out that the husband had not yet executed the contract because he had “a legal requirement firstly with his ex-wife. He does want to sign, but can’t do so until he receives that permission”;[27] and
[27] Affidavit of the third respondent sworn 12 July 2024, paragraph 23; annexure 8.
(d)on 1 August 2023, a further email was sent by the agent to the third respondent’s solicitor which indicated that the husband’s execution of the contract was still awaiting permission being given;[28] and
[28] Affidavit of the third respondent sworn 12 July 2024, paragraph 24; annexure 9.
(e)on 7 August 2023 (before the contract was executed), the husband’s solicitors wrote to the wife’s solicitors to advise that the shareholders of E Pty Ltd were putting pressure on him to sell the property and sought that she provide a response to the foreshadowed sale of the same by 4.00 pm that day;[29] and
[29] Affidavit of the husband sworn 16 July 2024, paragraph 15; annexure MM-08.
(f)at 5.31 pm on 7 August 2023, the husband executed the contract for the sale of the property to the third respondent for $1,700,000;[30] and
[30] Affidavit of the third respondent sworn 12 July 2024, page 106.
(g)on 7 August 2023, the wife’s solicitors advised the husband’s solicitors by way of a letter sent by email that she was opposed to the sale of the property; and
(h)on 10 August 2023, the wife’s solicitors sought confirmation from the husband’s solicitors that no contract in relation to the property had been entered into;[31] and
[31] Affidavit of the wife sealed 22 July 2024, paragraph 22; annexure MM-10.
(i)on 11 August 2023, the husband’s solicitors provided an executed copy of the contract to the wife’s solicitors;[32] and
(j)on 16 August 2023, the wife’s solicitors wrote to the third respondent’s solicitors and advised them, in essence, that:
(i)there was a Court ordered injunction restraining the husband in relation to the sale of the property; and
(ii)the contract had been signed contrary to the Court order; and
(iii)they held instructions to prepare and lodge a caveat against the title to the property,
(k)whilst the contract allowed until 21 August 2023, the due diligence condition was satisfied on 18 August 2023, at which time the contract became unconditional; and
(l)settlement was to occur on 30 August 2023 but was unable to be affected due to a caveat which had been lodged by the wife on the title to the property that day; and
(m)on 16 July 2024, Howard J made orders for the removal of the wife’s caveat and it was removed shortly thereafter.
[32] Affidavit of the husband, sworn 16 July 2024, paragraph 18; annexure MM-10.
The third respondent’s evidence included that:
(a)he believed the husband had the ability to enter into the contract and that he was doing so in good faith;[33] and
(b)he was not aware of any order of this Court restraining the husband from selling the property until 29 August 2023 (being 11 days after the satisfaction of the contract’s due diligence clause and one day before settlement) when he was copied into correspondence between the conveyancing solicitors for the purchase;[34] and
(c)he believed the husband had the necessary permissions he was required to have to sign the contract when it was executed.[35]
[33] Affidavit of the third respondent sworn 12 July 2024, paragraph 74.
[34] Affidavit of the third respondent sworn 12 July 2024, paragraph 75.
[35] Affidavit of the third respondent sworn 12 July 2024, paragraph 76.
The third respondent also gave evidence about why he attributes special value to the property; he was not required for cross-examination and I accept his evidence.
The essence of the submissions and resolution
The Court may grant the discretionary remedy of specific performance to a purchaser if it considers it fair and just.[36] The Court cannot judicially exercise its discretion by refusing the remedy unless some sound and recognised reason is shown.[37]
[36] Dowsett v Reid (1912) 15 CLR 695 at 705-706.
[37]Selen & Selen and Anor [2011] FamCA 310 at [135]; Fullers Theatres Ltd v Musgrove (1923) 31 CLR 524 at 549.
Counsel for the wife submitted that, despite being aware that the husband had a legal requirement to satisfy – namely, consent from the wife to the sale of the property – there was no evidence before the Court that the third respondent had asked the husband whether such condition had been satisfied; he submitted that the contract was void because it had been entered into in breach of the October 2022 order; he also submitted that no cause of action could arise out of illegality. It was submitted, in essence, that for these reasons, the third respondent’s application should be refused.
I accept the submissions made by Counsel for the third respondent that the third respondent was not obliged to proactively reach out and conduct an enquiry to ensure that the husband had complied with his obligations vis-à-vis obtaining the wife’s consent to the sale of the property; I also accept that the due diligence required by the contract to be undertaken was due diligence in relation to the property itself and not in relation to the circumstances which surrounded the execution of the contract. I accept that the third respondent has established that he has been ready, willing and able to perform his obligations under the contract. I accept that none of the defensive issues raised on behalf of the wife merit denial of the remedy sought by the third respondent. I also accept that, for the reasons particularised in the submissions prepared on his behalf, the third respondent attributes special value to the property and the loss of this cannot be adequately compensated by damages.[38]
[38]Selen & Selen and Anor [2011] FamCA 310 at [135]; Dougan v Ley (1946) 71 CLR 142 at 150 per Dixon J; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438-439.
For the reasons expressed and on the evidence before me, I am persuaded that granting the remedy of specific performance of the contract is fair and just.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 2 December 2024
SCHEDULE OF PARTIES
BRC 10946 of 2020 Respondents
Fourth Respondent:
MS J MICHELAKI
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