Mirren & Mirren
[2020] FamCAFC 94
•24 April 2020
FAMILY COURT OF AUSTRALIA
| MIRREN & MIRREN | [2020] FamCAFC 94 |
| FAMILY LAW – APPEAL – PRACTICE AND PROCEDURE – Property settlement – Consent orders – Where the husband sought to set aside final consent orders for property settlement – Where the primary judge made an order extending the time in which the husband could file an application to review the Registrar’s decision to make the consent orders – Where the wife appealed from this order – Where the primary judge did not conflate the considerations relevant to s 79A with those relevant to s 37A – Where the primary judge was correct to find that there were material errors in the Application for Consent Orders – Order made pursuant to s 94(2) of the Family Law Act 1975 (Cth) dispensing with the application for consent orders – Appeal dismissed. FAMILY LAW – APPEAL – STAY – Appeal against the refusal of a stay of the orders made by the primary judge to extend the time in which the husband could file an application to review the Registrar’s decision – Where the appeal lacks utility – Appeal dismissed. FAMILY LAW – APPEAL – COSTS – Where the husband did not file a schedule of costs – Where no application was made to extend the time to do so – No order as to costs. |
| Family Law Act 1975 (Cth) ss 37A, 79A, 94(2) Family Law Rules 2004 (Cth) rr 1.14, 18.08 |
| Gallo v Dawson (1990) 93 ALR 479; [1990] HCA 30 Harris v Caladine (1991) 172 CLR 84; [1991] HCA 9 |
| APPELLANT: | Ms Mirren |
| RESPONDENT: | Mr Mirren |
| FILE NUMBER: | MLC | 9896 | of | 2013 |
| FIRST APPEAL NUMBER: | SOA | 45 | of | 2019 |
| SECOND APPEAL NUMBER: | SOA | 63 | of | 2019 |
| DATE DELIVERED: | 24 April 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Strickland, Aldridge & Austin JJ |
| HEARING DATE: | 18 February 2020 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 14 August 2019 11 October 2019 |
| LOWER COURT MNC: | [2019] FamCA 532 [2019] FamCA 742 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Ms Swart |
| SOLICITOR FOR THE APPELLANT: | Kelly & McHale Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Robinson |
| SOLICITOR FOR THE RESPONDENT: | Berger Kordos Lawyers |
Orders
Leave to appeal in appeal no. SOA 45 of 2019 be granted.
Appeal no. SOA 45 of 2019 be dismissed.
Appeal no. SOA 63 of 2019 be dismissed.
Paragraphs 6, 8 and 9 of the Further Amended Response to Initiating Application filed on 1 March 2019 be dismissed.
The Application for Consent Orders filed on 13 November 2013 be dismissed.
There be no order as to costs.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Mirren & Mirren has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
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).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Numbers: SOA 45 of 2019 & SOA 63 of 2019
File Number: MLC 9896 of 2013
| Ms Mirren |
Appellant
And
| Mr Mirren |
Respondent
REASONS FOR JUDGMENT
Appeal no. SOA 45 of 2019
On 16 December 2013, a Registrar of the Family Court of Australia made a suite of property settlement orders at the joint request of Mr Mirren (“the husband”) and Ms Mirren (“the wife”).
Some six years later, on 1 March 2019, the husband filed a Further Amended Response to Initiating Application which sought an order for the orders made on 16 December 2013 to be set aside pursuant to s 79A(1)(a), s 79A(1)(b) or s 79A(1A) of the Family Law Act 1975 (Cth) (“the Act”), or that the time for filing an application to review the Registrar’s decision to make the consent orders be extended pursuant to r 1.14 of the Family Law Rules 2004 (Cth) (“the Rules”).
On 14 August 2019, the primary judge made the following order from which the wife now appeals:
(1)All relevant periods of time be extended thereby granting leave to review the decision of the Registrar made on 16 December 2013 under s 37A(9) and 37A(10) of the Family Law Act.
Background
The husband and the wife commenced living together in 1996 and married in 2003. They have three children who were born in 2004, 2006 and 2007.
The husband carried on a practice as a professional through a number of corporate entities.
The husband and the wife purchased a property in Suburb D in May 2010 and the wife purchased a property in G Town in November 2012.
The primary judge recorded that it was not in dispute that throughout the relationship “the husband was the primary income earner and the wife was the primary carer” of the family (at [17]).
The date of separation was hotly contested between the parties. The wife contended that the parties separated in October 2012 but nonetheless lived in the same house between March 2013 and March 2016. His Honour did not accept this to be the case and, despite the unsatisfactory nature of the evidence, found that the parties did not finally separate in October 2012 (at [38]).
Relevantly, the primary judge accepted the husband’s evidence that he signed the Application for Consent Orders, which had been prepared by the wife, her lawyers and accountant, because she pressured him to do so and not because they had separated.
There is no challenge to these findings in the appeal.
The primary judge held that the Application for Consent Orders contained the following misdescriptions (at [32]–[33]):
·The parties separated on 23 October 2012;
·The husband’s weekly gross income was $35,243 when it was likely to be a small fraction of that;
·Each party was described as owning a 50 per cent share in “[K] Trust and related entities” and the “related entities” were not identified;
·The value ascribed to each of the parties’ 50 per cent share ($1.25 million each) in “[K] Trust and related entities” was wrong; and
·The husband and the wife each failed to disclose debts that they owed by way of company loans in the sum of approximately $1,634,979 each.
Finally, an issue arose as to whether the orders had been performed, at least in part, or as the husband contended, the wife had given up reliance upon them. His Honour concluded that “[t]he better view is that the parties agreed that the consent orders were inoperative, waived or rescinded” (at [56]).
The Grounds of Appeal
The parties accepted that the order the subject of the appeal was interlocutory and that leave to appeal was required. The wife did not oppose leave being granted and we agree that leave should be granted.
Did the primary judge err in conflating the considerations relevant to s 79A of the Act with the considerations relevant to s 37A of the Act? (Ground 1)
It is convenient to also deal with Ground 4 at this stage, which states:
The [primary judge] erred in finding that an injustice to the husband would result if the orders were permitted to stand and that strict compliance with the rules will work an injustice on the husband.
Whilst Ground 4 refers to an injustice to the husband, the point of it, as was explained to us by counsel for the wife in oral submissions at the appeal hearing, is that no account was given to any injustice that would be suffered by the wife if the orders were to be set aside. The submission made was that, although his Honour was hearing only an application under s 37A of the Act, considerable reference and attention was given to s 79A instead. Thus, it was submitted that the primary judge failed to consider the injustice to the wife that would be suffered by her if the orders were set aside and failed to identify any reasonable explanation for the husband’s delay in seeking a review of the Registrar’s decision to make the consent orders, which are considerations that should be undertaken in an application for an extension of time.
Before turning to a discussion of this, it is helpful to set out the nature of the two applications.
Section 37A of the Act empowers the Court to make rules delegating the exercise of certain powers of the Court to Registrars. Central to the constitutional integrity of that process is the absolute right of a party to have such decisions made by a Registrar reviewed by a judge (s 37A(9) and s 37A(10) of the Act; Harris v Caladine (1991) 172 CLR 84).
In this case, any application for a review of the Registrar’s decision to make the consent orders had to be filed within seven days of the date that the orders were made (r 18.08 of the Rules), although that time can be extended by an order made under r 1.14 of the Rules. The practical effect of an extension of time, in this case, would be to set aside the consent orders made by the Registrar because once an application for a review is filed, those orders cease to have any effect and a judge must decide what orders should be made. The husband would then withdraw his consent leading to the inevitable dismissal of the application for the making of the consent orders.
The correct description of the application before the Court, therefore, was that it was for an extension of time in which to file an application for a review of the Registrar’s decision to make the property settlement consent orders. The well-known case of Gallo v Dawson (1990) 93 ALR 479 helpfully sets out the principles to the taken into account when dealing with such an application. The prime consideration is to do justice between the parties but significant considerations are the length of the delay, the explanation for the delay and the merits of the proposed proceeding.
The principles to be applied to an application under s 79A of the Act vary depending on which subsection is relied upon. In this case, the primary judge spent considerable time discussing s 79A(1)(a), which in these circumstances was enlivened if the Court was satisfied that there had been a miscarriage of justice because of a failure to disclosure relevant information. That involves a consideration of the nature of the information that was not disclosed, whether that material was relevant to the making of the orders and if so, whether it led to a miscarriage of justice. If that was found to be the case, the Court could then proceed in its discretion to vary the orders or to set them aside and make new orders in substitution of the earlier ones.
Whilst it is obvious that different principles arise for the consideration of an application for an extension of time under r 1.14 of the Rules and an application under s 79A of the Act, many of the facts found by his Honour are relevant to both applications because they are relevant to the considerations to be addressed under each. Thus, the discussion of the facts by the primary judge in the context of s 79A nonetheless remain relevant to the application for an extension of time.
Returning to the wife’s submission that his Honour conflated the consideration of the two alternatives, we accept that, at the outset, his Honour described the application in these terms:
3.Pursuant to orders made by [a judge of the Family Court of Australia] on 3 December 2018, the only question to be determined by me on this application was whether to grant the husband the extension of time he sought.
However, confusingly, the following then appeared:
5.Pursuant to the orders of [a judge of the Family Court of Australia] made on 3 December 2018, the relevant order was as follows –
All applications for final orders be adjourned for hearing before [a judge of the Family Court of Australia] on 6 May 2019 at 10:00 am as a two-day matter and that the evidence in chief of all witnesses be given by affidavit AND THE COURT NOTES that the issue for determination at that hearing is the husband’s application pursuant to s 79A of the Family Law Act 1975.
Despite this, in his Honour’s reasons for judgment, the primary judge discussed “[t]he operation of s 79A of the Family Law Act” at [9]–[15] and a “[r]eview of the orders of the [R]egistrar” at [50]–[55]. Thus, it would seem his Honour had in mind that this was an application for an extension of time under r 1.14 of the Rules, or in the alternative, an application under s 79A of the Act. The wife understood this to be the case as her written submissions to the primary judge dealt with both applications. Indeed, in her introduction to the written submissions as to s 37A, counsel for the wife said “[t]he factors available for consideration of the [r]eview option are the same as argued under s 79A(1)(a) and should be refused for the reasons above” (Wife’s written submissions filed on 5 August 2019, paragraph 69).
Finally, we turn to his Honour’s conclusion which was:
56.In my view the husband’s consent to the orders made in December 2013 was premised on an array of errors set out in the application for consent orders, prepared by the wife’s solicitors, that I have addressed above. The registrar received the application for consent orders by the parties jointly propounding for the making of them. The application was erroneous in several material respects identified above. By reason of those errors, the registrar could not have been properly satisfied that it was just and equitable to make the orders. A miscarriage of justice thereby occurred. By reason of that miscarriage of justice it was open to the husband to apply to this court to set aside the consent orders. The lapse in time since the making of the consent orders was no bar to his application. The husband was not precluded from bringing this application by reason of his being the architect of the consent orders as the errors were joint. Nor was he precluded from applying for the relief he sought in this application on the basis that the orders were “partly performed” (a concept I expressly denounce in the context of complying with court orders). The better view is that the parties agreed that the consent orders were inoperative, waived or rescinded. By reason of the fact that a miscarriage of justice occurred in the making of the consent orders, the registrar’s order should be set aside. Leave should be given to enable the application for a review of the registrar’s orders to be brought out of time. I order that an extension of time is granted to review the registrar’s orders.
(Emphasis added)
Despite using language which is associated with a s 79A application, this is ultimately a consideration of an application for an extension of time under r 1.14 of the Rules.
In the first two sentences that we have emphasised, his Honour deals with the merits of the proposed application for a review of the Registrar’s decision and finds that they are substantial.
The second finding which we have emphasised, is that the wife had effectively given up on the consent orders. This, is a consideration of the potential injustice to the wife. The wife had asserted that she was entitled to the benefit of the consent orders and contended that it would be unjust for her to have to partake in contested property settlement proceedings. However, if the wife had in fact abandoned the consent orders and did not regard them as binding, so that they were effectively inoperative, there is no injustice to her in the consent orders being set aside because they were of no moment to her.
This too, is an explanation for the husband’s delay in bringing the application for an extension of time because there was no need for him to do so until the wife belatedly sought to enforce the orders in 2016. This sits comfortably with the husband’s evidence that the parties did not separate until early 2016.
It follows, that the primary judge did consider the potential injustice to the wife in granting an extension of time to the husband. His Honour did not conflate the principles to be applied to the two different applications, although it was unnecessary for his Honour to address those principles to the extent that he did. The primary considerations to be undertaken on an application for an extension of time are the sufficiency of any explanation for the delay in bringing the application and its merits. This is what the primary judge considered at [56] quoted above.
Grounds 1 and 4 do not succeed.
Was the primary judge correct to find that there were material errors in the Application for Consent Orders, which meant that the Registrar could not be satisfied that the orders were just and equitable and a miscarriage of justice occurred? (Grounds 2 and 3)
It is necessary to deal with each error in turn.
The date of separation
The point of this submission is that at one point in the reasons for judgment, the primary judge states that he was unable to say whether the parties were in fact separated at the time that the orders were made but later his Honour finds that they were not separated.
This submission does not do justice to the reasons for judgment. His Honour said:
38.The first related to the date of separation. According to the husband by November 2013 when the application for consent orders was filed, the husband and wife had reconciled or at least resumed their marriage. According to the wife, they were separated although living under the one roof. Yet she admitted in cross examination that they lived in the same house and raised their children together, they had sexual relations and they holidayed together. In view of that state of the evidence I am unable to say definitively that the parties were in fact separated let alone on the date nominated in item 8 of the application for consent orders. By November 2013 it was erroneous to state, as the form stated, that the parties finally separated on 23 October 2012. In final addresses both counsel debated whether as a matter of law it was possible under the Family Law Act for two persons each married to the other to apply to the court by consent for orders under s 79 at a time when the marriage between the two was valid, subsisting and intact. The point of law is thorny and the older authorities as reviewed by Dr Dickey QC in his book Family Law revealed that it was theoretically possible for that result to follow. The point need not be decided by me as, for the purposes of the error reposed in the date of separation, I find that as at the date mentioned on the application for consent orders, the parties were not separated. The date given was wrong.
(Footnote omitted) (Emphasis added)
The first emphasised sentence poses doubt that the parties were ever relevantly separated. The second finds that they were not separated on a specific date. There is no inconsistency.
The misdescription of the “related entities” and their value
It is to be recalled that in the Application for Consent Orders, each party was described as having a 50 per cent share in “[K] Trust and related entities” valued at $1.25 million.
The wife submitted that the primary judge failed to take into account the fact that a company called F Pty Ltd was sold for $4.9 million plus a performance bonus of $2.1 million, just four days after the Application for Consent Orders was signed. It is also submitted that his Honour considered the loan accounts (approximately $1,634,979 for each party) in isolation and not as part of the overall accounts for the group of entities operated by the parties (Wife’s Summary of Argument filed on 7 January 2020, paragraph 20).
The primary judge’s findings were:
40.The third error alleged by the husband related to item 45 on the application for consent orders. Two vices were identified in relation to this asserted error, the first being the omission to stipulate the so-called related entities and the second was an estimated amount of $1 250 000 when in truth the husband and wife were jointly liable to one or more companies they owned for an aggregated sum of almost $3 300 000. In my view the entries in item 45 were wrong.
41.The fourth error alleged by the husband related to item 56 of the application for consent orders. The response failed to identify that each owed $1 600 000 by way of company loans, such amounts most likely taking the form of income amenable to assessment for income taxation purposes. That debt owed by both was acknowledged by both husband and wife. Item 56 was wrong.
It is correct that his Honour did not take into account the sale of one of the companies but that sale does not support the value ascribed to the entire group of entities in the Application for Consent Orders. It would tend to suggest an interest of each party valued at $2.45 million or perhaps $3.5 million and not $1.25 million, assuming each party had a 50 per cent share.
The sale price of the company is quite distinct from the value of the entire group of entities which owned the company and, while the sale price of the company would influence the value of the group of entities which owned it, it made no difference at all to the existence or quantum of the parties’ loan account debts to that company or any other company controlled by them.
In short, the findings made by the primary judge were open to his Honour on the evidence.
The parties accepted that they did not disclose their loan accounts or identify the entity to which they were owed. They did not dispute that they were owed. It follows that his Honour’s finding that they were erroneously not disclosed is unimpeachable.
The husband’s income
Finally, the wife submitted that there was no basis on which the primary judge could find that the husband’s income had been wrongly stated. His Honour said:
39.The second error alleged by the husband was contained in item 37 of the application for consent orders, namely, the assertion that the husband received $35 243 by way of weekly gross income. His taxable income for the financial year ended 30 June 2011 was $80 000 and $118 000 for 30 June 2012, as the husband deposed in paragraph 26 of his affidavit made 1 March 2019. Even recognising that gross income is entirely different to taxable income, by multiplying the stated weekly gross income to derive an annual gross figure, the sum of $1 800 000 or thereabouts was produced. The taxable amount is so different as to be inexplicably referrable to the asserted weekly gross sum of $35 243. In my view the entry in item 37 was erroneous.
We do not see any error in this reasoning. It is a perfectly orthodox application of fact finding. The Court is entitled to have regard to undisputed facts in determining whether a disputed fact is more likely or not to have occurred. There was no dispute as to the husband’s income for the earlier years. There was no explanation as to why the husband’s income differed so markedly from the previous years.
It is not to the point that the husband himself agreed with this figure in the Application for Consent Orders. Evidently, the primary judge accepted the husband’s explanation that the figures were derived by the wife, her accountant and lawyers, and that he signed the document under pressure from the wife without any regard to its accuracy.
It follows that Grounds 2 and 3 do not succeed.
Conclusion
The appeal will be dismissed. However, as raised by us with counsel, we do not consider that the order made by the primary judge simply to extend the time in which to file an application for a review of the Registrar’s decision to make the consent orders, finally disposed of the matter. We are obliged to make such orders as ought to have been made in the first instance (s 94(2) of the Act).
It follows inexorably, from the extension of time and the husband’s withdrawal of his consent to the orders, that the Application for Consent Orders must be dismissed. We did not understand the wife’s submission that there was a benefit to her in retaining them for a few weeks longer, until the matter could come before a judge of the Family Court of Australia on a hearing of the review. In the circumstances, it is most unlikely that any effect will be given to them.
We will make an order that the Application for Consent Orders be dismissed. It follows that the husband’s applications for relief under s 79A are redundant. Paragraphs 6, 8 and 9 of the Further Amended Response to Initiating Application filed on 1 March 2019 will also be dismissed.
Appeal no. SOA 63 of 2019
This is an appeal against the primary judge’s refusal to grant a stay of the orders made on 14 August 2019.
The current position is that a Registrar has directed that the property settlement proceedings be re-listed after the determination of the appeal from the orders made on 14 August 2019.
This appeal, therefore, has no utility and will be dismissed.
Costs
The husband did not file a schedule of costs in accordance with the orders made by the Appeals Registrar on 28 October 2019. No application was made to extend the time to do so.
The purpose of the order is to facilitate the quick, just and convenient approach to the costs of the appeal by having the Court itself fix the costs. Obviously, a schedule of costs that complies with the terms of the order is essential to that task.
There will be no order as to costs.
I certify that the preceding fifty-five (55) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Aldridge & Austin JJ) delivered on 24 April 2020.
Associate:
Date: 24 April 2020
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