Morse & Duarte (No 2)
[2022] FedCFamC1F 152
•17 March 2022
Federal Circuit and Family Court of Australia
(DIVISION 1)
Morse & Duarte (No 2) [2022] FedCFamC1F 152
File number(s): SYC 737 of 2014 Judgment of: HARPER J Date of judgment: 17 March 2022 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Summary dismissal application – Where property proceedings remitted for rehearing after successful appeal - Whether the husband’s Fifth Amended Initiating Application should be summarily dismissed – Whether initiating application has reasonable prospects of success – Whether initiating application is vexatious or an abuse of process – Where further consideration of property adjustment inherent in order remitting proceedings for rehearing – Whether second respondent holds registered legal interest in property but made no contribution to purchase – Where Court must determine the question whether property held on trust for wife or wife and husband – Whether the husband's application should be dismissed for non-compliance with pre-action procedures under repealed rules of court or a procedural order – Summary dismissal application dismissed – Proceedings listed for future mention.
FAMILY LAW – PRACTICE AND PROCEDURE – appropriate procedure for variation of parenting orders – Where wife seeks further parenting orders after final hearing and unsuccessful appeal – Where fresh parenting orders sought in an Application in a Case seeking summary dismissal of an amended Initiating Application filed after property proceedings remitted for rehearing after successful appeal – Inappropriate procedure – Application dismissed
Legislation: Family Law Act 1975 (Cth) ss 45, 74, 78, 79, 106B
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 46, 50, 132
Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions) Rules 2021 (Cth) s 7
Federal Court of Australia Act 1976 (Cth) s 31A
Family Law Rules 2004 (Cth) Sch 1, r 10.06, 11.02, 13.05
Family Law Repeal Rules 2021 (Cth) Sch 1
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.31, 1.33, 10.09, 10.11
Cases cited: Bigg & Suzi (1998) 22 Fam LR 700;
Bretton & Bondai [2013] FamCAFC 168
Clayton v Bant (2020) 62 Fam LR 16; [2020] HCA 44
D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1
Duarte and Anor & Morse (2019) 59 Fam LR 323; [2019] FamCAFC 93
Ebner & Pappas [2014] FamCAFC 229
Friar & Friar [2011] FamCAFC 71
Karlsson & Karlsson [2020] FamCAFC 207
Korsky & Bright (No 2) (2007) 38 Fam LR 106; [2007] FamCA 1512
Lindon v Commonwealth of Australia (No 2) (1996) 136 ALR 251
Morse & Duarte (2017) 58 Fam LR 131; [2017] FamCA 1039
Olman & Teitzel [2020] FamCAFC 136
Pelerman & Pelerman (2000) 26 Fam LR 505; [2000] FamCA 881
Port Melbourne Authoirty v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45
Pullman & Pullman (2013) 50 Fam LR 460; [2013] FCCA 31
Reichel v Magrath (1889) 14 App Cas 665
Ridgeway v The Queen (1995) 184 CLR 19; [1995] HCA 66
Rice & Asplund [1978] FamCA 84, (1979) FLC 90-725, 6 Fam LR 570
Ritter & Ritter [2020] FamCAFC 86
Simmons & Simmons (2008) 232 FLR 73; [2008] FamCA 1088
Spencer v Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507; [2015] HCA 28
UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45;
Zao & Lee [2019] FamCAFC 169
Division: Division 1 First Instance Number of paragraphs: 74 Date of last submission/s: 16 November 2021 Date of hearing: 16 November 2021 Place: Sydney The Applicant: Litigant in person The First Respondent: Litigant in person The Second Respondent: Litigant in person ORDERS
SYC 737 of 2014 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS DUARTE
Applicant
AND: MR MORSE
First Respondent
MR TOLMAN
Second Respondent
order made by:
HARPER J
DATE OF ORDER:
17 MARCH 2022
THE COURT ORDERS THAT:
1.The Application in a Case filed by the applicant wife on 9 August 2020 be dismissed.
2.The respondent husband be granted leave to file and serve a further Amended Initiating Application by no later than close of registry filing on 30 March 2022.
3.By no later than close of registry filing on 30 March 2022, the respondent husband file and serve a financial statement.
4.By no later than close of registry filing on 13 April 2022, the applicant wife and the second respondent:
4.1file and serve a Response in accordance with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
4.2file and serve a financial statement.
5.By no later than close of registry filing on 23 May 2022, the parties collaboratively prepare a joint balance sheet ("the Balance Sheet") to be submitted to the Chambers of Justice Harper:
5.1setting out all assets, liabilities and financial resources which the parties assert are relevant to the determination of this matter;
5.2The balance sheet is:
5.2.1to be divided into clearly identified sections, specifying Assets, Liabilities, Superannuation and Add-backs (if claimed);
5.2.2give totals for each category, and subtotals in each category for each party;
5.2.3in the event, there is dispute about totals and subtotals, each party is to include the total or subtotal for which they contend
5.2.4to have footnotes which explain the differences between the parties in relation to any disputed items;
5.3If a party contends any item should be included as an "add-back", the footnotes to the balance sheet must contain a brief description of the basis for the claimed add-back.
6.For the purposes of preparing the joint balance sheet:
6.1By no later than close of registry filing on 22 April 2022, the respondent husband provide to the applicant wife a draft Joint Balance Sheet, using the form available on the Federal Circuit and Family Court of Australia website, setting out the asset pool for which he contends.
6.2By no later than close of registry filing on 6 May 2022, the applicant wife return the Joint Balance Sheet to the respondent husband having inserted the applicant wife's contentions as to the asset pool, the applicant wife's asserted values and footnotes to explain any disputed items.
7.The proceedings be stood over to 9.30am on 26 May 2022 for mention.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
These proceedings have an extensive and complicated history in this Court, including both property and parenting issues. The wife, Ms Duarte ("the wife") is an applicant for summary dismissal of a Fifth Amended Initiating Application filed by the husband, Mr Morse ("the husband").
The second respondent, Mr Tolman was formerly in a relationship with the wife, and is the legal co-owner with the wife of a property at B Street, Suburb C ("the Suburb C property").
This judgment deals only with a summary dismissal application by the wife, explained in more detail below. It is necessary to give some brief history to contextualise the wife's application, including some facts surrounding the purchase of the Suburb C property.
BRIEF HISTORY
The husband and wife commenced cohabitation in April 2003, and were thereafter married on 29 December 2004. During the relationship, the parties had three children together; H, born 2006, J, born 2010, and K, born 2012 ("the children").
The parties separated on a final basis in late 2013, divorcing on 4 April 2015.
The timeline of the relationship between the wife and Mr Tolman is unclear, however it appears as though they commenced their relationship in approximately October 2013.
In early 2014, the former matrimonial home was sold for $1,150,000 by the parties, with settlement taking place on 7 April 2014. From the proceeds of sale, $389,000 was used to discharge a loan, and after payment of the agent's fees and commissions, and other selling costs, the remaining funds were placed into a controlled monies account.
The wife and Mr Tolman entered into a contract for the purchase of the Suburb C property prior to the sale of the former matrimonial home. Completion of the purchase could not take place until settlement of the sale of the former matrimonial home.
The wife claims that a number of conversations took place making the husband aware of her intentions to purchase the Suburb C property with Mr Tolman. She claimed that there was an informal agreement in 2014 between her and the husband for the division of martial assets, which included the wife retaining any proceeds of sale of the former matrimonial home she would need for the purchase of the Suburb C property. The husband denied any informal agreement about the division of property.
But before me there was no dispute that the wife utilised, with the husband's consent, $388,000 of the proceeds of sale of the former matrimonial home and the proceeds of sale of some of her shares, to purchase the Suburb C property. Mr Tolman made no contribution to the purchase.
The mother, Mr Tolman and the children, who were then residing with the mother, moved into the Suburb C property on 11 March 2014.
The husband claims he was not informed that Mr Tolman would be named on the title to the Suburb C property. The wife contends that he was at all times aware Mr Tolman would be a co-owner.
The trial of all issues was initially heard by Le Poer Trench J across 12 days in 2017. Judgment was delivered and final orders were made on 1 December 2017: Morse & Duarte (2017) 58 Fam LR 131 ("the initial judgment").
The ownership of the Suburb C property was an important issue in the initial judgment. The husband sought that there be a declaration that the wife has no "right, title or interest" in the Suburb C property. Alternatively, he sought an order that the wife and respondent hold the Suburb C property on trust for the husband and wife as tenants in common in equal shares.
In the initial judgment, the trial judge found that there was no agreement between the wife and the husband for a division of the matrimonial assets, but the wife and Mr Tolman held the Suburb C property on trust for the wife and the husband in equal shares for the following reasons:
861. … the trust fits the legal criteria of that which is required to be called a resulting trust, arising from the fact that the mother used the joint assets of herself and father to acquire the [Suburb C] property and therefore she was not in a position to make a gift of any part of those funds to [Mr Tolman] until it was clear at law, or in equity, that she was able to do so. I am satisfied there had been no concluded or final agreement between the mother and the father about the division of their matrimonial property, which would have entitled the mother to see the assets, utilised by her to purchase the [Suburb C] property, as her exclusive assets. I am satisfied the father did not intend at any relevant time, or at all, to bestow on [Mr Tolman] any part of the matrimonial assets of the parties.
862.I am also satisfied that the prerequisites for the imposition of a constructive trust have been satisfied. I find that it would be unconscionable for [Mr Tolman] to be afforded the benefit of a half share in the [Suburb C] property which was purchased using the marital funds of the parties. I am satisfied that the father was not aware at the time of acquisition of the [Suburb C] property that [Mr Tolman] would be on title and had he been aware, he would not have consented to the wife using matrimonial funds to purchase the property.
In summary the trial judge made orders for property adjustment pursuant to s 79 of the Family Law Act 1975 (Cth) ("the Act") as follows:
(a)A declaration that the mother and Mr Tolman, as joint legal proprietors of the Suburb C property, hold it upon trust for the mother and father as tenants in common in equal shares;
(b)The mother's payment to the father of $523,455 in satisfaction for his discharge of the caveat registered over the Suburb C property, pending which payment the mother and Mr Tolman are restrained from assigning or encumbering their interests in the property and from taking any action to remove the caveat;
(c)Failing the mother's timely payment of $523,455 to the father, then the Suburb C property is to be sold and 49.8 per cent of the net sale proceeds paid to the father;
Other orders, which it is unnecessary to set out, were made for a superannuation split, mutual indemnities and dismissal of some proceedings in the Supreme Court of NSW which had been cross vested to this Court.
It can be seen that after an extensive review of the factual circumstances of the parties, the trial concluded it was just and equitable to make property adjustment orders pursuant to s 79 of the Act.
The trial judge also made parenting orders, in summary, for the husband to have sole parental responsibility for the children, for supervised time with the mother, and a restraint on the mother bringing the children into contact with Mr Tolman.
On 4 June 2018, the wife, supported by Mr Tolman, filed a Notice of Appeal in relation to both property and parenting issues determined by the initial trial judge.
The appeal was allowed in part on 6 June 2019: Duarte and Anor & Morse (2019) 59 Fam LR 323 ("the appeal judgment"). The Full Court dismissed the wife's appeal against the parenting orders, but accepted that the trial judge erred in concluding the wife and Mr Tolman held the Suburb C property on trust for the husband and the wife in equal shares.
The Full Court explained this conclusion as follows:
533.The trial judge found all of the money contributed by the mother to the acquisition of the [Suburb C] property was jointly owned by the spouses and so they enjoyed joint beneficial ownership of the property pursuant to a resulting trust. That was not correct. It was not open to find the father’s beneficial interest under a resulting trust amounted to one-half of the [Suburb C] property when he did not contribute one-half of the acquisition costs. He only contributed one-half of the $388,931.25 derived from the net sale proceeds of the former matrimonial home. The mother alone contributed the sale proceeds of the shares. Applied to the purchase price of $865,000, the father’s financial contribution to the [Suburb C] property therefore amounted to about 22.5 per cent. It could only be presumed under a resulting trust that his beneficial interest in the property was proportionate to his financial contribution (Allen v Snyder at 78,472-78,474; Calverley v Green at 246; Russell v Scott (1936) 55 CLR 440 at 451).
534.Alternatively, even if the father had contributed one-half of all the money used to purchase the [Suburb C] property, as was found, the finding and declaration of a resulting trust in his favour was still erroneous because the implication of the trust is rebuttable and yields to evidence about the actual intention of the parties (Allen v Snyder at 78,473). The father did not actually intend to acquire any proprietary interest in the [Suburb C] property. He intended the mother would acquire exclusive legal and beneficial title to the property, as his counsel conceded in final submissions, subject to it being brought to account in the property settlement proceedings between them. The father did not, therefore, acquire any beneficial interest in the [Suburb C] property under a resulting trust.
535.However, the trial judge alternatively found the spouses enjoyed joint beneficial ownership of the [Suburb C] property pursuant to a constructive trust. In summary, the factual premises for that finding were: assets accumulated by the spouses during their marriage were the sole source of the entirety of the property’s purchase price and acquisition costs; the father expected the entire proprietary interest in the [Suburb C] property would be brought to account in the extant property settlement proceedings; the father did not know or intend that [Mr Tolman] would acquire any proprietary interest in the property; [Mr Tolman] made no financial contribution to the acquisition of the property; and the father received only $100,000 from the sale proceeds of the former matrimonial home, which was far less than the mother received, and only then over her objection.
536.While those factual findings were open to the trial judge, once found, they still did not support the imposition of a constructive trust in the father’s favour as to an equal share of the property. Constructive trusts are imposed when it would be unconscionable to allow the legal owner to enjoy the corresponding beneficial ownership of the property (Bannister v Bannister (1948) 2 All ER 133; Muschinski v Dodds at 614-617, 620-621; Baumgartner v Baumgartner (1987) 164 CLR 137 at 148-150). It was not unconscionable for the mother to enjoy the one-half legal and equitable interest she acquired in the property. The father did not argue otherwise. The debate surrounded [Mr Tolman’s] interest in the property.
537.As between the mother and [Mr Tolman], it might have been unconscionable for [Mr Tolman] to enjoy beneficial ownership of one-half of the property at her expense, but that is a different consideration from [Mr Tolman’s] joint legal proprietorship of the property depriving the father’s enjoyment of joint equitable interest in the property under a constructive trust. On the facts before the trial judge, it might have been open to find the mother and [Mr Tolman] held the property on constructive trust for the mother alone, had she sought a remedy to declare her exclusive beneficial interest in the property, but it was not open to find they held the property on constructive trust for the spouses jointly in equal shares, in which case the trial judge fell into error.
(Emphasis in original)
The Full Court set aside certain property orders of the trial judge and at Order 6, ordered the "property settlement proceedings remitted to the Family Court of Australia".
This means that the Court at first instance must exercise the discretions in s 79 afresh. In this regard, the Full Court said at [561]:
In the absence of any declaration about the beneficial interest enjoyed by the spouses in relation to [Mr Tolman’s] legal proprietary interest in the [Suburb C] property, the spouses’ proportional interests in the remaining property might be different from that which was found by the trial judge in the application of ss 79(4) and 75(2) of the Family Law Act. Consequently, there is no feasible alternative but to remit the Pt VIII dispute for re-trial.
(As per the original)
Most importantly, the Full Court said at [561]:
… The re-trial will presumably entail update evidence about the spouses’ contributions towards (for example) the care of the children and the maintenance of the Suburb C property. The evidence before us about the spouses’ matrimonial contributions is only current to the time the trial was concluded in August 2017.
It can be seen that the errors identified by the Full Court revolved around how the beneficial ownership of Mr Tolman’s share of the Suburb C property should be treated in light of the fact he made no contribution to the purchase. The Full Court discussed two possibilities, either that the husband contributed 22.5 per cent of the purchase price, in which case 22.5 per cent of the Suburb C property was held on resulting trust for him, or Mr Tolman held his half of the property on constructive trust for the wife. Either conclusion would materially affect the identification of the parties' assets and liabilities at a rehearing, as required by Stanford & Stanford (2012) 247 CLR 108, for the purposes of a re-exercise of the s 79 discretion.
It is worth emphasising that the error identified by the Full Court ultimately benefits the wife more than the husband, in the sense that, at a rehearing, it may be appropriate to conclude the wife owns the Suburb C property beneficially, either entirely or in a share greater than one half. As pointed out, the trial judge found the wife and Mr Tolman held the Suburb C property on trust for the wife and the husband in equal shares. The reasons of the Full Court exposed why it should be concluded that, if the husband enjoyed any beneficial interest in the Suburb C property, it was considerably less than the half interest found by the trial judge, and why it should be concluded Mr Tolman either had no more than a bare legal interest in the property or again something considerably less than a beneficial half interest.
After delivery of the appeal judgment, the husband filed a Fifth Amended Initiating Application on 24 December 2019 ("fifth application") as a result of the Full Court orders for rehearing. In summary, he seeks an order pursuant to s 106B of the Act setting aside the disposition of an interest in the Suburb C property to Mr Tolman, a declaration pursuant to s 78 of the Act that Mr Tolman holds his interest in the Suburb C property on constructive or resulting trust for the wife, consequential orders, vacation of the Suburb C property by the wife and Mr Tolman, and other machinery orders. The husband does not seek any express orders pursuant to s 79 of the Act.
On 18 June 2020, McLelland DCJ made a number of procedural orders, including an order that the parties exchange offers of settlement. This order has some importance for the purposes of determining the wife's summary dismissal application.
On 9 September 2020, the wife filed an Application in a Case seeking a variety of fresh parenting orders, notwithstanding that her parenting appeal was dismissed, as well as an order for the summary dismissal of the husband's fifth application.
The wife's application for summary dismissal was partially canvassed by the parties at the initial interim hearing on 26 May 2021. By reason of disruptions caused by the Covid-19 pandemic, the application was finally heard on 16 November 2021. All parties were self-represented.
At the interim hearing on 16 November 2021, the mother made clear that she no longer pressed the interim parenting orders set out in her Application in a Case. In my view, and in light of the unsuccessful appeal of the parenting orders, the wife's approach of seeking fresh parenting orders by way of an interim or interlocutory application is not appropriate. This part of her application should be dismissed for this reason. If the wife wants to seek new parenting orders, she should file proceedings in the Federal Circuit and Family Court of Australia (Division 2) as required by the Federal Circuit and Family Court of Australia Act 2021 (Cth) ("the new Act"), ss 50, 132. Division 2 is a separate and distinct court from this Court (see the new Act, ss 9, 10). This will enable such proceedings, if filed, to be managed according to the appropriate recent Practice Directions and the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the new Rules"), and allow the question of the potential application of the principles in Rice & Asplund [1978] FamCA 84, (1979) FLC 90-725, 6 Fam LR 570 to be properly ventilated, either as a threshold question or at a later point in any fresh parenting proceedings.
EVIDENCE RELIED UPON
The wife relied upon the following documents:
(a)Further Amended Aide Memoire Re: Mother’s Oral Submissions on Summary Dismissal emailed 15 November 2021;
(b)Written submissions emailed 14 September 2020;
(c)Her Application in a Case filed 9 September 2020;
(d)Her affidavit filed 9 September 2020.
The husband relied upon the following documents:
(a)His Case Outline filed 22 September 2021;
(b)The Fifth Amended Initiating Application filed 24 December 2019;
(c)Response to the Wife's Application in a Case filed 28 October 2020;
(d)His affidavit filed 28 October 2020;
(e)His affidavit filed 13 May 2021.
The second respondent relied upon the following documents:
(a)His response to the husband's Fifth Amended Initiating Application filed 12 October 2020;
(b)His affidavit filed 12 October 2020.
THE LAW
The wife's submissions were lengthy and somewhat convoluted. Disentangling the overlapping strands of argumentation somewhat delayed the delivery of judgment. Her main arguments as articulated orally and in writing may be conveniently grouped under four propositions: (1) the husband's claim as set forth in his fifth application has no reasonable prospect of success; (2) it is vexatious, harassing or an abuse of process; (3) the husband's claim should be dismissed for failure to comply with pre-action procedures and a failure to make a genuine offer to of settlement, and; (4) the doctrines of res judicata and "Anshun estoppel" (see Port Melbourne Authoirty v Anshun Pty Ltd (1981) 147 CLR 589) preclude the husband prosecuting his claim.
Summary Dismissal
Section 45A of the Act empowers "the Court" to make summary decrees. From 1 September 2021, the power of Division 1 specifically to order summary dismissal is also found in s 46 of the new Act as follows:
Summary judgment
(1) The Federal Circuit and Family Court of Australia (Division 1) may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is prosecuting the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.
(2) The Federal Circuit and Family Court of Australia (Division 1) may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is defending the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
(4) This section does not limit any powers that the Federal Circuit and Family Court of Australia (Division 1) has apart from this section.
The wife relied upon the former Family Law Rules 2004 (Cth) ("2004 rules") in her application for summary dismissal. These rules were repealed by Sch 1 of the Family Law Repeal Rules 2021 (Cth). Since 1 September 2021, the new Rules have come into operation. By force of s 7 of Part 3 of Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions) Rules 2021 (Cth) for the purposes of the new Act, a proceeding in the Family Court of Australia on and after 1 September 2021 is taken to be a proceeding in the Federal Circuit and Family Court of Australia (Division 1). This seems to mean that the new Rules, made pursuant to the new Act, must be applied.
The Court retains a broad general discretion under r 1.31 of the new Rules to dispense with compliance or full compliance with any of the new Rules.
Rule 10.09 of the new Rules provides as follows:
Application for summary orders
(1) A party may apply for summary orders after a response has been filed if the party claims, in relation to the application or response, that:
(a) the court has no jurisdiction;
(b) the other party has no legal capacity to apply for the orders sought;
(c) it is frivolous, vexatious or an abuse of process; or
(d) there is no reasonable likelihood of success.
Further, pursuant to rule 10.11 of the new Rules:
Orders that may be made under this Part
(1) On an application under this Part, the court may:
(a) dismiss any part of the proceeding; or
(b) decide an issue; or
(c) make a final order on any issue; or
(d) order a hearing about an issue or fact; or
(e) with the consent of the parties, order arbitration about the proceeding or part of the proceeding.
The wife's argument was that the fifth application was both vexatious and an abuse of process on the one hand, and had no reasonable prospects of success on the other, although she conflated these concepts to some extent in her submissions. I will first deal with the question of the husband's prospects of success.
The principles set forth by Kirby J in Lindon v Commonwealth of Australia (No 2) (1996) 136 ALR 251; [1996] HCA 14 ("Lindon") at 255–256 have long been applied in this Court in applications for summary dismissal, making due allowance for the fact Kirby J was considering the then rules of the High Court: Bigg & Suzi (1998) 22 Fam LR 700; Pelerman & Pelerman (2000) 26 Fam LR 505 ("Pelerman") at [46]; Korsky & Bright (No 2) (2007) 38 Fam LR 106; Simmons & Simmons (2008) 232 FLR 73 at [51]; Friar & Friar [2011] FamCAFC 71 at [51]; Pullman & Pullman (2013) 50 Fam LR 460; Bretton & Bondai [2013] FamCAFC 168 at [59], [120]–[122]; Ebner & Pappas [2014] FamCAFC 229 ("Ebner") at [57]; Ritter & Ritter [2020] FamCAFC 86 ("Ritter") at [27]; Olman & Teitzel [2020] FamCAFC 136 at [28]; Karlsson & Karlsson [2020] FamCAFC 207 at [41].
According to Kirby J in Lindon at 256:
1.It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against government and other powerful interests. This is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the court, is rarely and sparingly provided.
2.To secure such relief, the party seeking it must show that it is clear, on the face of the opponent’s documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious.
3.An opinion of the court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment.
4.Summary relief …, for absence of a reasonable cause of action, is not a substitute for proceeding by way of demurrer. If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts.
5.If, notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading…
6.The guiding principle is, as stated in O 26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the court of the burden of further waster time which could be devoted to the determination of claims which have legal merit.
(Footnotes omitted)
In short, the power to grant summary dismissal is a discretionary power sparingly exercised (Pelerman at [46]).
The principles set forth in Lindon, although regularly applied, must be understood in light of the relevant legislation. In Spencer v Commonwealth of Australia (2010) 241 CLR 118, the High Court, when construing the wording used in s 31A of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act"), which is identical to s 46 of the new Act, pointed out that the legislation has introduced the concept of reasonableness in assessing the prospects of a claim. At [22], French CJ and Gummow J said the criterion of a "reasonable prospect" of success has been understood "in analogous statutory settings to mean a "real" rather than "fanciful" prospect", and the expression "no reasonable prospects of success" applies to a case in which the pleadings disclose "no reasonable cause of action and their deficiency is incurable." They continued at [25]:
Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a "fanciful" prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. …
Hayne, Crennan, Kiefel and Bell JJ further held at [52]:
... [E]ffect must be given to the negative admonition in sub-s (3) that a defence, a proceeding, or a part of a proceeding may be found to have no reasonable prospect of successful prosecution even if it cannot be said that it is “hopeless” or “bound to fail”. ... [I]t is important to begin by recognising that the combined effect of sub-ss (2) and (3) is that the enquiry required in this case is whether there is a “reasonable” prospect of prosecuting the proceeding, not an enquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail.
It is generally correct to take the evidence of the respondent at its highest in assessing a claim for summary dismissal: Ritter at [66]. But here the evidence is not complete. The wife has brought her application before the evidence on a rehearing has been filed and served by the parties.
It is important to note here that although the wife has not yet filed a response to the fifth application, she herself made submissions about what an appropriate property adjustment would be at a rehearing (wife's written submissions received 14 September 2020 page 5, paragraph 27).
The wife's application for summary dismissal here must be evaluated in light of the fact that there have been proceedings under s 79 determined at first instance already, and reviewed on appeal. The result of the appeal, remitting the property proceedings for rehearing, means that the parties' respective contributions during their relationship will have to be assessed again in accordance with established principle, and, as the Full Court pointed out, there will likely be updated evidence, including evidence about the Suburb C property. It is inherent in the Full Court's order remitting the property case for a rehearing that there exists an arguable case on both sides and therefore a reasonable prospect of success.
In his fifth application, the husband seeks relief specifically under s 78 for declarations about the interests of Mr Tolman in the Suburb C property, to the effect that he holds his legal interest on trust for the wife. This is consistent with some of the views expressed by the Full Court. If the husband succeeds in obtaining such a declaration, this would mean the wife owns the entire Suburb C property beneficially, and this would then have a material impact on the nature and size of the pool of assets as between the husband and the wife, and thus the appropriate form of property adjustment.
The wife claims the fifth application, as currently formulated, leaves out of account relevant factors, gives the husband an unjustified greater superannuation, and tries to make her homeless as a single parent, with no accommodation to rehabilitate her career. Several of her arguments, such as estoppel or exercise of what she called "a new jurisdiction in equity" (wife's written submissions received 14 September 2020 page 4, paragraph 24), seem to rely upon the factual assumption that she and the husband made an agreement about the division of assets in 2014, a matter which was expressly decided against her in the initial trial.[1] If the wife chooses to contend for this factual finding again at a rehearing, this must be decided at a trial, not summarily. A rehearing will unavoidably require a further exercise of the discretion to adjust property under s 79 of the Act. It may ultimately be established that there are good reasons not to order that sale of the Suburb C property, as the wife suggests, but this does not mean the husband's claims have no reasonable prospect of success. Rather, this is the very type of issue that should be determined after a trial, not summarily. There must be a further determination of what property adjustment would be just and equitable between the parties to satisfy s 79(2), taking account of the considerations specified in s 79(4). For these purposes, once a finding is made at a rehearing as to what proportion, if any, of the Suburb C property is held on trust for the husband or the wife, the Court will be able to exercise the s 79 discretion taking account of the then existing assets and liabilities of the parties, including the interest held on trust in the Suburb C property.
[1] The wife made reference to s 21(2A) of the Act. This has been repealed. Section 8 of the new Act provides that Division 1 is a superior court of record and a court of law and equity.
With respect to the wife's arguments, they do not persuade me that the husband has no reasonable prospects of success. For the reasons given, I find that his prospects are reasonable, in the sense they are real and could not be described as "fanciful", especially in relation to the interests of the parties in the Suburb C property and the likelihood of the Court making fresh property adjustment orders.
With respect to the wife's arguments, they do not persuade me that the husband has no reasonable prospects of success. For the reasons given, I find that his prospects are reasonable, in the sense they are real and could not be described as "fanciful", especially in relation to the interests of the parties in the Suburb C property and the likelihood of the Court making fresh property adjustment orders.
This conclusion however, does not deny that the current form of the husband's fifth application may require some amendment. While the relief he seeks pursuant to s 78 or s 106B of the Act may be arguable, the husband may need to give consideration to how such relief relates to a fresh exercise of the s 79 discretion. The fifth application appears to claim that apart from these orders, there should be no further property adjustment pursuant to s 79.
The wife then argued the fifth application was vexatious or an abuse of process.
These concepts overlap. Vexatious proceedings are an abuse of process, and include proceedings that are 'seriously and unfairly burdensome, prejudicial or damaging' or 'productive of serious and unjustified trouble and harassment': Ridgeway v The Queen (1995) 184 CLR 19 at 74–75 (per Gaudron J); D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [74]–[75] (per Gleeson CJ, Gummow, Hayne and Heydon JJ). For the purposes of s 102Q of the Act, vexatious proceedings are proceedings motivated by an intention or desire to harass and annoy or cause delay or detriment or for another wrongful purpose. Abuse of process is a wide and flexible concept informed in part by considerations of finality and fairness which enlivens a power to dismiss proceedings where the use of the court's procedures occasions unjustifiable oppression to a party, or where their use is "scandal to the administration of justice", serving to bring the administration of justice into disrepute: Reichel v Magrath (1889) 14 App Cas 665 at 668; Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507 (“Tomlinson”) at [24]–[25]; UBS AG v Tyne (2018) 265 CLR 77 at [1], [45].
In her written submissions, the wife put a range of arguments in various ways, all of which in essence argued the husband was unfairly burdening, oppressing or harassing her by bringing his fifth application, serving to bring the administration of justice into disrepute and undermine the institutional integrity of this Court. For example, she contended the husband's motivations for the relief he seeks in the fifth application are self-centred, and so cold-hearted and narcissistic that a failure to dismiss them would bring the administration of justice into disrepute. She claimed that to allow further property adjustment proceedings would be unacceptably onerous on her as a self-represented litigant, whose conscience is clear, and create an "an ever-evolving opportunity to vex, harass, intimidate and gloat that was exploited with impugnity [sic], utterly disgracing the concept of the administration of justice to the point where the exercise of this Court's authority to summarily dismiss is well and truly warranted" (wife's written submissions received 14 September 2020 page 6, paragraph 29).
At paragraph 30 of her written submissions, the wife submitted:
To allow the applicant father’s case to ‘go another round’ after six years of the mother self-representing would be to impose such an egrerious [sic] burden on the mother as to be unjust and tyrranical [sic]. The Court had the opportunity to get justice right within six long years. It did not. Six years of work self-representing is more than enough to ask. It can not be allowed to continue.
The wife supported this submission by reference to authority concerning a refusal to retry a defendant in a criminal proceedings after success on appeal.
I am unable to accept any of these arguments. They establish no basis for summary dismissal. Self-represented litigants are not uncommon in this Court. They often find the process very taxing. That cannot be helped. It is often an unavoidable consequence of the exacting nature of the process. This does not mean the process is being abused. It simply reflects the reality that litigation can be hard and aggravating for all concerned. There is no basis given by the wife which supports a conclusion that the husband has engaged in persistent or unwarranted applications or court proceedings to deliberately oppress and harass the wife. On the contrary, the Full Court has remitted the property proceedings for a rehearing because the initial judgment was vitiated by error. All parties, the wife, the husband, and Mr Tolman, are entitled to procedural fairness and a proper further hearing. The wife's arguments seem to ignore this central fact. I am unable to ignore it. Authorities drawn from criminal law belong in a totally different area of legal discourse, they have no place here and do not assist the wife. I am compelled to observe that the wife's own application, the subject of this judgment, has produced delay, even if that delay was exacerbated by the disruption of the Covid-19 pandemic.
Finally, in this regard, the wife also argued the "whole framework" of this Court is "indeterminate junk", but nonetheless made an argument that a failure to summarily dismiss the husband's claim would undermine the Court's institutional integrity. Putting to one side the inherent tension between these two arguments, I disagree. In the circumstances already explained, and particularly where the Court cannot be satisfied there are no reasonable prospects of success, it is more likely that an order for summary dismissal would undermine the institutional integrity of this Court.
Non-compliance with Rules or a Procedural Order
The wife placed great emphasis on contentions about the failure of the husband to comply with pre-trial procedures in Schedule 1 of the 2004 rules and especially a failure to make a genuine offer to settle, thereby breaching r 10.06 of the 2004 rules. These failures were said separately to justify summary dismissal pursuant to r 1.33 of the new Rules, which replicates r 11.02 of the 2004 rules. Rule 1.33(2)(a) permits the Court to take a number of steps, including an order dismissing all or part of a party’s case, where a party does not comply with “these Rules, the Family Law Regulations 1984 (Cth) or a procedural order”: cf Zao & Lee [2019] FamCAFC 169. The wife also relies upon this subrule.
The wife relied on the requirements for parties to engage in pre-action procedures. It is true that Schedule 1 of the 2004 rules set out extensive pre-action procedures which "each prospective party to a case in the Family Court of Australia" was required to comply with before "filing an application to start a case". In circumstances where this case was started many years ago, has been determined at first instance once, followed by a partially successful appeal which remitted the property case for rehearing, there is reason to doubt that the pre-action procedures in Schedule 1 of the 2004 rules applied with full force before 1 September 2021 in any event. It does not seem to me that the fifth application started a case. Rather it became the latest iteration of a case that had been in existence for some time. None of the parties were "prospective" because they were already parties. All the parties had some understanding of what the issues between them were when the fifth application was filed.
But it is unnecessary to determine this question for two reasons. First, it is not self-evident that non-compliance with the 2004 rules, or the requirements of a Schedule to those rules, all of which have been repealed, can provide any basis for an exercise of power or discretion under the new Rules. As a matter of pure construction, the power to dismiss proceedings for non-compliance with the new Rules refers only to a failure to comply with "these Rules" which can only mean the new Rules, not the 2004 Rules. A failure to comply with the 2004 rules therefore would not enliven the discretion to dismiss proceedings in the new r 1.33(2)(a). A corollary of this conclusion would be, of course, that the discretion to dispense with the requirements of "these Rules" in r 1.31 of the new Rules could not allow the Court to make orders nunc pro tunc dispensing with compliance with the repealed 2004 rules Secondly, and even if the first reason is wrong, where the Full Court has remitted the proceedings for a rehearing, and there are reasonable prospects of success, the consequence of a failure to comply with pre-action procedures, even if applicable, would rarely lead in my view, without more, to a summary dismissal of a substantive application, filed for the very purpose of rehearing. This does not deny that the Court would always retain its discretion for summary disposal under the new Act and new Rules in an appropriate case. But this is not such a case. In the circumstances of this case, I am not satisfied the husband's fifth application should be dismissed for any non-compliance with pre-action procedures.
However, r 1.33(2) also refers to non-compliance with a "procedural order". As noted earlier, the parties' offers to settle pursuant to r 10.06 were required pursuant to procedural orders made by McClelland DCJ on 18 June 2020. I will assume that it is the wife's argument that this procedural order was breached by the husband because the offer he made was not genuine. She then argues that the appropriate response from the Court is to invoke the powers under r 1.33(2)(a) to dismiss the husband's fifth application.
No party tendered the original copy of the husband's offer, but after discussions during the interim hearing, it was accepted by the husband that he made an offer on 6 July 2020 in the following terms:
The Figure I will accept is $750,000 and [a letter from your parents ([…])] that [H, J and K] are still part of the family and haven’t been removed from there [sic] wills to finalise these proceedings.
The husband deposes that the offer was not accepted and that no counter offer was made by the wife or the second respondent.
The wife claims that the offer firstly was not an offer at all but a threat and financial abuse. This was said to be partly due to the husband not supplying an updated financial statement, causing the wife to proceed 'blind' in the process of each party making an offer. The wife orally argued that without a 'financial statement on the table' there is no proper information available to her to assess the offer. Consequently the wife claimed that the offer was only a purported offer. I accept that it was a requirement of the husband to file an updated financial statement at the time of filing to assist the Court in his duty to provide full and frank disclosure of his financial circumstances (r 13.05 of the 2004 rules). Otherwise I do not accept these arguments. The wife accepted that if she had received a financial statement she would have taken it at face value. But an absence of a financial statement does not render the husband's offer disingenuous in some way. I agree the husband's offer could have been couched in terms more acceptable to legal analysis and in terms which were capable of easier understanding or acceptance, but the husband is self-represented and cannot be expected to demonstrate any legal refinement in drafting offers of settlement. Neither the terms of the offer or the absence of a financial statement render the husband's offer insincere or disingenuous.
The wife further argued that asking for the letter from the wife's parents to confirm that the children were still included in their respective wills constituted a condition of the offer. This, so she argued, made the offer a threat and financial abuse because, in light of the fact he had sole parental responsibility for their children, it really meant the husband was trying to get himself included as a beneficiary of the wife's parents. The wife maintained that she would not be able to force a third party, her parents, to be under her control in order to write a letter. Therefore, it was impossible to carry out. Accepting all these contentions for the purposes of the argument, I cannot see how it supports the contention the husband failed to make any genuine offer.
The wife made some further submissions to the effect that the husband disclosed that he intended to live on the proceeds of the offer if accepted, and it was derisory because it sought more than the value of what the Full Court held was available as assets. Again these arguments have no merit. The Full Court remitted the proceedings for rehearing. The value of the available pool of assets must be determined afresh.
Estoppel or Res Judicata
The final argument of the wife was that the doctrine of res judicata or the form of claim estoppel usually called "Anshun estoppel". These arguments have no merit. As the High Court has made clear the doctrine of res judicata operates where rights and obligations in controversy, as between parties to litigation, cease to have an independent existence because they "merge" in a final judgment: Tomlinson at [20]. These concepts of finality or "merger" of rights operate in relation to final orders made under s 79(1) or s 74(1), so as to support Anshun or "claim" estoppel: Clayton v Bant (2020) 62 Fam LR 16 at [26]. But where the Full Court has remitted proceedings for rehearing, neither of these doctrines can have any application. The merger in final orders of the initial judgment, and their intrinsic finality, have been set aside. It is beyond argument that the Court must determine afresh the competing claims of the parties and exercise the statutory discretion pursuant to s 79.
The Second Respondent as a Party
The wife argued that Mr Tolman should be removed as a party. He resisted such an order. Since he has an interest in the Suburb C property, he is plainly a necessary party, and is entitled to make submissions. I decline to make an order removing him from the proceedings.
CONCLUSION
The wife's application for summary dismissal will be dismissed.
There remains the question of how the proceedings should be progressed. The husband should give consideration to filing an amended application. The wife and Mr Tolman must file and serve Responses to the husband's application. I will list the proceedings for mention at a future date and make orders for the preparation of a joint balance sheet. This should be reasonably straightforward in the circumstances of this case. Once this has been done, the parties will be in a position to go to a further conciliation conference, or enter a callover for allocation of hearing dates.
Since all parties are self-represented, I will reserve all questions of costs.
I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 17 March 2022
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