NANTZ and Brettos
[2011] FMCAfam 427
•17 March 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| NANTZ & BRETTOS | [2011] FMCAfam 427 |
| FAMILY LAW – Property – de facto relationship – initiating application filed before but served after the death of the respondent – grounds for summary dismissal – substitution of legal personal representative for deceased respondent. |
| Family Law Act 1975, ss.45, 79, 90SM, 118 Family Law Rules 2004, r.6.15 Federal Magistrates Act 1999, s.17A Federal Magistrates Courts Rules 2001, rr.1.05, 13.10 |
| In the Marriage of Love (1989) 17 FLR 263; (1994) FLC 92-441 In theMarriage of Mason (1993) 17 Fam LR 269; (1994) FLC 92-446 In the Marriage of Strelys (1988) 12 Fam LR 437; (1988) FLC 91-286 |
| Applicant: | MS NANTZ |
| Respondent: | MR BRETTOS |
| File Number: | SYC 6061 of 2010 |
| Judgment of: | Monahan FM |
| Hearing date: | 22 February 2011 |
| Date of Last Submission: | 22 February 2011 |
| Delivered at: | Sydney |
| Delivered on: | 17 March 2011 |
REPRESENTATION
| Counsel for the Applicant: | Not applicable |
| Solicitors for the Applicant: | Eleanor Murphy & Co |
| Counsel for the Respondent: | Not applicable |
| Solicitors for the Respondent: | CM Lawyers |
ORDERS
THE COURT ORDERS THAT:
All extant applications be adjourned to this Court on 28 April 2011 at 9:30am for mention (“the mention hearing”).
Ms K, as the Executor of the Estate of the late Mr Brettos be substituted for the deceased as the Respondent in these proceedings.
The Respondent make, file and serve a Response, Financial Statement relevant to the Estate of the late Mr Brettos and an Affidavit in support on which she intends to rely by no later than 4:00pm on 13 April 2011.
In the event that the Applicant files any application in any other jurisdiction relating to the Estate of the late Mr Brettos then the Respondent has liberty to apply on seven (7) days notice.
All extant interim applications be otherwise dismissed.
AND THE COURT NOTES THAT:
(A)The purpose of the mention hearing is to make further directions in this matter.
(B)Probate of the Respondent’s Will dated 11 October 2010 was granted to the sister of the late Mr Brettos, namely Ms K, on 19 January 2011.
IT IS NOTED that publication of this judgment under the pseudonym Nantz & Brettos is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 6061 of 2010
| MS NANTZ |
Applicant
And
| MR BRETTOS |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application by MS NANTZ (“the Applicant”) against
MR BRETTOS(“the Respondent”) seeking various property and related orders. The Initiating Application was initially filed on
23 September 2010 and an Amended Initiating Application was filed on 22 February 2011, that is, the day of the interim hearing.
Sadly, the Respondent died on 29 October 2010. That was the same day that the Applicant’s solicitor asserts that she posted sealed copies of the Initiating Application and affidavit in support (“the initiating documents”) to the law firm Manolakos Lawyers. What is clear is that the Respondent died before being personally served with the initiating documents.
The matter came before me in my duty list on 23 November 2010. On that occasion, the Ms Murphy appeared on behalf of the Applicant and Mr Lawson appeared as a friend of the Court on behalf of the Respondent.
On 23 November 2010, Mr Lawson advised the Court of the Respondent’s death and that he had died before service of the initiating documents had been effected. Mr Lawson also advised that he did not have instructions from the deceased’s legal personal representative to accept service of the initiating documents on behalf of the estate. As a consequence, the Court made orders directing the Applicant to cause service of the initiating documents upon the executor/executrix of the estate, if known. The matter was otherwise adjourned for mention on 22 February 2011 in the hope that probate of the Respondent’s will would have been granted by then.
The matter duly returned on 22 February 2011 for mention. On that occasion, the Applicant was again represented by Ms Murphy and the estate of the late Respondent was represented by Mr Eardley of Counsel. On that occasion, Ms Murphy made an oral application seeking to have the executrix of the Respondent’s estate, now identified as Ms K, the sister of the Respondent (“the executrix”), substituted for the late Respondent in these proceedings. Why that specific order was not included in her Amending Initiating Application filed that very day was not explained by Ms Murphy.
Mr Eardley sought the summary dismissal of the then filed Amended Initiating Application. Despite the matter only being listed for directions, the Court reluctantly agreed to allow Ms Murphy and
Mr Eardley to make some brief submissions in support of their respective oral applications.
Issues
The issues for determination in this interim or preliminary decision are:
·firstly, whether s.90SM(8) of the Family Law Act 1975 (“the Act”) operates to enable the Court to make an order substituting the executive of the estate of the late Respondent in circumstances where the Respondent’s death occurred after the filing of the application but before it was served;
·secondly, if so, whether the Court’s discretion should be exercised given the relevant circumstances; and
·thirdly, regardless, whether the application should be summarily dismissed at this stage of the proceedings.
Law
The Court will consider the general principles underpinning summary dismissal of an application prior to considering the issue of whether service of processes are a condition of the commencement of proceedings under the Act.
Summary dismissal
The Court has the necessary inherent power to summarily dismiss or to permanently stay particular proceedings. Regardless, s.17A of the Federal Magistrates Act 1999 and reg.13.10 of the Federal Magistrates Court Rules 2001 also empower the Court to summarily dismiss a proceeding. Generally speaking, the power to summarily dismiss proceedings is only exercised with caution. Its usual application is where the proceedings are considered to be an abuse of the processes of the Court, in that they do not disclose a reasonable cause of action, or where the Court is satisfied that the application is doomed to fail (although this is not specifically required by s.17A(3) of the Federal Magistrates Act 1999), as distinct from being merely weak or unlikely to succeed. Summary dismissal is not a preliminary trial of the action.
This power to dismiss or stay proceedings is different from the power in s.118 of the Act to otherwise dismiss proceedings as frivolous or vexatious. Regulation 13.10 of the Federal Magistrates Court Rules 2001 deals specifically with proceedings or claims that are “frivolous or vexatious”.
Section 45(1) of the Act deals with the situation where there are proceedings in different Courts relating to the same subject matter. The Court to which the application is made may stay or dismiss its own proceedings. This section does not grant a power to make orders in relation to the other set of proceedings. The power is not directed to the substance of the claim as its purpose is to minimise the risk of the exercise of competing jurisdictions by Courts under the Act.
That said, at this stage there are no family provision or related proceedings between the Applicant and the estate of the late Respondent.
Continuation of proceedings following the death of a party
It is well understood that, in a general sense, an application for property settlement under the Act would not survive the death of a spouse. That said, the Court has the power to allow property proceedings between de facto partners to continue before the Court despite the death of one of the parties, as is the case here. In such circumstances, the Court may substitute the deceased party’s legal personal representative as a party to the proceedings.
The relevant provision is s.90SM(8) of the Act. It states:
“(8) If a party to the de facto relationship dies after the breakdown of the de facto relationship, but before property settlement proceedings are completed:
(a) the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings; and
(b) if the court is of the opinion:
(i) that it would have made an order with respect to property if the deceased party had not died; and
(ii) that it is still appropriate to make an order with respect to property;
The court may make such order as it considers appropriate with respect to:
(iii) any of the property of the parties to the de facto relationship or either of them; or
(iv) any of the vested bankruptcy property in relation to a bankrupt de facto party to the de facto relationship; and
(c) an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.”
The Federal Magistrates Courts Rules 2001 (“the FMC Rules”) do not address the substitution of the legal personal representative upon the death of the party. In such circumstances, r.1.05(2) of the FMC Rules authorises the Court to apply the Family Law Rules 2004 (“the Family Law Rules”) in whole or in part and modified or dispensed with as necessary.
Turning then to the Family Law Rules, r.6.15 sets out the progress of a case after death. The rule states:
“(1)This rule applies to a property case or an application for the enforcement of a financial obligation.
(2) If a party dies, the other party or the legal personal representative must ask the court for procedural orders in relation to the future conduct of the case.
(3) The court may order that the legal personal representative of the deceased person be substituted for the deceased person as a party.”
Returning to s.90SM(8) of the Act, it is noteworthy that this provision is substantially similar, but not exactly identical to s.79(8). Section 79(8) of the Act states:
“(8) Where, before property settlement proceedings are completed, a party to the marriage dies:
(a) the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings;
(b) if the court is of the opinion:
(i) that it would have made an order with respect to property if the deceased party had not died; and
(ii) that it is still appropriate to make an order with respect to property;
the court may make such order as it considers appropriate with respect to:
(iii) any of the property of the parties to the marriage or either of them; or
(iv) any of the vested bankruptcy property in relation to a bankrupt party to the marriage; and
(c) an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.”
While s.90SM(8) of the Act does not appear as yet to have been the subject of consideration by the Full Court of the Family Court of Australia (“the Full Court”), the same cannot be said for s.79(8) of the Act.
In the case of In the Marriage of Love (1989) 17 FLR 263; (1994) FLC 92-441 (“Love”), in somewhat similar circumstances to the present case, the wife had, at first instance, filed an application for property settlement which, however, had not been served on the husband prior to his death. The wife applied under s.79(8) of the Act to continue the property proceedings against the husband’s legal personal representative. The application was dismissed on the ground that the jurisdiction of the Court had not been invoked as the property application had not been served. The wife successfully appealed.
In Love, the Full Court, comprising Murray, Baker, and Rowlands JJ, held that it is the filing and not the service of an application which commences the proceedings and thereby invokes the jurisdiction of the Court. If it were otherwise, there would be no jurisdiction for the Court to make an ex parte order. Their Honours further held that once jurisdiction had been invoked by the filing of the application for property settlement, whether or not such application had been served, an order could be made under s.79(8) of the Act in the event of death of one of the parties.
In Love, the Full Court approved the following dicta from Nygh J in the case of In the Marriage of Strelys (1988) 12 Fam LR 437; (1988) FLC 91-286, at 444:
“To summarise the position as I see it: an application is the machinery whereby a proceeding under section 79 is instituted. Once that proceeding is instituted, the whole of the property of the parties is affected by the power of the court to adjust the interest of each of the parties in favour of the other. It is true to say that no enforceable right can arise until an order is made, but an inchoate right or claim affecting the whole of the property of the spouses arises as soon as the proceeding is commenced. Hence it must follow that each of the applicant and the respondent has an interest in continuing the proceeding after the death of the other. The word ‘proceedings’ in s79(8) must therefore be read to refer to the process of litigation which will result in an adjustment of the interests of each of the parties in relation to the whole of their property which is just and equitable in the circumstances. That process may – that process may under s79(8) be continued by either the applicant or the respondent.”
The decision in Love was subsequently followed in a case called In theMarriage of Mason (1993) 17 Fam LR 269; (1994) FLC 92-446 (“Mason”). The Full Court in Mason, comprising Baker, Lindenmayer and Bell JJ, stated (at pages 279-280):
“…service is merely a procedural step in proceedings already on foot and not determinative of the existence of ‘proceedings’, which may subsist, subject to statutory time limits, until the court’s jurisdiction is perfected, either by the act of service or the dispensation of it.
In our view, that is the position in relation to proceedings under the Family Law Act. The statutory basis of that view can be found in s 44(1) of the Act and also in … the Family Law Rules.
…
Nothing in the Act or Rules makes service of the initiating application upon the respondent a condition precedent to the commencement of proceedings.”
Submissions
The transcript of the interim hearing on 22 February 2011 will reflect the oral submissions made by Ms Murphy for the Applicant and
Mr Eardley for the estate of the late Respondent.
By way of summary, Ms Murphy submitted that s.90SM(8) of the Act is applicable to the circumstances of the case. Ms Murphy referred the Court to a number of cases including both the Love and Mason decisions and asked the Court to apply those decisions, given that s.79(8) of the Act is similar to or worded substantially the same as s.90SM(8).
Mr Eardley acknowledged the decisions of Love and Mason, but asked the Court not to exercise its discretion under s.90SM(8) of the Act to allow the proceedings to continue.
In summary, Mr Eardley asked the Court to note the following:
·why did the Applicant not immediately arrange to serve the Respondent? The application was filed some four (4) weeks prior to the Respondent’s death;
·the estate itself is not large, it being valued at approximately $1,200,000.00, according to the inventory annexed to the Probate; and there is a bequest of $500,000.00 to the Applicant in the deceased’s will which is clearly significant. That said, Mr Eardley’s submission was there are other beneficiaries to consider.
·if the Applicant is unhappy with receiving a gift of $500,000.00 from the Respondent’s estate, she has options under the state based family provisions legislation which she can explore. Given the Respondent’s death and the reality that the other beneficiaries are involved, the Supreme Court of New South Wales is the appropriate venue for this dispute.
·there is some doubt as to whether the parties were in a de facto relationship prior to the amendments to the Act that commenced on
1 March 2009. On that potential aspect, Mr Eardley acknowledged that there was then no evidence before the Court; and·the application itself lacks merit because the Applicant is now seeking $750,000.00. Mr Eardley submitted that the claim seems excessive given that the Applicant will inherit $500,000.00 from the Respondent’s estate in any event. In other words, on one reading, the dispute is over $250,000.00. On another reading, if the Applicant is wholly successful, she will take the entire estate. Clearly, the former represents the logical dispute between the parties.
Mr Eardley also pointed out the affidavit of the Applicant also lacks the appropriate jurat because the Applicant requires a translator and hence her evidence should not be accepted at this stage of the proceedings.
Conclusion
The Court is satisfied that it has a discretion that under s.90SM(8) of the Act to allow the proceedings to continue and for there to be an order for the executrix of the Respondent’s estate to be substituted for the Respondent. As the Court does not believe, on the material currently available, that the Applicant’s claim is doomed to fail, the Court will not summarily dismiss the application at this stage.
That said, the Court must still be satisfied that the discretion in s.90SM(8) of the Act should apply. Clearly the fact that the Respondent was not served until after his death, does not make a request to apply s.90SM(8) finally determinative. The Family Court has previously determined this in the context of s.79(8) which the Court agrees is substantially similar to s.90SM(8) of the Act.
Nonetheless, Mr Eardley raises some valid points. No adequate explanation is given as to why the Respondent waited more than one month to effect service or why the affidavit did not contain the appropriate jurat, given the Applicant clearly needs the benefit of an interpreter. The Court notes that the Initiating Application sought substituted service. However, no attempt was made to request that aspect be dealt with expeditiously by the Court. Indeed, despite seeking substituted service, no effort was even made to attempt service upon the known solicitor’s firm until the very day of the Respondent’s death.
Clearly, this has been a tragic time for all concerned, in particular the executrix who has suffered not just the death of her brother but is now involved in a dispute with the Applicant, who is her brother’s former partner. The Amended Initiating Application should have sought an order to substitute the executrix for the Respondent. It did not. What it did was to seek some $750,000.00 from an estate now identified as being worth $1,200,000.00 according to the grant of probate.
In circumstances where the Respondent’s own will provides a bequest to the Applicant of some $500,000.00, the evidence before the Court is still somewhat limited. That said, the Court is satisfied that the Initiating Application was filed before the death of the Respondent. The Applicant has filed an affidavit that is deficient in form but asserts a lengthy de facto relationship between the parties. Moreover, the Court has been handed a copy of the probate of the Respondent’s will, which clearly bequeaths $500,000.00 to the Applicant as well making gifts to other family members of the Respondent.
The Court also notes that there is an assertion, yet to be tested, that the parties had been separated for some years and, more relevantly for this Court, that the parties separated before 1 March 2009. However, as mentioned, there has been no evidence yet presented to support such an assertion. The Applicant’s rights under State-based family provision legislation would not be prejudiced if these proceedings were to fail because of a lack of jurisdiction.
Having considered these issues in light of the submissions, the legislation and the available evidence, the Court does not propose to dismiss the application at this stage. Rather, the Court will make the order sought by the Applicant substituting the executrix of the Respondent’s estate of as the Respondent.
The Court will also make directions for the filing of a Response, supporting affidavit and presumably a Financial Statement on behalf of the estate and will adjourn the matter for further directions on a date to be fixed. In the event that the Applicant files any application in the New South Wales Supreme Court, the Respondent is granted liberty to re-list the matter before this Court on seven (7) days notice to apply for the dismissal of the application before this Court. The Respondent cannot be expected to fight a legal war on two fronts.
There will be Orders of the Court reflecting this decision.
The Court reserves the right to settle the reasons for this decision.
I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of Monahan FM
Date: 3 June 2011
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