Nixon & Dawkes
[2021] FCCA 1390
•22 June 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Nixon & Dawkes [2021] FCCA 1390
File number: BRC 10703 of 2016 Judgment of: JUDGE LAPTHORN Date of judgment: 22 June 2021 Catchwords: FAMILY LAW – property – application to set aside property orders pursuant to section 79A – application for summary dismissal Legislation: Family Law Act 1975 (Cth) ss 45A, 79A, 117
Federal Circuit Court Rules 2001 (Cth) r 13.10
Cases cited: Beck & Beck [2004] FamCA 92
Bigg v Suzi (1998) FLC 92-799
Donaghey v Donaghey (Costs) (2012) 47 FamLR 306
Fitzgerald v Fish (2005) 33 FamLR 123
Lindon v Commonwealth of Australia (No 2) [1996] HCA 14
Karlsson & Karlsson [2020] FamCAFC 207
Pelerman and Pelerman (2000) FLC 93-037
Ritter & Ritter and Anor [2020] FamCAFC 86
Rohnan & Rohnan [2010] FMCAfam 1091
Webster v Lampard (1993) 177 CLR 598
Number of paragraphs: 33 Date of hearing: 19 April 2021 Place: Brisbane Solicitor for the Applicant: Cherry Family Lawyers Counsel for the Applicant: Mr Bunning Solicitor for the Respondent: Lawyers With Integrity ORDERS
BRC 10703 of 2016
BETWEEN: MS NIXON
Applicant
AND: MR DAWKES
Respondent
ORDER MADE BY:
JUDGE LAPTHORN
DATE OF ORDER:
22 JUNE 2021
THE COURT ORDERS THAT:
1.The Response to an Application in a Case filed 18 February 2021 and the Amended Response to an Application in a Case filed 18 April 2021 be dismissed.
2.Each party to bear their own costs.
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 under the pseudonym Nixon & Dawkes is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE LAPTHORN
INTRODUCTION
A Registrar of the Family Court of Australia made final property adjustment orders by consent of the parties on 20 July 2018. Throughout this judgment I will refer to these orders as the consent orders. On 25 November 2020 the applicant wife, Ms Nixon, filed an Application in a Case seeking enforcement of the consent orders by way of having her made trustee for sale of an investment property (the Town B property) that had been ordered to be sold in the consent orders. Orders were made by consent to that effect on 23 February 2021 with her costs reserved.
The respondent husband, Mr Dawkes, in his Response filed 18 February 2021, sought orders varying the consent orders and costs. Although not specifically pleaded, it was understood between the parties, that he was seeking the variation pursuant to section 79A of the Family Law Act 1975 (Cth). His case was based on his belief that the consent orders had become impracticable to enforce and that they were entered into by him in the circumstance of the wife not having made full and frank disclosure of certain liabilities. The wife, in her Reply filed 23 March 2021, sought that the husband’s response be summarily dismissed. This judgment relates to the wife’s application for summary dismissal.
Each party also sought orders for the other to pay their costs on an indemnity basis. I will also determine the costs dispute.
Throughout this judgment I will refer to Ms Nixon as the wife and Mr Dawkes as the husband. I mean no disrespect in doing so. In determining the matter I have had regard to the applications and affidavit material relied upon by the parties; the outline of case documents; and the written and oral submissions. The matter proceeded on the papers.
LEGAL APPROACH
The court has both inherent[1] and legislative powers, in certain circumstances, to summarily dismiss applications before it. Section 45A of the Act reads as follows:
[1] Rohnan & Rohnan [2010] FMCAfam 1091
Summary decrees
No reasonable prospect of successfully defending proceedings
(1) The court may make a decree for one party against another in relation to the whole or any part of proceedings if:
(a) the first party is prosecuting the proceedings or that part of the proceedings; and
(b) the court is satisfied that the other party has no reasonable prospect of successfully defending the proceedings or that part of the proceedings.
No reasonable prospect of successfully prosecuting proceedings
(2) The court may make a decree for one party against another in relation to the whole or any part of a proceedings if:
(a) the first party is defending the proceedings or that part of the proceedings; and
(b) the court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceedings or that part of the proceedings.
When there is no reasonable prospect of success
(3) For the purposes of this section, a defence or proceedings or part of proceedings need not be:
(a) hopeless; or
(b) bound to fail;
to have no reasonable prospect of success.
Proceedings that are frivolous, vexatious or an abuse of process
(4) The court may dismiss all or part of proceedings at any stage if it is satisfied that the proceedings or part is frivolous, vexatious or an abuse of process.
(5) To avoid doubt, proceedings or a part of proceedings are not frivolous, vexatious or an abuse or process merely because an application relating to the proceedings or the part is made and later withdrawn.
Costs
(6) If the court makes a decree, or dismisses all or part of proceedings, under this section, the court may make such order as to costs as the court considers just.
Action by court on its own initiative or on application
(7) The court may take action under this section on its own initiative or on application by a party to the proceedings.
This section does not limit other powers
(8) This section does not limit any powers that the court has apart from this section.
Rule 13.10 of the Federal Circuit Court Rules 2001 (Cth) ("the Rules") relates to "Disposal by summary dismissal" and provides as follows:
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a) the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b) the proceeding or claim for relief is frivolous or vexatious; or
(c) the proceeding or claim for relief is an abuse of the process of the Court.
Mindful that to deprive a party from legitimate recourse to the courts is a serious matter, the court's power to summarily dismiss an application is a discretionary one that should only be used sparingly. In doing so the court needs to be satisfied there is no reasonable prospect of success.
The court must take the evidence of the applicant for relief at its highest unless the evidence is inherently incredible.[2] A case that appears to be weak will not necessarily be sufficient to warrant summary dismissal but an application does not have to be hopeless or bound to fail to have no reasonable prospect of success. If the court is satisfied that an application shows that there is a reasonable cause of action but the pleadings are defective it would ordinarily permit an applicant to amend the pleadings. If the material filed shows that a real legal question is to be determined an application should not be summarily dismissed. The overarching consideration or principle is for the court to do justice.[3]
[2] See Webster v Lampard (1993) 177 CLR 598; Ritter & Ritter and Anor [2020] FamCAFC 86
[3] See Bigg v Suzi (1998) FLC 92-799; Pelerman and Pelerman (2000) FLC 93-037; Beck & Beck [2004] FamCA 92
In Lindon v Commonwealth of Australia (No 2)[4] Kirby J said:
The guiding principle is,…, 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 wasted time which could be devoted to the determination of claims which have legal merit.
[4] [1996] HCA 14
In Karlsson & Karlsson[5] Ainslie-Wallace J said:
[40] Indeed, recent authority has preferred to apply the test of "no reasonable likelihood of success" rather than "doomed to fail" (see Spencer v Commonwealth of Australia[6] where the High Court discussed the "bound to fail" test and Bretton & Bondai[7]).
[41] That is not to say that the power should not, as Lindon said, be exercised sparingly and rarely, but that it will be exercised where it is clear that there is no real question to be tried (see Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd[8]).
[5] [2020] FamCAFC 207
[6] [2010] HCA 28; (2010) 241 CLR 118
[7] [2013] FamCAFC 168 at [59]–[60]
[8] [2013] VSCA 158; (2013) 42 VR 27 at [35]
The husband’s case is grounded in section 79A which reads:
(79A) Setting aside of orders altering property interests
(1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or
(b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or
(c) a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or
(d) in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order; or
(e) a proceeds of crime order has been made covering property of the parties to the marriage or either of them, or a proceeds of crime order has been made against a party to the marriage;
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside. Emphasis Added.
DISCUSSION
In summary, the consent orders provided for the wife to receive a cash amount of $30,000 from the husband and she would retain certain named items including liabilities in her sole name. The husband would receive a superannuation splitting order from the wife’s superannuation fund in the amount of $84,135, retain the former matrimonial home at Suburb C, subject to a refinance into his sole name, and a number of named items. Included in that list were certain liabilities that he would remain solely liable for, namely: rates and water rates associated with the former matrimonial home, any liabilities in his sole name and any liabilities associated with the sale of the Town B property including any shortfall in the mortgage after sale. The Town B property was to be placed on the market for sale within 14 days. The property had still not sold when the wife filed her enforcement application on 26 November 2020. I made orders by consent of the parties on 23 February 2021 for the sale of the Town B property with the wife appointed as Trustee for Sale. The property subsequently sold for $265,000 on 29 March 2021 with a settlement date in May 2021.
Despite the orders now having been complied with, the husband argued that at the time of entering into the consent orders there had been inadequate disclosure of liabilities by the parties; procedural fairness had not been afforded to the National Australia Bank in relation to a debt owed to the bank; that during 2018 until 2021 it had been impossible to sell the Town B property; and that when this is taken together there would be a miscarriage of justice if the consent orders were not varied.
The husband alleged that at the time of entering into the consent orders he relied on the wife’s disclosure that the outstanding rates on the Town B property were $2,882 but were in fact $3,997. Under the terms of the consent orders he took responsibility for these rates. He was also required to meet the outstanding rates for the former matrimonial home which he believed were $2,689 but were in fact $8,462. He said he relied on the amount disclosed by the wife at the time of entering into the consent orders. He also gave evidence of there being outstanding school fees of around $9,000 which were not included in the consent orders.
Prior to the recent sale of the Town B property the home had been tenanted with the rent going towards the mortgage and other expenses. The husband put money and effort into readying the property for sale. There was however a significant shortfall in the sale price and the amount owing to the National Australia Bank. Although the husband had in the consent orders given an indemnity to the wife for the outstanding debt to the bank, it will be a matter for the bank as to whether it pursues the debt from each of the parties or just the husband.
Turning firstly to the alleged non-disclosure of the outstanding rates for the Town B property. The difference in the amounts is a little over $1,100. This in and of itself would not be sufficient to cause the court to re-open the property proceedings but I have taken the husband’s submission as it being part of an overall injustice. The difficulty for the husband is two-fold: Firstly he did not have to rely on disclosure from the wife to fully inform himself of the amount outstanding as he was a co-owner of the property and the rates notices were sent to the home in which he lived and in any event he would have been able to make his own enquiries; Secondly the figure he relies on to show that the amount outstanding was higher than that used in the negotiations is a figure said to be owing at a date after the consent orders were entered into.
In relation to the outstanding rates for the former matrimonial home the difference in the figures come to $5,773. In relying of the higher figure the husband has again used a document that post-dates the consent orders. The wife’s evidence was that she disclosed the rate’s notice for the billing period ending 30 June 2018 which showed that there were arrears of $4,625.94 with new charges taking the total outstanding to $5,423.17. I do not accept there was a failure to make full and frank disclosure in relation to the rates and if there was an error in calculating the outstanding amount that error would have to fall to the husband given the disclosure made by the wife. I therefore do not consider the husband’s complaint in this regard has been made out.
The husband raised issue with the failure to include any outstanding school fees in the negotiated outcome that led to the consent orders. This cannot be a basis for varying the consent orders even if they were not included in the negotiated outcome as the parties on the evidence were to share equally in responsibility for these costs. They would not have formed part of any consent order for property adjustment given their nature as child support.
The husband argued that there had been a failure to give procedural fairness to National Australia Bank in relation to the shortfall on the mortgage. There is no merit in this complaint. Firstly the parties knew there would be a shortfall when negotiating and they made provision for the husband to be responsible for it. The bank does not have to be notified. The husband, by agreeing to the orders, has indemnified the wife. That does not bind the bank but may give some recourse to the wife if the bank chooses to pursue her for any of the shortfall.
I accept the husband had difficulty selling the property but now that it has been sold this limb of his argument is no longer applicable.
The remaining limb of the husband’s case is that he would suffer hardship if the orders were not varied. It is clear the husband, relying on a service pension, has limited means. The orders he consented to have left him with significant debt. Whilst I have much sympathy for the husband, there is nothing of an exceptional nature relating to the care of the children that has arisen since the making of the orders that would be captured by s.79A(1)(d). This part of his case would also fail.
When I take all these factors into account I am satisfied that the husband’s case has no reasonable prospects of success and should be summarily dismissed.
COSTS
Ordinarily each party to proceedings under the Family Law Act 1975 would bear his or her own costs. [9] However if the court is of the opinion that there are circumstances justifying a costs order the court may make such order as it considers just.[10] In determining whether to make such an order the court is required to have regard to the following factors set out in section 117(2A):
[9] Section 117(1)
[10] Section 117(2)
[117(2A)] In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
In Fitzgerald v Fish[11] the Full Court[12] said:
…Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
[11] (2005) 33 FamLR 123 at [41]
[12] Kay, Warnick and Boland JJ
In Donaghey v Donaghey (Costs)[13] Murphy J said:
[31] It is plain that section 117(2A) does not prescribe that more than one factor must be present or that any one factor has more or less weight than any other
[32] Of particular relevance here is the fact that modest, or even poor financial circumstances, is not determinative of the issues. Were it otherwise, the discretion inherent in this section would be curtailed and one of the enumerated factors will preclude appropriate consideration being given to all factors relevant to the discretion.
[13] (2012) 47 FamLR 306
I will address those factors that are relevant to this decision.
Financial circumstances of each of the parties
Both parties are of limited means. The wife is employed as a health care worker, the husband is not able to work having been discharged from the military on medical grounds. The Town B house has now been sold and pursuant to the consent orders the husband is left with the shortfall owing on the mortgage. There is little if any equity in the former matrimonial home. I accept his financial position is poor. Whilst it is true to say that impecuniosity is no barrier to a costs order, I do take into account his poor financial circumstances. The wife is clearly in a stronger financial position. Having said that I also take into account the wife has expended legal fees to bring her application for enforcement and to defend the husband’s application pursuant to s.79A.
Legal Aid
Neither party was in receipt of a grant of legal aid.
The conduct of the parties to the proceedings
There is nothing in the conduct of the parties during these proceedings that warrants consideration in relation to costs, although I note the husband consented to the orders sought by the wife for her to be made the Trustee for Sale of the Town B property.
Whether the proceedings were necessitated by the failure of a party to comply with previous orders of the court.
A relevant consideration is the delay in the husband achieving a sale of the Town B property which necessitated the wife bringing the enforcement proceedings. Whilst I take that delay into account I accept that there had been a downturn in the property market in that area due to a downturn in the gas industry.
Whether any party has been wholly unsuccessful
The husband has been unsuccessful in prosecuting his s.79A application. The wife has been wholly successful in her application for enforcement and in her application for summary dismissal.
Consideration of offers made in writing
The husband was put on notice by the wife in correspondence dated 10 March 2021 that she would seek indemnity costs if he persisted with his s.79A application. She offered not to press for her costs of the enforcement proceedings if he filed a notice of discontinuance leaving each party to bear their own costs. That offer was not taken up.
Conclusion as to whether a costs order should be made
When I take into account all of the above considerations I have come to the conclusion that each party should bear their own costs. I have arrived at that conclusion notwithstanding the very meritorious arguments raised by the wife. I am satisfied that she had to bring her application for enforcement given the delay in finalising the consent orders and should not have faced the s.79A application. She offered not to press her costs if he filed a notice of discontinuance. This would in most cases be sufficient to warrant a costs order. However in this case I have taken into account the husband’s parlous financial position and will exercise my discretion and decline to make any costs order save that each party bear their own costs.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Lapthorn. Associate:
Dated: 22 June 2021
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