Ormonde & Marley
[2020] FamCAFC 45
•3 March 2020
FAMILY COURT OF AUSTRALIA
| ORMONDE & MARLEY AND ORS | [2020] FamCAFC 45 |
| FAMILY LAW – APPEAL – PROPERTY – Where the trial judge made interim property orders providing for the sale of the former matrimonial home – Where there are third parties with interests in the property – Where the trial judge’s calculations were in error – Where such error is not capable of remedy by the slip rule – Where the trial judge acted upon wrong principle when making interim property orders – Where the respondent concedes the appeal – Where the appeal is to be allowed – Where costs certificates are granted. |
| Family Law Act 1975 (Cth) ss 90SM, 94(2) Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 8, 9 |
| Gabel & Yardley (2008) FLC 93-386; [2008] FamCAFC 162 Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466; [2009] FamCAFC 166 |
APPELLANT/SECOND CROSS-RESPONDENT: | Mr Ormonde |
| FIRST RESPONDENT/FIRST CROSS- RESPONDENT: | Ms Marley |
| SECOND RESPONDENT/FIRST CROSS- APPELLANT: | Ms Ormonde |
| THIRD RESPONDENT/SECOND CROSS- APPELLANT: | Mr B Ormonde |
| FILE NUMBER: | SYC | 3012 | of | 2018 |
| APPEAL NUMBER: | EAA | 66 | of | 2019 |
| DATE DELIVERED: | 3 March 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Strickland, Ainslie-Wallace & Kent JJ |
| HEARING DATE: | 3 March 2020 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 3 July 2019 |
| LOWER COURT MNC: | [2019] FamCA 455 |
REPRESENTATION
| SOLICITOR FOR THE APELLANT/ SECOND CROSS-RESPONDENT: | Browns The Family Lawyers |
| COUNSEL FOR THE FIRST RESPONDENT/ FIRST CROSS-RESPONDENT: | Mr Apelbaum |
| SOLICITOR FOR THE FIRST RESPONDENT/FIRST CROSS – RESPONDENT: | Mistry Fallahi Lawyers |
| THE SECOND RESPONDENT/FIRST CROSS-APPELLANT: | In person |
| THE THIRD RESPONDENT/SECOND CROSS-APPELLANT: | No appearance |
Orders
Leave to appeal and cross-appeal be granted.
The appeal be allowed.
The cross-appeal be allowed.
The orders of 3 July 2019 be set aside.
The matter be remitted for an interim rehearing before a judge other than the primary judge.
There be no order for costs as between the parties.
The Court grants to the appellant costs certificates pursuant to ss 9 and 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being certificates that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise payments under that Act to the appellant in respect of the costs incurred by him in relation to the appeal and in relation to the new hearing in the matter.
The Court grants to the first respondent costs certificates pursuant to ss 6 and 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being certificates that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise payments under that Act to the first respondent in respect of the costs incurred by her in relation to the appeal and in relation to the new hearing in the matter.
The Court grants to the second respondent costs certificates pursuant to ss 6 and 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being certificates that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise payments under that Act to the second respondent in respect of the costs incurred by her in relation to the appeal and in relation to the new hearing in the matter.
The Court grants to the third respondent costs certificates pursuant to ss 6 and 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being certificates that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise payments under that Act to the third respondent in respect of the costs incurred by him in relation to the appeal and in relation to the new hearing in the matter.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Ormonde & Marley and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EAA 66 of 2019
File Number: SYC 3012 of 2018
| Mr Ormonde |
Appellant/Second Cross-Respondent
And
| Ms Marley |
First Respondent/First Cross-Respondent
And
| Ms Ormonde |
Second Respondent/First Cross-Appellant
And
| Mr B Ormonde |
Third Respondent/Second Cross-Appellant
EX TEMPORE REASONS FOR JUDGMENT
Kent J
Mr Ormonde (“the de facto husband”) and Ms Marley (“the de facto wife”) are engaged in property settlement proceedings pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”) after the breakdown of their de facto relationship.
Also participating as parties in those proceedings is the de facto husband’s mother, Ms Ormonde (“the de facto husband’s mother”) and his brother, Mr B Ormonde (“the de facto husband’s brother”).
On 3 July 2019, a trial judge made interim property settlement orders which relevantly provided for:
a)The sale of the former matrimonial home valued at $3,700,000;
b)The distribution of the sale proceeds of that property to:
· cover the costs of sale;
· discharge the mortgage in the amount of approximately $1,350,000;
· pay the de facto wife’s tax debt, the subject of a District Court judgment, in the amount of $117,000;
· pay the de facto husband’s tax debt in the amount of $337,000;
· pay $100,000 to the de facto wife by way of interim property distribution;
· pay outstanding rates and bills; and
· the balance to be held in a trust account with, it was stated, $1,117,000 held specifically for the de facto husband’s mother and brother.
By Notice of Appeal filed on 25 July 2019, the de facto husband applies for leave to appeal, and to appeal if leave is granted, from those orders.
By Notice of Cross-Appeal filed on 14 August 2019, the de facto husband’s mother and brother apply for leave to appeal, and to appeal from those orders if leave is granted.
The appeal and cross-appeal were listed for hearing today.
In the event, the de facto wife does not oppose the appeal or the cross-appeal. Indeed the parties have joined in signing a minute of what is described as consent orders, agreeing that:
(1)The appeal be allowed.
(2)The cross-appeal be allowed.
(3)The orders of 3 July 2019 be discharged.
(4)The proceedings be remitted for an interim rehearing before a judge other than the trial judge.
(5)That there be no order for costs; and
(6)The parties be granted costs certificates under the Federal Proceedings (Costs) Act 1981 (Cth) for both the appeal and the rehearing.
This Court must be satisfied of error on the part of the trial judge to enliven the jurisdiction to make an order under s 94(2) of the Act to set aside the orders the subject of the appeal and to remit the proceedings for rehearing. Moreover, an error or errors of law must be identified in order to grant the parties, as they seek, costs certificates pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth).
Identified errors
For present purposes it is unnecessary to traverse each and every one of the grounds in the Notice of Appeal and the Notice of Cross-Appeal. It suffices to identify error sufficient for the making of the orders sought. Moreover, that more limited exercise is sufficient to establish that each of the de facto husband and the de facto husband’s mother and brother ought receive a grant of leave to appeal.
In identifying liabilities, the trial judge set out a total of liabilities of $2,617,726. But even on the trial judge’s own calculations and figures, that stated amount was incorrect; on her Honour’s own figures, the amount was $2,918,600.
The fundamental error made by the trial judge in terms of the calculations though, was to ascribe to the percentage entitlements of each of the de facto husband’s mother and brother in the subject property the amounts that they had originally contributed by way of capital advances, rather than the worth of their respective percentage entitlements. That error produces a very fundamental difference in the total amount of liabilities.
It would not be an error amenable to correction under the slip rule on an appeal because it had a consequent or follow on effect in terms of the orders made by the trial judge. Her Honour proceeded on the basis that after distribution of the sale proceeds in the manner ordered, there would be a substantial sum remaining for adjudication in the final property proceedings.
However, if the correct figures are utilised it can be seen that very substantially less is available which puts into question the reversibility of the subject interim orders or the “clawing back”, as it were, in terms of the overall entitlements of the parties as might ultimately be found at a concluded trial.
The total liabilities, on my calculations, are in fact $3,461,090 (not including costs of sale) arrived at as follows:
·The mortgage in the amount of $1,350,000;
·The de facto husband’s mother’s entitlement in the former matrimonial home which is $180,190, being 4.87 per cent of the value of the property at $3,700,000;
·The de facto husband’s mother’s loan of further money for family expenses of $222,600;
·The de facto husband’s brother’s entitlement in the former matrimonial home of $1,254,300 being 33.9 per cent of the valuation figure of $3,700,000;
·The de facto wife’s tax debt of $117,000;
·The de facto husband’s tax debt of $337,000;
If that be the correct total, it can be seen that there is very little left from the prospective proceeds of sale of the subject property, and certainly it gives pause for thought as to whether the de facto wife can retain the amount ordered by way of an interim property settlement in an ultimate determination at trial.
By reference to only some of the de facto husband’s grounds of appeal, I am satisfied that at least the following grounds are established:
a)First, that the trial judge failed to consider or adequately consider whether the order was just and equitable and to consider the matters set out in s 90SM of the Act. As is emphasised in the authorities (for example, Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 and Gabel & Yardley (2008) FLC 93-386), it is necessary for there to be at least a preliminary consideration of these matters to be satisfied that the entitlement of the party is within the ambit of the interim order;
b)Next, and allied to what I have just said, I am satisfied that the trial judge failed to adequately consider the likelihood of the de facto wife ultimately receiving a sum sufficient to cover the advances made to her via the interim orders in the ultimate property settlement orders to be made;
c)I am further satisfied that her Honour’s description of an obligation to preserve matrimonial property as being a “founding tenet”, leads to reservations about whether the trial judge correctly identified and applied the principles to be applied in the making of an interim property settlement order as distinct from, for example, the making of injunctive relief; and
d)Finally, I am satisfied that her Honour did not adequately consider both the de facto husband’s ambition to retain the former matrimonial home in the ultimate property settlement, and allied with that, the position of his mother and brother in wishing to preserve their investment in that property, in percentage terms, as opposed to that investment being crystallised by orders for its sale.
For these reasons, I am satisfied of errors and errors of law on the part of the trial judge sufficient to justify the making of the orders sought by the parties.
As was raised with the parties at the outset of the hearing, it is necessary for there to formally be an order granting leave to appeal with respect to each of the Notice of Appeal and the Notice of Cross-Appeal, and those orders ought be included.
Otherwise I would make orders in terms of the orders as sought in the Short Minutes of Orders by Consent which have been signed by the parties and placed before the Court.
Ainslie-Wallace J
I agree with the orders proposed by Kent J and the reasons he gives for making them.
Strickland J
I too agree with the orders proposed and the reasons provided for those orders.
The orders of the Court will be, and these are by consent, that:
(1)Leave to appeal and cross-appeal be granted.
(2)The appeal be allowed.
(3)The cross-appeal be allowed.
(4)The orders of 3 July 2019 be set aside.
(5)The matter be remitted for an interim rehearing before a judge other than the primary judge.
(6)There be no order for costs as between the parties.
(7)
The Court grants to the appellant costs certificates pursuant to ss 9 and 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being certificates that, in the opinion of the Court, it would be appropriate for the
Attorney-General to authorise payments under that Act to the appellant in respect of the costs incurred by him in relation to the appeal and in relation to the new hearing in the matter.
(8)
The Court grants to the first respondent costs certificates pursuant to
ss 6 and 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being certificates that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise payments under that Act to the first respondent in respect of the costs incurred by her in relation to the appeal and in relation to the new hearing in the matter.
(9)The Court grants to the second respondent costs certificates pursuant to ss 6 and 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being certificates that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise payments under that Act to the second respondent in respect of the costs incurred by her in relation to the appeal and in relation to the new hearing in the matter.
(10)
The Court grants to the third respondent costs certificates pursuant to
ss 6 and 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being certificates that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise payments under that Act to the third respondent in respect of the costs incurred by him in relation to the appeal and in relation to the new hearing in the matter.
I certify that the preceding twenty-two (22) paragraphs are a true copy of the ex tempore reasons for judgment of the Honourable Full Court (Strickland, Ainslie-Wallace & Kent JJ) delivered on 3 March 2020, edited to correct grammatical errors and some infelicity of expression.
Associate:
Date: 4 March 2020
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