Pacek & Saltzer (No 3)

Case [2024] FedCFamC1F 680


FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Pacek & Saltzer (No 3) [2024] FedCFamC1F 680

File numbers MLC 2954 of 2020
MLC 7293 of 2024
#...78
#...07
Judgment of WILSON J
Date of judgment 17 October 2024
Catchwords

FAMILY LAW – PROPERTY – enforcement application – objection on the basis the court was functus officio thereby having no power to enforce its own orders – enforcement application granted.

FAMILY LAW – JURISDICTION – whether this court possesses power to make orders for the enforcement of its own orders – statutory sources of such power examined – held, yes.

FAMILY LAW – MAJOR COMPLEX FINANCIAL PROCEEDINGS LIST – complex questions of statutory construction and of practice and procedure involved.   

Legislation

Commonwealth Acts Interpretation Act 1901

Corporations Act 2001

Family Law Act1975

Federal Circuit and Family Court of Australia (Family Law) Rules 2021

Cases cited

Akbar v Gandega (2023) 67 Fam LR 593

Arkin & Blasberg [2019] FamCA 476

Ascot Investments Pty Ltd v Harper (1983) 148 CLR 337

Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (in liq) (No 3) [2016] FCA 284

Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334

Bunbury v Fuller (1853) 156 ER 47

Cantrell v North [2020] FamCAFC 175

CBI Constructors Pty Ltd v Chevron Australia Pty Ltd [2021] WASCA 1

CGU Insurance Ltd v Blakeley (2016) 259 CLR 339

Clayton v Bant (2020) 272 CLR 1

Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297

DMW v CGW (1982) 151 CLR 491

Eberstaller v Poulos (2014) 87 NSWLR 394

Federated Engine-Drivers and Firemen’s Association of Australasia v Broken Hill Pty Co Ltd (1911) 12 CLR 398

Gabel v Yardley (2008) 40 Fam LR 6

Girlock (Sales) Pty Ltd v Hurrell (1982) 149 CLR 155

Harris v Caladine (1991) 172 CLR 84

HBSY Pty Ltd v Lewis [2024] HCA 35

Hill v Zuda Pty Ltd (2022) 275 CLR 24

Holloway v McFeeters (1956) 94 CLR 470

In the Marriage of Molier and Van Wyk (1980) 7 Fam LR 18

In the Marriage of Ravasini (1982) 8 Fam LR 903

Jess & Jess (No 4) [2022] FedCFamC1F 530

John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1

Kain & Kain and Ors [2020] FamCA 650

Kennon v Spry (2008) 238 CLR 56

Mulane v Mulane (1983) 158 CLR 436

Nana Ofori Atta II v Nana Abu Bonsra II [1958] AC 95

Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286

Penrice v Williams (1883) 23 Ch D 353

Pacek & Saltzer (No 1) [2024] FedCFamC1F 650

Pacek & Saltzer (No 2) [2024] FedCFamC1F 666

Project Blue Sky Inc v Australian Broadcasting Authority (1998) CLR 355

QYFM v Minister of Immigration, Citizenship, Migrant Services and Multicultural Affairs (2023) 97 ALJR 419.

Re HIH Insurance Ltd (in Liq) (2014) 101 ACSR 1

Re St Nazaire Company (1879) XII Ch D 88

Salomon v A. Salomon & Co Ltd [1897]…

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Details
AGLC
Pacek & Saltzer (No 3) [2024] FedCFamC1F 680
Case
[2024] FedCFamC1F 680
Decision Date

CaseChat Overview and Summary

The matter of Pacek & Saltzer (No 3) was heard in the Federal Circuit and Family Court of Australia. The dispute centred around the enforcement of property settlement orders and the validity of the enforcement application. The wife, Ms Pacek, sought enforcement of consent orders made in an earlier proceeding, while the husband, Mr Saltzer, and companies controlled by him objected on various grounds, including the contention that the court had no power to enforce its own orders due to the doctrine of functus officio. Additionally, the husband contested the joinder of certain parties to the enforcement proceeding.

The primary legal issues before the court were whether the enforcement application was validly commenced and whether the court had the jurisdiction to enforce its own orders. The court examined the relevant provisions of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, particularly Part 11, to determine if the enforcement application was appropriately made in the existing proceeding. The court also considered statutory interpretation and principles of practice and procedure to assess the husband's arguments about the court's jurisdiction and the applicability of the doctrine of functus officio.

The court found that the enforcement application was validly commenced and that the court possessed the power to enforce its own orders. The court rejected the husband's argument that the making of consent orders rendered the court functus officio, noting that Part 11 of the rules expressly preserves the ability of parties to bring enforcement applications. The court held that the husband's failure to comply with previous orders and his reliance on unapproved affidavit material did not affect the validity of the enforcement application. Furthermore, the court found no merit in the husband's objection to the joinder of certain parties, holding that the proposed joinder was permissible under the principles set out in John Alexander's Clubs v White City.

The court granted the wife's enforcement application, ordering Mr Saltzer and the companies to comply with the terms of the consent orders and restraining them from initiating further proceedings against Ms Pacek. The court also set deadlines for the filing of affidavits and submissions related to the enforcement application and scheduled a hearing for 3 February 2025 to address any further matters.

Orders

Orders of the court

MLC 2954 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN

MS PACEK

Applicant

AND

MR SALTZER

Respondent

MLC 7293 of 2024

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN

MS PACEK

Applicant

AND

MR SALTZER

First Respondent

AND

H PTY LTD

Second Respondent

AND

Q PTY LTD

Third Respondent

AND

W PTY LTD

Fourth Respondent

AND

V PTY LTD

Fifth Respondent

AND

E PTY LTD

Sixth Respondent

AND

SALTZER PTY LTD

Seventh Respondent

#...78

IN THE SUPREME COURT OF VICTORIA

AT MELBOURNE

BETWEEN

H PTY LTD

First Plaintiff

AND

SALTZER PTY LTD

Second Plaintiff

AND

Q PTY LTD

Third Plaintiff

AND

E PTY LTD

Fourth Plaintiff

AND

W PTY LTD

Fifth Plaintiff

AND

V PTY LTD

Sixth Plaintiff

AND

MS PACEK

Defendant

#...07

IN THE SUPREME COURT OF VICTORIA

AT MELBOURNE

BETWEEN

H PTY LTD

First Plaintiff

AND

Q PTY LTD

Second Plaintiff

AND

E PTY LTD

Third Plaintiff

AND

V PTY LTD

Fourth Plaintiff

AND

MS PACEK

Defendant

ORDER MADE BY

WILSON J

DATE OF ORDER

17 OCTOBER 2024

THE COURT ORDERS THAT –

1. Pursuant to order 24 of the final property orders of the Hon. Justice Bennett dated 14 April 2024 the following incorporated entities are hereby joined as a party to proceeding MLC 2954 of 2020–

(a) H Pty Ltd;

(b) Q Pty Ltd;

(c) W Pty Ltd;

(d) V Pty Ltd;

(e) E Pty Ltd; and

(f) Saltzer Pty Ltd.

“the companies”

2. I declare that the applicant Ms Pacek has complied with orders 3 to 9 of the final property orders made by consent by the Hon. Justice Bennett dated 14 April 2022.

3. The respondent Mr Saltzer in his personal capacity and his capacity as director of the companies and the companies themselves is hereby restrained from commencing a further proceeding in any court against the applicant arising out of the subject matter of proceeding MLC 2954 of 2020 or arising out of the subject matter of proceeding MLC 7293 of 2024.

4. The respondent Mr Saltzer in his personal capacity and his capacity as director of each of the companies must do all things and sign all documents prepared by the applicant Ms Pacek’s solicitors at his expense, required to release and discharge Ms Pacek from any and all claims that any of them may have against her and to pay and indemnify her in respect of all liability thereof.

5. Any affidavit material and submissions on which the wife intends to rely in relation to–

(a) her application for the dismissal of the two Supreme Court proceedings cross‑vested to this court by order of Delany J;

(b) her application to be indemnified in respect of costs she has incurred in the two Supreme Court proceedings cross-vested to this court by order of Delany J; and

(c) her application for costs of this proceeding or of the two Supreme Court proceedings

must be filed and served by midday on 18 November 2024.

6. Any affidavits and submissions on which the husband or the companies (as defined) wish to rely in opposition to the wife’s applications referred to in paragraph 5 hereof must be filed and served by midday 17 December 2024.

7. If any party wishes to be heard in respect of the matters set out in paragraphs 5 and 6 hereof, then I fix 3 February 2025 at 1.00pm for such a hearing.

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).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

As has already been recorded, I reject the husband’s contentions that –(c)proceeding MLC 2954 of 2020 is the subject to a valid claim of functus officio; and(d)in proceeding MLC 2954 of 2020 any proposed joinder of the parties the wife wishes to join is properly resisted by application of principles adumbrated in John Alexander’s Clubs v White City[61] for the reason that the parties proposed to be joined are not in fact and in law non-parties within the contemplation of the statements of principle in John Alexander’s Clubs v White City.[62][61] (2010) 241 CLR 1.[62] Ibid.THE HUSBAND’S EVIDENCE In Pacek & Saltzer (No 1)[63] I recorded in some little detail how the husband and his legal representatives had comprehensively failed to comply with orders made by Alstergren CJ on 7 August 2024. Notwithstanding such non-compliance, the husband (without leave) purported to rely on affidavit material for the hearing of the various application on 30 September 2024. At no stage between 17 September 2024 (when I first heard debate about the cases in this application), 20 September 2024 (when I handed down reasons) and 30 September 2024 when the fully contested interlocutory skirmish was heard in this litigation did the husband bring before me an application for leave to rely on material that he failed to prepare to comply with the Chief Justice’s orders of 7 August 2024. Nevertheless, on the husband’s behalf various affidavits were put forward as if leave to do so had been given. No such leave had been given. It was presumptuous for the husband to have proceeded as if leave was in fact given when it was not. The wife’s counsel made a formal protest about the husband’s course of conduct in purporting to rely on affidavit material in respect of which leave had not been given. However, in debate with Mr Coleman SC it became apparent that the wife’s position amounted to her objection to various aspects of the evidence on which the husband wanted to rely as revealed in affidavits he had no leave to adduce. The affidavit was made by Ms Packer, the husband’s solicitor on 26 September 2024. Mr Magowan told me[64] that he relied on that affidavit to offer an explanation why the husband did not comply with orders made by the Chief Justice on 7 August 2024. In debate before me on 30 September 2024, Mr Magowan told me his clients had not anticipated the transfer of the two Supreme Court proceedings. As it happened, the Supreme Court proceeding that involved document production had been addressed because all documents had been returned to the husband’s companies and the question then became one of costs. The other Supreme Court proceeding, involving the breach of fiduciary duties claim, was embryonic and nowhere near being ready to be dealt with by me. In any event, a trial was likely in the breach of fiduciary litigation. Mr Magowan then raised the peculiar submission that he expected the one day allocated to deal with issues ordered by the Chief Justice to take the form of a trial with witnesses being cross-examined.[65][63] [2024] FedCFamC1F 650. [64] T 32.[65] T 40.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The significance to the wife of the release was readily apparent. If her contentions about the release are correct, then the plaintiffs in the breach of fiduciary duty case were not entitled to bring that case against the wife and have not thereafter been entitled to prosecute or to maintain that litigation.CONSIDERATION – THE ENFORCEMENT APPLICATION In my view, the wife’s enforcement application was validly commenced in proceeding MLC 2954 of 2020. I reject the contention advanced by the husband and the companies controlled by him that the making of the consent orders brought to an immediate halt proceeding MLC 2954 of 2020. On its proper construction, Part 11 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 confirms that proposition. Several provisions of part 11 of the rules that support that conclusion. None of the provisions of rule 11 require the commencement of a separate proceeding or a new proceeding. To the contrary – part 11 includes several references to applications in a proceeding, that is to say in an existing proceeding. The rules in chapter 11 include reference to “the primary order” or “any order, bond, agreement or undertaking that the court is asked to enforce”. Table 11.1 to chapter 11 does not refer to the commencement of a further proceeding and instead speaks of an enforcement application. The fact that chapter 11 contemplates an enforcement application in an existing proceeding tends against the validity of the argument advanced by the husband that the moment Bennett J pronounced the consent orders on 14 April 2022 in proceeding MLC 2954 of 2020, the court thereupon became functus officio. To my mind, the husband’s contention in that regard was illogical by reason of the express preservation of the ability of all parties in proceeding MLC 2954 of 2020 to bring an enforcement application. It would produce an absurd result if terms of settlement that became consent orders caused the court in which the consent orders were made to become functus officio, if, for example, one party entirely ignored all of his obligations under the consent orders including payment. If the husband’s contentions about the court becoming functus officio were correct (and in my judgment they are wrong) the court could pronounce upon the resolution of the dispute but it otherwise became powerless to compel performance of the obligations recorded in the resolution. That cannot possibly be the intendment of chapter 11 of the rules. In fact, chapter 11 contains exquisite details enabling a party to enforce orders (called “the primary orders” in one place in chapter 11). On the facts of this litigation, the wife (on advice) elected to apply to enforce the consent orders in two ways. First, she sought enforcement of the provisions of the consent orders making application under chapter 11 of the rules in proceeding MLC 2954 of 2020, that is to say, in the proceeding in which the orders sought to be enforced were made. To my mind, in doing that the wife did no more than was authorised by chapter 11 of the rules. Had the husband failed to pay the sum he was required to pay under the consent orders, on his erroneous agreement about the court being functus officio, the wife had no remedy. That was an absurd proposition.