Paget and Dubois
[2013] FCCA 1746
•8 November 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PAGET & DUBOIS | [2013] FCCA 1746 |
| Catchwords: FAMILY LAW – Application under s.79A of the Family Law Act 1975 to set aside orders made by consent in 2010 – allegation that husband concealed £250,000 in (country omitted) in 2010 – allegation based wholly on hearsay – application to dismiss pursuant to s.17A of the Federal Circuit Court of Australia Act 1999 – consideration of authorities concerning s.17A. |
| Legislation: Family Law Act 1975, s.79A |
| Lindon v The Commonwealth (No.2) (1996) 70 ALJR 541 Beck v Beck (2004) FLC 93-181 Bigg v Suzi (1998) FLC 92-799 Pelerman v Pelerman (2000) FLC 93-037 Ting v Fingal [2013] FamCA 29 Rana v Deakin University [2012] FMCA 575 Jefferson Ford Pty Ltd v Ford Motor Co of Australia Limited [2008] FCAFC 60 Priestley v Godwin (No.3) [2008] FCA 1529 |
| Applicant: | MS PAGET |
| Respondent: | MR DUBOIS |
| File Number: | MLC 4015 of 2008 |
| Judgment of: | Judge Burchardt |
| Hearing date: | 23 October 2013 |
| Date of Last Submission: | 23 October 2013 |
| Delivered at: | Melbourne |
| Delivered on: | 8 November 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Salamanca |
| Solicitors for the Applicant: | Westminster Lawyers |
| Counsel for the Respondent: | Mr Indovino |
| Solicitors for the Respondent: | Joannidis & Associates |
ORDERS
The respondent provide the applicant with a customer authority required by the (omitted) Bank to enable the applicant to make enquiries with the bank as to any account held by the respondent in 2009 or 2010.
The costs of any such enquiry be paid by the applicant, subject to any further order of this Court.
IT IS NOTED that publication of this judgment under the pseudonym Paget & Dubois is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 4015 of 2008
| MS PAGET |
Applicant
And
| MR DUBOIS |
Respondent
REASONS FOR JUDGMENT
In order to understand this matter it is necessary to commence with some history.
On 25 February 2010, orders were made between the applicant and respondent, then relatively recently divorced, at a time when both were legally represented.
Relevantly, their property issues were resolved by consent and the pool, on any view, was a relatively modest one.
According to the applicant’s financial statement filed on 17 July 2009, there was approximately $300,000 worth of equity in the former matrimonial home and some superannuation.
On 10 May 2013, the applicant filed an application in a case seeking, as final orders, an order pursuant to s.79A of the Family Law Act 1975 (“the Family Law Act”) setting aside the 2010 orders and spousal maintenance. Interim orders were sought in respect of discovery pursuant to r.24.03 of the Federal Circuit Court Rules 2001.
The wife’s accompanying affidavit was filed on 10 May 2013 and set out the history of the parties’ relationship and their previous proceedings.
At paragraph 14, she deposed to the fact that she had had reservations at the time of the original orders as to whether the husband had fully disclosed his financial interests in (country omitted). She went on to say:
“15. It has come to my attention that Mr Dubois did not fully disclose his (country omitted) financial interests during the historic proceedings. A work acquaintance, Ms G undertook a search of the Mr Dubois’ interests in the (omitted) Bank and ascertained that approximately ₤250,000 (approximately $383,433) was held in an account in Mr Dubois’ sole name. The account was not disclosed in historic proceedings and significantly impacts upon the settlement contemplated by the Order.
16. Unfortunately, Mr G is unable to provide me with documents confirming the location and sum of Mr Dubois’ undisclosed account. …”
It should be noted that there is nothing in the affidavit that touches upon any other aspect of financial controversy between the parties and no mention is made of any matters that would otherwise go to support any application either under s.79A or in respect of spousal maintenance other than the passage I have read out.
The matter came before the Court on 26 June 2013 at which time I gave the applicant leave to issue more than five subpoenas (which was not opposed) and otherwise adjourned the matter for interim hearing. The interim hearing date was ultimately adjourned to 23 October 2013.
It should be noted that the applicant did not seek that the Court make a declaration for discovery pursuant to s.45 of the Federal Circuit Court of Australia Act 1999 on 26 June 2013.
The husband had filed a response and affidavit on 26 June 2013. The response sought the dismissal of the application. The affidavit relevantly denied any failure to disclose on the husband’s part.
On 12 August 2013, the wife filed an application in a case. She sought as a matter of urgency that the husband be required to provide full and frank disclosure of a series of schedules of documents including all Australian bank accounts, all (country omitted) bank accounts, all bank statements and the husband’s taxation returns essentially for the period 2009 to 2010.
The applicant’s affidavit in support essentially added little save that it annexed correspondence between the solicitors for the parties. The only part of the substantive text of the affidavit I would refer to is at paragraph 4 where the applicant said:
“… The application was made as I have been recently informed that Mr Dubois did not disclose savings of approximately ₤250,000 held in a bank account in the (omitted) Bank at the time the Final Order was negotiated. Those funds are likely to have affected the terms of our settlement.”
The correspondence between the parties’ solicitors is slightly depressing. On the part of the applicant there were assertions that the documents subsequently sought in the application in the case should be provided with countervailing assertions on the part of the respondent solicitors that there was no obligation for them to be provided.
The respondent filed a further affidavit on 19 August 2013 in which relevantly he continued to deny having any hidden funds in (country omitted). His affidavit referred to correspondence from his solicitors foreshadowing a strike-out application.
That strike-out application was made before the Court on 23 October 2013 but was not supported by any formal application in a case. No objection was taken to that course by the applicant.
Finally, on 22 October 2013, the applicant’s solicitor filed an affidavit. He asserted that his inquiries showed a previously undisclosed (omitted) Bank credit card facility (although it is not asserted in terms that the records showed that this account was extant or active in 2010. One has to make that inference) and deposed to the fact that the (omitted) Bank had refused to answer the subpoena served out of this Court and would only provide information to the applicant in the event that the respondent signs an authority to enable her to do so.
The affidavit confirms that the applicant would be prepared to pay for the cost of any inquiries that she might make with the (omitted) Bank.
Counsel for the applicant relied upon written submissions previously filed on 19 August 2013. Those submissions suffer from one significant methodological difficulty as I pointed out to counsel. Ms Lane’s written submissions are all composed in the context of a dismissal pursuant to r.13.10 of the Federal Circuit Court Rules. In fact, the application was brought, as was at least to me immediately obvious, pursuant to s.17A of the Federal Circuit Court Act.
I would make the following points in relation to the matters asserted in the applicant’s written submissions. First, it is asserted, at page 2, that:
“The Husband’s Application for Summary Dismissal of the Wife’s claim must be determined on the basis only of the material put forward by the Wife. (Kirby J Lindon v The Commonwealth (No 2 (1996) 70 ALJR 541 at 544-545)”
It should be noted that that decision involved summary dismissal in the context of a rule akin to r.13 of this Court’s rules and/or the Court’s inherent jurisdiction and proceeded on an examination of the statement of claim in the matter.
What his Honour said relevantly was (at 545):
“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.
The written submissions also assert (p.2):
“The Husband has no right to adduce any evidence at the summary hearing to contradict the evidence of the husband (sic) or to seek to contradict any inference that might be submitted should be drawn from that evidence. The husband therefore cannot rely upon his affidavits filed in these proceedings.”
Reference was made to authority in the Full Court of the Family Court in the cases of Beck v Beck (2004) FLC 93-181, Bigg v Suzi (1998) FLC 92-799 and Pelerman v Pelerman (2000) FLC 93-037.
I accept that the passage set out at page 3 of the applicant’s written submissions accurately sets out the matters referred to by the Full Court in Beck v Beck. It is, however, immediately apparent from such matters as the reference to the “doomed to fail” test that those authorities were conducted entirely in the context of the applicable rules akin to r.13 of this Court’s rules.
Unfortunately for the applicant in this regard much of what was then said has now been qualified although a number of the Full Court’s observations remain applicable.
There is one other aspect of the applicant’s written submissions to which I should refer. It is submitted by the applicant that:
“The husband has an obligation of disclosure as a party to a financial matter under the Family Law Act and therefore the Federal Circuit Court Rules.”
Reference was noted to Ting v Fingal [2013] FamCA 29 at [41]. In that matter Cronin J did observe in the passage cited:
“Injunctive orders should only be made where there is evidence that if no such order is made, there is a serious prospect that the respondent would take action to thwart the applicant having the benefit of any judgment. Having regard to the evidence before me of the accountant and the assertion of the respondent as to the nature of his business, I could not be satisfied that it would be proper to make an order restraining the respondent in the terms that the applicant sought. That does not mean however that the applicant is not entitled to full discovery and information of the type set out in the Family Law Rules 2004.”
Ting v Fingal was a case where the jurisdiction of the Court was in issue in view of the denial of an alleged de facto relationship. It was clearly a different case from this one.
Furthermore, while it is true that a person involved in a proceeding relating to financial matters has to comply with r.24 of this Court’s Rules, that obligation goes only to the question of a financial statement or an affidavit of financial circumstances (see r.24.02).
The husband has, in fact, filed a financial statement as required by r.24 and thus at this stage he is in breach of nothing at all albeit obviously that if his financial statement is untruthful it will be said that he has misconducted himself.
I turn now to the authorities governing s.17A of the Federal Circuit Court Act. There is a plethora of Federal Court authority on this issue. I would refer to and repeat what I said in Rana v Deakin University [2012] FMCA 575 at [35]-[37], quoting from Jefferson Ford Pty Ltd v Ford Motor Co of Australia Limited [2008] FCAFC 60, (2008) 167 FCR 372.
“[35] Rares J said at [45]:
[45] The character of a judgment under s 31A is identified by the test which the section prescribes. The judgment is a determination that the proceeding or part of the proceeding “has no reasonable prospect of success”. Thus, when the court gives judgment for a party under s 31A(1) or (2) it is exercising a jurisdiction similar to the implied or inherent power of the court to protect its own processes from proceedings which are an abuse of those processes. By enacting s 31A, the Parliament broadened the categories of case in which the power summarily to determine proceedings could be exercised. It is inherent in the power conferred by s 31A that the court need not and does not ordinarily determine the proceedings on their merits after a full trial. A decision under s 31A is that the claim or defence has “no reasonable prospect of success”. It is not that the claim or defence has been proved so that the right or cause of action or defence merges into judgment and loses its independent existence: Blair v Curran (1939) 62 CLR 464 at 531–2 per Dixon J. Rather, the power conferred by the section authorises the court to make a decision summarily that there is no reasonable prospect that if a trial were to take place the claim or defence would succeed. The section requires a prediction of the outcome of a trial on the merits but is not an actual adjudication of those merits.
[36] Gordon J dealt with the nature of s 31A at [123]–[134] of the judgment. Given the length of that extract, I do not propose to set it out in full but I pay careful regard to, and respectfully adopt, all of the matters to which Her Honour referred. Some matters of particular relevance to this case that I would extract from Her Honour’s observations are:
a) the express words of s 31A impose a different and less stringent test to that described in General Steel Industries Inc v Cmr for Railways (NSW) (1964) 112 CLR 125 at [129]–[130] (at [124]);
b) s 31A is a provision which permits and assists the court to manage proceedings and therefore assists in controlling the cost of, and delays in, resolving proceedings by summarily dismissing claims which have no reasonable prospects of success (at [125]);
c) the mechanism for assessment of whether a proceeding or part of a proceeding has no reasonable prospect of success will necessarily require attention to the matters set out by Her Honour at [126];
d) each case must be considered separately and there is no particular hard and fast set of rules (at [127]);
e) where there is a real issue of fact relevant to a pleaded cause of action which must be resolved to determine whether the claim succeeds, it is unlikely that that part of the proceedings has no prospect of success (at [130]);
f) by contrast, the existence of a real issue of law does not necessarily preclude a summary judgment (at [131]).
[37] Her Honour has set out five principles which I have (in part) paraphrased above. At [132], Her Honour went on to say however:
I now come to a final, sixth principle, which is that in determining whether a real issue of fact exists such as to preclude summary judgment, the court must draw all reasonable inferences — but only reasonable inferences — in favour of the non-moving party: Commonwealth Bank of Australia v ACN 000 247 601 Pty Ltd (in liq) [2006] FCA 1416 at [30]; Boston Commercial Services 236 ALR 720 at [45]. I emphasise “reasonable” because it is on this point that the lowering of the bar effected by s 31A becomes clear. By distinguishing between “hopeless” cases and those without reasonable prospects for success, the statute makes clear that the court need not (indeed, must not) refuse summary judgment on the basis of a factual dispute said to arise only from a plausible, as opposed to a reasonable, inference.”
To those remarks I would add only some observations by Bennett J in Priestley v Godwin (No 3) [2008] FCA 1529, which touched upon the question as to whether evidence is admissible in a hearing of this sort.
At [17]-[18] her Honour was analysing the applicant’s (who was self-represented) claims. Relevantly, her Honour said:
“[17] The applicant’s submissions are not completely clear. They seem to raise two broad arguments:
• The power to dismiss a matter summarily is an inherent power that cannot be the subject of legislative interference.
• The standard applied by the courts in a summary dismissal proceeding in the exercise of the Court’s inherent jurisdiction involves the exercise of judicial discretion to receive evidence, which is not available under s 31 A.
[18] This second submission is based on an assumption that s 31A prevents the Court from receiving evidence on a summary dismissal application.”
At [34]-[35], her Honour went on to conclude:
“[34] There is nothing in the language of s 31A, or the balance of the Federal Court Act, which supports the contention that evidence cannot be admitted on a s 31A application. Section 31A is silent on the admission and consideration of evidence. However, O 19 r 1(2) of the Federal Court Rules requires any motion to be supported by an affidavit, while O 10 r 1(2)(a)(xiv) allows the Court to make orders regarding the giving of evidence at a hearing, both orally and by affidavit. There is nothing in the Federal Court Rules that would prevent evidence from being admitted in a contested summary dismissal application. The applicant submits that O 20 r 5 does not allow evidence to be admitted on an application under s 31 A. There is nothing in that order to displace the power of the Court to receive evidence. Indeed, O 20 r 5(3) specifically provides that the Court may receive evidence on the hearing of an application. Order 19 r 1 requires such an application to be in the form of a notice of motion supported by an affidavit.
[35] While the determination of an application under s 31A does not involve a judge conducting a full trial or fact finding exercise, an application under s 31A requires the judge to exercise his or her discretion, following an assessment of the case, including the evidence. As Rares J said in Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720 at [48], ‘the assessment of whether there is a reasonable prospect of successfully prosecuting the proceeding must depend upon the evidence and pleading the subject of the application’.”
In my view, these authorities show quite clearly that the position of the applicant to the effect that the respondent is not entitled to even be heard as to the evidence he has filed must be wrong. What one is required to do, however, as the older authorities make clear and as confirmed in Jefferson Ford by Gordon J, is to:
“… draw all reasonable inferences — but only reasonable inferences — in favour of the non-moving party.”
Indeed, all the authorities have said that where there is a real issue of fact relevant to a pleaded cause of action which must be resolved to determine whether the claim succeeds, it is unlikely that that part of the proceedings has no prospect of success. I find it difficult to see how there could be an issue of fact that is contested unless both sides have gone into evidence to indicate what the contest is.
It should also be noted that a number of the summary dismissal cases to which the applicant refers are cases where matters were dealt with on the pleadings. In family law proceedings, proceedings are ordinarily started by way of an application and affidavit. Thus, in a sense, there will inevitably be an element of evidentiary material before the Court whenever an application is made that is in a family law proceeding under s.17A of the Federal Circuit Court’s Act.
Boiled down to its essentials, the applicant’s case is that she has evidence, admissible pursuant to s.75 of the Evidence Act 1995 in an interlocutory hearing, which this is (see Jefferson Ford per Rares and Gordon JJ, Finklestein J dissenting), that shows that the husband seriously misconducted himself by concealing a quarter of a million pounds in 2010. Although counsel for the applicant repeatedly sought to put a gloss on that, the reality is that this is the only matter that the applicant raises beyond vague suspicion and hyperbole.
The respondent has denied any such misconduct. He concedes, through his counsel, however, that the Court has power to order him to grant the applicant the authorisation that she seeks to conduct her investigations in (country omitted).
The affidavit material filed by the wife is of the most ephemeral character. She does not depose, herself, to having seen the material that Mr G obtained. She does not depose to how it was obtained. She does not even depose as to how it was that Mr G came to pass this information on to her. This information will not be admissible at trial and in that sense, the applicant’s case might be said to be hopeless.
There is, however, a very strong factor militating in her favour. It is reasonable to suppose that the applicant, who counsel assures me has been made aware of the possible significant effects of a failed application in terms of cost orders, has elected to proceed notwithstanding. Putting the matter colloquially, the applicant’s determination to proceed very strongly suggests that there might be something in it.
It should be noted that the only prejudice the respondent will suffer if an order requiring him to authorise the wife to make inquiries with the (omitted) Bank is made is that of costs, unless of course he has indeed been dishonest. Pursuant to the orders earlier made, the wife, as I understand it, still owns the former matrimonial property. On any view, her financial statement discloses the substantial equity in that property. There is every reason to suppose that the wife could therefore, in the ultimate, be made to meet any costs order that might be made against her. In saying that, of course, it should be noted that I am not indicating a concluded view as to whether any such order might or might not be appropriate.
In my opinion, the proper way to proceed is for me to make an order requiring the husband to authorise the wife to make her investigations in (country omitted). If this information reveals the sort of wrongdoing she asserts, plainly the order will have been justified. If it does not, then she will doubtless face such consequences as there may be.
The proper course is for me to reserve my ruling on the application made by the respondent pursuant to s.17A of the Federal Circuit Court’s Act until after those inquiries are conducted.
There is no proper purpose at this stage in making any of the other orders that the applicant seeks in relation to discovery which, in the circumstances, have all the appearance of a fishing expedition on a major scale. Clearly, on any sensible appreciation of the matter, the applicant’s case is likely to stand or fall on the outcome of the inquiries about the alleged ₤250,000 extant in (country omitted) in 2010.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Judge Burchardt
Date: 8 November 2013
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