Pelerman v Pelerman
[2000] FamCA 881
•28 July 2000
[2000] FamCA 881
FAMILY LAW ACT 1975
IN THE FULL COURT OF
THE FAMILY COURT OF AUSTRALIA
AT BRISBANE
Appeals No. LA5, NA15 & NA38 of 1999
File No. BR1522 of 1997
IN THE MATTER OF:
ANN SOPHIE PELERMAN
Appellant/Wife
and
REUBEN PELERMAN
Respondent/Husband
| Coram: | Ellis, Lindenmayer and Rose JJ |
| Date of Hearing: | 9 November 1999 |
| Date of Judgment: | 28 July 2000 |
REASONS FOR JUDGMENT
| Appearances: | Mr Kirk of Senior Counsel instructed by Hopgood Ganim, Lawyers, Level 3, T&G Building, 141 Queen Street, Brisbane Qld 4000, appeared on behalf of the appellant wife. |
| Mr Couper of Queen’s Counsel with Ms Hogan of Counsel instructed by McLaughlins, Solicitors, Level 11, Seabank, |
PROPERTY SETTLEMENT – Consent Orders – Application to set aside orders – Summary dismissal not available when circumstances particularised may be held to constitute a miscarriage of justice by reason of “suppression of evidence” or “any other circumstance.” “Suppression of evidence” – whether failure to disclose financial circumstances may amount to - when duty of disclosure arises.
Bigg v Suzi (1998) FLC 92-799; Morrison and Morrison (1995) FLC 92-573; Suiker and Suiker (1993) FLC 92-436 followed. Harris v Caladine (1991) FLC 92-217, considered.
Family Law Act 1975 – s79A(1)(a)
This was an application, by the wife, for leave to Appeal, and if leave was granted, an Appeal against the declaration made by Jerrard J on 30 April, 1999, that particulars provided by the wife of her application to vary consent orders did not, as a matter of law, constitute either “duress,” “suppression of evidence” or “any other circumstance,” within the meaning of s.79A(1)(a). The wife also appealed against orders subsequently made by Jerrard J which both dismissed her application for leave to amend the particulars, and struck out the initial application for variation of the consent orders.
The parties commenced cohabitation in November, 1980 and were subsequently married on 28 February, 1982. The husband, aged 85, was born on 12 July 1914, whilst the wife, who is 21 years his junior and aged 64, was born on 7 June, 1936. Whilst the actual date of separation is not forthcoming, the wife alleged that the relationship lasted in excess of 16 years.
The wife maintained that the relationship was somewhat difficult in that the husband refused to put any property into her name or discuss (presumedly financial) matters with her. The wife complained that whilst he suffered from depression at various times, he was “dominating, controlling and manipulative” of her.
The parties entered into consent orders on 17 February, 1997. These orders provided that the husband was to pay the wife $1 000 per week from 21 January, 1997, for the rest of his life, in conjunction with the sum of $2 000 000 on or before 5 March, 1997. The consent orders also provided for the husband to transfer two properties at Donnegal Crescent, Sorrento into both parties’ names as joint tenants but to remain solely liable for expenses relating to those properties. The orders also provided for the husband to supply the wife with a new BMW motor vehicle and to meet its running expenses, to maintain her private health insurance and meet all costs associated with house-keepers/carers for both the wife and himself. In accordance with the consent orders the wife would, in addition to receiving the contents of the Sorrento properties upon the husband’s death, retain all items of personalty in her possession while the husband was to retain the balance of his assets (investments, bank accounts, company interests, superannuation, life insurance, shares) free of all claims by the wife.
On 27 February, 1998, the wife filed an application seeking that, pursuant to s.79A(1)(a), the consent orders be varied so that, rather than the husband paying her
$2 000 000, she receive 40% of the net value of the parties’ assets and financial resources. On 22 July, 1998, the wife filed particulars in support of her application. The particulars essentially asserted that the wife had little knowledge of the husband’s financial affairs, largely as a result of his behaviour, and that under the consent orders she received far less than a just, equitable and appropriate outcome. Consequently, the wife complained that there had been a miscarriage of justice, by reason of “duress,” “suppression of evidence” or “any other circumstance.”
On 10 September, 1998, the husband filed an application seeking that the wife’s application be struck out and that a declaration be made to the effect that the particulars could not, as a matter of law, constitute duress, suppression of evidence or any other circumstance within the meaning of s.79A(1)(a).
The trial Judge found that, given the particulars indicated that the wife ended up with more than what the husband initially offered and having regard to all of the circumstances particularised, it was not open to the Court to find “duress,” even in equity, as explained in Barton v Armstrong [1973] NSWLR 598 at 631 and 634. Furthermore, the trial Judge held that the particulars failed to establish that the wife’s ignorance of the husband’s overall financial position was occasioned by “suppression of evidence,” rather than the manner in which they conducted their marriage. Ultimately, the trial Judge held that the wife’s particulars failed to reveal that she received less than a just sum and his Honour was of the view that she was simply asking the court to embark on a fishing expedition as to whether or not the settlement she received was just and equitable. Based on this reasoning the wife’s application regarding variation was struck out, after her application for leave to further amend the particulars was dismissed.
On Appeal, the wife sought to have the trial Judge’s declaration and orders set aside. In support of this request, she submitted that the trial Judge had erred in law and in the exercise of his discretion in summarily dismissing the application, given that a “miscarriage of justice” was open to be found on multiple grounds, on the particulars provided.
Held: in granting leave to appeal, allowing the appeal and setting aside the declaration;
Given that the husband failed to disclose his financial circumstances when the consent orders were being made, this may indicate that the wife suffered a miscarriage of justice due to “any other circumstance.” Therefore the trial Judge erred in summarily dismissing the application as it was not “doomed to fail.”Bigg v Suzi (1998) FLC 92-799 followed.
Through failure to disclose his financial circumstances, there was an absence of informed consent, on the part of the wife, when agreeing to the consent orders and, consequently, there may have been “suppression of evidence.” Therefore on this ground also the trial Judge erred in summarily dismissing the application. Harris v Caladine (1991) FLC 92-217 and Suiker and Suiker (1993) FLC 92-436 followed.
The trial Judge was correct in concluding that the particulars did not disclose a case of “duress,” even in the equitable sense.
REPORTABLE
INTRODUCTION
This is an Application for Leave to Appeal (LA5 of 1999) and, if leave is granted, an Appeal (NA15 of 1999) against the declaration made by Jerrard J on 30 April 1999, namely:
“(1)That the particulars supplied in support of the application filed by the WIFE on 27 February 1998 could not as a matter of law constitute either duress or suppression of evidence or any other circumstance within the meaning of section 79A(1)(a) of the Family Law Act.”
The wife has also appealed (NA38 of 1999) against the following Orders made by His Honour on 5 August 1999:
“(1)That the application for leave to amend the Particulars be dismissed.
(2)That the application of the WIFE filed 27 February 1998 be struck out.
(3)That Order (2) hereof be stayed until the judgment and further order of the Full Court of the Family Court.
(4)That the WIFE pay the costs of the HUSBAND of and incidental to her application filed 27 February 1998, such costs to be agreed or taxed.
(5)That Order (4) hereof be stayed pending the outcome of the appeal in this matter.
(6)That pursuant to Order 38 Rule 26 of the Family Law Rules I certify that it was reasonable for each party to brief Counsel, including Senior and Junior Counsel, to appear for that party to defend and prosecute the applications in these proceedings."
The Application for Leave to Appeal (LA5 of 1999) and the Appeal against the Declaration made on 30 April 1999 (NA15 of 1999) were argued together before us.
The second Appeal (NA38 of 1999) was argued before us on the same day as the Application for Leave to Appeal and Appeal NA15 of 1999.
Orders 2 and 4 made 5 August 1999 were stayed pending the outcome of the Appeal.
Order 2 made 5 August 1999 amounted to summary dismissal of the Application of the wife filed 27 February 1998 (“the Application”) whereby she sought orders in the following terms:
“1.That the Consent Order made in these proceedings on 17 February 1997 relating to property settlement being Order 1.2 be varied pursuant to the provisions of s79A(1)(a) of the Family Law Act.
2.That the said Order be varied so that after taking in account of the net assets and financial resources of the parties the wife receive such property as is equal to 40% of the net value thereof.
3.That the husband pay the wife’s costs of those proceedings.
4.Such further or other order as the Court may deem just.”
Whilst the Application did not specify which ground or grounds in s79A(1)(a) the wife was relying upon, it emerged from the particulars as subsequently furnished by her that she relied upon “duress”, “suppression of evidence” and/or “any other circumstance” as the bases upon which she had suffered a miscarriage of justice when Orders for property settlement were made by consent on 17 February 1997 (“the Consent Orders”).
RELEVANT HISTORY
As appears from the Application it is alleged that the parties commenced to cohabit in November 1980 and subsequently married on 28 February 1982.
It is further alleged that the respondent (who for convenience shall be referred to as “the husband”) was born on 12 July 1914 whilst the wife was born on 7 June 1936.
It is not clear when it is alleged by either party that they separated, as neither the Application nor the particulars or amended particulars furnished by the wife to which subsequent reference will be made contains any such allegation. It is alleged by her that “the marriage and the relationship was a long one having a duration of in excess of 16 years”.[1]
[1] AB vol. 1, p. 45
On 21 January 1997 an application for orders for property settlement was filed on behalf of the wife. Minutes of Proposed Consent Orders for property settlement were signed by the parties on 4 February 1997 and Consent Orders were made on 17 February 1997.
The 5th March 1997 was the date set down for a directions hearing of that Application of the wife for property settlement. We have inferred that as a consequence of the Consent Orders this date was vacated in accordance with the usual practice.
On 27 February 1998 the Application was filed. Directions were apparently made on that date for the Particulars to be furnished and they were so furnished.
On 9 April 1998 a Response was filed on behalf of the husband in which an order was sought that the Application be dismissed.
On 10 September 1998 an Application was filed on behalf of the husband seeking the following orders:
“1.That the application filed herein by the wife on 27 February 1998 be struck out/or dismissed.
2.That the court declare that the facts pleaded in the wife’s case in the document headed “Particulars of the wife’s claim” do not, as a matter of law, amount to duress or suppression of evidence or any other circumstance as required by Section 79A(1)(a) of the Family Law Act.
3.Further, or in the alternative, that in the event that this matter proceeds to trial, the wife be required to rely only upon those facts in the “Particulars of the wife’s claim” which the Court deems relevant to duress, suppression of evidence and/or any other circumstances.
4.That the wife pay the husband’s costs of and incidental to these proceedings.”
On 2 December amended particulars were provided (“the Amended Particulars”).
On 5 March 1999 the first hearing took place before Jerrard J which proceeded by way of submissions both written and oral.
On 30 April 1999 the Declaration was made.
On 21 May 1999 the wife filed an Application to further amend the Amended Particulars.
On 28 May 1999 a Response was filed on behalf of the husband in which an order was sought that the Application of the wife filed 21 May 1999 be dismissed.
On 31 May 1999 an Application for Leave to Appeal from the Declaration was filed.
On 5 August 1999 the second hearing took place before Jerrard J and it proceeded by way of written and oral submissions. On that date the Orders were made.
THE TRIAL JUDGE’S JUDGMENT AND DECLARATION MADE 30 APRIL 1999
Two affidavits contained in the Appeal Book, being those of the husband declared on 18 September 1998 and Christopher Stride sworn 18 November 1998 respectively, were not read by us as we were informed by counsel for the wife that those affidavits were not before the trial Judge.[2] In addition, it was submitted on behalf of the wife that we should add to the Appeal Book copies of the Consent Orders and the Application. Both those courses of action were agreed to on behalf of the husband and were followed.
[2] Appellant wife’s Outline of Submissions filed 25.10.1999, para. 1.3
The Application before the trial Judge was that of the husband filed 10 September 1998 in which he sought orders and a declaration as set forth in paragraph 15 hereof:
The trial Judge concluded:
“The declaration sought is really a ruling which the applicant seeks as the basis for making the striking out order.”
It is clear from the manner in which the proceedings were conducted before the trial Judge that the husband was seeking an order for summary dismissal of the Application rather than a mere striking out of the Application.[3] The submissions on behalf of each of the parties do not contend otherwise.
[3] Bigg v Suzi (1998) FLC 92-799 at 84,973-84,974
The proceedings for summary dismissal and the declaration sought were based on the Amended Particulars. The trial Judge was informed of additional matters by consent.[4] They were that on 21 January 1997 the wife made an application for orders for property settlement and a further directions hearing had been set down for 5 March 1997 and that the Particulars were furnished by the wife as a result of directions upon the filing of the Application.
[4] AB vol. 1, pp 14-15
The trial Judge set out the Amended Particulars in detail.[5] The effect of the Amended Particulars was then summarised by the trial Judge as follows:
“These amended particulars filed appeared to plead a mixture of that which is usually understood as particulars, general assertions (some of limited apparent relevance) and some matters of evidence. They focus upon the wife’s ignorance of the husband’s actual financial position, his knowledge of that ignorance occasioned by his treatment of her, those features of his conduct and the other matters in her life then causing her stress and distress, the financial uncertainty his death, serious ill-health or departure overseas would occasioned her, and the difference between that which he received and what might have been a just, equitable and appropriate outcome.”
[5] AB vol. 1, pp 15-18
After referring to some self-contraditory assertions contained in the Amended Particulars and matters arising from them in terms of the negotiations that ultimately took place between the parties, the trial Judge noted that the Application of the wife seeks to vary a consent order that she be paid $2 million and that the remaining Consent Orders remain operative.
The trial Judge then proceeded to emphasise what he regarded as “a most important matter”, namely, “what is not contended” in the Amended Particulars. In that regard, he noted “it is not asserted that” in relation to the wife:
“1.She was unaware that the husband was selling or had sold the Alamander Hospital at the time she agreed to the Consent Orders, or
2.That she did not know either the gross sale price or net funds received or expected.
3.That she would not have entered into the Consent Orders if she had known of any of those matters.
4.That she has received less than 25% to 35% of the net assets or financial resources of the parties.
5.Nor is any actual figure put forward which it is said would have been appropriate, just and equitable for her to receive.”
The trial Judge further stated that:
“The wife’s position advanced in the Amended Particulars is that she simply does not know that figure or what a 25% to 35% division of the net assets would be. This ignorance is because of the matters that are described in that document.”
The trial Judge then proceeded to state the principles that apply and the authorities for them in proceedings in which summary dismissal is sought.
Having noted the powers contained in ss79 and 79A of the Act and that the relevant consent order had been made pursuant to s79, the trial Judge concluded:
“It follows, that at that time, the wife invited the Court to accept without further enquiry that order was appropriate, just and equitable in all the circumstances.”
The Amended Particulars furnished on behalf of the wife made it clear that for the purpose of the Application she was contending that there had been a miscarriage of justice pursuant to s79A(1)(a) of the Act due to one or more of three grounds contained in that Section being “duress”, “suppression of evidence”, and “any other circumstance”.[6] The trial Judge proceeded to consider each of those grounds.
[6] AB vol. 1, pp 72-78
So far as the ground of “duress” was concerned the trial Judge noted the lack of a submission on behalf of the wife that duress as interpreted in Koki,[7] being “the compulsion of a person by physical or mental harm”, applied so far as the wife was concerned. Rather, it was contended on behalf of the wife that “duress” in equity applied, as interpreted in Barton and Armstrong,[8] that is, “economic duress containing the twin elements of pressure amounting to compulsion of the will of the victim and the illegitimacy of the pressure exerted, could be established by those particulars”.
[7] Koki (1991) FLC 91-078
[8] Barton and Armstrong (1973) 2 NSWLR 589 at 631 and 634
The trial Judge concluded that neither the common law concept of duress nor duress as interpreted in Equity could be established by the Amended Particulars. He concluded that the wife had the choice of accepting the husband’s offer or “running the uncertain and unquantifiable risk of getting less”. The trial Judge also found that the Amended Particulars by implication demonstrated that the wife received more than the husband originally offered.
The trial Judge when considering the ground “suppression of evidence” commenced by setting forth the interpretation of that phrase provided by the Full Court in Taylor v Taylor.[9]
[9] Taylor v Taylor (1977-8) 3 FamLR 11,220 at 11,233
The trial Judge then referred to the submission made on behalf of the wife that the last mentioned Ground was made out “by virtue of the unsatisfied demands by the wife’s solicitors that the husband disclose his assets, liabilities and financial resources and the wife’s consequent lack of understanding of his financial position when entering into the agreement”. The trial Judge then concluded that the Amended Particulars did not establish that the wife’s ignorance of the husband’s financial position was brought about by “suppression of evidence” consistent with the interpretation given by authority, but rather due to the manner in which the husband “had conducted his affairs and the parties their marriage”. In that regard, the trial Judge noted that the husband was not required to file either his Response or statement of his financial circumstances in accordance with the Rules until late February 1997 and that there was no issue of suppression of evidence until the husband was obliged to disclose his financial circumstances and failed to do so. In addition, the trial Judge noted that “there is no suggestion of any other variety of suppression of evidence; that is, the act of concealment from the wife of a property of his or enterprise he was engaged in”.
The trial Judge then proceeded with his consideration of whether or not there should be summary dismissal of the Application that was based on the Consent Orders having been brought about by a miscarriage of justice due to “any other circumstance”.
The thrust of the submissions made on behalf of the wife was that the husband was pressuring her knowing her to be under stress mainly caused by him whilst refusing to volunteer information implicitly in relation to his financial circumstances.
The trial Judge then considered the relevant principles and authorities that gave rise to them. In the course of doing so, he stated that the action and inaction of a party during a course of negotiation and ongoing influence operating thereby upon the other party could “in an appropriate case satisfy the description of a matter and circumstance which had an influence on the outcome of the litigation, and hence the integrity of the judicial process”. In addition, the trial Judge also considered the question of disclosure of each party’s financial position to the other for the purpose of providing informed consent to orders ultimately made.
After considering the Full Court’s judgment in Morrison[10], the trial Judge concluded that whilst “ordinarily, a failure to comply with a basic duty of disclosure would amount to a miscarriage of justice”, Morrison also was authority for the proposition:
“… that it would only be in cases where the absence of full and frank disclosure had led to the Court making either in contested proceedings or by consent, an order which was substantially different from the order which it might have made if such disclosure had taken place, that a case for setting aside could possibly be made out.”
[10] Morrison and Morrison (1995) FLC 92-573 at 81,670-2
After considering submissions by counsel for the parties, His Honour concluded that this Ground could only be established by the wife:
“… by virtue of her non-informed consent where evidence allowed the submission that the information the husband could have then provided as to his asset position would have made the agreed result so entirely outside the ambit of what was just and equitable that that result could only be achieved by the husband when the wife, to his knowledge, was acting through ignorance”.
His Honour noted that counsel for the wife did not submit that such a proposition, if applied to the case, would show that the wife had some prospect of success. He noted that the Amended Particulars “do not contain any claim that the husband’s actual asset position if then disclosed would have resulted in a different agreement”. His Honour concluded that the absence of such a contention revealed the wife’s case “as a fishing exercise” and to that extent differed from the authorities referred to in submissions. The trial Judge concluded that “the wife’s essential contention is that she simply does not know whether she did badly or well in the result. It follows that the Court would not either if she established every matter referred to in her Particulars and no more”.
The trial Judge noted that the Particulars which had been amended once were defended by senior counsel and no further application made for leave to amend them again. However, as such an application may be made, His Honour refused to dismiss the Application of the wife without hearing whether or not such an application would be made. He then proceeded to make the Declaration sought.
THE FIRST APPEAL - PRINCIPLES FOR SUMMARY DISMISSAL
OF THE APPLICATION
The gravaman of the Appeal is that the trial Judge erred in the exercise of the discretionary power to summarily dismiss the Application. It is well established that the following principles apply as were recently reviewed and stated in Bigg v Suzi[11]:
(a)The power for summary dismissal is a discretionary one.
(b)Relief “is rarely and sparingly provided”.
(c)The parties seeking summary dismissal must show that the application is “doomed to fail” or as has been otherwise described “that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious”.
(d)A weak case or one that is unlikely to succeed is not “sufficient to warrant termination”.
(e)“If there is a serious legal question to be determined, it should ordinarily be determined at a trial.”
(f)“If notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a Court will ordinarily allow that party to reframe its pleadings.”
[11] Ibid at 84,974-84,975
THE APPEALS
The first Appeal
In the event that the wife is granted leave to appeal she relies upon the following grounds of appeal:
“1.The Trial Judge erred in law in that he misapplied the principles in relation to applications to strike out.
2.That the Trial Judge erred in finding that the Wife’s particulars did not assert that she got less than a just sum and in finding that was ‘fatal’ in that:-
(a)The particulars (1.3.5, 1.3.6 and 1.3.6.13) in combination reveal (on the material then available to the Wife) that she ought to have received not less than the range of $4.5 million to $6.3 million which was substantially more than the $2 million she received.
(b)In the written submissions placed before the Trial Judge (in paragraph 3.4(c)), it was submitted, on the particulars, that the Wife had consented to orders ‘substantially less than her entitlement (probably much less than 50% of her entitlement)’.
3.The Trial Judge erred in finding, in effect, that in cases where there had been an absence of full and frank disclosure (here, there was a refusal to provide any financial disclosure) an application under Section 79A will be struck out as ‘doomed to fail’ unless the applicant is able to establish that the order made was ‘substantially different to’ or ‘entirely outside the ambit of’ the order which ought to have been made.
4.The Trial Judge erred in finding that the conduct of the Husband, as particularised, was such that the Wife’s application pursuant to Section 79A based on suppression of evidence was doomed to fail in that:-
(a)The test applied by the Trial Judge as to what constitutes suppression of evidence was irrelevant to a proper consideration of whether a miscarriage of justice had occurred pursuant to Section 79A;
(b)That, to the extent that the obligation to provide full and frank disclosure is a proper consideration in an application pursuant to Section 79A, such is not dictated or determined by time limits set by the Rules;
(c)The Trial Judge ought to have found that in negotiations in respect of property settlement proceedings, each of the parties is obliged to make full and frank disclosure of their respective financial positions and failure or refusal so to do constitutes ‘suppression of evidence’.
5.The Trial Judge was wrong in finding that the conduct of the Husband, as particularised, was such that the Wife’s application pursuant to Section 79A based on duress was doomed to fail in that:-
(a)That particulars provided established, to the extent that the Wife could be reasonably required to do at this stage of the proceedings, that there was evidence that the Wife had been subject to illegitimate means of persuasion;
(b)It was wrong to conclude that the Wife got more than the Husband’s initial offer and even if that were a finding that was open, it was wrong to conclude that because the Wife got more than the initial offer, that demonstrated the claim based on duress was doomed to fail.
6.The Trial Judge was wrong in finding that the conduct of the Husband and the other circumstances, as particularised, were such that the Wife’s application pursuant to Section 79A based on ‘any other circumstance’ as defined by the authorities to which he referred, was doomed to fail.
7.That the Trial Judge was wrong to find that the conduct of the Husband was such that the Wife’s application was, on the material of which she was aware, at this stage of the proceedings, doomed to fail in that:-
(a)At this stage of the application, having regard to the Husband’s prior failure to comply with his duty to disclose his financial position, the fact that the Wife was and remains ignorant of his financial position and the Husband’s knowledge of such ignorance, it is inappropriate in the application of Section 79A and the principles relating to strike out, to require an application to set out his or her case with precision;
(b)The Trial Judge was wrong to conclude that the Wife’s application was nothing more than a ‘fishing expedition’ in that what the Wife sought was nothing more than that which the Husband had an obligation to provide and despite requests had refused to provide;
(c)The Trial Judge was wrong to find that the Wife’s ignorance of the Husband’s financial circumstances (being the result of the Husband’s behaviour in the earlier proceedings) denied the Wife in these proceedings, the ability to obtain that which he had failed to provide.”
The second Appeal
In relation to this Appeal the wife relies upon the following grounds of appeal:
“1.At the time of settling these grounds, the Trial Judge’s Reasons for Judgment are not available and it may be necessary to amend these grounds on receipt thereof.
2.That the Trial Judge erred in law in finding that the further amendments to the particulars relied upon by the wife to establish that she had a claim pursuant to S.79A, ought not be allowed as such did not advance the wife’s claim based on the particulars, the subject of the Trial Judge’s declaration made 30 April 1999.
3.That, notwithstanding the grounds relied upon in Appeal No NA15 of 1999, that the Trial Judge erred in finding that the original particulars did not establish that the wife had a reasonable cause of action pursuant to S.79A and/or that it was ‘doomed to fail’, the Trial Judge erred on the wife’s application to amend in not finding that the wife had a reasonable cause of action.
4.That the Trial Judge erred in finding that it was necessary for the wife, to succeed, to assert that had she known the husband’s actual asset position, such would have resulted in a different agreement or order in that:-
(a)The husband, despite requests had failed and refused to disclose his actual asset position;
(b)The wife’s ability to know the husband’s actual position was limited by the husband’s failure to disclose, save that she had discovered the net sale proceeds from the Allamander Hospital were $18M and that he had other property of unknown value;
(c)Such a finding ignores the obligation upon the husband to provide full and frank disclosure of his actual asset position irrespective of rules of Court or practice directions, such that the wife would have a basis upon which to resolve the property settlement issue by agreement;
(d)Such a finding ignores that the result of the husband’s deliberate refusal to disclose his actual asset position was, that the wife’s consent was not the requisite informed consent;
(e)Such a finding, if correct, would necessarily and unjustly protect a party who refused to disclose his or her actual asset position and obtained the other party’s uninformed consent from any subsequent application pursuant to S.79A unless and until that other party was able to independently identify the true quantum of the actual asset position.”
THE FIRST APPEAL
Ground 1
It is contended that the trial Judge “misapplied the principles in relation to applications to strike out”. Submissions made on behalf of the wife as well as on behalf of the husband in relation to those principles were made in conjunction with the arguments advanced in relation to the remaining grounds in the Notice of Appeal. Those grounds contended that the trial Judge had erred in summarily dismissing the Application on each of the grounds relied upon by the wife pursuant to s79A(1)(a), namely, that the relevant Consent Order should be set aside as the wife had suffered a miscarriage of justice by reason of duress, suppression of evidence or any other circumstance.
Grounds 2, 3, 6 and 7
Grounds 2, 3, 6 and 7 considered in conjunction with the general ground in Ground 1 relate to one of the principal submissions that the trial Judge erred in summarily dismissing the Application insofar as it relied on the ground that there had been a miscarriage of justice due to “any other circumstance”.
We will proceed to consider the submissions made in support of those grounds before considering grounds 4 and 5 which respectively contend that the trial Judge had erred in dismissing the Application which relied on the grounds that the wife had suffered a miscarriage of justice at the time that the Consent Order was made due to “suppression of evidence” and “duress”.
The Ground of “any other circumstance” appearing in s79A(1)(a) for the purpose of establishing a miscarriage of justice pursuant to that Section has been the subject of interpretation in a number of Full Court decisions. In Clifton and Stuart[12] the Full Court approved and followed its earlier decision in Gebert and Gebert[13]:
“We consider that the words ‘any other circumstance’ appearing in s79A(1)(a) whilst not to be read ejusdem generis with fraud duress, suppression of evidence or the giving of false evidence, are intended to cover other situations where, for one reason or another, a miscarriage of justice has occurred.[14]. The important matter that must be established for an application under this part of the Section to succeed is that there has been a miscarriage of justice. It is, we think, clear as counsel for the appellant argued that the words ‘miscarriage of justice’ should not be given a restrictive meaning, particularly when coupled with the words ‘any other circumstance’ and that justice means justice according to law.[15]”
[12] Clifton and Stuart (1991) FLC 92-194 at 78,336-7
[13] Gebert and Gebert (1990) FLC 92-137 at 77,935
[14] See McKenna v McKenna (1971) 18 FLR 15 at p. 18; Holland and Holland (1982) FLC 91-243 at 77,341 (citation inserted)
[15] See Cokl and Cokl (1981) FLC 91-078 at 76,557
The Full Court proceeded to emphasise by way of summary:
“The passage is important in that it stresses that the words ‘any other circumstance’ are not of unlimited scope but governed by the words ‘miscarriage of justce’. It also elucidates the proposition that ‘justice means justice according to law’, i.e. it relates to the integrity of the judicial process.”
The above principles were subsequently followed in Suiker.[16]
[16] Suiker and Suiker (1993) FLC 92-436 at 80,470-1
The Application is not a pleading. The Family Law Rules which provided for pleadings were abolished in 1995. We agree with the trial Judge’s summary that the effect of the Amended Particulars has been “a mixture of that which is usually understood as particulars, general assertions (some of limited apparent relevance)” and “these particulars contained some apparently self-contradictory assertions”.[17]
[17] AB vol. 1, p. 19
The Amended Particulars in relation to the relevant ground for establishment of a miscarriage of justice relied upon all of the Particulars otherwise provided in support of the grounds of duress and suppression of evidence as well as other particulars.[18]
[18] AB vol. 1, pp 72-8
The trial Judge noted that the submissions for the wife in relation to the ground of “any other circumstance” focussed on “the pressure the husband was exerting on the wife while knowing her to be under stress (mostly caused by him) whilst refusing to volunteer the facts he knew”. The “stress” referred to reflected a combination of the allegations of the husband’s depressive state, attempted suicide, threats to leave permanently for overseas, and to provide the bulk of his funds to an overseas charity, the wife’s need to use medication to ease her own emotional difficulties and the manner in which he negotiated directly with her. The trial Judge’s reference to the husband “refusing to volunteer the facts he knew” was a reference to the contention in the Amended Particulars that the husband failed to provide a Statement of his Financial Circumstances in Form 17 or to otherwise disclose his assets, liabilities and financial resources “despite numerous demands by the wife’s solicitors”.
Whether or not there is a requirement or obligation for a party or parties to disclose their financial circumstances for the purpose of negotiations to settle financial issues between them leading to orders being made by consent, has been an issue which was considered by the Full Court in Suiker and Suiker[19] when the following was stated:
“Under the Family Law Act 1975 the need for a resolution of disputes by negotiation and the consequent making of consent orders or the approval of maintenance agreements is an essential part of the legislation and the Rules. Relevant provisions in force at the time included ss79(9) and 87 of the Family Law Act 1975 and O24 and O31 r8 of the Family Law Rules. In our opinion, the necessity for full and frank disclosure of financial matters to the Court and to the other party are basic to the process of the Court and the fundamental aims of the financial legislation contained in s79 of the Family Law Act 1975.” {emphasis added}
[19] Suiker, op cit 92-436 at 80,471
In Suiker the Full Court proceeded to emphasise the need for informed consent by also stating:
“The consent to the order is itself part of the judicial process on which the Court process relies. If that consent is based on misleading or inadequate information, then there may be, in our opinion, a miscarriage of justice either by reason of the ‘suppression of evidence’ or by reason of ‘any other circumstance’.” {emphasis added}
In a number of cases a finding of “inadequate information” led to the conclusion that there had not been an informed consent and consequently a miscarriage of justice occurred on the basis of “any other circumstance”.[20]
[20] See Suiker, op cit; Morrison and Morrison (1995) FLC 92-573
It would be an irony which would lead to the law being held in contempt if partial information of financial circumstances, regarded as being “inadequate”, could in a given case amount to “any other circumstance” for the purpose of establishing a miscarriage of justice, yet the failure to provide any information of a party’s financial circumstances could not lead to the same conclusion where, in each case, the party seeking the relevant information was not as fully informed on material matters as the party from whom the information was sought.
The trial Judge in the course of giving his reasons for judgment in respect of the ground of “suppression of evidence” referred to the obligations that arise under the Family Law Rules in relation to a party filing a statement of his/her financial circumstances. That particular matter has relevance in relation to the grounds of “any other circumstance” and “suppression of evidence” that appear in s79A(1)(a). The relevance relates to the provision of essential financial information which is peculiarly within the knowledge of one party, during not only the course of negotiations to which Suiker refers, but also at the time of making the Consent Order to enable the independent exercise of judicial power on an informed basis for the purpose of making those Orders pursuant to s79 of the Act. So far as the reasonable provision of financial information in the course of negotiations which lead to the making of consent orders and the requirements of the relevant Rules, we consider that the remarks of Smithers J in Briese and Briese[21] are apposite, namely:
“The Regulations and now the Rules, are not intended as a vehicle to mask the true position, or as an aid to confusion, complexity or uncertainty. They are not intended as the outer limits of the obligation of financial disclosure but as providing avenues towards disclosure. The need for each party to understand the financial position of the other party is at the very heart of cases concerning property and maintenance. Unless each party adopts a positive approach in this regard, delays will ensue with the consequent escalation of legal, accounting and other expenses, always assuming that a party has the strength to continue the struggle for information and understanding.”
[21] Briese and Briese (1986) FLC 91-713 at 75,180
We believe we can take judicial notice of contemporary attitudes in society, including that parties engaged in litigation relating to family law issues should be encouraged to settle their disputes so far as it is reasonable to do so. In that regard, this Court has provided counselling and conciliation conferences since its inception. Mediation is also encouraged and Rules may soon come into operation in relation to arbitration. At the heart of all alternative avenues for dispute resolution of financial issues is a full and frank disclosure of relevant information to ensure ultimate and lasting agreement, so far as it is possible to do so.
The absence of disclosure by the husband of financial circumstances, the details of which were peculiarly within his knowledge, may indicate that the wife has a case to advance on the ground of miscarriage of justice due to “any other circumstance”. The fact that the Amended Particulars may be less than persuasive in that regard and demonstrate only a weak case is not sufficient to conclude that the Application “is doomed to failure” in the context of an Application for Summary Dismissal.
This particular ground also raises the issue of the integrity of the judicial process as explained in Clifton and Stuart[22]. In Harris v Caladine[23], the High Court considered the judicial approach that should be taken to the making of consent orders pursuant to s79 of the Act. In their joint judgment, Mason CJ and Deane J, when referring to a consent order by a Deputy Registrar, held that the Court “was required to have regard to the matters mentioned in s79(4), though, in the case of the Deputy Registrar, as a consent order was sought, comparatively little was required to satisfy him on that score”.[24] Brennan J (as he then was) raised the question of whether, in the context of a consent order “is the Court bound to take into account the matters prescribed by s79(4)?”. He concluded that an analogy can be drawn with the approval of a maintenance agreement pursuant to s87 of the Act. So far as that approval is concerned, he held that there is a public interest in ensuring that its provisions are “proper”. So far as consent orders pursuant to s79 are concerned he held:
“The same reason equally calls for the exercise of a discretion in the making of a consent order with respect to financial matters when the parties have reached agreement on their respective interests in their property. To ascertain whether a provision is ‘proper’ it is necessary to take account of the factors listed in s79(4). The provisions of s87 thus suggests that the direction given to the Court by s79(4) to have regard to the factors therein mentioned applies to the making of consent orders as well as to the making of orders not by consent.”
[22] Clifton and Stuart, ibid
[23] Harris v Caladine (1991) FLC 92-217
[24] Harris, ibid, 78,470
His Honour also stated:
“It does not follow that when a consent order is sought in a s79 application, it is necessary to conduct an enquiry into each of those factors. A Court may be satisfied that a provision is proper by reference not only to the material before the Court relating to the factors mentioned in s79(4) but by reference to the advice available to the respective parties and the consent which they respectively give to the making of the order. In the majority of cases, once it appears that the parties are conscious of the factors mentioned in paragraphs (a) to (f) and have taken them into account before consenting, the provisions ‘with respect to financial matters proposed for incorporation in the consent order will be seen to be ‘proper’.” {emphasis added}
Brennan J concluded by stating:
“Nevertheless, when an application for a consent order in a s79(1) matter is made there is a discretion to be exercised with reference to the proprietary of the provisions with respect to financial matters. The making of a consent order in a s79(1) matter is not automatic.”[25]
[25] Harris, ibid, 78,474
The trial Judge referred to the dicta of Dawson J.[26] that the approach that may be taken by a Court or a Registrar for the making of a consent order is that the Court or Registrar “is adequately informed”. Toohey J in his judgment also emphasised that a proposed consent order pursuant to the provisions of s79 does not enable the Court to ignore the provisions of s79(2), namely, that an order should not be made “unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Toohey J further held:
“The requirement that the order be ‘just and equitable’ is inconsistent with an arbitrary exercise of discretion.”
[26] AB vol. 1, p. 28
His Honour considered that whilst the matters referred to in s79(4) must be taken into account “it is not incumbent on the Court, in that circumstance, to make its own enquiry into those matters”. Quite clearly, Toohey J was emphasising that a judicial officer exercising a judicial function does so independently and not by arbitrary means. It requires that the judicial officer be satisfied that a proposed order is “just and equitable”. It follows that adequate information must be put before the Court for that purpose.
The husband did not file a statement of his financial circumstances prior to, or at the time, that the consent orders were made. It is not clear whether the wife had done so. The consent orders were signed by a Registrar. Again it is not clear whether those Orders were made in Chambers or in open Court or what material, if any, there was before the Court other than the Application for property settlement. We do not have before us a transcript of the submissions, if any, that were made prior to the Consent Orders being made. As the High Court has emphasised in Harris v Caladine,[27] the making of a consent order is not an automatic function or an arbitrary one.
[27] Harris, ibid
We consider that the trial Judge erred in the Declaration made by him and the subsequent Order summarily dismissing the Application on the ground advanced by the wife that she had suffered a miscarriage of justice due to “any other circumstance”. The husband did not make a disclosure at all of his financial circumstances either during the course of negotiations between the parties or at the time that the Consent Orders were made. In those circumstances, it may be that neither the wife nor the Court was adequately informed in relation to the husband’s financial circumstances, apart from other matters that arise under s79(4). The trial Judge erred in not so finding in accordance with the principles to which we have referred. Accordingly, it was not open to the trial Judge to conclude that the Application was “doomed to fail”.
Ground 4
By this Ground, the wife submits that the trial Judge erred in summarily dismissing the Application which had been based on “suppression of evidence” pursuant to s79(1)(a). It is contended on behalf of the wife that:
(a)The evidence that was suppressed by the husband was the sworn detail of his financial circumstances.
(b)The husband had a duty to disclose his financial circumstances to the wife whether by way of a statement of financial circumstances in accordance with Form 17 or otherwise.
(c)The husband had a duty to disclose his financial circumstances to the Court in a sworn Form 17.
The Application instituted proceedings “with respect to financial matters” and accordingly Order 17 Rule 1(1) applied. Order 17 Rule 2 requires an applicant or a respondent who files a Response to file together with the Application or Response as the case may be “a Financial Statement in accordance with Form 17”. Order 17 Rule 3 requires the person who files a financial statement to make “a full and frank disclosure of the person’s financial circumstances”. It is clear that the husband was a respondent to the Application. At the date of the Consent Orders he had not filed a Response. As the trial Judge observed, the husband was not required to file a Response, and therefore his Statement of Financial Circumstances, until late February 1997 which was “at least 7 days” before the directions hearing of the Application set down for 5 March 1997. Consequently, that minimum period for the husband to file his Statement of Financial Circumstances did not arise until subsequent to the date of the Consent Orders. Order 17 Rule 1(2) provides that:
“Unless the Court, or Registrar otherwise orders, this order does not apply to:
(a)applications for interim or procedural orders; or
(b)applications under Order 11 Division 3 or Order 14 Division 1.”
Neither paragraph (a) nor the reference in paragraph (b) to Order 11 Division 3 is of relevance. Order 14 Division 1 applies to “consent orders”. Order 14 Rule 2 makes provision for a consent order to be sought by an application in accordance with Form 12A. Pursuant to Order 14 Rule 3(5) “if an applicant seeks financial orders, the applicant must complete Part F of the application”. Part F of Form 12A makes provision for sworn detail of the applicant’s financial circumstances.
A respondent, such as the husband, is required pursuant to Order 14 Rule 3(2) to complete Part K of the application, that is, Form 12A. That is a statement of independent legal advice which the respondent has received. It presupposes that the respondent has completed an affidavit which, inter alia, implicitly acknowledges that his/her property and financial resources have been fully described in the application (Form 12A). The Appeal Book does not contain a copy of an application in accordance with Form 12A, nor was it submitted that such an application had been completed by both or either of the parties and filed prior to or at the time of the Consent Orders having been made. It is clear that the initiating Application was not in that form, it being an Application by the wife only, and therefore (presumably) a Form 7 (see Order 8 Rule 3(1)).
The expression “suppression of evidence” as referred to in s79A(1)(a) of the Act was interpreted by the Full Court in Taylor.[28] The trial Judge referred to that interpretation which was as follows:
“It must go beyond the mere giving of one-sided evidence and amount to wilful concealment of matters which it is (the party’s) duty to put to the Court. Apart from that clear duty which (the party) owed to the Court (the party) was not bound to put the case for the other side.”
[28] Taylor and Taylor (1977-8) 3 Fam LR 11,220 at 11,233
The trial Judge concluded that the husband was not obliged by the Family Law Rules to file a statement of his financial circumstances prior to or at the time of the Consent Orders. Consequently, he held that the issue of “suppression of evidence” did not arise. In addition, he noted that there was no suggestion of active concealment from the wife of “any property of his or enterprise he was engaged in”.
We respectfully agree with the trial Judge that the Family Law Rules did not require the husband to file a statement of his financial circumstances prior to or at the time that the Consent Orders were made. However, that is not the end of the matter. In Krebs and Krebs[29] in relation to undefended property settlement proceedings it was held:
“It is essential in a case of that sort that there be a full and frank disclosure by the applicant of all relevant facts and circumstances so as to enable a Court to make an order which is proper and just in the circumstances.”
[29] Krebs and Krebs (1976) FLC 90-117 at 75,533
To that extent that decision set out the substance, albeit in a different context of the High Court’s subsequent decision in Harris v Caladine[30]. In Suiker[31] the Court held:
“The consent to an order must be informed consent. The consent to the order is itself part of the judicial process on which the Court places reliance. If that consent is based on misleading or inadequate information, then there may be, in our opinion, a miscarriage of justice either by reason of the ‘suppression of evidence’ or by reason of ‘any other circumstance’.” {emphasis added}
[30] Harris, ibid
[31] Suiker, ibid at 80,471; followed in Morrison, ibid at 81,673
Having regard to the Amended Particulars it would seem that it was not merely that “inadequate information” was given, but no information at all was provided in relation to the husband’s financial circumstances. Consequently, there may have been “suppression of evidence” by the husband. For that reason we conclude that this ground of appeal has been established and that the trial Judge erred in dismissing the Application on a summary basis.
We make no comment as to whether the wife’s case is a strong or weak one, let alone whether the discretionary power pursuant to s79A(1) should be exercised in her favour, even if the Ground of suppression of evidence is established. They are issues for determination on the substantive hearing.
Ground 5
In dismissing the Application whereby the wife relied on the ground of “duress” the trial Judge noted that the wife, through her counsel, did not rely on common law duress, but rather the equitable concept whereby “the party has been subjected to an improper motive for action” and the need for “a plaintiff to show that some illegitimate means of persuasion had been used”.[32]
[32] Barton and Armstrong (1973) 2 NSWLR 589 at 631 and 634
As with the other grounds contained in s79A(1)(a), for an applicant to be successful it must be shown that the relevant circumstances existed at or before the time that the order was made. The trial Judge concluded that the Amended Particulars do not attract the application of the abovementioned principles. He concluded that the wife was confronted with the choice of accepting the husband’s offer “or running the uncertain and unquantifiable risk of getting less”. He further concluded that the Amended Particulars imply that the wife received more than the husband originally offered and consequently it would not be open to a Court to find duress on those Amended Particulars.
So far as the wife having received more than the husband originally offered, that conclusion was based on the contention by the wife that the husband stated “I have decided you can have $2 million” and he followed that with “This is my last and only offer to you”.[33]
[33] AB vol. 1, pp 73-4
The reference by the trial Judge to the wife having received more than what the husband originally offered related to his earlier finding that the Consent Orders provided additional financial benefits to the wife beyond the amount of $2 million and that as a consequence either the husband unilaterally increased his offer or the wife negotiated a better result.[34] However, our review of the Amended Particulars does not make it clear as to whether the offer of $2 million followed negotiations which produced the other financial benefits, or whether the reverse was the case.
[34] AB vol. 1, pp 19-20
As to whether or not the Amended Particulars demonstrate to any extent at all that the wife had been subjected “to an improper motive for action” or “some illegitimate means of persuasion”, the Amended Particulars contend that the husband suffered some emotional ill-health with an attempted suicide, had made threats of leaving for overseas and not returning, as well as leaving his money to an overseas charity and had refused the wife’s request to inspect his Will. In addition, there was the allegation of the “last and only offer” to which we have made earlier reference. The wife also contends that the husband had a dominating personality. The wife also had her own individual reason for wanting to enter into the Consent Orders as she contended that she “wished to complete the legal agreement before the husband died”.
It was not in dispute that the wife was legally represented throughout the period of negotiations and at the time when the Minutes of Consent Orders were signed and ultimately made. The wife does not contend that the instructions that she gave to her legal representatives from time to time were given as a result of any pressure from or on behalf of the husband that may be described as “some illegitimate means of persuasion” or “improper motive or action”.
In the circumstances of parties who are separated and carrying out negotiations against a background of proceedings having been instituted by one of them, negotiating positions are established which, of their very nature, produce some pressure. However, elevating that pressure to the level required to attract the requisite principles is another matter. In any event, it is not consistent with pressure of the type amounting to the equitable concept of “duress”. The wife nonetheless, felt sufficiently free of such pressure to institute property settlement proceedings against the husband.
For the reasons set forth in paragraphs 86 and 87 and the wife’s own independent reason in concluding negotiations, we conclude that the case put forward by the wife that she had suffered a miscarriage of justice due to “duress” was clearly untenable. Accordingly, this ground has not been established.
LEAVE TO APPEAL
As previously referred to, the wife sought leave to appeal from the Declaration. The principles for granting leave are well established, namely that an applicant’s leave to appeal must establish that there has been an error of principle and/or substantial injustice to the applicant.[35] We consider that leave to appeal should be granted in respect of the first Appeal as the trial Judge had erred in principle, with a consequent substantial injustice to the wife by the summary dismissal of the Application insofar as it is contended that the wife had suffered a miscarriage a justice on the grounds of “suppression of evidence” and “any other circumstance”.
[35] Rutherford and Rutherford (1991) FLC 92-255
THE SECOND APPEAL - JUDGMENT AND ORDERS MADE 5 AUGUST 1999
On 5 August 1999 the trial Judge made Orders dismissing the application made on behalf of the wife for leave to amend the Particulars previously amended; that the Application “be struck out” and that the wife pay the husband’s costs of and incidental to the Application. The last two Orders were stayed pending the Order of this Court.
In his “Written Outline of Submissions”, Senior Counsel for the wife submitted that should we conclude that the trial Judge erred in making the Declaration and that he should have dismissed the Application of the husband for summary dismissal, then it was not sought to argue the second Appeal, save to set aside the Orders that were made and to make an order in relation to costs. That submission was not opposed by senior counsel for the husband. Accordingly, that is the procedure we will adopt as it is the proper one to be followed.
Application of the wife filed 21 May 1999
By this Application an order was sought by the wife that she be granted leave to amend the Amended Particulars. Order 1 made on 5 August 1999 dismissed that application. We propose to set aside that Order in accordance with the submissions made on behalf of the wife and not opposed by counsel for the husband. We will remit that Application for further hearing.
COSTS
At the completion of the hearing, we heard submissions relating to the costs of the leave application and both Appeals. Counsel for the wife submitted that an order for costs should be made in favour of the wife in relation to her Application for Leave to Appeal and both Appeals should leave be granted and the first Appeal allowed.
Senior Counsel for the husband submitted that in the event that the wife succeeded with her Application for Leave to Appeal in the first Appeal then he did not seek to be heard in relation to an order for costs in her favour but sought costs in favour of the husband in respect of the second Appeal due to the alleged defects in the Amended Particulars.
We consider that as the wife was granted leave to appeal and was substantially successful in the first Appeal an order for costs should be made in her favour. The second Appeal was not pressed by counsel for the wife in the event that the wife was successful in relation to the first Appeal other than for the purpose of setting aside the substantive Orders. In those circumstances we do not propose to make any order for costs in relation to the second Appeal.
ORDERS
The following Orders are made:
1.That Leave to Appeal in proceedings number LA5 of 1999 is granted.
2.That Appeal No. NA15 of 1999 is allowed.
3.That the Declaration made 30 April 1999 is set aside.
4.That Appeal No. NA38 of 1999 is allowed.
5.That Orders numbered 1, 2 and 4 made 5 August 1999 are set aside.
6.That the Application of the wife filed 21 May 1999 is remitted for re-hearing by a single Judge.
7.That the husband pay the wife’s costs of her Application for Leave to Appeal No. LA5 of 1999 and of the Appeal No. NA15 of 1999 as agreed or otherwise as taxed.
I certify that the preceding 96 paragraphs
are a true copy of the reasons for judgment
delivered by this Honourable Full Court
……………………………..
Associate
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