POLIK & POLIK
[2012] FamCA 335
•10 May 2012
FAMILY COURT OF AUSTRALIA
| POLIK & POLIK | [2012] FamCA 335 |
| FAMILY LAW – PROPERTY – Application by wife for summary dismissal of s 79 proceedings commenced by husband – Parties are young, have young children and have not separated – Unusual circumstances – Whether husband’s proceedings on a summary dismissal application can be regarded as having no reasonable likelihood of success – Jurisdiction – Exercise of discretion – Jurisdiction and exercise of s 79 discretion cannot be split – Independently of that circumstance and despite unusual circumstances it is not possible at this stage to conclude that the husband’s case has no reasonable likelihood of success – Application for summary dismissal under Rule 10.12(d) dismissed FAMILY LAW – PROPERTY – Application by wife for summary dismissal of s 79 proceedings commenced by husband – Whether husband’s proceedings an abuse of process – Consideration given to nature of the matters said to amount to an abuse of process – Allegation a serious matter requiring factual determination at a trial – Application for summary dismissal under Rule 10.12(c) dismissed |
| Family Law Act 1975 (Cth) s 43(1) s 75, s 79, s 81, s 90C Family Law Rules Rule 10.12(c) and (d) |
| ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559 Bain Pacific Associations LLC v Kelly (2006) FamCA 518 Beck & Beck (2004) FLC 93-181 Bigg & Suzi (1998) FLC 92-799 Custodio & Pinto (2006) FLC 93-279 Ferguson & Ferguson (1978) FLC 90-500 Figgins & Figgins (2002) FLC 93-122 Friar & Friar [2011] FamCAFC 71 Jennings & Jennings (1997) FLC 92-773 Jonah & White [2011] FamCA 221 Lindon v The Commonwealth (No 2) (1996) 70 ALJR 541 McManus & McManus (unreported, ML1477 of 1996, 21 March 1997 per Dessau J) Neale & Neale (1991) FLC 92-242 Pelerman& Pelerman (2000) FLC 93-037 Ricci & Jones (2011) FamCAFC 222 Robson & Robson (2003) FLC 93-145 Rogers v R (1994) 181 CLR 251 Stanford & Stanford (2011) FLC 93-483 Stapleton & Hayes [2011] FamCAFC 70 Starkey & Starkey (No 2) [2009] FamCA 432 |
| APPLICANT: | Mr Polik |
| RESPONDENT: | Ms Polik |
| FILE NUMBER: | BRC | 6338 | of | 2011 |
| DATE DELIVERED: | 10 May 2012 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | O'Reilly J |
| HEARING DATE: | 5 December 2011 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Doyle SC with him Ms Hogan |
| SOLICITORS FOR THE APPLICANT: | HopgoodGanim Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Sofronoff S-G QC with him Ms McArdle |
| SOLICITORS FOR THE RESPONDENT: | Barry.Nilsson.Lawyers |
Orders
IT IS ORDERED
The wife’s application (made by her response to initiating application filed 27 September 2011, Part headed “Interim or Procedural Orders Sought”) for the summary dismissal of the husband’s initiating application filed 22 July 2011 for a s 79 property order (the proceedings) is dismissed.
The wife’s alternative application for a stay of the proceedings is dismissed.
The costs of the parties of and incidental to the wife’s application for summary dismissal, or alternatively a stay, are reserved to the trial judge.
IT IS NOTED that publication of this judgment under the pseudonym Polik & Polik is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 6338 of 2011
| Mr Polik |
Applicant
And
| Ms Polik |
Respondent
REASONS FOR JUDGMENT
Applications
The husband by initiating application filed 22 July 2011 seeks a final order under s 79 of the Family Law Act 1975 (Cth) (the Act) for a settlement of the parties’ property and assets, on the basis that the wife receive cash and property equivalent to 60% of the net value of their property and assets, and he retain the balance 40%.
The wife by her response to initiating application filed 27 October 2011 seeks by way of a final order that the husband’s initiating application be dismissed, and by way of interim or procedural order, in effect, that the husband’s initiating application be summarily dismissed.
Background
The husband is 45 years and the wife 47 years.
They married in December 2001.
They have not separated.
The marriage thus has subsisted for over 10 years, about 9½ years at the time of the filing of the husband’s initiating application.
They have 3 children, S nearly 9½ years, J 6½ years and P just 5 years.
The husband the wife and the children live in the matrimonial home in Brisbane.
Jurisdiction
There is no doubt, as properly conceded by Mr Sofronoff S-G QC, for the wife, that the Court has jurisdiction to make a s 79 order, although the parties are not separated: Stanford & Stanford (2011) FLC 93-483 at [53]. It is not necessary thus to refer to the statutory provisions which make this clear, nor to earlier authorities which also have made this clear, collected in Stanford at [27].
Relevant rules
The Family Law Rules 2004, by Rule 10.12, provide:
RULE 10.12 APPLICATION FOR SUMMARY ORDERS
10.12 A party may apply for summary orders after a response has been filed if the party claims, in relation to the application or response, that:
(a) the court has no jurisdiction;
(b) the other party has no legal capacity to apply for the orders sought;
(c) it is frivolous, vexatious or an abuse of process; or
(d) there is no reasonable likelihood of success. (emphasis added)
Principles concerning applications for summary dismissal
If the Court plainly has no jurisdiction, or there is plainly demonstrated a want of legal capacity to apply for the orders sought, or if a matter plainly is frivolous or vexatious or an abuse of process an application for summary dismissal must succeed.
Otherwise, the authorities make clear that the power for summary dismissal is to be exercised sparingly. Whilst some older authorities (including in this Court) refer to the test as “doomed to fail”, Rule 10.12(d) of the Family Law Rules 2004 (above) uses the expression “no reasonable likelihood of success”. In the most recent authority in this Court, Friar & Friar [2011] FamCAFC 71, Thackray & Watts JJ dealt with the relevant principles at [48]-[53]. They observed at [50] that the Rules properly are read as supplementing the power of the Court under s 118(1) to dismiss frivolous or vexatious proceedings and are also to be read in the context of the many cases confirming the Court’s inherent power to dismiss or permanently stay an application which cannot succeed:
50.The Rules are properly read as supplementing the power of the Court to dismiss frivolous or vexatious proceedings pursuant to s 118(1) of the Act. The Rules are also to be read in the context of the many cases confirming the Court’s inherent power to dismiss or permanently stay an application which cannot succeed, as to which see the authorities discussed in Bigg v Suzi (1998) FLC 92-799 at 84,974.
After setting out at [51] the relevant passage in Lindon v The Commonwealth (No 2) (1996) 70 ALJR 541 at 544-5, their Honours said at [52] and [53]:
52. While Kirby J expressed the test as requiring the applicant for summary dismissal to demonstrate, by reference to 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 test has also been formulated in many other ways (see General Steel Industries Inc v Commissioner for Railways (N.S.W.) (1964) 112 CLR 125 at 129). However, for the purposes of an application for summary dismissal under the Act, the test is that laid down by the Rules, namely that the claim must be “frivolous, vexatious or an abuse of process” or has “no reasonable likelihood of success”.
53. Regardless of the formulation, “exceptional caution” must be used in applications for summary dismissal and the power should be “sparingly employed”: Barwick CJ in General Steel Industries (supra at 129). (emphasis added)
In Lindon (above) the third point of Kirby J is that a case which initially can appear weak, after evidence and argument and extended time for reflection, will sometimes turn an apparently unpromising cause into a successful judgment.
It is useful at this stage to set out the principles in Lindon which conveniently I will take from Custodio & Pinto (2006) FLC 93-279 at [6], per Finn J:
Principles relevant to an application for summary dismissal
6. … [T]he principles which govern an application for summary relief are as stated by Kirby J in Lindon v The Commonwealth (No 2) (1996) 70 ALJR 541 at 544-5:
The approach to be taken by the Court to [an] application for summary relief is not in doubt:
1.It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against government and other powerful interests. This is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the Court, is rarely and sparingly provided; [General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128f; Dyson v Attorney-General [1911] 1 KB 410 at 418.]
2.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 [Munnings v Australian Government Solicitor (1994) 68 ALJR 196 at 171f, per Dawson J] or in advancing a claim that is clearly frivolous or vexatious; [Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91.]
3.An opinion of the Court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant termination. [Coe v The Commonwealth (1979) 53 ALJR 403; Wickstead v Browne (1992) 30 NSWLR at 5-7.] Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment;
4.Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of a demurrer. [Coe v The Commonwealth (1979) 53 ALJR 403 at 409.] If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts;
5.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 pleading. [Church of Scientology v Woodward (1980) 154 CLR 25 at 79.] A question has arisen as to whether O 26, r 18 applies to part of a pleading. [Northern Land Council v The Commonwealth (1986) 161 CLR 1 at 8.]… ; and
6.The guiding principle is, as stated in O 26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the Court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit. (emphasis added)
After reference to Bigg & Suzi (1998) FLC 92-799; Pelerman& Pelerman (2000) FLC 93-037; Beck & Beck (2004) FLC 93-181 and other authorities, in particular Beck & Beck at [20] and [21], Finn J then said at [11]:
11. In the recent decision in Bain Pacific Associations LLC, BCIP Associates II-B and Pacific Equity Partners (NZ) Limited, and others and Kelly [2006] FamCA 518, having referred to what was said in paragraph 21 of the judgment in Beck (supra), the Full Court of this Court accepted the proposition:
21. … that apart from material in the case of the respondent to an application for summary dismissal, the court may have regard to relevant non-contentious facts, even if raised by the applicant for summary dismissal. (emphasis added)
The material
With minor exception, as later will be mentioned in the context of Mr Doyle’s written submissions (par 16, later set out), the wife’s material does not controvert the husband’s material. Necessarily, I will have regard only to the husband’s material (Lindon, second point), and the wife’s non-controversial material: Custodio & Pinto (above), at [11].
The wife’s grounds
Jurisdiction being conceded by Mr Sofronoff, and there being no issue as to the husband’s legal capacity to apply for a s 79 order, Mr Sofronoff invoked Rules 10.12(c) and (d) to frame the wife’s case.
Mr Sofronoff submitted that:
1.The proceedings have no reasonable likelihood of success.
2.The proceedings are based upon an improper purpose and amount thus to an abuse of process.
In relation to Rule 10.12(c) Mr Sofronoff confined his argument as stated, and did not argue that the husband’s proceedings are frivolous or vexatious.
In relation to these grounds, Mr Sofronoff commenced by reference to matters which he contended are common ground, which he stated as:
1.The parties are not separated.
2.The marriage has difficulties and pressures.
3.The marriage is a difficult one.
4.Neither party wishes to separate or apply for a divorce.
5.Each party intends to try to make the marriage work.
Collaterally to these matters, Mr Sofronoff said the following issues arise:
1.The husband’s reasons for bringing the proceedings, which should be “accepted on face value” (see the principles referred to as to the need to consider the husband’s material and in relation to the wife’s material only non-contentious facts)
2.The extent of the parties’ property (meaning, both now and as it may be in the future)
3.The nature of the facts “as of today” (even though some of the s 79 matters are not presently explored in the parties’ material).
Mr Sofronoff dealt with the ground of there being no reasonable likelihood of success, and then abuse of process. It is convenient thus to deal with the grounds in that order.
No reasonable likelihood of success
Mr Sofronoff
In relation to Rule 10.12(d), Mr Sofronoff distinguished, correctly, between the existence of jurisdiction and the exercise of the s 79 power, observing that the Court is not compelled to make a s 79 order, and that an applicant would need to demonstrate grounds to justify an exercise of the s 79 discretion in his or her favour.
He put that the nature and scope of the distinction is circumscribed by s 81 of the Act, which provides that the Court shall, as far as practicable, make such order as will finally determine the financial relationship between the parties and avoid further proceedings between them.
He submitted thus that it is difficult to envisage exercise of the s 79 discretion by the making of a final order where, as here, the parties intend the marriage to continue, and indeed that it might continue “for many years”, potentially even some 10 or 20 years into the future.
He referred to ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at [52] and [218], to the effect that once the jurisdiction of a court is regularly invoked, then “ordinarily” the court has a duty to consider the exercise of the discretion.
He submitted however that there are cases in which it can be plain from the outset that the s 79 discretion could never be exercised in an applicant’s favour, and that this is such a case.
He put that “absent the most peculiar circumstances”, no occasion could arise for the making of a s 79 order in an ongoing marriage in which the parties have not separated, and “in no case has the Court done so since the Act was first passed”.
He submitted that in this case the Court could not make a final s 79 order, nor one putting an end to the parties’ financial relationship, because while remaining married the parties are likely to continue to acquire property and deal with property such that their property interests inevitably will alter, with contribution in the future to such both directly and indirectly, for example, by the wife in her role as homemaker and parent. The Act requires the Court to take into account matters which at this stage largely are incapable of being considered: future contribution to the acquisition of property, financial and non-financial; future contribution to the welfare of the family; future contribution to the welfare of the children; future contribution by the wife in the capacity of homemaker and parent; and that these will not have ended.
Mr Sofronoff submitted thus that the application is premature, and further submitted (written submissions, pars 13-15):
13.… A husband who applies for a s 79 order intending to continue with the marriage and who, for example, gains the benefit of an order that he shall enjoy sole ownership of a business, will nevertheless continue to enjoy, for the future duration of the marriage, the wife’s contribution to the conservation and improvement of his business, the wife’s contribution to the welfare of the family and to the children, and will also gain the benefit of her contribution as homemaker and parent but will give nothing for it.
14.The circumstances, including those referred to in s 79(4) and s 75(2) will continue to operate between them but they will not be able to be taken into account.
15.In particular, the four stage process contemplated by the decision of the Full Court in In the Marriage of Coghlan [2005] FamCA 429; (2005) 33 FamLR 414 cannot be carried out.
Further, Mr Sofronoff submitted that a s 79 order at this stage would frustrate the very purpose of the conferral of the s 79 power on the Court, especially in relation to s 81.
He referred to the circumstance that the husband is seeking a final s 79 order, and drew attention to the circumstance that there can be only one s 79 final order, such that, as is correct, it is not as if, after many more years of marriage, if the parties then should separate the wife could apply for another s 79 order based upon subsequent contribution to the family, the children and the parties’ then property and assets, directly or indirectly.
Thus, Mr Sofronoff submitted (written submissions, par 18):
18.In the event that an order is made prematurely under s 79 during the subsistence of a marriage which the parties wish to continue, the Court would become powerless to make a proper order in the event that the parties actually do separate and divorce at some time in the future.
Mr Sofronoff submitted that the circumstances of the parties at the time of any later separation or divorce may make a s 79 order extremely necessary. For example, there may yet be more children; a child or children may have come under a disability requiring unexpected financial expenditure; or full time day to day parental care; or one of the parties may be unable to work, so that it could not be just and equitable to make a final s 79 order now, nor give effect to s 81.
Mr Sofronoff then relied on and analysed four authorities in which parties had not separated: McManus & McManus (unreported, ML1477 of 1996, 21 March 1997, Dessau J); Jennings & Jennings (1997) FLC 92-773; Starkey v Starkey (No 2) [2009] FamCA 432; and Stanford & Stanford (above).
For Mr Sofronoff’s purposes, he extracted from those cases the following observations.
In McManus, a decision of Dessau J, the parties had not separated. The wife was 82 years and the husband 81 years. They still resided together. A final s 79 order was not made on the basis that such was “inappropriate”: p 18. Jurisdiction was conceded (p 3) and independently her Honour was satisfied that jurisdiction existed (p 6). Her Honour made clear however that whilst in that case it was agreed that she should determine “whether I should exercise my discretion”, “as a preliminary matter” (p 3), and “before considering any orders that I might make” (p 3), her Honour made clear that her determination whether or not to make a final s 79 order was a “different matter”, to be determined “in the course of a full consideration of the matters set out in s 79 of the Act” (pp 6-7). The proceedings, which were trial proceedings, were adjourned sine die.
In Jennings, also a decision of Dessau J, the parties were 73 years and 70 years. They were physically separated by the husband’s hospitalisation. The husband was likely to remain in a nursing home for the rest of his life. There was no intent to divorce. The proceedings were commenced by the husband, by a next friend, seeking a final property order. The wife sought initially that the husband’s application be struck out as an abuse of process or alternatively that it be stayed until separation had taken place. At the hearing however Counsel for the wife submitted that although jurisdiction existed, as a matter of discretion her Honour should not exercise that jurisdiction but adjourn the matter sine die: (84,534). The husband’s Counsel submitted that once jurisdiction was conceded her Honour should adjourn the case for the property proceedings to follow “the normal course pursuant to s 79 of the Act” and that procedurally the matter should be adjourned to a conciliation conference: (also at 84,534). Her Honour determined that the matter “should not proceed” and made an order that the proceedings be struck out. The order does not appear in the reasons for judgment. However, I have obtained a copy of her Honour’s order made 26 June 1997 making clear that the husband’s application for a final s 79 order was struck out.
In Starkey (No 2), the parties had been married for 40 years. They had not separated and did not intend to bring their marriage to an end. The husband had legal incapacity such that his case was conducted by a guardian. The husband was in a hostel nursing home and it appeared he would spend the rest of his life there. Mr Page SC, at trial, raised as a “preliminary point” that the Court ought not exercise its discretion to make a final s 79 order, relying on Jennings. Murphy J however distinguished Jennings factually, and determined that he should make a s 79 order: see at [28]-[32]. In particular, his Honour was persuaded by the circumstance that at an earlier date, when the husband had capacity, the parties had each formed the intention to effect a final distribution of their property and assets by way of a consent order which, as events transpired, did not eventuate: see at [3]. Moreover, it would appear that although Mr Page SC had raised the “preliminary point”, once it was ruled against him: [41] and [42], his Honour was assisted by a form of order proposed by one party and not opposed by the other, being, assumingly, the order which his Honour made: see at [45],[47],[49] ff.
In Stanford, the parties were and intended to remain married but were physically separated by the need for the wife to reside in a nursing home. At trial, a s 79 order had been made. On appeal, the Full Court set it aside on the basis that whilst it was within power the learned Federal Magistrate had not considered other “options”, for example, a spousal maintenance order.
In relation to legal principle in those four cases, Mr Sofronoff relied upon Dessau J in Jennings at 84,536-8 in determining that in Neale & Neale (1991) FLC 92-242 (dealt with earlier by her Honour in McManus) the Full Court (see Jennings at 84,538, L col, top of the page):
… has not laid down a hard and fast rule for every circumstance. (emphasis added)
Earlier, in McManus, her Honour had been persuaded that it had: see McManus (p 4) as follows:
… At the commencement of the second day, counsel for the wife Mrs Carter referred me to the Full Court’s decision in Neale and Neale (1991) FLC 92-242 at 78,646 in which the Full Court clearly deprecated the practice of the exercise of such discretion as a preliminary point and did so in the following terms:
“The proposition that the court has a general discretion to make or not to make orders for property adjustments under s. 79(1) as a preliminary question to the considerations set out in ss. 79(4) and 75(2) was rejected by the Full Court as early as Ferguson and Ferguson (1978) FLC 90-500 at 77,616, 77,617; 4 Fam.LR 312 at 322, 323 per Strauss J with whom Watson and Wood JJ agreed. It should not, at this late stage, be revived.”
Neale’s case provides clear authority to the effect that a trial judge should approach an application in relation to property orders by considering the factors set out in s. 79(4) as well as such of the matters set out in s. 75(2) as are relevant. The fact that the parties are still residing together is a matter relevant to s. 75(2)(o) and a consideration of the justice and equity of any orders to be made. Once the authority was brought to his attention, counsel for the husband, Mr St John, agreed as to its binding nature. He then raised a different preliminary argument based on the court’s lack of jurisdiction to embark upon the s. 79 determination at a time when the parties had not separated. (emphasis added)
In Jennings, however, at 84,536-8, in particular at 84,538, L col, her Honour, as I have mentioned, was persuaded that Neale’s Case did not lay down a hard and fast rule for every circumstance.
Mr Sofronoff thus relied heavily on Jennings, as authority that “particular and unusual circumstances” (Dessau J, 84,538, R col) can warrant “a particular and unusual approach”, namely, for s 79 proceedings to be struck out without a trial, and submitted that the present case similarly not only has “particular and unusual circumstances”, but indeed is an “extreme case”, having the features of it described, warranting summary dismissal.
Mr Sofronoff submitted thus that “neither Neale nor Stanford is authority that such an extreme case should go to trial”.
Mr Sofronoff submitted that on the non-contentious facts of the present case, “no Judge of the Court” in proper exercise of the s 79 discretion could make a final s 79 order so that the proceedings should be summarily dismissed.
Mr Sofronoff submitted that once there is jurisdiction, there are 2 questions. First, whether the Court would make any order (that is, whether any order is warranted), and secondly, if so what order. As to the first of these, he submitted that there is already all of the evidence necessary to determine that question, and that Stanford does not say that a judge seized of all of the evidence necessary to determine the first question is precluded from making a decision as to whether there should be a full trial; and that there is nothing in Stanford to preclude or prohibit application of the ordinary summary dismissal principles.
Mr Sofronoff submitted that the Court now has all of the facts in the husband’s affidavit relevant to whether a s 79 order dividing the parties’ net property and assets would be made, asking “What other facts could the husband have put?”, and observing that “Nothing more has been put”.
In this regard, Mr Sofronoff likened the matter to the factual circumstance in Jennings, where Dessau J considered that she was seized of all relevant facts to determine whether the matter should proceed to trial or be struck out peremptorily.
Mr Sofronoff submitted that evidence that would be determinative on the first question can be looked at discretely, by way of preliminary point, on the basis that if the matter is decided one way that would finally determine the proceedings.
Further, he submitted that a judge of this Court ought not put the parties to the expense and anguish of preparing evidence for, and conducting a full property trial on the second question, when the need to consider such evidence “won’t arise”.
Mr Sofronoff submitted that Starkey (No 2), concerning parties who have not separated, but where one is and will remain in a nursing home, leading to favourable exercise of the s 79 discretion to divide property, is quite different from the present case, where the parties are young and indeed have very young children, living together as a family in the family home.
In response to submissions of Mr Doyle (to which I shortly will turn) Mr Sofronoff submitted that no part of the wife’s case involves asking the Court not to exercise its jurisdiction, on the basis that the Court is seized of all of the facts now to make a summary dismissal order, and that such an order is an exercise of jurisdiction, and as such does not amount to declining to exercise jurisdiction.
Mr Sofronoff thus submitted that if the facts are such that no judge could exercise the discretion to make a s 79 order dividing the parties’ net property and assets now, such as he urged is the case here, the proceedings should be summarily dismissed.
Mr Doyle
Mr Doyle submitted that the power of the Court under s 79 is a broad one, not excluded where parties have not separated, nor where the motivation to bring the s 79 application is to preserve the marital relationship, rather than to bring about its end, as is the husband’s case here, that is, to preserve the marital relationship.
He submitted that the language of the Act, including s 79(4)(e) and s 75(2)(g): “where the parties have separated or divorced” (etc), and the s 75(2)(o) language: “any other fact or circumstance” (etc), have effect that the intent is that the s 79 power be exercised in a broad range of circumstances, and there is not a constrictive approach.
Mr Doyle referred to and relied on Stanford (above) as the Full Court restating that where there is jurisdiction to make a s 79 order its exercise “cannot be done by way of a preliminary hearing (and a fortiori a strike out)” (written submissions, par 27):
27.The Full Court has very recently restated in plain terms that (i) there is jurisdiction to make orders under s 79 whether or not the parties to the marriage are separated; and (ii) the exercise of that jurisdiction requires a consideration of the factors in s 79(4) and 75(2) which cannot be done by way of a preliminary hearing (and a fortiori strike out) see Stanford v Stanford [2011] FamCAFC 208 at [51],[53],[56],[65]-[68],[73],[74],[78],[79]. Neale v Neale (1991) FLC 92-242 at 78,646-78,647 (Full Fam Ct). Kapoor v Kapoor [2010] FamCAFC 113 at [72]-[75] (per Finn J).
Mr Doyle submitted that Mr Sofronoff sought to draw a distinction “in an ephemeral sense” between the existence of jurisdiction and its exercise, by his submission, in effect, that the Court could determine on the preliminary basis that the power under s 79 “could not” be favourably exercised; whereas once there is jurisdiction, it can only be exercised by the s 79(4) process, which involves, necessarily, the hearing of all evidence adduced by the parties relevant to the matters in the four step process. Implicit in Mr Doyle’s submission is that there is no “two step” process, that is, whether to make a s 79 order, and if so, what should be its terms, but one process under s 79(2) and s 79(4):
79(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
…
79(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
[the matters set out in s 79(4)(a)-(g)]
Thus, he submitted that Mr Sofronoff’s contrary submission is “foreclosed” by a proper consideration of the various elements in s 79.
Mr Doyle relied on Stanford (above), thus, as the Full Court making plain that once there is jurisdiction, the Court must proceed to consider the exercise of its discretion based upon all of the s 79 matters, not just some of them, and in particular not just a few isolated facts collected by Mr Sofronoff.
In reference to Mr Sofronoff’s strong reliance on Jennings (above), Mr Doyle submitted that Jennings expressly was disapproved by the Full Court in Stanford:
65.In Jennings, a matter where the factual situation was not dissimilar to the present Dessau J determined that “in the particular and unusual circumstances” of the case a particular and unusual approach was warranted. She said at page 84,538:
…it seems to me there is nothing to be gained by embarking upon a full property application in the circumstances of parties who have formed no intent to separate; where one is suffering illness and is hospitalised and the other continues to visit and partake in his care to the extent that she is able. Orders finally determining property issues between them could not be appropriate, fair or just in that context.
66.In taking this position, which was effectively a preliminary decision whether or not to exercise discretion, her Honour distinguished in particular the decision of the Full Court (Nicholson CJ, Strauss and Nygh JJ) in Neale & Neale (1991) FLC 92-242. In distinguishing Neale’s case her Honour relied upon the fact that both Neale and authorities upon which the Full Court relied were not a situation comparable to the one with which she was dealing. Her Honour noted that the major thrust of the earlier decisions related to estoppel and related issues and said at page 84,537:
The import of the Full Court’s decision in Neale’s case was that in such cases, in order to determine whether a particular order was just and equitable, the trial judge would have to consider the factors set out in s. 79 and could not make a preliminary determination as to whether or not discretion should be exercised in one way or another.
67.With respect to her Honour we do not agree that Neale’s case can be so confined. At page 78,646 the Full Court said as follows:
The proposition that the Court has a general discretion to make or not to make orders for property adjustments under section 79(1) as a preliminary question to the considerations set out in section 79(4) and 75(2) was rejected by the Full Court as early as In the Marriage of Ferguson (1978) 4 Fam LR 312 at 322, 323 per Strauss J., with whom Watson and Wood JJ. agreed. It should not, at this late stage, be revived. The reasoning of the majority of the Full Court in Schokker and Edwards was confined to its very special circumstances by the Full Court in McIntyre and Malezer and this was reiterated more recently by another Full Court in Tasmanian Trustees Limited and Gleeson (1990) 14 Fam LR 189 at 192. To avoid any future confusion, it must now be said, unequivocally, that the reasoning of the majority in Schokker and Edwards proceeded from a mistaken premise and was, therefore, wrong. This leaves open the question to what extent, if any, the considerations set out in sections 79(4) and 75(2) can be supplemented or varied by general considerations of what is just and equitable under section 79(2), insofar as they are not covered by section 75(2)(o), but the Court must first take account of the specific factors before it can proceed to any wider question: …
It follows then that in this case in order to determine whether it was just and equitable to make any order in favour of the wife, the learned Trial Judge should have first considered the factors set out in section 79(4) as well as such of the matters set out in section 75(2) as were relevant. (our emphasis) [Full Court emphasis]
68.In our view once it is accepted that the Court has jurisdiction to make an order it must proceed to consider the relevant matters under s 79 including the matters under s 79(4) and s 75(2) when determining whether or not to make a particular order or to dismiss an application, making no order at all. It is obvious that one of the matters relevant to the exercise of discretion under s 75(2)(o) is the fact that the parties marriage has not come to an end and a consideration of the overall justice and equity of making an order in favour of one of the parties. Section 79 gives the Court power to make “such order as it considers appropriate – altering the interests of the parties to the marriage in the property”. The Court’s consideration of what is just and equitable having regard to the matters in s 79(4) and s 75(2) may include for example the fact that the parties have not separated other than in a physical sense. Those facts may be important in a particular case; we would expect them to be so, but under the wide rubric of what is “just and equitable”. (emphasis added)
Thus, Mr Doyle submitted, once there is jurisdiction (as conceded here), there is only one question, namely whether a property division order is just and equitable, which can only be determined after the full s 79 process at a trial.
Moreover, Mr Doyle pointed to the circumstance, as is correct, that of the four cases relied upon by Mr Sofronoff, McManus, Jennings, Starkey (No 2) and Stanford (at first instance), procedurally all except Jennings were decided at a trial. Jennings however, being the only case which did not involve a trial, was disapproved in Stanford.
Thus, in response to Mr Sofronoff’s “question” whether the present case is “so unarguable that the Court should not embark upon it any further”, Mr Doyle submitted that once there is jurisdiction, in order for the jurisdiction to be exercised, the nature of the s 79 discretionary power is such that there must be a trial, with the process under s 79(4) followed, before there can be any proper exercise of the s 79 discretionary power.
In relation to Mr Sofronoff’s submission that “all of the facts in the husband’s affidavit relevant to whether a s 79 order would be made”, already are in evidence, Mr Doyle submitted, correctly in my view:
18. The affidavit material is of course at this stage directed only to the strike out application and does not seek to fully address the matters which will be relevant to the hearing of the application under s 79.
Abuse of process
Mr Sofronoff
In relation to Rule 10.12(c), Mr Sofronoff submitted that there are three matters constituting improper purpose amounting to an abuse of process, two of which he described as “disclosed” purposes and the third the “real” or “concealed” purpose.
Mr Sofronoff, as I have said, did not argue that the husband’s proceedings are frivolous or vexatious. To ensure however that I have not placed Mr Sofronoff’s case too narrowly, I will mention Mr Doyle’s reference to the Explanatory Guide to the Rules (expressly, not part of the Rules) explaining “frivolous” as “not worthy of serious consideration, insupportable in law, disclosing no cause of action or groundless”; and “vexatious” as “having no reasonable prospect of success”: Mr Doyle’s written submissions, par 29, fn 3 and 4. To the extent relevant, these descriptions so overlap Mr Sofronoff’s first ground, no reasonable likelihood of success, as to be taken to be covered in his submissions on the first ground. Thus, even if expressly the wife’s case had been based on any alleged ground that the proceedings are frivolous or vexatious, relevantly, these matters have been dealt with already.
I will proceed then with Mr Sofronoff’s submissions as to abuse of process, and matters of evidence concerning that ground.
Mr Sofronoff described the two disclosed purposes of the husband as:
1.To protect “succession arrangements” of “the [Polik] Group”, which otherwise would be “at risk”: husband’s affidavit pars 88, 122-142 and other paragraphs.
2.To have the “financial certainty” of a property settlement with the wife, to allow the husband and the wife “to focus on resolving the other difficulties in our marriage”: husband’s affidavit pars 88, 105, 106-110; 143-162; and earlier, 48-58 (and annexures) and other paragraphs.
In relation to what Mr Sofronoff described as the first disclosed purpose, he referred to the circumstance that “the [Polik] Group” is substantial, the husband’s father and his two brothers having inherited “the family business” in the late 1960s.
He referred to the chronology in the husband’s affidavit, par 122, which is self speaking, and which I need not set out; and also to pars 123-5, wherein the husband deposes that he is in the third generation of the Polik family which by various structures has held extensive hotel interests and presently holds extensive other interests, for which presently he is “responsible”: par 123.
In contrast, the husband’s financial statement filed 22 July 2011 shows very modest property presently owned by him, with liabilities exceeding property value (excluding reference to superannuation interests, regarded as “another species of asset” in the authorities, but to be “treated as property” under relevant provisions of the Act, to which I need not presently refer).
Mr Sofronoff submitted that the only “risk” to the husband is that the Court at some later or future date might assess his wealth as more than at present, such that a later s 79 order, if and when the parties might separate, or divorce, would place the husband “at risk” of the wife having more than to which presently she might be entitled, and that, given the parties’ ongoing marriage, is a motive or purpose which is an abuse of process particularly by a husband who might perceive his own financial position “likely to improve substantially in the near future”.
Mr Sofronoff submitted thus that what he described as the first disclosed purpose is not a proper purpose to institute s 79 proceedings, and thus, on the husband’s own case, constitutes an abuse of process.
In relation to what Mr Sofronoff described as the second disclosed purpose, he submitted that it “is not one of the purposes for which the s 79 power is conferred”, or could be exercised, for an applicant to seek “financial certainty” in an ongoing marriage.
Further, Mr Sofronoff submitted that the two “disclosed” purposes are “pretexts”, not only in themselves improper, but that they disguise the husband’s “real” or “concealed” purpose, to be inferred from “his previous conduct”, in particular as disclosed in his own evidence his previous efforts to have the wife agree to a s 90C financial agreement, which she refused: see the husband’s affidavit pars 90-108; 162.
Mr Sofronoff submitted that the only proper purpose for which a s 90C financial agreement can be made (insofar as property is concerned) is how, “in the event of the breakdown of the marriage”, “all or any of the property or financial resources of either or both of the spouse parties at the time when the agreement is made, or at a later time and during the marriage” is to be dealt with: s 90C(1)(a) and s 90C(2)(a).
Thus, Mr Sofronoff submitted, the husband’s purpose in seeking a s 90C financial agreement was not to achieve an alteration of property interests to take effect immediately and during the currency of the marriage for its duration, but was to achieve an agreement about what was to happen “in the event of breakdown of the marriage and a divorce”, such that “he wanted certainty now about what would happen if his marriage failed later”. Mr Sofronoff put thus that it can be inferred that in making his application for a s 79 order the husband also is seeking, by “concealed improper motive”, to make certain immediately what should be the parties’ property rights later in the event of a breakdown of the marriage and a divorce.
In summary, Mr Sofronoff submitted that the “real” or “concealed” purpose of the s 79 proceedings is to have made a just and equitable property order on the basis of the parties’ property and assets now, to keep out of reach from the wife that to which properly at a later time she might be entitled.
Mr Doyle
Mr Doyle submitted that the improper purpose allegations and the “concealed improper motive” allegation are baseless, and that a proper scrutiny of the husband’s evidence shows plainly that he is sincere in his expressed motives, with no others.
In support of these submissions, it is convenient to set out several paragraphs of Mr Doyle’s written submissions, in particular for their precise reference to the husband’s material, as to the husband’s avowed purpose in bringing the proceedings (Mr Doyle’s written submissions, pars 7-13):
a.They [the parties] are not separated. The marriage relationship is however, plainly a distressed one. This is not the occasion to explore the precise extent of the distress to that relationship. The parties hold different perceptions of the current state of their relationship and the court is not (on a summary dismissal application) able to resolve those differences. But some examples serve to illustrate the nature of this marriage. Largely these are taken from the husband’s affidavit.
i)There have been constant arguments in the course of the relationship: paras 13, 15.
ii)Physical relations between the parties have been infrequent (close to but not actually non-existent): paras 35 to 38.
iii)The wife made a (the husband contends false) domestic violence complaint against him in August 2010: paras 113 and following.
iv)The wife has on many occasions asked the husband to leave her and the children: paras 14; 29; 119. Most recently by her lawyer’s letter dated 26 May 2011, the wife informed the husband that she proposed to make an application for a mandatory injunction so that she would have sole use and occupation of the home: see ex JGP 8.
v)For the three years up to when the husband said he intended to commence the primary proceedings they lived (as he puts it) as single people under the one roof: paras 35; 38. There had been some improvement in aspects of their relationship since very late December 2010 (against the background of the parties then exploring a negotiated financial agreement), though the improvement has been very fragile: see paras 149-151.
vi)The husband is isolated from the wife because of her closeness to her own mother and her practice of spending a considerable amount of time (with the children) with her mother, to his exclusion: see paras 27-34; paras 64 to 84; 156.
vii)The wife is openly and strongly critical of the husband to friends and family members: paras 40, 44. The wife has complained of the husband and the marriage relationship to a number of priests known to the parties and indeed to [a Church leader’s] office (with whom the husband has dealings regularly): para 22.
viii)The parties have tried counselling between 2002 and 2009 but without it resolving the distress in the relationship. Mr [Polik] paras 15; 20; 21; 23, 24. This has included (but is not limited to) talking to and being counselled by various priests.
ix)The parties have for well over a year now resorted to dealing with each other through solicitors. This has included: (at paras 30 and 107) the lawyers for the wife saying they would apply to have the husband removed from the family home; (paras 88 to 104) dealing through lawyers between April 2010 and April 2011 with a view to a financial agreement being made between them; and (paras 105 to 112) dealing with each other via lawyers in relation to this application.
x)Mr [Polik] swears that the relationship has deteriorated to the point that he is contemplating separation: para 13 (h), 147-148.
b.Both parties are devout Catholics: para 48. This provides something of the background to the primary application.
i)They attend church each week and on feast days. Their children are brought up as Catholics.
ii)He has strong connections in the church. His father established [a tertiary institution] in Sydney and his family is and for many years has been a very significant donor to that institution: para 56.
iii)He believes in the institution of marriage as the church teaches it and in it as a sacrament: paras 53, 58. He has thus far remained in an unhappy marriage he says due partly to his religious convictions. A decision to leave the marriage would be contrary to those values and not lightly undertaken by him: para 58.
iv)Also he has stayed in the marriage partly for the sake of the children, though is concerned about the impact on them of the distress in the marriage if it is to continue: paras 59 to 63.
v)However, the church will permit separation (as he understands it) given the state of the marriage relationship and indeed he may be able to secure an annulment from the church (para 148).
c.Starting with his grandfather, the [Polik] family has had extensive interests in [hospitality] and other businesses (whose fortunes have fluctuated over time). The husband assumed the management of the family businesses a decade ago, though the revenues are applied for the benefit of his father (…), his mother (…) and their children and descendants (including the parties to these proceedings), as well, as mentioned, for extensive charitable purposes.
d.It is not necessary to examine the detail of the dealings with these various companies and trusts for the present application. The husband is concerned to respect and to protect the interests of the others involved in these companies and trusts and to achieve certainty if possible: see paras 88, 143, 144. He sees the achieving of this financial certainty as essential; to have it would provide the foundation he requires to continue to pursue the married relationship: paras 151 and 162.
e.The husband sought to achieve that certainty by a financial agreement reached consensually with the wife under s 90 C and G. To facilitate this-
i)Both he and his wife had lawyers acting for them;
ii)He gave disclosure to his wife: para 92;
iii)He provided funds to the wife to finance her legal representation, and valuation costs: paras 93, 96, 102 (a total of $41,000).
f.Ultimately the wife would not sign the financial agreement: para 104.
g.In those circumstances the husband, of course, could continue to live in what he considered an unhappy marriage until eventually it became far too much for him (or the wife) and they separated and divorced. However, he has determined he could not do so: para 88; and determined (consistently with his attempt to reach a financial agreement) to seek this property order as “a last ditched attempt to salvage [the] marriage”: see paras 105; 110, 144.
As to other matters Mr Doyle submitted (written submissions, pars 15-18):
15.The wife contends that-
i) The parties have not separated (that is accepted); and
ii) While the marriage has had difficulties it is intact.
16.The wife also swears that the husband has not given her any indication that ‘he intended to end our marriage or separate from me’: wife’s first affidavit para 12. This really cannot be accepted: see ex JGP-6 (page 105) and JGP 9 (page 113).
17.The wife, as mentioned, says that she considers the marriage to be ‘intact’: see first affidavit at [11]. She gives various reasons. These are responded to in the husband’s affidavit and for present purposes the court will proceed on the basis that there are issues to be tried about that. Just what ‘intact’ means remains to be decided at trial. It is, however, hardly a healthy relationship given the matters referred to above.
(a)The husband has said he is not prepared to continue in a dysfunctional and unhappy relationship with the wife: para 147.
(b)A key (for him) to the marriage having any hope of continuation is the relief he seeks via the application, he having failed to secure a financial agreement consensually: paras 151; 162.
18.The affidavit material is of course at this stage directed only to the strike out application and does not seek to fully address the matters which will be relevant to the hearing of the application under s 79.
In relation to the meaning of “abuse of process”, Mr Doyle referred to Rogers v R (1994) 181 CLR 251 at 255, as including but not confined to “use of the court processes for some ulterior purpose or purposes in that it is not the party’s genuine purpose to obtain the relief sought … [or] to cause vexation or oppression”; and to Stapleton & Hayes [2011] FamCAFC 70 at [159].
In oral argument, Mr Doyle made reference to a submission by Mr Sofronoff that “both parties want the marriage to continue” but submitted, by reference to the husband’s material that from the husband’s perspective this is “conditional”, referring to the husband’s affidavit par 106 (a letter); 111 (the part in italics); 143 (last sentence); 147 (last sentence), 151 and 162; such that “confronted with an ongoing unhappy marriage”, the husband seeks financial certainty, and that there is no improper motive or purpose in seeking that relief.
Mr Doyle submitted that, in short, the husband’s options are (1) leave the marriage (which presently he cannot do for religious reasons); or (2) stay in the marriage, unhappy as it is, but seek to effect a financial division of the parties’ property and assets now so that he can then “focus” on the marriage.
When challenged as to a “conundrum” of seeking a s 79 division of property and assets now so that the husband can “focus” on the marriage, where such division conflicts with the usual concept of a marriage (“a partnership to which each brings different gifts”: Figgins & Figgins (2002) FLC 93-122 at [134]), Mr Doyle submitted that if the husband’s purpose were improper, and if the only purpose was financial “he would leave now”, thus showing genuinely a proper basis for his application based upon his and his wife’s religion.
Decision
No reasonable likelihood of success
In my view Mr Sofronoff’s reliance on Jennings is misplaced. As I read Stanford, Jennings was disapproved. Indeed, it is clear from [37], [79] and [122] that their Honours concluded that the conducting of a preliminary hearing by the learned Federal Magistrate in order to determine whether or not the discretion under s 79 should be exercised was an error.
Further, at [65]-[68] (especially [67]) their Honours concluded in relation to Jennings, and Dessau J’s treatment in Jennings of Neale’s case:
67.With respect to her Honour we do not agree that Neale’s case can be so confined. …
68.In our view once it is accepted that the Court has jurisdiction to make an order it must proceed to consider the relevant matters under s 79 including the matters under s 79(4) and s 75(2) when determining whether or not to make a particular order or to dismiss an application, making no order at all. … (emphasis added)
Their Honours continued, also at [68]:
68.… It is obvious that one of the matters relevant to the exercise of discretion under s 75(2)(o) is the fact that the parties’ marriage has not come to an end and the consideration of the overall justice and equity of making an order in favour of one of the parties. …
I am unable to accept Mr Sofronoff’s submission, that, once there is jurisdiction, there are two questions, namely (1) whether the Court would make any order and (2) if so what order. Section 79(2) read with s 79(4) makes clear that the order (if any) which is just and equitable is part of the one process:
79(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
…
79(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
[the matters set out in s 79(4)(a)-(g)]
In Stanford, at [71], their Honours observed that to decline to exercise jurisdiction when the Court has jurisdiction appears to be “adding an extra step” in the proceedings which is not countenanced by s 79; and that the question of alteration of property interests and how that may be done is contained in the provisions of s 79 and the opening words of s 79(1) “[i]n property settlement proceedings, the court may make such order as it considers appropriate” [which words] define the Court’s powers. Thus, their Honours continued “It may be that the Court does not have power to decline to exercise jurisdiction but it does have power to decline to make an order”.
I turn now to Mr Sofronoff’s submission that no part of the wife’s case involves asking the Court not to exercise its jurisdiction, on the basis that even a summary dismissal order is an exercise of jurisdiction and as such does not amount to declining to exercise jurisdiction. Whilst the Full Court has held that an order dismissing a s 79 application is an order “under” s 79: Robson & Robson (2003) FLC 93-145 at [48], [59], [63], [67], [71], [73], [74], [75], there is still the difficulty that if there is a properly constituted case for which there is jurisdiction, and legal capacity of the applicant to bring it, and there are no circumstances by which plainly the matter is an abuse of process (all of which would warrant summary dismissal), where that case is one involving exercise of the s 79 discretion, it is the discretion which cannot validly be exercised unless the court proceeds (“must proceed”): Stanford, [68], to consider the relevant matters under s 79 including the matters under s 79(4) and s 75(2) “when determining whether or not to make a particular order or to dismiss an application, making no order at all”: also at [68].
Of the four cases relied upon by Mr Sofronoff, McManus, Jennings, Starkey (No 2) and Stanford, Jennings was the only case which did not involve a trial. In essence, Jennings was the only one in which a summary dismissal order was made.
That does not mean however that a summary dismissal order could never be made, eg, if there is no jurisdiction (eg, the parties were never married); or, as demonstrated recently in Ricci & Jones (2011) FamCAFC 222, in relation to the de facto legislation, a summary determination can be made as to the want of a jurisdictional fact. Thus, in that case, the Full Court held that a determination by the learned Federal Magistrate properly, on the material before her, was able to be made, as a matter of law, that the parties to the proceedings had not been in a de facto relationship: [18]-[20]. In particular, in that case, their Honours concluded that the Federal Magistrate was entitled to assume that the appellant had placed before the Court all of the material facts on which she sought to assert a de facto relationship: [36]; and in this regard approved Murphy J in Jonah & White [2011] FamCA 221. See at [60], and [61]:
61. … [T]he making of a declaration that a de facto relationship existed does not involve the exercise of discretion but rather a consideration of the facts which may found the jurisdiction.
Conversely, the making of a declaration or determination that a de facto relationship did not exist similarly does not involve the exercise of a discretion but rather a consideration of the facts which may found the jurisdiction.
Thus, in Ricci v Jones, on appeal, the summary dismissal order was upheld, but because as a matter of law on the appellant’s own material she did not prove a de facto relationship, so that there was the want of a jurisdictional fact for the matter to continue.
In that case however there was no consideration of the question whether, once there is jurisdiction, involving the exercise of a discretion, a trial must ensue in order validly to exercise the discretion.
Thus, returning to the present case, it seems to me that all of the factual matters raised by Mr Sofronoff, and the arguments based upon those factual matters, consistently with Stanford, are matters to be considered under s 79(4) and s 75(2) in particular s 75(2)(o): Stanford, [68]; and thus are not matters which are a basis for summary dismissal under Rule 10.12(d).
Stanford is authority binding on me that the discretionary power under s 79 to make or not to make a s 79 property order validly can be exercised only by means of the trial process at which the parties are able to adduce all such evidence as they may wish in relation to each of the four stages of the four step process, including in relation to s 79(4), and the relevant matters in s 75(2), including s 75(2)(o). Thus, all of the factual matters raised by Mr Sofronoff, and the arguments based upon those factual matters, need to be raised at a trial under s 79(4), including s 75(2) and s 75(2)(o), as matters to seek to persuade the trial judge not to make a s 79 order dividing the parties’ property and assets now. The discretion cannot be exercised in a vacuum, or prematurely, or be prejudged or pre-empted, but dealt with only by way of the s 79 trial process.
I am also thus unable to accept Mr Sofronoff’s submission that the Court already has “all of the evidence necessary” to determine that a s 79 order dividing the parties’ property and assets could not be made. Mr Doyle pointed to the circumstance that the husband’s material at this stage is directed “only to the strike out application” and does not seek fully address the matters relevant to the hearing of the application under s 79. Thus, the husband has not as yet prepared his trial evidence as to the s 79(4) and s 75(2) matters because the time for that exercise has not yet arisen.
I turn now to Mr Sofronoff’s submission that there is nothing in Stanford to preclude or prohibit application of the ordinary summary dismissal principles, and that if there is a plain case to which the ordinary summary dismissal principles apply, the summary dismissal power should be exercised. Whilst this may be so, nor did Stanford disapprove Friar (above), a Full Court decision made earlier in the same year, which decision made clear that for summary dismissal in this Court:
52. … However, for the purposes of an application for summary dismissal under the Act, the test is that laid down by the Rules …
Moreover, the ordinary summary dismissal principles include, as reflected in Rule 10.12(d), that there is no reasonable likelihood of success.
Further, Stanford is not authority for the proposition that in relation to s 79 proceedings there could never be summary dismissal. That is wrong. Plainly there could be summary dismissal, eg under Rule 10.12(a) (where plainly there is no jurisdiction); (b) (where plainly there is a want of legal capacity); or (c) (where plainly an action is an abuse of process). This is amply demonstrated in Ricci v Jones (although dealing with the de facto provisions) as discussed.
There is therefore no inconsistency between Stanford, and Rule 10.12, as a rule with 4 separate categories giving rise to exercise of the summary dismissal power.
It is just that, for the purpose of Rule 10.12(d) (no reasonable likelihood of success), in relation to s 79 proceedings, when jurisdiction is attracted, the s 79 statutory power being a discretionary one, the Full Court has made clear that the manner in which the discretion will or may be exercised cannot summarily be prejudged or pre-empted, but is subject to the application of a statutory process.
I take into account the matters argued by Mr Sofronoff (there could be more children; as the marriage is on foot there will be future contribution, both financial and non-financial; the marriage could subsist another 10 or 20 years; if an order is made now and there is separation and divorce sometime in the future there could not be another s 79 order, etc). These however are s 75(2)(o) matters for the trial.
The husband’s case is unusual, if not novel, based primarily, as I read his affidavit, on his religious beliefs in the context of an unhappy marriage: see his affidavit at pars 10, 13h, 48-58, 110, 157, 159. But there is jurisdiction. He is entitled to run his case, and have the Court then consider whether to exercise its discretion to make an order in his favour, or to dismiss his application.
Thus, even independently of the cases that bind me (Ferguson; Neale; Stanford), I am unable to determine, at this stage, for the reasons explained, that there is no reasonable likelihood of success.
This is so both within the context of the principle in Stanford ([67], [68], set out above), (and see also ASIC v Edensor) (above) but also independently, by reference to Rule 10.12(d).
Abuse of process
I am unable to accept Mr Sofronoff’s submission that what he described as the husband’s two “disclosed” purposes indeed constitute two purposes, nor his submission that the alleged third “real” or “concealed” purpose, is a separate purpose.
Rather, as I read the husband’s affidavit, he has but one purpose, which is that a s 79 property order may be capable of preserving the marriage. Whilst the concept is a difficult one, there is no present reason to doubt the husband’s genuine motive in this regard.
Moreover, none of what Mr Sofronoff described as the husband’s purposes could be described as ulterior, at least to the extent that it cannot be said that it is not the husband’s genuine purpose to obtain the relief that he seeks in the proceedings: Rogers v R (above) at 255. On the contrary, plainly, the husband genuinely seeks that relief.
An allegation of abuse of process is a serious matter.
Thus, in Starkey & Starkey (No 2) (above), Murphy J (at a trial) dealt with an allegation that proceedings were “initiated and maintained for purposes other than purposes consistent with the Family Law Act”: [18]. His Honour said [19]:
19.However, an assertion of the type just mentioned is a very serious assertion and, essentially, amounts to an assertion that a party or parties are using the Family Law Act, and more particularly the procedures of this Court, for an improper purpose. I would not be inclined to make a finding to that effect unless there was clear evidence before me of which I could be well satisfied that such an assertion has been made out. (emphasis added)
Similarly, the wife’s allegation in this case as to the husband bringing the proceedings for purposes other than those consistent with the Act is a “very serious assertion”, incapable of being the subject of a finding absent “clear evidence” that the assertion has been made out.
The particular allegations by the wife, as articulated by Mr Sofronoff, could only be the subject of findings at a trial, after factual determination.
Hence, these matters cannot be determined summarily, on the particular facts of the case, to support summary dismissal of the proceedings under Rule 10.12(c).
Conclusion
In Bain Pacific Associations LLC v Kelly (2006) FamCA 518, Bryant CJ, Warnick and May JJ said in relation to an application for summary dismissal, at [31]:
31.…[O]nce it is conceded that an order as sought is within power, the argument in support of summary dismissal is rendered extremely difficult.
This is such a case.
The wife’s application for summary dismissal will be dismissed.
Stay
The wife’s case outline (par 26) included that if the Court is not minded summarily to dismiss the proceedings, then in the alternative it is appropriate to consider staying the proceedings until the circumstances of the parties change “such that separation occurs” and that to do otherwise “would only result in a determination of an interim property settlement and unnecessary costs to the parties, as a final property pool and findings as to the contributions of the parties could not be completed until after a time of final separation”.
Against this, Mr Doyle submitted that in relation to the alternative proposal of a stay: “But that too assumes that the primary application unarguably should not be dealt with until the parties separate”, so “That contention also should be rejected”: written submissions, par 5. I accept Mr Doyle’s submission.
Moreover, s 43(1) of the Act includes, as principles to which the Court must have regard, “the need to preserve and protect the institution of marriage”; “the need to give the widest possible protection and assistance to the family”; and “the means available for assisting parties to a marriage to consider reconciliation or the improvement of their relationship”.
In my view, to order a stay of the proceedings would put further pressure on an already difficult and fragile marriage, such that, if the parties do not separate at all, or for a considerable period of time (which Mr Sofronoff put could be 10-20 years), the proceedings would “hang in the air”. It is better thus that there be no stay, and that the proceedings be brought on, for final determination one way or the other.
Costs
In relation to costs, as the husband’s initiating application is unusual, and as there is as yet no possibility of determining the wife’s financial circumstances, she not having as yet provided a financial statement, her financial circumstances and those of the husband being mandatory matters to consider under s 117(2A), I will reserve to the trial judge the costs of both parties of and incidental to the wife’s application for summary dismissal.
Further, as the parties are still married, this is the only sensible course.
I certify that the preceding one hundred and twenty-seven (127) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Reilly delivered on 11 February 2011.
Associate:
Date: 10 May 2012
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