Ritter & Ritter
[2020] FamCAFC 86
•20 April 2020
FAMILY COURT OF AUSTRALIA
| RITTER & RITTER AND ANOR | [2020] FamCAFC 86 |
| FAMILY LAW – APPEAL – SUMMARY DISMISSAL – Where the primary judge summarily dismissed the husband’s application pursuant to s 79A of the Family Law Act 1975 (Cth) – Leave to appeal granted – Denial of procedural fairness – Where the primary judge decided the matter on issues not raised in the hearing and of which the parties had no notice – Where the husband was not provided the opportunity to be heard on issues relevant to the primary judge’s conclusion – Where the husband’s evidence taken at its highest was not incredible or unreliable – Appeal allowed – Discretion re‑exercised – Application for summary dismissal refused. FAMILY LAW – APPEAL – COSTS – Respondents ordered to equally pay the husband’s costs of and incidental to the appeal. |
| Family Law Act 1975 (Cth) ss 45A, 79A, 94AA, 117(2A) Federal Circuit Court of Australia Act 1999 (Cth) s 17A |
| Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40 Andrews & Andrews [2007] FamCA 562 Bigg v Suzi (1998) FLC 92-799; [1998] FamCA 14 Coe v The Commonwealth (1979) 24 ALR 118; [1979] HCA 68 Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; [2006] HCA 55 Dewhirst v Edwards [1983] 1 NSWLR 34 Ebner & Pappas (2014) FLC 93-619; [2014] FamCAFC 229 Kioa v West (1985) 159 CLR 550; [1985] HCA 81 Lindon v The Commonwealth (No 2) (1996) 136 ALR 251; [1996] HCA 14 Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27; [2013] VSCA 158 Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34 Meyers v Casey (1913) 17 CLR 90; [1913] HCA 50 Munnings v Australian Government Solicitor (1994) 68 ALJR 169; [1994] HCA 65 Spencer v Commonwealth of Australia (2010) 241 CLR 118 Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54 Taylor v Taylor (1979) 143 CLR 1; [1979] HCA 38 Webster v Lampard (1993) 177 CLR 598; [1993] HCA 57 Wickstead v Browne (1992) 30 NSWLR 1; [1992] NSWCA 272 |
| APPELLANT: | Mr Ritter |
| FIRST RESPONDENT: | Ms Ritter |
| SECOND RESPONDENT: | Ms X Ritter |
| FILE NUMBER: | PAC | 3900 | of | 2018 |
| APPEAL NUMBER: | EAA | 51 | of | 2019 |
| DATE DELIVERED: | 20 April 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney (via videolink) |
| JUDGMENT OF: | Ainslie-Wallace, Aldridge & Rees JJ |
| HEARING DATE: | 30 March 2020 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 30 April 2019 |
| LOWER COURT MNC: | [2019] FCCA 782 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Othen |
| SOLICITOR FOR THE APPELLANT: | Beswick Lynch Lawyers |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Todd |
| SOLICITOR FOR THE FIRST RESPONDENT: | Everett Evans Solicitors |
| COUNSEL FOR THE SECOND RESPONDENT: | Mr Wong |
| SOLICITOR FOR THE SECOND RESPONDENT: | McAuley Hawach Lawyers |
Orders
The appellant husband is granted leave to appeal.
The Application in an Appeal filed by the appellant husband on 9 March 2020 to adduce further evidence is dismissed.
The appeal against the orders of a judge of the Federal Circuit Court of Australia made on 30 April 2019 is allowed and those orders are set aside.
The oral application of the respondent wife and respondent daughter seeking summary dismissal of the Initiating Application for orders pursuant to s 79A of the Family Law Act 1975 (Cth) filed by the appellant husband on 20 August 2018 is dismissed.
The respondent wife and respondent daughter equally pay the appellant husband’s costs of and incidental to the appeal fixed in the sum of $19,030.67.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Ritter & Ritter and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EAA 51 of 2019
File Number: PAC 3900 of 2018
| Mr Ritter |
Appellant
And
| Ms Ritter |
First Respondent
And
| Ms X Ritter |
Second Respondent
REASONS FOR JUDGMENT
Introduction
On 16 July 2012 a Federal Magistrate made consent orders (“the 2012 consent orders”) resolving the property settlement proceedings between Mr Ritter (“the husband”) and Ms Ritter (“the wife”).
By an Initiating Application filed on 20 August 2018 the husband sought that those final property settlement orders be set aside pursuant to s 79A of the Family Law Act 1975 (Cth) (“the Act”). The respondents to the application are the wife and the parties’ adult daughter, Ms X Ritter (“the daughter”). In response to the husband’s application, both the wife and the daughter sought summary dismissal of the husband’s application.
On 30 April 2019 a judge of the Federal Circuit Court of Australia summarily dismissed the husband’s application. The husband appeals from that order.
Before considering the grounds of appeal, it is useful to explain the nature of the dispute before the primary judge to give the appeal context. The matters of context are taken principally from the husband’s affidavit and the reasons for judgment. Although the wife filed an affidavit in the summary dismissal proceedings, it did no more than set out principal dates such as when they married, separated and the date on which the consent orders were made. The daughter too filed an affidavit which was equally brief but in it she made a blanket denial of the matters on which the husband relied to support his application to set aside the 2012 consent orders.
Background
The parties were married in 1988, separated in 2009 and divorced in 2012. They have one child, now an adult, who is the second respondent in this appeal.
In 2008 the husband and the wife purchased Property C for $450,000. The property was not subject to a mortgage. After the parties separated the wife commenced property settlement proceedings which were resolved between the parties by the 2012 consent orders. These orders, relevant to this appeal, provide:
1.Within thirty (30) days of the making of these Orders (“the Due Date”) the parties shall adjust their property interests in accordance with the following provisions:-
1.1.The Husband and Wife do all such acts and things and sign all such documents to transfer to the Daughter of the marriage, [Ms X Ritter], at her expense, all of the Husband’s right title and interest in the real property situate at and known as [Property C].
1.2.The Wife shall retain all of her right title and interest in the real property known as [Property C].
1.3.From the date of the transfer of the Husband’s interest to the Daughter, the Wife and the Daughter will indemnify, and keep the Husband indemnified, in respect of any liabilities arising from [Property C] including, but not limited to mortgage repayments, rates, insurances and outgoings.
2.Unless otherwise provided for in these Orders, both parties are to be declared the sole and legal and beneficial owners of all items of property presently in their possession and control including but not limited to savings, motor vehicles, real property, entitlements to superannuation, furniture and personal effects.
…
In 2007 the husband was sentenced to a term of imprisonment. As a consequence of his conviction, the husband was ordered to pay to the NSW Crime Commission $100,000, which was paid in full by June 2007.
The husband was sentenced to another term of imprisonment which commenced on 28 March 2012. He was released on 27 December 2013. Whilst in prison the husband was attacked and stabbed eight times requiring hospitalisation and medical care in prison.
The husband told the daughter about this incident. He said that the attack left him feeling scared and anxious. In June 2012, his daughter visited the husband at prison and said to him that she had been contacted by the NSW Crime Commission who were seeking further funds, having discovered the husband’s ownership of Property C. The husband then, at the daughter’s request, signed a document that she had prepared in which he agreed to sell his share in Property C to her for $1. The husband said that the daughter told him she would sell that property and buy another in his name. He said he was confused that the NSW Crime Commission wanted more money and felt pressured by his daughter to sign the document but he did so nonetheless.
There was no evidence before the primary judge that the NSW Crime Commission had, in fact, been pursuing the husband for further funds at that time.
The 2012 consent orders give effect to the conclusion sought by the daughter in having the husband sign the document.
Property C was then sold by the daughter and the wife (who retained her interest in Property C) for $540,000 on 18 July 2013. On 24 July 2013, the daughter and the wife purchased Property B for $265,000. On 25 September 2013, the daughter and wife purchased Property A for $330,250.
After being released from prison, the husband moved into Property B which his daughter led him to believe was owned by him. He said that his daughter told him she needed to take out a mortgage of $50,000 in order to purchase it and thus required him to pay rent and produced for his signature a tenancy agreement. In compliance with his understanding the husband said he paid a total of $47,000 to his daughter thinking it was paying off the mortgage on Property B.
He was not. The property was not registered in his name. He was a tenant of his daughter who owned the property. Eventually, the daughter evicted the husband from Property B. Thus the husband brought proceedings pursuant to s 79A of the Act to set the 2012 consent orders aside on the basis that his daughter materially misled him in the circumstances in which he came to sign the documents.
As we have said, by applications filed in September 2018 both the wife and the daughter sought that the husband’s application be summarily dismissed.
The proceedings before the primary judge
At the commencement of the appeal, counsel for the husband sought to include in the appeal books the transcripts of two directions hearings conducted by the primary judge preliminary to listing the summary dismissal application for hearing. There was no objection to the inclusion of those transcripts as part of the material considered by the Full Court.
When the matter first came before the primary judge on 26 September 2018 for directions, the husband was ordered to file Points of Claim supporting his application and the respondents to file Points of Defence.
The matter returned before her Honour on 21 November 2018 when without prior notice to the husband, the solicitor then appearing for the daughter made an oral application that the husband’s s 79A application be summarily dismissed. The oral application was echoed and supported by counsel for the wife.
Although counsel for the husband urged her Honour to consider both applications together, that is to first determine the summary dismissal and then, if that application did not succeed, to hear the application pursuant to s 79A, her Honour instead proposed to deal with the summary dismissal application alone (Transcript 21 November 2018, p.3 lines 8–26).
The application was listed for hearing on 22 March 2019 and the primary judge directed the respondents to file and serve case outline documents.
When the matter came on for hearing before the primary judge, counsel for the wife argued that the Court had no jurisdiction to hear the s 79A application because the property, the subject of the 2012 consent orders, was no longer held by the wife and the daughter and thus there was no remedy available to the husband even if he was successful in having the 2012 consent orders set aside.
Essentially, the case for the daughter was that the husband’s claim against her could not succeed in the Family Court of Australia because it was not a matrimonial cause.
Further, the solicitor for the daughter argued that the Court lacked the necessary jurisdiction to entertain the husband’s application pursuant to s 79A, arguing that even if the Court set the 2012 consent orders aside it could not make further, consequential orders. The solicitor for the daughter also argued that there was no common substratum of facts which would allow the Court to assume jurisdiction and thus the husband’s application was “doomed to failure” (Transcript 22 March 2019, p.15 lines 13–15).
Her Honour discussed with counsel for the husband whether there would be no jurisdiction if the making of the 2012 consent orders was “ultra vires” such that the order could not stand (we are not entirely sure what her Honour meant by this oblique remark) (Transcript 22 March 2019, p.16 lines 11–15). However, counsel for the husband submitted, correctly in our view, that the jurisdiction to be exercised under s 79A of the Act was not dependent on there being an existing matrimonial cause. He further argued that he had not been required to particularise his claim to support the jurisdiction of the Court to make consequential orders in the event that the s 79A application was successful but maintained that the issue of jurisdiction was a matter at trial and said that if the Court found that because of the daughter’s conduct the 2012 consent orders were tainted, the Court would have jurisdiction to make consequential orders (Transcript 22 March 2019, p.17 lines 18–45).
As it turned out, the primary judge did not determine the question of whether the Family Court of Australia had jurisdiction to entertain the husband’s application pursuant to s 79A, instead determining the matter against the husband on other bases.
The Appeal
At the outset of the reasons for judgment, her Honour identified and discussed the legal principles to be applied in determining such an application. It is not her Honour’s identification of the relevant principles that is challenged but, rather her application of them where it is asserted she fell into error. We note however that in her Honour’s recitation of the legal principles, her Honour regarded herself as applying s 17A of the Federal Circuit Court of Australia Act 1999 (Cth) but, by reason of the operation of s 17A(5) of that Act, in fact it was s 45A of the Family Law Act 1975 (Cth) that applied. Fortuitously, the terms of the two sections are broadly similar and the principles of law are the same, her Honour being required to consider whether the husband had no reasonable prospects of success in prosecuting his application pursuant to s 79A. It was not contended that any error flowed from her Honour’s misconception.
It is necessary however to note that while her Honour’s recitation of the relevant legal principles was substantially correct, she referred as authority for those principles, to decisions of single judges of the Federal Circuit Court of Australia and of the Federal Court of Australia. There is in our view considerable benefit in revisiting those principles by reference to the decisions of the High Court of Australia and intermediate Courts of Appeal, for while judges of first instance often cite those principles, their decisions are not binding. The full force and effect of the applicable principles is felt by considering the cases from which the principles are derived (see Lindon v The Commonwealth (No 2) (1996) 136 ALR 251 per Kirby J at 255–256; Ebner & Pappas (2014) FLC 93-619; Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27; Spencer v Commonwealth of Australia (2010) 241 CLR 118).
That then is the context of the husband’s application.
Leave to Appeal
Counsel for the husband sought leave to appeal on the basis that the primary judge’s order was interlocutory.
Whether an order summarily dismissing an action is an interlocutory order was considered in Ebner & Pappas (2014) FLC 93-619 at [30]–[32] where the Full Court held that an order for summary dismissal on the basis that the application discloses no reasonable cause of action was interlocutory.
The Full Court in Medlow & Medlow (2016) FLC 93-692 at [57] stated that:
…the test to be applied in application for leave to appeal under s 94AA of the Act is whether, in all of the circumstances, the decision is attended by sufficient doubt to warrant it being reconsidered by the Full Court and whether substantial injustice would result if leave were refused…
(Emphasis in original)
Counsel for the husband further submitted that if leave to appeal was not granted, this would cause significant prejudice towards the husband as the effect of the 2012 consent orders that the husband wishes to set aside provides no room for the husband to initiate a claim in a court of equity. To determine whether sufficient doubt has been raised and whether substantive injustice would result if the matter was not considered by the Full Court, it is necessary to consider the merits of the appeal.
For reasons that follow, leave to appeal will be allowed in relation to the summary dismissal of the husband’s application to set aside property settlement consent orders, as there is merit in the appeal.
The Grounds of Appeal
The Notice of Appeal filed by the husband on 27 June 2019 contains 13 grounds however, the thrust of the argument on appeal was whether the primary judge failed to afford the husband procedural fairness and whether her Honour correctly applied the relevant legal principles.
In the husband’s Summary of Argument filed on 7 November 2019, the first three grounds were collectively grouped as the “inadequate evidence grounds” and the last ground was termed the “illegality ground”. We will deal first with so many of the grounds as contend a denial of procedural fairness.
Illegality
This challenge arises from her Honour’s findings in relation to the husband’s motive in effecting the transfer of his interests in Property C to the daughter.
Her Honour found:
66.What is striking in the husband’s case is that he says he consented to the transaction of transferring the property to the daughter so that the NSW Crime Commission would not be able to confiscate that asset.
67.In his mind, the husband was entering into the transaction with a view of escaping the legal consequences of his illegal actions and of defrauding the State of New South Wales. He had it in his mind that he would later reap the benefit of that transaction by having another property transferred to him.
68.Why this Court, or indeed any other court, would exercise its discretion in favour of a party who was clearly trying to escape the law (albeit erroneously), was not explained in the husband’s submissions.
69.The husband is in fact saying that there was a miscarriage of justice because he tried to pervert the course of justice when he had no reason to do so.
The first matter to be observed here is that this issue, the husband’s motive in transferring his interest to his daughter or, put another way, whether the husband had “clean hands” so as to entitle him to the exercise of the discretion of the Court, was not raised in the hearing before the primary judge either by counsel for wife, solicitor for the daughter or her Honour. The first time that this issue emerged was in the judgment.
It must be observed that had her Honour raised this issue with the parties, her Honour may have had the benefit of argument on the point and of course the husband would then have been on notice of her Honour’s concerns and been able to respond.
Regrettably too, her Honour’s characterisation and application of the principle is wrong as a matter of law. It would be hoped that had her Honour raised this issue with the parties the correct legal principles could have been considered.
The law on the equitable principle of “unclean hands” is quite well known. The Full Court in Andrews & Andrews [2007] FamCA 562 adopted the following principle:
56.The maxim “he who comes into equity must come with clean hands” is discussed in Meagher RP, Heydon JD and Leeming MJ, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (Sydney: Butterworths, 4th ed, 2002) at [3-110] as follows:
It means that when a plaintiff whose conduct has been improper in a transaction seeks relief in equity that relief will be refused. … [i]t is an historical reflection of the fact that courts of equity began with courts of conscience.
(See Cory v Gertcken (1816) 2 Madd 40; 56 ER 250; Cawthorn v Cawthorn (1998) FLC 92- 805 at 85,061).
However, the maxim is not of universal application and only applies where the improper conduct of the plaintiff has “an immediate and necessary relation to the equity sued for” (see Meyers v Casey (1913) 17 CLR 90 at 124; Dewhirst v Edwards [1983] 1 NSWLR 34 at 51).
Thus considered, the principle had no place in her Honour’s consideration of the issues to be determined by her.
On the appeal, counsel for the daughter argued that while her Honour’s consideration of the husband’s “fraud” was not raised in the hearing before the primary judge, it was not relevant to her Honour’s ultimate decision, it playing no part in her conclusion.
That submission cannot be maintained. Had her Honour not considered it to be a matter relevant to her ultimate conclusion, why then did her Honour devote four paragraphs to her discussion of it and furthermore, its placement in the judgment, that is, in the paragraphs leading to her ultimate conclusion drives the view that it was indeed an important part of her reasoning process.
Indeed, her Honour’s findings themselves support no other conclusion. Although her Honour found at [54]–[56] that the husband did not have a reasonable cause of action (which we observe is not an accurate articulation of the test to be applied), her Honour then under the heading “Conclusion”, apropos the husband’s claim that he was induced to enter into the terms by fraud, said:
59. However, given that a party may be able to establish a miscarriage of justice in respect of a consent order, if a party’s consent was for any reason not a true consent, the husband at least has an arguable case in this regard, albeit a very weak one. The consent to the order is itself a 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, a miscarriage of justice by reason of “any other circumstance”.
(Emphasis added) (Footnotes omitted)
Thus, having found that the husband had an arguable case under s 79A of the Act, her Honour then continued and concluded that a court would not exercise its discretion in the husband’s favour because of his attempt to “pervert the course of justice when he had no reason to do so” (at [69]).
Her Honour’s own reasoning shows that she considered the husband’s case to be arguable, albeit weak. That a case is said to be weak is insufficient to justify its summary dismissal (see Coe v The Commonwealth (1979) 24 ALR 118; Wickstead v Browne (1992) 30 NSWLR 1). Thus, but for her Honour’s consideration of the husband’s conduct, the application for summary dismissal should not have been dismissed.
Did then her Honour fail to afford the husband procedural fairness?
In Kioa v West (1985) 159 CLR 550, Mason J said at 582:
It is a fundamental rule of the common law doctrine of natural justice expressed in traditional terms that, generally speaking, when an order is to be made which will deprive a person of some right or interest or the legitimate expectation of a benefit, he is entitled to know the case sought to be made against him and to be given an opportunity of replying to it...
Again, although well known to the point of being trite, Kirby J’s expression of the principle in Allesch v Maunz (2000) 203 CLR 172 is apposite:
35.It is a principle of justice that a decision-maker, at least one exercising public power, must ordinarily afford a person whose interests may be adversely affected by a decision an opportunity to present material information and submissions relevant to such a decision before it is made. The principle lies deep in the common law. It has long been expressed as one of the maxims which the common law observes as “an indispensable requirement of justice”. It is a rule of natural justice or “procedural fairness”. It will usually be imputed into statutes creating courts and adjudicative tribunals. Indeed, it long preceded the common and statute law. Even the Almighty reportedly afforded Adam such an opportunity before his banishment from Eden.
36.The rule is also implicit in international principles of human rights. It is inherent in the proper conduct of judicial proceedings in a court of law. It may even be an implied attribute of the Judicature established under, and envisaged by, the Constitution. So deeply ingrained is the principle that more recent times have seen its extension, with certain exceptions, to administrative tribunals and other decision-makers. The principle governed the Family Court of Australia in determining the rights of the present parties.
(Footnotes omitted)
Natural justice requires that anything relied upon by a court in reaching its decision be made known to the parties to the proceedings prior to the making of the decision, so that parties may oppose reliance upon it, produce evidence in relation to it and/or make submissions about it. Reliance upon material which does not emerge in that manner amounts to appealable error.
Of course, not every denial of procedural fairness will be sufficient to establish appellate error, critical consideration needs to be given to the consequence of the denial and whether it is material (see Stead v State Government Insurance Commission (1986) 161 CLR 141; Taylor v Taylor (1979) 143 CLR 1).
To underscore, if emphasis is otherwise needed, the importance of this principle, we note that had her Honour afforded the parties an opportunity to be heard, her Honour may well have been asked to consider that there being no evidence that the NSW Crime Commission was seeking to attach Property C, to transfer the property in those circumstances is no crime. Further, it could not be overlooked that if the husband’s conduct was “illegal” so too must be the daughter’s, yet her Honour only visited the “illegality” on the husband and, the daughter and the wife who it is alleged benefited from the deceit were unaffected, but the husband was left without a remedy.
In our view, her Honour’s conclusion that the husband was attempting to, in effect, profit by his own fraud was significant to her ultimate decision and we are of the view that by failing to raise the issue with the husband, or at all during the proceedings, her Honour denied him procedural fairness.
This failure of itself is sufficient to cause the appeal to be allowed. This is because a denial of procedural fairness in relation to a material matter strikes at the validity and acceptability of the trial process and its outcome. Where a defect in the administration of justice has been found to have occurred the orders must be remedied (see Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 at [117]).
Sufficiency of evidence and procedural fairness
The primary judge considered whether the husband’s application had reasonable prospects of success from [46]–[55] and concluded at [56] that he did not after “[t]aking the evidence of the husband at its highest”.
However, from [70], her Honour turned to the sufficiency of the husband’s evidence in support of his application and said:
71.There is no evidence in the husband’s case as to how [Property C] was acquired except as to the date of its acquisition. The purchase price is only available as a result of the Transfer being annexed to the husband’s affidavit.
72.There is no evidence as to contributions nor any evidence going to the substantive issue of justice and equity in respect of the primary relief sought. The husband does not seek to disturb the interest of the wife. He only seeks to disturb the interests of the daughter.
73.The husband’s evidence, at its highest, is woefully inadequate as to the relevant matters the Court would need to consider in determining his application for s79A orders, in particular but not limited to: whether the Court in its discretion should vary or set aside the order; and whether it should make another order.
74.As such, the Court finds that he has no reasonable prospect of success, and his Initiating Application is therefore to be dismissed.
This challenge concerns her Honour’s treatment of the evidence in support of the husband’s application and it is argued that her Honour erred in two ways.
First it was argued that neither lawyer for the respondents challenged the sufficiency of the husband’s evidence in support of the s 79A application in the hearing before her Honour, thus this issue was raised for the first time in her reasons for judgment and, again, operated to deny the husband procedural fairness.
Secondly it was argued that her Honour in assessing the sufficiency of the evidence to support the s 79A application misapplied the principles of summary dismissal.
Procedural Fairness
There is no doubt that neither the solicitor for the daughter nor counsel for the wife addressed the primary judge on the adequacy of the husband’s evidence to found the application for orders pursuant to s 79A. Their arguments, as we have shown, were restricted to contending that the Court had no jurisdiction to make any order consequent on any application of s 79A. Indeed when the matter was listed for hearing, the solicitor for the daughter informed her Honour that the argument would not consider the husband’s evidence but would be a legal one.
It is to be understood too, as counsel for the husband observed during the hearing before the primary judge, that he had not been required to particularise his claim, only to file Points of Claim.
Thus, the husband having no notice of her Honour’s intention to traverse the evidence before her to see whether he could make good his claim to orders pursuant to s 79A, failed to afford him procedural fairness in circumstances where the failure had a material effect on her Honour’s orders.
In these two aspects, that is in relation to the husband’s motive for transferring his interests in Property C to his daughter, and the sufficiency of the evidence supporting the application for a s 79A order, her Honour failed to afford the husband procedural fairness and thus the appeal must succeed.
Did the primary judge correctly apply the relevant principles?
Counsel for the husband argued that the husband’s evidence taken at its highest, clearly raises serious questions of fact and law to be considered at trial, and by summarily dismissing the husband’s s 79A application, her Honour failed to correctly apply the guiding principles pertaining to summary dismissal which her Honour set out at length in the preamble to her reasons for judgment.
The determination of the issue must only take into account the material on which the respondent seeks to make out the case, or as often expressed takes the respondent’s case “at its highest” unless the respondent’s version is inherently incredible or unreliable (see Munnings v Australian Government Solicitor (1994) 68 ALJR 169 at 171; Bigg & Suzi (1998) FLC 92-799; Webster v Lampard (1993) 177 CLR 598 at 608). Indeed the primary judge herself stated at [13] “[t]he Court must consider whether the evidence at its highest and as a matter of law, establishes that the husband has no reasonable prospect of success”.
It is plain that her Honour did not take the husband’s evidence at its highest and in the context of these principles. Her Honour did not find that the husband’s account of the circumstances in which he came to sign over his interest in Property C was inherently incredible or unreliable and thus there was no basis for not accepting it for these purposes.
However, it is plain that her Honour concluded that such was the insufficiency of the evidence on which the husband relied to support his application, it would not entitle him to success on any s 79A application.
The point is that where, as here, the husband contends his consent to the orders was obtained through deception, very little evidence of the sort to which her Honour referred is required because a miscarriage of justice occasioned by fraud cuts to the integrity of the judicial process. If the husband demonstrates the deceit, it must follow that the orders be set aside and what orders then are made becomes a matter for trial.
We are of the view that her Honour’s reasons demonstrate that she failed to do as she indicated, take the husband’s evidence at its highest but, instead distracted her consideration by addressing what ultimate orders might be made while understanding that the husband had not had the opportunity to put on that evidence.
Thus this challenge is made out.
The appeal will succeed and her Honour’s order will be set aside.
At the conclusion of the appeal hearing all parties agreed that in the event that the appeal was allowed, the Full Court should re-exercise her Honour’s discretion and reconsider the respondents’ application for summary dismissal.
Re-Exercise
Before turning to the re-exercise, the husband filed an Application in the Appeal seeking to adduce further evidence. The evidence sought to be adduced comprises the documents which initiated the property settlement proceedings as between the husband and the wife in 2011 and which culminated in the making of the 2012 consent orders sought to be impugned in the s 79A application.
For our part, it is unnecessary to consider these documents because we are of the view that, taking the husband’s evidence as to the circumstances of the making of the orders at its highest, and not finding that the evidence is inherently unbelievable or incredible, we conclude that the husband’s case could not be said to have no reasonable prospects of success.
We thus will dismiss the oral applications of the respondents for summary dismissal.
Costs
In the usual way we took costs submissions at the conclusion of the appeal. It was argued for the husband that there should be no costs order inter partes unless the Court came to the view that the respondents having identified that the application succeeded on a basis that was not argued, ought to have conceded that appeal.
We are inclined to the view that the respondents should pay the husband’s costs of the appeal. During the appeal hearing, neither counsel for the daughter nor the wife argued that the “clean hands” point was agitated during the hearing before the primary judge and each would have been well aware that neither was the sufficiency of the husband’s evidence. In our view this was an appeal which was bound to succeed and each of the wife and the daughter has been wholly unsuccessful on the appeal (s 117(2A)(e) of the Act).
The evidence is that each stands possessed of property to which we have earlier referred and in our view it is appropriate that they equally bear the costs of the husband fixed in the sum of $19,030.67.
I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ainslie-Wallace, Aldridge and Rees JJ) delivered on 20 April 2020.
Associate:
Date: 20 April 2020
532
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