Roux and Roux
[2013] FCCA 359
•11 April 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ROUX & ROUX | [2013] FCCA 359 |
| Catchwords: FAMILY LAW – Attempted enforcement of final orders by third party (litigation funder) – joinder of parties – discretionary considerations including proceedings in other jurisdictions, time constraints/delay – proper forum – application to intervene by non-party (litigation funder). |
| Legislation: Family Law Rules2004, rr.20.05, 20.59 |
| Cases cited: Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386 |
| Applicant: | MS ROUX |
| Respondent: | MS ROUX |
| File Number: | CAC 880 of 2007 |
| Judgment of: | Judge Neville |
| Hearing date: | 11 April 2013 |
| Date of Last Submission: | 11 April 2013 |
| Delivered at: | Canberra |
| Delivered on: | 11 April 2013 |
REPRESENTATION
| Counsel for the Applicant: | In person |
| Solicitors for the Applicant: | Not applicable |
| Counsel for the Respondent: | In person |
| Solicitors for the Respondent: | Not applicable |
| Solicitor/advocate for the Intervener: | Mr Jones |
| Solicitors for the Intervener: | Argyle Lawyers Pty Ltd, Sydney |
ORDERS
The Application in a Case, filed 10 January 2013, be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Roux & Roux is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
CAC 880 of 2007
| MS ROUX |
Applicant
And
| MS ROUX |
Respondent
REASONS FOR JUDGMENT
(Revised from Transcript)
Introduction
On 31st March 2008, consent orders in relation to parenting were made by this Court.
On 22nd October 2010, consent orders in relation to property were made by this Court.
On 10th January 2013, an Application in a Case was filed by [A] Limited (“[A]”). [A] was never a party to either the parenting or property proceedings between the parties, or otherwise the subject of any orders made by the Court in relation to those matters. Briefly stated, [A] sought orders to intervene in the original proceedings, and sought further orders, pursuant to ss.92(1), 79A, and 106 of the Family Law Act 1975 (“the Act”) to enforce (in the alternative) (a) the original 2010 property orders, or (b) a judgment obtained in the District Court of Queensland against the Applicant Wife (Ms B, formerly, Ms Roux). [A] provided funding for Ms B for her family law proceedings. For the reasons that follow, the Application by [A] must be dismissed.
Background
The orders sought by [A] are as follows:
1. Pursuant to section 92(1) of the Family Law Act 1975 (Cth), that [A] Limited (ACN [omitted]) be granted leave to intervene in the proceedings.
2. Pursuant to section 106 of the Family Law Act 1975 (Cth) and Chapter 20 of the Family Law Rules 2004, that the final orders made by consent by this Honourable Court on 22 October 2010 in these proceedings (the Orders) be performed and otherwise enforced.
3. In the alternative to orders 1 and 2 above, orders pursuant to section 79A(1) of the Family Law Act 1975 (Cth) that the orders be varied or set aside, and in lieu thereof:
(a) An order that the amount of the debt owed to the intervener by the Applicant pursuant to the judgment of the District Court of Queensland dated 24 February 2012 together with accrued interest, be paid directly to the intervener or its solicitors, out of that portion of the matrimonial property to which the Applicant is, or may be, entitled; and
(b) Such further or other order as to the Court seems fit.
4. Costs
The Husband sought a curiously (and opaquely) worded order in the following terms: “To have my matter formerly [sic] investigated as to ascertain a correct dollar amount that is to be paid to [A] prior to any monies changing hands.”
Mr Roux filed an affidavit on 8 March 2013 in which he confirmed his support for the Application by [A]. He outlined also a range of other matters (but no formal orders) about which he sought from the Court assistance in the performance of various things, such as payment by his former Wife of the cost of a single expert report in 2007.
The Wife sought no formal orders. However, in the course of the hearing, she indicated that she opposed the Application by [A].
Ms B also filed an affidavit (also on 8 March 2013) in which she set out some background. Of some immediate relevance she deposed that (a) her former lawyers had advised her that if the matter went to trial it would cost approximately $40,000 to conduct the case, and (b) the same lawyers facilitated a loan (Ms B referred to the lender as “[I]”) in the sum of $100,000. Ms B also deposed that once those funds had been expended the lawyers ‘wished her well’ and ceased acting for her. As I note below, presumably because of this original loan, and the subsequent proceedings in Queensland, Ms B appears to have an outstanding debt to [A] now in excess of $200,000.
Background
With its Application, [A] filed an affidavit by its Chief Executive Officer, Mr T. On the day of the hearing (11th April) and shortly before it commenced, a further lengthy affidavit, sworn by [A]’s solicitor, Mr Petrucco, was also filed. The self-represented Applicant Wife, and self-represented Respondent Husband, each confirmed that they had only just received a copy of the latter affidavit but had no particular objection to it being relied upon. The Court indicated that the parties, if they wished, would have an opportunity to make any written submissions in relation to anything in Mr Petrucco’s affidavit.
The affidavits filed on behalf of [A] provide copies of documents that support the history of matters involving that company and Ms B, outlined below.
The solicitor who appeared for [A] at the hearing (Mr Jones) provided the Court (and the parties) with a hand-written chronology of events which, he said, were relevant to the Application. By way of summary, I note the following.
In August 2007, a loan contract was concluded between [A] and Ms B. Pursuant to that contract, [A] provided funds of approximately $91,000 to Ms B, via her then solicitors (Farrar Gesini & Dunn – “FGD”) in various instalments.
In March 2010, FGD advised [A] (in writing) of the terms of the property settlement in her family law proceeding. FGD further advised [A] that she would borrow against the property she would receive pursuant to the terms of settlement, and use those funds received to pay the debt owing to [A]. The payment to [A] would occur, so it was intended, at the time of the settlement of the family law proceeding.
I have already noted that property orders, by consent, were made on 27 October 2010.
In February 2011, [A] commenced proceedings against Ms B in the District Court of Queensland. In relation to that proceeding, Ms B was represented by different solicitors, Macpherson & Kelley Lawyers.
Ms B originally challenged the jurisdiction of the District Court of Queensland. Ultimately, however, the jurisdictional issue [apparently] was either not pursued or withdrawn, and Macpherson and Kelley withdrew from acting for Ms B. Indeed in January 2012, the District Court of Queensland dismissed Ms B’s application.
In February 2012, [A] obtained default judgment against Ms B.
Next, in March 2012, the bankruptcy process was commenced against Ms B by [A]. Paragraphs 15 – 17 of Mr Petrucco’s affidavit confirm that a bankruptcy notice was issued and served on Ms B. That Notice (a copy of which is part of annexure L to the affidavit) confirms that the debt [then] owing by her totalled $212,555.29.
In the course of hearing the current Application, Mr Jones confirmed the following matters. First, when asked about the status of the bankruptcy proceedings, Mr Jones said: “Nothing has happened with those proceedings, though it has been an active bankruptcy [sic], but my client elected not to pursue a creditor’s petition.”[1] In answer to questions from the Bench later in his submissions, Mr Jones confirmed that his client elected not to pursue bankruptcy proceedings, and accordingly, there were no bankruptcy proceedings commenced or otherwise currently on foot. Indeed, with appropriate candour,
Mr Jones said that “we took the view that it would not be any quicker or easier to go down the bankruptcy route….”[2]
[1] See Transcript (11th April 2013) p.5. Hereafter references will simply be to “T” followed by page number.
[2] See T 5, 10 & 12. Mr Jones also confirmed that he had not prepared the Application and therefore did not have immediate answers to a range of questions, such as why there was reference to the Family Law Rules and not [also] to the Rules of this Court, particularly in relation to “necessary parties” in Part 11. See T 8 – 9.
Secondly, the following exchange took place between the Bench and Mr Jones:[3]
[3] T 6 – 7.
HIS HONOUR: Sorry. If I understand correctly, what you’re seeking to do legally is to enforce the judgment that you’ve got in the District Court of Queensland, correct?
MR JONES: That is correct, your Honour.
HIS HONOUR: Right.
MR JONES: Obviously, by enforcing that judgment is by having the 2010 orders complied with by the parties.
HIS HONOUR: No, I understand. Yes, yes. Yes. I mean, you would say that the 2010 orders are a convenient vehicle, basically, on which you can ride in order to have satisfied the judgment that was obtained in the District Court of Queensland.
MR JONES: That is correct, your Honour. And the correspondence annexed to Mr T’s affidavit, there’s a fairly largely bundle of correspondence between my firm and Mr Roux’s solicitors of last year. We were told that Mr Roux was going to have this matter relisted to have those orders enforced. We sort of stood by the wayside waiting for that to happen and it finally reached the stage where we decided that enough time had elapsed and we would take that step. And I believe Mr Roux did refer on the last occasion to the fact that we beat him to it, so to speak, that he was actually intending to have this matter relisted and have the orders implemented or complied with.
Thirdly, as just noted, Mr Jones confirmed to the Court that it was his understanding that the Respondent Husband, Mr Roux, was going to seek to have the matter relisted with a view of having the 2010 orders enforced. And, he said, “we sort of stood by the wayside, waiting for that to happen, and it finally reached the stage where we decided that enough time had elapsed and we would take that step.”[4]
[4] T 7.
In the course of hearing the Application by [A], it was suggested to
Mr Jones that the more appropriate demarcation or characterisation of the respective disputes – based on the affidavit material filed by [A] and the brief material filed by each of the parties – was as follows: (a) the dispute between [A] and Ms B based upon the loan contract of August 2007 (Dispute A); (b) the unresolved contest between the parties in relation to compliance with the 2010 consent orders (Dispute B); and (c) the further contest between Ms B and her original lawyers (FGD) which she has yet formally to pursue, other than, she says, by seeking legal advice and referring the matter to the ACT Law Society (Dispute C). In effect, [A] was/is seeking to resolve Dispute A by seeking to intervene, and enforce orders made, in Dispute B.
If that characterisation be accepted (and there was no demurrer to it), in the circumstances outlined, the principal issue for the Court to determine is whether or not the contest between [A] and Ms B should be permitted to be litigated in this Court, by granting [A] leave to intervene in proceedings that were concluded by the property orders made in October 2010?[5]
[5] See the discussion at T 10.
Legal Principle & Discussion
In my view, the appropriate way to proceed is in two stages: (a) to consider whether there is any legal basis upon which [A] is entitled to intervene (and whether there are any discretionary considerations that would militate against granting the Application to intervene); (b) if granted leave to intervene, to consider the respective bases upon which [A] seeks to enforce the 2010 property orders.
The only statutory ground upon which [A] moves the Court to allow intervention is pursuant to s.92(1) of the Family Law Act 1975 (“the Act”). That section provides:
(1) In proceedings (other than divorce or validity of marriage proceedings), any person may apply for leave to intervene in the proceedings, and the court may make an order entitling that person to intervene in the proceedings.
(1A) In divorce or validity of marriage proceedings, a person in relation to whom an order has been made under subsection 69W(1) requiring a parentage testing procedure to be carried out may apply for leave to intervene in the proceedings, and the court may make an order entitling the person to intervene in the proceedings.
(2) An order under this section may be made upon such conditions as the court considers appropriate.
(3) Where a person intervenes in any proceedings by leave of the court the person shall, unless the court otherwise orders, be deemed to be a party to the proceedings with all the rights, duties and liabilities of a party.
Unfortunately, [A] provided no reference to any authority, or any discussion/submission in relation to the proper construction of s.92 of the Act. In the course of hearing the Application, I noted some authority in relation to the s.92 application, as well as in relation to each of the alternative grounds of relief in relation to enforcement, in the event that the intervention Application succeeded. I then invited Mr Jones to consider, and if necessary, to take instructions as to whether his client wished to press the Application. After granting him an opportunity to take those instructions, the Application was pursued.
The principal authority to which I referred Mr Jones was the High Court decision in Vitzdamm-Jones v Vitzdamm-Jones.[6] Before considering that case, I note two earlier judgments of the Family Court of Australia.
[6] Vitzdamm-Jones v Vitzdamm-Jones (1981) 148 CLR 383.
First, in In the Marriage of CR & JM Griffiths, Pawley SJ said: “Section 92 in my view relates only to proceedings which are on foot.”[7] Clearly, the current matter concluded in October 2010. Accordingly, there are no proceedings “on foot”.
[7] In the Marriage of CR & JM Griffiths (1980) 7 Fam LR 317 at p.320.
Secondly, in rather more colourful terms, and relying on the High Court decision in Ascot Investments Pty Ltd v Harper, Frederico J said that if intervention were granted “I could envisage the butcher, the baker, the candlestickmaker and all sorts of persons seeking leave to intervene to recover all manner of household debts from estranged spouses.”[8]
[8] In the Marriage of W (1982) 8 Fam LR 323 at p.325. Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337.
Finally, in Vitzdammm-Jones, in which, amongst other things, there was consideration of s.92 of the Act, the High Court held (in the words of Gibbs J in particular) that it “is not possible to intervene in proceedings that have concluded and are no longer on foot.”[9]
[9] Vitzdamm-Jones 148 CLR at p.415-416.
The authorities to which I have referred are sufficient to deal with the Application to intervene. Given that the proceedings between the parties are no longer “on foot”, the Application to intervene must be refused.
For the sake of completeness, however, I note the following [further] obstacles to the Application brought by [A].
First, and only for the sake of completeness, [A] did not raise (or seek to do so) any of the issues that were addressed by the High Court in relation to “representative proceedings” in Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd, including the Court’s consideration of ‘abuse of process.’[10] Nor did [A] raise (or seek to do so) any of the matters considered by the High Court in relation to the assignment of a bare right to litigate (also considered in Campbell’s Back Office at [74]) in Equuscorp Pty Ltd (formerly Equus Financial Services Ltd) v Haxton.[11]
[10] Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386.
[11] Equuscorp Pty Ltd (formerly Equus Financial Services Ltd) v Haxton (2012) 286 ALR 12.
Secondly, [A] did not seek to intervene when the proceedings between the parties were on foot. Whether such an application was appropriate or would have been likely to succeed – either as an intervener or as an amicus curiae – is now moot.[12] According to the affidavit material filed on its behalf in the current Application, [A] says that there was correspondence from Ms B’s then lawyers, which seem to have “represented” to it that its debt would be paid out at the time of settlement. Because of such representations, [A] says that it ‘stayed its hand’ in relation to the loan to Ms B. There is no indication whether [A] has considered its position in relation to those lawyers and any representation which they may or may not have made. I make no comment one way or the other on any such course or consideration.
[12] In relation to intervention while proceedings are on foot, see, for example, Levy v State of Victoria (1997) 189 CLR 579.
All of this is to highlight that, as a discretionary matter, as straight-forward as [A] seeks to put its case, there are a number of additional factual matters to which I have just referred that would militate against the granting of the Application in any event. I turn to other similar considerations.
I have already noted that [A] has secured a judgment debt in the District Court of Queensland. In a very preliminary way, it initiated but did not pursue steps in relation to bankruptcy proceedings but ultimately it has elected not to pursue them. Even if there was validly established a legal basis for intervention under s.92 of the Act, as a discretionary matter, I would likely have some difficulty in allowing the Application to proceed on the basis that (a) this Court should not be used by creditors to enforce judgments from other courts, and (b) as a choice of forum, there are other, more appropriate avenues for [A] to seek to satisfy the judgment it has obtained. In my view, it matters not that Mr Roux, initially at least, supported the Application by [A]. Formally, the Application is by a litigation funder to intervene. Mr Roux may ultimately seek to enforce the orders made in October 2010. To seek to enforce, on the one hand, a judgment obtained in the Queensland District Court and, on the other, to enforce orders made in this Court, are two distinct actions. [A] has sought to blur them both as to forum and as to the nature of the respective actions.
Finally, and briefly: if successful in the intervention Application, [A] sought an order to enforce the October 2010 orders pursuant to s.106 of the Act. That section relates to enforcing a maintenance order that is in arrears for more than 12 months. Unfortunately, Mr Jones did not have a copy of the Act with him (or copies of the Rules of any relevant Court); I read the section to him. The October 2010 orders, in my view, cannot properly be characterised as a “maintenance order.”
In the alternative, [A] sought orders pursuant to s.79A of the Act. Mr Jones said that s.79A(5) was the relevant sub-section. That sub-section actually deals with the bankruptcy trustee and orders made under s.79. Perhaps he was intending to refer to s.79A(4). That section provides:
For the purposes of this section, a creditor of a party to the proceedings in which the order under section 79 was made is taken to be a person whose interests are affected by the order if the creditor may not be able to recover his or her debt because the order has been made.
On the clear reading of that sub-section, at the time the October 2010 orders were made, [A] was not a creditor “whose interests are affected by the order.” Indeed, on its own affidavit evidence, ‘settlement’ between the parties was expected to benefit [A] by having its debt paid out.
However, as I have indicated, I need not, and do not make any orders, or findings, in relation to any of the orders sought concerning enforcement. For the reasons given, including the fact that it has been now close to three years since the proceedings were finalised, I order only that the Application to intervene be dismissed.
I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of Judge Neville
Date: 24 May 2013
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