Saha & Lahiri (No 3)

Case [2023] FedCFamC1A 144

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

APPELLATE JURISDICTION

Saha & Lahiri (No 3) [2023] FedCFamC1A 144

Appeal from:

Lahiri & Saha (No 3) [2023] FedCFamC1F 181

Lahiri & Saha (No 4) [2023] FedCFamC1F 182
Appeal number(s): NAA 52 of 2023
NAA 66 of 2023
File number(s): BRC 8518 of 2020
Judgment of: TREE, CAREW& rIETHMULLER JJ
Date of judgment: 24 August 2023
Catchwords:

FAMILY LAW – APPEAL – APPLICATION FOR ADJOURNMENT – Where the applicant sought an adjournment of the appeal – Where the applicant had ample time to prepare for the appeal, there is no new material relied upon by her, the appeal was expedited at the applicant’s instigation, and there is nothing in the material to support a stay of the appeal pending the determination of proceedings elsewhere – Where the adjournment was not justified and is refused.

FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Where the applicant sought leave to represent the third respondent self-managed superannuation fund (“SMSF”) – Where the applicant is a undischarged bankrupt, is a disqualified person pursuant to the Superannuation Industry Supervisory Act 1993 (Cth) and cannot be a trustee of the SMSF – Where the applicant has a greater member benefit interest in the SMSF – Where the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 prevent a party from being represented by a person other than a lawyer other than in special circumstances – Where there are no special circumstances – Application dismissed.

FAMILY LAW – APPEAL – LEAVE TO APPEAL – Where the applicant seeks leave to appeal from two orders made by a judge of the Federal Circuit and Family Court of Australia (Division 1), namely, an order made 13 February 2023 enforcing a notice under s 139ZQ of the Bankruptcy Act 1966 (Cth) and an order made 23 February 2023 dismissing an Application in a Proceeding made by the applicant wife – Discussion of the relevant test to determine whether an order is final or interlocutory – Where both orders found to be interlocutory in nature as the orders do not, by their nature, finally determine the rights of the parties – Where leave to appeal refused.

FAMILY LAW – APPEAL – COSTS – Where the second respondent sought costs of and incidental to the appeal and for expedition of the appeal in the sum of $41,759.65 for King’s Counsel’s fees and $3,193.89 for solicitor’s fees – Where applicant opposes costs being awarded however, if awarded, submits the appropriate quantum should be no more than $24,000 – Where it was not considered reasonable to retain King’s Counsel in the matter – Quantum reduced to reflect junior counsel rates – Costs awarded in the fixed sum of $24,000.
Legislation:

Bankruptcy Act1966 (Cth) ss 30, 35, 120, 139ZQ, 139ZR, 139ZS

Corporations Act 2001 (Cth) s 206B

Family Law Act 1975 (Cth) Pt VIII, ss 4, 79, 117

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 7, 26,…

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AGLC
Saha & Lahiri (No 3) [2023] FedCFamC1A 144
Case
[2023] FedCFamC1A 144
Decision Date

CaseChat Overview and Summary

The case of Saha & Lahiri (No 3) involved an appeal against orders made by the primary judge in family law proceedings concerning the wife's property settlement and bankruptcy. The primary judge had made an order requiring the wife to give vacant possession of her home and for the trustee’s costs to be paid by D Pty Ltd, which was one of the entities involved in the dispute. The wife, represented by counsel, sought leave to appeal against the orders made on 13 February 2023 and 23 February 2023, arguing that the orders were made ex parte, the court lacked jurisdiction, and there was a gross miscarriage of justice. The trustee opposed the application for leave to appeal, arguing that the wife had been absent from the proceedings and that the primary judge had exercised the powers available under the relevant court rules.

The legal issues the court needed to decide were whether the orders were attended by sufficient doubt to warrant reconsideration and whether the wife would suffer a substantial injustice if leave to appeal was refused. The court considered the grounds of appeal and the arguments presented by both parties. The court found that the primary judge had exercised the powers available to him under the court rules, and the orders made were consistent with the evidence presented. The wife had not established that the orders were attended by sufficient doubt to warrant reconsideration, and there was no evidence to suggest that the wife would suffer a substantial injustice if leave to appeal was refused.

The court found that the wife's arguments were without merit and dismissed the applications for leave to appeal. The wife was ordered to pay the trustee’s costs of and incidental to the appeal and the hearing of the application for expedition of the appeal in the sum of $24,000. The court considered the reduced fees for junior counsel and the volume of material comprising the appeal book and found that the wife had been wholly unsuccessful in her appeals. The court considered it reasonable to include the four days preparation as claimed and fixed the sum of $24,000 as the appropriate quantum of costs to be awarded against the wife.

In summary, the court dismissed the wife's applications for leave to appeal against the orders made by the primary judge in family law proceedings concerning the wife's property settlement and bankruptcy. The court found that the orders were not attended by sufficient doubt to warrant reconsideration and that the wife would not suffer a substantial injustice if leave to appeal was refused. The wife was ordered to pay the trustee’s costs of and incidental to the appeal and the hearing of the application for expedition of the appeal in the sum of $24,000.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

For the reasons set out below, leave to appeal will be refused. As the applications for leave to appeal are unsuccessful, the wife will be required to pay the trustee’s costs fixed in the sum of $24,000.BACKGROUND To provide context to these appeals, it will be helpful to provide some background. The wife has been involved in extensive litigation in a number of courts and tribunals, involving numerous persons and entities, over many years.[2] Some of these proceedings resulted in a number of costs orders being made against the wife. [2] Husband’s affidavit filed 23 January 2023, paragraphs 28-31. The wife became a bankrupt in September 2016. The period of bankruptcy was later extended for a further five years and is not due to expire until 2024. On 4 June 2020, the Official Receiver, at the request of the trustee, issued a notice under s 139ZQ(1) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”), requiring D Pty Ltd to pay the trustee the sum of $853,875, being the value of the wife’s 99/100th interest in a property situated at B Street, Suburb C, New South Wales (“B Street”). B Street was transferred by the wife and husband (who held a 1/100th interest) to D Pty Ltd on 8 December 2014 for nil consideration, and as such, the transfer was void as against the trustee pursuant to s 120(1) of the Bankruptcy Act. The sum payable under the notice is recoverable by the trustee as a debt against D Pty Ltd in a court of competent jurisdiction pursuant to s 139ZQ(8) of the Bankruptcy Act. The notice also creates a charge over B Street pursuant to s 139ZR(1) and if the debt is not paid within 60 days of receipt of the notice, the trustee has the power to sell B Street pursuant to s 139ZR(6). The sum of $853,875 remains unpaid. Ironically, the procedure under s 139ZQ of the Bankruptcy Act is supposed to be an efficient and inexpensive means for a trustee to recover money or property that has been transferred by a bankrupt under a transaction that is void as against a trustee in bankruptcy.[3] [3] Davidson v Official Receiver [2021] FCAFC 73 at [9]. On 4 September 2020, the Official Receiver issued a certificate pursuant to s 139ZR(4) of the Bankruptcy Act to the Registrar of Titles New South Wales certifying that B Street is charged pursuant to s 139ZR(1) with the liability of D Pty Ltd to make payment to the trustee in the sum of $853,875. It appears that the charge was registered on or about 26 October 2020. The husband and the wife each sought to have the s 139ZQ notice set aside pursuant to s 139ZS of the Bankruptcy Act, but neither of them had filed an application within the 60 day time limit required under s 139ZS(1A)(a) of the Bankruptcy Act. On 2 June 2021, an order was made in this Court, that the “issues in dispute under the Bankruptcy Act 1966 (Cth) identified in these proceedings be listed for a discrete and separate hearing for not more than two days commencing at 10.00 am on 16 September 2021”. On 3 September 2021, D Pty Ltd was joined to the proceedings. The hearing on 16 September 2021 was adjourned and further trial directions were made, listing the discrete hearing for three days commencing on 21 February 2022.

Evidence

Evidence Before The Court

There is no merit in this ground. Failure to consider relevant evidence (Ground 11 of the wife’s Summary of Argument) There is some repetition in this ground and matters already addressed will not be repeated. The wife complains that the primary judge did not consider an updated trust deed which replaced D Pty Ltd as the trustee. There is no evidence the purported updated trust deed was before the primary judge. In any event, in the wife’s application to adjourn the appeal hearing, the wife relied upon a document purporting to be an updated trust deed replacing D Pty Ltd as trustee with the wife and the husband. As already noted earlier in these reasons, the wife is disqualified from being a trustee. If this is the document to which the wife is referring it was invalid. The relevance of an alleged seven “stolen” properties was not established. The primary judge paid particular regard to the medical evidence relied upon by the wife at [51]–[59]. There is no merit in this ground. Failure to consider applicable laws, correct tests and authorities (Ground 12(a) of the wife’s Summary of Argument) We have been unable to discern what relevant laws, tests and authorities the wife might be referring to, that the primary judge failed to consider. There is no merit in this ground. Conclusion – are the decisions attended by sufficient doubt so as to warrant reconsideration? In our view, for the reasons discussed there is insufficient doubt about the decisions to warrant reconsideration. It is therefore unnecessary to consider the second limb of the test, but in any event we are not satisfied that the wife would suffer a substantial injustice, if leave were refused, supposing the decisions to be wrong. Leave to appeal will be refused and the appeals dismissed. COSTS The husband represents himself and does not seek costs. The trustee seeks costs of and incidental to the appeal and the hearing of the application for expedition of the appeal in the sum of $41,759.65 for counsel’s fees (including four days preparation) and $3,193.89 for solicitor’s fees. If unsuccessful in the application for the full sum claimed, the trustee invites the Court to fix a sum. It is noted that the trustee engaged King’s Counsel for both the hearing of the application in the appeal (expedition) and for the appeal. In our view, it was not reasonable to retain King’s Counsel in the matter, notwithstanding the same counsel was retained prior to his appointment as King’s Counsel. We would reduce the quantum to reflect junior counsel rates. Given the volume of material comprising the Appeal Book and the tangential nature of the grounds of appeal and Summary of Argument filed by the wife, we consider it reasonable to include the four days preparation as claimed. If the wife is not successful in her appeals, she nevertheless opposes costs being awarded against her. If a costs order is made, the wife submits an appropriate quantum is $24,000. The wife has been wholly unsuccessful and a costs order is appropriate but not in the sum claimed. Taking into account the reduced fees for junior counsel we consider costs in favour of the trustee should be awarded in the fixed sum of $24,000.

Decision

Reasons for decision

In Hardel Pty Ltd v Burrell & Family Pty Ltd,[36] the Full Court of the Supreme Court of South Australia held that an order by a Master dismissing an application to set aside a creditor’s statutory demand was an interlocutory order, and could therefore be heard by a single judge of the court rather than a three member bench. Kourakis J (as His Honour then was) (with whom Nyland and David JJ agreed) said at 355–360:… the fact that an order disposes of the only proceeding on foot between the parties cannot be determinative. Every order, whether it be final or interlocutory, will dispose of the application in which it is made, and applications which determine only procedural rights may be brought before any substantive action is instituted; applications for leave, either to appeal or to proceed, and for an extension of time are examples. Conversely, the determination of interlocutory applications may bring the only substantive proceedings to an end; orders striking out claims or entering default judgments are examples. …… A final order determines the underlying matter, or some part of it, and for that reason will generally dispose of the action or an element of it. An interlocutory order, on the other hand, determines an aspect of the forensic procedure in accordance with which the matter will be adjudicated. For that reason it will generally direct the course of further proceedings rather than determine any part of the subject matter of the dispute.……… there is much utility in the reformulation of the interlocutory/final dichotomy by reference to the concept of procedural or adjectival orders on the one hand, and orders determining substantive rights on the other. … Rights carry with them a co-relative right to enforcement or remedial orders if those obligations are breached. It is the function of the courts to adjudicate those controversies. … … A final order … finally settles the controversy which is the subject matter of the action, and thereby precludes any further application for another or different orders with respect to that matter; to ask whether a further application can be brought for the purpose of determining whether an order is final or interlocutory conflates cause and effect. Conversely, decisions on whether the court’s jurisdiction to adjudicate a controversy has properly been invoked, and on whether its procedures for determining that controversy have been complied with, are generally adjectival and therefore interlocutory. [36] (2009) 224 FLR 348. Conclusion – is leave required? We respectfully concur with the observations made by Higgins J in Re R & G Shelley Pty Ltd (in Liq) (No 2)[37] that “it would be helpful if the competence of the appeal was readily discernible to avoid sterile and time-wasting arguments concerning that issue”. That might be achieved by including in the Regulations a definition of “interlocutory decree” perhaps mirroring the definition for ‘interlocutory order’ contained in the Rules. [37] (1991) 9 ACLC 636 at 638.

Ratio Decidendi

Legal Principle Established

In order to determine whether the decision is attended by sufficient doubt so as to warrant its reconsideration, it is necessary to consider the merits of the appeal by reference to the grounds relied upon.[40] Are the decisions of the primary judge attended by sufficient doubt so as to warrant its reconsideration?[40] Medlow & Medlow (2016) FLC 93-692 at [58]. On 13 February 2023 and 23 February 2023, the primary judge made orders in the absence of the wife and D Pty Ltd. In doing so, the primary judge was exercising the power contained in r 15.19 of the Rules which relevantly provides: (1)If a party to a proceeding is absent from a court event (including a first court date), the court may do one or more of the following:…(c) if the absent party is an applicant —dismiss the application;(d)if the absent party is a party who has made an interlocutory application—dismiss the interlocutory application;(e)proceed with the hearing generally or in relation to any claim for relief in the proceeding.(2)If a party to a proceeding is absent from a court event, the court may also make an order of the kind referred to in subrule 10.27(1) or (2) (orders on default), or any other order, or may give any directions, and specify any consequences for non‑compliance with the order, that the court thinks just. Rule 10.27 relevantly provides:(1) If an applicant is in default, the court may order that:(a)the proceeding be … dismissed as to the whole or any part of the relief claimed by the applicant; or …(2) If a respondent is in default, the court may:(a) …(b) give judgment or make any other order against the respondent; or …(3)The court may make an order of the kind referred to in subrule (1) or (2), or any other order, … that the court thinks just. The order made on 13 February 2023 requires the wife to, among other things, give vacant possession of her home within 28 days, and for the trustee’s costs of and incidental to the proceedings to be paid by D Pty Ltd, and for D Pty Ltd to be entitled to an indemnity for those costs as against the wife. The wife does not separately address the applicable test to determine whether or not leave to appeal should be granted in her Summary of Argument, although in her Notice of Appeal NAA52/2023 filed 13 March 2023 the wife sets out the “facts” relied upon in support of her application for leave to appeal, which are summarised below:(1)The 13 February 2023 order will cause a substantial injustice as it will leave the wife and her disabled son nothing in the property settlement;(2)The order was made ex parte;(3)The Court had no jurisdiction to make the order;(4)The order represents a gross miscarriage of justice;(5)The trustee has no outstanding costs owed from her estate;(6)The fifth respondent did not consent to the order and was not heard;(7)The primary judge denied all procedural fairness to the wife and interested parties, denying them the right to be heard;(8)The s 139ZQ notice for one SMSF property cannot be used to force the sale of two SMSF properties;(9)The 13 February 2023 order was not made according to the relevant laws;(10)The husband had no legal right to consent to sign away the wife’s share in the SMSF;(11)The primary judge erred in failing to accept that the husband was no longer trustee for the SMSF;(12)The primary judge applied incorrect tests;(13)The primary judge applied incorrect applicable laws; and(14)The primary judge denied the wife procedural fairness by:(a)refusing her leave to appear at the hearing;(b)refusing her online filing;(c)blocking her from joining the hearing;(d)blocking her emails.