SALEEBA & MOON (AS EXECUTOR FOR THE ESTATE OF THE LATE MS LAMBROS)

[2015] FamCA 43

FAMILY COURT OF AUSTRALIA

SALEEBA & MOON (AS EXECUTOR FOR THE ESTATE OF THE LATE MS LAMBROS) [2015] FamCA 43

FAMILY LAW – ENFORCEMENT OF ORDERS – Property orders ­– Where a Federal Magistrate made consent orders – ­Where the husband wishes to have those consent orders set aside – Where the mother has died – Whether there was a miscarriage of justice by reason of the making of the consent property orders – Section 79A(1)(a) – Whether there are circumstances of an exceptional nature ­– Whether the husband will suffer hardship of a serious nature if the orders are not set aside ­– Where the husband’s application is dismissed.

Family Law Act 1975 (Cth) ss 79A(1)(a), 79A(1)(d)
Succession Act 2006 (NSW)

Harris v Caladine (1991) 14 Fam LR 593; (1991) 172 CLR 84; [1991] HCA 9
Inthe Marriage of J W and A M Gebert (1990) 14 Fam LR 62
In the Marriage of Holland (1982) 8 Fam LR 233; [1982] FLC 91 – 243
Smith and Smith (1984) FLC 91-512 at 79,165
Redman and Redman [2013] FamCAFC 183
Simpson and Hamlin (1984) 9 FamLR 1040
Public Trustees Executor of the Estate of the Late Ross George Gilbert & Cheryl Ann Gilbert (1991) FLC 92-211; 14 Fam LR 573

APPLICANT: Mr Saleeby

RESPONDENT: Ms Moon  (as executor of the estate of the late Ms Lambros)

FILE NUMBER: PAC 5308 of 2010

DATE DELIVERED: 3 February 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Aldridge J

HEARING DATE: 21 November 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Bridger

SOLICITOR FOR THE APPLICANT: Barraket Stanton Lawyers

COUNSEL FOR THE RESPONDENT: Mr Flaherty

SOLICITOR FOR THE RESPONDENT: Boyd Lawyers

Orders

1. That the husband’s Initiating Application filed on 25 March 2014 is dismissed.

2. That the husband attend an enforcement hearing and produce the documents listed below:

   (a)Income tax returns of the respondent for the financial years ending 30 June 2012 and 30 June 2013.

   (b)Income tax returns and financial statements of S International Pty Ltd for the financial years ending 30 June 2012 and 30 June 2013.

   (c)All home loan statements for the previous 2 years to date in respect to the property at I Street, Suburb P, NSW, being St George Bank limited account number …100 (BSB …).

   (d)All credit card statements for the period 1 July 2012 to date for the respondent’s credit card accounts (14 accounts) as listed at item 30 of the respondent’s financial statement filed in these proceedings on 25 March 2014.

   (e)An inventory of the “fine artwork” listed at item 43 of the respondent’s financial statement filed in these proceedings on 25 March 2014, including the nature of each piece of artwork, the name of the artist and the value of each piece of artwork, together with any appraisals or valuations for the said  “fine artwork”.

   (f)Any hire purchase agreements or lease agreement entered into between the respondent and Mercedes-Benz Financial Services Australia Pty Ltd (and/or Mercedes Benz Finance Australia Pty Ltd) in respect to motor vehicle registration number …, and in respect to any other Mercedes-Benz motor vehicle for the period 1 July 2012 to date.

   (g)All documents relating to the sale and purchase of C Street, Suburb B by the respondent solely or jointly with any other party, including any corporate entity of which the respondent is a director and/or shareholder.

3. That, within seven (7) days of these Orders, the husband is to deliver to the respondent a Memorandum of Transfer (in registrable form) duly executed by the husband as “transferor” of his interest in the property known as D Street, Suburb A (“the property”).

4. That the respondent is to have sole right, power and responsibility to sell the property including the sole right to select and engage a selling agent of the property and the sole right, power and responsibility to determine the sale price of same.

5. That the husband is to do all things reasonably necessary to facilitate the sale of the property by the respondent (including signing all documents and instruments reasonably necessary to facilitate such sale) at the price determined by the respondent.

6. That in the event that the husband refuses or neglects to execute any deed or instrument necessary to give effect to all or any of these orders that the Registrar of the Court at Sydney be appointed pursuant to s 106A of the Act to execute such deed or instrument in the name of the husband and do all other acts and things necessary to give validity to the said deed or instrument.

7. That the whole of the net proceeds of sale of the property be paid to the respondent. For the purposes of this order “Net proceeds” means  the whole of the sale price less:

   (i)Amounts due and payable to National Australia Bank Limited pursuant to mortgage … secured over the property.

   (ii)The costs, fees and disbursements of any real estate agents engaged by the respondent to assist in the sale of the property.

   (iii)Legal costs reasonably incurred by the respondent as a result of the sale of the property.

8. Notation to the effect that any payment of monies paid to the National Australia Bank Limited from the sale of the property by the respondent are without prejudice to her entitlement to enforce the orders made in the Federal Magistrates Court at … in proceedings File No. PAC 5308/2010 on 16 July 2012 and without prejudice to the respondent’s right to obtain reimbursement for such payment or payments from the husband.

9. That all applications and cross applications be and are hereby dismissed.

10. That all issues be removed from the Active Pending Cases List.

11. That all material produced on subpoena shall be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same not before fifty-six (56) days from the date of these Orders.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Saleeby & Moon (as executor of the estate of the late Ms Lambros) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: PAC 5308 of 2010

Mr Saleeby

Applicant

And

Ms Moon  (as executor of the estate of the late Ms Lambros)

Respondent

REASONS FOR JUDGMENT

introduction

1. On 16 July 2012 Federal Magistrate Halligan (as his Honour then was) made consent property orders in proceedings between Mr Saleeby (“the husband”) and Ms Lambros (“the wife”).  The husband now seeks to have those orders set aside.  He says, firstly, that the orders should never have been made because Federal Magistrate Halligan could not, on the material that was filed, have come to the conclusion that the orders were just and equitable.  Secondly, the husband asserts that the death of the wife in February 2014 and the return of his son E commencing to live with him constitutes exceptional circumstances which, combined with his financial hardship, justify setting aside the orders. 

2. The respondent to the proceedings is Ms Moon as executor of the estate of the late Ms Lambos.  The proceedings were conducted by the parties on the basis that the court would first determine whether or not the consent orders should be set aside and, if they were, then make directions for the preparation of a hearing to determine what should be the appropriate orders then to be made.

3. I shall refer to the parties as husband and wife without intending any disrespect to them.

background

1. The husband was born in 1966 and the wife was born in 1968.  They married in November 1991 and, according to the husband, separated in October 2010.  They were divorced in February 2011. 

2. The husband and the wife had three children – F born in 1996, H born in 1998 and E born in 2000. 

3. Upon separation of the husband and wife in October 2010 the three children lived with the wife at the property at D Street, Suburb A (“D Street property”).  Shortly after, in December 2010, H returned to live with the husband and in 2011 F also returned to live with the husband.

4. On 16 July 2012 Federal Magistrate Halligan made consent parenting orders.  Pursuant to those orders the husband and the wife were to have joint parental responsibility for the children.  E was to live with the wife and F and H were to live with the husband.  The orders provided for E to spend time with the husband as provided in the orders and for F and H to spend time with the wife as agreed. 

5. On the same date, by consent, the Federal Magistrate made the following property orders:

   1.That within 14 weeks of these Orders being made the Respondent will do all act and things and sign all instruments necessary to transfer to the Applicant all his right, title and interest in the property known as [D Street, Suburb A] contained wholly in Folio Identifier … .

   2.That within 14 weeks of these Orders being made the Applicant will do all acts and things and sign all instruments necessary to transfer to the Respondent all her right, title and interest in the properties known as, [Property X, G Street, Suburb A] contained wholly in Folio Identifier …52 and [Property Y, G Street, Suburb A] contained wholly in Folio Identifier …52.

   3.That simultaneously with delivery of the Transfer documents referred to in the Orders 1 & 2, the husband shall discharge the mortgages on the properties at [D Street, Suburb A], [Property X, G Street, Suburb A] and [Property Y, G Street, Suburb A] and indemnify and keep indemnified the Applicant from all liabilities with respect to said properties.

   4.That upon Orders being made the Respondent shall pay the Applicant a total sum of $140,000.00 in the following manner:

   1.$10,000.00 upon the making of these Orders.

   2.$40,000.00 within 14 weeks of the making of these Orders.

   3.$90,000.00 by way of instalments of $500.00 per week commencing 14 weeks from the date of these Orders.

   5.That the Respondent Husband be declared to have the sole right, title and interest of the property at [I Street, Suburb P] wholly contained in Folio Identifier … .

   6.That the Respondent shall retain all right, title and interest in the shares of the company known as [S] Pty Ltd and in the business operated under that name and the Applicant shall not make any claim as to right, title or interest in the said shares or business.

   7.The parties shall do all acts and sign all instruments necessary to register a caveat in the Applicant’s favour against the property known as [I Street, Suburb P] or any property substituted from time to time at the Respondent’s discretion until payment in full by the Respondent of any obligation pursuant to these Orders and in that event the Applicant Wife will sign and do all things reasonably necessary to effect a withdrawal of any such caveat.

   8.That the Respondent shall be solely responsible for all loans, credit cards and other debts in his sole name and in the name of [S] Pty Ltd.

   9.That the Applicant shall be solely responsible for all loans, credit cards and other debts in her sole name.

   10.That each party shall retain sole right, title and interest in all other personalty currently held in their sole name, possession and control, including but not limited to all motor vehicles, bank account proceeds, shares, home contents, art works and jewellery.

   11.In the event that either party neglects or fails to sign any necessary document or to do any act required or contemplated by these Orders, following a written request by either party the Registrar of the Family Court of Australia pursuant to powers conferred upon him/her under Section 106Aof the Family Law Act 1975 shall execute any document or instrument in the name of the person who has neglected or failed to sign any necessary document or to do any act required or contemplated by these Orders.

   12.That the parties covenant that the payment by the Respondent Husband to the Applicant Wife in accordance with order 4 hereof shall in addition be accepted by the Applicant Wife in full and final satisfaction of the Respondent Husband’s spousal maintenance obligations to the Applicant Wife.

   13.These Orders shall be binding upon all heirs, executors, administrators and assigns of each party respectively.

6. It is to be observed that pursuant to those orders the wife was to receive the properties at: D Street, Suburb A; Property X, G Street, Suburb A; and Property Y, G Street, Suburb A and the husband was obliged to discharge the mortgages on those properties.  In addition to receiving these three properties unencumbered the wife was to be paid $140 000 by the husband. 

7. Pursuant to the orders the husband was to receive I Street, Suburb P (“I Street property”) and retain all his interest in the shares of the company known as S Pty Limited. 

8. It is not known what, if any, material was taken into account by the court in making the consent orders. 

9. The I Street property was burdened by a mortgage in favour of Mercedes Benz Financial Services Australia Pty Limited (“Mercedes Benz”) securing a debt of $586 228.10 in respect of two loan agreements that the husband had entered into with that company.  Over the years the husband had purchased a number of expensive motor vehicles and the mortgage entered into on 18 October 2011 secured the amount then outstanding under two loan agreements. 

10. On 29 May 2013 Mercedes Benz, the husband and the wife entered into a settlement deed. 

11. Pursuant to the deed the husband and the wife agreed to sub-divide what was described in the deed as “[Property Z, G Street, Suburb A]” (“[G Street] property”) into four parts, sell them and to distribute the funds by first paying the encumbrances on the G Street property then the D Street property and finally the debt owed to Mercedes Benz. 

12. The property at G Street was described in the consent orders as Property X, G Street, Suburb A and Property Y, G Street, Suburb A.  There is no doubt that they are the one property because they bear identical folio identifier numbers. 

13. The deed referred to the sale of the four sub-divided properties identifying, amongst other things, the purchaser and the purchase price of each of the four sub-divisions.  Thus the deed was able to foreshadow a shortfall between the proceeds of sale and the amount of the debt to Mercedes Benz of $51 994.73 for one contract, and $33 670.92 for the other contract.  The deed provided for the shortfall to be repaid by the husband by regular monthly payments.  He was also to take reasonable steps to sell his Mercedes Benz motor vehicle within eight weeks and apply the proceeds to the debt to Mercedes Benz and then to the mortgage on the D Street property, if there were sufficient funds to do so.

14. On 13 June 2013 the husband made a payment in reduction of the mortgage on the D Street property of $20 000. 

15. On 28 November 2013, after the sale of his motor vehicle, the husband paid $44 824.59 to Mercedes Benz and $195 175 in reduction of the mortgage over D Street. 

16. The husband made a payment of $10 000 on 24 July 2012, said to be in compliance with order 4. On 4 March 2013 he made the payment of $40 000 which order 4 required him to make by 22 October 2012. 

17. The husband did not make all the payments of $500 per week as required by order 4.3. By 14 February 2014 he had made payments totalling only $20 000. The amount that should have been paid by the time of hearing was $41 000 and the debt continues to increase at $500 per week.

18. The amount owing to the bank in respect of the mortgage on the D Street property was at 22 April 2014 $91 925.34 The husband said that he was continuing to make the mortgage repayments.

19. The wife died in February 2014.  By her last Will and Testament dated 14 April 2013 (“the Will”) she appointed Ms Moon as her Executor and Trustee.  Probate of that Will was granted to Ms Moon on 1 April 2014 and Exemplification granted on 20 May 2014.  Pursuant to that Will the wife left the whole of her estate to Ms Moon upon trust for E absolutely upon his attaining the age of 25 years.  The Will made no other relevant provision the wife saying in paragraph 5 of the Will:

    I DECLARE that I have not bequeathed any part of my estate to my children [F] and [H] as they chose to shut me out of their lives since December 2010 for reasons I cannot understand or accept.  They have hurt me severely and have treated me with unspeakable contempt and disrespect.  I believe they will be sufficiently provided for by their father both during his lifetime and upon his death.

    (Annexure A of the affidavit of the husband sworn 24 May 2014)

20. Upon the death of the wife in February 2014 E returned to live with the husband and continues to do so.

was there a miscarriage of justice by reason of the making of the consent property orders

1. The husband submits that at the time consent property orders were made on 16 July 2012 there was a miscarriage of justice.  His counsel submitted:

   What he is saying and what his case is, that at the time the orders were made they ought not to have been made because the result was not a just and equitable result.  The court, on the information that it had before it at the time, could not have been – could not have resulted in a just and equitable result between the parties.

   (Transcript of proceedings 21 November 2014, page 3, lines 18-23)

2. In doing so the husband relies upon s 79A(1)(a) the Act which  relevantly provides:

   Setting aside of orders altering property interests

   (1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:

   (a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or

   (b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or

   (c) a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or

   (d) in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order; or

   (e) a proceeds of crime order has been made covering property of the parties to the marriage or either of them, or a proceeds of crime order has been made against a party to the marriage;

   the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
   (1A) A court may, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, and with the consent of all the parties to the proceedings in which the order was made, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.

3. In bringing this application the husband relies solely upon the words “any other circumstance” and does not seek to rely upon any other ground under 79A(1)(a).   The making of the orders is said to be the relevant “other circumstance”.

4. There is no evidence suggesting that the consent orders were made by Federal Magistrate Halligan in open court.  It was assumed by the parties that the orders were made in chambers.  There is no evidence as to what, if any, material was taken into account by the Federal Magistrate prior to him making the consent orders.  What is clear, however, is that each of the husband and the wife were then represented by legal practitioners and each asked the court, through their practitioners, to make the consent orders.

1. The husband relies on the three financial statements and two affidavits that had been filed in the proceedings prior to the making of the consent orders to submit that, having regard to that material, the consent orders should never have been made as they were not just and equitable. Quite clearly, these documents comprise all of the available evidence which the Federal Magistrate could have taken into account.  I repeat, however, it is entirely unknown whether the Federal Magistrate had any regard to any of it at all.

2. As the husband’s case was firmly based on them it is necessary therefore to turn to these documents. 

3. The first is the wife’s financial statement filed on 21 July 2011.  She listed her assets as:

[D Street, Suburb A] (owned jointly with the husband)	$250 000
[Properties X and Y, G street, Suburb A] (owned jointly with the husband)	$550 000
Cash at bank	$800
Toyota … motor vehicle	$15 000
Art collectables	$117 500
Total	$933 300
Together with Superannuation	$10 000

1. The wife described her liabilities as:

Borrowing on [D Street, Suburb A]	$163 000
[Properties X and Y, G Street, Suburb A]	$406 000
Personal Loan	$19 000
Total	$588 000

1. The husband filed a financial statement on 15 August 2011.  In that document he described as his salary or wages before tax as being $1 538 per week.  Given that he had no other apparent source of income I infer these wages were paid to him by S Pty Ltd.  He disclosed “income from business” as being $5 000 per week.  Again, I infer that was from S Pty Ltd. 

2. He described his assets as:

[D Street],	$280 000
[Properties X and Y, G Street]	$450 000
Motor vehicle	$560 000
[S Pty Ltd]	$0
Household contents	$100 000
Art and Collectibles	$200 000
Total	$1590 000
Superannuation	$58 846

1. He described his liabilities as:

Mortgage on [D Street]	$170 000
Other Mortgages	$275 000
Assessed and unpaid income tax	$55 000
Credit cards	$110 000
Hire Purchase or Lease	$510 000
Total Liabilities	$1 120 000

1. The husband filed a further financial statement on 13 October 2011.  It disclosed his salary and wages as $1 538 per week and income from business as $5 000 per week.  Again I infer that is from S Pty Ltd.  The husband described his assets as:

[D Street, Suburb A] (owned jointly)	$280 000
[Properties X and Y, G Street, Suburb A] (owned jointly) and[I Street] (owned by him solely) combined	$1 030 000
Motor vehicle	$560 000
Shares in [S Pty Ltd]	$0
Household contents	$100 000
Art and Collectibles (his share)	$200 000

1. The husband described his liabilities as being:

Mortgage on [D Street]	$170 000
Mortgage on [Properties X and Y, G Street and    I Street]	$795 000
Assessed and unpaid income tax	$55 000
Credit cards	$110 000
Hire Purchase or Lease	$510 000
Total	$1 640 000

1. It is to be noted that the August financial statement omits any reference to the I Street property.  According to the notes to each of his financial statements the motor vehicle was in fact three motor vehicles, a Ferrari, a Mercedes and a Toyota.  The last seemed to be a reference to the car disclosed in the wife’s financial statement.

2. The other point to note is that the husband’s statements do not disclose whether the mortgage over the two properties at Suburb A and the mortgage over the I Street property were one mortgage or two separate mortgages.  If it is the latter, the amount of the I Street mortgage was not known.

3. In his affidavit filed on 11 August 2011 the husband said:

   35.I have estimated over the course of the last 12 months that on average I have earned approximately $6000 gross per week, which includes my salary and the dividends from the company.

   36.I do not anticipate the same level of income from this point on. The contracts, which the company had undertaken, have all been finished and there is no guarantee that any other work is coming.  The Global Financial Crisis has had a dramatic effect on me and the building industry generally.  At the moment I do not envisage that either the company or I would be earning anything substantial.  Currently there are ample suppliers of the services that the company provides and very little work. 

4. In her affidavit filed on 20 July 2011 the wife described S Pty Ltd as having a value of “Not known” but having $113 000 in its bank account.

5. From the three financial statements the wife’s counsel prepared the following table to demonstrate what she said were the assets and liabilities of the parties :

   Wife:

[D Street]	560,000
[Toyota] car	30,000
Art (wife – relying on her Financial Statement)	117,500
House Contents	100,000
Cash	140,000
Superannuation	10,000
Total	957,500

Husband:

[Properties X and Y, G Street] + [I Street]	1,030,000
Cars x 3	560,000
Art & collectibles (husband – relying on his Financial Statement)	200,000
Superannuation – husband	58,864
Total
Superannuation – wife	10,000
Total	1,848,846
Less
Mortgage [D Street]	340,000
Mortgage [G Street] + [I Street]	795,000
ATO	55,000
Credit cards	110,000
Car loans	510,000
Cash payable to wife	140,000
Total	1,950,000
Net	38,846

1. The tables are not quite accurate.  For example the wife’s superannuation is included in both the husband’s and the wife’s asset table.  The tables also include the cash sums payable by the husband to the wife which attempts to show the effect of the orders rather than the assets available to the parties. For example, those payments could have been paid from income.  Allowing for these minor criticisms the husband’s counsel submits the tables demonstrate that the wife received all of the assets of the parties, that this could not possibly be an appropriate or just and equitable property division and therefore the making of these orders was a circumstance that resulted in a miscarriage of justice. 

2. There are a number of difficulties with this approach.

3. It is to be reiterated that it is not known whether or not Federal Magistrate Halligan took into account any or all of the above material. 

4. The submission proceeds on the premise that S Pty Ltd had no value. S Pty Ltd is an omission from the above table.  The husband’s counsel submits that this was because the evidence that could have been before Federal Magistrate Halligan indicated that it had no value.  That is not so. The wife ascribed an unknown value to it in her affidavit. That is not an indication of no value. She also asserted that it had a significant cash asset. Further, the evidence of the husband was that the company had generated for some time a considerable income by way of wages and dividends of $6 000 per week, although he did anticipate a drop in that amount.  Although possible, it would not be immediately obvious that such a company generating such an income for the benefit of its shareholder would have no value at all. 

5. Therefore a judge reading the three financial statements would proceed on the basis that although the husband asserted S Pty Ltd had no value, the wife did not accept that statement and that there was evidence capable of establishing that the company had some value. In short, the premise that this material establishes that S Pty Ltd had no value is not made out.

6. Given that such a reader may consider that S Pty Ltd could have had some value the reader may well consider that the husband considered that its value, whatever it may be, was sufficient to justify the making of the orders.

7. The husband relies very strongly upon the well-known decision in Harris v Caladine (1991) 14 Fam LR 593; (1991) 172 CLR 84; [1991] HCA 9.

8. In that case a Deputy Registrar made consent orders pursuant to s 79 of the Act. The Family Court held that the wife was not entitled to a hearing of the original property application and the only basis for a review of an order made by consent, including consent orders made by a registrar, was under s 79A. The High Court was primarily concerned with the constitutional validity of a registrar exercising judicial power. It held that the Act could validly permit a registrar to do so but only if there was an unfettered right of rehearing before a judge. In coming to that view remarks were made concerning the degree of satisfaction a court must have before making consent orders under s 79. At page 617 Dawson J said:

   In considering what order, if any, should be made under s 79, a court is required under sub-s (4) of that section to take a number of matters into account, including the various financial contributions made by the parties to the marriage. And sub-s (2) provides that a court shall not make an order under the section unless it is satisfied that, under all the circumstances, it is just and equitable to do so. The fact that an order is sought by consent does not relieve a court, or a registrar, from compliance with the requirements of the section, but it may render compliance much less demanding. Provided that a court, or a registrar, is adequately informed, where the parties are at arms length and are properly represented little more than consent may be needed to establish that the requirements of the section have been met.

9. At page  603 Brennan J said:

   It does not follow that, when a consent order is sought in a s 79 application, it is necessary to conduct an inquiry into each of those factors. The court may be satisfied that a provision is proper by reference not only to the material before the court relating to the factors mentioned in s 79(4) but by reference to the advice available to the respective parties and the consent which they respectively give to the making of the order. In the majority of cases, once it appears that the parties are conscious of the factors mentioned in in paras (a) to (f) and have taken them into account before consenting, the provisions “with respect to financial matters” proposed for incorporation in the consent order will be seen to be “proper”.

10. Whilst those passages clearly indicate that a court must undertake an inquiry to satisfy itself of the matters to be taken into account under s 79 they also clearly indicate the court is entitled to rely upon the fact of the consent itself and that the parties are properly represented. In such a case little more may be required.

11. These passages do not assist the husband. The Federal Magistrate was entitled to rely on the consent of each of the parties as conveyed to the court by their legal representatives.

12. Inthe Marriage of J W and A M Gebert (1990) 14 Fam LR 62 the Full Court of the Family Court of Australia considered an application under s 79A(1)(a) to set aside consent orders where the husband had received approximately nine per cent of the parties’ assets. The husband had submitted that the consent order was so unreasonable that it could be inferred that he had acted under duress, ignorance or as a result of incompetent advice.

13. At page 66 the court referred with approval to a decision of the Full Court In the Marriage of Holland (1982) 8 Fam LR 233; [1982] FLC 91 – 243 which said:

    To succeed in an application under s 79A, the wife must show some circumstance leading to a miscarriage of justice. Agreement, to a consent order which may not adequately reflect a party’s entitlements under s 79 does not, of itself, show that there has been a miscarriage of justice. There may be cases where the order consented to is so far outside the ambit of what is just and equitable that the court may infer that a party has acted under duress, in ignorance or as a result of incompetent advice.

14. Of this passage the Full Court in Gebert (supra) said at page 66:

    It is, we think, clear from the last sentence of the above passage, that the court considered that there may be circumstances where the order is so unreasonable as to give rise to an inference that some matter has affected the party’s reasoning, which would vitiate the order.  On the other hand, we think it must be appreciated, as the Full Court said, that the fact alone of an apparently unreasonable order does not necessarily lead to such a conclusion.  If the order is apparently unreasonable and there is no rational explanation of it having been agreed upon, then the inference referred to by the Full Court may be capable of being drawn.  On the other hand there may be quite rational explanations of such an order having been made.  There may be many situations where a party acting perfectly rationally, for reasons of his or her own, is prepared to make a more substantial allowance to the other spouse than would normally be the case.  Indeed, there may be some cases where a party will voluntarily concede the whole of the matrimonial property to the spouse.

15. The Full Court pointed out that although the husband was under some emotional stress at the time the consent orders were made and that the agreement for the consent orders were made at a time shortly after the breakup of the marriage which would have exacerbated the emotional stress, there was no evidence that the wife had taken any advantage of any superior bargaining power that she might have had as result of that stress.  The court continued at page 68:

    The very expression “miscarriage of justice” using s 79A(1)(a) does not fit happily with the concept of a party of full age and with full knowledge of the circumstances entering into an agreement of this nature in circumstances where he had deliberately decided not to seek legal advice, although urged to do so.  No doubt had the situation brought about by the order being imposed upon him, it may have amounted to a miscarriage of justice but the law fortunately still allows persons to form their own views as to the arrangement of their affairs.  In the present case, there appears to be no doubt that this is precisely what the husband did.  The fact that he later repented of that decision, in no sense elevates his original decision to consent to such an order to a miscarriage of justice nor should such an order in our view be interfered with.  On the contrary, we would regard it as a considerable miscarriage of justice from the wife’s point of view if the husband’s then conscious decision entered into free of duress, was now to be interfered with on a paternalistic view as to what might or might not have been in his best interests. 

16. These cases are consistent with what was said by the Full Court in Smith and Smith (1984) FLC 91-512 at 79,165 and 79,166:

    The second answer is that where the parties consent to an order, particularly when legally represented, they are to be taken as having given full and proper consideration to all the matters which lead up to the request to the Court to make an order by consent. That factor alone should therefore in the vast majority of cases be sufficient to satisfy a Judge that the order sought is just and equitable; for the very reason that he is doing exactly what the parties, properly advised, have asked him to do.

17. In Redman and Redman [2013] FamCAFC 183 the Full Court said at [36]:

    The Court is not relieved from its obligation to consider whether the making of the order is just and equitable under s 79(2) simply because the order is said to be by consent.

18. It is important to bear in mind that Redman (supra) was a case where the trial judge refused to make a consent order and where the Full Court, albeit for different reasons, again refused to make the same consent orders.  There was concern about the wife’s English skills and there was no evidence that she had received independent legal advice. I do not take Redman (supra) to be contrary to the above authorities.

19. Unlike Gebert (supra), in this matter the husband had the benefit of legal representation.  That makes the husband’s task in this case even more difficult.  These authorities establish that the learned Federal Magistrate would have been entitled to rely upon consent of the parties who had the benefit of independent legal representation and little more to make the consent orders. The possibility, or even probability, of different orders being made after a contested hearing does not vitiate the consent orders. The husband agreed to the consent orders having had the benefit of legal advice. Presumably, he thought they were appropriate at the time. He gave no evidence to the contrary.

20. This consideration is, of itself, sufficient for the husband’s application to fail.

21. I do not accept that the orders were on their face so unreasonable as not to be just and equitable and should not have been made.  The orders show the wife receiving three properties and the husband receiving one property and the company S Pty Ltd.  The husband has obligations to discharge mortgages on the properties.  It cannot be deduced from those orders themselves that the wife was getting, as the husband asserts, 100 per cent of the net available assets of the parties.  The learned Federal Magistrate could only have come to the view now asserted by the husband if his Honour had regard to the materials now relied upon by the husband. As I have said it is entirely speculation as to whether his Honour did so or not.

22. As was made clear in Holland (supra) a determination as to whether the consent orders resulted in a miscarriage of justice due to any other circumstance is to be undertaken having regard to the facts and circumstances existing at the time the orders were made.  I consider that in order to establish a miscarriage of justice by reason of the making of the orders the husband is obliged to demonstrate that on that date the orders engendered a miscarriage of justice. 

23. The husband did not attempt to give any evidence as to the financial position of the parties at the time the consent orders were made (remembering that the affidavits and financial statements now relied on by the husband were filed some months earlier).  In an affidavit filed in the application, however, the husband said:

    47.[S] Pty Ltd employs [Trade J workers] and subcontractors to undertaken commercial projects and on occasion residential projects.  In order to undertake these commercial projects, I, on behalf of [S] Pty Ltd tender contracts to companies requiring significant [Trade J or Trade K work].  The tender process can take anywhere between six (6) to twelve (12) months or more on occasions.

    48.[S] Pty Ltd had its largest project in 2011.  The company was hired by [Company L] in the supply fitout of [Material M] in [N Centre, Sydney].  The project was worth approximately $6 000 000.00.  It was the largest project the company had ever completed.  Prior to 2011 & 2012, contracts for supply and fitout were for significantly for smaller costs.  Usually, a project was worth approximately $ 1,000,000.00 to $1,500,000.00. 

    49.Since 2012, the company has not had any further contracts of that magnitude.     

    (Affidavit of the husband sworn 6 November 2014)

24. That evidence is capable of establishing that as at the date of making the consent orders S Pty Ltd had a value greater than nil and such a value as would have justified the husband entering into the consent orders. 

25. Thus the premise upon which the husband’s submissions are based, namely that there can be no rational explanation for the consent orders being made and that therefore they are not just and equitable has not been established.

26. This aspect of his application fails as no miscarriage of justice by reason of the making of the consent orders has been established.

section 79A(1)(d)

1. Section 79A(1)(d) provides:

   (1)Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:

   ….

   (d)  in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order;

   ….

1. The husband’s case rests on the following propositions.  The first is that since the consent orders were made the wife has died and E has gone to live with his father.  That, the husband submits, is a circumstance of an exceptional nature relating to the care, welfare and development of a child.  Secondly it is submitted that the husband’s financial circumstances are such that he will suffer hardship of a serious nature if the orders are not set aside. 

2. In the marriage of Simpson and Hamlin (1984) 9 FamLR 1040 the Full Court said at page 1045:

   … his Honour quite rightly, in our view, concluded that:

   “The occurrence of a change in the responsibility for the daily care and control of children of a marriage, after the making of a property order under sec. 79 of the Family Law Act could not be held of itself to be an unusual circumstance.  The ordinary vicissitudes of life coupled with the difficulties that parties to a marriage often experience in the task of restructuring their lives following the dissolution of their marriage and the division of their assets, and their obligations to the support of each other and the support, care and control of their children, frequently creates situations in which it is desirable having regard to the children’s welfare that such a change occurs.”

   The question therefore was whether the change which occurred in this case was such as to “take it out of and beyond the ordinary circumstances in which such change might be reasonably expected to occur”.  He saw that feature in the present case in “the fact that the change had occurred unexpectedly and so quickly after the making of the property order”.  The fact that the change was originally intended by the husband to be temporary, he considered irrelevant in the view of the fact that it afterwards became accepted by the parties as a permanent arrangement.  However, his Honour also accepted at p 16 that C would be likely to move back to her father’s household in “January 1984” [sic], presumably 1985.

   His Honour in our view stated correctly the law applicable on this point.  One amounts to “exceptional circumstances” is very much a question of fact and agree.  With findings on such matters an appellate tribunal is reluctant to interfere.  Whilst we might have had some hesitation ourselves as to whether or not in the light of the history of these parties and their admitted future intention, the change of custodial arrangements was so exceptional as to take it out of the normal vicissitudes of life, it was in our view a finding which his Honour was entitled to make on the evidence and which we cannot disturb.

3. At page 1047 the court said:

   The importance of bringing an end to litigation remains an important consideration and the remarks of Mason J. remain applicable to para. (d) mutatis mutandis.  To paraphrase his Honour’s remarks:

   It is not sufficient that appears that circumstances have arisen of an exceptional nature resulting in hardship to the applicant, the Court must consider in the exercise of its discretion whether that hardship is of such a serious nature and results in such inequity that it can only be rectified by the extreme step of setting aside or varying an existing order of the Court.  We leave aside the question of whether special circumstances applied to consent orders.

4. In Public Trustees Executor of the Estate of the Late Ross George Gilbert & Cheryl Ann Gilbert (1991) FLC 92-211; 14 Fam LR 573 the Full Court accepted that the death of one of the parties clearly fell within the description of “circumstances of an exceptional nature”.

5. I was referred to a number of decisions of first instance judges applying s 79A(1)(d) to the facts that were before them. Whilst they were all examples of how that section may be applied in different circumstances they do not provide great assistance in determining the present case.

6. The wife died some 20 months after the orders were made. 

7. Paragraph 41 of the affidavit of the husband filed on 11 August 2011, and tendered on this application, states:

   She [the wife] has been suffering from anxiety and depression for over the last four (4) years and when she became aware of the presence of “polyps” in her colon, which I believe has proven to be cancerous and to which she is currently receiving medication and treatment. 

8. Thus, at the time of the making of the consent orders, though the health of the wife was not good it could not be said that her death within less than two years was inevitable or was expected. After all, the orders provided for E to live with her. The death of the mother with whom E was then living within a relatively short period after the making of the consent orders and the moving of E to live with his father is a circumstance of an exceptional nature relating to the care, welfare and development of E. 

9. It is then necessary to turn to the issue as to whether or not the husband will suffer hardship if the court does not vary or set aside or make another order in substitution to the order made.

10. In his affidavit sworn on 6 November 2014 the husband deposed to S Pty Ltd being his only source of income. He said the company was unable to pay its debts.  S Pty Ltd incurs approximately $20 000 a month in expenses inclusive of employee wages.  He said he derived an income of approximately $3 128.05 per week. 

11. In his financial statement filed on 25 March 2014 that figure was repeated.  It recorded that the husband’s assessed and unpaid income tax was $93 332.28.  His weekly expenditure was said to be $5 986.01 with a value of his property being $1 392 377.64 plus superannuation of $65 023.55. The total of his liabilities was $1 030 335.41.  The husband’s weekly expenditure is said to be as follows:

Income tax	$732
Mortgage payments (being mortgages over [D Street] and [I Street])	$691
Rates	$545.20
Hire Purchase Agreements from Mercedes Motor Vehicle	$150
Credit card payments	$3 606.08
Other expenditure (school fees)	$261.73
Total	$5 986.01

1. The Australian Taxation Office (“ATO”) has filed a statement of claim seeking $128 117.67 in respect of the husband’s tax debt.

2. The husband said he had assets of $1 392 377 (excluding superannuation) and liabilities of $1 030 335.

3. In evidence given by leave at the hearing, the husband deposed to S Pty Ltd of having a debt of over $200 000 payable to the ATO and that if an arrangement was not accepted by the ATO it would lead to what he described as the bankruptcy of S Pty Ltd.  Therefore, he said he had needed to open a new company to carry out his business and had thus incorporated S International Pty Limited. I infer from that evidence it will carry on the same business free from the debts incurred by its predecessor.

4. I find the evidence of the husband’s financial position and especially that of the companies to be incomplete and somewhat contradictory. 

5. None of the accounts of either company was adduced. There were no profit and loss statements or any financial records of any kind tendered. Indeed, the evidence as to the financial position of the two companies was limited to what has just been described.

6. According to an affidavit of the husband’s sworn about one month before the hearing, S Pty Ltd, whilst apparently not able to pay its debts and struggling for work, was still able to pay the husband $3 128 per week.  That is the same figure that it was paying him earlier in the year, according to his financial statement filed on 25 March 2014.  The business seems consistently to have been able to generate that sum for the benefit of the husband notwithstanding its asserted financial difficulties. Those sums are now said to be paid by S International Pty Ltd whereas previously they were paid by S Pty Ltd – remarkably in the same amount.

7. The evidence of the financial position of the companies and the husband is simply his own uncorroborated evidence. He adduced no other evidence on this issue. If his evidence was accepted there would be some evidence of financial difficulties, and perhaps even hardship. I do not, however, accept it.

8. The husband was asked in cross-examination if he had been to Italy in the middle of 2014.  His reply was that he had been to City O in Italy for 24 hours to inspect Material M as part of the business of S Pty Ltd. When it was suggested that he might have also visited City P in Italy at the same time the husband noted that City P was not very far from City O, especially if one used one of the fast trains available in Italy.  When it was suggested that he had also visited Region Q the husband pointed out that City P was part of Region Q.  It then emerged that the husband had also visited City R on this trip. The husband agreed and offered the evidence that in all likelihood the trip had perhaps taken two to three days and not 24 hours.  When confronted with photos from his Instagram page the husband conceded that he had also visited Bulgaria, that he had been overseas for some two to three weeks and that he had taken his new wife with him. 

9. The husband could not possibly have been mistaken about the length of the trip. He was playing fast and loose with the truth, conceding only when faced with proof of the assertions made by the cross-examiner. He was prepared to chance his arm as to whatever he thought he could get away with.

10. This is sufficient to render his evidence entirely unacceptable unless corroborated. Therefore, as explained earlier, this aspect of the application must fail.

11. Further evidence emerged as to the alleged hardship.

12. The husband does not mention his new wife at all in his affidavit or otherwise his evidence in chief.  He married her in 2014.  He gave her an engagement ring worth $12 000. 

13. Just over one year ago the husband and his children travelled to Cannes and Monaco.  On his Instagram page there is a photo of an ice bucket with three bottles of Dom Perignon and a bottle of what could be spirits in an ice bucket with the caption “The Dom is going down well”.  (Exhibit 4, tendered 21 November 2014).

14. Neither of these trips, nor the engagement ring, bespeaks economic hardship on the part of the husband unless they are perhaps the cause of it but that is something he does not suggest. 

15. On 14 September 2012 the husband entered into a contract to purchase an apartment in an unregistered strata plan at C Street, Suburb B.  The purchase price was $4 880 000 and required the husband to pay a deposit of $488 000.  Settlement was delayed – according to the husband until the end of 2015.

16. On 15 November 2012 the husband and the vendor entered into a Deed of Variation of the Contract for Sale which provided that in lieu of the deposit being paid in accordance with the contract the deposit would be paid by instalments to be made between 2 November 2012 and 5 April 2013.  The husband made those instalment payments.

17. At some stage the husband proposed that another person take over the purchase of the Suburb B property from him which would have resulted in the deposit being returned to the husband and the husband being relieved from his obligation to complete the contract.  A Deed of Novation was prepared but was not executed.  At the time of the hearing the husband was in negotiation with another purchaser attempting to enter into a similar arrangement. 

18. Obviously if he is successful in that endeavour he will receive all or part of the deposit back and be relieved from having to complete the contract.

19. The husband said that he entered into that contract because S Pty Ltd had tendered for a large contract which he thought would be successful.

20. The potential value of S Pty Ltd to the husband at the time of the making of the consent orders is amply demonstrated by the fact that one contract could generate a sufficient sum for the husband to enter into a contract to buy a property of this magnitude.  It emphasises the point that S Pty Ltd had some value at the time of the consent orders or, more precisely, that the wife and particularly the husband thought that it had some value.

21. The submission of the husband is that he clearly cannot afford to complete this contract. That, of course, depends on the business of the two companies and I have not accepted the husband’s evidence as to that. It follows that this submission also cannot be accepted.

22. During the two month period in approximately March and April 2013 the husband spent approximately $10 000 on accommodation at T Luxury Hotel in Sydney.  The explanation given by the husband was that he was working on a building site near to T Luxury Hotel and that as he could not afford to employ a supervisor he had to himself supervise two shifts which required him to live close by. If that was the position, that expenditure again indicates the nature of the work undertaken by S Pty Ltd and the value of its contracts.

23. The evidence does not satisfy me that the husband is suffering from the hardship he alleges. 

24. In relation to the hardship occasioned by the orders he still has outstanding sums to pay to the wife’s estate but has been relieved of the burden of making a payment of $500 a week to the wife for the support of E.

25. The husband’s two eldest children have commenced proceedings against the respondent in the Supreme Court of New South Wales pursuant to the Succession Act 2006 (NSW).

26. It is to be recalled that the major asset in the wife’s estate is the D Street property. If the consent orders are set aside then either half or all of that property will be the husband’s. The financial statements of the parties make it clear that the husband and the wife were owners of equal shares but the evidence does not disclose whether that was as tenants in common or joint tenants. If the former, the two eldest children will be able to pursue their claim.

27. The other asset of significance in the wife’s estate is the obligation to it owed by the husband pursuant to the consent orders.

28. As is made clear in Gilbert (supra) above, the hardship that needs to be established to enliven s 79A(1)(d) is hardship that will result if the court does not vary or set the order aside. Not only has the husband failed to establish hardship for the reasons given earlier he has not demonstrated how he will suffer hardship if the orders are not set aside. It is not enough, in my opinion, merely to show a need for funds and that setting aside the orders will financially benefit the applicant. The husband must show precisely how he will suffer hardship if the orders are not set aside. That involves demonstrating the effect of setting aside of the orders on his financial position. For example, his financial position may be affected by the children’s claim. He has not done so.

29. Accordingly, the husband’s application under s 79A(1)(d) also fails.

30. Finally, it is necessary to take into account the conduct of the parties in relation to the repayment of Mercedes Benz.  In order to effect that payment the wife made available what would have otherwise been her interest in Properties X and Y, G Street, Suburb A.  Pursuant to the orders she was to receive those properties unencumbered.  In the event she received no benefit from them whatsoever. 

31. This has two effects.  Firstly, this agreement by the wife lessens the weight of the husband suffering hardship if the court does not vary or set aside the order because the parties have, subsequent to the consent orders being made, effected a different arrangement that was prescribed by the orders so that the interest in the G Street properties became available to the husband to meet his debt to Mercedes Benz.  Thus the orders were modified by the actions of the parties to assist the husband’s financial obligations.

32. Secondly this carries considerable weight in the exercise of the court’s discretion to set aside the orders even if it were satisfied that s 79A(1)(a) or (d) had been established.  In my opinion it would count decisively against the exercise of that discretion because, in effect, the orders have already been varied to assist the husband. 

33. For these reasons the application of the husband will be dismissed.

34. In the event that the husband’s application was dismissed the respondent sought a number of orders in aide of enforcement of the property consent orders.  It was accepted by the husband that there was no cogent argument that could be raised in opposition to those orders and they will be made.

I certify that the preceding one hundred and thirteen (113) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 3 February 2015.

Associate: 

Date:  3 February 2015