Sand and Sand (No. 2)
[2012] FamCAFC 216
FAMILY COURT OF AUSTRALIA
| SAND & SAND (NO. 2) | [2012] FamCAFC 216 |
| FAMILY LAW ─ APPEAL ─ PROPERTY SETTLEMENT ─ Where in its preliminary judgment, this Court referred to the possibility that, in reliance upon a cause, or causes of action which the respondent has not previously pleaded, the respondent might seek relief against third parties who have hitherto not been parties to the proceedings ─ Where having regard to the findings of fact of the learned Federal Magistrate, and accepting that those findings of fact would not be binding upon any third parties subsequently joined in the proceedings, it is possible that the respondent could establish a basis for relief which has not hitherto been pursued ─ Where notwithstanding that the obstacles to success may be substantial, the Court was not persuaded that an amended application seeking relief against third parties would be doomed to fail ─ Appeal allowed. |
| Family Law Act 1975 (Cth) Federal Proceedings (Costs) Act 1981 (Cth) |
| Lindon v The Commonwealthof Australia(No. 2) (1996) 136 ALR 251 Re Wakim; ex parte McNally (1999) 198 CLR 511 Ridley v Whipp (1916) 22 CLR 381 Ruscoe v Walker (2001) 28 Fam LR 566 Valceski v Valceski (2007) 70 NSWLR 36 Walton v Gardiner (1993) 177 CLR 378 Warby and Warby (2002) FLC 93-901 |
| APPELLANT: | Mr Sand |
| RESPONDENT: | Ms Sand |
| FILE NUMBER: | CAC | 1042 | of | 2010 |
| APPEAL NUMBER: | EA | 72 | of | 2012 |
| DATE DELIVERED: | 21 December 2012 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney via video link with Canberra |
| JUDGMENT OF: | Coleman J |
| HEARING DATE: | 26 October 2012 and by way of written submissions |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 18 May 2012 |
| LOWER COURT MNC: | [2012] FMCAfam 454 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Maurice |
| SOLICITOR FOR THE APPELLANT: | Dobinson Davey Clifford Simpson |
| THE RESPONDENT: | Self Represented |
Orders
That the appeal be allowed.
That the orders of Federal Magistrate Coakes made on 18 May 2012 be set aside.
That provided that within thirty-five days of the Court’s orders, the respondent files and serves an amended application in the Federal Magistrates Court together with such further affidavit evidence as the respondent intends to rely upon in support of such amended application, the proceedings be remitted to the Federal Magistrates Court for re-hearing by a Federal Magistrate other than Federal Magistrate Coakes.
That, in the event of the respondent failing to comply with order 3 of these orders, the response filed by the respondent in the Federal Magistrates Court on 27 August 2010 be dismissed.
That there be no order for costs.
That the Court grants to the Appellant Husband a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the Appellant Husband in respect of the costs incurred by the Appellant Husband in relation to the appeal.
That the Court grants to the Respondent Wife a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the Respondent Wife in respect of the costs incurred by the Respondent Wife in relation to the appeal.
That the Court grants to each party a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the new trial granted by these orders.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sand & Sand (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY VIA VIDEO LINK WITH CANBERRA |
Appeal Number: EA 72 of 2012
File Number: CAC 1042 of 2010
| Mr Sand |
Appellant
And
| Ms Sand |
Respondent
SUPPLEMENTARY
REASONS FOR JUDGMENT
introduction
On 9 November 2012 the Court delivered its preliminary reasons for judgment in this appeal. The orders of the Court of that date afforded the respondent the opportunity, for reasons articulated in the Court’s preliminary judgment, to file further submissions in relation to the appeal, and, if the appeal be allowed, the further orders appropriate to be made.
Pursuant to those orders, submissions on behalf of the respondent were filed on 30 November 2012. Fortunately, for the respondent, those submissions were prepared by very experienced and able Counsel. On 17 December 2012 further submissions drafted by the appellant’s learned Counsel were filed on his behalf.
In view of the concession by Counsel for the respondent that, on the findings of fact made by him, the learned Federal Magistrate had no jurisdiction to make the orders for settlement of property made by him on 18 May 2012, it is unnecessary to say more about the first issue in respect of which the Court invited, and received, further submissions.
Given that the appeal will be allowed, and the orders of the learned Federal Magistrate set aside, the issue becomes whether, as the appellant seeks, the original response filed on 27 August 2010 by the respondent in the Federal Magistrates Court should be dismissed, or whether, as Counsel for the respondent sought, notwithstanding the difficulties which Counsel for the respondent frankly conceded confronted any claim which the respondent may agitate on a re-hearing of the matter, the respondent ought not be denied the opportunity to do so.
Amongst the numerous cogent submissions of Counsel for the respondent, a number have particular resonance.
The first is the submission on behalf of the respondent that:
22.However, if the respondent is now prevented from re-litigating the proceedings and amending her application, she will be significantly disadvantaged in that after a 6 year relationship; having the primary care of a very young child and significantly less income that [sic] the husband, she will in effect retain nothing by way of the property she and the appellant worked to acquire.
The candid submission of Counsel for the respondent in relation to the consequences of dismissing the respondent’s application also resonates with the Court. That submission asserted:
23.... If the proceedings are dismissed, it is conceded that unless the respondent can satisfy a Court that there is property in existence, any further proceedings would be fatally flawed. However, the respondent could choose to file a new application seeking orders as set out in paragraph 8 and naming the appellant’s siblings as parties. In that event it could be reasonably anticipated that she would then face a summary dismissal application by one, if not all, the respondents
As Counsel for the respondent submitted, if the respondent were granted leave of this Court to amend her application to seek relief of the kind to which her Counsel referred, and did so, the difficulties to which Counsel referred would be averted, and the broader interests of justice potentially promoted.
The submission on behalf of the respondent that:
25.... it was the appellant that was wholly responsible for there being no property as at the date of hearing and if the respondent’s amended application were successful, the current pool could potentially be increased to something in excess of USA $171,000
has particular resonance.
As is not in doubt, the success of the appellant in the appeal is largely, if not entirely, referrable to conduct by the appellant, with or without assistance from others, which, properly, the learned Federal Magistrate extensively criticised. As the Court’s preliminary judgment confirms, no adverse finding of fact made by the learned Federal Magistrate with respect to the conduct of the appellant in the post separation period has been disturbed. To dismiss the respondent’s application summarily would not sit well with those realities.
It was further submitted by Counsel for the respondent that, particularly if her claim was amended to seek relief against third parties who have not hitherto been parties to the proceedings, the application would not necessarily be “doomed to fail”, or “obviously futile”.
In its preliminary judgment, the Court referred to the possibility that, in reliance upon a cause, or causes of action which the respondent has not previously pleaded, the respondent might seek relief against third parties who have hitherto not been parties to the proceedings. Having regard to the findings of fact of the learned Federal Magistrate, and accepting that those findings of fact would not be binding upon any third parties subsequently joined in the proceedings, it is possible that the respondent could establish a basis for relief which has not hitherto been pursued.
Counsel for the respondent alluded to the authorities in relation to what is, in the current circumstances, not dissimilar to a summary dismissal application. The often cited observations of Kirby J in Lindon v The Commonwealthof Australia(No. 2) (1996) 136 ALR 251 are relevant in this context. Particularly in the circumstances of this case, to deny the respondent her “day in Court”, albeit to pursue a claim which is far from certain to be successful, is an outcome to be embraced with the utmost reluctance.
Counsel for the appellant referred to the decision of the Full Court in Ruscoe v Walker (2001) 28 Fam LR 566 (“Ruscoe v Walker”), and to the dissenting judgment in that appeal. Flattering though the submissions of learned Counsel for the appellant in that regard may be, the fact remains that the statements relied upon were expressed in a minority judgment. Moreover, an application for special leave to appeal to the High Court against the decision of the majority in Ruscoe v Walker was refused. The Court undoubtedly can, and will, impose conditions if the respondent is to be afforded a re-hearing of her claim(s).
Whilst a re-hearing would be regrettable, the Court struggles to accept that a re-hearing would not be in the interests of justice. There are essentially two reasons why that is so. The first has been referred to earlier, and relates to the numerous, and undisturbed adverse findings recorded by the learned Federal Magistrate with respect to the financial conduct of the appellant subsequent to the parties’ separation.
The second is that, with respect to learned Counsel for the appellant, to use the colloquial, it is easy to be wise after the event. As is apparent from the reasons for judgment of the learned Federal Magistrate, the respondent was entitled to be at least sceptical about the appellant’s asserted absence of property, and the reasons advanced by him for such absence. The respondent could not reasonably have anticipated, prior to the testing of the appellant’s evidence at trial, that she might have needed to seek relief against, and join third parties. To the extent that Counsel then representing the respondent failed to seek to establish an evidentiary foundation for a claim of the kind which the respondent now seeks the opportunity to pursue, that failure should not be visited upon the respondent.
The undisturbed evidence before the learned Federal Magistrate did not permit his Honour to make the findings that third parties were holding property for or on behalf of the appellant. This Court cannot accept however, either by reference to untested evidence of those third parties, the findings of fact of the learned Federal Magistrate, or any submissions made on behalf of the appellant, that to remit the proceedings for re-hearing, albeit on the basis of an amended application by the respondent would necessarily be either an exercise in futility, or an exercise, the costs of which would outweigh the interests of justice. If joined as parties to proceedings in which claims were made against them pursuant to the Court’s accrued jurisdiction (see Valceski v Valceski (2007) 70 NSWLR 36), and their evidence tested, the third parties may be held liable to account for funds received from, or held on behalf of the appellant.
The submissions of learned Counsel for the appellant that:
12.it is submitted that the fundamental consideration when deciding whether to order a rehearing is to determine whether prime facie there sufficient merit in a case to put the litigants to the trouble and expense of a rehearing; using the valuable resources of the Court
13.the Court, a fortiori, would proceed even more cautiously when a party urges remittal of a matter where they propose to run a different type of case relying on a different cause of action (errors as in original)
raise substantial impediments to remitting the proceedings for re-hearing.
Were it not for the undisturbed adverse findings of fact of the learned Federal Magistrate with respect to the appellant’s financial conduct in the post separation period, and the fact that the appellant’s siblings were not tested in relation to their involvement in that conduct, the Court would be inclined to agree with the foregoing submissions. Where however, as in this case, it is not clear on the balance of probabilities that a re-hearing could not produce a different outcome, different considerations apply.
It must be recognised, as Counsel for the respondent undoubtedly does, that, whilst probably necessary in order to have a prospect of success, joining third parties carries with it the risk of costs orders being made against those third parties in the event of the respondent being no more successful on the re-hearing of the proceedings than she has been held to have been in the first hearing in the Federal Magistrates Court.
The submission at paragraph 14 of the submissions on behalf of the appellant also cannot be lightly dismissed. If the Court declined to dismiss the respondent’s primary application, it would do so on the basis that, unless within a limited time the respondent filed and served any amended application, together with such further evidence in support of the causes of action she intends to rely upon, the respondent’s primary application would be dismissed.
Whilst it is correct to say, as learned Counsel for the appellant has, that the respondent only identified s 106B as a possible source for relief, and, that relief pursuant to that section may be problematic, the Court’s preliminary judgment referred to the prospect of relief being granted pursuant to the exercise of the Court’s accrued jurisdiction.
The Court does not suggest that such a cause of action would be successful, nor does it need to make such a finding. The Court is not persuaded however that such a cause of action would be foredoomed to failure (see Walton v Gardiner (1993) 177 CLR 378).
With respect to the submissions of Counsel for the appellant at paragraphs 17 and 18, it is not uncommon for the existence of property to depend upon a successful application against a third party in the exercise of the Court’s accrued jurisdiction (see Ridley v Whipp (1916) 22 CLR 381, Re Wakim; ex parte McNally (1999) 198 CLR 511, Warby and Warby (2002) FLC 93-901 and Valceski v Valceski (supra)).
In Valceski (supra) Brereton J said:
60.The equity suit and the matrimonial proceedings share a common substratum of facts, notwithstanding that the underlying facts of each do not wholly coincide -- in that while the matrimonial proceedings involve wider and additional issues, the facts that underlie the equity suit are a subset of those that underlie the matrimonial proceedings. ...
...
64.In Warby, the Full [Court of the] Family Court said (at 357 [93]):
“[93] In the present case there is a single property that is central to the Parties’ controversy. The Family Court cannot determine and settle the property of the parties without determining the relative beneficial interests of the parties to the marriage and the wife’s father in the property. It is not to the point that a State court could make orders as to the dispute between the parties to the marriage and the wife’s father, and that the Family Court of Australia could then determine the Family Law dispute between the parties to the marriage. It is enough to say that even taking the narrow view of accrued jurisdiction represented by Wilson J’s judgment in Philip Morris, in this case ‘the Federal question could not be resolved without the determination of the non-Federal question’. The Family Court of Australia must ascertain as a first step the property pool of the parties available for distribution.”
65.That statement is equally apposite here. The claim in the equity suit forms part of the justiciable controversy in respect of which the matrimonial proceedings have been brought. Accordingly, there is but one justiciable controversy; and the Family Court has accrued jurisdiction in respect of so much of that controversy as does not fall within its ordinary jurisdiction.
The Court would not on that basis decline to remit the proceedings.
Whilst, as acknowledged throughout these reasons, the Court cannot affirmatively find that a remitted amended application would be likely to succeed, the more relevant issue is whether the Court is satisfied that such application would be doomed to fail. Notwithstanding that the obstacles to success may be substantial, the Court is not persuaded that an amended application seeking relief against third parties would be doomed to fail.
To the extent that the Court errs in exercising its discretion, it prefers in the circumstances of this case to err on the side of a course which has the greater potential to promote the interests of justice, than a course which has the potential to defeat the interests of justice. As has been said on a number of occasions earlier in these reasons, that is in no small measure because of the undisturbed adverse findings of fact of the learned Federal Magistrate with respect to the appellant’s post separation conduct.
The Court is also mindful of the ability to grant costs certificates to both parties with respect to the re-hearing of the proceedings, the reality that the respondent is not suggested to be impecunious, and that costs orders could be made in favour of the appellant and/or third parties in the event that Counsel for the appellant’s predictions are fulfilled.
Having regard to the basis upon which the appeal will be allowed, and the orders of the Federal Magistrates Court set aside, it is inappropriate to award costs of the appeal to either party, and appropriate to issue costs certificates to both parties with respect to the appeal and the re-hearing pursuant to the Federal Proceedings (Costs) Act 1981 (Cth).
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Coleman delivered on 21 December 2012.
Associate:
Date: 21.12.2012
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