SARBER & TACOMA

[2020] FCCA 2310

FEDERAL CIRCUIT COURT OF AUSTRALIA

SARBER & TACOMA [2020] FCCA 2310

Catchwords:
FAMILY LAW – Property – application to set aside final orders – allegation that final orders were not made by consent – submission raised that the entry of orders constitute a miscarriage of justice – whether the Court had jurisdiction to make the orders.

Legislation:

Family Law Act 1975 (Cth), ss.90SM, 90SN

Federal Circuit Court of Australia Act 1999 (Cth), s.15

Applicant: MR SARBER

Respondent: MS TACOMA

File Number: MLC 1888 of 2019

Judgment of: Judge McNab

Hearing date: On the Papers

Date of Last Submission: 30 April 2020

Delivered at: Melbourne

Delivered on: 21 August 2020

REPRESENTATION

Counsel for the Applicant: Mr T Puckney

Solicitors for the Applicant: Mr J Schepis

Counsel for the Respondent: Mr A Combes

Solicitors for the Respondent: Irvine Lawyers

ORDERS

1. The application filed on 26 September 2019 be dismissed.

2. Any application for costs must be filed and served by way of submissions which should include the quantum of costs, with such submissions to be filed by 4.00pm on 4 September 2020, and to consist of no more than two A4 pages.

3. Any response to the application for costs must be filed and served by way of submissions by 4.00pm on 11 September 2020 and to consist of no more than 2 A4 pages.

4. The judgment be reserved on the question of costs after 12 September 2020 and be determined on the papers.

IT IS NOTED that publication of this judgment under the pseudonym Sarber & Tacoma is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 1888 of 2019

MR SARBER

Applicant

And

MS TACOMA

Respondent

REASONS FOR JUDGMENT

Introduction

1. This decision considers an application by Mr Sarber (the applicant) to set aside orders made by Her Honour Judge Bender on 5 August 2019 (‘the August Orders’) relating to a final adjustment of property interests. The August Orders were made under the assumption that both parties consented to them. Mr Sarber submits that when making the August Orders in Chambers, the Court lacked both jurisdiction and his consent.

2. Pursuant to Orders made on 9 December 2019 by Her Honour Judge Bender, the discrete issue of whether the August Orders should be set aside was fixed for hearing on 9 April 2020. The parties agreed to the matter being be determined upon submissions without cross examination.

3. The hearing on 9 April 2020 was vacated in response to the COVID-19 pandemic and pursuant to Orders made 1 April 2020 and at the request of the parties, it was directed that the matter be determined in Chambers.

Background

1. On 22 February 2019, Ms Tacoma (the respondent) initiated proceedings seeking an adjustment of property interests as a result of an alleged de facto relationship with Mr Sarber. Ms Tacoma deposed to having lived in Mr Sarber’s home between early 2006 and late 2018, and that the parties lived together on a genuine domestic basis.

2. On 9 April 2019, Mr Sarber filed a response which amongst other things disputed the nature of the living arrangements asserted by Ms Tacoma and denied that Mr Sarber was in a de facto relationship with Ms Tacoma.

3. On 17 April 2019, the first return date, the proceeding was referred to mediation which took place on 26 July 2019. The parties attended the mediation represented by counsel and accompanying instructing solicitors. At mediation, a partly typed and partly handwritten document headed ‘Minutes of Final Property Orders’ was signed by both parties.  The minute included a provision that: “the solicitor for the applicant/respondent file 3/clean copies of these orders… within… days.”  It also provided that any future hearing/conference date be vacated.

4. On 30 July 2019, Ms Tacoma’s solicitors (Irvine Lawyers) sent Mr Sarber’s solicitor, Ms Doupe of R.P. Hoban Lawyers and Conveyancers (R.P. Hoban), the proposed orders for engrossing, together with a proposed joint letter to the Court.

5. On 31 July 2019, Pearsons Lawyers wrote to R.P. Hoban. That letter provides (omitting formal and irrelevant parts):

   We have been instructed to act on behalf of Mr Sarber.

   Enclosed is Mr Sarber’s handover authority signed by him and dated today.

   Please forward to us Mr Sarber’s file as a matter of urgency given that we understand that there has been settlement negotiations and perhaps some sort of settlement agreement the terms of which Mr Sarber is vague about.

   Please forward to us your file urgently (preferably by registered post) by no later than the close of business on Friday, 9 August 2019.

   Could you please notify Ms Tacoma’s lawyers that we now represent Mr Sarber and to direct all future correspondence and communication to Mr Schepis of our Suburb B office.

6. On 1 August 2019 R.P. Hoban wrote by email to Irvine lawyers responding to that firms email which enclosed the engrossed orders and the letter to the Court, in the following terms:

   Please note we no longer act on behalf of the above mentioned client. Mr Sarber is now represented by Pearsons Lawyers.

   We do believe that the orders provided are an accurate representation of the mediation outcome.

7. On 2 August 2019, R.P. Hoban sent an email to Irvine lawyers that attached a copy of a Notice of Intention to Withdraw as Lawyer addressed to Mr Sarber and dated 31 July 2019. That notice provided relevantly:

   [3]. If you neither appoint another lawyer nor file a notice of address for service within 7 days from the date on which you receive this notice, then you may not be served with any further documents in this case.

   [4]. Regardless of paragraph 3 above, the Court and other parties involved in the case can use the following address, telephone number and email (which is your last known residential or business address, telephone number and email) as your address for service (your contact address) until you appoint another lawyer or file a notice of address for service.

8. On 2 August 2019, Irvine lawyers emailed Judge Bender’s Associate enclosing an engrossed ‘Minute of Consent Orders’, a certification page and a letter in support of the outcome being just and equitable.

9. A letter addressed to Judge Bender’s Associate dated 2 August 2019 also stated:

   we advise that we received confirmation from the other side on 1 August 2019 stating that the orders were an accurate record of the mediation outcome (enclosed).

   With respect to the letter of support of the outcome being just and reasonable we advise that the other side have received it but have not responded beyond saying that they let no longer act. However, as of today, the other side remain on record as acting.

10. That letter and the attached documents were copied to R.P. Hoban.

11. In the letter of 2 August 2019 setting out submissions in support of the proposed orders, Irvine lawyers stated amongst other things:

    a)there was a mediation of this matter on 26 July 2019 conducted by Mr R Harrison of Counsel;

    b)both parties were represented by Counsel and their respective solicitors;

    c)there was no agreement on whether there had been a de facto relationship and if so when it commenced and ended;

    d)there was agreement on a “pool” for the purposes of the mediation;

    e)the Orders agreed upon provide to the wife approximately 22.8% of the asset pool;

    f)that percentage recognises the length of the relationship, the husband’s greatest initial contribution and a degree of dissipation of assets on account of the wife’s gambling issues;

    g)neither party has section 90SF(3) factors that weigh more greatly in their favour;

    h)both parties are in a stage of their respective lives where they wish to move on, not be engaged in expensive and traumatic litigation and have applied a high degree of pragmatism to the resolution of their differences; and

    i)both solicitors commend the proposed Orders as reflecting a just and equitable outcome on (in) the circumstances and respectfully request the Court to make Orders in those terms.

12. On 5 August 2009, the Court made final orders in chambers in the terms of the proposed minute. The Court provided a copy of those Orders to Irvine lawyers and R.P. Hoban.

13. On 6 August 2019, a copy of the Orders were forwarded to the husband by Irvine lawyers with a request that the property that was subject of the Orders be put on the market without delay.

14. On 12 August 2019, Pearsons Lawyers wrote to Irvine lawyers advising them they act on behalf of Mr Sarber and are currently in the process of taking over the file from his former lawyers and requesting that all future correspondence and communication be directed to Mr Schepis of that firm.

15. On 14 August 2019, Pearsons Lawyers wrote to Irvine lawyers advising that their client had provided a copy of the 6 August 2009 correspondence to them and that they were awaiting their client’s documents from his previous solicitors and that they expected them shortly. That letter concludes:

    Once Mr Schepis has had an opportunity to review the file and obtain instructions we will respond to your correspondence with the intention of bringing these matters to a speedy conclusion.

16. Pearsons Lawyers subsequently wrote to Irvine lawyers:

    a)on 20 August 2019, making reference to the August Orders and confirming that Mr Sarber is currently making arrangements to have the D Street, Town C property placed on the market for sale; and

    b)on 9 September 2019, enclosing an exclusive sale authority of the D Street, Town C property.[1]

    [1] Attachment 6 of submissions.

17. On 26 September 2019, Mr Sarber filed an initiating application seeking to set aside the Orders and affidavit in support on Ms Tacoma’s solicitors.

Legislation

1. Section 90SN(1)(a) of the Family Law Act 1975 (Cth) (the Act”) provides:

   Varying and setting aside orders altering property interests

   (1) If, on application by a person affected by an order made by a Court under section 90SM 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; […]

2. Section 15(a) of the Federal Circuit Court of Australia Act 1999 (Cth) provides:

   The Federal Circuit Court of Australia has power, in relation to matters in which it has jurisdiction, to:

   (a) make orders of such kinds, including interlocutory orders, as the Federal Circuit Court of Australia thinks appropriate; and

   (b) issue, or direct the issue of, writs of such kinds as the Federal Circuit Court of Australia thinks appropriate.

3. Rule 16.05 of the Federal Circuit Court Rules 2001 (Cth) (“the Rules”) provides:

   (1) The Court or a Registrar may vary or set aside a judgment or order before it has been entered.

   (2) The Court or a Registrar may vary or set aside a judgment or order after it has been entered if:

   (a) it was made in the absence of a party; or

   (b) it was obtained by fraud; or

   (c) it is interlocutory; or

   (d) it is an injunction or for the appointment of a receiver; or

   (e) it does not reflect the intention of the Court; or

   (f) the party in whose favour it was made consents; or

   (g) there is a clerical mistake in the judgment or order; or

   (h) there is an error arising in the judgment or order from an accidental slip or omission.

   (3) This rule does not affect the power of the Court or a Registrar to vary or terminate the operation of an order by a further order.

4. Rule 9.02 of the Federal Circuit Court of Australia Rules 2001 provides that:

   (1) A party may, at any stage in a proceeding, appoint another lawyer in place of the lawyer then acting for the party.

   (2) The newly appointed lawyer must, as soon as practicable, file and serve on each other party and the party’s former lawyer notice of the appointment.

   (3) The party’s former lawyer remains the lawyer on the record until the newly appointed lawyer has complied with subrule (2).

Matters to be considered in determining the application

1. The question to be considered by the Court in determining this matter is whether or not there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence, the giving of false evidence or any other circumstance; such that it is appropriate to set aside the Orders made on 5 August 2019.

The Husband’s Submissions

1. The husband submits that there was a miscarriage of justice for a number of reasons arising from the Court making the Orders in the circumstances outlined above. He submits that:

   a)the Orders which were recorded to have been made “by consent” were in fact made without consent;

   b)the request for the Court to make the Orders was made unilaterally by the wife’s solicitors;

   c)the Court was “misled to believe that the applicant’s previous solicitor had  the authority and instructions to provide that consent”;

   d)the wife’s solicitor had unilaterally communicated with the Court, knowing that the other party was represented, and failed to include that legal representative in every communication that it had with the Court;

   e)the Court had to be satisfied that it had jurisdiction to make the Orders. In circumstances where the correspondence to the Court indicated that there had been no agreement on whether there had been a de facto relationship, and if so when it commenced and ended, the Court could not have been satisfied that it had jurisdiction to make the Orders pursuant to section 90SM of the Act;

   f)even if the husband’s previous solicitor remained “on the record”, orders were in fact made in the absence of the husband’s solicitors because that solicitor’s retainer had been withdrawn. It is said that correspondence should have been directed to the “new solicitor acting for the applicant” (husband submissions 14 April 2020 at [24];

   g)The evidence of communications between Pearsons Lawyers and Irvine Lawyers after the Orders were made is irrelevant to the question of whether there has been miscarriage of justice. It is said that reference to that evidence seeks to persuade the Court to make certain findings about the state of mind and motivations of the applicant without testing that evidence and it is said “untested allegations about the state of mind of the applicant are prejudicial to the applicant in circumstances where a decision on the papers has been agreed to, as well as being irrelevant to the question to be determined by the Court”;

   h)in correspondence to the Court, the reference to the fact that R.P. Hoban had advised that the Orders were an accurate record of the mediation outcome constituted a miscarriage of justice because at that point Irvine Lawyers were aware that the firm no longer acting on behalf of the husband and in effect had no authority to make that statement; and

   i)similarly, the advice to the Court in the 2 August 2019 letter that both solicitors commend the proposed orders reflecting a just and equitable outcome was given when Irvine lawyers were aware that R.P. Hoban no longer acted for the husband. It is said that that advice was apt to mislead the Court as to the true state of affairs and accordingly there was a miscarriage of justice.

The Wife’s Submissions

1. The wife submits that at the time her solicitors communicated with the Court, R.P. Hoban were still the solicitors on the record, as Pearsons Lawyers had not filed a notice pursuant to rule 9.02(2) of the Rules. They note that they advised the Court that R.P. Hoban were no longer acting for the husband but they remained on the record.

2. The wife also submits that there was no communication directly or indirectly made to the wife’s solicitors from Pearsons Lawyers or R.P. Hoban requesting that they take no further action in relation to the agreement reached at mediation or that there was no consent for the agreement to be filed for the purposes of obtaining consent orders. They note that the agreement made provision for a clean copy of the minute of consent orders signed at mediation to be filed.

3. It is put by the wife’s written submissions that Pearsons Lawyers were under a positive obligation to contact the wife’s solicitors by email, mail or telephone requesting that they not act on the agreement signed by the parties if they were instructed to do so. They say that when the wife’s solicitors sent the application for consent orders to the Court they copied in the solicitors on the record with that correspondence and it then fell on R.P. Hoban solicitors to send a copy of those documents to Pearsons Lawyers. It was not up to the wife’s solicitors to provide the documents to Pearsons Lawyers without that party being on the record and without that party having directly contacted them. To have done so would have been to have acted in defiance of the information contained in the notice of intention to withdraw as a lawyer which have been filed by Hoban Lawyers.

Consideration

1. In my view there has been no miscarriage of justice in this case as a result of the Court entering the final orders in the circumstances outlined above. On 26 July 2019, the parties entered into an agreement as a result of a mediation process that they attended with counsel and instructing solicitors. By that agreement the parties expressly agreed for the settlement agreement signed by them at the mediation would be recorded as orders of the Court.

2. At no point prior to the entry of orders on 5 August 2019 did the husband withdraw his consent to the entry of judgement and there is no evidence that he instructed any firm of solicitors to communicate that he withdrew from the settlement.

3. When Pearsons Lawyers were appointed to act on behalf of the husband they were then required by rule 9.02 of the Rules to file and serve a notice of that appointment on the wife’s solicitors and the husband solicitors. The Rules expressly provide that the former solicitors remain on the record until the newly appointed solicitor files and serves the notice.

4. In this case, Pearsons Lawyers failed to serve that notice and, as was appropriate having regard to the rules, the solicitors for the wife communicated with the solicitor on the record for the purposes of giving effect to the settlement.

5. They did so in circumstances where the wife and the husband had attended a mediation where a settlement had been reached and where there was no indication that any party wished to withdraw from that settlement. It is the case that R.P. Hoban did communicate on 1 August 2019 that Pearsons Lawyers had been appointed, however the wife’s solicitors were required to act in accordance with the Rules and there is good reason for doing so. For the wife’s solicitors to then forward documents to a solicitor who was not on the record would potentially place them in breach of the Rules.

6. The wife’s solicitors did not seek to mislead the Court in relation to the circumstances at the time. They wrote to the Court on 2 August 2019 that R.P. Hoban were no longer acting but that they were still on the record. That letter, the engrossed orders, the certification page and the letter in support of the outcome being just and equitable was copied to R.P. Hoban. Given that R.P. Hoban remained on the record, the approach to the Court was not unilateral as has been asserted by the husband.

7. No proper basis has been put before the Court to base a finding that the husband did not freely agree to enter into the agreement reached the course of the mediation or that there was any dispute raised as to the capacity of the parties to reach that agreement.

8. The wife’s solicitors did not mislead the court as to whether the Orders were consented to by the husband’s solicitors. The husband consented to the order being made as is recorded in the signed minute.

9. There is no basis to the argument that the Court made the Orders without making a finding as to whether it had jurisdiction to do so. The wife refers to the comment in the letter to the Court that there was no agreement between the parties on whether there had been a de facto relationship and if so when it commenced and ended. Any controversy in relation of whether there was jurisdiction to make the order was quelled on the making of the agreement. That agreement expressly provided for the Court to be approached to make orders based on the agreement. The wife had asserted that the Court had jurisdiction to make the Orders by the terms of her application and the parties agreed to orders being made. Given the terms of the agreement, there was no basis for the Court to suspect that it was being asked to make an order beyond jurisdiction. It cannot be said that the entry of the Orders was made without jurisdiction or that the entry of such judgement constituted a miscarriage of justice.

1. This is not a case where the husband asserts that that there was no concluded agreement or where the agreement was entered into as a result of bad legal advice or undue pressure being applied by his legal representatives.  The husband does give evidence that he signed some documents but did not understand them, however he gives no evidence that he was subject to a disability that either his lawyers or the wife’s lawyers were aware of.

2. Further, as to the statement made by the wife’s solicitor in correspondence to the Court, both firms of solicitors commended the proposed order as reflecting a just and equitable outcome. There is no evidence that both firms of solicitors who attended the mediation, when the terms of the Orders were agreed, did not hold that view. There is no evidence that the husband sought to withdraw from the agreement prior to the Orders made or gave instructions to any solicitor to do so.

3. The evidence of Pearson Lawyers’ communications with Irvine Lawyers following their appointment, stating an intention to take steps to give effect to the Orders, by arranging for the sale of a property in accordance with the terms of the Orders, is relevant to establish that at the time those letters were sent they had instructions to give effect to the Orders as I presume that the letters sent on 20 August 2019 and 9 September 2019 (referred to at [19] above) were sent on instructions given by the husband.

4. In conclusion, the Court is not satisfied that there has been a miscarriage of justice within the meaning of section 90SN(1)(a) of the Act and accordingly the application filed on 30 September 2019 shall be dismissed.

5. Any application for costs must be made in writing by a submission, which includes a submission on quantum (not more than two A4 pages), by 4.00pm on 4 September 2020.

6. Any submission in response to an application for costs (not more than two A4 pages) must be made in writing by 4.00pm on 11 September 2020, with the quantum to be determined on the papers.

I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of Judge McNab

Associate:

Date: 21 August 2020