Sarto & Sarto
[2022] FedCFamC1A 16
•10 February 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Sarto & Sarto [2022] FedCFamC1A 16
Appeal from: Order dated 20 September 2021 Appeal number(s): NAA 43 of 2021 File number(s): PTW 5629 of 2021 Judgment of: AUSTIN J Date of judgment: 10 February 2022 Catchwords: FAMILY LAW – APPEAL – LEAVE TO APPEAL – Property – Appeal from the Magistrates Court of Western Australia – Where the wife seeks leave to appeal an order dismissing her application for interim exclusive occupation of the family home, of which she is the sole registered proprietor – Where the parties did not apparently appreciate the nature and extent of the wife’s existing legal rights – Where the magistrate wrongly assumed the husband enjoyed some form of inchoate proprietary interest in the property – Where the magistrate took irrelevant matters into account – Where the magistrate applied incorrect principle – Where the appealed order was patently made in error – Where the grant of leave to appeal and its success will positively define the parties’ interim rights in respect of the property – Leave to appeal granted – Application in an Appeal dismissed – Appeal allowed – No order as to costs. Legislation: Family Law Act 1975 (Cth), Pts VII, VIII, ss 79, 114
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 28, 35
Federal Proceedings (Costs) Act 1981 (Cth)
Federal Court and Federal Circuit and Family Court Regulations 2012 (Cth) reg 4.02
Cases cited: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; [1981] HCA 39
Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40
Lin & Ruan (2021) FLC 94-024; [2021] FamCAFC 90
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Mullane v Mullane (1983) 158 CLR 436; [1983] HCA 4
Pates & Pates [2018] FamCAFC 171
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Wirth v Wirth (1956) 98 CLR 228; [1956] HCA 71
Number of paragraphs: 31 Date of hearing: 10 February 2022 Place: Newcastle (via video link) Counsel for the Appellant: Mr Rynne Solicitor for the Appellant: Carr & Co Counsel for the Respondent: Mr Berry SC Solicitor for the Respondent: Terrace Law ORDERS
NAA 43 of 2021
PTW 5629 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS SARTO
Appellant
AND: MR SARTO
Respondent
ORDER MADE BY:
AUSTIN J
DATE OF ORDER:
10 FEBRUARY 2022
THE COURT ORDERS THAT:
1.Leave to appeal is granted.
2.The Application in an Appeal filed on 18 November 2021 is dismissed.
3.The appeal is allowed.
4.Order 9 made on 20 September 2021 is set aside.
5.The husband shall forthwith vacate the D Street, Town Y property, and is restrained from entering upon the property.
6.Any and all other outstanding applications for interim relief made by the parties up to and including 20 September 2021 are dismissed.
7.The appellant’s application for costs of and incidental to the appeal is dismissed.
8.The parties’ respective applications for costs certificates in the appeal pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) are dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sarto & Sarto has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENTAUSTIN J:
On 20 September 2021, a magistrate of the Magistrates Court of Western Australia made orders to determine all outstanding applications for interim relief made by the parties within property settlement proceedings brought under Pt VIII of the Family Law Act 1975 (Cth) (“the Act”).
The wife appeals from a single order made on that date in these terms:
9. All interlocutory proceedings otherwise be and are hereby dismissed.
The effect of that order was to dismiss the wife’s interim application for these two orders:
2.Until further order the Applicant Wife have exclusive use and occupation of the Town Y property.
3.Within 21 days of orders being made in terms of paragraph 2 of this application:
(a)The Respondent Husband do all acts and things necessary, at his expense, to:
(i)vacate the Town Y property and deliver up to the Applicant Wife or her nominee, all keys, garage or other remote controls, and alarm codes for the Town Y property; and
(ii)cause the Town Y property to be rectified to the same condition as the property was in when the Respondent Husband commenced sole occupation of the property, which at a minimum, is in a clean condition and in good order and repair, fair wear and tear excepted.
(b)The Respondent Husband do all acts and things and sign all documents necessary, at his expense, to:
(i)remove the items it is agreed that he is to retain when he vacates the Town Y property, together with all unregistered motor vehicles and boat motors; and
(ii)leave the items specified in Annexure A to this Form 1 initiating application, in the Town Y property in good order and repair, for the Applicant Wife to retain.
The appealed order also dismissed the husband’s countervailing application for an interim order in these terms:
1. The Husband have exclusive use and occupation of the Town Y property.
The Town Y property (“the property”), possession of which the parties were disputing, was the former family home.
The wife was, and remains, the sole legal proprietor of the property.
The wife departed the property upon the parties’ marital separation in January 2021, leaving the husband in occupation of it. By July 2021, when she commenced proceedings for property settlement, she wanted to return and enjoy exclusive occupation of the property, but the husband refused to vacate it.
The dismissal of the parties’ interim applications in respect of the property left their legal rights undisturbed.
Leave to appeal
The subject order is interlocutory and unrelated to a “child welfare matter”, so leave to appeal from it is therefore required (s 28(1)(b) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCA Act”); reg 4.02 of the Federal Court and Federal Circuit and Family Court Regulations 2012 (Cth)).
The wife contended leave should be granted because the order was made in error and it wreaks substantial injustice upon her (Medlow & Medlow (2016) FLC 93-692 at [44]–[57]).
As the following discussion will reveal, the decision was patently made in error, but the asserted injustice suffered by the wife is not so obvious. Being the sole legal proprietor of the property, absent an injunction to the contrary, she is entitled to exclusive possession of it. There was and is nothing to prevent her from ejecting the husband from the property as a trespasser – forcibly and with police assistance if necessary. She could have initially remedied her grievance in that way without the need to bring her interim application, since the magistrate’s imprimatur was not needed to exercise the full measure of her legal rights in whatever lawful way she sees fit.
While the demonstration of substantial injustice is typically required for the grant of leave, it is not obligatory (Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177). Since the parties seem not to have fully appreciated the nature and extent of the wife’s existing legal rights and the hearing was conducted wrongly believing she required the magistrate’s permission to regain possession of the property, the grant of leave to appeal and its success will solve any misunderstanding and avoid the prospect of police ambivalence about their involvement when summoned to assist, if that becomes necessary.
The appeal
The wife advanced numerous grounds of appeal contending legal and discretionary error, but it is unnecessary to traverse them. The appealable error can be explained succinctly, which means the wife’s application to adduce further evidence in the appeal pursuant to s 35(b) of the FCFCA Act may be dismissed as the evidence is not needed to demonstrate appealable error.
Regardless of whether or not persons are married, property law governs the ascertainment of their property rights and interests (Wirth v Wirth (1956) 98 CLR 228 at 231–232 and 247–248). Spouses do not enjoy communal interest in property which they happen to own individually (Stanford v Stanford (2012) 247 CLR 108 at [39]).
In any proceedings between spouses for property settlement under s 79 of the Act, the first task is to identify the parties’ existing legal and equitable property interests and consider whether it is just and equitable to make any property settlement order at all. It must not be assumed the spouses’ property rights or interests are, or should be, different from those that already exist (Stanford at [37]–[38] and [50]).
Here, the wife owns the property as she is the sole registered proprietor. The husband claims an equitable interest in it, which he sought to protect by the registration of a caveat over the title, though his claim is disputed and so far remains unproven.
The husband alleges he contributed all of the money to purchase the property, though he adduced no specific evidence as to how he did so. The wife refutes his claim. She alleges the purchase price was funded by the use of money from a joint bank account and an advance from a corporate trustee of a family trust. Being an interlocutory hearing, the conflicting evidence was untested and the magistrate did not make any finding to settle that controversy. However, if the wife’s evidence is correct, the husband would ordinarily not acquire an equitable interest in the property merely because she used money withdrawn from a joint account to buy it (Pates & Pates [2018] FamCAFC 171 at [32]). Aside from the wife’s assertion that the property was registered in her sole name because she was “responsible for the purchase”, there was no other evidence before the magistrate as to the parties’ intentions concerning the acquisition of title in the property.
Importantly, because the magistrate did not purport to resolve the factual conflict over the contributions made to the purchase price, nor was any finding made that the husband holds an equitable interest in the property. On the contrary, the magistrate made another order directing the husband to remove the caveat he had registered over the property (Order 1), from which order there is no cross-appeal by him.
The husband ultimately seeks to obtain a property settlement order which substitutes him as the exclusive legal proprietor of the property, which the wife resists. But the success of the husband’s claim depends upon an eventual exercise of discretion in his favour under Pt VIII of the Act adjusting the spouses’ existing property interests. Unless and until that adjustment occurs, he has no proprietary interest at all in the property (Lin & Ruan (2021) FLC 94-024 at [41], [48] and [49]) and, in the meantime, his occupation of it is only lawful whilst ever the wife consents.
In the face of the wife’s withdrawal of consent, the only way in which the husband could evade ejection from the property was by securing an injunction to restrain the wife from exercising the rights which attend her legal title. That was the point of the husband’s interim application to the magistrate for “exclusive use and occupation” of the property.
There was no dispute, either before the magistrate or in the appeal, that the magistrate was empowered to grant such an injunction in the husband’s favour, thereby temporarily overriding the wife’s legal rights but, to do so validly under ss 114(1)(b) or 114(1)(c) of the Act, the magistrate had to be satisfied it was “proper” to do so. Evidently, the magistrate concluded it was not proper to do so, because the injunction sought by the husband was refused.
However, the magistrate also refused to make the orders sought by the wife, which took the form of a declaration in her favour and a mandatory injunction requiring the husband to vacate the property. The magistrate decided no order was necessary, but that conclusion was reached on the false premise that making no order at all would then permit the husband to continue residing in the property and deny the wife’s right to forcibly recover possession of it from him.
In approaching the parties’ competing applications, the magistrate applied incorrect principle, saying this in the reasons for judgment:
The court has the power to grant an injunction that provides a party exclusive use or occupation of a property. The power is discretionary and the court may make such order as it thinks proper. The matters which should be considered include but are not limited to the financial circumstances of the parties, the needs of children, hardship to either party or to children and, where relevant, conduct of one party which may justify the other party in leaving the home or in asking for the expulsion from the home of the first party.
…
She is the registered proprietor of the property and she says the husband, at present, is seeking to interfere in her legal rights. This might be the case, however, the court is yet to determine who will retain the property on a final basis. I note the property was purchased in the wife’s name during the course of the marriage but it forms part of the pool of assets available for division between the parties.
(Transcript of reasons for judgment 20 September 2021, p.3 lines 1–9, p.4 lines 10–17)
(Emphasis added)
It is reasonably clear the magistrate wrongly assumed the husband already enjoyed some form of inchoate interest in the property simply because it was acquired during the marriage, even though it was owned exclusively by the wife. She was (and remains) entitled to exclusive possession of the property, since the husband failed to persuade the magistrate of his entitlement to an interim injunction temporarily curtailing the wife’s proprietary rights.
The magistrate said this in explanation of the decision to dismiss both parties’ applications:
Taking account of all of the competing considerations, I’m not satisfied that an order should be made in favour of either party, particularly noting the resources available to the parties in these proceedings. On that point, if the husband is to remain in the property, my view is he should be meeting the expenses at the property. If he does not do so, the wife will not be precluded from bringing a fresh application to occupy the property, but I don’t think the evidence supports the order being made at this time.
(Transcript of reasons for judgment 20 September 2021, p.4 line 45 to p.5 line 2)
(Emphasis added)
The factors which the magistrate recited at the outset as being material considerations were either not relevant in this situation at all and were wrongly taken into account or, alternatively, were far outweighed by other factors which were influential but wrongly disregarded. For example:
(a)the magistrate identified the needs of the parties’ children as a relevant factor, but it was an irrelevant consideration because they are adults and have no proprietary interest in the parties’ assets, as the magistrate seemed to subsequently accept in relation to at least one adult child;
(b)the wife’s exclusive legal title in the property and her immediate right to sole possession of it were overwhelmingly important considerations, but was mentioned only in passing by the magistrate because it was yet to be determined “who will retain the property on a final basis”;
(c)the magistrate found that, despite the wife living with her parents, she had paid “most of the expenses associated with [the property]” since separation, because she owned it and the husband was unemployed, but the wife’s subsidy of the husband’s occupation of her property then made no difference to the outcome;
(d)the magistrate found that the parties’ financial circumstances enabled each of them to rent alternate accommodation, if exclusive occupation of the property was granted to the other, so there was no pressing need for the husband to deny the wife’s legal entitlement to possession of her property;
(e)the husband conceded he could instead occupy another property owned by the parties, but he merely preferred not to do so, with the magistrate paying no heed to the fact there was no pressing need for the husband to thwart the wife’s possession of her property;
(f)the wife alleged the husband was not taking sufficient care of the house and garden and, even though no finding was specifically made by the magistrate about whether that was true, the wife’s apparently honest concern about it was ignored; and
(g)the magistrate found there was a “conduct agreement order in place binding the husband and protecting the wife”, the wife was “understandably concerned” about the husband’s behaviour towards her, and she was “fearful” of him, which findings had to be relevant to the force of the wife’s wish to exclusively occupy her own home.
Notwithstanding the magistrate’s errors of principle, both parties’ applications were dismissed. As the husband correctly acknowledged in the appeal, there has not yet been any alteration of the parties’ existing property interests (Mullane v Mullane (1983) 158 CLR 436 at 445) and so the wife’s legal rights remain intact. The absence of any appeal by the husband signifies he is content with the outcome, but the wife is far from content and so the pertinent question is: what, if anything, should be done about the dismissal of the wife’s application?
There is nothing to stop the wife from immediately summoning police assistance to forcibly eject the husband as a trespasser if he refuses to leave the property voluntarily. However, the police may be either unwilling or reticent to respond to her request for help when the issue of the parties’ entitlement to possession of the property has been the subject of civil dispute before the magistrate without clear resolution. The parties’ interlocutory dispute has not been quelled by the appealed order and the husband’s submission to the contrary in the appeal is rejected. It would be better if orders are made to positively define the parties’ interim rights in respect of the property. The dismissal order should be set aside and fresh orders made in the re-exercise of discretion.
The wife did not want to adduce further evidence and the husband was unable to say one way or the other whether he did. The parties need only be given the opportunity of adducing update evidence before discretion is re-exercised (Allesch v Maunz (2000) 203 CLR 172 at 183 and 191–192). Here, the husband had his opportunity and did not take it. The wife’s proposal for the re-exercise of discretion has always been clear. There was no justification to hold up the disposition of the appeal just because the husband was undecided.
The wife is the sole legal proprietor of the property. At this stage, the husband has not proven an existing equitable interest in the property. The husband is well able to live elsewhere and, for the discretionary reasons already canvassed, he has not demonstrated it would be “proper” to grant an injunction depriving the wife of her legal entitlement to possession of the property. An order should be made requiring the husband to immediately vacate the property and restraining his return to it. That will enable the wife to enjoy her existing legal rights.
The wife sought costs of the appeal in the event of it being allowed, but conceded the grant of costs certificates to both parties under the Federal Proceedings (Costs) Act 1981 (Cth) would be an appropriate alternative if the appeal succeeds for an error of law. The wife’s costs application is dismissed because the grounds of appeal and the submissions made in support of it did not squarely confront the appealable error which required the appeal to be upheld. Nor did the submissions made in rebuttal of the appeal. Neither party should have costs certificates for the appeal when their efforts were, in large measure, squandered.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Austin. Associate:
Dated: 10 February 2022
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