SRBINOVSKA & SRBINOVSKA & ANOR
[2014] FamCA 592
•30 July 2014
FAMILY COURT OF AUSTRALIA
| SRBINOVSKA & SRBINOVSKA & ANOR | [2014] FamCA 592 |
| FAMILY LAW – PROPERTY – Application to set aside Orders made by consent as between the First and Second Respondents – Where the Applicant has an interest in one of the real estate properties the subject of the Consent Orders – Orders made for these proceedings to be transferred to the Sydney Registry to join other proceedings on foot involving the parties FAMILY LAW – COSTS – Application that the First and Second Respondents pay the Applicant’s costs jointly and severally on an indemnity basis, or alternatively on a party/party basis – Costs reserved |
| Family Law Act 1975 (Cth) ss 79, 79(10), 79A |
Family Provision Act 1982 (NSW)
Byrne & Byrne (1965) 7 FLR 342
Gilbert v Estate of Gilbert (deceased) (1990) FLC 92-125
Kokl & Kokl (1981) FLC 91-078
McIntyre & McIntyre (1994) FLC 92-468
Patching & Patching (1995) FLC 92-585
Srbinovska& Srbinovska [2013] NSWSC 1491
Taylor & Taylor (1979) FLC 90-674
| APPLICANT: | Mr S Srbinovska |
| FIRST RESPONDENT: | Mr R Srbinovska |
| SECOND RESPONDENT: | Ms A Srbinovska |
| FILE NUMBER: | PAC | 1824 | of | 2013 |
| DATE DELIVERED: | 30 July 2014 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 21 July 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Bevan |
| SOLICITOR FOR THE APPLICANT: | One Group Legal Pty Limited |
| FIRST RESPONDENT: | No appearance |
| SECOND RESPONDENT: | No appearance |
Orders
That compliance with any Family Law Rules 2004 (Cth) so as to facilitate the application being heard on an undefended basis is dispensed with.
That the Orders of 7 May 2013 in the proceedings PAC1824/2013 be set aside.
That the costs of the Applicant are reserved.
That this file (PAC1824/2013) be transferred to the Family Court of Australia, Sydney Registry to be consolidated with the proceedings SYC1484/2010.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Srbinovska & Srbinovska 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 PARRAMATTA |
FILE NUMBER: PAC 1824 of 2013
| Mr S Srbinovska |
Applicant
And
Mr R Srbinovska
First Respondent
And
Ms A Srbinovska
Second Respondent
REASONS FOR JUDGMENT
The application for determination seeks orders pursuant to s 79A of the Family Law Act 1975 (Cth) (“the Act” or “the Family Law Act”) to set aside Consent Orders as to property made pursuant to s 79 of the Act on 7 May 2013 between the Respondent husband and wife.
The application came before the Court on the 21 July 2014.
Documents relating to the present application were sent to the Respondents by email on 6 June 2014 and by express post to their residential address on the same day. There has been a long history of litigation between the parties.
There being no appearance by or on behalf of the Respondents and for reasons that will become apparent, compliance with any Family Law Rules (2004) (Cth) (“the Rules”) that would prevent the present application being heard on an undefended basis are dispensed with.
The Applicant is the brother of the Respondent husband.
Background
There are concurrent proceedings in the Sydney Registry of the Family Court of Australia and the Supreme Court of New South Wales.
In proceedings initially commenced in the Federal Magistrates Court of Australia, as it then was, Ms C Srbinovska, the wife of the present Applicant, commenced proceedings for property settlement orders under the Family Law Act. Those proceedings were later transferred to the Family Court of Australia, being proceedings SYC1484/2010.
The Supreme Court proceedings are referred to below.
The Estate of Ms N Srbinovska
On 20 January 2006 Ms N Srbinovska, the mother of the Applicant in the present application, Mr S Srbinovska, and the Respondent husband in the present application, Mr R Srbinovska, died. Mr S and Mr R are the only children of the deceased.
At the time of her death, the deceased owned the following property:
a)B Street, Suburb M;
b)D Street, Suburb M;
c)E Street, Suburb M, owned jointly with Mr R;
d)K Street, Suburb M, owned jointly with both Mr R and Mr S;
e)Money with the Commonwealth Bank; and
f)Superannuation
On 3 January 2006, contemporaneously with the making of a new will by the deceased, Mr R signed an acknowledgement in the following terms:
I [Mr R Srbinovska] of [G Street Suburb M] solemnly declare and give my share of the property known as [K Street Suburb M], (ref: Lot …) to my eldest brother [Mr S Srbinovska] of H Street Suburb M in line with my mother’s (sic) last will.
On 3 January 2006 the deceased sign her last will and testament.
The will provided, inter alia, that Mr S was to receive the deceased’s interest in the properties at D Street, Suburb M and K Street, Suburb M. As to the K Street property, the deceased in her will noted:
[This property is currently under three (3) names, namely myself [Ms N Srbinovska], my son [Mr R Srbinovska] and my other son [Mr S Srbinovska].] In line with my wishes [Mr R Srbinovska] is to transfer his share in this property to his brother [Mr S Srbinovska].
The will further provided that Mr R was to receive the deceased’s interest in the properties at B Street, Suburb M and E Street, Suburb M.
The deceased died without revoking her will dated 3 January 2006. Probate of the last will and testament of the deceased was granted by the Supreme Court of New South Wales on 25 June 2009.
The dispute between Mr S and Mr R
The Applicant asserts that Mr R has refused to transfer his interest in the K Street property as provided for in the acknowledgement signed by Mr R and as contemplated by the deceased in her last will and testament.
As a consequence, Mr S commenced proceedings in the Supreme Court of New South Wales for provision out of the estate of his late mother under the Family Provision Act 1982 (NSW).
On 30 June 2009 Mr S and Mr R reached a compromise in relation to Mr S’s claim and a Deed of release was signed by them in conjunction with the executor of the deceased’s estate. The Deed, in summary, provided for Mr R to transfer to Mr S his interest in the property at K Street, Suburb M in consideration of a payment by Mr S to Mr R of the sum of $76,665 as security for the payment of Capital Gains Tax arising from the transfer and Mr S facilitating a release of Mr R from any liability arising from the mortgage secured over the property.
At the time of the Deed of release Ms C had registered a caveat over the property at K Street, Suburb M, presumably asserting an interest in the property by reason of her pending property settlement proceedings against Mr S in the Family Court, Sydney.
Subsequent to the Deed of release Mr R procured a transfer to himself of the properties at B Street, Suburb M and E Street, Suburb M.
The transfer of the K Street property to Mr S by Mr R contemplated by the Deed of release has not been completed, presumably as a consequence of the caveat by Ms C remaining on title.
In July 2011 Mr R intervened in the property settlement proceedings in the Family Court, Sydney between Mr S and Ms C, asserting that he owned a one-half share in the K Street property, notwithstanding the terms of the Deed of release referred to above.
As a consequence, on 20 March 2012 Mr S commenced further proceedings in the Supreme Court of New South Wales seeking provision out of the estate of his late mother and leave to commence that application out of time.
A discrete hearing to determine the issue as to the validity of the Deed of release commenced on 29 October 2012 and on 16 November 2012 the Supreme Court held that the Deed of release was null and void and reinstated Mr S’s application for provision out of the estate of his late mother.
Subsequent to Supreme Court Orders on 16 November 2012, Mr R’s interest in the real estate properties B Street, Suburb M and E Street, Suburb M comprised in the estate of his late mother again became the subject of Mr S’s proceedings in the Supreme Court of New South Wales. Mr R has not retransferred those properties to the executor of the deceased’s estate pending outcome of the Supreme Court proceedings and they remain registered in his name. They comprise prospective notional assets of the estate.
Proceedings in the Supreme Court of New South Wales, including it appears a claim by Ms C for provision out of the estate of Mr S’s late mother, were listed for hearing for 4 days commencing 27 May 2013. Subsequently, for an administrative reason, the hearing in the Supreme Court was adjourned to commence on 26 August 2013.
On 24 January 2013 Mr R’s solicitors in proceedings in the Family Court, Sydney filed a Notice of Ceasing to Act, that notice recording Mr R’s residential address and his email address as “…”.
On 31 January 2013 Mr R’s solicitors in the Supreme Court proceedings filed a Notice of Ceasing to Act. At a direction hearing on 1 February 2013 Mr R appeared unrepresented and provided an email address for the service of documents as “…”.
The Parramatta Application
On 2 May 2013 Mr R and his wife Ms A filed in the Parramatta Registry of the Family Court a joint Application for Consent Orders (Exhibit B) as to property in their marriage. The application asserted a separation of the parties in March 2012.
The application was filed by Prime Lawyers, who acted for the wife. On the application, the husband was unrepresented.
On 7 May 2013 a Registrar made Orders by consent in terms of the orders sought in the Application. No requisition was raised by the Registrar in circumstances where:
a)The application disclosed pending proceedings in the Family Court, Sydney SYC1484/2010 between Mr S, his wife Ms C and Mr R;
b)A copy of documents in the SYC1484/2010 proceedings were attached to the Application for Consent Orders which clearly revealed a contest in relation to the property at K Street, Suburb M, sought to be dealt by way of declaration in the proposed Consent Orders, that contest between Mr S, his wife and Ms C;
c)The Application for Consent Orders disclosed that proceedings SYC1484/2010 had been stayed pending the outcome of Supreme Court of New South Wales proceedings between Mr S and Mr R;
d)The Supreme Court proceedings clearly involved the properties at B Street, Suburb M and E Street, Suburb M, representing part of the notional estate of the deceased and subject to claim not only by Mr S but also by Ms C; and
e)The Application for Consent Orders falsely asserted that there was no person who may be entitled to become a party under s 79(10) of the Act. Clearly, for the reasons discussed above, Mr S and his wife Ms C would be so entitled.
The Consent Orders made on 7 May 2013, inter alia, provided that the properties at B Street, Suburb M and E Street, Suburb M be transferred by Mr R to his wife, Ms A.
Subsequent to the Consent Orders being made, the properties were so transferred.
On 9 August 2013 in the Supreme Court of New South Wales an Order was made joining Ms A in the proceedings pending in that Court.
On 23 August 2013 trial dates in the Supreme Court were vacated to facilitate Mr S making an application to set aside Orders made by the Registrar in the Family Court, Parramatta on 7 May 2013. Mr S, on the same day, registered caveats over the B Street and E Street properties to seek to protect his interest. Application was subsequently made by Ms A to lapse those caveats and on 11 October 2013 an Order was made in the Supreme Court of New South Wales by Slattery J allowing Mr S to maintain his caveats on the titles of those properties and thus preventing Ms A from encumbering or disposing of the properties.
In delivering his reasons in Srbinovska& Srbinovska [2013] NSWSC 1491 Slattery J said:
38.The circumstances of this case demonstrate that [Ms A] and her husband [Mr R] have been prepared to secretly transfer the [B Street] and [E Street] properties out of [Mr R's] ownership after Pembroke J's orders in 2012 and before his Honour's proceedings were completed, in circumstances where it must have been clear that [Mr S] would attempt to designate these two properties as notional estate.
39.[Ms A] submitted in the course of argument that she had obtained legal advice and was quite within her rights not to tell anyone that she and [Mr R] had made the May 2013 settlement, which took the [B Street] and [E Street] properties out of [Mr R's] hands. Her right to take that advice is undoubted. But she deliberately took the advice and deliberately decided to keep the transaction a secret, until it was discovered by [Mr S's] lawyers in the course of routine searches. This was arguably deliberately designed between [Mr R] and [Ms A] to remove these properties from [Mr R's] possession and [Mr S's] reach, without him knowing.
40.Equally troubling is Pembroke J's finding in his principal judgment that [Mr R] "should carefully consider his position" because this litigation has only become necessary as [Mr R] "resiled from the solemn promise that he made to his mother and his brother on 3 January 2006": Srbinovska v Srbinovska [2012] NSWSC 1338 at [21]. [Mr R] is apparently someone who is quite prepared to resile from solemn promises. He and [Ms A] have dealt with these properties together. [Ms A] has not given any account of her dealings with these properties; and has not given any undertaking not to deal with these properties. In these circumstances the Court would be willing in the Court's jurisdiction to make a freezing order as there is a danger that [Ms A] will deal with assets in this jurisdiction to prevent [Mr S] having any judgment satisfied ….
Proceedings in the Family Court, Sydney have been adjourned to 11 September 2014 facilitate the making of the present application.
On 2 May 2014 the Supreme Court proceedings were before the Expedition Judge. Trial directions were made and the proceedings listed for hearing for 5 days commencing 27 October 2014 before Sackar J.
Section 79A of the Family Law Act
Section 79A of the Act provides that the Court may, on the application of a party affected by an order in property settlement proceedings, have the order set aside (or varied) in certain circumstances. Section 79A(1)(a) provides for such an order where there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence, (including the failure to disclose relevant information), the giving of false evidence or any other circumstance.
Section 79A is a remedial section intended to overcome miscarriages of justice. Because it is a remedial section, it should be construed liberally to reflect its intended purpose (see Gilbert v Estate of Gilbert (deceased) (1990) FLC 92-125). However, at all times, it is important to realise the exercise of the power of the Court under s 79A, that is to say, even if the Court finds that one of the grounds of s 79A(1) are established, it then has to consider whether or not in the exercise of its discretion to set aside or vary the original order (McIntyre & McIntyre (1994) FLC 92-468 and Patching & Patching (1995) FLC 92-585).
“Fraud”, for the purposes of the provisions of s 79A (1)(a), means “conscious wrongdoing or some form of deceit”; see Byrne & Byrne (1965) 7 FLR 342 at 343 and Taylor & Taylor (1979) FLC 90-674 at 78,589, 78,590, 78,594 and 78,595 and Kokl & Kokl (1981) FLC 91-078 at 76,557.
As discussed above, it is abundantly clear that Mr R and Ms A sought by subterfuge to obtain orders by consent as to property knowing full well that the subject properties were very much in dispute. They deceitfully failed to disclose the prospective and pending third party interest of Mr S and Ms C in the Application for Consent Orders and sought to undermine proceedings in the Supreme Court of New South Wales. The observations of Slattery J are most apposite.
On being satisfied that s 79A (1)(a) applies for the reasons given, it is appropriate that the discretion be exercised to set aside the impugned Orders.
The Orders of 7 May 2013 in proceedings PAC1824/2013 will be set aside and the costs of the Applicant will be reserved.
I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 30 July 2014.
Legal Associate:
Date: 30 July 2014
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