Tan and Guan (No. 2)

[2021] FCWA 119

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

LOCATION: PERTH

CITATION: TAN and GUAN (No. 2) [2021] FCWA 119

CORAM: SUTHERLAND CJ

HEARD: WRITTEN SUBMISSIONS

DELIVERED : 6 JULY 2021

FILE NO/S: PTW 2649 of 2020

BETWEEN: MR TAN

Applicant

AND

MS GUAN

Respondent

Catchwords:

RESTITUTION - Applicant seeking transfer of interest in loan agreement following order for setting aside of consent property orders - Legal basis for the transfer was a Deed entered into by the parties and not the Consent Orders - Claim for restitution fails

COSTS - Applicant seeking costs of the extension of time/review application - Satisfied in the circumstances of this case that the costs application is premature and should await a final determination of the financial proceedings

Legislation:

Family Law Act 1975 (Cth)

Category: Not Reportable

Representation:

Counsel:

Applicant	:	N/A
Respondent	:	N/A

Solicitors:

Applicant	:	Norman Waterhouse Lawyers
Respondent	:	FMD Legal

Case(s) referred to in decision(s):

B & B [2015] FCWA 65

Coley v Danae [2020] WASCA 13

Collins & Collins (1985) FLC 91-603

Fitzgerald v Fish (2005) 33 Fam LR 123

Gludau and Gludau [No. 2] (2013) FLC 93-562

Greedy and Greedy (1982) FLC 91-250

I and I (No 2) (1995) FLC 92-625

Luadaka v Luadaka (1998) FLC 92-830

Tan and Guan [2021] FCWA 39

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

IT IS NOTED that publication of this judgment by this Court under the pseudonym Tan and Guan has been approved by the Family Court of Western Australia pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

INTRODUCTION

1On 28 April 2020, a Registrar made final financial orders by consent (the “Consent Orders”) between [Mr Tan] (the “husband”) and [Ms Guan] (the “wife”). On 7 August 2020, the husband applied for an extension of time in which to seek a review of the Registrar’s decision to make the Consent Orders (the “Review Application”). The husband was successful, and on 16 March 2021, I made orders (among others) pursuant to judgment (the “Review Reasons”)[1] setting aside the Consent Orders. I also made an order that if any party wished to make an application for costs/restitution, then they were required to file written submissions by 6 April 2021. I ordered that any written submissions in response be filed by 27 April 2021.

[1] Tan and Guan [2021] FCWA 39.

2The husband filed written submissions on 6 April 2021 and sought the following orders (in summary):[2]

a) That the wife pay his costs of and related to the Review Application, fixed in the sum of $54,660;

b) That the wife transfer to the husband any right, title or interest she has or may have had in the loan agreement with [Property[3] Group A];

c) That the wife pay to the husband, by way of restitution, any payments received by her in relation to the Property Group A loan; and

d) That the wife pay his costs of the restitution and the costs application, fixed in the sum of $5,000.

[2] Husband’s Written Submissions filed 6 April 2021, Annexure A.

[3] I observe that the name of Property Group A has been misspelt throughout some of the material that has been filed with the Court.

3The wife filed written submissions in response on 27 April 2021 and sought orders,[4] in summary, as follows:

a) Each party pay their own costs;

b) The husband’s costs application be dismissed;

c) In the alternative to the two preceding paragraphs, both parties’ costs be reserved to the Trial Judge;

d) The application for restitution be dismissed.

[4] Wife’s Responding Submissions filed 27 April 2021, [2].

4To the extent the parties’ written submissions relied on contested matters of fact, I am not able to have regard to those matters. Instead, I have only had regard to facts as found in my Review Reasons, or that were otherwise agreed or uncontroversial.

5In my Review Reasons I found that:

a) There were numerous significant factual disputes between the parties, including, inter alia: (1) the husband’s proficiency in various languages including English, Mandarin and Cantonese; (2) the date of the parties’ final separation; (3) whether the wife effectively “railroaded” the husband into a financial settlement (as the husband alleged) or the parties engaged in negotiations with each other and reached an agreement (as the wife alleged); (4) whether various emails purportedly sent to and/or from the husband were actually sent to and/or from him or at his direction, or were in fact authored by the wife (pretending to be the husband); and (5) whether the husband understood the nature and effect of the various documents written in English and signed by him in April 2020. As I recorded in my decision, these matters could not be determined on an interim basis.[5]

b) I was satisfied that the delay by the husband in bringing his Form 1 application (in which he sought an extension of time for the review of the Registrar’s decision to make the Consent Orders) was short and was reasonable in the circumstances.[6]

c) The Consent Orders were made by a Registrar upon an amended application for consent orders filed by the parties on 17 April 2020 (the “Amended Application”). Leaving aside a number of alleged (disputed) errors and omissions in the Amended Application, I was satisfied that having regard to the uncontested evidence of the parties, there were a number of other inaccuracies in the document. Having regard to the totality of the undisputed / uncontested errors and omissions, I was satisfied that the Registrar could not have been properly satisfied that it was just and equitable to make the orders and had the Registrar been aware, a further requisition ought to have issued.[7]

d) I was satisfied that granting the extension of time was necessary to do justice between the parties. The practical effect of so doing was to set aside the Consent Orders, noting that the husband had withdrawn his consent.[8]

[5] Tan and Guan [2021] FCWA 39, [3] and [4].

[6] Ibid, [26].

[7] Ibid, [29].

[8] Ibid, [33] and [34].

6I intend to deal with the claim for restitution first, before then considering the husband’s application for costs.

THE RESTITUTION CLAIM

Further relevant facts

7By affidavit filed 7 August 2020, the husband deposed that he and the wife (and a number of third parties) entered into a Deed of Variation on 9 April 2020 which had the effect of (among other things) transferring the husband’s “rights, responsibilities, benefits and liabilities under the Joint Venture Loan and Loan Agreement and Loan Security Agreement both dated 6 June 2016 to the wife (including quarterly interest payments of up to $30,000 and the eventual return of the $1,500,000 loan)”.[9] These interests are colloquially known as the “[Property Group A Investment]”.

[9] Husband’s affidavit filed 7 August 2020, [117.3].

8The husband annexed the Deed of Variation to his affidavit. I observe that the language of clause 3 of the Deed provided for the immediate transfer of the husband’s interests in the Property Group A Investment to the wife. Nothing in the Deed provided that the transfer was contingent upon, or subject to, the making of a family court order.[10]

[10] A copy of the Deed was annexed to the husband’s affidavit filed 7 August 2020 – see Book of Annexures, pages 95 – 101.

9By affidavit filed 18 September 2020, the wife deposed (at [100]) that “on 9 April 2020… [the husband] and I signed a deed of variation transferring [the husband’s] interest in the [Property Group A Investment] to me in accordance with our agreement”. It is the wife’s case that she and the husband agreed in early 2020 that she would receive the Property Group A Investment.

10On 9 April 2020, the parties signed and filed an application for consent orders. One of the final orders sought by the parties was for the husband to transfer his interest in the Property Group A Investment to the wife within a specified period of time. That same day, the Court requisitioned the application in relation to a number of issues.

11The parties then filed an Amended Application for consent orders on 17 April 2020. Again, the parties sought an order that the husband transfer his interest in the Property Group A Investment to the wife within a specified period of time.

12On 28 April 2020, Consent Orders were made upon the Amended Application.

Legal principles – restitution

13In Coley v Danae [2020] WASCA 13, the Full Court of the Supreme Court of Western Australia observed (at [179]) that there was a large body of authority, including in Western Australia, for the proposition that “following a successful appeal and the setting aside of orders below, restitution follows as a matter of course and is not a matter of discretion”.

14Further, the Full Court noted (at [181]) that the “right to an order for restitution arises because the legal basis for the payment (i.e. the court order) has been removed”.

Discussion

15The transfer of the husband’s interest in the Property Group A Investment to the wife was affected by way of the Deed of Variation executed on 9 April 2020. By the time the Registrar made the Consent Orders on 28 April 2020, the husband’s interest in the Property Group A Investment had already passed to the wife. Put simply, the legal basis for the transfer was the Deed, and not the Consent Order. Accordingly, the husband’s claim for restitution on the basis that the Consent Orders were set aside must fail.

16The outcome may have been different had the husband entered into the Deed of Variation in discharge of the in personam obligation cast upon him by the Consent Orders to “do all acts and things and sign all documents necessary” to transfer the Property Group A Investment to the wife. In this regard, I was invited to consider the discussion in Coley v Danae (at [180] to [185]), and that of the Full Court of the Family Court of Australia in Gludau and Gludau [No. 2] (2013) FLC 93-562 (per Murphy J at [38], with May and Hogan JJ agreeing). However, it is not necessary for me to express a view on such matters in light of my conclusion in the preceding paragraph.

17I intend to dismiss the husband’s application for restitution.

THE COSTS APPLICATION

Legal Principles

18Section 117(1) of the Family Law Act 1975 (Cth) (“the Act”) provides that, subject to s 117(2), each party to proceedings is to bear his or her own costs. Section 117(2) provides that if the court is of the opinion there are circumstances that justify so doing, the court may make such orders as to costs as it considers just.[11] Subsection (2A) provides that in considering what order (if any) should be made, the court must have regard to:

a)The financial circumstances of each of the parties to the proceedings;

b)Whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

c)The conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

d)Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

e)Whether any party to the proceedings has been wholly unsuccessful in the proceedings;

f)Whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

g)Such other matters as the court considers relevant.

[11] Subject to subs 117(2A), (4), (4A) and (5) of the Act and in accordance with any relevant rules.

19The discretion to award costs is a “broad” one, and the various enumerated factors are not to be read in any restrictive way.[12] Any one of the factors may be the sole foundation for an order for costs.[13] Nevertheless, the matters enumerated “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”.[14] It is unnecessary to spell out detailed reasons for decisions in costs matters. An exercise of discretion to order costs will be upheld if it appears to the appellate court that there are reasons upon which the trial judge or magistrate could rely.[15]

Discussion

[12] Collins & Collins (1985) FLC 91-603.

[13] Fitzgerald v Fish (2005) 33 Fam LR 123.

[14] I and I (No 2) (1995) FLC 92-625, 82,277.

[15] B & B [2015] FCWA 65; Greedy and Greedy (1982) FLC 91-250; Luadaka v Luadaka (1998) FLC 92-830.

20Unusually, in this case, I am satisfied that the husband’s application for costs is premature and should await a final determination of the proceedings. I make this finding for the following reasons:

21 Firstly, the Review Application was a discrete issue. I set aside the Consent Orders because, having regard to the totality of the undisputed / uncontested errors and omissions, I was satisfied that the Registrar could not have been properly satisfied that it was just and equitable to make the orders and had the Registrar been aware, a further requisition ought to have issued. However, I accept the wife’s submission that the Amended Application was a joint application by the parties. It follows that the parties were each responsible to ensuring the Amended Application accurately recorded their financial information and position. Complicating the matter is the husband’s as yet untested allegations that he did not understand the nature and effect of the documents he was signing and that he was effectively “railroaded” into a financial settlement.

22 Secondly, I also accept the wife’s submission that the manner in which the husband framed his case, including the matters he chose to raise (many of which could not be taken into account by the Court in determining the Review Application because they were disputed) had a direct bearing on the nature and scope of the wife’s response. As I have already identified in the Review Reasons and again at [5(a)] above, the Court was unable to determine on an interim basis a number of significant issues that the husband raised, including whether he understood the nature and effect of the documents he was signing.

23 Thirdly, until such time as the Court is able to make findings about these significant disputed issues, and noting that the quantum of costs sought by the husband is considerable, the Court is unable to make any assessment as to the reasonableness and proportionality of either the wife’s response, or the costs claimed by the husband.

24 Finally, I am not persuaded it is appropriate to simply dismiss the husband’s application for costs, in light of the wife’s alternate position that the costs of both parties should be reserved to the trial judge.

Orders

25I intend to make the following orders:

1. The husband’s application for restitution be dismissed.

2. Both parties’ costs of and related to the husband’s application for an extension of time and application to set aside the consent orders made on 28 April 2020 be reserved to the trial judge.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.

KV

Associate

6 JULY 2021