Varley and Varley
[2016] FCCA 2609
•27 September 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| VARLEY & VARLEY | [2016] FCCA 2609 |
| Catchwords: FAMILY LAW – Application to amend final orders – not a slip rule – application misconceived. |
| Legislation: Family Law Act 1975, ss.79A, 79A(1)(a) |
| Cases cited: Taylor & Taylor (1979) FLC 90-674 Official Trustee inBankruptcy & Bryan and The Estate of Christine Ann Gatenby (deceased) (2006) FLC 93-258 |
| Applicant: | MS VARLEY |
| Respondent: | MR VARLEY |
| File Number: | DGC 616 of 2016 |
| Judgment of: | Judge Harland |
| Hearing date: | 27 September 2016 |
| Date of Last Submission: | 27 September 2016 |
| Delivered at: | Dandenong |
| Delivered on: | 27 September 2016 |
REPRESENTATION
| Counsel for the Applicant: | Ms Samson |
| Solicitors for the Applicant: | Peninsula Law |
| Counsel for the Respondent: | Mr Dunlop |
| Solicitors for the Respondent: | Roberts Beckwith Partners |
ORDERS
The application in a case filed 15 September 2016 be dismissed.
The Applicant pay the costs of the Respondent fixed in the sum of $3,742.20 such costs to be deducted from the Applicant’s share in the proceeds of sale.
IT IS NOTED that publication of this judgment under the pseudonym Varley & Varley is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
DGC 616 of 2016
| MS VARLEY |
Applicant
And
| MR VARLEY |
Respondent
REASONS FOR JUDGMENT
These reasons for judgment were delivered orally. They have been corrected from the transcript. Grammatical errors have been corrected and an attempt has been made to render the orally delivered reasons amenable to being read.
This is an application in a case seeking orders that final orders that were made on 18 August 2016 by a Registrar of this Court following a resolution of the matters on a final basis at a conciliation conference be amended. The wife’s case is that she and her lawyer made a mistake and failed to realise that the orders did not include debts in her name to (omitted) that total approximately $23,000. The wife has deposed with two affidavits in support, one by her and the other by her solicitor. The application in a case filed 15 September 2016. This type of amendment does not fall within amendments with the slip rule.
Her solicitor also represented her client at the conciliation conference. She refers to herself and her lawyer overlooking the fact that order 1 of the orders did not include the wife’s debts. Order 1(ii) lists various debts to creditors to be paid from the net proceeds of sale of the home. Order 2 of those orders provides for the wife to otherwise indemnify the husband with respect to any other debts incurred in her name that are not identified in order 1, inclusive of any liabilities for (omitted).
There were several debts that the parties had, many of which were consolidated with (omitted). The wife filed an affidavit in support of her application, which was amended on 23 September. The wife seeks that the orders be amended to include debts that she lists in her amended application in the case totalling $23,464.92 and also asks that the indemnity order made in order 2 of those orders be deleted. The wife relies on section 79A(1)(a) of the Family Law Act 1975 (“Family Law Act”), which provides as follows:
Where an application by a person affected by an order made by a Court under section 79 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 evidence), the giving of false evidence or any other circumstance.
There is no complaint raised about fraud or duress. The complaint centres on suppression of evidence and any other circumstance. Part of the wife’s complaint in her affidavit and also submissions today are with respect to orders that were made earlier in the proceedings requiring the parties to do various things with respect to negotiating reduction of debts. In my view, whether or not parties complied with orders that were made prior to the conciliation conference can have no bearing on a section 79A application, because the parties, both represented, decided to compromise their claims at the conciliation conference.
It is not unusual, first of all, for there to be non-compliance with orders of this Court, but, secondly, for parties to compromise property settlement matters even when there are still outstanding issues or disputes between them about aspects of the property pool or other issues. It is not uncommon for parties - particularly when the asset pool is relatively small - for parties to compromise their position and to resolve matters with the advice of lawyers rather than having the expense and stress involved of continuing Court proceedings and the uncertainty of a litigated outcome.
The orders were made by a Registrar of the Court after conducting the conciliation conference. The Registrar is an experienced Registrar in this Court. The Registrar had the benefit of the discussions at the conciliation conference and the conciliation conference documents that were filed for that conference. The wife complains that the husband was under a duty to the Court to bring the debts of the wife to (omitted) to the Court’s attention. In my view, that submission is misconceived because the debt is the wife’s debt. It is the wife’s case that the husband was aware of it and didn’t dispute it.
The husband’s counsel points out that that is actually not the case when one refers to correspondence annexed to his affidavit opposing the wife’s application in a case. He says that he had understood that the orders reached were final orders and entered into it on that basis with that understanding. I am not aware of any authority that would suggest that a party is under an obligation to put to the Court material that’s already clearly before the Court in filed material and raise it in the Court in circumstances where the parties have reached a compromised position where both were legally represented.
That to me would suggest some sort of inquisitorial process or even a paternalistic one and I cannot see how that submission can stand. There was also a suggestion in the material and in submissions that the husband had appeared to instruct his solicitors to omit that debt. That submission was withdrawn and properly so as it would raise a serious issue of misconduct on the part of the solicitor. The real issue here is the wife and her solicitor made a mistake. It seems clear on the material that it is a unilateral mistake not a mutual one and not one where there could be any suggestion that the husband and/or his legal representatives have in some way acted improperly.
As what seems clear when one looks at exhibits A and B, which are the assets and liabilities schedules contended for by the parties at the conciliation conference, there was some difference in views as to what assets and liabilities should be included and what the figures were. Many of those figures were agreed, but not all of them were agreed. Also in the process of both where there are consent orders reached and also where there are orders made by the Court after contested hearings, matters that are listed in assets and liabilities schedules prepared by the parties are not always automatically dealt with in that way.
It is not uncommon, for example, for parties to raise issues of furniture or whilst the parties might seek to include items that do not have an agreed amount or valuations. The Court may well say each party is going to keep those assets in their possession and not include them in an asset and liability table. It may be that those amounts are similar. It may be that they were acquired post-separation, but the Court’s exercise is not a purely mathematical one. The Court falls into error if it focuses on mathematics.
The wife referred to the following authorities during submissions. The first was a case of Taylor & Taylor (1979) FLC 90-674. That case dealt with an application to set aside orders in circumstances where both parties had not been heard and dealt with the issue of false evidence. The wife says that certainly the circumstances in this case do not go as far as any wilful concealment, but that the husband should have included the wife’s debts in any proposal. I think it is fairly clear that what the husband proposed in his proposal was really that her debt would remain with her. It’s a matter for the wife to agitate what happens with her debt. The husband is under no obligation, nor is his lawyer, to argue her case for her.
The wife also relies on the case of Official Trustee inBankruptcy & Bryan and The Estate of Christine Ann Gatenby (deceased) (2006) FLC 93-258. That was a case where the parties had entered into section 79 orders by consent. There was an issue in that case of the husband and wife knowing about two creditors of the husband’s but not disclosing it to the Court. The husband was later made bankrupt. The Official Trustee in Bankruptcy who was seeking to set aside those orders in circumstances where the Court found that the husband and wife had deliberately and intentionally suppressed evidence. The Court in that case noted that ordinarily a failure to make full and frank disclosure would amount to a miscarriage of justice. Certainly that is a well-established principle. That case is not applicable to the circumstances here. There is no non-disclosure. There is no evidence that could support, even on the papers, a suggestion that there has been some sort of wilful concealment such that a miscarriage of justice arises.
The wife also relies on the case of Pelerman & Pelerman (2000) FLC 93-037 (“Pelerman & Pelerman”). It is a Full Court of the Family Court decision. Again, this case involves an application pursuant to section 79(1)(a) where the wife sought to vary the consent orders. In that case, the husband, failed to disclose his financial circumstances when the consent orders were made. The wife appealed the trial judges orders which summarily dismissed her s.79A application. The Full Court held that this could indicate a miscarriage of justice pursuant to any other circumstance, and therefore in the context of the trial judge having summarily dismissed the application, it could not be said that her application was doomed to fail. This Court also said the failure of the husband to disclose his financial circumstances means there was an absence of informed consent and that that could amount to a suppression of evidence, but again, this is not a case where there has been non-disclosure. A non-disclosure case cannot be made out against the husband when it is not a debt that is in his name, and in any event, the debt was disclosed by the wife. The principles referred to by the Full Court in Pelerman & Pelerman simply have no application to circumstances of this case.
Counsel for the husband argues that a mistake on the wife’s behalf is not a proper basis for setting aside the orders pursuant to section 79A(1)(a), and that if the wife has a cause of action it may be a negligence claim with respect to her legal adviser. He relies on the case of Clifton & Stuart (1991) FLC 92-194. The Court emphasises that a miscarriage of justice is talking about justice according to the law, and it relates to the integrity of the judicial process. A miscarriage of justice must arise out of the judicial process. Incompetence of legal representatives unless it is so bad to be the equivalent of having no representation at all, does not, by itself, affect the judicial process or fairness of the trial, even though the result may be unjust to the person concerned. That is directly on point with the issue here. There is no basis for saying that the process before the Registrar conducting the conciliation conference and entering into consent orders at the end of that conference was not part of an ordinary judicial process.
The wife and her lawyer refer to in their affidavits there being pressure to enter into the consent orders because it was getting close to the end of the day and when the Court closed. It is not uncommon for people to spend all day negotiating at Court. Again, it is entirely a matter for the parties and their lawyers as to whether or not to enter into consent orders that day or to enter into heads of agreement and then have orders drawn up later. Both happen quite often. Of course often parties and their lawyers want to finish the matter in a day and not incur further legal expenses, but it cannot be suggested that somehow that is not a proper process. Both parties, represented, decide to take that course. This is not a paternalistic jurisdiction. Parties have to take some responsibility for how they decide to enter into these matters, and it is not unusual for parties to enter into consent orders when they have resolved the matter at a conciliation conference. On the face of it, the Registrar was satisfied that the orders were just and equitable to make a property settlement in the circumstances. It is well known that the jurisdiction of the Court with respect to property settlement is discretionary, provided that the discretion falls within the legislative provisions. There is a range of outcomes that the Court might reach.
The husband’s counsel also referred to the decision of Rohde & Rohde (1984) FLC 91-592. In that case, the husband had been negotiating for two loans. He did not give evidence about the negotiation of those loans at the hearing, but following the hearing completed those borrowings and registered mortgages over the property before judgment was delivered, increasing his liabilities. The husband then applied to have the orders set aside pursuant to section 79A. The Court dismissed his application finding with respect to suppression of evidence that there could not be a suppression of evidence when it is the party who failed to give relevant evidence, either by choice or inadvertence. The Court found that there was not a miscarriage of justice by reason of any other circumstance because the husband, having himself withheld facts from the Court which he could have brought to the attention of the Court by seeking leave to reopen while the decision was reserved, could not later allege that the orders were unjust. It was his own conduct that contributed to that alleged injustice. That case also dealt with impracticability of orders which is not relevant to the issues here.
The issue is not whether or not I would have reached a different view to the Registrar. The issue is not whether or not the outcome is unfair. The issue is considering looking at final orders having been made whether or not there is a miscarriage of justice sufficient that the Court should exercise its discretion to set aside orders. It is quite clear that that is a discretion and there are several authorities that discuss that in the context of 79A cases and miscarriage of justice. In my view, the whole way this application has come about is misconceived. The application was brought by way of an application in a case. The wife’s solicitor referred to the Family Law Rules2004 (Cth) providing for applications in a case to be lodged in circumstances where the orders sought are procedural, ancillary or incidental. The Family Law Rules2004 (Cth) do not apply to this Court but in any event, the orders sought by the wife cannot be characterised as procedural. They are seeking a substantive change to final property orders. They are not ancillary or incidental. They are seeking, in effect, to set aside substantial final property orders and substitute new orders.
It is incorrect to refer to it as a simple amendment to the orders. That implies that it is akin to a slip rule and it is not because it is a substantive change, not an obvious omission that is being made. It is one thing for the parties consent and it is clear parties can consent to a section 79A order and that may well be brought in that fashion but that is not the case here.
This application should have had to have been brought by way of an initiating application because it is a substantive issue seeking to start proceedings a fresh. Section 79A applications are dealt with, as other hearings are and it would be necessary to test the evidence and for there to be cross-examination. I have dealt with the issues that are raised under section 79A because I was asked to and the parties have argued it. I am not satisfied that the wife has an arguable case. If I had found that there was an arguable case to be raised under section 79A, the matter would have to go to a hearing where evidence is tested and parties are cross-examined.
This is not simply a matter where if I was satisfied that there was a case under section 79A that I could simply substitute the orders that are sought because it is not for me to substitute orders of a Registrar without considering those circumstances. It is not for me to look behind it and decide that I have a different view. This is not an appeal. I have looked at the assets and liabilities that were before the Registrar in the conciliation conference for the purpose of determining whether there’s substance to the arguments raised about a miscarriage of justice.
On the material that is before me, the issue seems to me to be a mistake made by the wife and her solicitor. There are other remedies for that. It is not, in my view, a matter that raises an arguable case with respect to 79A principles. I dismiss the application in a case.
The husband seeks an order for costs in the sum of $3,742.20, which is below the scale of costs allowable under the Federal Circuit Rules 2001 for the event of this type which would total $5044.00.
The wife opposes the order for costs. She refers to the husband being in a stronger financial than her with respect to his earnings, refers to the small pool and the debt. Both in the submissions of the substantive case and the submissions with respect to costs the wife’s solicitor has referred to it being, in a sense, substantially unjust as far as the husband and wife is concerned. There is just no basis for that. It all is on a premise that somehow the husband has taken advantage of the wife and done the wrong thing. It is quite clear from the correspondence that is annexed to the husband’s affidavit that is just not the case and I find it unhelpful for submissions of that type to be made.
The husband has been entirely successful in an application which I have found to be misconceived and without merit.
I accept that the husband is in a stronger financial position, in terms of his earnings. I also accept, on the wife’s case, if she does nothing about pursuing other remedies that are potentially available to her, that she will have about $50,000.00 from the proceeds of sale.
The amount that is being sought in terms of costs is a modest one, less than the scale, for an argument that, in my view, could not succeed. It is not an answer to say that the husband did not consent to the orders sought. He did not have to consent. There was no basis for it and that cannot be held against him. In the circumstances of this case, given that the application did not have merit, given that the wife was on notice that the husband would be seeking costs if it proceeded and he has gone to the expense of having to defend the application that was defective in form and also in substance, the wife should pay her costs and does have the means to do so from the property settlement that she will receive.
I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of Judge Harland
Date: 11 October 2016
2
0
2