Virgona and Virgona - [2018] FamCA 976

FAMILY COURT OF AUSTRALIA

VIRGONA & VIRGONA

[2018] FamCA 976

FAMILY LAW – PROPERTY – Interim application – Where the wife seeks orders for the enforcement of previous consent orders – Where the wife seeks a variation of previous consent orders on the basis of non-compliance – Where the wife seeks injunctions – Court makes orders for enforcement of previous consent orders – Court declines to make orders for the variation of previous consent orders on the basis that the asserted changed circumstances do not require such a variation – Court declines to make injunctive orders on the basis that the wife’s application goes further than is necessary to protect her interests – Court makes injunctive orders for the provision of certain banking documents to the wife on the basis of the husband’s duty of disclosure.

Family Law Act 1975 (Cth) s. 114
Family Law Rules 2004, rr. 13.01, 13.04

Acton & Burton [2015] FamCA 469
Adam P Brown Male Fashions Pty Limited v Philip Morris Incorporated (1981) 148 CLR 170
Blue Seas Investments Pty Ltd v Mitchell and McGillivray (1999) FLC 92-856
Briese and Briese (1986) FLC 91-713
Cutler v Wandsworth Stadium Limited (1945) 1 All ER 103
Iphostrou & Iphostrou and Ors [2011] FamCA 20
In the Marriage of Farr (1976) FLC 90-133
Jeeves & Jeeves (No 2) [2008] FamCA 1148
Livesey and Jenkins (1985) 1 All ER 106
Mertens & Mertens [2016] FamCAFC 136
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia(No 3) (1998) 195 CLR 1
Sieling and Sieling (1979) FLC 90-627
Tripp & Tripp [2013] FamCA 1107

APPLICANT:

Ms Virgona

RESPONDENT:

Mr Virgona

FILE NUMBER:

SYC 7257 of 2016

DATE DELIVERED:

23 November 2018

PLACE DELIVERED:

Sydney

PLACE HEARD:	Sydney
JUDGMENT OF:	McClelland J

HEARING DATE:

29 October 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Maurice

SOLICITOR FOR THE APPLICANT:

Strong Law Pty Ltd

SOLICITOR FOR THE RESPONDENT:

Manning Lawyers

Orders

THE COURT ORDERS, PENDING FURTHER ORDER, THAT:

The husband comply with Consent Orders 9 and 10 of the Orders of the Family Court of 13 June 2018.
Within seven (7) days, the husband do all things necessary to provide a signed irrevocable written authority to B Bank authorising it and its employees to provide copies of bank statements, account balances and any payment plans to Ms Virgona, upon her request, in relation to the husband’s interests in mortgages secured over:
(a)C Street, Suburb D NSW … (Folio Identifier …); and
(b)E Street, Suburb F NSW … (Folio Identifier …).
The wife be permitted to provide a copy of these orders and the orders of 13 June 2018 to B Bank and its staff, for the purpose of making requests pursuant to order 2 herein.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Virgona & Virgona has been approved by the Chief Justice pursuant to s…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] FamCA 976
Decision Date: 23 November 2018

CaseChat Overview and Summary

This matter concerned an application by the wife, Ms Virgona, seeking orders against the husband, Mr Virgona, in the Family Court of Australia. The dispute arose from the husband's alleged failure to comply with existing consent orders regarding mortgage payments and his disclosure obligations concerning financial arrangements related to matrimonial assets.

The court was required to determine whether to grant the wife's application for orders that would allow her to access information about the husband's banking arrangements and to deduct certain amounts from a sum otherwise payable to the husband under the consent orders. Specifically, the wife sought to ensure the husband complied with his mortgage repayment obligations and to address the potential financial detriment she might suffer due to the husband's payment plans with B Bank.

McClelland J, applying principles from *Adam P Brown Male Fashions Pty Limited v Philip Morris Incorporated* and *Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3)*, acknowledged the court's power to amend interlocutory orders where changed circumstances render enforcement unjust, provided such changes are evidenced. The court also emphasised the paramount importance of full and frank disclosure in family law proceedings, as mandated by both common law and the Family Law Rules 2004. His Honour found that the husband had not diligently complied with his disclosure obligations, particularly concerning arrangements with B Bank that affected significant matrimonial assets.

Consequently, the court ordered that the husband comply with specific consent orders and provide an irrevocable written authority to B Bank authorising the disclosure of bank statements and account details to the wife concerning mortgages secured over two properties. The wife was also permitted to provide a copy of these orders to B Bank to facilitate her requests.

Orders

Orders of the court

THE COURT ORDERS, PENDING FURTHER ORDER, THAT:

The husband comply with Consent Orders 9 and 10 of the Orders of the Family Court of 13 June 2018.

Within seven (7) days, the husband do all things necessary to provide a signed irrevocable written authority to B Bank authorising it and its employees to provide copies of bank statements, account balances and any payment plans to Ms Virgona, upon her request, in relation to the husband’s interests in mortgages secured over:

(a) C Street, Suburb D NSW … (Folio Identifier …); and

(b) E Street, Suburb F NSW … (Folio Identifier …).

The wife be permitted to provide a copy of these orders and the orders of 13 June 2018 to B Bank and its staff, for the purpose of making requests pursuant to order 2 herein.

Note: The form of the order is subject to the entry of the order in the Court’s records.

Background

Background to the litigation

Relevantly, in Adam P Brown Male Fashions Pty Limited v Philip Morris Incorporated (1981) 148 CLR 170 at 178, the majority said:… But in our opinion, a court undoubtedly has such a power [to amend or vary an interlocutory order or undertaking accepted in respect to an interlocutory order]. Just as an interlocutory injunction continues “until further order”, so must an interlocutory order based on an undertaking. A court must remain in control of its interlocutory orders. A further order will be appropriate whenever, inter alia, new facts come into existence or are discovered which render its enforcement unjust. Of course, the changed circumstances must be established by evidence. [Emphasis added, references omitted]. In that decision, the High Court applied Cutler v Wandsworth Stadium Limited (1945) 1 All ER 103 in confirming that the onus rests upon the person seeking to vary the consent or interim order to establish those changed circumstances. The changed circumstances relied upon by the wife is the fact that the husband is failing to make mortgage payments in accordance with orders 9 and 10 of the consent orders. In place of the order for a $50,000 distribution to the husband, the wife seeks orders that she be permitted to deduct from that figure an amount equivalent to both the capital and interest that would have been paid to B Bank by the husband pursuant to the consent orders, had the husband not entered into the payment plans to which I had earlier referred. In addition, the wife seeks orders permitting her to deduct from that $50,000 sum additional amounts in the event that the husband fails to comply with order 9 of the consent orders. That order requires the husband to continue to make repayments in respect to the Suburb D mortgage, albeit at a reduced rate, as the balance of the net proceeds of the sale of the Suburb F property will be applied to reduce that mortgage. With respect, the wife’s application, in that regard, is a dramatic overreach. As stated, it is accepted that the wife will potentially be detrimentally affected by the fact that there will be additional interest accrued as a result of the husband entering into the payment plans with B bank. While that additional interest is yet to be quantified, it cannot be said to be remotely equivalent to the sum of $50,000. Moreover, it cannot be determined, at this point in time, that the husband will, in the future, fail to comply with his obligation to continue to make repayments in respect to the reduced mortgage secured over the Suburb D property, after the Suburb F property is sold. A more appropriate variation may have been, for instance, an application to vary order 8.5.1 of the consent orders to permit a deduction for the additional interest burden suffered by the wife, as a result of the husband entering into the payment plans with B Bank. It is not, however, for the Court to redraft the wife’s application. The wife sought to characterise her proposed order 3 as an order in aid of enforcement of the consent orders, pursuant to Part 20 of the Family Law Rules 2004 (“the Rules”). The solicitor for the husband objected to the Court considering such an application on the part of the wife, as he had not been given notice of any such application. Accordingly, I do not further consider that aspect of the wife’s claim as characterised as an aid to an enforcement application. I note, however, that such an application on behalf of the wife would appear to have the same issue of overreach, to which I have earlier referred.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Relevantly, the joint judgment of Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia(No 3) (1998) 195 CLR 1 at [35] reads, as follows:The general principle which informs the exercise of the power to grant interlocutory relief is that the court may make such orders, at least against the parties to the proceeding against whom final relief might be granted, as are needed to ensure the effective exercise of the jurisdiction invoked. The … Court had jurisdiction to make interlocutory orders to prevent frustration of its process in the present proceeding. [References omitted]. Disclosure is an important obligation in family law proceedings. It is an obligation that exists both at common law and pursuant to Part 13 of the Rules. In terms of the common law, in Briese and Briese (1986) FLC 91-713 at 75,182, Smithers J applied the House of Lords decision in Livesey and Jenkins (1985) 1 All ER 106 in determining that:… in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In terms of the parties’ statutory obligation of disclosure, Rule 13.01(1) of the Rules relevantly provides that:Subject to subrule (3), each party to a case has a duty to the court and to each other party to give full and frank disclosure of all information relevant to the case, in a timely manner. [Emphasis added]. Further, Rule 13.04(1)(a) provides that:(1) A party to a financial case must make full and frank disclosure of the party's financial circumstances, including:(a) the party's earnings, including income that is paid or assigned to another party, person or legal entity; … Clause 6 of Part 1 of Schedule 1 of the Rules relevantly provides that:(6) At all stages during the pre-action negotiations and, if a case is started, during the conduct of the case itself, the parties must have regard to: …(i) the duty to make full and frank disclosure of all material facts, documents and other information relevant to the dispute. Note: The duty of disclosure extends to the requirement to disclose any significant changes (see clause 4 of this Part). [Emphasis added]. The fact that the obligation of disclosure exists as a duty to the Court, as well as the other party, is significant. It is also significant that the obligation is in respect to the disclosure of “information relevant to the dispute” and includes “any significant changes”. In this matter, I am not satisfied that the husband has diligently complied with his obligations of disclosure in a timely manner. Clearly, details of the arrangements entered into between the husband and B bank, which concern the major assets of the matrimonial pool, are relevant in these proceedings. In those circumstances, it is appropriate for the wife to be given access to any information received by the husband in respect to banking arrangements and decisions concerning those properties. I will, therefore, make orders in accordance with the wife’s proposed orders 4 and 5.