Wynne and Hummell

[2019] FCCA 1412

FEDERAL CIRCUIT COURT OF AUSTRALIA

WYNNE & HUMMELL [2019] FCCA 1412

Catchwords:
FAMILY LAW – Parenting and property proceedings –– husband passes away unexpectedly after proceedings commenced – parenting proceedings abate – property proceedings continue – section 79(8) Family Law Act – wife seeks to be appointed as legal personal representative of husband’s estate for purposes of property settlement proceedings – if appointed to that role the wife intends to discontinue property settlement proceedings, thus bringing them to an end – where wife already appointed as legal personal representative of husband’s estate in Supreme Court of NSW as husband died intestate and parties were still married at date of his death – where wife’s application is unopposed – where there are no other competing claimants on husband’s estate apart from the wife and the parties’ children who are in her care – no prospect of abuse of process even with wife on both sides of the record – orders made as sought by wife.

Cases cited:

Family Law Act 1975 (Cth), ss.79(8), 79(8)(a)

Legislation:

Bailey & Bailey (1987) FLC91-803

Bailey & Bailey as Executrix [1989] FamCA 45

Applicant: MS WYNNE

Respondent: MR HUMMELL

File Number: NCC 3343 of 2018

Judgment of: Judge Betts

Hearing date: 1 May 2019

Date of Last Submission: 1 May 2019

Delivered at: Newcastle

Delivered on: 3 May 2019

REPRESENTATION

Counsel for the Applicant: Mr Duane

Solicitors for the Applicant: Watts McCray (NSW) Pty Ltd

Counsel for the Respondent: Not applicable

Solicitors for the Respondent: Not applicable

ORDERS

1. Pursuant to Rule 6.15 of the Family Law Rules, Ms Wynne be appointed as the legal personal representative on behalf of the Respondent in these proceedings, Mr Hummell (deceased); and that Ms Wynne as the legal personal representative be substituted as a party to the proceedings in the place of the Respondent.

2. That the Applicant is granted leave to discontinue the proceedings.

IT IS NOTED that publication of this judgment under the pseudonym Wynne & Hummell is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT NEWCASTLE

NCC 3343 of 2018

MS WYNNE

Applicant

And

MR HUMMELL

Respondent

REASONS FOR JUDGMENT

1. These reasons for judgment were delivered orally.  They have been corrected from the transcript so as to make them more readable.

Background:

1. These are property settlement proceedings conducted pursuant to the provisions of Part VIII of the Family Law Act (“the Act”). 

2. They were commenced by the applicant wife against the respondent husband in October 2018.  The proceedings had not progressed very far when suddenly and tragically the husband passed away. 

3. The husband died intestate at a time, though separated, the parties were still validly married.  The wife has since been appointed as the legal personal representative of the husband’s estate pursuant to letters of administration granted by the Supreme Court of New South Wales.

4. I would add that there were also parenting proceedings on foot between these parties at the time the husband died. By operation of law, the parenting proceedings abate.

5. However, the property settlement proceedings may be continued despite the husband’s death. Section 79(8) of the Act expressly provides that where a party dies after property settlement proceedings have been instituted but before they have been completed:

   ·the proceedings may be continued by or against the legal personal representative of the deceased party - as the case may be; and

   ·the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings; and

   ·the subsection goes on to provide for the circumstances in which the court may continue to make a property settlement order notwithstanding the death of the relevant party.

The application before me:

1. On 16 April 2019, the applicant wife filed an Application in a Case supported by an affidavit she had sworn.  Her application is that she be appointed as the legal personal representative of the deceased husband for the purposes of the property settlement proceedings.  In that event, she also seeks leave to discontinue the proceedings, thus bringing them to an immediate end.

Procedural history:

1. The wife’s Application in a Case was first listed before a Registrar on 26 April 2019. At that time her application was opposed by the husband’s mother, Ms A.  She had filed a Response in which she sought that she, rather than the wife, be appointed as legal personal representative of the husband’s estate for the property settlement proceedings.  Ms A otherwise sought that the proceedings progress to a Conciliation Conference.  Ms A’s Response was supported by an affidavit she had sworn.

2. The Registrar referred the matter to me for hearing on 1 May 2019.

3. On that date, which was a busy duty day, Mr Duane of counsel appeared for the wife.  Ms A had by then had a change of heart; she had withdrawn her Response and was no longer opposing the wife’s application.

4. Ms A’s change of position was understandable on the face of the evidence before me.  Nonetheless, out of prudence the court asked Mr Duane if he could contact Ms A’s former solicitor and confirm Ms A’s position. The matter was stood down to enable that to occur, following which Ms A’s solicitor (Ms Single) agreed to the court telephoning her to confirm that Ms A had indeed withdrawn her opposition to the wife’s application. 

5. The court duly telephoned Ms Single, who formally advised that her instructions were that Ms A’s Response could be dismissed by consent.  Ms Single confirmed that Ms A was well aware of the orders being sought by the applicant wife and that if successful the wife would be effectively putting an end to the property settlement proceedings.

6. The wife’s Application in a Case in therefore unopposed.   

Consideration of the wife’s Application in a Case:

Appointment as legal personal representative:

1. This application is made pursuant to rule 6.15 of the Family Law Rules.[1]

   [1] There is no specific FCC rule which governs this situation.  See rule 1.05, and Schedule 3, of the FCC rules

2. Relevantly, rule 6.15 of the Family Law Rules provides that:

   ·   If a party dies, the other party or the legal personal representative must ask the Court for procedural orders in relation to the future conduct of the case.  [Rule 6.15(2)]

   ·   The Court may order that the legal personal representative of the deceased be substituted for the deceased person as a party. [Rule 6.15(3)]

3. At first blush, the wife’s application for appointment is somewhat curious, because the practical effect of granting it will be that the wife will find herself on both sides of the record in this litigation. 

4. Curious as that situation may seem at first, Mr Duane very helpfully referred me to the precedent for the making of such an order: In the Marriage of Bailey & Bailey (1987) FLC 91-803, a single judge decision of Nygh J.

5. In that case, the husband passed away while matrimonial property settlement proceedings were ongoing, and at a time when there were separate civil proceedings against the husband in the Supreme Court of New South Wales in which various claimants were seeking substantial damages against the husband arising out of his past professional conduct as a psychiatrist.

6. Like the wife in the present case, the wife in that case had earlier been appointed as the personal representative of the husband’s estate by the New South Wales Supreme Court. 

7. Appointing the wife as personal representative in the Family Court proceedings obviously had the potential to facilitate an abuse of process – as it would potentially enable the wife to resolve the matrimonial property settlement proceedings on terms highly favourable to her and unfavourable to the husband’s estate, thereby potentially defeating or denying relief to the claimants in the Supreme Court proceedings.

8. The claimants in the Supreme Court were in fact seeking to intervene in the Family Court proceedings in order to protect their interests.  The wife provided an undertaking in the course of the Family Court proceedings that she would not settle or compromise those proceedings without an order of the Court or the consent of the interveners. 

9. In the circumstances, Nygh J did not find there to be a difficulty with appointing the wife as personal representative in the Family Court proceedings.  In fact His Honour was of the view that the wife must be appointed, because it would be inappropriate and improper to have her appointed as the personal representative of the husband’s estate in one court but to have somebody else appointed to the same role in the other court.  His Honour held that since the estate of a deceased party has no legal personality other than through the legal personal representative, and since the legal personal representative’s authority must extend to allow enforcement of a judgment, it follows that there cannot be two persons in whom the estate is vested with conflicting interests.

10. Nygh J also referred to other authorities supporting the making of such an order.  So certainly there is precedent for it.

11. Mr Duane also referred me to a later appeal decision in the same proceedings: In the marriage of Bailey & Bailey as Executrix [1989] FamCA 45, Full Court (Barblett DCJ, Baker & McCall JJ), unreported, 31 July 1989.

12. This was an appeal from a later order of Nygh J staying the wife’s proceedings until after judgment had been delivered in the Supreme Court proceedings.

13. The Full Court dismissed the appeal and the wife’s property settlement proceedings remained stayed. 

14. At that time, the members of the Full Court reviewed the law relating to the interests of third parties, noting that this decision pre-dated the legislative amendments to the Act specifically providing for third parties in Part VIIIAA.

15. The Full Court noted in paragraph 13 of the judgment that the wife had been substituted as the legal personal representative of the deceased in the Family Court proceedings – this appointment passing without comment from the Full Court. 

16. Returning then to rule 6.15, the court must have before it a person or a party who represents the estate - as the estate does not of itself have a legal identity as such. 

17. Presumably one purpose of rule 6.15 is to avoid potential abuses of process.

18. As the Full Court said at paragraph 25 of the judgment in In the marriage of Bailey & Bailey as Executrix (supra):

    For the Family Court, when exercising jurisdiction under section 79 to fail to take into account liabilities which term encompasses claims of all sorts as referred to above would be to ignore and in many cases to defeat the legitimate claims of third parties in respect of whom the liabilities had been incurred and this, in our view, it is not entitled to do.

19. The case here is entirely different because on the wife’s evidence there are no competing claims on the husband’s estate.  There are no creditors.  The parties together had amassed in the order of $1.5 million in property.  The wife has the ongoing care of the parties’ four (4) children. 

20. I am comfortably satisfied that it is appropriate in the circumstances of this case that the wife, being the legal personal representative of the husband’s estate appointed by the Supreme Court of New South Wales, be similarly appointed as legal personal representative of the husband’s estate in the matrimonial property proceedings pursuant to s.79(8)(a) of the Act and rule 6.15 of the Family Law Rules.

Discontinuance:

1. The second aspect of the wife’s application is that, upon appointment, she seeks to file a Notice of Discontinuance. 

2. It was entirely proper and appropriate for the wife to bring that application contemporaneously – it meant that the late husband’s mother Ms A was well aware when she withdrew her Response what the practical effect would be going forward if the wife’s applications were successful.

3. Rule 13.01(3)(a) of the Federal Circuit Court rules provides that, if a party dies during the course of property settlement proceedings, then a party who subsequently seeks to file a Notice of Discontinuance can only do so with leave from the court or a Registrar.

4. The purpose of the rule makes perfect sense to me.  It is about avoiding the potential for an abuse of process.  But in this case I accept that there is no such potential; I accept the wife’s unchallenged evidence that she is the carer of the four (4) children who are, no doubt, struggling as a result of the tragic passing of their father.  I accept without reservation the wife’s evidence that she cannot afford the costs or the emotional stress of ongoing litigation.

5. The real property owned by the parties is proposed to be sold by the wife in order to meet the mortgage expenses, and I see nothing improper or unusual about such a course.  It would seem to be a perfectly proper way forward in this matter. 

6. The wife should be granted the leave to discontinue that she seeks.

7. In all of the circumstances of this somewhat tragic case, I am of the view that the orders should be made as sought by the wife in her Application in a Case.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Judge Betts

Date: 30 May 2019