Case Note: Bebbington & Bebbington [2017] FamCAFC 31 – power to make property orders and leave to appeal

AdminCase Note

Case Note: Bebbington & Bebbington [2017] FamCAFC 31 (8 March 2017)

  1. This appeal case involves the contention of whether or not the court was was functus officio and had no power to make those orders – being orders varying the final property order.
  2. The Court considered whether the orders were machinery or consequential in nature or whether they affected the substantive rights of the parties.
  3. The Court also considered whether leave to appeal was required and whether the orders subject of appeal were interlocutory or final orders.

Legislation 

Family Law Act 1975 (Cth)

Family Law Regulations 1984 (Cth)

Family Law Rules 2004 (Cth)

Case Law

Adam P. Brown Male Fashions Proprietary Limited v Philip Morris Incorporated and Another [1981] HCA 39; (1981) 148 CLR 170

Allesch v Maunz [2000] HCA 40; (2002) 203 CLR 172

Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334

Bourke v Bourke (1993) FLC 92-406

Carr v Finance Corporation of Australia Ltd (No. 1) [1981] HCA 20; (1981) 147 CLR 246

CDJ v VAJ (1998) 197 CLR 172

Clemett & Clemett (1981) FLC 91-013

Jess and Ors & Jess and Ors (2014) FLC 93-620

Kerr and Kerr (1983) FLC 91-329

Licul v Corney [1976] HCA 6; (1976) 180 CLR 213

Medlow & Medlow (2016) FLC 93-692

Millar & Millar (1983) FLC 91-326

Ramsey and Ramsey (1983) FLC 91-301

Ramsey and Ramsey (No. 2) (1983) FLC 91-323

Ravasini and Ravasini (1983) FLC 91-312

Re McBain; Ex parte Catholic Bishops Conference and Another [2002] HCA 16; (2002) 209 CLR 372 Rutherford and Rutherford (1991) FLC 92-255

Slapp and Slapp (1989) FLC 92-022

Taylor v Taylor [1979] HCA 38; (1979) FLC 90-674

  1. The Appeal was heard by Kent J in Brisbane on 2 March 2017 and Judgment delivered on 8 March 2017
  2. The lower court was the Federal Circuit Court of Australia.  The orders were made on 29 September 2016.

Appeal Orders

  1. The leave to appeal was dismissed.
  2. The application to adduce further evidence on appeal was dismissed.
  3. Directions re cost matters.

Background

  1. On 29 September 2016, on the application of Ms Bebbington (“the wife”) to enforce earlier property settlement orders made by consent on 2 December 2015, Judge Purdon-Sully made orders from which the husband sought to appeal.

The 2 December 2015 consent orders

  1. The relevant terms of the consent orders included that the husband was to transfer to the wife his right, title and interest in and to the property situate at [Northern New South Wales] and the wife was to discharge the mortgage and be responsible for the repayments, rates and levies owing with respect to the property along with paying the sum of $33,000 to the husband.  If this did not occur within the time limited, the property was to be sold.
  2. The husband provided the transfer and then there was some delay and the husband insisted that the sale provisions within the orders with respect to the Northern New South Wales property had taken effect.

Orders of 29 September 2016

  1. The orders made by the primary judge on 29 September 2016 authorised and required the transfer of the husband’s interest in the Northern New South Wales property to the wife to proceed, as well as the other steps contemplated in Order 30 of the consent orders to occur within 28 days. That in fact occurred on 21 October 2016.
  2. The husband sought to contend on appeal by reason of the consent orders made on 2 December 2015 the Court was functus officio; and the orders made by the primary judge on 29 September 2016 were not machinery, consequential or by way of enforcement but varied the substance of the original orders. The husband’s remaining contention, ground 3, is that if contrary to the first contentions the primary judge had power to make the orders, her discretion to make them miscarried.

Is the appeal nugatory?

  1. The wife contended that before descending into questions concerning the need of the husband to obtain leave to appeal the subject orders, or to the merits of the appeal if leave is granted, that this appeal “is completely without any utility.”
  2. Whilst the husband filed a notice of appeal on 21 October 2016, that obviously did not have the effect of staying the operation and/or enforcement of the 29 September 2016 orders, as is confirmed by r 22.11 of the Family Law Rules 2004 (Cth). Moreover, no application was ever made by the husband under that rule to stay the operation or enforcement, or both, of all or part of the 29 September 2016 orders.
  3. The “statement of agreed facts” tendered on the hearing of the appeal with the consent of both parties and marked as Exhibit 1 and received by the Court as further evidence pursuant to s 93A(2) of the Act confirms, the orders made on 29 September 2016 were fully executed on 21 October 2016. None of the orders made on 29 September 2016 nor, for that matter, the orders made on 2 December 2015, remained executory after that which occurred on 21 October 2016. Specifically, on that date the husband’s liability to the prior secured creditor under the former mortgage was fully discharged; the husband’s solicitors collected on the husband’s account a bank cheque in the sum of $33,000; and the wife extinguished the husband’s liability by refinancing the debt into her sole name, and financed the payment made, by assuming liability to the Bank of Queensland. The transfer of the husband’s interest to the wife has been lodged for registration. The funds paid to the husband’s lawyers have not been returned.
  4. The only substantive order the husband seeks on appeal is “[t]hat the Orders of the Federal Circuit Court dated 29 September 2016 be set aside.”
  5. When the husband was invited to make submissions to as to how the appeal had any utility, counsel for the husband submitted that if the subject orders are set aside, the husband “will be restored to the position that he was in before the orders made by Judge Purdon-Sully were made.” However, this ignores that the orders have been fully executed with all the consequences of such execution, including the husband taking the benefits of execution. Setting aside of the orders would not address the fact and consequences of the execution of those orders.
  6. In Ramsey and Ramsey (No. 2) (1983) FLC 91-323 Nygh J emphasised that the power of enforcement under s 105 was discretionary and held that a refusal to enforce earlier property orders made in the context of the parties’ subsequent reconciliation could be justified on the basis that the unconditional transfer of the legal title to the wife provided for in those orders, no longer represented her entitlement in equity. This was so because the subsequent conduct of the parties was seen as conferring upon the husband a beneficial interest in the subject property.
  7. In Kerr and Kerr (1983) FLC 91-329 the Court had ordered in March 1977 that the parties join in the sale of the jointly-owned matrimonial home. The proceeds of the sale were to be divided equally between the parties. Later in 1977, the husband proposed to the wife that he buy her interest in the home for half the expected net proceeds of the sale. This occurred. In 1981 the wife applied to the Court to enforce the original order. It was held that the wife was estopped from asserting that the original order was still operative and enforceable because the basis upon which the parties had entered into the original order was no longer operative. The husband had acted to his disadvantage in paying the wife. Nygh J (at 78,250) recorded a finding that the Court had a discretion as to enforcement and that “even if she [the wife] were not so estopped it would be, in the circumstances of the case by reason of her conduct and her delay in seeking such enforcement, inequitable to exercise my discretion to enforce the orders”.
  8. There are distinctions between those cases and this case, but importantly in this case there is no executory order to be carried into effect. The husband, not having obtained a stay of the subject orders, acquiesced in them being carried into effect.
  9. There is no executory order capable of enforcement if the subject orders were to be set aside.
  10. An appeal pursuant to s 93A of the Act is by way of rehearing and the Court must decide the rights of the parties upon the facts and in accordance with the law as it exists at the time the appeal is heard (CDJ v VAJ (1998) 197 CLR 172 at [111]; Allesch v Maunz [2000] HCA 40; (2002) 203 CLR 172).
  11. There being no executory order capable of enforcement if the subject orders be set aside, the order sought by the husband on appeal lacks utility as it would not have the effect of determining an extant legal controversy.
  12. The appellate jurisdiction of this Court is expressed in s 93A of the Act to be “with respect to matters arising under this Act…” (emphasis added). In Re McBain; Ex parte Catholic Bishops Conference and Another [2002] HCA 16; (2002) 209 CLR 372 Hayne J said at 458: Hypothetical questions give rise to no matter.
  13. In Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334 at 355 Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ observed that it was central to the purpose of a judicial determination that it “…includes a conclusive or final decision based on a concrete and established or agreed situation which aims to quell a controversy…”
  14. As this proceeding lacks utility it ought for that reason be dismissed.

Leave to appeal

  1. Whilst the husband’s amended notice of appeal filed on 5 January 2017 included an application for leave to appeal, it was not conceded by the husband that leave is required. The application is made in compliance with an order of an Appeals Registrar made for the purpose of advancing that application on the hearing of the appeal if, contrary to the husband’s primary contention, the Court determined that leave is required.
  2. Pursuant to s 94AA of the Act and reg 15 of the Family Law Regulations 1984 (Cth), leave is required to appeal from a prescribed decree being an “interlocutory decree”. For the purpose of determining whether an order is interlocutory or final, it is the legal effect of the order that is focused upon. Only an order which has the legal effect of finally determining the substantive rights of parties is a final order (see, for example, Licul v Corney [1976] HCA 6; (1976) 180 CLR 213 and Carr v Finance Corporation of Australia Ltd (No. 1) [1981] HCA 20; (1981) 147 CLR 246).
  3. The consent orders, as with any property orders pursuant to s 79 of the Act, crystallised the parties’ respective rights to property.
  4. The primary judge found, at [25], “[w]hilst having made the consent orders under s.79 of the Act, the Court is functus officio with no power to vary the substance of the orders, it does have the power to make machinery orders to give effect to the orders.” No issue is taken with this statement of principle.
  5. The husband contends that her Honour did not identify the power on which she relied to make the orders, however the Appeal Court considered that the reasons as a whole makes plain that her Honour was asked to consider varying the orders on the basis that they were consequential or machinery orders.
  6. It is now well settled that the power of the Court to alter property interests is “a once and for all proposition” (Slapp and Slapp (1989) FLC 92-022 at 77,360 (“Slapp”)) and no power lies to alter the substantive provisions of a s 79 property settlement order (see Taylor v Taylor [1979] HCA 38; (1979) FLC 90-674).
  7. Despite this, the Court has power to vary the “consequential” provisions of an order made pursuant to s 79 of the Act (see Ravasini and Ravasini (1983) FLC 91-312 (“Ravasini”)).
  8. In Ravasini, the Full Court considered the nature of consequential orders, from 78,126:

There is no question of the power of the Court to make what we would with respect suggest is more properly called a consequential order. The real questions are what is the proper definition of a consequential or machinery order and where is the dividing line between a consequential order which may be varied or modified and a substantive order which the Act gives no power to the Court to modify or vary…

  1. A consequential order, in a property matter, would include an order following logically or of necessity from a prior substantive order.
  2. Whether what is to be done is termed a consequential order or a machinery order the result is the same. The Court has no power to vary the original order. It has power to enforce the order and to modify the machinery provisions of the order to effect enforcement provided that by so doing it does not affect the substantive rights of the parties. That power can also be used to spell out the effect of the order where that is not clear.
  3. It is argued by counsel for the husband that the orders ultimately made by her Honour vary the substance of the s 79 orders and “go further than just giving effect to the Original Orders”.
  4. In Slapp, the Full Court considered an appeal against orders varying the time for compliance with the transfer of property. In that case, there was a provision in the relevant orders which appointed the appellant as the trustee for sale of real property, which appointment was only discharged on the respondent meeting the financial obligation by a certain date. The respondent brought an application to seek to extend that date.
  5. Nygh J (with whom Fogarty and Bulbeck JJ agreed) observed: As counsel for the wife has pointed out, this Court in Bray and Bray (1988) FLC 91-968; 12 Fam. L.R. 563, held in an almost identical situation that an order which substitutes an alternative order if certain preconditions are not fulfilled by a certain time, confers upon the beneficiary of that order a substantive right. In other words, the orders as originally framed by his Honour … provided that if the money was not paid by 11 July 1988 or such further time as the parties might by agreement extend – there would be vested in the wife a substantive right of quite a different kind to that provided for in the first alternative.

… [T]his meant that on 30 September 1988 the wife became entitled pursuant to the orders, as amended by consent, to a quite substantively different entitlement, not merely as a matter of legal right, but also as a matter of substantive consequence…

In my view that situation falls fairly and squarely within the scope of the earlier decision in Bray and Bray. It cannot be described as merely a change of machinery but it had the effect of depriving the wife of a right of substance which the earlier orders of the court, as amended, had vested in her.

  1. The Appeal Court considered that this case was distinguishable from the case of Slapp, in which the orders provided for the appellant to be appointed as trustee for sale in default of the payment of monies. However, in the instant case, no substantive rights were conferred on the husband in the event the property failed to be transferred within the 45 days provided by the orders. The substantive right was conferred on the husband in the event the wife failed to refinance the mortgage secured against that property. As such, extending the time for the transfer to be effected did not alter the right of the husband to seek the sale of the property if the wife was unable to refinance the mortgage.
  2. Further, the lack of utility of this appeal are relevant to the question of leave.
  3. No relevant orders remain executory and leave to appeal could not justifiably be granted unless the husband could demonstrate that substantial injustice would result if leave were refused.
  4. The Court considered that not only did the husband fail to demonstrate how any purported prospect of “enforcement” of the original orders was other than illusory, he did not demonstrate how any injustice would be occasioned to him if he did not have the opportunity to pursue that course. Even on the hypothetical enforcement advanced by the husband, resulting in the orders for sale of the Northern New South Wales property taking effect, it was not demonstrated that this would be of any benefit to the husband. As but one example, it was not shown that after meeting the realisation costs and discharging liabilities, that the husband’s ordered share of 30 per cent of the net sale proceeds would even be as much, let alone more than, the $33,000 the husband has already received under the orders as executed.
  5. Leave to appeal was refused, rendering it unnecessary to address the challenges on appeal.

 

 

This article does not represent the views of the firm.  It a case note based on a decision made by the Full Court of the Family Court in relation to family law property case appeal involving issues of power to make further orders once final property orders have been made, and whether leave to appeal in this case was required.

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