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Allbeck & Fielders [2020] FCCA  2435  (1 September 2020)

Last Updated: 17 September 2020

FEDERAL CIRCUIT COURT OF AUSTRALIA

ALLBECK & FIELDERS

[2020] FCCA 2435

REPRESENTATION

ORDERS

(1) The Wife’s property proceedings in this Court are stayed until judgment in her action against the husband in the District Court of NSW, Sydney, General List, Case No. ..., or further order of this Court.

(2) The husband’s Application in a Case filed 25 February 2020 be dismissed.

(3) The husband’s proposed Minute of Order filed in Court on 27 May 2020 is dismissed.

(4) Liberty to either party to relist the proceedings on 14 days’ notice.

(5) The Wife’s Application for Costs arising out of the interim hearing held on 27 May 2020 are reserved.

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

PAC 4152 of 2018

Applicant

And

Respondent

REASONS FOR JUDGMENT

1. This is the determination of the Husband’s proposed Minute of Order filed in Court on 27 May 2020 in which he seeks orders, inter alia, that the property proceedings between the parties be expedited to final hearing. Ancillary proposed orders that he seeks include a suite of proposed orders relating to the further preparation of these property proceedings in readiness for a final hearing.
2. This is also the determination of the Wife’s Application in a Case filed 25 February 2020 for a stay of proceedings in view of an outstanding civil damages action that she has instituted against the Husband in the District Court of NSW relating to, inter alia, alleged sexual assaults by the Husband upon her during the relationship.
3. The Court should state that prior to the Husband seeking to rely upon the above proposed Minute of Order, he had filed and served an Application in a Case on 21 February 2020 seeking, inter alia, summary dismissal of the Wife’s property proceedings in this Court, by reason of her alleged dilatory behaviour and non-compliance with Court orders.
4. However, at the outset of hearing the parties’ competing applications on 27 May 2020, the Husband’s solicitor informed the Court that in view of the Wife having filed her primary affidavit (which the Court assumes is a reference to the Wife’s affidavit filed on 10 March 2020), and in view of the statement in the Wife’s Case Outline dated 14 May 2020 that she is ready to proceed with the hearing of her property application in this Court (subject to her above stay Application), the Husband now sought that the Court make the Orders set out in his above proposed Minute of Order, and also dismiss the Wife’s stay application.
5. The Husband relies upon the following documents:
   1. His Application in a Case filed 25 February 2020;
   2. His Case Outline dated 14 May 2020;
   100. His Minute of Order entitled “Respondent’s Minute of Order”;
   4. Affidavit of the Husband’s solicitor, Mr B, filed 21 February 2020.
6. The Wife relies upon the following documents:
   1. Her Application in a Case filed 25 February 2020;
   2. Affidavits of Mr C filed 24 February 2020, and 10 March 2020;
   100. Financial Statement of the Wife filed 10 March 2020;
   4. Affidavit of Dr D filed 24 February 2020;
   5. Her affidavit filed 12 March 2020.
7. The Wife submitted, inter alia, that the property proceedings in this Court should be stayed pending the determination of District Court of NSW proceedings that she instituted against the husband, commenced on 24 February 2020, and in which she alleges verbal abuse and sexual intercourse without consent, on 5 to 6 occasions, perpetrated against her by the Husband during the relationship.
8. The Wife submits that the first step in any proceedings under section 79 of the Family Law Act 1975 (Cth) (the Act), is the determination of the assets and liabilities of the parties. She submits that this Court is unable to determine that issue until such time as her District Court proceedings are finally concluded. In this context, the Wife relies upon the decision of the Full Court of the Family Court of Australia in Bailey & Estate of Bailey [1989] FamCA 45; (1989-1990) 13 Fam LR 652.
9. In that decision, the Full Court upheld the decision of Nygh J ordering a stay of the Wife’s property proceedings in the Family Court of Australia until judgment of certain third-party damages proceedings in the Supreme Court of NSW instituted against the Wife (as executrix of the estate of her former Husband, Dr Bailey) or until further order of the Family Court of Australia. Nygh J had also given general liberty to the Wife to apply on seven days’ notice in the Family Court of Australia.
10. In that decision, the Full Court stated, inter alia:
    • “Sec. 79 of the Family Law Act gives the Court the power to alter the interests of a party to the marriage in property. As has been said on many prior occasions the first step in applications under the Section is to ascertain what is the property of the parties (Sec. 79(1)) and to ascribe to that property a value. In so doing, the Court has properly taken into account the liabilities of a party and made orders affecting or dealing with the net assets. Liabilities cover a wide range. In some cases these are secured on the property. In other cases they are unsecured liabilities of a party, e.g. debts. Again, liabilities may be actual or contingent. We would agree with His Honour's comment that:
    • "It would be arbitrary to draw a distinction between a tortious liability arising out of business dealings with a husband or wife, as apparently these claims did, and a contractual liability; just as it would be illogical to draw a distinction between a claim for liquidated and unliquidated damages".
    • Accordingly, in our view, it matters not whether the liabilities are actual, contingent, arising out of contract or tort.
    • ......
    • The first submission by the appellant wife was referred to as the priority issue. It was that it was not for the Family Court to decide whether one type of claim was entitled to priority over the other. However, in our view, to talk in terms of priorities misconceives the role, the function and the powers of the Court. We do not see it as a question of priorities. The question is simply, what is the property of the parties that the order seeks to affect. The nature and extent of this property cannot be determined until proper liabilities have been ascertained. If the liabilities are not presently fully ascertained, then it may be that in the appropriate case the Family Law proceedings should be stayed until such time as the liabilities are so determined. This is such a case.
    • There was no suggestion that the claims by the interveners were other than genuine and being legitimately pressed. The relative sizes of the claims and the assets of the estate of the deceased are such that if the orders sought by the Wife were ultimately made the intervener claimants would be defeated. In these circumstances, in our view, it was proper in the circumstances for His Honour to have granted the stay until such time as the common law claims had been dealt with by the Supreme Court. It would not be until those proceedings have been completed that it would be known whether there was any property in the estate in respect of which orders could be made pursuant to s 79.”
11. It is apparent that the decision of the Full Court hinged on ensuring that the legitimate claims of the third party claimants in the Supreme Court of NSW were not prejudiced. In that sense, that is, where the rights of third parties were involved, the decision is distinguishable from the current matter.
12. Nevertheless, relevant dicta in the decision of the Full Court is helpful in determining the Wife’s stay Application. For example, it refers to the Court in section 79 proceedings ascertaining the property of the parties which of necessity involves the Court in ascertaining the liabilities of the parties. It refers to a relevant liability in this context being a contingent liability arising out of an alleged tort. And it refers to a consideration of whether the final determination of independent proceedings in another Court, in that case the common law damages proceedings for alleged negligence in the Supreme Court of NSW, might effectively result in there being an absence of relevant property available for adjustment in the section 79 property proceedings.
13. The Court observes that in these property proceedings the Husband’s Financial Statement filed 29 April 2019 indicate net property owned (after deducting asserted liabilities) of about $535,000, apart from superannuation.
14. The Wife’s Financial Statement filed 10 March 2020 indicates that her property owned is $14,555, with asserted liabilities of $144,233.
15. Turning to the Wife’s Statement of Claim in the District Court of NSW, she pleads that, again, during the first two years of cohabitation with the husband she was subjected to verbal abuse on a regular basis; she was raped (sexual intercourse without consent) on 5 to 6 occasions between 2015 to 2016, and as a result suffers from Post T Stress Disorder “or issues related to such a diagnosis”. Under the heading “Damages”, she pleads that as a consequence of “the assaults”, she has suffered injuries, disability, loss and damage and claims general and special damages. She reserves the right to make a claim for economic loss.
16. She pleads in her Statement of Particulars Personal Injury Proceedings, inter alia, that she has suffered injuries and disabilities comprising:
    1. Bruising and vaginal pain;
    2. Post Traumatic Stress Disorder;
    100. Psychological injury causing her various symptoms and disabilities, including panic attacks and low self-esteem;
    4. Damage preventing her from enjoying an intimate sexual relationship in ways she had previously enjoyed;
    5. Damage preventing her from enjoying an intimate sexual relationship with her present Husband;
    6. Depression.
17. The Wife pleads that particulars of out-of-pocket expenses are to be provided but including ongoing psychiatric and psychologist expenses for therapy and treatment.
18. As to the potential size of any future possible judgment in the District Court of NSW proceedings, taking the wife’s action in that Court at its highest, the parties made no submissions. The Husband denies the wife’s allegations of domestic violence and alleged sexual assaults.
19. By reference to the Wife’s pleadings in the District Court of NSW action, and the contents of the report of Dr D, psychiatrist, it can be seen that, at least looking at the matter theoretically, and taking the Wife’s claim at its highest, her claim may be significant. However, as presently pleaded and particularised, the Court’s impression is that it could not be stated that there is a significant prospect that the wife’s damages action in the District Court of NSW would exceed the husband’s above referred net property, excluding superannuation, of about $535,000.
20. Nevertheless, the Court is of the view that it will be in the interests of justice that the Application for a stay be granted. The Wife’s claim in tort against the husband, being a chose in action, falls within the definition of “property” under section 79 of the Act; see the above decision in Bailey & Estate of Bailey, and in the Marriage of Holden (1985 – [1986] FamCA 65; 1987) 11 Fam LR 835. The Court cannot clearly determine the assets and liabilities of the parties in the property proceedings until the determination of the Wife’s action for damages against the husband in the District Court of NSW.
21. So as to ensure that the Wife diligently prosecutes her District Court of NSW proceedings against the husband, the Court proposes to stay the property proceedings in this Court until judgment of the District Court of NSW in the action brought by the wife in that Court or further order of this Court. Further, the Court will grant liberty to apply on seven days’ notice to the parties.
22. The Court observes that the District Court of NSW Standard Time Table in respect to the Wife’s action in that Court, states that the estimated hearing date for that action is within a period of one month commencing 9 months from the date of filing being 24 February 2020. However, it is not unreasonable to suggest that that timetable may have been adversely affected by the Covid19 crisis.
23. The Court is of the view that the Application for the stay is made on a bona fide basis. The Wife’s qualified psychiatrist, Dr D, in his report dated 24 February 2020, provides a provisional diagnosis of the Wife of post-traumatic stress disorder having taken into account, inter alia, “the presence of anxiety, depression, her avoidance of discussion of events that are important for her to discuss, her avoidance of sexual activity post-ill treatment”.
24. The Husband strenuously submits that the Wife has failed to diligently prosecute the property proceedings in this Court, and submits that she has been in breach of certain interlocutory orders of this Court.
25. In relation to the issue of the Wife’s delay in prosecuting these property proceedings diligently, the Court has taken into account the affidavit of the Husband’s solicitor Mr B, affidavits of the Wife’s solicitor, together with the affidavit of the Wife filed 12 March 2020, and the affidavit of Dr D. There is a significant suggestion, taking into account all the material before the Court, and without making any findings of fact, that the Wife may well have had difficulty in giving her solicitors adequate and timely instructions in relation to the prosecution of the property proceedings by reason of her emotional state arising out of the subject matter of the property proceedings, in particular alleged domestic violence including alleged sexual assaults.
26. As to the commencement of the Wife’s District Court of NSW proceedings, being on 24 February 2020, the Court observes that the Husband’s Application in a Case, seeking summary dismissal of the Wife’s property proceedings, was filed on 25 February 2020. However, the solicitor for the Wife frankly states that he had difficulties obtaining adequate and timely instructions from the Wife, and that belatedly he had the Wife confer with Dr D for the provision of a medical report so as to at least elucidate a possible explanation for the Wife’s past inability to provide adequate and timely instructions. In paragraph 19 of his affidavit filed 10 March 2020, the wife’s solicitor states that, further, and as a result of Dr D’s report, he accepted instructions from the wife to commence separate proceedings against the husband for civil assault, including alleged sexual assault in the District Court of NSW on 24 February 2020. In the view of the Court, on the material before it, it cannot be said that the wife’s District Court of NSW action is not genuine or not being legitimately pressed, in the sense discussed in the above decision of Bailey and Estate of Bailey.
27. On the material before the court, whilst there has been undoubted delay in the property proceedings in this Court, with the reasons therefor being discussed above, recognising that the husband would appear to be legitimately desirous of finalising these property proceedings, and acknowledging the likelihood of further delay, there is no significant evidence before the court of the real chance of prejudice to the husband if the stay is granted.
28. Again, the Court, before it embarks on the property proceedings in this Court, should know, so as to enable it to ascertain the net assets of the parties, the result of the Wife’s District Court of NSW action against the husband, which, if it succeeds to any significant extent, will result in a verdict for a sum certain. The assets and liabilities of the parties in the property proceedings would then be able to be determined with clarity, enabling the court to proceed to determine what orders, if any, were just and equitable under section 79 of the Family Law Act 1975.
29. In view of the Court acceding to the stay application, the husband’s application for expedition of the property proceedings should be dismissed.
30. Accordingly, the Court makes the following orders:

(1) The Wife’s property proceedings in this Court are stayed until judgment in her action against the husband in the District Court of NSW, Sydney, General List, Case No. ..., or further order of this Court.
(2) The husband’s Application in a Case filed 25 February 2020 be dismissed.
(3) The husband’s proposed Minute of Order filed in Court on 27 May 2020 is dismissed.
(4) Liberty to either party to relist the proceedings on 14 days’ notice.
(5) The Wife’s Application for Costs arising out of the interim hearing held on 27 May 2020 are reserved.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Judge Newbrun

Associate:

Date: 1 September 2020