Declaration by the Court of Execution of Trust Deed Post Marital Separation
Jess & Jess (No 3) [2023] FedCFamC1A 2 (10 January 2023)
The Family Court of Australia declared in November 2019 that the trust deed was executed after the marital separation, and in June 2022 the primary judge made an order to set aside the 2009 orders on this basis.
Facts:
In 2006, the wife and the deceased entered into financial proceedings under Part VIII of the Act. In February 2002, a trust deed was made to look like it had been executed before the marital separation, but it was actually executed afterwards. In November 2019, a judge declared this as part of proceedings between the spouses in the Family Court of Australia. The trust deed said that Mr Jess Jnr was the beneficial owner of the 103 ordinary units and one Class D unit in the Jess Retail Unit Trust“JRUT”).
In 2009, the wife accepted this and the 2009 orders were made. In 2013, the wife re-applied to the Family Court of Australia for relief from the 2009 orders. On the strength of a declaration made in November 2019 and confirmed on appeal in August 2021, the wife filed an application in April 2022 to set aside the 2009 orders on the basis that the 2009 orders had been procured by the deceased's fraud, resulting in a deprivation of her claim upon a greater pool of property. In June 2022, the primary judge made the order on the former basis, but observed an arguable case had been made out on the latter basis.
A judge of the Federal Circuit and Family Court of Australia (Division 1) has ordered that the property settlement orders made consensually between two spouses on 24 September 2009 be set aside. An appeal and cross-appeal have been taken from this order, and the outcome of these appeals will determine whether the orders stand or are set aside. The wife, trustees and the executor are involved in these proceedings.
Issue:
The issue is whether the 2009 orders should be set aside on the basis that they were procured by the deceased's fraud, resulting in a deprivation of the wife's claim upon a greater pool of property.
Applicable law:
Analysis:
The applicants are alleging that the conduct of the primary judge and statements in his reasons could create a reasonable apprehension of bias by prejudgment in the primary judge hearing a rehearing of the applications under sections 79A1a and 79A1A of the Act. They are not challenging any of the orders or findings made by the primary judge, but rather the possibility that the primary judge would not bring an impartial mind to the rehearing. The determination of what constitutes a proceedings is based on the separate causes of action on which the parties move, and not on the administrative allocation of a file number.
The definitions of "matrimonial cause," "child-related proceedings," "divorce or validity of marriage proceedings," and other related definitions within the Family Law Act 1975 support the view that it is the nature and substance of the matter that defines the content of the proceedings. This means that two proceedings can exist in the same file number, as long as they are different in nature and substance. This is confirmed by looking at the words "was made," which show that the focus is on the structure and nature of the proceedings at the time the consent order was made.
The primary judge determined the application under s 79A(1A) in advance of and separate from determining whether it was appropriate to make another order in substitution for the order set aside. This was not an absolute rule and the primary judge had discretion to exercise. The applicants argued that a different decision should have been made, but this did not identify an error. It was possible for the proceedings to be split and all remaining issues involving the applicants to be heard at one time.
Conclusion:
The application for leave to appeal and cross-appeal the orders made on 29 July 2022 have been dismissed and the applicant is required to pay the costs of the first respondent in the amount of $39,303.54.
Case: Jess & Jess (No 3) [2023] FedCFamC1A 2
Judgment of: ALSTERGREN CJ, ALDRIDGE & AUSTIN JJ
Counsels:
