Before the Court is a Notice of Motion filed by the defendant on 17 August 2023 seeking, in substance, a stay of the Notice of Motion listed to be heard next week.
In support of the application, the affidavit of Timothy James Lynch dated 17 August 2023 was read. Essentially, the background to the matter is that there were proceedings on foot in this Court upon a transfer from the Supreme Court relating to an alleged loan from the plaintiff to the defendant. A mediation occurred shortly before the final hearing date in the matter and a Heads of Agreement was signed. The Heads of Agreement contemplated a further Deed of Agreement and Release which was subsequently signed by the parties.
Money that had been paid into court by the defendant in consequence of consent orders made by Black J in the Supreme Court was, pursuant to the agreement, released to the defendant's then solicitor and then released to him. Under the agreement, the defendant was to pay the sum of $155,000 to the plaintiff. The plaintiff was not paid this money by the defendant. The plaintiff then filed a Notice of Motion in the proceedings seeking orders for the payment of the $155,000 from the defendant to her relying on the two documents which had been signed by them. When the Notice of Motion was first returnable before the Court, the defendant was not represented. Orders were made for the filing of Points of Claim and Points of Defence and affidavits and a hearing on 23 August 2023 of the Notice of Motion to enforce the settlement agreed was ordered. The defendant then obtained new legal advice and the Points of Claim filed by the defendant, which were later amended, raised issues relating to the capacity of the defendant at the mediation hearing when he signed the documents and issues relating to unilateral mistake and unconscionability.
As I indicated, the matter was listed for hearing next week. There had been foreshadowed the possibility of the defendant making an application in the Federal Circuit and Family Court of Australia for financial relief in relation to an alleged de facto relationship between the plaintiff and the defendant. The evidence in Mr Lynch's affidavit is that that application is intended to be made and that the procedural requirements under the legislation first need to be complied with, but it will be expected to be filed within four weeks.
This morning, Mr Reynolds of counsel for the defendant, provided significant assistance to the Court to understand the complex legislative regime which applies to causes of action relating to proceedings between parties to a de facto relationship. From that analysis, it seems that there are significant jurisdictional arguments to be determined about whether the relationship between the parties in this case falls within the definition of "de facto relationship" in the Family Law Act 1975 (Cth).
Of assistance to the Court is the admirable analysis by his Honour Justice Meek in Aviani v Loh (No 2) [2022] NSWSC 1148 where his Honour considered a stay application in the course of Supreme Court proceedings after it seemed the matter had been heard for a few days in order for proceedings to be commenced in the Federal Circuit and Family Court of Australia. I have taken into account the factors that his Honour refers to as being relevant in such a stay application. In particular, I take into account paragraph 280 of his Honour's judgment where his Honour points to compelling factors which were in favour of a stay, including cautioning against fragmentation of proceedings, the undesirability of determining parts of disputes only, the considerable risk of conflicting findings of fact and credit by different judges if the dispute between the parties were to be litigated in different courts and the absence of prejudice in that case.
In the current case, there is a degree of practical prejudice to the plaintiff because of the upcoming hearing. However, I am persuaded by Mr Reynolds' submissions, that the appropriate course is to stay the matter for a period to allow the defendant to commence the foreshadowed proceedings. In relation to that stay, Mr Reynolds also seeks a stay in relation to the order made by the Court, which has been extended twice, for the defendant to pay the sum of $170,000 into court. The current order is for that sum to be paid by 11 September 2023.
Mr White in substance opposed that order on the basis that this was the last vestige benefit that the plaintiff had of the alternative orders before Black J relating to either an extension of the caveat or the payment of the $170,000 into court. It seems, looking at the matter, that a short extension is appropriate having regard to the various matters which the defendant has to deal with in his contemplated Family Court proceedings. Accordingly, subject to appropriate undertakings which have been discussed with counsel for the defendant, in my view, a stay is appropriate for a period to allow the Family Court proceedings to be commenced.
The consequence of that, inevitably, is that the Notice of Motion listed for hearing on 23 August 2023 must be vacated, which is regrettable, having regard to the short period before the hearing. It is clear, as was I think accepted by counsel for the defendant, that the defendant could have made an application in the Family Court in relation to the alleged de facto relationship well before now. Of course, the issue is not straightforward and counsel has relatively recently been retained on behalf of the defendant. However, that, in some ways, is of no concern to the plaintiff who wishes to pursue the benefit which she understood she had under the Heads of Agreement and the Deed of Release executed in the course of the mediation. She also wishes to retain the benefit of the agreement to pay the money into court as an alternative to the consent orders made by Black J and later orders made by this Court for the money to be paid into court.
The question is what costs orders should be made. In my view, having regard to the late application by the defendant in circumstances where he could have made it well before now, in the context of the listed date for hearing which has been listed for some considerable period of time when the dispute as to the agreement first surfaced, the appropriate order as to costs in the exercise of my discretion is that the defendant should pay the costs of the Notice of Motion seeking the stay. The defendant should also in my view pay the costs thrown away by reason of the vacation of the hearing date as agreed or assessed as the vacation has been caused by the late application for a stay due to the foreshadowed proceedings.
If the matter is commenced in the Family Court and jurisdiction is taken by that Court, it would appear that that could either be a practical termination of the proceedings in this Court or at least that the costs relating to today and the vacation of the hearing date will be wasted. Those matters are a separate legal matter and there will be on the face of it some potential delay, perhaps considerable delay, until the determination of the proceedings. In those circumstances, Mr White who appeared for the plaintiff, has sought leave for the costs to be assessed forthwith. In my view, there are compelling reasons to allow that in the circumstances of the late application and it effectively being an application leading to a determination of a separate issue which is different to the prime issue before this Court.
Mr Reynolds raised the issue of the defendant's financial circumstances. An order for costs is to compensate a plaintiff and, in my view, the defendant's circumstances are not a compelling reason not to make an appropriate costs order. Accordingly, in my view, leave should be granted as sought. Further, in my view, the matter should be brought back to this Court at a time which allows the defendant to commence the proceedings to ensure that there are no inappropriate delays in the event that the defendant decides for whatever reason not to commence the Family Court proceedings.
Having regard to all of those matters, in my view, the appropriate orders I make which have been discussed with counsel are as follows:
In relation to the Notice of Motion filed 17 August 2023:
1. The Notice of Motion filed 17 August 2023 is returnable instanter;
2. On the giving through his counsel of:
1. An undertaking by the defendant to commence proceedings in the Federal Circuit and Family Court of Australia (Division 2) no later than 18 September 2023 seeking relief against the plaintiff arising from their former relationship, including the setting aside of the Heads of Agreement dated 30 March 2023 and the Deed of Settlement and Release dated 12 April 2023 between the plaintiff and the defendant or similar relief in relation to the consequences of that Agreement and the Deed; and
2. An undertaking to prosecute such proceedings expeditiously,
pursuant to section 67 of the Civil Procedure Act 2005 (NSW) these proceedings are stayed until 5.00pm on 20 September 2023 or until further order.
1. The defendant is to pay the plaintiff's costs of the Notice of Motion as agreed or assessed.
2. The hearing of the Notice of Motion listed to commence on 23 August 2023 is vacated.
3. The defendant is to pay the plaintiff's costs thrown away by reason of the vacation of the hearing date as agreed or assessed.
4. The costs referred to in orders (3) and (5) may be assessed forthwith.
5. The matter is listed for further directions on 20 September 2023 before the Civil List Judge at 9.30am.
6. Liberty to apply on two business days' notice.
7. The time for the defendant to pay into court the sum of $170,000 is extended to 9.30am on 20 September 2023.
Note: The vacation is due to foreshadowed Family Court proceedings arising out of the alleged de facto relationship said to give potentially exclusive jurisdiction to the Family Court to determine the disputes between the parties.
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Decision last updated: 08 March 2024