MILLER v OFFICIAL TRUSTEE IN BANKRUPTCY AND EDWARDS

In 1993 Mr Miller was sued by the second opponent (Ms Edwards) who claimed relief under the De Facto Relationships Act 1984. The parties exchanged verified pleadings. It was common ground between them that they had lived together as man and wife on a bona fide domestic basis since 1976. Equally common ground was the fact that the parties were unmarried. In May 1994 the proceedings were settled. Consent orders were made which effectively distributed between the parties the assets acquired during the course of their relationship. Both real and personalestate were involved. It would appear that these orders were carried into effect shortly thereafter.

In June 1995 Mr Miller was made bankrupt on his own petition. The first opponent in the proceedings in the Court of Appeal (the Official Trustee in Bankruptcy) was appointed trustee of his bankrupt estate. During the course of the bankrupt's examination, it emerged that Mr Miller and Ms Edwards had entered into a ceremony of marriage in Hawaii in 1986, and that this marriage remained undissolved.

After seeking initially to be joined as a party in the completed 1993 proceedings, the Official Trustee in Bankruptcy commenced fresh proceedings in December 1996. Initially the only defendant was Ms Edwards. However Mr Miller was subsequently added as a defendant. In those proceedings the Official Trustee sought in various ways to challenge and set aside the consent orders made in May 1994; a declaration that the marriage between Mr Miller and Ms Edwards was valid under Australian law and had not been dissolved; and the setting aside of the transfers of property made by Mr Miller to Ms Edwards. The Official Trustee seeks the last mentioned orders as to the revesting of property transferred by Mr Miller to Ms Edwards in the Official Trustee, relying on ss 120 and 121 of the Bankruptcy Act. At least in part, such claimed relief appears to be consequent upon the setting aside of the consent orders made in the earlier proceedings.

The matter came before Simos J on 29 April 1997. His Honour was informed that the parties were agreed that the 'preliminary issue' which they wished to have determined related to the validity of the consent orders made in 1994 in purported reliance upon the De Facto Relationships Act. The Official Trustee

submitted that the Supreme Court had lacked jurisdiction under that Act to make the orders which it did, by virtue of the fact that the undissolved Hawaiian marriage was recognised in Australia. Mr Miller and Ms Edwards contended that the marriage ceremony was not valid under Australian law because each of the parties believed that it would not be valid under Australian law at the time the marriage was celebrated. It was agreed between the parties that the only other issues tendered for determination at that stage of the proceedings were, firstly whether the Official Trustee had standing to sue; secondly, whether the Court had 'jurisdiction' to set aside the earlier consent orders; and thirdly, whether the Court should as a matter of discretion exercise such discretion.

Simos J found that the parties to the marriage had given a true consent, and that they were not mistaken as to the nature of the ceremony performed. Accordingly, he declared that the marriage was and remained a valid marriage under Australian law. He also found that the Official Trustee had standing to bring the proceedings having regard to the fact that all property of Mr Miller had become vested in him consequent upon the sequestration order. He held that the Official Trustee had an interest in challenging the consent orders as a step towards recovery of the property transferred pursuant to them. His Honour noted that Mr Miller maintained asubmission that the declaration relating to the validity of the marriage should have been sought in the Family Court.

His Honour ordered that the consent orders made on the 24 May 1994 in the earlier proceedings should be set aside for the reason that they had been made without jurisdiction under the De Facto Relationships Act 1984.

Mr Miller seeks leave to appeal on the following grounds:

1. His Honour erred in deciding, that the Court had power to re-open a concluded matter.

2. His Honour erred in deciding that the Court had a discretion to determine whether consent orders in concluded matters entered without jurisdiction should be set aside.

3. His Honour erred in allowing the plaintiff to sue without a cause of action.

His Honour erred in accepting the plaintiff had standing to sue.

5. His Honour erred in allowing the plaintiff, a stranger to the proceedings concluded in 1994, to pursue an action to attack the validity of those proceedings.

6. His Honour further erred in declining to treat the question of the futility of the consent orders being set aside as a threshold question.

In our view the foreshadowed challenge to the orders made by Simos J does not enjoy a sufficient prospect of success to merit a grant of leave, particularly in a context where such a grant would continue the bifurcation of a single incomplete piece of litigation. That litigation should be allowed to run its course so that all issues can be resolved and, if necessary, addressed by the Court of Appeal in a single set of appellate proceedings.

It may be, and we express no concluded view on this, that Simos J's jurisdiction to set aside the earlier consent orders is not based upon the Court in 1994 having lacked 'jurisdiction' to make such orders. After all the Supreme Court is a superior court and the validity of the De Facto Relationships Act is not in issue. It may be that a sounder basis - but one which is quite sufficient to sustain the orders made by Simos J - is the jurisdiction to set aside consent orders on a ground which would invalidate the underlying agreement between the parties: see Harrington v Lowe (1996) 70 ALJR 495 at 501; Permanent Trustee Co (Canberra) Ltd v Stocks and Holdings (Canberra) Pty Ltd (1976) 28 FLR

WRULER v OFFICIAL TRUSTEE IN BANKRUPTCY AND EDWARDS (Mason P and Beazle$ JA)

195. On the assumption that the parties were not endeavouring to mislead the Court in 1994 there would appear on the evidence to be a basis for suggesting that they laboured under a common mistake as to a matter that was material to the consent orders, namely that the parties were unmarried in the eyes of Australian law. That common mistake would arguably provide a basis for setting aside the consent orders even if made within jurisdiction. In argument before us, Mr Miller embraced the submission that there was common mistake. As presently advised we are not persuaded that his Honour was in error in holding that the Official Receiver had standing to make such a claim, in view of the vesting of Mr Miller's property in the Official Receiver consequent upon the sequestration order. Cf also Australian Securities Commission v Ampolex Ltd (1995) 38 NSWLR 504 at 511. We reiterate that these are but provisional views. The parties will be free to agitate them in any appeal brought after final judgment in the proceedings.

Two further points should be made. If, as we suspect, Mr Miller is reserving the right to argue that Simos J lacked jurisdiction to make all or part of the orders which he did make by virtue of federal jurisdiction being vested exclusively in the Family Court or the Federal Court of Australia (having regard to the marriage between the parties and/or Mr Miller's bankruptcy) then that right is unprejudiced by the refusal of leave to appeal. None of these matters appear to have been developed in argument before Simos J. They were certainly not raised in any significant way before the Court of Appeal in the current application. If there is any merit in these federal jurisdictional points then (if there is utility in doing so) they can be developed at the appropriate time.

We have not thought it necessary to consider whether all or some of the orders made by Simos J were interlocutory or final. The information given to us does not enable one to know whether orders were made under Part 31, although that might not be critical. Since however the matter came to us on an application for leave to appeal it is sufficient if we dispose of it in that way and on the basis that the orders made by Simos J are interlocutory. If however any of those orders are final and of such a nature that this Court is the appropriate body to entertain an appeal from them, then it is appropriate to indicate that an application for leave to bring an appeal as of right out of time would be viewed with sympathy if such application were made promptly after the disposal of the balance of the proceedings initiated by the summons filed by the Official Receiver in the Court below.

Counsel for the 2nd opponent: SUBMITTING APPEARANCE Solicitors for the respondent: LINCOLN SMITH and COMPANY