CATCHWORDS BANKRUPTCY —- bankruptcy notice - application for review of Registrar's refusal to issue - appeal - whether orders made by Family Court final for purposes of s.40(1)(g) of Bankrutpcy Act 1966 - Registrar's decision final, not interlocutory ~ leave to appeal unnecessary - appeal allowed - costs - certificate under s.7A(1) of Federal Proceedings (Costs) Act 1981. Bankruptcy Act, 1966 ss.14(5), 40(1)(g), 40(3)(f) Family Law Act, 1975 ss.79(1), 79A(1) Federal Proceedings (Costs) Act, 1981 s.7A(1) re: FERDINAND NEMETH EX PARTE: LINDA MARY NEMETH Appellant No. G559 of 1986 t ly Se 4 y aR \ c. 2 2 Coram: Sweeney, Morling and Burchett, JI. eo ad AN 26 June 1987 © A —— Ty" Sydney wore aq peer on meer ese ee ee ne a le IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G559 of 1986 GENERAL DIVISION JUDGES MAKING ORDER RE: FERDINAND NEMETH EX PARTE: LINDA MARY NEMETH Appellant MINUTE OF ORDER Sweeney, Morling and Burchett, JJ. DATE OF ORDER WHERE MADE 26 June 1987 Sydney THE COURT ORDERS AS FOLLOWS: 1. 2. Appeal allowed. Application for leave to appeal dismissed. Costs of the appeal and of the application for leave to appeal reserved. Certificate under s.7A(1) of the Federal Proceedings (Costs) Act 1981 granted to the appellant in respect of the costs of the appeal. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. soe ete rowan ve ate ceee seer as roe ater ee te ————-— + IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G559 of 1986 ee ee ee GENERAL DIVISION RE: FERDINAND NEMETH EX PARTE: LINDA MARY NEMETH Appellant CORAM: SWEENEY, MORLING and BURCHETT, JJ. DATE: 26 JUNE 1987 REASONS FOR JUDGMENT THE COURT: The question which arises for decision in this appeal is whether an order made by the Family Court of Australia in proceedings brought by the appellant against her husband is "a final judgment or final order" within the meaning of s.40(1)(g) of the Bankruptcy Act 1966 ("the Act"). On i7 June 1986 the Family Court of Australia (Nygh J.) in proceedings brought by the appellant made orders which included the following: "1. That within three (3) months of this date the husband pay to the wife the sum of four hundred and fifty thousand dollars ($450,000.00) by way of settlement of property and that' in default of such payment within such period such sum carry interest in accordance with Order 40 Rule 1 of the Family Law Rules. red wor 38 nn oe See Crear rv = wr ema eae . 7 _ . 2. That in the event of the husband having insufficient assets for the purpose of the payment by him to the wife of the whole or any proportion of the said sum of four hundred and fifty thousand dollars ($450,000.00) the husband do all acts and things including the exercise of all voting (sic) and rights and powers vested in him for the purpose of causing such sum of four hundred and fifty thousand doliars ($450,000.00) or such proportion thereof as shall be unable to be paid from his assets to be paid to the wife from the property of the Nemeth Family Trust being the trust constituted by deed made on 12th day of May 1976." The orders were made in the exercise of the powers conferred on the Family Court by Part VIII of the Family Law Act 1975. Section 79(1) of that Act provides, inter alia, that in proceedings with respect to the property of the parties to a Marriage the Family Court may make such order as it thinks fit altering the interests of the parties in the property, including an order for a settlement of property in substitution for any interest un the property and including an order requiring either or both of the parties to make such settlement or transfer of property as the Family Court determines. Section 79A(1) provides that where, on application by a person affected by an order made under s.79, the court is satisfied, inter alia, that: "(b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out: (c) a person has defaulted in carrying out an obligation imposed on him by the order and, in the circumstances that have arisen as a result of that default, it is just and ro egne ees se a os nn er 3. equitable to vary the order or to set the order aside and make another order in substitution for the order;" the Family Court may, in its discretion, vary the order or set the order aside and, if it thinks fit, make another order under 5.79 in substitution for the order so set aside. Section 81 provides that, in proceedings under Part VIII, subject to exceptions not presently relevant, the Family Court shall, so far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them. An appeal against the whole of the orders of Nygh J. has been dismissed. The appellant applied to the Registrar of this Court for the issue of a bankruptcy notice, claiming that the sum of $450,000.00, together with interest, was payable to her by Mr Nemeth under Order 1 made by Nygh J., and that such order was a final order within the meaning of s.40(1)(g) of the Act. The Registrar declined to issue a bankruptcy notice on the grounds that the order was not an order for the payment of arrears or maintenance within s.40(3)(f) of the Act and was not otherwise a "final judgment or final order" within the meaning of 8.40(1)(g). 4 a ee oe ——r re ee i eli al 4. The appellant sought a review by a judge of the Court of the Registrar's decision (see s.14(5) of the Act). Upon the hearing of the review and on the hearing of the present appeal the appellant accepted that the order made by Nygh J. was not an order for the payment of arrears of maintenance and was not an order of the kind referred to in s.40(3)(f£) of the Act. In our opinion these concessions were properly made. The learned Judge who heard the review was of the opinion that Orders 1 and 2 were intended to be read together and that, when so read, it appeared that Order 1 was not intended to operate as a final order. He was therefore of the opinion that it was not a final order for the purposes of s.40(1)(g) of the Act and dismissed the application for review of the Registrar's refusal to issue a bankruptcy notice. This appeal is brought from that decision. Whether or not an order is final is often difficult to determine. As Lord Denning M.R. said in Salter Rex & Co. v Ghosh (1971) 2 Q.B. 597 at 601: "This question of 'final' or 'interlocutory' is so uncertain that the only thing for practitioners to do is to look up the practice books and see what has been decided on the point. Most orders have now been the subject of decision. If a new case should arise, we must do the best we can with it. There is no other way." eee yee 5. Orders made pursuant to s.79 of the Family Law Act are liable to be set aside or varied pursuant to the powers conferred by s.79A of that Act. However, his Honour was of the opinion that the possibility that the orders made by Nygh J. might be set aside or varied is not, of itself, sufficient to characterize Order 1 as not "final" for the purposes of s.40(1)(g). We agree that this is so: see Pepper v McNiece (1941) 64 C.L.R. 642 per Rich A.C.J. at pp.646-7; Re Hanby; Ex Parte Flemington Central Spares Pty. Limited (1967) 10 F.L.R. 378 at p.381, and Clyne v Deputy Commissioner of Taxation (1983) 57 A.L.J.R. 673 at p.675 where Gibbs C.J. observed that the fact that a judgment 1s subject to appeal or that it may later be set aside or become inoperative does not mean that it is not final. The question remains, however, whether the terms of Order 2 prevent Order 1 from being final. As we have observed, the learned judge was of the view that the two orders were intended to be read together and that, when so read, the first order was not intended to operate as a final order. We do not doubt that all the orders made by Nygh J. must be read together in the sense that the proper construction of any of them is to be determined in the light of the context in which they appear. However, in our opinion, this does not lead to the result that the second order deprives the first order of finality. . ame Orders 1 and 2 are quite separate and distinct although there is an obvious relationship between them. The first order is plainly final on its face. To our minds, the second order does not deprive the first order of its finality but merely affords the appellant an alternative remedy in the event of her husband having insufficient assets to comply with the first order. We do not read the terms of the second order as, in effect, giving the husband a defence to a claim by the appellant that he is obliged to pay her the sum of $450,000.00 pursuant to the first order. In other words, the second order does not render the first order not final but merely provides the appellant with an additional means of ensuring that she receives the sum of $450,000.00 from her husband or from the Nemeth Family Trust. It is to be observed that Order 2 refers only to the sum of $450,000.00, and does not refer to the interest which is payable in accordance with the terms of Order 1. Hence, on any view of Order 1, the provision for the payment of interest is final and is not defeasible under Order 2. It seems unlikely that Nygh J. intended that the requirement to pay the sum of $450,000.00 should not be final, but the requirement to pay interest on that sum should be. If the effect of the second order was to make the first order subject to revision at the time it was made, then the first order could not be regarded as a final order for the pee wae cee a oe ene ee ees Fy - Ter 7. purposes of s.40(1)(g) of the Act: see per Rich A.C.J. in Pepper v McNiece (supra) at p.647. But as Starke J. pointed out at p.649 in that case, "an order is not the less final because it is subject to appeal or to reconsideration or to rescission or variation, for until rescinded, set aside, or varied, the order stands with its quality and condition unimpaired." Giving Nygh J.'s orders the construction which we place upon them, the first order was not subject to revision at the time it was made. Even if it be construed as subject to variation at a later point of time in certain events, until so varied the first order (to borrow the words of Starke J.) "stands with its quality and condition unimpaired." If the appellant's husband is called upon to act in accordance with the terms of the second order made by the Family Court it might then be said that the first order would become inoperative. But this would not mean that the first order is not final until such time as it might become inoperative: see Clyne v Deputy Commissioner of Taxation (NSW) (1982) 45 A.L.R. 323 at 328. The same is true of a judgment against one of two concurrent tortfeasors both ordered to pay the same damages to a plaintiff, once the other has satisfied the full amount of the judgment: D'Angola v Rio Pioneer Gravel Co. Pty. Ltd. (1979) 1 N.S.W.L.R. 495; Bryanston Finance Ltd. v de Vries (1975) 1 Q.B. 703 at 733; Bushby v Morris (1980) 54 A.L.d.R. 240 at 243; but it has never been suggested that, by reason of that fact, such a judgment is not final. aie ow npee nae rene sree eye et 8. For more abundant caution, the appellant sought leave to appeal against the decision of the judge at first instance, lest it be held that his decision was interlocutory in nature. In our opinion, the refusal of the Registrar to issue a bankruptcy notice finally determined the appellant's right to take proceedings under the Act to enforce the Family Court's order. It was therefore final, and not interlocutory, in character. See Hall v Nominal Defendant (1966) 117 C.L.R. 423 at pp.439-440 per Taylor J. and Licul v Corney (1976) 50 A.L.J.R. 439 at p.444 per Gibbs J. Hence leave to appeal is unnecessary. If it had been necessary we would have granted it. We would allow the appeal and reserve the costs to be dealt with on the hearing of any petition founded upon non-compliance with the bankruptcy notice. The appellant should have a certificate under s.7A(1) of the Federal Proceedings (Costs) Act 1981, so that to the extent the costs are not ordered to be paid by the debtor she can seek to recover them pursuant to the certificate. We note that an appropriate undertaking was given at the hearing pursuant to which the certificate will only be presented in the event the debtor is not ordered to pay the costs. ere ee cme pee pe ee . : ye r A Counsel for the Appellant: Solicitors for the Appellant: Date of hearing: Date judgment delivered: I certify that this and the eight (8) preceding pages are a true copy of the Reasons for Judgment herein of the Court. / Associate: y/ Dated: 26 June 1987 R. Sackville Gillis Delaney 11 June 1987 26 June 1987 mye ae Petr er moe 7 TTAB ery poor are os we - . a oe ft aot oe ny Fe er Fea Recamdiaees i ar aa a ay wae © au.