Case Note: Ritter & Ritter and Anor (2020) FLC 93-957

In the case of Ritter & Ritter and Anor [2020] FamCAFC 86 the Full Court of the Family Court of Australia allowed an appeal after finding that the husband had not been afforded procedural fairness.

In 2012, Mr Ritter and Ms Ritter obtained consent orders resolving their property settlement matter. In 2018, the husband made an application to have the consent orders set aside (pursuant to section 79A of the Family Law Act 1975 (Cth)). The wife and the parties’ daughter sought that his application be summarily dismissed. The application was summarily dismissed and the husband appealed that decision.

Why did the husband seek to have the consent orders set aside?

In 2007, the husband was sentenced to a term of imprisonment. He was ordered to pay the NSW Crime Commission $100,000, which he paid in full by June 2007.

In 2008, the husband and the wife purchased Property C for $450,000. The consent orders provided for the husband to transfer his interest in the property to the parties’ daughter and for the wife to retain her interest.

The husband was then sentenced to another term of imprisonment. The parties’ daughter visited him in prison and said that the NSW Crime Commission sought further funds as they had discovered that he owned Property C. The husband signed a document agreeing to sell his interest in Property C to the parties’ daughter for $1. He was of the understanding that their daughter would then sell the property and buy another in his name. There was no evidence that the NSW Crime Commission was in fact seeking further funds.

The consent orders gave effect to the conclusion sought by the daughter. The daughter and the wife sold Property C and purchased two other properties (Property A and B).

After being released from prison, the husband moved into Property B which the daughter led him to believe was owned by him. The husband said that his daughter told him she needed to take a mortgage of $50,000 in order to purchase it. He paid a total of $47,000 to his daughter thinking it was paying off the mortgage. It was not.

The parties’ daughter then evicted the husband from Property B. The husband brought proceedings to set aside the consent orders on the basis that his daughter misled him.

Findings of the Primary Judge

The trial judge dismissed the application to set aside the consent orders. The trial judge made the following conclusions which were critical to her decision:

  • the husband’s motive in transferring his interests in Property C was to profit by his own fraud (and the court should not exercise its discretion in favour of a party who was clearly trying to escape the law)
  • that the evidence presented by the husband was insufficient  

The Appeal

The issue of the husband’s motive in transferring his interest in Property C and the issue of the evidence were not raised by either party or by the trial judge at the hearing. The first time that these issues emerged were in the judgment.

The husband argued that the trial judge failed to afford him procedural fairness. This was because he did not know that these issues were in fact issues (because they were not raised at any time during the proceedings) and he was not given an opportunity to respond to them.

The Full Court held that the failure of the trial judge to raise these issues with the husband at all during the proceedings amounted to a denial of procedural fairness.  The appeal was allowed and the daughter and the wife were ordered to pay the husband’s costs of the appeal.

Written by Eustacia Yates & Brooke Nickerson

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