Aarons & Aarons
[2021] FamCA 530
•21 July 2021
FAMILY COURT OF AUSTRALIA
Aarons & Aarons [2021] FamCA 530
File number(s): MLC 6647 of 2021 Judgment of: WILSON J Date of judgment: 21 July 2021 Catchwords: FAMILY LAW – FINANCIAL AGREEMENT – application in this court to set aside that agreement.
FAMILY LAW – PRACTICE AND PROCEDURE – application for expedition under rule 12.10A.
FAMILY LAW – CONCURRENT LITIGATION – in Supreme Court of Victoria – only directions given in proceeding in that other court.
FAMILY LAW – CROSS VESTING – applications yet to be determined.
FAMILY LAW – CORPORATIONS ACT – 28 corporations in Supreme Court proceeding part of asset pool – applications for their winding up.
Legislation: Corporations Act 2001 (Cth)
Jurisdiction ofCourts (Cross-vesting) Act 1987 (Cth) s 5
Family Law Act 1975 (Cth) ss 21(2A), 75, 79, 90C
Family Law Rules 2004 (Cth) rr 5.02, 12.10A
Cases cited: Lin & Yew (2020) 62 Fam LR 244
Santos Ltd v Helix Energy Services Pty Ltd (2009) 28 VR 595
Simonidis Steel Lawyers Brisbane Pty Ltd v Johnston [2015] QSC 81
Stanford v Stanford (2012) 247 CLR 108
Undershaft (No. 1) Ltd & Commissioner of Taxation (2009) 175 FCR 150
Wigmans v AMP Ltd [2018] NSWSC 1118
Wileypark Pty Ltd v AMP (2018) 265 FCR 1
Number of paragraphs: 27 Date of hearing: 20 & 21 July 2021 Place: Melbourne Counsel for the Applicant: Mr T. D. O. J. North SC with Mr R. Smith Solicitor for the Applicant: Kennedy Partners Counsel for the Respondent: Mr P. Jopling AM QC with Mr C. Nehmy and Ms J. Collins Solicitor for the Respondent: King Wood Mallesons ORDERS
MLC 6647 of 2021 BETWEEN: MR AARONS
Applicant
AND: MS AARONS
Respondent
ORDER MADE BY:
WILSON J
DATE OF ORDER:
21 JULY 2021
THE COURT ORDERS THAT:
1.Leave is granted under r 12.10A of the Family Law Rules to proceed with expedition in this proceeding.
2.I direct the parties to bring in minutes by 4:00pm on Friday 23 July 2021 giving effect to a timetable for the filing of affidavit evidence and submissions.
3.I fix 18, 19, 20, 21 and 22 October 2021 for the trial of the husband’s application to set aside the financial agreement.
4.I reserve costs of and incidental to this application.
5.I certify for counsel including Senior Counsel.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Aarons & Aarons has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
WILSON J:
INTRODUCTION
By application in a case filed 16 July 2021, the applicant sought orders under r 12.10A of the Family Law Rules that the applicant’s initiating application filed 16 June 2021 be expedited and listed for final hearing with priority.
The respondent has not filed a response to that application in a case. However, her counsel submitted that it was not appropriate for this court to make any orders until Riordan J in the Supreme Court of Victoria, who had made consent orders in a related proceeding in early July 2021, dealt further with the proceeding.
SYNOPSIS
For the reasons that follow –
(a)leave is granted under r 12.10A of the Family Law Rules to proceed with expedition in this proceeding;
(b)I direct the parties to bring in a minute by 4pm on Friday 23 July giving effect to a timetable for the filing of affidavit evidence and submissions;
(c)I fix 18, 19, 20, 21 and 22 October 2021 for the trial of the husband’s application to set aside the financial agreement;
(d)I reserve costs of and incidental to this application; and
(e)I certify for counsel, including Senior Counsel
SHORT NARRATION OF RELEVANT FACTUAL MATTERS
By initiating application filed in this court on 16 June 2021, Mr Aarons (who is referred to in documentation filed in this litigation as “the husband”) sought orders enforcing a financial agreement made under s 90C of the Family Law Act on 13 October 2014 between the husband and Ms Aarons (who is referred to in documentation filed in this litigation as “the wife”). When the initiating application was filed, the allocated return date assigned for first return was 4 October 2021.
In early July 2021, the wife commenced a proceeding in the Commercial Court of the Supreme Court of Victoria[1] (“the Supreme Court proceeding”) in which she sought, among other things, restraining orders under the Corporations Act. The first respondent in the Supreme Court proceeding is the husband. Twenty seven companies are also respondents.
[1] Proceeding S ECI 2021 …
In early July 2021 Riordan J made consent orders until late July 2021 or further order restraining the first and second defendants from, among other things, entering into any arrangement or taking any action in furtherance of an owner-operator model controlled by the first defendant and/or by any one of the second to 28th defendants for the investment and management of the business at B Street, Suburb C. Riordan J made orders requiring the parties to file affidavit evidence and otherwise adjourned the further hearing of the Supreme Court proceeding to late July 2021, a date subsequently extended to mid-August 2021, when his Honour returns from leave, so counsel informed me.
In mid-July 2021 the husband filed an originating process and interlocutory process in the Supreme Court of Victoria seeking orders transferring the Supreme Court proceeding to this Court.
In mid-July 2021, the wife filed a response to the husband’s initiating application in this proceeding. In it, she sought orders –
(a)pursuant to s 5 of the Jurisdiction ofCourts (Cross-vesting) Act 1987 (Cth) that this proceeding be transferred to the Supreme Court of Victoria to be heard together with the Supreme Court proceeding or, alternatively;
(b)an order that this proceeding be stayed until the resolution of the Supreme Court proceeding.
On 16 July 2021 the husband filed three relevant documents. The first was an amended initiating application, of which paragraph two was relevant. It provided as follows –
2.
In the alternative to paragraph 1,Pursuant to section 90K(1)(c) of the Family Law Act (1975), the financial agreement made between the parties and dated 13 October 2014 be set aside.The second relevant document filed on 16 July 2021 was the husband’s application in a case, mentioned in paragraph 1 of these reasons, in which he sought orders for expedition under r 12.10A of the Family Law Rules.
The third relevant document filed on 16 July was the husband’s reply to the wife’s response to his initiating application. In that reply the husband sought orders dismissing the wife’s application transferring this proceeding to the Supreme Court of Victoria as well as her application staying this proceeding until the Supreme Court proceeding is determined.
On 19 July 2021, that is to say on Monday this week, the husband filed a further amended initiating application. The significant amendment was the inclusion of a new version of paragraph 2 in the following terms –
In the event the financial agreement is set aside, there be such orders for alteration of property interests as this honourable Court deems appropriate.
In this proceeding, the husband made an affidavit filed on 19 July 2021 to which he exhibited his affidavit made mid-July 2021 and filed in the Supreme Court proceeding. In it he addressed matters to support his application for the transfer of the Supreme Court proceeding to this court and other relief. Unsurprisingly, that affidavit did not set out, nor did it purport to set out, matters this court ordinarily considers under the Family Law Act in a case involving alteration of property interests in accordance with the observations of the High Court in Stanford v Stanford,[2] especially the matters canvassed in s 79(4) and s 75(2) of the Family Law Act. A very substantial body of learning has developed since the commencement of the Family Law Act on the proper treatment of those sections.
[2] (2012) 247 CLR 108.
On 19 July 2021 the wife’s solicitor made an affidavit in which she helpfully narrated the subtleties of the matters raised in the Supreme Court proceeding.
Mr North SC, for the husband, informed me that his client did not intend to file any additional affidavit material for the purposes of r 12.10A of the Family Law Rules.
Rule 12.10A empowers a registrar or judge to make an order according a case expedition, thereby conferring on it “priority to the possible detriment of other cases.”[3] In determining whether to make an order for expedition, the court is empowered to take into account the matters set out in r 12.10A(2). Those considerations are not mandatory as each provision of sub-rules (1), (2) and (3) use the word “may” rather than the word “must”. The “relevant matters” to which the court may have regard are set out in a non-exhaustive manner in r 12.10A(4). If the Court takes the view that it is satisfied of the matters set out in r 12.10A(2), then the court may grant expedition in allocating a trial date.
[3] Rule 12.10A(2)(d) of the Family Law Rules.
In his careful submissions before me, Mr Jopling AM QC contended that there was no information in an admissible form to deal with the expedition application. He contended that under r 5.02 the husband was required to file affidavit material specifying the facts on which he relied in this expedition application on which consideration could be given as to whether the elements of r 12.10A have been met.
This litigation has been on foot for a very short time, since 16 June 2021. Already a large number of interlocutory steps are underway in this court and in the Supreme Court of Victoria. In the context of litigation that has been on foot for such a short time, it could not be said that the husband has delayed in the bringing of this expedition application. The expeditious hearing of the question of the validity of the financial agreement benefits both parties as each needs to know where each stands on that issue sooner than later. If the financial agreement is set aside, a s 79 application can be brought. If the financial agreement is not set aside, then the relevance and utility of litigation in this court may be doubtful. And unless the current application in relation to the validity of the financial agreement is determined quickly, then the applications pending in the Supreme Court of Victoria may be heard to completion, resulting, on one view at least, to orders being made for the winding-up of 27 companies of enormous value and relevance to the parties’ commercial interests.
For the purposes of r 12.10A, I am satisfied –
(a)the husband has acted reasonably and without delay in the conduct of this case;
(b)this application is made without delay;
(c)there is no prejudice to the respondent wife; and
(d)the purpose of this case will be lost if the application to set aside the financial agreement is not heard quickly.
In making the observations that follow I am very aware of certain procedural matters. In no special order, those include –
(a)no order has been made on the wife’s transfer application of this proceeding to the Supreme Court of Victoria;
(b)no order has been made on the wife’s application to stay this proceeding until the resolution of the Supreme Court proceeding;
(c)Riordan J in the Supreme Court proceeding is seized of the wife’s application for relief under the Corporations Act; and
(d)the husband not only participated in that proceeding by filing affidavit material, but he brought his own interlocutory application dated 12 July 2021 in which he sought orders restraining the wife from retaining D Real Estate, thereby invoking the jurisdiction of the Supreme Court.
Even acknowledging those matters, it must be said that the husband’s application for an order setting aside the financial agreement is separate and discrete from the relief currently sought by the wife in the Supreme Court proceeding. That proceeding is predominantly concerned with Corporations Act issues. The Supreme Court of Victoria has no power to grant relief setting aside the financial agreement unless an order is made by this court transferring the proceeding in this court to the Supreme Court. Conversely, this Court has power to hear and determine all issues in the litigation pending in this court as well as all issues pending in the Supreme Court proceeding, whether in the nature of equitable relief (see s 21(2A) of the Family Law Act) or relief in the nature of remedies under the Corporations Act.
Mr Jopling AM QC for the wife relied heavily on his contention that principles of comity[4] require me to respect the due progress of process in the Supreme Court proceeding. He said I should not embark upon a consideration of issues currently under the supervision of the Supreme Court of Victoria. I accept that submission, so far as it goes. Unless and until an order is made by this court for the transfer of this proceeding to the Supreme Court, the husband’s application for orders setting aside the financial agreement can only be determined by this court. In those circumstances, it is conceivable that litigation proceeds in tandem in both the Supreme Court of Victoria as well as in this Court. While I accept principles of comity are important, several things must be said on point. First, no decision has been made in the Supreme Court proceeding. Only directions have been given. Second, comity is a practice, not a legal principle, as was held in Undershaft (No 1) Ltd & Commissioner of Taxation.[5] Third, different issues will fall for determination in the application to set aside the financial agreement, different evidence will be led and matters beyond those with which the Supreme Court proceeding is currently concerned will become relevant.
[4] Wileypark Pty Ltd v AMP (2018) 265 FCR 1, Wigmans & AMP Ltd [2018] NSWSC 1118, Simonidis Steel Lawyers Brisbane Pty Ltd v Johnston [2015] QSC 81, Santos Ltd v Helix Energy Services Pty Ltd (2009) 28 VR 595 and Lin & Yew (2020) 62 Fam LR 244.
[5] (2009) 175 FCR 150.
In my view, as Mr Jopling AM QC himself acknowledged, for a time anyway, the litigation in this court and in the Supreme Court will travel in parallel, both courts being concerned with different issues. And while I accept that it will be utile to learn of the path of reasoning adopted by Riordan J, waiting for that decision should not hold up the orderly progress of the application in this proceeding in this court for the setting aside of the financial agreement. I do not accept that there is any unseemly urgency being pressed by the husband. However I do see merit in the contention urged by Mr North SC that if, at its highest, winding-up orders are made in the Supreme Court proceeding in relation to any of the second to 28th defendants, the value of those companies is necessarily diminished which will bear upon the value of the pool that will fall for division in the litigation in this court.
In those circumstances I make an order under r 12.10A of the Family Law Rules.
I direct the legal practitioners of the parties to bring in minutes giving effect to a timetable for the filing of evidence and submissions in the application to set aside the financial agreement.
I fix 18 October 2021 for five days for the trial of the husband’s application to set aside the financial agreement.
I certify for counsel including Senior Counsel and I reserve the costs of and incidental to this application.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 26 July 2021
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