Antoun & Antoun (No 2)
[2024] FedCFamC1F 354
•27 May 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Antoun & Antoun (No 2) [2024] FedCFamC1F 354
File number(s): PAC 796 of 2017 Judgment of: WILLIAMS J Date of judgment: 27 May 2024 Catchwords: FAMILY LAW – PROPERTY – Major complex financial proceedings list – Interim applications – Where the wife alleges the husband has divested himself of assets to minimise the matrimonial pool – Application for joinder – Application for ant-suit injunction – Application to strike out pleadings – Application for the sale of property and the distribution of proceeds of sale as a partial property settlement – Leave granted to amend amended points of claim within 28 days – Order made for sale of properties and partial property settlement to the wife Legislation: Family Law Act 1975 (Cth) ss 45, 45A, 75, 78, 79, 80, 106B, 117
Federal Circuit and Family Court of Australia Act2021 (Cth) ss 56, s 69
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 3.01, 3.03
High Court Rules 2004 (Cth) r 27.04
Contracts Review Act 1980 (NSW)
Cases cited: Akbar & Gandega (2023) 67 Fam LR 593; [2023] FedCFamC1A 174
Antoun & Antoun [2023] FedCFamC1F 129
Baba & Jarvinen (1980) FLC 90-882
Bearup & Bearup (1993) 16 Fam LR 797
Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81
CSR Ltd v Cigna Insurance Australia (1997) 189 CLR 345; [1997] HCA 33
Eastburn & Eastburn [2022] FedCFamC1F 706
Furtado & Furtado [2011] FamCA 1018
Harris & Harris [1993] FamCA 49
Henry v Henry (1996) 185 CLR 571; [1996] HCA 51
Hohol v Hohol (1980) FLC 90- 824; [1981] VR 221
In the Marriage of Af Petersons (1981) FLC 91-095; [1981] FamCA 50
In the Marriage ofBiltoft (1995) FLC 92-614; [1995] FamCA 45
Johnson v Buttress (1936) 56 CLR 113; [1936] HCA 41
Khalif & Khalif [2021] FamCAFC 123
Lan & Hao (No 2) (2017) FLC 93 – 795; [2017] FamCAFC 175
Lederer & Hunt (2007) FLC 93-311; [2007] FamCA 55
Lindon v Commonwealth (No 2) (1996) 136 ALR 251; [1996] HCA 14
In the Marriage of Zschokke (1996) 20 Fam LR 766
Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197; [1988] HCA 32
Osferatu & Osferatu [2012] FamCA 408
Quincey & Quincey [2023] FedCFamC1A 30
Silvia (Trustee) v Williams [2018] FCAFC 194
Strahan & Strahan (2009) FLC 93-466; [2009] FamCAFC 166
Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49
Wayne & Dillon & Anor (2008) Fam LR 543; [2008] FamCAFC 204
Zadenev & Zadenev [2013] FamCA 838
Division: Division 1 First Instance Number of paragraphs: 226 Date of hearing: 29 February 2024, 1 and 12 March 2024 Place: Heard in Sydney, delivered in Melbourne Counsel for the Applicant: Mr Ford Solicitor for the Applicant: Lewarne & Goldsmith Counsel for the First Respondent: Mr Wong Solicitor for the First Respondent: Barkus Doolan Winning Family Lawyers Counsel for the Second, Third and proposed Thirteenth and Seventeenth Respondents: Mr Dura SC Solicitor for the Second, Third and proposed Thirteenth and Seventeenth Respondents: Kennedys Law Counsel for the proposed Fourth, Fifth, Sixth and Twelfth Respondents: Mr Habib SC and Mr Todd Solicitor for the proposed Fourth, Fifth, Sixth and Twelfth Respondents: William Roberts Lawyers The Seventh, Tenth and Eleventh Respondents: Did not participate Counsel for the Eighth Respondent: Ms Horvath SC and Mr Macauley Solicitor for the Eighth Respondent: Thomson Geer Counsel for the proposed Ninth, Fourteenth, Fifteenth and Sixteenth Respondents: Mr Roberts Solicitor for the proposed Ninth, Fourteenth, Fifteenth and Sixteenth Respondents: Verlex ORDERS
PAC 796 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS ANTOUN
Applicant
AND: MR ANTOUN
First Respondent
B PTY LTD
Second Respondent
MR C (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
WILLIAMS J
DATE OF ORDER:
27 MAY 2024
THE COURT NOTES THAT:
A.The following definitions apply for the purpose of these orders:
a.Assessment means the assessment of CGT payable by K Pty Ltd or by the Husband as sole shareholder of K Pty Ltd arising from the disposition of the Suburb T property in whatever financial year the disposition occurs;
b.CGT means Capital Gains Tax;
c.CGT Liability means the amount of CGT payable pursuant to the Assessment;
d.Husband means Mr Antoun;
e.Parties means the Husband and the Wife;
f.Suburb T property means the property known as and located at TT Street, Suburb T being the whole of the land comprised in … and registered in the name of K Pty Ltd;
g.Wife means Ms Antoun;
h.Suburb EE property means the property known as and located at DD Street, Suburb EE.
THE COURT ORDERS THAT:
1.Ms BB be joined as the eighth respondent in these proceedings.
2.The wife’s Application in a Proceeding filed 29 March 2023 be otherwise dismissed.
3.On or before 28 days from the date of these orders, the wife:
(a)File and serve any Further Amended Points of Claim;
(b)File and serve any Application in a Proceeding to join any other party to the proceeding;
4.Within 28 days of service of a Further Amended Points of Claim, any respondents affected by the wife’s Further Amended Points of Claim file and serve an Amended Defence.
5.The application in a proceeding filed 25 January 2023 by the fourth, fifth, sixth and twelfth respondents is dismissed;
6.H Group be joined as the 13th respondent in these proceedings;
7.Q Pty Ltd be joined as the 17th respondent in these proceedings.
8.Contemporaneously with the settlement of the sale, or earlier , if agreed in writing, the Wife do all things and sign all documents necessary, at her cost, to lodge a Withdrawal of the Caveat lodged by her (dealing number …) on the Suburb T property.
9.That within 7 days of the date of these Orders, the Husband, as director of K Pty Ltd, will do all acts and things and execute all documents necessary to effect the sale of the Suburb T property for the best price reasonably obtainable as set out in the following manner:
(a)list the Suburb T property for sale with the method of sale to be as recommended by the agent appointed by the parties, as agreed in writing (“the agent”);
(b)co-operate in every way with the agent including (without limiting the generality of the foregoing):
(i)making the key available to the agent;
(ii)allowing inspection of the Suburb T property at all reasonable times requested by the agent;
(iii)ensuring the Suburb T property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and
(iv)signing all documents requested by the agent in relation to the listing for sale of the Suburb T property except a contract or agreement for sale which has not been authorised by the solicitor appointed with carriage of the sale.
(c)both the Husband and the Wife ("the parties") will ensure that they will not undertake any action so as to hinder or prevent a sale being effected;
(d)the Husband shall instruct UU Lawyers to have the conduct of the sale ("the Solicitor");
(e)the Husband shall execute a contract for sale in the form prepared by the solicitor having the conduct of the sale at the sale price;
(f)the Husband will do all things and sign all documents necessary to authorise the Agent and the Solicitor to liaise with the Wife in relation to the sale;
(g)in the event that the Suburb T property is listed for sale by auction and the bidding at the auction does not reach the reserve price such of the parties as are present at the auction may negotiate with the highest bidders or any other interested person and effect a sale of the Suburb T property at a price which is not more than 5% below the reserve price, or at such other price as the parties agree upon in writing;
(h)in the event the Suburb T property is not sold at the public auction conducted in accordance with Order 2.7 above, the Husband shall do all acts and things and sign all documents necessary so as to list the Suburb T property for sale by private treaty with the agent within 14 days of the auction date;
(i)the sale price at which the Suburb T property shall be listed shall be such price as the parties agree upon in writing or, in the absence of agreement reached within 14 days from the date of these Orders shall be the price nominated by the agent;
(j)if the Suburb T property remains unsold 12 weeks from the date of being listed for sale by private treaty (if so listed by that method), the Husband shall do all acts and things and sign all documents necessary to continue to relist the Suburb T property for sale by public auction again at three monthly intervals.
10.At settlement of the sale of the Suburb T property the Husband do all things and sign all documents necessary to divide the proceeds of sale of the Suburb T property as follows:
(a)to meet all costs associated with the sale of the Suburb T property including agent fees/commission, marketing and auction expenses and legal costs of the solicitor appointed under these Orders;
(b)in discharge of all monies owing to Australia and New Zealand Banking Group Limited (“ANZ Bank”) as may be required by ANZ Bank to give clear title to the incoming purchaser at settlement;
(c)in discharge of all municipal and water rates outstanding on the Suburb T property;
(d)to pay the sum of $250,00 to the wife as part property settlement;
(e)the remaining proceeds of sale, if any, be paid into a controlled monies account on behalf of the husband and wife
11.In relation to any CGT payable on the sale of the Suburb T Property:
(a)within 3 months of the end of the financial year in which the Suburb T property is sold, the Husband do all things and sign all documents necessary to lodge the tax return for K Pty Ltd so that an Assessment can issue;
(b)simultaneously with lodging the company tax return, the Husband will direct his accountant to prepare a capital gains tax calculation arising from the sale of the Suburb T property and will provide a copy of the calculation to the Wife;
(c)within 7 days of receiving the Assessment from the ATO, the Husband provide to the Wife a copy of the Assessment;
(d)within 14 days of the Husband providing the Assessment to the Wife, the Husband and wife do all acts and things and sign all documents necessary to pay to the ATO from the controlled monies account , the sum necessary to pay in full the CGT Liability only as calculated by the Husband's accountant pursuant to order 11 (b) above
12.That within 7 days of the date of these Orders, the Husband, as director of K Pty Ltd, will do all acts and things and execute all documents necessary to effect the sale of the Suburb EE property for the best price reasonably obtainable as set out in the following manner:
(a)That within 14 days give written notice (the Notice) to Q Pty Ltd (Q Pty Ltd) pursuant to Clause 32 of the registered lease … with such offer to sell to the latter in accordance with its first right of refusal, being at a price agreed between the spouse parties;
(b)In the event that Q Pty Ltd serves an Acceptance Notice, given effect to the sale in accordance with Clause 32;
(c)In the event that Q Pty Ltd rejects the Notice, list the Suburb EE property for sale by private treaty for the same price and on the same terms as offered to Q Pty Ltd unless otherwise agreed in writing or ordered by the Court.
(d)co-operate in every way with the agent including (without limiting the generality of the foregoing):
(i)making the key available to the agent;
(ii)allowing inspection of the Suburb EE property at all reasonable times requested by the agent;
(iii)ensuring the Suburb EE property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and
(iv)signing all documents requested by the agent in relation to the listing for sale of the Suburb EE property except a contract or agreement for sale which has not been authorised by the solicitor appointed with carriage of the sale.
(e)both the Husband and the Wife ("the parties") will ensure that they will not undertake any action so as to hinder or prevent a sale being effected;
(f)the Husband shall instruct UU Lawyers to have the conduct of the sale ("the Solicitor");
(g)the Husband shall execute a contract for sale in the form prepared by the solicitor having the conduct of the sale at the sale price;
13.At settlement of the sale of the Suburb EE property the Husband do all things and sign all documents necessary to divide the proceeds of sale of the Suburb EE property as follows:
(a)to meet all costs associated with the sale of the Suburb EE property including agent fees/commission, marketing and auction expenses and legal costs of the solicitor appointed under these Orders;
(b)in discharge of all monies owing to Australia and New Zealand Banking Group Limited (“ANZ Bank”) as may be required by ANZ Bank to give clear title to the incoming purchaser at settlement;
(c)in discharge of all municipal and water rates outstanding on the Suburb EE property;
(d)if the wife has not been paid $250,000 or any lesser amount from the proceeds of the Suburb T property, pay to the wife $250,000 or such lesser amount as may be outstanding to her, as partial property settlement;
(e)the remaining proceeds of sale, if any, be paid into a controlled monies account on behalf of the husband and wife
14.In relation to any CGT payable on the sale of the Suburb EE Property:
(a)within 3 months of the end of the financial year in which the Suburb EE property is sold, the Husband do all things and sign all documents necessary to lodge the tax return for K Pty Ltd so that an Assessment can issue;
(b)simultaneously with lodging the company tax return, the Husband will direct his accountant to prepare a capital gains tax calculation arising from the sale of the Suburb T property and will provide a copy of the calculation to the Wife;
(c)within 7 days of receiving the Assessment from the ATO, the Husband provide to the Wife a copy of the Assessment;
(d)within 14 days of the Husband providing the Assessment to the Wife, the Husband and wife do all acts and things and sign all documents necessary to pay to the ATO from the controlled monies account, the sum necessary to pay in full the CGT Liability only as calculated by the Husband's accountant pursuant to order 14(b) above;
15.The Wife’s Amended Application in a Proceeding filed 7 October 2022 be otherwise dismissed.
16.All extant applications be listed for mention on Wednesday 29 May 2024 at 9.30 am for the purposes of:
(a)Fixing a date for a judicial settlement conference with Chief Justice Alstergren;
(b)A date for final hearing, in the event the proceeding does not resolve after a judicial settlement conference;
(c)Any other extant procedural matter.
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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Antoun & Antoun has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILLIAMS J
INTRODUCTION
In 2017 the applicant wife commenced proceedings against the husband, the first respondent, pursuant to s 79 of the Family Law Act 1975 (Cth) (the Act) seeking a property settlement following the breakdown of their marriage in late 2015.
The wife asserts the husband, his relatives, business associates and advisors, have embarked upon a course of conduct to defeat the wife’s claim, by entering into transactions and creating and executing documents, which divested the husband of control of various companies and trusts.
The applications presently before the court for determination are:
(a)The wife’s Application in a Proceeding filed 29 March 2023 for joinder of the husband’s sister, Ms BB (“Ms BB”) and an anti-suit injunction restraining Ms BB from pursuing Supreme Court enforcement proceedings;
(b)Application in a Proceeding filed on 25 January 2023 by the 12th respondent (Ms G) seeking strike out of pleadings;
(c)The wife’s Amended Application in a Proceeding filed 7 October 2022 seeking to join the proposed 13th and 17th respondents, sale of the Suburb EE and Suburb T properties and the distribution of the proceeds of sale as a partial property settlement.
Prior to the commencement of the hearing, the wife’s claim against the proposed 9th, 14th, 15th, and 16th respondents was resolved by consent, and consent orders were made accordingly.
BACKGROUND
The husband and the wife are both aged 48 years. They married in 2000 and separated on 1 December 2015 according to the wife, and 6 December 2015 according to the husband, when he left the family home. There are four children of the marriage now aged 23, 21, 18 and 15 years.
The wife is a finance professional, and the husband is a tradesperson. During the marriage the parties operated a business, H Pty Ltd (“H Pty Ltd”). The wife worked at H Pty Ltd until early 2015. Thereafter, the husband paid her $750 per week to meet household expenses.
The structure of the husband’s business entities is vast and complex and involves a myriad of companies and trusts. I respectfully rely on, and adopt, the summary of the wife’s claim in the substantive proceedings as set out by Riethmuller J in Antoun & Antoun [2023] FedCFamC1F 129 at [13]–[68].
I now turn to the various interim applications, which will be dealt with in the order of submissions made during the hearing.
THE WIFE’S APPLICATIONS PERTAINING TO MS BB (PROPOSED EIGHTH RESPONDENT)
Before the court are two applications relevant to Ms BB. First, a purported Amended Application in a Proceeding filed on 7 October 2022 (notwithstanding the original application filed on 11 April 2022 was dismissed by paragraph 5 of orders made 14 June 2022). Second, an Application in a Proceeding dated 29 March 2023, and subsequently filed on 4 May 2023, which seeks to join Ms BB as the eighth respondent to the substantive proceedings and to restrain her from prosecuting proceedings in the New South Wales Supreme Court (the “SC proceedings”). The SC proceedings were commenced by Ms BB in early 2023 seeking specific performance to enforce a settlement reached in 2018 Supreme Court proceedings. Only the 29 March 2023 Application in a Proceeding is relevant, to the extent that the 7 October 2022 Application in a Proceeding only duplicates the relief of joinder sought.
Documents relied upon
The wife relied upon the following documents:
(i)Amended Application in a Proceeding filed 7 October 2022 (but only as to Orders 2, 6, 8, 14-22 and 24-28);
(ii)Amended Points of Claim filed 7 December 2022;
(iii)Affidavit of the wife filed 16 February 2024;
(iv)Consolidated affidavit of the wife sworn and filed 14 December 2022;
(v)Exhibits to the wife’s affidavit sworn and filed 14 December 2022;
(vi)Costs Notice filed 28 August 2023;
(vii)Case Outline filed 28 August 2023;
(viii)Documents tendered by counsel; and
(ix)Reasons for judgment of the Honourable Justice Riethmuller dated 9 March 2023 in Antoun & Antoun [2023] FedCFamC1F 129
In opposition to the Application in a Proceeding filed by the wife on 29 March 2023, Ms BB relied upon the following documents:
(i)Affidavit of Ms VV filed 16 November 2022 and Exhibit MVV-1 thereto;
(ii)Affidavit of Ms VV filed 21 August 2023 and Exhibit MVV-2 thereto;
(iii)Affidavit of Ms VV filed 22 February 2024 and the annexures thereto; and
(iv)Written Submissions.
I will first deal with the issue of joinder.
The Joinder Application
Legal Principles
Section 79(10)(b) of the Family Law Act 1975 (Cth) (“the Act”) states that “any other person whose interests would be affected by the making of the order, as sought by the parties, are entitled to become a party to proceeding”.
Rule 3.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) addresses the procedure to join a party proceedings. That Rule provides:
A person whose rights may be directly affected by an issue in a proceeding, and whose participation as a party is necessary for the court to determine all issues in the proceeding, must be included as a party to the proceeding.
The term necessary was considered in Wayne & Dillon & Anor (2008) Fam LR 543 by Warnick J who said:
[18]The word necessary… must mean something more than “useful” or “expeditious”. In my view, if there are available alternative means to joinder to the substantive proceedings, of obtaining from a third person or someone already a party what is needed to allow an applicant for joinder to establish an identified “case”, joinder is unlikely to be “necessary”.
[19]However, if a cause of action, recognisable at law, against a “third person” is particularised, then it is at least highly likely that joinder will be “necessary for the court to completely and finally determine all matters in dispute”.
Leave is required per r 3.03(4) of the Rules because the application is made after the first court date.
In exercising my discretion to determine the application, I must consider:
(i)Is Ms BB a person whose rights may be directly affected by an issue in the proceeding; and
(ii)Is Ms BB’s participation as a party necessary for the court to determine all issues in dispute in the proceeding.
The wife’s submissions – the joinder application
The wife again seeks to join Ms BB to the substantive proceedings for two reasons. First, because of her asserted involvement in a Deeds of Variation of Trust, which were prepared and executed in December 2015 and to restrain Ms BB from pursuing the Supreme Court enforcement proceedings against the wife.
The Deed of Variation of Trust removed the husband as appointor of five trusts referred to in paragraph 12 of the wife’s February 2024 affidavit and in substitution, appointed Ms BB and the husband’s accountant as the new appointors of the trust. The husband’s accountant subsequently resigned as an appointor and Ms BB remains the sole appointor.
The wife considers the appointment of Ms BB as appointor of the trusts to be particularly egregious for a number of reasons. These include the letter from the husband’s then solicitor to the husband and his accountant dated 19 November 2015 (Exhibit MSA-1 to the wife’s February 2024 affidavit), and an email from the husband’s then solicitor to the husband and his accountant, dated 26 November 2015 (Exhibit MSA-3 to the wife’s February 2024 affidavit).
In an Application in a Proceeding filed 24 January 2023, the husband sought to prevent the wife relying on the correspondence referred to in the previous paragraph because he asserted the documents were subject to legal professional privilege. On 9 March 2023 Riethmiller J dismissed the husband’s application and published his reasons (Antoun & Antoun [2023] FedCFamC1F 129).
The 19 November 2015 letter (Exhibit MSA-1) refers to the husband seeking to vary several different trust structures, remove himself as an appointor of the trusts and possibly resigning as a director of some of his companies because of pending family law matters. At that time, the wife was unaware of the husband’s intention to separate, although she did discover a few days earlier the husband was having an affair.
The email of 26 November 2015 refers to the husbands “estate planning matter” and confirms the husband had instructed his solicitors to proceed to make changes to his business structures. The instructions included preparation of Deeds of Variation for all of the husband’s trusts.
On 1 December 2015, the day of separation according to the wife, the wife’s then solicitors forwarded a letter to the husband, advising him not to take any steps to remove himself as appointor of various trusts or dissipate matrimonial assets. This letter is Exhibit MSA-4 to the wife’s February 2024 affidavit.
On 4 December 2015, the day on which the Deed of Variation was executed, the husband’s then solicitor forward a letter to the wife’s solicitor advising the husband had “no intention to transfer any interest in any corporate entity, trust or business” and that he undertook not to “transfer any interest in any relevant entity without giving to [the wife] 14 days’ notice”. This letter is Exhibit MSA-5 to the wife’s February 2024 affidavit.
Contrary to the letter of 4 December 2015, the husband removed himself as appointor of the various trusts. The wife views the involvement of Ms BB in these events, to say the least, with considerable suspicion.
The wife’s first application to join Ms BB, filed 11 April 2022 was resolved on the basis of an undertaking, which is Annexure A to orders made on 14 June 2022 (amended pursuant to the slip rule on 12 July 2022), which was signed by Ms BB on 17 June 2022. The undertaking provides that Ms BB will refrain from amending trust deeds, removing directors of the corporate trustee’s, removing trustees and/or changing the appointers in respect to six trusts.
On 7 October 2022 the wife filed an Amended Initiating Application. On 9 November 2022 the wife filed a Further Amended Initiating Application and on 7 December 2022 the wife filed an Amended Points of Claim (“APOC”).
The relief sought by the wife against Ms BB is as follows:
(a)Orders pursuant to s 106B of the Act setting aside the change in appointors of the following entities:
(i)H4 Trust;
(ii)H Pty Ltd;
(iii)H1 Pty Ltd;
(iv)L1 Trust;
(v)H3 Trust;
(vi)Antoun Group Pty Ltd;
(vii)J Trust; and
(b)Ms BB provide and pay an account of profits to the wife for:
(i)The value of the shareholding in H4 Trust between 4 December 2015 and date of trial; or alternatively
(ii)Equitable compensation.
(c)An anti–suit injunction in relation to the Supreme Court enforcement proceedings.
According to the wife’s counsel, the husband and his sister Ms BB are inextricably linked in the various business. The emails of 19 November 2015 and 26 November 2015 demonstrate the lengths the husband is prepared to go to defeat an anticipated order of the court, including his actions set out in Notation D(i)–(xv) of the APOC filed 7 December 2022.
Notwithstanding Ms BB’s undertaking, the wife’s counsel submitted in the event the court accedes to orders in accordance with the wife’s claim, Ms BB will be affected in her capacity as appointor of the various trusts and is therefore a necessary person who should be joined to the proceedings.
Ms BB is also a necessary person, because if the court grants orders as sought by the wife vis-a-vis the property situated at RR Street, Suburb SS, New South Wales (“the RR Street property”), Ms BB’s rights to pursue the Supreme Court enforcement proceedings will also be affected.
Ms BB’s submissions – the joinder application
Senior counsel appearing on behalf of Ms BB submitted there is no basis to join Ms BB to the proceeding because the relief sought in the Amended Application in a Proceeding filed on 7 October 2022, was resolved by the undertaking given on 17 June 2022. Notwithstanding that submission, the extant issue is whether the Amended Initiating Application filed 7 October 2022 and APOC raise any proper basis for joinder.
The APOC sees relief against Ms BB, to provide an account of profits or pay equitable compensation in relation to various trusts.
In her written submissions, senior counsel for Ms BB submitted the prayers for relief - seeking an account of profit or equitable compensation have no arguable basis. Rather, what is pleaded are allegations seeking to set aside the husband’s resignation as an appointor of various trusts and his appointment of Ms BB as replacement appointor. See APOC [46]–[49], [53]–[59], [77]–[78], [82]–[85], [87]–[9] and [98]–[100]. The allegations do not relate to any dealings with property, but rather question the validity of the husband’s actions.
At [50] of the APOC, the wife seeks:
Consequent upon a declaration that the Deed of Variation of the [H4 Trust] dated 4 December 2015 was a transaction made to defeat an existing or anticipated Court order, the applicant seeks that the first respondent and [Ms BB] provide and pay an account of profits to the wife for the value of shareholding in [H Pty Ltd Trust] between 4 December 2015 and the date of trial or alternatively equitable compensation.
According to senior counsel for Ms BB, the above is the purported basis for joinder for the relief sought at paragraphs [14], [22], [24], [26] and [28] of the Amended Initiating Application filed 7 October 2022. The pleading is nonsensical because:
(i)The relevant trust deeds removed the husband as appointor of the trust and appointed Ms BB (and others) in his stead. The trust deeds did not deal with any shareholding. This is reflected in the APOC at [48], [83], [89] and [99], where it is pleaded the husband has remained the shareholder in various corporate trustees;
(ii)The expression “shareholding in [H4 Trust]” is meaningless because there is no shareholding in the trust, only in the corporate trustee. The shares of the corporate trustee do not form part of the corpus of the trust and therefore there can be no action for account of profit or equitable compensation in respect of shares which do not form part of the trust property. Additionally, there are no allegations in the pleadings that Ms BB has dealt with the shareholding in the corporate trustee, nor are there any allegations of loss or profit by Ms BB; and
(iii)The wife could not compel any person to account to her for a breach of trust. If exceptional circumstances were demonstrated, she could compel a person to account to the trustee in a derivative action. The wife has not pleaded that Ms BB has dealt with any trust property.
At [241]–[249] of the APOC, the wife sets out the basis of the declaration she seeks to set aside the Deed of Settlement (referred to as Heads of Agreement in the APOC). Discussed below are the factual circumstances giving rise to the Deed of Settlement.
Senior counsel appearing on behalf of Ms BB submitted the pleadings in the APOC pertaining to the Deed of Settlement did not justify joinder of Ms BB. She referred to the comments of both Riethmuller J in Antoun & Antoun [2023] FedCFamC1F 129 at [68] who said “it is difficult to discern an arguable case respect to the [Suburb SS] property proceedings” and the observations of Williams J in the Supreme Court of New South Wales decision at [52] that “paragraphs 241 to 249 of the points of claim as presently drafted do not serve the essential function of pleadings, at least so far as [Ms BB] is concerned”.
Senior counsel for Ms BB submitted a number of other matters were also relevant.
First, the pleading at [246] of the APOC states:
The applicant asserts that she executed the Heads of Agreement in circumstances of undue influence and duress by reason of the pressure applied by the first respondent in the sense described in Johnson v Buttress [1936] HCA 41 and Blomley v Ryan [1956] HCA 81…
And [247] of the APOC states:
It is asserted by the applicant that the first and third respondents and [Ms BB] concealed their nefarious intent in seeking to remove assets from the matrimonial pool from the period between 1 December 2015, the date of separation and 2017, such that the applicant did not bring to the bargain an informed consent when she executed the Heads of Agreement.
The relationship of sisters-in-law is not a recognised category giving rise to a presumption of undue influence (Johnson v Buttress (1936) 56 CLR 113). The wife would therefore be required to plead, and prove, that Ms BB occupied a position of dominion, power, and ascendancy over her, or she had a dependence or trust in Ms BB, or the exertion of actual undue influence, where no such pleading exists.
The decision in Blomley v Ryan (1956) 99 CLR 362 is concerned with the doctrine of unconscionability, rather than duress. Such relief requires proof and pleading of both the identification of “a special disadvantage which seriously affects the ability of the innocent party to make a judgment as to [the innocent party’s] own best interests. The other party must also unconscientiously take advantage of that special disadvantage” per Thorne v Kennedy (2017) 263 CLR 85 (footnotes omitted).
There is no such pleading in the APOC, nor is there any pleading that Ms BB exerted any influence or pressure on the wife, rather the wife asserts it was the husband who pressured her [246].
Secondly the wife’s evidence in her affidavit filed 16 February 2024 at [354]–[366], is contrary to what is pleaded at [246] of the APOC. In this affidavit the wife deposes that it was her then solicitor who was pressuring her to settle and sign the agreement, not the husband nor Ms BB. She also deposes that she did not see the husband or Ms BB during the entire mediation. There is no evidence Ms BB said anything to the wife before the mediation or subsequently to pressure her to sign the document. The wife’s evidence is the agreement was signed a few days after mediation, which would have provided her with sufficient time to reflect.
Thirdly, the assertion in [247] of the APOC is not supported by any pleading or particulars as to how Ms BB was involved in the “nefarious intent”. Senior counsel for the wife referred to the remarks of Williams J at [54] of her reasons in the Supreme Court of New South Wales decision, where her Honour commented “it is difficult to comprehend how the alleged nefarious intent with respect to transactions between December 2015 and 2017 (if established) would be capable of affecting [the wife’s] consent to the Heads of Agreement, as asserted in the amended points of claim”.
Senior counsel for Ms BB further submitted the applicant has not demonstrated any proper basis to join Ms BB to the proceedings, despite having had ample opportunity to identify an arguable case for relief.
Having considered the submissions of both counsel, I determine that Ms BB should be joined as a party to the proceeding, she is a necessary party and her right may be directly affected. Certainly, at the very least, any order pertaining to the Deeds of Variation will affect Ms BB.
There are some identified deficiencies in the pleadings pertaining to Ms BB, and the wife will be afforded an opportunity to rectify the APOC, should she choose to do so.
I will now deal with the anti-suit injunction.
Anti-suit Injunction
Legal principles – anti-suit injunction
The Court has power to restrain a party to proceedings before the court from commencing or continuing proceedings in another court. The power to do so arises either from the Court’s inherent powers to prevent an abuse of its own process or in the power to prevent proceedings which are vexatious or oppressive or both: see CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 391-393. In the case of Lederer & Hunt (2007) FLC3-311 (“Lederer & Hunt”), the Full Court of the Family Court held the Court can grant an anti-suit injunction to restrain litigation in another Australian court, as well as a foreign court, in order to achieve the same object.
The relevant considerations in determining whether to grant an anti-suit injunction, include:
(i)whether both courts have jurisdiction;
(ii)whether each court will recognise the orders and decrees of the other court;
(iii)which court can provide more effectively for complete resolution of the matters involved in the parties controversy;
(iv)the order in which proceedings were instituted;
(v)the stage at which the proceedings have reached;
(vi)the costs incurred by both parties;
(vii)other party is able to participate in respective proceedings on an equal footing;
(viii)is there a Juridical advantage to one party or the other in the jurisdictions.
It is also necessary to consider principles of judicial comity: Lederer and Hunt. In Baba & Jarvinen (1980) FLC 90-882, Nygh J observed that issuing an injunction which prevents a party from continuing validly instituted proceedings in another Australian court “ought to be avoided, if possible”.
In Eastburn & Eastburn [2022] FedCFamC1F 706 at [30]-[31] Christie J said:
30.The mere existence of simultaneous proceedings in two different jurisdictions is not of itself vexatious or oppressive conduct: Henry v Henry (1996) 185 CLR 571 at 590 to 591.
31.The proper question is whether two sets of proceedings would be “productive of serious and unjustifiable trouble and harassment or seriously burdensome, prejudicial or damaging”: CSR Ltd v Cigna Insurance Australia (1997) 189 CLR 345; Oceanic Sun Line Special Shipping Company Inc v Fay (1986) 165 CLR 197 at [247] as cited in Lan & Hao (No 2) (2017) FLC 93 – 795 at [37].
The wife’s submissions – anti-suit injunction
To properly consider the injunction sought by the wife, it is also necessary to set out the history of the SC proceedings.
In 2018, Ms BB commenced proceedings against the husband and wife about the RR Street property (“2018 SC proceedings”). On 24 January 2020, when all parties were represented, the 2018 SC proceedings were resolved by consent and all parties entered into a Binding Heads of Agreement (Agreement). Under the Agreement, the parties agreed Ms BB would be transferred the title to 2 RR Street, free of encumbrance, and the wife and husband would retain 1 RR Street, where the wife currently resides.
On 21 July 2022, Ms BB forwarded a letter to the wife and husband complaining about their failure to transfer 2 RR Street to her and advising that Ms BB “is entitled to commence all necessary proceedings to give full effect to the terms of [the] agreement” (Exhibit MVV-2 to the affidavit of Ms VV sworn 21 August 2023).
In early 2023 Ms BB commenced the SC proceedings, seeking specific performance of the Agreement. The following month, the wife filed a notice of motion in the Supreme Court of New South Wales seeking to stay the SC proceedings pending determination of her applications to this court. In mid-2023, Williams J dismissed the stay application with costs. In the following month the wife filed a defence and crossclaim in the SC proceedings.
At paragraphs 10, 11 and 12 of the wife’s Further Amended Initiating Application filed 9 November 2022, she seeks orders pursuant to s 106B of the Act, that the Deed of Settlement between Ms BB, the husband and herself be set aside, a declaration pursuant to s 78 of the Act that Ms BB holds her interest in the property at RR Street on trust for the husband and in the event the property has not yet been transferred to Ms BB, the husband and wife be relieved of the obligation to transfer the property to Ms BB. The wife seeks these orders because she asserts, she entered into the Deed of Settlement, when her will was unduly overborne by both Ms BB and the husband.
In her affidavit of 16 February 2024, the wife deposes to the circumstances giving rise to the dispute about the RR Street property. At paragraphs 341-353, she refers to Ms BB being aware from August 2015 the property that was the subject of the dispute, was not registered in her name, and the SC proceedings were not commenced by Ms BB until, mid-2017, some 2 years later. At paragraphs 345–366 she refers to the events on the day of the mediation and following days when she executed the Deed of Settlement. At paragraph 368 she asserts Ms BB commenced the proceedings to remove matrimonial assets from the pool, in order to diminish her claim. At paragraph 373 she deposes to not yet having signed a transfer of land to transfer the property to Ms BB.
As to the anti-suit injunction, the wife’s counsel asserted the dispute about the RR Street property involves matrimonial property, and the wife’s crossclaim against the husband and Ms BB in the SC proceedings, arises from the same substratum of facts and involves a single justiciable controversy.
That controversy is whether the wife’s entry into the Deed of Settlement was brought about by the undue influence and/or unconscionable conduct of Ms BB and the husband. The dispute should properly be determined by this court.
Ms BB’s submissions – anti-suit injunction
Senior counsel for Ms BB submitted the court should not, as a matter of comity, grant an anti‑suit injunction to prevent Ms BB from prosecuting the SC proceedings to enforce a settlement agreement, which was reached by the parties prior to the trial of the 2018 SC proceedings and that the Supreme Court is the proper forum for those proceedings. If the court declined to join Ms BB to these proceedings, then it would flow automatically that the court would also refuse to make the anti-suit injunction.
The court should not make an anti-suit injunction for the following reasons.
First, the Supreme Court proceedings were properly commenced in the correct forum and there was no abuse in instituting proceedings in that forum.
Secondly, Ms BB could not have commenced proceedings in this court to enforce the Deed of Settlement, because the proceeding is not a “matrimonial cause”. The wife has not applied to have the Supreme Court proceedings cross vested to this court, notwithstanding she has been provided with the opportunity to do so, when in early 2023, she was granted leave in the Supreme Court “to file any motion concerning the proper progress of the matter in light of the ongoing family court proceedings”.
Thirdly, the wife’s attempt to have the validity of the Deed of Settlement determined by this Court is contrary to the terms of that agreement, which conferred exclusive jurisdiction on the Supreme Court. This court should not assist the wife to avoid her agreement to submit to the exclusive jurisdiction of the Supreme Court, particularly when there is no arguable case to set aside the Deed of Variation.
Fourthly, if the anti-suit injunction is granted, it will unduly fragment the resolution of the issues in dispute. The wife has not sought to transfer the Supreme Court proceedings to this court, rather she seeks this court to determine her defences of undue influence, unconscionability, and relief pursuant to s 106B of the Act. If she fails in that regard, then Ms BB’s entitlement to specific performance or damages will need to be determined by the Supreme Court.
Fifthly, the Supreme Court proceedings will determine the various defences/crossclaims of undue influence, unconscionability, and relief under the Contracts Review Act 1980 (NSW), none of which is pursued in this court. The Supreme Court will also determine, as sought by the wife her relief sought pursuant to s 106B of the Act.
Sixthly, Ms BB first raised the issue of specific performance of the deed of settlement in July 2022, prior to the wife raising the issue in these proceedings. The Supreme Court enforcement proceedings were commenced by Ms BB prior to the wife joining Ms BB to these proceedings.
Seventhly, the Supreme Court proceedings are more advanced than these proceedings. The pleadings have closed, the parties have exchanged evidence in chief, evidence in reply and a final hearing is expected to occur in the second half of 2024. In comparison, these proceedings are at the stage of pleadings and joinder. The more expedient resolution of the issue of validity of the Agreement will be accomplished by the Supreme Court proceedings, which is an advantage to all parties.
I prefer and accept the submissions pertaining to the anti-suit injunction, of senior counsel for Ms BB. It cannot possibly be said that the wife’s involvement in proceedings properly brought in the Supreme Court to compel enforcement of a deed of settlement, are “productive of serious and unjustifiable trouble and harassment, or seriously burdensome, prejudicial or damaging”: CSR Ltd v Cigna Insurance Australia (1997) 189 CLR 345; Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197 at [247] as cited in Lan & Hao (No 2) (2017) FLC 93-795 at [37]. That is particularly so in circumstances when the wife has sought and been refused a stay of those proceedings, and when the proceedings are nearing allocation of a trial date. I do not intend to make the injunction as sought by the wife.
I now turn to the next application before the court.
STRIKE OUT APPLICATION OF D PTY LTD (D PTY LTD), E PTY LTD (E PTY LTD), F PTY LTD (F PTY LTD) AND MS G
On 25 January 2023 D Pty Ltd, E Pty Ltd and F Pty Ltd (4th, 5th, and 6th respondents) and Ms G (12th respondent) filed an Application in a Proceeding, naming the wife as the respondent. The application seeks a variation of Order 8 of orders made on 16 November 2022, to extend the timeframe for the wife serve further particulars of her APOC. If the wife fails to do so, orders are sought to strike out paragraphs 119-136 and 149-156 of her APOC and for the wife to pay costs on an indemnity basis.
According to these entities and Ms G, the wife’s APOC dated 7 December 2022 failed to particularise the relevant paragraphs of the APOC. The application to be determined by the court is whether to strike out the relevant paragraphs of the wife’s APOC, pursuant to s 69(4)(b) of the Federal Circuit and Family Court of Australia Act2021 (Cth) (the “FCFCOA Act”).
Documents relied upon
Ms G, D Pty Ltd, E Pty Ltd and F Pty Ltd relied upon the following Documents:
(i)Application in a Case filed 25 January 2023;
(ii)Affidavit of Mr WW filed 25 January 2023; and
(iii)Case Summary document filed 28 August 2023.
The wife relied upon the following documents:
(i)Amended Application in a Proceeding filed 7 October 2022 (but only as to Orders 2, 6, 8, 14-22 and 24-28);
(ii)Amended points of claim filed 7 December 2022;
(iii)Affidavit of the wife filed 16 February 2024
(iv)Consolidated affidavit of the wife sworn and filed 14 December 2022;
(v)Exhibits to the wife’s affidavit sworn and filed 14 December 2022;
(vi)Costs notice filed 28 February 2024;
(vii)Case Outline filed 28 August 2023;
(viii)Documents tendered by counsel; and
(ix)Reasons for judgment of the Honourable Justice Riethmuller dated 9 March 2023 in Antoun & Antoun [2023] FedCFamC1F 129
Legal Principles
In relation to the power of this court to strike out pleadings, s 69 of the FCFCOA Act provides:
69 Power of the Federal Circuit and Family Court of Australia (Division 1) to give directions about practice and procedure in a civil proceeding
(1)The Federal Circuit and Family Court of Australia (Division 1) or a Judge may give directions about the practice and procedure to be followed in relation to a civil proceeding, or any part of a civil proceeding, before the Court.
…
(4)In particular, the Federal Circuit and Family Court of Australia (Division 1) or Judge may do any of the following:
(a) dismiss the proceeding in whole or in part;
(b)strike out, amend or limit any part of a party’s claim or defence;
(c) disallow or reject any evidence;
(d) award costs against a party;
(e)order that costs awarded against a party are to be assessed on an indemnity basis or otherwise.
Because the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (the “FCFCOA Rules”) are silent in relation to proceedings and strike out applications, the High Court Rules are incorporated by operation of s 56(2) of the FCFCOA Act.
Section 56 of the FCFCOA Act states
56 Practice and procedure
(1) Subject to this Chapter and the Family Law Act 1975, the practice and procedure of the Federal Circuit and Family Court of Australia (Division 1) is to be in accordance with:
(a)regulations made under this Act and the Family Law Act 1975; and
(b)the Rules of Court.
(2)To the extent that the provisions mentioned in subsection (1) are insufficient, the Rules of the High Court apply, mutatis mutandis, so far as they are capable of applying and subject to any directions of the Federal Circuit and Family Court of Australia (Division 1) or a Judge, to the practice and procedure of the Federal Circuit and Family Court of Australia (Division 1).
(3)This section does not apply in relation to proceedings that are transferred to the Federal Circuit and Family Court of Australia (Division 1) from the Federal Court.
(4)In this section, practice and procedure includes all matters with respect to which regulations under this Act, the Family Law Act 1975 or Rules of Court may be made
Rule 27.04 of the High Court Rules 2004 (Cth) (the “High Court Rules”) refers to the “Contents of Statements of Claim” and is the provision to be applied in determining whether pleadings are deficient in this jurisdiction. Rule 27.04 relevantly provides:
27.04 A Statement of Claim:
(a)shall state the basis on which it is claimed that the matter is within the original jurisdiction of the Court;
(b)shall contain in a summary form a statement of all the material facts on which the plaintiff relies, but not the evidence by which those facts are to be proved;
(c)where any claim arises by or under any Act, shall identify the specific provisions relied on; and
(d)shall contain the necessary particulars of any fact or matter pleaded, including:
(i)all particulars necessary to enable the opposite party to plead or to define the questions for trial or to avoid surprise at trial; and
(ii)particulars of any misrepresentation, fraud, breach of trust, wilful default, or like matter; and
(e)shall state specifically the relief or remedy claimed.
The purpose of pleadings is to enable parties and the court to discern the precise nature and extent of dispute between the parties. However, it must be borne in mind, this court is not a court of pleadings and cases are determined on the evidence, not the pleadings: see Tree J in Quincey & Quincey [2023] FedCFamC1A 30.
Background
I will first refer to the background of the dispute as set out in the Summary of Argument of the relevant respondents.
On14 June 2022 and 16 November 2022 orders were made listing D Pty Ltd (“D Pty Ltd”), E Pty Ltd (“E Pty Ltd”) and the F Pty Ltd (“F Pty Ltd”) as the respective 4th, 5th, and 6th respondents to these proceedings.
Ms G is the sole director, shareholder and secretary of these entities and is the 12th respondent to the proceedings.
F Pty Ltd (the 6th respondent) operates a business known as XX Business in Suburb GG, which is owned by XX Pty Ltd. (“XX Pty Ltd”).
D Pty Ltd (the 4th respondent) is a trustee of the D Unit Trust, and E Pty Ltd (the 5th respondent) is the sole unit holder of the trust.
E Pty Ltd is a trustee for the E Trust, of which Ms G is the named beneficiary.
XX Pty Ltd was incorporated in 2015 and the husband was the sole director, secretary, and shareholder until mid-2018. Despite the husband being the sole shareholder, Ms G asserts, from 2015 she had a beneficial entitlement to 15 of the 100 issued shares in the company.
In or about mid-2015, Ms G and XX Pty Ltd entered into an employment agreement which set out her responsibilities as an employee of XX Pty Ltd.
In mid-2015, Ms G also entered into a Shareholders Agreement with the husband, which inter alia granted her 15 shares in XX Pty Ltd, and appointed her as a director of the company.
In mid-2018 at a meeting between the husband and Ms G, at which apparently Ms G expressed her concern that the shareholders agreement had failed to be implemented, XX Pty Ltd resolved to transfer to Ms G 15 ordinary shares and appoint her as a director of the company. The transfer of shareholding was registered with ASIC a month later and according to Ms G, the transfer of shares was the fulfilment of the shareholders agreement entered into in mid-2015.
In late 2018, XX Pty Ltd entered a contract for management services with F Pty Ltd and D Pty Ltd, E Pty Ltd and F Pty Ltd were registered a month later.
In late 2018, XX Pty Ltd entered a further contract for management services with F Pty Ltd, which set out the consulting works to be undertaken by F Pty Ltd. The effect of the agreements was Ms G ceased being an employee of XX Pty Ltd and commenced providing services to XX Pty Ltd through F Pty Ltd.
XX Pty Ltd is the approved provider of the business, and Ms G is responsible for the management and operation of the business.
F Pty Ltd invoices XX Pty Ltd in relation to the costs of the business, which are initially incurred by F Pty Ltd. The costs include payroll, marketing and advertising expenses, motor vehicle, recruitment, professional development, telephone/internet/website, maintenance and other incidental costs and operational expenses of the business and the consultancy fees for Ms G.
Pursuant to orders of 14 June 2022 the wife filed a Points of Claim on 6 October 2022, wherein claims are made against D Pty Ltd, E Pty Ltd, F Pty Ltd and Ms G are at paragraphs [119]-[136] and [149]-[156].
On 16 November 2022, Riethmuller J made orders for the wife to file an Amended Point of Claim (the APOC). On 7 December 2022 the wife filed her APOC and according to D Pty Ltd, E Pty Ltd, F Pty Ltd and Ms G, there was no material amendment to the relevant paragraphs.
Submission of 4th, 5th, 6th and 12th respondents
I now turn to the precise parts of the APOC which are sought to be struck out, paragraphs 119–136 and 149–156, which are as follows:
119.[In] or about [early] 2015, the first respondent established and registered [XX Pty Ltd] and was appointed the sole director and sole shareholder of 100 shares.
120.[In] or about [mid] 2015, [Ms G] entered into an employment agreement with [XX Pty Ltd] as manager of the [business]:
Particulars
The employment agreement is dated [mid] 2015 and records the agreed remuneration in the sum of $108,160, together with other terms and conditions.
121.[In] or about [mid] 2018, the first respondent transferred 15 shares in [XX Pty Ltd] to [Ms G] for nil consideration.
122.[In] and after [late] 2018, sums totalling $4,635,750 were transferred from the bank accounts of [XX Pty Ltd] to [D Pty Ltd], the Fourth Respondent.
…
Common Intention Constructive Trust of [XX Pty Ltd]
123.It is asserted that [Ms G] holds her 15 shares in [XX Pty Ltd] pursuant to a common intention constructive trust for the first respondent (the common intention with respect to [XX Pty Ltd]).
124.[In] or about [mid] 2017 or between that date and [mid] 2018, [Ms G] and the first respondent formed a common intention with respect to [XX Pty Ltd] as to the beneficial ownership of the 15 shares which were to be held by her beneficially for the first respondent, such common intention was formed on or proximate to [mid] 2018.
Particulars
Email from [Mr YY] to [Mr ZZ] dated 17 March 2017
125.Acting in furtherance to the common intention with respect to [XX Pty Ltd], the first respondent transferred the 15 shares to [Ms G].
126.In transferring the sums totalling $4,635,750 the first respondent acted to his detriment as these funds were transferred to an entity wholly owned and controlled by [Ms G], namely [D Pty Ltd], the fourth respondent.
Common Intention Constructive Trust with Respect to [F Pty Ltd]
127. [In late] 2018, the following entities were registered with ASIC:
127.1. [D Pty Ltd] ([D Pty Ltd])
127.2. [E Pty Ltd] ([E Pty Ltd]); and
127.3. [F Pty Ltd] ([F Pty Ltd]),
Collectively the fourth to sixth respondents.
128.[Ms G] is the sole director and sole shareholder of the fourth to sixth respondents.
129.[In] or about [late] 2018, the fourth to sixth respondents were appointed the trustees of two trusts, namely [E Trust], which the third respondent is the Appointor, and [D Unit Trust].
130.It would be a fraud (in the sense described in Hohol v Hohol (1980) FLC 90- 824 at [225]) on the first respondent for [Ms G] to deny that she holds the beneficial interest in the 15 shares in [XX Pty Ltd] on behalf of the first respondent, and accordingly, such conduct by the [Ms G] is unconscionable.
131.The applicant seeks a declaration pursuant to section 78 of the Act that [Ms G] holds her 15 shares in [XX Pty Ltd] beneficially on behalf of the first respondent pursuant to a common intention constructive trust.
132.The applicant seeks an account of profits from [Ms G] and/or [D Pty Ltd]… for the period from 14 November 2018 to date, or alternatively equitable compensation.
Common Intention Constructive Trust with Respect to [F Pty Ltd]
133. It is asserted that [D Pty Ltd] and [E Pty Ltd] holds its interest in [F Pty Ltd] on trust for the first respondent, the husband.
134.It would be a fraud (in the sense described in Hohol v Hohol (1980) FLC 90- 824 at [225]) on the first respondent for [Ms G] to deny that she holds the beneficial interest in the [F Pty Ltd] on behalf of the first respondent, and accordingly, such conduct by the [Ms G] is unconscionable.
135.The applicant seeks a declaration pursuant to section 78 of the Act that [Ms G] holds her interest in [F Pty Ltd] beneficially on behalf of the first respondent pursuant to a common intention constructive trust.
136.The applicant seeks an account of profits from [Ms G] and/or the fourth to sixth respondents for the period from 14 November 2018 to date, or alternatively equitable compensation.
…
149.Pursuant to the Joint Venture as to the [S Street] Property, [XX Pty Ltd] caused funds to be transferred to the bank accounts of the fourth to sixth respondents and [H Pty Ltd] or [H Group], being accounts controlled and/or operated by the first respondent.
150.In furtherance of the said Joint Venture as to the [S Street] Property, the Joint Venture Partners as to the [S Street] Property used the funds provided by [XX Pty Ltd] to acquire and develop the [S Street] Property.
The Agreement: [S Street] Property [Business]
151.On a date presently unknown to the applicant but formed between [late] 2017 and [early] 2018, the first and third respondents and [Ms G] entered into an agreement or undertaking (the Agreement) on terms which included:
Particulars
151.1The Joint Venture Partners would cause [H Group] to acquire the [S Street] Property;
151.2The first respondent and/or the third respondent and/or [Ms G] would cause [XX Pty Ltd] to transfer funds into the bank accounts of the fourth to sixth respondents and/or [H Pty Ltd] and/or [H Group]; and
151.3Thereafter the Joint Venture Partners would lodge and prosecute the DA including engaging expert report writers, architects, accountants and solicitors.
The Assumption
152.On a date presently unknown to the applicant but between [late] 2017 and [early] 2018, the first and third respondents and [Ms G] proceeded on the following common assumption (the Assumption) as follows:
Particulars
152.1The Joint Venture Partners would cause [H Group] to acquire the [S Street] Property;
152.2That the first respondent and/or the third respondent and/or [Ms G] would cause [XX Pty Ltd] to transfer funds into the bank accounts of the fourth to sixth respondents and/or [H Pty Ltd] and/or [H Group];
152.3Thereafter the Joint Venture Partners would lodge and prosecute the DA including engaging expert report writers, architects, accountants and solicitors; and
152.4In the case of the first respondent executing ANZ bank mortgages and providing personal guarantees.
153.Thereafter, pursuant to the Agreement and in reliance on the Assumption:
153.1The Joint Venture Partners would cause [H Group] to acquire the [S Street] Property;
153.2That the first respondent and/or the third respondent and/or [Ms G] would cause [XX Pty Ltd] to transfer funds into the bank accounts of the fourth to sixth respondents and/or [H Pty Ltd] and/or [H Group]; and
153.3Thereafter the Joint Venture Partners would lodge and prosecute the DA including engaging expert report writers, architects, accountants and solicitors.
154.[In] or about [early] 2022, the third respondent caused himself to be removed as a director of [H Group] and he was replaced with [Ms AB], the first respondent’s sister.
155.By reason of the facts, matters and circumstances, the applicant seeks a declaration pursuant to section 78 of the Act that the Joint Venture Partners as to the [S Street] Property were involved in a Joint Venture Project to acquire and develop the [S Street] Property between [late] 2017 and thereafter.
156.The applicant seeks an order that Accounts be taken between the Joint Venture Partners as to the [S Street] Property.
(Emphasis in original)
D Pty Ltd, E Pty Ltd, F Pty Ltd and Ms G seek the wife’s claim be struck out because they assert the wife has failed to provide particulars necessary to identify an underlying reasonable cause of action or legal merit. The wife’s claim as it stands, does not assist the court in the determination of the issues or enable the relevant respondents to properly identify the nature of the case to be met.
Because these entities and Ms G are third parties to the proceedings, and the claim against them is commercial in nature, on 12 August 2022 orders were made in this court requiring the wife to plead with particularly and specification her claim and relief sought. Senior counsel for the relevant respondents submitted the wife has failed to do so because there is no such claim.
The wife’s claim against these entities and Ms G arises from three distinct complaints. First, the transfer of 15 shares in XX Pty Ltd to Ms G, secondly, payments totalling $4,635,750 made from the bank accounts of XX Pty Ltd to D Pty Ltd, and thirdly, a joint venture between Ms G and others to develop the S Street Business. I will deal with each complaint.
The transfer of 15 shares in XX Pty Ltd
The wife asserts in the APOC (paragraphs 123–125) the 15 shares in XX Pty Ltd transferred to Ms G, are held on trust for the husband, pursuant to a common intention constructive trust. As to the particulars of the common intention, the wife relies on an email from Mr YY (the husband’s former solicitor) to Mr ZZ (the husband’s accountant) dated 17 March 2017.
The relief sought by the wife, against Ms G, is a declaration pursuant to s 78 of the Act that Ms G holds her 15 shares in XX Pty Ltd on trust for the husband and against Ms G and D Pty Ltd, and account of profits or alternatively equitable compensation.
As to the deficiencies in the pleading, senior counsel for the relevant respondents referred to a number of matters.
First, at paragraph 120 of the APOC, the wife refers to an employment agreement entered into between husband and Ms G in mid-2015, which is accepted by the relevant respondents. It is notable that the employment agreement was entered into three years before the asserted illegal transfer of the shares, and six months prior to separation on or around 1 December 2015.
The wife particularises some terms of the agreement, namely that the agreed remuneration was $108,160, together with other terms and conditions, but omits others. Specifically, there is no reference in the pleading to the preamble of the employment agreement which is as follows:
This agreement is entered into between you and [XX Pty Ltd] on even date with the entering into of a Deed evidencing a Shareholders agreement whereby you will be issued non-voting shares (the “Shares”) in [XX Pty Ltd] entitling you to dividends and participation in the equity and value of [XX Pty Ltd] created through the operation of [businesses] and you acknowledge that the Shares are issued to you in consideration of you entering into the terms of this employment agreement.
(Exhibit [MSA]-81)
There is also no reference to the contemporaneous document referred to in the preamble, namely a “Deed evidencing a Shareholders Agreement”. A copy of that document is found at page 624 of the wife’s court book (Exhibit MSA-82).
According to senior counsel for Ms G, D Pty Ltd, E Pty Ltd and F Pty Ltd, the wife makes no allegation in the pleadings that either the employment agreement or the shareholders agreement is a sham, or anything other than ordinary commercial documents.
As to the delay in transfer of shares, which occurred in 2018, senior counsel referred to a file note dated 8 June 2018 which records a meeting on that date at 10.45 am between the husband, the 12th respondent, and Ms AB (Exhibit MSA-79). The file note records that the 12th respondent “has expressed her concern on her future with [XX Business] not having her 15% shareholder as per her employment contract”. Thereafter it is recorded the husband explained “it being a major oversight and was embarrassed about it not being processed properly as it should have been at the time the contract was drawn up as he expected it to have been executed […]. He has asked [Ms G] to email him a letter stating her distress about her directorship to correct it according to her contract agreement […]”.
According to senior counsel, thereafter the 15 shares were transferred to the 12th respondent to fulfil her existing equitable right to have the shares transferred to her, which she acquired in 2015. The wife does not allege, plead, or state otherwise that the meeting in 2018, as recorded by the file note, was a fraud, sham, or not a reflection of reality.
At paragraph 121 of the APOC, the wife asserts the transfer of the shares was for “nil consideration”. When pressed in correspondence about that allegation, and when the employment agreement was drawn to the attention of the wife’s representatives, the wife’s position was that there was no monetary consideration. The 12th respondent agrees that there was no monetary consideration, but rather the consideration is as reflected in the contractual documents, which was to become an employee to run the business, and part of that remuneration was to receive equity in the business, by transfer of the 15 shares.
At paragraph 123 of the wife’s APOC she asserts that Ms G holds her 15 shares in XX Pty Ltd pursuant to a common intention constructive trust, for the husband. Particulars are pleaded as an email from Mr YY to Mr ZZ dated 17 March 2017. Senior counsel for the fourth to sixth respondents and Ms G submitted that allegation was “a blithe conclusionary assertion of some common intention, unsupported by any pleading of a material fact. Inconsistent with the incontrovertible commercial documents, none of which is pleaded as not reflecting reality, or fraud, or a sham, or any of the like” (Transcript 22 February 2024, p.17 lines 17-20).
The email referred to in the particulars has yet to be provided to the relevant respondents, despite repeated requests for its production. Senior counsel submitted, absent the reference to the email, the wife has failed to particularise the alleged trust and there is no factual foundation for the so-called common intention and the contemporaneous documents which are entirely consistent with the asserted trust have not been attacked by the wife. The pleadings do not inform the respondents, or indeed the court about the case they are being asked to meet.
Looking at all documents before the court, the wife’s affidavit of 12th February 2024 does not elucidate the wife’s claim against the relevant respondents.
As to the relief sought by the wife at paragraphs 131, 132 and 136 of the APOC, senior counsel for the fourth to sixth respondents and Ms G submitted it was unclear which of the three claims gave give rise to the relief sought. Even on her own case, the wife is a stranger to the arrangements pleaded and she cannot seek an account of profits or equitable compensation. The court has no jurisdiction to determine a right or a claim that the husband might have and litigate that claim to conclusion. Rather if Ms G holds interests on trust for the husband, and if Ms G has breached a fiduciary duty and has an obligation to account or to pay equitable compensation, that obligation is to the husband and not the wife.
Payments made by XX Pty Ltd to D Pty Ltd
At paragraph 122 of the APOC, the wife asserts in and after late 2018 payments totalling $4,635,750 were transferred from the bank accounts of XX Pty Ltd to the fourth respondent (D Pty Ltd). Particulars of the payments are provided as to date, description, and amount.
Senior counsel for the fourth to sixth respondents and Ms G submitted the payments were made on a commercial basis, pursuant to the contract for management services entered between XX Pty Ltd and F Pty Ltd (the 6th respondent) in late 2018, and that the payments could not possibly found a trust, as asserted in the APOC. Furthermore, the allegation at paragraph 126 of the APOC, that the husband acted to his detriment is incorrect, because XX Pty Ltd transferred the money, not the husband.
There is no allegation in the APOC that the payments were not made pursuant to the invoices, the services were not provided, or the transfers were for no consideration. The commercial payment of invoices is not a basis for any remedy at law or in equity.
The assertions at paragraphs 133 and 134 of the APOC, that D Pty Ltd and E Pty Ltd hold their interests in F Pty Ltd on trust for the husband are unfounded and inconsistent with paragraph 126.
Senior counsel for the fourth to sixth respondents and Ms G submitted the wife was attempting to have the court determine the husband’s claim against third parties to conclusion with a monetary remedy, which is the creation of property and beyond the power of s 78 of the Act. He relied upon Akbar & Gandega (2023) 67 Fam LR 593 at [21].
Joint Venture of the S Street Business
Senior counsel for the fourth to sixth respondents and Ms G submitted the relief sought at paragraphs 155 and 156 of the APOC is effectively a declaration pursuant to s 78 of the Act, that the joint venture partners referred to were involved in a joint venture project. Section 78 of the Act does not permit such a declaration, because a declaration that joint venture partners were involved in a joint venture project to acquire and develop property, is not a declaration as to an existing right in property.
Furthermore, it is not apparent from the pleadings the extent of the allegation, nor relevant facts. Senior counsel for the fourth to sixth respondents and Ms G submitted that the relevant paragraphs should be struck out because they do not comply with the court’s orders of August 2018, nor with the pleading rules, do not disclose a cause of action, and do not permit the respondents to understand the case against them.
In conclusion, senior counsel finally submitted that any proper application of legal principle as to substance, pleading, and fairness to the respondents, should result in the pleadings being struck out as disclosing no reasonable cause of action, and no sufficient material facts to enable the respondents to know the case. Furthermore, the pleading does not disclose a cause of action that can be sustained at trial.
Wife’s submissions in response
Counsel for the wife submitted the strikeout application by the fourth to sixth respondents and Ms G, although not stated, is really an application pursuant to s 45A of the Act, and to succeed, the respondents must prove there is no reasonable prospect of successfully defending proceedings, which by inference, they would not be able to do.
At paragraphs 210 to 219 of the wife’s affidavit filed 16 February 2024, the wife sets out her understanding of the establishment of XX Pty Ltd, Ms G’s employment agreement, the transfer of shares to Ms G and highlights significant withdrawals from the XX Pty Ltd bank account between late 2017 and early 2018.
Counsel for the wife referred to paragraph 43 of the wife’s affidavit filed 16 February 2024, where she deposes in or around mid-2015, she saw a letter which referred to “[Antoun] V [Antoun] - Family Law matter”. Upon questioning the husband, she deposes he told her the letter referred to a “land dispute [overseas] between [the husband’s father] and his brother” and she “didn’t think anything further of it at the time”. She has subsequently found out that the husband was obtaining legal advice about family law matters at that time.
Counsel for the wife submitted that the wife believes the husband was contemplating separation at that time, which would mean the date of the common intention trust and the arrangement pleaded as an agreement, occurred around that time. I take that to mean the wife asserts that prior to the execution of the employment agreement in mid-2015, the husband had formed an intention to separate from the wife and had obtained legal advice about his options. Although not expressly stated, the inference is the employment agreement and shareholders agreement were entered into at a time when the husband was contemplating separating from the wife, in an attempt to reduce the asset pool available for distribution between husband and wife. Counsel was unable to explain why this was not included in the pleadings, particularly as there had been numerous requests from the relevant respondents about providing particulars of the pleadings.
In relation to the purchase of the S Street property and the asserted joint-venture, counsel for the wife relied on a file note from ANZ bank dated late 2021, which refers to “[Mr Antoun Business]” (Tender bundle of the wife p.1721). The document refers to consult fees, which he submitted, is understood to be the husband withdrawing money to fund the Development Application for his next business project in the name of H Group.
As to the difficulties faced by the wife in pleading a common intention constructive trust, because of her lack of knowledge of what occurred, counsel referred to two authorities; Khalif & Khalif [2021] FamCAFC 123, which at [10] cited Silvia (Trustee) v Williams [2018] FCAFC 194 where the Full Court of the Family Court said:
[16]Such proof may be direct by means of express agreement but it may also be implied from conduct. Matters of this kind are evidentiary and do not involve legal principles.
Counsel for the wife referred to the three different sets of financial statements of H Pty Ltd for the year ending 30 June 2015. The third set of financial statements for that period record a non‑current asset a loan payable by the wife to the company of $138,682 and the financial statements of the company for 2016 reflect the loan amount as $146,158. The second version of the 2016 financial statements reflect that the wife owes the company $260,658. When asked about the relevance of these documents, counsel for the wife submitted the case he was making “is that the husband is the centre, he’s the mastermind in relation to the [XX Pty Ltd] entity, the funds that are paid to and from [D Pty Ltd] where those funds end up with [H Group]” (Transcript 1 March 2024 p.24 lines 31-34).
When asked about the purpose of, and the creation of the various loans in the different versions of accounts, I understand the wife’s position to be that the husband was intentionally creating liabilities in the companies which were now being called up by the liquidator, thereby creating additional liabilities for the wife for the wife and further diminishing the pool of assets for distribution.
As to the issue of summary dismissal, I was referred to the judgement of Kirby J in Lindon v Commonwealth (No 2) (1996) 136 ALR 251 whereby his Honour said that “it is a serious matter to deprive a person of access to the courts” and the power to do so should be used sparingly.
In conclusion, it was submitted that if the court found against the wife, she would seek leave to replead, which could be achieved within 28 days of any order made.
Reply submissions of D Pty Ltd, E Pty Ltd, F Pty Ltd and Ms G (4th, 5th ,6th, and 12th respondents)
Senior counsel for the fourth to sixth respondents and Ms G also referred to the transactions relied upon by counsel for the wife between H Group and XX Pty Ltd. He submitted it was the other way around, namely money going out of the H Group company into XX Pty Ltd and not the other way round. In any event, that transaction had nothing to do with Ms G or her associated companies.
Senior counsel for the fourth to sixth respondents and Ms G reiterated the application was to strike out the pleadings pursuant to s 69(4)(b) of the FCFCOA Act, as opposed to a summary dismissal application. He submitted the court should be well satisfied because the pleadings are so deficient and the wife ought not be granted leave to amend the pleadings, because she has had two attempts and has failed to rectify the identified defects.
I agree with senior counsel for the fourth to sixth respondents and Ms G about the deficiencies in the wife’s pleadings, and accept the claim is brought pursuant to s 69(4)(b) of the FCFCOA Act and is not an application for summary dismissal pursuant to s 45 of the Act, which would likely fail. I do not accept the pleadings should be struck out. I accept the wife’s submissions that she faces significant difficulty in succinctly pleading, because of her lack of knowledge of the events preceding and immediately surrounding the execution of the relevant documents. Those events will undoubtedly be the subject of rigorous cross examination at the trial, and the wife’s claim will ultimately succeed or fail on the evidence. I will now turn to whether the wife should be granted leave to amend the pleadings.
Should the wife be granted leave to amend the pleadings
Senior Counsel for the relevant respondents submitted the wife should not be permitted to further amend the pleadings.
The affidavit of Mr WW filed 25 January 2023 sets out orders made on 12 August 2022 and 16 November 2022 requiring the wife to file and serve amended points of claim, and the respondents’ attempts to obtain particulars of the APOC, subsequent to the wife filing on 7 December 2022.
According to Mr WW, as at the date of filing his affidavit, 25 January 2023, he had not received a response to the further request for particulars.
Despite counsel for the wife not providing any explanation as to the failure of the wife’s representatives to respond to the further request for particulars, he submitted particulars could be filed and served within 28 days.
I will grant leave to the wife to file and serve particulars to rectify the identified defects in the APOC. Because this court is not primarily a court of pleadings, and cases are ultimately determined based on evidence before the court during a trial, it may be that rectification of the APOC may never be perfected. The ultimate trial will be determined on the evidence before the court, obtained through the process of discovery and disclosure, oral evidence, and cross-examination of witnesses. I will make the appropriate orders, to provide for the wife to amend the APOC within 28 days of these orders.
I now turn to the next application before the court.
THE WIFE’S APPLICATION PERTAINING TO PROPOSED 13TH AND 17TH RESPONDENTS
Pursuant to these applications, the wife seeks to join additional parties to the proceedings, injunctive relief against several respondents, a sale of the Suburb EE and Suburb T properties and her application for interim property distribution.
Documents relied upon
The wife relies on the following documents:
(i)Amended Application in a Proceeding filed 7 October 2022 (but only as to Orders 2, 6, 8, 14-22 and 24-28);
(ii)Amended points of claim filed 7 December 2022;
(iii)Affidavit of the wife filed 16 February 2024
(iv)Consolidated affidavit of the wife sworn and filed 14 December 2022;
(v)Exhibits to the wife’s affidavit sworn and filed 14 December 2022;
(vi)Costs notice filed 28 February 2024;
(vii)Case Outline filed 28 August 2023;
(viii)Documents tendered by counsel; and
(ix)Reasons for judgment of the Honourable Justice Riethmuller dated 9 March 2023 in Antoun & Antoun [2023] FedCFamC1F 129
The proposed 13th and 17th respondents rely on the following documents:
(i)Response to an Application in a Proceeding filed 15 November 2022;
(ii)Affidavit of Mr C, the second respondent, filed 15 November 2022.
I will first deal with the issue of joinder.
Joinder Application
The wife’s submissions – 13th proposed respondent
The wife seeks to join to the proceedings, the putative 13th respondent, H Group (“H Group”), which is the registered proprietor of the S Street property. She also seeks to join the putative 17th respondent, Q Pty Ltd, which is the lessee of the S Street property.
In relation to the proposed 13th respondent, in her Amended Application in a Proceeding filed 7 October 2022 at paragraph 24, the wife seeks leave to join H Group, the registered proprietor of the S Street property, as the 13th respondent to the proceedings. In her Further Amended Initiating Application filed 9 November 2022, at paragraph 37 of the final orders sought by the wife, she seeks a declaration pursuant to s 78 of the Act that the proposed 13th respondent (H Group), holds its interest in the S Street property on trust for the husband. At paragraph 38, she seeks a declaration pursuant to s 78 of the Act that, between late 2017 and early 2018, Ms G, XX Pty Ltd, H Pty Ltd, and H Group entered into a joint venture with respect to the S Street business. At paragraph 39 she seeks XX Pty Ltd account to her for all funds advanced to it by H Pty Ltd or H Group and/or pay equitable compensation.
In the wife’s Outline of Case filed 28 August 2023, she advanced the following reasons as to why H Group should be joined to the proceedings:
(i)Between February 2018 and April 2018, XX Pty Ltd transferred no less than $1,150,000 to H Group or H Pty Ltd;
(ii)In or about early 2018, H Group changed its registered office to the Suburb T property and on the same day appointed the husband as a director;
(iii)In or about mid-2018, H Group acquired the S Street property;
(iv)In or about mid-2020, the husband lodged a development application with the relevant council with respect to the construction of the business on the S Street property; and
(v)The wife alleges the husband and his brother-in-law (Mr C, the 3rd respondent), XX Pty Ltd, H Pty Ltd and H Group entered into a joint venture to acquire and develop the S Street property.
To define the matrimonial property pool, it is necessary to join H Group to the proceedings and the rights of third parties may be affected by any consequential order of the court.
The gravamen of the wife’s claim seems to be, although not specifically stated by her counsel, (but seemingly pleaded at [151]-[156] of the APOC) that the husband has masterminded the transfer of funds from XX Pty Ltd, either directly or via Ms G/the fourth to sixth respondents, to acquire the S Street property in the name of H Group. Funds have also been transferred to H Pty Ltd. The husband’s involvement is demonstrated by his signing various bank documents, including mortgages, in his capacity as a director of H Group (although not a shareholder), references to him in the bank file notes, and his participation in the development applications for the proposed construction of the business on the S Street property.
Counsel for the wife took the court to documents annexed to the wife’s affidavit of February 2024 and in her court book. Annexure MSA-38 is an extract of the bank account of XX Pty Ltd which demonstrates the sum of $425,000 was paid from XX Pty Ltd into the account of H Group on 30 April 2018, which enabled the purchase of the S Street property in mid-2018. Paragraph 139 of the wife’s APOC sets out significant transfers of funds between February 2018 and April 2018, from XX Pty Ltd to either H Pty Ltd or H Group.
Annexure MSA-42 the wife’s affidavit is a transfer of land and title search for the S Street property which demonstrates H Group was registered as proprietor of the property in mid-2018. In mid-2022, a proposed development application (DA) was lodged with the relevant council for the construction of a business on the property. Exhibit MSA-41 to the wife’s affidavit is a copy of the DA. A remediation and geotechnical report lodged in conjunction with the DA, is addressed to the F Pty Ltd (F Pty Ltd) per Exhibit MSA-44. The development application was paid for by F Pty Ltd, as demonstrated by Exhibit MSA-45.
In early 2021, the DA lodged by the husband was approved, which confirmed the cost of construction for the business is $1,686,250, with the husband as the applicant on the development application.
Counsel for the wife then referred to the second issue pertaining to joinder of H Group; the transfer of the shares in H Pty Ltd to the 3rd respondent for gross undervalue, which he submitted demonstrated a common intention between the husband and the 3rd respondent. Counsel for the wife agreed, the wife effectively alleges the 3rd respondent is operating a business, H Group, which was formerly the core business of the husband and wife and has been set up under a new corporate structure, H Group. The company formerly known as H Pty Ltd (now called AC Pty Ltd) is in liquidation, and the liquidator is claiming the husband and the wife owe substantial amounts to the company.
Counsel for the wife submitted because H Pty Ltd was placed in liquidation in late 2023, the wife may require some time to obtain advice as to whether the company should be reinstated and whether she should commence a derivative action against the company. When asked about the wife’s position if this court does not have jurisdiction to order an account of profits, counsel for the wife submitted that it can be saved by the accrued jurisdiction in this court. He distinguished this matter from the case of Warby & Warby [2001] FamCA 1469 whereby there was no common substratum of facts and submitted that “only one court ought to do with a factual dispute as to the transfer of shares in [H Group] to the second – third respondent, and the assertions regarding the value of that entity when it was transferred, matrimonial issues within a matrimonial cause, and therefore fit within one of the Warby factors, part of the High Court’s decision in [Re Wakim]” (Transcript 1 March 2024, p.61, lines 12-16).
In reply, senior counsel for the 4th, 5th, 6th, and 12th respondents submitted that “one does not reinstate a company in liquidation. Reinstatement is only relevant when a company is deregistered” (Transcript 12 March 2024, p.25 lines 18-19). Furthermore, because the wife is not seeking to advance a claim in the name of the second respondent, but rather is suing the second respondent, it cannot be a derivative action. Senior counsel then elaborated that having gone into liquidation, s 471B of the Corporations Act 2001 (Cth) is an effective stay in relation to any proceedings in a company in liquidation and provides that a proceeding against a company cannot begin or proceed except with the leave of the court, which includes this Court in Division 1. Furthermore, in relation to accrued jurisdiction, senior counsel for the relevant respondents further posited that the question of accrued jurisdiction is not even relevant, as he asserts the wife has no claim or standing for any equitable or common law relief to begin with.
Submissions of the proposed 13th respondent in response.
As to joinder of the 13th respondent, senior counsel for the proposed respondent submitted, at paragraph 37 of the wife’s Amended Initiating Application filed 9 November 2022, she seeks a declaration involving various entities, in circumstances where she does not propose to join XX Pty Ltd and where H Pty Ltd (as it was formerly) was placed in liquidation in late 2023.
At paragraph 39 of the wife’s Amended Initiating Application filed 9 November 2022, she seeks XX Pty Ltd account to her for all funds advanced by it, to the two entities, when XX Pty Ltd is not a party to the proceedings, and that claim must fail.
The wife is effectively seeking a declaration about an entity, XX Pty Ltd, which is not a party to the proceedings and a declaration pursuant to s 78 of the Act, that certain parties entered into a joint venture agreement, where the court lacks power to make that declaration. The relief sought by the wife at paragraphs 38 and 39 of the wife’s Amended Initiating Application filed 9 November 2022 must fail and cannot be the basis of any joinder.
The remaining relief sought by the wife is at paragraph 37 of the Amended Initiating Application filed 9 November 2022, where she seeks orders that the proposed 13th respondent holds the S Street property on trust for the husband. Senior counsel for the 13th proposed respondent submitted the relief sought at paragraph 37 is not open to the wife because she has not at any stage in the proceedings asserted, or in any document filed by her asserted, that the husband has made any form of contribution to the purchase of the S Street property, nor has it been it asserted, the husband has ever had any interest in the proposed 13th respondent. Rather, she has asserted XX Pty Ltd has made the financial contributions but has not sought to join XX Pty Ltd to the proceeding.
As to the joint venture allegation and the relief sought against the proposed 13th respondent, senior counsel for the 13th proposed respondent adopted the submissions of senior counsel for Ms G and the fourth to sixth respondents, because the relief sought at paragraphs 37 to 39 of the Further Amended Initiating Application is the same common intention constructive trust arrangements which have been identified in relation to the S Street property.
As to the wife’s purported attack on the transfer of the shares in H Pty Ltd, senior counsel drew my attention to a letter from the husband’s then solicitors to the wife’s then solicitors dated 12 September 2017 that the wife was put on notice of the husband’s intention to sell H Pty Ltd to the third respondent, including provision of a proposed contract the sale, ATO records of the company, a garnishee notice, and the 2016 financials and tax returns. An abundance of information was provided to the wife to put her on notice, but rather allowed it to proceed until seeking to set aside a transaction in these proceedings of the husband’s proposed sale to the third respondent and the terms of that sale. Despite the provision of that information, the wife did not engage in any action with respect to the proposed sale.
Notwithstanding the persuasive submissions about defects in the wife’s pleadings as they currently stand, considering the allegations of the wife, I am persuaded there are sufficient grounds to warrant joinder of H Group as a party to the proceedings and that the company’s rights may be affected, and participation of the company is necessary for the court to determine all issues in the proceeding.
There are obvious deficiencies in the pleaded APOC, and the wife will be afforded an opportunity to amend the APOC.
Proposed 17th respondent
As to the proposed 17th respondent, at paragraph 28 of the Amended Application in a Proceeding filed 7 October 2022, the wife seeks to join Q Pty Ltd (“Q Pty Ltd”) as a party to the proceeding. The relief the wife seeks against Q Pty Ltd is at paragraph 43 of her Further Amended Initiating Application filed 9 November 2022. At paragraphs 44 and 45 of the Further Amended Initiating Application, she seeks relief against two other entities, namely Q1 Pty Ltd and R Pty Ltd.
Wife’s submissions – proposed 17th respondent
The wife’s complaints about Q Pty Ltd are referred to at paragraphs 325 to 335 of her 16 February 2024 affidavit. Q Pty Ltd was registered in 2016 and the sole director and shareholder was the 3rd respondent. In early 2022 Ms AB was appointed the sole director and continues to hold that position.
The wife alleges Q Pty Ltd received loans in the 2017 financial year from H Pty Ltd totalling $1,176,808. The funds advanced were used to purchase high-value stock for the business conducted by the company. She asserts the company is “a company of the husband’s” and he initially installed his brother-in-law as a director and shareholder, and then Ms AB as sole director, to avoid any assets of Q Pty Ltd forming part of the matrimonial pool of assets. In addition to the funds advanced by H Pty Ltd, other companies associated with the husband, including K Pty Ltd (“K Pty Ltd”), have advanced funds to Q Pty Ltd in both the 2017 and 2018 financial years. Financial statements of H Pty Ltd produced via discovery in these proceedings demonstrate further advances have been made to Q Pty Ltd in the 2018, 2019 and 2021 financial years, which total $378,853.
In her Outline of Case filed 28 August 2023, the wife advanced a number of reasons as to why the proposed 17th respondent should be joined, which are as follows:
(i)In or about early 2016 Mr C (third respondent) transferred five shares in Q1 Pty Ltd to the husband. The remaining five shares were held by R Pty Ltd;
(ii)In early 2018 Mr C’s accountant withdrew the transfer of shares to the husband. The wife asserts that that transaction was to defeat an anticipated court order. In early 2022 the third respondent caused Q1 Pty Ltd to be deregistered;
(iii)The wife seeks an account of profits for the value of the five shares in Q1 Pty Ltd;
(iv)In early 2016 the third respondent registered Q Pty Ltd and between 1 July 2016 and 30 June 2017, H Pty Ltd transferred to Q Pty Ltd $1,176,808; and
(v)In late 2017 the husband, on behalf of K Pty Ltd and the third respondent on behalf of Q Pty Ltd entered into a lease on non-commercial terms with respect to the Suburb EE property, which the wife alleges is a transaction made to defeat an anticipated court order.
Q Pty Ltd should be joined to the proceedings given the interests of numerous parties are unable to be defined and rights of the third parties may be affected by an order of the court.
Submissions of the proposed 17th respondent in response
The relief sought by the wife at paragraphs 182–190 refers to both Q1 Pty Ltd and Q Pty Ltd. The transfer of $1,176,808 to Q Pty Ltd by H Pty Ltd, which created a loan account, was outstanding as at the date of transfer of the H Pty Ltd shares to the 2nd respondent and the wife was aware of the transactions.
Senior counsel for the wife submitted the wife’s own material acknowledges Q1 Pty Ltd has been deregistered for a number of years and there has not been any application for reinstatement of the company. Furthermore, the relief sought against Q Pty Ltd at paragraph 43, does not make sense.
Senior counsel for the 17th respondent submitted that nowhere in the wife’s documents did she seek to impugn any of the interrelated transactions nor any of the transactions (despite having documentation pertaining to the loans for years), nor did any of the transactions give rise to a trust as asserted by the wife.
I am persuaded there are sufficient grounds to warrant joinder of Q Pty Ltd as a party to the proceedings and that the company’s rights may be affected and to participation of the company is necessary for the court to determine all issues in the proceeding.
At the very least, the wife alleges the lease encumbering the Suburb EE property is not at arm’s length. If the wife is successful in those assertions, any consequential orders made pertaining to the lease may well affect Q Pty Ltd. There are obvious deficiencies in the pleaded APOC, and the wife will be afforded an opportunity to amend the APOC.
I now turn to the next application before the court.
WIFE’S APPLICATION FOR SALE OF PROPERTIES AND A PARTIAL PROPERTY SETTLEMENT
The wife seeks the sale of two properties and distribution to her of $500,000 of the proceeds of sale. The husband agrees to the sale of the properties but does not agree with the wife’s proposed distribution of the proceeds of sale.
Documents relied upon by the parties
The wife relies upon the following documents:
(i)Amended Application in a Proceeding filed 7 October 2022 (but only as to Orders 2, 6, 8, 14-22 and 24-28);
(ii)Amended points of claim filed 7 December 2022;
(iii)Affidavit of the wife filed 16 February 2024
(iv)Consolidated affidavit of the wife sworn and filed 14 December 2022;
(v)Exhibits to the wife’s affidavit sworn and filed 14 December 2022;
(vi)Costs notice filed 28 February 2024;
(vii)Case Outline filed 28 August 2023;
(viii)Documents tendered by counsel; and
(ix)Reasons for judgment of the Honourable Justice Riethmuller dated 9 March 2023 in Antoun & Antoun [2023] FedCFamC1F 129
(x)Affidavit of Ms AD filed 28 February 2024;
The husband relies on the following documents:
(i)Response to Application in a Proceeding filed 14 July 2022;
(ii)Amended Response to an Amended Application in a Proceeding filed 15 February 2024;
(iii)Affidavits of the husband filed 22 August 2023 and 26 February 2024 together with exhibited documents;
(iv)Financial Statement filed 20 December 2022;
(v)Financial Statement filed 15 February 2024;
(vi)Documents tendered by counsel;
(vii)Outline of Case filed 28 August 2023; and
(viii)Proposed Minute of Order forwarded to the court on 12 March 2024.
Counsel for all other parties present sought to be heard on the issue of distribution of the proceeds of sale, because any such distribution may impact on the capacity of the respective parties to recover any costs which may be ordered against the wife.
The wife seeks the sale of the properties and the distribution of proceeds to her as either a partial property settlement pursuant to s 79(4) and s 80(1)(h) of the Act, or payment of costs pursuant to s 117 of the Act.
In her written submissions, the wife characterised her application as one pursuant to s 79(4) of the Act. Because there were no oral or written submissions about the distribution of the property under an order pursuant to s 117 of the Act, I will consider the application under s 79(4) of the Act.
Relevant legal principles
The relevant principles are well established.
As to the court’s power to order interim funding and the principals to be applied, the Full Court of the Family Court in Strahan & Strahan (2009) FLC 93-466 stated at [132] and [137] that:
[132]In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the "overarching consideration" is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.
…
[137]Once a court proceeds to exercise the power in s 79 of the Act, being in the substantive phase, a court is required to undertake consideration of the matters in s 79(4) including by reference to s 79(4)(e) the matters in s 75(2) so far as they are relevant. However consideration of such matters may be brief and if it is established that "it seems likely to the court that … the applicant … will be likely receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made”…
As to the restraint and caution which should be exercised by a trial judge, the Full Court said at [136]:
[136]As to the third matter identified at 79,930 by the Full court in Harris, in discussion before us it was described as the "adjustment issue" or "claw-back issue". It was submitted by senior counsel for the Wife that it is relevant to consider whether an order would give the applicant "more than they would be indubitably entitled to on a final hearing" or alternatively "would it give them so much that it could not be adjusted on a final hearing?" As we have observed the Full court in Zschokke at 83,220–221 stressed the importance of consideration of the "adjustment issue" if the power in s 80(1)(h) of the Act is being exercised. We accept the submission and observe that this matter is relevant because the discretion conferred by the power in s 79 is to make such order as the court considers appropriate provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order. As Bryant CJ and Coleman J observed in Gabel v Yardley at [69] and [72] the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal. As Finn J said at [126] the interim order must be "capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power".
See: Bearup & Bearup (1993) 16 Fam LR 797, Harris & Harris [1993] FamCA 49, the decision of Murphy J in Furtado & Furtado [2011] FamCA 1018 at [10]-[11] and Watts J in Zadenev & Zadenev [2013] FamCA 838 at [21].
Submissions on behalf of the wife
The properties the wife seeks to sell are situated at Suburb EE and Suburb T. The registered proprietor of both properties is K Pty Ltd, which is the trustee of the Antoun Family Trust. The wife is the appointor of the trust. The wife was previously a director of K Pty Ltd but was removed as a director by the husband in mid-2015. The husband is the sole shareholder and sole director of the company.
According to the wife’s affidavit, the Suburb EE property is commercial vacant land, which was purchased in 2012 for $725,000 and was then encumbered by a mortgage of $653,000 in favour of NAB. In mid-2017 a lease was registered on the title to the property in favour of Q1 Pty Ltd, with the commencement date late 2015 despite Q1 Pty Ltd not being registered with ASIC until early 2016. In early 2019 a surrender of that lease was registered, and a new lease was also registered on title, in favour of Q Pty Ltd. The lease commenced in late 2017 and continues until late 2027, with a 10-year option and two further five-year options. The rent pursuant to the lease is $18,000 per annum with annual increases of 3.5%.
According to the wife, at separation the amount required to discharge the mortgage on the Suburb EE property was $567,000. In mid-2017 the original loan was discharged by means of the payment from the ANZ bank of $568,856. A month later the refinanced mortgage with ANZ was registered on the title to the Suburb EE property. The amount outstanding to the ANZ bank upon refinance was $775,000, an excess of $206,143 over the amount required to discharge the NAB mortgage. The wife deposes that the ANZ refinance mortgage secured against the Suburb EE property was also cross collateralised against the Suburb T property.
The Suburb T property was purchased in 2015 for the sum of $630,000 and was the premises from which H Pty Ltd carried out its business. The purchase price was funded by a mortgage from ANZ bank of $555,000.
In 2017, the husband refinanced the mortgage and increased the loan to $700,000, with the surplus $155,000 ostensibly to assist with the payment of the balance purchase price of another property. At the time of the refinance of the Suburb EE property in late 2017, the mortgages against both properties were cross collateralised.
H Pty Ltd leased the Suburb T property as did another company, H3 Pty Ltd.
The lease to H3 Pty Ltd (“H3 Pty Ltd”) ostensibly commenced in late 2015 for a 20‑year period, with an option for a further 20 years. It was registered on title in early 2017.
The wife asserts the value of both properties has been adversely affected by the non-arm’s-length leases entered into by the husband. She also asserts the equity in the properties has been diminished by the refinancing undertaken by the husband in 2017, and he has received the benefit of approximately $200,000 from the refinance of the Suburb EE property.
Unbeknownst to the wife, in early 2022 the husband again refinanced the loan against both properties by borrowing an additional $635,970, without the wife’s knowledge or consent. She discovered the increase in the mortgage on the properties when the husband filed his affidavit of 15 July 2022.
The estimated combined value of both properties is approximately $4,500,000 and the mortgages encumbering the properties are estimated to be $1,700,000. Both properties will attract capital gains tax upon sale.
The wife submits she requires an interim property distribution to enable her to meet the costs of litigation, and relies upon three factors as being relevant to the making of such an order, as identified in the Marriage of Zschokke (1996) 20 Fam LR 766 at 783. These are, a position of relative financial strength on the part of the husband, the husband’s capacity to meet his own legal costs and an inability on the part of the applicant to pay her costs.
As to the first step, in her written submissions, the wife identified a need to meet her legal expenses. It was obvious the husband was in a far superior financial position and has demonstrated the ability to raise significant capital, when required from his various business ventures. It is in the interests of justice for the court to exercise the power in circumstances where the wife’s financial circumstances in comparison to the husband are significantly weaker.
As to the second step, the wife submitted having regard to the length of relationship, the obvious contributions made by her, both financial and non-financial, having regard to relevant factors outlined in s 75(2) of the Act, and the husband’s acceptance that she would be entitled, to 50% of the assets the division, is sufficient to determine the wife’s entitlement to a partial property settlement to do justice and equity between the parties.
Furthermore, having regard to the relative financial positions in existing interests in property, an interim property division of $500,000 to the wife would be within what the court would find the wife should be entitled to receive on the completion of the discretionary exercise pursuant to s 79(4) of the Act The remaining property would be sufficient to meet the legitimate expectations of both parties at the final hearing and would be capable of being reversed or adjusted if subsequently necessary to do so.
According to counsel for the wife, the Suburb EE property is valued about $1,900,000, subject to the lease to Q Pty Ltd and is encumbered by a combined mortgage of about $1,700,000. The value of the Suburb T property is $2,600,000, subject to the lease registered to H3 Pty Ltd. Both properties are subject to capital gains tax.
Counsel for the wife submitted the alleged loans to AC Pty Ltd would fall within the line of authority from In the Marriage of Af Petersons (1981) FLC 91-095; In the Marriage ofBiltoft (1995) FLC 92-614 and should be disregarded.
The quantum of the wife’s costs are set out in her Costs Notice filed 28 February 2024. The actual costs incurred to date are $834,050, of which $106,149 .97 have been paid.
Submissions on behalf of the husband
The husband agrees with the proposed orders providing for the sale of both properties but does not agree that the wife should receive $500,000 from the proceeds of sale, or indeed any sum at all. In the alternative, if the wife receives any sum from the sale, he should be entitled to receive a similar amount.
According to the husband’s affidavit filed 22 August 2023, the husband deposes that he did not personally benefit from the refinancing and extension of the mortgages encumbering the properties, as these amounts were applied towards the acquisition of other properties, in Suburb JJ and Suburb LL, which are included in the pool of assets available for distribution between the parties.
Counsel for the husband submitted that the proceeds of sale of the properties should be distributed in accordance with his proposed minute. In relation to the proposed sale of the Suburb T property, the proceeds should be distributed as follows:
(i)Pay sale costs;
(ii)Discharge the mortgage to ANZ to provide clear title to the incoming purchaser;
(iii)Pay adjustable outgoings;
(iv)Pay CGT arising from the sale, estimated at $517,735.
(v)Discharge the amount owing by the Antoun Family Trust to AC Pty Ltd (in liquidation) formerly known as H Pty Ltd;
(vi)Discharge the amount owing by the parties jointly and by the husband to AC Pty Ltd (in liquidation);
(vii)Pay the balance remaining into an account held in the name of K Pty Ltd.
In relation to the proceeds of sale of the Suburb EE property, the proceeds should be distributed in accordance with (i)–(iv) of the preceding paragraph, and otherwise paid into an account in the name of K Pty Ltd.
Counsel for the husband agreed with the valuations of the two properties, save that he submitted because the lessee was a related entity, the lease could be terminated and the higher valuation of $2,900,000 could be adopted. He referred to the estimates of value and outgoings referred to at paragraphs 31–33 of the husband’s affidavit filed 26 February 2024. The husband estimates the sale proceeds of Suburb EE, after taking into account selling costs, discharge of both mortgages and anticipated capital gains tax, would be $105,193. The net proceeds of sale of Suburb T, after taking into account the same liabilities, would be $635,001. If both properties are sold there would be an additional $1,718,263 available, because the mortgage would be discharged from the settlement of the first sale.
Counsel for the husband submitted the total liability owing to AC Pty Ltd (formerly H Pty Ltd) was around $1,927,000, being the demand made by the liquidator to the various entities under the parties control. H Pty Ltd was the company sold to the third respondent for $115,000 in consideration of him assuming the tax and some other liabilities of the company. Counsel for the husband conceded he was asking the court to pay the amounts sought by the liquidator, in circumstances where the wife may well dispute the debts claimed, but the husband did not.
Counsel sought the balance of funds be placed into an account of K Pty Ltd, but conceded he would agree to the funds being placed in a controlled monies account, provided that the outgoings are met.
Counsel for the husband then addressed the court about the property pool available for distribution between the parties. There are different views about the value of the RR Street property occupied by the wife and the mortgage encumbering it. According to the wife, the property is worth around $1,000,000 and subject to a mortgage of around $400,000. According to the husband, the property is worth about $850,000 and the mortgage is around $264,000. There are no formal valuations in relation to property situated at Suburb LL, or at Suburb JJ, both of which are owned by companies and/or trusts, rather than the parties themselves. There is no valuation of the property situated at FF Street, Suburb GG, which again is held by a trustee of a trust associated with the parties, or the value of the husband’s shares in XX Pty Ltd. There were no estimates of potential tax payable by distributing assets of companies and trusts to the husband and wife personally, and that would be an additional liability to be factored into the pool. The husband’s current position is that the wife should receive no more than 20% of the pool in circumstances where assets which now have been acquired as a result of the husband’s post separation exertion, and where he has parented and paid for the outgoings of the two younger children.
The third respondent claims the husband-and-wife and associated entities are indebted to him for approximately $1,478,000, for personal loans he has advanced them, which are particularised at paragraph 28 of his affidavit filed 15 November 2022.
As to payment of their respective costs, counsel for the husband advised the husband had paid his legal costs of $788,204 up to 31 December 2023, through borrowing from the third respondent. In the husband’s affidavit of 26 February 2024 at paragraph 41, he deposed to owing further legal fees of $335,166 to H Pty Ltd and $86,955 to H3 Pty Ltd. He submitted the wife had effectively borrowed from her solicitors and counsel, (by not paying her outstanding costs of $732,312.36) which left the husband-and-wife in relatively the same position. I do not accept the proposition that the husband and wife are in a similar position vis a vis legal costs, because the wife owes hundreds of thousands of dollars to her lawyers and the husband clearly does not.
In summary, counsel for the husband’s position was that there may well be insufficient funds to satisfy the wife’s potential claim at the end of the day, and she should not get anything from the sale of the properties other than retaining her interest in the RR Street property of around $600,000.
Submissions on behalf of the other parties
Senior counsel for the other groups of respondents were invited to make submissions. All three senior counsel made similar submissions, to the effect that the proceeds of sale of both properties should be placed into a controlled monies account, after payment of costs of sale, and adjustable outgoings and discharge of the two mortgages.
Senior counsel for the 2nd and 3rd respondents submitted the wife’s application was premature in circumstances where the court was unable to be satisfied as to what was the property of the husband and wife and associated entities at this stage, and particularly take into account the claim for approximately $1,400,000 million which the third respondent claims he has advanced to the parties, excluding the advances to the husband for legal fees.
The 2nd and 3rd respondent and the proposed 13th and 17th respondent’s, according to the Costs Notice filed 28 February 2024 have incurred costs of $932,354 to date and do not agree to the wife or her solicitors’ receiving funds by way of interim property or interim litigation funding in priority to those parties.
Additionally, the 4th,5th,6th, and 12th respondents have incurred costs, according to their cost notice of around $350,000, with additional costs of trial to be estimated at $900,000.
Leaving aside the costs incurred by Ms BB, if the wife is unsuccessful at trial, there will likely be costs applications in the vicinity of $1,700,000 to $1,800,000, in circumstances where it is unknown at this stage what the pool of assets is.
Senior counsel for Ms BB submitted there was no cost notice before the court because her client had not been joined, but she indicated the costs incurred were more than $160,000. If Ms BB is not joined, she anticipated receiving a costs order in her favour which she would seek to be promptly enforced.
Senior counsel for Ms G and the fourth to sixth respondents submitted the costs incurred by his clients, in accordance with the cost notice, were $372,773. The court should not make any order for the release of funds to the wife until the issues of costs claimed by all parties are determined.
CONCLUSION
After hearing submissions from all relevant parties, I prefer and accept the submission of the wife’s counsel, excluding as to quantum, and determine the net proceeds of sale, after payment of sale costs, apportionable outgoings and discharge of both mortgages encumbering the properties, should be distributed as to $250,000 to the wife as partial property settlement and the balance should be placed into a controlled monies account, as provided in the draft minute.
In reaching my decision, I have had regard to all considerations raised in the submissions of all counsel, and in particular but not exclusively, to the following factors:
·The submissions of the wife’s counsel as to whether it is appropriate to exercise my discretion;
·There is an obvious imbalance in the capacity of the wife and husband to meet legal fees as demonstrated by the respective costs notices, where the wife has been unable to pay the majority of her costs, but the husband’s costs have been paid, albeit he asserts via loans;
·A level playing field is in the interests of justice see: Watts J in Osferatu & Osferatu [2012] FamCA 408 and this would, at the very least, enable the wife to pay her lawyers to enable rectification of any defects in the manner her case has to date, been framed;
·The submissions of the wife’s counsel about the required second step, as to s 79(4) and s 75(2) factors, although brief, and note there was no attempt to address the relevant considerations by the husband’s counsel or senior counsel for the non-spouse parties.
·All respondents submitted the wife would be entitled to receive between $600,000 and $700,000, although the pool has yet to be determined and valued.
·The amount of $250,000 is significantly less than the entitlement of the wife, as submitted by the respondents, and on any view, the wife would be entitled to that sum in a final division of property.
·The sum of $250,000 strikes a balance between the competing claims to the proceeds of sale of the properties.
·The costs submissions of all three senior counsel for the non-spouse parties, that all funds should be placed in trust pending the determination of possible costs claims by their respective clients:
·Are tantamount to seeking security for costs, in the absence of an application for same;
·Do not seem to consider s 117(1) of the Act where the starting point is that each party to proceedings shall bear his or her own costs, rather than costs follow the cause.
I will make orders accordingly.
I certify that the preceding two hundred and twenty-six (226) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Williams. Associate:
Dated: 27 May 2024
SCHEDULE OF PARTIES
PAC 796 of 2017 Respondents
Fourth Respondent:
D PTY LTD
Fifth Respondent:
E PTY LTD
Sixth Respondent:
F PTY LTD
Proposed Seventh Respondent:
W PTY LTD
Proposed Eighth Respondent:
MS BB
Proposed Ninth Respondent:
MR Z
Proposed Tenth Respondent:
H3 PTY LTD
Proposed Eleventh Respondent:
H2 PTY LTD
Twelfth Respondent:
MS G
Proposed Thirteenth Respondent:
H GROUP
Proposed Fourteenth Respondent:
NN PTY LTD
Proposed Fifteenth Respondent:
NN1 PTY LTD
Proposed Sixteenth Respondent:
NN2 PTY LTD
Proposed Seventeenth Respondent:
Q PTY LTD
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