Arnold & Arnold

In *Arnold & Arnold*, the wife sought property settlement orders against the husband and joined two companies, B Pty Ltd (the second respondent) and E Pty Ltd (the third respondent), as parties to the proceedings. The second and third respondents applied for their disjoinder and dismissal from the substantive proceedings, arguing that the wife had no reasonable prospects of success against them and that they were not necessary parties. The wife opposed this application.

The central legal issue before the court was whether the second and third respondents should be removed as parties to the property settlement proceedings. This required the court to determine if the wife had asserted sufficient facts to justify their joinder and whether she had reasonable prospects of success against them, considering the potential impact on the contractual rights of non-party shareholders. The court approached this application by applying principles analogous to those governing summary dismissal.

Carew J reasoned that the wife's claim against the second and third respondents lacked reasonable prospects of success. The court found that there appeared to be a reasonable alternative to the orders sought against these companies, such as an order for the sale of the husband's shares in the event of default. Furthermore, the wife's interests could likely be protected by other means, and the costs associated with providing procedural fairness to the respondents and potentially other affected parties would be considerable. Consequently, the court concluded that the second and third respondents were not necessary parties to the proceedings.

The court ordered that the second and third respondents be removed as parties to the proceedings and dismissed paragraphs 13 to 16 of the wife's amended Initiating Application, which were directed at these respondents. All outstanding applications for interim relief were also dismissed, save for any applications relating to costs.