Beckstead & Beckstead - [2021] FCCA 566

FEDERAL CIRCUIT COURT OF AUSTRALIA

Beckstead & Beckstead [2021] FCCA 566

File number(s):	MLC 7993 of 2019
Judgment of:	JUDGE HARLAND
Date of judgment:	25 March 2021
Catchwords:	FAMILY LAW – application for joinder – husband seeks to join wife’s former solicitor – wife seeking to set aside binding financial agreement – whether or not the husband has an arguable claim under the Trade Practices Act - whether or not the court has original jurisdiction – whether or not the joinder application is premature.
Legislation:	Trade Practices Act 1974 (Cth) ss 6(3), 52 Family Law Act 1975 (Cth) ss 79(4)(e), 90G, 90G(1)(b) Competition and Consumer Act 2010 (Cth) Federal Circuit Court Rules 2001 (Cth) rule 11.01 Federal Circuit Court Act 1999 (Cth) s 18 Fair Trading Act 1999 (Vic) ss 9, 158
Cases cited:	Boland v Yates (1999) 167 ALR 575 Rasch Nominees Pty Ltd v Bartholomaeus [2012] SASC 70 Re Pamela Snyman v Laura Isabella Cooper; Allan John Cooper and Ors [1989] FCA 500 Banks v Galea [2019] FCA 986 Mortensen v Enviro Water Tanks Pty Ltd [2020] FCCA 1951 F Firm & Ruane and Ors [2014] FamCAFC 189 Noll & Noll and Anor [2013] FamCAFC 24 ReWakim; Ex parte McNally (1999) 198 CLR 511 Reed & Reed [2016] FCCA 1338
Number of paragraphs:	77
Date of last submission/s:	16 December 2020
Date of hearing:	16 December 2020
Place:	Melbourne
Counsel for the Applicant:	Ms Costello QC
Solicitor for the Applicant:	Cargill Family Law
Counsel for the Respondent:	Ms Vohra SC
Solicitor for the Respondent:	MST Lawyers
Counsel for the Proposed Second Respondent:	Ms Smallwood SC
Solicitor for the Proposed Second Respondent:	Colin Biggers & Paisley

ORDERS

MLC 7993 of 2019
BETWEEN:	MR BECKSTEAD Applicant
AND:	MS BECKSTEAD Respondent
ORDER MADE BY:	JUDGE HARLAND
DATE OF ORDER:	16 DECEMBER 2020

THE COURT ORDERS THAT:

The application in a case filed on 12 August 2020 be dismissed.
The respondent wife and Ms B file and serve submissions with respect to their applications for costs within 21 days.
The husband file his response to submissions as to costs within 21 days thereafter.
Within 14 days the parties confer and submit a minute of order setting out the trial directions they seek.
The husband be granted leave to file a further application for joinder, after the determination of whether or not the financial agreement entered into by the parties on 24 June 2006 is binding and whether or not it should be set aside, provided that the husband annexes a draft statement of claim to that application in case.

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment under the pseudonym Beckstead & Beckstead is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

JUDGE HARLAND

The primary proceedings is with respect to whether or not the binding financial agreement entered into by the parties in 2006 should be set aside. On 17 July 2019 the husband filed an initiating application seeking a declaration that the financial agreement the parties entered into is binding. The wife filed her response on 12 September 2019 seeking to set aside the financial agreement she sought to be excused from particularising her claim pending receipt of full disclosure.
The interlocutory application I am asked to determine is the husband’s application for the wife’s former lawyer, Ms B to be joined as a party to the proceedings. The husband argues that she is a necessary party to the proceedings as he has a cause of action against her under the Trade Practices Act 1974 (Cth) (“TPA”) for misleading and deceptive conduct. The wife and Ms B oppose the joinder application. They argue the application is premature as the issue as to whether or not the agreement should be set aside is yet to be determined.
Rule 11.01 of the Federal Circuit Court Rules 2001 (Cth) address joinder applications and states as follows:
Necessary parties
(1)Subject to any order of the Court, a person whose participation is necessary for the Court to completely and finally determine all matters in dispute in a proceeding must be included as a party in the proceeding.
(2)The Court may require a person to be included as a party.
(3)A person required to be included as an applicant who does not consent to be included may be included as a respondent.
(4)The Court may decide a proceeding even if a person is incorrectly included or not included as a party.
In support of his joinder application, the husband says there are two disputes to be determined, one being between the husband and wife where the husband contends that the financial agreement should be found to be binding, and the other being between the husband and Ms B with respect to the certificate of independent legal advice she provided to the wife.
In essence the wife and Ms B argue that the joinder application is premature pending the determination as to whether or not the agreement is binding.
The issue as to whether or not the agreement is binding or should be set aside is listed for hearing in July 2021.
At the first return date on 18 September 2019, I listed the matter for a three day trial commencing on 10 September 2020 to determine whether or not the agreement is binding or should be set aside and made consent orders, which included the provision of various disclosure documents to be provided to each other.
On 1 June 2020, I made further directions including the order that the husband be at liberty to invite Ms B’s lawyer and/or her insurer to mediation and that liberty be reserved for either party to seek to join Ms B and/or her insurer to the proceedings.

BACKGROUND

The parties commenced cohabitation in mid-2001. They married in 2006 and separated in May 2017. They were divorced in January 2019. The parties entered into a binding financial agreement on 24 June 2006. It is common ground that the agreement is erroneously described as being pursuant to 90B instead of 90C, which the husband says can be easily rectified. Both parties had been married previously and had adult children. The husband says that it was their common intention for them each to retain their separate assets.
The wife says she entered into the agreement under duress from the husband. She makes other complaints about the agreement including that some terms are vague and uncertain. The husband disputes this.

THE HUSBAND’S APPLICATION IN A CASE

On 12 August 2020, the husband filed an application in a case seeking to join Ms B to the proceedings and seeking leave to file an amended initiating application referring to the Competition and Consumer Act 2010 (Cth) (“CCA”) and other relevant relief as well as filing pleadings and contentions of fact and law. In that application in a case the husband sought the following orders:
(1)Pursuant to Rule 11.02 of the Federal Circuit Court Rules2001, Ms B be included as a party to these proceedings.
(2)There be leave to the husband to file an Amended Initiating Application seeking orders against Ms B pursuant to the Competition and Consumer Act 2010 and any other relevant relief.
(3)There be directions for the filing of pleadings and/or Contentions as to Fact & Law as considered appropriate by this Honourable Court.
(4)Such further and other orders as this Honourable Court deems appropriate.
A major difficulty in this case is the lack of particularisation as to the precise nature of the parties’ respective claims. The husband says he is ready and willing to file a statement of claim noting that this has not been ordered. It is correct that an order to file a statement of claim has not been made, however this is because the parties were ordered to file contentions of fact and law, which should have provided sufficient particulars of the claims, such that the other party is in a position to have knowledge of the case they had to meet. I will refer to these in more detail later in these reasons.
In her response to the husband’s application in a case, the wife sought that orders be made “as deemed appropriate by this Honourable Court and that the husband pay the wife’s costs of the application”. The orders sought by the wife at first blush are quite curious. However, what is apparent when considering the written submissions, is that the wife’s primary position is that it is a matter between the husband and Ms B. In oral argument before me, Senior Counsel for the wife supported the submissions made on behalf of Ms B opposing the joinder and seeking costs.
The respondent wife opposes the joinder and supported the proposed second respondent’s submissions in this regard.
In order to determine whether or not Ms B is a necessary party to these proceedings and should be joined, it is necessary to give some consideration to the parties’ respective arguments about the agreement.
One of the difficulties in this matter is the lack of particularisation of the primary claims. The wife has not particularised her claim in the event if she is successful in having the agreement set aside. In her response dated 12 September 2019, the wife sought final orders:
(1)That the Court declare that the Financial Agreement between the parties dated 24 June 2006 is not binding and be set aside pursuant to a Section 90G(1)(b) of the Family Law Act 1975 (Cth) (“the Act”);
(2)That the Wife be excused from particularising her claim with respect to adjustment of property interests between the parties pursuant to Section 79 of the Act pending full financial disclosure from the Husband;
(3)That the Husband pay the Wife’s costs of and incidental to these proceedings on an indemnity basis; and
(4)Such further or other Order or Orders as this Honourable Court deems appropriate.
It is all too common to see parties referred to seeking leave to particularise their claims at a later date. The first point to note is that this is not a final order at all, yet more importantly it further leaves the parties and the Court in the dark as to the particular nature of the case. No doubt the wife would say that she is unable to particularise her claim without disclosure. This is a common refrain often made whilst at the same time relying on an affidavit that sets out assets and liabilities of the parties. Parties are able to amend their applications and responses when more information becomes available. Parties and the Court are entitled to know what the case is about. Parties cannot do that without properly particularising the relief they seek. At this stage, noting there has been orders for the exchange of various documents, as the claim remains un-particularised, it is impossible to know what potential difference in outcome there could be if the agreement is set aside and the parties litigate property adjustment proceedings. How can the parties consider the cost benefit analysis without this? This is something that needs to be considered now and not left to after the determination as to whether or not the agreement should be set aside. Given the parties have unsuccessfully attended mediation twice during these proceedings, there has presumably been some discussion about this in negotiations, but certainly it has not been articulated in the Court documents. Further, considering that the parties have committed significant financial resources to the litigation to date, I assume the potential difference in the outcome is significant.
In his affidavit filed in support of his joinder application, the husband says that he and the wife had many discussions prior to entering into the agreement. They both were married before and had their own assets and had children from their prior marriages. He says it was their common intention to keep their assets separate in the event of the breakdown of their relationship. He says they talked about assets they acquired together and that they would sell those assets or provide the other party with the option to buy out their interest.
Senior Counsel for the husband pointed out that a consequence of the agreement being set aside would be for his business to be included in the consideration of orders for property adjustment between the parties. Whilst that is true, it does not automatically flow that the outcome of the property adjustment proceedings will be significantly different to what is provided for in the financial agreement. There are many factors the Court must consider when determining a just and equitable property adjustment.
One of the issues of controversy between the parties is whether or not Ms B gave the wife independent legal advice and/or adequate legal advice. In his affidavit filed on 12 August 2020, the husband deposes that in early 2006, he found Ms B through a Bartercard directory website as he sought to pay his legal fees with Bartercard dollars through his business. He made an appointment for Ms B to prepare a binding financial agreement as well as wills and powers of attorney for both of them. He says Ms B did not explain that they would each need to be independently represented.
The husband says there was another meeting with Ms B a few months later, however he could not recall if it was before or after their wedding.
After further meeting with Ms B in April 2006, the parties executed the agreement in June 2006. The husband is of the view the parties executed the agreement at Ms B’s office. The husband says he believes he left the room whilst Ms B spoke to the wife, however cannot recall if Ms B saw them together or not and that for the first time, Ms B indicated to him that he would need to obtain independent legal advice and referred him to Mr C. Section 90G(1)(b) of the Family Law Act 1975 (Cth) (“the FLA”) requires each party to receive independent legal advice about the effect of the agreement before entering into it. The husband says at paragraph 13 of his affidavit filed on 12 August 2020 that he does not remember the circumstances of meeting with his lawyer and does not remember the date noting that his lawyer did not date the financial agreement. He says his lawyer witnessed his signature on the agreement and signed the certificate of independent legal advice. The husband said that he could not remember if he received any legal advice as to the contents of the agreement. The husband focuses on Ms B because he seeks to have the agreement upheld. It seems to me that there may be potential area for complaint with respect to the husband not receiving independent legal advice prior to entering into agreement.
At paragraph 14, he refers to the certificate of independent legal advice signed by Ms B and notes that notwithstanding this, the wife now alleges that she was not given that required legal advice. He also annexes a file note by Ms B of that meeting which was obtained under subpoena.
Significantly at paragraph 15, the husband says he relied on Ms B’s representation by signing the certificate of independent legal advice that she had provided that requisite advice and to the extent that the wife was not provided with that advice, he was misled by Ms B. He does not make any mention of misleading representations being made via telephone.
The husband also annexes and refers to the invoice received from Ms B which he paid via the Bartercard system. He says although the invoices addressed to the wife, his business address is used. He also refers to descriptions of the work done in the invoice and says he is referred to as the client or Mr Beckstead. It is not clear to me that he is being referred to as the client and not the wife. He concludes by stating that he seeks leave to join Ms B to the proceedings after two unsuccessful attempts at mediation with a member of the bar, noting that Ms B was invited to the second mediation, declined to attend, but said she could be subpoenaed to give evidence.

CONTENTIONS OF FACT AND LAW

On 10 September 2020, I made orders with respect to the joinder application and set out orders 4 to 7 as follows:
Within 21 days, the respondent wife file and serve Contentions of Fact and Law particularising with specificity the factual and legal basis (including pinpoint references to legislation and/or authority) upon which she seeks to set aside the financial agreement signed by the parties dated 24 June 2006.
Within 21 days of service of the wife’s Contentions of Fact and Law, the husband file and serve any Contentions of Fact and Law in response, including any claim against the proposed second respondent, particularising with specificity the factual and legal basis (including pinpoint references to legislation and/or authority) for such response or further claim.
Within 10 days of service of the husband’s Contentions of Fact and Law, the wife file any Contentions of Fact and Law in reply.
No later than 7 days prior to the adjourned hearing date, the husband, wife and proposed second respondent each file and serve a summary of argument as to the joinder application of no more than 10 pages.
Those directions were only partially complied with.

Wife’s contentions of fact and law

In her contentions of fact and law filed on 1 October 2020, the wife argues that the agreement should be set aside on several grounds:
(a)She did not receive independent legal advice as the lawyer advising her was Ms B and who was engaged by the husband, gave the husband advice on commercial matters, prepared wills for the parties and was paid by the husband;
(b)She also argues that the advice Ms B gave was inadequate. She did not receive advice about the advantages and disadvantages of entering into the agreement;
(c)The agreement is void, voidable or unenforceable due to various errors and uncertainties in the agreement;
(d)The agreement should be set aside because of the non-disclosure of the parties incomes, expenses, assets, liabilities;
(e)Undue influence.
The wife does not provide the factual basis of any particulars in support of her claim of undue influence.

Husband’s contentions of fact and law

The husband’s contentions of fact and law primarily address his contentions as to why the agreement should be found to be binding and enforceable. The husband argues that the parties had both been married previously and had adult children. They had a common intention to keep their assets separate. The parties started living together in 2001. In his contentions of fact and law:
“the husband and wife signed a co-habitation agreement on 26 June 2002 which demonstrated the husband and wife’s common intention to keep their assets separate and retain their own property if they separated.”
Anywhere in the material and the date is 26 June 4 years prior it could be that this is an error and was meant to refer to the 2006 agreement and not suggest that there had been an earlier cohabitation agreement under de facto legislation. No doubt this will be clarified in the evidence. At paragraph 13 she responds saying:
“as to paragraph 22, the wife disagrees and says that whilst a document was signed it was provided to the wife by the husband and drawn up by the wife’s business partner. It was provided with a short time for the wife to read and understand its consequences and whilst the wife signed it, it was upon the husband’s insistence for her to sign and without her having any advice as to its nature and an understanding as to its ramifications.”
This appears to refer to a different agreement and binding financial agreement. The parties married in 2006 and entered into the binding financial agreement in 2006.

The husband says that the parties received independent legal advice separately. The wife did not express any concern about the agreement prior to or after entering into it. The first time it was suggested the agreement was not binding was in 2019. Ms B’s file note refers to the following:
(a)“Advised client that if marriage break up she will have no claim to future needs against Mr Beckstead [and] vice versa”.
(b)“The terms of the agreement only will apply. Can only set aside agreement for misrepresentation, undue influence, duress or mistake”.
(c)“Ms B cannot advise re financial benefit/disadvantage of agreement”.
(d)“Ms B believes Ms Beckstead [illegible] agreement [illegible] and understands its terms”.
In response to the wife’s claims, the husband contends that the error in the agreement referring to s90B instead of 90C of the FLA can be easily rectified. The agreement is not void for uncertainty. He also disputes the wife’s allegations about non-disclosure. The parties were living together for several years before entering into the agreement. Even if the Court is satisfied that there was material non-disclosure, the Court should not set aside the agreement as the wife does not allege that she would not have signed the agreement if there had been disclosure. He also rejects any suggestion that there was undue influence.
With respect to his proposed claim against Ms B, he says she made a mix of written and oral representations including that she gave the wife the requisite advice about the agreement and was a competent and reasonable diligent lawyer. Ms B knew or ought to have known that the husband would rely on those representations. This argument only arises if the wife’s assertions are correct about Ms B.

Husband’s submissions on joinder

The husband filed submissions in support of the joinder application on 8 December 2020. The husband says that if the agreement is found to be binding he has a claim against Ms B for the costs he incurred in resolving that issue due to the mistakes she made in the agreement. However, it is clear from the husband’s submissions that the mistakes he identified could be cured by the doctrine of rectification. It does not automatically flow that he would have a claim against Ms B if the agreement is upheld.
In these submissions the husband argues for the first time that Ms B has contravened section 52 of the TPA. As the conduct occurred in 2006 the TPA applies and not the CCA. That case concerned misleading and deceptive advertisements in the directory. Section 52 of the TPA reads as follows:
Misleading or deceptive conduct.
(1)A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive.
(2)Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of sub-section (1).
Section 6(3) of the TPA (which also appears in the current Act) reads as follows:
(3)In addition to the effect that this Act, other than Parts IIIA, VIIA and X, has as provided by another subsection of this section, the provisions of Part IVA, of Divisions 1, 1AAA, 1AA and 1A of Part V and of Divisions 2 and 3 of Part VC have, by force of this subsection, the effect they would have if:
a) those provisions (other than sections 55 and 75AZH) were, by express provision, confined in their operation to engaging in conduct to the extent to which the conduct involves the use of postal, telegraphic or telephonic services or takes place in a radio or television broadcast; and
b) a reference in those provisions to a corporation included a reference to a person not being a corporation.
The husband contends that his claim against the wife and his claim against Ms B involve common facts and that if they are not heard together there is a risk that contrary findings may be made in a different Court. He also says he would incur further costs in having to pursue separate proceedings under the TPA in this Court or in another jurisdiction. Ms B is a necessary party in order for the Court to be able to fully determine all matters. If the Court finds that Ms B is not a necessary party, then the Court should still exercise its discretion to join her in the interests of justice.
Unlike the Family Court, the Federal Circuit Court has original jurisdiction with respect to claims made under the TPA and the CCA.
The husband relies on the case of Reed & Reed [2016] FCCA 1338. In that case, the respondent sought to set aside the financial agreement they entered into before they married. The applicant applied to join the firm of solicitors he instructed to prepare the financial agreement and the lawyer who provided the advice to the respondent with respect to the agreement to the proceedings. In that case, the applicant brought proceedings against the law firm under section 52 of the TPA and against the lawyer under section 9 of the Fair Trading Act1999 (Vic) (“FTA”) for misleading or deceptive conduct based on the certificate he signed. His Honour Judge Riethmuller allowed the joinder, finding the Court has original jurisdiction with respect to the TPA claim and accrued jurisdiction with respect to FTA claim. His Honour Judge Riethmuller referred to misleading conduct of the law firm being oral representations made over the phone and written advice with respect to the enforceability of the agreement. This would extend the application of the TPA to the law firm (assuming it is not a corporation) pursuant to section 6 of the TPA.
The husband argues that Ms B is a necessary party to the proceedings because if the agreement is set aside, the husband can pursue his claim of deceptive and misleading conduct and if the agreement is binding then the husband will seek that orders be made against Ms B and the wife for his costs. I do not accept this submission. Not all of the bases raised by the wife for setting aside the agreement relate to Ms B’s alleged conduct. The agreement is set aside due to the husband’s conduct with respect to duress or undue influence, and that is not something Ms B would be liable for. It also does not automatically flow that if the agreement is found to be binding, Ms B would be liable for the husband’s costs.
I was also taken to the Full Court authorities of Noll & Noll and Anor [2013] FamCAFC 24 and F Firm & Ruane and Ors [2014] FamCAFC 189 with respect to accrued jurisdiction.
Noll and Noll was an appeal from a refusal to join the firm of solicitors to proceedings in the Family Court. The wife commenced proceedings in the Family Court seeking to set aside the binding financial agreement the parties entered into during the relationship. She also made claims of unconscionable conduct, breaches of section 158 of the FTA and other relief. The husband made a cross-claim against the law firm who he says falsely represented that they acted solely for the wife and the wife had received requisite independent legal advice. The husband sought to have the law firm joined to the proceedings pursuant to the Court’s accrued jurisdiction so that the claim against the law firm could be heard at the same time as the application to contest setting aside the financial agreement. The husband argued that the proceedings between husband and wife and his cross-claim against the law firm arose from the same substratum of facts were part of the same justiciable controversy. The wife was opposed to this and said there were three separate issues to be considered at different stages being: one, whether the financial agreement is binding; two, potential property settlement between husband and wife; and three, possible claim to damages by husband against the law firm.
On appeal, Senior Counsel for the husband argued that the evidence with respect to the legal advice given was relevant to the claim of misleading and deceptive conduct by the husband and whether the wife had been subject to undue influence or unconscionability. The husband conceded that if the wife’s claim with respect to the financial agreement succeeds the law firm would not be liable to the husband but relying on ReWakim; Ex parte McNally (1999) 198 CLR 511 argued that the claims do not have to wholly coincide in order to be part of the same justiciable controversy. He also argued that there was a risk of there being inconsistent findings made by different courts if the husband’s claim against the law firm had to be determined in a state court. The Full Court dismissed the appeal as it was not satisfied that there was a single justiciable controversy.
In F Firm & Ruane and Ors [2014] FamCAFC 189 the Full Court distinguished Noll’s case on the basis that the agreement in Noll’s case had not yet been set aside. May and Thackery JJ expressed criticisms of the reasoning in Noll but did not go so far as to find the decision was plainly wrong. I am therefore bound by Noll.

The wife’s submissions on joinder

The wife filed submissions opposing the joinder on 9 December 2020 arguing that the application is premature. If the Court sets aside the agreement on the basis of the wife’s contentions that she did not receive independent legal advice and/or proper legal advice it would be appropriate to consider joining Ms B at that time. She points out that the only application currently on foot is the application to uphold or set aside the financial agreement. Whilst Ms B will be a witness in those proceedings, her rights are not affected by the outcome and she is not a necessary party.

The proposed second respondent’s summary of argument

The proposed second respondent filed a summary of argument on 9 December 2020 opposing the joinder, arguing that the utility of the joinder is premised on the husband anticipating being granted leave to file an amended initiating application seeking orders against Ms B.
She says the husband is mistaken when he says the court has original jurisdiction with respect to the TPA claim as that applies to corporations and not natural persons unless one of the limited exceptions under section 6 of the TPA applies. Further, she argues that in order to join Ms B, the husband must rely on accrued jurisdiction and not original jurisdiction and therefore the joinder application is premature. She points to the husband’s failure to enliven the Court’s original jurisdiction by failing to articulate his claim against Ms B. Accrued jurisdiction can only be enlivened after the threshold issue has been determined.
Section 52 of the TPA only applies to corporations unless one of the conditions set out in section 6 apply. She points out that the husband’s potential claim is not against his own lawyer but the wife and the wife does not make any claim about receiving postal or telegraphic communication.
The proposed second respondent argues that the husband is wrong when he asserts that the Federal Circuit Court has original jurisdiction to hear the proposed claim. This would only be the case if the extended application of section 6 applied to his claim under section 52 the TPA. If it does not, then the husband would need to rely on accrued jurisdiction. The extended application refers to activities undertaken in the course of foreign or interstate trade or commerce, in the course of trade or commerce with another territory or state and territory or between two territories, in relation to the supply of goods or services to the Commonwealth or whether conduct involved the use of postal, telegraphic or telephonic services or radio or TV broadcast. She goes on to argue that the husband’s application for joinder is premature as until the financial agreement is set aside, accrued jurisdiction is not attracted.
Reed & Reed does not assist the husband as that concerned a claim brought against the applicant’s own lawyer and not the other party’s lawyer. She argues that the husband cannot attract accrued jurisdiction based on potential claim against the wife’s former lawyer until the issue of whether or not the financial agreement is declared binding or set aside is determined. The wife as noted above seeks to set aside the agreement on several grounds including duress. If the agreement is set aside on that basis, then the husband would not have a claim against the wife’s former lawyer.
Senior Counsel for the proposed second respondent submits that in any event, any application the husband brought against his former lawyer would be statute barred. All counsel agreed that would be an issue for determination at a trial if the husband proceeds with a claim against Ms B. She also raises the issue of reputational damage to Ms B which would be without any proper basis. Certainly this would be the case if the agreement is either held to be binding or is set aside for reasons unrelated to Ms B.

The husband’s further contentions of fact and law filed on 14 December 2020

After receipt of the second respondent’s summary of argument the husband’s lawyers filed a further intention of fact and law dated 14 December 2020 well outside the timeframe for filing of such document, in which they address the extended application of section 52 of the TPA. It is only after receiving the wife’s contentions of fact and law that the husband addressed specific legislation and alleged that Ms B made misleading statements to him over the telephone. Significantly, the husband makes no reference to this in his affidavit filed in support of his application in a case.
The husband addresses the criticisms made by Ms B’s Senior Counsel, stating that section 52 extends to Ms B as a natural person because her alleged misleading or deceptive conduct occurred during the course of interstate trade and commerce and used postal or telephone services. The husband’s Senior Counsel says that the husband obtained the referral to Ms B through his company which was a member of Bartercard. Bartercard members exchange their services.
In his further contentions of fact and law, the husband alleges that he had several conversations with Ms B on 18 April 2006, 20 April 2006, twice on 13 June 2006 and on 13 July 2006. He refers to her invoice annexed to his affidavit filed 12 August 2020, which includes four entries referring to telephone communications. He made no reference to these calls in his affidavit or first set of contentions. He does not provide particulars of those conversations in his second contentions. Due to this, Ms B has not had a reasonable opportunity to reply. The invoice is addressed to the wife and includes the following items:
(a)On 18 April 2006 with the description, “phoned our client regarding the binding financial agreement”. There may be argument as to whether this refers to the husband or wife. The husband points to his business address used on the invoice but the invoice describes the wife as the client. .
(b)On 20 April 2006 with the following description, “phoned client to see if a Solicitor appointment had been made yet”. The time entry is unclear.
(c)On 13 June 2006 with two entries describing a phone call to Mr Beckstead [the husband] arranging appointments for Ms Beckstead [the wife]. Looking at the descriptions on the invoice, they are brief and somewhat unclear as to who conducted the work. Without having a copy of the costs agreement, it is not possible to tell whether a lesser rate is being charged because a non-lawyer carried out that work or because of the type of work being conducted. Noting that Ms B had not had the opportunity to respond to the late submissions, her Senior Counsel indicated that her instructions were that those calls were made by Ms B’s secretary.
(d)On 11 July 2006 with an entry stating “phoned client to let him know that Ms B will be calling him tomorrow afternoon”. This entry identifies the client as male but the description is also suggestive of an administrative assistant and not Ms B making the call.
(e)If the calls are simply administrative in nature it is difficult to see how the husband could maintain Ms B made misrepresentations to him over the phone.
At paragraph 5 of his second set of contentions the husband’s lawyers submit that Ms B made misrepresentations to the husband by telephone in January 2006 to the effect that she was a competent and reasonably diligent lawyer and on at least two other occasions that she was able to provide the wife with independent legal advice before signing the certificate. In order to attract original jurisdiction he needs to establish that he has an arguable case under the TPA which means he must satisfy the extension in s.6. The difficulty is that the husband, in seeking to keep all options open he raises inconsistent and potentially irreconcilable arguments. The wife’s senior counsel raised this during the course of oral argument.
The husband also relies on the fact that he paid for Ms B’s legal services using the Bartercard system. Bartercard Operations Aus Pty Ltd is based in Queensland.
A further alternative basis of jurisdiction raised by the husband but not expanded upon in writing or orally is associated jurisdiction: section 18 of the Federal Circuit Court Act 1999 (Cth). The basis for this is unclear but at paragraphs 14 and 15, the husband’s Senior Counsel refers to the husband having a claim against Ms B under both the federal and state Australian consumer legislation.
The husband also argues that his claims against Ms B are an integral part of the controversy between him and the wife. It is a relevant consideration under section 79(4)(e) of the FLA, if the Court declares that the financial agreement is not binding. That assumes that the agreement is found to be not binding because of conduct related to Ms B and not on other independent grounds. Certainly, there is a common element with respect to the issue of the independence and quality of the legal advice the wife received with respect to the agreement.
The husband’s Senior Counsel relies on these transactions to attract the Court’s original jurisdiction and notes that the Court has no choice but to exercise that jurisdiction. [1]Alternatively, the husband seeks to attract accrued jurisdiction[2].
[1] Senior Counsel for the husband referred to Mortensen v Enviro Water Tanks Pty Ltd [2020] FCCA 1951
[2] At paragraph 8 of the further contents or fact and law Senior Counsel refers to section 9 of the FTA. Presumably this is either a reference to the repealed Fair Trading Act 1999 (Vic) or the Australian Consumer Law and Fair Trading Act 2012 (Vic).
It also appears from paragraphs 2, 11, 15 and 21 of the further contentions of facts and law that the husband states he has a claim under both the federal and state Australian consumer law protection legislation. As this is not expanded upon I am at a loss to understand how he could have two different claims against Ms B under the federal and state legislation. Given the fact that the reforms to consumer laws in the states and territories order large measure of uniformity and consistency, I would assume that the husband would not have a claim under both the state and the federal act but would have to choose. It is clear that the whole purpose behind his joinder application is to seek to have his potential claim against Ms B determined as part of the Federal Circuit Court proceedings and not separate state proceedings.

The proposed second respondent’s response to the husband’s further contentions of facts and law

Apart from the lateness of the husband’s further submissions which deny Ms B the opportunity of responding, Ms B’s Senior Counsel also submits that the further submissions lack particularity as to how the husband alleges he relied on telephone conversations with Ms B to his detriment. She also points out that some of the calls he refers to took place after the financial agreement was signed.
There is no dispute that the agreement was drawn and signed in Victoria. She argued that seeking to have the payment by Bartercard constitute interstate commerce is akin to arguing that any payment made from an interstate bank account or through a financial institution whose head office is registered in another state would amount to interstate commerce. There is considerable force in that submission.

Ms B’s Senior Counsel argues that the husband is trying to stretch the natural meaning of these provisions in order to attract a finding that the Court has original jurisdiction with respect to his potential TPA claim, as in accordance with Full Court authority, his claim that accrued jurisdiction is attracted, is contrary to the binding Full Court authority of Noll and Noll and must fail at this stage.
Senior Counsel for Ms B emphasised that currently there is no claim against Ms B and until the agreement is set aside there is no potential claim. She argued that the Court is not in a position to join Ms B in the absence of any pleadings as to the basis for her to be joined to an action without knowing what the claim is against her. In essence, Senior Counsel argued that the husband is seeking to attract original jurisdiction on an improper basis and what is referred to in the authorities as “coloured” or artificial. In support of this submission she relied on Banks v Galea [2019] FCA 986. That case also involved an attempt to rely on s6 to extend the operation of the CCA to apply to a natural person. The cause of action needs to identify the loss and damage alleged to have been incurred by the misleading and deceptive conduct. In that case McKerracher J expressed concern with respect to the draft statement of claim which did not identify the case the respondent would have to meet and noted that reference to a text message was simply referring to a narrative and not conduct that can form a contravention of the CCA. Ms Smallwood SC argued that similarly in this case it is the same with the invoice which merely has a narrative. At paragraph 13 His Honour said
“in the circumstances, I am concerned that the attempt to invoke federal jurisdiction, at least as presently pleaded, is so strained that it is properly described as being artificial or colourable. However, there may be other aspects of the surrounding facts and circumstances which do properly give rise to a claim in federal jurisdiction.”
McKerracher J ordered the plaintiff to file a further draft statement of claim.
In this case there is even less articulation of the potential claim. I accept her submissions that the reference to phone calls invoice is not sufficient to form a basis for his potential claim. On its face, it certainly appears that at least some phone calls are merely making appointments and will likely not have been made by Ms B. That could not refer to any misleading or deceptive conduct.

ORAL ARGUMENT

The limitations in the Federal legislation is based on the limits in the Constitution. If it was as simple as identifying a phone call or payment of the bill is attracting the extension in section 6, that application would be so broad so as to defeat the purpose. She does not dispute that if the Court has original jurisdiction under the TPA then it will also have accrued jurisdiction under the state consumer legislation.
There is merit in this submission made on Ms B’s behalf that any reputational damage she may suffer as a result of being joined to the proceedings can be cured with a costs order. Being called as a witness in the proceedings is very different to being joined as a party. If necessary, Ms B can be subpoenaed to give evidence at the appropriate time. If she is joined as a party now she would have to participate in the three day trial without the benefit of knowing the case against her and whether or not in fact there is a case for her to meet.
It appears to me that what this argument has identified are some real problems with the husband’s potential claim. The husband relies on the TPA not the current Australian consumer legislation because of the misleading and deceptive conduct he complains of occurred in 2006 when the advice was given. This then raises the issue of whether or not his potential claim is statute barred in any event. Any argument about this would need to be determined at trial and is not relevant to my determinate of jurisdiction.
In her oral submissions, Senior Counsel for the husband referred to the Bartercard system being used for payment and compared this to situations where the client pays by eftpos or credit card and submitted that it would be ridiculous to suggest that paying by credit card or bank transfer would be enough to attract the extended application of section 52.
Senior Counsel for the husband relies on Re Pamela Snyman v Laura Isabella Cooper; Allan John Cooper and Ors [1989] FCA 500 with respect to the application of section 6 of the TPA. In that case Von Doussa J found that Parliament intended the legislation to be given widest interpretation consistent with the limits of constitutional power and found that the reference to telephonic services in section 6 extended to publications in directories such as White Pages and Yellow Pages. It is important to note that the misleading and deceptive conduct in this case did not arise from a simple administrative entry or narrative with a name and telephone number but was an advertisement with substantive content.
Senior Counsel for the husband referred to Rasch Nomines Pty Ltd v Bartholomaeus [2012] SASC 70 Kourakis J (as His Honour then was) found that section 6 was enlivened as an initial representation was made by telephone even thought that representation was not misleading at the time. The representation was not corrected when circumstances change. Silence can amount to false and misleading conduct. She also referred to the High Court decision of Boland v Yates (1999) 167 ALR 575 and Gaudron J’s comments at paragraph 102 where she referred to section 6(3) extending the operation of section 52 to conduct involving telephonic or postal services. I have already referred to the difficulties with respect to the telephone calls.
The wife opposes the joinder on the basis that it will increase the expense and length of proceedings. She supported the submissions made on behalf of Ms B that the joinder application is premature. She further submitted that it would be a long bow to draw that every time a person made a payment by eftpos from the bank outside of Victoria or made a phone call that the extension of consumer conduct to corporation’s law is attracted. This is seeking to enliven section 6(2) and conduct in the course of trade or commerce.
After hearing the submissions for the husband and Ms B, the wife’s Senior Counsel pointed to the husband’s submissions with respect to confusion as to who Ms B was acting for. In particular, notes the references to the invoice annexed to the husband’s affidavit and his reliance on the phone calls with Ms B to bolster his claims that he relied on her false representations She argues that this is effectively a concession from husband that the wife did not receive independent legal advice.
In response, Senior Counsel for the husband submitted that the husband would seek to argue pursuant to section 90G of the FLA to uphold the agreement even if the wife did not receive independent legal advice on the basis that it would be unjust and inequitable if the agreement were not binding. The wife’s senior counsel points out that the difficulty is that the husband is attempting to argue simultaneously that the agreement should be upheld and that Ms B engaged in deceptive and misleading conduct. It appeared now that the husband was seeking to argue that even if there was no independent legal advice the agreement should be upheld because it was unjust and inequitable not to. That is a different case. It underscores the joinder application’s prematurity and the difficulty with the lack of particularisation of the parties’ claims. This is particularly so in the case of the husband where there are substantial differences in the claims he seeks to make in his first set of contentions and the second set filed some weeks later. Furthermore, it has the appearance of seeking to address problems highlighted by the proposed second respondent and that presumably the husband had not turned his mind to previously. This approach continued during the course of oral argument. In her reply, Senior Counsel for the husband complained about the unfairness of only hearing during the course of oral submissions that the calls were by a secretary and not Ms B. That complaint is unreasonable when it is due to the further contentions filed without prior notice or leave being sought shortly before oral argument. The fact that her opponents did not ask for an adjournment is not a satisfactory answer. The time set aside for the oral argument was made several weeks in advance. The threshold hearing has already been delayed for several months because of the timing of the joinder application.

CONCLUSION

I am satisfied that this application for joinder has been brought prematurely. The husband has not properly articulated his claim. I am not satisfied that he has established that he has an arguable case against Ms B under the TPA. I am not satisfied that Ms B is a necessary party to the proceedings. Nor am I satisfied that it is in the interests of justice that she be joined to the proceedings. In my view the proper course is to dismiss the joinder application to grant leave to the husband to file a further joinder application with a draft statement of claim after the determination of the threshold issue. If the husband does bring such further application he should prepare a draft statement of claim against Ms B as the contentions of fact and law do not provide sufficient detail and particularity for Ms B to answer that claim. As I raised during the course of oral submissions the husband’s arguments also raise questions about his own solicitor’s conduct. It highlights the difficulty in the husband’s failure to clearly articulate his claim. Rather he seeks to keep all options open for potential arguments even if they are mutually exclusive. Of course, a litigant may plead a different cause of action in the alternative.
Ms B and the wife seeks costs. I will make orders providing for written submissions in that regard. It is appropriate to determine the costs issue now as I am not simply adjourning the joinder application. I will direct that Ms B and the wife file and serve submissions with respect to the costs they seek within 21 days and that the husband file submissions in response 21 days thereafter. Both indicated they intended to seek indemnity costs in the circumstances. Certainly during the course of discussions about costs I indicated that the Federal Circuit Court scale of costs does not adequately reflect the work involved in an application of this type. I will then determine the costs issue in chambers and issue reasons unless any of the husband, the wife or Ms B request a further oral hearing before me.
Trial directions will also need to be made with respect to the hearing in July. The parties indicated to Registrar Sudholz on 1 September 2020 that they would seek a staggered filing regime. I will direct that the parties confer and submit a minute of order setting out the trial directions they seek.

I certify that the preceding seventy-seven (77) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Harland.

Deputy Associate:

Dated: 25 March 2021