Belson and Belson and Ors

[2019] FamCA 797

FAMILY COURT OF AUSTRALIA

BELSON & BELSON AND ORS [2019] FamCA 797

FAMILY LAW – PRACTICE AND PROCEDURE – Where application for summary dismissal of equitable claim by applicant wife as against paternal grandparents (the fourth and fifth respondents) – Where discussion of applicable principles – Where application dismissed – Where costs of application reserved to final hearing.

Family Law Rules 2004 (Cth) r 10.12

Ebner & Pappas [2014] FamCAFC 229
Friar & Friar [2011] FamCAFC 71
Lindon v Commonwealth of Australia(No. 2) [1996] HCA 14

APPLICANT: Ms Belson

FIRST RESPONDENT: Mr Belson

SECOND RESPONDENT: Mr B Belson

THIRD RESPONDENT: Ms C Belson

FOURTH RESPONDENT: Mr D Belson

FIFTH RESPONDENT: Ms E Belson

FILE NUMBER: DUC 347 of 2017

DATE DELIVERED: 31 October 2019

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 23 July 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hogg

SOLICITOR FOR THE APPLICANT: Joplin Lawyers

COUNSEL FOR THE FIRST RESPONDENT: Mr Coleman SC

SOLICITOR FOR THE FIRST RESPONDENT: Campbell Paton & Taylor

COUNSEL FOR THE SECOND RESPONDENT: Ms Breeze

SOLICITOR FOR THE SECOND RESPONDENT: Hughes & Co Lawyers

COUNSEL FOR THE THIRD RESPONDENT: Ms Breeze

SOLICITOR FOR THE THIRD RESPONDENT: Hughes & Co Lawyers

COUNSEL FOR THE FOURTH RESPONDENT: Ms Judge

SOLICITOR FOR THE FOURTH RESPONDENT: Garden & Montgomerie Solicitors

COUNSEL FOR THE FIFTH RESPONDENT: Ms Judge

SOLICITOR FOR THE FIFTH RESPONDENT: Garden & Montgomerie Solicitors

Orders

1. That the application for summary orders under Rule 10.12 of the Family Law Rules 2004 (Cth) by the fourth and fifth respondents be dismissed.

2. That costs of and incidental to the application be reserved to final hearing or agreement between the parties.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Belson & Belson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: DUC 347  of 2017

Ms Belson

Applicant

And

Mr Belson

First Respondent

And

Mr B Belson

Second Respondent

And

Ms C Belson

Third Respondent

And

Mr D Belson

Fourth Respondent

And

Ms E Belson

Fifth Respondent

REASONS FOR JUDGMENT

1. The present primary proceedings relate to parenting and property settlement as between the applicant husband and the respondent wife.

2. On 28 September 2017 the applicant husband in his Initiating Application commenced proceedings in the Federal Circuit Court of Australia solely related to parenting seeking orders in relation to the two children of the parties’ marriage X now aged nine and Y now aged four.

3. The wife in her Response filed 4 December 2017 sought orders both as to parenting and property adjustment and sought orders joining the paternal grandparents Mr D Belson and Ms E Belson as parties to the proceedings, although in the Response the wife sought no orders as against the paternal grandparents but sought leave to file an Amended Response once there had been appropriate disclosure.

4. On 5 December 2017 interim parenting orders were made by consent that, in summary, provided for the parties to have equal shared parental responsibility for the children, that the children live with the wife and that the children spend defined time with the husband. Subsequently and on 18 April 2018 further interim parenting orders were made by consent that provided a more expansive provision for the children’s time with the husband.

5. On 18 April 2018 the wife was ordered to serve draft Points of Claim on the husband and the paternal grandparents setting out the basis upon which she sought orders against the paternal grandparents.

6. Subsequently on 21 December 2018 proceedings were transferred from the Federal Circuit Court of Australia to this Court.

7. On 8 April 2019 the wife filed a further Amended Response in the proceedings and in that Response notwithstanding that she sought no orders by way of declaratory relief or otherwise as against the paternal grandparents she sought an order that they be joined as fourth and fifth respondents in the proceedings. Otherwise, she sought an order that the husband’s brother Mr B Belson and his wife Ms C Belson be joined to the proceedings as second and third respondents.

8. In her further Amended Response the wife sought orders as against various personalty, property, profits and entitlements in which it is to be inferred the additional respondents had an interest.

9. The proceedings were before a registrar of this Court on 19 February 2019 following transfer. Various directions and orders were made by the registrar to progress the matter but by this date no additional respondents had been formerly joined in the proceedings.

10. On 15 April 2019 proceedings were again before a registrar of this Court. It was noted that the wife relied upon the relief claimed in her Points of Claim annexed to her affidavit filed in the Federal Circuit Court of Australia on 17 October 2018. Orders were made joining the husband’s brother and his wife as second and third respondents in the proceedings and joining the paternal grandparents as fourth and fifth respondents in the proceedings. Otherwise, the wife was directed to file and serve a further further Amended Application (presumably incorporating with particularity any declaratory or other relief sought as against the additional respondents).

11. On 18 April 2019 proceedings were before the Court for judicial case management. It was noted that the additional respondents were at liberty under the rules to administer a request to the wife for answers to specific questions in relation to the relief sought against them and the underlying facts relied upon. The matter was stood over to 31 May 2019 to facilitate the appearance of the Independent Children’s Lawyer appointed in the parenting proceedings.

12. On 14 May 2019 the fourth and fifth respondents filed a Response seeking orders that the claim by the wife against them be summarily dismissed or, in the alternative, that the wife’s interim application so far as it impacts the fourth and fifth respondents be dismissed, and an order for the wife to pay their costs on an indemnity basis.

13. On 20 May 2019 proceedings were listed before a registrar of this Court and all of the additional respondents informed the registrar that they would seek summary dismissal of the wife’s application for financial orders as against them.

14. The applications for summary dismissal were listed for consideration in the short matters list on 23 July 2019. On 23 July 2019 the applications for summary dismissal were heard with judgment reserved to a date to be fixed. At hearing, the second and third respondents did not press their applications for summary dismissal. The matter proceeded as to the fourth and fifth respondents, the paternal grandparents, only.

15. On 23 July 2019 the parties were informed that judgment could not be delivered until after a period of extended judicial leave ending in late September. 

16. These are those reasons for judgment.

The Law

1. The principles applied as to the issue of summary dismissal under the provisions of the Family Law Rules 2004 (Cth) (“the Rules”) are well settled.

2. Rule 10.12 of the Rules provides:

   10.A party may apply for summary orders after a response has been filed if the party claims, in relation to the application or response, that:

   (a)the court has no jurisdiction;

   (b)the other party has no legal capacity to apply for the orders sought;

   (c)it is frivolous, vexatious or an abuse of process; or

   (d)there is no reasonable likelihood of success.

3. In Lindon v Commonwealth of Australia (No. 2) [1996] HCA 14 the High Court of Australia said (at page 255 - 256):

   The approach to be taken by the court to the Commonwealth’s application for summary relief is not in doubt:

   1.It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against government and other powerful interests. This is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the court, is rarely and sparingly provided.

   2.To secure such relief, the party seeking it must show that it is clear, on the face of the opponent’s documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious.

   3.An opinion of the court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment.

   4.Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of demurrer. If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts.

   5.If notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading. A question has arisen as to whether O 26, r 18 applies to part only of a pleading. However, it is unnecessary in this case to consider that question because the Commonwealth’s attack was upon the entirety of Mr Lindon’s statement of claim.

   6.The guiding principle is, as stated in O26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.

   (Footnotes omitted)

4. In Friar & Friar [2011] FamCAFC 71 the Full Court said:

   49.Rules 10.12 (c ) and (d) of the Family Law Rules 2004 (“the Rules”) relevantly provide that a respondent may apply for “summary orders” in relation to an application on the basis that it is “frivolous, vexatious or an abuse of process” or has “no reasonable likelihood of success”.

   50.The Rules are properly read as supplementing the power of the Court to dismiss frivolous or vexatious proceedings pursuant to s 118(1) of the Act. The Rules are also to be read in the context of the many cases confirming the Court’s inherent power to dismiss or permanently stay an application which cannot succeed, as to which see the authorities discussed in Bigg v Suzi (1998) FLC 92-799 at 84,974.

5. The phrase “no reasonable likelihood of success” is, at least in relation to the test to be applied in the summary dismissal proceedings, of relatively recent origin: see Ebner & Pappas [2014] FamCAFC 229 where the Full Court said:

   60.In Bretton & Bondai [2013] FamCAFC 168 Finn and Strickland JJ at [59], and May J at [122], considered this is a conceptually different test to the “doomed to fail” test.

   61.In Spencer v Commonwealth of Australia [2010] HCA 28, referring to a Federal Court Rule in similar terms to Rule 10.12, Hayne, Crennan, Kiefel and Bell JJ said at [56]:

   Because s 31A(3) provides that certainty of failure (“hopeless” or “bound to fail”) need not be demonstrated in order to show that a plaintiff has no reasonable prospect of prosecuting an action, it is evident that s 31A is to be understood as requiring a different enquiry from that which had to be made under earlier procedural regimes. It follows, of course, that it is dangerous to seek to elucidate the meaning of the statutory expression “no reasonable prospect of successfully prosecuting the proceeding” by reference to what is said in those earlier cases.

   62.The applicable test was considered by another intermediate court of appeal, the Victorian Court of Appeal in Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158. At that time the relevant legislative test in Victoria was “no real prospect of success”. There at [27] Warren CJ and Nettle JA said:

   ... whatever might be the practical effect of the new test, it is difficult to disagree with McMurdo J in Gray v Morris and McMurdo P in the Commissioner of Taxation v Salcedo that it should be applied by reference to its own language, without paraphrase or comparison with the previous rule, always bearing in mind the principle that the power to award summary judgment is only to be exercised with caution and, therefore, not unless it is clear that there is no real question to be tried.

   (Footnotes omitted)

   63.      Their Honours continued at [35]:

   Upon the present state of authority:

   a.the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;

   b.the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in General Steel;

   c.it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;

   d.at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.

The Wife’s Contentions as Against the Fourth and Fifth Respondents

1. Primarily, the wife seeks relief as against the fourth and fifth respondents in the following terms:

   a)A declaration that farming properties known as “Property 1” and “Property 2” both of Town H together with all improvements and water (“the Town H Aggregation”) is constructively held on trust for the applicant wife and respondent husband in equal shares;

   b)An order that on or before 19 July 2020 the applicant wife, respondent husband, fourth respondent and fifth respondent are to do all things and sign all documents to cause the Town H Aggregation to be transferred to the applicant wife and respondent husband in equal shares; and

   c)A declaration that the fourth respondent and fifth respondent have a joint and severable life tenancy in the “Property 1” homestead on the condition that they pay any outgoings such as electricity, water and gas and meet any reasonable maintenance costs associated with the Homestead.

2. Otherwise, the wife seeks ancillary orders as between herself and the husband, in summary, as follows:

   a)that the husband pay to the wife’s solicitors for payment out to the wife an amount representing 40 per cent of the net value of the Town H Aggregation; and

   b)that simultaneously with the payment the wife and husband are to do all acts and things and sign all documents to cause the transfer of the wife’s interest in the Town H Aggregation to the husband.

3. The wife in her Points of Claim as against the fourth and fifth respondents, in summary, pleads her cause of action on the following basis:

   a)that the fourth and fifth respondents are the registered proprietors as joint tenants of the properties that comprise the Town H Aggregation;

   b)that in or about March 2000 and the fourth and fifth respondents represented to the wife and husband that they would receive by way of intergenerational transfer the property is comprised in the Town H aggregation in or about June 2020 when the paternal grandmother attained 65 years of age and was eligible for the aged pension;

   c)it is asserted by the wife that the conversations were oral and that the agreement was oral;

   d)the wife further asserts that it was represented by the fourth and fifth respondents that the Town H aggregation would be transferred to the wife and the husband if they remained in Town H and farmed the subject properties;

   e)It is contended by the wife that the agreement with the fourth and fifth respondents also included the following:

   i)that the fourth and fifth respondents would build the wife and husband a home on the “Property 2” property within a two to three-year period of the agreement;

   ii)the wife and husband would remain living at “Property 1” until the home was completed;

   iii)that the husband and wife agreed to retain the Town H Aggregation and continue the Belson family legacy of farming;

   iv)that the fourth and fifth respondents would receive a life tenancy in the “Property 1” homestead after the intergenerational transfer had been given effect;

   v)that the wife and husband would pay for and maintain a modern motor vehicle for the fourth and fifth respondents for their lifetime after the intergenerational transfer had been given effect;

   vi)that until July 2020 and thereafter it was expected that the wife would obtain off farm employment that would be applied in support of the family and thus allowing the husband to continue to work on the subject properties;

   vii)that the date of the intergenerational transfer of the Town H aggregation was to take place on or shortly after 18 July 2020;

   viii)that simultaneously with the intergenerational transfer being given effect, the husband will transfer to the second respondent “his brother” the husband’s interest in the “G” properties and the F Business;

   ix)that the husband would work principally at the “Property 1” and “Property 2” properties with his father;

   x)that the wife and husband would not receive any income in the form of drawings or wages in lieu of the intergenerational transfer; and

   xi)the Town H Aggregation farming operation would meet some living costs and supply produce to the wife and husband as needed. 

4. The wife asserts that she and the husband acted in reliance on the representations made by the fourth and fifth respondent to their detriment and that the husband and wife have added value to the Town H Aggregation by undertaking various tasks and works on the subject properties.

5. Otherwise, the wife relied on her affidavit filed 22 July 2019.

6. It is readily apparent that the claim by the wife is dependent upon general constructive trust and/ or equitable principles including issues such as reliance and detriment.

1. To a significant extent the remedy available to the wife depends upon the outcome of evidence particularly oral evidence as to the nature and extent of the asserted agreement and factual assertions as to reliance and detriment. 

2. The claim asserted by the wife is clearly based upon a well settled cause of action and remedy in equity. As is the case with most of such remedies the ultimate outcome depends upon the tribunal of fact making findings that either support or not support the asserted remedy. 

3. Whilst it is open to the fourth and fifth respondents and indeed the husband to deny the asserted agreement and to deny the actions of the wife and the husband that she asserts were to their detriment and in reliance of the asserted agreement such denial is not an answer to the claim that depends so much on ultimate findings of fact. The denial simply puts the wife to proof as to the facts fundamental to her cause of action.

4. The fourth and fifth respondents are now aware as to the matters relied upon by the wife in support of the relief sought by her and as such are in a position to address what they now anticipate to be the ambit and substance of the wife’s evidence. Yet the final determination as to the wife’s relief as against the fourth and fifth respondents must await final hearing. Of course, if unsuccessful, the wife will no doubt need to meet an application for costs from the fourth and fifth respondents.

5. It cannot be said that the cause of action relied upon by the wife is frivolous or vexation or has no reasonable likelihood of success but, indeed, it is founded upon well settled equitable principles and will succeed or fail on determination of facts at final hearing. 

6. In such circumstances it is appropriate that the application for summary dismissal promoted by the fourth and fifth respondents be dismissed. Such order will be made accordingly.

I certify that the preceding thirty three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 31 October 2019.

Associate:

Date:  31 October 2019