Budiarta and Zavahir

[2016] FamCA 923

FAMILY COURT OF AUSTRALIA

BUDIARTA & ZAVAHIR [2016] FamCA 923

FAMILY LAW – PRACTICE AND PROCEDURE – Application for joinder – Whether husband’s mother should be joined to property proceedings between the parties – Whether the joinder of the husband’s mother is necessary for the Court to completely and finally determine all matters in dispute – Where wife relies upon her s 106B application for dispositions made by the husband to the husband’s mother to be included in property adjustment orders pursuant to s 79 of the Act at trial – Where husband’s mother is already involved in these proceedings and intends to give evidence at trial as the husband’s witness – Application dismissed.

Family Law Act 1975 (Cth) ss 79, 80(1) and 106B
Family Law Rules 2004 (Cth) 6.02, 6.03 and 6.04

Wayne & Dillon & Dillon [2008] FamCAFC 204

APPLICANT: Ms Budiarta

RESPONDENT: Mr Zavahir

OTHER PARTY: Ms Beliz

FILE NUMBER: BRC 1270 of 2014

DATE DELIVERED: 3 November 2016

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 25 October 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Green

SOLICITOR FOR THE APPLICANT: Doyle Family Law

SOLICITOR FOR THE RESPONDENT:

Ms Stratton-Funk

Nita Stratton-Funk Lawyers

COUNSEL FOR THE OTHER PARTY: Mr Linklater-Steele

SOLICITOR FOR THE OTHER PARTY: Shila Batenburg & Associates

Orders

1. The Respondent wife’s application to join the husband’s mother as a Second Respondent to the proceedings is dismissed.

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 Budiarta & Zavahir 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 BRISBANE

FILE NUMBER: BRC 1270 of 2014

Ms Budiarta

Applicant

And

Mr Zavahir

Respondent

And

Ms Beliz

Other Party

REASONS FOR JUDGMENT

1. The Respondent wife in these parenting and property adjustment orders proceedings currently listed for trial before me in February 2017 filed a Further Amended Response on 24 May 2016. In that document, as part of the final orders she sought, she sought an order that the Applicant husband’s mother, be joined as a Second Respondent to the property adjustment orders proceedings, as well as orders pursuant to s 106B of the Family Law Act 1975 (Cth) (“the Act”) setting aside some transfers of money from the husband to his mother, one of which occurred prior to their separation and four others that occurred in the aftermath of their separation. The wife also sought orders for the husband’s mother to pay that money directly to her to meet her entitlements to property adjustment pursuant to s 79(4) of the Act and for that payment to be secured by a charge against real property that the husband’s mother owns in Western Australia.

2. When the matter was before me for a Trial Management Hearing on 16 September 2016, it became clear that the wife’s application for the order that her former mother-in-law be joined as a party to the proceedings had not been heard and determined and, after hearing that it was opposed by the former mother-in-law and the husband, I listed it for a discrete hearing. That took place before me on Tuesday, 25 October 2016.

3. Counsel who appeared for the wife, pointed out in his written submissions that the wife could simply have complied with Rule 6.03 of the Family Law Rules 2004 (Cth) (“the Rules) that provides a clear means by which a party may add another party after a case has started, leaving it for the party who is joined to apply under Rule 6.04 to be removed if they consider that appropriate. As no explanation was proffered as to why that course was not taken, I can only assume that the availability of that course was overlooked by the wife’s solicitors.

4. Counsel for the wife submitted that, nevertheless, the question of whether or not the wife’s former mother-in-law is now to be joined as a party involves consideration of the proposition contained in Rule 6.02. Sub-Rule (1) of that rule provides:

   A person whose rights may be directly affected by an issue in a case, and whose participation as a party is necessary for the court to determine all issues in dispute in the case, must be included as a party to the case.

5. The wife seeks orders pursuant to s 106B of the Act for the setting aside of a number of specific transactions. Each specific transaction is identified in her 24 May 2016 Further Amended Response at paragraph 11 of the Final Orders sought by her. Each transaction is identified by date, amount and the bank account from which the funds were withdrawn. If the orders the wife seeks were made, they would clearly directly affect the rights of the husband and the husband’s mother.

6. The evidence adduced by the wife, the husband and the husband’s mother confirms, without dispute, that the transactions the wife seeks to have set aside by the Court occurred with the money being paid, as the wife alleges, from the identified accounts by the husband to his mother on the said dates. The wife seeks orders from the Court that require the husband’s mother to effectively repay the money to the husband and, by way of property adjustment as between the wife and the husband pursuant to s 79(4), for that money simply to be paid directly to the wife without actually going back to the husband. As I have already observed, the wife seeks a further order securing that payment by a charge against her former mother-in-law’s unencumbered Western Australian property.

7. There was some argument at the hearing about the Court’s power to charge the real property of a third person arising from the Court’s use of power conferred by s 106B. Counsel for the husband’s mother argued that the terms of sub-section (2) of s 106B evince the need for a direct link between the disposition or instrument being set aside and any real property being charged by an order of the Court. With respect to counsel, the reference to property being “charged” in that sub-section refers specifically to such property being “charged with the payment of such sums for costs or maintenance as the Court directs” and says nothing about any other charge.

8. Counsel for the wife submitted that the charging power the wife relies upon is found in s 80(1) of the Act. That provides, relevantly:

   The court, in exercising its powers under this Part, may do any or all of the following:

   …

   (c) order that payment of any sum ordered to be paid be wholly or partly secured in such manner as the court directs.

9. The “Part” referred to in that section is Part VIII of the Act and s 106B is found in Part XIII. However, s 106B(4A) expressly provides:

   In addition to the powers the court has under this section, the court may also do any or all of the things listed in subsection 80(1)…

10. At first glance, it therefore appears that the Court could very well have the power to make the order charging the husband’s mother’s property if the Court is satisfied after a trial that the orders sought pursuant to s 106B should be made and that the husband’s mother should be ordered to repay the money directly to the wife rather than to the husband, with an order charging her own real property with that payment. I did not hear detailed argument on this point from counsel for both parties and do not consider that I need now to definitively determine that question at this point. I am merely determining the question of whether the husband’s mother should be joined as a party to the proceedings. Whether, ultimately, a charging order can be made against her property to secure any order that she repay money through the husband to the wife if dispositions are set aside pursuant to s 106B is a matter I am satisfied can be left to be determined after trial if the question of the Court’s power to do so still remains in dispute at such time. The legitimate invocation of the Court’s power contained in s 106B to set aside the identified dispositions of money from the husband to his mother, if the preconditions for the exercise of such power are satisfied, is sufficient context within which to determine the disputed question of joinder, in my judgment.

11. As I have already said, I am satisfied that should the Court determine to set aside any of the specifically identified dispositions, rights of the husband’s mother would clearly be affected. It is then to determine, having regard to the wording of Rule 6.02(1), whether the husband’s mother’s participation as a party is necessary for the Court to determine all the issues in dispute in the case. (my emphasis)

12. Counsel for the husband’s mother submitted that it is not. He pointed to the fact that the husband has filed affidavit evidence of his mother already and that it is clear that she will be a witness at the trial and will be available for cross-examination by counsel for the mother at the trial. He submitted that she will already be a participant in the trial, as a witness, and does not need to be joined as a Second Respondent to ensure that she participates. It follows, he submitted, that the husband’s mother’s participation in the trial as a witness will permit the Court to determine all the issues in dispute in the case. Indeed, he went on to submit that it is simply not necessary for her to be a party to the proceedings for this Court to make orders that affect her rights such that would bind her. I took that to be a concession that procedural fairness has been done by the husband’s mother being appropriately put on notice of the orders sought against her by the wife and a further concession that even if she is not a party to the proceedings in which orders pursuant to s 106B are sought for the setting aside of dispositions of money by the husband to her and the repayment of that money by her to the wife through the husband pursuant to a s 79 order, that any such orders would bind her. Those are, in my judgment, sensible and appropriate concessions which are, in the circumstances, correct.

13. When the possibility of the husband subsequently making a tactical decision not to read and rely upon the affidavit evidence of his mother at the trial, so as to prevent her from being available to be cross-examined by counsel for the wife, was raised, counsel for the husband’s mother pointed out that the husband would then face grave, probably insurmountable difficulties in his defence of the wife’s application for s 106B orders if he chose to take that course. The solicitor who appeared for the husband agreed with that submission and positively assured the Court that no such tactical decision would be taken and that the husband’s mother can be expected to be a critical witness at the trial, whose evidence the husband clearly wants the Court to consider.

14. Accordingly, having regard to those matters can the joinder of the husband’s mother as a party still be considered as “necessary” for the Court to determine all of the issues in dispute in the case?

15. Warnick J, sitting as the Full Court constituted by a single Judge,[1] said of the word “necessary” as used in rule 11.01(1) of the Federal Magistrates Court Rules (as they then were called) – a rule very similar to Rule 6.02 of the Family Law Rules:

    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”.

    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”.

    [1]Wayne & Dillon & Dillon [2008] FamCAFC 204 at [18]and [19].

16. Clearly, an application pursuant to s 106B for orders setting aside specific dispositions of money from a husband, who is a party to an application for orders pursuant to s 79, to his mother, where specific dispositions that are sought to be set aside are identified and conceded by the husband and his mother to have occurred, can be properly described as “a cause of action, recognisable at law, against a ‘third person’”, and as one that “is particularised”. Yet, although Warnick J said that, in such circumstances, “it is at least highly likely that joinder will be “necessary for the court to completely and finally determine all matters in dispute”, can it actually be said that it is in this case?

17. As already noted, the husband’s mother has sworn a number of affidavits in which she deposes to matters directly relevant to the s 106B issues. It is intended that she be a witness in the husband’s case at the trial, in respect of both the parenting orders dispute and the property adjustment orders dispute. She will, therefore, be available for cross-examination by counsel for the wife. Bank accounts of the husband’s mother have already been produced by a bank in response to a subpoena caused to be issued by the Court on application of the wife – although that drew complaint from the husband’s mother that she was not given notice. Nevertheless, documents that the wife will, no doubt, argue are critical to the determination of the application for orders pursuant to s 106B were produced, inspected and copied by the wife’s legal representatives. Clearly, the wife and her legal representatives have available to them for further use the Court’s Rules relating to subpoenas. If there are more documents that they consider they need to obtain from the husband’s mother if she is not a party and subject to disclosure obligations they are clearly able to take the necessary steps to achieve that. No part of the submissions made by counsel for the wife in support of the joinder application was directed at needing mandatory disclosure obligations to apply to the husband’s mother in order to be able to properly make out the s 106B case. I cannot, at this stage, see that such is “necessary” in order to determine all the matters in dispute in these proceedings.

18. The husband’s mother was quite apparently resolute in not wanting to be a party to the proceedings although she is quite content to be a witness and to be cross-examined on her affidavit evidence. As I have said, she accepts that any orders the Court makes directed at her pursuant to s 106B will bind her. Of course, although as a party she could choose not to have legal representation and choose to take no real active part in the trial other than as a witness, there is the potential for her to consider she should have legal representation and that could cost her quite a lot of money. She clearly eschews that prospect and has chosen, notwithstanding being fully appraised of the relief that the wife seeks against her and the husband and having clearly received comprehensive legal advice from experienced family law solicitors and counsel, not to become a party to the proceedings and to actively oppose such course.

19. I am, ultimately, not persuaded in all the circumstances that I have outlined that it is “necessary” for the husband’s mother to be joined as a party in the proceedings for me to be able to determine all issues in dispute in the case. Accordingly, I do not consider that I must join her as a party and I will not.

20. Finally, I refer to the fact that much of the argument before me on 25 October, particularly from counsel for the husband’s mother, was, in my judgment, directed at trying to persuade me that the s 106B relief will not be available to the wife in this case, as the evidence stands. In response, I observe that the orders sought by the wife pursuant to s 106B require, principally, the determination of whether the identified dispositions of money by the husband to his mother, or any of them, were made to defeat an anticipated order in property adjustment proceedings or whether they were likely to defeat any such order, irrespective of intention. If either of those findings are made, then a discretion to set aside the dispositions is enlivened and would have to be exercised judicially having regard to all of the other relevant aspects of the s 79 property adjustment proceedings. Whilst the evidence of the wife, the husband and his mother clearly demonstrates that the determination of these matters of fact and any subsequent exercise of discretion remain matters about which there is significant dispute, in my judgment, little more can be said at this point in the proceedings other than acknowledging that the determination of such matters is properly to be left to the trial and cannot be done on a summary basis, without cross-examination, at the point of determining a contested joinder application.

21. I refuse the application to join the husband’s mother not because of a view that the wife’s application for orders pursuant to s 106B will not succeed, but simply because I accept the submission of counsel for the husband’s mother that her joinder is not necessary to determine all of the issues in dispute and to make, if considered appropriate, just and equitable, orders that bind her at the conclusion of the trial.

I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 3 November 2016.

Associate: 

Date:  3 November 2016