Chen & Chen & Anor (No 2)

[2017] FamCA 285

FAMILY COURT OF AUSTRALIA

CHEN & CHEN AND ANOR (NO 2) [2017] FamCA 285

FAMILY LAW – PRACTICE AND PROCEDURE – Pleadings- – Where there are multiple parties and properties-where the wife seeks orders against third parties- where the wife has filed a Statement of Facts and Contentions _Whether the wife should be required to file a Statement of Claim in accordance with the Rules of the Supreme Court of Victoria-procedural fairness- distinction made between the merits of an application versus whether it sufficiently identifies the nature and basis of a claim-where it is found that the wife’s lack of knowledge and discovery has prevented a more detailed Statement of Facts and Contentions

Family Law Act 1975 (Cth)
Supreme Court (General Civil Procedure) Rules 2015 (Vic)

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175Banque Commericale SA v Akhil Holdings Ltd [1990] HCA 11
Bourke & Bourke and Anor [2009] FamCA 27

APPLICANT: Ms Chen

FIRST RESPONDENT: Mr Chen

SECOND RESPONDENT: Ms Quen

THIRD RESPONDENT: C Pty Ltd

FILE NUMBER: MLC 5805 of 2016

DATE DELIVERED: 5 May 2017

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Macmillan J

HEARING DATE: In Chambers

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Dickson QC

SOLICITOR FOR THE APPLICANT: Taussig Cherrie Fildes

COUNSEL FOR THE FIRST RESPONDENT: Mr Bartfield QC

SOLICITOR FOR THE FIRST RESPONDENT: Landers & Rogers

COUNSEL FOR THE SECOND RESPONDENT: Dr Ingleby

SOLICITOR FOR THE SECOND RESPONDENT: Kenna Teasdale Lawyers

THE THIRD RESPONDENT: N/A

THE FOURTH RESPONDENT: N/A

THE FIFTH RESPONDENT: N/A

THE SIXTH RESPONDENT: N/A

THE SEVENTH RESPONDENT: N/A

THE EIGHTH RESPONDENT: N/A

THE NINTH RESPONDENT: N/A

THE TENTH RESPONDENT: N/A

Orders

IT IS ORDERED THAT

1. All extant applications be adjourned for hearing in the Registrars Directions Hearing List at 9.30 am on 26 May 2017.

2. The Application in a Case filed by the Second Named Respondent on 31 August 2016 be otherwise 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 Chen & Chen and Ors (No 2) 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 MELBOURNE

FILE NUMBER: MLC 5805  of 2016

Ms Chen

Applicant

And

Mr Chen

First Respondent

And

Ms Quen

Second Respondent

And

C Pty Ltd

Third Respondent

And

Quen Pty Ltd (ACN …)

Fourth Respondent

And

E Pty Ltd (ACN …)

Fifth Respondent

And

Company F (ACN …)

Sixth Respondent

And

G Pty Ltd (ACN …)

Seventh Respondent

And

Mr A Chen

Eighth Respondent

And

Mr B Chen

Ninth Respondent

Mr C Chen

Tenth Respondent

REASONS FOR JUDGMENT

1. This is a complex matter involving multiple parties, properties and entities. By way of brief background, the husband and the wife in this matter married in 1983 and have three adult children. The husband and the de facto wife, who is the second named respondent in the substantive proceedings and the applicant in this application commenced a relationship in 1998 and they have two children. The two relationships co-existed alongside one another over many years. Although the de facto wife was aware of the husband’s relationship with the wife, it is the wife’s case that she was unaware of the husband’s relationship with the de facto wife.  

2. It is common ground that the husband and wife established various businesses, , as well as developing various properties from which they received rental income throughout their relationship. Simultaneously, the husband transferred and acquired assets in the name of the de facto wife, albeit it is the wife’s case that she was unaware that he had done so.

3. On 24 June 2016 the wife filed an Initiating Application in which she sought inter alia orders including orders pursuant to s 106B of the Family Law Act 1975 (Cth) (“the Act”) and orders for property settlement. The wife has amended that Initiating Application and now seeks to rely upon her Fourth Amended Initiating Application.

4. On 31 August 2016 the de facto wife filed an Application in a Case seeking the following orders:

   1.That the Applicant Wife’s Amended Initiating Application filed on 27 July 2016 be dismissed for want of jurisdiction and/or pursuant to Rule 10.12 of the Family Law Rules 2004.

   2.Any other order this Honourable Court deems fit.

Orders made on 6 December 2016

1. The de facto wife’s Application in a Case was listed for hearing before McClelland J on 6 December 2016. On that date orders were made by consent in the following terms:

   1.By 4.00pm on 22 December 2016 the Wife:

   a.File and serve a Further Amended Initiating Application specifying the Final Orders sought by her (noting that paragraphs 1(c) and (d) of the current Application are not being pursued in their current form) and naming as parties any additional necessary parties, having regard to the relief then sought; and

   b.Serve upon the Second Respondent contentions of fact and law setting out (with such particularity as the discovery by then provided to her permits) the legal and factual matters relied upon to found the relief sought by her.

   2.By 4.00pm on 30 January 2017 the Second Respondent serve upon all other parties a Response to the Contentions of Fact and Law setting out the matters admitted and in dispute.

   3.Paragraph 1 of the Second Respondent’s Application in a Case and paragraphs 1 and 2 of her Application for Interim Orders filed 27 July 2016 and the objections to Subpoena returnable today be adjourned for hearing at 10.00am on 8 February 2017 in the Judicial Duty List.

2. Although the de facto wife in her Application in a Case filed 31 August 2016 and in the submissions filed on her behalf and that of her associated entities, which are also parties to the proceedings, sought the summary dismissal of the wife’s Amended Initiating Application filed 27 July 2016, during the hearing before me on 8 February 2017 her counsel indicated that she was seeking an order requiring the wife to file a Statement of Claim in accordance with the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (“Rules of the Supreme Court of Victoria”) and was not pursuing her application for summary dismissal. Counsel for the de facto wife submitted that this was in accordance with the clear indication given by McClelland J during the hearing before him on 6 December 2016.

3. When the matter came before me in the Judicial Duty List the parties all agreed that this was not a matter that I could determine in the time available in that list on that date and, subject to them filing any further written submissions in support of their respective cases, I should determine the de facto wife’s application in chambers on the basis of those written submissions.

The De Facto Wife’s Case

1. It was submitted by the de facto wife that the wife should be required to file a Statement of Claim in accordance with the Rules of the Supreme Court of Victoria in order to identify “the essential elements of her cause of action” and to afford the third parties in this case, the de facto wife and the fourth to sixth respondents “procedural fairness in knowing the case that they are required to meet.”

2. In this regard counsel for the de facto wife and the fourth to sixth respondents referred to and relied upon the decision of the High Court in Banque Commericale SA v Akhil Holdings Ltd [1990] HCA 11 where Mason CJ and Gaudron J stated at [18]

   The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In Liquidation) [1916] HCA 81; (1916) 22 CLR 490, per Isaacs and Rich JJ. at p 517. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party’s right to this basic requirement of procedural fairness.

3. Counsel for the de facto wife and the fourth to sixth respondents also relied upon Bourke & Bourke and Anor [2009] FamCA 27 where Murphy J said as follows at [25]-[26]

   In cases such as this, where specific “causes of action” are pursued against third parties, pleadings have, in my respectful view, an important and highly useful role. The proper pursuit, and ordering of, particulars, equally serves a vitally important role in defining – and very frequently confining – the issue for determination by the court.

   I note with interest that the Full Court in a decision handed down at the beginning of this year in B Pty Ltd and Ors v K and K (2008) Fam CAF 113 held:-

   “44.However, the narrative or descriptive nature of evidence is often unsuited to formulate or particularise a cause of action against a third party. Something resembling a statement of claim will generally be necessary.

   45.In Gould v Gould: Swire Investments Ltd (1993) FLC 92-434 Fogarty J (with Nicholson CJ and Finn J agreeing) said (at 80,451)

   “I conclude, consistently with Buckeridge and Barro, that the correct procedure, where an applicant in proceedings under the Family Law Act seeks relief against a person who is a stranger to marriage or relationship, is to name that person as an additional respondent in the proceedings and set out the nature of the claim and the basis of it in the ordinary way in the application” [emphasis added by the Full Court in B Pty Ltd]

4. The de facto wife further submitted in summary that the Statement of Facts and Contentions (“SFC”) filed by the wife:

   a)Is transparently inadequate;

   b)A trust is pleaded without even identifying whether it is a resulting or constructive trust;

   c)There is no reference to the necessary integers of either a resulting trust or constructive trust;

   d)The elements of s 106B of the Act are not clearly articulated;

   e)The claim pursuant to s 106 of the Act is not property constituted; and

   f)The allegation of total failure of consideration is inconsistent with the wife’s affidavit material.

Purpose of SFC

1. The de facto wife submitted that during the course of the hearing McClelland J had indicated that “it is commonly the case in cases such as this one that there are actual pleadings along the line of the relevant State Supreme Court pleadings” and “that the parties would be assisted in understanding the issues by the wife filing such a pleading”. The de facto wife further submitted that it was in this context that orders were made by consent for the wife to file a SFC.

2. Irrespective of any comments that may have been made by McClelland J during the hearing before him on 6 December 2016 as to there being pleadings similar to Supreme Court pleadings in cases such as this, ultimately the parties in this case consented to orders requiring the filing of a SFC and not formal pleadings in accordance with the Rules of the Supreme Court of Victoria, as the de facto wife now seeks. Not only did the orders not require pleadings in that form, it also stated that the wife’s contentions of facts and law be provided “with such particularity as the discovery by then provided to her permits.” That order clearly had regard to the possibility that the wife might be unable, absent further discovery, to provide particulars of her claim.

3. In my view the orders speak for themselves and the issue in this case is not whether the orders the parties consented to require the wife to file formal pleadings in accordance with the Rules of the Supreme Court of Victoria, but whether the SFC filed by the wife is sufficient for the purposes of the order that was made. Further and if the Court were satisfied that there were deficiencies in the SFC filed by the wife, the issue then becomes whether those deficiencies would be remedied by the wife now filing a Statement of Claim in accordance with the said Rules.

Merits of a claim versus sufficiency of claim

1. The submissions filed on behalf of the de facto wife, and the fourth to sixth respondents inclusive were, primarily focused upon their then case for the summary dismissal of the wife’s Initiating Application based upon what she submitted was the lack of merit in the wife’s case rather than the procedural aspects of the case and in particular the question of whether the wife should be required to file formal pleadings in the form required by the Rules of the Supreme Court of Victoria. However, in my view there is a distinction to be drawn between the merits of the wife’s Initiating Application and whether the SFC sufficiently identifies the nature and basis of her claim against the various third parties who are the respondents in these proceedings.

2. Whilst the submissions are focused primarily upon the merits of the wife’s claim (submissions which may ultimately be determined to have merit), in so far as it is submitted that the SFC does not sufficiently identify the necessary integers of a resulting trust, I accept as submitted by the wife that this is likely a result of the deficiencies in the wife’s knowledge of the husband’s conduct and the financial arrangements during the marriage, rather than a deficiency in the SFC. Nor in these circumstances would any deficiency, even if I accepted that the SFC was deficient, be cured by the wife being required to file a Statement of Claim in accordance with the Rules of the Supreme Court of Victoria. She would almost inevitably be in exactly the same uninformed position as she was when the SFC was filed.

3. In so far as the de facto wife in her submissions makes any complaints with respect to the wife’s application for orders pursuant to s 106B of the Act and her case with respect to the Deed of Settlement, those submissions are largely based on the likely merits of her claim and the lack of particulars thereof, rather than those claims not having been identified.

4. No issue is taken with the principle that pleadings serve to ensure the basic requirement of procedural fairness, that is, that a party knows the case against him or her and has the opportunity to meet that case particularly in circumstances where that party is a stranger to the marriage. However as French CJ said in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [30] “[i]t might be thought to be a truism that ‘case management principles’ should not supplant the objective of doing justice between the parties according to law.”

5. Whilst this is not a case in which the wife seeks to amend her pleadings the above principles are in my view particularly relevant to this case. As submitted by the wife, and in my view with some force, neither the de facto wife nor the other third parties in this case can be said to be at arms length or parties to arms length transactions, as that term is generally understood. To the contrary it is possible that in this case all of the respondents have knowledge of the transactions complained of by the wife, which were not otherwise known to her at the time and of which she still has an incomplete understanding. It is hard to see how justice could be served in these circumstances by requiring the wife to file formal pleadings when she is not armed with the information she requires to do so. Nor can I see any purpose being served by requiring the wife to file a Statement of Claim in accordance with the Rules of the Supreme Court of Victoria in these circumstances.

6. In my view the SFC, whilst it may be lacking some particularity, which the orders requiring it to be filed foreshadowed, sufficiently identifies the nature of the case the respondents will be required to meet at least for the purposes of progressing these proceedings.

7. That does not mean that when armed with the knowledge she now lacks that the need for procedural fairness might require that the wife file a Statement of Claim in accordance with the Rules of the Supreme Court of Victoria. The added benefit of her doing so would be to confine the issues the Court is required to determine. In all of the circumstances I propose to dismiss the de facto wife’s Application in a Case filed 31 August 2016.

8. The parties agree that whatever the outcome of the de facto wife’s application the matter should be otherwise adjourned to the Registrars List for further orders and directions with respect to the further conduct of the matter.

I certify that the preceding twenty two (22) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered on 5 May 2017.

Associate: 

Date:  5 May 2017