FAMILY LAW – PRACTICE AND PROCEDURE – strike out application – incorporation of High Court Rules where Family Law Rules are silent on a matter – Family Law Rules making no provision for a pleading strike out application – incorporation of High Court Rules to that strike out application.
PLEADINGS – inconsistent pleadings – vague, embarrassing and otherwise vexatious pleadings – strike out application well-founded.
RESULTING TRUSTS – allegation made that certain real property and shares held by the second respondent on a resulting trust – detailed examination of all relevant authorities – held, pleading defective.
CONSTRUCTIVE TRUSTS – allegation made that certain real property and shares held by the second respondent on a constructive trust – detailed examination of relevant authorities – held, pleading defective.
TRACING – remedy in equity – need to show a proprietary interest in funds that are used to acquire the asset over which a resulting or constructive trust is asserted – review of relevant academic writings and authorities.
IN PERSONAM EXCEPTION TO INDEFEASIBILITY OF TITLE – Breskvar v Wall (1971) 126 CLR 376 – no allegation of personal impropriety of conduct alleged against registered proprietor – held, pleading defective.
STRIKE OUT APPLICATION – purpose of a strike out application – need for precision in pleading complex legal and equitable claims – undesirability of permitting a case to go forward in which the claims and causes of action are not properly pleaded.
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Chen & Chen & Ors (No 3) [2020] FamCA 744
Case
[2020] FamCA 744
Decision Date
CaseChat Overview and Summary
In this matter before Wilson J, the application concerned a strike-out application brought by the second respondent against the first respondent's statement of claim. The dispute involved allegations that certain real property and shares held by the second respondent were held on a resulting trust and a constructive trust for the first respondent. The second respondent sought to strike out parts C and E of the statement of claim.
The primary legal issues before the court were whether the statement of claim, as it related to the claims of resulting and constructive trusts, disclosed a cause of action, was scandalous, frivolous or vexatious, might prejudice, embarrass or delay the fair trial of the proceedings, or was otherwise an abuse of the process of the court. The court was also required to consider the application of the High Court Rules, specifically rule 27.09.5, to strike out applications in the Family Court, given that the Family Law Rules are silent on such matters.
Wilson J reasoned that the Family Law Rules' silence on strike-out applications necessitated the incorporation of the High Court Rules by operation of section 38(2) of the Family Law Act. The court examined the principles governing the pleading of resulting and constructive trusts, including the need to demonstrate a proprietary interest in funds used to acquire the asset in question and the requirements for alleging an in personam exception to indefeasibility of title. The court found that the pleading was defective, lacking the necessary precision for complex legal and equitable claims, and that it was undesirable to permit the case to proceed on such a basis.
The court ordered that the interim defended hearing listed for 14, 15, and 16 September 2020 be vacated. The parties were directed to provide chambers with a minute giving effect to the court's reasons on or before 4 pm on 16 September 2020.
Orders
Orders of the court
Orders
1. The interim defended hearing listed on 14, 15 & 16 September 2020 is vacated.
2. On or before 4pm on 16 September 2020 the parties provide chambers with a minute giving effect to my reasons.
Note: The form of the order is subject to the entry of the order in the Court’s records.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
At one level, the diverse range of circumstances giving rise to a claim to a resulting trust may well explain why there is so little in the books on acceptable methods of pleading a resulting trust. That said, in Snell’s Equity[14] the following is said – Evidence. A resulting trust may arise where B purchases real property of any description or personal property using money provided by A. A bears the burden of proving that he provided the money: Constandas v Lysandrou [2018] EWCA Civ 613. [14] John McGhee QC et al, Snell’s Equity, 34th ed, 2020, paragraph 25 – 004. Mr Glick brought his strike out application in reliance upon s 38(2) of the Family Law Act and r 27.09.5 of the Rules of the High Court of Australia. The application of the Family Law Rules was not apposite because the Family Law Rules, unlike rules of Supreme Courts across Australia and of the Federal Court Rules, are silent on pleadings and strike out applications. The High Court Rules are incorporated by operation of s 38(2) of the Family Law Act. It is in the following terms – In so far as the provisions applicable in accordance with subsection (1) are insufficient, the Rules of the High Court, as in force for the time being, apply, mutatis mutandis, so far as they are capable of application and subject to any directions of the Court or a Judge, to the practice and procedure of the Court. Rule 27.09 of the High Court Rules is entitled “summary disposition.” Rule 27.09.5 is in the following terms – Where a pleading: (a) does not disclose a cause of action or defence; (b) is scandalous, frivolous or vexatious; (c) may prejudice, embarrass or delay the fair trial of the proceedings; or (d) is otherwise an abuse of the process of the Court; the Court or a Justice may order the whole or part of the pleading be struck out or amended. On behalf of the second respondent, Mr Glick QC relied on all of the sub-paragraphs of r 27.09.5. Mr Glick argued that, as against his client, the latest iteration of the statement of claim did not disclose a cause of action, it was scandalous, frivolous or vexatious, it may prejudice, embarrass or delay the fair trial of this proceeding or it was otherwise an abuse of the process of the court. The second respondent did not seek judgment – only an order striking out parts C and E of the statement of claim. By reason of its length, the latest version of the statement of claim is annexed to these reasons. By way of introduction, Mr Glick QC submitted that the first respondent had abandoned an earlier claim to the existence of a resulting trust in his favour. That was historically informative but not determinative in any way for the purposes of this application. Mr Glick QC filed detailed written submissions on 30 April 2020 as well as on 27 August 2020. The submissions dated 30 April 2020 were considered by Dr Dinelli of counsel in formulating the latest version of the statement of claim dated 15 July 2020. The submissions dated 27 August 2020 provided the springboard for Mr Glick’s assault on the 15 July 2020 version of the statement of claim. Some indication of the second respondent’s approach was given by the opening paragraph of the 27 August 2020 submissions where Mr Glick QC wrote as follows – The Wife’s Further Amended Statement of Claim filed 28 July 2020 (“FASOC”) represents her third attempt to manufacture some equitable proprietary claim over properties and the proceeds of the sale of properties registered in the name of the de facto Wife and her related entities (referred to in this submission as the de facto Wife). It is to be noted that the Wife now for the first time has added a constructive trust claim notwithstanding her earlier adamantine protestations that her claim was confined to a resulting trust over assets held in the name of the de facto Wife.