Clarke and Vargas & Anor

[2017] FamCA 990

FAMILY COURT OF AUSTRALIA

CLARKE & VARGAS AND ANOR [2017] FamCA 990

FAMILY LAW – PRACTICE AND PROCEDURE – Where the Court identified no legal basis for the second respondent to remain in these proceedings – Where the applicant failed to articulate a proper claim in law against the second respondent – Where the second respondent is removed as a party in the proceedings.

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

Lindon v The Commonwealth of Australia (No 2) (1996) 70 ALJR 541

APPLICANT: Ms Clarke

FIRST RESPONDENT: Mr Vargas

SECOND RESPONDENT: Ms W Vargas

FILE NUMBER: BRC 10951 of 2011

DATE DELIVERED: 30 November 2017

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Carew J

HEARING DATE: 28 November 2017

REPRESENTATION

FOR THE APPLICANT: Self-Represented

FOR THE FIRST

RESPONDENT:

Self-Represented

FOR THE SECOND RESPONDENT: Self-Represented

Orders

1. That paragraphs 4 and 6 of the Further Further Amended Initiating Application filed 3 November 2016 (interim orders sought) be dismissed.

2. That the second respondent be removed as a party in the proceedings.

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 Clarke & Vargas and Anor 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 10951 of 2011

Ms Clarke

Applicant

And

Mr Vargas

First Respondent

And

Ms W Vargas

Second Respondent

REASONS FOR JUDGMENT 

1. On 7 July 2017 paragraphs 4 and 6 of the Application filed on 3 November 2016 (interim orders) and an application for summary dismissal of any claim made by the applicant against the second respondent were listed for hearing. 

2. The first respondent did not appear at the hearing.

3. The applicant and second respondent represented themselves.

4. At the commencement of the hearing the applicant indicated that she did not press paragraphs 4 and 6 of her application referred to above and sought that they be dismissed.

background

1. The applicant and first respondent lived in a de facto relationship from 1 September 2010 to 15 October 2011. They have one child together, C, born in 2011.

2. The applicant is 39 and engaged full time in home duties. She has another child, S, aged 10.

3. The first respondent is 57. His occupation is somewhat unclear but it appears he is involved in a business in Town A. He was declared bankrupt on 19 December 2012 and discharged from bankruptcy on 6 March 2016.

4. The second respondent is the first respondent’s adult daughter. She is 26 and is in a relationship and has two young children.

5. Property proceedings were commenced by the applicant against the first respondent on 11 October 2013. Earlier parenting proceedings were resolved after a trial in 2014. 

6. At some point the applicant joined the second respondent by filing an amended application. 

7. The first respondent has a history of involvement in a variety of businesses. His activities were conducted via W Pty Ltd and the W Trust. The first respondent contends that he did not draw a wage but received money when from the proceeds of his businesses. He was the appointor and trustee of the W Trust and contends that since 2007 the sole beneficiary of the W Trust has been the second respondent.

8. The first respondent contends that at the commencement of the relationship he had net assets of approximately $1,230,000. Further, he contends that at the commencement of cohabitation the W Trust owned a property at GG Street, Suburb HH, Queensland valued at about $3,090,000 subject to a mortgage of about $3,000,000. He contends that the net assets of the trust at that time were $90,000.

9. The first respondent accounts for the articles of property retained by him at separation. Some property was sold for $120,000 “through the W Trust”. The proceeds were used to pay outstanding service fees and the balance was paid to the second respondent. The second respondent denies receiving any money from the sale of the livestock. The remaining property was either given away or destroyed.

10. There is no evidence before me as to the assets owned by the applicant at the date of commencement of cohabitation. The only evidence of any contribution made during the relationship is contained in a transcript of proceedings of the parenting proceedings in 2014 where it was put to the first respondent that the applicant had given him $70,000 which he denied. The first respondent said that the applicant had told him she had contributed $30,000 and, she requested he reimburse her for this sum by cheque. This contention was not challenged.

11. In the Application Initiating Proceedings for property settlement (as amended on 3 November 2016) a number of orders are sought by the applicant that may involve the second respondent and are as follows:

    2. That assets forfeited, lost, gifted or transferred by Mr Vargas or any Company, Trust or other entity with whom he was involved be added back into the asset pool and a redistribution be made. Those assets to include [motor vehicle], [the equipment] as well as [livestock] and their 2011/12 progeny. That liberty be reserved if there is a shortfall in the monies to be paid to the de facto wife that thereafter the loss (as a wastage argument) make up the de facto husband’s share.

    3. That [the livestock] is to be returned to the asset pool to be sold at the … sale 2017 whereby the parties receive an equal share of the sale proceeds. And that the 2015 2016 progeny of the [livestock] Also be accounted for and returned to the asset pool for sale at ..M public auction That a claw back order be made for the direction a

    7. that the applicants share be made as a lump sum case payment within 6 (six) months of final orders with liberty reserved to reclaim said funds from future earnings. That under 106 of the act the court resolves that [Ms Vargas] account for the proceeds of such monies.

    (errors in original)

12. The second respondent contends that she has no idea why she has been joined as she has never received, to her knowledge, any distribution from any trust controlled by her father. The second respondent knows nothing about the W Trust other than what her father has told her, namely, that he set it up for her when she was a child. The second respondent has no property other than her car and an interest in a Town A development with two other persons to which she has made no direct financial contribution. The block in which the second respondent has a legal and beneficial interest is landlocked and was included in the purchase without a value. 

13. The second respondent lives with her partner. He earns $1,300 per fortnight. They receive a part parenting payment and Family Tax Benefits A and B. They have two very young children and rent the property in which they live. The second respondent contends that she simply wants to get on with her life and not be involved in the proceedings.

14. The applicant accepts that there is no property currently owned by the W Trust. The applicant nevertheless contends the matter should proceed to trial including her claim (such as it is) against the second respondent.

what application is before the court?

1. Although the order listing the matter for hearing refers to a ‘summary dismissal application’ the only application relied upon by the second respondent is her Response to Initiating Application filed 6 July 2017 which seeks by way of interim order the dismissal of the Application filed on 3 November 2016 in so far as it involves her.

2. An application to dismiss a proceeding summarily is rarely acceded to and granted only in the circumstances set out in Rule 10.12 of the Family Law Rules 2004 (Cth) (“the Rules”), relevantly for current purposes, where the application has no reasonable likelihood of success, and in considering such an application regard should only be had to the material relied upon by the applicant and any other material that is uncontentious.[1]  

   [1]Lindon v The Commonwealth of Australia (No 2) (1996) 70 ALJR 541

3. Rule 6.04 of the Family Law Rules 2004 (Cth) enables the Court to remove a party from a case. Given the submissions made by the second respondent her application might alternatively be described as such.

material relevant to the substantive claim against the second respondent

1. The applicant relied upon the following material to support her claim against the second respondent:

   a)Further further Amended Initiating Application filed 3 November 2016;

   b)Affidavit of the applicant filed 27 October 2015;

   c)Affidavit of the applicant filed 21 April 2016;

   d)Affidavit of the applicant filed 16 August 2016;

   e)Affidavit of the first respondent filed 13 June 2016 (paragraphs 10, 11, 12, 13, 14 and 52);

   f)Financial Statement of the first respondent filed 5 August 2015.

discussion

1. It is difficult to identify what claim is being made against the second respondent or upon what basis any claim could be made against the second respondent. As best I can determine the genesis for the joinder of the second respondent arose as a result of comments made by Bell J during the parenting proceeding where His Honour expressed suspicion about the legality of the W Trust in circumstances where the first respondent was paying a meagre amount of child support.  In particular, the first respondent gave oral evidence inter alia:

   a)As at 12 February 2014 the W Trust owned a property at Town AB which the first respondent said was worth $3,000,000 to which another person had contributed $1,000,000;

   b)The trust had been established by the first respondent in 2004;

   c)The first respondent just took money from the trust as needed;

   d)The first respondent lent livestock to a person as his “free service which he bred from”;

   e)The first respondent puts livestock in the second applicant’s name but they are really his.

2. The second respondent gave oral evidence during the current hearing and was cross-examined by the applicant. The second respondent stated that the livestock was bequeathed to her in a will by a friend of the first respondent’s. She only knows this from what the first respondent told her. Livestock is in Town II in New South Wales. The second respondent denied any knowledge of the first respondent putting livestock into her name and denied any knowledge of a property at Town AB or any other property owned by the trust. She denied ever receiving any distribution or benefit from the W Trust.

3. The second respondent said she is involved in a business with two people Mr JJ and Mr KK in Town A and the first respondent lives in a house on one of the properties rent free. The first respondent provides advice from time to time about the proposed development. The second respondent is on the title for one of the three lots but has a “handshake interest” in the other two lots. The second respondent denied that her father has an interest in the property. The second respondent has had minimal involvement in the subdivision and has heard from her partners that the “bank may be moving in”.

4. The second respondent denied any knowledge of why the first respondent provided sworn evidence in a financial statement on 5 August 2015 that he received a weekly payment from her of $300 per week. The second respondent conceded that she had lent her father money from time to time when she was previously employed but denied it was a weekly sum.

5. At the time of his bankruptcy the first respondent had unsecured creditors of $1,583,512. The investigations of the official trustee in bankruptcy revealed that W Pty Ltd was placed in liquidation on 16 October 2012 and the liquidator did not expect there to be any dividend paid to creditors. While the official trustee was unable to obtain financial statements for the W Trust a title search revealed that the only property owned by the second respondent was the property at GG Street in his capacity as trustee. A dividend was not anticipated to be paid from the second respondent’s bankrupt estate.

conclusion

1. On the state of the evidence I can find no legal basis for the second respondent to remain in these proceedings. The applicant has failed to articulate a proper claim in law against the second respondent or produce any viable evidence from which a claim might be made against her.

2. Accordingly I propose to order that the second respondent be removed as a party in the proceedings.

I certify that the preceding Twenty-Nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 30 November 2017.

Associate: 

Date: