Coopers and Coopers & Anor
[2013] FamCA 924
•29 November 2013
FAMILY COURT OF AUSTRALIA
| COOPERS & COOPERS AND ANOR | [2013] FamCA 924 |
| FAMILY LAW – PROPERTY – Interim Distribution – where the wife seeks a specified sum as an interim property distribution pursuant to s 79 and s 80(1)(h) of the Family Law Act 1975 (Cth) – orders made for an interim property distribution in accordance with the order sought by the wife. FAMILY LAW – PRACTICE AND PROCEDURE – Joinder – where the husband’s son seeks leave to be joined as a party to the proceedings – where the proposed intervener claims an equitable interest over certain real estate within the matrimonial asset pool – orders made granting leave to the proposed intervener to intervene in the proceedings. |
| Family Law Act 1975 (Cth) ss 74; 79; 80; 92; 117 Family Law Rules 2004 (Cth) r 6.02; 6.05; 6.06; 13.01 Federal Circuit Court Rules 2001 (Cth) r 11.03 |
| Muschinski v Dodds (1985) 160 CLR 583 Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578 Bergman & Bergman [2008] FamCAFC 207 Strahan & Strahan (interim property orders) [2009] FamCAFC 166 Finnazi & Finazzi [2012] FamCA 102 Marchant &Marchant [2012] FamCAFC 181 Vanin & Vanin [2013] FamCA 16 Kyriakos & Kyriakos [2013] FamCAFC 22 |
| APPLICANT: | Ms Coopers |
| RESPONDENT: | Mr C Coopers |
| INTERVENER: | Mr J Coopers |
| FILE NUMBER: | ADC | 1027 | of | 2012 |
| DATE DELIVERED: | 29 November 2013 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Dawe J |
| HEARING DATE: | 4 November 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr McQuade |
| SOLICITOR FOR THE APPLICANT: | Adey Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Richards |
| SOLICITOR FOR THE RESPONDENT: | Howe Martin & Associates |
| COUNSEL FOR THE INTERVENER: | Ms Kari |
| SOLICITOR FOR THE INTERVENER: | Norman Waterhouse |
Orders
By consent of the applicant and respondent it is ordered that:
The husband’s interest in the following:-
(a)the business known as the Business E, including all licenses, plant and equipment;
(b)the property situated at Property 1, B Street, Suburb M, in the State of South Australia;
(c)the property situated at Property 2, B Street, Suburb M in the State of South Australia;
(d)the property situated at C Street, Suburb M in the State of South Australia;
be valued by Mr A of V Valuers.
The following properties be valued by F Valuers:-
(a)5 G Avenue, Suburb H in the State of South Australia;
(b)I Street, Suburb J in the State of South Australia;
(c)3 K Street, Suburb L in the State of South Australia;
(d)1 and 8 N Street, Suburb O in the State of South Australia;
(e)P Street, Suburb L in the State of South Australia;
(f)Q Street, Suburb O in the State of South Australia;
(g)R Street, Suburb S in the State of South Australia;
The Type T boat be valued by U Valuers at the joint expense of the husband and the wife.
The valuations be conducted as single expert valuations pursuant to Part 15.5 of the Family Law Rules.
It is further ordered that:
UPON NOTING within seven [7] days the parties to confirm with Chambers if there are any typographical errors in relation to street numbers of the properties that require amendment in paragraphs (1) and (2) by way of a joint signed letter sent to …@familycourt.gov.au.
The valuations referred to above in paragraphs (1) and (2) be conducted at the joint expense of the husband and the wife.
To the extent that such documentation has not already been provided to the wife, the husband do within twenty-eight (28) days of the date hereof (or as soon as such documentation is made available to him) provide formal discovery of the following documents:-
(a)the husband’s personal taxation returns for the financial years ended 30th June 2007 to 30th June 2013;
(b)the wife’s personal taxation returns for the financial years ended 30th June 2007 to 30th June 2013;
(c)taxation returns and Financial Statements for the years ended 30th June 2007 to 30th June 2013 of all companies, trusts and other trading entities in which the husband is involved including but not limited to the following:-
(i)Coopers & Co Pty Ltd;
(ii)Coopers Nominees Pty Ltd;
(iii)D Pty Ltd;
(iv)W Pty Ltd;
(v)Coopers & Co Pty Ltd Superannuation Fund;
(d)the husband’s current Will;
(e)all statements relating to all bank accounts operated by the husband in his sole name or jointly with any other person for the period 1st January 2011 to the current date;
(f)all documents relating to all shares or investments held by the husband in his sole name or jointly with any other person;
(g)all documents relating to any sale, transfer, assignment, leasing or mortgaging of the husband’s interests in the assets of the husband and the wife including but not limited to the following:-
(i)the real estate interest of the husband and the wife;
(ii)the husband’s interest in Coopers & Co Pty Ltd, Coopers Pty Ltd, D Pty Ltd, W Pty Ltd and Coopers & Co Pty Ltd Superannuation Fund.
Within fifty-six (56) days of the date of the order, the husband do pay or cause to be paid to the solicitors for the wife the sum of ONE HUNDRED AND FIFTY THOUSAND DOLLARS [$150,000.00] pursuant to s 79 and s 80(1)(h) of the Family Law Act 1975 (Cth) with such sum to be characterised as a partial property settlement.
To the extent that such documents have not yet been completed or are not yet in the process of being completed, the husband do forthwith do all such acts and things as shall be necessary to provide instruction to the accountants of the husband and the wife or the accountants of the companies to complete taxation returns and Financial Statements of the parties personally and of the following companies and other entities:-
(a)the business and company of Coopers Pty Ltd;
(b)Coopers & Co Pty Ltd;
(c)D Pty Ltd being the business of Business E;
(d)X Pty Ltd;
(e)Coopers & Co Pty Ltd Superannuation Fund;
(f)any other company or entity operated by the husband;
for all financial years ended 30th June 2013;
To the extent that the value of any such items are not agreed between the husband and the wife, the husband and the wife do forthwith do all such acts and things as shall be necessary to obtain single expert valuations of furniture, personal property and motor vehicles of the husband and the wife to be undertaken by Y Valuers or such other valuer as agreed between the parties; with the costs of such valuation to be paid jointly by the husband and the wife;
The parties’ have leave to apply for a Financial Conciliation Conference to occur by filing and serving an Application in a Case with a supporting affidavit with such application not to be made until the valuations referred to in paragraphs (1), (2), (3) and (9) of these orders are completed.
Orders (5)(b) and (5)(c) as made by FM Cole (as he then was) on 9 May 2012 and order (4) made by FM Cole (as he then was) on 24 May 2012 do continue.
To the extent that such leave is required, leave is granted to Mr J Coopers and to Z Pty Ltd to intervene in these proceedings.
The wife’s Amended Response to Mr J Coopers’ Application in a Case filed 30 October 2013 and the husband’s Reply to the wife’s Response to Mr J Coopers’ Application in a Case filed 10 July 2013 do stand dismissed.
The costs of Mr J Coopers’ Application in a Case filed 23 April 2013; the wife’s Amended Response to Mr J Coopers’ Application in a Case filed 30 October 2013 and the husband’s Reply to the wife’s Response to Mr J Coopers’ Application in a Case filed 10 July 2013 as well as the costs more generally of the proceedings thus far be reserved to the final hearing of the matter.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Coopers & Coopers and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADC 1027 of 2012
| Ms Coopers |
Applicant
And
| Mr C Coopers |
Respondent
And
Mr J Coopers
Intervener
REASONS FOR JUDGMENT
Introduction
Ms Coopers (“the wife”) and Mr C Coopers (“the husband”) separated in September 2011 after approximately 16 years of marriage. The wife initiated proceedings in March 2011 seeking orders pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”).
There is one child of the marriage, namely, AB (“the child”). The child is 17 years of age. The child’s living arrangements post-separation appear to have been resolved by the parties without recourse to the Court.
The husband’s son Mr J Coopers (“the intervener”) seeks to intervene in these proceedings. The husband is amenable to that intervention. The wife is not.
This judgment deals with the interim orders sought in the wife’s Amended Initiating Application filed 23 October 2013 and the intervener’s Application in a Case filed 23 April 2013.
Relationship History
The husband was born in 1944 and is now aged 69. He describes himself as a company director and self-funded retiree. The wife was born in 1961 and is now aged 52. She describes her occupation as “home duties.” The parties commenced cohabitation in 1990 before marrying in March 1995. The child of the marriage, AB, was born in 1996 and is now aged 17.
The parties separated in either August or September 2011. Nothing turns on that point. There is no divorce order on the Court file.
The child has lived with the mother post-separation and spends time with the father in accordance with his wishes. The mother says this time is “irregular.” The father says the child is usually with him each weekend from the conclusion of school on Friday until either Sunday evening or the commencement of school on Monday.
The intervener was born in 1964 and is now 49 years of age. He describes himself as a company director.
Procedural History
The wife initiated these proceedings on 21 March 2013 by filing an Initiating Application supported by an affidavit of herself, an affidavit of her solicitor and a Financial Statement. An Amended Initiating Application has since been filed so the orders sought in the earlier Initiating Application will not be set out.
The wife appeared before FM Cole (as he then was) on 30 April 2012. His Honour adjourned the matter to 24 May 2012 upon noting that the wife was “having difficulty effecting service” and that she “may give consideration to applying for an order for substituted service.” The wife had filed an affidavit of attempted service on the same day.
The wife filed an Application in a Case on 4 May 2012 with a supporting affidavit sworn by her solicitor seeking orders that would have the effect of dispensing with the requirement of the wife to effect personal service of the documents she had filed thus far in the Court upon the husband.
FM Cole (as he then was) made orders substantially in accordance with those sought in the wife’s Application in a Case on 9 May 2012. He also restrained the husband from “disposing of, encumbering or dealing with any of the matrimonial assets in his power, possession or control save and except in the ordinary course of business” and “taking any steps to vary in any significant way his current office holdings or interest in any company, trust or other entity in which he has an interest save and except in the ordinary course of business.”
An affidavit sworn by the wife’s solicitor was filed on 16 May 2012. That document details the process in which substituted service upon the husband had been undertaken in the wake of FM Cole’s orders.
An affidavit of service was filed by the wife on 17 May 2012.
An Application in a Case was filed by the wife on 18 May 2012. The Application sought further orders concerning service upon the husband by the wife and further sought for orders to be made in terms of the interim orders sought in the wife’s Initiating Application.
The husband filed an address for service in 18 May 2012.
The wife’s solicitor filed an affidavit on 21 May 2012 annexing certain correspondence passing between the parties’ legal representatives.
Both parties appeared before FM Cole (as he then was) on 24 May 2012. The following notations appeared on the consent orders certified by his Honour on that date:
A.The husband denies deliberately avoiding service and, in any event, all of the documents filed by the wife in these proceedings have now been formally served upon the husband.
B.The husband does not admit the necessity for any injunction orders but does not oppose the continuation of the Orders made on 9 May 2012.
C.The parties have agreed to engage in a mediation style conference once the husband’s answering documents have been filed and once both parties have given disclosure.
D.The husband agrees that he will, pending further order, continue the payments which he is making on behalf of the wife and their son as set out in paragraph 51 of the wife’s affidavit filed on 21 March 2012.
The payments referred to in Notation D include $500.00 per week spousal maintenance, all education costs of the child AB, outgoings in respect of a property at Suburb S, and all payments relating to the wife’s use of store accounts and credit card liabilities for the day to day expenditure and costs of the child AB and the wife.
The actual orders certified by FM Cole (as he then was) on 24 May 2012 were as follows:
1.That the husband do file and serve a Response, Affidavit and Financial Statement within 28 Days.
2.That the parties do provide further informal disclosure of any documents reasonably requested by the other within 28 days.
3.That paragraph 5 of the Order made on 9 May 2012 do continue in force until further order.
4.That until further order the husband be restrained and an injunction be granted restraining him from giving to the trustees of the [Coopers] & Co Pty Ltd Superannuation Fund a Binding Benefit Nomination in favour of any person other than the wife, which would have the effect of in any way reducing the value to the wife of any superannuation splitting order which might be made by this Honourable Court.
5.That further consideration of all applications be adjourned to 13 July 2012 at 9.30am
6.Liberty to either party to apply on giving short notice to the other side.
Further consent orders were certified by FM Cole (as he then was) on 10 September 2012 in the following terms:
1.That the time for the husband to file and serve his answering documents be extended by a period of 21 days.
2.That the parties obtain valuations of all assets, the value of which is in dispute, with the valuations to be undertaken by such valuers as may be agreed, with liberty to the parties to apply in the event that:-
2.1No agreement can be reached as to the valuer(s) to undertake the valuation(s); and/or
2.2No agreement can be reached as to the method of payment of the valuations fees.
3.That the parties (if so advised and if they consent) attend a further mediation with Mr BB once the valuations have either been agreed or obtained.
4.That the matter be adjourned to 5 February 2013 at 9:30am for consent orders or trial directions.
5.That the parties be at liberty to apply generally on short notice.
Further consent orders were certified by FM Cole (as he then was) on 19 December 2012 in the following terms:
1.The time for the husband to file responding documents be extended to 1st February 2013.
2.The time for the husband to make informal discovery be extended to 1st February 2013.
3.The wife’s costs be reserved.
The parties appeared before FM Cole (as he then was) on 5 February 2013. His Honour ordered:
1.The time for the husband to file responding documents and make informal discovery be extended by a further 21 days.
2.In the event of the husband failing to comply with paragraph 1 of this order, leave is granted to the wife to proceed on an undefended basis.
3.Further consideration of this matter be adjourned for directions and possible listing for trial to 14 March 2013 at 9.30am before Federal Magistrate Cole.
The husband filed his Response to the wife’s Initiating Application on 26 February 2013 with a supporting affidavit and a Financial Statement. The only interim order sought in that Response is that the wife’s application for interim orders contained in her Initiating Application be dismissed.
The parties appeared before FM Cole (as he then was) on 14 March 2013. His Honour ordered:
1.The parties instruct their solicitors to confer within 14 days regarding the valuations of the matrimonial assets.
2.In the event of Mr [J Coopers] seeking to intervene that he file and serve an Application and Affidavit in support within 35 days.
3.Further consideration of this matter be adjourned for directions to 12 June 2013 at 9.30am before Federal Magistrate Cole.
The intervener filed his Application in a Case and his supporting affidavit on 23 April 2013. Those documents are discussed later in this judgment.
The wife filed a Response to the intervener’s Application in a Case along with supporting affidavits from herself and her lawyer on 6 June 2013. Those documents are also discussed later in this judgment.
The parties appeared before FM Cole (as he then was) on 12 June 2013. His Honour ordered:
1.The husband file and serve a Reply to the Response to the Application in a Case filed by Mr [J Coopers] filed on 6 June 2013 within 28 days.
2.Further consideration of this matter be adjourned for directions and possible listing for the application to intervene and valuation issues to 30 July 2013 at 9.30am before Federal Magistrate Cole.
The husband filed his Reply to the wife’s Response to the intervener’s Application in a Case with a supporting affidavit on 10 July 2013. Those documents are discussed later in this judgment.
Judge Cole transferred the proceedings to this Court on 25 July 2013 upon noting that “the parties agree that this matter has some complexity and the trial will exceed four (4) days.”
The intervener filed a Notice of Address for Service on 3 September 2013. The parties appeared before Registrar Paxton on the same day. The Registrar ordered that “all interim issues are adjourned for hearing before the Honourable Justice Dawe on Monday, 4 November 2013 at 10.00am (1/2 day allowed” upon noting that “a listing is required for interim issues including a Barro application, joining a third party to the proceedings, costs of valuation and the assets to be valued.”
The wife’s solicitor filed an affidavit on 14 October 2013. It annexes correspondence sent to the husband’s daughter Ms CC that queries whether the same intends to involve herself in the proceedings in a similar manner as planned by the intervener. No response is included in the affidavit. Nothing put to me during the hearing suggests that anything came of this letter to the father’s daughter.
The wife filed an Amended Initiating Application with a supporting Financial Statement on 23 October 2013. Those documents are discussed later in this judgment.
The wife’s solicitor filed an affidavit on 24 October 2013 annexing correspondence to the husband and the intervener concerning discovery.
The wife filed an Amended Response to the intervener’s Application in a Case on 30 October 2013.
The wife’s solicitor filed an affidavit on 31 October 2013 annexing certain correspondence and disclosed documents.
The intervener’s solicitor filed an affidavit on the same day annexing certain correspondence directed to the wife’s solicitor regarding disclosure on behalf of the intervener.
The matter was heard before me on 4 November 2013. The husband was represented by Mr Richards. The wife was represented by Mr McQuade. The intervener was represented by Ms Kari.
The intervener filed, with my leave, a Notice of Intervention by Persons Entitled to Intervene document. The husband filed with my leave, a summary of his submission with respect to valuations, the costs of the same, and the interim costs/property settlement application. I also received documents entitled “proposed orders sought by [Mr J Coopers]” from the intervener, “the wife’s aide memoir” and “the joinder issue” from the wife and a proposed consent order from the husband as exhibits.
I reserved my decisions after hearing the submissions of the parties.
The parties appeared before Registrar Paxton shortly after I heard the matter on 12 November 2013. The Registrar adjourned the proceedings for a directions hearing on 21 January 2013 at 2.30pm upon noting that the parties were awaiting the outcome of the intervention application and valuations issues dealt with in this judgment.
The Minute of Consent Orders
I received from counsel for the husband a minute of consent orders at the outset of the hearing. That document was modified after some discussions between bar and bench upon counsel for the wife revealing that certain parts of the consent order were not agreed to by his client. The amended minute of consent orders reads as follows (with issues on which the parties disagree struck through, deletions on which the parties agree double struck through, and additions to the minute on which the parties are in agreement underlined):
1.That the husband’s interest in the following:-
1.1.the business known as [Business E], including all licenses, plant and equipment;
1.2.the property situated at [Property 1, B Street, Suburb M];
1.3.the property situated at [Property 2, B Street, Suburb M];
1.4.the property situated at [C Street, Suburb M];
Be valued by Mr [A] of [V Valuers]
at the joint expense of the husband and the wife.2.That the following properties be valued by [
EE Valuers]/[F Valuers]at the joint expense of the husband and the wife:-2.1.[5 G Avenue, Suburb H];
2.2.[I Street, Suburb J]; and
2.3.[3 K Street, Suburb L];
2.4.[1 and 8 N Street, Suburb O];
2.5.[P Street, Suburb L];
2.6.[Q Street, Suburb O];
2.7.[R Street, Suburb S];
3.That the [Type T] boat be valued by [U Valuers] at the joint expense of the husband and the wife.
4.That the valuations be conducted as single expert valuations pursuant to Part 15.5 of the Family Law Rules.
I will certify the above as consent orders. I note that the intervener apparently took no part in the preparation of the minute and did not speak for or against the proposed orders contained within the same. I do not consider the intervener to have consented to these orders.
I draw to counsel’s attention some issues arising out of the consent minutes. Firstly, the parties have consented to the property at 3 K Street, Suburb L being valued. Throughout the Court file, and particularly, in the Property/Assist search annexures contained in the affidavit of the wife’s solicitor filed 21 March 2013, references are made to the property owned by the parties on that street as being 1 K Street as opposed to 3 of the same. I will give the parties leave to apply on short notice to amend the order in relation to the correct street number.
To similar effect, the Court file on occasion refers to a property at 9 N Street, Suburb O, yet the parties have agreed to the valuation of a property at 8 N Street, Suburb O. Once again, I will give the parties leave to apply on short notice to amend the order in relation to the correct street number.
Elsewhere, the Court file and the oral submissions of the parties variously referred to the property described in the consent minute as “5 G Avenue, Suburb H” as either “5 G Street, Suburb H” or “5 G Avenue, Suburb S” or “5 G Street, Suburb S.” Once again, parties will be given leave to apply on short notice to amend the order in relation to the consent minute if it does not reflect the correct address.
The only other issue outstanding arising out of the minute is the issue of at whose expense the valuations should be conducted. The wife is willing for the valuations to be joint expenses of the wife and the husband if she is successful in her application for litigation funding (discussed later in this judgment). She argues that the husband should bear the cost of the valuations at first instance if her litigation funding application is unsuccessful. The husband’s argument appears to be that the valuations should be joint expenses regardless of the outcome of the wife’s litigation funding application.
As will become clear later in this judgment, the wife has been successful in her application for “litigation funding.” Accordingly, the order will be that the valuations are to be conducted at the joint expense of the husband and the wife.
The Wife’s Amended Initiating Application
The wife’s counsel confirmed at the hearing that the wife was pressing interim orders 6, 10, 12 and 13 as sought in her Amended Initiating Application filed 23 October 2013. Orders 6 and 12 were amended to update year references to include 2013. As such, the orders presently sought are:
…
6.That the husband do within twenty eight (28) days of the date hereof provide formal discovery of the following documents:-
(a)the husband’s personal taxation returns for the financial years ended 30th June 2007 to 30th June 2013;
(b)the wife’s personal taxation returns for the financial years ended 30th June 2007 to 30th June 2013;
(c)taxation returns and Financial Statements for the years ended 30th June 2007 to 30th June 2013 of all companies, trusts and other trading entities in which the husband is involved including but not limited to the following:-
(i) [Coopers] & Co Pty Ltd;
(ii) [Coopers] Nominees Pty Ltd;
(iii) [D] Pty Ltd;
(iv) [W] Pty Ltd;
(v) [Coopers] & Co Pty Ltd Superannuation Fund;
(d)the husband’s current Will;
(e)all statements relating to all bank accounts operated by the husband in his sole name or jointly with any other person for the period 1st January 2011 to the current date;
(f)all documents relating to all shares or investments held by the husband in his sole name or jointly with any other person;
(g)all documents relating to any sale, transfer, assignment, leasing or mortgaging of the husband’s interests in the assets of the husband and the wife including but not limited to the following:-
(i) the real estate interest of the husband and the wife;
(ii) the husband’s interest in [Coopers] & Co Pty Ltd, [Coopers] Nominees Pty Ltd, [D] Pty Ltd, [X] Pty Ltd and [Coopers] & Co Pty Ltd Superannuation Fund.
…
10.That within twenty one (21) days of the date of the order, the husband do pay or cause to be paid to the solicitors for the wife the sum of ONE HUNDRED AND FIFTY THOUSAND DOLLARS ($150,000.00), such sum to be utilised on account of the costs and disbursements incurred or to be incurred by the wife in the conduct of these proceedings and including but not limited to the costs of engaging:-
(a)accountants to report on the financial position of the husband and any companies and/or entities in which they or either of them have an interest either legal or equitable; and
(b)valuers to value real estate or personal property;
(c)counsel;
(d)obtaining medical reports in respect to the wife’s health.
…
12.That the husband do forthwith do all such acts and things as shall be necessary to provide instruction to the accountants of the husband and the wife or the accountants of the companies to complete taxation returns and Financial Statements of the parties personally and of the following companies and other entities:-
(a)the business and company of [Coopers] Pty Ltd;
(b)[Coopers] & Co Pty Ltd;
(c)[D] Pty Ltd being the business of [Business E];
(d)[X] Pty Ltd;
(e)[Coopers] Pty Ltd Superannuation Fund;
(f)any other company or entity operated by the husband;
For all financial years ended 30th June 2013;
13.That the husband and the wife do:-
(a)forthwith do all such acts and things as shall be necessary to obtain single expert valuations of:-
(i) the real estate as set out in paragraph 1 hereof to be undertaken by [FF] Valuers or such other valuer as agreed between the parties;
(ii) furniture, personal property and motor vehicles of the husband and the wife to be undertaken by [Y] Valuers or such other valuer as agreed between the parties;
(iii) the business interests of the husband including but not limited to [Coopers] & Co Pty Ltd, [D] Pty Ltd, [X] Pty Ltd and [Coopers] Nominees Pty Ltd to be undertaken by Mr [HH] or such other valuer as agreed between the parties;
With the costs of such valuation to be paid at the first instance by the husband and with such valuations to be undertaken by such person as shall be agreed between the parties and in default of agreement by such person as shall be ordered by this Honourable Court;
(b)do make available for inspection and copying by the other at the other’s reasonable expense all relevant financial documentation such process to be completed by no less than twenty eight (28) days prior to the date of the Financial Conciliation Conference;
(c)participate in a Financial Conciliation Conference at such time and on such date as shall be ordered by this Honourable Court.
…
I take the reference to “the real estate as set out in paragraph 1” as a reference to paragraph 2 of the interim orders sought in the wife’s Amended Initiating Application (no real estate is set out in paragraph 1).
The real estate referred to in paragraph 2 is the properties situated at the following locations (in South Australia unless otherwise specified):
a)R Street, Suburb S;
b)P Street, Suburb L;
c)1 N Street, Suburb O;
d)9 N Street, Suburb O;
e)I Street, Suburb J;
f)1 K Street, Suburb L;
g)Property 1, B Street, Suburb M;
h)Property 2, B Street, Suburb M;
i)C Street, Suburb M; and
j)JJ Street, Suburb KK, Queensland.
Counsel for the wife noted that orders in terms of interim orders sought 3, 4 and 11 had already been made and requested that they continue. Interim orders sought 3 and 4 are reflected in orders 5b and 5a of the orders made by FM Cole (as he then was) on 9 May 2012 and continued indefinitely by order 3 of the consent orders certified by FM Cole (as he then was) on 24 May 2012. Interim order sought 11 is reflected in order 4 of the consent orders certified by FM Cole (as he then was) on 24 May 2012.
I will now deal with each of the interim orders pressed by the wife in turn.
Interim Order 6
This order sought concerns discovery. I note that all of the requested documents are in all likelihood required to be disclosed without any order of this Court given the general duty of disclosure each party owes to this Court as discussed in Chapter 13 of the Family Law Rules 2004 (Cth) (“the Rules”).
Regardless, in the interests of clarity, I will make the order in the terms sought by the wife with two minor exceptions arising out of comments made by the counsel for the husband.
Firstly, counsel for the husband noted that certain financial documents relating to the 2012/2013 financial year are yet to be prepared by the husband and his financial advisers. As such, the orders will be modified such that the husband is to provide those documents as and when they are finalised.
Secondly, counsel for the husband noted that some of the requested documents have already been disclosed. Duplicate disclosure is an unnecessary burden on the litigants. As such, the order will be further modified to reflect the fact that the only documents that are required to be given to the wife are those that have not yet been disclosed.
Of course, both parties’ obligations of disclosure owed to this Court are not confined within the scope of the orders I will make on this issue. Rule 13.01 of the Rules states, “each party to a case has a duty to the Court and to each other party to give full and frank disclosure of all information relevant to the case, in a timely manner,” with that duty starting “with the pre-action procedure for a case” and continuing “until the case is finalised.” There are consequences for non-compliance with this duty (see, eg, the orders for costs that can be made under s 117 of the Act).
Interim Order 10
This order sought concerns funds the wife is seeking from the husband to be utilised on account of the costs and disbursements incurred or to be incurred by the wife in the conduct of these proceedings.
The amount sought in the wife’s first Initiating Application was $60,000. The amount sought in the Amended Initiating Application is $150,000.
I received a short summary of submission document from both the wife’s counsel and the husband’s counsel on this issue at the hearing.
The husband’s written submissions refer to the decisions of the Full Court in Bergman & Bergman [2008] FamCAFC 207, the Full Court composed of Boland, Thackray and O’Ryan JJ in Strahan & Strahan (interim property orders) [2009] FamCAFC 166, Watts J in Vanin & Vanin [2013] FamCA 16, Murphy J in Finnazi & Finazzi [2012] FamCA 102, and the Full Court composed of Finn, Strickland and Forrest JJ in Kyriakos & Kyriakos [2013] FamCAFC 22.
The husband’s written submissions suggest that the requested order can be made as an interim property order pursuant to s 79 and s 80(1)(h); as a spousal maintenance order under s 74, or as a costs order under s 117.
The remainder of the written submissions sought to apply the “two-step process” involved in making an interim property order under s 79 and s 80(1)(h) of the Act as set out in by the Full Court in Strahan & Strahan (interim property orders) (Supra).
The first step was said to involve a “consideration of the interests of justice in making an interim order” with the wife not being required to “show compelling circumstances.” This step was said to be satisfied for numerous reasons:
a)The parties cohabited for 21 years and have a son who has since separation lived with the wife.
b)The parties’ wealth is controlled almost entirely by the husband.
c)The husband has conducted these proceedings so as to protract and delay their final determination by evading service, failing to comply with orders as to the filing of documents and adopting specious argument thereby adding considerably to the wife’s costs.
d)The husband has the financial capacity to comply with the order.
The second step was said to involve a “consideration of s 79 and the likely orders to be made on a final basis.” This step was said to be satisfied as the sum sought by the wife is “within any preliminary view of the wife’s final entitlement.” The wife was said to have “an irresistible claim to a substantial share of the parties’ assets and should not be held out of that property while the matter is being litigated.” The submission suggest that the “interim exercise of power does not interfere with the power of the Court to make orders on a final basis and the orders sought do not unduly limit that power.”
Mr McQuade for the wife delivered his oral submissions on this point first. He commenced by summarising his written submissions and noting that “it doesn’t matter which power is used” as “there is ample power for the making of the order and it is, of course, possible and acceptable and entirely appropriate to make an order for – a litigation funding order and to leave the determination of the character of that order until trial.”
Mr McQuade then restated and expanded upon the “interests of justice” considerations as set out in his written submissions. He went over the husband’s Financial Statement as filed on 27 February 2013 in an attempt to establish that the matrimonial pool appears to be in excess of $10.5 million. Mr McQuade noted that the husband appears to have in excess of $260,000 in bank accounts in his own name, and referred to the $5.6 million gross profit of the D Pty Ltd entity in the financial year ended 30 June 2011. Mr McQuade admitted these numbers were out of date but noted that more current financial documentation had not yet been disclosed by the husband.
Mr McQuade then sought to impugn the conduct of the husband throughout these proceedings with reference to the issue surrounding service early on in the proceedings and the ongoing issues with valuations and discovery in an attempt to show that “the husband has a history of taking every point.”
The husband’s written submission note that the amount sought by way of interim property distribution has increased from $60,000 (as sought in her first Initiating Application) to $150,000 (as sought in her Amended Initiating Application) and that no affidavit material discusses why this increase was necessary.
The submissions also noted that the wife has some $100,000.00 in savings and that her desire not to expend that sum on legal fees is not a valid reason to make the order sought by the wife.
The submissions also note that the wife estimated her likely costs at a total of $62,000.00 in her affidavit filed on 21 March 2012 and that no subsequent affidavit material has amended that figure.
Counsel for the husband’s oral submissions noted that the wife’s claim was, until the morning of the hearing, premised as a costs order pursuant to s 117 of the Act and that accordingly, he was surprised at the wife’s submissions being founded in s 79 and s 80(1)(h) as an interim property order.
Mr Richards noted, with reference to the decision of Murphy J sitting as a single judge in the Full Court in the decision of Marchant &Marchant [2012] FamCAFC 181, that the authorities on s 79 and s 80(1)(h) require a “level of assertion, outline and method” to the making of a claim and that no such structure was present in the wife’s case. He noted that the mere fact that the wife does not wish to expend her savings is not a sufficient reason to make such an order.
Regardless, Mr Richards submitted that the wife has sufficient funds in her savings such that no claim for an interim property order against the husband is appropriate. He further drew my attention to the properties at Suburb H and Suburb J that the wife also deposes to owning. Counsel also noted that the husband is also meeting certain expenses on behalf of the wife and the child that would have the effect of freeing up those savings to be deployed throughout the litigation.
Mr Richards further noted that there was no evidential material upon which such an application could be based, nor was there any material setting out how the sum of $150,000 would be expended. He noted that the wife’s share of the agreed valuations, were they to be joint expenses, would be approximately $13,500.
Counsel then took issue with the wife’s oral submissions as to the financial circumstances of some of the commercial entities in the husband’s control.
Mr Richards ultimately asked that I deal with the order sought as an application for costs and further reiterated that the mere fact that the wife did not want to expend her savings to fund the proceedings was not a sufficient reason for such an order.
The intervener did not advance written submission on this issue. Ms Kari for the intervener did not speak on this issue, save and except to say, in relation to the wife’s Amended Response to her client’s Application in a Case, that her client was not in a position to answer any claim for an interim property order against him by the wife as he was not in possession of the entirety of the Court file and, further, was only made aware of the claim recently.
I am required to identify the source of power which is relied on for the making of the interim order, even though the nature of, or basis for, that order may later be changed as it is “the source of the power that determines the necessary preconditions and relevant considerations for making the order” (Brereton J in Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578 at [30] as cited by Finn and Strickland JJ in Kyriakos & Kyriakos (Supra) at 37, Forrest J concurring at [62]).
As identified earlier in this judgment, the wife posited three potential bases for the making of the requested litigation funding order:
a)An interim property order pursuant to s 79 and s 80(1)(h);
b)A spousal maintenance order pursuant to s 74; and
c)A costs order pursuant to s 117.
The issue is that, whilst counsel for the wife identified those bases, he did not, with the exception of s 79 and 80(1)(h); meaningfully engage with the preconditions for the making of such an order as prescribed in the Act and the case law interpreting the same.
Conversely, the wife’s written and oral submissions concerning the applicability of s 79 and 80(1)(h) were much more focussed.
The following paragraphs from the joint judgment of the Full Court composed of May, Ainslie-Wallace and Kent JJ in Marchant & Marchant (Supra) are a convenient summary of the law on interim property distribution orders made pursuant to s 79 and s 80(1)(h) in light of the discussion of that issue by the Full Court composed of Boland, Thackray and O’Ryan JJ in Strahan & Strahan (interim property orders) (Supra):
[24]In Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 (“Strahan”), the Full Court (Boland, Thackray and O’Ryan JJ) undertook a comprehensive review of the authorities and identified relevant principles and guidelines to be followed in respect of interim property orders pursuant to ss 79 and 80(1)(h) of the Act.
[25]It follows from the joint judgment of Boland and O’Ryan JJ in Strahan that there are two stages to the hearing of such an application and that the first question on an application for such an order is whether the Court should exercise its discretion to entertain the application. Whilst it is not necessary for an applicant to establish compelling circumstances for that question to receive an affirmative answer, it is necessary to establish that it would be appropriate for the Court to exercise the power and the, “…overarching consideration…” as to appropriateness is the interests of justice. Recognising that in the context of s 79 proceedings, the interests of justice will usually be best served by one single and final determination of property orders, it will not be appropriate to exercise the power merely because, on such a final determination, the applicant would receive the interim property sought or in excess of that sought.
[26]We think it is important to highlight that whilst the discussion of the first question in the joint judgment in Strahan includes examples, including by reference to other cases, where the appropriateness criteria would be met, there was no attempt to define or exhaustively identify those circumstances or categories of cases meeting that criteria. That is understandable, given the discretionary nature of the adjudication involved and the wide range and variety of circumstances presented from case to case, so that any such attempt would likely prove to be futile. Nevertheless, the joint judgment in Strahan emphasised both the importance of the interests of justice normally being served by a single and final determination of s 79 orders and that establishing only that the applicant’s ultimate entitlement would cover or exceed the interim claim was not sufficient, on its own, to establish that the application ought be entertained.
[27]It also follows from Strahan that if the first question is answered affirmatively, and the second or substantive stage is reached, because the jurisdiction under s 79 of the Act is being exercised, the provisions of that section must be considered and applied, but with limitations given that it is not the final hearing ([135]). As their Honours Boland and O’Ryan JJ noted at [136], because the discretion conferred by the power in s 79 is to make such order as the Court considers appropriate, provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order, the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal, and must be capable of alteration at any time prior to, or as part of, a final exercise of the s 79 power.
[28]However, if it is established that it is likely that the applicant would only be receiving what he or she was entitled to receive when the power was exhausted, that would be sufficient to enable the order sought to be made ([137]).
I turn to the first step, that being an assessment of whether it would be appropriate to make an interim order, with the “overarching consideration” being the “interests of justice” with no additional requirement imposed upon the applicant for such an order to establish compelling circumstances. However, regard must also be had to “The fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing” (Boland and O’Ryan JJ in Strahan & Strahan (interim property orders) (Supra) at [132]).
I am satisfied that the interests of justice weigh in favour of an order being made for the following reasons:
a)The amount sought, being $150,000, would fall well within the entitlement of the wife in the final property orders proposed by the husband. The husband seeks orders that would have the wife retain the house at 5 G Avenue, Suburb H (estimated by the wife in her Financial Statement to be worth $890,000.00) as well as being transferred the house at I Street, Suburb J (estimated by the husband in his Financial Statement to be worth $450,000.00) as well as an interest in a superannuation fund and a motor vehicle.
b)The wife’s income per week, being $682.00 composed mostly of maintenance payments from the husband, appears to be far less than her personal expenditure per week. I note, however, that the husband meets additional expenses of the wife and child in addition to that sum. The fact that the wife deposed to bank savings of $165,000 in her initial financial affidavit filed 21 March 2012 and now deposes to bank savings of $100,000 in her more recent Financial Statement filed 23 October 2013 suggests that the wife’s financial circumstances, regardless of the husband’s assistance, are reducing. Regardless, the information before me clearly shows that it is the husband who controls the vast majority of the income-producing assets in the matrimonial asset pool. Conversely, the wife has only a modest capital sum at her disposal.
c)The amount sought, which has increased from $60,000 to $150,000, does not seem unreasonable in light of the fact that a third party now seeks to be joined and a multitude of properties and business entities will soon be valued. Those factors suggest that the increased amount sought is not an unreasonably high estimate of the total costs that the wife may incur throughout these proceedings.
d)The amount sought by the wife appears to be, at least on the face of the husband’s most recent Financial Statement, available cash deposits of the husband.
The second stage requires engaging with the factors referred to in s 79(2) and s 79(4) as is the standard practice in making a property order under s 79. The inquiry need not be detailed, but there must be “some assessment of section 79 factors” with any interim property order required to be “conservative so that the final outcome of property settlement will not be compromised by the interim property order” (Watts J in Vanin & Vanin [2012] FamCA 16 at [11]). I consider the following factors relevant to the second stage:
a)The parties have been married since 1995 and cohabited since either 1990 (on the wife’s case) or 1993 (on the husband’s case). It seems a very reasonable conclusion that the wife’s contributions, be they financial or non-financial and direct or non-direct, to the acquisition, conservation or improvement of the matrimonial asset pool or to the welfare of the family are likely be reflected in the final orders in a percentage of the total pool that far exceeds the amount she is seeking today given the fact that the total pool appears to be in excess of $10 million. Even on the husband’s case, the wife should receive in excess of $1,500,000 worth of the pool.
b)The wife’s “future needs” are likely to be substantial given her status as a sufferer of Multiple Sclerosis and her ongoing care of the child of the marriage,
My consideration of the relevant matters in s 79 has been brief, however, I note the comments of Boland and O’Ryan JJ in Strahan & Strahan (interim property orders) (Supra) at [137] that “consideration of such matters may be brief and if it is established that ‘it seems likely to the Court that … the applicant … will be likely to receive by way of property settlement a sum to cover the advance, that would seem to be sufficient to enable the order sought to be made.’” I consider that to be the case in the matter at hand.
As such, and pursuant to s 79 and s 80(1)(h) of the Act, I will make an order that the husband is to transfer to the wife the sum of $150,000.00 within 28 days. As an interim property distribution, I do not consider it necessary to attach conditions to the use of that money (see, eg, the comments of Watts J in Vanin & Vanin (Supra) at [12]). Of course, any final orders made in these proceedings will reflect the fact that the wife has already received $150,000 of the matrimonial asset pool.
Interim Order 12
This order seeks to require the husband to provide instructions to the appropriate accountants such that financial returns for all financial years ended 30 June 2013 of the various commercial entities operated by the husband.
The husband did not speak against this order, with the possible exception that some of this documentation has already been produced to the wife and some of the 2013 financial returns are still being prepared.
I will make this order, with the alteration that the husband is not required to disclose documentation that has already been disclosed, and that the disclosure of the financial year ending June 2013 documents is to occur as soon the same become available. All of that documentation would have been required to be disclosed by the husband in any event as a result of his disclosure obligations as contained in Chapter 13 of the Rules. These orders do not oust or derogate from the ongoing duties of disclosure owed by the parties as mandated by the Rules.
Interim Order 13
This order contains a number of components.
Interim order sought 13(a)(i) requests single expert valuations of certain properties owned by the parties. All of the properties sought to be valued by the wife were the subject of consent orders as discussed earlier in the judgment with the exception of the property at JJ Street, Suburb KK, Queensland. I have assumed that that omission was intentional and that a valuation of that property is not required. I make that assumption based on various comments made by counsel at the hearing that suggested that all of the issues surrounding the valuations of real estate were agreed but for the issue of who should bear the cost of the same.
I will not make an order on the property at JJ Street, Suburb KK, Queensland. Of course, the parties are more than encouraged to obtain that valuation on their own accord should that be necessary. As such, interim order 13(a)(i) can otherwise be dismissed.
Interim order sought 13(a)(ii) seeks the valuation of “furniture, personal property and motor vehicles of the husband and the wife to be undertaken by [Y] Valuers or such other valuer as agreed between the parties.” I did not receive any specific submissions on this point. In the interests of moving these proceedings forward, I will make the order sought, with the added caveat that only the “furniture, personal property and motor vehicles” over which there is a disputed value need be subject to professional valuation. The parties’ and their legal representatives should determine which of those assets really needs to be the subject of professional (and presumably expensive) valuation.
Interim order sought 13(a)(iii) seeks the valuation of the various business interests of the husband. Mr Richards for the husband spoke against this order. His client’s position is that, in light of the fact that all of the real estate is being valued, as well as Business E being valued, the need to value any of the husband’s business entities “will be disposed of because the only entities that trade are the entities that will form part of the [Business E] valuation.” In essence, his argument is that “all of those companies’ interests will be established by the valuation of [Business E] and the land on which it operates and there are no assets outside of that ambit.”
In the interests of minimizing the costs of litigation, I am inclined to agree with the counsel for the husband’s submission on this point. Once the real estate valuations and the valuation of Business E have been received, the parties and the Court will be in a better position to assess the necessity of the business valuations. As such, order 13(a)(iii) will be dismissed.
Interim orders sought 13(b) and 13(c) concern a Financial Conciliation Conference that the wife seeks. I am reluctant to make an order listing such a conference in light of the fact that valuations of many items in the matrimonial asset pool are yet to be completed or even commenced. It is unclear whether the various business entities will need to be valued. Instead, I will give the parties’ leave to apply on short notice to the other party for a Financial Conciliation Conference. An Application in a Case should be filed and served upon the other party with a supporting affidavit setting out the status of the various valuations of the matrimonial assets at the time of filing.
The Intervener’s Application in a Case
The Intervener filed his Application in a Case on 23 April 2013. The orders sought are as follows:
1.That Mr [J Coopers] be included as a party to these proceedings pursuant to Rule 11.03 of the Federal Circuit Court Rules 2001.
2.Such other orders as this Honourable Court deems fit.
The wife filed a Response to the Intervener’s Application in a Case on 6 June 2013. The orders sought are as follows:
1.That the Application in a Case filed by Mr [J Coopers] on 23rd April 2013 be dismissed.
2.That Mr [LL] of [MM Valuers] do value the parties’ interest in the following:
a)[Business E] and including the business license, plant and equipment;
b)the property situated at [Property 1, B Street, Suburb M] owned by [NN] Pty Ltd, [Coopers] Nominees Pty Ltd and [D] Pty Ltd;
c)the property at [Property 2, B Street, Suburb M] owned by [D] Pty Ltd;
d)the properties situated at:
i) [R Street, Suburb S];
ii) [P Street, Suburb L];
iii) [Q Street, Suburb L];
iv) [5 G Street, Suburb H];
v) [1 N Street, Suburb O];
vi) [8 N Street, Suburb O];
vii) [1 K Street, Suburb L];
vii) [I Street, Suburb J];
ix) [C Street, Suburb M]
be valued by [FF] Valuers.
3.That the parties’ remaining interests in [Coopers] & Co Pty Ltd, [D] Pty Ltd and [X] Pty Ltd and nay associated businesses and remaining interests of [Coopers] Nominees Pty Ltd in its capacity as trustee of the [Coopers] Family Trust not otherwise captured by paragraph 2 hereof be valued by either Mr [HH] of [OO Valuers] or Mr [PP] of [QQ Valuers].
4.That [Y] Valuers do undertake a valuation of the boat.
5.That the costs of valuations be paid by the husband at first instance and that the wife’s shares of the cost of valuation be deducted from her final property settlement entitlements.
6.Such further or other orders as this Honourable Court deems just and equitable in the circumstances.
7.That the husband pay the wife’s costs of and incidental to the within proceedings.
The husband filed a Response to the wife’s Response to an Application in a Case on 10 July 2013. The orders sought are as follows:
1.That the orders sought in the wife’s Response to an Application in a Case filed on 6 June 2013 be dismissed.
2.That the parties’ interests (or that of either of them) in the following properties be valued by either Mr [A] of [V] or Mr [TT] of [EE Valuers]:-
2.1.[Business E] including the business license, stock, plant and equipment;
2.2.The property situated at and known as [Property 1, B Street, Suburb M];
2.3.The property situated at and known as [Property 2, B Street, Suburb M]; and
2.4.The property situated at and known as [C Street, Suburb M];
3.That the following properties be valued by [FF Valuers]:-
3.1.The property situated at and known as [5 G Avenue, Suburb H]; and
3.2.The property situated and known as [I Street, Suburb J].
4.That in the event that this Honourable Court determines that it is just appropriate to value the [Type T] boat, that such valuations be undertaken by [U Valuers].
5.That the husband and the wife do bear in equal shares all of the costs of the valuations and that each party do pay into their solicitor’s Trust Account, prior to the completion of the valuations, sufficient funds to meet their share of the valuation fees.
6.That wife do pay the costs of and incidental to this application.
The wife filed an Amended Response to the Intervener’s Application in a Case on 30 October 2013. The amended orders sought are:
1.That the Application in a Case filed by Mr [J Coopers] on 23rd April 2013 be dismissed.
2.That in the event that Mr [J Coopers] is joined as a party to the within proceedings, pursuant to Regulation 19.05 of the Family Law Rules 2004 Mr [J Coopers] do give security for the wife’s costs in the sum of $70,000 and having regard to the following: -
a)the financial means of Mr [J Coopers];
b)the financial means of the wife;
c)the merits of the Mr [J Coopers’] case and the genuineness of his application;
d)the likely costs of the case.
3.That Mr [A] of [V Valuers] do value the parties’ interest in the following:
a)[Business E] and including the business license, plant and equipment;
b)the property situated at Property 1, B Street, Suburb M] owned by [NN] Pty Ltd, [Coopers] Nominees Pty Ltd and [D] Pty Ltd;
c)the property at [Property 2, B Street, Suburb M] owned by [D] Pty Ltd;
4.That a firm of valuers not associated with or known personally to the husband do value the following properties in the State of South Australia: -
i)[R Street, Suburb S];
ii)[P Street, Suburb L];
iii)[Q Street, Suburb O];
iv)[5 G Street, Suburb H];
v)[1 N Street, Suburb O];
vi)[8 N Street, Suburb O];
vii)[1 K Street, Suburb L];
vii)[I Street, Suburb J];
ix)[C Street, Suburb M]
be valued by [FF] Valuers.
5.That the parties’ remaining interests in [Coopers] & Co Pty Ltd, [D] Pty Ltd and [X] Pty Ltd and nay associated businesses and remaining interests of [Coopers] Nominees Pty Ltd in its capacity as trustee of the [Coopers] Family Trust not otherwise captured by paragraph 2 hereof be valued by either Mr [HH] of [OO Valuers] or Mr [PP] of [QQ Valuers].
6.That Mr [VV] of [Y] Valuers do undertake a valuation of the boat.
7.That the costs of the valuations sought herein do be paid at first instance by the husband and if joined a party also by Mr [J Coopers] where appropriate, and that the wife’s share of the cost of the valuations do be deducted from her final property settlement entitlement.
8.Such further or other orders as this Honourable Court deems just and equitable in the circumstances.
9.That the husband and / or Mr [J Coopers] pay the wife’s costs of and incidental to the within proceedings.
The Intervention Issue
Section 92(1) of the Act provides that “any person may apply for leave to intervene in the proceedings” under the Act and that “the Court may make an order entitling that person to intervene in the proceedings.” Such an order “may be made upon such conditions as the Court considers appropriate” (s 92(2) of the Act). An intervener “shall, unless the Court otherwise orders, be deemed to be a party to the proceedings with all the rights, duties and liabilities of a party.”
Rule 6.02 of the Rules provides that “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.”
“Person” is defined in the Dictionary to the Rules as including “a corporation, authority or party.”
Rule 6.05 of the Rules requires “a person who is not a party to a case (other than a person to whom rule 6.06 applies) that “seeks to intervene in the case to become a party” to file an Application in a Case and an affidavit that “sets out the facts relied on to support the application, including a statement of the person’s relationship (if any) to the parties” and “attaching a schedule setting out any orders that the person seeks if the Court grants permission to intervene.”
Rule 6.06 of the Rules applies where a person who is entitled under the Act to intervene in proceedings without the Court’s permission seeks to intervene in a case. That person must file a Notice of Intention by Person Entitled to Intervene document and an affidavit “stating the facts relied on in support of the intervention” and “attaching a schedule setting out the orders sought.”
Interventions pursuant to s 79(10) of the Act list an example of persons who are entitled to intervene in proceedings, and, accordingly, to whom Rule 6.06 of the Rules applies. Section 79(10) speaks of the persons who are “entitled to become a party to proceedings in which an application is made for an order under this section [eg for an alteration of the matrimonial property interests] by a party to a marriage.” Relevant to this case is s 79(10)(b) of the Act, which includes “any other person whose interests would be affected by the making of the order” sought by a party to a marriage pursuant to s 79 as such a person.
The parties did not appear to be certain as to whether leave was in fact required for the intervener to intervene in the proceedings. The orders sought in the intervener’s Application in a Case refer to Rule 11.03 of the Federal Circuit Court Rules 2001 (Cth) (“the FCC Rules”), which provides that “a person may apply to the Court to be included as a party to the proceedings”.
Of course, at that stage, the FCOA Rules did not apply as the matter had not yet been transferred to this Court. There is no analogous provision to Rule 6.06 of the Rules in the FCC Rules.
Counsel for the intervener based her oral submissions on the premise that Rule 6.06 of the Rules applied, and that, accordingly, no leave was in fact necessary as the intervener was entitled to intervene pursuant to s 79(10)(b) of the Act as a person “whose interests would be affected by the making of [an] order under s 79 of the Act.”
I will proceed on the basis that s 79(10) of the Act applies if the intervener manages to establish a prima facie case that he is a person “whose interests would be affected by the making of [an] order under s 79 of the Act.”
In short, the intervener claims to have an equitable interest in the properties at 1 N Street, Suburb O; 8 N Street, Suburb O; and Q Street, Suburb O. It appears to be agreed between the parties that, excluding any claim by the intervener, those properties form part of the matrimonial asset pool and as such are liable to the subject of property orders I may make pursuant to Part VIII of the Act.
The specific final orders sought by the intervener are declarations pursuant to s 78 of the Act that he has “an equitable interest” in those properties.
The husband supports the intervention and will be seeking declarations pursuant to s 78 of the Act to that effect at the final hearing. The wife does not. In her written submissions, the wife argues that the intervener “asserts no interest in the parties’ property other than anticipated bequests to be made to him in his father’s will” and that, regardless of any equitable interest he may have, “the wife does not seek orders that would detract from the husband’s capacity to bequeath the subject property” to the intervener. She further argues that “allegations of payments made for building works on the subject property are matters pertaining to contribution and can be presented by [the intervener] as part of the Husband’s case.” In her oral submissions, the wife argued the intervener has produced no evidence thus far that would substantiate any equitable interest.
In reply, counsel for the intervener argued that the orders sought by the wife would in fact affect the claimed equitable interest of the son as the wife is seeking 65 per cent of the pool and the properties over which the intervener is claiming an equitable interest represent a substantial portion of the total matrimonial asset pool. The exact portion those properties represent was said to be unascertainable at the present moment as the matter remains mired in the discovery and valuation stage.
The issue facing the intervener is that the affidavit filed in support of his Application in a Case does not specify what species of equitable relief he is relying upon to substantiate his claimed equitable interest.
References in his affidavit to the equitable interest being claimed “by virtue of [his] contribution to the acquisition, maintenance and improvement of the properties over a substantial period” suggest that the equitable interest claimed may be founded in a constructive trust as spoken of by the High Court of Australia in Muschinski v Dodds (1985) 160 CLR 583 and Baumgartner v Baumgartner (1987) 164 CLR 137.
Conversely, counsel for the wife based his submissions upon the premise that the intervener’s claimed equitable interest arose out of an equitable estoppel as discussed by the High Court of Australia in Waltons Stores(Interstate) Ltd v Maher (1988) 164 CLR 387. References in intervener’s affidavit to the intervener’s detrimental reliance upon certain representations allegedly made by the husband may have resulted in counsel for the wife taking that approach in his submissions.
Counsel for the intervener was unable to state the percentage of the properties that her client was seeking, instead admitting that her client’s claim was “not yet at that level of sophistication.” One would think that such sophistication would have been achieved by now given the fact that the Application in a Case was filed some seven months ago.
Counsel was ultimately able to confirm that her client says that his equitable interest in the properties is “no less than 50 per cent” but could provide no greater degree of specificity than that.
A further complication arises for the intervener when one considers that, regardless of what representations may have been made by the husband, the properties over which the intervener claims an equitable interest are not owned by him. Rather, they appear to be owned by entities over which the husband has some degree of ownership, control and/or involvement.
Regardless of the issues surrounding the intervener’s claim, I consider that the intervener has established at least a prima facie case that he is a “person whose interests would be affected by the making of [an] order” affecting the matrimonial property pool pursuant to s 79 if in fact he establishes the equitable interest he claims to have.
As such, he is “entitled to become a party to proceedings.” My understanding is that my leave is not required for him to become a party to the proceedings. If I am wrong on that point, then I will make an order granting him that leave.
Counsel for the intervener at the hearing made an oral application that would see the intervener’s company, Z Pty Ltd also joined as a party. For similar reasons, I consider that that entity is also “person whose interests would be affected by the making of [an] order” affecting the matrimonial property pool pursuant to s 79. If that entity does in fact require my leave to intervene in the proceedings and become a party to the same then I will grant that leave.
Finally, I would bring to the attention of the intervener the comments of Deane J in Muchinski v Dodds (Supra) at 615, namely, that the constructive trust is not “a medium for the indulgence of idiosyncratic notions of fairness and justice.” The time has come for the intervener to fully define the contours of his alleged equitable interest in the three properties. I assume that the obligations of disclosure imposed upon him now that he is a party, and obligations of disclosure imposed upon the other parties that will see the intervener receiving disclosure from them, will allow that process to begin immediately.
There is the potential that an order for costs will be made against the intervener if it turns out that his claimed equitable interest does not exist (see, eg, s 117(2A)(e) of the Act).
Other Issues Arising out of the Intervener’s Application in a Case
Paragraphs 2 to 9 of the wife’s Amended Response to the intervener’s Application in a Case and Paragraphs 1 to 6 of the husband’s Reply to the Wife’s Response to the intervener’s Application in a Case, concern issues irrelevant or extraneous to the main thrust of the intervener’s Application in a Case, that being the joinder issue.
Paragraph 2 of the wife’s Amended Response to the intervener’s Application in a Case seeks an order that would have the intervener provide security for the wife’s costs in the sum of $70,000. Counsel for the intervener claimed that her client was not in a position to answer that claim as he was yet to receive all of the documentation that has been filed in these proceedings and only recently became aware of the claim itself.
I am inclined to agree with that position. The wife has received a substantial sum from the husband as security for her costs as outlined earlier in the judgment. If her position is that a further sum is necessary and appropriate in the future and that such sum ought to be received from the intervener, then I will deal with that application if it is filed. I note that I received no oral submissions from the wife as to the appropriateness of such an order being made against the intervener – counsel for the wife’s submissions on orders for security for costs were all directed towards the husband. Accordingly, this paragraph can be dismissed.
Paragraphs 3 and 4 of the wife’s Amended Response to the intervener’s Application in a Case and Paragraphs 1 to 6 of the husband’s Reply to the Wife’s Response to the intervener’s Application in a Case appear to have been dealt with in the minute of consent orders as discussed earlier in this judgment. Accordingly, these paragraphs can be dismissed.
Paragraph 5 of the wife’s Amended Response to the intervener’s Application in a Case seeks the valuation of the various business interests of the husband. That issue has already been canvassed above in relation to the interim orders sought by the wife in her Amended Initiating Application. For the reasons discussed above, I do not consider it appropriate to make such an order at this stage. Accordingly, this paragraph can be dismissed.
Paragraph 6 of the wife’s Amended Response to the intervener’s Application in a Case deals with the valuation of the boat. That was dealt with in the minute of consent orders referred to earlier in the judgment. Accordingly, this paragraph can be dismissed.
Paragraph 7 of the wife’s Amended Response to the intervener’s Application in a Case seeks for the costs of the valuations to be borne by the husband at first instance and by the intervener as well if he is joined as a party. The issue of the costs of the valuations has been discussed earlier in relation to the minute of consent orders. I do not consider that those costs (or any portion thereof) should be borne by the intervener. Accordingly, this paragraph can be dismissed.
Paragraph 8 of the wife’s Amended Response to the intervener’s Application in a Case seeks “such further or other orders as this Honourable Court deems just and fit.” I do not consider that any further orders are necessary. This paragraph can be dismissed.
Paragraph 9 of the wife’s Amended Response to the intervener’s Application in a Case seeks that “the husband and / or Mr [J Coopers] do pay the wife’s costs of and incidental to the within proceedings.” The only order I consider appropriate to make in relation to costs already incurred in these proceedings by the parties (outside the order for partial property settlement that may ultimately be spent on legal costs) is that the costs of the intervener’s Application in a Case and the interim orders sought in the wife’s Amended Initiating Application be reserved to the final hearing of this matter. An assessment of the appropriateness of any order for already incurred costs will only be possible once, inter alia, the extent, if any, the intervener succeeds in substantiating his equitable interests. Accordingly, this paragraph can be otherwise dismissed.
Conclusion
For the foregoing reasons, I make the orders that commence at Coversheet and Orders Page 2 of this judgment.
I certify that the preceding one hundred and thirty-eight (138) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 29 November 2013.
Associate:
Date: 29 November 2013
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