Diem & Vho and Ors

[2016] FamCA 680

FAMILY COURT OF AUSTRALIA

DIEM & VHO AND ORS [2016] FamCA 680

FAMILY LAW – PRACTICE AND PROCEDURE – Joinder – where application for disjoinder by Fourth Respondent – where discussion of general principles – where application for disjoinder dismissed.

Family Law Rules 2004 (Cth) r 6.04

B Pty Ltd & Ors & K & Anor [2008] FamCAFC 113
Friar & Friar [2011] FamCAFC 71
Lindon v The Commonwealth (No.2) (1996) 70 ALJR 541

APPLICANT: Mr Diem

1st RESPONDENT: Ms Vho

2nd RESPONDENT: Mr Bo

3rd RESPONDENT: Ms Diem

4th RESPONDENT: Mr Vho

FILE NUMBER: PAC 4433 of 2012

DATE DELIVERED: 19 August 2016

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 15 August 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Friedlander

SOLICITOR FOR THE APPLICANT: Selective Lawyers

SOLICITOR FOR THE 1ST RESPONDENT: Bateman Battersby Lawyers

SOLICITOR FOR THE 2ND RESPONDENT: Marcus Alyssandra Lawyers

SOLICITOR FOR THE 3RD RESPONDENT: Marcus Alyssandra Lawyers

COUNSEL FOR THE 4TH RESPONDENT:	Mr Dura
SOLICITOR FOR THE 4TH RESPONDENT:	Than & Co

SOLICITOR FOR THE 3RD RESPONDENT: Than & Co

Orders

1. That the application by the Fourth Respondent for disjoinder is dismissed.

2. That the question of costs of and incidental to the application be reserved.

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 Diem & Vho 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 PARRAMATTA

FILE NUMBER: PAC 4433  of 2012

Mr Diem

Applicant

And

Ms Vho and Mr Bo and Ms Diem and Mr Vho

Respondents

REASONS FOR JUDGMENT

1. The primary proceedings before the Court relate to property settlement proceedings as between the applicant husband and the respondent wife.

2. The second and third respondents are the husband’s sister and his brother in law. They sought and were granted leave to intervene and seek orders as to their asserted equitable interest in the real estate property situated at B Street, Suburb C or in the alternative orders seeking the repayment of $394,170 being funds relating to asserted loans advanced to them to the husband and wife.

3. The fourth respondent is the father of the respondent wife.

4. Proceedings were commenced in the Federal Circuit Court of Australia in March 2014 and on 24 October 2014 proceedings were transferred to this Court.

5. Subsequently on 17 May 2016 it was ordered by consent that the wife’s father Mr Vho be joined as fourth respondent in the proceedings. Such order was made as a consequence of the husband’s application in a case filed on 1 February 2016 that inter-alia sought the joinder of the fourth respondent and a declaration that the business conducted by the fourth respondent known as “Company D” is the property of the wife.

6. On 17 May 2016 it was noted by the Court that on the adjourned date, 15 August 2016 there may well be an application for summary dismissal of the relief sought by the applicant husband as against the fourth respondent.

7. On 15 August 2016 the fourth respondent was granted leave to file a response to the husband’s application in a case and affidavit in support of that response.

8. As the fourth respondent had been joined as a party by order on 17 May 2016 the response by the fourth respondent was by agreement deemed to be an application that the fourth respondent be removed as a party (disjoinder) under r 6.04 of the Family Law Rules 2004 (Cth).

9. Rule 6.04 relevantly provides:

   Removing a party

   A party may apply to be removed as a party to a case.

10. The rule itself gives no guidance as to the applicable principles.

11. The test for joinder of a party is well settled. In B Pty Ltd & Ors & K & Anor [2008] FamCAFC 113, the Full Court said:

    [52] We do not accept that it is proper to allow joinder of third parties merely upon the formulation of a paragraph in, or to be added to, an application, on the basis that at trial facts to support the application may be asserted and proved. Sufficient facts must be asserted to demonstrate that, if proved, the law arguably provides the relief sought. (emphasis added)

12. The test referred to above is not in itself dissimilar to what must be shown by the respondent to an application for an order for summary dismissal of a cause of action.

13. Kirby J outlined the principles governing summary dismissal applications in Lindon v The Commonwealth (No.2) (1996) 70 ALJR 541 at 544 – 545 as follows:

    It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against Government and other powerful interests. This is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the Court, is rarely and sparingly provided;

    To secure such relief, the party seeking it must show that it is clear, on the face of the opponent's documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious;

    An opinion of the Court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment;

    Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of demurrer. If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts;

    If, notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading. A question has arisen as to whether O 26, r 18 applies to part only of a pleading. However, it is unnecessary in this case to consider that question because the Commonwealth's attack was upon the entirety of Mr Lindon's statement of claim; and

    The guiding principle is, as stated in O 26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the Court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the Court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit. (footnotes omitted)

14. In Friar & Friar [2011] FamCAFC 71 the Full Court said:

    While Kirby J expressed the test as requiring the applicant for summary dismissal to demonstrate, by reference to their opponent’s documents, that “the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious”, the test has also been formulated in many other ways (see General Steel Industries Inc v Commissioner for Railways (N.S.W.) (1964) 112 CLR 125 at 129). However, for the purposes of an application for summary dismissal under the Act, the test is that laid down by the Rules, namely that the claim must be “frivolous, vexatious or an abuse of process” or has “no reasonable likelihood of success”.

    Regardless of the formulation, “exceptional caution” must be used in applications for summary dismissal and the power should be “sparingly employed”: Barwick CJ in General Steel Industries (supra at 129).

The Husband’s case

1. In joining the fourth respondent the husband seeks a declaration as against the fourth respondent that would see the business known as “Company D” be declared an asset of the wife and thus in the pool of assets for division. It was argued that in the alternative elements of control or benefit would be shown so that the business could be regarded as, if not the asset of the wife, her financial resource.

2. The husband and wife separated in 2012 at which time they had a business at Suburb C trading as “D and V”. They had initially conducted the business at premises at Suburb E.

3. Subsequent to separation the husband and his parents commenced to occupy a property at Suburb C to the exclusion of the wife. The husband thus assuming control of the partnership business.

4. The wife and her parents after separation occupied a property at Suburb F.

5. Certain equipment from the old Suburb E business premises was moved by the wife to premises at Suburb G. It is on the Suburb G property that the wife’s father conducts a business, he says his business, known as “Company D”. It is this business at Suburb G that the husband seeks to be declared the property of the wife.

6. The wife by way of property settlement seeks that the husband transfer to her a certain retail premises. It is common ground that in an application to acquire such premises the applicant must declare that he or she is the owner or lessee of the property where the goods to be sold are produced. The husband contends that if the wife has no interest in the business purportedly conducted by her father she would be ineligible to apply for such premises.

7. The husband contends that the registration of the business “Company D” in the name of the fourth respondent is a sham and that the wife is the real owner.

8. In support of that contention the husband refers to various bank account records. The application to St George Bank for an account to be conducted in the name of the business was for an account on which the wife would be one of the signatories. The wife’s personal account reflects payments that would otherwise be expenses in relation to a business. Otherwise there are deductions from the business account for the children’s school fees and the wife’s legal fees.

The Fourth Respondent’s contention

1. The fourth respondent in his affidavit, filed with leave on 15 August 2016, provides his version as to the acquisition of the business.

2. The fourth respondent and his wife arrived in Australia in February 2010. The fourth respondent is nearly 60 years of age.

3. Initially on arriving in Australia they lived in cottage premises on the parties’ Suburb C property on which the husband and wife then conducted their business. The fourth respondent and his wife worked in the parties’ business without pay and were supported by the husband and his wife.

4. After the parties separation the fourth respondent and his wife moved to reside in the Suburb F property with the wife and the children of her marriage.

5. The fourth respondent asserts that consequent upon the husband assuming control of the parties’ former partnership business he arranged for funds to be remitted from South East Asia in the sum of $48,842. These funds were deposited to his account on 5 June 2012.

6. The fourth respondent asserts that he thereafter arranged to lease property at Suburb G on which he proposed to conduct a business. On 30 August 2012 the fourth respondent registered the business name “Company D”. The fourth respondent initially marketed products using half the premises owned by the husband and wife. That is the premises that the wife seeks to have transferred to her.

7. In March 2014 the fourth respondent acquired a one half share in similar premises adjacent to those owned by the husband and wife. The fourth respondent asserts that he purchased his half interest for $30,000.

8. Subsequently in July 2013 he commenced to pay to the wife wages of $500 per week presumably in consideration of her working in the business. Otherwise the fourth respondent asserts that between December 2012 and May 2016 he has paid expenses totalling $96,265 to or on behalf of the wife.

9. An examination of his income tax returns and financial statements of the business lead to the inescapable inference that an overwhelming majority of the income from the business has been paid to or on behalf of the wife, leaving the fourth respondent and his wife little to live on and indeed for the fourth respondent little income from which to meet what is presumably reasonable taxation bills for the financial years ended 2013, 2014, 2015 and 2016.

Discussion

1. It is clear that on the information available to the Court thus far there is clearly sufficient factual material asserted by the husband and indeed, in his own affidavit, by the fourth respondent that if proved could arguably provide the relief sought by the husband by way of declaration or otherwise.

2. In all of the circumstances the application for disjoinder is dismissed.

3. As the fate of relief sought against the fourth respondent will be determined at trial it is appropriate that costs of the present application be reserved. An order will be made accordingly.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 19 August 2016.

Associate: 

Date:  19 August 2016