Dillon and Wayne (No. 2)

[2012] FamCA 575

FAMILY COURT OF AUSTRALIA

DILLON & WAYNE (NO. 2) [2012] FamCA 575

FAMILY LAW – PRACTICE AND PROCEDURE – where this matter has a long history – where the applicant was ordered to prepare pleadings – where there have been repeated amendments to the applicant’s pleadings – where those pleadings have failed to properly particularise the applicant’s case – where the applicant has filed further amended pleadings – where those pleadings properly particularise the applicant’s case – where the pleadings include a claim of a sham transaction – where that claim was not contained in early pleadings that have been responded to by the respondent – where the respondent objects to the applicant relying upon the amended statement of claim – where the applicant contends that the amendments are consistent with material that has been before each party for some time, and, in many respects, are based on the respondent’s evidence – whether the applicant should be permitted to rely upon the amended pleadings – where order made permitted the applicant to rely upon the amended pleadings.

Family Law Act 1975 (Cth)

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449

APPLICANT: Ms Dillon

RESPONDENT: Ms Wayne

FILE NUMBER: BRC 2537 of 2007

DATE DELIVERED: 9 July 2012

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Murphy J

HEARING DATE: 9 July 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hackett

SOLICITOR FOR THE APPLICANT: Sempre Vero Lawyers

COUNSEL FOR THE RESPONDENT: Mr McGregor

SOLICITOR FOR THE RESPONDENT: Whitehead Gupta Lawyers

Orders

IT IS ORDERED THAT

1. The hearing set down for 13 July 2012 be vacated and the matter relisted for a 3 day trial commencing at 10.00am on 27 November 2012 in the Brisbane Registry of the Family Court of Australia.

2. The Applicant be permitted to rely upon her Amended Statement of Claim filed on 26 June 2012.

1. Any question for costs of and incidental to today and of and incidental to those thrown away by the hearing being vacated on 13 July 2012, including the question of who should pay such costs, be reserved to the final hearing.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Dillon & Wayne (No. 2) 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 BRISBANE

FILE NUMBER: BRC 2537 of 2007

Ms Dillon

Applicant

And

Ms Wayne

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. These reasons should be read in conjunction with reasons delivered by me on 7 June 2011 and further reasons delivered on 29 May 2012.  The current application can be expressed simply as an application by the wife to amend a statement of claim previously delivered by her. Expressing the application in those simple terms, however, masks a long, difficult and chequered history directly relevant to the disposition of that application.

2. The trial of this matter, or more accurately, what remains of this matter, is due to be heard on Monday, that is to say, in four working days’ time.  It is very important to understand that the trial to be heard on Monday is in fact an adjourned trial, the original trial, having been due to be heard on 9 January of this year. 

3. On that earlier occasion, yet further difficulties in this matter emerged and I made a number of orders.  I should point out that the further difficulties that emerged on 9 January related to yet another attempt by the wife to articulate the case she sought to make in this case. As reference to my earlier reasons will reveal, it was the latest of many, many attempts to properly articulate her case.

4. It is important, I think, to recall the orders made on that occasion as follows:

   1.Paragraphs 1.4 and 1.5 of the applicant’s amending initiating application filed on 24 August 2011 be struck out.

   2.The final hearing of the matter be adjourned so as to be heard over one day, commencing at 10.00 am on 16 July 2012 before myself.

   3.In the event that the parties reach agreement [orders were made for the order to be made in chambers].

   4.The applicant ([Ms Dillon]) shall file and serve, by not later than 4.00pm on 30 April 2012:

   (a)Pleadings in respect of any course of action alleged against the respondent or the respondents to be joined in accordance with the further provisions of these orders.

   (b)Contemporaneously therewith, minutes of order setting out the precise terms of each and every order sought against each and all the respondents.

   5.The respondent ([Ms Wayne]) shall file and serve a response to the pleadings by not later than 4.00pm on 25 May 2012.

   6.The matter be listed before Murphy J at 9.00am on 1 June 2012 for review and the making of any trial directions so as to progress the matter to final hearing.

   7.All relevant rules be dispensed with so as to permit the applicant to amend her case and file the documents referred to in paragraph 4 of these orders [the orders continued].

5. I should mention that the listing for 1 June 2012 was subsequently changed to 29 May 2012.  Although the orders just quoted referred to the applicant’s “amended initiating application”, that application is in fact, an application that had been amended many, many times.  Indeed, as reference to the earlier reasons for judgment will reveal, when this matter came before the Full Court some years ago, the application was, even at that time, referred to as the “many times amended” application.  The application has been amended many more times since then.

6. Secondly, it will be appreciated that the orders made on that day were made by reason of a trial that was due to take place on that day, not in fact occurring.  The order for the delivery of pleadings was a (yet further) attempt by the Court to have the applicant articulate in a meaningful and understandable way, the case sought to be made by her. 

7. Thirdly, the mention on 29 May was so as to ascertain the readiness for trial of this matter on the hearing date provided for in those orders, namely 16 July.  It will be appreciated, once reference is made to the earlier reasons, why that order was made; the Court having some concerns as to whether in fact the requirements for the further pleading, as it were, being complied with and the matter being ready to proceed on that date.

8. In compliance with the order made on 9 January 2012, a pleading was filed on behalf of the applicant on 2 May 2012.  It is an extraordinary document which, as counsel now representing the applicant, properly, with respect, concedes “could not be called in any sense a pleading”.  On 9 January, two further Applications in a Case were filed and prosecuted by the applicant.  Each was dismissed. 

9. It is against that background the current dispute arises; it centres upon a pleading that has now been filed by way of a yet further amended pleading that, on its face, properly articulates the case sought to be made by the wife.

10. Without, in any sense referring to the ultimate merits of the case there pleaded, it is plain that this is the document that should have been filed a long time ago and it does meet the requirements of the pleading that was envisaged when the order was made on 9 January. 

11. The dispute before me, neatly encapsulated, arises because, in reasons for judgment delivered on 29 May, I made a number of statements in relation to the purported pleading that had been filed in purported compliance with the order of 9 January 2012.

12. In reliance upon parts of the reasons given then, the respondent says that it was plainly envisaged by me that there would be no further amendment, all such opportunities, as it were, having passed.  That is responded to in two ways by Mr Hackett of counsel who now appears on behalf of the applicant. 

13. First, he says, no such order was made to that effect. Plainly that is so. Mr Hackett makes reference, secondly, to the transcript of the proceedings before me on that day.  Mr McGregor, who appears for the respondent, makes reference to the transcript of the proceedings before me on 9 January 2012.  The Court does not have either, but I propose to make some reference to what each counsel said in respect of those transcripts in due course. 

14. In essence, Mr McGregor argues on behalf of the respondent that the time has well past whereby a further amendment of the case sought to be made on behalf of the applicant ought be permitted.

15. As I said to Mr Hackett during the course of argument, this is not, generally speaking, a court of pleadings.  The orders made on 9 January can be seen,  when reference is had to the earlier reasons, as an attempt to have, via a pleading, a case properly articulated on behalf of the applicant; something that had eluded her to that point.  Thus, as it seems to me, it is inappropriate to view the current application as being an application to amend the statement of claim per se – that is, as such an application might be seen in a “court of pleadings”.

16. Rather, the application to amend the statement of claim should be seen as an attempt to articulate, via an amendment to that document, a case seen in the context of the numerous amendments to Applications, (which are in effect the only form of “pleading” in this Court absent a specific order), over a very lengthy period of time.  The amendment to the statement of claim cannot be divorced from the earlier context from which it emanates.  Specific reference should be made to paragraphs 49 and following of my reasons for judgment given on 29 May 2012 as follows:

    49.It will be appreciated that, as the documents currently stand, the wife’s application is confined to paragraph 1.6 of the further amended application, but her “pleading”, at least on one fair reading of it, appears to disclaim that and seek only relief in respect of the asbestosis claim. 

    50.No application has been made today to strike out paragraph 1.6 in light of the lack of particularity provided in respect of it in the “pleading” filed by [Ms Wayne].  It is, however, clear and manifest from the pleading ordered to be filed by her that no such claim in respect of the [E Trust] has been particularised. 

    51.It seems to me that no claim with respect to the [E Trust] as set out at paragraph 1.6 of the application ought be permitted to proceed in the absence of proper particularity and, indeed, the joining of parties who may have a direct interest in the proceedings.

    52.The claim in respect of the [E Trust] was purportedly articulated at the proceedings before me on 9 January 2012.  To the extent that it was purportedly articulated (by, it should be noted, counsel representing the wife on that occasion) it resulted in the striking out of paragraphs 1.4 and 1.5 of the application. 

    53.As is abundantly clear from the history of this matter and, indeed, from the very specific orders made by me on 9 January, to the extent that the wife sought to pursue the claim specified in paragraph 1.6 of the application there was a necessity for the facts and circumstances to be properly particularised so that [Ms Wayne] could know the case which she needed to meet.  So much in my view is abundantly clear from the very specific reference to “any cause of action alleged against the respondent or the respondents” and the separate reference to “the precise terms of each and every order” sought against “each and all respondents”.

    54.Some five months after that order was made, and about a month prior to the ordered directions/compliance hearing on 1 June 2012 a document purporting to be a pleading was filed.  It seems to me a fair reading of that document is that it is confined to a claim in respect of the $63,000 paid to [Ms Wayne] in respect of the husband’s asbestosis claim. 

    55.As I indicated to the solicitor for [Ms Wayne] during the course of argument, it seems to me that it is possible to read the substantive part of paragraph 5 as a reference to proceedings more generally, but, in light of the orders made by me on 9 January 2012 and the fact that the wife has had five months to properly particularise any claim as was contemplated by those orders, the only fair reading of the document is that the claim by the wife is confined to the asbestosis claim.

17. It will be appreciated, that the amended statement of claim sought to be relied upon by the wife, as drawn now (and filed on 7 June 2012), seeks to include a claim in respect of the E Trust.  In particular, it is alleged that the E Trust is a sham. 

18. As at the time that those reasons were delivered, the wife had had five months to properly particularise any claim after the making of the orders as made by me on 9 January.  When she did so, she produced a pleading that, with all due respect, was incomprehensible, and could not be seen to properly articulate the case that she sought to make. 

19. Further, it needs to be appreciated, by reference to those passages of the reasons to which I have just referred, that there was insufficient particularity in respect of any claim made in respect of the E Trust as at that time, at least insofar as it was pleaded on behalf of the wife.

20. These issues were not at that time new.  They had been alive for some considerable period of time – indeed some years – as reference to my earlier reasons makes clear.  It is exactly that point that Mr Hackett seeks to rely upon in particular, in ultimate submissions made by him, to which I will refer shortly.  It should also be noted, however, that I also said on that earlier occasion: 

    56.To the extent that the self-represented wife today makes what might be described as a further oral application to further amend either the “pleading” or the application itself, in my view that application, if that is what it can be called, should be dismissed or alternatively perhaps not entertained.  That result is arrived at by reference to the tortured history of this matter and the various opportunities that have been provided to the wife to properly articulate, plead and give notice of her claim. 

    57.Accordingly, then, for the purposes of the trial to take place on 16 July, the application by the wife is confined to an application in respect of the asbestosis claim.

21. It also might be pointed out that, in response to the purported pleading filed on behalf of the wife on 2 May, the responded pleaded, via a defence filed on 25 May 2012. 

22. It is the combination of the nature of the “statement of claim” filed pursuant to the order made on 9 January 2012, and the fact that subsequently I included in my reasons the passages just referred to, that Mr McGregor on behalf of the respondent argues that on Monday, when this trial commences, he has pleaded to, and has prepared for, a trial confined to the asbestosis claim. 

23. Against that background, it seems to me that, as with all applications of this type, it is not a question of looking to “punish” what might be described as incompetent or inadequate behaviour, nor, on the other hand, to reward the triumph of what might be described as procedural orders over what might be described as substantive issues of potential injustice. 

24. The respective contentions in that latter respect can be seen to be summarised as follows. 

25. The respondent says, in effect, that the applicant has had many years to get her case right, and has failed to do so.  In that respect, the significant deficiencies in the trial proceedings before me in June 2011 cannot be lightly brushed aside.  Indeed, it is worth repeating, in the context of what was then mooted as a section 106B claim and additional relief, there was no evidence whatsoever that the property, the subject of some of those claims, had in fact been transferred from the respondent, against whom that relief was sought to an independent third party.  So too, the deficiencies in the material before me at that time were such that the bankruptcy and death of the husband rated not even a mention. 

26. Secondly, as I have referred to before, it is said on behalf of the respondent that she has prepared to meet the case based on what was said by me, and by reference to what was earlier said on 9 January. As a result, it is said she is not prepared to meet a case that has as part of it any claim in respect of the E Trust, much less a case that asserts sham. 

27. The ramifications of a case pleaded in sham are that the husband – and, at least inferentially, the respondent – have engaged in behaviour that might be described as fraudulent.  That is a significant matter, and significant regard should be had to any need said to arise to prepare a response to that case. 

28. Thirdly, the point is made that the current application has been heard by the court four working days from the commencement of the trial, a trial date that had been set more than six months ago.  Next, it is said that the applicant has been given many, many opportunities, and made many, many attempts to, as it were, get her case right, and has singularly failed to do so until such time as the pleading was filed on her behalf on 7 June. 

29. Next, and it is common ground, the wife is significantly impecunious, so that there would be no meaning attached to any order for costs made against her.  Thus, if it is necessary for the trial to go away on Monday – and Mr McGregor contends that it is, because it would take longer than the one day that it is set for, and that there would be a necessity for him to prepare to respond to what I will call the sham part of the case – any order that I might make for costs thrown away is effectively meaningless (although I note in that respect that he foreshadows at least the possibility of an application being made that any order for costs be met by the wife’s solicitor personally). 

30. It seems to me, on the basis of the chequered history of this matter – more particularly set out, perhaps, in the earlier reasons – that Mr McGregor is well able to say on behalf of his client that there is a significant prejudice attached to permitting the amendment, and the consequences of it. 

31. As against that, Mr Hackett on behalf of the applicant concedes – as, with respect, he must – the appalling history that has resulted in this case only just being properly pleaded for the first time in the six years it has been alive in this Court.  Secondly, and importantly, he points to the terms of the pleading itself, and argues that the factual bases upon which the pleading is based are, virtually without exception, matters either within the knowledge of the respondent, or alternatively, matters arising from documents to which both parties have had access for some considerable time.

32. Counsel also argues, perhaps most importantly of all, that the case he seeks to make on behalf of the wife is largely based upon the material that the respondent deposes to herself in the material.  

33. Mr Hackett concedes that the wife is impecunious as things currently stand, but says, in effect, that the wife’s case is a strong one, and argues, implicitly at least, that, in a jurisdiction where costs are guided by section 117(1) this consideration does not loom as large as what it might otherwise. 

34. In the context of the balancing of justice, it is, it is said, a significant factor that there exists an allegation of sham.  As was famously said by Beaumont J in Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449, sham transactions can always be avoided. But, more importantly, sham transactions – if made out –involve, by definition, the potential for, as it were, improper conduct to be rewarded if they are not avoided.

35. If, in fact, there is a sham, and the basis for the creation of an entity or documents which perpetrate the sham has been to deprive somebody of an entitlement that they otherwise were entitled to, then the Court should – in my view, at least – tread very warily before allowing what might be very cogent procedural issues to take precedence over the hearing of such a claim. 

1. I am profoundly troubled by the history of this case, as I think reference to the decisions which I have given – and indeed these reasons themselves – will plainly indicate. 

2. I am acutely aware of what the High Court has said recently in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175. Procedural issues, for want of a better expression, and the Court’s need for case management, and the efficient throughput of cases, is now, I think, without attempting in any sense to do injustice to their Honours’ judgment, viewed much more robustly than what it has been in the past. In short, consideration must be given by courts to the throughput of cases in a manner that allows them to be heard and determined efficiently, and economically.

3. There are abundant reasons why the application in this particular matter ought be refused, and I am concerned about the potential injustice to the respondent by the amendment being allowed, and the case proceeding on that basis. 

4. I referred earlier to passages that both counsel had referred to in the various transcripts – which, again, I emphasise, I haven’t seen.  Mr McGregor refers to the fact that on 9 January – again, emphasising that the orders made on that day were made in the context of a trial set to proceed that day being sent away – were comments by me to the effect that “There will be no more amendments.” 

5. Mr Hackett refers to comments made by me on 29 May, some of which are referenced to in the reasons, and those parts of the reasons to which I have just referred.  But Mr Hackett points to the fact that other things said by me may perhaps have given the impression that an opportunity would be afforded to amend.  I am not persuaded that either of those matters are significantly productive of the resolution of the current application. 

6. What I consider to be the most important aspect is the assertion of sham, which is effectively an assertion of dishonesty, and I am concerned that a case which, on its face, is properly particularised – about which, let me emphasise, I am saying nothing about the ultimate merits – involves the ventilation of a suggestion of, for want of a better word, dishonesty.  The corollary of that is that if that case cannot be ventilated and run, there is a prospect that this court might be seen to countenance a result which flows from the manifestation of improper behaviour. 

7. In a close contest, it seems to me that this is the most important consideration, notwithstanding the grave reservations I have about the manner in which this matter has been conducted thus far on the part of the wife. 

8. For that reason primarily, it seems to me that the balance – just – favours the amendment being permitted, and I so order.

I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 9 July 2012.

Associate: 

Date:  25 July 2012