Eastburn & Eastburn

Case [2022] FedCFamC1F 706

Federal Circuit and Family Court of Australia

(DIVISION 1)

Eastburn & Eastburn [2022] FedCFamC1F 706

File number(s): SYC 1933 of 2022
Judgment of: CHRISTIE J
Date of judgment: 16 September 2022
Catchwords:

FAMILY LAW – ANTI-SUIT INJUNCTION – where proceedings were commenced in the Supreme Court of NSW by the husband’s father – where the wife seeks an injunction from the husband’s father continuing proceedings in the Supreme Court of NSW.

FAMILY LAW – JOINDER APPLICATION – where it is agreed the husband’s father loaned the husband and wife money – where the loan agreement defaulted due to the husband and wife’s separation.

FAMILY LAW – REVIEW OF REGISTRAR’S DECISION – where a subpoena was objected to on the basis of legal professional privilege – where a judicial registrar upheld the objection – where the wife asked for a review of that decision – legal professional privilege where all parties share same lawyer

FAMILY LAW – PARTIAL PROPERTY ORDER – only quantum of order in issue

Legislation:

Evidence Act 1995 (Cth) ss 118, 124

Family Law Act 1975 (Cth) ss 79, 80(1), 90AE, 90AF(3) and 106B

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 43

Real Property Act 1900 (NSW) s 57

Cases cited:

Aspinall v Aqua Sports Pty Ltd (2018) 57 Lam LR 594; [2018] NSWSC 706,

Baba and Jarvinen (1980) FLC 90-882; 6 Fam LR 276,

Ballard v Ballard [2020] NSWSC 778,

CSR Ltd v Cigna Insurance Australia (1997) 189 CLR 345; [1997] HCA 33,

Geron v Geron [2018] VSC 582

Glen v Kemp [2022] NSWSC 551,

Henry v Henry (1996) 185 CLR 571; [1996] HCA 51,

Hurst v Koszewski [2019] SASC 67,

Jane v Jane & Ors [2008] VSC 341,

Lan & Hao (No 2) (2017) FLC 93-795; [2017] FamCAFC 175,

Lederer v Hunt (2007) FLC 93-311; [2007] FamCA 55,

MJM v DT [2020] NSWSC 1881,

Oceanic Sun Line Special Shipping Company Inc v Fay (1986) 165 CLR 197; [1988] HCA 32,

S Pty Ltd v BV (No 2) [2019] VSC 125,

Kennon v Spry; Spry v Kennon (2008) 238 CLR 366; [2008] HCA 56,

Strahan and Strahan (Interim Property Orders) (2011) FLC 93-466; [2009] FamCAFC 166,

Valceski v Valceski (2007) FLC 93-312; 70 NSWLR 36,

William v Spautz (1992) 174 CLR 509; [1992] HCA 34,

Xie v Li [2019] NSWSC 808,

Xue v Xue; Xue v Xue [2020] NSWSC 501.

Division: Division 1 First Instance
Number of paragraphs: 105
Date of hearing: 15 September 2022
Place: Sydney
Counsel for the Applicant: Mr Samson SC
Solicitor for the Applicant: Karras Partners Lawyers
Counsel for the First Respondent: Mr Ford
Solicitor for the First Respondent: Owen Hodge Lawyers
Counsel for the Second Respondent: Mr Dick
Solicitor for the Second Respondent: Colin Biggers Paisley

ORDERS

SYC 1933 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS EASTBURN

Applicant
AND:

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AGLC
Eastburn & Eastburn [2022] FedCFamC1F 706
Case
[2022] FedCFamC1F 706
Decision Date

CaseChat Overview and Summary

The matter of Eastburn & Eastburn involved the wife, Ms Eastburn, seeking to join her husband's father, Mr B Eastburn, as a party to the proceedings that had been initiated by the husband in the Federal Circuit and Family Court of Australia (FCFCOA). The wife also sought an anti-suit injunction to restrain Mr Eastburn from continuing proceedings he had commenced in the Supreme Court of NSW. The wife's application was based on a loan agreement that Mr Eastburn had entered into with the husband and wife, which had defaulted following the husband and wife's separation. Additionally, the wife sought a review of a decision made by a judicial registrar upholding an objection to a subpoena issued to Owen Hodge Lawyers, on the basis of legal professional privilege.

The central legal issues before the court were whether the wife's application for an anti-suit injunction was appropriate, given the sequence of events and the relief sought by the wife against Mr Eastburn. Another issue was whether the wife was entitled to join Mr Eastburn as a party to the proceedings in the FCFCOA. Furthermore, the court had to determine the validity of the objection to the subpoena based on legal professional privilege, particularly given that all parties involved shared the same legal representation.

The court held that the wife's application for an anti-suit injunction was proper, as the relief she sought against Mr Eastburn was directly related to the loan agreement between the parties. The court reasoned that it was appropriate to consider the issues of the anti-suit injunction and joinder together. The court granted leave for Ms Eastburn to join Mr Eastburn as a party to the proceedings, and restrained him from further prosecuting the proceedings he had commenced in the Supreme Court of NSW. Additionally, the court held that the objection to the subpoena based on legal professional privilege was valid, as all parties shared the same legal representation. Consequently, the subpoena was set aside to the extent that an objection had been made.

The court ordered that Ms Eastburn be granted leave to join her husband's father, Mr B Eastburn, as a party to the proceedings. She was required to file and serve an Amended Response to Final Orders within seven days, setting out the relief sought against Mr Eastburn. The husband was ordered to pay Ms Eastburn the sum of $166,000 within 14 days. The subpoena to Owen Hodge Lawyers was answered by the production of documents to which no objection was taken, and the order regarding the subpoena was discharged with no order as to costs.

Orders

Orders of the court

THE COURT ORDERS THAT:

1. Leave be granted to Ms Eastburn (“the wife”) to join to these proceedings the father of the applicant, Mr B Eastburn.

2. Within seven days the wife file and serve an Amended Response to Final Orders setting out the relief sought against Mr B Eastburn.

3. Mr B Eastburn be restrained from further prosecuting proceedings commenced by Statement of Claim in the Supreme Court of NSW proceedings ….

4. Within 14 days the husband pay to the wife or as she may direct the sum of $166,000.

5. The subpoena to Owen Hodge Lawyers has been answered by production of documents to which objection was not taken including the redacted documents attached to the affidavit of Mr C dated 8 September 2022 and is otherwise set aside.

6. There be no order as to costs in respect of the subpoena to Owen Hodge Lawyer such that the order dated 25 July 2022 is discharged.

Note: The form of the order is subject to the entry in the Court’s records.

Background

Background to the litigation

The third party who the wife proposes be joined to these proceedings is the husband’s father Mr B Eastburn (“the husband’s father”). The husband’s father is also an interested party in respect of the subpoena to Owen Hodge Lawyers.Background The husband and wife (“the parties”) commenced to reside together in mid-1986 and were married in 1988. In 2014 the parties purchased a property at D Street, Suburb E (“the Suburb E property”). It would appear that in mid-2014 the deposit to facilitate the purchase of the Suburb E property was paid by the husband in the sum of $850,000 from his own funds. In late 2014 two amounts, $5.5million and $3million, were deposited by the husband’s father to the husband’s ANZ bank account and was subsequently utilised to complete the purchase. In late 2014 the husband says the parties signed a loan agreement recognising advance of the funds by the husband’s father to the parties. On the same day they signed a mortgage document. I am not sure how this is reconciled with the evidence of the husband’s father as set out in [9] and [10] below. In late 2014 the husband transferred to his father the sum of $1million being monies which were sourced from the sale of the parties previous property at F Street, Suburb G. In early 2015 a loan agreement was prepared by Owen Hodge Lawyers, being a loan agreement between the husband’s father as lender and the husband and wife as borrowers. In late 2015 a mortgage was signed which permitted the husband’s father to secure the loan over the Suburb E property. The parties separated in July 2021. On or about mid- 021 the husband’s father registered the mortgage. On 24 March 2022 the husband initiated proceedings in this Court, the Federal Circuit and Family Court of Australia (Division 1) (“this Court” or “the FCFCOA”). On 7 April 2022 the wife provided notice of the orders sought by her in this Court, to the proposed third party. On 14 April 2022 the lawyers acting on behalf of the husband’s father wrote to both of the parties serving them with a Notice of Default and Demand in respect of default in a term of the loan – namely the parties’ separation. In mid-2022 the husband’s father commenced proceedings in the Supreme Court of NSW (“the Supreme Court”) and on 23 May 2022 the wife filed an application before this Court for joinder of the husband’s father as third party (for some reason that application is marked as having been filed on 24 May 2022, nothing turns on this). In mid-2022 the wife filed a Notice of Motion in the Supreme Court seeking a transfer of the proceedings in the Supreme Court to the FCFCOA. The application in respect of the wife’s Notice of Motion is anticipated by each of the parties to be heard and determined on 19 September 2022. the subpoena On 4 May 2022 the lawyers acting for the wife caused to be issued a subpoena addressed to the Managing Partner at Owen Hodge Lawyers. That subpoena sought:All documents, correspondence, attendance, memoranda, file notes, trust and office account ledgers and the files generally whether in the names of [Mr Eastburn], [Ms Eastburn], [Mr B Eastburn] and / or [Ms H Eastburn], relevant to all instructions leading up to any including the preparation of the Loan Agreement dated [… 2015] between the named persons and the related mortgage documentation including in respect of the registration of the mortgage, being dealing number […].

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

In order to consider the application for the antisuit injunction I must have regard to those aspects of s 90AF of the Family Law Act 1975 (Cth) which are relevant to this case.consideration It is appropriate to consider the issues of anti-suit injunction and joinder together. It that context it is important to understand the nature of the relief sought as against the third party by the wife in the proceedings before this Court. In the wife’s Response to the husband’s Application for Final Orders she sought orders for the sale of the Suburb E property and from the proceeds:3 Upon settlement of the sale of the home, the parties shall do all acts and things necessary to distribute the proceeds of sale of the home in the following manner and priority:-31. In payment of agent’s commission and any auction fees on sale.3.2 In payment of legal costs and disbursements incurred in the sale.3.3 In payment to the wife of 60% of the then remaining proceeds of sale.3.4 In payment to the wife of $2,500,000,00.3.5 In payment to the husband of the then remaining balance of the proceeds of sale.4 Upon settlement of the sale of the home, the husband shall do all acts and things necessary to discharge the mortgage registered upon the title of the property in favour of [Mr B Eastburn] as dealing number […] and the husband shall otherwise indemnify and save harmless the wife in respect of any monies alleged to be outstanding pursuant to the said mortgage and the Loan Agreement asserted as between the parties and [Mr B Eastburn] and [Ms H Eastburn] dated [… 2015]. The wife tendered an Amended Response to Initiating Application (which formed part of exhibit 1) which she sought leave to file if her application for joinder was successful. Order 6 and 7 seek the following:That pursuant to section 106B of the Family Law Act 1975 the mortgage registered upon the title of the home as dealing number […] be set aside, or in the alternative, that pursuant to section 90AE of the Family Law Act 1975 the respondent do all acts and things necessary to remove the mortgage registered upon the title of the home as dealing number […].That pursuant to section 90AE of the Family Law Act 1975 the third party is directed to substitute the applicant for both the applicant and respondent as debtors in the loan agreement asserted as between the parties dated [… 2015]. It is necessary to understand the order in which events occurred to evaluate the submission that the wife’s application for an anti-suit injunction is improper. The Suburb E property was purchased in the names of the husband and wife. The title recorded the husband as entitled to 1 per cent and the wife 99 per cent. At that time the evidence suggests the husband was in employment and the wife did not have paid employment. In late 2015 a Loan Agreement between the husband and wife and the husband’s father evidenced an advance of $7.5million from the husband’s father to the parties (in 2014 to allow acquisition of the Suburb E property).