Eastmond and Halden
[2020] FamCA 68
•30 January 2020
FAMILY COURT OF AUSTRALIA
| EASTMOND & HALDEN | [2020] FamCA 68 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Adjournment – Where the Applicant, on the first day of trial, made an application for an adjournment to produce an amended application for additional parties to be joined and for orders and declarations to be made pursuant to section 106B of the Family Law Act 1975 (Cth) – Where the Respondent opposed the application – Where the court has discretion whether to grant an adjournment – Where the Applicant was provided an opportunity to amend his application when directions were made for trial and the Applicant did not do so – Where the Applicant may have an arguable case, however, on the evidence which is unlikely to change or improve, the case is not a strong one – Where four years have passed since proceedings began – Where further delay will cause detriment to the Respondent and is not in the public interest – Ordered application for adjournment refused. |
| Family Law Act 1975 (Cth) ss 106B Family Law Rules 2004 (Cth) r 11 |
| Aon Risk Services Australia Limited v ANU (2009) 239 CLR 175 |
| APPLICANT: | Mr Eastmond |
| RESPONDENT: | Mr Halden |
| FILE NUMBER: | LEC | 2 | of | 2017 |
| DATE DELIVERED: | 30 January 2020 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | Newcastle |
| JUDGMENT OF: | Cleary J |
| HEARING DATE: | 29 January 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Apelbaum |
| SOLICITOR FOR THE APPLICANT: | Glaser Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Rugendyke |
| SOLICITOR FOR THE RESPONDENT: | Harris Kelly & Associates Lawyers |
Orders
IT IS ORDERED THAT
The oral application made on behalf of the Applicant husband for adjournment of trial is refused.
IT IS FURTHER ORDERED THAT
The application of the husband filed 5 January 2017 is withdrawn and dismissed.
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 Eastmond & Halden 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 NEWCASTLE |
FILE NUMBER: LEC 2 of 2017
| Mr Eastmond |
Applicant
And
| Mr Halden |
Respondent
EX-TEMPORE REASONS FOR JUDGMENT
Introduction
This is an application by the husband, Mr Eastmond, to adjourn the trial set down for three days commencing 29 January 2020.
The application was opposed by the Respondent, Mr Halden, who is both the son of the late Ms Eastmond, who I will refer to as the wife, and the executor of her estate. The wife was First Respondent to the proceedings and Mr Halden the Second Respondent until the death of the wife in mid-2018.
Notice of possible adjournment
An Application in a Case was filed by the husband on Friday 24 January 2020 at 3.49 pm. The order sought was:
·The matter be listed for mention on Tuesday 28 January 2020 for urgent directions.
In support of the Application in a Case was an affidavit of the solicitor for the Applicant. That evidence candidly raised advice from counsel that additional parties should be joined, that the application would need to be amended to include orders and declarations pursuant to section 106B of the Family Law Act 1975 (Cth) (“the Act”). There was reference to an adjournment possibly being sought.
The letter annexed to that affidavit of Wednesday 22 January 2020 was somewhat optimistic in that it enjoined the solicitors for the Respondent to find out whether certain named persons, all family members of the Respondent (his partner and two of his brothers) would be willing to be joined to the proceedings at short notice. If not, the adjournment to amend the initiating application might be made.
The letter in response was swift, and, in my view, accurately assessed that the issues and evidence were well known; that the registrar had made recommendations about preparing a list of issues, that Judge Baumann, as His Honour then was in the Federal Circuit Court, had commented on the complexity of the matter; and further, that the address for nominated persons was well known to the Applicant. The letter concluded that costs would be sought on an indemnity basis if there was an adjournment.
That Application in a Case was listed by the Court at 9.30 am on 29 January 2020.
On that day, the application of the husband was initially made in two parts. First, a request for the matter to be stood down for 45 minutes to enable formulation of orders sought by the husband with respect to s 106B of the Act, and declarations of trust. Thereafter, there would be an oral application to rely on an Amended Initiating Application.
The Respondent was not strongly opposed to time being allowed for the formulation of orders sought, but foreshadowed vehement opposition to the trial proceeding on an amended application.
The indication was that there would be no consent to an adjournment. There was also an indication that the Respondent would press for dismissal of either the original application or an amended application.
The Court permitted a period of time for preparation of proposed orders.
After approximately 90 minutes, counsel for the Applicant quite properly advised the Court that he did not have instructions from his client for an amended application. Further, counsel was not confident without more time, possibly much more time to go through the orders, that he could be satisfied that the husband comprehended those orders.
The husband gives evidence of ill health and memory problems. Indeed, additional trial time was allowed (a third day) to enable the husband to take breaks when being cross-examined. On that basis, counsel for the husband made an application for an adjournment to obtain instructions for an amended application. The application was opposed.
The matter was stood over to the following day, today, for orders and reasons to be given. These are the reasons.
History of the relationship
The parties agree that the husband and wife began a relationship in 1980. At that time, the husband was aged about 36. He was divorced with one child from his former marriage, then aged about seven. The wife was 45. She was separated from her husband with five sons aged between 17 and 10 years.
For the first two years, the parties apparently lived in separate units in a block of units in Suburb B.
In 1982, the husband and wife began living together. The wife’s three youngest sons then moved to live with their own father. The elder two sons were already living independently.
The parties apparently, and I use the word “apparently” because all of the evidence is untested, lived in rented accommodation in various places in New South Wales.
The husband worked as a tradesman; the wife as a health care worker.
The parties may have experienced episodic separations between 1982 and 1993. It is uncertain.
In 1987, the wife, together with her mother, bought a property at C Town for $50,000.
In about 1989, the husband bought two blocks of vacant land at F Town for $30,000, and not $300,000 as asserted in the husband’s financial questionnaire. In paragraph 4 of that questionnaire,[1] the husband says this:
Due to cancer, its treatment and exposure to lead poisoning, I am very unwell and have a very poor recollection of my past assets and liabilities.
[1] Financial Questionnaire of Mr Eastmond filed 3/01/2019, par 4
This value is confirmed by the fact that the F Town property was sold 15 years later for $300,000.[2]
[2] Affidavit of Mr Halden filed 29/01/2019, Annexure M. In 1989 the husband purchased vacant blocks at D Street, F Town for a total of $30,000 (Affidavit of Mr Halden filed 8/11/2019, par 60). Fifteen years later the F Town properties were sold for $300,000 with net proceeds of sale totalling $268,412 (Affidavit of Mr Halden filed 8/11/2019, par 81)
In 1993, the wife sold the C Town property for about $85,000, and the husband alleges that he contributed “an unknown amount of superannuation”[3] to obtain council approvals and the construction of a house on the F Town land. The husband subsequently transferred a 50 percent interest to the wife in the property.
[3] Financial Questionnaire of Mr Eastmond filed 3/01/2019, par 6
The Respondent asserts that in 1994, the wife, his mother, was diagnosed with Parkinson’s disease. The Applicant asserts that it was in 2010, just prior to separation. On untested evidence, I am unable to make a finding about that, although the subsequent actions of the wife’s sons would be consistent with illness and increasing frailty for the wife.
In early 1995, the husband and his late wife married.
In 1996, the husband and wife moved into the house at F Town, and Mr Halden and his younger brother Mr E Halden moved in with them. The evidence of Mr Halden is that his younger brother increasingly became the full-time carer for their mother, providing all the services that she needed.
In 1998 the wife received substantial inheritances from her family, from two uncles and her mother, approximately $1.6 million. It is property acquired from those inherited funds which is the focus of the husband’s proposed amended application, but it has not remained unchanged.
In 1998 and 1999, renovations were undertaken on the F Town property with the work being done by four of the brothers and funded by the trust. A second trust was established by the four brothers, and the proceeds of sale of the F Town property went into the trust.
Subsequently, a further property at G Town was purchased, where the husband and wife and probably two of the sons lived until 2010. When that was sold in 2010, the husband was paid out a one-seventh share, approximately $91,500.
A third trust, the Halden Brothers Trust, was established in November 2009, its purpose being to provide for the care and support of the wife and to preserve funds in the trust.[4]
[4] Affidavit of Mr Halden filed 8/11/2019, pars 141-151
In 2010, the sons undoubtedly took over the care of their mother, nursing her at home.
The husband said the wife was removed from the marriage relationship by the sons against his will. The Respondent, Mr Halden asserts[5] that the husband said he no longer wanted anything to do with the wife or any member of the Halden family. I am unable to come to a conclusion about the reason for the separation.
[5] Affidavit of Mr Halden filed 8/11/2019, par 125
In 2015, the wife moved into a nursing home.
In 2016, she was diagnosed with dementia, and in 2018, she died. At her death, the parties had not been divorced.
History of the litigation
In January 2016, the husband caused a Summons to issue in a Local Court in northern New South Wales for discovery of documents identifying the Respondent to these proceedings as the Defendant. The Respondent gave discovery of documents, and the list of those documents is Exhibit A to his current affidavit.
In due course, those documents were inspected by the solicitor for the husband. Leave was granted by the Local Court to the solicitor to remove the documents, and he did so apparently, through a note on the Court file, between 16 and 18 November 2016.
An Initiating Application was then filed on 5 January 2017 in the Federal Circuit Court in Brisbane. The final orders sought are as follows:
(1)That the pool of assets of the marriage between the Applicant husband and the First Respondent wife be divided equally;
(2)That the First and Second Respondents (the wife and Mr Halden) pay the Applicant’s costs of these proceedings.
The pool of assets of the marriage is revealed by the Balance Sheet and has been known to be minimal.
Those orders have not changed in the three years since the application was made. That problem is at the heart of this application.
Within the Initiating Application, there was an interim order sought restraining the Respondent from dealing with a property known as H Street, J Town. That property had been purchased by Mr E Halden, the youngest of the wife’s five sons, in April 2013 for $732,500. The funds had, in a variety of ways, come originally from the first trust. The wife and the Respondent then moved into that property to live with Mr E Halden.
Twelve months later, in May 2014, Mr E Halden died. His estate consisted of the J Town property and $64,000. The will of Mr E Halden divided his estate in equal shares for three of his brothers: Mr K Halden, Mr L Halden and Mr Halden [the Respondent].
In September 2015, the Respondent, together with his partner Ms W, purchased the shares of the other two brothers, Mr K Halden and Mr L Halden, for $244,166 per share, and also bought out their interest in the Halden Brothers Trust.
On 29 May 2017 an order pending further order was made in the Federal Circuit Court restraining the Respondent from dealing with that property in H Street. That order has remained in place. There was of course, no order made restraining the partner of the Respondent, Ms W, because the Court, had no power to make such an order.
There could not have been a clearer alert to the fact that an attack on the property owned by Mr Halden and his partner would require at least Ms W to be a party to the proceedings. The ownership of that property exemplifies the challenge for the husband in asserting that the H Street property was a matrimonial asset, and who would have to give evidence if a claim on that property had been sought.
In July 2017, the wife filed a Response. Order 5(b) of that document sought a procedural order as follows:
[3]That the Applicant file and serve an amended application, which:
3.1Sets out precise particulars of the legal and factual basis for orders sought against the Second Respondent;
3.2Particularises the orders sought against the First Respondent wife.
On 17 July 2017, directions were made for provision of documents, and again on 6 September 2017.
On 21 November 2017, the proceedings were transferred to the Family Court of Australia in Brisbane.
On 21 June 2018, they were transferred to this registry. Six weeks later, the wife died.
On 17 January 2019, the matter came before me for judicial directions. The subpoenaed material was transferred to the Lismore Registry for further viewing by the Applicant.
At that time, counsel raised the question of the husband’s health, having read the passage that I have already read onto the record in these reasons about the husband’s poor health and his very poor recollection, to use his own words, of his past assets and liabilities. Counsel pressed at that time for evidence to be filed as to the husband’s capacity to provide evidence. To the best of my recollection, which may not be correct, there was some medical evidence provided at that time.
On 22 May 2019, the matter was set down for trial in January 2020. Provision was made for the Applicant to file any amended application on which he wished to rely by 3 July 2019. Affidavits were to be filed by 1 November 2019. The matter has not been relisted. The case outline[6] which was filed on behalf of the Applicant, refers to an application being made pursuant to s 106B of the Act; that is, to set aside some of the property dispositions which could be said to have been made against the possibility of an order being made in this Court.
[6] Exhibit 1
The law
The decision of the High Court in Aon Risk Services Australia Limited v ANU (2009) 239 CLR 175 was referred to by both counsel. The decision is relevant to this application. In that case, a commercial matter arising from an insurance claim, the Plaintiff had successfully applied to amend pleadings to bring an action against its insurance broker after having settled its claim with insurers. Leave was granted by the primary judge. The Court of Appeal dismissed the challenge to that decision. The High Court reversed that decision.
The decision draws attention to traditional considerations for adjournment arising from applications to amend. Those considerations include doing justice between the two parties to the proceedings, the need to identify the real issues, the right of parties to run an arguable case, and the availability of costs to address the disadvantage of an adjournment to the other party. The decision of the High Court concludes that these considerations are no longer the only relevant factors. The decision directs attention to the public interest in the efficient use of public resources and “delay for other litigants and cost to the public can be as important as the raising of an arguable case”. Their Honours Gummow, Hayne, Crennan, Kiefel and Bell JJ said this:
An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management will assume importance on an application for leave to amend.
Statements in JL Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases. On the contrary, the statements are not consistent with this Court’s earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the Court and other litigants. Such statements should not be applied in the future. A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed, but limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate.[7]
[7]Aon Risk Services Australia Limited v ANU (2009) 239 CLR 175 at [111] - [112]
Rule 11 of the Family Law Rules 2004 provides for amendment of an application at the discretion of a judge. That opportunity was explicitly given in May 2019 when directions were made for trial. No amended application was filed.
Turning then to the traditional considerations, as I have described them, the facts of this case establish that the Applicant has no capacity to pay costs, party-party or indemnity. He has minimal assets and is in difficult circumstances. There is also the question of whether the Applicant might have an arguable case. It is an important point.
What follows is a hypothetical discussion, since there is no amended application before the Court to consider. However, the Case Outline document for the Applicant, and to some extent the correspondence days prior to the trial expose what the case would be, which is the establishment of trusts, constructive or otherwise, for the husband, and a challenge to dispositions of property capable of being set aside by s 106B of the Act. In my view, it could be an arguable case, but it is unlikely to be a strong one.
The husband asserts that he had $1 million worth of assets when the parties got together in 1980.[8] There is no evidence from the husband to support that position, or anything close to it. The evidence is that the husband had been in Australia for eight years since he migrated from Europe. During that time, he separated from his first wife. They had bought and sold a property in the Newcastle area on the same day for a profit of $850. The evidence of property transactions came largely from the Respondent. There is simply no evidence that the husband had assets in property or cash in the amount asserted.
[8] Affidavit of Mr Eastmond filed 21/11/2019, pars 54 – 56
Next, a trust was set up by the wife in 1998 after she had inherited from her family as set out earlier in these reasons. The inheritance came mostly in shares. The chartered accountant who did the work of setting up that first trust, the Halden Eastmond Trust, was Mr V. Mr V provided an affidavit for the proceedings. In it, he gives evidence that the husband contributed no assets to the trust; that the husband was not a director, shareholder, unitholder or beneficiary of the trust; that the intention of the wife had been to “protect the capital investment from [the husband] and from her sons while they were young.”[9] The sons were unitholders of the trust, and that their mother wanted them to have income later; that the wife wanted to utilise income for living expenses for herself and the husband, and preserve the capital for her sons’ inheritance.
[9] Affidavit of Mr V filed 10/04/2019, par 12
The evidence of the husband is that he met with Mr V about either 10 or 15 times, always together with the wife. He says that he was always led to believe that he and the wife were beneficiaries.
I accept the submission of counsel for the wife that the evidence of the husband is likely entirely inconsistent with an attempt by the wife or any other person to defeat an anticipated order in this Court. The husband knew because he was present at all times on his own evidence that the trust was being set up, and why it was being set up. It was to provide for the wife and the husband with income, and to provide for the sons in due course as an inheritance.
Two subsequent trusts have been created in accord with the decision of the wife and her adult sons. The proceeds of sale of a property owned by the husband and wife together were paid into one of the subsequent trusts and used towards the purchase of the last property that the parties lived in together, a property at G Town. Balancing that, it is uncontentious that trust income indeed supported the husband and wife as anticipated from 1998 to 2010 when the parties separated. At that point, trust funds were no longer available to the husband.
Those circumstances cast great doubt on whether dispositions, for instance, creation of the trust, could fall within s 106B of the Act in order to avoid orders which might be made in this Court. It also raises a question about the contributions, and to what extent the wife’s contributions would likely be assessed to be much greater in those circumstances. That is not to disparage the contribution of the husband, but merely to acknowledge that without the trust assets, the parties would not have been able to have the lifestyle they did or acquire the assets that they did.
There are some other factors that the Court should consider. The costs that have been incurred to date, not only by the Applicant himself, but by the Respondent. An enormous amount of work has gone into preparing annexures to the Applicant’s affidavit. If an adjournment was granted, at least one party would need to be joined, that is, Ms W, who finds herself in the position of being an owner of property effectively without the power to deal with that property. It would likely be that one or more of the other Halden brothers would have to be joined. Revaluation would likely be undertaken.
Four years have passed since the first application to the Local Court was made on behalf of the husband; three since this application was made. There has no doubt been considerable pressure on the husband, who filed a Financial Statement in 2017 revealing that he had $100,000 in an account. His evidence in his affidavit is that that has reduced to $35,000. It has also been, no doubt, equally expensive, if not more, for the Respondent, and pressured in circumstances where his partner is a co-owner of the property in which they live, which has been injuncted by the Court. There is also the fact that his mother died in 2018 during the course of these proceedings.
There is no certainty that the husband will be able to give instructions. It may simply be that the pressure of what was happening in Court meant that he was unable to come to terms with what counsel was discussing with him, but the possibility exists, given the matters mentioned in these reasons, that he could require a case guardian, with additional costs and delay.
It seems unlikely that the evidence could change or improve from the husband’s position.
Conclusion
The proposed amendment yet to be formulated, in my view, for these reasons, comes too late and at much too great a cost, and for all those reasons, I refuse the application for an adjournment.
Orders are made accordingly.
I certify that the preceding sixty-nine (69) paragraphs are a true copy of the ex-tempore reasons for judgment of the Honourable Justice Cleary delivered on 30 January 2020.
Associate:
Date: 30 January 2020
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