El Saeid and Masih & Ors
[2020] FamCAFC 150
•22 June 2020
FAMILY COURT OF AUSTRALIA
| EL SAEID & MASIH AND ORS | [2020] FamCAFC 150 |
| FAMILY LAW – APPEAL – PROPERTY – Where the appellant wife challenges the primary judge’s dismissal of her Points of Claim relating to properties owned by entities and trusts associated with members of the respondent husband’s family – Where 16 of 19 grounds of appeal were abandoned at the appeal hearing – Where the remaining grounds of appeal fail – Where the contentions that the wife sought to make on appeal followed a different course to that taken at trial – Where no material error on the part of the primary judge could be demonstrated – Appeal dismissed – Amendment to the primary judge’s orders pursuant to s 94(2) of the Family Law Act 1975 (Cth) – Written submissions as to costs. |
| Family Law Act 1975 (Cth) ss 94(2), 106B Trustee Act 1925 (NSW) ss 6, 70 |
| De Winter v De Winter (1979) FLC 90-605 In Kendells (NSW) P/L (in liq); Kendell v Sweeney & Ors [2005] QSC 64 Statewide Developments Pty Ltd (In liq) (Receivers and Managers Appointed) v Azure Property Group (Holdings) Pty Ltd (2012) 84 NSWLR 133; [2012] NSWSC 616 |
| APPELLANT: | Ms El Saeid |
| FIRST RESPONDENT: | Mr A Masih |
| SECOND RESPONDENT: | Mr B Masih as trustee for the D Family Trust |
| THIRD RESPONDENT: | Mr B Masih as trustee for the C Unit Trust |
| FILE NUMBER: | SYC | 2986 | of | 2012 |
| APPEAL NUMBER: | EAA | 76 | of | 2019 |
| DATE DELIVERED: | 22 June 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney (via video link) |
| JUDGMENT OF: | Strickland, Aldridge & Austin JJ |
| HEARING DATE: | 19 May 2020 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 25 July 2019 |
| LOWER COURT MNC: | [2019] FamCA 497 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Raphael with Mr Friedlander |
| SOLICITOR FOR THE APPELLANT: | Sharah & Associates Solicitors and Conveyancers |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Schonell SC |
SOLICITOR FOR THE FIRST RESPONDENT: | Diamond Conway Lawyers |
| COUNSEL FOR THE SECOND AND THIRD RESPONDENTS: | Mr Roche with Ms McEwen |
| SOLICITOR FOR THE SECOND AND THIRD RESPONDENTS: | York Law Family Law Specialists |
Orders
Pursuant to s 94(2) of the Family Law Act 1975 (Cth), Order 2 made on 25 July 2019 be amended by the inclusion of “55” immediately after “54’.
The appeal be dismissed.
Any party seeking an order as to costs is to file and serve written submissions on the issue of costs within 21 days. Written submissions in response are to be filed and served within a further 21 days, with any submissions in reply to be filed and served seven days thereafter.
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 El Saeid & Masih and Ors 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).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EAA 76 of 2019
File Number: SYC 2986 of 2012
| Ms El Saeid |
Appellant
And
| Mr A Masih |
First Respondent
And
| Mr B Masih as trustee for the D Family Trust |
Second Respondent
And
| Mr B Masih as trustee for the C Unit Trust |
Third Respondent
REASONS FOR JUDGMENT
Introduction
Ms El Saeid (“the wife”) and Mr A Masih (“the husband”) are engaged in property settlement proceedings in the Family Court of Australia. The wife’s view is that properties owned by entities and trusts associated with members of the husband’s family are actually owned by the husband or are under his control. Accordingly, the wife joined E Pty Ltd, Mr B Masih (“the husband’s brother”) in his capacity as trustee for the D Family Trust and in his capacity as trustee for the C Unit Trust as respondents to the proceedings. E Pty Ltd was not a party in the appeal proceedings.
The wife’s Points of Claim document (undated and an amendment of earlier versions of the document) (“the wife’s Points of Claim”) identified the claims that she made against the husband and these additional respondents. These claims were determined at a separate hearing prior to the hearing of the property settlement proceedings and were substantially dismissed by a judge of the Family Court of Australia on 25 July 2019. The wife now appeals from that decision.
The Further Amended Notice of Appeal filed on 2 December 2019 contains 19 grounds of appeal, however 16 of them were abandoned during the course of the hearing of the appeal. Ground 19 was not the subject of any submissions made in the wife’s Summary of Argument filed on 18 December 2019 and, as counsel for the wife agreed that in those circumstances the ground could not be supported, we shall say no more about it.
In order to understand the remaining two grounds of appeal (Grounds 7 and 16), it is helpful to set out the facts which underpin them.
Background
The husband and the wife met in April 2005, were married in May 2005 and separated in March 2012.
The D Family Trust was established on 1 June 1998, which was well before the husband met the wife. Ms C (“the husband’s mother”) was its sole trustee and appointor. The primary judge found that, from its commencement, the husband assisted his mother in the administration of that trust (at [56]).
The husband’s mother died in August 2005. Her will, which appointed her husband, Mr F Masih (“the husband’s father”), as her sole executor was admitted to probate in March 2006. It left her entire estate to the husband’s father. Whilst a clause of the will appointed the husband’s brother to be the trustee and appointor of another trust of which the husband’s mother was the sole trustee and appointor, no reference was made to the D Family Trust.
The primary judge found that from the date of the husband’s mother’s death, the husband continued to administer the D Family Trust, including signing documents which represented that he was a trustee (at [67]).
The husband’s father died in January 2014. His will dated … 2005 appointed the husband’s brother as his sole executor and sole beneficiary. No appointments of any trustees or appointors were made. Probate was granted in September 2014.
The wife’s Points of Claim described the third respondent (in the proceedings before the primary judge) as “[the husband’s brother] in his capacity as trustee of the [D] Family Trust”.
Paragraph 34(ii) of the wife’s Points of Claim asserted:
That the appointment of [the husband’s brother] as trustee of the [D] Family Trust is part of a scheme being a sham entered into between [the husband] and [the husband’s brother] for the purpose of divesting assets, financial resources and/or income from [the husband] to [the husband’s brother].
Rather confusingly, paragraph 35 of the wife’s Points of Claim claimed that the D Family Trust “is controlled by the [h]usband being the [t]rustee and/or [a]ppointor and is the alter-ego of the [h]usband”.
The wife’s Points of Claim do not identify when or how it is said that either the husband or the husband’s brother became the trustee of the D Family Trust.
Ground 7
Ground 7 is in the following terms:
His Honour erred in respect of the Wife’s claim numbered 25. No trustee was appointed and thus his holding in Paragraph 170 and following is wrong at law. It further follows that any purported distribution of the net income of the trust estate by the purported trustee fails in limine.
(As per the original)
The claim in the wife’s Points of Claim the subject of this ground of appeal is:
An order pursuant to s. 106B of the Family Law Act 1975, the court set aside any document appointing [the husband’s brother] as the trustee of the [D] Family Trust.
(The wife’s Points of Claim, paragraph 25) (Emphasis in original)
His Honour found as follows in relation to this claim:
170.It is submitted for the wife that at all material times the husband had control of the [D] Family Trust. The evidence does not permit such a finding. The [D] Family Trust was established on 1 June 1998 and the husband’s mother was the appointor and trustee of the trust. The husband assisted his mother with the administration of the trust but although he thought he was the trustee from the time of his mother’s death in August 2005, that was never the case.
171.In any event it is submitted that [the husband’s brother] became the trustee by operation of law. It is submitted on behalf of the third parties that the appointment can only occur by death, will, the order of a superior court or operation of law and none of those are amendable to the Court’s power under s 106B. In other words, there is no document to set aside. I recall no submission challenging that proposition.
…
173.This claim under s 106B must fail.
As can be seen from the terms of the ground of appeal, contrary to the way the matter was framed in the wife’s Points of Claim and at the hearing before the primary judge, the wife now contends that the husband’s brother, or the husband for that matter, was never appointed as the trustee of the D Family Trust. The wife submits that this was because the only way that a new trustee could be appointed was by the husband’s mother and subsequently the husband’s father, in their respective wills pursuant to s 6(4) of the Trustee Act1925 (NSW) (“the Trustee Act”), and only by way of a registered deed (s 6(1)) or by a court order (s 70). None of these occurred.
The suggested requirement for a registered deed is subject to some doubt. In Kendells (NSW) P/L (in liq); Kendell v Sweeney & Ors [2005] QSC 64 at [41], Muir J found that s 6 of the Trustee Act was “not intended to restrict or qualify any power of appointment of new trustees conferred by the instrument constituting the trust”. See also the discussion by Pembroke J in Statewide Developments Pty Ltd (In liq) (Receivers and Managers Appointed) v Azure Property Group (Holdings) Pty Ltd (2012) 84 NSWLR 133 at 136–139. In any event, we were not taken to the terms of the trust deed.
However, it is not necessary for us to decide the issue. Even if the wife’s contention is entirely correct, it is beside the point, because she did not identify at the hearing before the primary judge, or before us, any instrument or disposition by which the husband’s brother became the trustee of the D Family Trust and, consequently, there is nothing upon which s 106B of the Family Law Act 1975 (Cth) (“the Act”) could operate. Indeed, the effect of the wife’s submissions made on appeal was that the husband’s brother had never been appointed as the relevant trustee. Consistently, therefore, the wife’s claim to set aside his appointment as trustee was misconceived.
Section 106B of the Act empowers the Court to “set aside or restrain the making of an instrument or disposition … which is made or proposed to be made to defeat an existing or anticipated order” in the proceedings or, “irrespective of intention, is likely to defeat any such order”.
It is axiomatic therefore that the person seeking relief under s 106B of the Act must identify the instrument or disposition which is sought to be set aside. As the wife did not do so, and on the basis of her submissions made on appeal, she could not do so, there is no error by his Honour and this ground of appeal must fail.
Ground 16
Ground 16 asserts that the primary judge incorrectly found that probate of the husband’s mother’s estate was granted to the husband’s father in March 2016. As we have recorded above, the correct date is in March 2006. As his Honour noted at [81], the husband’s father died in January 2014. Therefore, this is an obvious typographical error.
Nonetheless, the primary judge did rely on the incorrect date when his Honour said that the grant of probate in March 2016 lent “some credibility” to the husband’s evidence that he did not see the contents of his mother’s will until 2012 (at [142]).
The husband’s evidence was that he thought that he had inherited his mother’s shares in E Pty Ltd upon her death. On 11 May 2006, the husband arranged for those shares to be transferred to himself. There was a meeting between the husband, the husband’s brother and the husband’s father in October 2012. The husband’s and the husband’s brother’s evidence was to the effect that the husband’s father informed the husband that he had not inherited the shares, as was indeed the case according to the husband’s mother’s will, and that they had been left to the husband’s father. The husband agreed to transfer the shares to his father, which he did on 1 November 2012.
The primary judge accepted the evidence of the husband and the husband’s brother saying:
141.The husband’s evidence and that of his brother about him not being aware of the contents of his mother’s will is referred to in the wife’s case as “the will fantasy”. The problem is that there is no issue about there being a will or about its contents. The will was made prior to the husband meeting the wife and cannot have been part of a contrivance to defeat her claims.
142.The husband was cross-examined at some length about his failure to ascertain the contents of his mother’s will for about seven years following her death in August 2005. The husband explained that he made efforts to see the will but his father was very ill for a period and the husband steadfastly maintained that he was not aware of the contents of the will until 2012. It lends some credibility to the husband’s case on this issue that probate was only granted on the husband’s mother’s estate on 14 March 2016.
143.The wife has not made her case on this claim. The evidence about the husband being allowed by his father and brother to believe that he had inherited [E] Pty Limited is odd but odd things happen.
In short, his Honour substantially accepted the husband’s evidence on this issue, which was lent “some credibility” by the erroneous consideration that probate of the husband’s mother’s estate was granted in March 2016. The date of probate was, however, only a secondary finding and not the primary basis for the primary judge accepting the husband’s evidence. The finding was also made because the primary judge accepted the evidence of the husband’s brother. The husband’s brother’s evidence was that he always thought the shares had been left to his father.
Further, as his Honour recognised, there can be no dispute that the husband’s mother left her entire estate, including the shares in E Pty Ltd, to the husband’s father. It was not suggested that the husband’s father subsequently gave the shares to the husband. There is therefore no basis on which the husband could continue to hold the shares after his father required them to be returned to him (the wife’s other claims which suggested that the assets of or the shares in E Pty Ltd were beneficially held for the husband did not succeed before the primary judge and the grounds of appeal relating to those findings were not pursued).
Any error was not material to the dismissal of the wife’s claim and this ground of appeal does not succeed (De Winter v De Winter (1979) FLC 90-605 at 78,092).
The above findings were made by the primary judge in the part of the reasons for judgment where his Honour was dealing with the wife’s claim that the transfer of the shares in E Pty Ltd from the husband to the husband’s father on 1 November 2012 should be set aside pursuant to s 106B of the Act.
This ground of appeal does not succeed.
Conclusion
It follows that the appeal will be dismissed.
His Honour’s orders dealt with all but the claims in paragraphs 52 and 55 of the wife’s Points of Claim. It emerged that it was unnecessary for the primary judge to deal with the claim in paragraph 52 of the wife’s Points of Claim (at [184]). It is clear from his Honour’s discussion at [185]–[200] that his Honour intended to dismiss the claims in paragraphs 53, 54 and 55. Therefore, the failure to make an order dismissing the claim in paragraph 55 is simply a mistake in the orders.
Counsel for the wife did not oppose an order being made to correct the record so as to completely dispose of the wife’s Points of Claim.
Costs
As can be seen, most of the grounds of appeal were abandoned during the course of the hearing of the appeal. This was largely because the contentions that the wife sought to make followed a completely different approach to that taken at the hearing before the primary judge. The difficulty was that those contentions, whether they are correct or not, could not demonstrate error on the part of the primary judge.
Given the nature of the arguments raised by the wife, it seems unlikely that the course of the appeal, or the hearing before the primary judge for that matter, was directed by the wife.
Accordingly, orders will be made for the issue of costs to be dealt with by way of written submissions from any party seeking any order as to costs.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Aldridge & Austin JJ) delivered on 22 June 2020.
Associate:
Date: 22 June 2020
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