El Saeid & Masih and Ors
[2015] FamCA 516
•6 July 2015
FAMILY COURT OF AUSTRALIA
| EL SAEID & MASIH AND ORS | [2015] FamCA 516 |
| FAMILY LAW – PROPERTY SETTLEMENT – Interim Application – Where the wife sought the joinder of several parties to the proceedings – Where no relief is being sought against some of those parties – Where it is alleged the husband has an interest in a company – Where that company is joined to the proceedings. |
FAMILY LAW – COSTS – Where the respondents seek indemnity costs – Where none of the parties was wholly unsuccessful – Where the wife’s conduct warrants a costs order in favour of the husband and the respondents – Where impecuniosity is no bar to a costs order – Where costs ordered on a party/party basis.
| Family Law Act 1975 (Cth) s 90AE, s 106B, s 117(2A) Family Law Rules 2004 (Cth) r 6.02(1), r 6.03, r 10.12 |
| Ebner & Pappas [2014] FamCAFC 229 Colgate-PalmoliveCo and Anor v Cussons Pty Ltd (1993) 118 ALR 248 Stanford v Stanford (2012) 247 CLR 108 |
| APPLICANT: | Ms El Saeid |
| FIRST RESPONDENT: | Mr A Masih |
| PROPOSED SECOND RESPONDENT: | Mr B Masih |
| PROPOSED THIRD RESPONDENT: | Mr A Masih and Mr B Masih as trustees of the Ms C Unit Trust |
| PROPOSED FOURTH RESPONDENT: | Mr A Masih as trustee of the D Family Trust |
| PROPOSED FIFTH RESPONDENT: | Mr B Masih in his capacity as a director of E Pty Limited and as an executor and/or trustee of the estate of the late Mr F Masih and also in his capacity as trustee of the D Family Trust |
| FILE NUMBER: | SYC | 2986 | of | 2012 |
| DATE DELIVERED: | 6 July 2015 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Aldridge J |
| HEARING DATE: | 9 June 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Friedlander |
| SOLICITOR FOR THE APPLICANT: | Sharah & Associates Solicitors and Conveyancers |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Schonell SC |
SOLICITOR FOR THE FIRST RESPONDENT: | Cameron Gillingham Boyd |
| COUNSEL FOR THE PROPOSED 2ND, 3RD, 4TH AND 5TH RESPONDENTS: | Ms Campton SC |
| SOLICITOR FOR THE PROPOSED 2ND, 3RD, 4TH AND 5TH RESPONDENTS: | York Law Family Law Specialists |
Orders
Pursuant to r 10.12 of the Family Law Rules 2004 (Cth) paragraphs 5, 6, 7 and 8 of the relief sought and paragraphs 14 – 26 inclusive of the Statement of Claim dated 7 May 2015 be struck out.
That leave for the wife to amend her Application in a Case filed 17 June 2014 to add a claim to join Mr B Masih in his capacity as a director of E Pty Limited and as an executor and/or trustee of the estate of the late Mr F Masih and also in his capacity as trustee of the D Family Trust to these proceedings is refused.
That the wife pay the costs of the husband and Mr B Masih of the Application in a Case filed on 17 June 2014 on a party and party basis as agreed, or in default as assessed. Such costs to be payable upon the determination of these proceedings.
That E Pty Limited be joined as a party to these proceedings and served with all relevant documents within twenty eight (28) days of these Orders.
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).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 2986 of 2012
| Ms El Saeid |
Applicant
And
| Mr A Masih And Mr B Masih And Mr A Masih and Mr B Masih as trustees of the Ms C Unit Trust |
Proposed Third Respondent
And
Mr A Masih as trustee of the D Family Trust
Proposed Fourth Respondent
And
Mr B Masih in his capacity as a director of E Pty Limited and as an executor and/or trustee of the estate of the late Mr F Masih and also in his capacity as trustee of the D Family Trust
Proposed Fifth Respondent
REASONS FOR JUDGMENT
Introduction
By an Application in a Case filed on 17 June 2014 Ms El Saeid (“the wife”) sought the following orders in proceedings between her and her husband Mr A Masih (“the husband”).
1.That [Mr A Masih] and [Mr B Masih] in their capacity as trustees of the [Ms C Unit Trust] be joined as a party to the proceedings.
2.That [Mr A Masih] in his capacity as trustee of the [D Family Trust] be joined as a party to the proceedings.
3.That [Mr B Masih] in his capacity as trustee of the [G Family Trust] be joined as a party to the proceedings.
4.That the Wife have leave within fourteen (14) days to file and serve a Further Amended Response incorporating both the orders sought against the Husband and the orders sought against the trustees of the [Ms C Unit Trust] and the [D Family Trust].
5.That pending further order the trustees of the [Ms C Unit Trust] be restrained from assigning, mortgaging, encumbering, charging, selling or dealing with any units in such trust or any assets owned or controlled by such trust.”
(As per original)
On 20 October 2014 the proposed second, third and fourth respondent appeared conditionally and under protest to oppose their joinder. The wife sought an adjournment to file further evidence in support of her application and directions were made for that to occur. The costs of the parties including the proposed respondents were reserved. The following order was also made:
That the wife have leave to withdraw her injunctive relief as sought in paragraph 5 of her application in a case filed 17 June 2014 and that part of her relief sought is dismissed.
On 22 December 2014 the matter returned to the court. The wife had changed lawyers and those then appearing were not in a position to proceed. The matter was then again adjourned.
A direction was made that:
On or before 13 February 2015, the wife is to file and serve:
(a)a fully particularised amended response setting out the claims to be made against each of the proposed respondents;
(b)all evidence in support of the application in a case filed on 17 June 2014; and
(c)written submissions as to that application in a case.
Again, costs were reserved.
On 20 February 2015 the matter returned to court. The wife had filed some evidence but was still not in a position to proceed. The matter was fixed for hearing on 9 April 2015 and the wife was directed to file any further evidence no later than 13 March 2015. There was an order that no further material could be relied upon without the prior leave of the court. Again, costs of the parties were reserved.
When the matter returned to court on 9 April 2015 I was unable to discern from the material before the court the precise nature of the allegations made against the proposed respondents. I made the following order:
I direct the applicant on or before 7 May 2015 to file and serve a response identifying the relief they seek against the husband and any proposed third parties and to file and serve a document particularising the claims made against the proposed third parties and the basis and legal basis on which those claims are made in the form of a statement of claim in the Supreme Court of New South Wales.
The wife complied with that direction.
The proposed second respondent is Mr B Masih and is the brother of the husband. The proposed third respondents are the husband and his brother Mr B Masih as “trustees of the Ms C Unit Trust”.
The proposed fourth respondent is the husband “as trustee of the D Family Trust”.
The proposed fifth respondent is Mr B Masih “in his capacity as a director of E Pty Limited and as an executor and/or trustee of the estate of the late Mr F Masih and also in his capacity as trustee of the D Family Trust”. (Affidavit of Ms El Saeid sworn 13 March 2015, at [2]).
Rule 6.02(1) of the Family Law Rules 2004 (Cth) (“the Rules”) provides:
A person whose rights may be directly affected by an issue in a case, and whose participation as a party is necessary for the court to determine all issues in dispute in the case, must be included as a party to the case.
This rule thereon casts an obligation upon a party seeking an order against a person whose rights would be directly affected or whose participation is necessary in the case to join that person.
Rule 6.03 provides:
(2) A party may add another party after a case has started by amending the application or response to add the name of the party.
(3) A party who relies on subrule (2) must:
(a) file an affidavit setting out the facts relied on to support the addition of the new party, including a statement of the new party's relationship (if any) to the other parties; and
(b) serve on the new party:
(i) a copy of the application, amended application, response or amended response; and
(ii) the affidavit mentioned in paragraph (a); and
(iii) any other relevant document filed in the case.
This rule provides the mechanism by which a party may add another party. Importantly, subject to any restrictions that may apply to amending the application or the response, new parties may be joined simply by amending the application or response.
A party who has been so joined may apply to be removed as a party.
Recognising the above, the approach taken by the proposed respondents to the proceedings, in the context of the particularised Statement of Claim being filed, is to seek to have parts of that Statement of Claim summarily dismissed.
Rule 10.12 provides:
A party may apply for summary orders after a response has been filed if the party claims, in relation to the application or response, that:
(a) the court has no jurisdiction;
(b) the other party has no legal capacity to apply for the orders sought;
(c) it is frivolous, vexatious or an abuse of process; or
(d) there is no reasonable likelihood of success.
In Ebner & Pappas [2014] FamCAFC 229 the Full Court discussed the approach to be taken under this Rule as follows at [59] – [63]:
59.The phrase “no reasonable likelihood of success” is, at least in relation to the test to be applied in the summary dismissal proceedings, of relatively recent origin.
60. In Bretton & Bondai [2013] FamCAFC 168 Finn and Strickland JJ at [59], and May J at [122], considered this is a conceptually different test to the “doomed to fail” test.
61. In Spencer v Commonwealth of Australia (2010) 241 CLR 118, referring to a Federal Court Rule in similar terms to Rule 10.12, Hayne, Crennan, Kiefel and Bell JJ said at [56]:
Because s 31A(3) provides that certainty of failure (“hopeless” or “bound to fail”) need not be demonstrated in order to show that a plaintiff has no reasonable prospect of prosecuting an action, it is evident that s 31A is to be understood as requiring a different enquiry from that which had to be made under earlier procedural regimes. It follows, of course, that it is dangerous to seek to elucidate the meaning of the statutory expression “no reasonable prospect of successfully prosecuting the proceeding” by reference to what is said in those earlier cases.
62. The applicable test was considered by another intermediate court of appeal, the Victorian Court of Appeal in Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158. At that time the relevant legislative test in Victoria was “no real prospect of success”. There at [27] Warren CJ and Nettle JA said:
… whatever might be the practical effect of the new test, it is difficult to disagree with McMurdo J in Gray v Morris and McMurdo P in the Commissioner of Taxation v Salcedo that it should be applied by reference to its own language, without paraphrase or comparison with the previous rule, always bearing in mind the principle that the power to award summary judgment is only to be exercised with caution and, therefore, not unless it is clear that there is no real question to be tried.
(Footnotes omitted)
63. Their Honours continued at [35]:
Upon the present state of authority:
a) the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
b) the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in General Steel;
c) it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.
Bearing those rules and principles in mind I shall now turn to the Statement of Claim. The prayers for relief and the pleadings were grouped under headings and I shall use the same headings.
Re E Pty Limited and H Street, Sydney
The relief sought in this Statement of Claim relevant to this section of it, is:
2.An order that pursuant to s 106B of the Family Law Act 1975 the court set aside the transfer, which was made on or about 1 November 2012, by Mr A Masih (the husband), to Mr F Masih of 100 shares in E Pty Limited.
3.An order that pursuant to s 106B of the Family Law Act 1975 the court set aside the transfer, which was made on or about 7 November 2014 by, the estate of the late Mr F Masih, to Mr B Masih of 100 shares in E Pty Limited.
4.An order that pursuant to s 90AE(2) of the Family Law Act 1975 Mr B Masih as executor and/or trustee and/or beneficiary of the estate of the late Mr F Masih transfer to the husband 100 shares in E Pty Limited.
It can immediately be seen that E Pty Limited (“E”) should be a party to the proceedings as it clearly has an interest in who its shareholders are from time to time.
The pleading identifies that on 11 June 1999 E became the registered proprietor an apartment at H Street, Sydney. The issued capital was 100 shares which, as at 18 July 2006, were held by the husband.
On 1 November 2012 the husband transferred those shares to his father Mr F Masih. After the death of Mr F Masih those shares were transferred by the executor of his estate to Mr B Masih, the husband’s brother. The pleading continued:
11.That transfer was likely to defeat an anticipated order in favour of the wife in property settlement proceedings under the Family Law Act 1975.
…
13.In exercising its discretion under S. 106B of the Family Law Act 1975 to set aside the transfer of the shares from the husband to [Mr F Masih] the Court should take into account that the husband is the beneficial owner of the shares
Particulars;
i.The registered office and principal place of business of [E Pty Limited] was listed as [I Street, Suburb J] being the former matrimonial home from 17 July 2006 until 16 December 2014 and the sole director was the husband from 4 May 2006 until 1 November 2012.
ii.The husband was the Chairman of meetings of [E Pty. Limited], the sole person and director present.
iii.The husband paid outgoings relating to the said [H Street] apartment.
iv.The husband informed the applicant wife herein that he was the owner of the property.
13. In exercising its discretion under S. 106B of the Family Law Act 1975 to set aside the transfer of the shares from [Mr F Masih] to [Mr B Masih] the Court should take into account that the husband is the beneficial owner of the shares
Particulars;
i.The registered office and principal place of business of [E Pty Limited] was listed as [I Street, Suburb J] being the former matrimonial home from 17 July 2006 until 16 December 2014 and the sole director was the husband from 4 May 2006 until 1 November 2012.
ii.The husband was the Chairman of meetings of [E Pty. Limited], the sole person and director present.
iii.The husband paid outgoings relating to the said [H Street] apartment.
iv.The husband informed the applicant wife herein that he was the owner of the property.
(As per original)
The pleading is poorly expressed. However, I take the two paragraphs numbered ‘13’ to allege that it remained the intention of the husband and the two transferees that, notwithstanding the transfer of the shares, the husband would continue to hold the beneficial interest in them and that, accordingly, the transfers were solely to defeat an anticipated order in the proceedings.
The contention of the respondents is that the husband’s late mother, Ms C, was in fact the owner of the shares in E which were transferred to the husband on her death. That much does not seem to be disputed.
The submissions of the respondents then continued:
In July 2006, the shareholdings of [E] were erroneously transferred to the husband – rather than to [Mr F Masih] as part of the administration of the probate of the late [Ms C’s] estate. This was rectified in 2012 by way of recording [Mr F Masih] as the legal and beneficial owner of the shareholdings in [E Pty Limited]. These shareholdings passed to [Mr B Masih] by way of a grant of probate of the estate of his late father.
(Further submissions on behalf of the proposed 2nd, 3rd, 4th and 5th respondents filed 4 June 2015)
In support of those submissions the copy of the Last Will and Testament of Ms C (“the will”) was tendered (Exhibit 6). Pursuant to Clause 3 of the will she left the whole of her estate to her husband, Mr F Masih. The list of inventory of property annexed to the grant of Probate describes an interest in a property in Suburb K and one in Suburb L. There is no reference to the shares in E or the property owned by it.
It was the wife’s evidence, at least from her observations, the husband’s parents were people of modest means. The wife deposed that shortly after separation she found a letter in the husband’s handwriting dated 30 January 2006 the introductory paragraph of which is:
I am seeking legal advice in understanding and planning my present financial affairs in such a way that my full assets; acquired prior to marriage; are protected from any potential future claims in a marital settlement.
(Affidavit of Ms El Saeid sworn 13 February 2015, Annexure ‘A’)
The document goes on to list assets one of which is described as “[H Street] Apartment – in the name of [E]”.
As the above authorities make clear, I am to look at the substance of the allegations notwithstanding that the pleading alleging them might need substantial amendment. It is by no means clear that the shareholdings in E were erroneously transferred to the husband. That would only be the case if they were in fact beneficially owned by the husband’s late mother. The husband’s document indicates that that may not have been the case.
Bearing in mind the above principles, I am not satisfied that it has been established that there is no reasonable cause of action available to the wife in respect of the shares of E and the property at H Street, Sydney.
These paragraphs of the Statement of Claim will not be struck out and E will be added as a party.
N Street, Suburb O
The relief sought in respect of this property is that the husband be declared the beneficial owner of a one half interest in the property (his brother Mr B Masih being the other registered owner) and that the husband and Mr B Masih do all things necessary to cause the property to be sold and to pay from the net proceeds of sale, 25 per cent to the wife.
The pleading in support of this claim for relief is as follows:
14.The husband and his brother [Mr B Masih] are the registered proprietors as joint tenants of the property at [N Street, Suburb O].
15.In exercising its discretion pursuant to s 79 of the Family Law Act 1975 the court should take into account that the husband is the beneficial owner of this property as a joint tenant with his brother.
Particulars;
ii.The husband first inspected the property before its purchase and instigated the purchase. The husband and his brother [Mr B Masih] purchased the property as joint tenants.
iii.The husband has been the person responsible for the ongoing management of the [Suburb O] property.
iv.The husband has held himself out as being a beneficial owner as to one half of the property by statements to the applicant wife.
v.The husband has signed a personal guarantee in respect of the mortgage secured over the property.
16.The husband has asserted that the [Ms C Unit Trust] is the beneficial owner of the [Suburb O] property.
17.As result of the assertion referred to in paragraph 16 above the wife seeks an order that the trustees of the [Ms C Unit Trust] be joined as a party.
Particulars;
i.The Financial Report of the [Ms C Unit Trust] for the year ended 30 June 2013 lists the [Suburb O] property as an asset of that unit trust.
ii.The husband informed [Mr P] that he wanted to transfer properties and backdate the transactions.
iii.Communications in relation to the purchase and management of the [Suburb O] property have been addressed to the husband and/or [Mr B Masih] personally or to the husband and [Mr B Masih] or to the [Ms C Unit Trust] c/o [Mr A Masih] at [I Street, Suburb J].
iv.The husband is the person who completed the Business Activity Statements in respect of the [Ms C Unit Trust].
v.The accountants engaged to prepare the taxation and financial records of the [Ms C Unit Trust] communicate directly with the husband.
(As per original)
It appears to be the position that the husband and Mr B Masih are trustees of the Ms C Unit Trust which was established on 1 January 2002. The units in that trust are held equally by the G Family Trust and the D Family Trust.
As far as can be discerned from the evidence the ownership of those trusts was correctly described by counsel for the 2nd, 3rd, 4th, and 5th respondents in his written submissions as follows:
9.The [G Family Trust] was created by way of a Deed made 14 April 1999. The husband’s mother, [Ms C], was the original trustee and appointer of the trust. In an exercise of power by way of Clause 18 of the trust Instrument, she nominated [Mr B Masih] as appointer of the trust in Clause 5 of her Will.
10.The [D Family Trust] was established by way of a Deed dated 1 June 1998. The late mother, [Ms C], was the original trustee of this trust and the appointor of the trust. She did not appoint a successor under her Will. Her will does not mention who was to be appointed as successor appointor or trustee.) [Mr F], by way of Clause 2 of [Ms C’s] Will, became the executor and trustee of the estate. By way of S.44 and 45 of the Probate and Administration Act (1898) (NSW) as the legal personal representative of his late wife [Ms C], [Mr F] became the appointor and trustee of the [D Family Trust]. These powers passed to [Mr B Masih] on the death of his Father [Mr F]. (Footnotes omitted).
(Further submissions on behalf of the proposed 2nd, 3rd, 4th and 5th respondents filed 4 June 2015)
It is asserted by the husband and the proposed respondents that the property at N Street, Suburb O (“Suburb O property”) as well as a property at Q Street, Suburb L (“Suburb L property”) are held by them as an asset of the unit trust.
Again there are some difficulties with the pleading. The court does not have discretion, pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) or indeed otherwise, to determine that a person is a beneficial owner of property. The court may find and declare that to be the position but it will do so based on general legal and equitable principles (Stanford v Stanford (2012) 247 CLR 108).
The court can set aside a transfer of property to a third party pursuant to s 106B or make an order against third parties under s 90AE of the Act. In each case the relief sought and the basis on which it was sought would need to be clearly and specifically pleaded.
There is no reference to the Suburb O property in the handwritten note of the husband dated 30 January 2006. There is a reference to the Suburb L property which reads as follows:
Commercial property in [Suburb L] – in the name of Unit Trust 50 per cent share [comprising of]:
22.7 per cent owned by self managed super fund
27.3 per cent owned by a Family Trust.
(Affidavit of Ms El Saeid sworn 13 February 2015, Annexure ‘A’)
I take the phrase “the court should take into account that the husband is the beneficial owner of this property” at [15] of the Statement of Claim to be an allegation that the treatment of this property as an asset of the unit trust is a sham designed to hide the true ownership of the property. The particulars set out are consistent with that position but they are also equally consistent with the property being an asset of the unit trust with the husband and his brother as trustees.
Although there was a passing reference to the reliance upon the husband’s position as appointer of the trust in submissions that is not relied upon in the Statement of Claim. I am concerned that, having regard to evidence of the wife, that the husband’s parents were of modest means and that the husband seems to regard the commercial property in Suburb L as his asset, that there may be some force in the position of the wife. However, the purpose of requiring the wife to plead the case in the form of a Statement of Claim was to identify the basis upon which she sought the relief claim. The Statement of Claim fails to do so.
I propose to strike out therefore paragraphs 5 and 6 of the relief claimed and paragraphs 14 to 17 inclusive of the pleadings as contained in the Statement of Claim. They do not identify a power of the court or the facts necessary to support the relief claimed. Such an order fits appropriately within r 10.12. I do not propose to summarily dismiss the relief sought because the husband has yet to give proper and complete disclosure in this case and the wife has yet to make further investigations. The approach I am taking leaves it open to the wife to revisit this issue should the evidence become available enabling her to do so where a summary dismissal would not. This, I consider, is the best way to do justice between the parties.
Q Street, Suburb L
The pleadings and the position in relation to the Suburb L property is all but identical to the Suburb O property and does not require separate consideration. A similar approach will be taken.
The Fourth Respondent
The proposed fourth respondent is the husband as trustee of the D Family Trust. No relief is identified as being sought against the husband as trustee of this trust. However the pleading states:
22.As against the fourth respondent [Mr A Masih] (the husband) as Trustee of the [D Family Trust], a claim is made by the wife that the husband is in control of the [D Family Trust]. The [D Family Trust] is a 50 per cent unit holder in the [Ms C Unit Trust] referred to above that claims to be the owner of assets including [Q Street, Suburb L] and [N Street, Suburb O].
Particulars;
i.The accountants engaged to provide accountancy services including preparation of Income Tax Returns for the year ended 30 June 2011 for the [D Family Trust] communicated directly with the husband.
ii.The husband has performed acts as the trustee of the [D Family Trust].
iii.The [D Family Trust] is recorded as have a one half interest in the [Ms C Unit Trust].
iv.The husband has at material times been the person in control of the [D Family Trust] and the [D Family Trust] was set up for the purpose of benefitting the husband and his immediate family.
I take this to be an assertion that the D Family Trust is a beneficiary of the [Ms C Unit Trust] and thus may have an interest in the proceedings.
As the claim in respect of the property held by that trust has been struck out this claim will also be struck out.
Mr B Masih in his capacity as a director of E Pty Limited and as an executor and/or trustee of the estate of the late Mr F Masih and also in his capacity as trustee of the D Family Trust
The wife sought to amend the relief sought in her Application in a Case by adding the following prayer for relief:
That [Mr B Masih] in his capacity as a director of [E Pty Limited] and as an executor and/or trustee of the estate of the late [Mr F Masih] and also in his capacity as trustee of the [D Family Trust] be joined as a party to the proceedings.
(Affidavit of Ms El Saeid sworn 13 March 2015, at [2])
The difference between this claim and the relief already sought, is to include Mr B Masih in his capacity as a director of E.
The Statement of Claim does not identify any claim against Mr B Masih in his capacity as a director of this company. There is therefore no point in amending the Application in a Case as it would be futile. Accordingly, leave is not granted to the wife to amend her Application in a Case to include this prayer for relief.
The pleading continues:
23. Further and/or in the alternative, as against the fifth respondent [Mr B Masih] as Trustee of the [D Family Trust] and as an executor and/or trustee of the estate of the late [Mr F Masih] a claim is made that he holds an interest the properties at [Suburb L] and [Suburb O] and shares in [E Pty Limited] on behalf of the husband.
24.The husband asserts that he no longer has an interest in and/or control of the [D Family Trust] and that his brother [Mr B Masih] is in control of the [D Family Trust].
25.[Mr B Masih] is the trustee of the [G Family Trust] which is a one half unit holder of the units in the [Ms C Unit Trust].
26.As result of this assertion the wife seeks an order that [Mr B Masih] be joined as trustee of the [G Family Trust].
Again the allegation seems to be that Mr B Masih is a necessary or desirable party as he, in these capacities, may have an interest in the properties notwithstanding that no relief is sought against him. Insofar as the claim is made in relation to the shares in E he will be a party. As to the balance I have determined that these claims should be struck out. Accordingly, this part of the pleading is unnecessary and will also be struck out.
costs
The respondents and the husband seek an order for costs and that those costs be paid on an indemnity basis.
As has been seen the respondents were not entirely successful in obtaining the relief that they sought.
The primary position under the Act is that the parties should bear their own costs. The court may, however, where the circumstances justify it make another costs order. In considering making such a costs order the court must have regard to the matters set out in s 117(2A) of the Act.
The wife’s position is that she is impecunious. She has no assets of her own. Her only assets will be whatever she receives from these proceedings. No specific evidence was directed towards the financial circumstances of either the husband or the respondents. Whilst this consideration might point towards there not being a costs order it is important to recognise that there are many authorities to the effect that impecuniosity is, of itself, no bar to a costs order. If it were otherwise, impecunious litigants could litigate with impunity, without regard to the appropriateness or reasonableness of their actions.
None of the parties appear to be receiving assistance by way of Legal Aid.
The conduct of the parties is a significant feature to be taken into account. As set out at the commencement of these reasons the wife has been given many opportunities to present to the court a properly identified claim against the respondents. One can readily accept that she may have had difficulties in doing so when issues as to disclosure are yet to be resolved. There have been difficulties with changing lawyers. However, accepting that, it is incumbent upon parties to litigation not to make claims, particularly claims against third parties to the marriage, unless and until they are in a position to identify those claims and to state clearly how those claims arise. As can be seen from these reasons the wife did not do so. I consider this to be a factor that very strongly warrants a costs order in favour of the husband and the respondents.
The proceedings were not necessitated by a failure of a party to comply with previous orders of the court but were exacerbated by a failure properly to comply with the orders of the court once the issues had been raised.
None of the parties was wholly unsuccessful in the proceedings.
None of the parties drew attention to any relevant offer.
Taking these matters into account I am satisfied that the appropriate order is that the wife pay the husband’s and the respondents’ costs of the Application in a Case filed on 17 June 2014.
The costs should not be paid on an indemnity basis. In Colgate-PalmoliveCo and Anor v Cussons Pty Ltd (1993) 118 ALR 248, after noting that the categories of indemnity costs are not closed, Sheppard J said at p 257:
It is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud…; evidence of particular misconduct that causes loss of time to the court and other parties…; the fact that proceedings were commenced or continued for some ulterior motive… or in wilful disregard of known facts or clearly established law…; the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions…; an impudent refusal of an offer to compromise…; and an award of costs on an indemnity basis against a contemnor … The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis. (Citations omitted)
Whilst there is considerable force in the position of the husband and the respondents I do not consider the conduct of the wife to be so exceptional as to warrant the imposition of indemnity costs. The payment of costs itself will be a significant burden.
It was accepted by counsel for the husband and the respondents that the wife did not presently have any capacity to meet any costs order and that any costs payable by her should be paid upon the determination of the substantive proceedings. That is an appropriate order to make.
I certify that the preceding sixty-six (66) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 6 July 2015.
Associate:
Date: 6 July 2015
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