Estes & Holmes
[2022] FedCFamC1F 267
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Estes & Holmes [2022] FedCFamC1F 267
File number(s): B3365 of 1988 & BRC 8727 of 2020 Judgment of: CAREW J Date of judgment: 27 April 2022 Catchwords: FAMILY LAW – PROPERTY – Where no steps taken in adjourned property proceedings for over thirty years – Where timely service of the 1989 order on the respondent and proposed third parties could not be established – Where application to join third parties dismissed – Where existing property de minimis – Where substantive property proceedings dismissed summarily – Where no reasonable prospects of success. Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia Act 2021 (Cth)
Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions Act) 2021 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: B Pty Ltd v Ors & K and Anor (2008) FLC 93-380
Big and Suzi [1998] FLC 92-799
General Steel Industries Inc v Commissioner for Railways (N.S.W) (1964) 112 CLR 125
Heath, R.A.E. and Heath, P.V (1984) FLC 91-517
In the Marriage of Gould: Swire Investments Ltd (1993) FLC 92-434
Lindon v The Commonwealth (No 2) (1996) 70 ALJR 541
Nevins & Urwin (No 3) [2022] FedCFamC1F 201
Southern & Southern [2017] FamCA 128
Stanford & Stanford (2012) 247 CLR 108
Wayne & Dillon [2008] FamCAFC 204
Division: Division 1 First Instance Number of paragraphs: 66 Date of hearing: 17 February 2022 Place: Brisbane Counsel for the Applicant: Mr Kissick Solicitor for the Applicant: Fallu McMillan Lawyers Counsel for the Respondent: Ms Fraser Solicitor for the Respondent: Brooke Winter Solicitors & Advisors Counsel for B Company
(not a party)Ms Hellewell Solicitor for B Company
(not a party)Crown Law ORDER
B3365 of 1988
BRC 8727 of 2020FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS ESTES (AKA MS HOLMES)
Applicant
AND: MR HOLMES
Respondent
ORDER MADE BY:
CAREW J
DATE OF ORDER:
27 APRIL 2022
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed 2 December 2021 to join Ms C and B Company (ABN …) to the proceedings be dismissed.
2.The Application for property settlement by the applicant in proceedings B3365 of 1988 be dismissed.
3.The Initiating Application filed on 8 July 2020 in proceedings BRC 8727 of 2020 be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Estes & Holmes has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAREW J:
On 26 September 1989 an order was made by the Family Court Australia (now known as the Federal Circuit and Family Court of Australia (Division 1)) adjourning Ms Holmes’ (now Estes) (“the applicant”) application for property settlement against her then husband, Mr Holmes, (“the respondent”) to an indefinite date. The file number for those proceedings is B3365 of 1988. It was anticipated that the application would come back before the Court prior to the respondent receiving his superannuation. The respondent was not at Court when the order was made and was not legally represented. There is no evidence he was ever served with a copy of the order.
Thirty-one years later, the applicant purported to initiate fresh proceedings in the Federal Circuit Court of Australia (now known as the Federal Circuit and Family Court of Australia (Division 2))[1] against the respondent, in which, among other things, she sought leave to commence property proceedings out of time. The applicant and respondent were divorced in 1989 but the applicant did not need leave to commence proceedings as there remained pending proceedings in this Court. The applicant’s fresh Initiating Application was filed on 8 July 2020 and surprisingly was permitted to be filed without her seeking any final orders. The file number for those proceedings is BRC8727 of 2020.
[1] Despite the similarity in the names of this Court and the Federal Circuit and Family Court of Australia (Division 2), they remain two separate courts. See ss 8, 9, 10 of the Federal Circuit and Family Court of Australia Act 2021 (Cth)
The matter came before the Federal Circuit Court on seven occasions before being transferred to this Court on 16 August 2021. Inexplicably, it was even listed for trial in the Federal Circuit Court at one stage. It is unclear how this occurred. The 1989 order made it clear that the applicant need only contact the Registrar of this Court to have the matter relisted, as there were already proceedings on foot. It would seem that at least initially the error associated with having two competing proceedings in two different courts was not apparent because the applicant stated in her Initiating Application filed 8 July 2020 that there were no ongoing cases in any court about family law.
WHAT REQUIRES DETERMINATION?
The matters for determination before me concern the following:
(1)The applicant’s Application in a Proceeding filed 17 November 2021 (inexplicably ‘sealed’ on 2 December 2021) which primarily involves an application to join two parties to the proceedings; and
(2)The respondent’s Application in a Proceeding filed 28 October 2021 which primarily involves an application to summarily dismiss the substantive property proceedings.
JURISDICTION
As from 1 September 2021 this Court’s original jurisdiction is largely limited to matters transferred to it from the Federal Circuit and Family Court of Australia (Division 2).[2] Section 25 of the new Act confers jurisdiction on this Court as follows:
(1)The Federal Circuit and Family Court of Australia (Division 1) has original jurisdiction:
(a)if a matter, being the subject of a family law or child support proceeding, is transferred to the Court by the Court under section 51—as set out in paragraphs 132(1)(a), (b), (c) and (d); or
(b)if a matter, being the subject of a family law or child support proceeding, is transferred to the Court by the Federal Circuit and Family Court of Australia (Division 2) under section 149—as set out in paragraphs 132(1)(a), (b), (c) and (d); or
(c)as is conferred on the Court, or in respect of which proceedings may be instituted in the Court, by any other Act.
[2] Which despite its name is a separate and independent court to this Court. (see ss 8, 9, 10 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the new Act”).
A family or child support proceeding is defined by s 7 of the new Act and means “proceedings in respect of which the Federal Circuit and Family Court of Australia (Division 2) has original jurisdiction under section 132”.
Section 132 of the new Act provides as follows:
(1)The Federal Circuit and Family Court of Australia (Division 2) has original jurisdiction:
(a) with respect to matters in respect of which proceedings may be instituted under the Family Law Act 1975; or
(b) with respect to matters arising under the Marriage Act 1961 in respect of which proceedings (other than proceedings under Part VII of that Act) are instituted under that Act; or
(c) with respect to matters arising under a law of a Territory (other than the Northern Territory) concerning:
(i) the adoption of children; or
(ii)the property of the parties to a marriage or either of them, being matters between those parties referred to in the definition of matrimonial cause in the Family Law Act 1975; or
(iii)the rights and status of a person who is an ex‑nuptial child, and the relationship of such a person to the person’s parents; or
(d)as is conferred on the Court, or in respect of which proceedings may be instituted in the Court, by:
(i) the Child Support (Assessment) Act 1989; or
(ii) the Child Support (Registration and Collection) Act 1988.
Item 229 of Schedule 1 of the Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions Act) 2021 (Cth) (“the CATP Act”) relevantly provides as follows:
The amendments of the Family Law Act 1975 … made by this Schedule apply in relation to a proceeding commenced before, on or after [1 September 2021]”.
(Emphasis added)
The question of whether or not this Court has jurisdiction in matters pending in this Court as at 1 September 2021 has recently been the subject of determination by the Full Court in Nevins & Urwin [3]. The Full Court answered the following question in a case stated in the affirmative:
Does the Federal Circuit and Family Court of Australia (Division 1) have original jurisdiction to hear and determine this proceeding which was pending before 1 September 2021 in the court previously known as the Family Court of Australia?
[3] Nevins & Urwin NAA 59 of 2022 (unreported).
There is nothing unique about the circumstances of that case to suggest that the decision by the Full Court would not be of general application. Accordingly, I am satisfied that I have jurisdiction to determine the matters currently before me.
BRIEF BACKGROUND
By way of brief background I note that the applicant and respondent married in 1971 and separated on 23 May 1985. They have four surviving adult children. At the time of their separation, the children were aged 12, 11, 6 and 3 years respectively. The children remained with the applicant, and the respondent paid child support.
The applicant is now 70 years of age and financially dependent on an Aged Pension. The respondent is now 71 years of age and receives a part Aged Pension and supplements his income with casual employment. His weekly income is $497 from all sources and his weekly expenses are $515. He has total property to the value of $11,000 and liabilities of $1,904. The respondent is married to Ms C. She is 72 years of age and receives a part Aged Pension and works part time. Ms C’s 45 year old daughter lives with her and the respondent in a property owned by Ms C at F Street Suburb D, Queensland. She has owned this property since 1988. Ms C’s daughter receives a Disability Support Pension.
At the date of the original hearing in 1989, the respondent’s superannuation was valued at $14,950.60 upon immediate retirement, $123,065.90 at minimum retirement age of 55 and $150,192.45 at compulsory retirement age of 65.
The respondent was 38 years of age at the time of the hearing and worked for G Organisation in Queensland. He contends that the first time he ever saw or read a copy of the 1989 order was upon being served with the applicant’s Initiating Application in proceedings BRC8727 of 2020. He further contends that he did not receive any communication from the Court in relation to the making of the 1989 order. At that time, his mail was received by him at his place of employment, namely, the T Facility. There is no evidence that the respondent was served with a copy of the order prior to 2020.
There was no significant property at the date of the hearing in 1989 and the property proceedings were adjourned pending receipt by the respondent of his superannuation. There was apparently some prospect that the respondent may have been eligible to access his superannuation if certain disciplinary proceedings against him were successful and he lost his job. Ultimately, the respondent did not receive his superannuation until 5 January 2006.
THE APPLICATION IN A PROCEEDING FILED 17 NOVEMBER 2021
The applicant seeks the following relief in her Application in a Proceeding filed 17 November 2021:
(a) [Ms C] be joined as a party to these proceedings;
(b) [B Company] (ABN …) and [B3 Company] (ABN …) be joined as parties to these proceedings;
(c)The applicant amend her Initiating Application seeking final Orders in the terms annexed to the applicant’s written submissions.
In her Case Outline, the applicant sets out different relief sought as follows:
1. That [Ms C] be joined as a party to the proceedings.
2.That [Ms C] be restrained from selling or encumbering the property situated at [F Street Suburb D], more particularly described as […] on … with Title Reference ….
3.That [B Company] (ABN …) and [B3 Company] (ABN …) be joined as a party to the proceedings.
(Emphasis added)
On the day of hearing, a Minute of Order was provided on behalf of the applicant in which a further iteration of the relief sought was as follows:
1. That [Ms C] (sic) be joined as a party to the proceedings.
2. That [Ms C] (sic) be restrained from selling or encumbering the property situated at [F Street, Suburb D], more particularly described as […] on … with Title Reference ….
3. That [B1 Company] (ABN …) as trustee for [B Company] (ABN …) be joined as a party to the proceedings.
(Emphasis added)
Mr Kissick, counsel for the applicant, sought leave to amend the Application in a Proceeding by substituting the orders sought in the Application with the orders sought in the Minute of Order. In particular, counsel referred to the injunction sought against Ms C. There were no submissions made (indeed there was no mention at all) about the change from B3 Company (ABN …) to B1 Company (ABN …) as trustee as contained in the Minute of Order.
Ms Hellewell of Counsel, was given leave to appear on behalf of ‘B Company’ to oppose being joined to the proceedings. In material relied upon by Ms Hellewell I note that her client contends that the applicant’s application to join B Company (ABN …) and B3 Company (ABN …) as a party is incorrect and that the correct entity is B1 Company (ABN …) as trustee for B Company (ABN …).
In any event, it seems to be accepted for present purposes that the P Super Fund and the R Super Fund (referred to in the 1989 order) is now correctly identified as B1 Company (ABN …) as trustee for B Company (ABN …), but for convenience I will adopt in these Reasons, the shorthand description used by the parties namely, ‘B Company’.
Ms C did not appear at the hearing and was not represented. Although it was suggested on behalf of the applicant that an affidavit of service, other than the one already filed by Mr J on 10 January 2022, would be forthcoming, no application was made to read and file any further affidavit at any stage of the hearing. The affidavit of Mr J deposes to service upon Ms C of the following:
A. Application in a Proceeding
B. Affidavit of Ms Estes, sworn 29 July 2021
C. Affidavit of Ms Estes, sworn 29 October 2021
D. Affidavit of Ms E, sworn/affirmed 21 September 2021The problems with the affidavit of service are immediately apparent. Firstly, there are no filing dates specified for any of the material served upon Ms C. I have no way of knowing what material was in fact served. Secondly, the affidavit does not refer to the service of any document notifying Ms C that injunctions would be sought against her. There was an attempt to give evidence from the Bar table about Ms C’s alleged knowledge of the proceedings but, as already noted, no further affidavit addressing such matters was forthcoming.
The application for leave to amend the Application in a Proceeding was refused.
The third order sought in the Application in a Proceeding is as follows:
(c) The applicant amend her Initiating Application seeking final Orders in the terms annexed to the applicant’s written submissions.
It remains a mystery what precise orders the applicant seeks in her substantive property claim as there were no “terms” annexed to the written submissions. However, I note that in the applicant’s affidavit filed 29 July 2021 at paragraph 4 she states an intention to vary her application for final orders as follows:
… to seek relief against the parties to be joined, including pursuant to section 106B of the Family Law Act. By the variation, I am seeking Orders that dispositions made to, or for the benefit of [Ms C] by the Respondent be set aside, and likewise with respect to dispositions made to, or for the benefit of the Respondent by [B Company].
There is still no indication of what particular property adjustment order might be sought in the event that an order is made pursuant to s 106B of the Act.
In his written submissions, Counsel for the applicant alluded to a possible claim expressed as follows:
Even if the award to the applicant is 20% (of $370,000.00) grossed up for her contribution to the equity that the Respondent holds in the [Suburb D] property it can be seen that in the circumstances of this case it is not trivial.
Should Ms C be joined to the proceedings?
When considering an application to join a party to proceedings it is generally necessary to know with some particularity what order is sought against the party proposed to be joined and the legal basis for the relief sought.
In B Pty Ltd v Ors & K and Anor,[4] the Full Court (Faulk DCJ, Coleman and Warnick JJ) allowed an appeal by third parties concerned with relief sought under Part VIIIAA of the Act and said:
52. We do not accept that it is proper to allow joinder of third parties merely upon the formulation of a paragraph in, or to be added to, an application, on the basis that at trial facts to support the application may be asserted and proved. Sufficient facts must be asserted to demonstrate that, if proved, the law arguably provides the relief sought.
[4] (2008) FLC 93-380; see also In the Marriage of Gould: Swire Investments Ltd (1993) FLC 92-434; Southern & Southern [2017] FamCA 128.
Further, in Wayne & Dillon,[5] Warnick J (sitting in the appellate division) said:[6]
17. … any person joined to a proceeding ought, at that point, be able to take advice on whether the facts pleaded (if established) would lead to a successful claim. Joinder to litigation is a serious step with often significant financial consequences.
[5] [2008] FamCAFC 204.
[6] Ibid at [17].
When a party to a marriage seeks to join a third party it is usual for pleadings to be filed so that the basis for the proposed claim can be clearly articulated. No pleadings have been filed but nor were they ordered. Currently there is no order or relief sought against Ms C. However, Counsel for the applicant was given a fair amount of leeway to articulate what the claim against the third parties might be, if the matter proceeded further, so as to determine whether or not the deficiencies in her case might be able to be overcome by granting her leave to file an Amended Initiating Application and Points of Claim.
Although the applicant cannot establish service of her application to join Ms C to the proceedings, I see no utility in adjourning the matter for reasons which will become apparent.
Doing the best I can, the order that Counsel for the applicant indicated might be sought against Ms C if she were joined as a party would be along the following lines:
(1)Pursuant to s 106B the dispositions made by the respondent to Ms C from the funds received by him on 5 January 2006 from his B Company superannuation payout and used in the improvement of her property at F Street Suburb D, be set aside.
(2)Further that Ms C holds her interest in the property at F Street Suburb D on trust for the respondent to the extent of the dispositions utilised by her from the B Company superannuation payout in carrying out improvements to the said property.
The applicant further argues that “[t]he evidence is likely to demonstrate that the superannuation money put into the improvement of the Suburb D house has improved its value” and that “it is open to the Court at trial to find that Ms C holds the property on trust for the Respondent and the Applicant; or is at least being unjustly enriched”.
For the purposes of giving consideration to the applicant’s best possible case I propose to consider the “tracing” argument articulated on behalf of the applicant, by reference to various bank statements relied upon by her. Firstly, it is common ground that upon attaining 55 years of age, the respondent received his superannuation payout of $370,430.71 on 5 January 2006.
The respondent contends that the sum has long ago been fully expended. He contends that he and Ms C invested significant sums from his superannuation payout in a business called “K Business” which they operated with two other people, Mr and Ms H, during the period January 2006 to October 2006 and which was ultimately an unsuccessful enterprise. I note that the initial bank account styled Ms C, Mr Holmes, Mr and Ms H (later H) as trustee for K Business indicates that the account was opened on 30 April 2005 with a cheque deposited by Ms C in the sum of $5,000 and second cheque deposited by Ms C in the sum of $20,000 on 4 June 2005. The account was closed on 30 October 2006.
By reference to the bank accounts in evidence, the respondent contends that the initial sums expended in relation to the business enterprise totalled $368,385, particularised as follows:
(a)10 January 2006 $125,573.88 for inspections by the local council and a large amount of equipment for the business;
(b)18 January 2006 $170,000 was the deposit and bond for the lease and items for the start-up of the business;
(c)24 January 2006 $27,469.98 for the purchase of an equipment or for one of the refurbishments for the business’ office;
(d)20 February 2006 $5,343 for an air conditioner;
(e)21 April 2006 $40,000 for various items of equipment for the business;
(f)Various other smaller amounts relating to the operation or set up of the business.
The respondent further contends, by reference to the bank accounts, that an additional $223,781 was expended on the business during its nine month operation, including wages for five staff, purchase of produce, and transportation and storage costs. He further contends that all sales were deposited in either cash or cheque into the business bank account. Despite attempts to diversify, the respondent maintains that the business was not successful and closed in October 2006.
Notwithstanding the evidence and explanation provided by the respondent in relation to how he used his superannuation payout, the applicant contends that some of the superannuation funds may have been used to improve Ms C’s home at F Street Suburb D. The applicant invites the Court to engage in a tracing exercise by reference to various bank statements disclosed by the respondent.
The applicant contends that at trial she hopes to be able to prove that at least some of the superannuation money went into improving a home owned solely by Ms C. The tracing exercise at its highest, involves the following:
(a)On 5 January 2006 the respondent received his superannuation of $370,430.71 deposited into a joint account (ending ...09) with his wife, Ms C “the super account”;
(b)On 17 January 2006 another joint account (ending …65) was opened by the respondent and Ms C “the joint account”;
(c)On 18 January 2006 $170,000 was withdrawn from the super account;
(d)On 18 January 2006 there was a cash deposit of $150,000 into the joint account;
(e)On 18 January 2006 there was a cash deposit of $20,000 into another joint loan account (ending …18) designated “repay ex nom. Acct Ms C”, “the loan account”;
(f)On 21 April 2006 $40,000 was withdrawn from the joint account designated “house raising”;
(g)On the same date an identical sum was deposited into the super account designated “house raising”’
(h)On 12 May 2006 $20,000 was withdrawn from the joint account designated “brick layer”;
(i)On the same date there was an identical sum deposited into the super account designated “brick layer”;
(j)On 22 May 2006 $40,000 was withdrawn from the joint account designated “F Street”;
(k)On the same date there was $30,000 was deposited into the super account designated “F Street”;
(l)On 1 June 2006 $11,371.80 was withdrawn from the joint account designated “house renovations”;
(m)On the same date an identical sum was deposited into the super account designated “house renovations”;
(n)On 7 August 2006 $10,000 was withdrawn from the joint account designated “house”;
(o)On the same date an identical sum was deposited into the super account designated “house”;
(p)On 21 August 2006 $12,000 was withdrawn from the joint account designated “house”;
(q)On the same date an identical sum was deposited into the super account designated “house”;
(r)On 29 August 2006 $3,000 was withdrawn from the joint account designated “house”;
(s)On the same date an identical sum was deposited into the super account designated “house”;
(t)On 12 September 2006 $5,000 was withdrawn from the joint account designated “house”;
(u)On 23 October 2006 there was a transfer of $1,000 from the joint account to the super account;
(v)On 13 November 2006 $2,200 was withdrawn from the joint account designated “plastering”;
(w)On the same date an identical sum was deposited into the super account designated “plastering”;
(x)On 20 November 2006 $2,200 was withdrawn from the joint account designated “house tiles”;
(y)On the same date an identical sum was deposited into the super account designated “house tiles”;
(z)On 22 November 2006 $3,000 was withdrawn from the joint account designated “tiler etc”;
(aa)On the same date an identical sum was deposited into the super account designated “tiler etc”;
(bb)On 27 November 2006 $1,000 was transferred from the joint account to the super account;
(cc)On 1 December 2006 $1,000 was transferred from the joint account to the super account;
(dd)On 4 December 2006 $1,000 was transferred from the joint account to the super account;
(ee)On 5 December 2006 $3,610 was transferred from the joint account to the super account;
(ff)On 6 December 2006 $2,000 was transferred from the joint account to the super account;
(gg)On 18 December 2006 $2,000 was transferred from the joint account to the super account;
(hh)On 5 January 2007 $1,500 was withdrawn from the joint account designated “house”;
(ii)On the same date an identical sum was deposited into the joint account designated “house”;
(jj)On 13 February 2007 $10,000 was transferred from the loan account to the super account;
(kk)On 26 March 2007 $4,000 was transferred from the loan account to the super account;
(ll)On 11 April 2007 $2,000 was transferred from the loan account to the super account;
(mm)On 22 October 2007 $2,000 was transferred from the loan account to the super account;
(nn)On 17 December 2007 $2,000 was transferred from the loan account to the super account;
(oo)On 28 December 2007 $2,000 was transferred from the loan account to the super account.
Assuming for the purposes of the tracing exercise that the $150,000 cash deposit into the newly opened joint account on 18 January 2006 was sourced from the super account (which is contrary to the respondent’s evidence): withdrawals from the joint account during the period 21 April 2006 to 5 January 2007 that appear to relate to house renovations totalled $150,271. However, in the same period, deposits into the super account from the joint account during the same period totalled $141,881. The difference of $8,119 may mean that this de minimis sum was utilised for improvements to Ms C’s home and not repaid to the super account. In relation to the $20,000 deposited into the loan account on 18 January 2006 (which may have been sourced from the super account) I note that $22,000 was transferred from the loan account to the super account over the period 13 February to 28 December 2007. In my view, the tracing exercise would be unlikely to assist the applicant.
Accordingly, I propose to dismiss the application to join Ms C to the proceedings.
Even if I am wrong in relation to the tracing exercise I would dismiss the application to join Ms C because the applicant has failed to prove that the respondent and/or Ms C knew about the 1989 order prior to 2020, and the applicant failed to prosecute her claim or take any relevant action until 2019 at the earliest. In my view, it would be a gross injustice to join Ms C to the proceedings, particularly as there would be no prospect of her recovering any costs against the applicant, in the event the substantive proceedings fail.
Should B Company be joined to the proceedings?
As with Ms C, no order is currently sought against B Company nor is there any basis for a claim against B Company particularised in Points of Claim. However, again doing the best I can to identify what the applicant’s claim might be if granted leave to join B Company, Counsel for the applicant was afforded the opportunity to place on record what order would be sought against B Company if joined. The order sought is expressed as follows:
That [B Company] make restitution in the sum assessed as that lost by the distribution to the husband.
Although continuing to lack particularity, the basis for such a claim is said to be reliant upon B Company’s alleged consent to the 1989 order. It was conceded by Counsel for the applicant that the Court had no power to bind B Company other than if it could be inferred that B Company consented to the 1989 order. In his written submissions, Counsel for the applicant appears to go further and submits that the order is binding upon B Company because it had “actual knowledge of the restraint and acted contrary to it”. The 1989 order does not on its face indicate that B Company consented to the order but it nevertheless included the following provision:
(5)That the [P Super Fund] and the [R Super Fund] be restrained and an injunction hereby issues restraining them from paying out of the Fund any entitlement due to the HUSBAND, [Mr Holmes], Without giving to the WIFE, [Ms Holmes[, care of her Solicitors Messrs [O, Q & E of L Street, Suburb M], 21 days notice in writing of their intention so to do prior to making such payout.
It is submitted on behalf of the applicant, that B Company’s consent to the 1989 order can be inferred because of the presence of a representative of B Company at Court on the day the 1989 order was made. The 1989 Reasons for Judgment of Elliott J indicate that there was a representative of B Company at Court. A Mr S appeared pursuant to a subpoena issued at the request of the applicant. Mr S provided information about the respondent’s potential superannuation entitlements. Prior to making the 1989 order purporting to bind B Company, the primary Judge said:
The fund and the [R Super Fund] office are aware of the proceedings that are afoot and have provided information to the wife for the purposes of them. They are aware of an order being sought by the wife to provide that she receive notification of any intended payout from the Fund.
In my view, consent cannot be inferred by the mere presence at Court of an employee of B Company. Further, there is no evidence that the 1989 order was served on B Company despite the applicant’s assertion that it was. The applicant’s solicitor at the time of the 1989 order, Ms E, could only state as follows:
6. It is inconceivable to me that I did not forward by mail a sealed copy of the final Orders made that day to the [R Super Fund Office], which I understood was Trustee for or administered the [P Super Fund] very soon after receipt of the same….
7. I have every confidence that I provided the Orders to [Mr S] on behalf of the Fund and its trustee as directed. I find it very hard to believe that the Orders of 26 September 1989 were not thereby served by me on the super fund trustee/administrator.
(Emphasis added)
It is not clear what Ms E means by her reference to “as directed”. There is no direction in the 1989 order or in the Reasons for Judgment of Elliot J about service of the 1989 upon B Company. Unsurprisingly in the circumstances, Ms E further contends that she at no time received notification from B Company that a superannuation payment was to be made to the respondent.
Mr N is a lawyer in the employ of B2 Pty Ltd and B1 Company (ABN …) as trustee for B Company (ABN …) and in his affidavit he sets out the history of the B Company Structure as it has changed over the years including in 1990, 1991, 1997, 2007 and 2017. He deposes to his searches of the B Company Systems which produced a copy of the 1989 order date stamped 11 October 2018 at 10:58 am. A search was made of physical files retained by B Company in an attempt to locate the 1989 court order having been received at an earlier time and no such document was located. A search of the respondent’s profile with B Company resulted in a note indicating only that a copy of the 1989 order was served on B Company on 10 October 2018. A thorough search of their records did not reveal that the order was served on B Company prior to 2018.
In support of her case that B Company should pay restitution, the applicant relies upon the Full Court decision of Heath, R.A.E. and Heath, P.V.[7] in which a primary judge’s decision to set aside a bank mortgage was upheld on appeal. The circumstances in that case were very different to the current case. In that case, the wife had registered a caveat over a property registered solely in the husband’s name. Despite the existence of the caveat, the third party Bank lent a sum of money to the husband secured by an unregistered second mortgage. The second mortgage was set aside, it being held that had the Bank followed its own procedures, it would have discovered the existence of the wife’s caveat registered on the title.
[7] (1984) FLC 91-517.
In circumstances where the applicant cannot establish B Company’s consent to the 1989 order, nor that B Company was served with a copy of the 1989 order, nor that any conduct on the part of B Company would warrant either partial or complete restitution of the funds paid out to the respondent, I propose to dismiss the applicant’s claim to join B Company. I also take into account that Elliott J’s Reasons contemplated the respondent receiving his superannuation in 2006 yet there is no evidence that the applicant took any steps to enquire about that prospect, either from her own solicitor who was to receive notice from B Company pursuant to the 1989 order, nor from B Company itself. Even if, as the applicant contends, she was advised by some unstated person that the respondent would not be eligible to receive his superannuation until 2016 (contrary to the Reasons of Elliott J), there is no evidence she took no steps to enquire about the superannuation until 2019 (or possibly 2018 as that was when the 1989 order was received by B Company).
THE APPLICTION IN A PROCEEDING FILED 28 OCTOBER 2021
The relief sought by the respondent in his Application filed 28 October 2021[8] is stated in the following terms:
(1)That the Initiating Application filed 8 July 2020 in proceeding BRC8727/2020 be dismissed.
(2)That all orders sought by Ms Estes (AKA Ms Holmes) in Proceeding B3365 of 1988 be dismissed.
(3)Further and in the alternative to Order 1, that the Initiating Application filed 8 July 2020 in Proceeding BRC8727/2020 be dismissed pursuant to rule 10.09 of the Federal Circuit and Family Court Rules (sic) 2021.
(4)Further and in the alternative to Order 2 and 5, that all orders sought by Ms Estes (AKA Ms Holmes) in Proceeding B3365 of 1988 be dismissed pursuant to rule 10.09 of the Federal Circuit and Family Court Rules (sic) 2021.
(5)Further and in the alternative to Order 2 and 4, that all orders sought by Ms Estes (AKA MS Holmes) in Proceeding B3365 of 1988 be dismissed pursuant to rule 10.22 of the Federal Circuit and Family Court Rules (sic) 2021.
[8] The orders sought mirror those set out in his Amended Response to Initiating Application filed 2 November 2021.
There is provision in s 45A of the Family Law Act1975 (Cth) to dismiss substantive proceedings summarily and the section relevantly provides for the making of a summary decree as follows:
Summary Decrees
…
No reasonable prospect of successfully prosecuting proceedings
(2)The court may make a decree for one party against another in relation to the whole or any part of a proceedings if:
(a)the first party is defending the proceedings or that part of the proceedings; and
(b)the court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceedings or that part of the proceedings.
When there is no reasonable prospect of success
(3)For the purposes of this section, a defence or proceedings or part of proceedings need not be:
(a)hopeless; or
(b)bound to fail;
to have no reasonable prospect of success.
…
Curiously, an application to dismiss the substantive proceedings summarily may also be brought pursuant to s 46 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the new Act”) which relevantly provides for giving summary judgment as follows:
Summary judgment
…
(2)The Federal Circuit and Family Court of Australia (Division 1) may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a)the first party is defending the proceeding or that part of the proceeding; and
(b)the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a)hopeless; or
(b)bound to fail;
for it to have no reasonable prospect of success.
…
It is unclear whether s 45A of the FLA still applies or whether s 46 of the new Act governs the determination of the respondent’s application. No submissions were made on this point. Ultimately, I do not find it necessary to determine it as I am satisfied that given the similarities in the provisions, the outcome will not differ.
The respondent relies upon r 10.09 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the new Rules”) which applies to an application for summary orders. The relevant rule provides as follows:
Part 10.3 – Summary orders and separate decisions
10.09 Application for summary orders
(1)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; or
(b)the other party has no legal capacity to apply for the orders sought; or
(c)it is frivolous, vexatious or an abuse of process; or
(d)there is no reasonable likelihood of success.
(2)An application under this rule must be made by filing an application in accordance with the approved form.
…
Alternatively the respondent relies upon r 10.22 of the new Rules which provides for the summary disposal or dismissal of proceedings for want of prosecution where a party has not taken a step in the proceedings for six months.
It is argued on behalf of the respondent that the following circumstances justify summary dismissal of the substantive proceedings as the applicant has no reasonable prospects of success:
(a)The 2020 proceedings have now been on foot for some 17 months yet there remains an absence of any final relief sought against the respondent despite numerous appearances in the other court before transfer to this Court;
(b)The 2020 proceedings were commenced despite there being existing proceedings in this Court;
(c)The applicant wrongly represented to the Federal Circuit Court (as that court was then known) that there were no ongoing proceedings in this Court which resulted in numerous appearances and orders in the other court;
(d)The 1989 proceedings had effectively been abandoned in the absence of any step in those proceedings for over thirty years;
(e)The 1989 order provided a clear path for the re-listing of the matter in this Court but no steps were taken by the applicant to do so;
(f)Despite the 1989 Reasons for Judgment anticipating the respondent might receive his superannuation in 2006, the applicant took no action at all until 2019 when she sought legal advice, despite, even on her case, being aware that the respondent would be entitled to his superannuation in 2016;
(g)Even if the applicant were able to overcome the procedural hurdles, it would not be just and equitable (“the Stanford point”)[9] to make any property adjustment order in circumstances where:
(i)the delay in taking any step in the proceedings remains unsatisfactorily explained;
(ii)the respondent’s property is de minimis;
(iii)the respondent was unaware of the1989 order until 2020;
(iv)the applicant is unable to prove that the superannuation payout was utilised by Ms C in improving her F Street property or that she was unjustly enriched; and
(v)if the proceedings are not summarily dismissed and the applicant ultimately fails in her claim there is no prospect of the respondent recovering any costs against the applicant.
[9] Stanford & Stanford (2012) 247 CLR 108.
The applicant resists the summary dismissal of the substantive proceedings effectively seeking the opportunity to amend the initiating proceedings against the respondent and the two proposed third parties (presumably in terms discussed earlier in these Reasons). In relation to the respondent’s reliance on his ignorance of the 1989 order as supportive of his claim that the applicant’s claim against him should be dismissed, the applicant argues that while the respondent and Ms C deny any knowledge of the 1989 order “the Court at trial could come to a different conclusion upon the examination of the bank records and the differences in the sworn accounts of Ms C and the respondent”. Further, the applicant contends that it would be open to the Court to find that $170,000 of the superannuation payout was used to improve Ms C’s home and added to its value.
Finally, it is argued on behalf of the applicant, that subsequent to the 1989 proceedings the applicant continued to make relevant contributions as a homemaker and mother and as such it would be open to the Court to find that it is just and equitable to make a property adjustment order.
Should the substantive proceedings be dismissed summarily?
The principles that govern an application to summarily dismiss proceedings include the following:[10]
(a)It is a serious matter to deprive a person of access to the courts of law and the power should be “sparingly employed”;
(b)To obtain such relief, the party seeking it must show, on the face of the opponent’s documents, that the opponent has no reasonable prospect of success;
(c)The overriding guiding principle remains “doing what is just”.
[10] Big and Suzi [1998] FLC 92-799; see also General Steel Industries Inc v Commissioner for Railways (N.S.W) (1964) 112 CLR 125; Lindon v The Commonwealth (No 2) (1996) 70 ALJR 541.
It is no longer the case that in order to succeed in an application for summary dismissal the case sought to be dismissed should be doomed to fail. The relevant test is that stated in the FLA and/or the new Act and the Rules i.e. the case sought to be dismissed should have no reasonable prospects of success.
In my view, even after affording the applicant both the opportunity to articulate what her claim might be and reviewing the evidence upon which she would rely to prosecute her claim, and upon considering factors that would be taken into account in assessing whether any order would be just and equitable (as articulated on behalf of the respondent), I conclude that the applicant’s substantive claim has no reasonable prospects of success.
In reaching this conclusion I am particularly persuaded by the following factors:
(a)Despite the Reasons for Judgment from 1989 anticipating that the respondent may receive his superannuation in 2006, the applicant took no steps to prosecute her application for a property adjustment order pursuant to s 79 of the FLA until 2020;
(b)The respondent has provided no explanation or no satisfactory explanation for the delay (either from 2006 or from 2016);
(c)The respondent cannot prove that the respondent was served with the 1989 order;
(d)The respondent’s current property is de minimis;
(e)The prospects of the respondent recovering costs against the applicant if ultimately unsuccessful in her application would be remote.
Accordingly, I propose to dismiss the substantive proceedings commenced initially in this Court (B3365 of 1988) and later commenced in another court and transferred to this Court (BRC 8727 of 2020).
I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carew. Associate:
Dated: 27 April 2022
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