Filip & Filip
[2025] FedCFamC1F 35
•30 January 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
FIRST INSTANCE
Filip & Filip [2025] FedCFamC1F 35
File numbers: BRC 11696 of 2018
BRC 9373 of 2023Judgment of: CAREW J Date of judgment: 30 January 2025 Catchwords: FAMILY LAW – PROPERTY – Joinder – Where there is a Family Trust – Where an agreement had been reached and a property order made by consent – Where a party to a property order dies – Where an estate has insufficient funds to meet the outstanding debt in full – Where a party failed to provide security for payments as required by a property order – Where the trustee resists being a party to the proceedings – Where factual or legal contentions in pleadings are insufficient – Where an application to add a party is dismissed – Where an application to remove a party from a proceeding is granted Legislation: Family Law Act 1975 (Cth) ss 79, 79A(1), 79A(1)(b), 79A(1)(c), 85A, 90AE, 90AE(2), 90AF, 90AG, 114(3)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 3.01, 3.03(4), 3.05, 14.05
Cases cited: B Pty Ltd & K (2008) 39 Fam LR 488
Dare v Pulham (1982) 148 CLR 658
Hancock Family Memorial Foundation Ltd v Fieldhouse (No 3) [2010] WASC 223
R v Watson; Ex parte Armstrong (1976) 136 CLR 248
Wayne & Dillon (2008) 40 Fam LR 543
Number of paragraphs: 62 Date of hearing: 7 June 2024 and 11 November 2024 Counsel for the Applicant: Mr Alexander and Ms Murphy Solicitor for the Applicant: McInnes Wilson Lawyers Counsel for the First and Fourth Respondents: Mr Looney KC and Ms Horsley Solicitor for the First and Fourth Respondents: Hillhouse Legal Partners Counsel for the Second and Third Respondents: Mr Drysdale KC and Mr Gordon Solicitor for the Second and Third Respondents: Gear & Co Lawyers ORDER
BRC 11696 of 2018
BRC 9373 of 2023FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS FILIP
Applicant
AND: MR B FILIP AS LEGAL PERSONAL REPRESENTATIVE FOR THE ESTATE OF THE LATE MR FILIP
First Respondent
MR C FILIP
Second Respondent
MS BARAN (and another named in the Schedule)
Third Respondent
ORDER MADE BY:
CAREW J
DATE OF ORDER:
30 JANUARY 2025
THE COURT ORDERS THAT:
1.The application for D Pty Ltd as trustee for the Filip Family Trust to be added as a party in proceedings numbered BRC 11696 of 2018 be dismissed.
2.The application for D Pty Ltd as trustee for the Filip Family Trust to be removed as a party in proceedings numbered BRC 9373 of 2023 be granted.
3.The proceedings in both matters be listed for a case management hearing before the Honourable Justice Carew on a date to be advised.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 Filip & Filip has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAREW J:
Ms Filip (“the wife”) and Mr Filip (“the husband”) were married for 53 years before separating around 2017 or 2018. They divorced in 2022. They have three adult children, namely, Mr B Filip, Mr C Filip, and Ms Baran.
During the marriage, the wife, and the husband, and later each of their three children were involved in various businesses operated by the E Group of entities (“E Group”), which comprised 38 entities or trusts including the Filip Family Trust of which D Pty Ltd is (and was) the trustee. The income from the various businesses was distributed via various entities and trusts within the E Group to the wife, the husband, Mr B Filip, Mr C Filip, Ms Baran, and others. In about 2017, Mr C Filip and Ms Baran allege that as a result of a break down in family relationships their involvement in the businesses ceased as did their receipt of income.
When the wife instituted property proceedings against the husband in 2018, being proceedings number BRC 11696 of 2018 (“the 2018 proceedings”), Mr C Filip and Ms Baran intervened in those proceedings claiming a proprietary interest in the E Group. Their claims were resisted by the husband.
In 2022, the parties reached an agreement compromising their various claims and a final property order was made by consent by a registrar on 6 December 2022 (“the 2022 property order”).
The 2022 property order, among other things, made provision for the wife and Mr C Filip and Ms Baran to receive substantial cash payments and for them to forego any claim in the E Group.
The husband died unexpectedly in 2023 without paying all that was owed to the wife, Mr C Filip and Ms Baran under the 2022 property order and the husband’s estate has insufficient funds to meet the outstanding debt in full. It is not in dispute that the real property in the husband’s sole name is subject to an equitable charge by operation of the 2022 property order.
The wife and Mr C Filip and Ms Baran are attempting to recover that part of the debt that cannot be met from the husband’s estate, from D Pty Ltd as trustee for the Filip Family Trust (“the trustee”) notwithstanding that it was not a party to the 2018 proceedings. The trustee resists being a party in the proceedings.
When the matter was first before me on 7 June 2024, it was ordered by consent that the wife and Mr C Filip and Ms Baran file a Statement of Facts, Issues and Contentions to identify the factual and legal basis of their claims against the trustee and/or the E Group and that the trustee file a Response thereto. A Statements of Facts, Issues and Contentions was filed by the wife on 19 July 2024, and by Mr C Filip and Ms Baran on 26 July 2024. A Response to the Statements of Facts, Issues and Contentions was filed by the trustee on 23 August 2024 and a Reply to the trustee’s Response was filed by Mr C Filip and Ms Baran on 14 October 2024. Unfortunately, due to commitments of counsel and the Court, the matter was unable to return for further hearing until 11 November 2024 when the decision about whether the trustee should be a party was reserved.
OTHER RELEVANT BACKGROUND
The parties to the 2018 proceedings attended a mediation and entered into heads of agreement on 11 October 2022.
The husband’s lawyers drafted the proposed property order and Mr C Filip and Ms Baran’s lawyers sought certain amendments, among other things, to impose positive obligations on the E Group to make the cash payments. In correspondence dated 11 November 2022, the husband’s lawyers rejected the proposed amendments on the basis that “none of the entities are a party to the proceedings or the Orders. For the same reason, those Orders, as amended by your clients, are unenforceable”.
Notwithstanding the rejection of the amendments, the husband’s solicitors, “made it clear that [the husband] in any capacity will do certain things, such as in relation to the cash payments to [the wife and [Mr C Filip and Ms Baran]]”.
The amendments proposed by Mr C Filip and Ms Baran’s lawyers were not pressed and the draft property order was signed by all parties.
On 26 October 2022, the husband’s lawyers authored the letter to the Court addressing issues of justice and equity for the purposes of s 79 of the Family Law Act 1975 (Cth) (“the Act”) and included the following statement:
It is not possible to precisely identify the net value of the property pool. However:
•The property pool primarily consists of a group of entities collectively referred to as the [E Group].
•…
•It is the [husband’s] position that the net pool between the [wife] and [the husband] is in the vicinity of $52.5M …
Pursuant to the 2022 property order, several things occurred/were to occur including the following:
(a)The husband retained his interests in the E Group (paragraph 4);
(b)The husband retained/received the E Group free of any claim from the wife, Mr C Filip and Ms Baran (paragraph 13);
(c)The wife, Mr C Filip and Ms Baran fully released and discharged the husband, personally and in any other capacity, from any claim they have or may have against the husband and/or E Group (paragraph 14);
(d)The wife, Mr C Filip and Ms Baran relinquished all right, title or interest they have or may have, whether legal or equitable, in or relating to the E Group (paragraph 15);
(e)The husband was to pay, or cause to be paid by the E Group $8,000,000 to the wife and $6,500,000 to each of Mr C Filip and Ms Baran (paragraph 24);
(f)The cash payments were to be made in six tranches, namely on 10 November 2022, 4 February 2023, 5 April 2023, 1 July 2023, 1 July 2024, and 1 July 2025 (paragraph 24);
(g)The husband was to provide security for the cash payments, by providing a first registered mortgage over a property in his sole name and in addition “a Security Interest over all of the [E Group] entities’ present and after-acquired property” (paragraph 25);
(h)Any obligation created by the 2022 property order applies to the parties in their personal capacities as well as to the parties in whatever other capacity that they may have (paragraph 31); and
(i)To the extent any obligation imposed upon the husband and the E Group requires other persons to execute documents or to action, the husband will procure such signatures and/or such action from such persons (paragraph 32).
Before his death, the husband gave standing instructions to Mr F, the Chief Financial Officer (“CFO”) of the E Group to make the payments due under the 2022 property order to the wife and Mr C Filip and Ms Baran, from the Filip Family Trust bank account and to debit his loan account accordingly.
A payment of $500,000 was made to the wife on 8 November 2022. A further payment of $2,562,000 was made to the wife on 6 February 2023, and a payment of $2,344,000 was made to each of Mr C Filip and Ms Baran on 6 February 2023. The latter three payments were made after the husband’s death. It is common ground that the wife is owed $4,938,000 and each of Mr C Filip and Ms Baran is owed $4,156,000.
At the time the 2022 property order was made, the husband and Mr B Filip were the two directors of D Pty Ltd, and the husband was the sole shareholder. The husband was also one of the primary beneficiaries of the Filip Family Trust and the appointor of the Trust.
Mr B Filip is now the sole director of D Pty Ltd and owns the husband’s shareholding in D Pty Ltd as executor of the husband’s estate.
Mr B Filip is also the sole beneficiary of the husband’s estate.
The assets of the husband’s estate are allegedly $4,731,221. The husband’s estate has liabilities including a debt owed to the Filip Family Trust pursuant to a beneficiary loan account of $3,178,678.
Prior to his death, the husband had failed to provide the security for the payments as required by the 2022 property order.
Mr C Filip and Ms Baran filed an ‘Enforcement’ Application in the 2018 proceedings on 23 June 2023 (and amended on 21 July 2023) seeking to join the trustee to the proceedings and, among other relief, they seek an order pursuant to s 79A(1) of the Act to vary the 2022 property order to obligate the trustee to pay the debt owing to them under the 2022 property order. Alternatively, they seek an extension of time to file an Application for Review of the 2022 property order pursuant to r 14.05 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”). Further, in the alternative, they seek to set aside the 2022 property order pursuant to s 79A(1) of the Act and a fresh order made pursuant to s 79 dividing the interests of the wife and the husband in the property of the parties including the interests of the trustee and any other entity within the E Group equally between them.
The wife filed an Initiating Application on 19 July 2023 (and amended most recently on 19 July 2024). The wife’s application has been allocated a new file number, namely, BRC 9373 of 2023 (“the 2023 proceedings”). The named parties to the 2023 proceedings are Mr B Filip as the legal personal representative of the husband’s estate (“the husband’s estate”), Mr C Filip, Ms Baran, and the trustee. The wife seeks, among other relief, a declaration that she has an equitable estate in the E Group to the value of the debt owing to her plus interest, and an order that the trustee pay the debt, plus interest, net of tax. Further, the wife seeks a variation of the 2022 property order pursuant to s 79A(1) of the Act, and/or in any event that orders be made pursuant to s 85A and/or ss 90AE, 90AF and/or s 114(3) such that each of the husband’s estate and the trustee pay the debt owing to the wife plus interest thereon. In the alternative, the wife seeks an extension of time to file an Application for Review of the 2022 property order under r 14.05 of the Rules, or further in the alternative, an order setting aside the 2022 property order pursuant to s 79A(1) of the Act and a fresh order made pursuant to s 79 dividing the interests of the wife and husband in the property of the parties including the interests of the trustee equally between them.
Mr C Filip and Ms Baran filed a Response to the wife’s Initiating Application on 15 September 2023 (most recently amended on 8 November 2024) in which they seek declarations of equitable estates in E Group and for the trustee to pay the debt owing to them. They seek similar alternative relief as that sought by the wife including pursuant to s 85A and/or ss 90AE, 90AF and/or s 114(3) of the Act.
The only issue currently for determination is whether the trustee should be added as a party in the 2018 proceedings, and whether it should be removed as a party in the 2023 proceedings.
The husband’s estate joins with the trustee in resisting the joinder of the trustee as a party in the 2018 proceedings, and in seeking the removal of the trustee as a party in the 2023 proceedings. The husband’s estate does not resist the enforcement of the 2022 property order against the husband’s estate.
THE ARGUMENTS IN SUPPORT OF THE TRUSTEE BEING A PARTY
The wife and Mr C Filip and Ms Baran submit that the trustee, separately from the husband is bound by the obligation to pay the debt because the assets of E Group were treated as property of the husband in the 2018 proceedings, and the claims by Mr C Filip and Ms Baran and the wife were compromised on the basis that their entitlements would be paid by the husband or he would cause them to be paid by the trustee.
The wife and Mr C Filip and Ms Baran further submit that the 2022 property order bound the husband in his personal capacity, and also in his capacity as trustee, and he was obligated to provide security for the payments by a fixed and floating charge over the assets of the E Group which he failed to do. They argue that an equitable charge over the E Group was created notwithstanding the failure of the husband to formally provide the security, firstly because of the 2022 property order itself, and secondly because, prior to his death, the husband gave a standing direction to the CFO of the E Group to pay the debts created by the 2022 property order. Indeed, after the husband’s death payments were made but then ceased by the trustee and/or the husband’s estate.
It is further argued that the death of the husband makes it impracticable for the 2022 property order to be carried out within the meaning of s 79A(1)(b) of the Act or alternatively, the husband is in default of his obligations under the order within the meaning of s 79A(1)(c), which would justify a variation to the 2022 property order requiring the trustee to do what the husband, in that capacity, was obligated to do i.e. cause the debt created by the 2022 property order to be paid to the wife and Mr C Filip and Ms Baran.
Section 79A relevantly provides:
(1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a) …
(b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or
(c) a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or
(d) …
(e) …
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
Alternatively, it was submitted that a claim under s 85A of the Act would be available to the wife, Mr C Filip and Ms Baran, (presumably in the event that the 2022 property order was set aside pursuant to s 79A(1)(b) or (c)).
Section 85A of the Act is in the following terms:
(1) The court may, in proceedings under this Act, make such order as the court considers just and equitable with respect to the application, for the benefit of all or any of the parties to, and the children of, the marriage, of the whole or part of property dealt with by ante‑nuptial or post‑nuptial settlements made in relation to the marriage.
(2) In considering what order (if any) should be made under subsection (1), the court shall take into account the matters referred to in subsection 79(4) so far as they are relevant.
(3) A court cannot make an order under this section in respect of matters that are included in a financial agreement.
Although not pleaded, notice was given of an intention to amend the pleadings to rely upon s 90AG of the Act which is in the following terms:
If an order or injunction binds a person in the capacity of trustee in relation to property, then the order or injunction is also binding (by force of this section) on any person who subsequently becomes the trustee.
For these reasons, the wife, Mr C Filip and Ms Baran submit that the trustee is a necessary party.
Alternatively, the wife argued that the application to remove the trustee as a party was premature. It is unclear why that would be the case. It seems to be suggested, that the substantive claims should simply proceed to be heard. If that occurs, it seems to me that it would not be a question of adding or removing a party but allowing or dismissing the substantive claims.
THE ARGUMENTS AGAINST THE TRUSTEE BEING A PARTY
It is not disputed by the trustee and the husband’s estate that the rights of the trustee may be directly affected by the orders being sought by the wife and Mr C Filip and Ms Baran. What is in contention is whether the trustee is a necessary party for the determination of the issues as pleaded by the wife and Mr C Filip and Ms Baran.
The trustee and the husband’s estate submit that the facts and contentions as pleaded could not lead to a successful claim against the trustee and that in those circumstances it has not been established that the trustee is a necessary party.
Reliance is placed on several authorities including Hancock Family Memorial Foundation Ltd v Fieldhouse (No 3)[1] where Le Miere J said at [27]:
The applicant on a joinder application must show that there is an arguable case sufficient to resist the entry of summary judgment by the parties sought to be joined: … It would be futile to order that a person be joined as a defendant if the material before the court disclosed that if the person, having been joined as a defendant, applied for summary judgment the application would succeed.
(Citations omitted)
[1] [2010] WASC 223.
As to the sufficiency of the pleadings, the trustee and the husband’s estate rely on Wayne & Dillon,[2]where Warnick J (sitting in the appellate division) said at [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.
[2] (2008) 40 Fam LR 543.
Further, in B Pty Ltd & K,[3] the Full Court allowed an appeal by third parties where relief was sought under Part VIIIAA of the Act and said:
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.
[3] (2008) 39 Fam LR 488 at [52].
The trustee and husband’s estate argue that in the pleadings filed by the wife and Mr C Filip and Ms Baran there is but a mere assertion that the making of the 2022 property order itself vested in the wife and Mr C Filip and Ms Baran an equitable estate in the E Group ([52] of wife’s pleading and [48] of Mr C Filip and Ms Baran’s pleading). The pleading is silent as to “any legal or factual premise… to support that assertion”. It is acknowledged that reliance is placed on the order itself as the foundation for the equitable interest but how that could be the case remains unparticularised. The E Group was not a party to the proceedings and was not bound by the 2022 property order. The parties, as evidenced by their communication prior to the making of the 2022 property order, were alive to that fact.
To the extent that reliance is placed by the wife and Mr C Filip and Ms Baran on paragraph 24 of the 2022 property order which required the husband to pay or “cause to be paid” the cash payments, it is submitted by the trustee and the husband’s estate, that the paragraph did not bind the trustee to do anything and indeed, the instructions given by the husband to the CFO were to pay the sums from the Filip Family Trust’s bank account and to debit his loan account. The payments were from the husband in compliance with his obligation under paragraph 24. The fact that the payments were not made from a bank account in the husband’s name does not change the characterisation of the payments made by him.
The trustee and the husband’s estate submit that as the husband was not the trustee of the Filip Family Trust, the 2022 property order could not bind the trustee. The husband was one of two directors of the corporate trustee, D Pty Ltd. It is not in dispute that the husband had an obligation to cause the cash payments to be made, and to cause the security over the E Group to be provided in his personal capacity and in his capacity as a director, in his capacity as a shareholder, and in his capacity as appointor, because that is what the 2022 property order provided.
If the husband had defaulted when alive, orders could have been made against him personally to act in certain ways to give effect to the order, but those personal obligations did not survive his death. Firstly, because his obligations in those various capacities did not bind the trustee, and it was necessary for it to do so before any new trustee would then be obliged to act on it. Secondly, it was known at the time the 2022 property order was entered into that the husband was one of two directors, not a sole director to be treated the same as if he were the trustee, and because the correspondence exchanged prior to the 2022 property order being made expressly rejected that the trustee was bound by the order.
The trustee and the husband’s estate submit that s 90AG of the Act has no application as the husband was not the trustee and therefore could not bind the trustee in that capacity.
The trustee and the husband’s estate further submit that the 2022 property order did not create an equitable estate for the wife and Mr C Filip and Ms Baran in the assets of the Filip Family Trust pending discharge of the husband’s obligations under the 2022 property order. They rely upon the plain reading of the 2022 property order which at paragraphs 4(a) and 13 provide for the husband to retain his right, title and interest in the E Group and was not subject to compliance with his payment obligations. They argue that any claims the wife, Mr C Filip or Ms Baran may have had in the assets of the Filip Family Trust were compromised by the 2022 property order.
The trustee and the husband’s estate submit that whether or not the husband’s death is a factor sufficient to satisfy s 79A(1)(b) of the Act (miscarriage of justice because it is impracticable for the 2022 property order to be carried out) is not a matter that the Court need determine because even if it does create a miscarriage of justice, the pleadings do not identify how a variation to the 2022 property order could bind the trustee when the trustee was not a party to the original order.
As to any claim relying on s 85A of the Act, the trustee and husband’s estate submit that the mere recounting of the circumstances of the operation of the businesses does not provide a factual or legal basis to support a nuptial settlement, or that it would be just and equitable to make the order sought, particularly in circumstances where the pleading identifies significant benefits received by the wife and Mr C Filip and Ms Baran during the subsistence of the marriage. Further, it is submitted by the trustee and the husband’s estate that there are no facts alleged in the pleadings which identify why the Filip Family Trust is a nuptial settlement rather than what it appears to be, namely, an ordinary discretionary family trust.
DISCUSSION
Rule 3.01 of the Rules provides as follows:
A person whose rights may be directly affected by an issue in a proceeding, and whose participation as a party is necessary for the court to determine all issues in dispute in the proceeding, must be included as a party to the proceeding.
In the circumstances of this case, leave is required to join the trustee to the 2018 proceedings (r 3.03(4) of the Rules). As the trustee has already been joined to the 2023 proceedings, the trustee can only be removed by order (r 3.05 of the Rules).
As earlier noted, the matter was initially adjourned to enable pleadings to be filed. It is not in contention that the point of pleadings is as identified by the High Court said in Dare v Pulham[4] at page 664:
Pleadings and particulars have a number of functions: they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it …; they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial …; and they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court. Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings…
(Citations omitted)
[4] (1982) 148 CLR 658 at 664.
These proceedings raise an interesting conundrum. At first blush it would seem inconceivable that the wife and Mr C Filip and Ms Baran could not recoup that which they are owed pursuant to the 2022 property order, but this is not a Court administering ‘palm tree justice’.[5] There must be a principled legal basis to provide the relief sought that is identified in the pleadings. In my view, the submissions made on behalf of the trustee and the husband’s estate as to the inadequacy of the pleadings are compelling.
[5] R v Watson; Ex parte Armstrong (1976) 136 CLR 248.
For example, the wife at [52] of her Statement of Facts, Issues and Contentions filed 19 July 2024 and Mr C Filip and Ms Baran at [48] of their Statement of Facts, Issues and Contentions filed 26 July 2024, assert that “the making of [the 2022 property order] vested [in the wife and [Mr C Filip and Ms Baran]] an equitable estate in the [E Group] … pending compliance with the payment of all monies to them pursuant to the [2022 property order]”. No facts or legal contentions are provided to support the assertion that the mere making of a property order affords the wife and Mr C Filip and Ms Baran an equitable estate in various separate legal entities, none of which were parties to the 2022 property order. The pleading does not disclose any basis for the trustee being liable for the husband’s debt.
As to the claim for relief pursuant to s 79A(1)(b) of the Act, I agree with the submission made by the trustee and the husband’s estate that it is not necessary to determine at this point whether the husband’s death is a circumstance which makes the 2022 property order impracticable to carry out within the meaning of that section. What I do have to be satisfied about in relation to the relief sought under ss 79A(1)(b) or (c) of the Act is whether the pleadings identify a factual and legal basis for a variation or a setting aside of the 2022 property order (assuming that the circumstance of s79A(1)(b) or (c) is established) so as to, among other things, make the trustee or the E Group liable for the payments due to the wife and Mr C Filip and Ms Baran when neither the trustee nor the E Group were parties to the 2022 property order and the husband was not the trustee of the Filip Family Trust.
The pleadings are silent on those matters.
It is not in contention that the 2022 property order created in the husband personal obligations and obligations in his capacity as a director, a shareholder, and as appointor. However, contrary to the impression I gained during submissions made on behalf of the wife and Mr C Filip and Ms Baran, the husband was not the trustee of the Filip Family Trust at the time of the 2022 property order. If the husband’s obligations somehow nevertheless bind the trustee, a factual and legal basis remains unspecified in the pleadings.
Whether at common law, or pursuant to s 90AG of the Act, it is not in dispute that a new trustee is bound by the obligations of the old trustee but the distinction in this case is that the husband was not the trustee. If it is to be contended that s 90AG of the Act has some broader application than would seem on the plain reading of the section, the pleadings would need to articulate the factual and legal contentions.
In relation to the alternative relief claimed under s 85A of the Act, the pleadings assert that the Trust is a nuptial settlement within the meaning of s 85A. The facts then relied upon to support the assertion do not identify, among other things, why it would be just and equitable to make an order in the circumstances pleaded including unparticularised contributions for which significant payments from the Filip Family Trust had been received by the wife, Mr C Filip and Ms Baran over many years.
Lastly, in relation to the alternative relief claimed by the wife under ss 90AE(2), 90AF, and s 114(3) of the Act the wife is silent in her pleading as to any factual or legal contentions. In relation to the alternate relief sought by Mr C Filip and Ms Baran under those sections, only s 90AE(2) of the Act is mentioned but the pleading does not articulate any factual or legal contentions that would enliven its application. No submissions addressed this alternative relief.
CONCLUSION
The wife and Mr C Filip and Ms Baran have failed to establish on their current pleadings that the trustee is a necessary party to the proceedings. The purpose of the adjournment in June last year was to afford the wife and Mr C Filip and Ms Baran an opportunity to provide a Statement of Facts, Issues and Contentions which, if proved, could arguably justify the relief sought. The pleadings filed by the wife and Mr C Filip and Ms Baran fail to do so.
I propose to dismiss the application to join the trustee to the 2018 proceedings and to remove the trustee from the 2023 proceedings. That course seems to be more appropriate than ordering amended pleadings to be filed which would require the trustee to remain involved in the proceedings and incur further costs, perhaps unnecessarily.
I propose to list the matter for a case management hearing at a time convenient to the remaining parties to determine the future progress of the matter.
I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carew. Associate:
Dated: 30 January 2025
SCHEDULE OF PARTIES
BRC 11696 of 2018
BRC 9373 of 2023Respondents
Fourth Respondent:
D PTY LTD AS TRUSTEE FOR THE FILIP FAMILY TRUST (IN BRC 9373 OF 2023 ONLY)
0
3
2