Foster and Cotter and Anor - [2016] FamCA 1038

FAMILY COURT OF AUSTRALIA

FOSTER & COTTER AND ANOR

[2016] FamCA 1038

FAMILY LAW – Property – contested application for removal of second respondent from proceedings – contested application for summary dismissal – application refused.

Family Law Act 1975 (Cth), s 90AE, 118
Family Law Rules 2004 (Cth), rr 6.02, 6.04, 10.12

Australian Broadcasting Commission v Lenah Game Meats Pty Ltd (2001) 208 CLR 199

Bima and Anor & Minister for Immigration and Border Protection [2014] FamCA 1094
Diem & Vho and Ors [2016] FamCA 680
Friar & Friar [2011] FamCAFC 71
Kelly & Lomax and Anor [2013] Fam CA 496
Lindon v Commonwealth of Australia (No 2) (1996) 70 ALJR 541
Pelerman and Pelerman (2000) FLC 93-037
Wayne & Dillon and Anor [2008] FamCAFC 204

APPLICANT:

Ms Foster

FIRST RESPONDENT:

Mr Cotter

SECOND RESPONDENT:

Mr Parks

FILE NUMBER:

MLC

1699

2014

DATE DELIVERED:

2 December 2016

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Thornton J

HEARING DATE:

28 & 29 September 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Geddes QC

SOLICITOR FOR THE APPLICANT:

Kennedy Partners

COUNSEL FOR THE FIRST RESPONDENT:

Mr Sweeney

SOLICITOR FOR THE FIRST RESPONDENT:

M A Legal

COUNSEL FOR THE SECOND RESPONDENT:

Mr St John QC and Mr Murphy

SOLICITOR FOR THE SECOND RESPONDENT:

CE Family Lawyers

Orders

That paragraphs 1 and 2 of the second respondent’s Application in a Case filed 8 February 2016 be dismissed.
That paragraph 2 of the first respondent’s Further Amended Response to Initiating Application filed 14 August 2015 be dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Foster & Cotter and Anor 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 MELBOURNE

FILE NUMBER: MLC 1699 of 2014

Ms Foster

Applicant

And

Mr Cotter

First Respondent

And

Mr Parks

Second Respondent

REASONS FOR JUDGMENT

The second respondent Mr Parks, supported by the first respondent, brings an Application in a Case in response to an Amended Initiating Application filed by the applicant de facto wife pursuant to s 90AE of the Family Law Act 1975 (Cth) (“the Act”).
The applicant and the first respondent were in a de facto relationship from 1987. There is disagreement about the date of separation. On the applicant’s case the parties separated in April 2013. On the first respondent’s case the parties separated in October 2009. (For ease of reference I will refer to the de facto wife as the wife and the first respondent de facto husband as the husband.)
By way of final orders sought in the substantive property settlement proceedings, the applicant wife seeks orders in her favour and/or the husband, adjusting Mr Parks’ shareholdings in a number of entities which she alleges Mr Parks holds on behalf of the husband.
Mr Parks seeks the following orders:
1. That [he] be removed as the Second Respondent in these proceedings;
2. That paragraphs 5 and 6 of the Final Orders sought in the Amended Initiating Application filed by [the applicant wife] on 3 March 2015 be dismissed and/or struck out;[1] …
[1] Application in a Case filed 8 February 2016.
The wife seeks in paragraphs 5 and 6 of her Application, by way of final orders:
5. That pursuant to s 90AE of the Family Law Act 1975 (Cth) (‘the Act’), there be such orders in favour of the wife and/or the husband, adjusting [Mr Parks’] shareholdings in the entities listed below which he holds on behalf of the husband in proportions as the court may determine:
5.1[B] Pty Ltd as trustee for the [B] Trust and the [C] Unit Trust;
5.2[C] Unit Trust;
5.3[D] Pty Ltd as trustee for the [E] Unit Trust;
5.4[F] Pty Ltd as trustee for the [F] Unit Trust;
5.5[G] Pty Ltd as trustee for the [G] Unit Trust;
5.6[H] Pty Ltd as trustee for the [H] Unit Trust;
5.7[I] Pty Ltd;
5.8[J] Pty Ltd;
5.9[K] Pty Ltd;
5.10[L] Pty Ltd.
6. That the wife be excused from further particularising the orders sought by her in relation to [Mr Parks] pending the financial investigation and valuations being obtained as sought by the wife in the amended application in a case filed contemporaneously with this amended initiating application.
The husband also seeks that Mr Parks be removed as the Second Respondent in these proceedings, and that paragraphs 5 and 6 of the Final Orders sought by the wife be dismissed.[2]
[2] Further Amended Response to Initiating Application filed 14 August 2015.
The wife seeks that Mr Parks’ Application in a Case be summarily dismissed.

Background

There is a significant dispute between the wife and the husband and Mr Parks about the commercial relationship between the husband and Mr Parks. Findings of facts about these disputed issues must await trial.
The husband deposed that he is the sole director and shareholder of M Pty Ltd trading as UN Pty Ltd.[3] He deposed that M Pty Ltd is the trustee of the Cotter Unit Trust, which is a discretionary trust of which he is the sole appointor. He deposed that he and the wife are beneficiaries of that Unit Trust.
[3] Affidavit of the husband filed 7 April 2015.
The husband deposed :
5. I have a 20% interest in [O Pty Ltd], trading as UP Pty Ltd. [O Pty Ltd] is a partnership between [Q Pty Ltd] and [M Pty Ltd]. The shareholders agreement entered into with [Q Pty Ltd] in 2011 provides that I have a 20% share of [O Pty Ltd]. [Mr Parks] has a one half interest in my share in [UP Pty Ltd]. [Mr Parks] and I have agreed that he has this interest due to his efforts in building the business up before we merged and sold it in September 2011…
6. [Mr Parks] and I had conducted [UP Pty Ltd] as a [business] and had considered closing it. We received a request for merger with another [business] ([R Pty Ltd]) and the end result was that the merged [business] is known as “[UP Pty Ltd]”. [Mr Parks] and I have a 20% interest in that agency or effectively 10% each. Neither I nor [Mr Parks] are actively involved in [UP Pty Ltd].
On 3 February 2016 Macmillan J made the following orders:
IT IS ORDERED BY CONSENT (AS BETWEEN THE HUSBAND AND THE WIFE) THAT
…
2. Within 14 days of these orders the husband disclose to the wife all information and documents within his possession, power and control as sought in paragraph 4 of the Application in a Case filed 24 December 2015 (to the extent that such documents have not already been disclosed by the husband) and provide such further information and documents as may be requested by the wife within 21 days of such request, provided such documents are within the husband’s possession, power and control.
…
IT IS ORDERED BY CONSENT (AS BETWEEN THE WIFE AND THE SECOND RESPONDENT) THAT
4. The wife within 60 days make file and serve a statement of her claim against the second respondent, including:-
(a)precisely identifying the terms of the trust(s) alleged;
(b)identifying all assets which are subject to the trust(s); and
(c)a statement of the acts, facts and circumstances relied upon as evidencing the trust(s) alleged.
IT IS FURTHER ORDERED THAT
1. By 4.00 pm on 10 February 2016 the second named respondent file and serve upon all other parties an application in a case seeking his removal as a party to these proceedings.
…

Wife’s Statement of Claim

Following these orders the wife filed a Statement of Claim on 13 April 2016. The Statement of Claim particularises at paragraph 4 that:
[The husband’s] interest in [B Pty Ltd]
4. At a time presently unknown to [the wife] but in about or shortly prior to August 2010, [the husband] and [Mr Parks] (who, at that time was a contractor engaged by [the husband] through the … franchises operated by him) agreed that:
4.1they would commence undertaking work in respect [business] together in south-eastern suburbs of Melbourne; and
4.2[the husband’s] interests in that work or in [that business] would be held by [Mr Parks], or a company controlled by [Mr Parks], on behalf of [the husband] (the Agreement).
Particulars
The Agreement is to be inferred from the particulars subjoined to paragraph 8 below. Further particulars may be provided after discovery and/or the issue of subpoenas. (wife’s emphasis)
The wife claims at paragraphs 5 to 7 of her Statement of Claim that inferences can be drawn from a number of facts which are particularised, that the husband holds an equitable interest in the entities and real properties of Mr Parks.
The wife claims that Mr Parks holds the husband’s B Pty Ltd (“BPL”) interest on constructive or resulting trust for the husband (at paragraph 9 of the Statement of Claim) and that she is entitled to a declaration that Mr Parks holds the husband’s BPL interest on constructive or resulting trust for the husband.
Further or alternatively, the wife claims that Mr Parks holds the husband’s BPL interest as agent for the husband.
By reason of all of these matters, it is pleaded by the wife that she is entitled to an order adjusting Mr Parks’ shareholdings in BPL in proportions that reflect the husband’s BPL interest pursuant to s 90AE(2)(b) of the Act.
At paragraph 39 of her Outline of Case the wife summarises the evidence supporting her case as follows:
The facts in support of the applicant’s case that the first respondent holds an equitable interest in the entities and real properties of the second respondent are set out in paragraphs [4] or [107] of the statement of claim filed by the [sic] her on 13 April 2016 (“applicant’s statement of claim”). In particular:
39.1The first and second respondents agreed to establish [BPL] in August 2010 for the purpose of jointly undertaking … work in the south-eastern suburbs of Melbourne.[4]
[4] Wife’s Statement of Claim filed 13 April 2016 at [4].
39.2The first respondent, inter alia:
39.2.1was and is involved with the establishment and ongoing operation of [BPL] and its business, [Company S], with the second respondent;[5]
[5] Ibid at [8.29] to [8.31], [8.33], [8.34], [8.37], [8.38] and [8.39].
39.2.2invested funds into [BPL] and received payments from [BPL], including payment of rental from property owned by [BPL];[6]
[6] Ibid at [8.20] to [8.24] and [8.28].
39.2.3acted as guarantor for loans from third parties to [BPL] using real properties in his personal name as security;[7]
[7] Ibid at [8.14] to [8.18].
39.2.4arranged for [BPL] to operate from the same premises from which he operated his businesses, [UN Pty Ltd] and [UP Pty Ltd], and then from premises leased by [UN Pty Ltd], without payment of rental or contribution towards the utilities and expenses by [BPL], until the purchase by [BPL] of its current premises;[8]
[8] Ibid at [8.2] and [8.3].
39.2.5arranged for [BPL] to utilise and share staff, resources and contact details of [UN Pty Ltd] and [UP Pty Ltd];[9]
[9] Wife’s Statement of Claim filed 13 April 2016 at [8.4] to [8.6].
39.2.6paid by a salary and made superannuation contributions to the applicant from [BPL];[10]
[10] Ibid at [8.9] to [8.13].
39.2.7was a signatory to [BPL] bank accounts;[11]
[11] Admitted by Mr Parks in his Notice Disputing Facts or Authenticity of Documents filed 25 March 2015 at [15].
39.2.8was and is involved in the set-up and operation of the business of [BPL], [Company S] which utilises staff with [UN Pty Ltd] interchangeably;[12]
[12] Wife’s Statement of Claim filed 13 April 2016 at [8.35].
39.2.9works predominantly from current premises of [BPL] and sold properties on behalf of [BPL] and [Company S] outside of [UN Pty Ltd].[13]
[13] Ibid at [8.37].

Evidence

The documents relied upon by each of the parties are set out in annexure A to this judgment.
Pursuant to previous procedural orders, each of the parties filed and served an Outline of Case including the following:
·a concise set of orders sought;
·the list of the applications and affidavits to be read and the relevant paragraphs relied upon;
·a list of the parties’ respective legal and equitable interests in property and liabilities;
·a list of objections to evidence upon which rulings are required, if any; and
·a summary of argument in relation to the legal and factual issues in dispute.
(The Outline of Case filed by Mr Parks was a document titled “Submissions of Second Respondent”, but for ease of reference I will refer to this document as Mr Parks’ Outline of Case).
The hearing proceeded by way of submissions and counsel for the second respondent, Mr Parks, submitted written “Replying Submissions of Second Respondent”. Counsel for the wife submitted an Aide Memoire titled “Conduct of the husband and Mr Parks”.

The law

Rule 6.02(1) of the Family Law Rules 2004 (“the Rules”) provides that 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.
Rule 6.04 of the Rules provides that a party may apply to be removed as a party to a case.
Section 118 of the Act relevantly provides:
The court may, at any stage of proceedings under this Act, if it is satisfied that the proceedings are frivolous or vexatious:
(a)dismiss the proceedings; …
Rule 10.12 of the Rules provides that:
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:
…
(c)it is frivolous, vexatious or an abuse of process; or
(d)there is no reasonable likelihood of success.
In Friar and Friar [2011] FamCAFC 71, the Full Court said:
49.Rules 10.12(c) and (d) of the Family Law Rules 2004 (“the Rules”) relevantly provide that a respondent may apply for “summary orders” in relation to an application on the basis that it is “frivolous, vexatious or an abuse of process” or has “no reasonable likelihood of success”.
50.The Rules are properly read as supplementing the power of the Court to dismiss frivolous or vexatious proceedings pursuant to s 118(1) of the Act. The Rules are also to be read in the context of the many cases confirming the Court’s inherent power to dismiss or permanently stay an application which cannot succeed, as to which see the authorities discussed in Bigg v Suzi (1998) FLC 92-799 at 84,974.
In Lindon v The Commonwealth (No 2) (1996) 136 ALR 251 at 255-256 (“Lindon”), Kirby J said:
The approach to be taken by the court to the Commonwealth’s application for summary relief is not in doubt:
1.It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against government and other powerful interests. This is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the court, is rarely and sparingly provided.
2.To secure such relief, the party seeking it must show that it is clear, on the face of the opponent’s documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious.
3.An opinion of the court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment.
4.Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of demurrer. If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts.
5.If, notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading. A question has arisen as to whether O 26, r 18 applies to part only of a pleading. However, it is unnecessary in this case to consider that question because the Commonwealth’s attack was upon the entirety of Mr Lindon’s statement of claim.
6.The guiding principle is, as stated in O26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and relieve the court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.
The Full Court affirmed the principles set down in Lindon and Bigg v Suzi (1998) FLC 92-799 and summarised and applied them in Pelerman and Pelerman (2000) FLC 93-037 (“Pelerman”).
In Pelerman the following was said about the discretionary power to summarily dismiss an application:
… It is well established that the following principles apply as were recently reviewed and stated in Bigg v Suzi:
(a) The power for summary relief is a discretionary one.
(b) Relief “is rarely and sparingly provided”.
(c) The parties seeking summary dismissal must show that the application is “doomed to fail” or as has been otherwise described “that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious”.
(d) A weak case or one that is unlikely to succeed is not “sufficient to warrant termination”.
(e) “If there is a serious legal question to be determined, it should ordinarily be determined at a trial.”
(f) “If notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a Court will ordinarily allow that party to reframe its pleadings.”[14]
[14] (2000) FLC 93-037 at [46] (emphasis in original).

Second respondent’s application in a case filed 8 February 2016

Mr Parks seeks that he be removed as the named Second Respondent to the proceedings and that paragraphs 5 and 6 of the final orders sought in the wife’s Amended Initiating Application filed 3 March 2015 be dismissed and/or struck out.

Rule 6.02(1) of the Family Law Rules

Mr Parks argues that rule 6.02(1) cannot be enlivened unless firstly, there is a proper case before the Court pursuing a claim which prospectively directly affects the rights of a third party and secondly, the participation of that third party as a party to the proceedings is necessary for that claim to be determined. Counsel for Mr Parks argued that no factual basis has been advanced by the wife in her Statement of Claim, affidavits or her Outline of Case which establishes either requirement.

Rule 6.04 of the Family Law Rules

Mr Parks seeks to be removed as a party pursuant to rule 6.04 of the Rules. He does not dispute the following principles stated in the Outline of Case of the wife:
The test to remove a party pursuant to rule 6.04 is regarded as “being the inverse of the test which applies to rule 6.03, so that a party ought be disjoined if, upon an application for joinder, they would not be joined”: Kelly & Lomax and Anor [2013] Fam CA 496 at paragraph [36].
In Wayne & Dillon and Anor [2008] FamCAFC 204, the Full Court stated at [19], “… if a cause of action, recognisable at law, against a “third person” is particularised, then it is at least highly likely that joinder will be ‘necessary for the court to completely and finally determine all matters in dispute …”.[15]
[15] Wife’s Outline of Case filed 23 September 2016 at [30] & [31] (wife’s emphasis).

However, Mr Parks through his counsel argued again that neither of the two necessary requirements have been satisfied in that, firstly, there is not a proper case before the Court pursuing a claim which prospectively directly affects the rights of a third party and secondly, the participation of that third party as a party to the proceedings is not necessary for that claim to be determined. Mr Parks again argues that no factual basis has been advanced by the wife in her Statement of Claim, affidavits or Outline of Case which establishes either requirement.
Mr Parks does not dispute the proposition of the wife that, in order for joinder of a third party to be permitted:
Sufficient facts must be asserted to demonstrate that, if proved, the law arguably provides the relief sought”: B Pty Ltd & Ors & K & Anor [2008] FamCAFC 113 at [52]. The test for joinder of a party “is not in itself dissimilar to what must be shown by the respondent to an application for an order for summary dismissal of a cause of action”: Diem & Who and Ors [2016] FamCA 680 at [12].”[16]
[16] Ibid at [32] (wife’s emphasis).
Mr Parks also accepts the principles governing summary dismissal outlined by Kirby J in Lindon v The Commonwealth (No 2) (1996) 70 ALJR 541 at 544-545.
Mr Parks also relies on the decision of the Full Court in Friar & Friar [2011] FamCAFC 71 where the relevant considerations in an application for summary dismissal were reviewed by the Full Court. Mr Parks argues that the evidence to which the Court must have regard is that of the respondent to the application for summary dismissal but the Court may have regard to relevant non-contentious facts even if raised by the applicant for summary dismissal.[17]
[17] Custodio v Pinto (2006) FLC 93-279 (Full Court) per Finn J at [11] and also the Full Court decision of BA P Associations and Ors & K and Ors [2006] FamCA 518 at [21]. See Mr Parks’ replying submissions at [23] and Mr Parks’ Outline of Case filed 13 September 2016 at [25].
As to the proposition in the wife’s Outline of Case that the multiple affidavits filed by both respondents and witnesses in response to those filed by the wife are indicative of numerous factual issues in dispute between the parties which will be required to be tested at trial, Mr Parks denies that there are “… many factual disputes between the affidavits of [the wife] and those filed by [Mr Parks] and his witnesses”. Rather, he says:
The unsupported assertions/speculations/conclusions drawn by [the wife] as to the relationship between [Mr Parks and the husband] are the subject of denial but they do not constitute admissible evidence. [Mr Parks’] detailed affidavit evidence providing particulars and explanations of financial transactions raised by [the wife] (without accompanying explanation) has never been responded to by [the wife]. Such of his unanswered contents as reply to admissible evidence of [the wife] can properly be described as non-contentious.[18]
[18] Mr Parks’ replying submissions at [24]
Mr Parks denies that there is any evidence supporting the wife’s case that the husband holds an equitable interest in the entities and real properties of Mr Parks as set out in the wife’s Statement of Claim (paragraphs 4 to 107). Counsel for Mr Parks argued that evidence of subjective intention of the parties is irrelevant where a resulting or constructive trust is alleged. In response to the wife’s Statement of Claim in paragraphs 4 to 107, Mr Parks argues that:
·There is no evidence that the husband contributed financially to the establishment of [BPL], nor of [Company S]. In those circumstances no resulting or constructive trust can arise;
·The fact that the husband acted as guarantor for loans from third parties to [BPL] using real properties in his personal name as security does not constitute a financial contribution by him to [BPL] or to [Mr Parks] in circumstances where no claim was made pursuant to the guarantee;
·The allegation that the husband arranged for [BPL] to operate from the same premises from which he operated his businesses, [UN Pty Ltd] and [UP Pty Ltd], and then from premises leased by [UN Pty Ltd], without payment of rental or contribution towards the utilities and expenses by [BPL], until the purchase by [BPL] of its current premises, is irrelevant as it is subsequent to the establishment of [BPL];
·The allegation by the wife that the husband arranged for [BPL] to utilise and share staff, resources and contact details of [UN Pty Ltd] and [UP Pty Ltd] is also irrelevant as it is subsequent to the establishment of [BPL];
·The husband admits that [BPL] paid him a salary and superannuation contributions but this does not constitute a financial contribution to [BPL] or to [Mr Parks];
·[Mr Parks] admits that the husband was a signatory to [BPL] bank accounts but argues that this does not constitute a financial contribution to [BPL] or to the second respondent in any event, but that it is also irrelevant as he became a signatory subsequent to the establishment of [BPL];
·The wife’s allegation that the husband was and is involved in the set up and operation of the business of [BPL], [Company S] which utilises staff with [UN Pty Ltd] interchangeably, is denied, but in any event does not constitute a financial contribution by the husband to [BPL], [Company S] or to the second respondent.
Counsel for Mr Parks argues that the there is a legal misconception and flawed analysis regarding the alleged subjective intentions of Mr Parks and the husband which he argues are not relevant to a case where a resulting or constructive trust is alleged. In particular he refers to the wife’s case that the husband’s interest in the entities and real properties of Mr Parks in addition to BPL arises, inter alia, by virtue of his interest in BPL which he established jointly with Mr Parks in August 2010.[19]
[19] Wife’s Outline of Case filed 23 September 2016 at [39] and Mr Parks’ replying submissions at [27]

Wife’s statement of claim and case outline is based upon misconceived views of the relevant law

Counsel for Mr Parks argues that the wife’s case is fundamentally, irretrievably and fatally flawed and must be summarily dismissed because of a misconceived view of the relevant law and provides the following examples:
(a)Reliance is wrongly placed by [the wife] upon evidence as to dealings by relevant parties subsequent to the acquisition of shares in the relevant companies or the real property. Such evidence is irrelevant or inadmissible when application is made to a Court for the construing of a resulting or constructive trust. In a unanimous judgment the High Court stated in Charles Marshall Pty Ltd v Grimsley [1956] HCA 28, (1956) 95 CLR 353 (High Court) (at para. 10):
“Save for admissions made the only evidence that is relevant and admissible comprises the acts and declarations of the parties before or at the time of purchase … or so immediately thereafter as to constitute a part of the transaction.”
(Cited with approval in Calverley v Green per Gibbs, C J at his paras. 9 & 12, per Mason & Brennan, JJ at para 14 & per Deane, J at his para 8.);
(b)It is wrongly assumed that a constructive or resulting trust in favour of [the husband] can arise in circumstances where he has made no financial contribution to the purchase or acquisition of the relevant real or personal property. There must be financial contribution to the purchase price unless the presumption of advancement applies: see eg Charles Marshall Pty Ltd v Grimsley at paras. 9 & 10; Calverley v Green (High Court) per Gibbs, CJ at paras. 3, 4, 9 & 12, per Mason & Brennan, JJ at paras. 5, 7, 8;
(c)It is wrongly assumed that financial contributions made by [UN Pty Ltd] to [BPL] or any other relevant company, (which is denied), can create a beneficial interest personal to [the husband] in the shares of that company. ([UN Pty Ltd] is an incorporated entity with a separate legal identity. A payment by that company cannot create a beneficial interest for [the husband].) A mere financial advance creates only a relationship between borrower ([BPL]) and lender ([the husband]);
(d)It is wrongly assumed that a mere payment of monies by [the husband] to [BPL] (which is denied) creates an equitable interest in the shares held by [Mr Parks] in [BPL]. (No monies are alleged to have been paid by [the husband] to [the second respondent]);
(e)It is wrongly assumed that shares held by [Mr Parks] in a company, or by [BPL] in a company, create a legal or beneficial entitlement in his / its favour in the assets of that company. See eg. R v Portus; Ex parte Federated Clerks Union of Australia [1949] HCA 53; 79 CLR 428 per Latham, CJ (at para 9):
“The company, however, is a distinct person from its shareholders. The shareholders are not liable to creditors for the debts of the company. The shareholders do not own the property of the company: see Aron Salomon v Salomon & Co. (1987) AC 22 and Macacura Assurance Co. (1925) AC 619.”
(See also Dixon, J at para 4);
(f)It is wrongly assumed that the mere payment of monies by [the husband] to [BPL] (which is denied) creates an equitable interest in the assets of [BPL] (see sub-para. (e) hereof).
(g)It is wrongly assumed that if monies were paid by [the husband] to [BPL] (which is denied), and [BPL] subsequently acquired shares or real properties by advancing its monies, then [the husband] has a personal beneficial interest in those newly acquired assets of [BPL] – see (b), (c) & (e); and
(h)It is wrongly assumed that if [Mr Parks] acquired the assets, including company shares or real estate, subsequent to any payment of monies by [the husband] to [BPL] (which is denied) then [the husband] has a personal beneficial interest in those newly acquired assets of [Mr Parks]. [20]
[20] Mr Parks’ replying submissions at [3] (Mr Parks’ emphasis)
Mr Parks argues that further discovery cannot remedy a case that is fatally flawed and particularly so where the relevant evidence is limited to dealings by relevant parties subsequent to the acquisition of shares in the relevant companies or the relevant real property. Counsel for Mr Parks argued that the following matters apply to the question of further discovery raised by the wife:
(a)To commence her claims there must be reasonable grounds for believing that factual material already available provides a proper basis for [the wife’s] allegations – see para. 17 of [the second respondent’s] Case Summary;
(b)The Order that [the wife] provide a Statement of her claim by the date specified was made by consent;
(c)No application was commenced by [the wife] for an extension of time necessary to complete the Statement of her claim.;
(d)No request for documents has been made of [the second respondent] since the Order was made;
(e)[The wife] has been free to issue subpoenae to obtain documents relevant to her case and she has vigorously exercised that avenue of investigation – see [the second respondent’s] Case Summary at para. 2;
(f)There was no correspondence forwarded to [Mr Parks’] solicitors, nor a sworn assertion by [the wife], asserting a failure by [Mr Parks] and / or [the husband] to supply documents relevant to the allegations traversed in [the wife’s] Statement of Claim since the Statement of Claim was ordered. [Mr Parks’] previous evidence that he had supplied all information required of him is uncontradicted – see eg his affidavit 1/2/16 at paras. 29, 31 & 32(c); and
(g)No application was commenced by [the wife] for the disclosure or production of documents since the filing of a Statement [sic] of her claim was ordered. [21]
[21] Mr Parks’ replying submissions at [4] (Mr Parks’ emphasis)

Lack of particulars in the wife’s statement of claim

Mr Parks argues that the wife’s Statement of Claim is inconsistent with her Outline of Case, in that her case has been pleaded on the basis that he holds all of his registered ownership of the relevant shares and real estate on trust for the husband. It was submitted that this is inconsistent with her Outline of Case which asserts that the second respondent holds “part” of his registered ownership for the husband “such part to be particularised upon the completion of discovery by the first and second respondents, cross examination of the parties and their witnesses and/or the issue of further witnesses” and that no proportion or percentage of the husband’s alleged entitlement is advanced.
Mr Parks argues that the wife is unable to particularise her case from the material presently available to her and that this highlights the speculative nature of the claims she advances.[22] Counsel for Mr Parks argued that the wife asserts fraudulent behaviour against Mr Parks and the husband. He argued that the wife’s solicitors have failed to respond to paragraphs 9 - 18 of Mr Parks’ submissions which included “submissions asserting a dereliction of professional and ethical obligations by her solicitors and the filing of a document which constitutes an abuse of process.” [23]
[22] Mr Parks’ replying submissions at [2].
[23] Ibid at [7].
Counsel for Mr Parks did not take issue with the law outlined at paragraphs 9 to 10 of the wife’s Outline of Case concerning when a constructive trust may be imposed, but did not accept the following contention on behalf of the wife:
It is contended the first respondent has made significant financial contributions to the property held by the second respondent, the nature and extent of which is unclear until completion of discovery by the first and second respondents, cross-examination of the parties and their witnesses, or the issue of further subpoenas.[24]
[24] Wife’s Outline of Case filed 23 September 2016 at [10].
Counsel for Mr Parks argued that the wife and her solicitors had failed to provide proper and material particulars for the allegations made and that they had at least two years and seven months in the lead up to the hearing to do so rather than engage in a “fishing expedition” to found her claims.[25]
[25] Mr Parks’ replying submissions at [8].
Paragraphs 11-12 of the wife’s Outline of Case provide:
11.The issue of intention of the parties is not a necessary element for the imposition of a constructive trust: Lehane [sic]. However, where there is a common intention of the parties that property is to be held in a particular way, and equity may enforce that common intention by the imposition of a constructive trust: Jin v Yang [2008] NSWSC 754; Pettit v Pettit (1970) AC 777; Allen v Snyder (1977) 2 NSWLR 685; McMahon v McMahon [1979] VR 239.
12.The applicant submits that in circumstances where:
12.1 the first and second respondents have, on their own evidence, acknowledged their legal interests do not accurately reflect their actual interests; and
12.2 the investment, contributions and involvement by the first respondent in the entities held by the second respondent as set out in the applicant’s statement of claim,
a prima facie case that a constructive trust arises is established, and that further discovery and testing of the evidence at trial is necessary.
In response to that contention of the wife, Mr Parks argues that subjective intention is irrelevant to the imposition of a constructive trust by a court. Counsel for Mr Parks argued that:
The cases cited stand for the proposition that where no constructive trust arises an express trust can be construed from the common intention of the parties as inferred from their conduct. That is a finding of fact, not an imputed intention which the parties never had but would have had if they had applied their minds to it: see eg Allen v Snyder at p.699 at “C” & McMahon at p.244. Further, a plaintiff would ordinarily be required to satisfy s. 53(1) of the Property Law Act 1958, (see eg. Allen v Snyder at p. 698 “C”). No express trust is alleged by [the wife].[26]
[26] Mr Parks’ replying submissions at [9] (Mr Parks’ emphasis).
Counsel for Mr Parks asserts that the wife does not specify what evidence is relied upon for the assertion that there is a prima facie case that a constructive trust arises. He also asserts that the Statement of Claim is not evidence, and that any evidence for the wife’s claims must be found within her admissible evidence and uncontradicted evidence or admissions made in the affidavits of the first and second respondents and their respective witnesses. He argued that the proposal for further discovery is unacceptable.

Resulting trust

Counsel for Mr Parks argued that “for a resulting trust to arise the contribution made must constitute financial contribution to the purchase price [and] [a]dmissible evidence is therefore circumscribed.”[27]
[27] Ibid at [12] (Mr Parks’ emphasis).
Counsel for Mr Parks argued that the execution of a guarantee which was not called upon does not constitute a financial contribution to the purchase of the real property, nor does it create an equitable interest in the real property in favour of the guarantor. The right of a guarantor is to be reimbursed in the event that the guarantee in question is called upon.
This is in response to the wife’s argument that several types of contribution can be recognised as contributions to the purchase price, such as a mortgage liability to provide contributions to the purchase price counting as a contribution which will give rise to the presumption of a resulting trust. The wife also relied upon evidence of the shares in the entities which she asserts are held on trust by Mr Parks on behalf of the husband and the husband acting as guarantor for the purchase of property by an entity held by Mr Parks.[28] Counsel for Mr Parks continues to rely upon the lack of any financial contribution by the husband for the purpose of alleging a resulting trust.
[28] Wife’s Statement of Claim filed 13 April 2016 at [8.4] and [8.5]; Wife’s Outline of Case filed 23 September 2016 at [15.1].
Counsel for Mr Parks argues that the wife’s assertion of a resulting trust cannot be established on the evidence. Counsel for Mr Parks notes that the wife does not allege that the husband legally owned property that was transferred to Mr Parks, nor that he provided funds when shares in the relevant entities and/or Mr Parks’ other entities were acquired, nor for any of Mr Parks’ real properties.[29]
[29] Mr Parks’ Outline of Case filed 13 September 2016 at [38]-[42].
Counsel for Mr Parks argues that the wife has failed to identify the interest held or to plead the facts that would form the basis of any finding of an agency agreement between the husband and Mr Parks.

First respondent husband’s response

Counsel for the husband maintained that the wife’s Statement of Claim does not refer to facts or circumstances from which inferences can be drawn, but rather makes assertions only.
He argued that the wife’s case is doomed to fail and her application should be dismissed “to save the wife from herself”, referring to the sixth test in Kirby J’s principles from Lindon’s case. He argued that the wife’s case at its highest may amount to $1.5 – $1.6 million in circumstances where the costs of Mr Parks could be half a million dollars if he were successful. He referred to what is just in circumstances where the wife’s case is doomed to failure.
He argued that s 90AE of the Act has no application and is a misunderstanding of a claim against a third party. He argued that UP Pty Ltd and T Town Nominees do not exist any longer and therefore the wife’s application is doomed to failure.
Counsel for the husband repeated the arguments of the second respondent Mr Parks regarding the complaint about the lack of particulars in the wife’s Statement of Claim regarding fraud.
He argued that to obtain shares in a company which is a bare trustee is to obtain an interest in an entity which does not own anything, so the wife’s claim is doomed to failure. He argued that the right to shares in a bare trustee can be adjusted as a matter of dollars between the husband and the wife and that Mr Parks is therefore not a necessary party to the proceedings.

Counsel for the husband argued that the wife is pursuing a case which is doomed to fail and which is an unnecessarily expensive exercise.

Wife’s response to application in a case filed 8 February 2016

The wife contends that Mr Parks’ rights are directly affected by the issues in the case and he is therefore a necessary party within the meaning of rule 6.02 of the Family Law Rules 2004 (Cth) (“the Rules”). Relying on Cronin J’s comments in Bima and Anor & Minister for Immigration and Border Protection [2014] FamCA 1094 at [18], the wife argues that Mr Parks is a necessary party to the proceedings because there is some underlying relief proposed which requires him to be given an opportunity to be heard.
The grounds of claim by the wife against Mr Parks are that he holds the husband’s equitable interests:
·pursuant to a constructive or resulting trust; and/or
·as agent; and/or
·on the basis that Mr Parks’ interests in the entities and real properties were obtained and held by him for the purpose of disguising the husband’s interest and were not intended to create the legal rights it gave the appearance of creating.[30]
[30] Wife’s Outline of Case filed 23 September 2016 at [8].
The wife argues that there is a prima facie case that a constructive trust arises and that further discovery and testing of the evidence at trial is necessary.[31] For this proposition the wife relies upon the fact that the husband and Mr Parks have, on their own evidence, acknowledged their legal interests do not accurately reflect their actual interests; and that the wife’s Statement of Claim sets out the investment, contributions and involvement by the husband in the entities held by Mr Parks.
[31] Ibid at [12].
The wife asserts that Mr Parks holds his interests in the entities and real properties on trust for the husband. Counsel for the wife argued that by virtue of the husband’s interest in BPL, a resulting trust arises as to the additional entities and trusts held by Mr Parks.[32]
[32] Ibid at [15.3].
At paragraph 19 of the wife’s Outline of Case it is asserted:
The first and second respondents assert that the first respondent holds his interest in entities (and consequently previously in real property) on trust for the second respondent, and that they “intended to create rights and obligations different from those described in their documents”. These altered interests are to the detriment of the first respondent. It is not incredible, or even unlikely, that there is a reciprocal arrangement between the first and second respondents where the second respondent holds his interests on trust for the first respondent. (wife’s emphasis)
Further, it is asserted by the wife that the husband, by having Mr Parks exclusively hold the entirety of the entities and real properties, receives benefits in that:
·He is able to retain his business licence for UN Pty Ltd and comply with the conditions of his franchise agreement; and
·The property settlement entitlements of the wife are substantially reduced.
At paragraph 21 of the wife’s Outline of Case it is noted that the assets held solely by the husband are the real properties purchased by him prior to separation, as well as his interest in the businesses UN Pty Ltd and UP Pty Ltd, which required his business licence to establish, and which were also established prior to separation.
The wife argues that the establishment of the entities and purchase of the real properties in the sole name of Mr Parks “were intended to mislead third parties, and in particular [U Corporate] and the applicant”.[33]
[33] Wife’s Outline of Case filed 23 September 2016 at [22]
The wife claims that the husband authorised Mr Parks to act as his agent in establishing the entities and purchasing real properties in addition to holding such interest on trust for the husband. The wife relies on inferences being drawn from the evidence of the conduct of the respondents.
Concerning the removal of Mr Parks as a party pursuant to rule 6.04 of the Rules, the wife relies upon what the Full Court said at [19] in A Bank& Coleiro [2011] FamCAFC 157:
… If the cause of action, recognisable at law, against a “third person” is particularised, then it is at least highly likely that joinder will be “necessary for the court to completely and finally determine or matters in dispute” … (wife’s emphasis)
This quote appears to have been erroneously connected with the case referenced by the wife, and is taken from Wayne & Dillon & Anor [2008] FamCAFC 204.
The wife argues that it is necessary for Mr Parks to remain joined as a party for the Court to completely and finally determine all matters in dispute.[34]
[34] Ibid at [31]
The wife further argues that the test for the joinder of the party “is not in itself dissimilar to what must be shown by the respondent to an application for an order for summary dismissal of a cause of action” (Diem & Vho and Ors [2016] FamCA 680 at [12]).
Concerning summary dismissal pursuant to rule 10.12 of the Rules, counsel for the wife relied upon the principles governing summary dismissal outlined by Kirby J in Lindon v Commonwealth of Australia (No 2) (1996) 70 ALJR 541 at 544-545.
Counsel for the wife also referred to the acknowledgement by the Full Court in Friar & Friar [2011] FamCAFC 71 that the test for summary dismissal has been “formulated in many other ways” but that “exceptional caution” must be used in applications for summary dismissal and the power should be “sparingly employed”.
Applying the principles for considering an application for summary dismissal, the wife argued (at paragraph 38 Outline of Case) that the Court should only consider whether her version is “inherently incredible”, has “no reasonable likelihood of success” or is “clearly frivolous or vexatious” when determining whether to remove Mr Parks as a party to the proceedings (wife’s emphasis).
In summary the wife argued that her case that the husband has an equitable interest in the entities and real properties of Mr Parks, and that Mr Parks does not or did not have an equitable interest in the husband’s entities is :
·a serious legal question to be determined, and should be so determined at trial;
·not frivolous, vexatious or an abuse of process and is not one which has no reasonable likelihood of success;
·not inherently incredible;
and it is therefore incumbent upon the court to proceed on the basis that the wife’s version will ultimately be accepted at trial.[35]
[35] Wife’s Outline of Case filed 23 September 2016 at [45]

Conclusion

The fact that the wife does not advance a percentage of the husband’s entitlement from Mr Parks is not at this stage a deficiency that warrants summary dismissal. The wife asserts that Mr Parks holds “part” of his registered ownership for the husband and this is an issue in dispute to be determined on the evidence at trial.
I do not accept the legal argument advanced by both respondents that their subjective intention is not relevant to a case where a constructive or resulting trust is alleged. It may be that intention is not a necessary element for the imposition of a constructive trust but the wife’s case here relies on inferences being drawn from such evidence.
The wife relies upon authorities such as Jin v Yang [2008] NSWSC 754; Pettit v Pettit (1970) AC 777; Allen v Snyder (1977) 2 NSWLR 685; and McMahon v McMahon [1979] VR 239 for the proposition that where there is a common intention of the parties that property is to be held in a particular way, equity may enforce that intention by the imposition of a constructive trust.[36]
[36] Wife’s Outline of Case filed 23 September 2016 at [11]
I make no determination on the application of this argument but it is an argument open to the wife after further discovery and a testing of the evidence, from which inferences might be drawn at trial. It is for the Court to construe from the evidence whether property has been acquired in circumstances where the holder of the legal title may not in good conscience retain the beneficial interest and for the Court to determine what legal consequences might attach. (See High Court in Australian Broadcasting Commission v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at [297].)[37]
[37] See Mr Parks’ replying submissions at [34]
The criticism raised by both respondents relating to what they allege are the wife’s assumptions that creation of a beneficial interest personal to the husband can arise from financial contributions made by companies who have a separate legal identity is likewise a matter for legal argument but the circumstances are also part of the factual matrix relied upon by the wife from which inferences might be drawn.
The husband and Mr Parks assert that the husband holds his interests in entities (and consequently previously in real property) on trust for Mr Parks and that they “intended to create rights and obligations different from those described in their documents.”[38]
[38] Wife’s Outline of Case filed 23 September 2016 at [19]; Affidavit of the husband filed 11 April 2014 at [19.14.2], [19.16], [27.6.7], [27.6.9] and [27.21]; Affidavit of the husband filed 17 November 2014 at [11] and [12]; Affidavit of the husband filed 7 April 2015 at [5], [6] and [10]; Affidavit of Mr Parks filed 24 April 2015 at [14], [20], [21], [47], [169], [201], [202] and [210]; Affidavit of Mr Parks filed 24 August 2015 at [7]; Affidavit of Mr Parks filed 1 February 2016 at [15(h)].
It is not inherently incredible, that as the wife asserts, there may be a reciprocal arrangement between the husband and Mr Parks whereby Mr Parks holds his interests on trust for the husband.
It is not inherently incredible that such an arrangement may as asserted by the wife, be of benefit to the husband because he is “able to retain his licence for UN Pty Ltd and comply with the conditions of his franchise agreement” in addition to reducing the wife’s entitlement to property settlement.
Regarding the dispute between the parties as to whether discovery has been completed or complied with, this is an unresolved issue which I cannot determine on the material before me.
The legal argument advanced by the respondents and detailed earlier in these reasons, regarding the timing of the acquisition of property by Mr Parks is a matter for final submissions in the trial after discovery, and a testing of the evidence from which inferences might be drawn.
A constructive trust arises from the date the court declares the trust to exist on the basis of all the evidence. The argument raised by Mr Parks and the husband about when any constructive trust might arise will be a matter for submissions.
I accept the submissions on behalf of the wife that her claim is not inherently incredible, that there is a serious legal question to be determined at trial and that the wife’s application is not frivolous, vexatious, an abuse of process or an application which has no reasonable likelihood of success. To remove Mr Parks as a party to the proceedings at this stage would amount to a summary dismissal of the wife’s case.
The husband admits that he is a signatory to a BPL bank account, that he paid approximately $300,000 to BPL on 21 February 2013, that various payments were made by UN Pty Ltd to BPL between January 2012 July 2013, that BPL uses the U email addresses for BPL business operations, that he signed a loan agreement between Mr V and BPL, that this property at W Street, Suburb X was included as a security property listed in the loan agreement and that he guaranteed the loan.
The husband and Mr Parks appear on their own evidence to acknowledge that historically their legal interests have not accurately reflected their actual interests. T Town Nominees Pty Ltd was registered on 12 October 2012 when the husband was appointed the sole director and was issued 6 of the 10 issued shares beneficially. The registered address of that company is the address of Mr Parks’ accountant. T Town Nominees Pty Ltd was the trustee of the T Town Unit Trust which was established the day before. The husband is the appointor and the sole unit holder of the T Town Unit Trust. Mr Parks deposed that the shares in T Town Nominees Pty Ltd were registered “with [the husband] holding the shares, (three which are held on trust [sic] or me as I have been unable to sign necessary documents to become a shareholder).”[39]
[39] Affidavit of Mr Parks filed 24 April 2015 at [47].
By contract dated 20 October 2012 T Town Nominees Pty Ltd purchased vacant land at Z Street, T Town (“Z Street”). The husband deposed that “Mr Parks contributed the deposit of $46,000”. On the husband’s evidence “I had arranged to borrow the balance to purchase from the ANZ bank. The ANZ borrowings were not available at the time of settlement on 23 January 2013 and Mr Parks contributed $275,771.67 being the balance required to settle.”[40]
[40] Affidavit of the husband filed 7 April 2015 at [12(b)] and [12(c)].
Mr Parks’ evidence in relation to the acquisition, funding and purchase of Z Street appears to be inconsistent with the husband’s evidence. Mr Parks deposed that “it was further agreed that the [BPL] would purchase [Z Street], that [BPL] would obtain finance to initially pay the deposit of $46,000 required to acquire [Z Street] and also part of the settlement amount.”[41]
[41] Affidavit of Mr Parks filed 24 April 2015 at [45].
At paragraph 27.6.9 of the husband’s affidavit filed 11 April 2014, the husband asserts a one third interest in Z Street is held by him and Mr Parks. Mr Parks was not at any time a director or shareholder of T Town Nominees Pty Ltd, nor a unitholder of the T Town Unit Trust.
Counsel for Mr Parks argued that “the only extant company involving [the husband] and [Mr Parks] is [T Town Nominees Pty Ltd], a company seized with no assets, non-trading and where [Mr Parks] is prepared to relinquish his admitted entitlements”.[42] It is arguably open to the wife to rely on the historical circumstances of the establishment of the entity as part of the factual background and the conduct of the respondents.
[42] Mr Parks’ replying submissions at [31]
It will be a matter on all the evidence in the trial as to whether the $300,000 paid personally by the husband to BPL on 21 February 2013 is in fact a refund to BPL by the husband of a loan BPL had advanced for the purchase of Z Street by T Town Nominees Pty Ltd as he deposed or may in some other way be characterised as a financial contribution by the husband to BPL.
Documents produced by the Bank of Queensland on subpoena by the wife[43] indicate that Mr Parks has represented his legal position to the Bank for loan applications differently from his actual position. For example amongst other things, representations were made that Mr Parks “owns and runs” UN Pty Ltd and that Mr Parks “runs [B Pty Ltd] which trades as UN Pty Ltd”. This is in circumstances where it appears that the husband is the sole director and shareholder of M Pty Ltd trading as UN Pty Ltd and M Pty Ltd is the trustee of the husband’s discretionary Unit Trust of which the husband is the sole appointor and of which the husband and wife are the primary beneficiaries.
[43] Exhibit A for the wife, admitted for identification only.
Mr Parks is not a director or a shareholder of M Pty Ltd, or a member of the class of beneficiaries of the husband’s unit trust. Mr Parks is not mentioned in the franchise agreement between M Pty Ltd and U (Victoria) Pty Ltd commencing on 10 May 2010 when Mr Parks deposed that the husband “agreed to hold my 50% interest entitlement in his name on trust for me”.[44]
[44] Affidavit of Mr Parks filed 24 April 2015 at [14]
The husband does not dispute that together with Mr Parks he was guarantor for a BPL loan agreement for the sum of $500,000 but says that he was not called upon to honour this guarantee. His involvement as a personal guarantor for the BPL loan is a piece of evidence from which inferences might be drawn in support of the wife’s case.

Franchise agreement

The wife claims that the husband acted contrary to his obligations pursuant to the franchise agreement with U (Victoria) Pty Ltd to commence 1 August 2012.
The employment agreement between the husband and BPL on 13 January 2012 regarding commission payments are prima facie at odds with clause 3.14(b) of the UN Pty Ltd franchise agreement.
On the wife’s case, the characterisation of the payments to the husband by BPL pursuant to the employment agreement between the husband and BPL is a matter for exploration and a testing of the evidence in the trial.
The wife claims that the entity D Pty Ltd did not reflect the intended beneficial interests of the husband and is evidence of “an intention by [the husband] and [Mr Parks] to secretly and collusively enter into a sham transaction”.[45]
[45] Aide Memoire at [7.9]
The husband acknowledges that he was considering purchasing a property through D Pty Ltd because he “did not want the vendor to know that [he] was the purchaser” and that his friend “agreed to be the shareholder and director of the company”.[46] The husband deposed that he arranged for the company to be incorporated and his friend Ms D was appointed as the sole director and shareholder.
[46] Ibid at [7.5]
Mr Parks deposed that:
In discussions with [the husband] in or about June 2011 he told me of land for sale in [AA Town] (the vendor had approached [UN Pty Ltd]). [The husband] was also aware of another client of [UN Pty Ltd] who wanted to purchase a like property. [The husband] saw the potential to make a profit. He wanted to purchase the [AA Town] land and then to on-sell it to the prospective purchaser...[47]
[47] Affidavit of Mr Parks filed 24 April 2015 at [51]
Based on the ASIC current and historical extract in relation to D Pty Ltd dated 24 October 2014, the shares in D Pty Ltd were transferred from Ms D to BPL and others on 3 July 2012, and to Ms BB on 11 July 2013, for the purposes of a joint venture between BPL / Mr Parks, Ms BB and other investors, in relation to development of a property acquired by BPL at CC Street, Suburb DD.[48]
[48] Affidavit of Mr Parks filed 24 April 2015 at [55]
In circumstances where the husband and Mr Parks have on their own evidence acknowledged their legal interests do not accurately reflect their actual interests and there is evidence of a complex history of involvement by the husband with BPL including acting as a personal guarantor for a BPL loan, being an entity in which he asserts he holds no interest, I am satisfied that the wife’s case is not inherently incredible, vexatious or an abuse of process. There is a serious legal question as to the nature of the husband’s interests in entities established by Mr Parks and the application by the wife is not one which could be characterised as having no reasonable likelihood of success.
Regarding the criticisms of counsel for Mr Parks that the solicitors for the wife have failed to particularise allegations of fraudulent conduct, I make no comment as to whether the wife will succeed or otherwise. However I am satisfied that sufficient particularisation has been made by the wife. The wife’s claim (at paragraph 8 item 1.3 of her Outline of Case) that Mr Parks holds the husband’s equitable interests “on the basis that [the husband’s] interests in the entities and real properties were obtained and held by [Mr Parks] for the purpose of disguising the husband’s interest and were not intended to create the legal rights it [sic] gave the appearance of creating” is supported by particulars about the alleged conduct of both the husband and Mr Parks to which they have deposed. This is further supported by documents obtained from the Bank of Queensland and ASIC records. There would appear to be some foundation for the claims made, but what inferences might be drawn from a testing of the evidence as a whole is a matter for a trial. The same applies to the arguments outlined previously regarding agency.

It may be that the wife is ultimately unsuccessful in proving her claim however at this stage she should be afforded a proper and appropriately informed opportunity to formulate her case. Even a weak case is not sufficient to warrant termination. This is a claim where many matters are in contention and further discovery may elicit further evidence.
I am not satisfied that the Mr Parks or the husband have established the onus for summary dismissal or dis-joinder. Should the wife be successful in her application for final orders, Mr Parks’ rights will be directly affected and it is necessary for him to participate as a party for the court to determine all the issues in dispute.
The affidavit evidence of both the husband and Mr Parks is open to an interpretation that historically their legal interests have not been consistent with their actual interests. I have focussed on the evidence of the wife in reaching my conclusion but arguably this conclusion could be reached on the evidence of the first and second respondents themselves.
The cost to Mr Parks of remaining in the proceedings must be balanced with a consideration of the overall justice for all parties which includes providing for an opportunity to be heard where the underlying relief proposed directly affects the rights of Mr Parks. No doubt the wife has been made aware of the potential costs implications in joining the second respondent to the proceedings.
Accordingly for all the reasons previously outlined, I refuse the application for summary dismissal and dis-joinder. I dismiss paragraphs 1 and 2 of Mr Parks’ Application in a Case filed 8 February 2016 and paragraph 2 of the husband’s Further Amended Response to Initiating Application filed 14 August 2015.

I certify that the preceding one-hundred and one (101) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thornton delivered on 2 December 2016.

Associate:

Date: 2 December 2016

ANNEXURE A

Documents relied upon by the wife:

·    Amended Initiating Application filed 3 March 2015;
·    Affidavit of Ms Foster filed 27 January 2015:
o   Paragraphs 3 to 112;
o   Paragraphs 123 to 128;

·    Affidavit of Ms Foster filed 28 August 2015:
·    Affidavit of Ms Foster filed 27 November 2015;
·    Affidavit of Ms Foster filed 24 December 2015:
o   Paragraphs 9 to 13, 15 and 18 to 25.

· Affidavit of Mr Cotter filed 11 April 2014:
o Paragraphs 19.14.2, 19.16, 27.6.7, 27.6.9 and 27.21.

· Affidavit of Mr Cotter filed 17 November 2014:
o Paragraphs 11 and 12;

· Affidavit of Mr Cotter filed 7 April 2015
o Paragraphs 5, 6, 10

· Affidavit of Mr Parks filed 24 April 2015:
o Paragraphs 14, 20, 21, 47, 169, 201, 202 and 210;

· Affidavit of Mr Parks filed 24 August 2015:
o Paragraph 7.

· Affidavit of Mr Parks filed 1 February 2016:
o Paragraph 15(h).

·    Statement of Claim filed 13 April 2016.
·    Second respondent’s notice to admit facts directed to the applicant filed 19 January 2016;
·    Notice disputing a fact or document filed by the applicant on 2 February 2016;
·    Applicant’s notice to admit facts directed to first respondent filed 11 March 2015;
·    Notice disputing facts or the authenticity of documents filed by the second respondent on 25 March 2015;
·    Order of Justice Macmillan dated 3 February 2016, orders 2 and 3.

Documents relied upon by the husband:

·    Further Amended Response to Initiating Application filed 14 August 2015
·    Affidavit of Mr Cotter filed 11 April 2014:
o   Paragraphs 27.6.3-7, 27.6.9, 27.10, 27.11, 27.21, 27.23, 27.24, 27.50, 27.61, 27.63.1, 27.63.2

·    Affidavit of Mr Cotter filed 17 November 2014;
·    Affidavit of Mr Cotter filed 7 April 2015:
o   Paragraphs 5, 6, 10-17 (T Town Nominees);
o   Paragraphs 19-23 (D Pty Ltd and E Unit Trust);
o   Paragraphs 24-30 (B Pty Ltd – B Trust);
o   Paragraphs 31-36 (C Vic Pty Ltd/C Unit Trust);
o   Paragraphs 41-44 (Mr Parks and B Pty Ltd);
o   Paragraph 45 (Payments between BPL, UN Pty Ltd, C Unit Trust and Mr Cotter);
o   Paragraph 46 (Applicant’s claim of interchangeability of office resources);
o   Paragraph 47 (Loan agreement between BPL and Mr Cotter);
o   Paragraphs 48-49 (Loan agreement between BPL and Mr V);
o   Paragraphs 50-51 (Loan agreement between BPL and Mr EE);
o   Paragraphs 52, 53, 54-62 (G Pty Ltd, H Pty Ltd, FF Pty Ltd, BPL and Mr Cotter);
o   Paragraph 63;
o   Paragraph 64, save for the final sentence, which has been objected to by Ms Foster;
o   Paragraph 65 (save for the words “hearsay upon hearsay” which have been objected to by Ms Foster);
o   Paragraphs 66-68 (C Vic Pty Ltd);
o   Paragraphs 69-74 (D Pty Ltd);
o   Paragraphs 75-77 (T Town Nominees);
o   Paragraphs 78-81 (F Limited);
o   Paragraphs 82-84 (J Pty Ltd);
o   Paragraphs 85-86 (I Pty Ltd);
o   Paragraphs 87-89 (K Pty Ltd and L Pty Ltd);
o   Paragraphs 90-91 (Company S);
o   Annexures DC.1, 3-24;

·    Affidavit of Mr Cotter filed 1 February 2016:
o   Paragraphs 4-7, 13, 14, 18, 29, 34, 38-40, 41(a), 42-44, 46, 47, 49;
o   Annexures DC.2, 5, 8, 9.

Documents relied upon by the second respondent Mr Parks:

·    Amended Response to Amended Initiating Application filed 24 August 2015;
·    Application in a Case of Mr Parks filed 8 February 2016;
·    Defence to the Statement of Claim filed 13 September 2016;
·    Affidavit of Mr Parks filed 24 April 2015;
·    Affidavit of Mr Parks filed 24 August 2015;
·    Affidavit of Mr Parks filed 1 February 2016;
·    Affidavit of Mr GG filed 24 April 2015;
·    Affidavit of Mr HH filed 24 April 2015;
·    Affidavit of Mr II filed 24 April 2015;
·    Affidavit of Mr JJ filed 24 April 2015;
·    Affidavit of Ms BB filed 24 April 2015;
·    Affidavit of Mr KK filed 24 April 2015;
·    Affidavit of Mr LL filed 24 April 2015;
·    Affidavit of Ms MM filed 21 December 2015;
·    Request for Answers to Specific Questions delivered to Ms Foster on 6 November 2015 and responding affidavit of Ms Foster filed 27 November 2015;
·    Notice to Admit Facts delivered on behalf of Mr Parks to Ms Foster on 19 January 2016 and responding Notice Disputing Facts filed by Ms Foster on 2 February 2016;
·    Notice of objections to affidavits relied upon by Ms Foster delivered by Mr Parks by letter dated 5 April 2016.