FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Frederic & Brisset [2024] FedCFamC1F 801
File number LNC 600 of 2022 Judgment of WILSON J Date of judgment 11 December 2024 Catchwords FAMILY LAW – MAJOR COMPLEX FINANCIAL PROCEEDINGS LIST – de facto wife a beneficiary under relevant family trust – de facto husband not a beneficiary – de facto husband asserting an entitlement under trust despite not being a beneficiary.
FAMILY LAW – TRUSTS – STANDING – de facto husband, not being a beneficiary, has no standing to bring a breach of trust application in a s 90SM application.
FAMILY LAW – TRUSTS – POWERS – trustee alleged to have exercised a trust power in a manner that was said to be bad – whether void – extensive review of relevant authorities.
FAMILY LAW – EQUITY – FIDUCIARIES – whether trustee a fiduciary towards de facto husband who is not a beneficiary – held, no fiduciary duties owed to him.
FAMILY LAW – PRACTICE & PROCEDURE – strike out application – de facto husband’s points of claim wholly defective – irremediable defects – no standing to bring claims for breach of trust – no standing to bring claim for breach of fiduciary duty – held, points of claim stuck out.
Legislation Family Law Act 1975, ss 4, 45A, 90SM, 106B Cases cited Aleyn v Belchier (1758) 1 Eden 132
Ashton v Pratt (2015) 88 NSWLR 281
Askham v Barker (1853) 17 Beav 37
Associated Alloys Pty Ltd v ACW 001 452 106 Pty Ltd (in liq) (2000) 202 CLR 588
Attorney-General for Hong Kong v Ried [1994] 1AC 324
Bahr v Nicolay (No. 2) (1988) 164 CLR 604
Balls v Strutt (1841) 66 ER 84
Barnes v Addy (1874) LR 9 Ch App 244
Brady Street Developments Pty Ltd v M E Asset Investments Pty Ltd [2013] NSWSC 1755
Brooks v Burns Philp Trust Co Ltd (1969) 121 CLR 432
Byrnes v Kendle (2011) 243 CLR 253
Cachia v Westpac Financial Servies Ltd [2000] FCA 161
Cao & Trong [2022] FedCFamC1F 754
Chen v Chen (No 3) (2020) 63 Fam LR 448
Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226
Cloutte v Storey [1911] 1 Ch 181
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 224 CLR 98
Cypjane Pty Ltd v Sverre Rodskog [2009] NSWSC 301
Dare v Pulham (1982) 148 CLR 658
Divcon (Australia) Pty Ltd v Devine Shipping Pty Ltd [1996] 2 VR 79.
Eclairs Group Ltd v JKX Oil & Gas PLC [2015] UKSC 71
Fischer v Nemeske Pty Ltd (2016) 257 CLR 615
Futter v Futter [2013] UKSC 26
Gaisberg v Storr [1950] 1 KB 107
Gambotto v WCP Ltd (1995) 182 CLR 432
Gartside v Inland Revenue Commissioners [1968] AC 553
General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125
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- AGLC
- Frederic & Brisset [2024] FedCFamC1F 801
- Case
- [2024] FedCFamC1F 801
- Decision Date
CaseChat Overview and Summary
The court identified several key legal issues, including whether Mr Frederic, as a non-beneficiary, had standing to bring a breach of trust application. The court also examined whether the trustee owed any fiduciary duties to Mr Frederic. Additionally, the court reviewed whether the trustee had exercised a trust power in a manner that could be considered void. The court extensively considered relevant authorities and principles from equity and trust law to address these issues.
In its reasoning, the court found that Mr Frederic, as a non-beneficiary of the Brisset Family Trust, had no standing to bring claims for breach of trust or fiduciary duty. The court held that the chosen in action available to the de facto wife, as a beneficiary, did not constitute "existing property" as required by relevant authorities. Furthermore, the court noted that the trustee's exercise of discretionary powers was not void and that the de facto husband had failed to provide sufficient details to support his claims. Consequently, the court struck out Mr Frederic's points of claim due to their irremediable defects.
The court ordered that Mr Frederic's amended points of claim were to be struck out, but he was granted leave to file and serve an amended statement of claim. This new statement of claim had to be filed and served by 4pm on 19 December 2024 and must comply with the Federal Court Rules 2011. Costs of and incidental to these orders were reserved.
Orders
Orders of the court
LNC 600 of 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN
MR FREDERIC
Applicant
AND
MS BRISSET
Respondent
MR C
Second respondent
D PTY LTD AS TRUSTEE FOR THE BRISSET FAMILY TRUST
Third respondent
ORDER MADE BY
WILSON J
DATE OF ORDER
4 DECEMBER 2024
THE COURT ORDERS THAT –
1. The applicant’s amended points of claim dated 18 October 2024 and filed pursuant to order 2 of the orders made 26 September 2024 by the Hon. Chief Justice Alstergren are struck out.
2. The applicant has leave to file and serve an amended statement of claim setting out any claim he seeks to maintain against the second and third respondents.
3. Any such amended statement of claim as the applicant chooses to file and serve in accordance with paragraph 2 hereof must be –
(a) filed and served on or before 4pm on 19 December 2024; and
(b) in compliance with the rules for pleading as set out in the Federal Court Rules 2011, Part 16 – pleadings.
4. Costs of and incidental to theses orders are reserved.
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.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
In those circumstances I make an order striking out the de facto husband’s points of claim dated 15 November 2024. The orders proposed are as set out in the first pages of those reasons. CONSIDERATION Principles adumbrated by Barwick CJ in General Steel require any consideration in a strike out application to take the pleaded causes of action at their highest, thereby recognising the truth of the assertions alleged. I have done that on this application. In my view the construction pleased on clause 3(4) by the de facto husband is erroneous. I say that for several reasons. First, the de facto wife as a beneficiary under the Brisset Family Trust enjoys the choses in action that a beneficiary under a discretionary trust enjoys – the right to due consideration and the right to due administration. She has and at all times had no interest in the trust itself. According to Kennon v Spry as applied in Woodcock v Woodcock (No 2), those choses in action may (repeat may) constitute “property” for the purposes so long as the choses in action can be valued. In this case, no evidence presently exists about the value of the dual choses in action. To constitute “existing property” as held in Stanford v Stanford those choses in action must be valued. Unless and until that happens they are not capable of being described as “existing property”. Second, the relevant dramatis personae in the factual scenario posited in the points of claim are the trustee and the de facto wife as beneficiary under a discretionary trust, but not the de facto husband. He is not a beneficiary under the Brisset Family Trust. He has no standing to complain about breaches of trust because he is not a beneficiary under the Brisset Family Trust. Third, the terms of the Brisset Family Trust set out a collection of powers which the trustee was authorised to exercise in its absolute discretion thereby conferring upon the trustee powers which were required to be exercised honestly and for the purpose each was intended. Any impropriety in the exercise of those discretions rendered the exercise of the power void. However, the de facto husband in his points of claim did not identify – (a)the appointments to objects of the trust which were impugned; (b)when each appointment was made and in what amount;(c)in what respect each such appointment contravened the relevant power under the Brisset Family Trust;(d)how and why the statement attributed to the second respondent that he would administer the trust as his own vehicle represented the evincing of an intention to no longer be bound by the terms of the Brisset Family Trust, in circumstances where, since 1991 the trustee has appointed income to objects with the agreement of directors of the trustee from time to time;(e)the consequences of any void exercise of a trust power especially against whom the void status operated;(f)how it is said that the consequence of an exercise of power rendered void that appointment of income to an object in circumstances where the Brisset Family Trust otherwise operated validly notwithstanding the allegedly void exercise of power;(g)how it is said by the de facto wife that the exercise of a power by the trustee to appoint income to her since 2001 was void yet the de facto wife received and unconditionally appropriated to her own use and benefit funds in the order of $1.5m allegedly pursuant to powers exercised in an allegedly void manner;(h)how it was said that the body of rights described as Ms Brisset’s income trust was a validly constituted bare express trust allegedly constituted in pursuance of clause 3(5) of the Brisset Family Trust in circumstances where the subject matter of the trust was uncertain;(i)how it was said that the body of rights described as Ms Brisset’s income trust to which no value attached were said to be “existing property” as that phrase was used by the High Court in Stanford v Stanford; and (j)how it was said that whatever rights inured pursuant to Ms Brisset’s income trust represent “property” for the purposes of the Family Law Act when the de facto husband did not acquire any status in respect of those alleged rights in the absence of an order declaring an entitlement in the hands of the de facto husband in relation to those alleged rights under Ms Brisset’s income trust.