Grange and Grange

[2014] FamCA 81

FAMILY COURT OF AUSTRALIA

GRANGE & GRANGE [2014] FamCA 81

FAMILY LAW – PRACTICE AND PROCEDURE – Application to dismiss Initiating Application – Where the application to dismiss has no merit – Where the husband is bankrupt – Where the trustee for bankruptcy has not yet been joined as a party – Application for joinder of third-parties – Where the husband seeks to join his adult children and his father-in-law to the property proceedings – Where there are no grounds for doing so – Spousal maintenance application – Where the husband seeks a non-specific order for spousal maintenance – Where the husband provides no evidence as to his financial situation or the wife’s capacity to pay spousal maintenance.

Family Law Act 1975 (Cth) ss 79(1), 79(11), 106B

APPLICANT: Mr Grange

RESPONDENT: Ms Grange

FILE NUMBER: ROC 580 of 2011

DATE DELIVERED: 20 February 2014

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 17 February 2014

REPRESENTATION

FOR THE APPLICANT: Mr Grange in Person

COUNSEL FOR THE RESPONDENT: Mr Shoebridge

SOLICITOR FOR THE RESPONDENT: Madden Solicitors

Orders

1. All of the husband’s applications for interim orders included in his Amended Response to Initiating Application filed 5 November 2013 are dismissed.

2. The wife’s application for the proceedings to be listed for a default hearing is adjourned to the Registrar responsible for case managing the matter.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Grange & Grange 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 BRISBANE

FILE NUMBER: ROC 580 of 2011

Mr Grange

Applicant

And

Ms Grange

Respondent

REASONS FOR JUDGMENT

1. By an Amended Response to an Initiating Application filed on 5 November 2013, the husband, who is the Respondent in these property adjustment proceedings brought by the wife, seeks a number of interim orders. He is not represented by solicitor or counsel and has prepared his Court documents, including the Amended Response and his supporting affidavits, clearly without the assistance or advice of a lawyer. As a consequence, it is difficult to extract from the Amended Response the exact orders he seeks from the Court, and the affidavits he relies upon contain a great deal of irrelevant matters, including much comment and complaint that detracts from the husband’s case rather than  improving it.

2. However, doing the best I can, I discern that the applications the husband agitated at the hearing were as follows:

   (i)That the wife’s applications against him and against the Second Respondent (one of the parties’ adult daughters) and the Third Respondent (the husband’s mother) be dismissed because:

   (a)The wife is “technically” bankrupt;

   (b)The husband is actually bankrupt; and

   (c)The applications against him and the other two respondents are doomed to fail;

   (ii)That the wife’s father, Mr M, be joined as a Respondent in the proceedings and injunctions issue restraining him from dealing with certain real property and the proceeds of sale of other unidentified real properties and that he provide disclosure;

   (iii)That another adult daughter of the parties, Ms H, be joined as a Respondent in the proceedings and injunctions issue restraining her from dealing with certain real property and that she provide disclosure;

   (iv)That an adult son of the parties, Mr J, be joined as a Respondent in the proceedings and injunctions issue restraining him from dealing with certain real property and that he provide disclosure;

   (v)That the wife pay the husband spousal maintenance in an unspecified amount, backdated to an unspecified date and ongoing;

   (vi)That the wife contribute, by way of an unspecified method, towards the cost of legal representation to be obtained by the husband in these proceedings.

3. The husband concedes that the wife is not formally bankrupt as he is. Nevertheless, he argues she is “technically” bankrupt as he asserts she is just as liable for the debts that he owes as he is. He argues that she should, therefore, not be allowed to proceed against him and the other parties. Whether or not the wife is also liable for the husband’s debts, whilst she is not actually bankrupt she has a right to make application to the Court for property adjustment orders pursuant to s 79 of the Family Law Act. The husband’s argument has no legal merit and I cannot accept it.

4. There is no dispute that the husband is actually an undischarged bankrupt at this point in time. The husband puts into evidence a copy of the Certificate of Appointment of Trustee reflecting the appointment of Mr K as his trustee in bankruptcy on 1 February 2012. He also puts into evidence a copy of a document sent by the Insolvency and Trustee Service Australia to the Second Respondent on 3 February 2012 purporting to set out a list of the creditors disclosed on the husband’s “Statement of Affairs”. The names of the creditors have curiously been blanked out or redacted from the document. The total of the debts listed is $272,650. The inference from the fact the letter was addressed to the Second Respondent is, at least I conclude, that the Second Respondent is one of the husband’s creditors. Of course, that will be a matter for the Second Respondent and the husband to disclose if that is correct and it could be of relevance in the wife’s proceedings.

5. There is no dispute that the husband’s trustee in bankruptcy was given notice of the proceedings for property adjustment brought by the wife and has elected not to apply under s 79(11) of the FLA to join in the proceedings at this point in time. That is unsurprising. Once the trustee is joined in the proceedings, on his application or on the application of the wife, orders can be made by the Court against the trustee pursuant to s 79(1) of the FLA in respect of the vested bankruptcy property. Trustees in bankruptcy are most unlikely to voluntarily expose the vested bankruptcy property that is to be distributed amongst the bankrupt spouse’s creditors to being subject to adjustment in favour of the non-bankrupt spouse. Should the wife expect to ultimately seek orders against the vested bankruptcy property then the husband’s trustee in bankruptcy will have had to have been joined as a party in the proceedings, either of his own application or on the wife’s application made by that point in time. Whether the wife brings an application for the trustee to be joined is, of course, a matter for the wife and her legal representatives.

6. Currently, on her Amended Initiating Application, the wife seeks a final order that the transfer of a certain real property at C Street, D Town from the husband to the Second Respondent, Ms A, be set aside, presumably pursuant to s 106B of the FLA. She then seeks an order that the said property (plus other property) be divided between her and the husband as to 70 per cent to her and as to 30 per cent to the husband.

7. If the wife’s application to have the transfer of the property from the husband to the Second Respondent set aside is successful, it seems to me, at least at this point in time, likely that the property would then form part of the bankruptcy property vested in the husband’s bankruptcy trustee and, as I have just discussed, unless the trustee in bankruptcy is a party to the proceedings, no order adjusting 70 per cent of the value of that property, or any other portion of it, could be made against that property.

8. Of course, if the value of that property exceeds the value of the husband’s outstanding creditors who have proved in his bankruptcy and the trustee were to sell it and pay out all the outstanding creditors leaving the husband, upon discharge from his bankruptcy, with some property, in my opinion at least, the wife would be within her rights to seek orders from the Court, in the absence of joinder of the trustee in bankruptcy, as against any such property.

9. On her Amended Initiating Application, the wife also seeks a final order, again presumably pursuant to s 106B of the FLA, for a payment of $1.125 million made to the Third Respondent, the husband’s mother, to be set aside. As I understand the wife’s case in respect of this issue, it is that a company, G Pty Ltd, in which she and/or the husband held the shares, owned a valuable property in the form of a transferable contractual right to take raw materials to process and sell, and that this contractual right was sold at the instigation of the husband and the proceeds of sale in the amount of $1.125 million were then given to the Third Respondent by the husband.

10. The wife’s case is that the said company has long been wound up but that corporate regulatory law provides the mechanisms for dealing with any property such as this that goes back to the company. If that is the case, it can only be presumed that if the wife’s application is successful that the money returned to that wound up company would find its way back to the shareholder/s of the no longer existent company, subject to any priority rights relating to the previous winding up. Again, if that is what happened and money was returnable to the husband as a former shareholder of that company consequent upon any such orders, it would immediately vest in his trustee in bankruptcy if he remains at that time an undischarged bankrupt. Even if he has been discharged from the bankruptcy, the trustee may have some interest in the matter, given that the money may have been property that would have vested in the trustee had it been the husband’s at the time he went into bankruptcy.  As previously discussed, unless the trustee is a party to the proceedings by joinder, no orders against the vested bankruptcy property could be made, but the wife might still be entitled to seek orders from the Court as against any property the husband has on his discharge from bankruptcy.

11. At this point in time, even though the trustee in bankruptcy has not been joined as a party to the proceedings, meaning no order can be made against any vested bankruptcy property or could be made against any property that subsequently becomes vested bankruptcy property whilst the trustee is not a party, I do not find that the wife has no right to continue the proceedings against the husband simply because he is bankrupt.  I reject that part of the husband’s argument.

12. Furthermore, whilst there are currently serious questions about the nature of any property adjustment orders the wife could expect to get solely against the husband, at least whilst he remains an undischarged bankrupt, the circumstances that present do not persuade me that her application is doomed to fail, particularly having regard to the possibility that the husband could again have interests in property upon his discharge from bankruptcy, if the wife’s s 106B applications succeed.  His Honour Justice Kent determined to make the orders joining the Second and Third Respondents to the proceedings on the basis of satisfaction that there were arguable cases for trial in respect of the orders the wife seeks against each of them, namely that certain transactions in their favour be set aside.  The husband has adduced no evidence, nor made any submissions that actually persuade me on this summary hearing that the wife’s case against the Second and Third Respondents is doomed to fail. I am not satisfied, therefore, that the wife’s proceedings against the husband and the two other respondents should be summarily dismissed at this stage of the proceedings.  I will not do so and I dismiss that part of the husband’s application.

13. The husband seeks to have the wife’s father, Mr M, joined as a Respondent in the proceedings and for injunctions to issue restraining him from dealing with certain real property and the proceeds of sale of other unidentified real properties.

14. The evidence he adduces and the submissions he made in support of the application provide ample basis for concluding that this application is just a simple “tit for tat” response to the joinder of his mother in the proceedings.  Such a response does the husband no credit. Further consideration and analysis though, reveals that there is no basis disclosed by the husband in either the order he seeks or the evidence he has deposed to for the joinder of the wife’s father.

15. The husband makes no application for an order expressly against property of the wife’s father. That fact alone, justifies dismissing his application for joinder of the man. Even if the absence of such an express application might be excused by the husband’s lack of legal training, the evidence he has adduced assists his case no further.  In his affidavit evidence, he makes the simple, bald assertion that a property he calls “[L Property]” is “our property and is part of the marital pool”.  The inference that one draws from the husband’s evidence is that the property known as “[L Property]” is actually property registered in the wife’s father’s name. The wife’s evidence in response seems to confirm that. However, the husband does not establish in his evidence, any kind of prima facie case as to how it is that the said property is claimed to belong to him and/or the wife. Accordingly, I am not satisfied that there are any reasonable grounds for joining the wife’s father to the proceedings. I will dismiss that part of the husband’s application. Of course, the husband is not prevented from arguing at the trial that the wife owns other property, even property registered in her own father’s name, he just cannot seek an order directly against that property if the wife’s father is not a party to the proceedings.

16. The husband applied for an order joining as a respondent to the proceedings the parties’ adult daughter, Ms H. At the hearing on Monday, I quickly dismissed that application as I was satisfied it had absolutely no merit.

17. The husband’s argument again was no more than “tit for tat”. His position is that as one daughter, who, I am satisfied, is in favour with him, is a respondent at the application of the wife, another daughter, who is in favour with the wife, should also be joined. Litigation in this Court is not conducted like that. As distressed and disturbed about the proceedings as the husband might be, and as concerned as he is in respect to the joinder as respondents of his mother and the daughter who is in favour with him, that concern alone is no basis for joining another daughter to the proceedings.

18. The husband’s case for joinder, distilled further, seemed to be that a property that is MS H’s is actually beneficially his and the wife’s property and, therefore, joinder is justified. The argument had absolutely no merit and it failed when evidence was adduced by Ms H, who appeared by counsel at the hearing of the joinder application, that proved that the very issue that the husband argues has previously been litigated by him in the Supreme Court of Queensland and determined by judgment of that Court in favour of Ms H. It was declared in July 2011 that the husband has no beneficial interest in the subject property that is registered in Ms H’s name and set aside a written agreement that the husband sought to rely upon as giving him some interest in the said property. It was set aside as having been procured by the undue influence of the husband over Ms H.

19. No other case was evident on the husband’s evidence and again as he has made no application for an order expressly against the property of Ms H his application for her to be joined had no merit at all.

20. The husband also applied for an order that an adult son of the parties, Mr J, be joined as a Respondent in the proceedings and injunctions issue restraining him from dealing with certain real property. That application, too, fails comprehensively.

21. There was no evidence that Mr J had even been served with the application. In fact, the husband adduced evidence that confirmed that he had not. That explains why Mr J did not appear.

22. Yet again, the husband makes no application for an order expressly against property of Mr J, so there would be no utility in joining him to the proceedings. As to the evidence the husband adduces, he puts before the Court a copy of the first page of a contract of purchase of real property. The purchaser is shown to be Mr J. The vendors are shown to be a couple whose relationship to the parties in this case, or to Mr J, if any, is not identified or explained. The husband again makes bald assertions that Mr J acquired a half interest in the property himself from Mr M and that the other half of his interest in the property is held by him on trust for the wife. The husband offers no evidence as to how that might be and pleads no material facts supporting such a case. No prima facie arguable case is presented. There is no basis established at all for the proper joinder of Mr J to the proceedings. That part of the husband’s application is also dismissed.

23. The husband applies for spousal maintenance and an unspecified litigation costs funding order. He adduces totally insufficient evidence to support either of these applications. Nothing of his own financial circumstances was adduced in evidence. The Court cannot even begin to embark on a measured consideration of such significant applications in the absence of such material evidence. Both of those applications are dismissed.

24. In her material in response, the wife deposes to the non-compliance by the husband, the Second Respondent and the Third Respondent with orders and directions in respect of disclosure. For the wife, it is submitted that the matter should be listed for a default hearing before a Judge. The matter is currently listed for a directions hearing before Registrar Brookes in early March at which the issue of non-compliance is to be considered further by the Registrar and trial directions made. As such, I will leave it for the Registrar to determine what further directions are to be made but consider that it would be quite appropriate for the Registrar to make directions, if she is satisfied that there is continued non-compliance by any of the respondents, for the matter to be readied for trial and to be mentioned at the next available call-over for listing before a Judge with the trial Judge to determine whether the trial proceeds on the basis of the defaulting respondent/s having no right to defend the application.

25. I conclude by observing that the Third Respondent, the husband’s mother, did not appear at the hearing before me on 17 February 2014 and that she has not filed any document in the proceedings to date. I made it clear to the husband and to his daughter Ms A, the Second Respondent, at that hearing, that if the Third Respondent does not comply with disclosure obligations, directions and orders of the Court and continues to fail to appear, then she seriously risks orders as sought by the wife being made against her. I was left in no doubt that the husband and the Second Respondent understood what was being said.

26. All of the husband’s applications for interim orders included in his Amended Response to Initiating Application filed 5 November 2013 are dismissed. The wife’s application for the proceedings to be listed for a default hearing is adjourned for consideration by the Registrar responsible for case managing the matter.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 20 February 2014.

Associate: 

Date:  20 February 2014