Gregg and Gregg and Ors

[2019] FamCA 927

FAMILY COURT OF AUSTRALIA

GREGG & GREGG AND ORS [2019] FamCA 927

FAMILY LAW – PROPERTY – Where the wife asserts that she and the husband have an equitable interest in a farming operation conducted by the husband’s family – Where the wife contends that the farming business was a common endeavour between the parties that justifies the court imposing a remedial constructive trust – Where the respondents seek that the wife’s claim be summarily dismissed – Whether the test under Rule 10.12 of the Family Law Rules 2004 (Cth) of “no reasonable likelihood of success” is demonstrated – Where the court is not satisfied that there is no reasonable likelihood of success – Where both applications for summary dismissal fail –Where in the event summary dismissal failed, the respondents sought security for their costs – Where s 117(2A) of the Family Law Act 1975 (Cth) applied – Where given the parties’ financial positions, and the fact any order would stifle litigation, the court does not order security for costs – Applications in a Case dismissed

Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) r 10.12

Bretton & Bondai [2013] FamCAFC 168
Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10
John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19
Luadaka & Luadaka (1998) FLC 92-830; [1998] FamCA 1520
Pelerman v Pelerman (2000) FLC 93-037; [2002] FamCA 881
Richards, Duff, Patient & DoCS [2002] FamCA 223

APPLICANT: Ms Gregg

FIRST RESPONDENT: Mr Gregg

SECOND RESPONDENT: Mr B Gregg

THIRD RESPONDENT:	Ms C Gregg
FOURTH RESPONDENT:	Mr D Gregg
FIFTH RESPONDENT:	Mr E Gregg
SIXTH RESPONDENT:	Mr F Gregg
SEVENTH RESPONDENT	Ms G
EIGHTH RESPONDENT:	Mr H Gregg
NINTH RESPONDENT:	N Pty Ltd ATF The B & C Family Trust
FILE NUMBER:	TVC	167	of		2018

DATE DELIVERED: 5 December 2019

PLACE DELIVERED: Townsville

PLACE HEARD: Cairns

JUDGMENT OF: Tree J

HEARING DATE: 18 September 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Looney QC and Mr Pack

SOLICITORS FOR THE APPLICANT: Resolute Legal

COUNSEL FOR THE FIRST RESPONDENT: Dr Brasch QC

SOLICITORS FOR THE RESPONDENT: Reaston Drummond Law

COUNSEL FOR THE SECOND TO NINTH RESPONDENTS: Mr Wilson QC

SOLICITORS FOR THE SECOND TO NINTH RESPONDENTS: Cairns Family Law Group

Orders

1. That the husband’s Application in a Case filed 22 March 2019 be dismissed.

2. That the second to ninth respondents’ Application in a Case filed 29 March 2019 be dismissed.

3. That any application for the imposition of a pleadings regime be made, filed and served within twenty-eight (28) days of the date of these orders. 

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Gregg & Gregg has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT CAIRNS

FILE NUMBER: TVC167/2018

MS GREGG

Applicant

And

MR GREGG

First Respondent

And

MR B GREGG, MS C GREGG, MR D GREGG, MR E GREGG, MR F GREGG, MS G, MR H GREGG AND N PTY LTD ATF THE B & C FAMILY TRUST
Second to Ninth Respondents

REASONS FOR JUDGMENT

INTRODUCTION  

1. The property litigation from which this judgment arises is complex.  But in overview, by her Further Amended Initiating Application filed 16 September 2019, Ms Gregg (“the wife”) asserts that she and Mr Gregg (“the husband”) have an equitable interest in an extensive crop farming operation (“the farming business”) conducted by the husband’s family generally.  Particularly she says that, in addition to properties which are wholly or partly owned by the husband, other properties registered in the names of his parents (“Mr B and Ms C”) or some of his siblings, (collectively, “the farm properties”) are held by them on trust in equal shares for those members of the family involved in the farming business.  As explained in her Statement of Facts Issues and Contentions (“SFIC”), the basis of her claim is that the farming business was a common endeavour between the parties, which would justify a court imposing a remedial constructive trust in respect of all of the farm properties, such that all of the participants, including the wife, each hold an equal interest in them.

2. The proceedings are at an early stage.  Nonetheless it appears as though the value of the farm properties is likely to be many millions of dollars, although the net value of them, taking into account borrowings secured against them, may be considerably less.  By Applications in a Case filed 22 March 2019 and 29 March 2019, all of the respondents to the wife’s Further Amended Initiating Application seek that her equitable claim be summarily dismissed, or alternatively, that the wife be required to provide security for their costs.  The wife opposes those applications. 

3. On 18 September 2019, I heard the Applications in a Case and reserved my decision.  This is that decision and the reasons for it.

BACKGROUND

1. Part of the complexity of this case arises from the fact that the husband comes from a large family of 10 siblings.  In descending age order, those siblings are Ms G (presently 42); the husband (presently 41); Mr D (presently 39); Mr E (presently 38); Ms J (presently 34); Mr F (presently 33); Mr K (presently 30); Mr H (presently 29); Mr L (presently 26) and Mr M (presently 25).

2. The story starts in the O Town district of northern New South Wales, where Mr B and Ms C operated some farms, seemingly in conjunction with other family members.  Not confident of the future of the crop 1 industry in that district, on 25 September 1995, Mr B and Ms C purchased a farm (“Farm 1”) in the P Town district in North Queensland.  It was then growing crop 2.  Later that year, the husband, then aged 17, moved to live on Farm 1, and was taught by its former owner how to grow crop 2.  Other acquisitions of farms followed, starting with Farm 2 on 30 October 1996.  After it was purchased, Mr B and Ms C and six of their children moved to P Town from O Town, with the three remaining siblings staying in O Town to complete their schooling.

3. For her part, the wife was born in P Town, and is presently 38 years of age.  She came from a local P Town family that has lived in the district for many years.

4. The husband and wife met in December 1997, when they were respectively 19 and 16 years of age.  By then, the husband’s brother Mr D had just finished his schooling in O Town, and had moved to P Town to join the family working in the farming business.

5. On 19 October 1998, Farm 3 was purchased, and registered in the names of the husband and Mr D, although it seems unlikely that they contributed any part of the purchase price.

6. In 1998 the wife left school and commenced studying (seemingly externally) a Bachelor of Science degree.  She also obtained part time work in P Town.

7. A remarkable feature of this case is the level of remuneration which has been paid, and apparently continues to be paid, to family members who work in the farming business.  According to the wife’s evidence as I understand it, whilst the farming business provides accommodation, electricity, telephone and petrol costs for family members working in it, initially, incoming family members are expected to work for no other remuneration for two years, and then move to a very low wage.  For instance, in 1999, the husband was only being paid $300 per month by his parents.  This meant that he, and indeed all sibling participants, qualified for Centrelink benefits.  

8. Another interesting feature, according to the wife’s evidence, is that once the new family member has been working in the business for two years, the next acquired farm property is placed in their names, although they may be young and contribute no monies to the purchase price.  Thus, for instance, she says that on 27 October 1999, when a farm at Q Street in P Town was purchased, it was placed into Mr D’s name.

9. Yet another interesting feature of the case is that, whilst a property may be registered in the name of a family member, that does not necessarily translate to them residing at the property, or indeed working it.  As an example, whilst Q Street was in Mr D’s name, and remains so, in fact for most of the parties’ relationship, they lived and worked there, and Mr D lived and worked elsewhere.

10. The parties married in 2000, and although initially they commenced to reside in a unit in a shed on Farm 1, upon the wife giving birth to the first of the parties’ six children, they moved into the house at Q Street.  Indeed the husband remains living there.

11. Whilst up until April 2001, the farming business had been principally, if not solely, directed towards crop 1, in that month a disease, was found on one of the farm properties.  In consequence, and for the good of the industry generally, a decision was made to eradicate all of crop 1 then growing on the farm properties.  The wife says that it was “common knowledge amongst the members of the industry in the P Town community that the Greggs destroyed their crop for the sake of the industry, and they received monetary compensation for their loss.”

12. Two things happened in consequence.  The first was that the farming business changed to crop 2.  The second was that the compensation monies (at least in part) were used to buy a farm known as Farm 4, located in the R Town district, on 18 September 2001.  At the time, crop 1 not commonly grown in R Town, and yet that is what Farm 4 thereafter became devoted to.  The farm was registered in the husband’s sole name.  However obscurely, it appears as though some financial assistance towards the purchase of it was provided by a wide range of other family members, including Mr H (then 11), Mr B (then 12), Mr F (then 15) and Ms J (then 16).  Also confusingly, upon the purchase of Farm 4, even though it was in the husband’s name, Mr D and his then wife moved to the property, and after they separated, Mr D remained living there until 2015.

13. There are two other remarkable features of the farming business.  The first is that it seems as though every family member who works in it, work long hours, with the husband working between 11 and 12 hours a day, seven days a week.  The only recognised time off for family members is on Good Friday, although there is a lesser work load on Christmas Day and Easter Sunday.  Holidays are rare.  The second matter is that although family members engaged in the farming business have day-to-day control in respect of some operations, overall control remains firmly vested in Mr B and Ms C.  That control is both in relation to big decisions and small ones, even extending to Ms C, according to the wife, scrutinising the length of time that family members spend on the phone (it being shown in their itemised phone accounts which she pays) or have fans and air conditioners running in their homes.

14. Towards the end of 2001, the remuneration paid to siblings working in the farming business increased to $1,000 per month.  However that sum was still low enough to enable them and their families to continue to qualify for Centrelink benefits.  This occurred throughout all of the parties’ relationship.

15. Mr F commenced working in the farming business in 2003, albeit he appears to have subsequently left it at some time which is not clear on the material before me.  Next, Mr E joined the farming business in late 2003.

16. On 2 August 2006, Farm 5 in the P Town district was purchased.  It comprised two lots.  One of those lots was placed in Mr E’s name, and the other in Mr F’s name.

17. As if the facts were not sufficiently complex already, in 2006 the wife’s sister, Ms T, married Mr E.  At that point there were four of the Gregg siblings working with Mr B and Ms C in the farming business.  Although Mr D was primarily working on Farm 4 at R Town, and the three other siblings working on the P Town farms, it appears as though they would move between the farms as required.

18. In late 2006 Mr H also joined the farming business. Then in early 2007, Ms G’s husband, Mr G, also commenced working in it.

19. On 18 July 2007, 1 S Street was purchased, and placed in Mr F’s name. He was only then 21 years of age. 2 S Street was also purchased on that date, and placed in Mr B and Ms C’s name. 3 S Street was also purchased on that date, and placed in the name of Ms G. These properties were all adjacent to each other, and collectively were known to as Farm 6.  Farm 6 is in the P Town district, but unlike the balance of the farms owned by the family in that district, shares no boundary with any other farm property.

20. In early 2009 the family determined to start harvesting their own crop 2, rather than using contractors. This required the purchase of considerable equipment. 

21. In early 2010 Mr L commenced working in the farming business.

22. On 8 March 2010, Ms G’s husband, Mr G, passed away. That saw Ms G leave the P Town district, and move to New South Wales, where she (probably with the assistance of Mr B and Ms C) purchased a home. However 3 Street remains registered in her name, although the wife’s affidavit suggests that Ms G might now hold it on trust for Mr B and Ms C.

23. On 3 February 2011 Cyclone Yasi struck the P Town district. The home in which the parties were living at Q Street suffered significant damage. Even though they were not the registered proprietors of it (it remaining in Mr D’s name) they received government funds in consequence of the damage to the house, and together with those funds and some savings, repaired and renovated it.

24. On 18 July 2011, Farm 7 in the R Town district was purchased in Mr B and Ms C’s name. It adjoins Farm 4.

25. In July 2012 Mr E suffered an injury, which permanently reduced his capacity to work. In consequence, the wage which he was paid from the farming business also reduced. However his diminished work capacity nonetheless remained a contentious issue for the husband.

26. In 2013, Mr M commenced working in the family business.

27. On 17 February 2015 Farm 8 was purchased and registered in Mr H’s name.  He was then aged 24. Farm 8 shares a boundary with Farm 4.

28. At about that time, Mr D moved out of Farm 4, and Mr H moved into the home there instead.

29. In March 2017 Mr E and his wife Ms T left the farming business.  According to the wife’s evidence, she was told by her sister that, in exchange for Mr E agreeing to make no claim against their estate, Mr B and Ms C agreed to purchase a property for him in New South Wales, and indeed on 14 October 2017, a property there was purchased in his name.

30. The parties separated on 4 September 2017. Since then the wife has been living in rented accommodation, whereas the husband continues to reside at Q Street.

31. Although not strictly relevant to the application I am dealing with, for the sake of completeness, I should say that the parties’ separation appears to have impacted significantly upon their children, three of whom now live with the husband, and apparently have little to do with the wife. Their eldest child, X, is now working in the farming business. At least one of his brothers expects to also do so once he leaves school.

32. Finally, I should say that, to try and keep this review of the relevant background as simple as possible, I have deliberately neglected to include in it the fact that the farming business also has a number of corporate entities involved, some of which seem to be trustees only, and some of which seem to be trading entities.  One corporate entity is the ninth respondent; it is the owner of Farm 2.

RELEVANT LEGAL PRINCIPLES

Summary dismissal

1. Family Law Rule 10.12 provides as follows:

   A party may apply for summary orders after a response has been filed if the party claims, in relation to the application or response, that;

   (a)the court has no jurisdiction;

   (b)the other party has no legal capacity to apply for the orders sought;

   (c)it is frivolous, vexatious or an abuse of process; or

   (d)there is no reasonable likelihood of success.

2. In Pelerman v Pelerman (2000) FLC 93-037 at [46], the Full Court said in relation to the test for summary dismissal as follows:

   The gravamen of the appeal is that the trial judge erred in the exercise of the discretionary power to summarily dismiss the 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 dismissal 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.”

   (Citations omitted)

3. The subsequent Full Court decision of Bretton & Bondai [2013] FamCAFC 168, involved an appeal from the dismissal of an application for summary termination of a parenting proceeding which, on any view, was a most unusual application. The court comprised in the majority, Finn and Strickland JJ, and in the minority, May J. However it does not seem to me that in the articulation of the relevant test for summary dismissal, their Honours were in conflict.

4. At [59] to [60] in the majority judgment, it is said as follows:

   59. Assuming, that a summary dismissal application was available to the mother in this case, the appropriate test would have been “no reasonable likelihood of success”. It must be acknowledged that his Honour did not, at least expressly, apply this test. Rather, he apparently applied the “doomed to fail” test referred to by Kirby J in Lindon. The tests are, of course, conceptually different.

   60. However, we are not persuaded that this court would be justified in interfering with his Honour’s order because of his apparent use of the “doomed to fail” test. This is because in [12] and [13] of his reasons his Honour made findings that are more akin to the “no reasonable likelihood of success” test. It cannot, in our view, be said that his Honour would have concluded that the father’s application “had no reasonable likelihood of success” given that his Honour said (at [12]) that he did not consider that he could find that the father’s application “cannot succeed”, and (at [13]) that he was not persuaded that he was wrong when he had decided in his first decision that there is a likelihood of the existing orders being varied in a significant way as a result of a new hearing.

5. On the other hand, May J was more expansive at [119] to[124] as follows:

   119. In my view, the test for summary dismissal of a case once instituted, compared to the test for the recommencement or reopening of proceedings following the making of final orders is different.

   120. The principles guiding the exercise of discretion under a court’s inherent power to dismiss proceedings were explained by Kirby J in Lindon v The Commonwealth (No 2) and referred to by the Full Court in Bigg & Suzi (1998) FLC 92-799 (at 84,974). Kirby J said (at 256):

   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…

   6.The guiding principle is, as stated in O 26, 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 to relieve the court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.

   (footnotes omitted.)

   121. Although Forrest J did not directly refer to the Family Law Rules 2004 (Cth) (“the Rules”), and while there is no doubt there is inherent power to summarily dismiss an application, it is appropriate to set out r 10.12:

   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.

   122. His Honour applied the test of “doomed to fail” which is no longer the correct test, see Spencer v The Commonwealth (2010) 241 CLR 118 particularly at p. 139 and 140. At paragraph 56 referring to similar Federal Court Rules, Hayne, Crennan, Kiefel and Bell JJ said:

   Because s 31A(3) provides that certainty of failure (“hopeless” or “bound to fail”) need not be demonstrated in order to show that a plaintiff has no reasonable prospect of prosecuting an action, it is evidence that s 31A is to be understood as requiring a different inquiry from that which had to be made under earlier procedural regimes. It follows, of course, that it is dangerous to seek to elucidate the meaning of the statutory expression “no reasonable prospect of successfully prosecuting the proceeding” by reference to what is said in those earlier cases.

   123. The applicable test for summary judgment was recently considered by another intermediate court of appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158. The applicable legislation in Victoria is provided in the Civil Procedure Act2010 (Vic) the words being where there is “no real prospect of success”. Warren CJ & Nettle JA said:

   35Upon the present state of authority:

   a) the test for summary judgment under s 63 of the Civil      Procedure Act2010 is whether the respondent to the application for summary judgment has a ‘real’ as           opposed to a ‘fanciful’ chance of success;

   b)       the test is to be applied by reference to its own      language and without paraphrase or comparison with      the ‘hopeless’ or ‘bound to fail test’ essayed in General      Steel;

   c)        it should be understood, however, that the test is to          some degree a more liberal test than the ‘hopeless’ or     ‘bound to fail’ test essayed in General Steel and,     therefore, permits of the possibility that there might be           cases, yet to be identified, in which it appears that,          although the respondent’s case is not hopeless or          bound to fail, it does not have a real prospect of         success;

   d)       at the same time, it must be borne in mind that the          power to terminate proceedings summarily should be          exercised with caution and thus should not be     exercised unless it is clear that there is no real question           to be tried; and that is so regardless of whether the          application for summary judgment is made on the basis          that the pleadings fail to disclose a reasonable cause of         action (and the defect cannot be cured by amendment)   or on the basis that the action is frivolous or vexatious     or an abuse of process or where the application is          supported by evidence.

   124. Although the test applied by his Honour was incorrect, the judge was correct in refusing the applications for summary dismissal. The second appeal should be dismissed.

1. The question then arises as to how those statements affect the earlier Full Family Court decisions.  

2. The starting point must be that, insofar as the application for summary dismissal is brought pursuant to the Family Law Rules 2004 (Cth) (“the Rules”), the language of the applicable rule will determine the relevant test. Under Rule 10.12, the test is that there is “no reasonable likelihood of success.” (I leave to one side whether there is any residual inherent jurisdiction to dismiss, notwithstanding there being a rule).

3. Sometimes it is helpful, and sometimes not, to try and evaluate the satisfaction of a particular test by reference to other wording; the notion of “reasonable doubt” in criminal proceedings is par excellence an example of where it is not helpful.

4. I have formed the view that, although the other articulations help to provide sounding boards as to whether the test under Rule 10.12 has been met, ultimately the standard that must be demonstrated is that there is “no reasonable likelihood of success.” That is the test which I will apply here.

The wife’s case

1. The wife has now, on several occasions, sought to articulate her case, albeit not necessarily in entirely consistent terms. 

2. In the SFIC, she claimed that the husband’s extensive work in the farming business, particularly given the lack of commercial remuneration, her homemaker contributions, and some limited work by her in the farming business, founds her contention that there was “a common endeavour… to which the wife, the husband and the farming venture siblings have contributed” such that all of the participants have an equal equitable interest in the farm properties, and the plant and equipment.  However, correctly, Queen’s Counsel for the husband and Queen’s Counsel for the other respondents, observed that nowhere in the SFIC is there any assertion that the denial of the interests claimed, in respect of both the wife and the husband, is unconscionable, and more, there is no explanation as to why it is that the wife, as the husband’s spouse, is entitled to an equitable interest, but the other siblings’ spouses apparently are not.

3. In her affidavit filed 1 March 2019, and indeed in her subsequent affidavits, the wife has detailed various representations which she says were made to her, to the effect that she and the husband, together with other farming siblings, would inherit some unspecified part of the farming business when Mr B and Ms C passed away.  For instance, at paragraph 83 of her affidavit filed 1 March 2019, she said:

   …I recall Mr B sympathising with my position and saying that he (Mr B) would probably be in debt for the rest of his life however, I clearly recall Mr B saying to me “it won’t always be like this, we’re doing it tough at the moment so one day after I’m gone you will be able to enjoy all that I worked for”…

   (As per the original)

4. The wife says that she took this to mean that she and the husband would inherit a portion of the farming business, or at least the properties within it. 

5. At paragraph 85 of her affidavit filed 1 March 2019 the wife detailed coming across a map outlining the farm properties that would be left to the farming siblings if Mr B and Ms C passed away whilst on a holiday.. However such representations do not found the imposition or recognition of a remedial constructive trust based on unconscionability, but rather, they are relevant to other potential relief, such as estoppel,[1] which is not sought to be availed of by the wife here.

   [1]Nolan & Nolan [2015] QCA 199.

6. Most recently in the wife’s Outline of Submissions filed 16 September 2019, Queens Counsel for the wife articulated her claim at paragraphs 20 and 22 as follows:

   20. Throughout the relationship, the Wife was a party to a number of conversations with the Husband and the Husband’s parents from which the rationale for the operation of the farming venture may be deduced.  That rationale may be summarised as follows:

   (a)payments for work on the farms were kept low to enable additional farming properties to be bought to build the family business;

   (b)at some future point, the farming properties were to be distributed between those involved in the farming venture with the husband and wife to be allocated a portion of the farming venture properties.

   …

   22. It is open for the Court to find on the evidence of the Wife that:

   (a)there was a common endeavour between the Wife and the Respondents (at least the parents, the Husband and the farming venture siblings) to build the family business and acquire the farming venture properties;

   (b)the farming venture insofar as it involved the Wife (and the Husband and Wife as a couple) ceased on her separating from the Husband;

   (c)the denial of the interests of the Wife and the Husband in the farming venture properties is unconscionable. 

   (Citation omitted) (As per the original)

7. However, correctly, in their written submissions, both counsel for the husband, and counsel for the second to ninth respondents, identified that a constructive trust ought not be imposed if there are other orders capable of doing full justice.[2]  Subsequently, during the course of oral submissions, apparently for the first time, counsel for the wife identified that, whilst claiming a remedial constructive trust, inevitably his client would accept whatever equitable remedy might otherwise achieve full justice for her.

   [2] John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1 at [128] and Giumelli v Giumelli (1999) 196 CLR 101.

8. A number of other difficulties attend the wife’s claim.  These were helpfully articulated in a so-called “Table of Troubles” appended to the husband’s written submissions filed 5 September 2019 in support of his Application in a Case filed 22 March 2019, and include that:

   (a)There is some confusion over who the wife says would have a beneficial interest in any constructive trust, and especially whether it would encompass those siblings who had once been in the joint endeavour, but no longer are, albeit are said to now hold property in lieu of their interest in the joint endeavour (at least according to the wife);

   (b)Other than the maxim that equity favours equality, it is unclear why the participants in the joint endeavour, who introduced different assets, and joined at different times, should have an equal entitlement;

   (c)Not all of the members of the joint endeavour are currently parties to this litigation;

   (d)The wife seeks a present entitlement to a vested beneficial interest, which was never the subject of any promise or representation, even taking her case at its highest, as the joint endeavour was to the effect that the farm properties would be divided between the participants only upon Mr B and Ms C’s deaths; and

   (e)Two of the farming properties are already solely or jointly in the husband’s name (although the husband only claims a beneficial interest in Farm 3, and it is unclear whether Mr B and Mr C accept that he has a beneficial interest in either property).

Evaluation

1. The following matters seem to be, in varying degrees, arguable on the wife’s evidence:

   (a)There is, and has been since the husband was 17 years of age, a common endeavour between him, Mr B and Ms C, and later some of his siblings, in the form of the farming business as it existed from time to time.  There is almost no other rational explanation for the markedly uncommercial remuneration of the husband, and the other siblings, and their extreme working hours.  Further support for the existence of the common endeavour is to be found in the placing of new properties in the names of members of the farming business, including the husband, although notably, never a spouse of any of the siblings.  That, of course, may make the wife’s claim that she herself was a member of the common endeavour more difficult, but given her own work in the farming business, that her homemaking supported the husband’s long hours, and the fact that, raising the next generation of the family, who might reasonably be expected, and now have started, to go into the farming business, could itself be seen as part of the common endeavour, it may not be an impossible claim;

   (b)Absent knowing, even in broad terms, the extent to which the husband’s activity in the joint enterprise has contributed to its value, or knowing the net value of the farming business, or knowing whether Mr B and Ms C concede any beneficial interest of the husband in the farm properties in his sole or joint name, it cannot be said that the wife’s argument that the denial of the claimed equitable interest, at least in the husband, and perhaps her, is unconscionable, is doomed to fail;

   (c)Many difficulties beset the wife’s claim, as discussed above, and set out in the “Table of Troubles,” but they largely relate to her claim for a remedial constructive trust, and there are a number of equitable remedies short of that which may better achieve full justice in this case, which are not met by the plethora of difficulties which her present constructive trust claim faces; and

   (d)As counsel for the wife conceded, assuming it is not summarily dismissed, her case is likely to evolve, particularly once disclosure has been made by Ms B and Ms C, and indeed the other respondents.

2. The question then is whether I am presently persuaded that there is no reasonable likelihood of success on the part of the wife, including in relation to any cause of action presently not articulated by her in proper form (for example, equitable compensation).  Upon balance, I am not so satisfied, at least at this point in time, particularly given the infancy of the proceedings, the lack of clarity as to whether Mr B and Ms C concede that the husband has any equitable interest in the farm properties in his sole or joint name, and the wife’s late made concession that she would not eschew equitable relief other than a remedial constructive trust.  It therefore follows that both applications for summary dismissal fail.

SECURITY FOR COSTS

Overview

1. In the event that the applications for summary dismissal failed, then both the husband and the other respondents, sought security for their costs.  The husband sought security in the sum of $120,000, the first tranche of $10,000 being payable after disclosure, the second $10,000 60 days prior to a mediation, and the final $100,000, no less than 60 days prior to trial.  The other respondents also sought security in the sum of $120,000, but on a slightly different timetable, being $20,000 within 28 days of the orders, $10,000 28 days prior to the date of mediation, $40,000 prior to trial affidavits being due for filing, and $50,000 28 days prior to the first day of trial.

2. During the course of the oral submissions, I raised with all counsel whether or not s 117 of the Family Law Act 1975 (Cth) (“the Act”) governed costs in these proceedings, insofar as they involve the parties to the wife’s equitable claim. Ultimately, helpful written submissions were provided by the wife and the respondents other than the husband, which conceded that s 117 of the Act did govern the application, albeit they correctly identified that there is a lack of uniformity among the authorities as to the exact reason why that is so. In his submissions filed 2 October 2019 at paragraph 3, counsel for the respondents other than the husband, noted the lack of cohesion in the jurisprudence relating to this issue, and suggested that “this application provides the Court with the opportunity to provide clarity and a principled approach to the operation of s. 117 of the Act where third parties are joined to litigation between parties to a marriage.” However I am disinclined to seize the alleged opportunity, which more properly seems to raise an issue requiring the attention of the Full Court, rather than yet another single judge sitting in the General Division adding potentially even further discordant reasoning to the present jurisprudential melee. Suffice to say that, absent any controversy about the application of s 117 of the Act, it is not necessary for me to resolve it, and I decline to do so.

Relevant statutory provisions and legal principles

1. Section 117(2) of the Act provides:

   If, in proceedings under this Act, the court is of the opinion that there are circumstances that justified in doing so, the court may, subject to sub-sections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

2. Section 117(2A) of the Act requires the court to have regard to, amongst other things, the financial circumstances of each of the parties to the proceedings. Sub-sections (4), (4A) and (5) of s 117 have no bearing upon an application for security for costs in the circumstances before me.

3. In Luadaka & Luadaka (1998) FLC 92-830 (“Luadaka”) at [62] the Full Court (Ellis, Finn and O’Ryan JJ) said:

   The purpose of an order for security is to secure justice between the parties by ensuring that an unsuccessful party does not occasion injustice to the other. In considering whether or not to make an order, apart from those referred to in s.117(2A), matters which may be relevant include the following…

4. Their Honours then set out a number of matters, which were later helpfully summarised by Mullane J in Richards, Duff, Patient & DoCS [2002] FamCA 223 (“Richards”)at [19] as follows:

   (a)The means of the respondent to the application to satisfy an order for costs if he or she is unsuccessful

   (b)The prospects of the respondent to the application succeeding in the proceedings

   (c)Whether the claim in the proceedings of the respondent to the application “is made bona fide, whether is genuine or not trivial, vexatious or a sham.”

   (d)Whether an order for costs would be “oppressive or stifle the litigation”

   (e)Whether or not the litigation may involve a matter of public importance.

   (f)Whether or not there has been delay in bringing the application, causing prejudice to the respondent to the application

   (g)The amount of costs likely to be incurred

   (h)Any difficulties likely enforcing an order for costs.

   (As per the original)

5. Mullane J noted that the Full Court in Luadaka did not suggest the list was exhaustive, and there may be other matters able to be taken into account pursuant to s 117(2A)(g) of the Act.

Consideration

1. By reference to the relevant matters in s 117(2A) of the Act, I note as follows:

   (a)The wife is in poor financial circumstances.  In her Financial Statement filed 16 August 2019 she says that she has property to the value of $7,237, liabilities of $650, an average weekly income of $675, and superannuation of only $3,283. She discloses in her financial statement a financial resource of $39,018, being monies in children’s bank accounts of which she is the trustee, but I accept, as she claims, that she does not have an entitlement to access those monies for her own purposes.

   For his part, in his Financial Statement filed 22 March 2018, the husband does not attribute a value to the property owned by him, or his liabilities or financial resources, but simply discloses that he has an average weekly income of $667, his expenditure exceeds that to the extent of $868, and he has $21,695 worth of superannuation.

   I have no evidence as to the financial circumstances of the respondents other than the husband.  In submissions however, it was conceded by their counsel that they have wealth, albeit precisely who has that wealth was not specified.  The conclusion I reach is that the wife is in parlous financial circumstances, whereas the husband and the other respondents are not.

   (b)No party is in receipt of legal aid; and

   (c)No respondent contended that the wife’s conduct in the proceedings was relevant to the question of security for costs.

2. By reference to the list of matters identified in Richards I observe as follows:

   (a)The wife will not be able to satisfy an order for costs if she does not significantly succeed in the principal litigation;

   (b)It is too early to make any definitive assessment of the wife’s overall prospects of success, but I have already identified that her claim for a remedial constructive trust faces many obstacles, although they are not necessarily insurmountable, and any claim by her for lesser equitable relief faces less difficulties;

   (c)There is no suggestion that the wife, in asserting her claim, is not acting bone fide;

   (d)It is conceded that, if an order for security for costs were made, it would stifle the litigation;

   (e)The litigation does not involve any question of public importance;

   (f)There has been no delay in the bringing of the applications for security;

   (g)The amount of costs claimed are significant, in the total sum of $240,000.  There is no reason to doubt that estimate is accurate, and indeed, perhaps conservative; and

   (h)The only difficulty in enforcing any order for costs that might ultimately be made against the wife, is that there are at present virtually no assets, and very little income, against which any order might be enforced.

3. Weighing those factors in the balance to my mind tells strongly against an order for security for costs in this case. I place particular weight upon the wife’s financial circumstances, the respondents’ financial circumstances, and the fact that any order would stifle the litigation. However I should make it plain that, if it later transpires that the wife’s prospects of success in relation to any equitable claim can be definitively assessed as weak, then different considerations, or at least the weight given to them, might apply.

4. However for present purposes, the application for security for costs, both by the husband and the other respondents, fails.

THE PATH FORWARD

1. Although ordinarily in these circumstances, as I raised during the hearing, I would contemplate making orders for a pleadings regime, upon reflection I am hesitant to do so at this point in time because, other than establishing a broad framework for the wife’s various alternative cases, with presumably a cascading prayer for relief, it would seem to have little utility, until at least some disclosure has been made by the respondents other than the husband. Correctly, counsel for the wife identified that disclosure will greatly assist in framing the wife’s case, albeit that observation caused much disquiet amongst the counsel for the respondents. 

2. I do not overlook that the parameters of disclosure are necessarily governed by the matters in dispute, but subject to argument, they seem to me to be sufficiently identified in the wife’s present SFIC, although I accept they have not necessarily been consistently identified in the other material the wife has provided. 

3. Whilst the absence of any mention in the SFIC of unconscionability is regrettable, it is a readily curable, technical matter, the correction of which will do little to advance the substantive progress of the matter. However if any party contends that there should be a renewed pleadings regime at this stage, then I will direct that any such application be made within 28 days of these orders.

CONCLUSION

1. For these reasons, the Applications in a Case filed 22 March 2019 and 29 March 2019 will be dismissed.               

I certify that the preceding sixty nine (69) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 5 December 2019.

Associate:

Date: 5 December 2019