Janda & Janda
[2022] FedCFamC1F 106
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Janda & Janda [2022] FedCFamC1F 106
File number(s): SYC 2295 of 2021 Judgment of: REES J Date of judgment: 3 March 2022 Catchwords: FAMILY LAW – SUMMARY DISMISSAL – Where the husband seeks final orders declaring that the second and third respondents held beneficially a 50 per cent interest in property on trust for the husband and wife – Application by the second and third respondents to summarily dismiss the husband’s application or for the husband provide security for costs – Where the husband’s application has a reasonable likelihood of success – Application for summary dismissal and security for costs dismissed. Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 10.09, 12.02
Cases cited: Gong & Zao (2021) FLC 94-032
Henry & Henry (1996) 185 CLR 571
Division: Division 1 First Instance Number of paragraphs: 24 Date of hearing: 2 March 2022 Place: Sydney Counsel for the Applicants: Mr Jackson Solicitor for the Applicants: Russell Kennedy Aitken Lawyers Counsel for 1st Respondent: Mr Hand Solicitor for 1st Respondent: Gordon & Barry Lawyers Pty Ltd Solicitor for 2nd Respondent: No appearance ORDERS
SYC 2295 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS THOMAS
First Applicant
MR NORMAN
Second Applicant
AND: MR JANDA
First Respondent
MS JANDA
Second Respondent
ORDER MADE BY:
REES J
DATE OF ORDER:
3 MARCH 2022
THE COURT ORDERS:
1.That the Application in a Proceeding filed 24 August 2021, seeking summary dismissal of the husband’s claims against the second and third respondents, and an order for security for costs, is dismissed.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Janda & Janda has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
REES J:
Ms Janda (“the wife”) and Mr Janda (“the husband”) have separated and the wife has filed an application for property settlement.
In his response to that application, the husband seeks a declaration that the second respondent, the wife’s daughter, and the third respondent, the wife’s son-in-law, hold a 50 per cent interest in the proceeds of sale of a property in the United Kingdom on trust for the husband and the wife.
The second and third respondents (“the respondents”), by an Application in a Proceeding filed 24 August 2021, seek the summary dismissal of the husband’s application in relation to the property in the United Kingdom or, in the alternate, that he provide security for their costs in the sum of $80,000.
SUMMARY DISMISSAL
As the Full Court explained in Gong & Zao (2021) FLC 94-032:
12.The provisions of s 45A of the Act apply to applications for summary disposal of proceedings under the Act initiated both before and after its commencement date of 1 September 2018 (Family Law Amendment (Family Violence and Other Measures) Act 2018 (Cth) Sch 1, s 14).
13.It provides that a court may make a decree for one party, as to the whole or any part of the proceedings, where the Court “…is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceedings or that part…” (s 45A(2) of the Act). The proceedings need not be “hopeless” or “bound to fail” for the section to apply (s 45A(3) of the Act).
14.The section is in similar terms to r 10.12(d) of the Family Law Rules 2004 (Cth) which provides that a person may apply for summary orders where “there is no reasonable likelihood of success”. As was explained in Ebner & Pappas (2014) FLC 93-619 (“Ebner”), this rule replaced the earlier test for summary dismissal, which looked to see whether the proceedings were doomed to fail, with a less stringent test.
Further, Rule 10.09 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) provides:
10.09 Application for summary orders
(1)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; or
(b) the other party has no legal capacity to apply for the orders sought; or;
(c) it is frivolous, vexatious or an abuse of process; or
(d) there is no reasonable likelihood of success.
Thus it is clear that the onus is on the respondents before me to demonstrate that the husband’s application has no reasonable prospects of success.
In assessing those prospects, I am required to take the husband’s evidence at its highest.
The husband was directed to file Points of Claim setting out the basis upon which he claimed relief and that document was filed on 5 August 2021. The husband relied on an affidavit sworn by him on 21 June 2021 and an affidavit answering specific questions posed by the respondents which was sworn on 14 September 2021.
The respondents relied upon an affidavit of their solicitor, Ms Doring, sworn on 24 August 2021.
Relevantly to this application, the husband in his Points of Claim stated that:
·On 21 November 2006, the husband and the wife entered into an agreement with the respondents wherein the respondents agreed to purchase a property in B Street, City C (“B Street”) and to hold 50 per cent of their interest for the husband and the wife in equal shares.
·The husband and wife jointly borrowed $62,502.53 from their joint Commonwealth Bank of Australia loan account to apply toward the deposit and purchase of their 50 per cent interest in B Street.
·The husband and the wife jointly borrowed $300,400 from the Commonwealth Bank which funds were applied to the purchase of B Street.
·On 29 December 2006, the husband and the wife entered into a deed with the respondents which provided, inter alia, the effect on the respective entitlements to the B Street property if one party to the deed died or if either couple divorced.
·The respondents lived in the B Street property and did not pay rent to the husband and the wife.
·In about November 2009, B Street was sold and the whole of the proceeds of sale were used to purchase a property at D Street, City C (“D Street”).
·The respondents lived in D Street and did not pay rent to the husband and the wife.
·In about August 2014, D Street was sold and the proceeds of sale used to purchase a property in City E (“City E”).
·The respondents lived in City E and did not pay rent to the husband and the wife.
·On 24 March 2019, the husband notified the respondents that he and the wife had separated and demanded payment of the value of his interest in the City E property in accordance with the terms of the 2006 deed.
·On 29 March 2019, the third respondent advised the husband that, pursuant to the terms of the 2006 deed, he must firstly give the wife the right to purchase his interest.
·On 11 September 2020, the City E property was sold for £640,000. From the proceeds of that sale $47,232.29 was paid into an account in the husband’s name and the same amount was paid into an account in the wife’s name.
Thus the husband claims that when the respondents used the husband and wife’s half share of the proceeds of sale of B Street to purchase D Street, a resulting trust arose in favour of the husband and the wife. Similarly, when the respondents used the husband and wife’s share of the proceeds of sale of D Street to purchase City E, a resulting trust arose. In the alternate, the husband submits that a constructive trust would be imposed.
The husband now seeks an order that the respondents account to the husband and the wife for half of the proceeds of sale of the City E property together with interest.
Further, the husband relied on a will prepared for the wife in February 2020 where the wife leaves her one quarter interest in the City E property to the second respondent.
In so far as the second and third respondents now contend that the funds provided by the husband and the wife were a gift, that was not the third respondent’s position when he wrote the email of 29 March 2019 and it was not the wife’s position when she prepared the 2020 will.
I am not satisfied that the husband’s application has no reasonable likelihood of success.
The respondents also raise the issue of forum, submitting that the husband would need to convince the Court that this is not a “clearly inappropriate forum”. Setting aside the correct formulation of the test propounded in Henry & Henry (1996) 185 CLR 571, counsel for the respondents conceded that there are three possible fora for this dispute:
·Australia where the husband and the wife both live.
·The United States where the respondents live.
·The United Kingdom where the properties were situated.
Prima facie, it is arguable that Australia is not a clearly inappropriate forum, particularly in circumstances where the respondents have joined in the proceedings in Australia and have not objected to the jurisdiction.
The summary dismissal application must fail.
SECURITY FOR COSTS
The matters to be considered are set out in Rule 12.02 of the Rules in the following terms:
12.02 Application for security for costs
(1)A respondent may apply for an order that the applicant in the proceeding give security for the respondent’s costs.
(2)In deciding whether to make an order, the court may consider any of the following matters:
(a) the applicant’s financial means;
(b) the prospects of success or merits of the application;
(c) the genuineness of the application;
(d)whether the applicant’s lack of financial means was caused by the respondent’s conduct;
(e)whether an order for security for costs would be oppressive or would stifle the proceeding;
(f) whether the proceeding involves a matter of public importance;
(g)whether a party has an order, in the same or another proceeding (including a proceeding in another court), against the other party for costs that remain unpaid;
(h) whether the applicant ordinarily resides outside Australia;
(i) the likely costs of the proceeding;
(j) whether the applicant is a corporation;
(k) whether a party is receiving legal aid;
(l) any other relevant matter.
The affidavit of the respondents’ solicitor addresses the likely costs of the proceedings to the respondents but does not address the other considerations.
It is clear from the words used that the reference to “the applicant” is a reference to the person making an application in the substantive proceedings, in the case, the husband.
Dealing with each consideration seriatim:
(a)The husband has very modest means.
(b)The husband has an arguable case.
(c)There is no challenge to the genuineness of the application.
(d)It is arguable that the husband’s lack of means was caused by the respondents’ failure to account to him and the wife for their share of the proceeds of sale of City E.
(e)An order for security for costs would stifle the proceedings.
(f)There is no matter of public importance.
(g)There have been no orders for costs.
(h)The husband lives in Australia.
(i)The respondents’ solicitor provides an estimate of the respondents’ costs but that estimate is provided on a solicitor/client basis, not on a party/party basis at scale.
(j)The husband is not a corporation.
(k)No party is in receipt of legal aid.
(l)I was not taken to any other relevant matter.
None of these considerations is persuasive of making the order sought by the respondents.
The applications will be dismissed.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 3 March 2022
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