Jess & Jess

Case [2021] FedCFamC1F 24

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Jess & Jess [2021] FedCFamC1F 24

File number(s): MLF 3444 of 2006
Judgment of: WILSON J
Date of judgment: 8 September 2021
Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – restriction on publication of court proceedings – s 121 of the Family Law Act – trustees of the bankrupt estate of the first respondent wishing to apply to the Federal Court of Australia in the exercise of jurisdiction under the Bankruptcy Act, for orders ratifying the trustees’ entry into a litigation funding agreement – in making that application, trustees will divulge information of which s 121 prohibits disclosure – trustees seeking approval under s 121(9)(g) of the Family Law Act – review of authorities – application by trustees earlier opposed but subsequently not opposed by the represented third parties – application approved under s 121(9)(g).
Legislation: Bankruptcy Act 1966 ss 19, 30(1)
Constitution of the Commonwealth of Australia Chapter III 
Family Law Act 1975 ss4(1), 117(1), 117(2A), 121(9)(g)
Federal Court of Australia Act 1976 s 17(4), 37AF and 37AG
Federal Court Rules 2011 r 20.31
Insolvency Practice Schedule (Bankruptcy) s 90-15
Trustee Act 1958 (Vic) s 67
Cases cited:

Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297
Corporate Affairs Commission (South Australia) v Australian Central Credit Union (1985) 157 CLR 201
De Santis v Aravanis (2014) 227 FCR 404

Dickason v Dickason (1913) 17 CLR 50

DOQ17 v Australian Financial Security Authority (No 3) [2019] FCA 1488
Fitzgerald v Fish (2005) 33 Fam LR 123

Gibb & Gibb [1978] FamCA 8

Harman v Secretary of State for the Home Department [1983] 1 AC 280
Hearne v Street (2008) 235 CLR 125
Hinchcliffe v Commissioner of Police of the Australian Federal Police (2001) 118 FCR 308
In the Marriage of Hogan (1986) 10 Fam LR 681
Jess & Jess [2021] FamCAFC 159

Martin v Martin [2015] WADC 138
McPherson v McPherson [1936] AC 177
Minister for Immigration and Border Protection v Egan [2018] FCA 1320

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355

R Pty Ltd (as trustee for the Fletcher Trust) v Jones and Another (2016) 56 Fam LR 445

Re Condon, ex parte James [1874] All ER Rep 388
Re David Hurt (1988) 80 ALR 236
Re Edelsten, Donnelly v Edelsten and Others (1988) 18 FCR 434
Re W: Publication Application (1997) 137 FLR 205

Russel v Russel (1976) 134 CLR 495
Scott v Scott [1913] AC 417

Sitwell v Sitwell (2014) 51 Fam LR 158

SRD v Australian Securities Commission (1994) 52 FCR 187
Winters & Winters [2015] Fam CA 195
Ying v Song [2010] NSWSC 1500
Division:  Division 1 First Instance
Number of paragraphs: 62
Date of hearing: 12 July 2021, 20 August 2021 & 6 September 2021
Place: Melbourne
Counsel for the Applicant: Not applicable
Solicitor for the Applicant: Kenna Teasdale Lawyers
Counsel for the First Respondent: Not applicable
Solicitor for the First Respondent: Mr J
Counsel…

Continue reading Jess & Jess

Sign in free to access the full text

Details
AGLC
Jess & Jess [2021] FedCFamC1F 24
Case
[2021] FedCFamC1F 24
Decision Date

CaseChat Overview and Summary

In the matter of Jess & Jess, the trustees of the bankrupt estate of Mr Jess Snr sought approval to apply to the Federal Court of Australia to ratify their entry into a litigation funding agreement. The application was brought under section 121(9)(g) of the Family Law Act 1975 (Cth), which allows for the disclosure of certain information that is otherwise prohibited by section 121. The represented third parties initially opposed the trustees' application but later withdrew their opposition. The court had to decide whether to grant the trustees' application for approval to disclose the required information to the creditors of the bankrupt estate. The trustees argued that their entry into the litigation funding agreement was necessary for the ongoing administration of the bankruptcy and that they would implement measures to maintain confidentiality. The represented third parties had previously opposed the application, citing technical deficiencies in the trustees' material. However, they later withdrew their opposition, and the court found that the trustees' proposed measures to maintain confidentiality were practical and achievable.

The court approved the trustees' application under section 121(9)(g) of the Family Law Act. The court noted that the trustees' actions in entering into the litigation funding agreement were not in themselves objectionable, but section 121 of the Family Law Act prohibited the dissemination of certain information without approval under section 121(9)(g). The represented third parties had initially opposed the trustees' application but later withdrew their opposition. The court found that if it were to refuse the application, the trustees would likely be hindered in their ongoing administration of the bankruptcy of the first respondent. The court also found that the trustees' proposed measures to maintain confidentiality were practical and achievable. The court concluded that it was appropriate to grant the trustees' application and directed the legal representatives of the trustees and the represented third parties to confer and agree on a mechanism to reduce the risk of creditors further disseminating any information given to them by the trustees. The court also noted that the Federal Court of Australia, drawing on its expertise in class action litigation when issues of confidentiality arise, may add a layer of protection in addition to the trustees' proposed measures.

The court granted the trustees' application for approval to apply to the Federal Court of Australia to ratify their entry into a litigation funding agreement. The court directed that the trustees could disclose certain information to the creditors of the bankrupt estate, including the existence of the proceedings, the names of the parties, the factual background, the procedural history, findings of fact and reasons for judgment, notice of appeal, and any future orders, declarations, and reasons for judgment. The court also directed that the legal representatives of the trustees and the represented third parties must confer and agree on a mechanism to reduce the risk of creditors further disseminating any information given to them by the trustees. The court ordered that each party bear their own costs of and incidental to the trustees' application for orders under section 121(9)(g). The represented third parties had applied for an order that their costs be paid by the trustees, but the court found that an order for costs was not just in all the circumstances. The court noted that the trustees' material had required considerable refinement, but the represented third parties had not objected to the trustees' application until it was in proper form.

Orders

Orders of the court

MLF 3444 of 2006

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS JESS

Applicant

AND:

MR J AS LEGAL PERSONAL REPRESENTATIVE FOR MR JESS SNR (DECEASED)

First Respondent

MR JESS JNR

Second Respondent

PPP INVESTMENTS PTY LTD (ACN …) (and others named in the Schedule)

Third Respondent

MR K AND MR L AS TRUSTEES OF THE BANKRUPT ESTATE OF MR JESS SNR

Intervenor

ORDER MADE BY:

WILSON J

DATE OF ORDER:

8 SEPTEMBER 2021

THE COURT ORDERS THAT:

1. In these orders –

(a) ‘Act’ means the Family Law Act 1975 (Cth);

(b) ‘approval application’ means the application to be made by the trustees to the Federal Court of Australia as set out in paragraphs 6 to 11 of the affidavit of Mr K sworn 4 June 2021, including any appeal flowing therefrom;

(c) ‘bankrupt estate’ means the bankrupt estate of Mr Jess Snr (Deceased) in administration numbered VIC …;

(d) ‘proceedings’ means, collectively, the proceedings in this Court numbered MLF3444/2006 and SOA74/2019; and

(e) ‘trustees’ means the Trustees of the Bankrupt Estate.

2. Pursuant to section 121(9)(g) of the Act, for the purpose of creditors of the bankrupt estate being given an opportunity to be heard in relation to and participating in the approval application, the trustees have leave to disclose to the creditors of the bankrupt estate an account of the proceedings including –

(a) the existence of the proceedings;

(b) the names of the parties to the proceedings;

(c) the factual background to the proceedings;

(d) the procedural history of the proceedings, and further procedural matters as and when they arise;

(e) the finding of fact and reasons for judgment dated 4 December 2018 (including the orders to which that finding and judgment relates);

(f) the reasons for judgment dated 15 November 2019 (including any the orders to which that judgment relates);

(g) the notice of appeal dated 13 December 2019 in proceeding number SOA74/2019; and

(h) copies of any future orders, declarations, and reasons for judgment made in the proceedings.

3. Prior to 4pm on 20 September 2021 and prior to the trustees filing the originating application the proposed draft of which has been canvassed above, the legal representatives of the trustees and of the represented third parties must confer with a view to agreeing on a mechanism to be implemented so as to reduce as far as possible if not eliminate the risk of creditors of the bankrupt estate of the first respondent further disseminating any information they are given by the trustees following the making of these orders.

4. Each party is to bear his, her or its own costs of and incidental to the trustees’ application for orders under s 121(9)(g).

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.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

MR J
The trustees’ actions in entering into the litigation funding agreement is, in and of itself, unexceptional. But in litigation under the Family Law Act, s 121 operates to prohibit the dissemination of certain information, absent approval under s 121(9)(g). The represented third parties once urged me to refuse approval under s 121(9)(g). They cited technical deficiencies in the material on which the trustees rely. It seems plain enough that the trustees are likely to intensify their efforts against the represented third parties once the court ratifies the trustees’ entry into the litigation funding agreement. In any event, if I were to refuse this application, the trustees are highly likely to be stultified in their ongoing administration of the bankruptcy of the first respondent. I take the view that the steps the trustees will undertake to maintain confidentiality are practical and achievable. It remains to be seen whether the Federal Court of Australia, drawing on its expertise in class action litigation when issues of confidentiality arise, adds a layer of protection in addition to the trustees’ proposed measures.CONCLUSION ON THE TRUSTEE’S APPLICATION UNDER S 121(9)(G) For those reasons I make the orders in paragraph 1 and 3 of the trustees’ application in a case dated 21 June 2021. In my view, no leave is required under s 121(9)(g) to disclose the information canvassed in paragraph 2 of the trustees’ application in a case. For the purpose of paragraph 4 of the trustees’ application in a case, I direct that prior to 4pm on 20 September 2021 and prior to the trustees filing the originating application the proposed draft of which has been canvassed above, the legal representatives of the trustees and of the represented third parties confer with a view to agreeing on a mechanism to be implemented so as to reduce as far as possible if not eliminate the risk of creditors of the bankrupt estate of the first respondent further disseminating any information the trustees give those creditors following the making of these orders.COSTS The represented third parties applied for an order that their costs of and incidental to this application be paid by the trustees, to be assessed on a party/party basis. They sought to invoke s 117(2A) (c) and (g). They recognised that they only needed to successfully invoke one of the elements of s 117(2A).[52] They submitted that an order for costs was just in all the circumstances.[53] They argued, in essence, that –(a)on the 12 July appearance the trustees’ application was not well formed and required considerable refinement; (b)the trustees were given an indulgence to put their material in proper form; (c)the trustee’s material remained defective during the appearance on 20 August 2021, requiring yet a further indulgence; and (d)only once further refinements to the trustees’ documentation were made ahead of the 6 September 2021 appearance was the trustee’s documentation in such form as enabled the represented third parties to make an informed decision to not object to the trustees’ application. [52] Fitzgerald v Fish (2005) 33 Fam LR 123. [53] In the Marriage of Hogan (1986) 10 Fam LR 681.

Ratio Decidendi

Legal Principle Established

Established by: MR J

Full text does not contain this section.