Kayce & Wilda (No 2)

Case [2024] FedCFamC1F 405

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Kayce & Wilda (No 2) [2024] FedCFamC1F 405

File number: MLC 14481 of 2022
Judgment of: STRUM J
Date of judgment: 17 June 2024
Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Joinder application – Where the applicant seeks to join the respondent’s new wife as the second respondent and the company of which she is the sole shareholder as the third respondent – Where the joinder application is opposed by the respondent and the proposed second and third respondents – Where the applicant seeks a declaration that the respondent has an equitable interest in the company but no alteration of interests thereof – Where the applicant seeks an equal division of the respondent’s and her property and financial resources –Where the applicant does not contend that that, even if successful in her claim against the proposed second respondent, the property of the applicant and the respondent is insufficient to satisfy her claim – Where there have been undisclosed financial dealings between the respondent and the proposed second respondent – Where the respondent failed to make disclosure of his disposition of a substantial life insurance payment to the proposed second respondent – Where the applicant’s joinder application nevertheless does not presently satisfy requirements of r 3.01 of the Federal Circuit and Family Court of Australia Rules 2021 – Where the joinder application has been unsuccessful.
Legislation:

Family Law Act 1975 (Cth) ss 78, 79, 90AE

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rr 1.05, 3.01, 3.03
Cases cited:

Arnold & Arnold [2021] FamCA 226

B Pty Ltd and Ors & K and Anor (2008) FLC 93-380

Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279

Galante & Galante and Ors [2019] FamCA 756

Gould & Gould & Swire Investments Ltd (1993) FLC 92-434

Hankinson v De Vries and Ors (2013) 50 Fam LR 79

John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1

Jones v Dunkel (1959) 101 CLR 298

Jordan & Sutton (No 2) [2022] FedCFamC1F 850

Pencious & Pencious [2010] FamCA 605

Quincey & Quincey [2024] FedCFamC1A 30

Wayne & Dillon and Anor (2008) 40 Fam LR 543
Division: Division 1 First Instance
Number of paragraphs: 45
Date of hearing: 28 March 2024
Place: Melbourne
Counsel for the Applicant: Mr Schmidt
Solicitor for the Applicant: Blackwood Family Lawyers
Counsel for the Respondent: Mr Dickson KC
Solicitor for the Respondent: Sayer Jones
Counsel for the Proposed Second and Third Respondents: Dr Matta
Solicitor for the Proposed Second and Third Respondents: Barry Nilsson Lawyers

ORDERS

MLC 14481 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS KAYCE

Applicant
AND:

MR WILDA

Respondent

MS MODESTO

Proposed Second Respondent

J PTY LTD

Proposed Third Respondent

ORDER MADE BY:

STRUM J

DATE OF ORDER:

17 JUNE 2024

THE COURT ORDERS THAT:

1.Paragraphs 3, 4, 5, 7 and 14 of the orders sought in the applicant wife’s…

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AGLC
Kayce & Wilda (No 2) [2024] FedCFamC1F 405
Case
[2024] FedCFamC1F 405
Decision Date

CaseChat Overview and Summary

The case of Kayce & Wilda (No 2) involves a dispute between Ms Kayce, the applicant, and Mr Wilda, the respondent. Ms Kayce sought to join Ms Modesto, the respondent's new wife, and J Pty Ltd, a company of which Ms Modesto is the sole shareholder, as the second and third respondents respectively. The joinder application was opposed by Mr Wilda, Ms Modesto, and J Pty Ltd. Ms Kayce sought a declaration regarding an equitable interest in the company, an equal division of property and financial resources, and did not contend that the existing property would be insufficient to satisfy her claim. However, there were undisclosed financial dealings between Mr Wilda and Ms Modesto, including Mr Wilda's failure to disclose his disposition of a substantial life insurance payment to Ms Modesto. Despite these concerns, the joinder application did not satisfy the requirements of rule 3.01 of the Federal Circuit and Family Court of Australia Rules 2021, resulting in the dismissal of the application.

The legal issues the court was required to decide included whether Ms Modesto and J Pty Ltd were necessary parties under the Family Law Act 1975 (Cth) and the Federal Circuit and Family Court of Australia Rules 2021, and if the joinder application met the requirements of rule 3.01. The court considered the principles outlined in various cases, including Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd, John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd, and Jordan & Sutton (No 2). The court noted that while joinder of third parties is an exercise of the court's discretion, the existence of claims affecting the rights or interests of third parties generally compels the conclusion that those parties are necessary. However, the court also emphasised that the joinder application needed to comply with the specific requirements of the rules.

The court's reasoning led to the conclusion that Ms Kayce's joinder application did not presently satisfy the requirements of rule 3.01. While the concerns raised by Ms Kayce regarding the financial transactions between Mr Wilda and Ms Modesto might be valid, the application itself did not meet the necessary criteria for joinder. The dismissal of the joinder application was without prejudice to any future application that complied with the rules. Regarding the other relief sought in Ms Kayce's amended application and Mr Wilda's response, the court determined that these matters were unable to be addressed due to the limited time available and were accordingly adjourned for hearing and determination by a Senior Judicial Registrar on a date to be fixed.

The final orders of the court dismissed specific paragraphs of Ms Kayce's amended application and Mr Wilda's response that referred to or sought relief against Ms Modesto and J Pty Ltd. The remaining parts of the amended application and response were adjourned for further hearing. Any applications for costs related to the dismissed paragraphs were also adjourned to a date to be fixed after final orders were made in the proceeding. The form of the order was subject to review to correct minor errors or to record any variations.

Orders

Orders of the court

MLC 14481 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS KAYCE

Applicant

AND:

MR WILDA

Respondent

MS MODESTO

Proposed Second Respondent

J PTY LTD

Proposed Third Respondent

ORDER MADE BY:

STRUM J

DATE OF ORDER:

17 JUNE 2024

THE COURT ORDERS THAT:

1. Paragraphs 3, 4, 5, 7 and 14 of the orders sought in the applicant wife’s amended Application in a Proceeding filed 29 February 2024 be dismissed.

2. Paragraphs 8, 9 and 11 of the orders sought in the amended Application in a Proceeding be dismissed insofar as they refer to and/or seek relief against the proposed second and third respondents.

3. The amended Response to an Application in a Proceeding filed 22 March 2024 by the proposed second and third respondents be dismissed, save as to costs.

4. The balance of the amended Application in a Proceeding and the respondent husband’s Response to an Application in a Proceeding filed 22 March 2024 be otherwise adjourned for hearing and determination by a Senior Judicial Registrar on a date to be fixed.

5. Any applications for costs of and incidental to the dismissed paragraphs of the applicant wife’s amended Application in a Proceeding, including by the proposed second and third respondents, be adjourned to a date to be fixed after the making of final orders in this proceeding.

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

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Evidence

Evidence Before The Court

In Quincey & Quincey [2024] FedCFamC1A 30 at [28], Tree J referred to Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 296–297, where Dawson J said:It is, of course, the purpose of pleadings to define the issues between the parties so that they may know the case which they have to meet and in order that the proceedings upon trial may be conducted in an orderly fashion by reference to those issues. The defined issues provide the basis upon which evidence may be ruled admissible or inadmissible upon the ground of relevance. But modern pleadings have never imposed so rigid a framework that if evidence which raises fresh issues is admitted without objection at trial, the case is to be decided upon a basis which does not embrace the real controversy between the parties. Special procedures apart, cases are determined on the evidence, not the pleadings. It is incumbent upon the trial judge to see that the pleadings or particulars are amended so that the record reflects the proceedings as they have been conducted, but his failure to do so will not result in the invalidity of those proceedings: Dare v Pulham (1982) 148 CLR 658 at 664; Water Board v Moustakas (1988) 62 ALJR 209 at 211; 77 ALR 193 at 197; Leotta v Public Transport Commission (NSW) (1976) 50 ALR 666 at 668; 9 ALR 437 at 446; Maloney v Commissioner for Railways (NSW) (1978) ALJR 292 at 295; 18 ALR 147 at 151.(Emphasis added by Tree J) Tree J continued at [29]:Both before and after that decision, many other cases have stated identical principles, of which Prysmian Cavi E Sistemi SRL v Australian Competition and Consumer Commission [2018] FCAFC 30 at [69]–[73] (adopting Betfair Pty Ltd v Racing New South Wales [2010] FCAFC 133 at [50]–[52]) is but one example. See also Jordan & Sutton (No 2) [2022] FedCFamC1F 850 at [78], per Harper J. In that latter case, at [38], albeit in the context of an application to join third parties for the purpose of making orders against them pursuant to s 90AE of the Family Law Act 1975 (Cth) (“the Act”), Harper J referred to John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1 at [131], where the High Court stated that where a court is invited to make, or proposes to make, orders directly affecting the rights or liabilities of the non-party, the non‑party is a necessary party and ought to be joined. At [39] – [41], Harper J continued:39.It does not matter whether a proposed party wishes to participate in a proceeding: Arida v Arida [2015] NSWCA 170, per Sackville AJA at [19] (with Bell P and Macfarlan JA agreeing).40.It is well settled that, applying these principles, it can be appropriate to join third parties to a marriage to proceedings in this Court, for example, to bind them in respect of declarations as to property interests pursuant to s 78 or as ancillary to the exercise of discretion in s 79 or s 106B to set aside dispositions: Valceski v Valceski (2007) 70 NSWLR 36 at [31]–[33]; Khalif & Khalif (No 2) [2021] FedCFamC1F 308 at [37]. Clearly, according to these principles, the existence of claims for orders affecting the rights or interests of third parties proposed to be joined usually compels the conclusion that those parties are “necessary”. Such joinder is, nonetheless, an exercise of the Court’s discretion.41.Under the Act and the Rules, there is no special procedure or regime for representative proceedings, as in some other court. Joinder of parties is dealt with at several places. For example, in the Act, s 79(10) grants an entitlement to various classes of person to be joined as parties. These include creditors and any other person whose interests would be affected by the making of an order pursuant to s 79. No party here relies on this provision.

Decision

Reasons for decision

However, that is not to say that the concerns raised by the wife in relation to the financial transactions between the husband and Ms Modesto may be without merit. Indeed, those concerns are fortified by the husband’s (and Ms Modesto’s) admitted non-disclosure in respect of, at least, the disposition by him to her of $2.2 million of the $2.3 million life insurance payment received by him, which clearly constituted “property of the parties to the marriage or either of them” within the meaning of, and for the purposes of, s 79(1) of the Act.CONCLUSION Accordingly, the dismissal of the wife’s present joinder application against Ms Modesto and J Pty Ltd is entirely without prejudice to any further joinder application she may be advised to make, provided that, unlike the present joinder application, it satisfies the requirements of r 3.01 of the Rules. Insofar as the balance of the wife’s amended Application in a Proceeding filed 29 February 2024 is concerned, together with the husband’s amended Response thereto filed 22 March 2024, given the limited time available at the hearing on 28 March 2024, the other relief sought therein was unable to be addressed. The amended Application and the Response will be adjourned for hearing and determination by a Senior Judicial Registrar on a date to be fixed.

Ratio Decidendi

Legal Principle Established

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