Kiddle & Daher
[2021] FedCFamC1F 193
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kiddle & Daher [2021] FedCFamC1F 193
File number(s): MLC 528 of 2020 Judgment of: WILSON J Date of judgment: 15 November 2021 Catchwords: FAMILY LAW – PRACTICE & PROCEDURE – pleadings – deficiencies – statement of claim struck out.
FAMILY LAW – CONSTRUCTIVE TRUST – elements
FAMILY LAW – RESULTING TRUST – elements.
Legislation: Family Law Act 1975 ss 31(11), 79 and 106B
Federal Circuit and Family Court Act s 67
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 1.04
Cases cited: Bishop v Bishop (2003) 30 Fam LR 108
Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600
Chen v Chen (No 3) (2020) 63 Fam LR 448
Commonwealth of Australia v Verwayen (1990) 170 CLR 394
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523
Fencott v Muller (1983) 152 CLR 57
Gissing v Gissing [1971] AC 886
Giumelli v Giumelli (1999) 196 CLR 101
In the Marriage of Duffy (1977) 3 Fam LR 11, 211
In the Marriage of McKay (1984) 9 Fam LR 850
In the Marriage of Page (1980) 4 Fam LR 663
In the Marriage of Warby (2001) 28 Fam LR 443
In the Marriage of Whitaker (1980) 5 Fam LR 769
John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1
Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR
Karjala and Gallard [2020] FamCA 110
Khalif & Khalif [2020] FamCA 39
McNab v Graham [2017] VSCA 352
Re C and C and Another (Accrued Jurisdiction) (2001) 28 Fam LR 253
Re Wakim,; Ex parte McNally (1999) 198 CLR 511
Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261.
Stewart v White [2020] VSC 116
Vroon BV v Foster's Brewing Group Ltd [1994] 2 VR 32
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Dr I. C. F. Spry QC, Equitable Remedies (Law Book Company, 1990).
Division: Division 1 First Instance Number of paragraphs: 54 Date of hearing: 5 November 2021 Place: Melbourne Counsel for the Applicant: Not applicable Solicitor for the Applicant: Not applicable Counsel for the First Respondent: Not applicable Solicitor for the First Respondent: Not applicable Counsel for the Second Respondent: Mr D. Easteal Solicitor for the Second Respondent: Mirabellas Solicitors ORDERS
MLC 528 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS KIDDLE
ApplicantAND: MR DAHER
First Respondent
AND MR G DAHER
Second Respondent
ORDER MADE BY:
WILSON J
DATE OF ORDER:
15 NOVEMBER 2021
THE COURT ORDERS THAT:
1.The applicant’s statement of claim dated 12 August 2020 is struck out.
2.The first and second respondents’ cost thrown away are reserved.
3.The applicant has leave to file and serve an amended statement of claim by 4:00pm on 15 December 2021.
4.The further hearing of this proceeding is adjourned to 17 February 2022 at 9:30am for directions.
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 the pseudonyms Kiddle & Daher is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON JINTRODUCTION
Pursuant to my orders on 24 August 2021 the determination of a jurisdictional issue raised by the second respondent was fixed for hearing on 5 November 2021, which I heard. These are my reasons for determining that the applicant’s statement of claim must be struck out with a right to replead, the respondents’ costs thrown away being reserved.
SHORT FACTUAL RECITAL
When this proceeding was commenced, the applicant sought an order for spousal maintenance against the first respondent, although the second respondent was named as a party to the proceeding. The applicant did not identify the relief she sought against the second respondent. In her affidavit made 15 January 2020, the applicant asserted as follows –
(a)she met the first respondent in 2003 or 2004 and commended an intimate relationship with him;
(b)their relationship ended and in 2005, she travelled abroad returning to Australia in 2008 at which time she recommenced her relationship with the first respondent thereafter falling pregnant;
(c)the applicant and the first respondent’s first child was born in 2008;
(d)the applicant and the first respondent commenced to live together towards the end of 2009 or thereabouts at the home of the first respondent’s parents;
(e)the applicant fell pregnant to the first respondent in early 2010 but terminated the pregnancy, after which the first respondent told her to leave the property;
(f)in mid-2010 the applicant and first respondent reconciled;
(g)they moved to another property in the same suburb in 2011;
(h)their second child was born in late 2012;
(i)in 2016 the applicant and first respondent married in a civil ceremony;
(j)in December 2016 the applicant discovered that the first respondent was being unfaithful so she and the children moved into the home of the applicant’s mother;
(k)in 2017 the couple’s third child was born;
(l)in April or May 2017 the applicant moved back with the first respondent;
(m)the couple separated on a final basis in December 2017 and have not reconciled since; and
(n)parenting issues were finalised on 18 September 2018.
In the same affidavit the applicant asserted that she has an equitable interest in two parcels of real estate, namely –
(a)B Street, Suburb C; and
(b)D Street, Suburb F.
In relation to both of those parcels of land, the applicant acknowledges that the second respondent is the sole registered proprietor.
Pleadings were filed by all parties. It is utile to distil the essence of each party’s claims.
In her statement of claim the applicant asserted as against the second respondent an entitlement in equity in relation to D Street, Suburb F and Unit 1, B Street, Suburb C. The applicant asserted that the second respondent is currently the registered proprietor of units 1, 2 and 3, B Street, Suburb C. She also asserted that until its sale in January 2020 or thereabouts, the second respondent was the registered proprietor of D Street, Suburb F pursuant to an agreement made between the applicant, the first respondent and the second respondent in 2013. In the statement of claim the applicant described that agreement as “the D Street Agreement”. She did not give the date on which the agreement was said to have been made. However, she asserted that the agreement was partly oral and partly implied. To the extent that the agreement was oral, the applicant asserted that it was comprised of discussions between the parties “to the effect alleged”, yet she did not say when, where or between whom that conversation or those conversations occurred. Be that as it may, the applicant pleaded that pursuant to the agreement thereby constituted –
(a)she and the first respondent would pay the deposit on the property, meet all mortgage payments and outgoings referable to the property and each was at liberty to make improvements to the property without inference to the second respondent; and
(b)the second respondent would become the registered proprietor of the property and he would seek mortgage finance for the property;
(c)upon payment of all labilities due to the mortgage, the second respondent would transfer title to the property to the applicant and first respondent; and
(d)upon any sale of the property, the proceeds would be paid to the applicant and the first respondent.
Pausing there, the claim asserted to that point was said to be founded in one or more conversations between the applicant, the first respondent and the second respondent. During the appearance before me on 5 November 2021, each of the respondents denied the fact or substance of any such conversation as alleged in the applicant’s claim as cast in paragraph 8 of the statement of claim and each respondent contended that by reason of the lack of particulars, paragraph 8 of the statement of claim should be struck out. To my mind the respondents make a valid point in relation to the particulars subjoined to paragraph 8. To the extent that the agreement allegedly reached was verbal, the applicant is required to set out the details of each conversation on which she relies as constituting her version of the agreement. To the extent that the agreement allegedly reached was to be implied, the applicant is required to set out each act, fact, omission or circumstance by which she asserts that the conduct of the parties gives rise to the alleged agreement.
In Australian contract law, the establishment of the phenomenon of an agreement by conduct is not an everyday occurrence because the phenomenon of an agreement is customarily established by acceptance of an offer and by the provision of consideration. However, parties may drift into a contractual relationship, as was held by the Supreme Court of Victoria in Vroon BV v Foster's Brewing Group Ltd.[1] There, Ormiston J (as his Honour then was) held that courts do not usually lend their aid to the enforcement of an incomplete bargain, citing Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd.[2] Yet, as Ormiston J pointed out in Vroon, that a contract may be inferred from the acts and conduct of the parties as well as by the absence of words in circumstances where –
(a)the parties’ conduct, viewed in light of all the surrounding circumstances, shows the existence of a tacit understanding or agreement; and
(b)the conduct of the parties is capable of providing all the essential elements of an express contract.
[1] [1994] 2 VR 32.
[2] (1982) 149 CLR 600.
Ormiston J relied on the decision of the New South Wales Court of Appeal (Kirby P, Samuels and McHugh JJA) in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd[3] in reaching that holding.
[3] (1988) 14 NSWLR 523.
Whether the applicant can establish a factual basis in the circumstances of this case to bring herself within the ratio decidendi of Vroom and Empirnall remains to be seen. But it is not unarguable of her to so contend. A justiciable issue may well be enlivened in the facts set out in paragraph 8 of the applicant’s statement of claim.
Paragraphs 9 and 10 of the statement of claim recite the parties’ performance of the agreement alleged in paragraph 8.
Paragraph 11 contains an assertion that the home loan was approved and repayments were made by the applicant and the first respondent.
The applicant did not descend to the detail by pleading, whether by way of particulars or at all, how much, when and by whom the amounts asserted in paragraph 11 were paid. She will be required to do so.
In paragraph 12 of her statement of claim the applicant asserted that the agreement for which she contended is binding and that the applicant and the first respondent have a contractual right to the proceeds of sale. Both respondents denied the allegations in paragraph 12. Curiously, the applicant did not claim damages of breach of the agreement that is asserted between paragraphs 7 and 11 of the statement of claim. Instead she merely asserted the existence of rights she said inure to her. She did not assert a claim to specific performance, however. The particulars subjoined to paragraph 12 had no factual or legal connection to the substantive pleas in paragraph 12 and therefore added little, if anything, to that paragraph.
Paragraphs 13 to 15 introduced the allegation that were said to support an estoppel plea. Paragraph 13 was the genesis of the plea. It was as follows –
The Wife and the Husband have relied upon representation from Mr G Daher in reaching the D Street Agreement (representations).
That seemed to be intended to convey the concept that the second respondent made representations to the applicant and the first respondent, on which they relied “in reaching” the agreement alleged. The draftsperson of this pleading did not assert that the applicant and the first respondent relied on the representations in entering into the agreement. Instead, and for a reason presently unexplained, the applicant asserted that the representations formed the basis of “reaching” the agreement. Conventionally, in pleading allegations supporting a plea of estoppel the party who sets up the estoppel pleads that he or she acted in reliance upon the representations (and not otherwise) in doing something or in refraining from doing something. In paragraph 13 no such plea is asserted. Instead the pleader asserts that the applicant and the first respondent “relied upon representations in reaching the D Street Agreement.”
Several things must be said of paragraph 13. First, no details of the so-called representations are given, especially who said what to whom, when, where and in what circumstances. Second, and peculiarly, the applicant asserts that she and the first respondent relied on the alleged representations. That is peculiar because the first respondent’s reliance upon the representations would ordinarily enable him to set up the estoppel against his father yet in this case the first respondent denies the existence of the representations for which the applicant contended. Third, a difference exists between terms of an agreement on the one hand and pre-contractual representations that induce a party to enter into the agreement on the other hand. Usually, the pre-contractual representations do not become terms of the contract in which case their breach becomes actionable extrinsically to the contract for the simple reason that the terms, once breached, can be the subject of the breach of contract claim whereas pre-contractual representations, by definition, are extraneous to the contract and are actionable only on some legal basis that addresses representations extraneous to the agreement such as a statutory cause of action for misleading and deceptive conduct or the equitable doctrine of estoppel by representation as espoused by the High court of Australia in Waltons Stores (Interstate) Ltd v Maher.[4]
[4] (1988) 164 CLR 387.
Here, the applicant’s failure to define precisely the representations on which she relies leads the reader of the statement of claim to speculate about the detail and content of those representations. The word “representations” appears as a defined term in paragraph 13 of the statement of claim. Yet who said what to whom is unstated. The provision of paragraphs 6 to 13 of the statement of claim relate to what the applicant describes as “the D Street Agreement” especially its terms. Nowhere is there a reference to or descriptions of “representations” in paragraphs 6 to 13. Paragraph 13 introduced the word “representations” for the first time but in the context of reliance upon them, yet not in the context of being induced by them to do something or to refrain from doing something. Nor does paragraph 13 contain a plea to the effect that, relevantly, the wife was induced by, and that she relied solely on, the representations to do something.
To my mind, by reason of the applicant failing to plead precisely what were the representations on which she relies, the applicant has not set up the foundation for her demonstration of equitable estoppel in accordance with the observations of the High Court in Waltons Stores (Interstate) Ltd v Maher[5].
[5] (1988) 164 CLR 387.
Paragraph 13 is defective.
Paragraph 14 is likewise defective. In paragraph 14 the applicant asserts that both the applicant and the first respondent suffered detriment in reliance upon the representations in the three ways set out in paragraphs 14(a) to (c). Those were “attending to home loan repayments”[6], “attending to maintenance of the property”[7] and “undertaking improvements to the property.[8]
[6] She does not say “paying home loan instalments” nor does she give particulars of the dates of payment, the sums paid and by whom if not jointly.
[7] She does not give details of the acts of maintenance involved, when and by whom.
[8] She does not describe the acts involved in the improvements she asserts, the dates of the activities or the person actually undertaking the improvements.”
In Waltons Stores (Interstate) Ltd v Maher Brennan J set out six matters a party must demonstrate in establishing a claim by way of equitable estoppel. Those are as follows –
In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff’s action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.
Conventionally, those matters are the subject of any pleading in relation to an equitable estoppel. The need for such proof was also explained by Brennan J in the following terms –
The unconscionable conduct which is the object of equity to prevent is the failure of a party, who has induced the adoption of the assumption or expectation and who knew or intended that it would be relied on, to fulfil the assumption or expectation or otherwise to avoid the detriment which that failure would occasion. The object of the equity is not to compel the party bound to fulfil the assumption or expectation; it is to avoid the detriment which, if the assumption or expectation goes unfulfilled, will be suffered by the party who has been induced to act or to abstain from acting thereon.
A cursory examination of paragraph 14 of the statement of claim reveals that the elements of Walton Stores have not been traversed. They must be if the estoppel plea is to have any legitimacy still less merit. That said, in paragraph 14 the applicant purports to set up the three activities there mentioned as constituent elements of detriment yet concurrently, according to paragraph 8 of the statement of claim, those same three activities were promissory terms of the agreement itself.[9] In an equitable estoppel claim, it is unconventional for the detriment said to have been occasioned by the representation to concurrently form a term of the contract said to be the subject of the inducement.
[9] Paragraph 14 (a) corresponded with paragraph 9(b), paragraph 14(b) corresponded with paragraph 9(d)(ii) and paragraph 14(c) correspondence with paragraph 14(d)(iii).
Paragraph 14 is not the subject of particulars even if, as a matter of law, the acts of detriment alleged can be concurrently terms of the agreement.
Paragraph 14 requires recasting. In my view, it is not properly pleaded.
Paragraph 15 is expressed to be in the alternative to the contractual claim recorded in paragraph 12. In paragraph 15, the applicant contended that the second respondent is estopped from the three things described in paragraphs 15(a), (b) and (c). In the first, the applicant asserted in paragraph 15(a) that the second respondent was estopped from denying the existence of a contract between the applicant, the first and the second respondents. A plea in near identical terms was considered by Macaulay J of the Supreme Court of Victoria in Stewart v White[10] His Honour held as follows, in reliance upon Commonwealth of Australia v Verwayen [11] and Giumelli v Giumelli[12] -
The importance of these passages to this case is to highlight that an equity created by an estoppel against denying the existence of a contract does not result in bringing the contract back into existence. Rather, it equips the court with the means of fashioning a remedy to avoid the detriment occasioned by the reliance on the assumption that has been unconscionably induced. The measure or extent of the remedy is only that which is necessary to prevent the detriment resulting from the unconscionable conduct. That detriment is not remedied by automatically granting the relief which the enforcement of the contractual promise would otherwise have delivered. Whilst doing so might, in proven circumstances, be the appropriate remedy, that would only be because that remedy equates to the minimum required, in all the circumstances, to prevent the detriment actually suffered by the reliance and to do equity.
[10] [2020] VSC 116.
[11] (1990) 170 CLR 394.
[12] (1999) 196 CLR 101.
From that holding it is apparent that the equity created by an estoppel against denying the existence of a contract does not result in bringing the contract back into existence. Further, any such equity enables the court to fashion a remedy to avoid the detriment caused by the reliance on the assumption that has been unconscionably induced. Further that detriment is not remedied by automatically granting the relief which the enforcement of the contractual promise would otherwise have delivered.
It will be immediately apparent that where contractual terms are capable of construction and enforcement, the party seeking to rely on those terms will ordinarily look to those terms as the first step in addressing a remedy in the circumstances of the case. To the extent that the applicant for relief seeks to pursue relief pursuant to the equitable doctrine of estoppel, then the six-step approach adumbrated by Brennan J in Walter Stores must be enlivened. If established, the equity thereby enlivened enables the court to fashion a remedy to avoid the detriment occasioned by the reliance on the assumption that has been unconscionably induced. In the circumstances of this case, whether by the fashioning of some remedy, the prevention of the second respondent’s denial of the existence of the contract is the upshot, may well be one outcome open to the court.
The second respondent not only denied the allegations in paragraph 15 but he challenged the content and legitimacy of the pleaded assertions. Having regard to the observations in Walton Stores about matters to be proved in a case involving equitable estoppel, the proper pleading of those matters that must be proved is an essential prerequisite. Paragraph 15 in its current form is deficient in that regard. The particulars do not support the contentions in paragraph 15(a) – (c) so they too must be recast.
The heading above paragraph 16 is expressed as follows –
D Street – Constructive Trust and Resulting Trust
Paragraph 16 contains assertions that the second respondent holds D Street property on trust for the applicant and the first respondent and that the second respondent currently holds the proceeds of sale of that property on trust. In the particulars subjoined to paragraph 16 the applicant merely referred to and repeated the “matters alleged in paragraphs 6 to 11.” Those paragraphs were in no way supportive of pleas concerning the existence of the constructive trust or a resulting trust.
Paragraph 16 is defective in that it does not contain assertions of fact necessary to establish the existence of either a constructive trust or a resulting trust as the heading of the paragraph indicates.
The constituent elements of a constructive trust are fundamentally different from a resulting trust. In Chen v Chen (No 3)[13] I examined the elements of a resulting trust that must be pleaded and proved. So far as the constructive trust is concerned, various Australian statements since the House of Lords decision in Gissing v Gissing[14] have emphasised that the imposition of a constructive trust is to be circumscribed by minimum equity requirements.[15]
[13] (2020) 63 FamLR 448.
[14] [1971] AC 886.
[15] Giumelli v Giumelli (1999) 196 CLR 101, John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1, McNab v Graham [2017] VSCA 352 and Khalif & Khalif [2020] FamCA 39.
In the specific context of family law litigation, as was held in Khalif & Khalif, even before getting to a determination of a constructive trust, the trial judge must first explore whether other orders may be made that are capable of doing full justice between the parties.
In my view, the current state of paragraph 16 is defective. The characterisation of the trust asserted is not revealed. It is plain that an express trust is not asserted. Based on the heading to paragraph 16, it might fairly be thought that the trust referred to in paragraph 16 was either a constructive trust or a resulting trust. They are very different animals. The respondent should not be forced to guess at which. The applicant must select which trust she pleads and she must plead out the existence of that form of trust in proper form. As the statement of claim presently stands, the applicant has failed to do so. She must properly articulate her trust claim if she wishes to rely on it in this litigation.
THE B STREET AGREEMENT
In paragraph 17 of her statement of claim the applicant contended that the second respondent was the sole registered proprietor of the land situated at and known as B Street, Suburb C, when the applicant and the first respondent commenced their relationship. She contended that prior to late 2011 the land known as B Street, Suburb C was described in only one certificate of title and that a single storey swelling was constructed on the land. In paragraph 19 of the statement of claim, the applicant asserted that in late 2011 the applicant, the first respondent and the second respondent agreed to develop the land at B Street, Suburb C. No particulars of that agreement were provided, especially when the alleged agreement was made, the form the alleged agreement took (whether express or implied, written or oral), who the participants in the verbal component of the agreement were, whether and if so the form any written component of the agreement took and if implied, on what acts, facts, matters, circumstances or omissions any implication allegedly arose. Yet in paragraph 20 of the statement of claim the applicant contended that the agreement referred to in paragraph 19 was partly oral and partly implied. The deficiencies set out immediately above nevertheless applied.
Both respondents denied paragraphs 19 and 20 of the statement of claim, contending that the assertions should be struck out on a variety of grounds. There was merit in the respondents’ contentions.
The assertions in paragraphs 19 and 20 were curious in that in both, no suggestion of my description was made to the effect that the applicant provided any consideration for the formation of the contract alleged. It was not said that the agreement was by deed.
Stripped to its essence, in paragraph 20 the applicant asserted that B Street Agreement contained terms in relation to the development of the land. Specifically, the applicant pleaded that the applicant and the first respondent would occupy the property at D Street Suburb F while obtaining plans, permits and architectural drawings for the construction of those units at B Street property while permitting the second respondent to live rent-free at D Street property during the currency of construction.
The applicant further pleaded that upon construction and completion of the three units, the applicant and the first respondent would receive the legal and beneficial interest in one of the units while the second respondent would receive the legal and beneficial interest in the other two units.
The first respondent denied the allegations in paragraph 20 of the statement of claim and pleaded that his role in the events described in paragraph 20 was limited to acting as a translator for the second respondent. In a three-part denial of the facts of paragraph 20, the second respondent contended that the allegations in paragraph 20 should be struck out.
In paragraph 21 of the statement of claim the applicant asserted that the applicant and the first respondent obtained permits and drawings at their expense and permitted the second respondent to live at D Street property while the units were being constructed.
In paragraph 22 the applicant asserted that “pursuant B Street Agreement”, the second “and possibly the first respondent constructed or caused to be constructed” units on B Street property.
In conventional pleadings in a breach of contract claim, once the pleader pleads the existence of the contract and its terms, ordinarily the pleader pleads the breach of contract giving rise to the claim being made in the litigation. Rather than doing that, in paragraph 23 the applicant asserted that B Street Agreement is binding and the applicant and the first respondent are entitled to unit 1. She does not plead an entitlement to specific performance of the terms of B Street Agreement as a legal basis for her assertion of an entitlement to unit 1. In my view, that is a defect in paragraph 23. Had she asserted a plea of specific performance, a complex array of considerations concerning her entitlement to that remedy are thereby enlivened.[16] It is likely that on a proper construction of her statement of claim, the plea for declaratory relief against the second respondent in paragraph C of her prayer for relief is the real relief she seeks in relation to B Street property. Whether that arises at common law or in equity is unlikely to be of any real moment to the applicant.
[16] Dr I. C. F. Spry QC, Equitable Remedies (Law Book Company, 1990).
In paragraph 24 of her statement of claim the applicant makes the same assertions in respect of an estoppel in relation to the D Street property. The comments set out above in respect of the estoppel plea referable to the D Street property apply with equal force in relation to the estoppel plea in respect of B Street property. Having regard to the fact that paragraphs 25 and 26 largely replicate the pleas in paragraphs 13, 14 and 15, the same observations above apply.
Those allegations in paragraphs 25 and 26 are likewise defective.
Under the heading “Constructive Trust and Resulting Trust”, in paragraph 27 of her statement of claim the applicant makes the bald assertion that the second respondent holds unit 1 of B Street property on trust for the applicant and first respondent. A similar allegation was made against the second respondent in respect of D Street property. No details of the nature of the trust asserted were given. The observations set out above in relation to the constructive trust and in relation to the resulting trust apply to the applicant’s assertions in respect of a trust concerning unit 1 that are pleaded against the second respondent.
Both respondents denied the existence of any trust in favour of the applicant concerning unit 1.
STRIKING OUT THE STATEMENT OF CLAIM
The above observations should suffice to demonstrate that the statement of claim in its present form is defective. The respondents should not be vexed by allegations in the statement of claim in its current form. The statement of claim in its current form does not promote the overarching purpose set out in s 67 of the Federal Circuit and Family Court Act nor rule 1.04 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. In the exercise of powers that address the advancement of litigation in this court in a manner consistent with the overarching obligations I make an order striking out the statement of claim.
DISMISSING THE PROCEEDING IN ITS ENTIRETY
In very helpful submissions advanced by Mr Easteal of counsel dated 26 October 2021, he contended that this proceeding should be dismissed in its entirety. In support of that application, he relied in particular on the following –
(a)no claim is made under s 79 of the Family Law Act for the alteration of property interests as between the applicant and the first respondent;
(b)the applicant seeks relief in the statement of claim against the second respondent who is not a party to the marriage between the applicant and the first respondent with the consequence that no federal justiciable controversy is alleged;
(c)this is not a case of the invocation of the court’s accrued jurisdiction[17] because the court’s statutory jurisdiction arising from s 79 has not been regularly invoked;
(d)the claim being advanced against the second respondent is in reality a claim at common law or in equity that should be pursued in a state court and not in the Federal Circuit and Family Court of Australia;
(e)the statement of claim does not contain a claim in respect of “property” as defined in s 31(1) of the Family Law Act because the claim presently advanced against the second respondent is not a claim in respect of property “in relation to parties to the marriage”;[18]
(f)the claim in relation to s 106B of the Family Law Act cannot stand in isolation and it must be ancillary to a proceeding in relation to a “matrimonial cause” as defined;[19]
(g)in order for a non-federal controversy to be determined by the court the justiciable controversy must either be constituted by or include a claim arising under a federal law;[20]
(h)even if it could be said (which here it cannot) that the accrued jurisdiction of the court is invoked, the court nevertheless retains a discretion as to whether to exercise that jurisdiction; [21] and
(i)the first duty of the court to determine the existence of its jurisdiction.[22]
[17] For example, in cases such as In the Marriage of Warby (2001) 28 Fam LR 443, Re C and C and Another (Accrued Jurisdiction) (2001) 28 Fam LR 253; Re Wakim,; Ex parte McNally (1999) 198 CLR 511 and Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261.
[18] Counsel relied on In the Marriage of Duffy (1977) 3 Fam LR 11, 211.
[19] In the Marriage of Whitaker (1980) 5 Fam LR 769 and In the Marriage of Page (1980) 4 Fam LR 663.
[20] Fencott v Muller (1983) 152 CLR 57 and In the Marriage of McKay (1984) 9 Fam LR 850.
[21] Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564 and Bishop v Bishop (2003) 30 Fam LR 108
[22] Karjala and Gallard [2020] FamCA 110.
I agree entirely with the whole of Mr Easteal’s submissions as synthesised above.
The question then becomes whether to dismiss this proceeding or grant the applicant leave to replead in the expectation that she properly and regularly invokes s 79 as a primary issue to which she appends such other relief against the second respondent as she may be advised. I take the view that while Mr Easteal’s submissions impeccably identify the enormous obstacles in the applicant’s case against the second respondent, it would work an undue hardship against the applicant to stop in its tracks her litigation against both respondents right now. She should have an opportunity to replead her case. But she should have a confined period within which to do so. Costs consequences may also follow in relation to the statement of claim that I now strike out.
ORDERS
I order as follows –
(a)the applicant’s statement of claim dated 12 August 2020 is struck out;
(b)the first and second respondents’ cost throw away are reserved;
(c)the applicant has leave to file and serve an amended statement of claim by 4:00pm on 15 December 2021; and
(d)the further hearing of this proceeding is adjourned to 17 February 2022 at 10:00am for directions.
I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 15 November 2021
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