Leblanc & Curry
[2023] FedCFamC2F 1230
•22 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Leblanc & Curry [2023] FedCFamC2F 1230
File number(s): DUC 14 of 2023 Judgment of: JUDGE NEWBRUN Date of judgment: 22 September 2023 Catchwords: FAMILY LAW – PROPERTY – Joinder of third parties Legislation: Family Law Act 1975 (Cth) ss 75, 79
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 3.03
Division: Division 2 Family Law Number of paragraphs: 23 Date of hearing: 14 September 2023 Place: Parramatta Counsel for the Applicant: Mr Dalzell Solicitor for the Applicant: Peacockes Solicitors Solicitor for the First Respondent: Ms Shirlaw Counsel for the Second and Third Respondents: Mr Scarlett Solicitor for the Second and Third Respondents: Long Saad Woodbridge Lawyers ORDERS
DUC 14 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS LEBLANC
Applicant
AND: MR CURRY
First Respondent
MR B CURRY
Second Respondent
MS CURRY
Third Respondent
ORDER MADE BY:
JUDGE NEWBRUN
DATE OF ORDER:
22 SEPTEMBER 2023
THE COURT ORDERS THAT:
1.Pursuant to rule 3.03 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, Mr B Curry and Ms Curry be added as the Second and Third Respondents to the within property proceedings.
2.Within seven days of the date of these Orders, the Applicant wife, unless she has already done so, serve upon the Second and Third Respondents:
(a)Her Amended Initiating Application filed 30 March 2023;
(b)Her Financial Statements filed 6 April 2023 and 31 August 2023;
(c)Her affidavits filed 17 January 2023, 13 June 2023 and 31 August 2023.
3.Within seven days of the date of these Orders, the Respondent husband, unless he has already done so, serve upon the Second and Third Respondents:
(a)His Amended Response filed 13 June 2023;
(b)His Financial Statement filed 13 June 2023 and 30 August 2023;
(c)His affidavits filed 13 June 2023 and 30 August 2023.
AND THE COURT NOTES THAT:
A.This matter is listed on 29 November 2023 at 9.30 am before Senior Judicial Registrar Friend for mention.
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 has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE NEWBRUN:
INTRODUCTION
This is the determination of an application by the de facto wife, in these property proceedings against the de facto husband, to join as parties to the property proceedings the parents of the husband. The husband and his parents oppose this application.
It is common ground that the de facto relationship of the husband and wife spanned the period from about 2013 to about 2021.
In about mid-2017 the husband entered into a partnership agreement with his parents relating to farming and grazing activities. Under point 9 of the Schedule to the agreement, headed, “Shares of capital and profits: (Clause 7)” it refers to the husband and his parents as having a 1/3 interest each.
MATERIAL RELIED UPON
The wife relies upon her Case Outline filed 11 September 2023 and the documents relied upon under Part B of that document.
The husband relies upon his Case Outline filed 13 September 2023 and the documents relied upon under Part B of that document.
The husband’s parents rely upon the affidavits of Ms Curry filed 21 August 2023 and 8 September 2023; the affidavits of Mr B Curry filed 21 August 2023 and 8 September 2023; and the affidavit of Mr Curry filed 30 August 2023. On behalf of the husband’s parents it was submitted that the wife’s Case Outline accurately set out the legal and factual issues relevant to the determination of the wife’s joinder application.
LEGAL PRINCIPLES
The above application is brought by the wife pursuant to rule 3.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) which provides:
3.01 Necessary parties
A person whose rights may be directly affected by an issue in a proceeding, and whose participation as a party is necessary for the court to determine all issues in dispute in the proceeding, must be included as a party to the proceeding.
(Court’s emphasis)
DISCUSSION
This joinder application was heard by the Court on Thursday 14 September 2023 and oral submissions were made. There was no cross-examination of any party nor of the proposed second and third respondents. Accordingly, it is appropriate for the applicant wife’s allegations in her material relied upon to be taken at their highest where in conflict with the allegations of the husband or the proposed second and third respondents.
In the view of the Court, the applicant wife has established that the husband’s parents have rights that may be directly affected by an issue in the proceedings.
Firstly, the husband and his father are tenants in common in equal shares in relation to two items of real estate that are utilised by the partnership (it is apparent from the affidavit evidence of the husband’s mother, supported by the husband’s father, together with the financial statements of the partnership in evidence, that these two items of real estate are utilised by the partnership). Prior to the formation of the partnership the husband’s father was tenants-in-common in equal shares with his brother Mr D in relation to these two items of real estate. By reference to the 2022 financial statements of the partnership, the value of the husband’s legal interest in this property is some $504,680 (and see paragraph 29 of the husband’s mother’s affidavit sworn 18 August 2023).
An issue in the proceedings may be whether or not the husband, by reference to the wife’s found relevant contributions under s 79 of the Family Law Act 1975 (Cth) (adjusted by any found relevant needs of the wife pursuant to s 75(2) of the said Act), should by way of Court order:
(a)Transfer his legal interest in either or both of the above two items of real estate to the wife, or alternatively,
(b)Sell his legal interest in either or both of the above two items of real estate on the open market, with the net proceeds of sale to be paid, in whole or in part, to the wife.
(As to possible relevant contributions and needs of the wife, the Court refers to her affidavits relied upon in which she alleges specific contributions and inferentially refers to indirect contributions to property through her care of the parties’ children).
Were the Court in the property proceedings ultimately to consider making an Order in relation to the husband’s legal interest in these two items of real estate, as referred to in (a) and (b) above, then the rights of the husband’s father may be directly affected.
For example, if the Court was to consider ordering that the husband’s legal interest in either or both of these two items of real estate be transferred to the wife, then the husband’s father may wish to contend that that would have the result that the wife would become a tenant in common in equal shares with him in respect to either or both of these two items of real estate and which may well result in prejudice to him; for example, the wife may not wish to utilise her legal interest in either or both of these two items of real estate in farming and/or grazing activities. A similar eventuality may arise if the husband’s legal interests in either or both of these two items of real estate were purchased by a third party.
Were the Court in the property proceedings ultimately to consider making an Order in relation to the husband’s legal interest in either or both of these two items of real estate, the husband’s father may wish to contend that by reason of the husband allegedly having made no contribution towards the acquisition of his legal interest in these two items of real estate, that there should be found to exist an equitable interest in his favour overriding the husband’s legal interests.
By reference to the above discussions relating to the wife possibly acquiring (or a third party so acquiring) the husband’s legal interest in either or both of the two items of real estate, it can be seen that the husband’s mother’s rights to have either or both of the two items of real estate fully utilised by the partnership may be similarly adversely affected.
Further, as submitted by the wife, the above two items of real estate are not the only property utilised by the partnership for their farming and grazing activities. For example, by reference to the partnership’s financial statements for the year ended 30 June 2022, it is apparent that the partnership owns and/or utilises, inter alia, valuable plant and equipment, motor vehicles, livestock, and cash and cash equivalents. Were the Court in the property proceedings ultimately to make an Order in favour of the wife in relation to the husband’s possible legal or equitable interest in this property, then the rights of the husband’s father and mother may be affected because the partnership’s activities may be adversely affected if such property was diminished to some extent through such Court Order.
An issue in the property proceedings between the parties is the valuation of the husband’s interest in the partnership. The husband and his parents make allegations as to the current extent of the husband’s financial interest in the partnership which they contend is financially in the negative. These allegations include the husband’s lack of financial contribution to the two items of real estate and other property utilised by the partnership. These allegations of a financial nature are made by reference to, inter alia, the financial statements of the partnership in evidence. The wife is entitled to examine and test these allegations objectively through an independent valuer, if not a forensic accountant, and the evidence indicates that she wishes to do so.
The wife, if the husband’s parents are not made parties to the proceedings, would be hampered in obtaining such valuation because, for example, the husband’s parents may refuse the wife and her engaged valuer access to all relevant property utilised by the partnership, including real estate. As submitted by the wife, it is possible, for example, that the husband may be in breach of his partnership obligations to his fellow partners if he alone was to grant access to the wife and her valuer to real estate utilised by the partnership for farming and grazing activities without the consent of his partners. If the husband’s parents are joined to the proceedings, then this difficulty falls away. This example (again, were the husband’s parents to refuse the wife and her engaged valuer access to all relevant property utilised by the partnership) bears out the proposition that the participation of the husband’s parents as parties to the property proceedings is necessary for the Court to determine an issue in dispute in the proceedings.
In passing, should the husband’s parents be joined to the proceedings, there is a significantly enhanced prospect that any valuation of the husband’s interest in the partnership, with the input of not only the husband but his parents, will lead to a more accurate valuation.
It was submitted on behalf of the husband’s parents, supported by the husband, that an alternative to the wife’s proposed joinder of the husband’s parents was simply that the wife issue subpoenas to produce documents to the husband and the husband’s parents for production of relevant books and records of the partnership, and subpoenas to produce documents to the partnership’s accountant and bank. It was submitted that the wife, following production of such documents to the Court, would be able to, inter alia, engage a relevant valuer to value the husband’s interest in the partnership.
However, as submitted by the wife, she would still be potentially hampered in obtaining a relevant valuation of the real estate utilised by the partnership if the husband’s parents object to relevant inspections of the property of the partnership including real estate. Further, a valuation of the husband’s interest in the partnership obtained at the instance of the wife alone would not have the input of the husband and his parents and may ultimately be challenged by the husband with his own alternative valuation. Moreover, as submitted and asserted by the wife, she cannot afford the significant cost of engaging a valuer herself to value the husband’s interest in the partnership. There is force in the submission of the wife that by joining the husband’s parents to the proceedings, a Court ordered joint valuation of the husband’s interest in the partnership, having the input of parties and the husband’s parents, would be more likely to resolve this issue satisfactorily in the proceedings.
Taking into account the above discussions, the wife having persuaded the Court that the relevant elements of rule 3.01 have been satisfied by her, the Court will order that the husband’s parents be joined to the proceedings. The Court so orders.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Newbrun. Associate:
Dated: 22 September 2023
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