Lin v Yew
[2020] FamCA 1102
FAMILY COURT OF AUSTRALIA
| LIN & YEW | [2020] FamCA 1102 |
| FAMILY LAW – ANTI-SUIT INJUNCTION – proceeding on foot in Supreme Court of Victoria that wife wishes to stop – application refused. FAMILY LAW – LEAVE TO BRING PROCEEDING OUT OF TIME – s 44(3) – 32 year lapse of time from order nisi to leave application – hardship will be suffered unless leave granted – leave granted. FAMILY LAW – STAY APPLICATION – husband seeking order staying this proceeding upon leave under s 44(3) being granted – litigation in Supreme Court of Victoria has been on foot for over 4 years – at an advanced stage – different issues involved – stay ordered. |
| Corporations Act 2001 (Cth), s 1337H(2) Supreme Court (General Civil Procedure) Rules 2005 (Vic), ord 47 |
| Applicant A26 of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1050 Dr Andrew S Bell & Justin Gleeson, The Anti-suit Injunction (1997) 71 Australian Law Journal 955 |
| APPLICANT: | Ms Lin |
| RESPONDENT: | Mr Yew |
| THIRD PARTY: | B Pty Ltd |
| PROPOSED INTERVENOR: | Mr J |
| FILE NUMBER: | MLC | 3498 | of | 2014 |
| DATE DELIVERED: | 22 December 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Wilson J |
| HEARING DATE: | 9 November 2020 |
| DATE OF LAST SUBMISSION: | 17 December 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms M. Vohra SC with Mr P. Marchetti |
| SOLICITOR FOR THE APPLICANT: | Belleli King And Associates |
| COUNSEL FOR THE RESPONDENT: | Mr I. D. Martindale QC with Ms A. Parker |
| SOLICITOR FOR THE RESPONDENT: | Willocks Lawyers |
| COUNSEL FOR THE THIRD PARTY: | Not applicable |
| SOLICITOR FOR THE THIRD PARTY: | Aitken Partners Pty Ltd |
| COUNSEL FOR THE PROPOSED INTERVENOR: | Mr T. Hutchings |
| SOLICITOR FOR THE PROPOSED INTERVENOR: | Robinson Gill Lawyers |
Orders
Pursuant to s 44(3) of the Family Law Act I grant the wife an extension of time until 22 October 2019 by which she has to commence this proceeding.
Pursuant to s 44(3) of the Family Law Act I grant leave to the wife to commence an application for orders under s 79 of the Family Law Act.
I grant Mr J leave to intervene in this proceeding pursuant to paragraph 1 of his application in a case dated 5 November 2020.
I dismiss the wife’s anti-suit injunction application.
I grant the husband’s stay application staying this litigation pending the hearing and determination of Supreme Court proceeding SCI … or until that proceeding is otherwise resolved by agreement.
The further conduct of this proceeding is referred to the docketed registrar.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Lin & Yew has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 3498 of 2014
| Ms Lin |
Applicant
And
| Mr Yew |
Respondent
And
| B Pty Ltd |
Third Party
And
| Mr J |
Proposed Intervenor
REASONS FOR JUDGMENT
Introduction
On 9 November 2020, while sitting in the Judicial Duty List I heard five applications in this and related litigation. They were –
a)the wife’s application under s 44(3) of the Family Law Act to commence a proceeding under s 79 of the Act against the respondent;
b)the wife’s application for an anti-suit injunction restraining the husband from continuing with proceeding SCI … in the Supreme Court of Victoria;
c)the husband’s application to dismiss the wife’s application for leave under s 44(3);
d)the husband’s application for orders staying this proceeding; and
e)the proposed intervenor’s application for leave to intervene.
The wife and the husband were each represented by silk and juniors. Each prepared compendious written submissions that I found particularly useful. That enabled me to focus in particular upon the verbal addresses on behalf of all parties. The matters set out below representing the factual matrix between the parties have been extracted largely from the summaries distilled by the parties in their written submissions (including addendum submissions) as well as from the parties’ addresses on 9 November 2020.
Synopsis
For the reasons that follow, in my judgment –
a)pursuant to s 44(3) of the Family Law Act I grant the wife an extension of time until 22 October 2019 by which she has to commence this proceeding;
b)pursuant to s 44(3) of the Family Law Act I grant leave to the wife to commence an application for orders under s 79 of the Family Law Act;
c)Mr J has leave to intervene in this proceeding;
d)I dismiss the wife’s anti-suit injunction application; and
e)I grant the husband’s stay application staying this litigation pending the hearing and determination of Supreme Court proceeding SCI … or until that proceeding is otherwise resolved by agreement.
Relevant factual background
The wife’s version
Expressed most simply, the wife’s position on these applications may be condensed in the manner set out below. It was –
a)the husband and wife married in 1966, they separated in 1983 and they divorced in 1988;
b)the husband remarried Ms G who is his case guardian, the husband now suffering from dementia;
c)the husband and the applicant in this proceeding married in Country C where they lived until 1983 then they arrived in Australia with six children ranging in age from 18 to four years of age;
d)within a week of arriving in Australia the husband returned to Country C never to return to Australia to live;
e)the wife raised the children of the marriage by herself;
f)the husband and his brother, one Mr K, established a trust called the B Trust each contributing a corpus of $350,000 or thereabouts;
g)the husband and his brother acquired parcels of real property in Suburb M and elsewhere in the eastern suburbs of Melbourne;
h)the husband told the wife that the trust established by the husband and his brother would be hers;
i)the husband and Mr K fell out in their business together in 1984 at which time Mr K renounced his interest in the family trust;
j)in 1984 the applicant became a director of the trustee of the trust upon Mr K ceasing to be a director;
k)in 1987 the husband executed a series of deeds pursuant to which he transferred his shareholding in B Pty Ltd to the applicant’s and respondent’s eldest daughter Ms N at which time the husband and Mr K ceased any involvement in B Pty Ltd and the trust of which that company is trustee;[1]
[1] A solicitor, Mr L, prepared all relevant documentation, according to the wife.
l)on 19 October 1988 the wife’s application for a decree nisi for divorce was granted;
m)in late 1988 Mr L, the solicitor, provided written advice to the wife to the effect that he doubted the benefit to her of commencing a property application having regard to the fact that she had all Australian assets and that she controlled the family trust;
n)in late 1988 the husband visited Australia and introduced her to an accountant by the name of Mr O to whom the husband said he (the husband) had transferred control of the trust to the wife;
o)in 1989 the husband remarried a woman named Ms G (who Ms Vohra SC called “Ms G”);
p)in 2013 the parties’ eldest son, Mr P and the wife had a substantial falling out;
q)on 23 April 2014 the husband appointed Mr P as the husband’s attorney under power;
r)on 24 April 2014 the husband commenced a proceeding in this court for orders under s 79 of the Family Law Act, including seeking leave to proceed out of time, for orders reinstating him as a director of and shareholder in B Pty Ltd and for orders for the division of half of the trust assets to him;
s)on 27 August 2015 the husband was diagnosed with dementia or senile dementia;
t)on 28 August 2015 Mr P filed an application in a case seeking orders for his appointment as the husband’s litigation guardian in the s 79 proceeding;
u)on 7 September 2015 the husband made and filed an affidavit in which he deposed to not being in Australia in 1988 with the consequence that he was not properly served with the divorce application and that he was not in Australia in 1987 with the further consequence (so he asserted) that he did not sign the deed of arrangement on 15 June 1987;
v)in that affidavit the husband accused the wife of forging his signature;
w)on 21 October 2015 orders were made in this court discontinuing the husband’s s 79 application and for indemnity costs to be paid to the wife by the husband in the sum of $59,797.84;
x)on 6 November 2015 Johns J ordered the appropriate officer of this court to send to the Commonwealth Director of Public Prosecutions various documents to enable consideration to be given to prosecuting the husband for giving false evidence;
y)on 22 March 2016 Mr P commenced a proceeding in the Supreme Court of Victoria in which the wife was named as the first defendant and B Pty Ltd was named as second defendant;[2]
z)between 2016 and 2019 the litigation in the Supreme Court of Victoria was fought; and
aa)on 2 October 2019 the husband and Ms G applied to become plaintiffs in the Supreme Court litigation.
[2] It was arguable that when that litigation was commenced the statement of claim did not disclose a cause of action and no relief was claimed. A further amended statement of claim was filed on 30 October 2020.
In October 2019 McDonald J in the Supreme Court of Victoria declared that the trust failed for uncertainty. To the further amended statement of claim, the plaintiffs, some of whom were infants, attached a trial plan document. It was as follows –
Trial plan for proceeding SCI … Yew v Lin
Contentious matters are those that are controversial or turn on a credit, or both. They are:
1.whether any of the Husband, Ms G, Mr K or Mr P are precluded from making a contribution claim because of the alleged property agreement;
2. the date of loss of the trust deed;
3. the contributions of:
(a) Mr Yew and Mr K of the $700,000;
(b) Mr Yew and/or Ms G, or Ms Lin of the $570,000;
(c) Mr Q and Mr J of the $544,858.51 Country H money;
(d)Mr P as to a one third share of Mr Q and Mr J’s contribution (if any).
Matters that need to be decided in the first phase of the trial out of practical necessity rather than because they are contentious, are:
4.the Wife’s limitation plea and whether she is guilty of conduct that precludes the plea being relied on, affecting how far back any account should be carried, and equitable defences;
5.whether the Wife is liable to restore property to the Trustee, such as the Suburb S property, or is accountable for payments or distributions from the Trust to them by the Trustee such as superannuation contributions and directors’ fees, or for receipts that ought to have been received by the Trustee, such as rent;
6.determination of any matters of fact relevant to uncontentious contribution claims where a party is put to proof;
7.what assets not presently held by or in the possession of the Trustee are or should be treated as assets of the resulting trust, such as the Suburb S property;
8.whether the court should appoint an expert to take an account of the assets that are to be distributed to the successful claimants, refer the matter to an associate justice or proceed in some other manner; and
9.the correct method of calculating the entitlement of contributors to the asset pool having regard to the timing of their respective contributions and the change in the value of the asset pool for reasons other than the contributions (e.g. organic growth).
Orders will be made after the first phase of the trial determining whether it is necessary or not to have a second phase trial and if not, dismissing the proceeding. If there is to be a second phase of the trial, orders will be made directing further discovery (assuming discovery has been limited to disclosure relevant to the first phase of the trial) for the purpose of the second phase of the trial, the taking of accounts and the conduct of any inquiries ordered to be taken and made. Those tasks will be referred either to an associate judge or a court appointed expert.
In the second phase of the trial the judge will receive a report from an expert or associate judge and after hearing the parties submissions, will determine whether to accept it with or without adjustment or to further refer any matters.
The judge will make substantive orders for the proper constitution of the asset pool, the contributors’ several entitlements, any adjustments to contributors’ entitlements to account for prior distributions and the like, exoneration of the Suburb S property from the Suburb S mortgage, realisation and distribution of the asset pool, and so on.
The court will finally order the realisation and distribution of the asset pool, with or without the appointment of a receiver to bring the asset pool under the court’s control.
According to the wife, the parties in the Supreme Court were represented at the highest level by senior and junior counsel. McDonald J delivered reasons for judgment[3] in which his Honour made the following pertinent findings and orders –
a)The B Trust failed for uncertainty;
b)B Pty Ltd held all of the trust’s property on one or more resulting trusts;
c)B Pty Ltd hold any further income arising from the assets of the trust on the same resulting trust or trusts;
d)the trust deed was lost;
e)insufficient secondary evidence existed to establish the contents of the trust deed;
f)B Pty Ltd was precluded from being indemnified for its costs liability from the assets of the B Trust; and
g)the litigation in the Supreme Court continued between the defendants and Mr Yew (the husband in this court) and Ms G.
[3] [2019] VSC …
McDonald J recorded the first and second plaintiffs’ assertions in the proceeding in the Supreme Court. They were as follows –
(a)that the defendants propounded as the trust deed of the Trust, a deed that is not the true and genuine trust deed (‘the propounded trust deed’);
(b)the propounded trust deed does not mirror the trust deed that created and established the Trust;
(c)the Trust has failed for uncertainty as it cannot be enforced or executed according to its terms; and
(d)the transfer by the second defendant to the first defendant of property in Suburb S in July 2005 for no consideration constituted a breach of trust.
McDonald J recorded the contentions of the first defendant (the wife in this litigation) and two of her children. Those were that until late June 2019, the first, third and fourth defendants –
(a)did not admit that the original trust deed had been drawn in May 1982 by Mr R, who was then a partner in the law firm of T Lawyers;
(b)contended that the original trust deed had been replaced by a later deed prepared by accountants, U Pty Ltd, the terms of which were in substance to the same effect as the original trust deed (‘the replacement trust deed’); and
(c)contended that the replacement trust deed constituted a valid amendment of the original trust deed.
The existence of the trust deed for the B Trust was a much-contentious point in the litigation in the Supreme Court. His Honour held as follows on point –
21.Where a trust deed is lost, in order to prove a trust deed by secondary evidence there must be clear and convincing proof, not only of the existence of the deed, but also of its contents.[4] The outlines of evidence filed on behalf of the defendants were bereft of secondary evidence of sufficient quality to establish the contents of the trust deed. Shortly stated, the defendants were not in a position to mount a case in support of their pleaded defences. The defendants acted unreasonably in maintaining defences until the eve of the trial which were effectively abandoned. Further, I have no hesitation in concluding that at no stage of the proceeding did the defendants have evidence of sufficient quality to prove the contents of the lost trust deed.
[4]Re DR McKendrey Nominees Pty Ltd [2015] VSC 560 (at [7]) (Digby J).
McDonald J was critical of the conduct of the first, third and fourth defendants in their capacity as directors of B Pty Ltd. His Honour held as follows –
22.It is necessary to address the position of the second defendant. The second defendant did not adopt a passive role in the proceeding. Rather, it actively defended the first and second plaintiffs’ claims, including by the making of a counter claim. Ultimately, that claim was not pressed. On 28 June 2019, Mr O’Brien appeared for the second defendant and informed the Court that his instructions were not to defend the proceeding but to abide by the order of the Court. Mr O’Brien was instructed by the first, third and fourth defendants as the directors of the second defendant.
23.The second defendant chose, until late in the day, to be an active participant in the litigation. All of the criticisms which can be levelled at the first, third and fourth defendants apply equally to the second defendant. Further, as the second defendant actively participated in the litigation, it should not be indemnified from the assets of the Trust for any cost which it has incurred in defending the proceeding.
The husband’s version
Before addressing the factual matters on which the husband, by his case guardian, relied, it is useful to recite the husband’s main propositions on the applications currently before me. They included the following –
1. The husband, via his case guardian:
(a)opposes the wife’s application for leave pursuant to s. 44(3) of the Family Law Act 1975 (Cth) (the Act) at the threshold, and seeks its dismissal on the basis that the court has exercised its jurisdiction under s. 79 and may not do so a second time;
(b)seeks dismissal of the wife’s application for leave on the merits because –
(i)the wife has not demonstrated hardship for the purposes of s.44(4)(a),
(ii) the wife does not satisfy the requirements of s.79(2),
(iii)her substantive application under s.79 asks the court to override or extinguish the proprietary interests on the husband’s present wife (Ms G), brother (Mr K) and Mr P (Mr P), none of whom are parties to the wife’s application, and
(iv)her application does not warrant the exercise of discretion in her favour.
(c)alternatively, seeks a stay of the wife’s application for leave on the basis that it is -
(i)an abuse of the process of this court to bring the application for the purpose of interfering in or frustrating the concurrent proceeding in the Supreme Court of Victoria proceeding SCI … between Mr P and others and the wife and others (Supreme Court proceeding), and
(ii)premature because the wife cannot demonstrate hardship for the purposes of s.44(4)(a) and other threshold jurisdictional conditions until the determination of the Supreme Court proceeding.
(d) opposes the wife’s application for an anti-suit injunction; and
(e) seeks that:
(i)Order 1 of the orders made on 21 October 2015 be discharged or permanently stayed and in its place, Mr P be ordered to pay those costs and that the costs be set off against the costs payable by the wife to Mr P in the Supreme Court proceeding pursuant to the order made therein on 18 November 2019.
(ii)Order 1 of the orders made 6 November 2015 be set aside, discharged or permanently stayed.
2. The husband seeks the following orders:
(a) that the wife’s application be dismissed;
(b)alternatively, that the wife’s application be stayed until the determination of the Supreme Court proceeding;
(c)that order 1 of the orders made on 21 October 2015 be discharged and in its place, Mr P be ordered to pay those costs and that the costs be set off against the costs payable by the wife to Mr P in the Supreme Court proceeding pursuant to the order made therein on 18 November 2019.
(d)That order 1 of the orders made 6 November 2015 be set aside, discharged or permanently stayed; and
(e) costs.
Mr Martindale, One of Her Majesty’s Counsel who appeared with Ms Parker prepared very helpful written submissions in which they distilled relevant and applicable matters of fact and law. It is not time efficient to record the uncontested factual matters on which they relied as on many (although not all) issues, their position was the same as was Ms Vohra SC’s and Mr Marchetti’s. Of particular interest was the complexion placed on the B Trust, namely –
a)it was established by deed of trust made on 18 May 1982;
b)the trust deed was lost;
c)the loss of the trust deed was discovered in 1998 or possibly earlier;
d)upon the trust deed being lost, the assets held by the trustee on what had been the trusts of the trust resulted under a resulting trust to the persons who had from time to time contributed assets to the trustee;
e)such contributors were entitled to the asset pool in proportion to their contribution to the trustee;
f)by reason of the loss of the trust deed, it is unknown whether any beneficiary was a taker in default of either income or corpus;
g)relying upon the observations of the High Court in Kennon v Spry[5] it is impossible to identify who would have taken the corpus on the vesting date absent the exercise of a power of appointment, whether there was anyone with a contingent remainder of the corpus and whether there was any power of appointment prior to the vesting date;
[5] (2008) 238 CLR 366 (at [60] and [62]).
h)the husband and Mr K each settled $350,000 on the trustee in 1983 so each was, prima facie, a contributor to that extent;
i)the husband transferred control of the trustee to the wife thereby renouncing all interests in the trust by executing the 15 June 1987 deed, by resigning his directorship on 24 October 1988 and by transferring his share in the trustee to his daughter in 1987;
j)Mr K renounced all his interests in the trust upon executing the deed dated 26 June 1987;
k)neither deeds executed by the husband and his brother affected the resulting trusts now enlivened because the June deeds only affected the expectation interest that the husband and brother had as discretionary objects of the trust as well as any powers of appointment or as guardians;
l)the husband asserted that as he was the registered proprietor of the land known as V Street, Suburb M, the proceeds of sale of which were paid to the trustee, he claims those funds as a contribution by him whereas the wife asserted that pursuant to an informal agreement made between the husband and the wife the husband agreed that she would receive ownership of the matrimonial property in Australia so the net sale proceeds of V Street, Suburb M paid to the trustee represented her contribution;
m)the husband and Ms G claimed as a contribution to the trustee the sum of $570,000 paid by them between October 1993 and August 1994 being funds raised on properties in Country H;
n)conversely, the wife asserted that she (not the husband and Ms G) contributed the sum of $570,000 because the payment of that sum was made in pursuance of an informal agreement between the husband and wife the operative effect of which was that the wife would retain all assets in Australia and the husband would sell three properties in Country C providing the proceeds thereof to the wife;
o)the husband contended that the wife advanced three different versions of some agreement between her and the husband, none of which satisfied the requirements of s 53 of the Property Law Act (Vic);
p)in the decades following the parties’ separation the corpus of the trust changed substantially;
q)the present asset pool can be treated as made up of the traceable substitutes for the assets held by the trustee at the time of separation and divorce, plus subsequent contributions as alleged by the husband, the wife, Mr Q and Mr J, and the traceable substitutes for the assets acquired by the trustee with the contributed funds; and
r)the fact that the loss of the trust deed means that subsequent substitutions have been unauthorised does not affect the character of current assets as being the traceable proceeds of the successive contributions.
On behalf of the husband, counsel pointed out that on 24 April 2014, the husband filed an initiating application in this court seeking leave under s 44(3) to proceed with a property settlement application out of time. The husband stated that his application was strenuously opposed by the wife who sought the dismissal of the husband’s application as well as an anti-suit injunction restraining the husband from commencing or taking any step in any proceeding in a state or federal court against her or the trustee. Counsel submitted that the husband’s application was withdrawn on 21 October 2015 and the wife’s response was otherwise dismissed.
On 22 March 2016 Mr P commenced a proceeding in the Supreme Court of Victoria in his capacity as a discretionary beneficiary of the trust. Various parties were joined and pleadings were amended.
On 10 October 2019 McDonald J declared[6] that the trust failed for uncertainty. According to the husband’s counsel, on 10 October 2019 the wife’s counsel informed McDonald J that the wife wished to investigate whether an order for the bankruptcy of the husband had been made in Country C.
[6] At paragraph 30 of the husband’s written submissions dated 12 October 2020 it was recorded that the declaration made by McDonald J was “by consent”, however the sealed orders made by McDonald J in October 2019 do not record them as having been made by consent.
On 22 October 2019 the wife filed this proceeding.
On 25 October 2019 McDonald J made orders for the joinder of the husband and Ms G as the third and fourth plaintiffs to the Supreme Court pleading. According to the husband, on 25 October 2019 counsel for the wife informed McDonald J that the wife and others may apply for orders transferring the Supreme Court proceeding to this court pursuant to the provisions of the Jurisdiction of Courts (Cross-vesting) Act 1987 and that McDonald J informed the parties that his Honour’s approach to any such application was likely to be as was canvassed in Tucker v State of Victoria.[7] There, McDonald J was influenced by the observations of Judd J in Bob Jane Corporation Pty Ltd v Robert Frederick Jane[8] where Judd J essayed the applicability of the facts of that case to the provisions of s 5(2) of the Jurisdiction of Courts (Cross-vesting) Act. The point was largely academic because the wife did not make an application under that legislation.
[7] [2018] VSC 389.
[8] [2014] VSC 27.
The husband submitted that Mr K should be joined as a party to the Supreme Court proceeding. Citing News Ltd v Australian Rugby Football League Ltd,[9] Victoria v Sutton[10] and John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd,[11] counsel for the husband argued that the brother Mr K is a necessary party as he contributed half of the $700,000 originally deposited with the trustee.
This court is functus officio, according to the husband
[9] (1996) 64 FCR 410.
[10] (1998) 195 CLR 291.
[11] (2010) 241 CLR 1.
On behalf of the husband, Mr Martindale QC and Ms Parker submitted that this court’s jurisdiction under s 79 was exercised, finally, on 21 October 2015 when the husband’s application was discontinued and the wife’s response was dismissed. In paragraph 48 of their written submissions, the husband’s counsel put their proposition in the following terms –
48.The Wife, having sought a dismissal order under section 79, may not now make a further application invoking jurisdiction under that section. Furthermore, the Wife’s Amended Response in the 2014 proceeding having been dismissed, the jurisdiction of the Court under s. 79 is spent. The Court is therefore functus officio and without power to entertain any further application pursuant to section 79 of the Act.
The authenticated order[12] made by Johns J on 21 October 2015 was expressed to have been a final order made in part as a consent order and in part as an order of the court, that is to say, not by consent. It is utile to record the order in precise terms, as follows –
[12] That is to say, the order that was passed and entered in accordance with Rule 17.01B of the Family Law Rules.
BY CONSENT IT IS ORDERED
1.That the applicant husband pay the respondent wife’s costs of and incidental to this proceeding on an indemnity basis and fixed in the sum of $59,797.84, such costs to be paid within 60 days of the date of this order.
BY THE COURT IT IS ORDERED
2.That the wife’s Amended Response to Initiating Application filed 18 May 2015 be otherwise dismissed.
3. That the husband be granted leave to file a Notice of Discontinuance of his Amended Initiating Application filed 4 May 2015.
Further orders were made in this proceeding. Chronologically, those orders were made on the following dates –
a)6 November 2015 by Johns J pursuant to which her Honour directed documents to be forwarded to the Commonwealth Director of Public Prosecutions for consideration whether the husband should be prosecuted for any offence in connection with giving false evidence;
b)11 December 2019 by Registrar George dispensing with the need to serve certain documents on the husband;
c)15 January 2020 by Registrar Sudholz adjourning all applications to the Judicial Duty List on 8 April 2020;
d)27 March 2020 by Registrar Sudholz concerning the filing of submissions in relation to subpoena objections;
e)6 April 2020 by Registrar Sudholz pursuant to which the objectors to subpoenae had leave to withdraw their objections;
f)22 May 2020 by Registrar Sudholz pursuant to which, by consent, the registrar gave the wife leave to file a response to the husband’s application in a case filed on 15 May 2020 for the appointment of Mr P as the husband’s case guardian;
g)12 June 2020 by Registrar Sudholz varying dates for the filing of material;
h)7 July 2020 by Registrar Sudholz ordering costs in relation to the subpoena objection and adjourning the application for the appointment of a case guardian to 10 August 2020;
i)3 September 2020 by Hartnett J ordering by consent the appointment of Ms G as the husband’s case guardian and adjourning the wife’s application for leave under s 44(3) to bring her property settlement application to 21 October 2020; and
j)15 September 2020 by Registrar Sudholz ordering by consent to vacate the hearing on 21 October 2020, requiring the wife to file any application to restrain the husband from taking further action in the Supreme Court proceeding SCI … and referring the wife’s application for leave under s 44(3) for hearing on 9 November 2020.
It could not be said that any substantive determination had been made in any of those orders since 21 October 2015 in relation to the wife’s application for leave to commence her property settlement proceeding.
It must be recognised that pursuant to paragraph 4 of the orders of Johns J made 21 October 2015 the husband was given leave to file a notice of discontinuance of his amended initiating application filed 4 May 2015. In pursuance of the leave thereby conferred, the husband filed a notice of discontinuance of his initiating application. He did so on 21 October 2015.
The filing of a notice of discontinuance does not amount to a release of claims. I made a collection of observations on the consequences of the filing of a notice of discontinuance in Cao & Trong.[13] It is utile to highlight the main points, in the following terms –
50.As long ago as February 1887, the House of Lords held in Owners of Cargo of the Kronprinz v Owners of the Kronprinz (The Kronprinz and The Ardandhu)[14] that an order for discontinuance does not amount to a release of claims. Observations to like effect have been made in one other decision of the House of Lords in Castanho v Brown & Root (UK) Ltd[15] as well as in Australian decisions including Botany Municipal Council v Department of Arts Sport & Environment[16] and SZFOG v Minister for Immigration and Multicultural and Indigenous Affairs.[17] In the Court of Appeal of England & Wales, Lewison LJ held in Spicer v Tuli[18] that a second proceeding may be commenced on the same facts as an earlier proceeding that is discontinued rather than dismissed. In UBS AG v Tyne[19] Nettle and Edelman JJ (in dissent on the outcome of the appeal) addressed the authorities referred to immediately above.
51.To state that the discontinuance of a proceeding does not amount to a release of claims gives no insight into the factual and legal basis for the exercise of the judicial discretion to permit the setting aside of a notice of discontinuance. Dr Ingleby brought to my attention the decision of Baumann J in Dylan and Bryson.[20] My reading of that decision offered no illumination into the circumstances when the discretion is properly exercised. Certain judicial statements offer fact-specific illustrations of the making of an order setting aside a notice of discontinuance. For example, in Fowler v Renmark & Paringa District Hospital Inc,[21] Cox J set aside a notice of discontinuance that had been filed in error. A similar course was adopted by Mansfield J in the migration case of Applicant A26 of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs.[22] In Applicant NACT of 2001 v Minister for Immigration and Multicultural and Indigenous Affairs,[23] Jacobsen J held that the court in an appropriate case has inherent power to set aside a notice of discontinuance if it is necessary to do so to prevent injustice.
52.In Christodoulou v Disney Enterprises Inc,[24] the Full Court of the Federal Court of Australia referred to a line of authority to the effect that the Federal Court had inherent jurisdiction to set aside a discontinuance or abandonment of a proceeding if the act constituting the discontinuance or abandonment was a nullity in the eyes of the law by reason of fraud or mistake. That line of authority included several English decisions such as R v Moore,[25] R v Essex Quarter Sessions Appeals Committee; Ex parte Larkin[26] and R v Medway.[27] The Full Court also cited authority to the effect that the power extends beyond cases of fraud or mistake because the court has power to set aside a discontinuance or abandonment whenever the interests of justice dictate that such a course is appropriate. In that line of authority is Applicant NACT of 2001, NACU of 2001 v Minister for Immigration andMulticultural and Indigenous Affairs[28] and Applicant A26 of 2002.
53.To my mind, analysing the circumstances surrounding the filing of notice of discontinuance for fraud or for abuse of process or for mistake fails to recognise, as the High Court recognised in UBS that even if a notice of discontinuance is filed, the claims recorded in the litigation thereby discontinued survive as no release of the claims was affected by the filing of the notice of discontinuance. It seemed to me that the Honourable Justice Gordon in UBS accurately stated the point where her Honour said the following –
This appeal is concerned with an alleged attempt to raise or re-litigate issues that were said to have been the subject of earlier proceedings. Where a party attempts to raise issues in successive proceedings, that conduct may be assessed as an abuse of process if it is contrary to the principle of finality: that is, that “controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances”. This fundamental principle protects “parties to litigation from attempts to re-agitate what has been decided”.
[13] [2019] FamCA 336.
[14] (1887) 12 App Cas 256.
[15] [1981] AC 557.
[16] (1992) 31 FCR 412.
[17] (2005) 88 ALD 138.
[18] [2012] 1 WLR 3088.
[19] (2018) 265 CLR 77.
[20] [2018] FamCA 269.
[21] (1988) 51 SASR 506.
[22] [2003] FCA 1050.
[23] [2004] FCA 316.
[24] [2006] FCAFC 183.
[25] [1957] 2 All ER 703.
[26] [1961] 3 All ER 930.
[27] [1976] 1 All ER 527.
[28] [2004] FCA 1444.
In Cao & Trong I held that a notice of discontinuance, once filed, could be set aside and, in that case, I made such an order setting aside the notice of discontinuance. The property adjustment proceeding went forward thereafter.
In this case the filing of the notice of discontinuance did not take effect as the exercise of jurisdiction under s 79, in my view. If properly explained as to why the notice of discontinuance was filed, an order could be made setting it aside. At once it will be evident that the facts of this case are on a fundamentally different basis to those that were the facts of In the Marriage of Robson.[29] Here, no order was made dismissing the s 79 application, unlike the facts of In the Marriage of Robson.
[29] (2003) 30 Fam LR 442.
However, the position more closely resembles In the Marriage of Robson in respect of the wife’s amended response to initiating application filed 18 May 2015. Paragraph 1 of that amended response was as follows –
1.That the applicant's initiating application for interim orders and final orders, filed 24 April 2014, as amended on 4 May 2015, be dismissed.
Pursuant to paragraph 2 of the orders of Johns J made 21 October 2015, “the wife’s amended response to initiating application filed 18 May 2015” was dismissed. That order was not by consent. Consistent with the observations in In the Marriage of Robson, the order dismissing the wife’s application to dismiss the husband’s s 79 application was itself the exercise of jurisdiction under s 79. I agree that once the court exercises its jurisdiction in relation to s 79, any such exercise can be done once only and the court’s jurisdiction is thereafter exhausted. Once exhausted, the power is spent, unless s 79A applies, as was held in In the Marriage of Branchflower[30] as well as by the High Court in Mullane v Mullane.[31] In In the Marriage of Ramsey[32] Nygh J provided a most illuminating exposition of the learning on point. The High Court’s decision in Taylor v Taylor[33] stands for the proposition that an order under s 79 is once and for all, to be varied only on appeal or under s 79A. Other decisions of undeniable veneration have held likewise including In the Marriage of Slapp,[34] In the Marriage of Florie[35] and In the Marriage of Hickey.[36]
[30] (1979) 6 Fam LR 188, 196.
[31] (1983) 158 CLR 436.
[32] (1983) 8 Fam LR 1005.
[33] (1979) 143 CLR 1.
[34] (1989) 13 Fam LR 158.
[35] (1988) 12 Fam LR 7.
[36] (2003) 30 Fam LR 355.
On behalf of the wife counsel contended that the husband’s characterisation of the operation of the orders of Johns J on 21 October 2015 was erroneous. They submitted –
a)paragraph 2 of her Honour’s order was procedural in nature as opposed to it being substantive in nature;
b)no hearing of the case proceeded on that date and no finding of justice and equity under s 79(2) was made;
c)leave under s 44(3) had not been granted to bring the s 79 proceeding out of time;
d)the dismissal of the wife’s amended response cannot constitute the exercise of power under s 79 of the Act; and
e)at all events, the wife did not seek any order under s 79 and she actively opposed any grant of leave in favour of the husband for him to seek a s 79 order.
On behalf of the husband it was submitted that this court has been functus officio for a considerable time by reason of there having been exercised an order under s 79. I do not agree. At its highest on 21 October 2015 Johns J dismissed the wife’s amended response to the husband’s initiating application. Pursuant to the same order the husband was given leave to file a notice of discontinuance. To my mind that scarcely amounted to the exercise of power under s 79. My view is fortified by two other factors, namely –
a)a notice of discontinuance is revocable as was canvassed in Cao & Trong;[37] and
b)the parties participated in not less than 10 separate interlocutory applications recorded above subsequent to Johns J’s order, tending to indicate that the parties did not regard this court as functus officio from 21 October 2015.
The stipulations of s 44(3) of the Family Law Act when applying for leave to proceed out of time
[37] [2019] FamCA 336.
Before analysing issues of hardship that must be addressed for the purposes of s 44(3), it is important to point up that in this case the elapsed time between the date on which the applicant should have commenced her s 79 application and the date when she did in fact commence it was 32 years. No counsel cited or relied on a case where the delay in bringing the application for leave under s 44(3) was as egregious as was the case in this litigation. So far as I was able to distil, the authorities have generally been concerned with applications for leave where the delay in applying has been of considerably shorter duration than 32 years as might be seen as the relevant duration here. The relevant cases show –
a)a delay of eight months was involved in Shedden v Shedden;[38]
[38] (1965) 7 FLR 303.
b)a delay of about 12 days was involved in In the Marriage of McDonald;[39]
[39] (1977) 3 Fam LR 426.
c)a delay of about eight months and three weeks was involved in In the Marriage of MacKenzie;[40]
[40] (1978) 4 Fam LR 374.
d)a delay of about one year and ten months was involved in In the Marriage of Howard;[41]
[41] (1979) 8 Fam LR 178.
e)a delay of about two years and one month was involved in In the Marriage of Whitford;[42]
[42] (1979) 4 Fam LR 754.
f)a delay of about ten months was involved in In the Marriage of Hall;[43]
[43] (1979) 5 Fam LR 411.
g)a delay of about one year and six months was involved in In the Marriage of Perkins;[44]
h)a delay of about two months was involved in In the Marriage of Althaus;[45]
i)a delay of about one year and seven months was involved in In the Marriage of Frost & Nicholson;[46]
j)a delay of about one year and nine months was involved in In the Marriage of Kercher;[47]
k)a delay of almost four years was involved in In the Marriage of Carlon;[48]
l)a delay of about three years was involved in In the Marriage of Walker;[49]
m)a delay of about 15 years and four months was involved in In the Marriage of Leibinger;[50]
n)a delay of about four years and three months was involved in Sharp v Sharp;[51]
o)a delay of about four years and three months was involved in Lagioia & Rapino;[52] and
p)a delay of eight years was involved in Panwar & Panwar.[53]
[44] (1979) 4 Fam LR 634.
[45] (1979) 8 Fam LR 169.
[46] (1981) 7 Fam LN N9.
[47] (1981) 7 Fam LR 216.
[48] (1982) 8 Fam LR 729.
[49] (1984) 9 Fam LR 983.
[50] (1985) 11 Fam LR 33.
[51] (2011) 50 Fam LR 567.
[52] [2020] FamCA 11.
[53] [2020] FamCA 480.
None of those cases even remotely approximate the 32 years between the divorce order in this case and the date on which the applicant brought her s 44(3) application for leave. Yet the duration of the delay is but one consideration. Plus, the authorities do not all speak in one voice about the requirement (if it be a requirement at all) for the court to examine the duration of, and any explanation for, the delay. Certainly Emery J regarded the need for an adequate explanation as to why the claim was allowed to lapse as being important in the unreported decision of Swallow & Swallow[54] as did the Full Court in In the Marriage of McDonald.[55] In In the Marriage of Whitford,[56] Asche & Pawley SJJ and Strauss J held that in any consideration of s 44(3), the length and reason for the delay was important as was any prejudice occasioned to the respondent by reason of the delay. In In the Marriage of Althaus[57] the court held that on a s 44(3) application consideration must be given to the whole of the period between the date on which the decree nisi was made up to the time of the making of the application.
[54] (Family Court of Australia, Emery J, 16 September 1977).
[55] (1977) 3 Fam LR 426.
[56] (1979) 4 Fam LR 754.
[57] (1979) 8 Fam LR 169.
Delay in commencing a proceeding was held to be among the matters relevant to the court’s exercise of its discretion under s 44(3) in In the Marriage of Hall.[58] In that case the lapsed time was as little as ten months.
[58] (1979) 5 Fam LR 411.
In In the Marriage of Carlon the court held that the delay of almost four years was “absolutely inexcusable”.
A discernible trend in the authorities is evident, which I surveyed in Panwar & Panwar,[59] to the effect that the fact and duration of the delay was relevant but more important was the existence of a reasonable claim and the hardship that the applicant would suffer if the leave sought under s 44(3) were to be refused. Further, a certain thread in the authorities that include In the Marriage of Leibinger[60] indicates that the court entertaining the s 44(3) application will be particularly concerned about the prejudice caused by the delay in commencing the proceeding.
[59] [2020] FamCA 480.
[60] (1985) 11 Fam LR 33.
Delay is one matter that is relevant to the grant of leave under s 44(3). It is not determinative to the outcome of a s 44(3) application, however.
Section 44(3) speaks of hardship that will be suffered by the applicant for leave or by a child of the relationship if the application for leave were to be refused. Of that I said the following in Panwar & Panwar between paragraphs 85 and 87 –
85.Section 44 uses the word “hardship” so the court’s primary task is to assess whether the applicant or a child of the relationship will suffer hardship if the application is refused. Several authorities[61] speak of an applicant establishing a prima facie case for hardship. Several other authorities speak of the requirement for an applicant to demonstrate that he or she has a reasonable claim to some interest in the property and that the applicant would suffer substantial detriment if not permitted to litigate that claim.[62] In Leibinger, Emery J spoke of the “quality of the proposed claim”. In Swallow, the court said any attempt to classify hardship would not be proper.
86.It seemed to me that the “hardship” to be shown by an applicant is also the subject of differing statements. In Whitford the hardship was said to be akin to “hardness, severity, privation, that which is hard to bear or a substantial detriment”. In Hall and MacKenzie the word was said to mean “substantial detriment”.
87.The authorities seem to be entirely unsettled when the question of the need to account for delay is addressed. Some authorities regard delay in the bringing of the application and an adequate explanation for any delay as merely being part of the discretionary considerations that must be considered assuming hardship is proved. In that category are cases such as Shedden v Shedden, Whitford and In the Marriage of Walker.[63] Other cases such as Carlon, Althaus, In the Marriage of Howard[64] and Leibinger have held that the rigidity of requiring delay to be explained goes too far. Yet an undeniable body of authority (and to my mind the overwhelming preponderance of the authority) states that an applicant under s 44 is required to provide an adequate explanation for any delay. Cases in that category include Swallow, McDonald, MacKenzie, Perkins, Hall and Frost. Other authorities have focused on the prejudice caused to the respondent to the application.
[61] Those include Swallow, McDonald, Whitford, Perkins, Frost and Leibinger.
[62] In that category are Hall and Walker.
[63] (1984) 9 Fam LR 983.
[64] (1979) 8 Fam LR 178.
As I pointed out in Panwar, the statement by the Full Court in Sharp v Sharp[65] to the effect that the principles concerning applications for leave to commence an action out of time are well known was both ambitious and tendentious. I do not accept that statement. The principles in the authorities were very far from well known still less were they well settled. Yet Young J in Sharp v Sharp offered what I regard as the most compelling rationale in the highly confused learning surveyed by me in Panwar about the appropriate test to be applied to an application under s 44(3). There his Honour held as follows –
In my opinion, in undertaking a determination of whether the requisite hardship will be occasioned to the applicant under s 44(4)(a) what is required by the court is an assessment of the asserted hardship, and in view of that hardship, a determination of whether the applicant has demonstrated that there is a reasonable claim to be heard. If the applicant has established that there is a reasonable claim to be heard and has demonstrated that she or he would suffer hardship in the form of a substantial detriment as a consequence of the loss of the right to institute the proceedings, then the statutory precondition in s 44(4)(a) will be satisfied and the court may then consider whether in all the circumstances leave should be granted to allow the application under s 44(3) of the Act.
[65] (2011) 50 Fam LR 567.
In Panwar I also traced the learning to the very recent decision of Gill J in Lagioia & Rapino,[66] judgment in which was handed down in January of this year. His Honour identified three issues of current relevance. They were –
31.At its best for the Wife, the evidence sustains that there was a net pool at the time of separation, from which each party received benefit. On the Wife’s case the Husband has had the benefit of approximately 55 per cent of the separation pool. That, however, does not answer the current pool position.
32.The Wife alleges that the Husband has not made full and frank disclosure. If that allegation is accepted it still does not establish, even on a prima facie basis, that there are existing assets regarding which an adjustment could be justified. Absent an identification of a pool of existing assets being available for distribution the Wife does not meet the first hurdle set out in Stanford.[67]
33.Establishing hardship requires that the Wife demonstrate that she would be denied a claim that is worth pursuing. The Wife has not established that she has a reasonable claim to be heard. Absent establishing this aspect, she has not established, despite her evidence as to dire current financial circumstances, that she would suffer hardship should leave not be granted.
[66] [2020] FamCA 11.
[67] (2012) 247 CLR 108.
In the upshot, Gill J dismissed the wife’s application for leave under s 44(3).
With that review of the key authorities in applications for leave under s 44(3), more exhaustively canvassed in Panwar & Panwar it seems to me that it is possible to conclude that the authorities reveal –
a)delay must be examined as it is relevant to the determination of the grant of leave under s 44(3); but
b)“hardship” in refusing the grant of leave is likely to be the determinative factor.
Accordingly, I now turn to address, on the facts, whether the wife has demonstrated that she will suffer hardship if leave under s 44(3) is refused.
In my view she did in fact make out her contentions in that regard. But before going to the factors that in my view led to a conclusion that the wife has met the requirements of s 44(3) of the Family Law Act, it is utile to distil the parameters of the concept of hardship according to the existing case law.
Various judicial constructs have been applied to the word “hardship” in s 44(3) of the Family Law Act. In précis form, they amount to the following –
a)“serious injustice” as was held in Swallow & Swallow,[68] In the Marriage of McDonald,[69] In the Marriage of Perkins[70] and In the Marriage of Carlon;[71]
b)“hardship” is akin to hardness, severity, privation, that which is hard to bear or a substantial detriment, as was held in In the Marriage of Whitford;[72]
c)“hardship” means “substantial detriment” as was held in In the Marriage of Frost & Nicholson;[73] and
d)in assessing hardship the court must concern itself with the prejudice that may be occasioned to the respondent in deciding whether or not to exercise the discretion once satisfied that the applicant would suffer hardship if leave were not given, as was held in In the Marriage of Leibinger.[74]
[68] (Family Court of Australia, Emery J, 16 September 1977).
[69] (1977) 3 Fam LR 426.
[70] (1979) 4 Fam LR 634.
[71] (1982) 8 Fam LR 729.
[72] (1979) 4 Fam LR 754.
[73] (1981) 7 Fam LN N9.
[74] (1985) 11 Fam LR 33.
In that last-mentioned decision, one member of the Full Court held that an applicant must demonstrate that he or she has a reasonable claim to some interest in the property and that the applicant would suffer “substantial detriment” if not permitted to litigate that claim. The cases in support included Swallow, McDonald, Whitford, Perkins, Frost and Leibinger.
Quite properly, Ms Vohra SC recognised that in this case the wife could remain a party to the proceeding in the Supreme Court. However, if she is limited to such a course, Ms Vohra pointed out that the issues about which this court concerns itself in a s 79 application will be of no relevance in the Supreme Court proceeding, such as her non-financial contributions to the assets of the family trust. Ms Vohra SC submitted that having regard to the findings of McDonald J in the Supreme Court that the trustee holds the assets of the trust on a resulting trust, the Supreme Court will only be concerned with the financial contributions to the acquisition of those assets now held by the trust. Conversely, so Ms Vohra submitted, in this court, if leave under s 44(3) were given to the wife to bring this proceeding, the entirety of all parties’ contributions will fall for consideration, including –
a)the contributions by Mr K;
b)the contributions by the husband;
c)the contributions by Ms G; and
d)those made by the wife.
Ms Vohra further submitted that in the Supreme Court litigation once the financial contributions are determined, without leave to proceed out of time, “there can be no further adjustment in the wife’s favour based on her non-financial contributions which are myriad and which extend well beyond the parties’ separation and divorce”.[75]
[75] Paragraph 24 of the wife’s written submissions.
Then there were the assets located in Country C that will not be even considered unless leave out of time to bring this proceeding were granted, according to the wife. On her behalf, Ms Vohra distilled seven propositions that she said was borne out by the evidence, namely –
29. The Wife’s evidence establishes that:
29.1She and the Husband agreed that she would retain control of and the benefit of the assets of the Family Trust and he renounced his interest and benefits in its assets. It is not disputed that the Husband and his brother Mr K signed a Deed of Arrangement in 1987 to give effect to this agreement;
29.2The parties acted on the agreement and implemented it, with the husband transferring to the wife the former family home; transferring to the wife ownership and control of the Family Trust Trustee company; and otherwise executing a Deed renouncing any interest in the Family Trust;
29.3The wife, further, received advice from solicitor Mr R that, in accordance with the private agreement, she “would have full control of B Pty Ltd and the Family Trust and, as such, [she] would not need a separate property settlement from the Family Court”;
29.4In November 1988, the husband visited Melbourne and put the wife in touch with an accountant named Mr O whom informed her he “could look after [her] from now on”. To that end, the wife heeded the husband’s advice and engaged Mr O to manage the Family Trusts’ affairs. The wife then treated the assets within the Family Trust as her own and made significant contributions to the trust property;
29.5Despite the agreement reached the Husband is now that the Family Trust has failed for lack of certainty, seeking to reclaim monies he has advanced to the Family Trust. He sought to join the Supreme Court proceedings in October 2019;
29.6The Wife’s contributions as homemaker and parent will not be considered in the Supreme Court proceedings. She parented the parties’ six children entirely alone from approximately Christmas 1983, only a few months after they arrived here. Four of the six children were under the age of 18 years;
29.7The Husband’s other assets and financial resources would not be considered in the Supreme Court proceedings when determining what each of the Husband and Wife ought retain of the Family Trust assets.
On behalf of the wife, Ms Vohra contended that no prejudice was occasioned to the husband by the grant of leave under s 44(3). She submitted as follows –
a)he initiated the Supreme Court litigation in an endeavour to overturn the state of affairs that existed since the parties’ divorce;
b)the wife brought this application in this court as soon as she ascertained that the family trust was declared to have failed;
c)the proposed s 79 proceeding that the wife wishes to advance does not prejudice any claims of parties in the Supreme Court which each may wish to continue agitating;
d)in this proposed proceeding in this court any adjustments of property interests between the husband and the wife are relevant, although all legal and equitable interests will need to be determined in accordance with Stanford v Stanford ;[76] and
e)it cannot be said that the wife sat on her hands in failing to bring this application in 2014 or 2015 because as soon as the Supreme Court of Victoria made its declaration in relation to the family trust, the wife moved to bring this application.
[76] (2012) 247 CLR 108.
In support of her application, the wife relied on a smattering of the authorities that have considered s 44(3) yet the review of them was perfunctory, canvassing only In the Marriage of Jacenko[77] and In the Marriage of Hall. The cases that have considered s 44(3) are extensive and they do not speak with one voice, as I held in Panwar, to which neither counsel referred.
[77] (1986) 11 Fam LR 341.
The relief obtainable in this court
The wife made a valid point that in this court she can obtain relief that is more extensive than the relief she can obtain in the Supreme Court of Victoria. For example, in this court –
a)direct and indirect financial and non-financial contributions are relevant whereas in the Supreme Court, in assessing contributions relevant to a resulting trust, direct financial contributions are likely to be the predominant focus;
b)the legal and equitable interests in property that must be addressed for the purposes of Stanford v Stanford will not be relevant in the Supreme Court litigation as only matters relevant to financial contributions in a resulting trust are relevant in that proceeding;
c)interests in properties in Country C and elsewhere are amendable to consideration in litigation in this court whereas in the Supreme Court proceeding, those interests will be ignored;
d)in litigation in this court, the wife’s contributions as homemaker and as a parent of six children who she raised singlehandedly from late 1983 are relevant whereas those considerations are irrelevant in the Supreme Court litigation; and
e)s 75(2) issues are relevant in litigation in this court yet they are irrelevant to the Supreme Court litigation.
On behalf of the husband, Mr Martindale QC submitted that nothing prevented litigation in this court being transferred to the Supreme Court of Victoria. That is true, save for the fact that until leave is granted under s 44(3) of the Family Law Act there is no proceeding in this court to transfer.
At paragraph 44 of their written submissions, Ms Vohra SC and Mr Marchetti advanced what seemed to me to be a compelling argument on the leave application. There they submitted as follows –
44.Significantly, if leave is granted and the wife is permitted to proceed with her application for property adjustment orders pursuant to s 79 of the Act, it is further submitted that this Court can do full and final justice with respect to the interests of all persons concerned with the assets held within the Family Trust. That circumstance speaks in favour of exercising this Court’s discretion as the hardship asserted by the wife will be alleviated by her sec 79 claim being able to be pursued together with the competing claims of any other interested persons in the trust property contemporaneously.
Husband’s contentions on hardship
On behalf of the husband Mr Martindale QC advanced a collection of submissions to the effect that the wife will not suffer hardship by my refusing her leave to bring the property proceeding out of time. His first ground was as follows –
49.The Wife is unable to demonstrate hardship within the meaning of section 44(4)(a) of the Act. The status quo continues under which she controls the Trustee. The Trustee is in possession of most of the asset pool. The Trustee, despite having no power to do so, is, under the Wife’s control, paying $6,000 per month to the Wife, without reference to her actual ordinary living expenses. She does not show that her position has changed in any way as a result of the orders made on 10 October 2019.
Next, on behalf of the husband Mr Martindale contended that the loss of a right to commence a proceeding is not “hardship” for the purposes of s 44(4)(a) of the Family Law Act. In support of that proposition Mr Martindale called in aid two decisions of this court, namely, In the Marriage of Whitford[78] and Sharp v Sharp[79] arguing that the relevant consideration is the consequence attendant upon the loss of a right to commence a proceeding.
[78] (1979) 4 Fam LR 754.
[79] (2011) 50 Fam LR 567 (at [17]).
Next, Mr Martindale argued that if the wife is not granted leave under s 44, she will nevertheless remain able to pursue her claim that she is entitled to the asset pool to the exclusion of the husband.
Pausing there, and taking the last point first, true, the wife will remain able to pursue her claim in the Supreme Court. However –
a)that case will not be a s 79 claim that incorporates Stanford considerations, direct and indirect financial and non-financial financial contribution considerations and s 75(2) considerations;
b)that Supreme Court litigation will be limited in the manner described above particularly in that it will relate mostly to an examination of direct financial contributions to the funds in trust; and
c)the “pool” over which the parties will be fighting in the Supreme Court is nowhere near as exhaustive as might be a consideration of legal and equitable interests the parties have in property wheresoever situate of relevance to a s 79 application.
Mr Martindale submitted that “hardship” is akin to severity, privation and substantial detriment, as was held in In the Marriage of Whitford[80] and In the Marriage of Hall.[81] As has already been surveyed, in Panwar I reviewed an extensive array of authorities that went very much beyond Whitford and Hall. That aside, Mr Martindale was correct in his synthesis that hardship includes severity, privation and substantial detriment. But Mr Martindale went further by contending that –
a)the wife was unable to demonstrate the existence of hardship on the facts of this case;
b)to demonstrate hardship, it is insufficient to assert in a speculative way that the wife “may” suffer hardship if the Supreme Court litigation is determined adversely to her;
c)the wife does not contend that she is impecunious or is otherwise unable to support herself;
d)even if the husband and Ms G are wholly successful in the Supreme Court proceeding, that does not equate to hardship being suffered by the wife because complete success for the husband and Ms G in the Supreme Court represents no more than a recognition that the wife obtained no benefit to property in respect of which she made no contribution; and
e)only at the conclusion of the Supreme Court litigation can any hardship suffered by the wife be assessed.
[80] (1979) 4 Fam LR 754.
[81] (1979) 5 Fam LR 411.
That last point, if upheld, tended to render nugatory the applicant’s whole purpose in seeking leave under s 44. It also tended to render nugatory the anti-suit injunction sought by the wife. I do not accept the point. My duty is to determine, now, the wife’s leave application and such other consequential relief as may be required.
To my mind the litigation in the Supreme Court is of a very different character than might be a s 79 property application, if leave were given to commence one, in this litigation. In the Supreme Court several parties are contesting an entitlement to the funds held in pursuance of the failed trust. Conversely, in litigation in this court the trial judge will be required as a first task to assess the legal and equitable interests in property, as required by Stanford v Stanford[82] and as most recently applied in Clayton v Bant.[83] Commonly, that is described as assessing the “pool”, or “preparing a balance sheet”. By either nomenclature, the court searches widely to ascertain those legal and equitable interests. The “property” may take the form of personal, real, or intellectual property. It may be situated in the Commonwealth of Australia or elsewhere. The court’s tasks is to ascertain each party’s legal and equitable interests in that property. Conversely, the “property” in the Supreme Court litigation is the corpus of the failed trust. Various parties will seek to prove direct contributions to the funds held by the trustee. But matters relevant to s 79, such as indirect financial contributions plus direct and indirect non-financial contributions along with s 75(2) issues will not be relevant to the Supreme Court proceeding whereas they will be highly pertinent to property litigation in this court. If the wife is prevented from –
a)bringing into consideration the legal and equitable interests of the parties in all property;
b)asserting her claims to all elements under s 79, not merely direct financial contributions; and
c)adducing evidence on matters pertinent to s 75(2);
then in my view she suffers “severity”, or “privation” or “substantial detriment”. Moreover, if the wife is forced to argue her claims exclusively in the Supreme Court litigation, the whole of the lis pendens she wishes to agitate will not be determined.
[82] (2012) 247 CLR 108.
[83] [2020] HCA 44.
The husband’s broader submission
Mr Martindale advanced a contention to the effect that it is not just and equitable for any adjustment of property to be undertaken in this case. He relied on the observations in Stanford v Stanford to make good that contention. He relied on four factors, namely –
a)the effluxion of a period in excess of 36 years since the parties’ separation in 1983 during which 36 years the parties have conducted their financial affairs separately with the consequence that the nexus between assets and liabilities of each of the parties and the contributions of each has been severed;
b)in the 36 years since their separation, the matters relevant to s 79 have changed including their states of health, their respective earning capacities and the fact that their children’s ages now range between 41 and 52;
c)the parties hold no jointly owned interest in property in Australia or overseas; and
d)the wife had the opportunity of pursuing a s 79 claim in 2014 and actively opposed the exercise of jurisdiction with the consequence that the wife should not be permitted “to pick and choose when it suits her for the jurisdiction to be exercised based on her assessment of when it will most favour her interests.”[84]
[84] This was the phraseology adopted in the husband’s written submissions dated 12 October 2020 at paragraph 62.
Mr Martindale went further by describing this application for leave to commence a s 79 application as an abuse of process.
Merging equitable concepts with the statutory entitlement to seek leave under s 44 of the Family Law Act, Mr Martindale somewhat theatrically contended that the “wife does not have clean hands”. While it may be correct to contend that an applicant for an equitable remedy is disentitled to that relief by reason of the want of clean hands, it is an altogether different, and erroneous proposition, to put forward what amounts to a basis for refusing an application for equitable relief when opposing a statutory grant of leave that does not involve equitable notions or doctrines.
Mr Martindale also advanced an argument to the effect that the need for the wife to seek relief under s 79 is wholly dependent upon the Supreme Court rejecting her evidence. Counsel for the husband submitted as follows –
68.The Wife’s case in the Supreme Court proceeding is that she was or ought to be treated as having been a major contributor of the trust property as a result of what she asserts was an informal property settlement entered into between the parties. If the Wife’s evidence in that regard is accepted, the practical outcome of Supreme Court proceeding, as between the Husband and the Wife, will be the same as the outcome she now seeks in her application in this court. The need for the Wife to seek an order under s. 79 in this court is wholly dependent upon the rejection of her evidence in the Supreme Court. Otherwise she gets all she claims and all she is entitled to, and the Husband gets nothing.[85]
[85] Paragraph 68 of the husband’s written submissions.
To my mind that analysis is defective as it largely ignores the weighing and evaluative process involved in a s 79 application. It cannot be said with any certainty that the wife will succeed in demonstrating an entitlement to 75% of the value of the property as she claims any more than it can be said, as counsel for the husband argued in paragraph 68 of their submissions, that the husband is at risk of getting nothing. In my view the contentions in paragraph 69 of the husband’s written submissions place undue emphasis on the wife’s evidence being wholly accepted in one court and wholly rejected in another. While I cannot (and should not) presuppose the manner in which the evidence may unfold, it is conceivable, for example, that the wife will or may be accepted in her evidence that she provided very little by way of direct financial contribution towards the development of the corpus of the trust fund about which the parties are fighting in the Supreme Court. It is equally conceivable that the wife’s evidence will or may be accepted in relation to her non-financial contributions as a homemaker and parent, for example. I do not agree that the wife will only succeed in this court if contradictory findings are made in the two courts.
As to the husband’s broader contention that it is not just and equitable to make a s 79 order or to even entertain an application for such an order, I am unable to accede to that invitation. The evidence should be allowed to be put. It may well transpire that after a full trial the husband can persuade the trial judge that an order under s 79 should not be made on the basis that it is not just and equitable for the court to do so. But it is too early for such a conclusion to be reached. This is a leave application. It is not the full trial. It is erroneous to fold considerations relevant to the leave application into considerations in which the s 79 application will be decided beyond making a preliminary assessment of the arguability of the s 79 claim. It will be a rare case in which a judge dealing with a leave application concludes, without hearing viva voce evidence, that no useful point will be served in the grant of leave because the applicant can never succeed in obtaining a s 79 order. In this case I specifically decline to proceed on that basis. Unless and until each party’s claims are tested, it is not possible (nor is it sensible) to predict the outcome of a s 79 application.
Next, Mr Martindale urged me to refuse the grant of leave on the basis that “a full determination of the competing claims of all relevant parties would exceed the jurisdiction of this court”. That was a peculiar submission as the jurisdiction of the Family Court of Australia is second only to that of the High Court of Australia. If anything, the jurisdiction of this court could accommodate all claims of all parties in this litigation and in the Supreme Court litigation whereas a s 79 claim, while strictly speaking amenable to cross-vesting, has not been cross-vested to a Supreme Court in very many years, possibly decades.
Mr Martindale submitted that the chapeau to s 44(4) of the Family Law Act discloses a legislative intention that applications for leave will not be permitted to proceed in most cases.
I disagree.
The cases surveyed above in relation to the duration of the delay revealed the contrary. The husband cited In the Marriage of McDonald[86] as standing for the proposition that in addition to hardship, an applicant for leave should show the existence of a reasonable prima facie case and the applicant should provide an adequate explanation for any delay. The decision in McDonald was given very early in the life of the Family Law Act. Since 1977 a large number of authorities have considered the test to be adopted on a leave application under s 44. I surveyed them in Panwar & Panwar.[87] Those authorities do not speak with one voice. It must also be acknowledged that in In the Marriage of Althaus[88] the relevant full court held that s 44(3) and s 44(4) were not intended to require a detailed hearing on the merits to determine whether leave should be granted. In the interest of expedition I shall not repeat my analysis of the learning that I undertook in Panwar as these reasons are already long enough.
[86] (1977) 3 Fam LR 426.
[87] [2020] FamCA 480.
[88] (1979) 8 Fam LR 169.
Yet Mr Martindale’s point is well made, namely, the delay in this case is extraordinarily long. But that is only if one calculates the delay by reference to the starting point being the date of the divorce. For reasons already explained, that is but one construction open on the evidence. It cannot be denied that the finding in the Supreme Court about the trust having failed was and remains a very relevant date. Had that finding about the trust’s failure not been made, in all likelihood all parties’ claims arising from this entire milieu would have been proceeded in the Supreme Court of Victoria. But the court found as it did putting the wife to her election in terms of options. It was and remains open to the wife to seek leave out of time to commence this s 79 application.
Applying the hardship test
In the passages above I have set out the elements that the cases reveal as being indicia of hardship for the purposes of s 44(3) of the Family Law Act. I take the view that unless the wife has leave to commence a s 79 application out of time, she will suffer a serious injustice,[89] or she will suffer a substantial detriment,[90] and it is relevant to consider the prejudice that may be occasioned to the respondent, within the contemplation of In the Marriage of Leibinger.
[89] Within the contemplation of In the Marriage of Swallow, In the Marriage of McDonald, In the Marriage of Perkins and In the Marriage of Carlon.
[90] Within the contemplation of In the Marriage of Whitford and In the Marriage of Frost & Nicholson.
I take the view that the wife will be denied an opportunity of putting in issue non-financial contributions such as those arising from homemaker and parent if she is forced to litigate this dispute exclusively in the Supreme Court of Victoria, which will be concerned most significantly with direct financial contributions on which issues a resulting trust can be assessed. Under s 79 of the Family Law Act the issues to be taken into account are vastly broader. Further under s 79 of the Family Law Act the legal and equitable interests in property must be assessed which will take into account not only assets within Australia but also assets in Country C. The proceeding in the Supreme Court is unlikely to be concerned with issues that the High Court in Stanford v Stanford mandates must be taken into account.
All those matters considered, then where does that leave the respondent?
He is not disadvantaged at all except that claims that he would not have to face if the proceeding were litigated exclusively in the Supreme Court will now vex him in this court, especially those already mentioned, such as non-financial contributions and claims to interests in property overseas. To my mind, it is not a good reason for refusing leave that the husband now must bring to issue matters that he would not have been troubled by if leave were refused.
That corresponded with similar observations made in October 2020 by the High Court in Hsiao v Fazarri[110] as follows –
In considering what, if any, orders should be made for the alteration of the parties’ property interests it was necessary for his Honour to take into account the factors set out in s 79(4), which include the matters set out in s 75(2) so far as they are relevant.[111] The s 79(4) factors included the financial and non-financial contributions made directly or indirectly by the parties to the acquisition, conservation or improvement of any of their property,[112] the contribution that each made to the welfare of the family[113] and the effect of any proposed order upon the earning capacity of either party.[114]
[110] [2020] HCA 35 (at [27]).
[111] Section 79(4)(e) of the Family Law Act.
[112] Section 79(4)(a) and (b) of the Family Law Act.
[113] Section 79(4)(c) of the Family Law Act.
[114] Section 79(4)(d) of the Family Law Act.
The submissions of the parties revealed the parties’ characterisations of the relevant tests to be applied in the determination of the anti-suit injunction. It is necessary to record that characterisation briefly.
On behalf of the wife, the propositions on which she relied may be condensed to those that immediately follow. They were –
a)s 34 of the Family Law Act confers jurisdiction upon the Family Court to grant an anti-suit injunction;
b)citing Cole v Abati[115] the grant of an anti-suit injunction is premised on the Family Court’s inherent power to make appropriate orders to avoid injustice;
c)citing CSR, the power to grant an anti-suit injunction is not confined to closed categories and may be exercised where such an order is necessary to protect the court’s own process;
d)citing Oceanic Sun and Voth, the wife argued that on an anti-suit injunction application, the court must first consider whether its own proceeding should be stayed;
e)also citing Oceanic Sun and Voth, the wife argued that a stay will only be granted if one court is a clearly inappropriate forum;
f)citing Henry v Henry, the wife argued that the clearly inappropriate forum test applies in a proceeding in this court; and
g)citing Steen & Black[116] several factors must be balanced including the connection to the forum selected, whether an advantage exists in the proceeding remaining in the Family Court and the substantive law to be applied.
[115] (2016) 55 Fam LR 329.
[116] [1999] FamCA 1198.
Counsel for the wife, between paragraphs 56 to 60 of their submissions, addressed the considerations pertinent to a s 79 proceeding. Counsel for the wife drew an analogy between a proceeding transferred from the Federal Court of Australia to the Family Court of Australia in Yeo, in the matter of Armstrong and Shaw Pty Ltd (in liq) v Whiteman[117] in which Anderson J ordered the transfer of that proceeding under s 1337H(2) of the Corporations Act. It must be recognised at once that in making the transfer order, Anderson J addressed considerations under s1337H(2) including whether, having regard to the interests of justice, it is more appropriate for the proceeding to be heard by another court. That is a very different issue to the restraint ordered by an anti-suit injunction. That said, his Honour’s extempore reasons for judgment are, in my respectful view, scholarly and warrant close attention in an appropriate case where issues under the Family Law Act are raised along with issues under the Corporations Act.
[117] [2020] FCA 849.
Counsel for the wife cited s 21(2A) of the Family Law Act highlighting that the Family Court of Australia is and is taken to have always been a court of law and equity. That was an accurate paraphrasing of the legislation, putting into focus that the statements made unanimously (Thackray, Strickland & Murphy JJ) to the effect that the Family Court is “arguably not a court of equity” are wrong.[118] I refuse to apply that comment. This court is undeniably a court of law and equity and always has been. There can be no argument on point. Counsel for the wife submitted as follows on the issue of the Family Court being the only court capable of dealing with the entirety of the controversy between the parties –
59.The Family Court is the only Court that can deal with the entirety of the controversy between the parties. There is no greater burden on the third parties who are joined or seek to be joined in the Supreme Court. All of the prospective plaintiffs are represented by the same solicitor and same Queen’s Counsel. They all have to go to a court and establish the same facts using the same evidence. There is no greater burden on them.
[118]Cole v Abati (2016) 55 Fam LR 329.
The wife’s counsel submitted that unless and until leave is given to commence this proceeding, there is no proceeding to be cross-vested to the Supreme Court. That seemed to me to be rather self-evident.
Next, the wife’s counsel relied on the decision of the Full Court of the Federal Court in News Ltd v Australian Rugby Football League Ltd[119] as well as on the decision of the High Court of Australia in John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd[120] to the effect that parties who are necessary parties will need to be joined to the Family Court proceeding if leave under s 44(3) is granted.
[119] (1996) 64 FCR 410.
[120] (2010) 241 CLR 1.
Counsel for the wife placed reliance on the administration of justice ground canvassed in anti-suit injunction cases dealt with in the Federal Court of Australia. Those cases include the decision of Markovic J in Shepard, in the matter of Grainpro Pty Ltd (in liq) v Bonfante.[121] They also relied on the decision of the Supreme Court of New South Wales in In the matter of Peter G Ward Industries Pty Ltd.[122] Counsel for the wife put their contention in the following terms –
(a)a single proceeding is likely to minimise costs even for third parties not concerned with other aspects of the Family Court proceedings;[123]
(b)of central importance is whether one court has the power to determine the whole dispute when another court does not;
(c)as in the case of Hancock Prospecting Pty Ltd v 150 Investments Pty Ltd,[124] if one court may determine a discrete issue that has the potential of limiting a wider dispute in another court, a proceeding may still be transferred and in particular:
... But assuming those observations to be correct, as they well might be, it does not follow that those advantages can only be secured by the present proceeding remaining in this Court. If those advantages are real and capable of attainment, they can just as readily be realised by transferring the present proceeding to the Supreme Court, where the standard principles of case management can be equally deployed to ensure that the Trust proceeding is conducted as quickly, inexpensively and as efficiently as the just determination of the case requires. Indeed, to my mind, it makes no sense that an apparently anterior but nevertheless central question in a case raising a broad range of issues for determination in one court should be treated, effectively, as a separate question for resolution in another court having the same jurisdiction as the first court to hear and determine that separate question. It seems to me that fragmentation of that kind can only lead to manifest inefficiency and certainly greater cost brought about by the inevitable and unnecessary duplication of work. ... There is also the real likelihood of delay arising from an inability to co-ordinate court events optimally while (what is essentially) one dispute straddles two courts. Such fragmentation is not conducive to efficient case management or to outcomes that serve the interests of justice.[125]
[121] [2020] FCA 1618.
[122] [2020] NSWSC 339.
[123] As was held by White J in Vaughan v Frost [2010] NSWSC 492.
[124] (2017) 120 ACSR 495
[125] As was held by Yates J.
Husband’s contentions on the anti-suit injunction application
Mr Martindale QC distilled there to be two jurisprudential bases for the grant of an anti-suit injunction. They were –
a)the protective basis, namely, where such an order is made so as to protect the integrity of the court’s own process once set in motion, citing CSR; and
b)the separate equitable basis where the court makes such an order so as to restrain unconscionable conduct or conduct amounting to the unconscientious exercise of a legal right, also citing CSR as well as Kraft Foods Group Brands LLC v Bega Cheese Ltd.[126]
[126] (2018) 130 IPR 434.
Mr Martindale submitted that this court possessed power under s 114 of the Family Court Act, consistent with this court’s general power as a court of equity by virtue of s 21(2A) of the Family Law Act, to make an order in the nature of an anti-suit injunction.
So far as the protective basis for the grant of an anti-suit injunction was concerned, the husband argued that the grant of such an order depended upon the applicant establishing that the proceeding sought to be halted is likely to interfere with the processes of the court making the order, as was held in CSR yet the phenomenon of there being two proceedings on foot, per se, does not constitute an interference with the process of the first nor does it amount to the first court losing control over its own process, as was held in South Carolina Insurance Co v Assurantie Maatschappij De Zeven Provincien NV.[127] Mr Martindale submitted as follows –
104.There is no reason why the Supreme Court proceeding should be considered to interfere with or have the tendency to interfere with the Wife’s proceeding pending in this court. Indeed, while it is possible to see how a later proceeding might interfere with the processes of a court in an earlier proceeding, it is difficult to see how a prior proceeding can be regarded as interfering in the processes of a court in a later proceeding. That is what the Wife has to show.
[127] [1987] AC 24, 39.
So far as the equitable basis for the grant of the anti-suit injunction was concerned, on behalf of the husband it was argued that the wife was required to demonstrate that it would be unconscionable for the respondent to commence or to continue with the second proceeding with respect to the same subject matter or that to do so would be an unconscientious exercise of a legal right. Mr Martindale contended as follows –
111.In this case it is this proceeding which is prima facie vexatious or oppressive and this proceeding which has the tendency to bring the administration of justice into disrepute because of the possibility of different courts coming to different conclusions on the common matters in dispute.
On behalf of the husband, an argument was advanced founded on comity. In Hillam & Barret as well as in Scarffe & Obannon I canvassed the learning on comity. Mr Martindale relied on two early decisions in the life of this court on the subject of comity, namely In the Marriage of Baba and Jarvinsen[128] and In the Marriage of Tansell.[129] Taken in combination it may fairly be said that those two authorities stand for the proposition that this court should, where possible, avoid restraining a person from continuing a proceeding validly instituted in another Australian court unless such an extreme step is essential. So far as it being essential to do so was concerned, Mr Martindale submitted as follows –
119.It is not essential to restrain the husband from continuing the Supreme Court proceeding. The declaration of the equitable ownership of the current assets pursuant to the resulting trusts will not frustrate a claim by the wife under s.79. To the contrary, it will facilitate such a claim and will accord with the procedural imperative of determining first whether it is just and equitable for there to be any adjustment of property between the husband and the wife,[130] which in this case requires a determination of who owns the asset pool by virtue of their contributions to the trust.
[128] (1980) 6 Fam LR 276.
[129] (1977) 3 Fam LR 11,466.
[130]Stanford v Stanford (2012) 247 CLR 108.
In Wileypark Pty Ltd v AMP Ltd[131] the Full Court of the Federal Court of Australia held as follows when considering the importance that Ward CJ placed on comity in Wigmans v AMP Limited[132] –
11.I wish to express, emphatically, my complete agreement with the Chief Judge that comity between the Supreme Courts of the States and Territories and the Federal Court in the concurrent exercise of federal jurisdiction is of the utmost importance. Indeed, to put it thus may be to suffer understatement. In an integrated federal judicature such comity is a Constitutional assumption of the utmost practical and institutional importance.
[131] (2018) 265 FCR 1.
[132] [2018] NSWSC 1118.
I agree.
Consideration of the anti-suit injunction application
In my view the wife’s anti-suit injunction application must be refused. There is nothing unconscionable about, nor is there unconscientious conduct in, the husband persisting with his proceeding in the Supreme Court. To the contrary – that proceeding will determine the equitable claims made in this factual imbroglio at least in relation to the money held by the trustee. The Supreme Court proceeding was commenced many years ago and the wife actively participated in it. Knowing that proceeding was on foot, yet not apparently content with the determination that the trust failed, the wife filed this proceeding. She now seeks leave to commence it well out of time and in the process she ambitiously seeks orders restraining the further conduct of the litigation begun four years ago in another court. I accept Mr Martindale’s characterisation of the matters the wife needed to show in order to succeed on her anti-suit injunction application. In my view the wife failed to make out her entitlement to such relief. On one construction of events, the wife participated in the Supreme Court litigation and only gave consideration to the possibility that the totality of her claims may not be addressed when McDonald J held that the trust failed with the consequence that the funds held by the trustee were held on one or more resulting trusts.
Further, the Supreme Court litigation involves parties beyond the husband and wife. If I were to grant the anti-suit injunction their causes of action would be adversely compromised possibly leaving them without remedy.
Further, the Supreme Court litigation has progressed at least to the point of the determination of a preliminary point under Order 47 of the Rules of the Supreme Court. While there remains in that case the filing of evidence in support of each party’s resulting trust claims, the Supreme Court litigation is in a state of vastly greater development than is the litigation in this court for which leave is sought to commence it.
I am not persuaded that it is appropriate to grant the anti-suit injunction that the wife seeks.
The husband’s stay application
It will be recalled that in CSR, the High Court held that the anti-suit injunction often arises in the same circumstances as does the stay application yet the two applications are different and the principles on which each is determined are likewise quite different.
Mr Martindale QC provided extensive written submissions on the husband’s stay application. Those submissions were comprehensive. I found them to be most valuable. Relevantly distilled, those contentions were as follows –
a)an order staying this proceeding pending the hearing and determination of the Supreme Court proceeding results in the avoidance of an abuse of process and in the avoidance of the possibility of inconsistent outcomes in this proceeding and in the Supreme Court proceeding;
b)relying on Voth, this court has an implied power to stay its own process in order to ensure that one party is not the subject of vexatious or oppressive conduct;
c)the commencement of this proceeding in the Family Court is vexatious or oppressive in the sense used in CSR because the Supreme Court litigation has been on foot since 2016 during which judgment was given pursuant to Order 47 of the Supreme Court Rules on 10 October 2019;
d)citing Australian Hardboards Ltd v Hudson Investment Group Ltd,[133] Henry v Henry,[134] Moore v Inglis[135] and Union Steamship Co of New Zealand Ltd v The Caradale,[136] the husband argued that the brining of multiple proceedings in Australian courts is prima facie vexatious or oppressive;
[133] (2007) 70 NSWLR 201.
[134] (1996) 185 CLR 571, 591.
[135] (1976) 50 ALJR 589.
[136] (1937) 56 CLR 277, 281.
e)citing Mackellar Mining Equipment Pty Ltd v Thornton,[137] Hyman v Helm,[138] CSR[139] and Henry,[140] the husband submitted that the prima facie vexatious nature of multiple proceedings being afoot in Australian courts is different to the situation in which a concurrent foreign proceeding is on foot as is an Australian proceedings;
f)cross-vesting legislation recognises “by implication that State courts may determine issues that were previously in the exclusive jurisdiction of this court” pursuant to which “State courts have exercised their concurrent jurisdiction”, citing Young v Lalic,[141] Eberstaller v Poulos[142] and Singh v Singh;[143]
g)citing Moore v Inglis,[144] the wife bears the onus of showing that the bringing of this proceeding (more properly, this leave application) is not an abuse of process;
h)the Family Court has no power to restrain Ms G, Mr P or Mr K from pursuing the Supreme Court proceeding, even if orders were made restraining the husband;
i)the wife is endeavouring to circumvent the Supreme Court proceeding by her anti-suit injunction application in circumstances where the Supreme Court has been seized of that litigation since 2016;
j)the wife has deliberately created concurrent proceedings in two courts in Australia in which the same factual matters and legal issues fall for determination;
k)the anti-suit injunction application brought by the wife has been purposefully manufactured to put a stop to the Supreme Court proceeding;
l)until the Supreme Court of Victoria hears and determines the competing claims of the parties in relation to the wife’s asserted equitable interests in the trust property, this court is unable to undertake the task prescribed by Stanford v Stanford of identifying the existing legal and equitable interests of the parties;
m)until that activity is undertaken, the trust fund is not “property” for the purposes of s 4 of the Family Law Act; and
n)further to the last mentioned point, until that task is undertaken it will not be established that such property is within the jurisdiction of this court.
[137] [2019] QCA 77.
[138] (1883) 24 Ch D 531.
[139] (1997) 189 CLR 345, 395.
[140] (1996) 185 CLR 571, 590.
[141] (2006) 197 FLR 27.
[142] (2014) 87 NSWLR 394.
[143] [2018] NSWCA 30 (at [250]).
[144] (1976) 50 ALJR 589.
It is necessary to make some observations on the stay application. In CSR the court held that a stay application falls for separate consideration to an anti-suit injunction application, although the two applications often arise from a similar substratum of facts.
In my view, largely for the reasons set out in Mr Martindale’s submissions recorded in paragraph 119 above, it is appropriate to make an order for the stay of this litigation until the hearing and determination of the Supreme Court litigation. In that way the parties will not be fighting two sets of litigation concurrently. When the Supreme Court determines the claims in relation to the parties’ entitlements to the funds held by the trustee on one or more resulting trusts, then the equitable interests of the husband and wife in relation to that aspect of property will be determined for the purposes of Stanford v Stanford. In my view, Mr Martindale’s analysis of the husband’s stay application is correct, especially in relation to –
a)a stay of this proceeding will avoid an abuse of process and the possibility of inconsistent outcomes in this proceeding and in the Supreme Court proceeding;
b)the commencement of this proceeding in the Family Court is vexatious or oppressive in the sense used in CSR because the Supreme Court litigation has been on foot since 2016; and
c)this court being unable to undertake the tasks prescribed by Stanford v Stanford until the Supreme Court of Victoria hears and determines the competing claims of the parties in relation to the wife’s asserted equitable interests in the trust property.
For those reasons I grant the husband an order staying this litigation pending the hearing and determination of Supreme Court proceeding SCI … or until that proceeding is otherwise resolved by agreement.
Conclusion
In view of the foregoing, orders must be made as follows –
a)pursuant to s 44(3) of the Family Law Act, the wife has leave to commence this proceeding;
b)I dismiss the wife’s anti-suit injunction application;
c)Mr J has leave to intervene in this proceeding; and
d)I grant the husband’s stay application in relation to this litigation.
I certify that the preceding one hundred and twenty-three (123) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 22 December 2020.
Associate:
Date: 22 December 2020
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