Lung and Meridien and Anor

[2009] FamCA 1065

FAMILY COURT OF AUSTRALIA

LUNG & MERIDIEN AND ANOR [2009] FamCA 1065

FAMILY LAW – PRACTICE AND PROCEDURE – Application to remove second respondent from proceedings

APPLICANT:  Ms M Lung

FIRST RESPONDENT:

SECOND RESPONDENT:

 Mr Meridien

Ms Q Lung

FILE NUMBER: PAF 2020 of 2005

DATE DELIVERED: 18 May 2009

PLACE DELIVERED: Parramatta

JUDGMENT OF: Waddy J

HEARING DATE: 18 May 2009

REPRESENTATION

APPLICANT WIFE: Mr Kenny of counsel

FIRST RESPONDENT HUSBAND: In Person

SECOND RESPONDENT: Mr Heazlewood of counsel

Orders

1. The second respondent is dismissed from the matter without determining any issue between the second respondent and the other parties. 

2. For reasons given this day, it is noted the rights of any of the parties equitable or otherwise may be pursued in the appropriate jurisdiction. 

3. Costs are reserved. 

IT IS NOTED that publication of this judgment under the pseudonym Lung & Meridien and Anor is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAF 2020 of 2005

MS M LUNG

Applicant

And

MR MERIDIEN

Respondent

REASONS FOR JUDGMENT

1. This matter was commenced in 2005 and is between the applicant wife, Ms M Lung and the first defendant her former husband, Mr Meridien and a second respondent, Ms Q Lung, who is a sister of the applicant wife.  The husband appears representing himself; the wife is represented by Mr Kenny of counsel; and the sister is represented by Mr Heazlewood of counsel. 

2. Mr Kenny’s Outline of Case indicates that the husband and wife have no assets or “negative equity”.

3. The father filed only two documents, on 16 March 2006.  One is a financial statement and the other is a response to an application for final orders.  They concerned both property and children.  The children's issue has been resolved elsewhere and what is before me is the property application. 

4. In the property aspect, the husband has asked for three orders by way of relief:

   “(1)That the property at [V] be sold and the net proceeds of sale be divided equally between the applicant and the respondent.”

5. It should be remarked immediately that this property has been sold already under the instructions of the mortgagee in possession.  The remaining proceeds after payment of all liabilities has been equally divided between the applicant and the first respondent, the husband and wife each receiving a sum slightly in excess of $9000. 

6. The second order that the husband seeks is:

   “(2)That the properties at [G] and [B] be sold, and the net proceeds of sale be divided equally between the applicant, the respondent number 1 and the respondent number 2.”

7. The third order sought was:

   “(3)That each party retain and be separately entitled to all other property, superannuation, and chattels in each of their separate names and/or possession.

8. At the time the amended response was filed the husband was represented by a solicitor from the firm of Terrence Patrick Salman. He is no longer represented.  He has filed no other document in relation to the property matters.  The wife has filed a substantial affidavit on 27 February 2009, and a new financial statement, and a further amended application for final orders. 

9. The matter has been listed many times in the Court and was last listed during what was euphemistically called a judicial “blitz”, but was not, on that occasion, reached for hearing.  However, Mr Heazlewood, counsel for the sister, (and sister in law, but I will call her sister here throughout), has indicated that he sought to pursue an Application in a Case seeking “that orders 1 and 2 sought by the husband in his amended response be struck out so far as concerns the second respondent”.  He also sought an order for costs. 

10. The application in a case was initiated orally and had been set down to be determined when the matter was last listed.  It was not able to be heard at that time.  So it is that on 13 May, some five days ago, the Application in a Case was physically filed in the registry.

11. The application in the case seeks, as I said, that the second respondent be removed from the proceedings.  When Mr Heazlewood’s application in a case came on there was no statement by the husband.

12. I have endeavoured to explain to the applicant, the husband, that if I were to proceed on his application against the second respondent, that given the paucity or absence of evidence that he has filed at the moment, he is likely to be severely disadvantaged.  It seems to me that the most convenient thing would be to strike out the second respondent and leave unadjudicated any proceedings between the husband, the wife, and the sister as may concern any joint venture or other arrangements that they allegedly entered into. 

13. At 11.30 this morning I advised the husband that I would require something written by 2.15 so that I would know what the first respondent’s basic claim was.  I put the following into the judgment so there can be no doubt about what the adjournment achieved.  It is headed “Affidavit” but has not yet been sworn.  The second respondent can swear to it when he enters the witness box. 

14. This is the statement:

    “Affidavit of [the husband] , 18 May 2009. 

    The purchase of the properties at [B] and [G] was organised by my wife who was also my accountant.  My wife informed me of the following:

    (a)       That the properties were to be a family investment;

    (b)That the funds to purchase these properties and to cover stamp duties and other costs would be paid by increasing the mortgage on the [V] home;

    (c)That I would be included as family.  At no time did I see any contracts, mortgages, or transfers regarding these properties;

    (d)That I would continue to contribute to the payment of the [V] mortgage and, therefore, assume that I maintained an interest in the other properties.

    I'd paid large amounts of cash to my wife during our marriage and I can only surmise that some of this cash is being counted as a contribution from my sister in law.  Example: I give my wife $1000, these funds are smuggled to China and then being officially bank transferred back to Australia.  My wife now counts that $1000 as her sister's contribution, and that now I owe her sister $1000.  By only showing one side of the transaction, money coming out of China and not money going in, vast areas for financial creativity can be displayed.  The [V] bank accounts show all the property costs come from there and there are no large cash deposits. 

15. It seems to me that where such a joint venture is being alleged it is possible that it could be argued that the matter could be adjudicated in the appropriate circumstances as part of the original jurisdiction or, as Mr Heazlewood prefers the accrued jurisdiction, of this Court.  I do not intend at the moment to decide such a matter but it seems to me that in certain circumstances that might be possible and even desirable.

16. Mr Heazlewood has brought to my attention the decision in 2003 of the Family Court of Australia sitting on Appeal from a judgment of my sister Dawe J. That case involved third party issues, accrued jurisdiction, and a joinder application. The Court readily acknowledged that there is such a jurisdiction and under sections 78, 79 and 114 of the Family Law Act as it then was, provided the Court with very wide jurisdiction. Their Honours also indicated that some caution and very careful examination of the facts needed to be exercised before applying the general notion that if the Court has jurisdiction it ought to exercise it when dealing with claims involving third parties and family law cases.

17. That caution having been sounded if the facts support the exercise of accrued jurisdiction, the Court ought not to shy away from it. It's a very important and necessary part of the Court's powers.  With that, I respectfully agree.  On the other hand I do have to be aware of the overall interests of justice due to all parties and, indeed, above all I must see that natural justice is afforded all parties.

18. It is clear that the husband is at a disadvantage, at the moment, of presenting evidence of the arrangement or agreement or family investment that he wishes to allege.  It seems to me to be no doubt that some money was advanced from an increase of the mortgage on the V home and it seems, no doubt, that these other two properties have been purchased.  One disputed property was placed in the sister's name only, but legal title will not stand in the way of equity when it is duly invoked.  (Both the wife and her sister insist that the monies drawn down were monies returned to the sister following loans from her to the husband and wife to purchase V property in the first place.)

19. The question here though is, is it possible to do justice to a claim of that nature when this is the first formulation of it by a layman who claims that he's had great trouble getting accounts and discovery of documents from his wife, saw and signed nothing, bases his claim on an assumption and alleges by surmise that it was his money smuggled into and out of China, and to support such a claim he has produced not a shred of evidence? Should I push such a claim to a conclusion now, or later during this week, or should I leave the issue between the parties to be litigated elsewhere in a more equitable environment and at a time when the husband can bring his claims as he wishes on the evidence he can then gather together, and with the advice of a legal expert in the area? 

20. Litigants in person ought to enjoy no greater rights than those who employ solicitors or brief counsel to appear for them.  There would be no Judge of this jurisdiction and, indeed, probably any jurisdiction including the High Court that does not acknowledge the great difficulty a Judge presiding anywhere can face, in dealing justly with the rights and interests of those who do have representation and those who do not.  It seems to me that in the present circumstances greater justice will be done if this issue is not argued through the jurisdiction of this Court at this time.  The husband has not fulfilled the most basic of responsibilities of such a claimant and the sister as third party cannot be prejudiced by having to meet a claim on the fly, as it were, against her wishes.

21. I have been advised the case might go for four or five days.  There is said to be no other money out of which the sister can be compensated for her costs if she were successful except by the sale of the house which is presently in her name.  So that, were I to force her to remain here for four or five days of the hearing, and if the husband were not successful as against her, then there is no evidence of any sufficient fund on which an order for her costs might be imposed. 

22. Secondly, if I proceed on the matter I will be bound to hear it on the evidence presented and not on the allegations voiced.  And where the litigant in person has, at this stage, very little evidence be it either here or in view, then I fear he may suffer an injustice which my attempts at explanation to him seem to have fallen on barren ground and been far from understood.  It seems to me that he will be better to keep his rights of alleging some such equitable charge, of resulting or constructive trusts, or some agreement between the parties elsewhere and at a different time.

23. There is no doubt that money was advanced for the purchase of the property at B in the sister’s name.  As far as I can see, there does not seem to be any dispute that that was done by increasing the mortgage on the V home.  The question of whether that source of the money gives rise to an interest of the husband in that property, I believe, can stand outside these proceedings which already will be sufficiently complicated.  It can be resolved when everyone has had due notice of the full claim and the evidence on which it is allegedly based.

24. This, of course, also preserves the rights not only of the sister to file whatever defence she might want to, and to know the case she has to meet.  It also means that the wife will not be disadvantaged by prolongation of these proceedings which already have been running for over four years. 

25. I have come to the view that it is best that the matter proceed today between the parties to the marriage.  Once those issues are decided here, then the partnership, understanding, arrangement, or whatever may be claimed, that is said to affect the house in the sister’s name, can be pursued elsewhere.  

26. As to the husband’s claims raised at 2.15 p.m. today of the alleged interchange of money from Australia to China and from China to Australia; who it came from, who got the benefit of it, how much there was, and how it was dealt with, again, that matter can be pursued, it seems to me, insofar as the house in contest in concerned, in another jurisdiction. 

27. I want to make it quite clear that granting the sister’s application in a case may prove to be a Pyrrhic victory for Mr Heazlewood's client in that the issue of the alleged interest in the subject property will remain to be determined elsewhere. But I believe that is the most economical and practical approach.  Where each of the parties who have counsel are paying their own way, it seems to me that it will be more economical in the long run.

28. I also feel that where it is asserted that someone has a right to a house which is ostensibly in the name of a third party, the third party should have all those rights and the protection of the Rules as to due and timely service of documents and so on, in time to defend themselves when a claim is brought.  Similarly, the other alleged partner, being the wife, deserves to have the claim laid out in front of her stating exactly what it is the father is claiming and the evidence on which that claim is based.

29. So in those circumstances, having read the voluminous and rather skilful submissions of Mr Heazlewood on behalf of his client, and determining the application on the basis which I have set out in these reasons, I intend to dismiss the second respondent Ms Q Lung from these proceedings and to note, as I do so, that my decision will leave unresolved any matters of equity between her and her brother in law and her sister.  Nothing I say is to prejudice the rights of any of the parties to pursue and defend their claims in equity.    

30. The orders that I have formulated are:

    Upon the application of Mr Heazlewood of counsel for the second respondent, and the first respondent, appearing in person, the Court orders:

    (1)The second respondent is dismissed from the matter without determining any issue between the second respondent and the other parties. 

    (2)For reasons given this day, it is noted that the rights of any of the parties equitable or otherwise, may be pursued in the appropriate jurisdiction. 

    (3)      Costs are reserved. 

    (4)It is noted that the second respondent submits to any order the Court may make in relation to the property at G, presently standing in the name of the wife and the second respondent.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Waddy

Associate: 

Date: