Narkis and Narkis and Anor (No. 2)
[2018] FamCA 1026
•28 March 2018
FAMILY COURT OF AUSTRALIA
| NARKIS & NARKIS AND ANOR (NO. 2) | [2018] FamCA 1026 |
| FAMILY LAW – PRACTICE AND PROCEDURE – where there are some modest disputes about the nature of the process – where the wife seeks orders under s 79A of the Act but will now file a statement of claim which will seek relief against the trustee of a family trust – where despite there being no present formulated claim, the court accepts there will be and as such, anticipatory orders can be made – where there is a parenting dispute about a 15 year old child and the wife refuses to indicate where she is living despite the child’s father having sole parental responsibility – orders made for the filing of comprehensive evidence to resolve that issue. |
| Family Law Act 1975 (Cth) |
| B Pty Ltd and Ors & K and Anor [2008] FamCAFC 113 Narkis & Narkis [2016] FamCA 976 Narkis & Narkis (No. 3) [2016] FamCA 1048 Narkis & Narkis [2017] FamCA 52 Narkis & Narkis (No. 2) [2017] FamCA 118 Narkis & Narkis (No. 3) [2017] FamCA 184 Narkis & Narkis (No. 4) [2017] FamCA 200 Narkis & Narkis (No. 5) [2017] FamCA 225 Narkis & Narkis (No. 6) [2017] FamCA 226 Re K Appeal [1994] FamCA 21; (1994) FLC 92 461 |
| APPLICANT: | Ms Narkis |
| RESPONDENT: | Mr Narkis |
| PROPOSED INTERVENOR: | Mr HH Narkis |
| FILE NUMBER: | MLC | 210 | of | 2014 |
| DATE DELIVERED: | 28 March 2018 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Cronin J |
| HEARING DATE: | 28 March 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr McEvoy QC with Ms Matson |
| SOLICITOR FOR THE APPLICANT: | Farrar Gesini Dunn |
| COUNSEL FOR THE RESPONDENT: | Ms Lane |
| SOLICITOR FOR THE RESPONDENT: | Cantwell Family Lawyers |
| COUNSEL FOR THE INTERVENOR: | Mr Wraith |
| SOLICITOR FOR THE INTERVENOR: | Tisher Liner FC Law |
Orders
Parenting
That all outstanding applications are adjourned to a date to be fixed.
That the Wife file and serve an affidavit on or before 4pm 13 April 2018 addressing:
a. The basis upon which she alleges the Husband should not be provided with the child’s residential address; and
b. Details of the child’s living arrangements and conditions.
The Husband be at liberty to file an Affidavit in answer to the Wife’s Affidavit within 14 days of service of the Wife’s affidavit.
That pursuant to Section 68L(2) the Family Law Act 1975 the child E born on the … 2002 be separately represented AND IT IS REQUESTED that Victoria Legal Aid arrange such separate representation.
That forthwith upon appointment by the said Victoria Legal Aid or otherwise the Independent Children’s Lawyer file a Notice of Address for Service.
That within 48 hours of notification of such appointment the parties, and if represented the solicitors for the respective parties, provide to the Independent Children’s Lawyer copies of all relevant documents relied upon.
That pursuant to section 91B Family Law Act 1975, the Department of Health and Human Services be invited to intervene in these proceedings.
Financial matters
That in relation to the real property know as M Street, Suburb N the Wife shall pay the following expenses for the said property in addition to the monthly sum of $4,167 including but not limited to:
a. Land tax owing in the amount of $8,094;
b. Land tax instalment due in March $5,772 and all further instalments of land tax as and when they fall due;
c. Building insurance premium $2,438; and
d. Accounts owing for repairs in the amount of $2,500.
That within 14 days the Wife provide the names of 3 appropriately qualified tradespersons to the Husband to inspect the real properties as follows:
a. With respect to the real property at M Street, Suburb N in order to identify necessary repairs (if any) and provide a quotation as to the works to be done, with particular attention to water damage and the door lock system, with such attendance and report (if any) to be at the equal expense (if any) of the husband and the wife; and
b. With respect the real property at Q Street, Suburb R in order to ascertain in general terms the nature and extent of works to be done, with the expense (if any) of such attendance and report (if any) to be at the Wife’s sole expense.
c. With the Husband to make his election of tradespeople within a further 7 days and notify the Wife of his election.
d. The Wife’s solicitors to contact the tradespeople to facilitate the inspections of the properties; and
e. The Wife is not permitted to attend either of the properties for the purposes of any inspection.
Procedural matters
That on before 4pm 4 May 2018 the Applicant Wife file and serve:
a. an Amended Initiating Application (if any) seeking to join Mr HH Narkis in his capacity as trustee of the Ms JK & Mr Narkis Family Trust (“the Family Trust”) as a party to the proceeding, annexing a Statement of Claim setting out the basis of any relief sought against the Family Trust or its assets and particularising the basis of any claim under section 79A Family Law Act1975 (Cth);
b. any affidavit in support thereof;
c. written submissions in relation to:
i.her assertion that the power of the Court pursuant to section 79 Family Law Act 1975 was not exhausted after the making of final orders on 13 April 2017 with respect to each of:
1. the superannuation fund; and
2. the Family Trust.
ii.the joinder of Mr HH Narkis in his capacity as trustee of the Family Trust.
That no later than 4pm 5 June 2018 the Respondent Husband file an Amended Response attaching a Defence to any Statement of Claim so filed and submissions.
That no later than 4pm 15 June 2018, Mr HH Narkis in his capacity as trustee of the Family Trust file and serve a Defence and a response to the submissions of the Applicant and First Respondent (if necessary) in so far as they relate to the Family Trust or the assets of the trust and the question of joinder.
That matter be listed for mention on a date to be advised by the Court for any further oral submissions as may be required by the Court and/or the release of judgment on the question of the joinder and any claim that the power under section 79 was not exhausted by the Orders of 13 April 2017 and further directions in relation to the conduct of the matter generally.
The costs of the parties and Mr HH Narkis are reserved.
Liberty to Apply.
NOTATION
The parties have agreed that the solicitors for Mr HH Narkis will hold 45 per cent of the proceeds of sale of the real property at S Street, Suburb T (“The Suburb T property”) on trust in the name of the Trustee in an interest bearing account until the determination of the proceeding.
A.That of the 55 per cent of the proceeds of sale of the property the Suburb T property the parties agree that the funds will only be used to meet expenses and investments of the Trust including those payments set out in paragraph 15 of the Affidavit of Mr HH Narkis dated 22 March 2018 and otherwise there be no distributions from these funds to beneficiaries pending determination of these proceedings
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 Narkis & Narkis and Anor (No 2) 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 210 of 2014
| Ms Narkis |
Applicant
And
| Mr Narkis |
Respondent
And
| Mr HH Narkis |
Proposed Intervener
REASONS FOR JUDGMENT
On 28 March 2018, I made a number of interlocutory orders in proceedings between Ms Narkis (the wife) and Mr Narkis (the husband) and the husband’s son Mr HH Narkis (the trustee). I gave cursory explanations to enable the parties to finalise the draft orders but at the request of counsel, I said I would give more expansive reasons. These are those reasons.
The interlocutory proceedings arose out of a pending application by the wife which is opposed by the husband and the trustee. The trustee is not yet a party to the proceedings.
This case has an extensive and difficult history which does not need to be explained here but various orders and judgments have been published under the pseudonym Narkis & Narkis (see [2016] FamCA 976; [2016] FamCA 1048; [2017] FamCA 52; [2017] FamCA 118; [2017] FamCA 184; [2017] FamCA 200; [2017] FamCA 225; [2017] FamCA 226).
The wife did not participate (as she should have) in the April 2017 final orders; they were made on an “undefended basis” at the urging of the husband. An undefended hearing does not mean that the applicant obtains a judgment by default and in this case, the husband was required to establish that the orders he promoted were just and equitable (see s 79 (2) of the Family Law Act 1975 (Cth) (“the Act”)). In that truncated hearing, I expressed concern about the state of the evidence but the husband maintained that the Court should do the best it could. One consequence of that was, and is, an unresolved question of whether the Court’s power arising from its jurisdiction under s 79 of the Act is, and was, exhausted by the April orders.
In addition to property alteration orders, I also dealt with a parenting dispute about the parties’ child E who is now not far off 16 years of age. It is fair to say that the parenting orders were not successful if viewed from the perspective of giving some certainty to E’s life. She is now residing with the wife and there appears to be no contact occurring with the husband. That issue is part of the present dispute.
In December 2017, and presumably in the context of endeavouring to complete the requirements of the property orders, an auction organised by the husband was about to be conducted on a specific real property. The wife initially sought ex parte orders to stop the auction proceeding on the basis that, notwithstanding the apparent finality of the April 2017 orders, she was seeking to set them aside and retain that property. I declined to deal with the matter ex parte and the proceedings were then brought to the attention of the husband. In understanding those circumstances, it needs to be said that he was in the US at a time with a raging bushfire around him, his lawyer was apparently unavailable and, he had an auctioneer pressing him for instructions. To his credit, he participated by telephone and agreed to stay the auction. Controversies have continued since that time.
There were subsequent hearings and, mostly, compromises were made and agreements reached which involved very little of the Court’s time. That ended on 28 March even though some agreements were reached.
At this point, it is necessary to mention the trustee. One issue in the April 2017 proceedings concerned a family trust. The relevant cited reasons explain how a dilemma arose which I shall not repeat. Suffice to say, the appointor of the trust is said to have replaced the corporate trustee and the present trustee now stands in that role. At the moment, there is no relief sought against him although the various submissions of counsel would indicate that a statement of claim seeking that relief will be forthcoming.
One issue about the trust that is the focus of the dispute can be seen from the wife’s affidavit in December 2017. She deposed to the purchase of the now disputed trust property with the husband. This was the property which was the subject of the auction.
The wife asserted that she had been provided over $200,000 by her father which went towards the purchase and on that acquisition, the property was put into the trust. I asked what that meant because it might be viewed a number of different ways. First, it could be understood that the property was bought by the family trust regardless of its objects and purposes and as such, is simply an asset of the trust. Alternatively, it could have been bought for the wife by the trust and as such, the trustee holds the property, or a portion of it, on trust for the wife. Alternatively again, was this a resulting trust for the father?
Counsel for the trustee asserted that a life tenancy for the father was created in the property. He has now died and it is unclear to me who is/are the remaindermen and what effect that arrangement, if accepted, had.
Senior Counsel for the wife said that a statement of claim would assert that the wife had an interest in her own right in this property which suggests that she is making an equitable claim. I understand the title to the property is in the name of the former trustee.
The position is very confusing and I indicated that I would be assisted by a formal statement of claim about just what this trust is and who has an interest in it not to mention who owns the apartment block that was to be the subject of the auction.
In addition to those issues, there is the question about whether the power of the court under s 79 of the Act is exhausted anyway. That issue also focuses on whether the parties’ self-managed superannuation fund was the subject of the orders. The April 2017 reasons dealt with my concerns about the evidence and relevantly, this was an interest in a self-managed superannuation fund.
Counsel for the trustee submitted that he would be arguing that the catch-all orders at the end of the orders dealt with all outstanding issues on the basis that I said that each party kept what was otherwise in their possession but that does not answer the question of the potential interest of either of the parties in their member accounts (if they existed) in the SMSF. These are matters that need to be ventilated.
Turning then to the issues in dispute, most revolved around whether the trustee was to be joined and whether there was any cause of action against him. I have unashamedly worked on the assumption that what senior counsel has told me will occur and that I can shortly anticipate receiving a statement of claim. The formal application initiating proceedings used by this Court is largely unhelpful for complex cases such as this but I have said that I will accept a formal statement of claim attached to the amended application. The rules of court permit joinder simply by naming a person and I see no reason why that cannot occur here. If the trustee takes the view that he has been inappropriately joined, or desires to seek summary dismissal of any claim by him, he can then do so.
Dealing first with the parenting issues, three matters were ventilated. They were:
(a)Should the wife disclose the address of E to the husband as distinct from the provision of an electronic address in circumstances where he is in the United States, there is an intervention order against him and he only knows that E is attending a Melbourne private school?
(b)Should the Court request the intervention of the relevant State welfare department under s 91B of the Act because of past concerns about the welfare of E notwithstanding she is almost 16 years of age?
(c)Should an Independent Children’s Lawyer be appointed?
I have left (a) to be considered by the parties but with the wife providing an affidavit as to why the address details should not be disclosed. Senior Counsel for the wife gave some reasons why the order should not be made but I do not accept that I should determine this issue without evidence. He observed that the wife would give evidence as to why E had missed school. Having regard to her age, that is something about which the Court should be concerned if it is submitted by the husband that there is a health or other welfare reason for E’s problems. In any event, it is normal for most separated parents to know what is happening to their children. In April 2017, I had sufficient evidence to show that the husband could care for E and in the circumstances, the wife’s silence on the subject is unusual.
Items (b) and (c) are different and have to be viewed in the context of the history of the parenting proceedings.
It is unnecessary to say more about the concerns I have except that there have been questions of the standards of living under which E remained with her mother. The home was uninhabitable at one stage and my recollection was that E was living above a shop. The Department of Health and Human Services have had past involvement which is indicative that conditions of care are of interest to them. The proceedings also had the involvement of an Independent Children’s Lawyer previously and, as I suspect much will revolve around E’s views (as well as her wishes having regard to her age). I think she should have a voice independent of her mother.
Section 118 of the Act governs the power of the Court to make an order for a child to be represented in parenting proceedings. The appointed lawyer is not the lawyer in the traditional sense. The relevant provisions say:
(1)This section applies to proceedings under this Act in which a child's best interests are, or a child's welfare is, the paramount, or a relevant, consideration.
(2)If it appears to the court that the child's interests in the proceedings ought to be independently represented by a lawyer, the court:
(a)may order that the child's interests in the proceedings are to be independently represented by a lawyer; and
(b)may make such other orders as it considers necessary to secure that independent representation of the child's interests.
(3)…
(4)A court may make an order for the independent representation of the child's interests in the proceedings by a lawyer:
(a)on its own initiative;……..
(5)Without limiting paragraph (2)(b), the court may make an order under that paragraph for the purpose of allowing the lawyer who is to represent the child's interests to find out what the child's views are on the matters to which the proceedings relate.
Note: A person cannot require a child to express his or her views in relation to any matter, see section 60CE.
(6)Subsection (5) does not apply if complying with that subsection would be inappropriate because of:
(a)the child's age or maturity; or
(b)some other special circumstance.
The statutory basis for an order in this case is apparent. The court may make the order of its own motion but in this case, I am urged by the husband to make it.
Some assistance as to the appropriate approach can be found in Re K Appeal [1994] FamCA 21; (1994) FLC 92 461. It is not necessary for me to set out the full details of that decision but I have kept in mind that the Full Court issued “guidelines”. There, the Court considered categories of cases involving child abuse in its various forms, cases of intractable conflict between parents, alienation of a child from a parent, obvious issues of significant medical, psychiatric or psychological illness or personality disorder and where a mature child was expressing strong views which would change a status quo. In respect of these, and other categories, the Full Court explained why the court would benefit from the child’s interests being represented. It is unnecessary that I set out those explanations but I am satisfied having taken them into account that because of what occurred after April 2017, and in the context of what I was told in the final parenting hearing, E could fit into a number of the categories mentioned in Re K. In my view, the circumstances here justify an order.
Turning then to the question of whether or not the relevant State welfare authorities should be invited to intervene, it is important to note that s 91B of the Act simply confers power to request that assistance. Whilst the department may take the view that there is no protective concern to warrant its officers indicating their views about welfare issues or participating in a parenting hearing, I do not consider the invitation should not be offered where the court is bereft of information about E. It may be that the Department is already conscious of what is happening in E’s life and no doubt then, s 69ZW might be considered. In addition to the mystique around what is happening to E are the questions of why intervention orders were made. The uncertainty of the mother’s position at least warrants the Department being put on notice that this Court is not sure what is happening to E even if she is attending school.
I turn then to the financial matters. These are the unresolved issues:
(a)What should be done about outstanding land tax, repairs to the property already completed and building insurance?
(b)What should be done about occasional future expenses of a similar nature to those in (a)?
(c)Should the wife be permitted to attend inspections by trades-people who attend to give quotes for work to be done?
(d)Should the wife prepare written submissions about the issue of jurisdiction and whether the power to make orders is expended?
(e)Should the trustee be ordered to file a formal defence?
I understand that the negotiations with the husband personally in December 2017 led to an agreement about the auction being stopped on condition that the wife did certain things. It seems that one of the agreements related to an agreed monthly amount to be set aside for expenses and the other amounts which were or were not within that agreement.
I take into account that the wife sought an indulgence of the husband in relation to the auction and he agreed to it. Those details can all be found in the documents filed with the court but significantly, two matters arise out of the orders. First, the wife gave an undertaking as to damages. Secondly, the order provided for the wife to be responsible for the “holding costs” under what is now described as an amount of $4,167 per month. Around that sum revolves the “overs and unders” arrangement.
Senior Counsel for the wife submitted that in relation to issue (a), nothing was pressing from the relevant revenue office and that payment of that obligation could be delayed. It was submitted that I should remember that the wife had also picked up the obligation to pay E’s private school fees.
Counsel for the husband pointed to the order and said that these expenses now in dispute fell within the wife’s obligations and their non-payment could affect the husband’s credit rating.
In my view, the intention is clear that the wife was to ensure that holding costs were her responsibility. The precision in the monthly amount could not be said to be decisive because it was a formula expressed to give both parties some understanding what was to happen with money. The wife was responsible for the payments and I see no reason why the repairs do not fit into the same category as the land tax. She should pay those. The fact that she has paid private school fees is not decisive as no doubt that was her choice of schooling.
In respect of (b), to make any order about future expenses would be speculative. It is unnecessary for me to deal with that issue.
In respect of (c), what is contemplated is that trades people will attend to give quotations for repairs to properties that are tenanted. Obligations on the landlords no doubt fall to state laws but here, the parties agree that an attempt must be undertaken to see what repair work is to be done. The process is no more than obtaining quotes. I see no reason for the wife’s presence and nothing cogent was offered. There is no apparent cost involved in the exercise and as this property is a set of apartments, a building manager will apparently attend to give the quoting people access to parts of the building. There will no doubt be an invasion of the tenants’ privacy but then again, they presumably want the work done. Having the wife also attend for no obvious reason is therefore unnecessary. The parties drafted an order in the form of an injunction and I see no reason why the wife should not be so restrained.
The final two matters relate to the court process and procedures. The rules of court do not assist much in this case as I have already observed. I anticipate that there will be a comprehensive claim for relief which includes relief against the trustee. I agree with counsel for the trustee that this Court has traditionally taken the view (B Pty Ltd and Ors & K and Anor [2008] FamCAFC 113) that a claim should first be pleaded. However, the Full Court did say:
[64]It would be impossible, based upon the wife’s deposition, to identify what the wife said were the facts material to a cause of action which would lead to an order that the trustees of a discretionary trust distribute to one of a group of beneficiaries. The amendment would have joined the third parties to an unformulated claim to which they would have had great difficulty responding. That Morgan J did not address this issue is, in our view, an appealable error.
All of those problems are overcome by my anticipation of what will occur because the Court should accept the assurance of senior counsel. If it turns out to be incorrect, that can be adjusted by costs. Here, I understand that the trustee will be pursued and the nature of the claim is as was canvassed during the discussion before me. The claim may be “unformulated” in one sense, and even unparticularised in another, but the trustee can be under no misapprehension that the wife is arguing that she (through her father) put money into the property that was “put into” the trust and as such, the Court is being asked to deal with that. There is, in my view, no prejudice to the trustee in an anticipatory order.
The wife’s senior counsel was reluctant to bifurcate or separate out the jurisdiction and power question but again, I see no prejudice to the wife in that being the subject of written submissions on the basis that the issue is largely one of law and all agreed that upon submissions being filed, it did not require a formal hearing in open court unless I needed further submissions. I have agreed to that course and senior counsel for the wife agreed that submissions could be provided if the Court went down that path. In my view, that is the most efficacious way of handling the point because it seems to be the wife’s case that the power is not exhausted on that point in which case, if so found, the pursued s 79A relief may not be necessary.
These are the reasons for the orders I have made.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 28 March 2018.
Associate:
Date: 28 March 2018
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