Nghiem & Truong & Anor - [2012] FamCA 550

FAMILY COURT OF AUSTRALIA

NGHIEM & TRUONG AND ANOR

[2012] FamCA 550

FAMILY LAW - PRACTICE AND PROCEDURE - Application - Dismissal or Striking Out

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

B Pty Ltd & Ors & K & Anor (2008) FLC 93-380
Doisy & Wilmot-Doisy [2009] FamCAFC 14
Gould & Gould; Swire Investments Ltd (1993) FLC 92-434
Lindon v The Commonwealth (No 2) (1996) 136 ALR 251; 70 ALJR 541
Pelerman & Pelerman (2000) FLC 93-037
Pencious & Pencious [2010] FamCA 605

APPLICANT:

Mr S Nghiem

RESPONDENT:

Ms Truong

INTERVENOR:

Ms Luong

FILE NUMBER:

MLC

4291

2011

DATE DELIVERED:

18 July 2012

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Macmillan J

HEARING DATE:

10 July 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Serra

SOLICITOR FOR THE APPLICANT:

Moores Legal

COUNSEL FOR THE RESPONDENT:

Mr Davis

SOLICITOR FOR THE RESPONDENT:

Berger Kordos

COUNSEL FOR THE SECOND NAMED RESPONDENT:

Dr Ingleby

SOLICITOR FOR THE SECOND NAMED RESPONDENT:

Forte Family Lawyers

IT IS ORDERED THAT

The matter be listed for Mention before Justice Macmillan at 9.00 am on 16 August 2012
On or before 4.00pm on 8 August 2012 the applicant file and serve upon all other parties a statement of claim setting out the precise nature of the applicant’s claim or claims against the second named respondent including but not limited to:
(a)The basis of such claim or claims and whether they are made pursuant to accrued jurisdiction, s78, s79 and/or part VIIIAA of the Family Law Act 1975 (Cth) or otherwise;
(b)The precise legal basis and nature of the claim or claims (such as constructive trusts, expressed trusts etc); and
(c)The propositions of law and fact asserted by the applicant in respect of each such claim or claims and sufficient particulars to enable the respondents to identify what the applicant alleges against the second named respondent including issues to be determined in respect of each such claim.
The oral application of the second named respondent be dismissed.
The costs of all parties of the Mention on 10 July 2012 be reserved.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Nghiem & Truong and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 4291 of 2011

Mr S Nghiem

Applicant

And

Ms Truong

Respondent

REASONS FOR JUDGMENT

Rule 6.02(1) of the Family Law Rules 2004 (Cth) provides that:
a person whose rights may be directly affected by an issue in a case, and whose participation as a party is necessary for the court to determine all issues in dispute in the case, must be included as a party to the case.
A person affected is joined by being named as a party to the proceedings in the application or response to that application either at the commencement of the proceedings or by the filing of an amended application or response after the case has started. A party who seeks to join another party after the case has started is required by the Rules to file an affidavit setting out the facts relied on to support the addition of the person named as a party to the proceedings. Such an amendment requires the court’s permission if it is made after the procedural hearing at which time the case is allocated the first day hearing before a Judge [Rule 11.10].
On 18 May 2011 the applicant in this case filed an initiating application naming the second named respondent as a party to the proceedings. The application sought final orders for a 50/50 split of the assets and liabilities of the parties. The applicant did not seek any final orders with respect to the second named respondent however he did seek interim orders directed to the respondents generally, and the second and third named respondents specifically, including orders for disclosure of documents and orders restraining the second named respondent from disposing of, selling, encumbering or in any way dealing with “her shareholding, unit holding or entitlement” in G Pty Ltd, G Unit Trust (“the Trust”), C Pty Ltd, F Pty Ltd and U Unit Trust. The husband also sought an interim order that the second and third named respondents be declared to hold their shares in G Pty Ltd and interests in the trust on trust for the applicant and the first respondent.
When the matter came on for hearing before Registrar Russell on 2 June 2011 orders were made requiring the husband to file and serve his application and financial statement filed 18 May 2012 and his affidavit filed 31 May 2011 upon the second named respondent by 4.00pm on 6 June 2011. The matter was otherwise listed for hearing before Justice Cronin on 14 June 2011. On that date his Honour made orders requiring the applicant to file an amended application setting out with precision the final orders sought. As a consequence of that order the applicant filed an amended initiating application in which he sought the following orders:
1.   There be an apportionment of the assets, liabilities and financial entitlements of the parties to effect an overall split such that each of the applicant and the first respondent receive 50 per cent and the second respondent and third respondent 0 per cent.
2.   The second and third named Respondents be declared to hold their shares in the company [G Pty Ltd] and interests in [G Unit Trust] (“the Trust”) on trust for the Applicant and the first Respondent.
3.   The second and third respondents do all acts and things necessary and sign all documents to give affect (sic) to the declaration in paragraph 2 above and to renounce any interest in [G Pty Ltd] and the Trust.
On 26 April 2012 I ordered by consent that the applicant and the respondent make full disclosure of all documents related to the Suburb A development undertaken by G Pty Ltd and any other documents relating to that company, and that within 45 days of the date of my order the applicant withdraw his application as against the second and third named respondents, or fully particularise his claim against both those parties and file any amended application. It was acknowledged by all parties at the first day hearing on 26 April 2012 that the Suburb A development undertaken by G Pty Ltd and the associated entities had failed and that accordingly the second named respondent’s interest in G Pty Ltd and the Trust was likely to have little or no value and it may well be that in those circumstances any application with respect to that interest will be of little financial benefit to the applicant.
On 8 June 2012 the applicant filed a second further amended initiating application. By that further amended application the applicant sought orders as against the second named respondent with respect to her shares in F Pty Ltd and her units in U Unit Trust.
The applicant has not withdrawn his application nor has he, as ordered, provided particulars with respect to the orders sought against the second named respondent in relation to either G Pty Ltd, the Trust, F Pty Ltd or U Unit Trust. It is on that basis that the second named respondent seeks, as submitted by Dr Ingleby, to be released from the proceedings.
Dr Ingleby on behalf of the second named respondent referred me to paragraphs 10 and 20 of the applicant’s affidavit filed 18 May 2011. Mr Serra on behalf of the applicant relied upon paragraphs 7-13 inclusive and paragraph 20 of that affidavit in support of his client’s application for orders against the second named respondent. The applicant, in those paragraphs of his affidavit, deposed that he was declared bankrupt in or about 2000 and, as a consequence of his bankruptcy, shares in companies and interests in trusts were held by relatives on trust for the applicant and the respondent rather than in their individual names. He further deposed that the shares in G Pty Ltd and the units in the Trust owned by G Pty Ltd were held by the wife, the second named respondent and a business associate. It was his evidence that the shares held by the respondent and the second named respondent were held on trust for him and the second respondent was made a shareholder for the specific purpose of assisting her application for Australian residency. Although it was the applicant’s evidence that prior to separation the second named respondent did not have any involvement in the management of the G Pty Ltd project, according to the applicant because she had lent considerable money to the project she was present at a meeting in September 2010 in relation to the refinancing of the project.
It is submitted by the applicant that he should be given a further period of 21 days in which to provide particulars of his claim. It is his case that although he has not provided the particulars as ordered he has filed an amended application setting out the orders that he now seeks and that his affidavit filed sets out in some detail the basis upon which he seeks relief against the second named respondent.
In B Pty Ltd & Ors & K & Anor (2008) FLC 93-380 the Full Court said at 82,800 (paras 43 to 46) :
In the usual run of applications for alteration of property interests or parenting orders, the fact of marriage or parenthood, accompanied, in respect of the former, by a history of contribution to and acquisition of, property and, in respect of the latter, evidence that relates to any aspect of a child’s interests, is sufficient to make the existence of a “cause of action” apparent. No pleading in the traditional sense is required to identify further facts material to the cause.
However, the narrative of descriptive nature of evidence is often unsuited to formulate or particularise a cause of action against a third party. Something resembling a statement of claim will generally be necessary.
In Gould v Gould; Swire Investments Ltd (1993) FLC 92-434 Fogarty J (with Nicholson CJ and Finn J agreeing) said (at 80,451):
“I conclude, consistently with Buckeridge and Barro that the correct procedure, where an applicant in proceedings under the Family Law Act seeks relief against a person who is a stranger to the marriage or relationship, is to name that person as an additional respondent in the proceeding and set out the nature of the claim and the basis of it in the ordinary way in the application”. (emphasis added)
Of relevance to the procedure adopted in the instant case, Fogarty J had also earlier said (at 80,448):
“…good case management and fairness to the parties, in particular to a third party, suggest that in appropriate circumstances the claim against a third party, or more particularly the jurisdictional base of that claim, be determined as a preliminary issue where it is appropriate and practical to do so…”
In Pencious & Pencious [2010] FamCA 605, which referred to the decision of the Full Court in B Pty Ltd & K, Cronin J observed:
The recipient of the application for joinder as well as all other parties to the litigation must be able to identify what material facts give rise to a cause of action against the party sought to be joined. Perhaps the practical test is whether the application would enable the party so joined or to be joined, to respond, in the sense of filing a defence to the claim.
I accept the submissions made by Dr Ingleby that in circumstances where the applicant has been ordered to particularise his claim as against the third parties it is not sufficient to simply rely upon the matters deposed to by the applicant prior to the making of those orders. Nor does the further application filed by the applicant assist. In my view that application, in so far as it seeks orders with respect to F Pty Ltd and U Unit Trust, only compounds the problem. I have not been referred to any evidence in support of any claim with respect to the second named respondent’s interest in either F Pty Ltd or U Unit Trust let alone particulars with respect to that claim. I also note that the applicant has offered no explanation for his failure to comply with my order and particularise his claim.
Mr Davis of Counsel on behalf of the first named respondent submitted that I should strike out the applicant’s application. It was his submission that although it is a serious step to deprive a litigant of access to the court the striking feature of this case is the applicant’s failure to provide any explanation for his failure to comply.
Although the second named respondent’s application was couched in terms of being released from the proceeding, in effect what was being sought was that the applicant’s application as against the second named respondent should be summarily dismissed. Rule 10.12 of the Family Law Rules provides that a party may apply for summary orders if it is claimed that the court has no jurisdiction, the other party has no legal capacity to apply for the orders sought, it is an abuse of process or that there is no reasonable likelihood of success.
In Lindon v The Commonwealth (No 2) (1996) 136 ALR 251; 70 ALJR 541, Kirby J set out the principles to be applied. These principles have been confirmed by the Full Court of this Court on many occasions. They were summarised by the Full Court (Ellis, Lindenmayer and Rose JJ) in Pelerman & Pelerman (2000) FLC 93-037 at 87,582 (para 45) as follows:
(a)The power for summary dismissal is a discretionary one.
(b)Relief “is rarely and sparingly provided.”
(c)The parties seeking summary dismissal must show that the application “is doomed to fail’ or has been otherwise described “that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious.”
(d)A weak case or one that is unlikely to succeed is not “sufficient to warrant termination.”
(e)“If there is a serious legal question to be determined, it should ordinarily be determined at a trial.”
(f)“If notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a Court will ordinarily allow that party to reframe its pleadings.”
In Doisy & Wilmot-Doisy [2009] FamCAFC 14 the Full Court pointed out that an application “with such potentially serious consequences would ordinarily be made by the filing of an Application in a Case (as required by r 5.01) rather than being made orally” as was the case in this matter.
The application of the second named respondent to strike out those parts of the applicant’s application seeking orders against her was based upon his failure to provide particulars of his claim as ordered, not that he has no claim. Whilst there may arguably be issues with respect to any costs thrown away by virtue of the applicant’s failure to comply with my orders, and I propose to reserve the costs of all parties of the Mention. I do not accept that the applicant’s failure to provide particulars as ordered is a sufficient basis for the summary dismissal of the relevant parts of his application.
In all of the circumstances and notwithstanding the lack of any explanation for non-compliance with my order, I am not satisfied that I should accede to the second named respondent’s application and summarily dismiss the applicant’s claim against the second named respondent. I propose to allow the applicant a further 21 days to particularise his claim. However, this is the second time that the applicant has been ordered to provide particulars of his claim and a further failure to comply with that order is likely to significantly prejudice any claim he may have against the second named respondent.
I propose to list this matter for final hearing in March 2013 and I will list it for Mention after the date upon which the applicant is required to file and serve the particulars of his claim for the purposes of making directions for that trial whether or not the applicant persists with his claim against the second named respondent.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered on 18 July 2012.

Associate:

Date: 18 July 2012