Nicotra & Nicotra
[2023] FedCFamC2F 1548
•19 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Nicotra & Nicotra [2023] FedCFamC2F 1548
File number(s): SYC 7967 of 2021 Judgment of: JUDGE MONAHAN Date of judgment: 19 December 2023 Catchwords: FAMILY LAW – ANTI-SUIT INJUNCTION – where wife allegedly borrowed monies from the wife’s partner –
where the former matrimonial home was used as security for the alleged loans – where the wife has allegedly defaulted on the loan agreements – where the husband has exclusive occupation of the former matrimonial home and seeks to retain the property on a final basis – where debt recovery proceedings were commenced in the District Court of NSW against the wife by the wife’s partner – where the husband seeks an injunction to prevent the wife’s partner continuing the current proceedings or commencing further proceedings in the District Court of NSW.FAMILY LAW – JOINDER APPLICATION – where it is alleged that the wife borrowed money from the wife’s partner secured against real property occupied by the husband – where the husband seeks to retain the property on a final basis – where the wife has allegedly defaulted on the loan agreement – where the wife’s partner seeks payment of the loan monies.
Legislation: Family Law Act 1975 (Cth) Part VIII, Part XIV, ss. 72(1), 74, 75, 75(1), 75(2), 75(3), 79, 80, 80(1)(b), 80(1)(h), 80(1)(k), 90AB, 90AC, 90AE, 90AF(3), 106B, 114(1), and 114(3)
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 43
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Rule 3.01
Cases cited: AC & VC (2013) FLC 93-540
Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1
Arida v Arida [2015] NSWCA 170
CSR Ltd v Cigna Insurance Australia (1997) 189 CLR 345
Dovgan & Dovgan [2021] FamCA 306
Eastburn & Eastburn [2022] FedCFamC1F 706
Jordan & Sutton (No 2) [2022] FedCFamC1F 850
Pencious & Pencious [2010] FamCA 605
Division: Division 2 Family Law Number of paragraphs: 123 Date of hearing: 18 September 2023 Place: Sydney Counsel for the Applicant: Mr Dura Solicitor for the Applicant: O’Sullivan Legal Counsel for the First Respondent: Mr Macarounas Solicitor for the First Respondent: CK Lawyers Counsel for the Second Respondent: Mr Macarounas Solicitor for the Second Respondent: CK Lawyers Counsel for the Proposed Third Respondent: Mr Heazlewood Solicitor for the Proposed Third Respondent: MLC Lawyers ORDERS
SYC 7967 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS NICOTRA
Applicant
AND: MR NICOTRA
First Respondent
CC PTY LTD
Second Respondent
MR GULL
Third Respondent
ORDER MADE BY:
JUDGE MONAHAN
DATE OF ORDER:
19 DECEMBER 2023
THE COURT ORDERS THAT:
1.Mr Gull (“the Third Respondent”) be joined as a party to the proceedings.
2.Pending determination of these proceedings in the Federal Circuit and Family Court of Australia, the Third Respondent be restrained from continuing the legal proceedings against Ms Nicotra (“the Applicant”) in the proceedings numbered … and … in the District Court of NSW other than to discontinue those proceedings.
3.The Third Respondent be otherwise restrained from commencing any legal proceedings against the Applicant (including any recovery proceedings pursuant to an alleged loan between the Third Respondent and the Applicant) either on his own behalf or via the company C Pty Ltd until further orders of this Court.
4.If pressed, the question of the costs arising from the Amended Application in a Proceeding filed on 14 September 2023, and the responses thereto, be reserved to the final hearing.
5.All extant applications be adjourned to this Court on 31 January 2023 at 12:00pm by Microsoft Teams for directions, and for interim hearing with respect to issues raised in the Response to an Application in a Proceeding filed by the Applicant on 11 September 2023 (“the interim hearing”).
6.Any Application in a Proceeding or Objection to Subpoena made returnable by the Registry from the date of these orders until the date of the interim hearing will not be heard on that date without the express leave of Judge Monahan, however directions in respect of that Application or Objection may be given.
AND THE COURT DIRECTS THAT:
7.By no later than 4:00pm on 17 January 2024, the First Respondent make, file and serve:
(a)one brief affidavit in response to paragraphs 32 to 42 of the Applicant’s Affidavit filed on 11 September 2023 and, if required, a further Amended Application in a Case limited to the issues raised by the Applicant in her Response to an Application in a Proceeding filed on 11 September 2023; and
(b)an Amended Response to Final Orders, and one Affidavit in support setting out any relief sought against the Third Respondent and the factual basis for that relief.
8.If required, the Applicant file a brief Affidavit in reply by no later than 4:00pm on 24 January 2024.
9.The Third Respondent make, file and serve a Response to Final Orders, and one Affidavit in support by no later than 4:00pm on 24 January 2024.
10.By no later than 4.00pm on 29 January 2024 the solicitors for the Applicant and the First Respondent (or, if unrepresented, the parties themselves) file on the Commonwealth Courts Portal and forward to Chambers at [email protected] and each other party an Outline of Case Document (Interim Hearing) in Microsoft word format (not PDF). The Outline of Case Document (Interim Hearing):
(a)may be downloaded from the Court’s website;
(b)is to be no longer than 15 pages;
(c)is to include a brief chronology listing significant events in Part B of the form (following the list of documents relied upon section of the document); and
(d)must be emailed to Chambers and served on each other party, even if the document is filed through the Commonwealth Courts Portal.
11.In the event the Applicant and the First Respondent proposes to tender relevant material they do all acts and things necessary to prepare a joint electronic tender bundle and forward such bundle to the Chambers of Judge Monahan by email at …@... by no later than 4:00pm on 29 January 2024. The joint tender bundle should not be of unreasonable length and must be arranged chronologically, paginated, indexed and in text searchable PDF format.
12.The legal representatives have inspection and photocopy access to documents produced under subpoena (“the material”) for the purposes of preparing a joint tender bundle in accordance with paragraph 11 herein. Such access is granted on the condition that:
(a)the legal representatives provide an undertaking to not provide the parties or any third parties paper or electronic copies or photographs of the material;
(b)all copied material is destroyed at the conclusion of the hearing; and
(c)if any party is to become self-represented, then leave must be sought by the self-represented party to photocopy the material.
13.The parties through their legal representatives are to engage in discussions prior to the interim hearing.
14.The parties have liberty to approach Chambers with a Minute of Orders that resolves any issues in dispute.
15.Subject to these Orders, all interim applications be otherwise dismissed.
THE COURT NOTES THAT:
A.These Orders followed a contested interlocutory hearing heard by the Court on 18 September 2023.
B.If an Affidavit or document relied upon does not comply with these directions and/or the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) as amended by the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) then it is at the discretion of this Court as to whether certain parts of the Affidavit of document can be relied upon during the interim hearing.
C.The interim hearing will be limited to the issues raised in the Response to an Application in a Proceeding filed by the Applicant on 11 September 2023 and the question of whether the length of the final hearing can be limited to not more than three to four days.
D.If any party requires an interpreter at the interim hearing they are to inform the Court as soon as practicable.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MONAHAN:
The parties MS NICOTRA (“the wife”) and MR NICOTRA (“the husband”) are in dispute about property and financial matters.
In the substantive proceedings, the wife is the applicant and the husband is the first respondent. In addition, a company controlled by the husband, CC PTY LTD is the second respondent.
This decision arises from the filing of an interlocutory application by the husband seeking inter alia:
·the joinder of a third party, MR GULL (“the proposed third respondent); and
·an anti-suit injunction against the wife and the proposed third respondent.
The proposed third respondent opposes the interlocutory orders sought by the husband. The wife ultimately did not seek to be heard on these issues. I also note that the second respondent did not seek to be heard at the interlocutory hearing.
Further details of the outcomes sought by each of the parties are provided later in these reasons.
The interim hearing proceeded before me on 18 September 2023. All parties were legally represented by Counsel; Mr Macarounas appeared for the husband and the second respondent, Mr Dura (as the Senior Counsel then was) appeared for the wife, and Mr Heazlewood appeared for the proposed third respondent.
For the reasons that follow, the Court has found it appropriate to make orders joining the proposed third respondent to these proceedings and granting the anti-suit injunctions sought by the husband.
Unless otherwise indicated, any statutory references I make will be to the:
·Family Law Act 1975 (Cth) (“the Act”); and
·Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Family Law Rules”).
BACKGROUND
Relationship history
The husband is currently aged 53 years and the wife is currently aged 35 years.
The parties commenced a romantic relationship in 2002 while the husband was still married to his former wife. The husband separated from his former wife in 2009.
The husband and the wife have two children: Ms D currently aged 18 years and X currently aged 14 years.
The husband and wife agree that they commenced cohabitation in 2009 and married in 2016. The wife gives untested evidence that the parties separated under the one roof in September 2019.
The husband is currently employed by the business E Pty Ltd.
The wife is currently employed as a professional at F Company.
In 2017, the parties purchased the former matrimonial home, located at G Street, Suburb H (“the Suburb H property”). The Suburb H property was registered in the wife’s sole name and is detailed further below. The parties moved into in the Suburb H property in early 2018. As stated, the wife asserts that the parties separated under the one roof in September 2019.
In early 2021, the wife commenced a relationship with her current de facto partner, Mr Gull, being the proposed third respondent in the current proceedings. Although the wife and the proposed third respondent agree that they remain in a relationship, the wife gives evidence that they do not currently reside together.
In late 2021, the wife and the two children vacated the Suburb H property and moved into a property that she now owns in Suburb W that is detailed further below. The wife asserts that this decision to leave the Suburb H property followed the making of an Apprehended Domestic Violence Order (“ADVO”) against the husband for the protection of Ms D.
The husband continues to reside in the Suburb H property.
Property history
Husband’s previous marriage
The wife asserts that:
·in 2000, the husband and his former wife allegedly purchased a property located at J Street, Suburb K for $210,000.
·in 2002, the husband and his former wife allegedly purchased a property located at L Street, Suburb K for $372,000 that was sold two years later for $525,000.
·in 2004, the husband and his former wife allegedly purchased a property located at M Street, Suburb N for $520,000 that was sold in 2012 for $555,000.
Husband’s companies and the Nicotra Family Trust
The wife asserts that:
·the husband caused the registration of the company O Pty Ltd, in 2006;
·the husband caused the registration of the company P Pty Ltd, in 2009;
·the Husband caused the establishment of the Nicotra Family Trust in 2010 (with P Pty Ltd as the trustee); and
·the husband caused the registration of the company CC Pty Ltd in 2015 (in which he is the majority shareholder).
The company O Pty Ltd, has a 50% shareholding of, and allegedly acts as the vehicle for services provided by the husband in, the business E Pty Ltd.
In 2014, the Nicotra Family Trust allegedly purchased the property located at Q Street, Suburb R for $437,250.
In 2017, the second respondent allegedly purchased the properties located at B Street, Suburb K (“the B Street properties”) in 2017 for $880,000 and $1,160,00 respectively.
The wife asserts that the husband contributed the sum of $730,000 towards the purchase of these properties without her knowledge.
Suburb T property
The wife asserts that in 2012, the husband purchased the property located at S Street, Suburb T (“the Suburb T property”) for $1,200,000. The wife further asserts the husband funded the deposit paid of $120,000 and that the balance of the purchase monies borrowed through a mortgage over the property.
Suburb H property
As stated, the parties purchased the Suburb H property in late 2017, and commenced residing there in early 2018. The property was purchased in the wife’s name only for the sum of $3,620,000. The wife asserts that the purchase was financed using $600,000 raised by the husband against the Suburb T property together with mortgage finance from the National Australia Bank (“NAB”) (also in the wife’s name) for $3,358,000.
Suburb N property
The wife gives evidence that in 2009, she purchased the property at U Street, Suburb N (“the Suburb N property”) for $310,000, with a housing assistance loan of $110,000.
In mid-2022, the wife took out a further mortgage over the Suburb N property with V Company for $235,000. These funds were used by the wife to assist in the purchase of a property at Suburb W that is detailed further below.
The wife subsequently entered into contract to sell the Suburb N property for $525,000 that settled in late 2022. After payment of the rates, taxes and selling costs, the net sale proceeds were largely applied to discharge the mortgages over both the Suburb N and Suburb W properties.
Suburb Z property
The wife gives evidence that in 2017 she purchased a property located at Y Street, Suburb Z, Melbourne (“the Suburb Z property”) for $460,000. The wife asserts that the purchase was assisted by a loan of $250,000 she received from the proposed third respondent and from a loan of $180,000 she received from her parents.
The wife further gives evidence that she entered into an updated loan agreement with the proposed third respondent in late 2021. The wife asserts that with interest, the loan debt from the proposed third respondent is now $334,800 and remains unpaid. In addition, the loan debt from her parents remains outstanding in the amount of $180,000.
Of immediate relevance to the Court in the current dispute is the evidence that the Suburb H property was used as security by the wife for the updated loan agreement to the proposed third respondent.
The husband disputes inter alia that the loan monies allegedly received from the proposed third respondent and alleges that the loan(s) are not genuine. He gives evidence that he only became aware of the alleged debt(s) owed to the proposed third respondent by way of updating disclosure. Following a conversation he had in mid-2023 with the former wife of the proposed third respondent, the husband formed the view that the debt recovery proceedings commenced against the wife by the company C Pty Ltd in the District Court of NSW (“the District Court proceedings”), were being used by the wife and the proposed third respondent as a vehicle to cause the sale of the Suburb H property.
Suburb W property
The wife gives evidence that in late 2021, she purchased a property located at AA Street, Suburb W (“the Suburb W property”) for $721,000. The wife asserts that the purchase was funded by a loan from V Company that was secured by way of mortgage over this property and the then Suburb N property, and a further loan from the proposed third respondent. There is evidence that the wife entered into a loan agreement with the proposed third respondent in mid‑2021 for $291,520 (inclusive of interest payable).
Again, of immediate relevance to the Court in the current dispute, is the evidence that the Suburb H property was used as security by the wife for the loan agreement to the proposed third respondent.
C Pty Ltd
There is evidence that in mid-2021, the wife and the proposed third respondent established the company C Pty Ltd with each being directors and holding 50 of the 100 shares in the company.
There is also evidence that in late 2021, the company lodged a caveat over the Suburb H property in the mistaken belief that the two alleged loan agreements between the wife and the proposed third respondent were taken out with the company. I note that in the Orders made at the conclusion of the interlocutory hearing on 18 September 2023, the Court noted that:
A.The proposed Third Respondent, [Mr Gull] indicated that he intends to withdraw the caveats lodged on the [Suburb H] and [Suburb Z] properties on behalf of [C Pty Ltd] and intends to lodge new caveats on those properties in his own name.
I further note that the husband tendered the 2022 Tax Return and Financial Statement for the company.
Procedural history
On 29 October 2021, the wife commenced property proceedings against the husband seeking orders that included the sale of the Suburb H property and the distribution of the net sale proceedings.
On 19 November 2021, the husband filed a Response to the wife’s property application seeking inter alia orders that the wife transfer her interest in the Suburb H property to him in return for a specified cash payment.
On 22 November 2021, Orders were made by consent providing inter alia for the husband to have sole right of occupancy over the Suburb H property and that he be solely responsible for and pay all mortgage repayments, council rates and utilities as they fall due. I note that the wife now alleges that the husband has been late in making payment of the council rates and mortgage repayments.
On 4 April 2022, Orders were made by consent providing inter alia for the valuation of the Suburb H, Suburb Z, Suburb N, Suburb T, and Suburb K properties, and the parties’ various companies.
On 16 August 2022, the husband filed an Application in a Proceeding seeking that the wife be restrained from selling or otherwise dealing with her interest in the Suburb H, Suburb N, Suburb W, and Suburb Z properties, as well as Order for the wife to pay the husband’s costs.
On 22 August 2022, the wife’s Application in a Proceeding was listed for interim hearing before a Senior Judicial Registrar. On that date, the parties agreed to interim consent orders providing for inter alia for the wife to be restrained from selling, or otherwise interfering with her interest in the Suburb H property, and for the parties, and their companies, to be restrained from selling, or otherwise changing their interest in various other properties without providing 21 days’ notice to the other party, and for the wife to be at liberty to sell the Suburb N proceeds and to retain the sales proceeds by way of a partial property settlement.
On 23 January 2023, the wife filed an Amended Initiating Application seeking inter alia that the B Street properties be sold, and for various child support related orders including for the husband to pay a lump sum of $240,550 to the wife by way of retrospective child support.
On 23 January 2023, the wife also a further Application in a Proceeding seeking inter alia that CC Pty Ltd be joined as a party to the proceedings, that the Suburb H property be placed on the market for sale, that the husband vacate the Suburb H property, and that the wife receive $700,000 by way of interim distribution from the sales proceeds of the Suburb H property.
On 3 April 2023, the husband filed a Response to an Application in a Proceeding seeking inter alia that the wife provide specific disclosure, and for the wife to be restrained from transferring, encumbering, or otherwise dealing with her interest in the Suburb W and Suburb Z properties.
On 4 April 2023, the proceedings were listed for interim hearing before Her Honour Judge Lioumis. On that day her Honour made directions relisting the interim hearing to 26 May 2024. Shortly thereafter, it would appear that the parties were able to resolve their interim property issues with consent orders being made by her Honour in Chambers on 14 April 2023. The interim property orders provided inter alia for:
·the husband’s company, CC Pty Ltd, that owns various properties detailed in these reasons, be joined to the proceedings as the second respondent;
·the wife to return the sum of $360,550 held in her relevant Commonwealth Bank account to the V Company in partial discharge of the mortgage the wife has over a property she owns at Suburb W that is detailed further below;
·the wife to terminate the second tranche of the mortgage with V Company, secured over her Suburb W property, that was due to be disbursed to her;
·various Orders for disclosure to be complied by the wife and husband;
·orders permitting the husband to lodge caveats on the properties registered in the wife’s name (further detailed below); and
·various restraints upon the wife dealing with any of the properties in her name.
On 25 May 2023, the proceedings came before Her Honour Judge Boyle for a compliance and readiness hearing and her Honour listed the matter for a four day final hearing before me on 7 to 10 May 2024.
On 21 August 2023, the husband filed the current Application in a Proceeding seeking the orders previously referred to and detailed further below. The husband sought that the application be heard urgently in circumstances where he alleges collaboration between the wife and the proposed third respondent to force the sale of the Suburb H property through debt recovery proceedings commenced in the NSW District Court.
As stated, the proposed third respondent filed a Response to the Application in a Proceeding on 11 September 2023 seeking the dismissal of the husband’s interlocutory application and costs.
The wife also filed a Response to the Application in a Proceeding on 11 September 2023. Interesting, the wife sought no orders for the dismissal of the husband’s interlocutory application in that response. That said, in her Outline of Case document filed on 16 September 2023, the wife stated that she “opposes the Orders sought by the Husband in his Amended Application in a Proceeding filed 14 September 2023”. In addition, the wife seeks the discharge of certain orders or property restraints imposed upon her by the interim property orders made on 14 April 2023 or, in the alternative, an order for the husband to remove the caveats he has filed on her properties (as permitted by the interim property orders made on 14 April 2023). The wife also sought an order for costs against the husband.
On 14 September 2023, the husband filed an amended Application in a Proceeding that enlarged the scope of the orders sought.
As stated, the interim hearing proceeded before me on 18 September 2023. As noted, the Court only heard the dispute relevant to the joinder of the proposed second respondent and the anti‑suit injunction. The specific issues raised by the wife in her Response to the Application in a Proceeding, and relevant to her asserted need to obtain litigation funding, has been adjourned for hearing in the new year.
Following the interlocutory hearing, and in addition to reserving its decision, the Court made the following bridging orders pending judgment:
(a)Pursuant to s 90AF(2) and/or Section 114 of the Family Law Act, [Mr Gull] and the Wife will be restrained from taking any further step in proceedings commenced by [C Pty Ltd] (the Company) as against the Wife, including specifically NSW District Court Proceedings Number […] and […], until further order of this court namely the handing down of judgment on the Application; and
(b)Pursuant to s 90AF(2) and/or Section 114 of the Family Law Act, [Mr Gull] be restrained from commencing any further proceedings against the Wife whether by himself or by the Company until further order of this court namely the handing down of judgment on the Application.
I note that these bridging orders were ultimately unopposed by the wife and the proposed third respondent.
ORDERS SOUGHT
Husband
The husband’s revised Minute of Proposed Orders sought the following:
1.That leave be granted to join [Mr Gull] born [in] 1957 as a party to these proceedings.
2.That [Mr Gull] be restrained under Section 90AF(1)(b) and/or Section 114 of the Family Law Act from commencing any legal proceedings against the Wife, including any recovery proceedings pursuant to an alleged loan between [Mr Gull] and [Ms Nicotra] or any alleged loan by [C Pty Ltd] (the Company), either by himself or in his capacity as director and shareholder of the company [C Pty Ltd] until further order or orders of this Court
3.That pursuant to s 90AF(2) and/or Section 114 of the Family Law Act [Mr Gull] and the Wife be directed to do all acts and things and sign all documents necessary to discontinue any proceedings already commenced against the Wife commenced either by himself or via the company [C Pty Ltd], including specifically NSW District Court Proceedings Number […] and […], until further order of this court.
4.That [Mr Gull] and the Wife be restrained under Section 90AF(1)(b) and/or Section 114 of the Family Law Act from participating in any meeting or the passing of any resolution by the company [C Pty Ltd] so as to dispose of any property of the company including but not limited to any transfer of money from its [BB Bank] bank accounts BSB […] Account # 13, BSB […] Account# 87, BSB […] Account # 90 and BSB […] Account # 03.
5.That the Wife be restrained under Section 114 of the Family Law Act from filing any document or taking any steps in NSW District Court Proceedings Number […] and […] to file any document acknowledging any alleged debt owed to [C Pty Ltd] including, specifically, filing a document entitled Acknowledgement of Liquidated Claim
6.That Leave be granted to the First Respondent to amend his Response to plead substantive relief as against [Mr Gull] including under s106B of the Family Law Act in respect of any alleged loans within 21 days.
7.That the Applicant be directed to do all acts and things and sign all documents necessary to discontinue any proceedings already commenced against her by [C Pty Ltd].
8.That within 14 days from the date of these Orders that [Mr Gull] provide full and frank disclosure as required under Part 6.1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 including, in particular, providing for inspection the originals or copies of the following financial documents and file an affidavit of documents under rule 6.18:
a.All bank statements from 1 January 2015 to date in respect of bank accounts in his name, in the name of [Mr Gull] and over which he has access to as a signatory or authorised operator;
b.All Income tax returns and notice of assessment from FY 2015 to date;
c.Particulars of the acquisition or disposal of any real property from 1 January 2015 to date whether by himself or with any other co-purchaser;
d.All documents related to any loans made by [Mr Gull] to any third party and any third party to [Mr Gull].
9.In respect of the Wife’s Response to an Application in a Proceeding filed 11 September 2023, that the following orders apply:
a.Within 14 Days of the date of these orders, the Wife shall serve on each active party a copy of any proposed facility or dealing in respect of reasonable anticipated future legal costs of these proceedings, that requires the removal of the caveat/s to effect same (the Proposed Facility);
b.Simultaneously with order 9a, the wife shall serve upon each active party any application and supporting documentation provided to the proposed financier in respect of the Proposed Facility (save and except for any document that is reasonably the subject of a claim for Common Interest Legal Privilege);
c.Within 14 days of these orders, the Wife shall file and serve an updated Financial Statement;
d.Within 7 days of receipt of the material in orders 9 a, b and c, the Husband and [Mr Gull] shall indicate whether they, individually, agree to lift the Caveat(s) for the purposes of the proposed facility in respect of reasonable anticipated future legal costs of these proceedings only and shall be at liberty to lodge further Caveat after the facility is obtained by the Wife and in the event they disagree, each of them, shall indicate in writing the reason for any refusal; and
e.For the purposes of this order, the Wife acknowledges that any liability owing to the proposed financier remains a debt of the Wife as it relates to her legal fees and is not a matrimonial liability;
f.That the Wife’s Response to an application in a proceeding be listed for interim hearing on a date convenient to the Court following the process outlined in this order.
10.That the Parties have leave to use these orders in other proceedings both by way of a release of the implied Harman undertaking and under s 121 of the Act.
11.That [Mr Gull]’s Response to an Application in a Proceeding filed 11 September 2023 otherwise be dismissed.
12.That the Husband has leave to file an Amended Response in the proceedings seeking final orders as against [Mr Gull]:
a.Seeking that the alleged loan agreements dated [mid] 2021 in the sum of $291,520 and [late] 2021 in the sum of $334,800 be set aside pursuant to s106B of the Family Law Act 1975 (Cth);
b.Seeking that further, or in the alternative, a declaration that the Wife is not indebted to [Mr Gull] as alleged by [Mr Gull] or at all.
c.Seeking that further, or in the alternative, a declaration that to the extent the Wife is indebted to [Mr Gull] that such indebtedness is not a debt of the Marriage;
d.Seeking orders requiring [Mr Gull] in his personal capacity or as Director and Shareholder of the Company remove Caveats lodged upon various marital assets;
e.Seeking such other order or orders as this Honourable Court deems fit to make,
13.That the costs of this application be reserved.
14.Such other order or orders as this Honourable Court deems fit to make
NOTATION
A.The Court notes that [Mr Gull] acknowledges that the Company is not owed any debt by the Wife, but [Mr Gull] asserts that a debt is owed to him by the Wife in respect of two separate loan agreements dated [mid] 2021 in the sum of $291,520 and [late] 2021 in the sum of $334,800.
I note that the above orders sought by the husband in response to the wife’s proposal to either discharge paragraphs 12 and 13 of the Orders of 14 April 2023 or for the husband to withdraw the caveats lodged by him on the title of any property owned by the wife, to enable her to secure litigation funding, were not pressed as the Court declined to deal with those issues at the recent interlocutory hearing.
Wife
As stated, while the wife did not formally seek the dismissal of the husband’s interlocutory application in her filed Response, it was clear from her Outline of Case document that she did seek such, together with an order for the husband to pay her costs. That said, the wife through her counsel did not ultimately wish to be heard on the issue of the joinder of the proposed third respondent and any consequential orders that may be made against the proposed third respondent (Transcript, 18 September 2023, pages 6 and 8).
The wife also sought the following orders in her filed Response that the Court is yet to properly hear argument about:
1.That Order 12 and 13 of the Orders of 14 April 2023 be discharged.
2.In the alternative to Order 1, within 7 days of the date of these Orders, the Husband do all acts and things and sign all documents necessary to withdraw the caveats lodged by him on the title of any property owned by the Wife, such that the Wife may secure litigation funding against these properties or any of them.
In her Response, the wife sought orders inter alia for the husband to withdraw caveats he had lodged to allow her to secure litigation funding. The wife’s application will be adjourned for interlocutory hearing on 31 January 2024 given there was insufficient time for it to be heard on this occasion.
Proposed Third Respondent
The proposed third respondent seeks the dismissal of the husband’s Application in a Proceeding and costs.
DOCUMENTS
Each party provided the Court with Outline of Case document detailing documents relied upon and providing written submissions in support or against the proposals sought.
In addition, the husband tendered the documents detailed below.
Husband
The husband relied on the following documents:
·His Amended Application in a Proceedings filed on 14 September 2023;
·His Affidavit filed on 21 August 2023;
·His Further Affidavit filed on 14 September 2023;
·The following documents filed by the wife in these proceedings:
·Her filed on 29 October 2021 at [55] and [61];
·Her Financial Statement filed on 29 October 2021;
·Her Financial Statement filed on 27 January 2023; and
·Her Financial Statement filed on 22 May 2023.
Given the large number of annexures to affidavits relied upon by the husband, only those documents referred to by the husband’s counsel during oral submissions were read by the Court.
The husband also tendered the following documents marked Exhibit “A1”:
·A copy of an ASIC Current and Historical Company Extract for C Pty Ltd dated 8 September 2023; and
·A copy of C Pty Ltd Financial Statement for the year ending 30 June 2022.
Wife
The wife relied on the following documents:
·Her Response to the Application in a Proceeding filed on 11 September 2023;
·Her Affidavit filed on 11 September 2023; and
·Her Financial Statement filed on 22 May 2023.
Proposed Third Respondent
The proposed third respondent relied on the following documents:
·His Response to the Application in a Proceeding filed on 11 September 2023; and
·His Affidavit filed on 11 September 2023.
LAW
The recent interlocutory application sought by the husband raises a number of areas for comment and consideration. More specifically, the following two areas arise:
·First, the right of a party to seek an injunction against another party or parties, and related thereto, the right of a party to seek an anti-suit injunction against another party or parties to restrain any further prosecution of arguably related proceedings in a Court in another jurisdiction; and
·Second, the joinder of a third party to proceedings.
In addition, the Court is being asked to determine whether a costs order should be made against one party for the benefit of the other party, as a consequence of having to bring, or resist, the recent interlocutory application.
In considering these issues, the Court must consider whether it has the power to make the orders sought and whether the evidence justifies the making of such orders.
Injunctions and orders against third parties (including anti-suit injunctions)
The husband relies upon the provisions of Pt XIV (s.114) and Pt VIIIAA (in particular s.90AF) of the Act for the power to make the orders sought.
Pt XIV
Section 114(1) states:
(1)In proceedings of the kind referred to in paragraph (e) of the definition of matrimonial cause in subsection 4(1), the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including:
(a) an injunction for the personal protection of a party to the marriage;
(b) an injunction restraining a party to the marriage from entering or remaining in the matrimonial home or the premises in which the other party to the marriage resides, or restraining a party to the marriage from entering or remaining in a specified area, being an area in which the matrimonial home is, or the premises in which the other party to the marriage resides are, situated;
(c) an injunction restraining a party to the marriage from entering the place of work of the other party to the marriage;
(d) an injunction for the protection of the marital relationship;
(e) an injunction in relation to the property of a party to the marriage; or
(f) an injunction relating to the use or occupancy of the matrimonial home.
Section 114(1) clearly gives to the Court an independent power to make such order or grant such injunction “as it considers proper”. It is not conditional upon the existence of other proceedings. That said, it must be a proceeding of the kind referred to in para (e) of the definition of “matrimonial cause” in s 4(1) of the Act. That is, proceedings between the parties to a marriage “for an order or injunction in circumstances arising out of the marital relationship”.
As noted above, s.114(1)(1)(a) to (f) sets out a non-exhaustive list of injunctions that may be made. Relevant to this present application is s.114(1)(e) that provides for “an injunction in relation to the property of a party to the marriage.” However, as noted, the power is broader than the non-exclusive criteria and permits the Court to “make such order or grant such injunction as it considers proper.” The word “proper” in this section means reasonable and just in the circumstances of the case.
The more commonly used provision is s.114(3) of the Act which is ‘ancillary’ in that it operates only where there are existing proceedings. Section 114(3) states:
(3) A court exercising jurisdiction under this Act in proceedings other than proceedings to which subsection (1) applies may grant an injunction, by interlocutory order or otherwise (including an injunction in aid of the enforcement of a decree), in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate.
Where the Court is dealing with an application for an interim or interlocutory injunction, the Court must be satisfied that there is a serious issue to be tried and the balance of convenience supports the making of the order.
It is clear that the relevant statutory provisions referred to grant a wide discretion whether to make the orders or injunctions sought. The exercise of that discretion depends upon the particular circumstances of the individual case and the nature of the relief being sought. Normally, factors which would be taken into account would include questions of urgency, the means and needs of the parties, the balance of hardship, the interests of third parties, alternative remedies and the welfare of any relevant children. It may also raise the issue of whether an undertaking or undertakings should be given by a party.
Pt VIIIAA
In order to understand the competing contentions about the injunctions sought and joinder, it is necessary to set out a number of relevant provisions of Pt VIIIAA.
For the purposes of Pt VIIIAA, “third party” in relation to a marriage means “a person who is not a party to the marriage”: see s 90AB.
Section 90AC provides:
This Part overrides other laws, trust deeds etc.
(1) This Part has effect despite anything to the contrary in any of the following (whether made before or after the commencement of this Part):
(a) any other law (whether written or unwritten) of the Commonwealth, a State or Territory;
(b) anything in a trust deed or other instrument.
(2)Without limiting subsection (1), nothing done in compliance with this Part by a third party in relation to a marriage is to be treated as resulting in a contravention of a law or instrument referred to in subsection (1).
This section is arguably expressed in very broad terms. The section makes it clear that Pt VIIIAA can override both state and federal legislation and privately executed instruments such as contracts and trust deeds, although it protects third parties from allegations of contraventions of other state or federal laws, and breaches of trust or contract. This means Pt VIIIAA has effect despite anything to the contrary, for example, in the Family Law Rules including r.3.01 concerning joinder discussed further below.
Section 90AD provides that a “debt” of a party to a marriage is to be taken to be “property” of the party to the marriage, arguably inverting the ordinary concepts of asset and liability.
In relation to orders that include third parties, s.90AE states:
Court may make an order under section 79 binding a third party
(1)In proceedings under section 79, the court may make any of the following orders;
(a)an order directed to a creditor of the parties to the marriage to substitute one party for both parties in relation to the debt owed to the creditor;
(b)an order directed to a creditor of one party to a marriage to substitute the other party, or both parties, to the marriage for that party in relation to the debt owed to the creditor;
(c) an order directed to a creditor of the parties to the marriage that the parties be liable for a different proportion of the debt owed to the creditor than the proportion the parties are liable to before the order is made;
(d)an order directed to a director of a company or to a company to register a transfer of shares from one party to the marriage to the other party.
(2) In proceedings under section 79, the court may make any other order that:
(a)directs a third party to do a thing in relation to the property of a party to the marriage; or
(b)alters the rights, liabilities or property interests of a third party in relation to the marriage.
(3) The court may only make an order under subsection (1) or (2) if:
(a)the making of the order is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; and
(b)if the order concerns a debt of a party to the marriage–it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full; and
(c)the third party has been accorded procedural fairness in relation to the making of the order; and
(d)the court is satisfied that, in all the circumstances, it is just and equitable to make the order; and
(e)the court is satisfied that the order takes into account the matters mentioned in subsection (4).
(4) The matters are as follows:
(a) the taxation effect (if any) of the order on the parties to the marriage;
(b) the taxation effect (if any) of the order on the third party;
(c)the social security effect (if any) of the order on the parties to the marriage;
(d) the third party's administrative costs in relation to the order;
(e)if the order concerns a debt of a party to the marriage--the capacity of a party to the marriage to repay the debt after the order is made;
Note: See paragraph (3)(b) for requirements for making the order in these circumstances.
Example: The capacity of a party to the marriage to repay the debt would be affected by that party's ability to repay the debt without undue hardship.
(f)the economic, legal or other capacity of the third party to comply with the order;
Example: The legal capacity of the third party to comply with the order could be affected by the terms of a trust deed. However, after taking the third party's legal capacity into account, the court may make the order despite the terms of the trust deed. If the court does so, the order will have effect despite those terms (see section 90AC).
(g)if, as a result of the third party being accorded procedural fairness in relation to the making of the order, the third party raises any other matters–those matters;
Note: See paragraph (3)(c) for the requirement to accord procedural fairness to the third party.
(h) any other matter that the court considers relevant.
I note that in Dovgan & Dovgan [2021] FamCA 306 at [295]–[297], Harper J made the following comments on s.90AE and citations to authority:
295.The range of orders that the Court can make is broad. For example, orders can be made under s 90AE(2)(b) or s 90AF(2)(b) altering “the rights, liabilities or property interests of a third party in relation to the marriage”. The expression “in relation to the marriage” is important and has been held to mean the exercise of discretion is carefully linked and sufficiently connected to the subject matter of the marriage and matrimonial causes: Hunt v Hunt at [119]; XYZ Pty Ltd and Anor & Charisteas & Ors; ABC Pty Ltd & Charisteas and Ors (2017) FLC 93-782; [2017] FamCAFC 112 at [89]. By reason of s 90AC(1), such an order overrides the provisions of a trust deed. In Hunt & Hunt (2006) 36 Fam LR 64; [2006] FamCA 167 (“Hunt & Hunt”), O’Ryan J held that Part VIIIAA did not contemplate “some arbitrary invasion of the rights of a third party but an alteration of those rights where they are sufficiently connected to the division of the property between parties to a marriage”. The Full Court in B Pty Ltd & Ors & K & Anor [2008] FamCAFC 113; (2008) FLC 93-380 at [63] made clear that any order made under these sections must be for the purpose of effecting the division of a property between the parties, and cannot be used for the purpose of increasing the property of the parties. In Allan and Allan and Ors [2009] FamCA 553; 41 Fam LR 565 at [99] Watts J emphasised that the sections cannot be used “to deprive a third party of its rights simply to benefit a party to the marriage”. The same comment applies to property interests.
296.In Commissioner of Taxation v Tomaras (2018) 265 CLR 434; (2018) 93 ALJR 118; [2018] HCA 62 Gordon J at [73] said Part VIIIAA is “facultative and protective”. In that decision the High Court emphasised Part VIIIAA sits alongside and is ancillary to s 79 of the Act (at [4], [66]) and the power to make orders binding third parties only arises if the conditions in s 90AE(3), …are satisfied…
297.There is no definition of “rights” in the Act nor do the provisions of Part VIIIAA indicate clearly what “rights” are contemplated by s 90AE(2)(b) or 90AF(2)(f). The word is wide in scope. For example, in Tomaras there was extensive mention of a taxpayers rights to object to assessment, and the rights of the Australian Taxation Office to collect revenue. It is not limited to property rights as defined on ordinary principles. The presence of “property interests” as a separate elements of the collocation “the rights, liabilities or property interests of a third party” shows this…
In relation to the requirement in s.90AE(3)(a), that the making of the proposed order is “reasonably necessary” or “reasonably appropriate and adapted” to effect a division of matrimonial property, the Full Court has held in AC & VC (2013) FLC 93-540 at [91] that both phrases should be read together with the balance of the paragraph as providing “the requisite sufficient connection between the making of the order … in relation to a third party and the core of the marriage and matrimonial causes power” and this construction “meets the test which marks the limits of the power and discretion of the Court”.
In relation to injunctions and third parties, s.90AF states:
(1) In proceedings under section 114, the court may:
(a)make an order restraining a person from repossessing property of a party to a marriage; or
(b)grant an injunction restraining a person from commencing legal proceedings against a party to a marriage.
(2)In proceedings under section 114, the court may make any other order, or grant any other injunction that:
(a)directs a third party to do a thing in relation to the property of a party to the marriage; or
(b)alters the rights, liabilities or property interests of a third party in relation to the marriage.
(3) The court may only make an order or grant an injunction under subsection (1) or (2) if:
(a) the making of the order, or the granting of the injunction, is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; and
(b) if the order or injunction concerns a debt of a party to the marriage--it is not foreseeable at the time that the order is made, or the injunction granted, that to make the order or grant the injunction would result in the debt not being paid in full; and
(c)the third party has been accorded procedural fairness in relation to the making of the order or injunction; and
(d) for an injunction or order under subsection 114(1)--the court is satisfied that, in all the circumstances, it is proper to make the order or grant the injunction; and
(e)for an injunction under subsection 114(3)--the court is satisfied that, in all the circumstances, it is just or convenient to grant the injunction; and
(f) the court is satisfied that the order or injunction takes into account the matters mentioned in subsection (4).
(4)The matters are as follows:
(a)the taxation effect (if any) of the order or injunction on the parties to the marriage;
(b) the taxation effect (if any) of the order or injunction on the third party;
(c) the social security effect (if any) of the order or injunction on the parties to the marriage;
(d)the third party's administrative costs in relation to the order or injunction;
(e) if the order or injunction concerns a debt of a party to the marriage--the capacity of a party to the marriage to repay the debt after the order is made or the injunction is granted;
Note: See paragraph (3)(b) for requirements for making the order or granting the injunction in these circumstances.
Example: The capacity of a party to the marriage to repay the debt would be affected by that party's ability to repay the debt without undue hardship.
(f) the economic, legal or other capacity of the third party to comply with the order or injunction;
Example: The legal capacity of the third party to comply with the order or injunction could be affected by the terms of a trust deed. However, after taking the third party's legal capacity into account, the court may make the order or grant the injunction despite the terms of the trust deed. If the court does so, the order or injunction will have effect despite those terms (see section 90AC).
(g) if, as a result of the third party being accorded procedural fairness in relation to the making of the order or the granting of the injunction, the third party raises any other matters--those matters;
Note: See paragraph (3)(c) for the requirement to accord procedural fairness to the third party.
(h) any other matter that the court considers relevant.
Anti-suit injunctions
Although the husband questions whether the alleged debts due by the wife to the proposed third respondent are genuine, the Court accepts that proceedings could be properly commenced before the District Court of NSW by the proposed third respondent against the wife for recovery of the alleged debts. As previously noted, the proposed third respondent confirmed the current proceedings before the District Court were incorrectly commenced by C Pty Ltd against the wife.
Given that the Court accepts that the proposed third respondent is arguably entitled to bring the debt recovery proceedings, the Court should be cautious in making an order which would prevent him from commencing those proceedings in a jurisdiction of his own choosing (or in continuing the current proceedings had they been properly brought).
While it is acknowledged that the relevant debt recovery proceedings could be commenced in the District Court, I note that neither the wife nor the proposed third party argue that this Court does not have jurisdiction to hear and determine the dispute involving the proposed third respondent. If the matter were to be determined by this Court, it would arguably be as a non‑federal matter with sufficient connection with the federal matter before this Court.
Moreover, this Court has the power to restrain a party from commencing or continuing proceedings in another court. That power arises either from the Court’s inherent power to prevent an abuse of its own processes or from the power to prevent proceedings which are vexatious or oppressive or both: see the High Court’s decision in CSR Ltd v Cigna Insurance Australia (1997) 189 CLR 345 at [392] to [393].
As to which court or jurisdiction should hear the matter, the test is more than one of mere convenience.
In the decision of Eastburn & Eastburn [2022] FedCFamC1F 706, Christie J provided the following list of factors at [29] that the Court should consider in determining whether an anti‑suit injunction should be granted:
29…
(a)Do both courts have jurisdiction?
(b)Will the [Federal Circuit and Family Court of Australia] recognise orders made in the [other] Court as binding upon its determination of the factual controversy?
(c)Can one court or the other more effectively deal with all disputed matters?
(d)Which proceedings were filed first in time?
(e)What stage are both sets of proceedings at?
(f)Are there barriers to participation faced by one party or the other in the different courts (put another way can both parties participate on an equal footing)?
(g)Is there a juridical advantage to one party or the other in the available jurisdictions?
In addition, Christie J noted at [30]-[32]:
30The mere existence of simultaneous proceedings in two different jurisdictions is not of itself vexatious or oppressive conduct: Henry v Henry (1996) 185 CLR 571 at 590 to 591.
31The proper question is whether two sets of proceedings would be “productive of serious and unjustifiable trouble and harassment or seriously burdensome, prejudicial or damaging”: CSR Ltd v Cigna Insurance Australia (1997) 189 CLR 345; Oceanic Sun Line Special Shipping Company Inc v Fay (1986) 165 CLR 197 at [247] as cited in Lan & Hao (No 2) (2017) FLC 93-795 at [37].
32It must be acknowledged that the making of an anti-suit injunction is a final determination as to the place in which an issue is to be litigated. In this case that determination needed to be made in one court of the other.
Joinder of third parties
The High Court stated the position under the general law concerning joinder in the case of John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1 at [131]-[132]:
131. Walker Corporation submitted that where a court is invited to make, or proposes to make, orders directly affecting the rights or liabilities of a non-party, the non-party is a necessary party and ought to be joined. That submission is correct. The Court of Appeal … erred when it held to the contrary.
132. In News Ltd v Australian Rugby Football League Ltd the Full Federal Court … said (127):
Where the orders sought, establish or recognise a proprietary or security interest in land, chattels or a monetary fund, all persons who have a claim or interest in the subject matter are necessary parties. This is because an order in favour of the claimant will, to a corresponding extent, be detrimental to all others who have or claim an interest.
In the exercise of the Court’s power, it does not matter whether a proposed party wishes to participate in a proceeding: Arida v Arida [2015] NSWCA 170 per Sackville AJA at [19] (with Bathurst CJ and Macfarlan JA agreeing).
As Harper J noted in Jordan & Sutton (No 2) [2022] FedCFamC1F 850 at [40]-[41], in the family law context:
40.It is well settled that, applying these principles, it can be appropriate to join third parties to a marriage to proceedings in this Court, for example, to bind them in respect of declarations as to property interests pursuant to s.78 or as ancillary to the exercise of discretion in s.79 or s 106B to set aside dispositions: Valceski v Valceski (2007) 70 NSWLR 36 at [31]–[33]; Khalif & Khalif (No 2) [2021] FedCFamC1F 308 at [37]. Clearly, according to these principles, the existence of claims for orders affecting the rights or interests of third parties proposed to be joined usually compels the conclusion that those parties are “necessary”. Such joinder is, nonetheless, an exercise of the Court’s discretion.
41.Under the Act and the Rules, there is no special procedure or regime for representative proceedings, as in some other court. Joinder of parties is dealt with at several places. For example, in the Act, s 79(10) grants an entitlement to various classes of person to be joined as parties. These include creditors and any other person whose interests would be affected by the making of an order pursuant to s 79 …
Pts 3.1 and 3.2 of the Family Law Rules deal with ‘necessary parties’ and adding and removing parties.
Rule 3.01 states:
Necessary parties
A person whose rights may be directly affected by an issue in a proceeding, and whose participation as a party is necessary for the court to determine all issues in dispute in the proceeding, must be included as a party to the proceeding.
Example:If a party seeks an order of a kind referred to in section 90AE or 90AF of the Family Law Act, a third party who will be bound by the order must be joined as a respondent to the proceeding.
It would appear that the requirements for joinder in r.3.01 are conjunctive; a person must be included as a party to a proceeding if (a) their rights may be directly affected by an issue in the proceeding; and (b) their participation as a party is necessary for the Court to determine all issues in dispute: see Pencious & Pencious [2010] FamCA 605 at [4] per Cronin J.
Rule 3.03 sets out detailed methods for adding a party such as naming a party in an application, response or reply or amending an application or response, or with leave after the first court date: see rr.3.03(1), (2), and (4). Following the first court date, a party seeking to add a party must file an Application in a Proceeding accompanied by an affidavit setting out the facts supporting joinder, and service the proposed party: see r.3.03(5). A party may apply themselves to be joined (r.3.04), removed (r.3.05), or intervene if they are entitled to do so: see r.3.07.
DISCUSSION
The parties each provided the Court with written and oral submissions which the Court has considered and summarised below.
Husband’s submissions
The husband seeks that the proposed third respondent be injuncted from continuing, or more properly stated, recommencing proceedings against the wife in the District Court of NSW. The husband made the following arguments in support of his application for the anti-suit injunction:
·First, that the District Court proceedings have been orchestrated by the wife and the proposed third respondent to dissipate the martial asset pool, and in the event they are allowed to continue, the husband’s application in this Court to retain the Suburb H property may be rendered “nugatory” (Transcript, 18 September 2023, page 11);
·Second, that the husband is precluded from seeking relief against the proposed third respondent, in circumstances where he asserts the relevant loans are a sham, given that he is not a party to the District Court proceedings;
·Third, that this Court can resolve all issues, as between the parties, within the context of the current proceedings; and
·Fourth, that, in any event, this Court could resolve the dispute between the proposed third respondent and the wife more expeditiously given that the matter is currently listed for final hearing in May 2024, albeit on a double listed basis.
The husband also seeks the joinder of the proposed third respondent and argued that in circumstances where the proposed third respondent has already sought to protect his asserted interests by lodging caveats on the Suburb Z and Suburb H properties, this Court would not be able to properly effect a property division between the parties without the joinder.
Proposed Third Respondent’s submissions
In response to the husband, the proposed third respondent argued that the husband’s application should be dismissed on the basis that the husband had not produced any evidence to establish the relevant loans were unenforceable or otherwise a sham.
In response to the husband’s assertion that the District Court proceedings, if allowed to continue, would result in a dissipation of the martial property, counsel acting on behalf of the proposed third respondent submitted that:
“…there was certainly therefore sufficient funds to enable the wife to meet [Mr Gull]’s claim and there are clearly sufficient funds for the husband to read just whatever arrangements he wished to make if he were to wish to put the title of [Suburb H] into his name and substitute his name for the wife’s name.” (Transcript, 18 September 2023, page 20).
During submissions, counsel for the proposed third respondent confirmed that the District Court proceedings had been improperly commenced on behalf of C Pty Ltd, and that the caveats lodged over the Suburb H and Suburb Z properties had also been improperly lodged on behalf of the company. The proposed third respondent confirmed that he loaned the wife the relevant monies, in his personal capacity, and that he intended to recommence District Court proceedings, and relodge the caveats, in his own name.
Wife’s submissions
As noted, the wife ultimately did not seek to be heard in relation to either issue before the Court at this interlocutory hearing. Nevertheless, counsel acting on behalf of the wife made submissions in support of the proposed third respondent’s application.
In the essence, the wife submitted that the husband had failed to establish that it was necessary to join the proposed third respondent to these proceedings. She argued that the husband had not adduced any evidence to support his assertion that the loan agreements between the wife and the proposed third respondent were illegitimate, nor had he particularised the relief he sought as against the proposed third respondent notwithstanding the submissions made by counsel acting on behalf of the husband.
The wife concluded by making the following submissions:
“[The husband] can’t have it both ways. If the money has been advanced to purchase the property, it’s a matrimonial property with a matrimonial debt or neither of them are and that’s why your Honour wouldn’t consider joining [Mr Gull] at this stage or making any of those consequential orders because of those deficiencies in the husband’s present application.” (Transcript, 18 September 2023, pages 22 and 23).
FINDINGS
Anti-suit Injunction
In relation to the husband’s proposal for the proposed third respondent to be injuncted from proceeding, or recommencing, District Court proceedings against the wife, I find in favour of granting the anti-suit injunction as sought by the husband.
By the conclusion of the interlocutory hearing, it was clear that the gravamen of the husband’s case was his assertion that the loans between the proposed third respondent and the wife were a sham, and the District Court proceedings have been instigated by them to force the sale of the Suburb H property. Whilst the proposed third respondent conceded that the loans had not “been dealt with appropriately” (Transcript, 18 September 2023, page 20), he, and the wife, disputed the husband’s assertions. I accept their submissions that the husband has not provided any basis to establish his assertions at present. In any event, the Court is not in a position to make findings in relation to these submissions at this stage of the proceedings.
Notwithstanding this, it is plain that there is a factual dispute as to the legitimacy of the loans and the source of the funds allegedly loaned to the wife, vigorously disputed as it is. I note the husband confirmed during his oral submissions that he intends to amend his application in this Court to seek declaratory relief, and for the loans to be set aside. If the proposed third respondent is permitted to recommence proceedings in the District Court of NSW, there will be, in effect, two sets of proceedings addressing the same issue – being the enforceability of the relevant loan agreements. The husband is not a party to the current District Court proceedings and, unless joined, will not be able to give evidence in relation to the enforceability of the loans in any future proceedings in that jurisdiction. If the matter was heard in this Court, the parties will all be afforded the opportunity to give evidence in relation to this issue.
The proposed third respondent and the wife argued that the husband had failed to establish an injunction was necessary given that he had not adduced any evidence the relevant loans were a sham. Whilst I have accepted these submissions, I do not accept that the husband has failed to establish that an injunction is reasonably necessary. The wife has given sworn evidence of her intention to not to file a Defence to a Statement of Claims in the current proceedings, or to otherwise dispute the loans.[1] The wife has also given evidence that she is unable to repay the loans.[2] In such circumstances, where the loans are secured against the Suburb H property, I am satisfied that any District Court proceedings between the wife and the third respondent are likely to impact on the husband’s claims in this Court. I am also satisfied that if the matter was heard in this Court, the parties would be spared the expense of potentially litigating the issue in two jurisdictions.
[1] Affidavit of the Wife filed 11 September 2023, paragraph 27.
[2] Affidavit of the Wife filed 11 September 2023, paragraph 16.
The Court finds accordingly.
Joinder of the Proposed Third Respondent
Having found it appropriate to grant the anti-suit injunction, I am satisfied that it will be necessary for the proposed third respondent to be joined given that his interests will be impacted by the outcome of these proceedings, and the factual findings made therein.
Nevertheless, I accept the submissions made by the wife that the husband has failed to particularise the relief he seeks against the proposed third respondent, notwithstanding the oral submissions made by counsel acting for him. The Court will make orders for the husband to particularise the relief he seeks by way of filing an Amended Response to Final Orders. Orders for financial disclosure can be considered if there is evidence that a party has not complied with their obligations under the Family Law Rules.
Costs
The issue or question of costs arising from the Amended Application in a Proceeding filed on 14 September 2023, and the responses thereto, can be reserved to the final hearing if pressed. That said, the Court is highly concerned about the significant amount of costs that have been so far accrued in these proceedings, as evidenced by the respective Cost Notices filed by the Applicant and the First Respondent on 18 September 2023.
CONCLUSION
The Court’s findings have now been stated.
The Court will make orders for:
·The proposed third respondent to be joined as a party to these proceedings;
·The proposed third respondent to be injuncted from continuing or commencing proceedings in the District Court of NSW against the wife; and
·The husband to file an Amended Response to Final Orders particularising the relief he seeks against the proposed third respondent.
The wife’s application for the other orders she seeks in her Response to the Application in a Proceeding relevant to her asserted need for litigation funding can be listed for hearing on 31 January 2023. The parties will have liberty to approach Chambers with any agreed Minute that may resolve that specific dispute or indeed any aspect of the substantive dispute.
I note that the substantive proceedings remain listed (on a double-listed basis) for final hearing of not more than four days commencing on 7 May 2024. Given the joinder of the third respondent and the widening of the property dispute to include the asserted loans by the wife from the third respondent, and the addition of child support matters, the Court has serious doubts that the matter can safely be contained to not more than four hearing days on a double‑listed basis. The Court will, therefore, consider this issue further as part of the hearing listed on 31 January 2023.
There will be Orders of the Court to reflect this decision.
I certify that the preceding one hundred and twenty-three (123) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Monahan. Associate:
Dated: 19 December 2023
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