Pacheco & Pacheco

Case [2023] FedCFamC1F 911

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Pacheco & Pacheco [2023] FedCFamC1F 911

File number(s): ADC 5923 of 2021
Judgment of: BERMAN J
Date of judgment: 26 October 2023
Catchwords: FAMILY LAW – PROPERTY – DISJOINDER – Farming matter – Where the second respondent seeks to be disjoined from the proceedings – Where the applicant seeks no substantial order in respect of the second respondent – Where the applicant’s claim in respect of the second respondent is yet to be crystalised – Where the applicant foreshadows an Amended Initiating Application – Where the second respondent concedes being rejoined once a claim is properly formulated and orders are sought – Consideration of s 90AE of the Family Law Act 1975 (Cth) – Consideration of s 81 of the Act – Where the applicant is given 14 days to file Amended Application and a statement of claim – Orders.
Legislation:

Family Law Act 1975 (Cth) Part VIIIAA, ss 79, 79(5), 81, 90AE, 90AE(2), 90AE(3)(a), 90AF

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 3.01, 3.03, 3.03(2)

Cases cited:

B Pty Ltd and Ors & K and Anor [2008] FLC 93-380

Gormley & Gormley [2023] FedCFamC1F 296

Hancock Family Memorial Foundation Pty Ltd v Fieldhouse [No 3] [2010] WASC 233

Pagliotti & Hartner (2009) 41 Fam LR 41

Trawl Industries of Australia Pty Ltd v Effem Food Pty Ltd (1992) 108 ALR 335

Wayne v Dillon [2008] Fam LR 543

Division: Division 1 First Instance
Number of paragraphs: 78
Date of hearing: 5 October 2023
Place: Adelaide
Counsel for the Applicant: Mr Robertson SC and Ms Lewis
Solicitor for the Applicant: Jacqui Ion Lawyers Pty Ltd
Counsel for the First Respondent:  Mr Bullock
Solicitor for the First Respondent: Howe Jenkin
Counsel for the Second Respondent: Mr Hoffmann KC
Solicitor for the Second Respondent: Clelands Lawyers Adelaide

ORDERS

ADC 5923 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS PACHECO

Applicant
AND:

MR PACHECO

First Respondent

B PTY LTD

Second Respondent

ORDER MADE BY:

BERMAN J

DATE OF ORDER:

26 OCTOBER 2023

THE COURT ORDERS THAT:

1.Subject to the applicant filing and serving, within fourteen (14) days of the date of delivery of judgment, a Further Further Amended Initiating Application setting out a Statement of Claim or a Points of Claim document that establishes a cause of action recognisable at law and appropriately particularised, then B Pty Ltd is disjoined from the proceedings. 

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…

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Details
AGLC
Pacheco & Pacheco [2023] FedCFamC1F 911
Case
[2023] FedCFamC1F 911
Decision Date

CaseChat Overview and Summary

The case of Pacheco & Pacheco involved the applicant, Ms. Pacheco, and the first respondent, Mr. Pacheco, who were married and separated in 2021. The applicant sought to join B Pty Ltd, the second respondent, to the proceedings, which the second respondent opposed. The primary issue before the court was whether B Pty Ltd should be disjoined from the proceedings, given that the applicant had not yet formulated a claim against it and had not specified any orders sought against it. The applicant indicated that they would file an amended initiating application with a statement of claim within fourteen days if the disjoinder was granted.

The court considered the requirements of section 90AE and section 81 of the Family Law Act 1975 (Cth). Section 90AE mandates that joinder of a third party should only occur if it is necessary for the court to completely and finally determine all matters in dispute. Section 81, on the other hand, directs the court to avoid further proceedings and to determine litigation to finality. Given that the applicant had not yet formulated a recognisable cause of action against B Pty Ltd, the court concluded that joinder was not necessary at that stage. However, the second respondent conceded that if the applicant could establish a cause of action and particularise it, B Pty Ltd could be rejoined to the proceedings.

Consequently, the court ordered that B Pty Ltd be disjoined from the proceedings, subject to the applicant filing a further amended initiating application within fourteen days that sets out a statement of claim or points of claim document establishing a recognisable cause of action against B Pty Ltd. This order ensures that the litigation progresses towards finality while allowing the applicant the opportunity to properly formulate their claims against the second respondent.

Orders

Orders of the court

ADC 5923 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS PACHECO

Applicant

AND:

MR PACHECO

First Respondent

B PTY LTD

Second Respondent

ORDER MADE BY:

BERMAN J

DATE OF ORDER:

26 OCTOBER 2023

THE COURT ORDERS THAT:

1. Subject to the applicant filing and serving, within fourteen (14) days of the date of delivery of judgment, a Further Further Amended Initiating Application setting out a Statement of Claim or a Points of Claim document that establishes a cause of action recognisable at law and appropriately particularised, then B Pty Ltd is disjoined from the proceedings.

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.

Background

Background to the litigation

The extent to which the further production of documents may satisfy the orders sought by the applicant either in whole or in part, was not able to be determined and accordingly, the applicant’s application for discovery from the first respondent was adjourned to either 2 or 3 November 2023.BACKGROUND The applicant was born in 1979 and is 43 years of age. The first respondent was born in 1977 and is 46 years of age. The parties commenced their relationship in 1995 and were married in 1999 which marked the commencement of their cohabitation. There are three children of the relationship, Mr X now aged 20 years, Y now aged 17 years and Z now aged 15 years (collectively referred to as “the children”). Following a relationship of 22 years, the parties separated on 10 February 2021. Of relevance to the current proceedings is Mr C Pacheco, the first respondent’s father, Ms D Pacheco, the first respondent’s mother and Mr FF and Ms GG being the first respondent’s brother and sister-in-law. Whilst not agreed, the first respondent considers that the assets and liabilities of the parties are as follows:- Following the separation of the parties, the first respondent lived in a caravan parked on a property at E Street, Town F (“the E Street property”). This property is registered in the joint names of the first respondent’s parents. The applicant and the children remained living at the Town CC property which had been the family home since 1999. At the time of first occupation, the Town CC property was owned by the first respondent’s grandparents via the JJ Family Trust. In 2011, a financial arrangement was undertaken that resulted in the Town CC property being transferred to the applicant and first respondent.Pacheco Family Group There appears to be little controversy as to the structure of the entities that comprise the “Pacheco Family Group”. Each of the parties rely upon a document setting out the construct of the Pacheco Family Group as prepared by accountants to the Pacheco family, as at February 2020 and as at February 2021. Prior to February 2021, B Pty Ltd was the Trustee for the FF Family Trust being the entity associated with Mr Pacheco, the first respondent’s brother and the Pacheco Family Trust being the entity associated with the first respondent. The directors, secretaries and shareholders of B Pty Ltd were the first respondent and his brother. The appointors of FF Family Trust and Pacheco Family Trust were also the first respondent and his brother. The separate trusts were the partners in Pacheco Family Farming Partnership trading as B Pty Ltd. The partnership farms land owned by Pacheco Holdings Pty Ltd which is the trustee for a number of land holding trusts as set out in Annexure “A” to the first respondent’s affidavit of 17 November 2022. The first respondent’s parents are the directors, secretaries and shareholders of Pacheco Holdings Pty Ltd. The first respondent contends that shortly after separation in early 2021, a restructure of the farming partnership took place such that a company known as Pacheco Group Pty Ltd, which had been established in late 2020 comprising the first respondent’s brother Mr FF and his wife as joint directors and shareholders, was appointed as trustee of FF Family Trust replacing B Pty Ltd.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Whilst the affidavit material filed by and on behalf of the applicant and the Outline of Case Document as presented for the hearing set out the broad contention of the applicant namely, that in some way the interest in B Pty Ltd as the entity that conducts the farming enterprise in South Australia, it could not be seen as satisfying the following proposition by Warnick J in Wayne (supra) as follows:-17.As seen, while neither that rule nor the relevant Family Law Rule refers to an applicant for leave to join having to establish a cause of action and supporting “case” which, taken at its highest, is arguable, that test was adopted by the parties before Morgan J and by her Honour. That approach was not attacked in the appeal in B Pty Ltd & K (supra). It is a test consistent with the references, in the passages quoted above from B Pty Ltd & K (supra), to the need for an applicant for joinder to set out the nature of the claim and the basis of it. As also seen, in Gould v Gould; Swire Investments Ltd (1993) FLC 92-434, Fogarty J particularly referred to the need for fairness to the third party. Any person joined to a proceeding ought, at that point, be able to take advice on whether the facts pleaded (if established) would lead to a successful claim. Joinder to litigation is a serious step with often significant financial consequences. 18.The word “necessary” in rule 11.01(1) must mean something more than “useful” or “expeditious”. In my view, if there are available alternative means to joinder to the substantive proceedings, of obtaining from a third person or someone already a party what is needed to allow an applicant for joinder to establish an identified “case”, joinder is unlikely to be “necessary”.19.However, if a cause of action, recognisable at law, against a “third person” is particularised, then it is at least highly likely that joinder will be “necessary for the court to completely and finally determine all matters in dispute”. Thus, in an application such as was before the Federal Magistrate, such a question falls for consideration.CONCLUSION The proceedings were commenced in 2021. Whilst Kings Counsel for the second respondent urges the disjoinder of B Pty Ltd on the basis that no substantive order is sought against the entity nor is there anything approximating a points of claim document or even an indication of the particulars of claim from the affidavit material of the applicant, a concession was made on behalf of the second respondent that if disjoined, B Pty Ltd could always be added back as a party to the proceedings if the applicant was able to establish a basis to do so. Section 81 of the Act requires the Court to avoid further proceedings and to determine the litigation between parties to finality. Kings Counsel for the applicant has foreshadowed that if the disjoinder of B Pty Ltd is successful, there will be another amended initiating application setting out the detail of the orders sought and presumably, by necessary implication, the orders relating to the operation of s 90AE of the Act to give effect to orders made pursuant to s 79.

Ratio Decidendi

Legal Principle Established

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