Pearce & Pearce (No 2)
[2022] FedCFamC1F 193
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Pearce & Pearce (No 2) [2022] FedCFamC1F 193
File number(s): SYC 2654 of 2017 Judgment of: CAMPTON J Date of judgment: 7 March 2022 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Application by an intervener to amend final relief sought – Where no notice of such application was given to the parties prior to the commencement of the trial – Where it would not be fair to the wife to allow the intervener to amend her relief at such a late stage of the proceedings and absent notice – Leave to amend refused. Legislation: Federal Circuit and Family Court (Family Law) Rules 2021 (Cth) rr 2.18, 10.10 Cases cited: R v Watson; Ex parte Armstrong (1976) 136 CLR 248; [1976] HCA 39 Division: Division 1 First Instance Number of paragraphs: 17 Date of hearing: 7 – 9 March 2022 Place: Sydney Counsel for the Applicant: Mr Scarlett Solicitor for the Applicant: Hudson Law Pty Ltd Counsel for the Respondent: Mr Roberts Solicitor for the Respondent: Barkus Doolan Counsel for the Intervener: Mr Stapleton Solicitor for the Intervener: Watts McCray ORDERS
SYC 2654 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR PEARCE
Applicant
AND: MS PEARCE
Respondent
MS V PEARCE
Intervener
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
7 MARCH 2022
THE COURT ORDERS THAT:
1.I grant the intervener leave to make an oral application to amend her final relief sought.
2.I refuse the intervener’s oral application to amend her final relief sought.
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 the pseudonym Pearce & Pearce has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CAMPTON J:
These are proceedings relating to the division of property between Mr Pearce (“the husband”) and Ms Pearce (“the wife”). The proceedings have been listed for hearing of a discrete issue concerning whether Ms V Pearce (“the intervener”) is owed monies in relation to funds purportedly advanced to the parties.
On the first day of the discrete issue hearing, the intervener sought leave to amend her relief sought as identified in her Response to an Initiating Application filed on 3 March 2019 (“the Response”) in accordance with a document entitled “MFI-A Intervener’s Alternate Equitable Relief” (“MFI-A”). The amendment is by way of supplement to the relief sought in the Response and contains a further five prayers for relief.
The primary differences in respect of what is sought by way of the relief contained in the Response and that contained by way of supplement in MFI-A, is that the relief by way of the Response was grounded on the basis of what might be colloquially described as the recovery of monies pursuant to a loan arrangement. By way of the evidence relied upon by the intervener for the purposes of the trial today, it was apparent that the contended borrower, or borrowers, of the money had not satisfied the call for their repayment.
The proceedings have a rather tortuous history and first came before me for trial management on 2 November 2021. On that day, reference was made to a number of prior judgments delivered in the matter by Ryan J on a defended basis on 17 April 2019 and 29 November 2019. Those judgments record that from at least late 2019, the intervener was in a position to prosecute her relief by way of the Response. In circumstances where the intervener had been delayed for more than two years from doing so, trial directions were made so that the matter could proceed for final determination over four days commencing today, 7 March 2022. Directions were made on that day noting that the intervener sought orders in accordance with the Response, for each of the husband and the wife to file single consolidated trial affidavits relevant to their case, and granting the intervener leave to rely on earlier affidavits that she had filed in the proceedings.
The matter came before me again for trial management on 11 February 2022. On that date, each of the parties’ representatives informed me that single expert evidence as to the valuation of corporate and other interests of the parties would not be ready in time for the anticipated trial dates. In those circumstances, the allocated trial dates were vacated. Directions were made facilitating the progression of the single forensic accounting expert evidence. Pursuant to r 10.10 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), the matter was listed before me commencing today for three days for the determination of, as a discrete issue, the relief of the intervener as contained in her Response.
In the course of exchanges between Mr Stapleton, counsel for the intervener, and myself on 11 February 2022, there was a foreshadowing of the intervener seeking to amend her relief by way of additional equitable claim arising from a resulting trust imposed on the husband and the wife as the legal owners of a property at T Street, Suburb P (“the T Street property”), that property having subsequently been sold in 2019.
MFI-A broadly seeks a declaration as to the imposition of a resulting trust in respect of the T Street property such that, at the time of the acquisition of the property, the husband and wife held for the benefit of the intervener, 70 per cent of that legal interest. It seeks three alternate forms of relief, being:
(a)A claim that the beneficial interest of the intervener in the T Street property be in such proportions as the court seeks fit; or
(b)A declaration that the T Street property be subject to an equitable charge in favour of the intervener for repayment of $751,000; or
(c)That there be a declaration that a different property at T Street, Suburb P, later purchased by the parties, be held subject to either a resulting trust or an equitable charge dependent upon the findings of factors made by the Court.
I raised with counsel for the intervener in the course of submissions what was identified by both the High Court and the Supreme Court of New South Wales as to the necessary evidentiary foundations for the imposition of a resulting trust and the requirement of the legal owners to account for the beneficial owners in relation to the use of the property subject to the imposition of the trust. On any view, the evidence as to those latter matters appears not to be before the court.
The intervener’s leave to make an oral application and the application itself, should leave be granted, is opposed by the wife, in circumstances where the wife contends she is taken by surprise and that she first received a Minute of Order setting out the alternate equitable relief sought by the intervener at or about 11:30 am today, being the first day of the discrete issues hearing. The gravamen of the objection is that the wife, by way of her counsel, says clearly that she cannot meet the amendment that is proposed at 11.30 am today. She says that she is prejudiced and should not be required to deal with the matter on the run.
The husband, for his part, does not oppose the intervener’s application for leave to make an oral application, and if the application for leave is granted, then the application itself for amendment is not opposed.
Rule 2.18 of the Rules prescribes that the time to file a Response to an Initiating Application is 28 days after that Initiating Application has been served. Any Response is required to set out, with some particularity, the orders that are sought. The clear and obvious intention of the Rules and orders by way of case management is to ensure that, consistent with principles of natural justice, parties have appropriate notice of the case they are required to meet.
The High Court has said, on a number of occasions that this court as the superior court of record is obliged to afford procedural fairness to all parties and not act in a matter that can be described as dispensing “palm tree justice” (see R v Watson; Ex parte Armstrong (1976) 136 CLR 248. Despite the fact that this Court does not operate on the basis of formal pleadings, in the absence of established urgency, any litigant before this Court is entitled to receive fair and appropriate notice of the matters to be agitated before it.
There is little doubt that the assessment of the relevant criteria relating to the imposition of a resulting trust and/or equitable charge are entirely different than those which would apply in respect of what is contended to be a loan arrangement. I encounter some difficulty, albeit probably resting with me, as to engaging on all fours with how what is contended to be a liability for a debt can somehow, absent any other particular arrangements, go beyond a debtor and creditor relationship. It may be obvious to others, but it is not obvious to me.
It could not be said that the wife has had an adequate opportunity to consider the relevant principle and criteria and how the relevant facts and circumstances in this matter would meet the proposed amendment by way supplement of the intervener as contained in MFI-A today. That position, I find, is understandable and reasonable.
On the intervener’s case, this amendment was available to her from the end of 2019. There is an absence in her evidence as to why this amendment has not occurred well before the matter came before me for trial management in November 2021, or again in February 2022.
The Rules of the court and the management of the matter are constructed to ensure the principles of procedural fairness are observed. There is an overriding entitlement in these proceedings for the wife to receive notice. To allow the amendment, in my view, at this time, would see this court riding roughshod over a party’s entitlements to procedural fairness, which is a fundamental right of all litigants.
On that basis, I grant the intervener leave to make her oral application to amend her relief sought, and I refuse the oral application to amend.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 28 March 2022