Ramirez & Ramirez
[2024] FedCFamC1F 403
•4 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Ramirez & Ramirez [2024] FedCFamC1F 403
File number(s): SYC 9681 of 2023 Judgment of: SCHONELL J Date of judgment: 4 June 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Joinder – Where the adult child of the matrimonial relationship sought to join the proceedings – Where the former de facto partner of the husband sought to join the proceedings – Where a company claiming equitable interest in the former matrimonial home sought to join the proceedings – Where the husband and wife opposed the joinder of the former de facto partner of the husband – Where the husband and wife support the joinder application of the child of the matrimonial relationship – Where the husband and wife neither oppose nor consent to the joinder of the company – Where the Court is of the view that joinder of the former de facto partner of the husband and the adult child of the relationship is necessary to determine the matters in dispute – Where the Court is of the view that the company’s claim arises entirely in contract – Joinder application of the company refused – Orders made for joinder of the adult child of the matrimonial relationship and the former de facto partner of the husband as respondents.
FAMILY LAW – COSTS – Where the former de facto partner of the husband sought costs in respect of the joinder application – Orders made that costs in respect of the joinder Application by the former de facto partner of the husband should be paid from the husband and wife’s share of their property settlement entitlements.
Legislation: Family Law Act 1975 (Cth) ss 79(10)aa, 79(10)(b) 117, 117(2), 117(2A)
Family Law Rules 2004 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 3.01, 3.03(4)
Cases cited: B Pty Ltd and Ors & K and Anor (2008) FLC 93-380; [2008] FamCAFC 113
Hancock Family Memorial Foundation Ltd v Fieldhouse (No 3) [2010] WASC 223
Krishna and Suk [2019] FamCA 794
Riemann & Riemann and Ors (No. 3) [2017] FamCA 911
Rigby and Kingston (No. 3) [2021] FamCA 146
Victoria v Sutton (1998) 195 CLR 291;[1998] HCA 56
Wayne v Dillon (2008) 40 Fam LR 543; [2008] FamCAFC 204
Division: Division 1 First Instance Number of paragraphs: 57 Date of hearing: 4 June 2024 Place: Sydney Counsel for the Applicant: Mr Smith Solicitor for the Applicant: Quill Legal Pty Ltd Solicitor for the First Respondent: Ms Duncan, M Duncan & Associates Counsel for the Proposed Second Respondent: Mr Weightman Solicitor for the Proposed Second Respondent: Lagom Family Law Counsel for the Proposed Third and Fourth Respondent: Mr O’Shea Solicitor for the Proposed Third and Fourth Respondent: Stephen Teece Solicitor ORDERS
SYC 9681 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR RAMIREZ
Applicant
AND: MS RAMIREZ
First Respondent
MS SCHUSTER
Proposed Second Respondent
MS HOLLAND (and another named in the Schedule)
Proposed Third Respondent
ORDER MADE BY:
SCHONELL J
DATE OF ORDER:
4 JUNE 2024
THE COURT ORDERS THAT:
1.Pursuant to r 3.03(4) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), Ms Schuster and Ms Holland are joined to the proceedings as the second and third respondents.
2.The second respondent is directed to file a Response within 14 days.
3.The husband is restrained from dealing with his interest in the property described as C Street, Suburb D without first giving 28 days' written notice to the second respondent.
4.The parties have liberty to restore the matter on 7 days' notice in writing.
5.A Registrar is requested to allocate a Conciliation Conference.
6.Leave is granted to the second respondent to make an oral application for costs against the applicant and first respondent.
7.The applicant and first respondent pay in equal shares the costs of the second respondent assessed in the sum of $6,700, such sum to be paid from their share of their property settlement entitlements.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 Ramirez & Ramirez has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
SCHONELL J
By order made 15 May 2024 the court listed for hearing applications as set out in the Application in a Proceeding of Ms Schuster, Ms Holland and B Pty Ltd seeking joinder to the proceedings.
The husband and wife opposed the joinder of Ms Schuster but support the joinder applications of Ms Holland and B Pty Ltd. Ms Holland and B Pty Ltd neither oppose nor consent to the joinder of Ms Schuster.
The husband relied upon the following documents:
(1)Response to Application in a Proceedings; and
(2)Affidavit filed 16 May 2024.
The wife relied upon the following documents:
(1)Response filed 29 May 2024;
(2)Affidavit filed 29 May 2024; and
(3)Financial Statement filed 19 February 2024.
Ms Schuster relied upon the following documents:
(1)Response to an Application in a Proceeding filed 29 May 2024;
(2)Affidavit filed 18 April 2024; and
(3)Financial Statement filed 29 May 2024.
Ms Holland relied upon the following documents:
(1)Application in a Proceeding sealed 7 May 2024; and
(2)Affidavit filed 6 May 2024.
B Pty Ltd relied upon the following documents:
(1)Application in a Proceeding sealed 7 May 2024; and
(2)Affidavit of Mr E filed 6 May 2024.
BACKGROUND
The husband was born in 1951 and is aged 72 years. The wife was born in 1955 and is aged 68 years. The husband and wife commenced cohabitation in 1973, married in 1975 and separated in 2012. They were divorced in 2013.
There are two children of their relationship: Mr F and Ms Holland. Both are over 18.
Ms Holland seeks to be joined to the proceedings as the proposed third respondent.
The husband and Ms Schuster, according to him, commenced cohabitation in 2010 and separated in January 2023. Ms Schuster was born in 1984 and is aged 39 years. They have one child G born 2012 who is aged 12.
Ms Schuster seeks to be joined as the second respondent.
During the husband and wife's relationship they purchased a property at C Street, Suburb D which became their home. They also conducted a business. The business profits according to the husband paid the mortgage on the Suburb D property and living expenses of the parties. Following their separation the parties continued to operate the business, but Covid affected its profitability and the husband says that in 2021 he ceased to operate the business which was continued by the wife until mid-2023 when it was closed.
He contends that the only assets of substance as between he and the wife is the Suburb D property. He says it is valued according to his Financial Statement at $9 million subject to a debt to the bank of approximately $920,000. He is not working, is living with a friend and cannot get a Centrelink benefit as Suburb D is according to his affidavit perceived as an investment.
The wife is in receipt of a Centrelink benefit and continues to live in the Suburb D property.
The wife says in her affidavit that following their separation, she assisted her daughter with meeting legal fees in relation to her divorce. In her affidavit she says the following:
9.When [Ms Holland] finalised her family law property settlement in or about 2012, she consulted our family accountant about how to utilise her funds. On his recommendation she paid it to the joint account I held with [Mr Ramirez] which was the mortgage offset account and from which account we paid all business and living costs. There was no loan agreement or documentation regarding the funds paid. To the best of my recollection, the plan was that we could use it to reduce our mortgage on the basis however that [Ms Holland] could call on the funds if required at a future date and we agreed with the proposal. As far as I recall [Ms Holland] gave to us a sum in the vicinity of $590,000.00 which included reimbursement of the legal fees we had paid from our business account.
10.The mortgage on the home at [Suburb D] was not reduced by my daughters funds and these were fully dissipated within the offset account over the next ten years or so. The mortgage as at 30 June 2023 was $93,4677.72. It was slightly reduced from the balance at 31/12/2022 which was $949,040.56 Annexed […] are copies of the mortgage offset statement for the periods October to December 2022 and April to June 2023.
…
28.In respect of my daughter [Ms Holland], she and her three children have lived with me at [Suburb D] since about 2010 when she was separated from her then husband. She has continued to live with me to the current date together with her three children. Over the years [Ms Holland] has funded some renovations suitable for the living arrangements for her and the children. She has receipts indicating the extent of her contributions.
…
30.After the business closed in 2023 [Ms Holland] has helped fund some of the mortgage payments. I have borrowed more funds from my friend [Ms H] and I understand [Mr E] who is [Ms Holland’s partner] has assisted her with funds to give me for the mortgage instalments from time to time. [Mr Ramirez] has not been able to help and [Ms Schuster] has not been involved.
…
36.[Ms Holland] and [Mr E] came up with a plan to help out by [Mr E] via his company [B Pty Ltd] offering to acquire [Mr Ramirez’s] interest in the [Suburb D] property. I became aware discussions were conducted in 2023 with [Mr Ramirez] not involving me but I learned there was no agreement on the purchase price or property value. [Mr E] supplied two valuations for the property one from a valuer for the NAB, both of which are Annexed marked "Rl AND R2".
37.[Mr Ramirez] commenced this family law action against me, seeking an urgent sale of the [Suburb D] property and a hearing date for the interim application was listed 18/3/24. In the meantime, the court recommended we attempt mediation which we did. The mediation on 21/3/24 was conducted over the entire day and included me, [Mr Ramirez] and [Ms Holland] via her legal representative. At the end of the day an agreement was reached and recorded in principle by the mediator to the effect that [Mr E] via his company [B Pty Ltd] would purchase [Mr Ramirez’s] interest in the [Suburb D] property for an agreed sum and would refinance the mortgage. [Mr Ramirez] was to be indemnified against any claim that [Ms Holland] may have on the [Suburb D] property, which would be my responsibility thereafter. Annexed marked "S" are the terms which we had initially agreed upon. We cannot finalise an agreement with [Ms Holland] and [Mr E] unless respectively [Ms Holland] and [B Pty Ltd] are joined to the proceedings.
38.If we are allowed to finalise the terms of settlement between [Mr Ramirez], myself and [Ms Holland] and [B Pty Ltd], [Mr Ramirez] will receive a just and equitable distribution from the [Suburb D] property which would form part of his assets for a financial adjustment with [Ms Schuster] in any separate proceedings they might conduct.
The husband in his affidavit says:
[Suburb D] property
…
80.In early 2023 due to my situation of being unemployed and having no secure place to live, I approached [Ms Ramirez] to sell the [Suburb D] property, and each receive our share.
81.[Ms Ramirez] wished to retain the property, however, was unable to on her income.
[Mr E’s] intervention
82.[Mr E] who is [Ms Holland’s] partner offered to purchase my share of the property so that [Ms Ramirez] and my family could retain it. [Ms Holland] and my three grandchildren have been residing at the property since 2012.
…
84.On 18 December 2023 I filed an initiating application to resolve my financial relationship with [Ms Ramirez]. The time issue was consented to.
85.We agreed to participate in mediation and on 21 March 2023, [Ms Ramirez] and I participated along with [Ms Holland’s] lawyer. [Mr E] was also involved. The reason [Ms Holland] was involved is because there was an indication to the Court of her possible interest in the [Suburb D] Property. Eventually there was consent orders drafted and signed. The effect of the orders was that [Mr E] was to purchase my share of the property so [Ms Ramirez] can retain the house.
86.Due to my destitute state, there was a $200,000 interim distribution agreed to in my favour to get me by until the orders were finalised.
87.My solicitors are currently retaining $100,000 due to the extensive legal fees I have accrued for my criminal matter, family law matter and now [Ms Holland’s] intervention. I am using the remainder of those funds on day-to-day expenses.
[Ms Holland’s] intervention
88.[Ms Holland] has also claimed in an interest in the property as she had put in approximately $590,000 in the off-set account in 2012. This was her settlement monies from her financial settlement after her separation.
89.As [Ms Holland] and [Mr E] needed to be joined to the proceedings to finalise the consent orders, the Court had rejected the consent orders.
90.I was planning to purchase a unit with the funds I was going to receive from the settlement of the [Suburb D] property for myself and [G]. This property would have been left for [G]. I also wanted to contribute to [G’s] needs, education, and any expenses she may require.
91.I acknowledge that [Ms Holland] has put money into the offset account which was a place for her to park her funds obtained after the settlement proceedings.
The proposed third respondent says in her affidavit:
9.In about September 2012 I had a number of conversations with my father and my mother. I do not recall the words used, as it was more than 11 years ago. However, the gist of those conversations was:
a.I said I needed somewhere to live with my 3 children, and I did not think I could afford to buy a suitable home for us near my parents’ home in [Suburb D].
b.My parents said words to the effect, “We don’t want you to move a long way away. Why don’t you move into [C Street], it’s big enough for Mum, [Mr F], you and the grandkids.”
c.My parents also said words to the effect, “You can invest your settlement money in the house. It will give you and the children security. We won’t sell without your agreement.”
d.They also said words to the effect, “It will be really helpful to have your settlement money to pay down the mortgage on the house”.
10.My understanding was that the property was worth about $2.5 million to $3 million at the time. I was not aware how much was owing on my parents’ mortgage.
11.At no time did either my mother, my father or I ever say that the settlement money was to be treated as a loan to my parents. There was never any suggestion by my parents or by me that my parents would repay the settlement money to me, or pay me interest on it.
12.On about 28 September 2012 I instructed [J Lawyers] to pay their remaining fees from the money they held in trust, and to pay the balance of $587,777.53 into my mother’s bank account. Annexed to my affidavit and marked “A” is a true copy of a letter I received by email from [J Lawyers] on or about this date.
13.I paid the money to my parents because:
a.I needed somewhere to live with my children;
b.my parents offered me a share of the house as a way to invest my settlement moneys; and
c.my parents needed the money for their business, and I wanted to help them.
14.I understood the settlement money was used to pay down or pay out the loan secured on the property, but I am not aware of what actually happened with it.
15.I moved into the property with my children in about October 2012.
16.My parents did not pay me back any part of the moneys, and they did not pay me interest.
17.The first mention to me that the moneys I had paid were viewed as a loan occurred in email correspondence I received from my mother’s solicitor in these proceedings in about February 2024.
18.From about 2012, I spent about $80,000 on various work and maintenance to the property, and about $39,000 on payments of my parents’ new mortgage on the property, after my parents refinanced.
Mr E on behalf of B Pty Ltd, who seeks to be fourth respondent, contends in his affidavit:
4.I am also the [partner] of [Ms Holland], the daughter of [Mr Ramirez] and [Ms Ramirez].
5.Annexed hereto and marked “B” is a true copy of heads of agreement (“Heads of Agreement”) drafted by the mediator, at the conclusion of a mediation between [Mr Ramirez], [Ms Ramirez], [Ms Holland] and myself on behalf of the company, held on 21 March 2024.
6.Annexed hereto and marked “C” is a true copy of signed consent orders (“the Consent Orders”) proposed to be filed on the part of [Mr Ramirez] and [Ms Ramirez], who are parties to these Family Law property proceedings.
7.The Consent Orders impose obligations on the Company which are agreed to on the part of the Company, subject to the amendments sought in order 2 of the Application in a Proceeding filed by the Company herewith.
8.On or about 26 March 2024 I transferred the sum of $200,000 into the trust account of Quill Legal Pty Ltd ACN 613 013 031, the solicitors for [Mr Ramirez], in performance of the Company’s obligations under clause 1a of the Heads of Agreement.
9.Annexed hereto and marked “D” is a true copy of a payment confirmation in respect of the payment of $200,000 made on 26 March 2024.
10.Other than accepting the payment of $200,000 by the Company, no steps have been taken by [Mr Ramirez] or his legal representatives under the Heads of Agreement to effect transfer to the Company of [Mr Ramirez’s] share of the former matrimonial home at [C Street, Suburb D] NSW (“[Suburb D] property”).
11.The Company seeks to be joined to these proceedings, for the purpose of having the Consent Orders made, and to protect its interest as purchaser of [Mr Ramirez’s] share of the [Suburb D] property.
The proposed consent orders record a severing of the joint tenancy of the husband and wife, such that each would hold half the Suburb D property as tenants-in-common in equal shares and thereafter it references an agreement whereby B Pty Ltd will acquire the husband's interest in the Suburb D property for $2.5 million. The wife is to cause the existing mortgage to be discharged and in the event that she defaults, then the property is to be sold, the existing mortgage discharged, $590,000 paid to the proposed third respondent and the balance divided as to 45 per cent to the husband and 55 per cent to the wife.
The proposed orders have not been implemented because of the application by the proposed second respondent.
While the evidence of the husband, the wife and their daughter are largely aligned, the same cannot be said for the claims by the proposed second respondent. She asserts that she and the husband commenced a relationship in 2008, commenced living together in 2010 and separated in November 2022.
Each contend the other has perpetrated family violence. The proposed second respondent contends that the husband been charged by the police with sexual assault of her and that those charges are currently before a court.
The proposed second respondent in her affidavit contends that she has attempted to obtain information and documents from the husband and wife in relation to their property settlement and says she has been frustrated in the process. In her affidavit she says the following:
4.[Ms Ramirez] is [Mr Ramirez’s] ex-wife ([Ms Ramirez]). [Ms Ramirez] was born [in] 1955 and is currently 68 years of age. [Ms Ramirez] holds property with [Mr Ramirez] as joint tenants, which I say forms part of the asset pool for division between me and [Mr Ramirez].
…
20.My best estimate is that the [Suburb D] property is worth approximately $10,000,000 and that [Mr Ramirez’s] interest 50% interest in that property is equity of not less than $4,200,000.
22. …
(e)throughout our relationship I was almost entirely responsible for all of the costs associated with our living expenses and [G’s] expenses such as rental costs and groceries notwithstanding [Mr Ramirez] continued to work in his business with [Ms Ramirez] each day. I received no information about how [Mr Ramirez] was directing his business income and it was a source of ongoing arguments between us such that I now believe he was likely directing his income towards the [Suburb D] property whilst I was paying for all of our living expenses;
(f)I contributed to [Mr Ramirez] and [Ms Ramirez’s] business by both working in the shop from time to time between about 2009 to 2013, and also by assisting [Mr Ramirez] and [Ms Ramirez] set up a Facebook page for the business;
…
(h)on or about 7 July 2021 [Ms Ramirez] said to me words to the effect of "We are in trouble [Ms Schuster]. If we don't get some money on the mortgage, the bank is going to take [Suburb D]. If they sell it, it will be a fire sale and we will never get what it is worth" so I agreed to loan [Ms Ramirez] the amount of $20,000 to pay the mortgage arrears over the [Suburb D] Property. As at the time of finalising this Affidavit, the sum of $8,000 remains outstanding and payable to me. I asked [Ms Ramirez] about this and she said to me words to the effect of “I don't have it. I promise I will give it to you when we sell the [Suburb D] Property. I wouldn't ever not repay you when you have helped so much. I will let you know as soon as we decide to sell". To the best of my knowledge and belief following the loan I gave [Ms Ramirez], the value of the [Suburb D] Property significantly increased due to the increase in property prices in Sydney. I estimate the value of the [Suburb D] Property increased by up to $4,000,000 over a few years prior to and during the COVID lockdowns which [Mr Ramirez] and [Ms Ramirez] would not have the benefit of if they had been required to sell the [Suburb D] Property if they could not meet the mortgage arrears.)
33.In the early years of our relationship, I helped [Mr Ramirez] and [Ms Ramirez] by undertaking work for [their business], including but not limited to working in the shop on an unpaid basis and assisting [Mr Ramirez] and [Ms Ramirez] by setting up a Facebook page for them. I have various evidence by way of Facebook posts and photographs to evidence this. I say I worked approximately 30 hours per week in the shop between about 2009 and mid‑2012 (in addition to working in my own business) and about 47 hours per week in the shop for between about mid 2012 and early 2013.
The proposed second respondent has not actually commenced proceedings for financial adjustment against the husband. Attached to her affidavit is a copy of the orders she seeks as between herself and the husband recording that she seeks 60 per cent of the matrimonial pool as between herself and the husband. That term is illusory as there is no clear picture of what the actual matrimonial pool would be as contended for by her.
APPLICABLE LAW – JOINDER
Section 79(10)(b) of the Family Law Act 1975 (Cth) ("the Act") provides that any other person whose interests would be affected by the making of an order is entitled to be joined to the proceedings.
The Act reflects what McHugh J observed in Victoria v Sutton (1998) 195 CLR 291 that:
77.The rules of natural justice require that, before a court makes an order that may affect the rights or interests of a person, that person should be given an opportunity to contest the making of that order. Because that is so, it is the invariable practice of the courts to require such a person to be joined as a party if there is an arguable possibility that he or she may be affected by the making of the order. …
(Footnote omitted)
Rule 3.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the Rules") provides:
3.01 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.
While r 3.03(4) provides that a party who seeks to join someone to the proceedings after the first Court date must seek leave to do so.
In Wayne v Dillon (2008) 40 Fam LR 543 ("Wayne v Dillion"), Warnick J observed in relation to the old Family Law Rules 2004 (Cth) that "necessary" means:
18.… 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”. …
The Full Court in B Pty Ltd and Ors & K and Anor (2008) FLC 93-380 held as follows:
52.We do not accept that it is proper to allow joinder of third parties merely upon the formulation of a paragraph in, or to be added to, an application, on the basis that at trial facts to support the application may be asserted and proved. Sufficient facts must be asserted to demonstrate that, if proved, the law arguably provides the relief sought.
In Riemann & Riemann and Ors (No. 3) [2017] FamCA 911 at [37], McClelland J (as his Honour then was) cited with approval the judgment of Le Miere J in Hancock Family Memorial Foundation Ltd v Fieldhouse (No 3) [2010] WASC 223 where Le Miere J observed as follows:
27.The applicant on a joinder application must show that there is an arguable case sufficient to resist the entry of summary judgment by the parties sought to be joined: Universal Music Australia Pty Ltd v Cooper [2004] FCA 78 [6] (Tamberlin J). The test is that stated by Barwick CJ at 128 - 129 in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125: Universal Music Australia Pty Ltd v Cooper [7] (Tamberlin J); Review Australia Pty Ltd v Red Berry Enterprises Pty Ltd [2003] FCA 1009 [5] (Heerey J). It would be futile to order that a person be joined as a defendant if the material before the court disclosed that if the person, having been joined as a defendant, applied for summary judgment the application would succeed.
Further, this matter calls into direct consideration the provisions of s 79(10)(aa) which provides as follows:
(10)The following are entitled to become a party to proceedings in which an application is made for an order under this section by a party to a marriage (the subject marriage):
…
(aa) a person:
(i)who is a party to a de facto relationship with a party to the subject marriage; and
(ii)who could apply, or has an application pending, for an order under section 90SM, or a declaration under section 90SL, in relation to the de facto relationship;
…
SUBMISSIONS OF THE HUSBAND
The husband submits that the proposed second respondent does not meet the status of a necessary party as contemplated by r 3.01 of the Rules. In making his submissions he relied upon a decision of Rees J in Krishna and Suk [2019] FamCA 794 in support of the proposition that the proposed second respondent is not a necessary party. The husband submits that orders could be made that restrain the parties from approaching the court for the purposes of seeking consent orders without providing 14 days' notice to the proposed second respondent. His counsel submits that is sufficient to protect the interests of the second respondent.
SUBMISSIONS OF THE WIFE
The solicitor for the wife in her Case Outline contended as follows:
3.[Ms Ramirez] contends that the participation of [Ms Schuster] is not necessary to determine issues in proceedings between [Ms Ramirez] and [Mr Ramirez] nor is [Ms Schuster] disadvantaged if her application is dismissed as she retains her rights to pursue separate proceedings with [Mr Ramirez] who will benefit from the adjustment of interests between him and [Ms Ramirez].
4.[Ms Ramirez] contends that that the court should first determine her property interests as against [Mr Ramirez] in accordance with sections 79(4) and 75(2).
…
BACKGROUND
10.[Ms Schuster] alleges she made contributions to the property jointly owned by [Mr & Ms Ramirez] and the partnership business formerly operated by the [Ramirez’s]. This is denied by [Ms Ramirez].
…
25.There is no basis for [Ms Schuster] to allege that she has any claim against any assets of [Ms Ramirez]. In contrast the financial position of [Ms Ramirez] now 68 years of age, has been adversely impacted by the extent to which [Mr Ramirez] supported [Ms Schuster] from the partnership business income. This is evidenced by the fact that from 2011 to date, the mortgage on the [Suburb D] property has not been reduced in any significant manner and remains in an amount of some $g35,000.00. In addition, the funds contributed by [Ms Holland] in 2012 to her parents of approximately $590,000.00 were dissipated through the business and did not reduce the loan secured over the [Suburb D] property. [Ms Schuster] logically cannot be said to have contributed to the financial benefit of [Ms Ramirez] or the [Suburb D] property. To the contrary [Mr Ramirez] utilised income from the partnership business to support [Ms Schuster] and their child.
…
29.There is no injustice to [Ms Schuster] if her application to intervene is dismissed as [Ms Schuster] will retain her rights to pursue separate property proceedings against [Mr Ramirez] after he has resolved proceedings with [Ms Ramirez] on a just and equitable basis.
30.The joinder application is pursued on the unfounded assumption that unless [Ms Schuster] is involved the agreement reached between [Mr and Ms Ramirez] may deprive him of a greater financial benefit which it is in [Ms Schuster's] interests to pursue for herself.
…
33.[Ms Schuster] has failed to identify
a)Why her intervention or an order or injunction in these proceedings is reasonably necessary to protect her interests;
b)In what way is any order or injunction sought by her in the current proceedings between [Mr & Ms Ramirez] reasonably appropriate or required to effect a division of property between her [ that is [Ms Schuster]] and [Mr Ramirez];
c)How any order or injunction proposed by her impacting adversely upon our client [Ms Ramirez] would be said to be just and equitable or proper or just and convenient.
These are matters which ought to have been addressed pursuant to the reasoning of Rigby & Kingston (No. 3) [2021] FamCA 146.
SUBMISSIONS OF THE PROPOSED SECOND RESPONDENT
Counsel for the proposed second respondent in his Case Outline submitted:
[Ms Schuster’s] Joinder
1.On [Ms Schuster’s] application to be joined to the proceedings, the proposed third and fourth respondents take a neutral position, the applicant’s position is unknown, and the first respondent opposes it.
2.Having regard to [Ms Schuster’s] Affidavit filed 29 May 2024, together with the concessions made by the Applicant in his Affidavit filed 16 May 2024 at [4] – [6], it is hard to envisage there would be any opposition to the proposition that the relationship between [Ms Schuster] and the applicant was a de facto relationship as that term is defined at s.4AA of the Family Law Act 1975.
3.If the determination is that [Ms Schuster] and the Applicant were in a de facto relationship, given the effect of s.79(10)(aa) of the Family Law Act 1975, [Ms Schuster] is “entitled to become a party to [these] proceedings”. The basis of the first respondent’s opposition is not apparent.
Orders sought by [Ms Holland] and [B Pty Ltd]
4.[Ms Schuster] does not oppose the joinder of [Ms Holland] and [B Pty Ltd].
5.If [Ms Schuster] is joined to the proceedings, there can be no suggestion of the “consent orders” dated 5 April 2024 being made in the absence of [Ms Schuster’s] consent – which she does not give, accordingly order 2 in the respective Application’s in a Proceeding must be dismissed.
He submitted that the decision of Krishna and Suk [2019] FamCA 794 had no application to these proceedings and that by virtue of the provisions of s 79(10)(aa) it is clear that the proposed second respondent is a necessary party.
SUBMISSIONS OF THE PROPOSED THIRD AND FOURTH RESPONDENTS
Counsel for the proposed third and fourth respondents variously contended that the third and fourth respondents have an equitable interest in the Suburb D property and by virtue of that should be joined to the proceedings.
DISCUSSION
I am not satisfied that there is any basis for the intervention of B Pty Ltd. The claim arises entirely in contract. The Heads of Agreement does not provide a basis for joinder as it is subject to the entry of consent orders which have not been made. Nor is it an agreement that is capable of specific performance. At its highest it seems to me to be a claim in debt. It is a claim for approximately $200,000 and I am not satisfied that the circumstances are such as to require them to be a necessary party to the proceedings.
The proposed third respondent seeks to be repaid a sum of money which does not seem to be disputed. It is asserted that she has some claim in equity albeit it is less than clear. That said, I am not determining the actual merits of the claim and accept that an equity may be articulated with greater precision at some stage in the future. Accordingly, I am satisfied that she is a necessary party.
Ms Schuster's claim falls into a different category. Her joinder is, in my view, necessary by the terms of s 79(10)(aa). While there remains a degree of imprecision around the relief that she seeks, it is undoubtedly the case that she has a claim on the property of the husband and as does he on her assets following the breakdown of their relationship.
She contends that the Suburb D property has a value of approximately $10 million. If so, then the husband's 50 per cent interest would be worth approximately $5 million less any share of the mortgage and the claim of his daughter. On its face, the proposed agreement with the wife may well see her claim ultimately affected.
I am not satisfied that the decision of Rees J in Krishna and Suk [2019] FamCA 794 has any relevance to this application and is confined to its facts. That was the situation where a party sought to intervene about a month prior to the final hearing. The primary judge's determination seemed to rest upon consideration of trial management including that it would lead to the vacation of the final hearing dates. Further, the primary judge identified that the party seeking to be joined had made no contribution to the property of the husband and wife. That is not the case here. Lastly I note that the primary judge did not have regard to the provisions of s 79(10)(aa) in reaching her determination.
The solicitor for the wife referred to Rigby and Kingston (No. 3) [2021] FamCA 146 in support of her submissions. Beyond referring to it, I was not taken to it as foundation for any proposition and having read the decision it seemed to me to be an application not for joinder but rather one for disjoinder. I am not satisfied that it has any application to these proceedings.
I am satisfied that it is necessary for the joinder of the proposed second respondent to completely and finally determine all matters in the terms identified by Warnick J in Wayne and Dillon. In the event that the proposed second respondent does not make good her case against the other parties then one may well imagine that costs will loom large. I will, however, direct the proposed second respondent to file a Response seeking relief in proper form. In my view, as articulated, the proposed orders are incompetent. In the event that she fails to comply with a direction that she file a Response within 14 days, then the other parties are granted leave to relist the matter.
The proposed second respondent also sought an order by way of injunction restraining the husband and wife from seeking to mortgage and/or further encumber the Suburb D property. Her counsel advises that she gives an undertaking as to damages. No submissions were advanced by the husband and wife, but I presume that it is opposed.
I am not satisfied that there is any basis to restrain the wife from dealing with her interest in the property. It is not clear how her interest could form any part of the property for division between the husband and proposed second respondent. Nor am I satisfied that an injunction as broad as that contended is necessary. However, I am satisfied that the balance of convenience favours the granting of an injunction in more limited terms such that the husband is not to seek to encumber or dispose of his interest in the Suburb D property without giving the second respondent 28 days' notice.
As to the balance of the relief sought by the proposed second respondent, these are matters governed by the Rules. I will, however, direct that the parties attend upon a Conciliation Conference.
COSTS
The second respondent seeks an order for her costs of the application today. It is predicated on two bases, namely, first of all on an indemnity costs basis and in the alternative at scale in the order of $6,693.
An application for costs is governed by the provisions of s 117 of the Act which provides as a general rule that each party to the proceedings should bear their own costs. Section 117(2) reposes in the court a discretion to make costs orders in circumstances where the court determines that there are circumstances that justify it making an order having regard to the provisions of s 117(2A).
It is well settled law that no one matter in s 117(2A) is determinative and it may well be that an order for costs can be made on the basis of one only of the factors set out therein.
In making a determination as to costs I have had regard to the financial circumstances of each of the parties. It is clear that the husband and wife are asset rich but income poor; one being on a pension and one not being in receipt of any form of income at all and living on what appears to be the generosity of others. That said, impecuniosity is not a basis or a reason for a refusal to make an order for costs.
Neither party is in receipt of Legal Aid.
I have had regard to the conduct of the parties to the proceedings. The rules of court make it plain, as does the Act, that the second respondent was a person entitled to be a party to the proceedings. It is really not adequately explained in the material as to why her request for information was frustrated.
The proceedings were not necessitated by the failure of a party to comply with an order nor could it be contended that a party has been wholly unsuccessful in the proceedings.
It is clear that the second respondent has made an offer in writing to resolve aspects of the proceedings and had that offer been accepted then it would have necessitated at least part if not all of these applications being resolved.
I am satisfied that it is proper that an order should be made that the costs of the second respondent be paid. I am not satisfied that the circumstances attract the notion of exceptionality which would be the benchmark test for an order for costs on an indemnity basis. I am, however, satisfied that costs at scale should be paid and I assess those costs in the sum of $6,700.
I will order that that sum be paid by the applicant and respondent in equal shares, such sum to be paid from their ultimate share of the property settlement entitlements.
I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 18 June 2024
SCHEDULE OF PARTIES
SYC 9681 of 2023 Respondents
Proposed Fourth Respondent:
B PTY LTD
0