RAYNOR & RAYNOR
[2020] FamCA 951
•19 November 2020
FAMILY COURT OF AUSTRALIA
| RAYNOR & RAYNOR | [2020] FamCA 951 |
| FAMILY LAW – PRACTICE AND PROCEDURE – joinder – equitable claims asserted by parties proposed to be joined. |
| Family Law Act 1975 (Cth) ss 78(1), 79, 92 Family Law Rules 2004 (Cth) r 6.05 |
| Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 B Pty Ltd v K (2008) 39 Fam LR 488 Calverley v Green (1984) 155 CLR 242 Diem & Vho [2016] FamCA 680 Dougherty v Dougherty (1987) 163 CLR 278 Fencott v Muller (1983) 152 CLR 570 Foster & Cotter [2016] FamCA 1038 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Giumelli v Giumelli (1999) 196 CLR 101 Kain & Kain [2020] FamCA 650 Karjala & Gallard [2020] FamCA 110 Lindon v Commonwealth of Australia (No 2) (1996) 70 ALJR 541 Mann v Paterson Constructions Pty Ltd (2019) 93 ALJR 1164 Muschinski v Dodds (1985) 160 CLR 583 Stanford v Stanford (2012) 247 CLR 108 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 WorkPac Pty Ltd v Rossato [2020] FCAFC 84 |
| APPLICANT: | Mr Raynor |
| RESPONDENT: | Ms Raynor |
| FIRST PROPOSED INTERVENOR: | Mrs Holt (Both Personally and In Her Capacity as Executrix of The Estate of the Late Mr Holt) |
| SECOND PROPOSED INTERVENOR: | Mr A Raynor and Mr B Raynor |
| FILE NUMBER: | MLC | 13962 | of | 2019 |
| DATE DELIVERED: | 19 November 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Wilson J |
| HEARING DATE: | On the papers |
| DATE OF LAST SUBMISSIONS: | 5 November 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr F. Dixon SC |
| SOLICITOR FOR THE APPLICANT: | Clancy and Triado |
| COUNSEL FOR THE RESPONDENT: | Mr T. Puckey SC |
| SOLICITOR FOR THE RESPONDENT: | Purcell & Purcell |
| COUNSEL FOR THE FIRST PROPOSED INTERVENOR: | Mr N. McOmish |
| SOLICITOR FOR THE FIRST PROPOSED INTERVENOR: | William Murray Solicitors |
| COUNSEL FOR THE SECOND PROPOSED INTERVENORS: | Mr D. Laidlaw |
| SOLICITOR FOR THE SECOND PROPOSED INTERVENORS: | Keypoint Law |
Orders
I grant leave for the first and second proposed intervenors to each intervene in this proceeding and for each to become a party to this proceeding.
On or before 4pm on 3 December 2020 the parties must bring in minutes for the ongoing conduct of this proceeding.
I adjourn the further hearing of this proceeding to 4 December 2020 at 9:30am for mention.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Raynor & Raynor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 13962 of 2019
| Mr Raynor |
Applicant
And
| Ms Raynor |
Respondent
And
| Mrs Holt (Both Personally and In Her Capacity As Executrix of the Estate of the Late Mr Holt) |
First Proposed Intervenor
And
| Mr A Raynor and Mr B Raynor |
Second Proposed Intervenors
REASONS FOR JUDGMENT
Introduction
Pursuant to orders made on 19 October 2020 I ordered that submissions concerning all parties’ joinder applications be filed by 2 November 2020 after which I would determine those applications on the papers. These are my reasons for ordering the joinder of Mrs Holt as well as Mr A Raynor and Mr B Raynor.
Short recital of relevant background
This proceeding began on 9 December 2019 with an injunction application brought by the husband for orders restraining the wife from disposing of or otherwise encumbering matrimonial assets without the consent of the husband. He also sought orders for the payment to him of $2,000 per week as a salary from C Pty Ltd.
In support of his injunction application the husband made an affidavit on 6 December 2019. Relevantly synthesised, he deposed to the following –
a)he cohabited with the respondent, now his wife, for six years prior to their marriage in 1997;
b)the applicant and the respondent have two children the eldest of whom, Mr A, is 21 and the youngest, Mr B, is 19 (and are collectively the second proposed intervenors in this application);[1]
[1] Mr A is now aged 22 and Mr B 20.
c)the applicant is a transport worker by occupation and an early party involved in C Pty Ltd;
d)the applicant holds one of two issued shares in the capital of C Pty Ltd and the respondent holds the other;
e)the respondent is the sole director of C Pty Ltd;
f)C Pty Ltd owns plant and equipment estimated to be valued at $600,000 some of which it leases;
g)C Pty Ltd’s annual turnover is approximately $2m;
h)soon after their marriage, the applicant and respondent purchased 100 acres of rural land in Suburb D, the original purpose of which was storage for vehicles, goods and material;
i)the 100 acres of land in Suburb D appreciated in value;
j)that land is registered solely in the respondent’s name;
k)on 11 September 2019 the Suburb D land was sold to a property developer for $34m, with the deposit of $5,100,000 being payable as to $3,400,000 on signing of the contract and $1,700,000 twelve months later;
l)the respondent received the net balance of the deposit namely $2.2m;
m)once the contract was executed the respondent placed the applicant’s clothing on the back porch, declaring that the marriage was over and refusing to allow the applicant to return to the matrimonial home;
n)occasionally, the respondent deposited modest sums of money into his account; and
o)he was sleeping in the back of his vehicle.
The respondent made an affidavit on 10 December 2019. In it she deposed to the following matters –
a)she became the registered proprietor of the Suburb D land at the insistence of the applicant;
b)the applicant agreed to the respondent receiving the deposit once selling costs were paid;
c)she denied blocking the applicant’s telephone account;
d)she denied cancelling the applicant’s credit card;
e)both the applicant and respondent were paid a salary of $400 per week by C Pty Ltd; and
f)several events of domestic violence occurred throughout the marriage.
On 11 December 2019 Bennett J heard the applicant’s application. Her Honour made a collection of consent orders. They included mutual restraints from dealing with or disposing of matrimonial assets, the respondent paying the applicant $1500 weekly from C Pty Ltd, orders for the use of certain vehicles, for the payment to each of $50,000 by way of part property settlement and the applicant ceasing to use a particular credit card. Her Honour otherwise dismissed all applications.
In May 2020, consequent upon the full impact of the international COVID-19 pandemic being felt by litigants in this court, I arranged for this proceeding to be mentioned at a case management conference. Consent orders were made for the parties to obtain taxation advice about the ramifications of the sale of the Suburb D property and for the valuation of C Pty Ltd to be obtained. The parties agreed to mediate their differences and the further hearing of the proceeding was adjourned to 1 July 2020. That listing was later vacated and the case was re-listed to a future date.
The mediation of this proceeding was unsuccessful. I heard a mention of the proceeding on 2 September 2020. At that mention I was informed that Mrs Holt in her personal capacity and as the executrix of the estate of the late Mr Holt claimed an interest in the Suburb D property. The details were scant. I was also informed that Mr A Raynor and Mr B Raynor, the parties’ adult sons, also claimed an interest in the Suburb D property. Similarly, the details were scant. I ordered Mrs Holt and Messrs Raynor to apply to intervene in this proceeding by 4pm on 12 October 2020.
The parties requested by email that I convene an urgent hearing which I did on 23 September 2020. By then the intervenor’s application had not been filed. The urgency for the hearing seemed to relate to actual or threatened destruction of matrimonial assets. By consent, orders in the nature of mutual restraints were made as well as orders concerning the application of the deposit of the sale of the Suburb D property and other orders.
Mrs Holt filed her joinder application on 19 October 2020, that is to say, one week late. Mr A and Mr B Raynor also filed their application to intervene on 20 October 2020.
The affidavit material in support of Mrs Holt’s joinder application
It is utile to record the basis on which Mrs Holt sought to intervene. That was recorded in 10 paragraphs of her application in a case filed on 19 October 2020. While lengthy, those grounds were as follows –
1.A declaration that the Agreement and the Furtherance are valid agreements and binding on Ms Raynor and Mr Raynor.
2.A declaration pursuant to s78(1) of the Family Law Act 1975 that the Block is held by Ms Raynor and/or Mr Raynor as trustees pursuant to a constructive trust as to one-third for Mr Holt and Mrs Holt.
3.Alternatively, a declaration pursuant to s78(1) of the Family Law Act 1975 that Ms Raynor and/or Mr Raynor hold their legal title to the Block on a resulting trust for Mr Holt and Mrs Holt as tenants in common beneficially entitled in such shares as the Court may determine.
4.Alternatively, a declaration pursuant to s78(1) of the Family Law Act 1975 that Ms Raynor and/or Mr Raynor are estopped from:
i.denying that Mr Holt and Mrs Holt are beneficially entitled as tenants in common as to one-third to the Block; and
ii.acting in any manner inconsistent with the assumption and/or expectation duly created or encouraged that Mr Holt and Mrs Holt are beneficially entitled as tenant in commons as to one-third of the Block.
5.The following orders and directions pursuant to s78(2) of the Family Law Act 1975:
i. that the proceeds of sale be applied -
• first in payment of the costs and expenses of and incidental to such sale;
• second by payment of one-third of the remaining proceeds be paid to Mr Holt and Mrs Holt or in such proportions as the Court may direct;
ii.that insofar as it may be necessary, there be directions for the making of inquiries and the taking of accounts.
6.Alternatively, pursuant to s78(2) of the Family Law Act 1975 a declaration that Mr Holt and Mrs Holt are entitled to an equitable charge over the Block to secure the repayment of their contributions towards the Block, together with interest.
7.Alternatively, pursuant to s78(2) of the Family Law Act 1975 a declaration that the Plaintiff is entitled to an equitable lien over the Block or the proceeds of sale of the property to secure repayment of their contributions together with interest.
8. Interest.
9. Costs.
10. Such further or other orders as are just and equitable
In support of her application Mrs Holt swore an affidavit on 18 October 2020. Relevantly paraphrased she deposed to the following –
a)she is the respondent’s mother and widow of Mr Holt, the respondent’s father;
b)she is the executrix of her late husband’s estate, he having died in mid 2020;
c)she is also the sole beneficiary under the last will of her late husband;
d)in 1986 she and her late husband commenced G Pty Ltd which carried on business as a sub-contractor to H Company;
e)on a date not given Mrs Holt, her late husband, the respondent and the applicant discussed establishing a business together;
f)C Pty Ltd was incorporated on 6 October 1994 with the respondent and the late Mr Holt as directors and those two being the shareholders;
g)Mr Holt worked full-time for C Pty Ltd for over 20 years between 1994 and 2013 over which time he was a significant contributor to the workings of C Pty Ltd;
h)Mrs Holt assisted her daughter with bookkeeping issues;
i)on 5 June 1997 Mr Holt ceased to be a director of C Pty Ltd;
j)from a little earlier, in 1996 the applicant and respondent lived in Suburb E in a home built by the respondent;
k)during 1997 the applicant, the respondent, Mrs Holt and her late husband discussed purchasing a large property on which vehicles and equipment could be stored and later the land could be sold for a profit;
l)she said “it was a common understanding, and openly discussed, that “we”, that is all four of us, were buying a property together”;
m)after sourcing a suitable parcel of land the property at F Street Suburb D was identified, being the whole of the land described in certificate of title volume … folio …;
n)she said “we purchased the Block for $167,000” and the respondent paid a 10% deposit using C Pty Ltd funds;[2]
o)the respondent obtained mortgage finance from Commonwealth Bank which Mrs Holt said she and her late husband guaranteed;
p)loan repayments were made by C Pty Ltd;
q)in 1997 the applicant commenced a relationship with another woman;
r)in 1998 the applicant and respondent resumed their relationship;
s)Mr Holt worked the land that had been purchased;
t)on 8 September 2014 upon the retirement of Mrs Holt’s late husband, G Pty Ltd was deregistered;
u)the Suburb D land was sold for $34m; and
v)at all times prior to entering into the contract for the sale of the Suburb D land, the applicant stated that Mrs Holt and her late husband were entitled to a one-third interest in the proceeds of sale.
[2] Exhibit “H5” was a copy of the relevant certificate of title showing the respondent as the registered proprietor and Mrs Holt as a caveator.
Mrs Holt stated in her affidavit that after the contract for the sale of the Suburb D land was executed, the applicant asserted that Mrs Holt and her late husband were not entitled to a one-third interest in the proceeds of sale.
In her affidavit Mrs Holt deposed as exhibit “H7” a proposed statement of claim. That statement of claim was prepared by counsel. In it Mrs Holt raised contentions about a common intention constructive trust, a resulting trust and an estoppel. They sought declaratory relief under s 78(1) of the Family Law Act. At first blush, the pleadings raised propositions of fact that legitimately arose on Mrs Holt’s affidavit. Put slightly differently, it could not be said that in her statement of claim Mrs Holt raised propositions of fact or law that were untenable.
The affidavit material in support of Messrs Raynor’s joinder application
The older of the two children of the applicant and the respondent is Mr A, aged 22. He and his brother Mr B, aged 20, relied on the one application in a case pursuant to which they sought orders for their joinder under s 92 of the Family Law Act. They also sought declaratory relief to the effect that their parents hold their interests in the land known and described as F Street, Suburb D on trust for them. In the alternative, they sought equitable compensation.
In the case of Mr A he made an affidavit on 16 October 2020. Relevantly paraphrased, in it he deposed to the following –
a)he lives and always had lived at F Street, Suburb D;
b)as a child he was asked by his father to assist on the property in C Pty Ltd’s business activities, especially in respect of vehicles;
c)from 2012 his father told Mr A that Mr A and Mr B would each receive 10% of the Suburb D property;
d)as a teenager Mr A worked on the vehicles involved in C Pty Ltd’s business;
e)the 10% of the Suburb D property discussed by the applicant was from the proceeds of sale of the land;
f)the applicant told Mr A on many occasions, often in the presence of the respondent, that after Mr A finished his secondary schooling the applicant wanted Mr A to work with the applicant and that Mr A would be provided with a 10% share in the Suburb D property;
g)Mr A believed his parents when they told him he would receive a 10% share in the Suburb D property;
h)Mr A worked full time for his father since finishing secondary school;
i)Mr A has worked for the applicant as required, day or night, yet he has not been provided with a wage and he has no formal days off;
j)he said he has been paid at the discretion of his parents; and
k)Mr A (along with his brother) gave up aspiring careers in sport at the insistence of their parents so as to work in the business.
Mr B made an affidavit, also on 16 October 2020. While the precise details of it were different, he too deposed to repeat statements from his parents to the effect that he would receive 10% of the Suburb D property so long as he continued to do jobs as requested by the applicant.
Mr A and Mr B retained Mr Douglas Laidlaw of counsel, a highly experienced barrister in the equity jurisdiction, to prepare a statement of claim on their joint behalves. Their case was cast as one of promissory estoppel, fully particularised, as well as one of unjust enrichment, although, strictly speaking, the law on unjust enrichment has been subsumed by the law of restitution, according to the High Court in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd.[3] Each sought declaratory relief, alternatively, equitable compensation, alternatively again, orders under s 79 of the Family Law Act.
[3] (2014) 253 CLR 560.
Mrs Holt’s Submissions
Mr McOmish of counsel prepared written submissions on behalf of Mrs Holt. In support of Mrs Holt’s constructive trust claim Mr McOmish called in aid the High Court’s decision in Muschinski v Dodds.[4] In support of Mrs Holt’s resulting trust claim Mr McOmish called in aid the High Court’s decision in Calverley v Green.[5] In support of his client’s claim to an equitable charge, Mr McOmish relied on the High Court’s observations in Giumelli v Giumelli.[6]
[4] (1985) 160 CLR 583.
[5] (1984) 155 CLR 242.
[6] (1999) 196 CLR 101.
On all grounds it seemed to me that Mrs Holt’s claims were arguable.
So far as Mr A’s and Mr B’s grounds were concerned, Mr Laidlaw of counsel made a collection of submissions most of which call for recital. Those included the following –
a)the equitable claims advanced by Mr A and Mr B attract the exercise of the court’s accrued jurisdiction within the conception of Fencott v Muller;[7]
b)the affidavit material filed in support of this application complies with rule 6.05 of the Family Law Rules;
c)an arguable case must be advanced, as was held in B Pty Ltd v K[8] and Foster & Cotter;[9]
d)the test for joinder as espoused in Diem & Vho[10] and in Lindon v Commonwealth of Australia (No 2)[11] was satisfied on the facts of this case;
e)in Kain & Kain[12] the court expressed the test in having parallels to the learning on summary dismissal as was held in General Steel Industries Inc v Commissioner for Railways (NSW);[13]
f)according to Waltons Stores (Interstate) Ltd v Maher,[14] the test was satisfied;
g)according to Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd[15] as applied in Karjala & Gallard,[16] unjust enrichment is now subsumed into the broader jurisprudence of restitution;
h)cases such as WorkPac Pty Ltd v Rossato[17] and Mann v Paterson Constructions Pty Ltd[18] have applied Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd; and
i)s 79’s requirement of no order being made unless “in all the circumstances” it is just and equitable was applied in Dougherty v Dougherty.[19]
[7] (1983) 152 CLR 570.
[8] (2008) 39 Fam LR 488.
[9] [2016] FamCA 1038.
[10] [2016] FamCA 680.
[11] (1996) 70 ALJR 541.
[12] [2020] FamCA 650.
[13] (1964) 112 CLR 125.
[14] (1988) 164 CLR 387.
[15] (2014) 253 CLR 560.
[16] [2020] FamCA 110.
[17] [2020] FCAFC 84.
[18] (2019) 93 ALJR 1164.
[19] (1987) 163 CLR 278.
The applicant provided written submissions in opposition to those of Mrs Holt, of Mr A and of Mr B Raynor. Mr Fabian Dixon SC signed those submissions, certifying the seriousness of the contentions advanced in them. It cannot be disputed that the amount in issue in this case is enormous. While it is not immediately possible to distil the submissions of Mr Dixon SC into monosyllabic propositions, the following is a distillation of his main points –
a)in Dougherty v Dougherty[20] the High Court held that the circumstances to support a claim by or on behalf of an adult child of the marriage will be exceptional;
b)the claim made by Mrs Holt in reliance upon Muschinski v Dodds[21] is of no avail because “there is no such money or other property contributed by either Mr or Mrs Holt and the case for a constructive trust must fail”;[22] and
c)there were no contributions giving rise to a resulting trust;
[20] Ibid.
[21] (1985) 160 CLR 583.
[22] Paragraph 12 of counsel’s submissions filed 5 November 2020.
So far as the case advanced by Mr A and Mr B was concerned, Mr Dixon SC took issue with the factual assertions alleged by them.
Consideration
This application was presented with exquisite promptitude and careful analysis for which I extend to all counsel the court’s gratitude.
In the end, the application falls to be determined by a consideration of the matters set out in s 92(1) of the Family Law Act and rule 6.05 of the Family Law Rules.
Sufficient facts must be asserted to demonstrate, if proved, that the law arguably provides the relief sought, as was held in B Pty Ltd v K.[23] I adhere to what I said in Kain & Kain.[24]
[23] (2008) 39 Fam LR 488.
[24] [2020] FamCA 650 (at [170] – [184]).
To my mind, all claims by the proposed intervenors are not only arguable but they should be allowed to proceed so as to test their veracity. While I recognise that the applicant may wish to keep this litigation within manageable parameters by confining it to a dispute inter se between the applicant and the respondent, self evidently the facts of this case introduced other claims by other parties. In order for me to do what the High Court mandates in Stanford v Stanford[25] I must consider all legal and equitable interests in this case. Each intervenor brings her or his case for equitable relief. I must consider those claims. Put differently, unless I consider those claims I will fall short in the dispatch of my judicial duties according to Stanford v Stanford.[26]
[25] (2012) 247 CLR 108.
[26] Ibid.
I grant leave for each intervenor to intervene in this proceeding and for each to become a party to this proceeding.
Certain procedural orders will need to be considered, beyond the filing of defences to each intervenor’s statement of claim. Disclosure will be important in this case. I take the view that the parties should confer and formulate a consent order (to the extent they are able) that makes provision for this case to move forward in a time effective and cost efficient manner.
To that end I will give the parties 14 days within which to bring in minutes for the ongoing conduct of this proceeding. I adjourn the further hearing of this proceeding to 4 December 2020 at 9:30am.
I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 19 November 2020.
Associate:
Date: 19 November 2020
0
15
2