Sigley and De Santis and Ors (No 2)
[2019] FamCA 596
•27 August 2019
FAMILY COURT OF AUSTRALIA
| SIGLEY & DE SANTIS AND ORS (NO. 2) | [2019] FamCA 596 |
| FAMILY LAW – PROPERTY – procedural steps to ensure three proceedings advance smoothly to trial – 12 day trial ordered. |
| Family Law Rules 2004 (Cth) r 1.04, 1.06, 1.07, 6.02, 6.03 Trustee Act (Vic) s 63 Corporations Act 2001 (Cth) sch 2, s 60-10(2)(a) |
| Australasian Performing Right Association Ltd v Austarama Television Pty Ltd [1972] 2 NSWLR 467 B Pty Ltd v K (2008) 39 Fam LR 488 Banque Commerciale SA v Akhil Holdings Ltd (1990) 169 CLR 279 Bourke v Bourke (2010) 43 Fam LR 139 Buckeridge & Buckeridge (No 2) (1981) 7 Fam LR 958 Chen & Chen (No 2) [2017] FamCA 285 Chye & Thian [2019] FamCA 336 Collins & Collins (1987) 11 Fam LR 382 Commerce Consolidated Pty Ltd v Johnstone [1976] VR 724 Dare v Pulham (1982) 148 CLR 658 Friar & Friar (2014) 52 Fam LR 275 Gilbert v Stanton (1905) 2 CLR 447 Gould & Birkbeck & Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 Gould & Gould; Swire Investments Ltd (1993) 17 Fam LR 156 Hooker Town Developments Pty Ltd v Director of War Services Homes (1973) 47 ALJR 320 Howtrac Rentals Pty Ltd v Thiess Contractors (NZ) Ltd [2000] VSC 415 Miller v Cameron (1936) 54 CLR 572 Pakullus v Cameron (1982) 180 CLR 447 Slee v Warke (1949) 86 CLR 271 Stanford v Stanford (2012) 247 CLR 108 Sigley & De Santis [2019] FamCA 271 Victorian Economic Development Corporation v Simons [1994] VicSC 475 |
| I. C. F Spry, The Principles of Equitable Remedies, Specific Performance, Injunctions, Rectification and Equitable Damages (Law Book Company Ltd, 4th ed, 1990) The Hon. J. Dyson Heydon AC QC, Mark J Leeming and Peter G Turner, Meagher, Gummow and Lehane's Equity Doctrines and Remedies (LexisNexis Butterworths, 5th ed, 2014) |
| APPLICANT: | Mr Sigley |
| FIRST RESPONDENT: | Mr De Santis |
| SECOND RESPONDENT: | Q Pty Ltd as trustee for Q Discretionary Trust |
| THIRD RESPONDENT: | R Pty Ltd as trustee for De Santis Family Trust |
| FOURTH RESPONDENT: | Mr S De Santis |
| FIFTH AND SIXTH RESPONDENTS: | Mr T and Mr U as liquidators of E Pty Ltd (in liquidation) |
| SEVENTH RESPONDENT: | De Santis Family Investments Pty Ltd as trustee for E Superannuation Fund |
| EIGHTH RESPONDENT: | V Pty Ltd (formerly P Partners Pty Ltd) |
| NINTH RESPONDENT: | B Accountants Pty Ltd |
| TENTH RESPONDENT: | X Pty Ltd as trustee for Trust for the Children of Mr & Ms De Santis |
| PROPOSED ELEVENTH RESPONDENT: | E6 Pty Ltd |
| TWELFTH RESPONDENT: | Ms De Santis (also known as BB De Santis) |
| THIRTEENTH RESPONDENT: | E Pty Ltd |
| FILE NUMBER: | MLC | 9296 | of | 2015 |
| DATE DELIVERED: | 27 August 2019 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Wilson J |
| HEARING DATE: | 20 August 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr J W St John QC |
| SOLICITOR FOR THE APPLICANT: | Peter Szabo Family Law |
| COUNSEL FOR THE FIRST RESPONDENT: | No appearance |
| SOLICITOR FOR THE FIRST RESPONDENT: | None |
| COUNSEL FOR THE SECOND RESPONDENT: | No appearance |
| SOLICITOR FOR THE SECOND RESPONDENT: | Berry Family Law |
| COUNSEL FOR THE THIRD RESPONDENT: | No appearance |
| SOLICITOR FOR THE THIRD RESPONDENT: | Berry Family Law |
| COUNSEL FOR THE FOURTH RESPONDENT: | No appearance |
| SOLICITOR FOR THE FOURTH RESPONDENT: | Berry Family Law |
| COUNSEL FOR THE FIFTH AND SIXTH RESPONDENTS: | Dr A P Trichardt |
| SOLICITOR FOR THE FIFTH AND SIXTH RESPONDENTS: | Charles Fice Solicitors |
| COUNSEL FOR THE SEVENTH RESPONDENT: | No appearance |
| SOLICITOR FOR THE SEVENTH RESPONDENT: | Berry Family Law |
| COUNSEL FOR THE EIGHTH RESPONDENT: | No appearance |
| SOLICITOR FOR THE EIGHTH RESPONDENT: | V Partners Pty Ltd |
| COUNSEL FOR THE NINTH RESPONDENT: | No appearance |
| SOLICITOR FOR THE NINTH RESPONDENT: | Berry Family Law |
| COUNSEL FOR THE TENTH RESPONDENT: | No appearance |
| SOLICITOR FOR THE TENTH RESPONDENT: | Berry Family Law |
| COUNSEL FOR THE ELEVENTH RESPONDENT: | No appearance |
| SOLICITOR FOR THE ELEVENTH RESPONDENT: | Berry Family Law |
| COUNSEL FOR THE TWELFTH RESPONDENT: | Mr M Wilson |
| SOLICITOR FOR THE TWELFTH RESPONDENT: | KCL Law |
| COUNSEL FOR THE THIRTEENTH RESPONDENT: | Dr A P Trichardt |
| SOLICITOR FOR THE THIRTEENTH RESPONDENT: | Charles Fice Solicitors |
Orders
By 4pm on 2 September 2019 I direct that the parties bring in minutes that give effect to these reasons.
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 Sigley & De Santis and Ors 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 9296 of 2015
| Ms Sigley |
Applicant
And
| Mr De Santis |
First Respondent
And
| Q Pty Ltd as trustee for Q Discretionary Trust |
Second Respondent
And
| R Pty Ltd as trustee for De Santis Family Trust |
Third Respondent
And
| Mr S De Santis |
Fourth Respondent
And
| Mr T and Mr U as liquidators of E Pty Ltd (in liquidation) |
Fifth and Sixth Respondents
And
| De Santis Family Investments Pty Ltd as trustee for E Superannuation Fund |
Seventh Respondent
And
| V Partners Pty Ltd (formerly P Partners Pty Ltd) |
Eight Respondent
And
| B Accountants Pty Ltd |
Ninth Respondent
And
| X Pty Ltd as trustee for Trust for the Children of Mr & Ms De Santis |
Tenth Respondent
And
| E6 Pty Ltd |
Proposed Eleventh Respondent
And
| Ms De Santis (also known as BB De Santis) |
Twelfth Respondent
And
| E Pty Ltd |
Thirteenth Respondent
REASONS FOR JUDGMENT
Introduction
Following the handing down of my decision in relation to an interlocutory application in this proceeding (Sigley & De Santis)[1] consent orders were made on 27 May 2019 requiring all parties to attend to a large number of activities and I fixed the trial of the proceeding for 12 days commencing on 17 February 2020.
[1] [2019] FamCA 271
Pursuant to the 27 May 2019 consent orders, the applicant was required to apply to join additional parties by 1 July 2019 and the applicant was required to file and serve a statement of claim by 15 July 2019. Neither was done by the date ordered. Pursuant to liberty to apply reserved to all parties by paragraph 15 of the 27 May 2019 orders, this case returned before me on 20 August 2019.
On that day a lengthy and detailed interlocutory hearing was conducted with all relevant issues canvassed comprehensively and very helpfully by –
a)Mr Jeremy St John One of Her Majesty’s Counsel for the applicant Ms Sigley;
b)Mr Mark Wilson of counsel for the 12th respondent, Ms De Santis;
c)Dr Anton Trichardt of counsel for Mr T and Mr U, the fifth and sixth respondents; and
d)Mr Mark Lipshutz, solicitor (who appeared as the advocate) for R Pty Ltd, Mr S De Santis, De Santis Family Investments Pty Ltd, X Pty Ltd and E6 Pty Ltd, respectively the third, fourth, seventh, 10th and 11th respondents.
Competing versions of proposed orders were debated. The issues covered by those proposals were extensive. I took time to consider the proposals and agreed to provide reasons. These are my reasons for the determinations I make.
The statement of claim
Mr St John QC recognised that the applicant’s statement of claim was prepared outside of the time stipulated in paragraph 2 of the 27 May 2019 orders. Mr St John QC told me by way of explanation that the factual matrix involved in this case was most complex and he was required to examine a very large amount of affidavit material in order to properly perform the task of synthesising the claims contained in affidavits into a proper pleading that was within the contemplation of paragraph 2 of my 27 May 2019 orders. As it happened, Mr St John QC produced the applicant’s statement of claim one month after the date it was due. He needed leave to rely on it out of time. All parties advanced the position that Mr St John QC should have that leave but that consequential orders should be made making corresponding enlargements to the dates previously ordered by which the respondents are to take steps as previously ordered.
All parties agreed that the applicant should have leave to file her statement of claim that bears the date 15 August 2019 and is recorded as having been prepared by Mr St John QC. I grant that leave.
In the course of debate Mr St John QC pointed out that pleadings in this court are a rarity. That may be so. However they are not entirely out of the question. I considered the question of the desirability of pleadings in a factually complex case in Chye & Thian.[2] It is worthwhile reciting my review of the authorities to demonstrate that pleadings in this court are not so rare as to be without utility. In Chye & Thian I made the remarks that appear below.
[2] [2019] FamCA 336
Lest there be concerns about the wisdom or otherwise of ordering pleadings, it is beyond argument that in an appropriate case pleadings may be ordered. The Honourable Justice Macmillan discussed many of the lead authorities on the subject in Chen & Chen (No 2).[3] Several propositions may be stated from those authorities. The High Court held in Dare v Pulham[4] that pleadings serve a number of functions. As was held in Gould & Birkbeck & Bacon v Mount Oxide Mines Ltd (in liq),[5] pleadings furnish a statement of the case sufficiently clear to allow the other party to meet it. In Miller v Cameron,[6] the High Court held that pleadings define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at trial. Relief is generally confined to that available on the pleadings, as the High Court held in Banque Commerciale SA v Akhil Holdings Ltd.[7]
[3] [2017] FamCA 285
[4] (1982) 148 CLR 658
[5] (1916) 22 CLR 490
[6] (1936) 54 CLR 572
[7] (1990) 169 CLR 279
For more than 20 years, in this court pleadings have been ordered sparingly, usually being confined to cases where persons were joined as third parties or strangers to the marriage relationship. In those cases pleadings served to set out the nature of the claim and the basis of it, as was held by Fogarty J in Gould & Gould; Swire Investments Ltd.[8] That course was consistent with the observations in Buckeridge & Buckeridge (No 2)[9] and Collins & Collins[10] as well as Friar & Friar.[11] The rationale for the conventional orthodoxy of conducting litigation in this court without pleadings was explained by the Full Court of this court in B Pty Ltd v K.[12] There, the court (Faulks DCJ, Coleman & Warnick JJ) held that in the usual run of applications for the alteration of property interests or parenting orders, the fact of marriage and in property cases a history of contributions to and acquisition of property is sufficient to make the existence of a cause of action apparent. The phrase “cause of action” was written in quotation marks by the Full Court. That may be because in litigation in this court a property division application is rarely described as a cause of action. Yet where a claim is made against a party who is a stranger to the marriage relationship the nature of the claim including the factual and legal basis for it frequently raises equitable principles or common law concepts rendering the appellation “cause of action” more appropriate. In Bourke v Bourke,[13] Murphy J described the wife’s statement of claim against a third party as a pleading. Murphy J also described the wife’s statement of claim as “an odd document consisting of assertions of fact as well as statements of opinion and assertion”. His Honour stated that where specific causes of action are pursued against third parties pleadings have an important and highly useful role in defining and confining the issues for determination by the court. In this case, it will be recalled that Cronin J ordered the intervenor to file a statement of claim.
[8] (1993) 17 Fam LR 156
[9] (1981) 7 Fam LR 958
[10] (1987) 11 Fam LR 382
[11] (2014) 52 Fam LR 275
[12] (2008) 39 Fam LR 488
[13] (2010) 43 Fam LR 139
The fact that the case law on pleadings is largely referrable to claims made against third parties does not mean that pleadings cannot be ordered as between applicant and respondent if the circumstances of the case require that. In Chen Macmillan J was concerned with a case where the parties consented to a statement of facts and contentions being supplied rather than formal pleadings. In the course of her Honour’s consideration of the issue, her Honour specifically addressed the question whether a formal statement of claim would overcome deficiencies in a statement of facts and contentions. Ultimately, her Honour took the view that by reason of the want of personal knowledge of information to which the wife was privy any deficiency (if one existed) in the statement of facts and contentions would be unlikely to be remedied by a statement of claim because she was not armed with the requisite knowledge to do better than was done in her statement of facts and contentions. In those circumstances the Honourable Justice Macmillan took the view that no purpose would be served in requiring the wife to file and serve a statement of claim. Yet her Honour at no stage denounced the notion of a statement of claim being ordered. Further, in the opening passages of her Honour’s reasons, her Honour spoke of the complexity of the case involving multiple parties, properties and entities. The same might fairly be said in this case. To that may be added that complex trust documentation is involved in this case, as well as allegations of fraud and corporate fraud. The time has come for the claims that the De Santis camp wish to advance in relation to property issues to be cast precisely as to facts and relief sought. In my view the magnitude of the case and the complexity of it warrants ordering the provision of pleadings. As Macmillan J mooted in Chen & Chen, pleadings in accordance with the Rules of the Supreme Court of Victoria are warranted and I ordered them in that form in Chye & Thian.
My view in relation to pleadings being available beyond third party claims is forfeited by s 119 of the Family Law Act. That section permits a party to a marriage to commence a proceeding against the other in contract or in tort. The range of tort is there unspecified. Conceivably, a claim for damages for assault can be brought, as can a claim for false imprisonment, a claim for defamation or for negligent misstatement or indeed a claim for pure economic loss in negligence. A statement of claim in any such claim would be necessary. Likewise, if a claim for breach of contract were alleged the composition of the contract would need to be identified as Gillard J canvassed in Howtrac Rentals Pty Ltd v Thiess Contractors (NZ) Ltd.[14] It must not be forgotten that in Stanford v Stanford,[15] the High Court said that in a property division case the existing legal and equitable interests of the parties must be identified. Community of ownership has no place in the common law. In this case it seems to me that the complex tangle of legal and equitable interests must be identified and the existing legal and equitable interests in various pieces of property must be set out. A statement of claim is the best way to do that.
[14] [2000] VSC 415
[15] (2012) 247 CLR 108
In this case the claims made by the applicant went beyond simply a claim for property settlement orders. With the emergence of the statement of claim, an array of claims have been brought against 14 respondents, not all of which involve conventional property settlement orders. It seemed to me the basis for ordering a statement of claim was unassailable. Before me on 19 August 2019 no party suggested otherwise.
Proposed joinder – Ms DD De Santis and Ms EE De Santis
All parties agreed that Ms DD De Santis and Ms EE De Santis should be joined as parties. Curiously, in the version of the statement of claim Mr St John QC prepared they were not included as proposed parties so the factual and legal basis of their proposed joinder was not given. In discussions with Mr St John QC, he explained the proposal for their joinder emanated from Macmillan J’s observations when an aspect of this litigation was before her Honour. It seemed that in the applicant’s camp a view was taken that it was not necessary to join the children Ms DD and Ms EE as they were not necessary. However, her Honour took a different view. The need for their joinder was common ground before me.
The position of all parties in this proceeding was largely the same, namely, that Ms DD De Santis and Ms EE De Santis should be joined. The debate before me on 20 August 2019 in relation to Ms DD De Santis and Ms EE De Santis then moved to compliance with rules 6.02 and 6.03 of the Family Law Rules. Mr St John QC submitted, correctly in my view, that by force of r 6.02(1), Ms DD De Santis and Ms EE De Santis must each be included as a party to the case because in respect of each, her rights may be directly affected by an issue in the case and the participation of each as a party was necessary in order for this court to determine all issues in dispute. The concession by all parties who appeared before me on 20 August 2019 that Ms DD De Santis and Ms EE De Santis should be joined seemed to represent the acknowledgment of the need for the joinder of each. However, r 6.03(3) presented points of difference. Under that rule (which is expressed in mandatory terms by its use of the word “must”), a party who relies on r 6.02(2) must file an affidavit setting out the facts relied on to support the addition of the new party including a statement of the new parties’ relationship to the other parties. Further, under r 6.03(3)(b), the party seeking the joinder order must serve on the new party (or parties) a collection of documents that include a copy of the –
a)applicant, amended application, response or amended response; plus
b)affidavit recording the basis for the joinder application; plus
c)any other relevant document filed in the case.
This case has been on foot since 2015. The volume of affidavit material filed in it to date is mountainous. Mr St John QC appeared to have recognised the enormous burden that fell upon his client under r 6.03(3)(b)(iii) in its requirement to serve upon the new party “any other relevant document filed in the case” as Mr St John QC submitted that the proposed new parties could ascertain all they need to learn about the documents filed thus far if they examined the court portal.
Mr Lipshutz agreed to accept service of all process upon the proposed new parties, Mesdames Ms DD De Santis and Ms EE De Santis.
An issue for me in relation to the service of documents on Ms DD De Santis and Ms EE De Santis was the cost and enormity of the task of physically copying and serving the totality of all documents filed so far in this case. Just in the documentation filed in this court, the documentation has filled nine court files. No doubt the sheer size of the court file – to say nothing about other documents exchanged between solicitors – underpinned Mr St John QC’s submission that the proposed new parties can examine the court portal and select for themselves the documents of importance to them. To my mind, that inverted the necessary step. While it is true that the party seeking the joinder order must serve on the new party “any other relevant document filed in the case”, the cost of copying and serving documents corresponding to that criteria is likely to impose an unreasonable burden upon Ms Sigley in this case. On the other hand, the newly joined parties are entitled to be told by the person joining them on what information the party joining them relies for their joinder. In a large case (of which this is one) the lamentable consequence of the rule requiring service upon the newly joined parties of “any other relevant document filed in the case” is that the achievement of that rule comes at a significant cost.
In my view, it would be unjust to impose such a cost burden on Ms Sigley, even though no evidence was adduced before me on 20 August about the likely magnitude of those costs. It seems to me a more inexpensive yet appropriate order can be fashioned so as to achieve the purpose of telling the new parties of the documents on which the applicant relies to support the joinder of Ms DD De Santis and Ms EE De Santis.
Rule 1.04 of the Family Law Rules provides that the main purpose of the rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case. In promoting the main purpose set out in r 1.04, several stipulations are set out in r 1.06 that the court is required to undertake, all of which I have considered. Rule 1.07 sets out six means by which the court achieves the main purpose identified in r 1.04. Sub-rules 1.07(c) and (d) are presently relevant. The first of those requires the court to apply the Family Law Rules in a way that is proportionate to the issues in the case and their complexity and the likely costs of the case. The second of the requirements under r 1.07 is the need to apply the Family Law Rules in a way that promotes the saving of costs.
It seems to me that in addressing the documents to be served upon Ms DD De Santis and Ms EE De Santis consequent upon their joinder, I need to balance several conflicting considerations. On the one hand this case is complex and voluminous. The proposed new parties are entitled to be told the basis on which their joinder is founded. They are also entitled to be told on what documents the party joining them relies. On the other hand, the task of physically copying all such documents is likely to be burdensome and very costly. Having regard to the other option available, to my way of thinking it is disproportionately expensive to say nothing of being unacceptably labour-intensive to require Ms Sigley to reproduce what may turn out to be a very large number of documents, only some of which may turn out to be of eventual use or interest to the new parties. The better way to proceed is for the solicitors for Ms Sigley to provide a letter to the newly joined parties identifying the documents that Ms Sigley says constitute “any other relevant document filed in the case” for the purposes of r 6.03(3)(b)(iii) of the Family Law Rules. Once that is provided, the newly joined parties should have time to examine each such documents on the court portal and inform Ms Sigley’s solicitors whether they require a copy of that documentation. Given that the electronic version of the document is on the court portal, it will be unlikely that a hard copy of that document will be needed. However, I cannot rule out the possibility (remote as it may presently seem to be) that the newly joined parties will seek a hard copy of some documents that have been referred to in electronic form. While I cannot foreclose upon the newly joined parties requesting a large portion of the documents identified for copying, I encourage the parties to keep an eye steadily fixed on containing costs rather than enlarging them.
It is true that no application and affidavit was filed to support the joinder of Ms DD De Santis and Ms EE De Santis. No party claimed the joinder was inappropriate. For that matter, all agreed it was entirely appropriate. That said, to date at no point has an affidavit been filed setting out the facts on which Ms Sigley relies to support the addition of Ms DD and Ms EE De Santis within the contemplation of r 6.03(2). I am unable to accept Mr St John QC’s submissions that from the large number of affidavits in this case filed thus far the factual basis of the claim against the new parties can be distilled. No particular utility is served in requiring Ms Sigley to go on oath in an affidavit merely to recite her contentions or propositions supporting the joinder. However, her solicitors must provide a letter to all parties and file it with the court stating in numbered paragraphs all facts, contentions and relief on which Ms Sigley relies to grant the joinder of Ms DD De Santis and Ms EE De Santis. That letter must be filed and served in 14 days.
Joinder of Mr AA De Santis
In minutes of orders proposed by Mr St John QC, no mention was made of an application to join Mr AA De Santis as the proposed 14th respondent. Conversely, in minutes proposed by Mr Wilson as supported by Mr Lipshutz the third paragraph of those minutes specified that an application should be filed and served for the joinder of Mr AA De Santis as a respondent to this proceeding, such application to be returnable on 30 September 2019.
In debate before me on 20 August 2019 Mr St John QC contended that an abundance of material already existed about the role and involvement of Mr AA De Santis and that no further affidavit was necessary to explain his role and involvement as a party to this proceeding. I accept that contention. For that matter I canvassed the role of Mr AA De Santis in my previous reasons for judgment. But that is not the issue for present purposes. In the version of the statement of claim provided by Mr St John QC, Mr AA De Santis is mentioned in paragraphs 1(m), 16, 19, 21, 23, 24, 28, 34, 35, 55, 79, 118 and 121. Most of those allegations lead to the claim in paragraph 121 to the effect that Mr AA De Santis, by reason of his directorship of E6 Pty Ltd knew or ought to have known that the purchase of the business at less than a proper market value had or would have the effect of defeating the orders sought by Ms Sigley in this proceeding. No separate relief is claimed against Mr AA De Santis. Inferentially, he is pleaded to be taken to have been a participant in the acts of the proposed eleventh respondent, E6 Pty Ltd. The directors of the thirteenth respondent, as pleaded, namely E Pty Ltd included Mr AA De Santis. Relief is specifically pleaded against E Pty Ltd. It must not be forgotten that statements of claim are not the norm in this court. Pleading niceties of the sort regularly observed in the Commercial Court of the Supreme Court of Victoria or in the Federal Court of Australia are far from the staple diet in this court. I am willing to proceed on the basis that the claim advanced against Mr AA De Santis is one of aiding and abetting or perhaps counselling and procuring the matters alleged in paragraphs 11 and 12 of the prayers for relief.
In the upshot, in my view no need exists for an affidavit under r 6.03 for the joinder of Mr AA De Santis nor is there a need to provide additional documentation. I decline to make orders in the terms of paragraph 3 of the minute provided by Mr Wilson. To the extent that a formal order is required for the joinder of Mr AA De Santis I hereby make that order.
Request for further and better particulars
All counsel agreed that it was appropriate for respondents to request and for the applicant to answer requests for further and better particulars. Mr St John QC’s minute contemplated the respondents’ requests within seven days and Ms Sigley’s provision of further and better particulars within 21 days of receipt of the request. The version of the same proposal that Mr Wilson and Mr Lipshutz put forward involved lesser formality but a larger response time for the provision of further and better particulars.
Mr St John QC was at pains to point out that the pleadings process in this case should be the end of the interlocutory skirmishing in this case rather than it being the commencement of the way the case is cast. It is true, after this case has travelled as far as it has on the path to trial, it would be absurd to permit or require the parties to engage in the full gamut of pleadings with the possibility of a statement of claim, request for particulars, particulars, a defence, possibly a counterclaim, a defence to counterclaim, reply, rejoinder and surrejoinder. The intendment of the order for the statement of claim was to learn how the applicant cast propositions of fact and law against the various respondents. It is as much in the interests of the respondents for them to know the case they must meet as it is in the interests of the applicant to require her to structure her case so she precisely identifies the factual basis for the relief she claims against all respondents. Responses are appropriate and necessary. If a party wishes to go beyond that, he she or it will need to apply to me for orders.
So far as the request for particulars and the particulars themselves are concerned, I favour the informal method of the request being by letter to be served within seven days of the date of these orders and further and better particulars themselves to be by letter within 21 days of receipt of the respective request. The applicant need not provide particulars in response to a request served beyond the seven day period mentioned above.
Ms De Santis v Ms De Santis
In proceeding MLC 11947 of 2018 the twelfth respondent in this proceeding (Ms De Santis) brought her own proceeding against the first respondent in this proceeding, Mr De Santis. In that proceeding, Ms De Santis amended her initiating application to include a claim in relation to this proceeding. It was a curious claim. It was in the following terms –
That in relation to proceeding numbered MLC 9296/2015 between Ms Sigley as Applicant and Mr De Santis as Respondent and being the same Respondent as referred to in this proceeding (hereinafter referred to as ‘Ms Sigley’s proceeding’), each and every part of Ms Sigley’s Application which deals with or touches upon the Caulfield South property and/or the Trustee company, X Pty Ltd, and/or the children of the marriage in this proceeding, Ms EE De Santis born on … 1991 and Mr S De Santis and Ms DD De Santis both born … 1995, be wholly dismissed.
Unequivocally, Ms De Santis was contending that Ms Sigley’s claim in this proceeding that touched or concerned –
a)the real property at X Street Suburb FF;
b)the children of Ms and Mr De Santis namely Ms EE, Mr S and Ms DD De Santis; or
c)X Pty Ltd;
should be wholly dismissed.
Ms De Santis made other claims in proceeding MLC 11947 of 2018.
As has already been observed, in this proceeding Ms DD, Ms EE and Mr S are now parties. Relief involving X Pty Ltd has been alleged. Mr Wilson has requested that the application by X Pty Ltd for summary dismissal of Ms Sigley’s claims against it be heard and determined on a date in late September. Self evidently, a significant overlap exists of parties and claims in this proceeding and in proceeding MLC 11947 of 2018. An unbalanced result would follow if in proceeding 11947 of 2018 Ms De Santis were to be permitted to assert that Ms Sigley’s case should be dismissed as against certain parties when Ms Sigley did not have an opportunity to advance her claims in Ms De Santis’s case. In my view, there is merit in Mr St John QC’s contentions that Ms Sigley be joined as the second respondent to proceeding MLC 11947 of 2018.
I make an order in terms of paragraph 3 of Mr St John QC’s minute. All documentation should be regularised to give effect to that order within seven days.
The position of X Pty Ltd
On behalf of Ms De Santis, Mr Wilson of counsel contended that no case has been alleged against X Pty Ltd with the consequence that summary judgment should be entered in its favour ahead of the trial of this proceeding rendering it unnecessary for that company to file a defence to the statement of claim.
The status of X Pty Ltd in the overall dispute between Ms Sigley, Ms De Santis and Mr De Santis requires some explanation. According to the statement of claim prepared by Mr St John QC, it was alleged that upon its incorporation X Pty Ltd was owned and controlled (de facto if not de jure) by Mr De Santis. In the statement of claim, at paragraphs 66 and following, it is alleged that on 29 March 2017 legal control of X Pty Ltd passed from Mr De Santis to Mr S De Santis and that on 1 June 2017 Mr De Santis together with Mr S De Santis plus X Pty Ltd executed a deed of change. That deed operated in such manner that X Street became trustee of a trust known as the Trust for the Children of Mr and Ms De Santis in place of Mr De Santis. In the statement of claim Ms Sigley contended that the participants to the deed of change participated in a scheme (defined in the statement of claim) that was, to put it neutrally, nefarious. Paragraph 22 of the statement of claim in the Sigley proceeding was in the following terms –
At a time not known (save that it was by 6 June 2016), the First Respondent entered into a scheme with others to execute documents and / or to effect dispositions with him (or at his direction, or in his interests) which were deliberately intended to defeat existing Orders in Ms Sigley’s proceedings, or orders it was anticipated the Applicant might obtain in Ms Sigley’s proceedings against him and / or assets in his name or within his control (“the Scheme”).
Unmistakably, in this proceeding Mr St John QC asserted that Mr De Santis entered into the scheme as narrated between paragraphs 16 and 21 of the statement of claim deliberately intending to defeat existing orders in this proceeding.
On 26 February 2019 X Pty Ltd issued a proceeding in the Supreme Court of Victoria in case …. The originating motion to commence that proceeding bears Mr Lipshutz’s name. In reliance upon s 63 of the Trustee Act (Vic), in the originating motion in that proceeding the plaintiff asserted that it was the trustee under a discretionary trust titled “Trust for the Children of Mr & Ms De Santis” made between Phillip McGuiness as settlor and Q Pty Ltd (as former trustee). The prayer for relief was in one paragraph as follows –
A direction that it is appropriate and expedient that clause 2.1 of the Trust Deed for the Trust be rectified from: “‘PRIMARY BENEFICIARIES’ means Ms EE De Santis, Ms DD De Santis and Q Pty Ltd (ACN …) care of B Chartered Accountants, …, Melbourne in the State of Victoria and their issue as shall be living from time to time.”
to read:
“‘PRIMARY BENEFICIARIES’ means Ms EE De Santis, Ms DD De Santis and Mr S De Santis and their issue as shall be living from time to time.”
In debate with Mr St John QC I raised the legal position that claims for rectification of instrument have at their core equitable principles to the effect that the written instruments fails to accurately record its intendment, one of the earlier High Court illustrations of which is Gilbert v Stanton.[16] More recent illustrations of the application of the doctrine have emerged in Australasian Performing Right Association Ltd v Austarama Television Pty Ltd,[17] Hooker Town Developments Pty Ltd v Director of War Services Homes,[18] Slee v Warke,[19] Commerce Consolidated Pty Ltd v Johnstone,[20] Pakullus v Cameron[21] and Victorian Economic Development Corporation v Simons.[22] Yet the equitable principles underpinning the doctrine of rectification date back hundreds of years. Dr I.C.F. Spry QC surveyed the learning in Chapter 6 of his treatise The Principles of Equitable Remedies, Specific Performance, Injunctions, Rectification and Equitable Damages,[23] pointing out that the standard of proof in such a case is “convincing”. The learned authors of Meaghre, Gummow & Lehane's Equity Doctrines and Remedies describe the onus as “relatively stern”.[24] It seemed apparent enough that the trust instrument as it was originally cast listed the trustee as not only trustee but also a primary beneficiary.
[16] (1905) 2 CLR 447
[17] [1972] 2 NSWLR 467
[18] (1973) 47 ALJR 320
[19] (1949) 86 CLR 271
[20] [1976] VR 724
[21] (1982) 180 CLR 447 (Wilson J)
[22] [1994] VicSC 475
[23] I. C. F Spry, The Principles of Equitable Remedies, Specific Performance, Injunctions, Rectification and Equitable Damages (Law Book Company Ltd, 4th ed, 1990)
[24] The Hon. J. Dyson Heydon AC QC, Mark J Leeming and Peter G Turner, Meagher, Gummow and Lehane's Equity Doctrines and Remedies (LexisNexis Butterworths, 5th ed, 2014)
In any event, Mr Wilson submitted that in this proceeding it was not possible to ascertain the gravamen (at least at a factual level) of the claim against X Pty Ltd and therefore the claim against it should be summarily dismissed. I have listed that application to be heard on 30 September 2019.
It is inappropriate to say very much at this juncture about the role of X Pty Ltd. That said, the basis of its involvement in this litigation has been canvassed above at least perfunctorily.
Mr Wilson submitted that X Pty Ltd should be relieved of the obligation to file a response pending the hearing and determination of the motion for summary judgment. In view of the relatively few factual matters pleaded against it I can understand Mr Wilson’s submissions in that regard. In respect of X Pty Ltd only and not other respondents I will make an order in terms of paragraph 6 of Mr Wilson’s minute.
Recalibrating dates
Mr St John QC submitted that the late provision of the statement of claim caused a consequential prolongation of the dates previously ordered by me. Mr Wilson and Mr Lipshutz joined in the application to recast the dates previously ordered.
The first alteration to dates related to the trial. Pursuant to paragraph 14 of my orders made on 27 May 2019 I fixed the trial of this proceeding (and only this proceeding) for 17 February 2020. No party protested about that date being deferred to 4 May 2020 so that the trial will now be conducted on 4, 5, 6, 7, 8 May, then on 11, 12, 13, 14 and 15 May, then on 18 and 19 May 2020 – in all, 12 days. Mr St John QC told me he was of the view that the trial was unlikely to require 12 sitting days. At this stage I am unable to say. Yet caution suggests 12 days. I will fix the trial for those dates in May 2020.
Next, Mr St John QC sought the date 23 September 2019 for the date by which defences to the statement of claim are to be filed and served. In my orders of 27 May 2019 the date nominated was 12 August 2019. Mr Wilson and Mr Lipshutz posited a regime by which each respondent had until 24 September to elect whether to bring an application for summary dismissal before filing responses. The respondents’ proposal involved not only their election about filing a summary dismissal application by 24 September 2019 but if they elected not to do so they suggested another month within which to file their defences bringing the effective date for responses to 22 October 2019, then a reply and defence to counterclaim by 6 November and replies to defences to counterclaim by 27 November 2019. That is far too long in the context of a case that has been on foot for as long as this one.
The proposal suggested by Mr St John QC is in keeping with the intendment of my 27 May 2019 orders. I do not envisage this case, at this stage of its evolution five years after its commencement, turning into a pleadings battle. Extensive affidavit material has already been filed. The real utility of a limited form of pleadings at this stage is characterising the facts as they have been asserted into recognised legal propositions. The statement of claim has gone some way to achieving that.
Defences will be utile if they go beyond mere denials. Further, not every respondent will advance a counterclaim. It seemed to be that the timetable proposed by Mr Wilson and Mr Lipshutz, which proceeded on the basis that all respondents will bring a counterclaim in respect of which Ms Sigley must file a reply and defence to counterclaim, was unrealistic because not all respondents will. As a result, the dates proposed in paragraphs 6 and 7 were leisurely. I prefer the timetable proposed by Mr St John QC in paragraph 5(c) of his minute in relation to paragraph 4 of the 27 May 2019 orders and the date proposed by Mr St John QC in paragraph 5(d) in relation to paragraph 5 of the 27 May 2019 orders.
As mentioned above, 30 September 2019 has been reserved for a full day if required for the hearing and determination of the motion by 26 Seaview Street Pty Ltd for summary dismissal.
New dates were the subject of competing proposals in relation to the filing of trial affidavits. Paragraph 7 of the 27 May 2019 orders required Ms Sigley to file and serve her evidence-in-chief by 4pm on 28 October 2019. All parties agreed that a new date for that step was required. Mr St John QC proposed 13 January 2020. Mr Wilson and Mr Lipshutz said that in reality even if ordered in the manner requested by Mr St John QC, affidavits will be produced nearer mid February 2020 so they sought the date 17 February 2020. With a case such as this one which has been on foot for as long as it has involving the volume of affidavit material that this case has involved, the likelihood of new material emerging as evidence-in-chief is slim. The date for evidence-in-chief to be filed and served should be as Mr Wilson and Mr Lipshulz proposed, namely 17 February 2020. One month thereafter the respondents should file and serve their evidence-in-chief, being the date proposed by Mr Wilson and Mr Lipshutz as 16 March 2020. Reply material by the applicant should be 30 March 2020, that date being the latest date for the filing of evidence. The date by which the setting down and trial fees are to be paid must be correspondingly extended to 27 April 2020, as Mr Wilson and Mr Lipshutz proposed. Also by 27 April 2020 the steps recorded in paragraph 12 of the 27 May 2019 orders are to be completed.
The two other proceedings
The disputation between Ms Sigley, Mr De Santis, Ms De Santis, their children, companies owned and controlled by them as well as trustees and beneficiaries has spawned three separate pieces of litigation. They are –
d)proceeding MLC 11947 of 2019 issued in this court;
e)proceeding MLC 9296 of 2015 also issued in this court; and
f)Supreme Court of Victoria proceeding … of 2019, transferred to this court by order of the Supreme Court of Victoria.
It is necessary for all three proceedings to be heard and determined at the same time and, to the extent necessary, an order made such that the evidence given in one proceeding should stand as evidence in all other proceedings.
Evidentiary objections
In paragraph 14 of his minute of proposed orders, Mr Wilson proposed that prior to the commencement of the trial the parties determine whether any evidentiary rulings are required arising out of objections to evidence and that any such objections should be mentioned in each party’s written opening. The proposal was useful yet it needed some refining.
I expect that in this case, indeed every case, counsel will, prior to the trial, identify evidentiary objections of a substantial nature. De minius objections and those even if correct are unlikely to bear upon the outcome of the case should not be taken so as to disproportionately consume time away from the smooth running of the trial. Where a party presses a valid and necessary objection, then I expect that counsel will confer about the objection in an endeavour to resolve it, possibly by finding an alternative method of adducing the same evidence in an admissible way. If upon counsel conferring in a bona fide endeavour to resolve the objection they are unable to do so, then a note should be made of the objection and its basis and the objection should be incorporated into an appendix to that party’s outline of opening. I do not encourage line objections as they are extremely time consuming, they distract from the main purpose of the trial and frequently they do not directly bear upon the outcome of the trial. Subject to hearing submissions to the contrary, my preferred approach is to determine any extant objections to paragraphs or sentences of affidavits during my consideration of this case when my decision is reserved.
Any subpoena in any of the three proceedings
Mr St John QC submitted that each party in each of the three cases should have leave generally to issue such subpoena as he, she or it may be advised to issue. No serious protest was offered to that course. In those circumstances I agree with the proposed order in paragraph 10 of Mr St John QC’s minute.
Openings
Mr Wilson proposed and Mr Lipshutz supported a set of steps to be undertaken by 27 April 2020, the details of which appeared at paragraph 13 of Mr Wilson’s minutes. That was a replica of paragraph 12 of the 27 May 2019 order. Mr St John QC urged the same order and by the same date. An order by consent should be made in those terms.
Further documents
Mr St John QC informed me that documents had not been provided in response to a request by his solicitors made by letter dated 29 March 2019. Unless a claim is made in relation to those documents that would otherwise relieve the party to whom the letter is directed from producing them, such as a claim to privilege, I take the view that Chapter 13 of the Family Law Rules is an enabling provision with which parties should comply. I urge cooperation between parties on the subject of discovery. That applies to the documents sought in the 29 March 2019 letter. In paragraph 11 of the minutes proposed by Mr St John QC he put forward a more expansive proposal. It seemed to me that the ongoing discovery obligations in Chapter 13 should be observed. I will entertain on short notice any discovery applications.
Liberty to apply
It is conceivable that one or more applications will need to be considered in the lead up to trial. I grant all parties general liberty to apply. That can be done by letter between solicitors requesting an appearance before me, indicating the relief sought, the reasons for it and, if factual issues are relevant or are complex or out of the ordinary, an affidavit may be required.
Costs
Costs of the debate before me on 20 August should be reserved. It is appropriate to certify for counsel, for Mr Lipshutz as a solicitor advocate and for Mr St John QC in his capacity as One of Her Majesty’s Counsel.
Orders should also be made from Mr Wilson’s minute at paragraphs 14 and 15.
The liquidators’ costs
Following the provisions of my reasons in Sigley & De Santis[25] the liquidators provided a report for which they sought an order for the payment of their costs. Dr Trichardt referred to paragraph 66 of my previous reasons in which I said the liquidators should have their fees. Dr Trichardt also submitted that pursuant to s 60-10(2)(a) of the Insolvency Practice Schedule, members of the company had authorised the liquidators to pay the liquidators’ remuneration up to $185 000 and that for work done to October 2017 the liquidators had been paid $24 000. Dr Trichardt submitted that the liquidators had paid their own legal fees of $51 000 and their work in progress stands at $49 000. In debate with Dr Trichardt I mentioned that the sum his clients sought was considerable and the liquidators’ claim for fees was made against a factual backdrop where a swirling melee of information existed about ownership, value and of claims to the assets that are involved in this case. I also mentioned to Dr Trichardt that in order to verify the amount claimed by the liquidators I would need to examine timesheets to verify the activity undertaken, the need for it and the proprietary of the sum sought. In the upshot I reserve the liquidator’s costs.
[25] [2019] FamCA 271
court heading
I request the practitioners for the parties to pay particular attention to the identity of the respondents consequent upon these reasons.
I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 27 August 2019.
Associate:
Date: 27 August 2019
2
11
0