Southern & Southern
[2017] FamCA 128
•27 February 2017
FAMILY COURT OF AUSTRALIA
| SOUTHERN & SOUTHERN AND ORS | [2017] FamCA 128 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Disjoinder. FAMILY LAW – COSTS – Order made on party/party basis. |
| Family Law Act 1975 (Cth) |
| B Proprietary Limited & K (2008) CAFC 113 Wayne & Dillion & Dillion (2008) FamCAFC 204 |
| APPLICANT: | Mr Southern |
| 1st RESPONDENT: | Ms Southern |
| 2nd RESPONDENT: | B & C Trustee in Bankruptcy |
| 3rd RESPONDENT: | D Pty Ltd |
| 4th RESPONDENT: | E Pty Ltd |
| INTERVENORS: | Mr F Southern and Ms G Southern |
| INDEPENDENT CHILDREN’S LAWYER: | Legal Aid New South Wales |
| FILE NUMBER: | LEC | 629 | of | 2011 |
| DATE DELIVERED: | 27 February 2017 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Hogan J |
| HEARING DATE: | 27 February 2017 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Mr Pellandine, Jensens Solicitors & Attorneys |
| COUNSEL FOR THE 1ST RESPONDENT: | Mr Balzamo of Counsel |
| SOLICITOR FOR THE 1ST RESPONDENT: | Hannigans Solicitors |
| 2ND RESPONDENT: | No appearance |
| COUNSEL FOR THE 3RD RESPONDENT: | Ms Oakley of Counsel |
| SOLICITOR FOR THE 3RD RESPONDENT: | SS Lawyers Pty Ltd |
| COUNSEL FOR THE 4TH RESPONDENT: | Mr Balzamo of Counsel |
| SOLICITOR FOR THE 4TH RESPONDENT: | Hannigans Solicitors |
| COUNSEL FOR THE INTERVENORS: | Ms Oakley of Counsel |
| SOLICITOR FOR THE INTERVENORS: | SS Lawyers Pty Ltd |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Legal Aid New South Wales |
Orders
UPON NOTIFICATION BY THE THIRD RESPONDENT that it intends filing a Notice of Discontinuance as noted IT IS ORDERED BY CONSENT THAT
D Pty Ltd pay E Pty Ltd costs of and incidental to the proceedings in an amount as agreed between the parties or, failing agreement, as assessed on a party and party basis.
AND IT IS FURTHER ORDERED THAT
E Pty Ltd be removed as a party to the proceedings.
The Applicant pay E Pty Ltd’s costs of and incidental to the interim Application (contained within the Response to Further Second Amended Initiating Application filed 2 November 2016) on a party and party basis in an amount agreed between the parties and, failing agreement, as assessed on a party and party basis.
The Applicant pay those costs within 28 days of either the finalisation of the proceedings (being those between the Applicant and First Respondent in which the Applicant seeks to set aside the Binding Financial Agreement) by the making of consent orders or by way of order made following trial.
IT IS NOTED THAT
(A)D Pty Ltd intends to file a Notice of Discontinuance in relation to the orders sought against E Pty Ltd as contained within the Response to Further Second Amended Initiating Application filed on 29 November 2016.
(B)The Interveners intend to file a Notice of Discontinuance in relation to the relief sought in Clauses 4 and 5 of the Response to Initiating Application filed on 25 October 2015.
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 <pseudonym> 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 BRISBANE |
FILE NUMBER: LEC 629 of 2011
| Mr Southern |
Applicant
And
| Ms Southern |
1st Respondent
And
| B & C Trustee in Bankruptcy |
2nd Respondent
And
| D Pty Ltd |
3RD Respondent
And
| E Pty Ltd |
4TH Respondent
And
| Mr F Southern and Ms G Southern |
Intervenors
And
| Independent Children’s Lawyer |
EX TEMPORE
REASONS FOR JUDGMENT
I have before me an Application made on behalf of E Proprietary Limited, currently the Fourth Respondent to proceedings in this Court.
Speaking broadly, in these proceedings commenced by way of the Initiating Application (and by its subsequent iterations), the Applicant seeks the setting aside of a Binding Financial Agreement entered into between himself and the First Respondent, Ms Southern.
E Proprietary Limited is the corporate trustee of the E Trust. This was dealt with pursuant to the terms of the Agreement.
E’s Application that an order be made removing it as a party to the proceedings is based in essence on that, by reference to the Further Second Amended Initiating Application filed by the Applicant on 26 August 2016, no relief is sought by the Applicant against it.
It is, therefore, submitted in broad terms by Mr Balzamo, who appears on behalf of the Fourth Respondent, that its presence as a party is not necessary to the proceedings.
Each of the legal representatives, namely those who appear for the Applicant and for the Fourth Respondent, have provided written submissions. I have had the opportunity to read the contents of both of those and have taken the contents of each of them into account in arriving at my decision.
It is clear, in my view, that the presence of a person or entity as a party should only occur or continue where that party or entity’s presence is necessary in the sense that either orders are sought against that person or entity or orders are sought which might affect that person or entity.
Rule 6.02 of the Family Law Rules provides that:
A person whose rights may be directly affected by an issue in a case, and whose participation as a party is necessary for the court to determine all issues in dispute in the case, must be included as a party to the case.
It is clear that the Rule simply expresses what is a fundamental concept or principle of natural justice and procedural fairness: namely, that a person who might be affected by orders made by a Court have the opportunity to be heard with respect to those orders. It is, in that sense then, no more than a restatement of longstanding law that a person should be made a party if their rights may be affected so as to be afforded the opportunity to be heard. The focus must be upon whether substantive rights of a person (who is a party and seeking to be disjoined) would be affected by the relief sought. Participation, as the Rules makes clear, must be necessary before a person or entity is joined as a party. Consequently, it has often been said that the fact that persons may be necessary as witnesses to a particular proceeding in which a particular issue is raised does not mean they are necessarily parties. Similarly, the fact that disclosure may be more efficiently obtained does not, of itself, provide an appropriate basis for joinder as a party to proceedings.
That the Applicant, does not seek relief or orders directly against, E Proprietary Limited, means, in my view, that it is not a necessary party within the meaning of Rule 6.02. The fact that no relief is sought against it in its capacity as trustee of the Trust justifies the making of an order disjoining it as a party to the proceedings.
A number of authorities have established clearly the principles to which I have already referred: for example, B Proprietary Limited & K[1] and Wayne & Dillion & Dillion (2008) FamCAFC 204,[2] where Warnick J said[3] that the word “necessary” in the equivalent Rule must mean something more than useful or expeditious.
[1] A decision of the Full Court (2008) CAFC 113.
[2]A decision of the Full Court constituted by Warnick J.
[3] Particularly at paragraph 17 to 19 of his Honour’s Judgment.
It was said:
In my view, if there are available alternative means to joinder to the substantive proceedings for obtaining from a third person or someone already a party what is needed to allow an applicant to establish an identified case then joinder is unlikely to “necessary”.
Therefore, it is clear that in order to sustain joinder, E Proprietary Limited must be able to identify the material facts which give rise to a cause of action against it. Here, as I have said, no relief in particular is sought against E Proprietary Limited.
I have also taken into account the matters contained within the Outline of Submissions provided by Counsel for the Fourth Respondent, which I have dated and initialled and which will be placed with the papers.
To the extent that it is necessary, the contents of the last sentence of paragraph 22 of that written Outline provides further confirmation for the view I have reached that the ongoing presence of E Proprietary Limited, in its capacity as trustee for the Trust as a party to the proceedings is not necessary. For those reasons, then, I intend to make an order that E Proprietary Limited be removed as a party to the proceedings.
It should be obvious from the comments I have made, though, that the issues of disclosure, bounded as they are by relevance, as considered within the overarching dispute between Mr Southern and Ms Southern (namely for the setting aside of a Binding Financial Agreement) still fall to be disposed of in accordance with the Rules and, of course, in accordance with the appropriate acknowledgement of the degree of control which Ms Southern exercises in relation to E Proprietary Limited in its capacity as trustee for the Trust and the Trust itself.
First and Fourth Respondents’ Costs Application
The starting point in dealing with an application for costs is clearly set out in s 117(1) of the Family Law Act 1975 (Cth): namely, that parties to proceedings under the Family Law Act 1975 (Cth) bear their own costs.
That starting point can be departed from if the Court is persuaded that the circumstances justify the making of an order for costs. A number of factors are to be taken into account. They are as particularised in s 117(2A) of the Family Law Act 1975 (Cth).
It is clear in this case that a number of those are of less relevance. For example, it is accepted that neither party here is in receipt of legal aid. The Applicant for the order for disjoinder has been wholly successful – consequently, the Applicant in the Initiating proceedings, Mr Southern, has been wholly unsuccessful in seeking to maintain the joinder to the proceedings of the entity (which was joined as a consequence of his decision to join it when filing one of the iterations of the Initiating Application).
The submissions relied upon in support of the application for costs may be summarised briefly. They are, in essence, that the opposition to an order disjoining the entity was doomed to fail in the circumstances established by the evidence. Mr Balzamo, of Counsel, submitted that, when regard is had to the contents of the Applicant’s own affidavit material, there was available to the Applicant, in essence, no proper basis for opposition.
Mr Balzamo goes so far as to submit that the Court would be persuaded that the opposition to the order for disjoinder sought by the corporate entity in such circumstances should be regarded as vexatious. He submitted further that the financial circumstances of the Applicant are unknown in a sense, other than that there has previously been compliance with an order for the payment of $40,000.00 by way of security for costs.
It seems that there are no particular offers vis-à-vis the parties that need to be the subject of consideration.
In opposing the making of any order for costs, submissions were made by the Applicant’s legal representative to the effect that it has taken him “two and a half years” for there to be disclosure in relation to the assets held by the Trust; that, whilst the Applicant was aware of the existence of the Trust, the issue of disclosure has caused significant difficulty and delay, and, in essence, if disclosure had been made earlier in relation to the Trust and the corporate trustee of the Trust in its capacity as the trustee of the Trust, then there would have been no necessity for the joinder of the entity to the proceedings.
It was submitted that I would not be persuaded that the Applicant acted vexatiously in joining the entity in its capacity as trustee of the Trust. It was submitted that if an order for costs was contemplated, it should be costs in the cause.
I have taken into account the contents of the submissions made by each of the legal representatives.
I am persuaded that it is appropriate to make an order for costs. I am not persuaded that it is appropriate that costs be ordered on an indemnity basis.
The factors I have taken into account in determining that the circumstances justify the making of an order for costs are that, on the Applicant’s own case, having regard to the contents of his affidavit material, the only basis upon which it was really advanced that the corporate entity should be a party to the proceedings was in order to facilitate disclosure and that there is nothing contained in the most recent iteration of the Initiating Application by which the Applicant has identified any relief sought against the corporate entity.
I consider that those matters were obviously known to the Applicant. I consider that opposition to the order sought by the corporate entity for its disjoinder was something that should not properly have been maintained by the Applicant.
Whilst there is no real detail before me in relation to the Applicant’s financial circumstances that, it seems to me, is a matter for the Applicant. No submissions were made vis-à-vis impecuniosity. Even if they had been, authority is clear in establishing that impecuniosity of itself is not a bar to the making of an order for costs, if the circumstances are such that the Court is otherwise persuaded that they justify the making of the same.
I am not persuaded to make an order on an indemnity costs basis because, whilst the Applicant in the substantive proceedings (the Respondent to the application for disjoinder) was wholly unsuccessful, there is nothing before me in evidence to establish the quantum of any costs that the corporate entity has incurred as a consequence of this Application.
The order will be that the Applicant will pay E Proprietary Limited’s costs of and incidental to the application for its disjoinder on a party and party basis in an amount agreed between the parties, and failing agreement, in a manner assessed on a party and party basis. The time for the payment of costs will, however, await the determination of the overarching dispute between Mr Southern and Ms Southern: namely, whether there should be an order made setting aside the Binding Financial Agreement.
I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 27 February 2017.
Associate:
Date: 27 February 2017
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