Thorpe and Thorpe and Anor

[2011] FamCA 858

FAMILY COURT OF AUSTRALIA

THORPE & THORPE AND ANOR [2011] FamCA 858

FAMILY LAW – PRACTICE AND PROCEDURE – Adjournment - part heard application for summary dismissal  

Family Law Act 1975 (Cth) ss 78 and 79(5)

Friar & Friar and Anor [2009] Fam CA 295
Friar & Friar [2011] FamCAFC 71
Bigg & Suzi (1998) 22 FamLR 700;
Pelerman & Pelerman [2000] 26 FamLR 505
Doisy & Wilmot-Doisy [2009] FamCAFC 14

APPLICANT: Ms Thorpe

FIRST RESPONDENT: Mr Thorpe

SECOND RESPONDENT: Ms R Thorpe

FILE NUMBER: CSC 547 of 2009

DATE DELIVERED: 4 November 2011

PLACE DELIVERED: Hobart

PLACE HEARD: Cairns

JUDGMENT OF: Benjamin J

HEARING DATE: 3 October 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mrs Benson

SOLICITOR FOR THE 1^ST APPLICANT: AMR Legal

COUNSEL FOR THE 1^ST RESPONDENT: Mr Victoire

SOLICITOR FOR THE 1^ST RESPONDENT: Apels Solicitors & Notary

COUNSEL FOR THE 2^ND RESPONDENT:

SOLICITOR FOR THE 2^ND RESPONDENT:

Mr Tree S.C.

Farrellys Lawyers

Orders

1. The application for summary dissmisssal by the second respondent be adjourned part heard and be listed for continuation of the summary dissmissal hearing at 2.15 pm on Monday 6 February 2012.

2. On or before 1 December 2011 the wife file and serve on the husband and the second respondent the following:-

   (a)A Statement of Claim setting out the precise nature of the wife’s claim or claims agaisnt the second respondent, including but not limited to:-

   i. The basis of such claim and or claims, and whether they are made pursuant to an accrued juridiction, Section 78, 79 or Part VIIIAA of the Family Law Act 1975(Cth) or otherwise;

   ii.     The precise legal basis and nature of the claim or claims and the relief sought in respect of each such claim or claims, (such as contructive trust, express trust etc);

   iii.   The propositions of law and fact asserted by the wife in respect of each such claim and sufficient particulars to enable the husband and second respondent to identify what the wife alleges against the second resondent, including the issues to be determied in respect of each such claim.    

   (b)Affidavits setting out the whole of the factual evidence upon which the wife relies in support of the contentions, pleadings and particulars contained in the Statement of Claim.

3. On or before 23 December 2011 the husband and the second respondent file and serve on the other parties pleadings by way of a defence so that the parties and the Court know exactly what matters are left in dispute.

4. Leave is given to the husband and/or the second respeondent to file affidavit material on or before 23 December 2011. Such material to include the details of the Will of the second respondent and the arrangements for civil administration of her assets (whether by power of attorney or by a guardianship order or otherwise.

5. The wife is restrained from filing any further affidavit material and/or alternate or amended statement of claim against the second respondent as and from 2 December 2011, without leave of the Court.

6. The wife is given leave for a period of seven (7) days from the date of this order to seek particulars from the second respondent as to the precise details of the current Will of the second respondent and/or the arrangements for civil administration of her assets, whether by power of attorney or by a guardianship order or otherwise.  The second respondent is to provide such particulars within a further period of fourteen (14) days of that request.    

7. The costs of the parties in respect of the hearing on 3 October 2011 be reserved.  

8. The parties be given liberty to relist the matter on seven (7) days notice.

   IT IS CERTIFIED

9. Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage senior counsel and counsel to attend.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Thorpe and Thorpe & Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT CAIRNS

FILE NUMBER: CSC547/2009

Ms Thorpe

Applicant

And

Mr Thorpe

First Respondent

And

Ms R Thorpe

Second respondent

REASONS FOR JUDGMENT

Introduction

1. Ms R Thorpe is the second respondent in these proceedings.  Her son, Mr Thorpe (“the husband”), and her daughter-in-law, Ms Thorpe (“the wife”), were married and are presently engaged in litigation in the Family Court over a division of their matrimonial property.  The wife asserts that part of the pool of property, which ought to be included in any division or declaration between her and the husband, is an interest in real estate owned by the second respondent. This claim was initially set out in particulars filed in early May 2011 but that claim was later abandoned and replaced by the claim set out in the wife’s particulars filed less than 14 days before the hearing on 3 October 2011.   

2. The second respondent denies that either the wife or the husband has an interest in the subject property and the second respondent asserts that the claims propounded by the wife are not supported by the evidence.  In those circumstances the second respondent filed an application for summary dismissal on 8 September 2011 seeking summary dismissal of the wife’s then claims against her.

3. Alternatively, counsel for the second respondent submits that if there is to be no summary dismissal then the wife should provide security for costs in the sum of $95,000 either by a lump sum or cascading amounts totalling that sum.

The claims in equity

1. By order made in the Federal Magistrates Court on 18 April 2011, the wife was required to file pleadings setting out the details of her claims against the second respondent.  Namely the basis and particulars for any trust alleged including the details of any constructive trust or other equitable relief to which the wife claims she and/or the husband is entitled.

2. On the 4 May 2011 the wife filed ‘further and better particulars’ setting out her then basis of claim against the second respondent.  Counsel for the wife submitted that the wife no longer relied upon the claims set out in that unsworn document.

3. The wife now relies upon the claims set out in the particulars of claim filed 23 September 2011.  These she says are the pleadings in respect of her claims against the second respondent.  That later document is signed by the wife’s solicitor and is expressed to be ‘put forward in accordance with the instructions of the wife’.  I am concerned that the nature of the wife’s claim was changed after the summary dismissal application was filed and without leave or direction from the Court.   

4. In those pleadings the wife claimed that she, the husband or both of them have an equitable (present) interest in the land owned by the second respondent under an equitable entitlement by way of constructive trust, or promissory estoppel, proprietary estoppel or unconscionable retention of benefit.  Finally the wife claims in the alternative, that if in the event that the Court finds the wife is entitled to an interest in the property [presumably under one or more of the preceding equitable claims] but that the relief by way of transfer of the property to the husband, the wife or both of them is inequitable then the Court should order the payment of a lump sum to the value of her interest in the property or such other relief as the Court considers appropriate.

5. The details of the claims made in that document filed 23 September 2011 are that the wife:-

   1.Seeks a declaration that the second respondent holds lot [A] on a constructive trust (emphasis added0 for her and her husband jointly, as there was a common intention that the husband and wife would have a beneficial interest in the property; and that the wife acted to her detriment on the basis of that common intention.

   2.Alternatively to the existence of a constructive trust the wife claims to have the beneficial interest in [lot A] by way of Promissory Estoppel (emphasis added) in that the second respondent promised the wife that the wife owned a beneficial interest in the property and that the wife and/or her husband would receive a legal entitlement of property at some time in the future.

   3.Alternatively to the existence of the constructive trust and/or the Promissory Estoppel the wife claims a beneficial interest in the property by way of Proprietary Estoppel (emphasis added) in that;

   a.she says the second respondent induced, encouraged and/or allowed the wife her to believe that she had or would acquire an interest in the property; and

   b.in reliance upon that belief, the wife acted to her detriment to the knowledge of the second respondent; and

   c.that the second respondent seeks to take unconscionable advantage of the wife by denying her the right or benefit which she expected to receive.

   4.In the alternative to a beneficial interest by way of Constructive Trust or by way of Promissory Estoppel, or Proprietary Estoppel, the wife claims a beneficial interest in the property by way of the second respondent having an Unconscionable Retention of Benefit (emphasis added) in that:

   a.the wife improved the property relying on the belief, encouraged or created by the second respondent, that she had or would acquire an interest in the property, and

   b.the second respondent seeks to retain an unconscionable benefit which the wife expected to receive.

   5.In the event the Court finds the wife is entitled to an interest in the property but that relief other than the acquisition of title is more appropriate, in all the circumstances, the wife seeks that the Court order her payment of a lump sum to the value of her interest in the property (emphasis added) or such other relief as the Court considers appropriate

6. In the statement of claim filed 23 September 2011 the wife sets out unsworn particulars of her claims.

7. The wife’s claims are disputed by both the husband and the second respondent.

Issues

1. The issues which need to be determined in this application are:-

   (a)The evidence to which I should have regard.  In this respect whether it should be only the affidavit evidence referred to by the wife or whether I should also have regard to the unsworn particulars set out in items 6 to 28 of the wife’s particulars of claim.

   (b)The nature of the wife’s claims against the second respondent.  In that regard it is submitted by senior counsel for the second respondent that the legal questions have to be considered against the particular claims in the form that were promoted by the wife.

   (c)Whether the claims considered in the light of the principles in Bigg & Suzie (19980 22 FAM LR 700 and Peleman & Peleman (2000) 26 FAM LR 505 are such that the Court, exercising its discretionary power, summarily dismiss the wife’s claim against the second respondent.

   (d)If there is no summary dismissal, whether the wife should provide security for costs.

2. The second respondent is aged 84 and suffers from dementia.  She does not have the capacity to instruct a legal practitioner and it is an agreed fact that she has no present testamentary capacity.  Ms M, a daughter of the second respondent, is her case guardian.  Ms M (“the case guardian”) was appointed by consent orders made in the Federal Magistrates Court on 26 May 2011.  The case guardian was represented by qualified legal practitioners.

3. The wife and the husband commenced cohabitation in about 1991.  They married in 1992.  The wife is presently aged 53.  The husband is presently aged 51.  They have two children, a son aged 20 and a daughter aged 18.

4. Senior counsel for the second respondent set out the following as uncontentious facts in his submissions, this assertion was not challenged by counsel for the wife:-

   3.   The Second Respondent was married to [her late husband [Mr D], who passed away in 1990.  The Second Respondent and [Mr D] had three children; the husband, [Ms M] (the case guardian) and [Mr N].

   4.   In the 1940’s [Mr D] received the land, including the land the subject of this proceeding (“the main property”), by ballot[1].  Subsequently [Mr D] cleared the land and up until the late 1970s farmed it for [crops and livestock].  Later he acquired an adjacent bush block of 300 acres (“the back block”).  In the early 1980s, he established a small […] orchard on the main property land, which he tended until his death in 1990.

   5.   The husband and the wife commenced cohabitation in 1991.  At that time, they moved into a small worker’s cottage on the main property (“the cottage”).  It had previously been used to accommodate farm workers, and when it ceased to be required for that purpose, had been rented out.  The wife had a young son from a previous relationship, who lived with them.  The husband and the wife married in 1992.  The Second Respondent continued to live in the principal house on the main property.  

   6.   At the time the husband and the wife commenced co-habitation, [Mr N] was residing in a shed on the main property until he left in 1992.   

   7.   In about 1996, the main property was sub-divided into two lots.  The first lot, lot [B], is [the] orchard which has been maintained and farmed by [the case guardian, Ms M] and her husband for some years.  Lot [B] adjoins other property held by [Ms M] and her husband, which had been previously been gifted to [Ms M] by [Mr D].

   8.   Lot [B], being the balance of the subdivision, contained the second respondent’s home, the cottage, and the shed.  Pursuant to the second respondent’s will, lot [B] is left to [Ms M], whereas lot [A] is left to the husband.  Because the second respondent has dementia, it is unlikely in the extreme that she will ever recover sufficient mental capacity to be able to alter her will, and hence the prospects of those bequests being revoked or varied is slight.

   9.   In 2004, the back block was sold for $185,000.00 ($180,000.00 net), of which $90,000.00 was given to [Mr N] by the Second Respondent.  The remaining $90,000.00 is bequeathed to [Mr N] in the Second Respondent’s will.

   10. The husband and the wife resided continuously in the cottage from about April 1991 until separation in September 2008.  At separation, the husband moved into the shed that his brother [Mr N] had previously lived in, and has made it his residence.  Ultimately the wife moved out of the cottage on 26 February 2011, and now lives in rented accommodation at [Town H].  As at March [2011], the parties’ daughter, remained living in the cottage.

   [1] Second respondent’s case summary filed 30 September 2011, as amended on submission as to the receipt of the land by ballot.

5. In her summary of facts, counsel for the wife submitted that the following was  uncontentious:-

   At the commencement of their relationship they [the husband and wife] moved to live on [the cottage on lot A], such property being owned by the husband’s mother. Also living on that property were the husbands sister and her husband and family, and the husband’s brother and his partner for a periods of time.

The husband and wife specifically lived on a portion of the Farming property being Lot [A].

The husband and wife may [emphasis added] have contributed some rent in the early years of cohabitation but thereafter contributed ¼ and later, 1/3 of the rates and outgoings on the entire farm, as did the other siblings who lived at the property and the husband’s mother.

The husband is named as the beneficiary under his mother’s Will, of the entirety of Lot [A]. The husband’s mother has, since preparing her Will after the parties separated lost testamentary capacity.

The husband’s sister is named as beneficiary of another portion of the farm, being a block which is greater in area than Lot [A] and being the block of land upon which she and her husband and family lived, during the time the husband and wife lived at Lot [A], and continue to do so.

The husband’s brother, and third sibling, was previously expected to receive a portion of the farm but after choosing to move away from the farm was paid a cash lump sum from the sale of a portion of the land and is named as a beneficiary of a further cash lump sum upon his mother’s death.

1. The above facts are accepted as uncontentious by counsel for the husband.

2. There was no issue between the various parties as to the law applying in respect of summary dismissal. 

3. A Court must be conscious that if there are defects of pleadings and it appears that a party may have a reasonable cause of action, the Court should ordinarily allow that party to reframe its pleadings.  

4. Senior counsel for the second respondent submitted that the basis of the summary dismissal must be on the case that the wife has set out. 

5. In these proceedings the wife has had two endeavours in particularising her claim.  It is those claims set out in her particulars filed 23 September 2011 upon which she relies.  It is on those claims which this Court must determine whether, in all the circumstances advanced by the wife, such claims are doomed to fail or have no reasonable prospects of success.  The limitations of the wife’s pleading was raised by senior counsel for the second respondent in his written submission filed 30 September 2011 and counsel for the wife had that material prior to the hearing of the application on 3 October 2011. No application was made to amend those particulars of claim, nor was there an application to have the particulars verified under oath. 

6. Counsel for the wife submitted that even if the wife’s claims had been clumsily stated in her documentation, that in itself should not prevent her from pursuing those claims.[2]

   [2] Doisy & Wilmot-Doisy [2009] FamCAFC 14

7. Counsel for the wife went on to submit that it was open for the Court to determine some other basis for her to have an equitable interest in the property.  I am troubled by that submission.

8. The wife sought no adjournment and made no application to re plead or amend her claims.  A Court must consider the wife’s claims as pleaded and it is against those claims that the application for summary dismissal must be considered.  It is not a matter for a court to find and/or identify claims on behalf of a party.

9. The wife relied upon:-

   ·her affidavit filed 19 April 2011 (“the wife’s affidavit’);

   ·parts of the affidavit of Mr N filed 8 September 2011 (“Mr N’s affidavit’);

   ·her particulars of claim filed 23 September 2011; and

   ·the affidavit of her solicitor, Sandra Sinclair, annexing a real estate appraisal of the 30 September 2011.

10. The wife sought to rely upon the assertions of fact contained in her particulars of claim filed the 23 September 2011.  In the absence of an agreement, I do not intend to allow her to treat that as evidence. 

11. There was argument about whether the factual material set out in the particulars was available to the wife.  In the first instance decision of Friar & Friar and Anor [2009] Fam CA 295 Fowler J observed:-

    12.In the circumstances it was the wife’s claim as pleaded and particularised in her points of claim which was taken to be the foundation for case for an order affecting the husband’s sister.  In respect of that case the application for an order for summary dismissal is made, which, if granted, would result in dismissal …

12. Finn J said in the Full Court appeal of that decision:-[3]

    7.As His Honour explained at the outset of his reasons, the judgment, it was the wife’s claim ‘as pleaded and particularised in her points of claim which as taken to be the foundation of her case’ for declaration. Thus, the basis on which the application for summary dismissal was to be determined, was the contents of the wife’s points of claim and not just from her evidence, which is the more unusual course in this jurisdiction (Custodio & Pinto and Ors [2006] FLC 92-297 at [15]. No issue is raised on the appeal regarding that approach.

    [3] Friar & Friar [2011] Fam CAFC 71.

1. A party to litigation, particularly a third party, is entitled to the sworn material setting out the factual substratum upon which the relief is claimed as well as a clear description setting out the nature of the claim. 

2. No party should have to guess the nature of the claim being made against them. This must apply particularly to strangers to relationships who are caught up in proceedings between parties to a relationship being litigated under the Family Law Act 1975 (Cth) (“The Family Law Act”)..

3. In the Family Court pleading in terms of claims were abandoned many years ago and the process of claims against third parties is developing. 

Conclusion

1. In this case it is not clear as to the real nature of the wife’s claim against the second respondent.  If there is evidence of the wife undertaking work on the land and the cottage a claim, albeit on the surface a weak claim, may be established.  On the current state of the evidence it seems that the second respondent may have given some promises to leave lot A to the husband and she has made a will to that effect.   

2. I do not know the precise details of her will nor the arrangements for the civil administration of her assets, whether by power of attorney or by a guardianship order.  I do not know whether the putative gift of lot A to the husband can be lost or diminished by way of sale or mortgage of that land.  I will give leave to the second respondent and the husband to file such material in that respect as they consider appropriate and I will give leave to the wife to seek particulars in that respect.

3. The claim by the wife is more than just clumsily drafted. It fails to adequately set out the nature of her claim. It is not clear to me whether her claim is under the accrued jurisdiction of the Family Court, section 78, 79 or Part VIIIAA of the Family Law Act or otherwise.

4. In this case summarily dismissing the application may do a great injustice to the wife, but not dismissing it may do a great injustice to the second respondent, who is not a party to the marriage.

5. On the current state of the pleadings I am forced to determine what ‘evidence’ the wife is entitled to rely upon.  Either approach suggested could give rise to an injustice.

6. It must be that if the wife adequately sets out the particulars of her claim and the evidence upon which it is based I will be better able to make a proper and informed determination.  On the current state of the material I am unable and unwilling to do so.

7. On a better informed basis it may be that the relief sought by the second respondent is appropriate (either in full or in part) or it may be that a claim under an accrued jurisdiction should be transferred for determination in the Supreme Court of Queensland or that all or part of these proceedings be adjourned under section 79(5) of the Family Law Act or some other course.  

8. As such I am directing the wife to properly provide a statement of claim and file and or identify sworn supporting evidence within a reasonable period of time.  Once filed the wife will not be able to amend the pleadings or file further evidence without the leave of the Court.  I will direct the other parties to file a defence so that the issues can be properly indentified.

9. As to costs I will reserve same as that issue (both in terms of security and the costs of 3 October 2011) has not been properly ventilated.      

I certify that the preceding thirty nine (39) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 4 November 2011.

Associate:     

Date:              4 November 2011