Warin & Warin (No 7)

Case [2022] FedCFamC1F 489

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Warin & Warin (No 7) [2022] FedCFamC1F 489

File number(s): MLC 7368 of 2020
Judgment of: WILSON J
Date of judgment: 7 July 2022
Catchwords: FAMILY LAW – PRACTICE & PROCEDURE – joinder application – joinder granted.
Legislation:

Corporation Act (2001) Cth s 601AD

Family Law Act (1975) Cth ss 79 and 106B

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 3.01

Cases cited:

Barnes v Addy (1874) LR 9 Ch App 244

Warin & Warin [2020] FamCA 796

Warin & Warin (No 2) [2021] FamCA 483

Warin & Warin [2021] FedCFamC1F 269

Warin & Warin (No 2) [2021] FedCFamC1F 310

Warin & Warin (No 3) [2021] FedCFamC1F 372 Warin & Warin (No 4) [2022] FedCFamC1F 160 Warin & Warin (No 5) [2022] FedCFamC1F 452

Warin & Warin (No 6) [2022] FedCFamC1F 457

Lazarus Estates Limited v Beasley [1956] 1 QB 767
Division: Division 1 First Instance
Number of paragraphs: 26
Date of hearing: 6 July 2022
Place: Melbourne
Solicitor for the Applicant: Vadarlis & Associates
Solicitor for the First and Third Respondents: Sebastian Rubera & Associates
Solicitor for the Second Respondent: Maddocks Lawyerps
Solicitor for the Fourth Respondent: McNab and Associates

ORDERS

MLC 7368 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS WARIN

Applicant
AND:

MR WARIN

First Respondent

MR STANTON & MR BASFIELD IN THEIR CAPACITY AS TRUSTEES IN BANKRUPTCY OF THE BANKRUPT ESTATE OF THE RESPONDENT HUSBAND

Second Respondent

MS INSTON (and another named in the Schedule)

Third Respondent

ORDER MADE BY:

WILSON J

DATE OF ORDER:

7 JULY 2022

THE COURT ORDERS THAT:

1.The applicant has leave to join BB Nominees Pty Ltd as the fifth respondent to this proceeding.

2.The applicant has leave to join Mr CC as the sixth respondent to this proceeding.

3.On or before 4:00pm on 8 August 2022 the applicant must file and serve her second further amended statement of claim to a standard appropriate to a proceeding in the Federal Court of Australia, fully particularised.

4.The further hearing of this proceeding is adjourned for directions at 9:30am on 10 August 2022, by which date the statement of claim should have been filed and served.

5.Costs are reserved.

6.Applications returnable on 4 and 8 August 2022 are adjourned to 10 August 2022.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that…

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AGLC
Warin & Warin (No 7) [2022] FedCFamC1F 489
Case
[2022] FedCFamC1F 489
Decision Date

CaseChat Overview and Summary

This case involves a dispute between two parties, Warin and Warin, in which the applicant seeks to join two additional respondents, BB Nominees Pty Ltd and Mr CC, to the proceeding. The applicant claims that Ms Inston, the bankrupt's domestic partner, acquired real estate in D Town with funds provided by the applicant's former accountant and a company controlled by the bankrupt's son. The applicant asserts that the funds provided were derived from the marriage and that she has a joint entitlement and an interest in them. The applicant also claims that Warin Pty Ltd, a wholly owned subsidiary of Warin Nominees Pty Ltd, was deregistered by the bankrupt before the bankruptcy took effect. The court must decide whether BB Nominees Pty Ltd and Mr CC should be joined as respondents and if the applicant's claims have merit.

The legal issues before the court were whether BB Nominees Pty Ltd and Mr CC should be joined as respondents and if the applicant's claims regarding the acquisition of the D Town property and the deregistration of Warin Pty Ltd had merit. The court considered the applicant's assertions that Ms Inston acquired the property with funds derived from the marriage and that Warin Pty Ltd was deregistered by the bankrupt before the bankruptcy took effect. The court also considered the bankrupt's position that he had no power to deal with assets that vested in the bankrupt's trustee, including shares owned by him.

The court found that BB Nominees Pty Ltd and Mr CC should be joined as respondents because the applicant had demonstrated a sufficient connection between them and the issues in the proceeding. The court found that the applicant had made out a prima facie case that Ms Inston acquired the D Town property with funds derived from the marriage and that she holds her interest in the property on trust for the applicant. The court also found that the bankrupt had no power to deregister Warin Pty Ltd after the bankruptcy took effect.

The court ordered that BB Nominees Pty Ltd and Mr CC be joined as respondents in the proceeding. The court also ordered that certain payments be deposited into a controlled money account. The court found that the applicant had made out a prima facie case that Ms Inston acquired the D Town property with funds derived from the marriage and that she holds her interest in the property on trust for the applicant. The court ordered that further particulars be provided regarding the applicant's claims and that the matter proceed to trial.

Orders

Orders of the court

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Background

Background to the litigation

For reasons that follow, orders for the joinder of BB Nominees Pty Ltd and Mr CC must be made. BACKGROUND This proceeding was commenced in mid-July 2020. Two days later, the husband presented his own petition in bankruptcy, leading to Mr Basfield’s appointment as the bankrupt’s trustee-in-bankruptcy. Mr Basfield became the second respondent in this proceeding. Among the many contentions in this litigation is the applicant’s assertion that the third respondent, Ms Inston, who is now the bankrupt’s domestic partner, became the registered proprietor of real estate in D Town after paying the vendor of that property $2.38 million. The wife alleges that Ms Inston’s income and accumulated assets were too modest for her to acquire the D Town property from her own sources of financial accommodation and that instead, Ms Inston executed the contract to purchase the D Town property and obtained mortgage finance for the acquisition of that property after representing to the mortgagee that she had savings of $1.6 million. The wife asserts that in truth, the husband’s former accountant, one Mr Winsor, and the company controlled by the bankrupt’s son, H Pty Ltd, advanced amounts by way of loan to Ms Inston to enable her to borrow from the mortgagee and thereby acquire the D Town property becoming the registered proprietor of it. The wife asserted that the funds provided by Mr Winsor and H Pty Ltd were derived from the marriage and are funds to which the wife has a joint entitlement and an interest pursuant to section 79 of the Family Law Act. The wife asserts that Ms Inston holds her interest in the D Town property on trust for the wife. Warin Pty Ltd was joined as the fourth respondent on 17 December 2021. As was recorded in my reasons handed down on 22 December 2021, Warin Pty Ltd was joined as the fourth respondent on 17 December 2021 when orders were made requiring certain payments to be deposited into a controlled money account. In the most recent version of the applicant’s statement of claim, she asserted that on 17 October 2017, when the husband and wife were still married and prior to their separation on 2 August 2018, the bankrupt voluntarily deregistered Warin Pty Ltd. The wife asserts that the bankrupt procured the deregistration of Warin Pty Ltd in his capacity as the sole director of that company. She asserted that Warin Pty Ltd was a wholly owned subsidiary of Warin Nominees Pty Ltd. Pausing at that juncture, according to the undisputed chronological factual sequence of events, the bankruptcy of the first respondent took effect upon the presentation of his own petition, that is to say on 17 July 2020. On that day, he ceased to have powers under the Corporations Act to act as a director of the company. Under the Bankruptcy Act, on and from that date, the bankrupt ceased to have power to deal with assets that vested in the bankrupt’s trustee. Shares owned by him were in that category. Precisely how he had power to resign as a director of Warin Nominees Pty Ltd on 18 July was not explained.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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