ZUNINO & ZUNINO - [2019] FamCA 845

FAMILY COURT OF AUSTRALIA

ZUNINO & ZUNINO

[2019] FamCA 845

FAMILY LAW – PRACTICE AND PROCEDURE – Where application by additional respondents for orders removing them as parties to the proceedings – Where application dismissed – Where costs reserved.

FAMILY LAW – PRACTICE AND PROCEDURE – Where application for Rule 10.12 summary orders seeking dismissal of the wife’s claim as against the additional respondents – Where discussion of applicable principles – Where application for summary relief dismissed – Where costs reserved.

FAMILY LAW – PRACTICE AND PROCEDURE – Where application for order under s 198F of the Corporations Act 2001 (Cth) requiring husband to inspect corporate records as previous director of various entities – Where applicable principles considered – Where application dismissed – Where costs reserved.

Corporations Act 2001 (Cth) s 58AA, 198F
Family Law Rules 2004 (Cth) r 6.02, 10.12

Ebner & Pappas [2014] FamCAFC 229
Friar & Friar [2011] FamCAFC 71
Kelly & Lomax [2014] FamCA 431
Hardcastle v Advanced Mining Technologies Pty Ltd [2001] FCA 1846
In the Matter of Motasea Pty Ltd [2014] NSWSC 69
Lindon v Commonwealth of Australia(No. 2) [1996] HCA 14
McWilliam v Penthouse Publications [2001] NSWCA 237
Oswal v Burrup Holdings Ltd [2011] FCA 609
Sharpe v Grobel [2017] NSWSC 1065
Stewart v Normandy NFM Ltd [2000] SASC 344

APPLICANT:

Ms Zunino

FIRST RESPONDENT:

Mr Zunino

SECOND RESPONDENT:

C Pty Ltd

THIRD RESPONDENT:

D Pty Ltd

FOURTH RESPONDENT:

E Pty Ltd

FIFTH RESPONDENT:

F Pty Ltd (ACN …)

SIXTH RESPONDENT:

F2 Pty Ltd (ACN …)

FILE NUMBER:

PAC

1885

2019

DATE DELIVERED:

15 November 2019

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Parramatta

JUDGMENT OF:

Foster J

HEARING DATE:

12 August 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Coleman SC

SOLICITOR FOR THE APPLICANT:

Hammond Nguyen Turnbull

COUNSEL FOR THE FIRST RESPONDENT:

Mr Sansom SC

SOLICITOR FOR THE FIRST RESPONDENT:

Longton Legal

COUNSEL FOR THE SECOND, THIRD, FOURTH, FIFTH AND SIXTH RESPONDENTS:

Mr Campton SC

SOLICITOR FOR THE SECOND, THIRD, FOURTH, FIFTH AND SIXTH RESPONDENTS:

Matthews Folbigg Pty Ltd

Orders

That the applications by the Fourth, Fifth and Sixth respondents to be removed as parties to these proceedings be dismissed.
That the applications by the Fourth, Fifth and Sixth respondents for summary orders under Rule 10.12 of the Family Law Rules 2004 (Cth) as to the relief sought against them by the wife be dismissed.
That the application by the wife for orders as to s 198F of the Corporations Act 2001 be dismissed.
That costs of and incidental to the present applications be reserved.

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 Zunino & Zunino 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 PARRAMATTA

FILE NUMBER: PAC 1885 of 2019

Ms Zunino

Applicant

And

Mr Zunino

Respondent

REASONS FOR JUDGMENT

In the context of pending property proceedings, issues have arisen as to whether this Court should exercise accrued jurisdiction in dealing with certain relief sought by the additional respondents in these proceedings.

Introduction

On 24 April 2019 the applicant wife commenced proceedings for property adjustment orders under the provisions of section 79 of the Family Law Act 1975 (Cth) (“the Act”).
In her Initiating Application the wife sought orders as against the first respondent husband and C Pty Ltd as second respondent, D Pty Ltd as third respondent and E Pty Ltd as fourth respondent.
The relief sought by the wife as against the second respondent company was, in substance, relief as provided for in s 106B of the Act so as to reinstate the husband’s shareholding in the first respondent.
The relief sought by the wife as against the third respondent company was relief of a similar nature.
As against the fourth respondent (the Trustee of the Zunino Family Trust) the wife sought a declaration that the third respondent company holds a certain real estate property at G Street, Suburb H in trust for the husband and wife in equal shares.
On 20 May 2019 the wife file an Amended Initiating Application joining a fifth respondent F Pty Ltd and a sixth respondent F2 Pty Ltd.
The same date the wife filed an Application in a Case seeking various interim orders, in summary, as follows:
a)interim spousal maintenance;
b)interim property provision;
c)interim injunctions restraining the husband from dealing with certain properties including the matrimonial home;
d)interim injunctions restraining the fourth respondent from dealing with the property at Suburb H;
e)interim injunctions restraining the second respondent from dealing with certain properties at Suburb J, NSW;
f)interim injunctions restraining the third respondent from altering its share capital or permitting itself to be placed into administration;
g)interim injunctions restraining the fifth respondent from dealing with the properties at L Town; and
h)interim injunctions restraining the sixth respondent from dealing with the property at Suburb J.
Otherwise, the wife sought various orders in relation to disclosure, discovery and valuations including an order sought against the husband pursuant to the provisions of section 198F(2) of the Corporations Act 2001 (Cth) requiring him to gain access to certain books and financial records of the additional respondents and make such documents available to the wife.
As against the fifth respondent (the Trustee of the Zunino Family Trust No. 2), the wife sought a declaration of trust that the company held certain properties on K Street, L Town NSW (“the L Town properties”) on trust for the husband and wife in equal shares. The L Town properties were acquired for a total purchase price of about $5.35 million between April 2014 and April 2017.
As against the sixth respondent company, the wife sought a declaration that the company held the property situate at M Street, Suburb J on trust for the husband and wife in equal shares.
The husband for his part on 3 July 2019 filed a Response to the wife’s application, in summary, seeking property adjustment orders in relation to the parties’ jointly owned property at N Street, Suburb O NSW and seeking to indemnify the wife as against any liability in relation to an alleged loan of $1 million from a Mr B Zunino in relation to the construction of the home on that property. The husband, otherwise, sought an order that the wife’s Application in a Case be dismissed.
On 4 July 2019 a registrar made certain directions to progress the matter. The registrar directed, inter alia, that on or before 1 August 2019 the wife serve upon the husband and the additional respondents Points of Claim verified by affidavit setting out, with particularity, the nature of the wife’s claim or claims as against the husband and the additional respondents including but not limited to:
a)the precise legal basis and nature of the claim or claims and the relief at least sought in respect of each such claim or claims (such as constructive trusts, express trusts et cetera); and
b)the propositions of law and fact asserted by the wife in respect of each such claim or claims and sufficient particulars to enable the husband and the additional respondents to identify what the wife alleges against them including the issues to be determined in respect of each such claim.
It was further directed that the husband and the additional respondents by 2 September 2019 file Points of Defence verified by affidavit in response to the applicant’s Points of Claim.
On 7 August 2019 the additional respondents filed a Response to the wife’s application for final orders. The additional respondents sought orders that all of the relief sought against them be dismissed and that the wife pay their costs on an indemnity basis. Otherwise, the additional respondents sought interim orders:
a)that the additional respondents be removed as parties to the proceedings;
b)that pursuant to rule 10.12 of the Family Law Rules the relief sought against the fourth, fifth and sixth respondents be dismissed;
c)that pursuant to rule 10.12 of the Family Law Rules the relief sought as against the second and third respondents be dismissed; and
d)that the wife pay the costs of the additional respondents on an indemnity basis.
On 12 August 2019 the various applications were listed before the Court in the judicial duty list. On that day certain orders were relevantly made as follows:
(1)That the parties sign all necessary documents, instruments, writings and things to list for sale and sell the property known as and situate at P Street, Suburb Q NSW (“the property”) as soon as necessarily practicable and in this regard:
1.1The Wife shall nominate in writing three agents whom she proposes to instruct on the sale within 14 days; and
1.2The Husband shall notify the Wife within 7 days which of the three nominated agents he chooses to conduct the sale;
1.3The Husband will instruct the agent he has chosen to list the property to sell at the best price reasonably obtainable and to sell the property by private treaty or auction and within a further 7 days;
1.4upon the sale of the property the sale proceeds shall be applied in the following manner:
(a)in payment of reasonable agents expenses and legal costs on sale; and
(b)in discharge of the mortgage to the CBA; and
(c)in payment of an amount into a controlled monies account in the name of the Husband with the solicitor for the Husband as is calculated by the Accountants R Pty Ltd who is hereby appointed to calculate the capital gain tax payable by the Husband upon the sale of the said property, and then paid to the husband to apply it to the payment of the tax and provide the Wife with the receipt; and
(d)in payment of the sum of $125,000.00 to reimburse him for the payment to be made to the Wife pursuant to these Orders; and
(e)the balance to be divided equally between the parties.
(2)That the Husband cause the sum of $125,000.00 to be paid to the Wife from the funds held by his solicitors in their trust account within 14 days.
(3)That the payments made to the parties pursuant to these Orders one (1) and (2) hereof (unless otherwise specified) by way of partial property Order.
(4)That the application of the Wife for interim spousal maintenance, as contained in her Application in a Case filed 21/5/19 be and is hereby dismissed.
(5)That in relation to the Interim Application of the Wife for injunctive orders against the Husband (in paragraph three (3)) the same is withdrawn and dismissed, however the Husband shall provide the Wife 28 days’ notice in writing in the event that he proposes to sell, transfer, alienate or further encumber the said properties other than in accordance with these Orders.
IT IS FURTHER ORDERED THAT
(6)The solicitor for the husband is to forward an electronic typescript of the document marked “A” as amended to the Court within two business days.
(7)The parties have leave to inspect documents produced by S Pty Ltd being documents comprised in Sleeve 1 and that the parties have leave to have photocopy access to such document provided that such copies remain in the possession and control of the parties legal representatives, not be disseminated to any third party and at the conclusion of these proceedings be destroyed.
BY CONSENT, IT IS FURTHER ORDERED THAT
(8)That pursuant to Section 106B of the Family Law Act:
8.1The disposition by way of the forfeiture of the husband’s 5 F Class shares in C Pty Ltd on the 19th December 2018 be set side; and
8.2This disposition by way of the forfeiture of the husband’s 25 F Class Shares in D Pty Ltd on the 19th December 2018 be set aside.
(9)That the husband and C Pty Ltd within 21 days do all things as are necessary to reissue or reinstate to the husband his 5 F Class shares in C Pty Ltd.
(10)That the husband and D Pty Ltd within 21 days do all things as are necessary to reissue or reinstate to the husband his 25 F Class shares in D Pty Ltd.
(11)That there be no order as to costs in relation to prayers 3,4,5 and 6 as sought in the wife’s amended initiating application filed 20th May 2019 such that each of the husband, the wife, the second respondent and the third respondent each pay their own costs.
(12)That C Pty Ltd be removed as the second respondent in these proceedings.
(13)That D Pty Ltd be removed as the third respondent in these proceedings.
On reserving judgment the parties were informed that by reason of pending long leave arrangements, judgment would not be delivered for about three months.

The wife’s documents

Apart from the Initiating Application and her Application in a Case referred to above, the wife relied upon her affidavit sworn 17 May 2019 and filed 20 May 2019 together with the documents exhibited thereto marked into evidence as Exhibit “C”. Otherwise, the wife relied on her affidavit filed 7 August 2019. That affidavit incorporated the Points of Claim filed by the wife pursuant to the registrar’s directions.

Context

The parties commenced cohabitation in early 1996 and married in 2001. They separated on a final basis in mid-November 2018. The wife continued to live in the former matrimonial home following separation.
The four children of the parties’ marriage ranging in age from 18 down to 11 reside with the wife.

The wife’s evidence

At the commencement of cohabitation the wife had moderate superannuation and savings. The husband was the owner of the property at P Street, Suburb Q (“the Suburb Q property”) and was employed by his family business “D Pty Ltd”.
The parties resided in the Suburb Q property from the commencement of cohabitation and by mid-2001 the mortgage secured over the property had been discharged. Otherwise, the assets of the parties were accumulated during a cohabitation of about 22 years.
During cohabitation the wife was employed in various positions for about 22 years with the company F3 Pty Ltd. Her employment with that company was terminated in January 2019. The wife otherwise asserts significant engagement in the operations of the various corporate entities.
As best as can be established, the matrimonial asset pool comprises the following:
a)the jointly aimed matrimonial home at N Street, Suburb O;
b)motor vehicle 1 returned by the wife to the husband after separation;
c)motor vehicle 2 purchased by the wife post separation for $56,000;
d)the wife’s cash at bank representing an inheritance from her father’s estate in 2015;
e)household contents and personalty;
f)the wife’s superannuation of about $38,000;
g)the husband’s property at T Street, Suburb J;
h)the husband’s property at P Street, Suburb Q, that property being the subject of the interim sale order made as referred to above;
i)the husband’s property at U Street, Suburb J;
j)the husband’s 5F class shares in the second respondent they being the subject of interim orders referred to above;
k)the husband’s 25 F class shares in the third respondent they being the subject of interim orders referred to above;
l)the husband’s 8283 ordinary shares in V Pty Ltd; and
m)the husband’s one ordinary share in W Pty Ltd.
The three properties standing in the husband’s name are asserted to have a value of about $4.65 million.
Otherwise, the wife identifies a number of companies in respect to which the husband was a director, such companies holding property and/or being vehicles for businesses run by the husband.
The second respondent company holds interest in real estate properties as tenants-in-common with X Pty Ltd being the properties at Y Street, Suburb J and Z Street, Suburb J.
The fourth respondent company owns the property G Street, Suburb H.
The wife complains as to the adequacy of discovery and financial disclosure by the husband with some information as to his circumstances only being ascertained as a result of third-party searches and enquiries.
It is the wife’s evidence that during cohabitation the parties, particularly the husband, enjoyed a very comfortable lifestyle including overseas travel, purchase of a light plane, purchase of a sports car and the purchase of a helicopter.
The wife asserts that from her observations it was the husband who controlled the family business entities and businesses. The husband further represented to her that “Mother and father are not involved in the business anymore. I run the company.”
The wife asserts that the husband represented to her that it was he who purchased the property at M Street, Suburb J but that property is registered to the sixth respondent company.
The wife’s Points of Claim reveal, in summary, the following assertions:
a)That at all material times the husband was a director of a number of companies referred to as the “Zunino Group”;
b)That various partnerships were in place involving certain companies from the Zunino Group and the husband’s relatives;
c)That such partnerships and entities were used to run, inter-alia, businesses known as D Pty Ltd and/or AA Pty Ltd and received income arising from those businesses;
d)At all material times the husband was the controlling mind of D Pty Ltd and/or AA Pty Ltd and the entities that traded under those business names;
e)That the husband was held out by the businesses D Pty Ltd as managing director, had direct authority over the management structure of the business, made decisions in respect of the marketing of the business, instructed solicitors in respect of legal disputes involving the business, dealt with complaints from purchases and at times identified himself as the owner, made decisions on prices for both purchases and sales, made decisions on credits to be provided to suppliers and purchases, sourced and negotiated terms with overseas suppliers, attended various conventions overseas and held himself out as the representative of the business with further particulars to be provided following disclosure and the issue of subpoena;
f)That the husband in respect of the business AA Pty Ltd established the business or its progenitor in about 2000, managed the business, organised supplies for the business, managed legal disputes, oversaw marketing, had direct authority over those managing the business and had direct authority over hiring employees with further particulars to be provided following disclosure and the issue of subpoena;
g)That the husband has received benefits from the Zunino Group which are uncommercial and is able to treat various entities in the Zunino Group as his alter ego with particulars supplied as to such uncommercial benefits including loans without interest or terms of repayment, funds provided for holidays and travel for himself and his family, the personal use of a helicopter, personal use of motor vehicles owned by members of the Zunino Group and has caused various properties to be purchased with further particulars to be provided following disclosure and issue of subpoena;
h)As to the relief sought against the fourth respondent relating to the property at Suburb H that the husband until 19 December 2018 was a director of the company, in early 2008 the husband represented to the wife that he had seen a property at Suburb H and that he and the wife should inspect the property with the intent to purchase it, the property was inspected by the husband and wife who discussed the desirability of the property’s location and its use as a weekend from time to time for the family, that the husband and wife agreed that the property would be purchased and in July 2008 the property was purchased in the name of the fourth respondent company, that the husband at that time represented to the wife that he had purchased the property for himself and the wife, that the property was used by the husband and wife as a weekender on a regular basis and that they caused the property be outfitted with furniture;
i)As to the relief sought against the fifth respondent relating to the landholdings at L Town:
i)That in early 2014 the wife attended an inspection of the property at 1 K Street with the husband’s mother, that following inspection the husband and wife agreed that the property would be purchased and that on 4 April 2014 the property was acquired by F Pty Ltd for the sum of $1.7 million, that subsequent to purchase the husband and wife caused the property to be renovated and improved, that the husband and wife and their children would attend upon the property most weekends and use the property as their residence for that purpose;
ii)That in around 2016 the husband and wife had a conversation about the properties adjoining the then L Town landholdings and the prospect that a train line was planned to run through the area, that the husband and wife had a conversation that they should purchase properties in the area that had the potential to be a good investment, that on 20 February 2017 the fifth respondent became registered proprietor of the property at 3 K Street, L Town acquired for the sum of $1 million, that on 25 April 2017 the fifth respondent became the registered proprietor of the property at 2 K Street, L Town acquired for the sum of $1 million, that in early 2017 the husband informed the wife that he had purchased properties at 3 K Street, L Town and 2 K Street, L Town; and
iii)That on 19 December 2018 the husband resigned as a director of the fifth respondent.
j)As to the relief sought against the sixth respondent that in 2015 the husband represented to the wife that he was to expand the operations of AA Pty Ltd and that the property at M Street, Suburb J would be acquired as a new factory for the business, that in mid-2000 the wife accompanied the husband and the selling agent to inspect the M Street property, subsequent to the inspection the husband asked the wife as to her opinion as to the suitability of the property and the husband informed the wife that he would purchase the property for them, that on 17 August 2015 the property was acquired by the sixth respondent, in about mid-2015 the husband represented to the wife that he had purchased the property for the business and that he would like to develop the property into the future, and that on 19 December 2018 the husband resigned as a director of the sixth respondent.

Discussion

The Law

The principles applied as to the issue of summary dismissal under the provisions of the Family Law Rules 2004 (Cth) (“the Rules”) are well settled.
Rule 10.12 of the Rules provides:
10.A party may apply for summary orders after a response has been filed if the party claims, in relation to the application or response, that:
(a)the court has no jurisdiction;
(b)the other party has no legal capacity to apply for the orders sought;
(c)it is frivolous, vexatious or an abuse of process; or
(d)there is no reasonable likelihood of success.
In Lindon v Commonwealth of Australia (No. 2) [1996] HCA 14 the High Court of Australia said (at pages 255 - 256):
The approach to be taken by the Court to the Commonwealth’s application for summary relief is not in doubt:
1.It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against government and other powerful interests. This is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the court, is rarely and sparingly provided.
2.To secure such relief, the party seeking it must show that it is clear, on the face of the opponent’s documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious.
3.An opinion of the court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment.
4.Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of demurrer. If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts.
5.If notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading. A question has arisen as to whether O 26, r 18 applies to part only of a pleading. However, it is unnecessary in this case to consider that question because the Commonwealth’s attack was upon the entirety of Mr Lindon’s statement of claim.
6.The guiding principle is, as stated in O26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.
(Footnotes omitted)
In Friar & Friar [2011] FamCAFC 71 the Full Court said at [49] to [50]:
Rules 10.12 (c ) and (d) of the Family Law Rules 2004 (“the Rules”) relevantly provide that a respondent may apply for “summary orders” in relation to an application on the basis that it is “frivolous, vexatious or an abuse of process” or has “no reasonable likelihood of success”.
The Rules are properly read as supplementing the power of the Court to dismiss frivolous or vexatious proceedings pursuant to s 118(1) of the Act. The Rules are also to be read in the context of the many cases confirming the Court’s inherent power to dismiss or permanently stay an application which cannot succeed, as to which see the authorities discussed in Bigg v Suzi (1998) FLC 92-799 at 84,974.
The phrase “no reasonable likelihood of success” is, at least in relation to the test to be applied in the summary dismissal proceedings, of relatively recent origin: see Ebner & Pappas [2014] FamCAFC 229 where the Full Court said:
60.In Bretton & Bondai [2013] FamCAFC 168 Finn and Strickland JJ at [59], and May J at [122], considered this is a conceptually different test to the “doomed to fail” test.
61.In Spencer v Commonwealth of Australia [2010] HCA 28, referring to a Federal Court Rule in similar terms to Rule 10.12, Hayne, Crennan, Kiefel and Bell JJ said at [56]:
Because s 31A(3) provides that certainty of failure (“hopeless” or “bound to fail”) need not be demonstrated in order to show that a plaintiff has no reasonable prospect of prosecuting an action, it is evident that s 31A is to be understood as requiring a different enquiry from that which had to be made under earlier procedural regimes. It follows, of course, that it is dangerous to seek to elucidate the meaning of the statutory expression “no reasonable prospect of successfully prosecuting the proceeding” by reference to what is said in those earlier cases.
62.The applicable test was considered by another intermediate court of appeal, the Victorian Court of Appeal in Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158. At that time the relevant legislative test in Victoria was “no real prospect of success”. There at [27] Warren CJ and Nettle JA said:
... whatever might be the practical effect of the new test, it is difficult to disagree with McMurdo J in Gray v Morris and McMurdo P in the Commissioner of Taxation v Salcedo that it should be applied by reference to its own language, without paraphrase or comparison with the previous rule, always bearing in mind the principle that the power to award summary judgment is only to be exercised with caution and, therefore, not unless it is clear that there is no real question to be tried.
(Footnotes omitted)
Their Honours continued at [35]:
Upon the present state of authority:
a.the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
b.the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in General Steel;
c.it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
d.at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.
Senior counsel for the wife appropriately submitted that in a claim such as the present as against the remaining additional respondents and where the applicant necessarily relies on circumstantial evidence within the control of the opposing parties, taking advantage of the interlocutory process assumes particular significance. The assessment of the wife’s claim is made taking her case at its highest with the respondents accepting the truth of all the allegations in her claim and the ranges of meaning the assertions of fact are reasonably capable of bearing: McWilliam v Penthouse Publications [2001] NSWCA 237
As was said in Lindon (supra):
An opinion of the court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment.
It was contended properly by senior counsel for the wife that the application of the general principles applicable to applications of this nature are fatal to the application of the remaining additional respondents.
It was further contended by counsel for the remaining additional respondents that they have been impermissibly joined to the proceedings (Rule 6.02).
It is readily apparent that the relief sought by the wife as against the fourth, fifth and sixth respondents directly affects those respondents as the relief sought is as to an asset or assets of those respondents. Should the wife be successful, then those respondents would be deprived of their right or rights over the said properties. As such, it is appropriate that these respondents are parties to these proceedings for that purpose and for the purpose that should the wife be successful the matrimonial asset pool for division will be significantly enhanced; the joinder of these additional respondents is mandated by the provisions of rule 6.02. It is not appropriate that they be removed as parties to these proceedings.
It was further contended on behalf of the additional respondents that there are no orders sought by the wife in the event that she is able to obtain the primary declaration that she seeks as to the subject real estate properties. It is readily apparent that implementation orders so as to realise any equitable relief obtained by the wife will be determined by the nature and extent of that relief in due course. The evidence to refute the claims made by the wife, particularly as to the acquisition of the subject properties, is peculiarly within the control and the knowledge of the remaining additional respondents. Such issue raises, of course, significant issues of fact for determination at final hearing.
It is, otherwise, readily apparent that in the event the declarations are made the Court would be in a position to order the additional respondents or any of them to transfer the subject property or properties to the names of the husband and wife as tenants-in-common. Thereafter the fate of those properties depends upon the ultimate resolution of the section 79 proceedings as between the husband and wife.
Clearly, the wife is at significant risk as to costs should she be unsuccessful in relation to the relief sought as against the additional respondents or any of them.
For the reasons set out above, the applications by the remaining additional respondents as against the wife will be dismissed. It is appropriate that the question of costs be reserved to either agreement or final hearing for argument.
Orders will be made accordingly.

Section 198F of the Corporations Act 2001 (Cth)

Section 198F of the Corporations Act 2001 (Cth) (“Corporations Act”) provides as follows:
Right while director
(1)A director of a company may inspect the books of the company (other than its financial records) at all reasonable times for the purposes of a legal proceeding:
(a)to which the person is a party; or
(b)that the person proposes in good faith to bring; or
(c)that the person has reason to believe will be brought against them.
Right during 7 years after ceasing to be director
(2)A person who has ceased to be a director of a company may inspect the books of the company (including its financial records) at all reasonable times for the purposes of a legal proceeding:
(a)to which the person is a party; or
(b)that the person proposes in good faith to bring; or
(c)that the person has reason to believe will be brought against them.
This right continues for 7 years after the person ceased to be a director of the company.
Right to take copies
(3)A person authorised to inspect books under this section for the purposes of a legal proceeding may make copies of the books for the purposes of those proceedings.
Company not to refuse access
(4)A company must allow a person to exercise their rights to inspect or take copies of the books under this section.
Interaction with other rules
(5)This section does not limit any right of access to company books that a person has apart from this section.
There is no issue that this Court has jurisdiction to make orders under the provisions of the Corporations Act 2001. In s 58AA of the Corporations Act 2001, “Court” is defined to include the Federal Court, the Supreme Court of a State or Territory, and the Family Court of Australia.
The relief sought by the wife was the subject of consideration by Hogan J in Kelly & Lomax [2014] FamCA 431 where her Honour said:
5.Notwithstanding this, it became apparent during the hearing of the application that, in essence, the wife seeks an order requiring the husband to seek financial documents from the particularised corporate entities for which he was previously a director.
6.It was submitted that ss 198F(2) and 1303 of the Corporations Act 2001 (Cth) (the Corporations Act) mean that the husband has a right to obtain the documents the wife seeks to obtain from the entities and that, as a result, he is obliged to act to obtain them so they can be disclosed to the wife given her assertions as to their relevance in the property settlement proceedings between the parties. Further, given the terms of s 1303 of the Corporations Act, it was submitted that the Court could, by order, compel that a copy of a relevant book – defined in s 9 of the Corporations Act to include a register, any other record of information, financial reports or financial records however compiled, recorded or stored and a document – be provided to the husband by the relevant entity. It was submitted that, given his obligation of ongoing full and frank disclosure, once the documents were within the husband’s possession, he would be compelled to disclose them to the wife...
8.Section 198F was introduced into the Corporations Act by the Corporate Law Economic Reform Bill. The Explanatory Memorandum relevant to s 198F refers to the principles of common law by which a director has a right of access to all company information necessary to enable the director to discharge his or her fiduciary or statutory obligations, subject to the limitation that such information could only be used by the director for the purposes of the company. It was explained that if, for example, a director was being sued by the company for an alleged breach of duty owed to the company it could be difficult for the director to demonstrate that access to documents would be “for the purposes of the company” – even more so if the person is a retired director. Against this background, the Explanatory Memorandum outlined that s 198F as proposed would allow current and retired directors a legally enforceable right of access, at all reasonable times, to the books of a company in which they are or were a director.
9.Section 1303 of the Corporations Act provides that the Court may compel compliance:
If any person in contravention of this Act refuses to permit the inspection of any book or to supply a copy of any book, the Court may by order compel an immediate inspection of the book or order the copy to be supplied.
Hogan J referred to Hardcastle v Advanced Mining Technologies Pty Ltd [2001] FCA 1846 where Emmett J said, at paragraphs 23-25:
23.There appear to me to be two possible restrictions on the right of inspection that is conferred by s 198F(2). The first is clear: inspection must be for the purposes of a legal proceeding. The legal proceeding must be one to which the person requesting access is a party, one that the person proposes to bring in good faith or one that the person has reason to believe will be brought against him or her. That requires that the purpose for inspection of specific books be identified.
24.That does not mean to say that specific documents need to be identified by the former director. A former director would not necessarily remember every piece of paper that a Company had. However, in my view, the section requires that a person seeking to inspect books must identify at least specific categories or classes of books, which have some bearing on the relevant legal proceeding. There may be a question as to whether or not the former director is required to identify precisely how the relevant books are relevant or material to that proceeding. There must, however, be some indication of the nature of the books sought and the bearing that the books have on the proceeding in question.
25.A second possible limitation on the operation of s 198F(2) is that the proceeding must be a proceeding to which the former director is a party or believes might be brought against him or her or which he or she proposes to bring in his or her capacity as a director of the company. It would be curious if a person who, fortuitously, happened to have been a director of a company in the past would be entitled to access to books of the company that might be material to proceedings brought by that former director or which might be brought against the former director in a capacity totally unconnected with the capacity of the former director as a director. I do not express any firm or final view on that question at this stage because it does not arise in the application before me...
After considering Hardcastle (supra) her Honour said:
15.I express the tentative view that, despite the clearly expressed limitation set out above, the subsequent decisions of various Courts noted above have applied the ‘second possible limitation’ to the interpretation of s 198F(2) as though it is firmly established. Section 198F(2) itself contains no express restriction or limitation – as could easily have been done had it been the intention to restrict a director’s access to records – as to the nature of the legal proceeding to which it refers. Further, it may be argued the discretionary nature of s 1303 itself provides a means by which unnecessary or irrelevant requests for access to records by current or former directors can be overseen. In any event, I consider it unnecessary to express a concluded view about the application of ss 198F and 1303 of the Corporations Act in dealing with the current application.
A director or former director’s right to inspect company books under s 198F is not at large. As said by Black J in In the Matter of Motasea Pty Ltd [2014] NSWSC 69 at [51]:
It is essential to the exercise of a director's right to inspect books under these sections that the director be, actually or prospectively, a party to litigation, and the director must establish the factual background to the application by more than unsubstantiated assertions (emphasis added): Stewart v Normandy NFM Ltd [2000] SASC 344; (2000) 18 ACLC 814 at [10]; Boulos v Carter; Re TARBS World TV Australia Pty Ltd [2005] NSWSC 891; (2005) 220 ALR 572; (2005) 54 ACSR 827 at [28], [31]; Re Jervois Mining Ltd; Campbell v Jervois Mining Ltd [2009] FCA 316 at [48] . …
In Sharpe v Grobel [2017] NSWSC 1065 Brereton J observed:
[21]Moreover, directors are entitled, at common law, to access the books and records of the company as a necessary incident of the office of director, in order that they may properly perform their duties. The statutory right of access under Corporations Act, s 198F, now permits access for the purpose of legal proceedings to which a director or former director is or may become a party, notwithstanding that the director’s purpose may be a private one. (emphasis added)

Yet the right to access is a constrained one, being limited to books of the company material to the legal proceeding: Stewart v Normandy NFM Ltd [2000] SASC 344 at [10]. It has been held that because s 198F refers to a director inspecting the books of the company, the section does not permit an agent of the director to inspect the books: Oswal v Burrup Holdings Ltd [2011] FCA 609 at [22]–[25].
Thus the right of the husband under the section is to have access to and copy such documents as may be material for the purpose of the present legal proceedings notwithstanding the proceedings are of a private nature.
Such a right carries with it the obligation on the husband, or in this matter the wife who seeks to promote the order for the s 198F request, to establish the factual background to the request. As such it is incumbent of the wife to identify with some particularity the nature and extent of the documents sought to be included in the request.
Some of the considerations that might be relevant, in particular, circumstances to whether the Court will make an order to comply with s 198F include that the request is unduly onerous, that the company should not be expected to bear the cost of a very large inspection of documents, and that the party requesting the documents already has them: Oswal v Burrup Holdings Ltd [2011] FCA 609 at [17].
The wife seeks an order ultimately directed to four corporate entities in which the husband was until recently a director. The nature of documents sought are in a broad category of general financial and corporate records (some of which are public records) over a period of five years and in one respect seek to have the company or companies compile a list of all assets and liabilities.
The Court is not satisfied that the order sought by the wife is proper in all the circumstances. That is not to say that at a time when issues for determination are more focused a further application of this nature could not be made on a proper basis. Indeed, the wife is at liberty to cause the issue of subpoena to the additional respondents or third parties for such documents as may be relevant to the issues for determination.
The application as to s 198F will be dismissed.
In the circumstances of the present matters for determination, it is appropriate that any applications for costs be determined at the end of proceedings when the financial circumstances of both parties will be determined. Costs will be reserved.
Orders will be made accordingly.

I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 15 November 2019.

Associate:

Date: 15 November 2019