FH as trustee for the FH Trust v TS as trustee for the TS Trust [2022] QCAT 105

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: FH as trustee for the FH Trust v TS as trustee for the TS Trust [2022] QCAT 105 PARTIES: FH AS TRUSTEE FOR THE FH TRUST (applicant) V TS AS TRUSTEE FOR THE TS TRUST (respondent) APPLICATION NO/S: MCDO 1347-21 MATTER TYPE: DELIVERED ON: HEARING DATE: HEARD AT: DECISION OF: Other minor civil dispute matters 29 March 2022 On the papers Brisbane Adjudicator Lember ORDERS: 1. The application for a minor civil dispute – minor debt filed 23 December 2021 is dismissed on the grounds that it lacks substance pursuant to section 47 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld). 2. The application by the respondent for costs is dismissed. CATCHWORDS: ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – minor civil dispute – claim for debt or liquidated demand of money – where trustee parties were married – where debt arose from mistaken payment after separation but before divorce – where subsequent property orders made after a contested family law hearing under the Family Law Act 1975 (Cth) PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – OTHER MATTERS – whether proceedings should be dismissed under s 47 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) Family Law Act 1975 (Cth), s 4, s 39, s 79, s 79A, s 81, s 121 Family Law Rules 2004 (Cth), ch 13 -- 1 of 9 -- 2 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 3, s 4, s 13, s 32, s 47, s 100, s 102, s 122 Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 84 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Creek v Raine & Horne Real Estate Mossman [2011] QCATA 226 Dey v Victorian Railways Commissioners [1949] 78 CLR 62 Dyne v Hasbach [2014] QCATA 189 Fox v Percy (2003) 214 CLR 118 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 In the marriage of Chorn and Hopkins (2014) FLC93-204 at 79,314 Kennon v Spry (2008) 238 CLR 366 Markan v Bar Association of Queensland [2013] QSC 146 Platinum United II Pty Ltd & Anor v Secured Mortgage Management Ltd (in liq) [2011] QCA 162 Port of Melbourne Authority v Anshun Pty Ltd (Anshun Case) (1981) 147 CLR 589. Spencer v Commonwealth (2010) 241 CLR 118 Yeo v Brisbane Polo Club Inc [2013] QCAT 261 APPEARANCES & REPRESENTATION: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) REASONS FOR DECISION What is the application about? FH and TS1 were married on 1 October 2005, separated in January 2018 and divorced on 20 August 2019. By an application for minor civil dispute – minor debt filed 23 December 2021, the applicant wife sought orders from the Tribunal that the respondent husband pay her the sum of $6,012 being payments she says were incorrectly paid by customers of her business to an account in her husband’s control, namely: (a) $5,346 paid on 9 August 2018; and (b) $666 paid on 8 May 2019. 1 Parties have been de-identified and pseudonyms adopted for privacy reasons pursuant to section 121 of the Family Law Act 1975 (Cth). -- 2 of 9 -- 3 Each party was named in the application in their capacity as trustees for the trusts that operated the respective bank accounts to which payments were made and ought to have been made at the relevant time. FH does not dispute that his account received the two payments nor that they were paid to his account in error. Rather, his response filed 14 February 2022 and his application for miscellaneous matters filed 4 February 2022 each seek dismissal of the application on the grounds that the disputed money is matrimonial property addressed in and the subject of final orders by the Federal Circuit Court of Australia (as it then was). The respondent says the application therefore: (a) lacks substance and is futile; (b) amounts to an abuse of process; and (c) perpetrates domestic violence upon the respondent in breach of domestic violent protection order in which he is named as the aggrieved and the applicant the perpetrator, and, on those bases should be dismissed with a costs order in the respondent’s favour. On 1 March 2022 the applicant sought an order requiring the respondents’ account to produce documents pertaining to the respondent’s trust and the mistaken payments. On 15 March 2022 I dismissed the application for a minor civil dispute – minor debt, declining to make a costs order. The applicant has requested reasons for that decision2 and they are set out below. The Tribunal’s jurisdiction Schedule 3 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”) describes a minor civil dispute, amongst other things, as “a claim to recover a debt or liquidated demand of money, of up to the prescribed amount”. The prescribed amount is currently $25,000.00. Where parties who were previously married come before the Tribunal, the question of jurisdiction must be considered as a preliminary issue. Whilst jurisdiction of the Tribunal is not automatically ousted in minor debt claims merely because the parties to the dispute had previously been married and party to final orders or a financial agreement under the Family Law Act 1975 (Cth) (“FLA”),3 the nature of the claim must be examined to ensure that the dispute is not one which has already been decided in family law proceedings or is one in which courts with family law jurisdiction are the appropriate forum to hear the dispute. Regardless of whether family law concerns apply, a party will also not be permitted to bring an action which: (a) relies upon a cause of action which was identical to that in a claim which was previously before a competent court or tribunal, and 2 Pursuant to section 122 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). 3 Dyne v Hasbach [2014] QCATA 189. -- 3 of 9 -- 4 (b) in which a final judgment or final decision has been made, and (c) which was not obtained by fraud, and (d) where the parties to the two proceedings were the same (and acting in the same capacity) or their privies.4 The rule is to avoid re-agitation of proceedings and to provide finality.5 A subsequent action for the same cause of action will be an abuse of process and could be struck out under section 47(1)(c) of the QCAT Act. The nature of family law proceedings and orders Section 39 of the FLA vests jurisdiction in matrimonial causes in the Federal Circuit and Family Court of Australia. A “matrimonial cause” includes “proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them... arising out of the marital relationship”.6 By virtue of section 79 of the FLA the Federal Circuit Court of Australia and the Family Court of Australia (as they were, now merged into the Federal Circuit and Family Court of Australia, “the Court”) can divest a party to a marriage of an interest in property and vest this interest in the other party to the marriage – in other words, the Court can make property orders. Section 79A of the FLA empowers the Court, in limited circumstances, to set aside or vary a property order made under section 79. The duty of the Court is to make orders that, as far as practicable, finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.7 “Property” is defined in section 4(1) of the FLA as: in relation to the parties to a marriage or either of them, …property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion. Property to which a party to a marriage is “entitled” excludes property to which a party to a marriage might have legal title but in which he or she has no beneficial interest. The majority of the High Court of Australia in Kennon v Spry8 adopted an expansive per approach towards the property of a discretionary trust of a party and regarded a discretionary trust as property of the parties to the marriage because, in that case, the husband as trustee controlled the trust and could have vested the trust property in the wife during the course of the party's marriage. If a spouse has unreasonably disposed of an asset of some value, especially since separation, for example, by spending money in an account, one way of bringing it into account in property proceedings is by treating it as “notional property” that is still owned by the spouse and bringing its value into account for the purpose of assessing 4 See generally Halsbury’s Laws of Australia “Estoppel by judgment” paragraphs [190-45] to [95]. 5 Port of Melbourne Authority v Anshun Pty Ltd (Anshun Case) (1981) 147 CLR 589. 6 Section 4(1), FLA. 7 Section 81, FLA. 8 (2008) 238 CLR 366. -- 4 of 9 -- 5 the total value of the asset pool that is available for division for the purposes of section 79(1). Courts are cautious about including notional property into the party's asset pool.9 Adding back to the asset pool the value of an asset that has been unreasonably disposed of is typically how such notional property is dealt with, if the Court chooses to deal with it. Parties to family law proceedings have extensive duties of disclosure pursuant to Chapter 13 of the Family Law Rules 2004 (Cth). Typically, disclosure in property cases takes place by way of the filing of a Financial Statement and, where appropriate, a supporting Affidavit. The conduct of the parties’ family law proceedings On 12 November 2019, the parties appeared before Judge Jarrett in the then Federal Circuit Court of Australia in contested property and parenting proceedings. Shortly before the hearing, the parties filed updated financial disclosure documents. Relevantly, the mistaken payments the subject of this minor debt claim were known to the applicant and disclosed to the Court in: (a) her affirmed Financial Statement filed 5 November 2019;10 and (b) her affirmed Affidavit filed 5 November 2019.11 Each party was legally represented throughout the family law proceedings. Reasons for the decision in parenting and property proceedings between the parties were given on 11 May 2020 when the parenting orders were made. Property orders followed on 21 August 2020, after the parties were directed to discuss and agree on the format of property orders, and, if they could not agree, upon written submissions by the parties of draft orders on their preferred terms. In making property orders His Honour Judge Jarrett said, among other things: [5] I prefer generally the orders proposed by the wife. They provide for a “clean break” and give greater effect to my reasons than do those proposed by the husband. [6] However, the superannuation splitting orders suggested by the husband have attracted the wife's agreement and I will make those.12 It is not clear what, if anything, transpired between the making of the orders on 21 August 2020 and December 2021 other than, I infer, the transfer of the property according to the orders made. On 13 December 2021 the applicant wrote to the respondent demanding payment of the money the subject of the application and purporting to serve a “Notice to Admit” that the two payments were mistakenly received by his trust. The Notice to Admit 9 In the marriage of Chorn and Hopkins (2014) FLC93-204 at 79,314 10 Page 13 of 14, contained in Exhibit 1 of the application for miscellaneous matters filed 4 February 2022. 11 At paragraph 54 on pages 18 and 19 of 30, contained in Exhibit 2 of the application for miscellaneous matters filed 4 February 2022. 12 Exhibit 3 of the application for miscellaneous matters filed 4 February 2022. -- 5 of 9 -- 6 had the appearance of an official Court document but does not identify a Court or Tribunal, or any legislation or rules pursuant to which the applicant purported to serve it. It appears to have been created by the applicant to give the false impression that is was an “official” document or notice issued by third party like a court or tribunal or other authority, which it clearly was not. The Tribunal application was filed on 23 December 2021 when the applicant did not receive the payment or the admission demanded from the respondent. Discussion and findings on the dismissal application As a matter of procedure, proceedings may be finally determined, or interlocutory applications decided by the Tribunal upon the written submissions of the parties without those parties or their representatives appearing at a hearing.13 These proceedings are known as decisions made “on the papers”. The Tribunal must allow a party to a proceeding a reasonable opportunity to call or give evidence and to make submissions to the Tribunal14 and I am satisfied that this process has taken place. [34] The Tribunal is mandated15 to deal with matters in a way that is accessible, fair, just, economical, informal and quick, and must also: (a) encourage the early and economical resolution of disputes before the Tribunal;16 and (b) ensure proceedings are conducted in an informal way that minimises costs to the parties and is as quick as is consistent with achieving justice.17 [35] Section 13 of the QCAT Act obliges the Tribunal to make orders that it considers fair and equitable to the parties to the proceeding in order to resolve the dispute but may, if the Tribunal considers it appropriate, make an order dismissing the application. [36] The Tribunal need also be mindful that their resources serve the public as a whole, not just the parties to the proceedings, Justice Wilson noting in Creek v Raine & Horne Real Estate Mossman18 that: The statutory regime under which QCAT operates places obligations upon parties themselves to take care in their dealings with Tribunal matters, and to act in their own best interests. QCAT’s resources for the resolution of disputes are in high demand and serve, as the High Court has recently observed in relation to court resources, “… the public as a whole, not merely the parties to the proceedings”.19 Finality in litigation is highly desirable, because any further action beyond the hearing can be costly and unnecessarily burdensome on the parties.20 13 Section 32(2) of the QCAT Act. 14 Section 95(1), ibid. 15 Section 3(b), ibid. 16 Section 4(b), ibid. 17 Section 4(c), ibid. 18 [2011] QCATA 226 at paragraph [13]. 19 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at 217. 20 Fox v Percy (2003) 214 CLR 118 at 128 per Gleeson CJ, Kirby and Gummow JJ. -- 6 of 9 -- 7 [37] The Tribunal can act on its own initiative21 under section 47 of the QCAT Act to strike out or dismiss a proceeding if the Tribunal considers a proceeding is: (a) frivolous, vexatious or misconceived; or (b) lacking in substance; or (c) otherwise an abuse of process. [38] However, the power to strike out ought only to be exercised “sparingly” and “when a claim is groundless or futile”.22 [39] According to Dey v Victorian Railways Commissioners,23 in considering a strike out application, the evidence should be weighed to reach a conclusion about whether the applicant has an arguable case. A lack of any cause of action must be very clear.24 The Tribunal ought to be satisfied to a “high degree of certainty about the outcome” to strike the proceeding out.25 [40] Summary dismissal should not be granted simply because it appears an applicant is unlikely to succeed on an issue of fact, in circumstances where there are factual issues in dispute and capable of dispute.26 Whilst I said the fact that parties were married and have final orders between them does not necessarily oust our jurisdiction, particularly where they engage in a subsequent contractual relationship, the current application is distinguished from such a situation because: (a) the mistaken payments giving rise to the debt were made on 9 August 2018 and 8 May 2019 respectively, which were prior to the contested hearing on property matters and prior to the orders made by the Court; (b) the mistaken payments giving rise to the debt were known to the applicant and disclosed to the Court in: (i) her affirmed Financial Statement filed 5 November 2019;27 and (ii) her affirmed Affidavit filed 5 November 2019;28 (c) the applicant sought but was not successful in having the Court deal with the mistaken payments as notional property or “add backs” in the property proceedings; and (d) the balances of the parties’ bank accounts, forming part of their assets disclosed to the Court were considered by the Court and factored into the Court’s ultimate 21 Section 47(3) of the QCAT Act. 22 Yeo v Brisbane Polo Club Inc [2013] QCAT 261, [5]-[7] citing Dey v Victorian Railways Commissioners [1949] 78 CLR 62. 23 [1949] 78 CLR 62. 24 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. 25 Yeo, ibid at [6], citing Agar v Hyde (2000) 201 CLR 552; Platinum United II Pty Ltd & Anor v Secured Mortgage Management Ltd (in liq) [2011] QCA 162; Markan v Bar Association of Queensland [2013] QSC 146. 26 Spencer v Commonwealth (2010) 241 CLR 118. 27 Page 13 of 14, contained in Exhibit 1 of the application for miscellaneous matters filed 4 February 2022. 28 At paragraph 54 on pages 18 and 19 of 30, contained in Exhibit 2 of the application for miscellaneous matters filed 4 February 2022. -- 7 of 9 -- 8 decision that dealt with financial and property settlement between the parties, evidence in His Honour’s reasons given 11 May 2020.29 In the circumstances the applicant is estopped from bringing these proceedings because: (a) the mistaken payments formed part of the matrimonial “property” of the parties; (b) a higher Court has already decided upon the nature and ownership of the mistaken payments during family law proceedings; and (c) the decision in the family law proceedings brought finality to the issue. Further, if the applicant seeks to vary or appeal the family law orders, the Tribunal does not have jurisdiction to hear such an application, which must be made to Federal Circuit and Family Court of Australia. Having been legally represented throughout the family law proceedings, having knowingly disclosed and unsuccessfully argued the issue of the mistaken payments in a contested family law hearing, having affirmed an Affidavit and a Financial Statement to that effect and having received detailed and considered reasons for the Court’s decision on point, the only inference available to the Tribunal is that the applicant brought her minor debt application wilfully intending to cause inconvenience, distress and harm to the respondent, knowing that the matter had already been litigated and decided, and that her application was futile. In doing so, the applicant has also wasted the Tribunal’s resources and inconvenienced the Tribunal. The application is clearly futile, lacks substance and was brought as an abuse of process. I have no hesitation in dismissing it under section 47 of the QCAT Act on that basis. Costs The respondent seeks his costs of responding to the application. The starting point in the Tribunal is that each party to a proceeding must bear its own costs.30 This differs from the Courts where the starting point is that costs follow the event. Section 102 of the QCAT does permit the Tribunal to make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it. Rule 84 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) limit the Tribunal’s power to award costs in a minor debt claim to service and bailiff’s fees, company search fees and the filing fee for the application. The respondent has not disclosed the costs he incurred in responding to the application. The respondent has not incurred a filing fee for the response or the application for miscellaneous matters. 29 At paragraphs 74 and 86 in particular. 30 Section 100, ibid. -- 8 of 9 -- 9 In those circumstances I decline to make an order for costs in favour of the respondent because I regretfully do not have power to do so. Production of documents To the extent that the applicant sought orders for non-party production of documents, I decline to make that order. Disclosure ought to have taken place in the family law proceedings. In any event, I have dismissed the application for a minor civil dispute with the effect that there are no proceedings to which a notice to produce can attach. As the substantive proceedings are over, there are no interlocutory orders that can be made in relation to it. -- 9 of 9 --