B Pty Ltd and Ors v K and Anor

B PTY LTD (ACN...)(and others named in the Schedule)

1. Ms Fonseca be joined as the Second Respondent.
2. B Pty Ltd (ACN...) be joined as the Third Respondent.
3. C Pty Ltd ATF B Investments Trust (ACN...) be joined as the Fourth Respondent.
4. D Pty Ltd ATF B Unit Trust (ACN...) be joined as the Fifth Respondent.
5. On or before 2 May 2025 the applicant de facto wife file and serve a further Amended Initiating Application in the form annexed to her amended Points of Claim filed 16 April 2025.
6. On or before 14 May 2025 each of the Second, Third, Fourth and Fifth Respondents file and serve any Response to any further Amended Initiating Application.
7. On or before 28 May 2025 each of the husband, Second, Third, Fourth and Fifth Respondents file and serve Points of defence to the Points of Claim filed by the de facto wife on 16 April 2025.
8. The costs of all parties of the joinder application be reserved to the trial.

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).

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

IT IS NOTED that publication of this judgment by this Court under the pseudonym Ochoa & Fonseca has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. Ms Ochoa ("the de facto wife") and Mr Fonseca ("the de facto husband") are engaged in proceedings as to the adjustment of their property after the termination of their de facto relationship and as to the parenting of their child, X, born in 2015 currently 10 years old.
2. The proceedings were commenced on 29 April 2024 in the Federal Circuit and Family Court of Australia (Division 2) and transferred to this Court on 7 March 2025.
3. The de facto wife was born in 1976 and is currently 48 years old. The de facto husband was born in 1970 and is currently 54 years old. They commenced cohabitation in March 2013 and separated on 24 April 2024.
4. On 15 July 2024 orders were made as between the de facto husband and the de facto wife as to the obtaining of single expert evidence pursuant to ch 7 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the Rules") and regulating the parenting of their daughter.
5. These reasons determine the de facto wife's application for leave to amend her substantive relief and to join additional parties as the second, third, and fourth respondents to the proceedings.

1. E Pty Ltd ("E Pty Ltd") was incorporated in January 1981. The de facto husband and his brother, Mr F, each hold one share in E Pty Ltd. The husband's mother, who is the proposed second respondent in the proceeding, was born in 1942 and is presently 83 years of age. She beneficially holds the other shares in E Pty Ltd. E Pty Ltd has historically been engaged in a business enterprise and may have, in recent times, expanded its operations to deal in cryptocurrency and other trading enterprises.
2. The proposed third respondent is B Pty Ltd (ACN...) ("B Pty Ltd"). It was incorporated on 6 January 2005. At the time of its corporation, and always since then, both the de facto husband and Mr F have been the shareholders and the directors of the entity. It was, until recent times, the trustee of the B Unit Trust ("the Unit Trust").
3. In July 2005 the Unit Trust acquired G Street, Suburb H ("the Suburb H property") for $7 million.
4. All the units in the Unit Trust are held by the B Investments Trust ("the Discretionary Trust").
5. The Discretionary Trust was established by way of a deed made in January 2005. B Pty Ltd was until recent times the trustee of the Discretionary Trust. The husband and Mr F are the shareholders and directors of the trustee.
6. By way of the January 2005 deed establishing the Discretionary Trust, the husband held the sole unfettered discretion to remove and appoint the trustee. The de facto husband was one of the specified income and capital beneficiaries of the Discretionary Trust together with his brother Mr F.
7. On 7 July 2007, by way of a further deed, the de facto husband resigned his power of appointment of the Discretionary Trust and appointed his mother as the appointor.
8. It is the de facto wife's case that the Suburb H property owned by the Unit Trust, in turn owned by the Discretionary Trust, is valued in the range of $22-30 million.
9. It seems relatively uncontroversial, on the material before me to date, that the de facto husband had, consistent with long-standing authority, the capacity to control the identity of the trustee of the Discretionary Trust, prior to entry of the July 2007 deed, and could, in turn, control the distribution of income and capital from the Discretionary Trust to specified objects of the trust. The broad gravamen of the case currently prosecuted by the de facto wife is that the change in the identity of the appointor of the Discretionary Trust occurred in the context as identified in her affidavit, being:
   1. I asked [the de facto husband] about what else occurred during the separation and [the de facto husband] explained to me: "At the end of our relationship, [Ms J]and her father were working at [E Pty Ltd] While she was working there, she had access to my emails, which resulted in her finding out about the affair. Before this, in early 2007, my father became sick [...] and was in hospital. My mother was living in [Country K] at the time, and she flew back to Australia to help take care of my father and be with us. While my father was in hospital, my mother was living with [Ms J] and I. Our relationship was not going well. I was afraid of my father passing away and a separation occurring with [Ms J], so I transferred my assets into my mother's name. I wanted to protect my money from any money grabbers. When [Ms J] and I eventually separated, I allowed her father to continue working at [E Pty Ltd] for a year. I gave her a [vehicle] and some cash as a settlement.".
   2. Around 2012, I was cooking in [Suburb M] and taking to [the de facto husband's mother], who was very upset due to some family problems involving [Mr F] and [Ms L], her daughter in law. They had not been speaking to her for a couple of years and she had very little access to visit her grandsons. [The de facto husband's mother] explained that it was deeply affecting her and said words to the effect of: "If it was not for the kids, I would ask [Mr F] to divorce [Ms L]." She then started talking about [the de facto husband's] relationship with [Ms J]. [The de facto husband's mother] said to me words to the effect of: "When I was staying with [the de facto husband] and [Ms J], I noticed that their relationship was not good. The whole time I was with them in their property at [Suburb M], [Ms J] would go into their bedroom and would never talk to me or [the de facto husband]. She would not come out even to eat. The only thing she was eating were pills. I felt sorry for [the de facto husband]. One time, after my husband passed away, I was so sad I went to the casino. [the de facto husband] came to get me and found me crying. I pleaded with him that I did not want him to ever marry [Ms J] and that I was glad he was protecting himself against her. When I went back to [Country K] after my husband died, [the de facto husband] came to visit me. When he visited, he informed me that he had separated from [Ms J]. When I asked whether it was because of me, he only told me that I was one of the reasons. He did not tell me anything else".

1. The de facto wife adduces evidence of representations made by the de facto husband as to the property ultimately held by the discretionary trust, including the Suburb H property, being either in whole or in part, his property for the purposes of the proceedings pursuant to s 90SM of the Family Law Act 1975 (Cth), being:

(a) On 23 May 2017, by application to the N Bank for finance on behalf of E Pty Ltd, an asset and liability statement indicated him holding a 50 per cent beneficial ownership of the Suburb H property;

(b) In December 2017 the de facto husband and his brother, Mr F personal guaranteed an O Bank loan facility, in favour of the unit trust, valued in excess of $8 million;

(c) In June 2018 the de facto husband executed a NAB guarantor information document to support the borrowings of another entity which records he holding a $10 million interest in the Suburb H property; and

(d) In June 2018 Mr F producing a letter to the National Australia Bank in support of the de facto husband's application for a loan, indicating a capacity to raise further funds implicitly identifying the Suburb H property as a personal asset.

1. In December 2024 the de facto wife commenced a process of purporting to amend her substantive Initiating Application to join the proposed second respondent, the de facto husband's mother, to the proceedings, and the trustee of the Unit Trust, as the proposed third respondent to the proceedings.
2. On 7 March 2025, as amended on 11 March 2025, McClelland DCJ made orders as to the de facto wife filing points of claim, and the proposed then additional respondents filing points of defence for the purposes of the joinder application and transferring the matter from Division 2 to this Court. On 12 March 2025, the joinder application of the de facto wife was listed for hearing on 25 March 2025. On that day, the proposed second respondent, the de facto husband's mother, was hospitalised.
3. The solicitor now appearing for the second, fourth, and fifth respondents facilitated the de facto husband's mother exercising her power of appointment to remove the then trustee of the Discretionary Trust from that position and to appoint the proposed fourth respondent C Pty Ltd (ACN...) ("C Pty Ltd") as the trustee of the Discretionary Trust. The proposed fourth respondent was incorporated on 26 February 2025. The proposed second respondent and the husband's brother, Mr F, are the shareholders and directors of the proposed fourth respondent.
4. At or about the same date, being 12 March 2025, the existing trustee of the Unit Trust, the proposed third respondent, was removed, and the proposed fifth respondent, D Pty Ltd (ACN...) ("D Pty Ltd") was appointed as the trustee of the Unit Trust. The proposed fourth respondent was also incorporated in February 2025. The proposed second respondent, the de facto husband's mother, and his brother, Mr F, are the sole shareholders and directors of D Pty Ltd.

The case of each party and proposed additional party as to joinder

1. It is broadly the case of the de facto wife that the de facto husband has indirect control by way of his mother, the proposed second respondent, in exercising the power of appointment of the trustees of the respective trusts, to cause the income and capital of ultimately of the Discretionary Trust, and specifically the Suburb H property, to be distributed. There is no issue that the de facto husband is within a class of discretionary objects of the Discretionary Trust, and that the Discretionary Trust owns all the issued units in the Unit Trust.
2. The de facto wife has made prior contentions made by the de facto wife as to the de facto husband and his mother engaging in a sham arrangement as to the current presentation of the Discretionary Trust. As identified by the High Court, a ""sham" is an expression which has a well-understood legal meaning. It refers to steps which take the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences" (Equuscorp Pty Ltd and Another v Glengallen Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 at [46]). The contention as to sham, if made, is now withdrawn or abandoned.
3. The wife's case as to the relationship between the de facto husband and his mother is as to control, consistent with that identified by the Full Court in Harris & Dewell and Anor [2018] FamCAFC 94; (2018) FLC 93-839, in which the Full Court accepted that the principles emerging from the High Court permit a finding to be made that property ostensibly of a trust, can be treated as property of a party for the purposes of s 90SM proceedings where the evidence establishes that a person or entity with whom the trust deed vests effective control (here, the de facto husband's mother), is the puppet or creature of the party to the property adjustment proceedings (in this case, the de facto husband).
4. Putting it another way using the terminology from that determination, the contention of the de facto wife is that the de facto husband's mother is the puppet, and the de facto husband is the puppet master, controlling or directing his mother in relation to the application of the power of appointment, leading to the identity of the appointed trustee distributing the income and capital of the trust.
5. On 25 March 2025 an order was made:
   1. On or before 16 April 2025 the de facto wife file and serve an amended points of claim document annexing such second further amended initiating application to be the subject of leave to file and setting out with particularity the propositions of fact and law asserted by her grounding her relief for the proposed joinder of the additional respondents identified in Order 2 hereof and in support of any application for injunctive orders for the preservation of property as sought against the husband or the proposed additional respondents.
6. In support of her application for a joinder, the de facto wife filed an amended points of claim document on 16 April 2025. The amended Points of Claim document attaches to it a further Amended Initiating Application, for which the wife seeks leave to file pursuant to the Rules.
7. The wife, by way of that proposed further Amended Initiating Application, broadly seeks that she achieves an adjustment of 55 per cent of the property of she and the de facto husband and, for the purposes of that adjusting order, contends that the Discretionary Trust is the property of the de facto husband. She specifically seeks, should she obtain the indulgence of leave to file the further Amended Initiating Application as identified, the following orders:
   1. Pursuant to section 90SL of the Act, that there be a declaration that in adjudicating the property settlement proceedings between the Wife and the Husband pursuant to section 90SM of the Act, the property of the Husband includes the assets held within the [B Investments Trust], which encompasses the totality of the units in the [B Unit Trust] and, therein, the entirety of the beneficial interest in the [Suburb H] Property and the other assets of the [B Unit Trust].
   2. In altering the interests of the Wife and the Husband with respect to the properties of the parties to the de-facto relationship or either of them, that, pursuant to section 90SS and 90AE of the Act (as given effect by section 90TA of the Act), an Order be made as against the Second to Fifth Respondents as necessary to give effect to Order 3, including:

6.1. an Order requiring the sale of the [Suburb H] Property (and the making of attendant and machinery Orders to effect the sale of the [Suburb H] Property, including Orders as to: the appointment of agents, conveyancer and auctioneer; the setting of any reserve price, and the distribution of sale proceeds); and

6.2. compelling the distribution of all or some of the net proceeds of sale of the [Suburb H] Property or other assets comprising the corpus or income of the [B Investments Trust] to the Husband, to be adjusted in favour of the Wife.

...

1. That, pending the Wife's receipt of payment necessary for the overall division of the net property as required in Order 3 herein, pursuant to s. 114 and 90AF of the Act, [...] each of the Husband, the Second Respondent, the Third Respondent, the Fourth Respondent, and the Fifth Respondent, personally and/or in their capacity as appointors, directors, shareholders and/or trustees of any relevant entity or trust be restrained by injunction from:

12.1. causing the registered proprietor of the [Suburb H] Property to be altered in any way, including but not limited to lodging any Application to Record New Registered Proprietor or Transfer with the NSW Land Registry Services;

12.2. taking any steps to alienate, encumber or further encumber, and/or deal with any interest held in the Third Respondent, Fourth Respondent, Fifth Respondent and/or [B Investments Pty Ltd], including but not limited to resigning as director and/or secretary, appointing any director and/or secretary, and/or transferring, issuing and/or encumbering any shares in those entities;

12.3. causing any borrowing secured upon or in any way related to the [Suburb H] Property or the [Suburb Q] Property to be increased in any way other than to facilitate compliance with Order 3 herein or as otherwise agreed in writing between the parties);

12.4. causing any new borrowings to be created in any way related to the [Suburb H] Property or the [Suburb Q] Property, whether by way of refinance or increased finance and whether secured or not (other than to facilitate compliance with Order 3 herein or as otherwise agreed in writing between the parties);

12.5. taking any steps to cause the Fifth Respondent to be removed and/or replaced as trustee for the [B Unit Trust] and/or causing any new trustee to be appointed to the [B Unit Trust];

12.6. taking any steps to cause the present trustee of the [B Investments Trust] (i.e. the Fourth Respondent) to be removed and/or replaced as trustee and/or causing any new trustee to be appointed to the [B Investments Trust];

12.7. taking any steps to cause the Second Respondent to be removed and/or replaced as Appointor for the [B Investments Trust] and/or causing any new Appointor to be appointed to the [B Investments Trust] 12.8. taking any steps to cause the Husband to be removed as a named beneficiary (i.e., 'named person or persons') of the [B Investments Trust] and/or causing any new beneficiary (i.e., 'named person or persons') to be added to the [B Investments Trust];

12.9. without providing the Applicant 28 days' notice, causing the [B Investments Trust] from making any distribution of income or capital or corpus of the trust, or creating any present entitlement in favour of any beneficiary, or causing the vesting of the trust; and

12.10. taking any steps to dispose of, cancel or transfer any of the units that the Fourth Respondent holds (as trustee) in the [B Unit Trust] and/or causing any new units to be issued in the [B Unit Trust] to any other person.

1. Additionally, by way of Exhibit 7, the de facto wife seeks orders for the preservation of the current structures of the trust and the Suburb H property, including:
   1. That, on a without admission basis, pursuant to s. 114 and 90AF of the Family Law Act 1975 (Cth), each of the First, Second, Third, Fourth and Fifth Respondents personally and/or in their capacity as appointors, directors, shareholders and/or trustees of any relevant entity or trust, be restrained by injunction from:

1. taking any steps to alienate, encumber or further encumber, and/or deal with any interest held in the Third Respondent, Fourth Respondent, Fifth Respondent and/or [B Investments Pty Ltd], including but not limited to appointing any director and/or secretary, and/or transferring, issuing and/or encumbering any shares in those entities; 2. without first providing the Applicant 28 days' notice, causing any borrowing secured upon or in any way related to the property situated at [G Street, Suburb H] NSW ("[Suburb H] Property") to be increased in any way, with such notice to include; 1. details as the proposed increase in borrowing, including the amount such borrowing is proposed to be increased by, and the reason for the increase in the borrowing; 2. a copy of the proposed application for increased borrowing, together with all documentation provided in support the proposed application; and 3. any other deed, agreement or other document prepared for the purposes of and/or giving rise to the proposed increased borrowing.

1. without first providing the Applicant 28 days' notice, causing any new borrowings to be created in any way related to the [Suburb H] Property, whether by way of refinance or increased finance and whether secured or not, with such notice to include: 1. details as the proposed new borrowing, including the amount of such new borrowing, and the reason for the new borrowing; 2. a copy of the proposed application for the new borrowing, together with all documentation provided in support the proposed application; and

1. any other deed, agreement or other document prepared for the purposes of and/or giving rise to the proposed new borrowing.
   1. taking any steps to cause the present trustee of the [B Unit Trust] to be removed and/or replaced as trustee of the [B Unit Trust] and/or causing any new trustee to be appointed to the [B Unit Trust];
   2. taking any steps to cause the present trustee of the [B Investments Trust] to be removed and/or replaced as trustee of the [B Investments Trust] and/or causing any new trustee to be appointed to the [B Investments Trust];
   3. taking any steps to cause the Second Respondent to be removed and/or replaced as Appointor for the [B Investments Trust] and/or causing any new Appointor to be appointed to the [B Investments Trust];
   4. taking any steps to cause the First Respondent to be removed as a named beneficiary (i.e., 'named person or persons') of the [B Investments Trust] and/or causing any new beneficiary (i.e., 'named person or persons') to be added to the [B Investments Trust];
   5. without first providing the Applicant 28 days' notice, causing [B Investments Trust] from making any distribution of income or capital or corpus of the trust, or creating any present entitlement in favour of any beneficiary, or causing the vesting of the trust; and
   6. taking any steps to dispose of, cancel or transfer any of the units held by [B Investments Trust] in the [B Unit Trust] and/or causing any new units to be issued in the [B Unit Trust] to any other person and/or entity.

1. The de facto husband has filed some affidavit material for the purposes of this determination and other interlocutory matters listed for hearing. He does not wish to be heard in relation to the application for joinder of additional parties, or as to the application of the de facto wife for leave to file her further amended initiating application.
2. B Pty Ltd, the proposed third respondent, has not appeared at the prior hearing event 25 March 2025 or today.
3. The proposed second, fourth, and fifth respondents oppose the application for joinder. It is their contention that no specific order, on a final basis, is sought against the proposed second respondent in the further amended initiating application, for which leave is sought to file. They identify that there have been several contended significant shifts in the case prosecuted by the de facto wife, over the course of a short period of time, in these proceedings to date, illustrated by her previous case as to the de facto husband beneficially holding 50 per cent of the Discretionary Trust, and ultimately the Suburb H property, and he now holding, by way of her points of claim and relief sought, "100 per cent" of that Discretionary Trust and its assets. The additional proposed respondents complain that the de facto wife has not adequately explained the changes to her contentions, and that she ought not be able to depart from previous assertions or contentions she has made in the proceedings to date.
4. The proposed additional respondents are critical of the content of the amended Points of Claim relied upon by the de facto wife. It is their contention that the Points of Claim, by way of the particulars, convey little more than either bare assertions, or circumstances and factual matters that are either equivocal or explainable, to lead to a conclusion that her case as to control has no reasonable prospect of success. The proposed additional respondents identify what was said by the Full Court in B Pty Ltd and Ors v K and Anor [2008] FamCAFC 113; (2008) FLC 93-380:
   1. We do not accept that it is proper to allow joinder of third parties merely upon the formulation of a paragraph in, or to be added to, an application, on the basis that at trial facts to support the application may be asserted and proved. Sufficient facts must be asserted to demonstrate that, if proved, the law arguably provides the relief sought.
5. It is further contended by the proposed additional respondents that the de facto husband's mother's conduct, in exercising her power of appointment and changing the identity of the trustees of the Discretionary Trust and the Unit Trust, was little more than her discharging her obligations in that role, in circumstances where the de facto husband and his brother, being the office holders of the prior trustees, were in dispute and positions of conflict, having regard to the current litigation between the de facto wife and the de facto husband.

1. Rule 2.50 of the Rules mandates that the de facto wife obtain leave to amend her response for substantive relief. It is her case that the matters identified earlier in these reasons, and as pleaded in her amended Points of Claim, give context to the fact and terms of her application for substantive relief. Joinder to litigation is a serious step. It often carries with it significant financial consequences. The wife is required to establish that as set out in r 3.01. That rule mandates that a necessary party must be joined upon the prescribed satisfaction of two conjunctive thresholds, being:
   • Firstly, that the party who is proposed to be joined has rights that will be directly affected in the proceedings; and
   • Secondly, that their participation in the proceedings is necessary to determine all issues in dispute in the proceeding.
2. Putting it simply, if the de facto wife discharges, by way of her pleading and her evidence filed to date, satisfaction of those thresholds or rule obliges joinder.

1. The proposed amended substantive relief of the de facto wife, by way of declaration that the de facto husband controls the Discretionary Trust and its assets, including the Unit Trust and the Suburb H property, such that the Discretionary Trust is amenable for adjustment pursuant to s 90SM of Act, as property of the de facto husband, clearly impacts on the rights of the proposed third and/or fourth respondents and fifth respondent, in their capacities as trustees of the Unit Trust and the Discretionary Trust. The impact of the relief sought by the de facto wife, as against the de facto husband's mother, is somewhat more obscure.
2. The relief sought does not appear to engage, at least on all fours, with the exercise of the power of appointment of the discretionary trust on a final basis, but is engaged for the purposes of the interlocutory relief, as sought by the de facto wife in Exhibit 7, for the preservation of property, and also impacts on the conduct and rights of the de facto husband's mother, in her capacity as a director of the current trustees of the Discretionary Trust and the Unit Trust.
3. B Pty Ltd remains the current legal registered proprietor of the Suburb H property as recorded at the NSW Land Titles Office. It did not appear today. While I accept the broad contention as to the new trustee being bound by the obligations of the prior trustee, capacity always exists for an added or additional party to be removed from a proceeding.
4. On a consideration of all the matters identified in these reasons, the de facto wife has established the necessity of each of the proposed additional respondents to be joined, by way of application of r 3.01, to the proceeding, by reference to the evidence that has been identified, her amended points of claim, by way of pleading, and her proposed amended final relief subject to the leave sought.
5. While there may be some merit to the submissions made on behalf of the proposed additional respondents as to the current claim as pleaded by the de facto wife as to control not having significant merit, it could not be said that the case as pleaded and having regard to the facts and contentions as identified would be unsuccessful.
6. Putting it another way, on the material available at the current time the de facto wife has at least an arguable case to resist the entry of any contended summary judgment, if made by the parties sought to be joined. Hence, I do not accept the submission, made on behalf of the proposed additional respondents, that it would be futile to join them in that circumstance. That said, the de facto wife is implicitly on notice as to any costs thrown away by way of joinder.
7. For all of these reasons, orders will be made for the joinder of the proposed additional respondents, as sought by the de facto wife, and for her to have leave to file her proposed further Amended Initiating Application.

I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Campton.