Younes v Younes

Solicitors: Thomson Geer (Plaintiff) Lewarne & Goldsmith (First Defendant) No appearance for Second Defendant. File Number(s): 2023/48573 Publication restriction: N/A

Judgment

These proceedings were commenced by the plaintiff, Ms Lolita Younes, on 13 February 2023. The defendants are Ms Susie Younes and Mr George Younes. I shall refer to these proceedings as the 2023 proceedings to distinguish them from other proceedings referred to in these reasons. For clarity, and without intending any disrespect, I will refer to all of the parties to the 2023 proceedings by their first names.
Susie and George were married and have been separated since 2015.
Lolita is George's sister.
On 24 February 2017, Susie commenced proceedings for adjustive property orders under s 79 of the Family Law Act 1975 (Cth) in the court that was then the Family Court of Australia. From 1 September 2021, that court continued in existence as the Federal Circuit and Family Court of Australia (Division 1) and the proceedings commenced by Susie were taken to be proceedings in the Federal Circuit and Family Court of Australia (Division 1). [1] I will refer to those proceedings as the family law proceedings.
Lolita is not a party to the family law proceedings.
Although they were commenced more than six years ago, the family law proceedings have not yet been listed for final hearing.
In 2018, Lolita commenced proceeding 2018/64647 in this Court against Susie and George as the first and second defendants respectively (the 2018 proceedings).
The 2018 proceedings arose out of a joint venture allegedly entered into between Lolita, Susie and George in about 1998 for the purchase and development of townhouses on land at 26 Page Street, Wentworthville (the Page Street property). Watts McCray, solicitors, represented Susie in the 2018 proceedings, including at the mediation and settlement negotiations referred to below.
In January 2020, Lolita, Susie and George entered into a Heads of Agreement recording the terms on which they agreed to settle the 2018 proceedings. The Heads of Agreement are undated, but there is no dispute that the document was executed on or about 24 January 2020 following a mediation that was conducted on 20 January 2020. Nothing turns on the precise date of execution.
The Recitals to the Heads of Agreement record: "1. The parties are parties to proceedings 64647 of 2018 in the Supreme Court of New South Wales, which comprise both a claim and cross claim (the Proceedings). 2. The Proceedings concern a joint venture arrangement (Joint Venture) between the parties in relation to the property at 36 Page Street, Wentworthville which was subsequently sub-divided (the Property). A portion of the Property known as the back block has been sold. 3. The unsold part of the Property (known as the front block) contains two duplex units, known as 36/1 Page Street and 36/2 Page Street. 36/2 Page Street does not currently have a kitchen installed. 4. On a without admissions basis, the parties wish to resolve the dispute between them so as to dissolve the joint venture and distribute the proceeds of the joint venture between them, on the terms set out in this deed."
Clause 1(a) of the Heads of Agreement provides: "1. Settlement (a) The parties agree that the title in 36/2 Page Street is to be transferred free and clear to Lolita and the title in 36/1 Page Street is to remain with George and Susie. Upon the transfer of the title in 36/2 Page Street to Lolita, any encumbrance by Lolita on the title at 36/1 Page Street (including any caveat lodged) will be simultaneously removed. This is the substance of the settlement contemplated by this Agreement"
Clause 1(b) of the Heads of Agreement provides that the parties will enter into a more formal Deed of Settlement and Release to document the precise terms of their agreement. There is no evidence that any such formal deed was entered into, but no party contends that the Heads of Agreement is not binding for that reason. Clause 2 of the Heads of Agreement records the parties' acknowledgement that it is "immediately binding and enforceable notwithstanding that the parties have agreed the terms of this agreement will be restated in a more fulsome and precise deed".
Clause 1(c) of the Heads of Agreement sets out terms that the parties agreed would be included in the formal deed that they intended to enter into at the time the Heads of Agreement was executed. Those terms include terms to the following effect: 1. in clause 1(c)(i) of the Heads of Agreement: "George (and to the extent necessary Lolita) are to do all things and pay for all things necessary to prepare the Property at 36/2 Page Street, so as to enable the title of 36/2 Page Street (Lolita's Duplex) to be transferred to her including but not limited to all construction works necessary to obtain occupation certificates in respect of 36/2 Page Street (Lolita's Duplex) which includes installing a kitchen and separating title (by way of sub-division or otherwise), and 36/1 (George and Susie's duplex)." 1. in clause 1(c)(ii) of the Heads of Agreement: "Lolita's Duplex is to be transferred into her sole name or her nominee by no later than 6 months from the date of his Agreement." 1. in clause 1(c)(iv) of the Heads of Agreement: "All costs associated with construction, the subdivision of the property and the issue of Occupation Certificates for Lolita and George and Susie's duplex and transfer of Lolita's duplex to Lolita are to be paid by George and Lolita. George and Lolita will be financing the payment of these costs by obtaining loan funds secured on their own account. Susie will not be required to pay any of these costs nor will the property at 36/1 Page Street, Wentworthville be used as security for these costs." 1. in clause 1(c)(vi) of the Heads of Agreement: "That the transactions effected by this agreement will be to the full extent legally possible not able to be unwound or set aside by any order of the Family Court of Australia arising in proceedings between Susie Younes and George Younes and each of these parties will agree to not make any application in that Court for any orders affecting or varying this agreement." 1. in clause 1(c)(vii) of the Heads of Agreement: "The Parties enter into mutual releases such that each party release each other from any liabilities arising from the Proceedings in the Supreme Court and the facts and matters giving rise to it save for any liability or obligation arising under this Agreement. The mutual releases are intended to preclude Susie or George from agitating any other correct characterisation of any matter arising under this Agreement or the proper distribution and transfer to Lolita of Lolita's duplex as set out in this Agreement in any family law proceedings involving George and Susie." 1. in clause 1(c)(viii) of the Heads of Agreement: "The Parties enter into this Agreement in good faith and agree that each will do all things necessary and sign all documents necessary to implement the substance of the transaction expeditiously and without delay and specifically Susie to allow the Parties and their agents access to the Property." 1. in clause 1(c)(ix) of the Heads of Agreement: "Susie will have exclusive occupation of 36/1 and 36/2 Page Street Wentworthville until the transfer to Lolita of Lolita's duplex and thereafter exclusive occupation of 36/1 Page Street, Wentworthville pending either an agreement in writing between George and Susie or Court Orders in the Family Court of Australia." 1. in clause 1(c)(x) of the Heads of Agreement: "Only in the event that documents necessary to obtain the issue of the Occupation Certificates for 36/1 and 36/2 Page Street and or the registration of the subdivision of the 2 duplex units and or the transfer of 36/2 to Lolita are sent by Lolita and or George to Susie at Susie's address at 36/1 Page Street, Wentworthville and her email address … and to her lawyers Watts McCray and if Susie then refuses to sign any of those documents without reasonable cause, Lolita shall upon giving a further 14 days' written notice to Susie … and to Watts McCray, Lolita shall be able to cause the sale of the whole of the property if at the expiry of that 14 day notice, Susie has still not signed the necessary documents."
Clause 3.1 of the Heads of Agreement stipulates the law of New South Wales as the governing law of the Heads of Agreement. Clause 3.2 provides: "Jurisdiction (a) Each party irrevocably submits to the exclusive jurisdiction of the courts of New South Wales, and the courts competent to determine appeals from those courts, with respect to any proceedings which may be brought at any time relating in any way to this deed. (b) Each party irrevocably waives any objection it may now or in the future have to the venue of any proceedings, and any claim it may now or in the future have that any proceedings have been brought in an inconvenient forum, where that venue falls within clause 3.2(a)."
Clause 4 of the Heads of Agreement provides: "4. Acknowledgments The parties acknowledge that they enter into this Heads of Agreement fully and voluntarily on their own information and investigation. Each party acknowledges that it is aware that it or its advisers, agents or lawyers many discover facts different from or in addition to the facts that they now know or believe to be true with respect to the subject matter of this deed and that it is their intention to, and they do, fully, finally, absolutely and forever settle according to the provisions of this deed any and all actions, suits, liabilities, claims, disputes, and differences which now exist, or may exist or have ever existed between them relating in any way to the matters the subject of this Heads of Agreement."
During the period after the parties entered into the Heads of Agreement in January 2020 until about mid-2022, the parties took steps to carry out the subdivision of the Page Street property as referred to in the Heads of Agreement. Lolita arranged and paid for certain works, and Susie allowed access to the Page Street property in order for those works to be carried out. In about June 2022, Susie and George executed some (but not all) documents required to give effect to the subdivision.
On 21 July 2022, solicitors acting for Lolita in relation to the Heads of Agreement wrote to George and Susie stating that they were in breach of the Heads of Agreement because George was yet to undertake certain construction works that were required for occupation certificates to be issued for the duplexes and the title to 36/2 Page Street was yet to be transferred to Lolita. The letter stated that the Heads of Agreement had been "embodied" in orders made by this Court in the 2018 proceedings and that Lolita intended to "enliven" the 2018 proceedings in order to enforce the Heads of Agreement. I infer that this statement was, in substance, foreshadowing an application under s 73 of the Civil Procedure Act 2005 (NSW) which confers jurisdiction on this Court to determine any question in dispute between the parties to the proceedings as to whether, and on what terms, the proceedings have been compromised or settled between them and to make such orders as it considers appropriate to give effect to any such determination. The letter continued: "However, in an attempt to avert unnecessary legal costs of the proposed proceedings, we request the following be provided within 14 days of this correspondence: 1. We request that George provide a list of all actions undertaken thus far to obtain the necessary construction certificate for Lolita's duplex at 36/2 Page Street. 2. We seek urgent confirmation that the property at 36/2 Page Street, Wentworthville is to be transferred to Lolita, including but not limited to provision of all transfer documentation and PEXA invitations necessary to transfer such title. Failure to provide the above will result in our client commencing further proceedings without further notice."
As at 21 July 2022, neither Susie nor George had raised any issue concerning the Heads of Agreement in the family law proceedings. Susie had filed an application in the family law proceedings on 11 April 2022 seeking to join Lolita and numerous other persons and entities as respondents to those proceedings. Insofar as it concerned Lolita, that application was based on George having been removed and Lolita having been appointed in his place as the appointer of various trusts. That application been dismissed on 14 June 2022 after Lolita gave certain undertakings to the Federal Circuit and Family Court of Australia to refrain from amending the trust deeds for the relevant trusts, removing directors of the corporate trustees of those trusts, or removing the trustees or changing the appointors of those trusts, other than in the ordinary course of business without giving 28 days prior written notice of her intention to do so.
Susie did not respond to the 21 July 2022 letter from Lolita's solicitors referred to above.
On 7 October 2022, Susie purportedly amended her application in the family law proceedings that had been dismissed on 14 June 2022. The purported amendments re-agitated an application to join Lolita as a respondent to the family law proceedings. Although the amended application did not identify any new basis for joining Lolita as a respondent to the family law proceedings, it was filed one day after Susie filed points of claim on 6 October 2022 that raised for the first time in the family law proceedings issues concerning the Heads of Agreement. Insofar as they related to the Heads of Agreement, those amended points of claim stated: "241. On or about 27 February 2018, Lolita Younes Nakhle, the first respondent's sister commenced proceedings in the Supreme Court of New South Wales seeking relief with respect to the property located at 36 Page Street, Wentworthville in the State of New South Wales (Page Street Property). 242. The Supreme Court proceedings sought the following relief, ultimately expressed in the iteration of the Further Amended Statement of Claim filed 7 January 2020 in proceedings number 2018/64647: 242.1. declaratory relief as to the validity of a transfer with respect to the Page Street Property; and 242.2. an order pursuant to section 138(3) of the Real Property Act 1900 (NSW) amending the Register and rectifying the title so as to reflect legal and beneficial ownership as to 50% to the plaintiff, Lolita Younes Nakhle and 50% as to the applicant and the first respondent as tenant-in-common. 243. The applicant filed a cross claim, ultimately expressed in the iteration of the Further Amended Cross Claim filed 28 November 2018. 244. On or about 29 January 2020 the parties to the Supreme Court litigation executed Heads of Agreement to resolve the proceedings (the bargain). 245. Immediately following the execution of the Heads of Agreement, which is undated, the parties to the Supreme Court litigation executed a Notice of Discontinuance which the parties caused to be filed with the Supreme Court of New South Wales, thereby bringing that action to cessation. 246. The applicant asserts that she executed the Heads of Agreement in circumstances of undue influence and duress by reason of the pressure applied by the first respondent in the sense described in Johnson v Buttress [1936] HCA 41; (1936) 56 CLR 113 at 134 - 136 and Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362 at 405; [1956] hca 81. 247. It is asserted by the applicant that the first and third respondents and Lolita Younes Nakhle concealed their nefarious intent in seeking to remove assets from the matrimonial pool from the period between 1 December 2015, the date of separation and 2017, such that the applicant did not bring to the bargain an informed consent when she executed the Heads of Agreement. 248. In all of the facts, matters and circumstances of this case, the Heads of Agreement is amendable to being set aside at law or by application of section 106B of the Act, as it was a design by the first respondent, the third respondent and Lolita Younes Nakhle to take action to defeat an anticipated order of the Court, which is amendable to being set aside pursuant to section 106B of the Act: Particulars 248.1. the conduct by the first respondent husband that was actioned between 1 and 4 December 2015 as pleaded above; and 248.2. the conduct by the first respondent in divesting himself of his interests in MPES in October 2017, and in circumstances where he continued to exercise de facto control of the entity. 249. Consequent upon a declaration being made that the Heads of Agreement is to be set aside the applicant seeks to included in the matrimonial pool of assets the Page Street Property: Particulars 249.1.1. Transfer of front blocks at 36 Page Street, Wentworthville to George and Susie Younes; and"
As mentioned earlier in these reasons, Susie seeks adjustive property orders under s 79 of the Family Law Act in the family law proceedings. Section 79 relevantly provides: "(1) In property settlement proceedings, the court may make such order as it considers appropriate: (a) in the case of proceedings with respect to the property of the parties to the marriage or either of them - altering the interests of the parties to the marriage in the property; or (b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage - altering the interests of the bankruptcy trustee in the vested bankruptcy property; including: (c) an order for a settlement of property in substitution for any interest in the property; and (d) an order requiring: (i) either or both of the parties to the marriage; or (ii) the relevant bankruptcy trustee (if any); to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines. … (2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order. …"
Section 106B, referred to in paragraph 248 of the points of claim above, is in Part XIII of the Family Law Act and relevantly provides: "(1) In proceedings under this Act, the court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order. … (2) The court may order that any money or real or personal property dealt with by any instrument or disposition referred to in subsection (1), (1A) or (1B) may be taken in execution or charged with the payment of such sums for costs or maintenance as the court directs, or that the proceeds of a sale must be paid into court to abide its order. (3) The court must have regard to the interests of, and shall make any order proper for the protection of, a bona fide purchaser or other person interested."
On 11 November 2022, Lolita's solicitors wrote to Susie's solicitors complaining that both the purported amended joinder application and the points of claim had been filed without the leave of the Federal Circuit and Family Court of Australia. In relation to the points of claim, the letter stated: "By paragraph 248 of the Points of Claim, your client seeks to have set aside a heads of agreement which was entered into between your client, Mr George Younes, and our client in settlement of Supreme Court proceedings 2018/64647 (HOA). By paragraph 246, your client pleads that Mr Younes applied undue influence and duress so as to induce your client to enter into the HOA. We note that it is not alleged that our client applied any duress. Instead, by paragraph 247, it appears to be alleged that our client had a common fraudulent design with Mr Younes - a "nefarious intent" - to remove assets from the matrimonial pool. This is a serious allegation of fraud and the pleading of it is woefully inadequate, comprising only one paragraph. The Points of Claim do not disclose the relevant material facts in relation to our client's alleged conduct or intention. The allegation is made without any particularisation. On any view, it is impossible for our client to understand the case against her. Notwithstanding that a deficient pleading such as this cannot be cured by evidence, to the extent the voluminous evidence which has been served can be understood, there seems a total absence of any evidence to support an allegation as serious as this against our client. To the extent the allegations against our client relate to the matters subject of Supreme Court of New South Wales Proceedings no. 2018/64647 (NSW SC Proceedings), the material served on behalf of your client appears to be entirely silent as to the nature of those proceedings and our client's claim. As your client is aware, those proceedings concerned, in part, allegations that your client improperly obtained an interest in the Page Street property in breach of a joint venture agreement between our respective clients and Mr Younes, as well as through a forgery by your client of our client's signature. As such, the Page Street property was never matrimonial property at all. For this reason alone, your client's claim appears vexatious and frivolous."
Susie's amended application filed on 7 October 2022 to join Lolita (and numerous other persons and entities) to the family law proceedings was listed for hearing in Federal Circuit and Family Court of Australia on 16 November 2022. The evidence before this Court in the 2023 proceedings does not disclose how that came about, in circumstances where the application was apparently filed without leave and purported to amend an earlier application that had already been dismissed. In any event, the hearing of that joinder application was adjourned on 16 November 2022 to 27 January 2023 at the request of Susie's legal representatives.
On 7 December 2022, Susie filed an amended points of claim in the family law proceedings. Notwithstanding the matters raised in the letter sent by Lolita's solicitors to Susie's solicitors on 11 November 2022, the amendments made no change to paragraphs 241 to 249 of the points of claim filed on 6 October 2022.
The amended points of claim document states that it was filed pursuant to orders made by the Federal Circuit and Family Court of Australia on 16 November 2022. There is no evidence before this Court of the terms or substance of those orders made on 16 November 2022 and it is not clear whether they included an order granting leave to Susie to file and rely on the amended points of claim in the family law proceedings, notwithstanding that the Federal Circuit and Family Court of Australia is yet to determine Susie's application to join as respondents to the family law proceedings many of the persons and entities whose interests would be affected by the orders sought in the amended points of claim, if those orders were ultimately made. Relevantly, Lolita's interests would be affected by the order under s 106B of the Family Law Act sought in paragraph 248 of the amended points of claim.
On 25 January 2023, Lolita's solicitors wrote to Susie's solicitors referring to Susie's amended joinder application filed on 7 October 2022, the orders made on 16 November 2022, the amended points of claim filed on 7 December 2022 and an affidavit made by Susie on 14 December 2022 in the family law proceedings.
The letter identified that Susie's application to join Lolita as a respondent to the family law proceedings appeared to be made on two bases: 1. Susie's allegation that Lolita had been made the appointor of certain trusts, and Susie's application for an account of profits or equitable compensation from Lolita in respect of those trusts; and 2. the allegations in paragraphs 241 to 249 of the amended points of claim filed on 16 November 2022.
The first apparent basis referred to above is not relevant for present purposes and it is therefore not necessary to refer to the evidence of the parties' correspondence concerning that first basis.
In relation to the second apparent basis, the Lolita's solicitors wrote: "As to the second basis, we refer to our correspondence of 11 November 2022 (to which we have never received a response) and also to our client's written submissions served on 16 November 2022. We do not intend to restate again the matters traversed in that correspondence and submissions, other than to note that the Orders [referring to the 16 November 2022 orders] afforded your client an opportunity to consider the issues raised therein and to attend to the various deficiencies in her pleadings. Your client appears not to have availed herself of that opportunity. Specifically, Paragraphs 241 to 249 of the APOS [referring to the amended points of claim] remain entirely unchanged: the APOS remains totally deficient with respect to the pleading, and particularisation, of the very serious allegations made against our client. Nowhere is there pleaded any intention, nefarious or otherwise, between the Respondent Husband [referring to George] and our client (nor anyone else), and much less any concealment. Nowhere is there pleaded the nature, or absence, of any legal advice received by your client. Nowhere is there pleaded with any requisite particularity the alleged undue influence or duress by the Respondent Husband. Nowhere is there pleaded any fact by which our client would be accessorily liable for the same. None of those allegations are supported by anything deposed to in the Younes affidavit [referring to Susie's affidavit made on 14 December 2022]. Your client's application to join our client to the proceedings is without merit and must fail. Your client should withdraw that aspect of her application."
The letter continued: "Furthermore, in commencing the proceedings to set aside the compromise of the Supreme Court Proceedings, the Applicant Wife is in breach of clause 1(c)(vi) of the Heads of Agreement entered into by our respective clients and the Respondent Husband (HOA), which HOA also conferred on our client the proprietary interest in the relevant property. … In so doing, your client seeks to take advantage of our client performing her obligations under the HOA. Our client has expended significant time and funds in attending to works and improvements at the Page Street Property pursuant to the HOA. In this context, we hold instructions to commence proceedings in the Supreme Court of New South Wales so as to preserve our client's position. A draft statement of claim is enclosed. For the avoidance of doubt, in the event that our client is joined to these proceedings, she will amend the statement of claim to seek orders restraining your client from continuing this aspect of the proceedings and to otherwise seek a transfer of these proceedings to the Supreme Court, with all necessary interlocutory and other relief also. Our client's rights are strictly reserved, including to rely on this correspondence in relation to costs, both in the present proceedings and any other proceedings."
The hearing of Susie's amended joinder application in the family law proceedings did not proceed on 27 January 2023 by reason of an application that had been filed by George in those proceedings on 24 January 2023 seeking orders that Susie not be permitted to rely on certain allegedly privileged documents and orders restraining her solicitors from continuing to act for her in the family law proceedings. There is no suggestion that any act or omission of Lolita caused or contributed to that adjournment.
The family law proceedings are presently listed for directions in the Federal Circuit and Family Court of Australia on 5 May 2023. Susie's amended joinder application has not been allocated a new hearing date and there is no evidence before this Court about when that application is likely to be heard and determined.
Lolita commenced the 2023 proceedings by filing a statement of claim on 13 February 2023 seeking: 1. a declaration that the Heads of Agreement is valid, enforceable and binding on them; 2. a declaration and order that the Heads of Agreement be specifically performed; 3. an injunction restraining Susie from pursuing claims in the family law proceedings to set aside the Heads of Agreement or seeking to join Lolita as a party to the family law proceedings; and 4. further or alternatively, damages.
Neither Susie nor George have filed a defence in the 2023 proceedings.
Susie filed a notice of appearance on 21 February 2023. Susie's solicitors wrote to Lolita's solicitors on the same day, inviting Lolita to consent to the 2023 proceedings being transferred to the Federal Circuit and Family Court of Australia to be joined with the family law proceedings.
Lolita's solicitors replied on 28 February 2023 stating that Lolita was not a party to the family law proceedings, despite applications to join her as a respondent having been listed for hearing before the Federal Circuit and Family Court of Australia on three occasions.
Susie's solicitors wrote to Lolita's solicitors on 8 March 2023, advising that they were drafting an application to seek orders transferring the 2023 proceedings to the Federal Circuit and Family Court of Australia. Lolita's solicitors replied on 14 March 2023 advising that Lolita did not consent to the transfer of the 2023 proceedings.
On 9 March 2023, the Federal Circuit and Family Court of Australia dismissed the applications that had been filed by George on 24 January 2023, as referred to at [32] above.
At the first directions hearing in the 2023 proceedings on 17 March 2023, this Court made orders granting leave to Susie to file and serve any notice of motion concerning the proper progress of the 2023 proceedings in light of the ongoing family law proceedings by 31 March 2023, and directing that any such notice of motion be returnable in the Real Property List on 21 April 2023 for hearing.
On 29 March 2023, Susie filed an application in the family law proceedings for an order that Lolita be restrained from further prosecuting the 2023 proceedings in this Court and for an order joining Lolita as respondent to the family law proceedings "forthwith". The evidence before this Court is silent as to the present status of that application.
On 31 March 2023, Susie filed a notice of motion filed in the 2023 proceedings in accordance with the orders made on 17 March 2023. The notice of motion seeks orders that the 2023 proceedings be stayed: 1. pending the determination of Susie's application filed in the family law proceedings on 7 October 2022 to join Lolita and numerous other persons and entities as respondents to the family law proceedings; and/or 2. pending the determination of Susie's further application filed in the family law proceedings on 29 March 2023 to restrain Lolita from further prosecuting the 2023 proceedings.
That motion, which I will refer to as the stay application, was heard before me on 21 April 2023. Mr Ford of counsel appeared for Susie. Ms Horvath of senior counsel appeared for Lolita. There was no appearance for George, who did not seek to be heard on the stay application and has reserved his position as to whether he will file a defence to the statement of claim or file a submitting appearance in the 2023 proceedings. Further written submissions in relation to the stay application were filed (with leave) on 24 April 2023 on behalf of Susie and on and 26 April 2023 on behalf of Lolita.
Having considered all of the parties' written and oral submissions, I have concluded that the stay application should be dismissed. I will endeavour to explain my reasons as briefly as possible.
The submissions made on behalf of Susie identified two bases for the orders sought in the stay application.
The first basis was Susie's contention that the 2023 proceedings are an abuse of the process of this Court because, if Lolita is joined as a respondent to the family law proceedings, then there will be two concurrent proceedings on foot concerning the validity of the Heads of Agreement. It was submitted that this would be contrary to the public interest in the administration of justice because there would be a risk of inconsistent findings in the two proceedings in that scenario. It was submitted that the 2023 proceedings should therefore be stayed pending the determination of Susie's amended joinder application and her other application filed in the family law proceedings on 29 March 2023. It was further submitted that Lolita should have awaited the determination of the amended joinder application in the family law proceedings before taking any step to commence the 2023 proceedings, emphasising that the amended joinder application had been filed four months before Lolita commenced the 2023 proceedings. Counsel for Susie conceded that there will be no basis to stay the 2023 proceedings if Lolita is not joined as a respondent to the family law proceedings.
Susie's submission that there will be an overlap of issues and risk of inconsistent findings between the 2023 proceedings and the family law proceedings if Lolita is joined to family law proceedings relied solely on paragraphs 241 to 249 of Susie's amended points of claim in the family law proceedings referred to at [20] and [25] above. It is convenient to refer to those claims as the nefarious intent claims.
The 2023 proceedings are a suit for the specific performance of an agreement governed by the law of New South Wales in relation to real property in New South Wales. The proceedings are plainly within the jurisdiction of this Court, and the parties expressly agreed to submit to the exclusive jurisdiction on this Court. Unless and until Lolita is joined as respondent to the family law proceedings, so as to facilitate the Federal Circuit and Family Court of Australia entertaining the nefarious intent claims, it cannot be said in any meaningful sense that there is a duplicity of proceedings concerning the validity of the Heads of Agreement or that there is any risk of inconsistent findings being made in the 2023 proceedings and the family law proceedings. That is because, if the Federal Circuit and Family Court of Australia were to make an order setting aside the Heads of Agreement at law or pursuant to s 106B of the Family Law Act without joining Lolita as a respondent to the family law proceedings, Lolita would be entitled to have that order set aside as a matter of right. [2]
In my opinion, it was not an abuse of the process of this Court for Lolita to commence the 2023 proceedings on 13 February 2023 in circumstances where: 1. Lolita had foreshadowed the commencement of proceedings of that kind in July 2022, at which time there was no extant application to join her as a respondent to the family law proceedings and Susie had not pleaded or foreshadowed any claim for relief in respect of the Heads of Agreement in the family law proceedings; 2. Susie first took steps to make a claim in respect of the Heads of Agreement in the family law proceedings, and to re-agitate for joinder of Lolita as a respondent to those proceedings, some three and half months later in early October 2022; 3. Lolita's solicitors sought to engage with Susie's solicitors in relation to manifest deficiencies in the pleading of Susie's claims concerning the Heads of Agreement in the family law proceedings, but Susie's solicitors failed to even respond to that correspondence, and the deficiencies remain, with the consequence that the points of claim do not serve the essential function of being pleadings which is to give proper notice to Lolita (as a prospective respondent) of the case she would be required to meet (if joined as a respondent); 4. the hearing and determination of Susie's amended joinder application in the family law proceedings was deferred on two occasions between 7 October 2022 and 27 January 2023 and, as at 13 February 2023, had not been allocated any further hearing date; 5. by commencing the 2023 proceedings, Lolita invoked the jurisdiction of this Court to determine a contractual dispute with Susie and George, consistently with their agreement in clause 3.2 of the Heads of Agreement to submit to the exclusive jurisdiction on this Court; and 6. the only alternative course that Susie contends that Lolita should have taken - waiting for an unknown period of time until Susie's amended joinder application had been listed for hearing, heard and determined in the Federal Circuit and Family Court of Australia - would have left Lolita in the unenviable position of having arranged and paid for work to be undertaken at the Page Street property in part performance of the Heads of Agreement yet being delayed indefinitely in taking steps to enforce the obligations which she claims that Susie and George owe to her to transfer the property known as 36/2 Page Street in accordance with the Heads of Agreement. It is difficult to estimate the likely length of the waiting period, which is outside Lolita's control and is reasonably likely to be a significant period of time, given that the hearing has already been deferred on two occasions by reason of conduct of Susie and George, and that the amended joinder application affects numerous prospective respondents to the family law proceedings.
The submission made on behalf of Susie that Lolita "should" have waited until after Susie's amended joinder application was determined in the family law proceedings before taking any step to commence the 2023 proceedings, is without merit for all of those reasons above, and for the following additional reasons.
Whilst, the question whether Lolita should be joined as a respondent to the family law proceedings for the purpose of Susie's nefarious intent claims is plainly a matter for the Federal Circuit and Family Court of Australia to determine, I accept the submissions made by senior counsel for Lolita that the evidence adduced before this Court at the hearing of the stay application does not reveal a proper basis for joinder because it does not reveal a proper basis for the nefarious intent claims, including the very serious allegation against Lolita that is wrapped up in those claims.
As I have stated above, paragraphs 241 to 249 of the points of claim as presently drafted do not serve the essential function of pleadings, at least so far as Lolita is concerned. The nefarious intent claims do not rise above a bare assertion of undue influence and duress on the part of George (not Lolita) and do not plead a single material fact relied on in support of the assertion that George, the third respondent to the family law proceedings, and Lolita held and concealed an alleged mutual "nefarious intent in seeking to remove assets from the matrimonial pool from the period between 1 December 2015 and 2017". Susie took no steps to clarify any of those matters when she amended the points of claim, despite being invited to do so by Lolita's solicitors on 11 November 2022, as referred to at [23] above.
At the hearing of the stay applications before this Court, Susie did not seek to adduce any evidence capable of elevating the nefarious intent claims above the bare assertions referred to above. Rather, counsel for Susie submitted that she had discovered "at least two" documents on a home computer at some unspecified time between 11 April and 7 October 2022 that had "raised her suspicions regarding what we have termed the nefarious conduct between various parties in that jurisdiction. That conduct … is conduct, in my submission, that is designed to defeat the jurisdiction of the Family Court, or now the Fed Circuit and Family Court of Australia". Although counsel for Susie informed the Court that the Federal Circuit and Family Court of Australia had determined on 9 March 2023 that those documents were not the subject of legal professional privilege, the documents were not tendered at the hearing of the stay application. The submissions do not provide a basis for this Court, in determining the stay application, to infer that there is a proper basis for the joinder of Lolita as a respondent to the family law proceedings in connection with the nefarious intent claims.
On the contrary, having regard to the terms of the Heads of Agreement and the other evidence adduced before this Court at the hearing of the stay application, it is difficult to comprehend how the alleged nefarious intent with respect to transactions between December 2015 and 2017 (if established) would be capable of affecting Susie's consent to the Heads of Agreement, as asserted in the amended points of claim. The Heads of Agreement expressly identified the effect of the parties' agreement on the matrimonial pool of assets. I refer in particular to clauses 1(c)(ii), (vi) and (vii), which are set out at [13] above. As counsel for Susie acknowledged at the hearing of the stay application, it was obvious from those clauses that the Heads of Agreement would have the effect of excluding 36/2 Page Street from the pool or potential pool of matrimonial assets that was (and remains) in issue in the family law proceedings, which had been commenced almost three years before the Heads of Agreement was executed. It was not submitted that Susie did not understand that at the time she entered into the Heads of Agreement. Nor was it submitted that she executed the Heads of Agreement without the benefit of legal advice. As referred to at [8] above, Susie was advised by Watts McCray throughout the 2018 proceedings and the negotiation of the Heads of Agreement.
Forum non conveniens is the second basis of Susie's stay application. As a result of the substantial overlap between the matters relied on by Susie in support of the abuse of process basis and the forum non conveniens basis, the substance of the second basis has already been addressed above. Applying well established principles to the circumstances of this case, this Court is not forum non conveniens for the reasons there explained. [3]
Senior counsel for Lolita emphasised that she does not seek by commencing the 2023 proceedings to shut Susie out of prosecuting any properly pleaded claim to set aside the Heads of Agreement, including a claim under s 106B of the Family Law Act. It was submitted that such a claim could be pleaded as a defence, or defensive cross-claim, to the statement of claim in the 2023 proceedings. I accept the submission made by counsel for Susie that it is doubtful that this Court would have jurisdiction to entertain a s 106B defence or cross-claim in the 2023 proceedings, unless the family law proceedings were transferred to this Court. The doubt arises because the power to set aside instruments or dispositions under s 106B of the Family Law Act is exercisable "[i]n proceedings under this Act". Although s 4(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) confers jurisdiction on this Court with respect to family law proceedings, [4] the 2023 proceedings are not proceedings under the Family Law Act and this Court will not be exercising jurisdiction under that Act unless the family law proceedings are transferred to this Court.
That doubt was raised by Brereton J (as his Honour then was) in In the matter of PJL Group Pty Ltd [2018] NSWSC 756 at [24]. Although it is not necessary for me to determine the question for the purpose of determining the stay application, I respectfully consider that the doubt is well-founded, notwithstanding that it had not been identified in those terms in his Honour's earlier judgment in Elias & Elias Pty Ltd atf the Elias Family Trust v Chidiac [2010] NSWSC 1364. However, his Honour had identified in that case other difficulties that would be involved in permitting a defendant to proceedings in this Court to propound at s 106B claim seeking to set aside a disposition or instrument that the plaintiff sought to enforce in this Court, in circumstances where the relevant proceedings under the Family Law Act were pending before the Family Court of Australia. His Honour said (at [21]): "… such a course is … usually undesirable, because there is likely to be a significant overlap between the evidence adduced on the s 106B application and that in the s 79 proceeding, and because the discretion to make an order under s 106B is usually informed by whether the applicant's entitlement can be satisfied without resort to the property the subject of the impugned transaction."
Shortly before Brereton J concluded his deliberations concerning the finely balanced alternatives in that case of transferring the Supreme Court proceedings to the Family Court or transferring the Family Court proceedings to the Supreme Court, the Family Court of Australia made an order for the transfer to that Court of the proceedings that had been commenced in the Supreme Court. His Honour's reasons for judgment were published to explain the circumstances in which the second defendant's motion filed in the Supreme Court proceedings for the transfer of those proceedings to the Family Court was dismissed and to determine the costs of that motion. [5]
Both bases of Susie's stay application have failed for the reasons explained above and orders will be made dismissing the notice of motion filed on 31 March 2023. I am not aware of any reasons why costs should not follow the event, but I will hear the parties in relation to costs.
It is plain from correspondence that was tendered at the hearing of the stay application that, if Lolita is joined as a party to the family law proceedings, Susie is likely to apply for the 2023 proceedings to be transferred to the Federal Circuit and Family Court and Lolita is likely to apply for the family law proceedings to be transferred to this Court. In the meantime, Susie and George will be required to file any defence and cross-claims to Lolita's claims in the 2023 proceedings. That work will be required, irrespective of the outcome of any transfer applications. Indeed, the substance of any defences may be relevant to determining any such transfer applications in accordance with established principles. [6]
For all of the reasons above, the order of the Court is as follows: 1. Order that the notice of motion filed by the first defendant on 31 March 2023 is dismissed.

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