Bonus: Pleadings, Harman obligations, restraining lawyers, and crypto

In this bonus episode of This Week in Family Law, we discuss topics that have been given some airtime with recent Full Court and Div 1 decisions including pleadings, Harman obligations, restraining lawyers, and cryptocurrency. This is part one of a two-part series with The Honourable Garry Watts AM.



Chapters:
0:00 - Introduction
0:58 - Pleadings
6:42 - Harman obligations
11:08 - Restraining lawyers
15:48 - Cryptocurrency



Disclaimer: This podcast is intended for general information and discussion purposes only. It does not constitute legal advice, and should not be relied on as such. The views expressed are general in nature and may not apply to your specific circumstances. You should seek independent legal advice before acting on any information discussed.



About the podcast:
This Week in Family Law is the go-to podcast for busy Australian family lawyers looking to stay updated without the overwhelm. Whether you’re a family lawyer in Australia, a practitioner working towards CPD, or simply interested in family law, this podcast delivers clear, practical insights in a bite-sized format. Subscribe to stay up to date with the latest developments in Australian family law. New episodes drop every Monday.




Case List:
Fing and Ma [2025] FedCFamC1A 168 (Aldridge, Campton and Christie JJ) 
Harman v Secretary of State for the Home Department [1983]1 AC 280
Hearne v Street (2008) 235 CLR 125
Kuang and Kuang [2025] FedCFamC1A 31 (Harper, Reithmuller and Strum JJ)
Mihova [2005] FedC Fam C1F 113 (Behrens J)
Jingyi v Chao (No 7) [2025] FedCFamC1F 184 (Harper J)




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Transcript

SPEAKER_01 0:09

Welcome to a bonus episode of This Week in Family Law. I'm Jenna Downey, and my very special guest today is the Honourable Gary Watts AM. How are you, Gary?

SPEAKER_00 0:19

Um, I'm chip and you look like your normal, cheerful self.

SPEAKER_01 0:23

Thank you, Gary. And I'm very pleased to have you here for this bonus episode. It is a privilege to have you here and to be speaking to you. And this episode is one of two special episodes of the series. And we will be talking about some cases that have had airtime recently and their Div 1 and full court decisions. Today we'll be talking about pleadings, harmon obligations, restraining lawyers, and cryptocurrency as well. We'll provide viewers with a list of the cases in the show notes. Gary, let's first talk about pleadings in the FCFCOA. My understanding is that before I was even born, there were pleadings all the time in courts.

SPEAKER_00 1:34

And we had that for quite a while. So you would plead, for example, in a property case that somebody had made an indirect non-financial contribution, and then you would particularise what those contributions were, like you would particular give particulars in a statement of claim for negligence. That idea was never going to work in a discretionary jurisdiction. And after a while, the court recognized that and abandoned it as a very bad idea. And it it's never been revisited. So we've never, after that, had a case where, in all cases, you have to plead your case.

SPEAKER_01 2:19

But proceeding but pleading, sorry, have still played a part in proceedings, haven't they?

SPEAKER_00 2:24

Aaron Powell Yes. In certain cases where they're ordered. And those types of cases are usually cases that involve third parties, the application of state law, uh, the application of the corporations law. Uh those types of cases uh attract uh uh the consideration of making an order for pleadings.

SPEAKER_01 2:48

So the full court has recently made some comments about pleadings in Fing and Ma. Can you tell us about the facts of that case? Aaron Powell Yes.

SPEAKER_00 2:56

In Fing and Ma uh the husband uh sought a declaration that his daughter and companies owned and controlled by his daughter held particular property uh that they legally owned uh beneficially for him by way of uh both a resulting trust and a constructive trust. And uh what happened in that case was uh Justice Chanel found that uh in relation to the resulting trust, the money that uh had been used to acquire the properties um had not been sourced back to the husband. The husband pro had had the husband had not, in fact, proved that he'd provided the uh funds for the acquisition of those properties. And he also, on the facts of the case, held that there was no constructive trust. But the the full court uh uh went on and said some things about pleadings.

SPEAKER_01 3:56

From my understanding of the case, the full court took the opportunity to make a strong statement about the role and the effect of pleadings in cases where they are ordered.

SPEAKER_00 4:06

Yes. Uh what they actually said was that uh where pleadings are ordered, they should not be treated more laxly than in other courts. They are binding on a party who has been ordered to plead their case or that part of their case. They define issues and the admissibility of evidence uh, particularly on relevance in relation to those issues, and can only be altered with leave or by amendments to the pleading.

SPEAKER_01 4:39

And if you had to seek leave to amend a pleading, what are some of the considerations that would be taken into account by the court?

SPEAKER_00 4:50

The main ones that the full court emphasized were prejudice to the respondent, whether or not any prejudice could be accommodated uh in some way, and the need to finalise the litigation. So the later you leave an application to amend a pleading, the more difficult it is going to be to succeed in that application to be given leave to do so. And if you don't get leave, you're going to be stuck with your uh pleading that you'd wanted to amend and you're going to be confined by it.

SPEAKER_01 5:23

And what would you say to lawyers who predominantly practice in family law and might not be confident with pleadings if they want to rely in part of their case on, say, corporation law or state law, what tip could you provide them?

SPEAKER_00 5:40

Aaron Powell Well, the obvious thing to do is source a barrister who does that type of work and get them to settle the pleading for you. Uh and in that way you know that you've got a robust pleading that's been done properly by somebody who does it as part of their ordinary work.

SPEAKER_01 5:59

Trevor Burrus, Jr. And although some lawyers might think that pleadings are uncomfortable, is there an advantage to using pleadings?

SPEAKER_00 6:06

I think there's a there's a couple of advantages in uh doing a pleading in these types of complex cases where you there's a complex claim being run that's an application of state law, for example. The first one is to stress test the viability of the claim you are making. And the second is to provide some type of framework and structure for the evidence that you then marshal to support the claim that is made in the pleading.

SPEAKER_01 6:42

The next topic we will discuss is the Harman obligation. Gary, can I first ask you what is the Harman obligation?

SPEAKER_00 6:50

Well, I think the first thing to say is the Harman obligation got its name from an English case which has been subsequently affirmed by the High Court in a case called Herman Street. So it's sometimes called the Hernan Street obligation in Australia, but usually the Harman obligation. And the obligation arises when you receive any piece of information, any document, during a family law case. Um you are taken to have given implied undertaking to the court not to use that information or document you have received for any other purpose than for uh the family law case itself. And if you want to be relieved from that implied obligation, you need to make an application to the court to do so. Uh so that's basically what the harmon obligation uh is.

SPEAKER_01 7:48

And there was a recent court decision of Quang and Quang which discussed the harmon obligation. Can you tell us about the facts of that case?

SPEAKER_00 7:57

Yes, in that case, the husband had been charged with a serious criminal offense. Um and he went to the family uh to the FCFCOA and sought leave to be relieved from the Harmon obligation in relation to a particular report that had been prepared uh for the purposes of the family law proceedings. And the trial judge who was hearing that application refused it, saying that the husband hadn't demonstrated um how that particular report would be able to be got into evidence in the uh criminal proceedings, um and hadn't demonstrated why it would um be in the interest of the administration of justice to give him leave to use it in the criminal proceedings.

SPEAKER_01 8:51

So what did the full court do with the appeal from that decision?

SPEAKER_00 8:57

Well, the full court um upheld his appeal from that decision and allowed him to use it in the criminal proceedings. Um they the reasons they gave for that uh were that um something less than a probability that the report would be useful to the husband um is uh required. Um the full court discussed ways in which parts of the report might be relevant in the husband's criminal proceedings, but they emphasized it wasn't up to the family court to get into the weeds of how that report might be used in the district court criminal proceedings. Um and they also commented that the information in the report uh might be used by the husband without the report actually being tendered. Uh so for for those reasons, um they found that uh it was appropriate to give the the husband leave to uh be able to use the report in any way he wished in his criminal proceedings.

SPEAKER_01 10:08

Trevor Burrus And there was also an application by the husband to be relieved from his obligation under Section 114 Q, which is the section that has replaced the old Section 121. How did the full court re-exercise their discretion? Trevor Burrus, Jr.

SPEAKER_00 10:26

Well, the full court um uh responded to that application by saying that it was uh odious, it wasn't necessary for two reasons. Firstly, uh the order allowing it to be used in the district court wasn't um an order which was authorizing publication to members of the public, it was to a court itself. And secondly, there's an exception uh in uh as there was under the old Section 121 uh for anything that happens pursuant to a court order in relation to the publication of anything that's happening in proceedings.

SPEAKER_01 11:09

We're now going to be talking about restraining lawyers from acting, information barriers, and intentional conflict shopping. Lawyers always seem to be interested in cases where lawyers are restrained from acting. What are the usual bases for granting an injunction restraining a lawyer from acting?

SPEAKER_00 11:29

The usual bases are breach of confidence, uh, breach of fiduciary duty, or protection of the appearance of justice. So they're the three main general categories under which you can successfully get an injunction against a lawyer from continuing to act for a client.

SPEAKER_01 11:52

And there was a recent single instance decision of Mahova, which involved an application by the wife to restrain a firm from acting for the husband, but the husband successfully defeated it. How did he do it?

SPEAKER_00 12:07

Uh primarily uh the firm that he engaged uh successfully erected an information barrier around uh the lawyers who were doing the case for him in the firm to uh protect the information inside that firm. Um what had happened was that the uh wife had had a first conference with a lawyer of that firm and had then not engaged the firm.

SPEAKER_01 12:43

So what did the husband's lawyers do in this case to effectively erect an information barrier?

SPEAKER_00 12:49

Well, uh the trial judge uh described what they did at paragraph twenty-seven of the judgment, and uh they did the following. The managing partner and the lawyer who saw the wife gave undertakings to prevent any possibility of confidential information being disclosed to lawyers now working on the husband's case inside the firm. The husband waived his right to receive any confidential confidential information from his lawyers about the wife's first conference with the firm. The initial notes taken at that first conference were actually in writing and were not part of the electronic system of the firm and had been independently secured. No other lawyer had access to the notes apart from the one lawyer who had done that initial consultation. Undertakings were given that only four people in the firm were able to be involved in work on the husband's case, and the lawyer who did the initial consultation was instructed not to discuss anything in relation to the wife's first conference with any of the other practitioners in the firm.

SPEAKER_01 13:56

So the judge was satisfied by these pre precautions and undertakings that were being made?

SPEAKER_00 14:01

Yes. The judge found that the uh firm had effectively uh erected an information barrier, which uh uh meant that uh there was not going to be any breach of risk of breach of confidence. Um that was the primary uh issue in the case, whether or not there would be a breach of confidence as a result of uh the wife having a first interview with this firm.

SPEAKER_01 14:30

And something that stood out to me in this case is that the wife went around to speak to multiple lawyers to conflict them out, and she did the same with barristers as well.

SPEAKER_00 14:41

Aaron Ross Powell Yeah, she brought she retained a number of quite a number of barristers. Um The judge uh referenced that and took that into account under the third uh topic that I mentioned, um, that is the protection of the administration of justice. And she took it into account in the husband's favour.

SPEAKER_01 15:00

Aaron Powell How often do you think that that uh tactic works in terms of conflicting out lawyers?

SPEAKER_00 15:09

I think unfortunately it works quite a lot, uh probably uh because um lawyers just think that once they've seen one side they can't do anything with the other side. Um secondly, i if they know about erecting Chinese walls and information barriers, it's just a very big hassle. Uh and so it's easier just to say to the the new client coming in, sorry, we've already seen the other side in a first conference. That's why it works a lot. Yeah. It shouldn't, though.

SPEAKER_01 15:43

Yeah. We will end today on the emerging issue of cryptocurrency and what you might need to do on an interim basis to preserve that asset. In the matter of Jingy and Chow was a case heard by Justice Harper, which involved $2 million US in cryptocurrency. Why, what was this asset, sorry, important in in this case?

SPEAKER_00 16:12

Um it was sort of everything in this case because it was the only asset uh that could be made uh the subject of a Section 79 order. So preserving it, so far as the wife was concerned, was uh paramount.

SPEAKER_01 16:26

So what did the wife do to attempt to preserve the cryptocurrency?

SPEAKER_00 16:31

Well, she approached the court for um a set, a suite of interim orders specifically targeted uh at the uh cryptocurrency. And in fact, Justice Harper made most of the orders that she sought. Um and those orders actually provide a very good precedent for uh this type of application for interim orders to freeze cryptocurrency and uh are making their way to our very popular order library. Um so those orders uh that uh Justice Harper made were firstly to appoint a trustee pursuant to rule uh 5.15 of the FCFCOA rules um to take charge of all the cryptocurrency held by the husband. He also restrained the husband from accessing any electronic devices or wallets that could be used for the purposes of dealing with the cryptocurrency. He required the husband to deliver to the trustee any cold wallet uh of cryptocurrency, and required him to disclose to the trustee within two and a half hours all uh IDs, passwords, private keys, uh recovery phrases and codes, uh, two-factor authentication, and various other categories of information that would allow the trustee to access the cryptocurrency.

SPEAKER_01 18:08

And what about the orders that were made r restraining the husband from mobile phone use?

SPEAKER_00 18:14

Well, the wife had applied for those orders that um that she have actually uh access to the husband's mobile phone. Um Harper Joe took a very conservative attitude to that application and um refused to make an order that the husband give up his mobile phone to the wife for the purposes of a uh uh uh IT expert downloading um the contents of his phone. Um and there's a phrase in the uh uh judgment, which I'll just read out mobile phones are plainly devices which people uh conduct their ordinary lives by, and compelling a surrender of that phone even for a short period of time is potentially too onerous. Um some other judges wouldn't have taken as cautious approach as Justice Harper did, but he didn't want to um take the husband's mobile phone away from him. Um he thought the other orders that he made were sufficient to secure the cryptocurrency.

SPEAKER_01 19:25

Yeah, I can understand that. And you mentioned, Gary, that we'll be curating these orders, um, a version of these orders, sorry, to go into our order library, which is available um to our clients as well.

SPEAKER_00 19:38

And soon, I think, to be uh put uh as a full stack app on our ribbon in leap to make it even more convenient to be able to get to the order.

SPEAKER_01 19:49

Absolutely. Thank you, Gary, for this discussion today.

SPEAKER_00 19:52

It's been my pleasure.

SPEAKER_01 19:54

We've loved being in your ears for this bonus episode. Don't forget to like, subscribe, and share this episode. This is part one of a two part series, and we'll be back with Gary as my guest for part two. We look forward to you joining us then.