ANGLISS & ANGLISS

[2016] FamCA 74

FAMILY COURT OF AUSTRALIA

ANGLISS & ANGLISS [2016] FamCA 74

FAMILY LAW – PROPERTY – Interim – Expert Report – Where single expert accountants appointed  – Where both parties initially responsible for payment of expert’s fees – Whether the wife still jointly responsible for the payment of fees – Where change in the wife’s financial circumstances has caused disparity in income between the parties – Whether husband required to provide further documents and information to the expert – Application granted.

FAMILY LAW – PROPERTY – Interim – Disclosure – Whether the husband should provide further disclosure to the wife – Where the wife seeks internet banking access to view the personal accounts of the husband – Where the wife seeks further financial statements from the business – Application granted.

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

APPLICANT: Ms Angliss

RESPONDENT: Mr Angliss

FILE NUMBER: BRC 1878 of 2015

DATE DELIVERED: 17 February 2016

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 14 December 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Dr Ingleby

SOLICITOR FOR THE APPLICANT: Hopgood Ganim Lawyers

COUNSEL FOR THE RESPONDENT: Mr Kirk QC

SOLICITOR FOR THE RESPONDENT: MacDonnells Law

Orders

1. That the husband do all acts and things necessary to cause all invoices of B Auditors issued to the husband and the wife jointly to be paid within the terms of payment of B Auditors and to disclose in a timely fashion to the wife’s solicitors the source of the funds he uses to pay such invoices, with the ultimate responsibility for the burden of all such payments to be a matter to be determined by agreement between the husband and the wife or, failing agreement, the trial Judge.

1. That the husband shall provide or cause to be provided to B Auditors as soon as practicably possible after a request is reasonably made of him, any further information (including by answering all questions reasonably asked of him) and any further documents reasonably requested of him by Mr C and should the husband assert that he cannot provide any such information or documents requested in the future then he shall file and serve upon the wife, within fourteen days of informing B Auditors of such assertion, an affidavit deposing to the factual circumstances of such inability, a copy of such affidavit to be provided to B Auditors forthwith upon filing.

1. That the husband provide or cause to be provided to the wife as and by way of further disclosure in these proceedings:

   (a)A copy of all documents and written information provided to the single expert within 7 days of production of the documents and provision of that written information to the single expert (excluding the documents already provided to the wife by the husband and/or single expert to date) with the costs of photocopying or printing any such documents and written information to be met by the wife;

   (b)Within 7 days of these Orders the husband reinstate or cause to be reinstated to the wife internet viewing access of all the National Australia Bank accounts of the parties, the husband and all related entities, including but not limited to those accounts to which viewing access had previously been provided to the wife and subsequently withdrawn;

   (c)A copy of all statements of all bank accounts conducted by the parties jointly, by the husband himself and all entities within the Angliss / D Group of Companies and Trusts conducted in Australia, United State of America, China (both mainland China and Hong Kong) or in any other country, and as follows:

   (i)Where statements of accounts have been disclosed, then further disclosure from 1st July 2014 to date; and

   (ii)Where statements of accounts have not been previously disclosed, then all statements for the period 1st July 2014 to date.

   Save that the husband shall not be obliged to provide copies of any statements the wife could print off herself from the internet via her internet viewing capacity to be reinstated by the husband pursuant to these Orders and with the costs of photocopying or printing any such documents provided to the wife to be met by the wife.

   (d)Copies of the monthly financial statements (including income statements and balance sheets) for D Pty Ltd, D China and D USA from February 2015 to date and then monthly thereafter, save for any that have already been disclosed, and with the costs of photocopying or printing any such documents provided to the wife to be met by the wife;

   (e)Within 7 days of these Orders, copies of the 2014 financial statements and tax returns for the husband and all related entities in the United States of America (including D USA) and China (including D China) save for any that have already been disclosed, and with the costs of photocopying or printing any such documents provided to the wife to be met by the wife; and

   (f)In respect of the E project / undertaking of D USA and any other related entity of the Angliss / D Group of Companies and Trusts, all documents and written information (save for any already disclosed) showing or tending to show the following:

   (i)A copy of all contracts (including variations);

   (ii)Details of all income and payments received in respect of the said project; and

   (iii)Details of all future income and payments to be received in respect of the said project (including anticipated date of payment, amount and where the funds are to be paid).

   With the costs of photocopying or printing any such documents provided to the wife to be met by the wife.

2. That the applications for orders contained in the husband’s Response to an Application in a Case not hereby determined are adjourned for hearing in the Judicial Duty List before Justice Forrest commencing at 10.00 am on Monday, 14 March 2016.

1. That any application for interim spousal maintenance and/or interim litigation costs funding filed by the wife before Monday 14 March 2016, shall also be listed for hearing before Justice Forrest on Monday, 14 March 2016.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Angliss & Angliss has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 1878 of 2015

Ms Angliss

Applicant

And

Mr Angliss

Respondent

REASONS FOR JUDGMENT

1. The parties to this application in pending property adjustment proceedings seek a variety of orders from the Court on an interim basis. The wife’s Application in a Case was filed on 15 July 2015. It was mentioned before a Registrar on 22 September 2015. It was then listed for hearing in a Judicial Duty List before me on 14 December 2015. The wife filed an Amended Application in a Case on 9 October 2015.

2. In that Amended Application in a Case the wife seeks three and half pages of orders relating to disclosure and the provision by a jointly retained single accounting expert of a report into the valuation of the parties’ business interests.

3. In a Response to an Application in a Case filed on 3 December 2015, the husband seeks the dismissal of the wife’s Amended Application in a Case as well as injunctive relief against the wife in respect of a number of particular issues.

4. At the commencement of the hearing before me, counsel for the wife informed the Court that the wife was not ready to deal with the husband’s application for injunctive relief and had not had time to put on her evidence in response, given the recent service of the husband’s response and supporting affidavit material. I accepted that assertion and informed the parties that those applications would be listed for hearing in a Judicial Duty List before me on Monday 14 March 2016. Counsel for the wife also informed the Court that it was the wife’s intention to file a further application for interim spousal maintenance and interim litigation funding orders and submitted that it would be appropriate to cause that to be listed to be heard at the same time. I told the parties that I would direct that any such application filed by the wife prior to 14 March 2016 also be listed for hearing on 14 March.

Some Background

1. The parties separated after approximately 41 years of marriage in 2014. Three children of the marriage are aged in their 30’s and are self-supporting.

2. A commercial lighting business is operated by the husband through an array of companies and trusts, conveniently described as the D Group. Since well prior to separation, the wife has had little personal involvement in the operation of the business. 

3. Significant wealth has been accumulated by the parties over the years of their marriage through the operation of the business. That wealth is primarily held in real property throughout Australia, their business interests and superannuation entitlements. The business operates internationally, in Australia, China and the United States of America.

4. Apparently, mistrust, conflict and disputation has attended the breakdown of the parties’ marriage. That has led to the engagement of specialist family law solicitors and the commencement of property adjustment proceedings in this Court.

5. As part of the ongoing proceedings, the parties agreed to jointly instruct a single expert accountant to value their interests in the D Group. Mr C of B Auditors was engaged.  On 2 April 2015, a Registrar of the Court made orders that included the appointment of Mr C as a single expert to value the parties’ interests in their various entities, although the parties had agreed to facilitating that well prior to agreeing to that Court order. Subsequent disagreements about matters pertaining to the provision of the valuation report by Mr C are what brought the parties before the Court in respect of the matters immediately under consideration.

6. For the wife, it is submitted the orders she seeks are necessary to facilitate the completion of the report by Mr C and to progress the matter in terms of the Court proceedings and any dispute resolution alternatives.

7. Relevantly, the orders the wife actually seeks are as follows:

   1.That the respondent husband do all acts and things necessary and requested of him by the single expert [Mr C] of [B Auditors] to facilitate the preparation of the valuation report under paragraph 2 of the order made herein on 2 April 2015, without further delay including:

   (a)Causing payment of all invoices of [B Auditors] issued to the parties jointly within the terms of payment of [B Auditors], with such payment to be made:

   (1)By an entity within the [Angliss / D Group] of Companies and Trust on the basis that subject to paragraph 2 of this order and until further order, such payments may be recorded in the books of account of the said entity as a debit entry to a loan account in the joint names of the parties; and

   (2)The parties do all acts and sign all documents (both personally and in their respective capacities as officeholders of the relevant entity(s) of the [Angliss / D Group] of Companies and Trust) to cause payment of all invoices delivered by [B Auditors] to be paid within the terms of payment of [B Auditors].

   (b)The respondent husband provide or cause to be provided to the said single expert within 7 days of a request being made to him, any further information and documents reasonably requested of him by the single expert and answers to all questions reasonably requested by the single expert.

   (c)Causing payment of all invoices of [F Accountants] issued to the parties and / or the related entities of the parties including but not limited to the outstanding invoice/s as at the date of this Order with such payment to be made:

   (1)By an entity with the [Angliss / D Group] of Companies and Trust on the basis that subject to paragraph 2 of this order and until further order, such payments may be recorded in the books of account of the said entity as a debit entry to a loan account in the joint names of the parties; or

   (2)The parties do all acts and sign all documents (both personally and in their respective capacities as officeholders of the relevant entity(s) of the [Angliss / D Group] of Companies and Trust) to cause payment of all invoices delivered by [F Accountants] to be paid within the terms of payment of [F Accountants].

   2.That ultimate responsibility for the payment of the invoices from [B Auditors] and [F Accountants] referred to in paragraph 1(a) and (c) of these Orders be reserved to trial.

   3.That if the Respondent husband, the entities within the [Angliss / D Group] of Companies and Trust and / or the company [F Accountants] are unable to provide the documents and information requested by the Court Expert [Mr C] within 7 days of a request made by the said Court Expert, then within a further 7 days the respondent husband shall file and serve on the applicant wife and deliver to the said Court Expert an affidavit in these proceedings deposing to and explaining fully why such documents and information is not available.

   4.That the respondent husband provide or cause to be provided to the applicant wife as and by way of further disclosure in these proceedings:

   (a)A copy of all documents and information provided to the single expert within 7 days of production of the documents to the single expert (excluding the documents already provided to the applicant wife by the respondent husband and/or single expert to date);

   (b)Within 7 days of these Orders the respondent husband reinstate or cause to be reinstated to the applicant wife internet viewing access of all the National Australia Bank accounts of the parties, respondent husband and all related entities, including but not limited to those accounts previously provided to the applicant wife and subsequently withdrawn;

   (c)A copy of all statements of all bank accounts conducted by the parties jointly, the respondent husband and all entities within the [Angliss / D Group] of Companies and Trust conducted in Australia, United State of America, China (both mainland China and Hong Kong) or in any other country, and as follows:

   (1)Where statements of accounts have been disclosed, then further disclosure from 1st July 2014 to date;

   (2)Where statements of accounts have not been previously disclosed, then all statements for the period 1st July 2014 to date;

   (d)The monthly financial statements (including income statements and balance sheets) for [D Pty Ltd], [D China] and [D USA] from February 2015 to date and then monthly thereafter;

   (e)Within 7 days of these Orders, the 2014 financial statements and tax returns for the applicant husband and all related entities in the United States of America (including [D USA]) and China (including [D China]); and

   (f)In respect of the [E] project / undertaking of [D USA] and any other related entity of the [Angliss / D Group] of Companies and Trust, all documents and information showing or tending to show the following:

   (1)A copy of all contracts (including variations);

   (2)Details of all income and payments received in respect of the said project; and

   (3)Details of all future income and payments to be received in respect of the said project (including anticipated date of payment, amount and where the funds are to be paid).

The manner in which B Auditors is to be paid

1. The evidence establishes that the parties initially agreed to each be jointly responsible for the payment of B Auditors’ fees, in equal shares. That was at a time when the husband was causing the wife, who is not in employment and has not been throughout their marriage, to receive regular payments equivalent to approximately $113,000 per annum as well as meeting many of her other living expenses associated with the occupation and use of a real property and her use of a motor car. It was at a time when the wife personally guaranteed a $2,000,000 credit facility made available to the business by the NAB that the husband was most anxious to see continue to remain in place for the use by the business.

2. The wife’s personal guarantee is, apparently, valuable, as one real property at G Town, valued at $2,100,000 by a single expert real property valuer, is unencumbered and registered in her sole name.

3. In early June 2015, matters deteriorated further between the parties. Around the same time, the husband stopped making the regular payments to the wife and the wife withdrew the sum of $497,526 from a bank account, which funds had been set aside principally to meet her 2014 tax liability of $317,822. She also notified the NAB that she withdrew her $2,000,000 personal guarantee and the bank shut down the credit facility previously made available to the D Group.

4. There is apparent controversy between the parties as to the sequence of those events and as to whose actions were a precursor to the other’s actions. I am not able to determine that now. Those matters are likely to be subject of further argument at the hearing of the applications to be listed on 14 March.

5. Suffice to observe, in my judgment, the wife’s evidence in her affidavit of 14 October 2015 that she only had $112,665 in her own bank accounts and that she was then solely dependent on those funds to meet her “ongoing support and expenses pending property settlement”. Those expenses include her own legal fees and shadow accounting expert’s costs. The wife also said that she seeks to preserve those remaining funds (in so far as she can, it is inferred) by now seeking the order that B Auditors be paid from the resources of the D Group with the payments to be recorded as debit entries to a loan account in the joint names of the parties, to be considered and appropriately characterised later in the proceedings. By the filing of her Financial Statement the balance of the wife’s bank accounts had reduced to $80,751. Correctly, in my view, the wife also points out that she does not have access to the same level of income and resources as the husband who controls the D Group, nor does she have access to the information that B Auditors requires to complete the valuation report. The husband alone has that access.

6. For the husband, it was submitted that the cost of the B Auditors report was originally estimated to be in the range of $20,000 to $23,000 but it rose very quickly until it effectively doubled. This distressed the husband. He wants B Auditors to be paid as per the original agreement – that is, equally by the parties from their own assets and resources.  It was submitted that with the $80,000 in bank accounts the wife still has sufficient funds to pay her equal share in accordance with the original agreement.

7. The evidence supports a finding, in my judgment, that the parties were made aware that B Auditors’ fee estimate might be revised as the actual scope of the work to be done to provide the valuation became clearer with the provision of the required information. It also seems clear that the factual circumstances underlying the wife’s initial agreement to pay half the fees from her assets and resources changed in a number of significantly relevant ways.

8. The loss of the $2,000,000 credit facility (which the husband seeks to have reinstated by an order compelling the wife to again provide her personal guarantee in his application that is now to be heard on 14 March) is referred to by the husband as having a significant impact on the ongoing viability of the business, which he also asserts is otherwise struggling to remain profitable. I understand he points to that fact as supportive of the submission that the wife should use the limited funds she has to pay half of B Auditors’ fees rather than place a further drain on the D Group. 

9. The husband adduced no evidence of the extent to which the $2,000,000 credit facility had been previously used to support the proposition that its loss was a critical issue for the business and, in any event, the evidence reveals that there was about $800,000 in three NAB term deposits controlled by the husband as at 10 June 2015 when the wife’s internet viewing access to all of the bank accounts was stopped by the husband and her receipt of regular payments was also stopped by him. The evidence also reveals that the husband had not, by the hearing on 14 December 2015, disclosed copies of statements or other documents in respect of those term deposits that evidenced what had become of that money. Counsel for the wife poignantly referred the Court to paragraph 143(b) of the husband’s affidavit of 3 December 2015 in which the husband said:

   In relation to viewing access of all National Australia Bank accounts, I have restored viewing access to all accounts as previously existed, save those term deposits that have been extinguished for cash flow purposes. (my emphasis)

1. Whilst it may be the case that the money in those term deposits has all been used for business purposes between June and December 2015, the husband has, for his own reasons, apparently chosen not to disclose documents and information about the use of the funds in those term deposits to the wife or to adduce evidence to the Court that might satisfy the Court that those funds have all been used in the ordinary course of business.

1. Accordingly, having regard to the disparity in the income, assets and resources that each party has access to, for the time being, at least, I am satisfied that it is appropriate to make an order that the husband cause B Auditors’ fees to be paid within B Auditors’ terms of payment and that he disclose in a timely fashion to the wife’s solicitors exactly where he gets the money from to do that, with the ultimate responsibility for the burden of all such payments to be a matter to be determined by agreement between the parties or, failing agreement, the trial Judge.

The Provision of further Documents and Information to B Auditors

1. There is further dispute between the parties as to whether the husband has provided B Auditors with all of the documents and information that they have requested of him so that they may complete the valuation report. For the wife, it is asserted, relying upon the opinions expressed by Mr C himself, that the husband has not. The husband says he has given B Auditors everything they have requested that he has within his possession. He says it has been a burdensome and expensive exercise. With a business enterprise such as the D Group that is hardly surprising. The D Group’s accountant also says that all information requested by Mr C that currently exists has been supplied to Mr C.

1. For the husband, it was submitted that “we know of no outstanding request from [Mr C]”.

2. For the wife, it is submitted that certain documents said to have previously been requested by Mr C not provided by the husband because he says they do not exist should be brought into existence by the husband so that they can be provided to Mr C.

1. In the circumstances, I am satisfied that an order similar to one ultimately sought by the wife at the interim hearing is appropriate, having regard to the husband’s disclosure obligations in these proceedings. I will order the husband to provide or cause to be provided to B Auditors as soon as practicably possible after a request is made of him, any further information (including by answering all questions reasonably asked of him) and any further documents reasonably requested of him by Mr C. I will also order that should the husband assert that he cannot provide any such information or documents requested in the future then he shall file and serve, within fourteen days of informing B Auditors of such assertion, an affidavit deposing to the factual circumstances of such inability, such affidavit to also be provided to B Auditors.

F Accountants’ Fees

1. F Accountants, the D Group’s external accountants were required to undertake work to provide documents and information to B Auditors as the husband was requested. Unsurprisingly, they charged for the work. There was a dispute about how that was to be paid. The Court was told at the hearing that dispute had been resolved. Accordingly, I make no order about that and observe that it is hoped that any further fees charged by F Accountants in similar circumstances will be paid without further dispute by recourse to the same arrangements, whatever they were.

Further Disclosure to the Wife by the Husband

1. The wife also seeks more comprehensive particularised disclosure orders. Those are all included in paragraph 4 that is set out earlier in this judgment.

2. Of course, given that a party’s disclosure obligations in property adjustment proceedings are clearly set out in the Family Law Rules 2004 (Cth) and well and truly settled by authority, it is unsurprising that Queen’s Counsel for the husband informed the Court that the husband is and will continue to honour his disclosure obligations. However, I have already observed that it was undisputed that the husband had not disclosed documents and information about the use of around $800,000 that was in bank term deposits in early June 2015 by the time of the interim hearing in mid-December.

3. I am satisfied that the specific order sought by the wife in paragraph 4 sub-paragraph (a) of the document provided to the Court by her counsel dated 11 December 2015 should be made. As the husband provides documents to the single expert accountants, copies of those should be provided to the wife, at the wife’s expense though.

4. Internet banking viewing access in respect of all accounts, including personal accounts of the husband, is sought by the wife. It previously existed. Provision of such viewing access is an easy, convenient, cheap and timely means of compliance with disclosure obligations. The husband opposes such viewing access being given in respect of personal accounts. That is difficult to understand as those accounts are usually required to be disclosed in any event. I will make the order sought by the wife in paragraph 4 sub-paragraph (b) of the document already referred to.

5. The wife seeks disclosure of copies of all statements of all bank accounts conducted by the parties jointly, the respondent husband and all entities within the Angliss / D Group of Companies and Trust conducted in Australia, United State of America, China (both mainland China and Hong Kong) or in any other country. She specifically seeks the following:

   (a)Where statements of accounts have been disclosed, then further disclosure from 1st July 2014 to date;

   (b)Where statements of accounts have not been previously disclosed, then all statements for the period 1st July 2014 to date.

6. I consider it appropriate that the wife be provided with such documents in   respect of any such accounts that she is not able to view and print off through the internet viewing access already referred to. The expense of copying any such documents shall be the wife’s though.

7. Specific orders are sought by the wife for the provision of monthly financial statements for the business’s entities from February 2015 onwards. The husband has deposed to problems in the business with the implementation of a new accounting system. I will make the order sought by the wife but will provide for the husband’s compliance as soon as it is possible.

1. Disclosure by the husband of 2014 financial statements and tax returns is also sought by the wife. There is some dispute about which of these may have already been provided. I will make orders dealing with this, so that the husband is required to disclose any such documents not already disclosed by him.

1. Disclosure of documents and information relating to one particular business project in the USA is also sought by the wife. The husband asserted that there might be thousands of documents relating to that project and that disclosure of those would be onerous. However, the orders sought by the wife are specifically set out in paragraph 4 sub-paragraph (f) of the document already referred to herein. The documents and information sought are confined to three limited categories. I do not accept that they would amount to several thousand documents. I will make the order sought by the wife but with such disclosure by provision of copies of documents to be conditioned on the wife’s obligation to pay for any copies provided. 

2. I will make the orders set out at the commencement of these written reasons for judgment.

I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 17 February 2016.

Associate:

Date:  17 February 2016