Auden and Auden and Anor
[2018] FamCA 831
•17 October 2018
FAMILY COURT OF AUSTRALIA
| AUDEN & AUDEN AND ANOR | [2018] FamCA 831 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Leave to reopen – where judgment as to interim property orders is reserved – where the wife seeks to reopen her case to tender documents and make further submissions – discussion as to applicable principles – Where the interests of justice are served by dismissing the wife’s application in a case. |
| Family Law Act 1975 (Cth) ss 79, 80(i) |
| Strahan & Strahan [2009] FamCAFC 166, Stephens & Stephens & Ors (enforcement) (2009) Fam LR 42 |
| APPLICANT: | Ms Auden |
| RESPONDENT: | Mr Auden |
| SECOND RESPONDENT: | Mr B Auden |
| FILE NUMBER: | PAC | 3319 | of | 2017 |
| DATE DELIVERED: | 17 October 2018 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Hannam J |
| HEARING DATE: | 12 October 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Campton SC |
| SOLICITOR FOR THE APPLICANT: | Mills Oakley Lawyers |
| RESPONDENT: | Appeared in person |
| COUNSEL FOR THE SECOND RESPONDENT: | Ms Gillies SC |
| SOLICITOR FOR THE SECOND RESPONDENT: | Lander & Rogers |
Orders
The wife’s Application in a Case filed 17 August 2018 be dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Auden & Auden and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAC 3319 of 2017
| Ms Auden |
Applicant
And
| Mr Auden |
Respondent
And
Mr B Auden
Second Respondent
REASONS FOR JUDGMENT
Introduction
The husband and wife are engaged in parenting and property proceedings following the breakdown of their 17 year marriage. The paternal grandfather (“the second respondent”) has intervened in the property proceedings. He contends that considerable sums of money were advanced by him to the husband alone and the husband and wife throughout the marriage which gives rise to him having an interest in the proceeds of sale of the family home, the only significant item of matrimonial property.
On 14 August 2018 I heard interim applications (“the interim hearing") in relation to both parenting and property.
Subsequent to the interim hearing various documents were provided by the husband and second respondent by way of disclosure to the Applicant wife’s legal representatives. The Applicant wife seeks to reopen the interim property proceedings to tender a number of the documents that were provided to her subsequent to the interim hearing and other documents that she contends were not available to her at the interim hearing.
The husband and second respondent oppose the wife’s application to reopen the proceedings on the basis that the interests of justice do not require that this occur. Each of them seek that the wife’s application be dismissed.
Background
The wife who is 48 and husband who is 45 met in the UK when they were students. It appears to be common ground that neither party owned any assets of significance at the commencement of their relationship though for a number of years the husband has been a beneficiary of various trusts run by the second respondent.
The husband and wife married in 1999 and lived for some time in various overseas countries, finally settling back in the UK in January 2000. In mid-2000 the first of their five children was born.
The husband and wife purchased their first family home in the UK in 2004. By 2006 they had four children.
In August 2009 the husband commenced with a new employer and he and the family were relocated to Australia. A home (“the family home”) was purchased for the family in Sydney in March 2010 and registered in the name of the husband alone.
In late 2011 the parties’ youngest child, who is almost seven was born.
At all times throughout the marriage the husband has been the breadwinner while the wife (who also has professional qualifications) has been involved in the care of the parties’ five children and household responsibilities
In October 2015 the husband became aware that the wife was engaged in a relationship with another man and the parties separated. They subsequently reconciled only to separate again on a final basis in October 2016 according to the husband or February 2017 according to the wife. Regardless of the date on which this final separation occurred there is no dispute between the parties that both of them and the children continued to live in the family home.
The husband commenced property settlement proceedings in this court in July 2017.
On 7 May 2018 the parties met with a family consultant for the purposes of the Child Responsive Program. The family consultant formed the view that it appeared there was ongoing high conflict in the family home and as neither parent indicated that they would be leaving the family home in the near future this would likely put ongoing strain and pressure on the children. The situation may also in the family consultant’s view continue to negatively affect the wellbeing and mental health of the children and may also result in the children’s relationships with one or both parents to become damaged. The Memorandum relating to the family was released the day after the meeting with the family consultant.
On 19 June 2018 the wife filed an Application in a Case seeking interim property and parenting orders including exclusive occupation (with the children) of the family home, orders with respect to the children’s living arrangements and time with the husband and partial property settlement orders.
The following day, 20 June 2018 the husband unilaterally sold the family home of which he was the sole registered owner. Settlement of the sale is due to be completed on 16 November 2018.
On 6 July 2018 the parties consented to some short term interim orders including that the husband would vacate the family home at 6pm that evening and thereafter the wife would have exclusive use and occupation of the home where she would continue to live with the children until settlement is completed.
On 6 July 2018 all interim applications of both parents were listed for hearing on 14 August 2018.
August 2018 Interim Hearing
At the interim hearing on 14 August 2018 the paternal grandfather who asserts a significant interest in the matrimonial property was given leave to intervene in the proceedings.
At the same hearing I dealt first with the interim parenting applications of each parent and the Independent Children’s Lawyer who had been appointed in the parenting proceedings.
I then dealt with the interim applications as to property. The wife seeks orders for interim spouse maintenance, orders that each party be restrained from further dealing with or encumbering the family home and that by way of interim property settlement the husband pay to the wife two million dollars from the sale proceeds from the family home which she be entitled to use to purchase a property in the same area. The wife’s proposed orders require her to deposit the two million dollars into an account to be utilised only for the purchase of real estate to house herself and the children and associated costs and that she be restrained from dealing with these funds in any other way. The wife also seeks an order that she and the husband receive $100,000 from the sale proceeds of the family home to meet their respective legal costs and that the balance of the sale proceeds be placed into a controlled monies account in the parties’ names.
The Respondent husband opposes the wife’s application for interim spouse maintenance on the basis that she has not established an inability to support herself and he has no ability to make any such payment. The husband opposes the interim property orders on the basis that the rights of the second respondent and the obligations in respect of funds advanced by him over the years cannot be determined at an interim hearing. It was contended on his behalf that in the absence of a determination about the asserted loans and the consequential impact upon the parties’ asset pool the court cannot make the interim orders sought on the basis of an exercise of the power in s 79 of the Family Law Act 1975 (Cth) (“the Act”). It is contended on the husband’s behalf that there may not remain to the parties any matrimonial estate for distribution once the second respondent’s rights have been determined.
It was also contended on behalf of the husband that even if the court were to embark upon an interim distribution on the basis of an exercise of the s 79 jurisdiction by means of s80(i) of the Act and the monies advanced by the second respondent were treated as gifts then the contributions made by the husband to the matrimonial assets could be as high a 90 per cent in his favour. On this basis he contended that is difficult to see how the court could make the orders proposed by the wife. Such a partial distribution it is submitted would amount to a substantial change in the property rights that could not be justified pursuant to the principals in Strahan [1] on the basis that such a payment could not be reversed or altered once made if required following a final hearing
[1]Strahan & Strahan [2009] FamCAFC 166
The second respondent consented to the wife’s proposed order that she and the husband each receive $100,000 to meet their respective legal costs and other outgoings associated with the proceedings such as the payment of an expert to provide a report in the parenting proceedings. He opposed the wife’s proposed orders that she receive two million dollars from the proceeds of sale of the family home to purchase another in her name. It was contended on his behalf that he is a significant creditor of the husband and the wife’s proposed orders which would see her receive virtually all of the property of the parties if made would effectively defeat his claim.
It was contended on behalf of the second respondent that in accordance with the authorities the court is required in an interim property application to start from a position of identifying or recognising the existing property interests and not from an assumption that the parties’ interests are different from those interests as identified. This it is submitted is highly apposite to a person in the position of a third party. It was argued on his behalf that the orders sought by the wife could not be made whether she accepted that the advances made by him were loans or whether she contends that they were advanced on another basis. In the latter case it is argued that the advances are of such significance as to weigh heavily in favour of the husband when assessing a contribution based entitlement to property settlement orders. Either way the second respondent argues the wife’s interim application involves disputed facts that would need to be determined and this cannot be done on an interim basis.
Events following 14 August 2018 hearing
On 17 August 2018, a few days after the interim hearing the wife filed an Application in a Case. She sought orders that the husband and second respondent provide by way of disclosure certain documents that had been sought in the course of the interim proceedings. The wife sought orders that as soon as possible after such disclosure has been made that the proceedings be listed for consideration of an application for leave to reopen the interim proceedings such reopening being limited to the wife tendering further documents and making further short submissions in relation thereto.
The wife’s Application in a Case envisaged three additional court events. The first to consider the application that the husband and second respondent provide various documents to the wife and a second hearing for determining whether the wife have leave to reopen the proceedings. In the event that the wife were granted such leave a further court event would be required to hear the further submissions.
On 18 September 2018 the first of these court events occurred. On that day both the husband and the second respondent consented to orders that they provide by way of disclosure any of the documents identified in particular paragraphs of Exhibit 18 of 14 August 2018 and that each of the parties provide directly to chambers a Response to the wife’s application in relation to the reopening of the proceedings.
The documents were provided and on 12 October 2018 and I heard the wife’s application to reopen the interim proceedings.
Application to reopen – 12 October 2018
The wife’s application is that she be granted leave to reopen the interim hearing for the purpose of the further tender of documents and making submissions in relation to the documents tendered at the interim hearing in reply to the submissions of the other parties.
The Applicant’s outline of the submissions which her counsel would seek to make if the proceedings were reopened comprises 5 pages.
The respondent husband, who was self-represented at the application to reopen opposed the wife’s application. Prior to the withdrawal of his legal representation he had prepared an affidavit which I had understood related to further evidence in the event that the proceedings were reopened. However, most of that affidavit is directed to additional orders that the father seeks in his Response to the wife’s application to reopen relating to other matters such as a division of personal property and interim parenting. Although the husband had an expectation that in the hearing on 12 October 2018 I would also deal with these other orders sought in his unfiled Response, it was made clear to him that he would be required to make an application for such other orders in the usual way and that on 12 October I was dealing only with the wife’s application to reopen the proceedings. That application was opposed by him.
Counsel who appeared on behalf of the second respondent indicated her client’s opposition to the application to reopen the proceedings. Counsel also indicated that in the event that the proceedings were reopened the second respondent would seek to rely upon a further affidavit and annexures (of 40 pages in total) and would also seek to make further submissions if that opportunity were given to the Applicant.
Application to reopen proceedings – relevant principles
In Stephens & Stephens & Ors[2], the Full Court said the following with respect to an application to reopen a hearing after Judgment has been reserved.
[2]Stephens & Stephens & Ors (enforcement) (2009) Fam LR 423
In relation to an application to reopen a hearing after judgment has been reserved the fundamental principle to be applied in determining whether to grant an application is whether the interests of justice are better served by allowing the application or rejecting it: see Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471 per Clarke JA at 476 with whom Mahony JA and Meagher JA agreed; Gelly and Gelly (No 1) (1992) FLC 92-290 per Treyvaud J at 79,146-148; Smith v New South Wales Bar Association (No 2) (1992) 176 CLR 256 per Brennan Dawson, Toohey and Gaudron JJ at 266-7 and Gaspaldi and Gaspaldi [2008] Fam CACF 134 (unreported, Family Court of Australia, Bryant CJ, Thackray and Le Poer Trench JJ, 2 October 2007). In Gaspaldi and Gaspaldi the Full Court said at [140] that the “object [was] to make the order most likely to promote the interests of justice, paying proper regard to any prejudice to the other party”.
We observe that in Australian Securities and Investments Commission v Rich (2006) 235 ALR 587 Austin J set out at 593 what he described as a “useful statement of relevant discretionary factors” to the exercise of discretion to permit a beginning party in a civil penalty proceeding to adduce further evidence after it had closed its case. The factors included:
·The nature of the proceeding;
·Whether the occasion for calling further evidence ought reasonably to have been foreseen;
·The importance of the issue on which the further evidence is sought to be adduced;
·The degree of relevance and probative value of the further evidence;
·The prejudice to the other party;
·The public interest in the timely conclusion of litigation;
·The explanation offered for not having called the evidence.
It may also be relevant to consider what the High Court recently said in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175.
It is contended on behalf of the wife that she could not have adduced the evidence she now seeks to rely on as it is entirely comprised of documents that came into her hands subsequent to the interim hearing in August 2018. She contends that the further documents are relevant and probative to the issue of whether the sums advanced by the second respondent should be treated as loans and if so whether those loans have been repaid, forgiven or not called upon or whether they should be characterised as funds given by the second respondent to the husband and utilised by him to acquire the property of the parties. She contends that this is an important issue in her interim property proceedings.
In relation to a consideration of whether calling further evidence ought reasonably to have been foreseen the wife’s counsel submitted that although it had been the husband’s case for some time that the second respondent had lent him significant sums of money loan agreements upon which the husband and second respondent rely were tendered for the first time in the course of the interim proceedings. Other documents which formed part of the evidence upon which the second respondent relied at the interim hearing also suggested the existence of further documents in relation to the purported loans which were not produced until the interim proceedings were complete and my decision was reserved.
It is central to the wife’s application that these are property proceedings in which there is an obligation to disclose all relevant material in particular material which relates to the question of whether the sums advanced by the second respondent were loans, and if they were whether the loans had been forgiven. It is submitted that the documents sought to be tendered if the proceedings are reopened are of such weight that a reopening is necessary to avoid a miscarriage of discretion necessarily involved in a consideration of the interim application.
There are a range of documents sought to be tendered in the event that the proceedings are reopened which were divided into three bundles. The first of these bundles (“marked A”) comprises fourteen documents dating from 2007-2018 and are described as the wife’s tender bundle. The second bundle (“marked B”) comprises documents received from the second respondent subsequent to the interim hearing and the third bundle (“marked C”) are documents disclosed by the husband following the interim hearing.
The documents in each of the bundles are of varying types and include an agreement of 24 February 2005 between the second respondent in relation to money advanced by him to the husband and the husband’s brother, financial documents and correspondence from the second respondent’s tax and business advisers, letters from the second respondent to each of his children including the husband in relation to liabilities, correspondence from the respondent’s tax adviser, extracts from ledgers prepared by the second respondent, a loan agreement between the second respondent and the husband, loan applications executed by the husband and the wife and correspondence between the legal representatives.
All of these various documents it is submitted by the wife’s counsels undermine the second respondent’s claim that funds advanced to the husband were loans as opposed to gifts, cast doubt upon the assertions made by the husband at various stages in the proceedings concerning his indebtedness to the second respondent and support the wife’s contentions that even if such sums were loans, those loans have been forgiven. Some of the documents also support the wife’s position that at no time has she been a party to loan agreements nor have any other entities associated with the second respondent lent money to her alone or jointly with the husband.
In general terms it is submitted on the wife’s behalf that it is very important in an exercise of discretion for interim property relief that I be satisfied about each loan agreement and that each is enforceable. It is argued that the documents sought to be tendered would give the court a complete picture of the relative strength of each parties’ case and on this basis it is in the interests of justice to permit those documents to be tendered. The failure of the husband and second respondent to provide these relevant documents prior to the interim proceedings when they had at all times been available to them is submitted to be relevant to the issue of fairness. It is also submitted that there is no prejudice to the other parties as the evidence sought to be relied upon if the proceedings are reopened are the documents of the husband and second respondent themselves.
The husband who represented himself at the hearing at which the wife sought to reopen the proceedings made few submissions in relation to this application other than to submit that the wife had always known of the relevant loan agreements. He otherwise relied on submissions made by counsel for the second respondent.
It is submitted on behalf of the second respondent that the question of whether or not a loan was made by him to the husband or the husband and wife was a hotly contested matter at the interim hearing and will be the central matter in dispute in the final proceedings. He contends that all the additional evidence sought to be adduced in the event that the proceedings are reopened relates to this central dispute and as these are interim proceedings and the court is not in a position to make findings it is not in the interests of justice to reopen the proceedings.
It is submitted on the second respondent’s behalf that a consideration of the relevant factors in the exercise of discretion in the terms identified by the wife’s counsel in this application involves an examination of the minutia of each of the documents sought to be relied upon rather than globally considering each of the party’s claims and determining whether on a consideration of those factors the interests of justice is better served by allowing the application.
In relation to the explanation for not having relied upon the documents in the various bundles in the first place it is submitted that there is no explanation as to where many of the documents within the bundle marked “A” come from and thus it is unknown why they were not before the court at the interim hearing on 14 August 2018. Some documents in the various bundles such as letters sent to both the husband and the wife, may well have always been under the control of the wife prior to 14 August especially in circumstances when the husband was required to leave the former family home immediately on 6 July 2018 and contended at the August interim hearing that he did not have access to documents at the former family home.
When considering fairness in exercising the discretion to reopen the proceedings it is also submitted on behalf of the second respondent that it would be a dangerous course if the court were to draw conclusions about various documents sought to be relied upon by the wife and form a view as to the strength of the second respondent’s case as urged by the wife’s counsel in the absence of any other evidence as to those documents or testing by cross-examination.
The second respondent’s counsel also made submissions about the nature and extent of evidence to be called by her client and the husband in the event the proceedings were reopened and the prejudice in terms of delay in completion of the proceedings and consequential costs and the public interests in the timely conclusion of the litigation. In this regard it is noted that both the husband and the second respondent have prepared further affidavits upon which they would seek to rely if the proceedings were reopened. The second respondent’s counsel foreshadowed that a further affidavit may be relied upon by second respondent as he was unaware of a number of the documents that the wife would seek to tender if the proceedings are reopened until the date of hearing of that application on 12 October 2018. Counsel submitted that the second respondent would also wish to make further submissions in the event the proceedings were reopened.
The husband also submitted that the application to reopen which may involve a further future court event was also delaying delivery of judgment in relation to the interim parenting proceedings in circumstances where he had spent very limited time with the children while this matter was outstanding which prejudiced his interests.
Discussion and conclusion
In my view the interests of justice are better served by dismissing the wife’s application that the interim proceedings be reopened. Although there are a wide range of documents sought to be relied upon if the proceedings are reopened, all of these documents relate to the second respondent’s contention that the funds advanced to the husband or the parties during their marriage were loans which are required to be repaid and the wife’s contention about the strength of his case and the likelihood that it will be rejected. Having regard to the nature of these proceedings, being interim proceedings in which no findings can be made, the strength or otherwise of a party’s case cannot be of great importance even when the issue itself is of central importance in the final proceedings.
It is the wife’s case in the interim proceedings that it is just and equitable to make interim property settlement orders whether the sums advanced by the second respondent are characterised as loans or gifts. The contentions made by the husband and the second respondent at the interim proceedings, that the orders sought by the wife in the interim property proceedings would far exceed her entitlement on the basis of her contributions even if treated as gifts and that the adjustment to property interests could not be reversed if made is capable of being determined having regard to the evidence adduced in the interim hearing.
These proceedings have been ongoing since July 2017 with very little progress with respect to the party’s property or their five children. Due to the unilateral act of the husband in selling the family home in June 2018 and as the settlement will be completed in less than a month there are important personal interests and public interests in a timely completion of the litigation generally and the interim application in particular. The interim applications have been on foot for almost four months but as the parties have been unable to reach agreement about virtually every matter those proceedings have also been protracted. A reopening of the interim proceedings would involve another court event and associated costs and such a date would not be able to be allocated this year.
Having regard to each of the foregoing matters the application to reopen the proceedings and adduce further evidence is dismissed.
I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hannam delivered on 17 October 2018.
Associate:
Date: 17 October 2018
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