Beach and Beach (No. 3)
[2007] FamCA 1486
•19 December 2007
FAMILY COURT OF AUSTRALIA
| BEACH & BEACH (NO. 3) | [2007] FamCA 1486 |
| FAMILY LAW – PROPERTY – Case management |
| Family Law Act 1975 (Cth) |
| Applicant: | Ms Beach |
| Respondent: | Mr Beach |
| File Number: | MLF | 2761 | of | 2003 |
| Date Delivered: | 19 December 2007 |
| Place Delivered: | Melbourne |
| Place Heard: | Melbourne |
| Judgment of: | Carter J |
| Hearing Date: | 11 December 2007 |
Representation
| Counsel for the Applicant: | Mr Mawson |
| Solicitor for the Applicant: | Gillian Coote Family Law |
| Solicitor for the Respondent: | Ms Twigg |
| Solicitor for the Respondent: | Wilmoth Field Warne |
Orders
That by 4:00pm on Thursday, 13 December 2007:
(a)the husband provide to the wife answers to specific questions dated 28 September 2007; and
(b)the husband file and serve an up-to-date sworn Statement of Assets and Liabilities relevant to these proceedings.
That in the event that the husband does not comply with par (1)(a) and/or (1)(b) hereof:
(a) the husband’s response filed 27 April 2007 be dismissed; and
(b)the wife have leave to proceed on an undefended basis save that with her consent, given through counsel this day, the husband shall be permitted to cross-examine any witnesses called by the wife and to make submissions.
That until 4:00pm on Monday, 17 December 2007 or further order the husband be restrained from disbursing funds from the sale of livestock to be made to him or at his direction, by P Livestock and Property of W and/or C Rural of Y save for arrears of mortgage payments owing to Suncorp Metway Ltd.
That forthwith upon receipt of any of the funds referred to in par (3) hereof the husband pay the aforesaid arrears of mortgage payments to Suncorp Metway Ltd.
That all questions of costs be reserved to the trial judge.
That my Reasons for the above orders be delivered as soon as practicable.
IT IS NOTED that publication of this judgment under the pseudonym Beach & Beach is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLF 2761 of 2003
| MS BEACH |
Applicant
and
| MR BEACH |
Respondent
REASONS FOR JUDGMENT
Proceedings are pending in this Court between Ms Beach (for convenience referred to as “the wife”) and Mr Beach (for convenience referred to as “the husband”). The proceedings are for alteration of property interests and they have been fixed for hearing to commence on 17 December 2007.
The proceedings have come before me on a number of occasions and most recently on 2 November 2007.
On that occasion the husband and the wife both had legal representation and orders were made by consent which amongst other things, effectively extended time for the husband to provide answers to specific questions which the wife had been granted leave to serve upon the husband on an earlier date. Originally the answers were to have been answered by no later than 30 October 2007, but this was not done. Pursuant to the orders of 2 November 2007, the husband was required to provide the answers by 23 November 2007.
A further order was made granting the parties liberty to apply at short notice but not before 12 November 2007 in respect of a mortgage and/or other liabilities secured over the property situate and known as …, D. The wife lives in this property.
On 5 December 2007 solicitors for the wife sought to have the matter listed for mention. There were two issues:
Firstly, that the husband had not provided his answers to the specific questions by the relevant date; and
Secondly that the mortgage to Suncorp-Metway had fallen into arrears.
Arrangement were therefore made for the matter to be listed before me at 9:30am on 11 December 2007.
On that day Mr Mawson SC appeared on behalf of the wife and the husband’s solicitor, Ms Twigg, appeared on his behalf.
Mr Mawson informed me, and Ms Twigg agreed, that the mortgage to Suncorp-Metway was in arrears, and further that the husband had of recent times sold cattle and expected to receive about $160,000 from that sale.
It was Mr Mawson’s submission that the total nett proceeds (after deduction of sale costs only) should be paid into the wife’s solicitor’s trust account to be applied firstly as to arrears of the mortgage which stood at about $55,000 and thereafter to be held pending the final hearing. The basis of the application was a combination of two matters. The wife was concerned that the mortgage payments would again not be made. Even though the trial was, as I have said, fixed for hearing on 17 December 2007, it was not possible to predict when a judgment would be given. The other basis of the application was that moneys should be effectively held as security for costs.
On this latter point it should be noted that an order for costs was made against the husband on 17 September 2007. The amount was $3,000 and it was common ground that the husband had not paid those costs.
It was the husband’s counter proposal that about $60,000 of the anticipated proceeds of sale should be applied towards the mortgage. The balance, according to the husband’s submissions, should be applied towards payments of liabilities for costs of transport of the cattle; labour costs in connection with the sale; agistment fees; and an outstanding liability to a stock agent. The stock agent was owed $70,000, as I was informed, however, would have been prepared to wait for some further period of time provided he received between $20,000 and $30,000. Ms Twigg subsequently advised that there was no objection to the wife’s outstanding costs being met from the proceeds of sale of the cattle.
Those payments would have been likely at least to exhaust the proceeds of sale of the cattle. I was told by Mr Mawson that the wife had not been provided with any documentary material supporting these liabilities and Ms Twigg did not dissent from that assertion.
Mr Mawson proposed that the husband be given a further and very short period to provide the answers to specific questions and if he did not do so, I was asked to make a self-executing order which would have the effect of dismissing his application. Thereafter it was contended that the wife should have leave to proceed on an undefended basis save that the husband would be permitted to cross-examine any of the wife’s witnesses and to make submissions.
Additionally, Mr Mawson sought an order that the husband provide an up-to-date Statement of Assets and Liabilities relevant to the proceedings, and subject to the same default mechanism.
Ms Twigg told me that the husband could and would comply with an order for the provision of answers to the specific questions by the suggested time, namely, 4:00pm on 13 December 2007. However, she anticipated some difficulty in providing the updated Statement of Assets and Liabilities in that timeframe. Following further discussion however she told me that the husband could and would comply with the same timeframe for the provision of this Statement as had been suggested for the provision of the answers.
In the event I made the following orders:
“(1) That by 4:00pm on Thursday, 13 December 2007:
(a)the husband provide to the wife answers to specific questions dated 28 September 2007; and
(b)the husband file and serve an up-to-date sworn Statement of Assets and Liabilities relevant to these proceedings.
(2)That in the event that the husband does not comply with par (1)(a) and/or (1)(b) hereof:
(a)the husband’s response filed 27 April 2007 be dismissed; and
(b)the wife have leave to proceed on an undefended basis save that with her consent, given through counsel this day, the husband shall be permitted to cross-examine any witnesses called by the wife and to make submissions.
(3)That until 4:00pm on Monday, 17 December 2007 or further order the husband be restrained from disbursing funds from the sale of livestock to be made to him or at his direction, by [P] Livestock and Property of [W] and/or [C] Rural of [Y] save for arrears of mortgage payments owing to Suncorp Metway Ltd.
(4)That forthwith upon receipt of any of the funds referred to in par (3) hereof the husband pay the aforesaid arrears of mortgage payments to Suncorp Metway Ltd.
(5) That all questions of costs be reserved to the trial judge.
(6)That my Reasons for the above orders be delivered as soon as practicable.”
Time did not permit me to deliver anything more than a skeletal outline of my Reasons and upon my enquiry Ms Twigg confirmed that the husband sought written Reasons for Judgment. He was of course perfectly entitled to do so, however, at the outset I warned all parties that my other commitments were such that I would probably not be able to deliver these Reasons prior to the trial commencing on 17 December 2007.
What follows are my Reasons for Judgment for the orders which I made on 11 December 2007.
Short History
The wife was born in April 1957 and is presently aged 50. The husband was born in December 1957 and he, too, is now aged 50.
They married in November 1984 but had been in a committed relationship for a number of years before then. Separation took place in January 2003. There were three children born of the union. These children are now aged 20, 18 and 15.
Both parties claimed to have had a significant involvement and input into a farm known as “[the F property]”, at T. The husband inherited that farm when his father died in June 1999. It appears that the bulk of his late father’s estate was devised to the husband and his brother received a cash legacy.
The husband’s brother brought a Testator’s Family Maintenance claim in the Supreme Court of Victoria which was heard in October 2001, with Judgment being delivered in early April 2002. In the event, the husband’s brother’s share of the Estate was increased from $150,000 to $200,000. That decision was appealed in August 2004 as I understand it, unsuccessfully so.
The Supreme Court proceedings explain part of the delay which this case has experienced. There were also later proceedings in the Federal Court which may also have contributed to some of the delay.
Litigation History
The wife commenced these proceedings when she filed Applications seeking final and interim orders on 17 April 2003. In support of her Application she also filed a Financial Statement and affidavit. Time was abridged and the matter came on for hearing on 30 April 2003. The husband had not filed any documents at that stage. The hearing was adjourned to the Judicial Duty List on 7 May 2003 and interim restraining orders were made precluding both the husband and the wife from dealing in any way with the proceeds of sale of certain shares.
On 2 May 2003 the husband filed a Notice of Address for Service.
Interim orders were made by consent. Amongst other things the husband was ordered to file and serve a Statement of Financial Circumstances and Response before 31 May 2003. A Conciliation Conference was ordered and fixed for 25 July 2003.
The husband did not file a Financial Statement or his Response as required.
As I understand it from the wife’s Case Summary filed 16 April 2007, the parties and their legal advisers agreed that the Conciliation Conference could not proceed on the appointed day. The file record of that day demonstrates that the husband was ordered to file and serve a Financial Statement within 21 days.
He did not do so.
It would appear that the husband’s solicitors ceased to act for him in August 2004.
A Trial Notice List hearing took place on 3 September 2004. The husband appeared in person and the wife was legally represented. The Trial Notice date was adjourned to a date to be fixed on the first available date following receipt of a letter from the wife’s solicitor that the matter was ready to proceed. The Trial Notice listing was fixed for 21 October 2005. It was administratively adjourned. A further Trial Notice listing was made for 11 August 2006. The relevant Bench sheet demonstrates that the husband was again ordered to file and serve a Response and Financial Statement on or before 4:00pm on 29 August 2006 and the wife’s costs were reserved.
The husband did not comply with the order requiring him to file his Court documents.
On 4 September 2006 a Directions Hearing took place.
The husband appeared in person and the wife was legally represented. The husband received a further extension of time to file his Court documents, the new date upon which they were to be filed being 18 September 2006. Additionally, orders were made listing the wife’s Application for Final Orders for hearing on 17 October 2006 as a one-day case. In the event that the husband did not comply with the orders requiring him to file his Court documents by 18 September 2006, the wife was granted leave to apply to proceed on an undefended basis. In the event that he did comply with the relevant order, then the wife was granted leave to approach the Registrar with a view to seeking alternative orders, including Trial Notice orders. The husband was directed to file and serve a Notice of Address for Service within seven days.
On 15 September 2006 the husband filed a Notice of Address for Service. He did not file any of the other documents which he had been required to file and on 13 October 2006 the husband’s solicitors filed a Notice of Ceasing to Act on his behalf.
The trial date of 17 October 2006 was vacated and the matter was listed before a Registrar in the Registrar’s procedural list on 27 November 2006.
On 27 November 2006 the Registrar adjourned the proceedings for case management on 22 January 2007. The husband was again ordered to file and serve his Financial Statement and Response and this was required to be done on or before 22 December 2006.
On 20 December 2006 the husband filed a hand-written Financial Statement. He did not file his Response.
On 18 January 2007 the wife filed an Amended Application, further affidavit material and an updated Financial Statement.
On 22 January 2007 Mushin J made orders requiring that no later than 4:00pm on 18 February 2007, the husband file and serve: a Response by way of Form 1A; any affidavit of evidence-in-chief on which he proposed to rely at the trial, including any affidavit of any lay witness; a Financial Statement by way of Form 13; an Undertaking as to Disclosure; and a Certificate of Compliance. A Pre-Trial Conference was appointed for 22 February 2007. A further order was made that in the event the husband failed to comply with any provision of his Honour’s orders, then any application by him was to be dismissed for want of prosecution without further application, and thereupon the wife’s application was to be set down for trial on an undefended basis subject to any order of the trial judge as to cross-examination and the making of submissions.
The husband did not comply with those orders.
The Pre-Trial Conference was conducted on 22 February 2007. The husband was not in attendance at the appointed time but appeared about an hour later and was given a copy of the orders as well as the orders made by Mushin J on 22 January 2007. One of the other orders which was made at the Pre-Trial Conference directed that the wife’s Amended Application filed 18 January 2007 be fixed for hearing before a Judge on 19 April 2007 for one to two days.
The husband filed an appeal against the orders of Mushin J but did not serve a copy of that upon the wife. In any event, the matter was listed before Kay J on 16 March 2007. The wife’s solicitor was notified by the Court and attended before his Honour. His Honour extended the time for the husband to file his material to 23 March 2007, and otherwise dismissed the husband’s application. The orders which Mushin J had made otherwise remained in full force and effect. I was shown a copy of Kay J’s order.
Notwithstanding the extension of time which the husband had been afforded, he still did not file his documents. The matter came before me on 19 April 2007. The wife was legally represented and the husband appeared in person. There is a transcript of the proceedings on the Court file.
The matter came before me for hearing on an undefended basis in the circumstances which I have already described. The husband sought an adjournment. His submission was that he would soon be ready to prosecute his case. I expressed my doubts about that. The matter had some urgency for the wife, not simply because of the expense and delays and costs which had been involved but also because the husband had defaulted in the terms of a mortgage to Suncorp-Metway Ltd. That mortgage was secured on certain real estate including the home in which the wife and the three children lived. The husband assured me that he was confident that he would be able to satisfy the mortgage arrears by the due date and would be in a position to provide all necessary documentation to enable a full hearing. All of this of course was dependent upon my acceding to his request for an adjournment.
Mr Mawson, who appeared on behalf of the wife, urged that the matter proceed on an undefended basis and that the husband not be permitted to participate. I found that suggestion not without merit, however, in the event I decided to afford one last indulgence to the husband in a manner in which the wife would also be able to be protected.
I suggested and the parties agreed, that I would hear the matter on an undefended basis, and if satisfied on what would be of course, uncontradicted evidence that the result was just and equitable, I would make orders but stay the operation of those orders. If the husband paid the mortgage arrears and filed the relevant documents within certain timelines, I suggested that the matter could proceed to trial; if he did not the orders could be executed.
My Reasons for Judgment are on the Court file and set out some of the background to this case which I have already recorded as well as my determination of the wife’s application for property settlement.
The orders which I made effectively granted the orders sought in the wife’s Amended Application filed 18 January 2007 and I made a further order that those orders should lie in the Registry. The husband was ordered to pay all arrears of the mortgage by 3:00pm on 7 May 2007 and to file all relevant trial documentation by no later than 12 noon on 30 April 2007. If he did not comply with either of those orders then the property orders which I had made would be executed. If the husband did comply, then the wife was at liberty to proceed with her Amended Application, which included certain additional orders. The proceedings were adjourned for mention before me at 9:30am on Tuesday, 8 May 2007.
The husband did comply with the orders which I had made and accordingly on 8 May 2007 I discharged the earlier orders relating to the property application. Orders were made to enable the appointment of a single expert witness and for valuations of various items of property.
The matter was otherwise fixed for trial as a three to four-day case to commence 20 August 2007. The wife was granted liberty to file an affidavit responding to the husband’s affidavit within certain prescribed time limits.
The matter came before Brown J on 15 August 2007. The parties were in dispute in respect of the valuation issues, and her Honour resolved the impasse and made orders to enable the matter to proceed. Unfortunately there was not sufficient time for the valuations to be prepared before the trial and the trial date of 20 August 2007 was vacated. Otherwise, the competing applications for final property orders were adjourned. Her Honour’s Reasons for Judgment remain on the Court file.
As seen, Brown J adjourned the trial of the competing applications, fixing the hearing for 17 September 2007. So much appears from her Honour’s Reasons for Judgment and from the Bench sheet for the day. Unfortunately, when the orders were extracted an incorrect date was inserted for the trial, namely, 27 September 2007.
The order was amended to include the correct date and the amended orders were sent as an enclosure to a letter from her Honour’s Associate dated 29 August 2007.
On Friday, 14 September 2007 at 7:13am Brown J’s Associate received a voicemail message from the husband. The husband suggested that the Associate might need to transcribe his message, which in fact she did. The transcript of the message remains on the Court file.
Amongst other things the husband said he was in Central New South Wales dealing with his cattle, getting them ready to be valued on Monday and Tuesday of the following week, in accordance with the orders. He advised that he had spoken to one of the land valuers on the preceding day who made some mention of the case being fixed for the 17 September. The husband confirmed that he and his lawyers had heard Brown J speak of the 17th September as being the trial date when they were in Court, however, noted that they “actually came out” with the 27th September as being the trial date. He said that he had been “working towards the 27th”. He said he had “a real problem with the 17th; I’ve got no QC, no solicitors, effectively no money and I’m selling cattle to fund the case on the 27th and 28th September.”
Given that I was due to commence the case on Monday, 17 September 2007, the Associate referred the matter to me and at my request advised the husband that the matter remained listed for Monday, 17 September.
On 17 September 2007 the husband attended at Court. He was represented by Mr Gidley of counsel, who informed the Court that he had been instructed at approximately 9:40 that morning to make an application to the Court for an adjournment. The husband had instructed Messrs Wilmoth Field and Warne, Solicitors, at 9:30am on that day. The basis for the adjournment was that previous counsel for the husband, Ms Molyneux QC was not able to attend because her mother was very ill. A further complication was that Ms Molyneux had all the relevant documents.
There was discussion about the events following the appearance before Brown J on 15 August 2007 and the voicemail which the husband had left with her Honour’s Associate. Mr Gidley informed me that the husband had only received the amended order on Friday, 14 September 2007, apparently because the husband had been away for some time.
Mr Mawson continued to appear on behalf of the wife and opposed the adjournment.
There was discussion about the possibility of changing the dates to accommodate the matter during the week. That was not possible.
I enquired of Mr Gidley whether he had personally spoken to Ms Molyneux and Mr Gidley told me that he had not. His instructions however were that it was not until 4:00pm on the day before (i.e. Sunday, 16 September 2007) when the husband rang Ms Molyneux and was then advised that she would not be able to appear because of the illness of her mother.
Mr Gidley also told me that when the husband had spoken to Ms Molyneux he was informed that she was staying in the hospital overnight with her mother and Ms Molyneux was more than happy for me to be advised of her situation.
Whilst making it clear that no imputations were being made against either Mr Gidley or Ms Molyneux, Mr Mawson requested the opportunity to at least speak to Ms Molyneux’s clerk to find out her whereabouts. The matter was stood down to enable this to take place.
When Mr Mawson returned he apologised that the time had been somewhat longer than expected and advised that he had been able to speak directly to Ms Molyneux.
I now set out from the transcript of proceedings on 17 September 2007 the information which Mr Mawson conveyed to me:
“Your Honour, Ms Molyneux was at pains for me to make it clear to your Honour that she intended and meant no discourtesy either to your Honour or to me because ordinarily in those sort of circumstances I would have expected a call from Ms Molyneux to explain. Ms Molyneux has asked me to put the following explanation to your Honour so that your Honour is under no misunderstanding as to her position in this. I undertook to do that, your Honour. Ms Molyneux tells me, your Honour, that after the last occasion before her Honour Brown J Ms Molyneux prepared a detailed memorandum of advice, the contents of which she couldn't discuss with me of course, your Honour.
But that was sent to the husband via Kempson’s and set out very clearly in that advice, she tells me, the steps that were necessary to be taken in preparation for hearing on the 17th. In particular, your Honour, for Kempson’s to be properly placed on the record so that she could be properly briefed and for the payment of fees to be placed in trust so that the case could be prepared. She tells me, your Honour, that she heard nothing more from the husband and no compliance with the detailed instructions in the memorandum. She received a telephone call from the husband on Friday and the substance of that telephone conversation was that the husband undertook to put funds in trust so that Ms Molyneux could prepare the case on Saturday and confer with the husband on Sunday upon confirmation of funds being placed in trust.
That, she tells me, was not done, and she even provided the husband with a fax number to confirm the details of the payment. She next heard from the husband some time after 5 pm on Sunday and at that stage she made it clear to the husband because he had not complied with the earlier advice, nor with the discussions on Friday, that even if she had been minded to assist him by that stage she had made a commitment to assist in the care of her mother who has renal failure and the family are taking it in turns to monitor the mother. Because she wasn't in court on Monday she undertook to put herself on the roster for Monday. Your Honour, Ms Molyneux was very anxious for me to convey that to your Honour and anxious for me to understand that there was no professional discourtesy meant to either of us, more particularly to your Honour.
Your Honour, in my submission that puts things in a very different light. …”
Mr Mawson was absolutely correct in that submission.
Notwithstanding that it was of course inevitable that the trial could not proceed and after further discussion orders were made. One of those orders required the husband to pay the wife’s costs of the day which I fixed in the sum of $3,000. The costs were to be paid within 30 days.
It was on this occasion that I also granted leave to the wife to serve the husband with a request to answer specific questions within 14 days and made a further order that the husband was to answer them by no later than close of business 30 October 2007.
As seen, the husband did not provide those answers within the specified time and he was effectively given an extension of time to 23 November 2007, pursuant to the orders made on 2 November 2007.
Again, as already recorded, the husband did not provide his answers by the relevant date.
Those are the background events which led to the mention before me on 5 December 2007.
Relevant Legal Principles
Case Management
In Byron v Southern Star Group Pty Ltd (1995) 13 ACLC 301 at 302 Kirby P (as he then was), observed:
“In recent years it has increasingly been recognised that justice requires consideration not only for the interests of the parties before the Court but also parties whose hearing has been displaced or delayed by the case before the Court.” (Citations omitted.)
Justice in the modern connotation may extend to the community’s interest and the efficient and timely disposal of litigation which sustains the community’s faith in its judicial institution. The contemporary approach to court administration has, in the language of the High Court, ‘introduced another element into the equation, or more accurately, has put another consideration into the scale’.”
Litigation in this Court follows a number of steps which commence from the filing of an application and continue to the trial itself. The case management system governs the timing and preparation requirements for each step and provides a framework for the Court to supervise the progress of cases and to account to parties and to the community for the way in which public and private resources are used in achieving the best possible outcome.
In Jackamarra v Krakouer (1998) 115 CLR 516 Kirby J dealt with the question of efficient case management as a consideration in judicial proceedings in the following terms:
“The close of the century has seen something of a revival of the insistence upon a stricter adherence to rules of practice. The source of the strictness is largely a judicial concern to ensure the efficient dispatch of court business ... Lord Denning MR, for example, (held that) all through the years men have protested at the law’s delay and counted it as a grievous wrong, hard to bear. Shakespeare ranks it amongst the whips and scorns of time ... To put this right wrong we will in this court do all in our power to enforce expedition and, if need be, we will strike out actions where there has been excessive delay ... Court lists are typically more congested today. This fact and the growing awareness about the need for efficiency in judicial administration help to explain a somewhat diminished inclination, recently, to extend procedural indulgences. Yet even today, rules and efficient case management must not be seen as ends in themselves. The ultimate obligation of the court is the attainment of justice as the law requires it.”
A little earlier the High Court had said in Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 that while case management is a relevant consideration, it should not usurp the primary consideration of justice between the parties.
As the Full Court of this Court said in Tate (2000) FLC ¶93-047:
“In attempting to match the limited resources of the Court to the demands of increasing lists, the principles of case management are assuming greater prominence. Never an end in themselves, they are and must always remain subject to and never prevail over the attainment of justice as ‘the paramount consideration’.” (Citation omitted.)
See also the discussion in Reed and Reed; Draper (Intervener) [1995] FLC ¶92-649 commencing at p 82,569.
As the Full Court also observed in Tate (supra) it is not for litigants, whether appearing in person or otherwise, to pick and choose which orders they will or will not obey or when they may condescend to comply with them. The reason for this is not only because it is contemptuous of the Court’s orders, but also because it works injustice to the parties who do comply and unfairness to the many litigants who are waiting to have their matters dealt with as soon as the Court can hear them.
But it must be remembered at all times that rules and efficient case management must not be seen “as ends in themselves”. It is one of the considerations that a court should take into account when arriving at a discretionary decision on a matter of practice of procedure that has an impact on substantive rights.
Discussion
As can be seen from the chronology which I have outlined the husband was ordered to file documents on 2 May 2003, 11 August 2006, 4 September 2006 and 27 November 2006. It was not until 20 December 2006 that he filed a Statement of Financial Circumstances. He did not file a Response. As I have earlier noted the litigation in the Supreme Court and the Federal Court may well explain some of the delays in this case. However, correspondence which was annexed to affidavit material indicated that the wife’s solicitors continued to press for compliance with the orders.
Further orders were made on 22 January 2007 with which the husband did not comply. Those orders required the filing of what I might call the “usual documents” to enable the matter to proceed to trial. The husband obtained a further indulgence from Kay J on 16 March 2007. He still did not comply.
When the matter came before me on 19 April 2007 I had before me the wife’s trial affidavit filed 23 February 2007 and two affidavits sworn by her solicitor, Ms Watts, filed on 18 January 2007 and 16 April 2007. The solicitor’s affidavits set out the results of inspection of subpoenaed documents. It was from that source as well as her own knowledge the wife attempted to reconstruct the financial situation relating to these proceedings. She included in her affidavit as well a detailed procedural history.
As at April 2007 the mortgage to Suncorp-Metway was in arrears of more than $35,000. Suncorp-Metway had issued a default notice in April 2006 requiring payment of those arrears by 7 May 2007. If this did not occur, then the totality of loans made to the husband would become immediately repayable in full. The loan in question was noted as being just over $1.44 million. There was interest accruing on that debt on a daily basis. The loan is secured over the home in which the wife and the children live as well as the F property.
The wife’s trial affidavit, her solicitors’ affidavit and her Financial Statement provided the basis for her counsel’s submission at the time that the husband had not accounted for well over $2 million. As Mr Mawson submitted at the time, the wife had attempted to provide a reconstruction of what moneys had been received. The sums were quite substantial. There were further borrowings, a further increase in debt and no satisfactory explanation had ever been provided by the husband. Mr Mawson pointed out that there might well be a commercial explanation however the wife did not know. Nor did the wife know what the husband’s case was because he had never previously filed affidavit material or indeed a response to the wife’s application.
In my Judgment delivered 19 April 2007 I set out in some detail the well-known authorities relating to the obligation upon parties in this Court to make full disclosure. I incorporated in my Judgment the Full Court’s discussion in Chang v Su (2002) FLC ¶ 93-117 relating to the task of a trial judge in a property case where that judge was unable to ascertain the extent of the pool of assets due to a lack of full and frank disclosure.
Subsequently I referred to the decision in Kannis (Appeal No. WA 6L of 2000 and WA 9 of 2002, Judgment given 24 December 2002). In Kannis the Full Court set out a summary of the cases referred to in Chang v Su and went on to note that the High Court had dismissed an application by Mr Chang seeking special leave to appeal from the Full Court’s decision.
In Kannis the Full Court went on to say:
“50. [Counsel] submitted that the cases discussed above were authority for the proposition that where there was a finding of deliberate non-disclosure the court could act more robustly in making findings adverse to the party who had actively mislead it. We do not see that the principle should be so confined.
51. Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour. This is the course the trial judge adopted. It was a course clearly open to him and one that does not merit appellate interference.”
As earlier noted the husband did comply with the orders I made on 19 April 2007.
His Response was filed 27 April 2007. He sought two orders in the alternative. His first preference, as would appear from his Response, was that on 11 November 2008 he would transfer to the wife the home in which she and the children lived, subject to the wife refinancing the mortgage debt currently owing to the extent of $500,000 and assuming sole liability for this, and otherwise indemnifying the husband in respect of all rates and outgoings payable in respect of the D property.
The alternative to that order was for the sale of the home, with the nett proceeds to be applied towards the discharge of the mortgage to Suncorp-Metway in the sum of $500,000 only, together with any other encumbrances affecting the property with the balance to go to the wife. The husband was to retain the F property and indemnify the wife in respect of all other liabilities to Suncorp-Metway over and above the sum of $500,000, together with all other debts, rates, and other outgoings payable in respect of the F property.
One or other of those orders may be the proper outcome for these proceedings. What I found somewhat disquieting however was that the husband proposed as his first option for the home to be transferred to the wife in November 2008. As can be seen, he was to have the immediate benefit of the F property in any event, albeit with an indemnity for liabilities to Suncorp-Metway which exceeded $500,000. I record here for the sake of completeness that I have not listed all the orders which the husband sought. I have simply highlighted certain of them.
I refer again, to what the husband said in his voicemail on 14 September 2007 and the events of 17 September 2007. The husband did not provide the answers to specific questions by 30 October 2007 as had been directed. He was given a further indulgence by orders made on 2 November 2007 which effectively extended the time for the provision of those answers to 23 November 2007. He did not comply with that order either.
Determination
It will be recalled that the wife’s application was to provide a further but very short period of time for the husband to provide his answers to the specific questions. In the event he did not so do, a self-executing order was sought which would have the effect that the wife would have leave to proceed on an undefended basis, although it was also proposed that the husband would be at liberty to cross-examine any of the wife’s witnesses and to make submissions.
In A v Z (2006) 35 FamLR 254 the Full Court considered the nature of undefended proceedings commencing at par [62]. In so doing, their Honours referred at [67] to the consideration given to this question by the Full Court in Tate. In that case their Honours considered Drummond J’s reasoning in Australian Securities Commission v MacLeod (1994) 54 FCR 309.
In Tate the Full Court rejected that approach and said at [95]:
“[95] In the exercise of its jurisdiction under the Family Law Act, this Court ought in the exceptional case where a matter is ordered to proceed ‘undefended’, no follow the approach adopted by Drummond J (above). The Family Court of Australia is all too frequently confronted with litigants who fail in their duties of full and frank (and prompt) disclosure of their financial affairs. Where such failure results in a Form 7A being struck out, as here, then that party ought have no further right to be heard without further order of the Court which is a matter for the Judge in his or her discretion.”
By way of explanation I note that the document known as a Response was previously by way of Form 7A.
In A v Z after further discussion their Honours summarised the effect of an undefended hearing in the circumstances of that case as being one which would significantly curtail the husband’s participation in the proceeding. This was because the husband would not be able to test the wife’s and/or her witnesses’ evidence in cross-examination; the husband’s own affidavit material if read in the wife’s case would be out-of-date; and the trial judge might give little or no weight to the material filed on behalf of the husband.
I pause here to note that some of those considerations do not apply to the present case, given that it was proposed that the husband would be able to test the evidence of the wife and/or her witnesses and further, he would be entitled to make submissions.
Commencing at [86] in A v Z the Full Court considered the question of Case Management Guidelines and natural justice. One of the cases to which their Honours referred was an unreported decision of J & J [2000] FamCA 729. Their Honours applied J & J and concluded at [91] that an exceptional case might be dismissed or listed for hearing on an undefended basis, if the discretion to so order is properly exercised.
Their Honours drew attention to the importance of balancing the competing requirements of timely and effective disposition of cases facilitated by effective case management, and the need to ensure justice between parties. I have earlier referred to one of the cases cited by their Honours which led the High Court to confirm that, whilst case management is a relevant consideration, it should not usurp the primary consideration of justice between the parties.
Their Honours then referred at [95] and [96] to Alleschv Maunz (2000) 203 CLR 172, citing what Kirby J had said at [35]; and [39] – [41].
For present purposes it is sufficient for me to reproduce [39] and [40] where Kirby J noted:
“[39]Decision-makers, including the courts, cannot generally force people to protect their own rights, to adduce evidence or other materials, to present submissions or to act rationally in their own best interests. This consideration may be especially relevant in relation to the Family Court where emotions, often engendered by the highly personal issues involved, can sometimes cloud rational thought.
[40]Nor are courts obliged to delay proceedings indefinitely because one party, although proved to be on notice of the proceedings, refuses or fails to appear in person or to be represented by a lawyer or some other individual permitted to speak for them who can explain the need for an adjournment. The rights of other parties are commonly involved. In the Family Court, the rights of non-parties (especially children) may be affected. Additionally (as this Court has itself accepted), the rights of the public in the efficient discharge by courts of their functions must be weighed against unreasonable delay in concluding litigation.”
In the present case I formed the view that the husband has repeatedly disobeyed orders of the Court, largely with no, or no reasonable, explanation. This has put the wife to considerable expense. It is reasonable to infer from the husband’s response that his first priority it to retain the F property. However, the home in which the wife and the parties’ children live was not to be transferred to her until 2008 or alternatively, it was to be sold. The husband’s history, so far as the wife has been able to inform the Court, is not one where the Court could have confidence as to the security of the wife’s position, particularly given the debt situation and the mortgage arrears from time to time. Whilst the evidence is untested, there must be considerable doubts about whether or not the husband has made a proper disclosure of his financial affairs. This was sought to be remedied by the requirement that he provide answers to specific questions.
The Court’s powers in respect of case management are set out in r 11.02 which provides:
“RULE 11.02 FAILURE TO COMPLY WITH A LEGISLATIVE PROVISION OR ORDER
11.02(1) If a step is taken after the time specified for taking the step by these Rules, the Regulations or a procedural order, the step is of no effect.
11.02(2) If a party does not comply with these Rules, the Regulations or a procedural order, the court may:
(a) dismiss all or part of the case;
(b) set aside a step taken or an order made;
(c) determine the case as if it were undefended;
(d) make any of the orders mentioned in rule 11.01;
(e) order costs;
(f) prohibit the party from taking a further step in the case until the occurrence of a specified event; or
(g) make any other order the court considers necessary, having regard to the main purpose of these Rules (see rule 1.04).”
Rule 11.03 provides that a party may apply for relief from (relevantly) an order under r 11.02(2).
My decision takes into account the fact that the principles of case management are important, however I stress that this is only one factor. That principle must always remain subject to, and never prevail over, the attainment of justice. I have already referred to what I would accept are the considerable costs which the wife has incurred in attempting to have this matter finally determined. That is a prejudice which she has incurred. Another prejudice which she has incurred is the fact that these proceedings are still pending. It must be remembered that the attainment of justice is justice between the parties and not merely justice to one of them. There is also the public interest in the efficient discharge by courts of their functions and this must be weighed against unreasonable delay in concluding litigation.
My decision provides the husband with yet another opportunity to provide the answers to specific questions. He is also required to provide an up-to-date Statement of Assets and Liabilities. If he does not do so within the time provided his Response will be dismissed. The solicitor who appeared on his behalf on 11 December 2007 was ultimately confident that the husband would be able to comply with both these orders. If his Response is dismissed he will still have certain, but limited, opportunities at the trial. That will limit the undoubted prejudice which he would suffer by the dismissal of the applications set out in his Response.
When I balanced the considerations for both the husband and the wife I determined that the justice of the case required the orders which I made on 11 December 2007.
Injunctive Relief
One of the orders which I made restrained the husband until 4:00pm on Monday, 17 December 2007 or further order from disbursing funds from the sale of livestock which were to be made to him, save for arrears of mortgage payments owing to Suncorp-Metway Ltd.
From what I was told by Ms Twigg, the money had not yet been received and indeed might not be received until after this trial commenced on 17 December 2007. The period of time in any event was quite short and in all of those circumstances I formed the view that the husband was not likely to be prejudiced at all.
When the matter comes on for hearing the trial judge can consider whether the restraining order should continue or whether it should be varied in some way. I took into account the purpose to which the husband sought to apply those funds. I also took into account the fact that I was told the husband had not provided any documentary evidence to substantiate the liabilities which were said to be outstanding.
The injunction which I granted was, as I have said, for a very short period of time and was designed to effectively preserve the status quo until the trial judge could examine the situation in more detail.
I certify that the preceding one hundred and eleven (111) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carter.
Associate
Date: 19 December 2007
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