Bernet and Bernet

[2017] FamCA 395

FAMILY COURT OF AUSTRALIA

BERNET & BERNET [2017] FamCA 395

FAMILY LAW – PRACTICE AND PROCEDURE – DISCOVERY

Family Law Act 1975 (Cth)

APPLICANT: Ms Bernet

RESPONDENT: Mr Bernet

FILE NUMBER: MLC 6860 of 2015

DATE DELIVERED: 7 June 2017

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 2 June 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Meehan

SOLICITOR FOR THE APPLICANT: Mckean Park

COUNSEL FOR THE RESPONDENT: Mr Kirkham QC

SOLICITOR FOR THE RESPONDENT: Saxby Lawyers

Orders

1. Each party has leave to file such evidence of witnesses (other than experts) as they are so advised.

2. By 4 pm on 21 July 2017, each party file an updated financial statement.

3. That the husband and the wife each have leave to file such affidavits from experts as they are so advised.

4. Each party has leave to bring an urgent application on short notice if either asserts that the other is not complying with the agreed arrangements for preparation for trial as set out in the minutes tendered on 2 June 2017.

5. The application in a case filed 30 May 2017 and the response thereto (not filed but tendered) are each otherwise dismissed.

6. I direct that the combination of minutes of the parties with the various changes be placed on the court file.

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 Bernet & Bernet 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 MELBOURNE

FILE NUMBER: MLC 6860  of 2015

Ms Bernet

Applicant

And

Mr Bernet

Respondent

REASONS FOR JUDGMENT

1. Mr Bernet (the husband) and Ms Bernet (the wife) are awaiting a final hearing of their property dispute in August. That dispute revolves around a farming operation.

2. The discrete application before the Court on Friday 2 June 2017 concerned discovery and expert evidence. Because I did not have time to give reasons in respect of all of the matters, I reserved judgment. The orders at the commencement of these reasons reflect the outcome of that discrete application.

3. Mr Meehan of counsel appeared for the applicant wife whose interim application was filed on 30 May 2017. The Court was told that the wife no longer sought the relief pleaded but rather orders that:

   ·Restricted the parties to the evidence in affidavit form already filed save for some “updating” evidence and a financial statement;

   ·Enabled the wife to file evidence from an expert Mr B:

   ·“to provide a financial analysis of the husband’s farming operations since the conclusion of the 2015/2016 financial year to date including crop yields, stock sales and income and expenditure”;

   ·The husband make available various financial documents that were listed for the purposes of the preparation of the proposed report just mentioned; and

   ·Enabled both parties to appoint an agricultural accountant to provide a report on their respective profits/losses “(or crop on hand at the end of the harvest)” for the 2017/2018 cropping period and such profit/loss be divided “as may be determined by the court”.

4. There was consensus that the experts prepare updated values of three farming properties and if they were unable to agree on the “land classifications” of those farms, they instruct another expert to produce an independent soil survey report in relation to a matter mentioned in their joint report of 9 November 2016. They agreed on other orders but disagreed about who was to update a valuation of the livestock.

5. The evidence in chief issue was a curious one. There is a plethora of affidavits filed in October-November 2016 and one in May 2016. Mr Meehan submitted that as the recent setting down order noted, the parties could not rely on past affidavits and it was an expensive exercise to do them all again. Whilst there is common sense in all of that, the reason the Court seeks fresh affidavits is to ensure that:

   ·Only relevant affidavits are relied upon and the evidence is directed to the final issues in dispute as distinct from the interlocutory issues that support applications in a case; and

   ·To avoid the problem of cross-referencing interlocutory evidence and the trial judge having to read a number of documents that may not be relied upon by the other party to get the gist and context of the deponent’s evidence.

6. As I shall mention below, much of the evidence relied upon was for a final hearing so the direction which arises from the Court’s rules, does not apply.

7. Mr Kirkham QC for the husband provided the Court with a written submission. Most of the matters relating to the questions that were contentious could not be seriously disputed and I only propose to deal with those questions that require court intervention.

8. Mr Kirkham had no difficulty with the parties being entitled to rely on old affidavits but he wanted an order that would allow his client to file material that “rectified” past affidavit evidence. His submission was that the husband’s past material was inadequate and therefore presumably inappropriate or misleading.

9. There is a distinct flavour about the wife’s position that it was not just a cost issue but that there was some advantage in restricting the husband to what he had already said. If that perception is correct, and I make no such finding, the issue can be swiftly disposed of by saying that every legal practitioner who knows that the evidence in written form of a client or that of a client’s witness is incorrect must rectify that position before the witness enters the witness box. To do otherwise would be misleading the court. Before affidavits (which were designed to avoid time-wasting by putting an opponent on notice as to what was to be said), counsel was required to “lead” evidence and could only responsibly do so if the evidence was admissible. If as Mr Kirkham submitted, the husband now knew the evidence was not correct or did not comprehensively assist the Court, it is responsible to rectify the situation.

10. If I am entirely wrong about the flavour of the wife’s position and fresh affidavits by the husband will require expenditure by the wife because of added costs for replying, that issue can be ameliorated by costs. Whilst s 117 of the Act provides that in proceedings, each party shall bear their own costs, the Court is empowered to make an order if there are circumstances so justifying it. If additional, and unnecessary expense, has been incurred, one wonders why that would not be a justifying excuse?

11. More importantly, there could be no suggestion in this case that there is impecuniosity on the part of either party where the property for division runs into millions of dollars.

12. In my view, the parties should file appropriate affidavits. More directly, to the extent that it needs an explanation, the restriction in the rules and that mentioned in the notations to the setting down orders is directed to affidavits used for another proceeding which is concluded. If the affidavits were filed for the final hearing previously when previously set down but not heard, there can be no such restriction.

13. I decline therefore to make an order in the terms of the draft minute but will order that each party has leave to file such evidence in chief as they are so advised.

14. Each party should, as agreed, file an updated financial statement. The rules provide an obligation for people to do that as their circumstances change. The order should be made here.

15. The next issue concerns the wife’s desire to file an expert’s evidence as to the “financial analysis” of the farming operations. It was difficult to get a clear understanding what this proposed person would say. The starting point is the wife’s interlocutory affidavit where she said that she did not understand the intricacies of the financial affairs of the farming business. There is therefore good reason for, and could not be any objection to, an accountant giving a description of what the financial records show. That does not require expert evidence. If the proposed evidence is that the records do not reflect what has occurred, that also may not be expert evidence as it may be a narrative of what has occurred.

16. If the evidence is intended to show that on the basis of a certain amount of expenditure combined with various farming activities, the yield should have been different, that is not an accounting exercise but rather an opinion as to whether the farm was properly managed. Whether it is a wastage argument or a matter of contribution, depends on how it is put. None of this was clear because nothing in the wife’s supporting affidavit makes the specific claim.

17. I agree with the submission of Mr Kirkham that until that evidence is clear, particularly where the court that does not have the benefit of pleadings, the parameters of the dispute remain vague and uncertain whether there is a need for expert evidence. As no evidence was drawn to my attention directed to that specific issue, I cannot make such the specific order as sought by the wife. That said, if the wife wishes to rely upon some other evidence of an expert nature, no doubt she will be so advised.

18. I observed at the time that it is with great reluctance that the court should decline to allow a party to call evidence which he or she considers may be relevant to an issue in dispute. To deny the party that right even where the rules of court rely upon a single expert, may amount to a denial of procedural fairness in circumstances where s 79(2) requires the court to be satisfied that the order it is proposing is just and equitable to both parties. How can that be seen to be fair if a party is denied the right to call evidence which is (at least in that party’s eyes) relevant. The focus of the rules however is on evidence which is relevant. I am prepared to make a general order that expert evidence will be filed if it is relevant to an issue that requires it even though the rules focus on a single expert because too much attention is being paid here to that issue rather than focus on getting the matter ready for trial. To require a further application will be expensive, time wasting and probably become unnecessary if there is ultimately agreement as to the nature of the dispute. My determination is also affected by my concern about what has been happening to date which is something I return to below.

19. The next proposal of the wife was directed to discovery of documents. Mr Meehan referred to the order that was made in March 2016 that required each party to provide a list of documents in their possession or control. That had a distinct old-fashioned flavour of an affidavit of documents about it but the order went on to say:

    relevant to the issues in dispute.

20. It is not clear how that clarifies or sets the parameters of the disclosure obligations; each case must depend upon its circumstances. Where both parties have been in a business or where there are professional advisers involved for them, the parameters should be much more easily confined. It is not clear to me what the wife’s position is here because the evidence only said that she did not have a:

    proper understanding of the husband’s financial position relating to his farming operations on the basis of the documentation he has made available for inspection to date.

21. These proceedings were begun in July 2015 and were later set down for a final hearing in November 2016. Both parties later agreed to adjourn that because of the illness of a witness. The point of raising the issue is that the litigation is nearing its second anniversary and the question of discovery and witnesses is still unresolved. I return to the basis of what does determine discovery disputes.

22. The Family Law Rules 2004 [13.07] impose a duty to disclose documents that are ‘directly’ relevant to an issue. Until the disputed issue is known, it is hard to known what is relevant. Discovery is not just preparing lists of documents or making a wide fishing type inquiry; that is particularly so where there are advisers (as here) looking at what the dispute is about.

23. Direct relevance requires of lawyers, as well as parties, an assessment after their examination of their client’s documents but it also requires discussion between lawyers to isolate and limit issues in dispute. That is clear in chapter 1 of the Family Law Rules.

24. Litigation behoves lawyers to discuss with each other as officers of the court the nature and extent of the dispute. That of necessity involves inquiring of the other litigant’s advisers not just what documents they wish to see but what case they are conducting. At an early stage therefore, parties and advisers are required to focus upon the real issues in dispute and what documentary evidence assists the determination of those issues.

25. It is concerning that if discovery has not been completed here (when the trial would have been heard in November 2016), why that is so. The hearing is only weeks away again.

26. It must therefore be apparent that the wife should know what she is ultimately endeavouring to prove. As such, she should be able to ask for a confined rather than general class of documents. It is comforting that Mr Kirkham has indicated that co-operation will be forthcoming from the husband and Mr Meehan has indicated that the wife will travel with her expert to the farm to inspect what apparently is a reasonably sizeable set of filing cabinets. If that co-operation does not eventuate, an urgent listing before me can be sought and will be dealt with. Presumably in any event, those pursued documents relate to expenditure to earn farming income and should have already been compiled for an accountant to undertake financial statements.

27. It is unnecessary therefore to order general discovery in terms of paragraph 5 of the wife’s draft minute on the basis that I do not know what the issue is or what the wife’s proposed expert considers necessary.

28. Accordingly, the discovery orders I will make are set out at the beginning of these reasons.

29. By his (as yet unfiled) response, the husband sought a variety of orders which I do not need to detail here as many of them were part of the combined minutes that resulted in an agreement. They deal with issues other than just discovery and the filing of affidavits but it is sufficient for me to note that most matters were compromised.

30. Another interesting argument arose about a livestock valuer, Mr C. It seems that, as might be expected in a farming community, most people know each other. Mr C was apparently to be invited to a wedding involving the parties but, to use the expression of counsel, “did not make the cut”. The husband’s evidence was that Mr C was not independent because he was “an acquaintance” of the wife. That is not a basis to say that he is not independent. I consider that if there is some suggestion of bias, it can be raised at trial but it could only then be on the basis that the bias has infected the independence or expertise. A bald statement as made here does not assist me. That said, if the husband wanted to spend money on another expert and rely upon that, I cannot see why he should not be able to do so. Presumably, the cattle market will determine the value anyway.

31. I note the parties’ agreement about the other minutes put before the Court. In those circumstances, I shall presume they will do what they have agreed to do rather than make formal orders. If there is a breakdown of those arrangements, the parties have leave to bring an urgent application, whereupon costs will no doubt be a simple issue to determine.

32. I shall direct that the combination of minutes of the parties, with the various changes, be placed on the court file.

I certify that the preceding Thirty Two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 7 June 2017.

Associate: 

Date:  7 June 2017