Brayton & Brayton (No 2)

[2022] FedCFamC1F 567

Federal Circuit and Family Court of Australia

(DIVISION 1)

Brayton & Brayton (No 2) [2022] FedCFamC1F 567

File number(s):

SYC 5516 of 2017

Judgment of:

WILSON J

Date of judgment:

9 August 2022

Catchwords:

FAMILY LAW – MAJOR COMPLEX FINANCIAL PROCEEDINGS LIST – practice and procedure – case management – litigation guardian appointed – weekly directions ordered.

Legislation:

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rule 3.01

Cases cited:

Aon Risk Services Australia Pty Ltd v Australian National University (2009) 239 CLR 175

Bacall & Zagar [2020] FamCA 350

Division:

Division 1 First Instance

Number of paragraphs:

34

Date of hearing:

3 August 2022

Place:

Melbourne

Counsel for the Applicant:

Mr G. Richardson SC

Solicitor for the Applicant:

Barkus Doolan

Counsel for the First Respondent:

Mr J. Graham QC

Solicitor for the Respondents:

Armstrong Legal

Counsel for the Second to Eighteenth Respondents:

Mr B. Roberts QC

Solicitor for the Second to Eighteenth:

WRP Legal & Advisory

ORDERS

SYC 5516 of 2017

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS BRAYTON
Applicant

AND:

MR BRAYTON

First Respondent

MS AA BRAYTON

Second Respondent

MR TOBLER (and others named in the Schedule)

Third Respondent

order made by:	WILSON J
DATE OF ORDER:	9 AUGUST 2022

THE COURT ORDERS THAT:

1.The wife has leave to rely on the fifth amended application along with the third amended points of claim filed on 28 July 2022.

2.On or before 4:00pm on 16 August 2022 the respondents must file and serve any response to the fifth initiating application and points of defence to the third amended points of claim.

3.Ms CN from CO Lawyers is appointment as the litigation guardian for the children. 

4.The costs of the litigation guardian are to be met from the DD Trust. 

5.On or before 4:00pm on 16 August 2022 the wife’s representative must provide all documents filed thus far to the litigation guardian.

6.On or before 4:00pm on 16 August 2022 each of the husband and the 2^nd to 18^th respondents must provide copies of the DD Trust General Ledgers for the period of 2018/2019, 2019/2020 and 2020/20221 to Ms BX and the wife's legal representative.

7.On or before noon on 16 August 2022 each of the husband and the 2^nd to 18^th respondents must provide a response in writing together with the documents requested as set out by BV Company in the correspondence dated 25 July 2022.

8.On or before 4:00pm on 16 August 2022 the husband must provide an inventory of the furniture, collectibles and artworks located in the Suburb N property and in his possession and control for the purpose of facilitating the valuation pursuant to paragraph 9.

9.On or noon on 16 August 2022 each of the Husband and the 2^nd to 18^th respondents must provide to the wife's legal representative a copy of the valuation dated 2 May 2022 for AE Pty Ltd.

10.The further hearing of this proceeding is adjourned to 10:00am on 17 August 2022 for mention in the Major Complex Financial Proceedings List.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

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

REASONS FOR JUDGMENT

WILSON J

Introduction

1. The trial of this proceeding is fixed for 5 September 2022 on the expectation that it will run until 19 September 2022.

2. On Wednesday 3 August 2022, that is to say with as little as one month ahead of the commencement date of the trial, application on behalf of the wife was made for an extensive array of orders set out in 22 separate paragraphs of an application in a proceeding dated 28 July 2022.  This proceeding is in the Court’s Major Complex Financial Proceedings List.  Cases in that list enjoy the significant advantage of having complex applications of the sort this case presented returnable before a judge of that list with enormous expedition.  The relevant application in a proceeding was filed on a Thursday, served and it was heard on the following Wednesday thereafter with me in Melbourne and Senior Counsel and Queen’s Counsel appearing both in person and remotely across three states of Australia.  This decision was reserved for three business days.  By reason of the imminence of the trial, the parties are best served by this decision being handed down without delay, which I now do. 

   Subpoena costs issue

3. The costs of compliance with a subpoena directed to BZ Company was dealt with last Wednesday.  No issue was raised about the costs of compliance being paid by the party requiring compliance with the subpoena.  Mr JJ who appeared for BZ Company asked me to make orders for the costs of his client to be fixed in a sum specific.  I decided not to do that as I had next to no information at my disposal to enable a determination to be made on that issue.  I ordered BZ Company’s costs of complying with the subpoena to be assessed by Senior Judicial Registrar Hoult. 

   Joinder of Z Corp Pty Limited (“Z Corp Pty Limited”)

4. The wife applied for the joinder of Z Corp Pty Limited. No issue was taken that Z Corp Pty Limited is a party the inclusion of which is necessary for the purpose of rule 3.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.  The parties for whom Mr Roberts QC appeared accepted that the wife is entitled to recast her case in such manner as she may be advised, including introducing again propositions earlier abandoned so long as even handed justice can be extended to all other parties affected by any such rearrangement of the wife’s case.  After considerable debate on point, the nub of the complaint by all respondents was that the wife should only have leave to recast her case at this late stage of the interlocutory phases of this litigation if no irremediable prejudice is occasioned to the respondents.  Mr Roberts submitted that his client may be prejudiced by the wife’s recasting of her case unless the trial is adjourned.  Having heard all parties on the possibility of the trial of this case being adjourned by reason of the grant of any of the orders sought in the wife’s application in a proceeding filed on 28 July 2022, the position was reached that weekly directions hearings will be conducted hereafter until trial to see precisely how each party is coping with trial preparation.  That approach seemed to me to accord with the approach favoured by the High Court in Aon Risk Services Australia Pty Ltd v Australian National University.[1]  If it becomes apparent that a respondent finds himself, herself or itself unable to properly prepare for trial or that he, she or it cannot obtain the necessary evidence needed to advance the best case each respondent is able ahead of the trial commencing on 5 September 2022, then consideration may need hereafter to be given to refixing the trial date.  However, that point has not yet been reached. 

   [1] (2009) 239 CLR 175.

   AmendING pleadings

5. In those circumstances, it seems to me to be appropriate to grant the joinder sought in respect of Z Corp Pty Limited and for Z Corp Pty Limited to become the 19^th respondent to this proceeding.  That disposes of paragraphs 4 and 5 of the wife’s application.  Consequent upon those orders being made the wife will need to recast her initiating application and to amend her points of claim.  That proposal is recognised in paragraph 2 of her application returnable last week.  She should take the steps contemplated by paragraph 2 of her application immediately.  The fifth amended application along with the third amended points of claim were filed on 28 July 2022.  I grant leave to the wife to rely on those two documents.

6. The respondents should have seven days to respond.  For the purposes of paragraph 3 of the wife’s 28 July 2022 application I order that on or before 4:00pm on 16 August 2022 the respondents must file and serve any response to the fifth initiating application and points of defence to the third amended points of claim.

   Joinder of B, C, CB, CD and CE Brayton

7. In paragraphs 6 and 7 of the wife’s application, she proposed the joinder of the persons mentioned above, correctly described factually and legally as “the children”, on the basis that their inclusion is necessary as persons affected by this proceeding.  No protest was advanced about their joinder.  The only issue was the identity of their litigation guardian.  The wife herself proposed the husband to be the litigation guardian of the children.  Alternatively, if the husband were not appointed in respect of all children then he proposed that he be appointed litigation guardian of some children and Mr BB Brayton be appointed litigation guardian of others.  In paragraph 10 of her application the wife further proposed the selection of one of three family law practitioners to be appointed as the litigation guardian of the children, the costs of which is to be met from funds held by the DD Trust.

8. The husband proposed that the children’s litigation guardian be the Mr AP.  Such a proposal has the attraction that Mr AP is very well equipped to represent the children as their litigation guardian.  But to the extent that he will be required to engage in day-to-day tasks that must be undertaken and which are ordinarily undertaken by solicitors and his own counsel, if that eventuality came to pass, I am unable to see the advantage of having a person of the eminence of Mr AP undertaking the more routine of tasks that must be done as a litigation guardian. 

9. In those circumstances the choice of three solicitors presented itself.  In my view the children require objective representation so it is not appropriate for the husband to be their litigation guardian. As for the concept of the husband acting for some of the children with Mr BB Brayton representing others, that proposal is also met by the reality that a party to the proceeding would be their litigation guardian.  It could not be said that either the husband or Mr BB Brayton is neutral, detached and wholly objective.

10. Paragraph 10.3 of the wife’s application proposed Ms CN from CO Lawyers.  I make an order for her appointment as the litigation guardian for the children.  Her costs and expenses are to be met from the DD Trust. 

11. In making an order for the appointment of a litigation guardian so close to the presently fixed trial date, the likelihood of procedural complications arising is exacerbated.  This case is far from straight forward.  While the newly joined children’s role in the litigation may be relatively confined, the litigation guardian (newly appointed) must have a reasonable opportunity of becoming fully acquainted with all the factual and legal intricacies of this case.  Whether Ms CN is able to do that in the time between now and 5 September 2022 remains to be seen.  If the ligation guardian has insufficient time to prepare for the trial between now and 5 September 2022, then the wife herself may face an adjournment application.  While it is best I say nothing more about that now, I can readily anticipate such an application being later made. 

12. Naturally, the litigation guardian must have all documents filed thus far.  The wife’s representatives must provide them by not later than 4:00pm on 16 August 2022. 

    Further disclosure

13. As is often encountered in complex commercial litigation (of which this case is an illustration, even though it arises in a family law context) disclosure has been and continues to be an issue between the parties. I am unable to conclude that the parties have exhibited an uncooperative attitude towards the discharge of their duties of disclosure (Bacall & Zagar)[2] yet it is fair to say that a remarkable number of recent appearances in this case has been referrable to disclosure and complications associated therewith.[3] 

    [2] [2020] FamCA 350.

    [3] Transcript of hearing 3 August 2022, T13 L35-45.

14. Paragraph 13 of the wife’s application related to the disclosure of copies of any share plan between Z Corp Pty Limited and Z Group of Companies Pty Ltd (“Z Group of Companies Pty Ltd”) relating to nearly 45 million shares.  Z Corp Pty Limited hold those on a bare trust for Z Group of Companies Pty Ltd.  Mr Graham QC submitted that no problems existed with further disclosure so long as all parties have liberty to apply.  Of course, all parties have such liberty in all cases in the Major Complex Financial Proceedings List.

15. The husband agreed to paragraph 13 of the wife’s application.

16. So far as the position of the clients of Mr Roberts QC was concerned, whatever may follow from orders in terms of paragraph 13 must await another day.  But that is not a reason for not ordering disclosure.

17. Paragraph 14 of the wife’s application related to the provision of certain ledgers.  The husband agreed to those orders.  I shall therefore make orders in terms of paragraph 14 of the wife’s application in a proceeding.

18. Paragraph 15 was not pressed because the husband executed a retainer agreement with BW Real Estate.

19. Paragraph 16 related to responses the wife sought from the respondents concerning BV Company correspondence.  Senior Counsel for the wife informed me that the husband agreed to do as the order sought by Wednesday 10 August 2022.  The wife sought orders for compliance by Friday 5 August 2022.  I will extend the compliance date to noon on 10 August 2022.  No real explanation was given about the importance of supplying BV Company with information by 5 August 2022 or 10 August 2022 except to say that the BV Company report could be completed by 17 August 2022 if the responses were to hand by BV Company by 5 August 2022.  Whether BV Company is doing any more than seeking the most time it can obtain in order to complete its report was not stated.  However, having regard to the exquisite timing imperatives against which the parties must operate, I record my hope and expectation that BV Company will nevertheless supply its report by 17 August 2022 even if the respondent’s responses are to hand on 10 August 2022 and not 5 August 2022.  Unless those additional five days present insuperable obstacles, then BV Company should proceed on the basis that its report is expected on 17 August 2022.

20. Paragraph 17 related to valuations of collectibles, artwork and jewellery.  The husband agreed to an order in terms of paragraph 17.

21. The terms of paragraph 18 were open-ended as to time yet the concept recorded in the order was the subject of the husband’s consent.  In those circumstances I order him to provide the inventory sought by seven days but from 9 August 2022.  Therefore the time for his compliance is 4:00pm on Tuesday 16 August 2022.

22. Paragraphs 19 and 20 were the subject of the husband’s consent so I make those orders by consent.

23. In paragraph 21 of the wife’s application she sought orders for the provision of the valuation date 2 May 2022 for AE Pty Ltd.  She sought that document by 48 hours of these orders.  In debate that was expanded to 72 hours of these orders.  The factual narration of the issue to which paragraph 21 is directed was set out in a chain of emails passing between BU Company and the solicitors in this litigation.  In essence, between 13 July 2022 and 1 August 2022 the relevant BU Company employee had been corresponding in relation to outstanding information needed to enable BU Company to complete its tasks.  Among the items in respect of which progress was reported was AE Pty Ltd.  BU Company stated that the report to be provided by it was “on track for delivery by 19 August 2022”.  Relevant to the achievement of that report’s delivery by 19 August 2022 was the provision of a valuation dated 2 May 2022.  No opposition was put forward to that valuation being provided.  The time for the provision was put at 72 hours from the date of these orders.  In those circumstances I will require the valuation in paragraph 21 to be supplied by noon on 16 August 2022.

24. Paragraph 22 was premised on the valuations by BU Company not being provided by BU Company by 19 August 2022.  If they were not, the wife sought leave to provide to Ms BX valuations in relation to two Queensland properties, one Adelaide property and one New Zealand property and to do so by 19 August 2022.

25. Mr Roberts QC sought the deferral of questions related to paragraph 22 until Tuesday 9 August 2022.  Mr Graham QC submitted that the matters traversed in paragraph 22 should likewise be deferred until 9 August 2022.

26. The need to make an order in terms of paragraph 22 even on the wife’s contentions is only enlivened if by 19 August 2022 the BU Company report does not emerge.

27. As I propose to conduct weekly directions hearings of this proceeding from this date to 5 September 2022, the progress of the BU Company report finalisation will be known at regular intervals prior to 19 August 2022.  Of course I will hear Mr Graham QC and Mr Roberts QC on point.  However, at least one view is that an order in terms of paragraph 22 is premature and will only be relevant if on 19 August 2022 BU Company fails to supply its report.

    Mediation

28. The concept of a mediation of this proceeding being held prior to the trial was mooted.  A mediation was last conducted in May 2020.  The case was in a vastly lesser prepared state at that time, the orders made by me last December had not then been made and certain parties were then not before the Court.  There is considerable merit in attempting to resolve this case consensually if at all possible.  I will require submissions on the desirability of sending the case to mediation and willingness of the parties to mediate.

29. The prospects of achieving a successful outcome at mediation is enhanced by the parties having the totality of the evidence at their fingertips.  Only then are they able to more comprehensively assess their strengths and weaknesses if the mediation fails.  Further, while the sum of $350 million has been bandied around by the parties at several mentions, a more definitive statement of the value of the pool of assets needs to be ascertained before the parties can meaningfully negotiate.

30. That said, and consistent with the approach adopted in superior courts at federal and state levels in the Commonwealth of Australia, I will not start the trial of this proceeding unless and until the case has passed through a further mediation, that is to say one subsequent to May 2020.  The parties should embed such a mediation in their trial preparation.

    Costs

31. In paragraph 23 of her application in a proceeding the wife sought indemnity costs.  According to authority prevailing in this court indemnity costs are usually ordered once a determination has been made that an order for costs is appropriately made under s 117(2) consequent upon one of the issues in s 117(2A) being enlivened.  The court may at its discretion order indemnity costs where exceptional circumstances exist rendering such an order just.

32. While lengthy, the debate on 3 August 2022 was mostly in the nature of legitimate proposals and counterproposals to advance this case to trial.  The joinder issue has been raised very late.  Ongoing disclosure issues have been canvassed yet again as has the obtaining of expert evidence.  None of that tells of circumstances out of the ordinary[4] warranting the imposition of indemnity costs. 

    [4] Hatcher v Cohn (2004) 139 FCR 425 (Kiefel J).

1. I shall reserve all parties’ costs of and incidental to the hearing on 3 August 2022.

   Weekly directions until trial

2. All parties agree that it is in the interests of all parties for me to keep this case under close judicial control in the lead up to trial.  To that end I propose to conduct weekly directions hearings each Wednesday at 10:00am.  By 4:00pm each Tuesday the solicitors for the applicant must supply my chambers with an agenda of outstanding issues to be canvassed the following day.

I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson.

Associate:

Dated: 9 August 2022

SCHEDULE OF PARTIES

SYC 5516 of 2017
Respondents
Fourth Respondent:	AM PTY LTD
Fifth Respondent:	CC HOLDINGS PTY LTD
Sixth Respondent:	DD GROUP PTY LTD
Seventh Respondent:	EE INVESTMENTS PTY LTD
Eighth Respondent:	FF PTY LTD
Ninth Respondent:	GG HOLDINGS PTY LTD
Tenth Respondent:	AN HOLDINGS PTY LTD