Brown & Brown

[2007] FamCA 493

FAMILY COURT OF AUSTRALIA

BROWN & BROWN (NO. 2) [2007] FamCA 493

FAMILY LAW - COURTS AND JUDGES – Disqualification

Family Law Act 1975 (Cth)

R v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 262-263
Livesey v The New South Wales Bar Association (1983) 151 CLR 288
Johnson v Johnson (2000) 201 CLR 488
Re Lusink; Ex parte Shaw (1981) 55 ALJR 12; 32 ALR 47
Re JRL; Ex parte CJL (1986) 161 CLR 342
Vakauta v Kelly (1989) 167 CLR 568
Webb v The Queen (1994) 191 CLR 41
Ebner v Official Trustee in Bankruptcy; Clenae Pty Ltd v ANZ Banking Group Ltd (2001) 205 CLR 337
S & M Motor Repairs Pty Ltd & Others v Caltex Oil (Australia) Pty Ltd & Another (1988) 12 NSWLR 358
Shelton v National Roads and Motorists Association Ltd [2004] FCA 977
Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd & Others (1986) 6 NSWLR 272
Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd [2006] HCA 55

APPLICANT: Mr Brown

RESPONDENT: Mrs Brown

SECOND RESPONDENT Ms RB

THIRD RESPONDENT: BH Company

FOURTH RESPONDENT: MA Company

FIFTH RESPONDENT: BI Company

SIXTH RESPONDENT: CW Company

SEVENTH RESPONDENT: DI Company

FILE NUMBER: SYF 9777 of 1992

DATE DELIVERED: 29 May 2007

PLACE DELIVERED: Sydney

JUDGMENT OF: O'Ryan J

HEARING DATE: 13, 15 and 16 November 2006, 20 December 2006, 8 February 2007, 20 April 2007 and 11 May 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Counsel B1

SOLICITOR FOR THE APPLICANT: Firm B

COUNSEL FOR THE RESPONDENT: Counsel A1 and Counsel A2

SOLICITOR FOR THE RESPONDENT: Firm A

SOLICITOR FOR THE SECOND RESPONDENT: Firm C

COUNSEL FOR THE THIRD TO SEVENTH

RESPONDENTS:

Counsel D1 and Counsel D2

SOLICITOR FOR THE THIRD TO SEVENTH

RESPONDENTS:

Firm D

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 9777 of 1992

Mr Brown

Applicant

And

Mrs Brown

Respondent

And

Ms RB

Second Respondent

And

BH Company

Third Respondent

And

MA Company

Fourth Respondent

And

BI Company

Fifth Respondent

And

CW Company

Sixth Respondent

And

DI Company

Respondent

REASONS FOR JUDGMENT

Introduction

1. Before me for hearing is an application made on 15 November 2006 by the husband seeking that I disqualify myself from hearing any further applications between the Husband, the wife and the Second to Seventh Respondents. There are pending proceedings commenced by application filed on 10 March 2006, as amended on 15 November 2006, for enforcement of an order for spousal maintenance and arrears of adult child maintenance. The enforcement proceedings include an application for orders pursuant to s 106B of the Family Law Act 1975 (Cth). There are also pending proceedings for orders pursuant to s 79A of the Family Law Act. The Husband has also recently filed an application for an order pursuant to s 83 of the Family Law Act.  The proceedings commenced in April 2002.

2. In the enforcement proceedings the Wife sought the following:

   APPOINTMENT OF TRUSTEE

   1.      That [Mr S], Official Liquidator and Registered Trustee, be appointed as the Family Law Trustee to hold the [G] Trust Properties on trust with power to sell (and manage including power to borrow on security of the assets) pursuant to orders made for enforcement by way of this Application.

   ORDERS FOR ENFORCEMENT

   2. The wife applies for enforcement (including the issue of an enforcement warrant) by reference to the Family Law Act 1975 and the Family Law Rules 2004 to enforce the following orders made by this Honourable Court against the Husband:

   (a)Order 1 of the Orders made by His Honour Mr Justice O’Ryan on 5 December 2005 requiring the husband to pay by 4.00pm on 31 January 2006, the sum of $3,750,000 in lump sum spouse maintenance (less payments made by the Husband from 10 February 2006 until 13 November 2006 in accordance with a stay on conditions made on 14 February 2006) together with interest thereon until 14 November 2006 being in the sum of $326,630 as per Affidavit of [Ms E] affirmed on 14 November 2006 making the total payable $4,027,630; and

   (b)Order 2 of the Orders made by His Honour Mr Justice O’Ryan on 5 December 2005 requiring the husband to pay by 4.00pm on 31 January 2006, the sum of $61,000 in adult child maintenance together with interest together with interest thereon until 14 November 2006 being in the sum of $5,352 as per Affidavit of [Ms E] affirmed on 14 November 2006 making the total payable $66,352

   ENFORCEMENT

   3.      That forthwith [BH Company] as the majority shareholder of [MA Company]; and/or the husband as in his capacity as a director of  [MA Company] and/or [MA Company]; and/or the husband in his capacity as appointor of the [G] Trust (which beneficially owns [MA Company] and its underlying assets) do all acts and things and sign all necessary documents to vest the [inner suburban Sydney A] Property in the Family Law Trustee who shall hold the [inner suburban Sydney A] Property on trust for sale as provided for in Orders 9 and 10 hereunder.

   4.      That forthwith [BH Company] as the majority shareholder of [DI Company]; and/or the husband as in his capacity as a director of  [DI Company]; and/or [DI Company]; and/or the husband in his capacity as appointor of the [G] Trust (which beneficially owns [DI Company] and its underlying assets) do all acts and things and sign all necessary documents to vest the [North Western Sydney A] Property  in the Family Law Trustee who shall hold the [North Western Sydney A] Property on trust for sale as provided for in Orders 9 and 10 hereunder.

   5.      That forthwith [BH Company] as the majority shareholder of [BI Company]; and/or the husband as in his capacity as a director of  [BI Company]; and/or [BI Company]; and/or the husband in his capacity as appointor of the [G] Trust (which beneficially owns [BI Company] and its underlying assets) do all acts and things and sign all necessary documents to vest the [inner suburban Sydney C] Property in the Family Law Trustee who shall hold the [inner suburban Sydney C] Property on trust for sale as provided for in Orders 9 and 10 hereunder.

   6.      That forthwith [BH Company] as the majority shareholder of [CW Company]; and/or the husband as in his capacity as a director of  [CW Company]; and/or [CW Company]; and/or the husband in his capacity as appointor of the [G] Trust (which beneficially owns [CW Company] and its underlying assets) do all acts and things and sign all necessary documents to vest the [inner suburban Sydney B] Property in the Family Law Trustee who shall hold the [inner suburban B] Property on trust for sale as provided for in Orders 9 and 10 hereunder.

   7.      That each of the Husband, [MA Company], [DI Company], [BI Company], [CW Company] and [BH Company] forthwith:

   (a)do all acts and things and sign all necessary documents to transfer to the Family Law Trustee each of the [G] Trust Properties;

   (b)do all acts and things and sign all necessary documents to transfer to the Family Law Trustee all of the shares in each of [MA Company], [DI Company], [BI Company], [CW Company] and [BH Company];

   (c)Provide all keys, alarm codes, computer password and do all acts and things to provide to the Family Law Trustee total and unfettered control of each of the [G] Trust Properties.

   8.      That forthwith [BH Company], the husband and all employees or agents of [BH Company]; [DI Company]; [BI Company]; and [CW Company], do all acts and things and cooperate with the Family Law Trustee and the agent(s) appointed to market and sell each of the [G] Properties including but limited to:

   (a)making the key available to the agent;

   (b)allowing inspection of each of the [G] Properties at all reasonable times requested by the agent(s) and/or the Family Law Trustee;

   (c)doing or saying nothing to hinder or prevent a sale being effected;

   (d)ensuring each of the [G] Properties including the grounds are in a neat and clean condition at the time of inspection by the agent(s) and prospective purchasers;

   (e)handing documents requested by the Family Law Trustee and/or the agent in relation to the rental and outgoings of each of the [G] Properties including but not limited to

   (i)the names, addresses and telephone numbers of each tenant;

   (ii)a copy of each of the leases in respect of each of the tenants;

   (iii)copies of all documents evidencing the outgoings on each of the [G] Properties;

   (iv)all details and documents evidencing payment of rent and outgoings by each of the tenants; and

   (v)and all other reasonable requests made by the agent or the Family Law Trustee for further and other documents relevant to the marketing and/or sale of each of the [G] Properties.

   9.      That the Family Law Trustee shall forthwith upon being vested with the [G] Trust Properties as provided for hereof, do all acts and things and list for sale by public auction each of the [G] Trust Properties in the following manner:

   (a)instruct such solicitor as the Family Law Trustee deem appropriate to prepare a contract for sale of land in relation to each of the [G] Properties and act on the sales;

   (b)instruct such agent(s) and auctioneer(s) that the Family Law Trustee deem appropriate to list, market and sell each of the [G] Properties;

   (c)execute all documents requested by the real estate agent for sale of each of the [G] Properties;

   (d)request the real estate agent(s) to recommend a reserve price to be placed on each of the [G] Properties for the purpose of the auction sale and accept such recommended reserve price;

   (e)attend the auction and negotiate with the highest bidder(s) in the event that the reserve price is not reached in relation to any or all of the [G] Properties and accept the advice of the real estate agent as to the acceptance of a price less than the reserve price, either during or after the auction;

   (f)execute a contract of sale of land in relation to each of the [G] Properties;

   (g)cooperate in every way with the real estate agent in relation to the auction of each of the [G] Properties;

   (h)execute all other documents necessary to complete the sale of each of the [G] Properties.

   10.    That the Trustee shall deal with the proceeds of sale of each of the [G] Properties in the following manner and priority:

   (a)in payment of the Family Law Trustee’s costs and disbursements;

   (b)in payment to the real estate agent’s commission and auction expenses (if any) due on the sale of each of the [G] Properties;

   (c)in payment of legal costs and disbursements of the sale of each of the [G] Properties;

   (d)in payment of the amount required to discharge the mortgage registered against of each of the [G] Properties;

   (e)in payment of the balance to the husband, however, the Family Law Trustee is forthwith upon the proceeds becoming available for distribution to the husband be hereby appointed as trustee for the Husband and shall deal with the said proceeds in the following manner and priority:

   (i)in payment to the wife of the sum of $3,750,000 together with interest calculated at $1,53.08 per day as and from 1 February 2006 until date of payment;

   (ii)in payment to the wife of the sum of $61,000 together with interest calculated at $17.13 per day as and from 1 February 2006 until date of payment;

   (iii)In payment of GST, CGT and all other taxes payable in relation to the sale of each of the [G] Properties; and

   (iv)The balance (if any) to the Husband.

   TRUSTEE’S POWERS

   11.    That within 14 days from the date of these orders, the Third, Fourth, Fifth, Sixth and Seventh Respondents and the husband as appointor of the [G] Trust forthwith provide to the Family Law Trustee the Financial Records.

   12.    That the Family Law Trustee has the power to investigate each of the Third, Fourth, Fifth, Sixth and Seventh Respondents and the [G] Trust to ascertain any improper application of funds or borrowings secured over each of the [G] Properties.

   13.    That the Family Law Trustee has the power to take possession of any cash flow (including rent, licence fees, occupation fees and any other source of income) from the [G] Trust properties or each of [MA Pty Ltd], [DI Pty Ltd], [BI Company], [CW Company] and [BH Company], with such cash flow to be applied in the following order and priority:

   (a)To protect and preserve the assets pending the sale;

   (b)Family Law Trustee’s fees and expenses including legal fees.

   ANCILLARY ORDERS

   14.    That the husband as appointor of the [G] Trust be restrained by injunction from doing any act or thing to change or remove or in any way fetter or limit the power of the trustee of the [G] Trust, [BH Company].

   15.    That the husband shall indemnify and keep the Family Law Trustee indemnified in relation to any claim, action, suits and demands as may be made against the Family Law Trustee as a result of any act or thing done or omitted to be done by the Family Law Trustee from the assets owned by each of [MA Company], [DI Company], [BI Company], [CW Company] and [BH Company].

   DEFAULT

   16.    In default of [BH Company]; [DI Company]; [BI Company]; [CW Company]; [MA Company] or the husband or any of them doing all acts and things and executing all such documents as are necessary to give effect to these Orders within 14 days of an obligation to do so is set under these orders, and on the Registrar being satisfied of such failure or neglect or default (by any of the Respondents) by way of an affidavit evidence only, then a Registrar of the Family Court of Australia at Sydney is hereby appointed pursuant to S.106A to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders and the party in default shall pay to the other party to this Application that party’s costs and disbursements on an indemnity basis.

   LISTING OF APPLICATION FOR HEARING

   17.    That this Application be listed for hearing before His Honour Mr Justice O’Ryan.

   COSTS

   18.    That the husband pay the wife’s costs of and incidental to this Application on an indemnity basis.

3. The Wife was seeking to enforce orders for spouse and child maintenance I made on 5 December 2005.  It will be seen shortly that the Husband appealed against the orders and his appeal was successful.  The Wife may now file an amended enforcement application.

4. The Second Respondent is Ms RB who is the Husband’s present wife.  Ms RB is the registered owner of a home at [North Western Sydney B address] and also the registered holder of the issued capital of W Company.  She also is the holder of the issued shares of BH Company.

5. There are then a number of Corporate Respondents being companies that are part of what is called the E Group of companies.  The first is the Third Respondent, BH Company.  Until 8 May 2007 the Husband was the sole director.  The shareholder is his present wife who holds two ordinary shares.  It is also the trustee of the G Trust.

6. The Fourth Respondent is MA Company.  The shareholder is BH Company as to two ordinary shares.  The principal asset of the company is the inner suburban Sydney A property.

7. The Fifth Respondent is BI Company.  The Husband holds two ordinary shares and BH Company holds 1,200,998 ordinary shares.  The Husband contended that his shares are held on trust for BH Company.  The principal asset of the company is the inner suburban Sydney C property.

8. The Sixth Respondent is CW Company.  The Husband holds two ordinary shares and BH Company holds 5,700,000 shares.  The Husband contended that he holds his shares on trust for BH Company.  The principal asset of the company is the inner suburban Sydney B property.

9. The Seventh Respondent is DI Company.  The shareholder is BH Company as to one ordinary share.  The principal asset of the company is the North Western Sydney A property.

10. There are other important entities who are not parties to the proceedings such as the G Trust and W Company.

Background

1. By way of background I am going to refer to some of what I said in a number of previous judgments and what is in various affidavits.  I will also refer to a chronology that was provided to me on behalf of the Wife.  Importantly, I am also going to set out, as best I can, what has happened since 5 December 2005.  Insofar as I refer to various matters that occurred before 5 December 2005 it is mainly to put into some context what has happened since that date.

2. The Husband said that since 17 August 1984 he has continuously been a director of BH Company.  As will be seen later, this may now have changed.

3. The G Trust was established by deed on 29 June 1987.  The Husband annexed a copy of the trust deed to his affidavit of 13 November 2006.  It reveals that stamp duty was paid on the deed.  The settlor was Mr P, solicitor.  The trustee was G Pty Ltd.  The Husband was the appointor of the trustee.  The Husband and the Wife were named as beneficiaries.  The Husband’s contentions about this trust are bizarre and confused.  For a period during 2006 the Husband contended that the trust was never established.

4. There was in evidence (Exhibit C) a copy of financial statements of BI Company, BT Company and the G Trust for the financial year ended 30 June 1988.  These financial statements are instructive.  For example, a schedule to the balance sheet of BI Company reveals that there were loans to the G Trust.  A schedule to the balance sheet of BT Company reveals an unsecured loan to the G Trust of $4,228,795.36.  There were also financial statements of the G Trust which included a balance sheet and it revealed that as at 30 June 1988 the trust had investments of a stated value of $6,902,002.  As well, it revealed as trust capital the settlement sum of $10.  In notes to and forming part of the accounts it revealed that the investments included $5,702,000 of shares in JV Company and shares in BI Company of a value of $4,201,000.  As well, it revealed current unsecured loans of $6,902,002.  The significance of the above matters is self evident and includes that the G Trust was an active entity.  

5. On 22 October 1992 G Pty Ltd changed its name to BH Company.  As seen, BH Company beneficially holds all or the majority of the issued shares of MA Company, BI Company, CW Company and DI Company.  These are the companies which together with W Company comprise the E Group.

6. On 28 January 1993 an order was made by consent pursuant to s 79 of the Family Law Act resolving property settlement issues between the Husband and the Wife.  BH Company as trustee of the G Trust was a party to the terms of settlement.  In my judgment of 5 December 2005 I said:

   43.    It is also relevant to note that the Minute contains the following declarations:

   1.It is declared under section 85A of the Family Law Act that the [G] Trust is a post nuptial settlement made in relation to the marriage of the husband and the wife.

   2.It is declared that the assets of the [G] Trust were acquired from contributions made only by the husband and the wife.

   3.It is declared that the matrimonial property of the husband and the wife includes but is not limited to the [JR] property, the matrimonial home and the [T Street] Unit.

   4.It is declared that the [G] Trust is controlled by the husband and the wife through their directorships and shareholding in [BH Company], and thereby they also control [CW Company].

   44.    In the notations, in relation to the [G] Trust, it was noted that:

   …the beneficiaries of which include as discretionary objects, the husband and the wife and members of the husband’s family, but no beneficiary other than the husband, the wife and their child have ever received any benefits from the trust.

7. On 14 October 1996 the Husband transferred to his present wife a one half interest in the North Western Sydney B property for a consideration of $1. This transfer is the subject of a pending application pursuant to s 106B of the Family Law Act.

1. The Husband contended that after 30 October 1996 he was the sole director and sole secretary of BH Company.

2. On 31 December 1996 the Husband signed an Annual Return for BH Company and the document recorded that the company is a “Trustee Company”.  The document was signed by the Husband and dated 31 December 1996.  On page three the Wife’s name as an officer of the company was crossed out.

3. The Husband as sole director and sole secretary of BH Company signed a document entitled “Trust Undertaking” dated 20 December 1996.  The document purported to be under the seal of BH Company and it was stated that BH Company was the trustee of the trust described and the trust was identified as the G Trust constituted by Deed of Settlement dated 29 June 1987 between Mr P as the settlor and G Pty Ltd, now BH Company, as the trustee.

4. There was in evidence a copy of a letter dated 21 November 2006 from the Australian Taxation Office to the solicitors for the Corporate Respondents as well as copies of certain documents.  There was included a copy of the income tax return of BH Company for the year ended 30 June 1997.  There is very little information contained in the document however, I note that in relation to overseas transactions or interests, in answer to the question whether there is an interest in a foreign company or foreign trust or a foreign investment fund and life assurance the answer was “yes”.  I also observe that in a copy of a tax return for 20 June 2001 in response to the question “Description of main business activity” it was said “Trustee Service”.

5. On 1 August 1997 the Wife filed an application seeking, amongst other things, an order pursuant to s 79A of the Family Law Act.

6. The Husband contended that on 23 September 1997, when there were pending proceedings before this Court, a document was prepared varying the trust deed of the G Trust so as to exclude the Husband as a beneficiary.  In the judgment of 5 December 2005 I said:

   228   On 4 June 2004 I made the following orders:

   1. That within 7 days from the date of this order the husband provide or cause to be provided to the wife and her legal and accounting advisers the trust deeds for the [G] Trust together with any amendments made to the said deed from the date the trust was established to the date of this order.

   2. That within 14 days from the date of this order the husband provide or cause to be provided to the wife and/or her legal and accounting advisers a copy of the financial statements, including balance sheets, profit and loss statements and tax returns of the [G] Trust for the financial years ending 30 June 2000 to 2003, inclusive.

   3. That the proceedings be listed before me at 9.30 am on 30 June 2004.

   4. That the wife is to lodge with my associate by 4.00 pm on 29 June 2004 a schedule of the evidence on which she seeks to rely in support of the balance of the orders set out in the “Short Minutes of Orders” sought by the wife filed in Court this day.

   5. That the husband is to lodge with my associate by 4.00 pm on 29 June 2004 a schedule of the evidence on which he would seek to rely in opposition to the relief sought by the wife in the said Minutes.

   229 In relation to these orders the wife contends that Order 1 was complied with in part on 11 June 2004 when the solicitors for the husband provided to the solicitors for the wife a copy of the trust deed of the [G] Trust. In relation to an alleged amendment to the Trust Deed, the documents were not received until 22 July 2004. The issue in relation to the amendment was the subject of an order of 30 June 2004.

   230   By facsimile dated 17 June 2004 the solicitors for the husband advised the solicitors for the wife that they were informed by [Mr P] that a document was prepared on 23 September 1997 which varied the trust deed of the [G] Trust so as to exclude the husband as a beneficiary and that office records disclosed that the file was recorded as having been sent to the husband in February 2002 at his [Sydney] office.  The solicitors went on to say that the person at the [Sydney] office who conducted the business on behalf of the husband refused to be involved and that they were presently unable to obtain any assistance in looking at files retained in the office and were pressing the situation with the husband but he has his own difficulties being on the other side of the world.

7. On 22 December 1997 the Wife sent a facsimile transmission to the Husband outlining their agreement to resolve the proceedings commenced by her on 1 August 1997 and thereafter the Wife advised her solicitor to discontinue the proceedings.

8. On 31 December 1997 the Husband signed an Annual Return for BH Company and recorded that the company is a “Trustee Company”.  On page four of the document the Husband crossed out his name and that of the Wife and inserted the name of his present wife as a shareholder holding two ordinary shares.

9. On 9 January 1998, because of the settlement reached between the parties, a Notice of Discontinuance was filed on behalf of the Wife of the proceedings commenced on 1 August 1997.

10. Documents were produced by X Mortgages Pty Ltd and my attention was drawn to a document titled “[BH Company] Trustee for the [G] Trust balance sheet as at 30 June 1999”.  This balance sheet revealed assets of $7,550,020.17, liabilities of $4,389,487.95 and “total equity” of $4,389,487.95.

11. There was in evidence a copy of the financial statements of BH Company for the year ended 30 June 1999.  In the notes to and forming part of the financial statements there was revealed as current creditors, loans from the G Trust for $6,903,002.  These loans did not exist as at 30 June 1998. 

12. In late 2000 there was a sale of an asset of TR Company for $140,000,000.

13. In November 2001 the Husband left Australia and he did not return until December 2004.  In my view, the Husband has never adequately explained why he left Australia as this time and or why he was absent from Australia for such a significant period.  The explanations he has given are contradictory.

14. The present proceedings were commenced when an application was filed by the Wife on 9 April 2002.  In my judgment of 5 December 2005 I said:

    1      This is an exceptional case about spouse maintenance, child support and arrears of adult child maintenance.  [The wife] is seeking lump sum or periodic spouse maintenance, child support and adult child maintenance.  [The husband] opposes the relief sought by the wife.  The proceedings were commenced by application filed on 9 April 2002.  The facts of this case are unusual.  They are also extensive.

    2.      The wife seeks that the husband pay $4,000,000 lump sum spouse maintenance.  In the alternative the wife seeks that the husband pay periodic maintenance of $20,000 per calendar month as and from 1 May 2002 to be paid as to amounts accrued to date totalling $620,000 within 14 days and as to future periodic amounts the first payment within 7 days.  The wife also seeks that the periodic spouse maintenance be varied in each year in accordance with the Consumer Price Index. 

    3.      The husband contends that if an order for spouse maintenance is made then it should be for payment of a periodic amount of $1,000 per week.

    4. In relation to child maintenance the wife sought pursuant to s 98(1) of the Child Support (Assessment) Act1989 (Cth) that a child support agreement entered into between the parties dated 8 December 1992 be varied so that the husband pay direct to the wife child support for the child of the marriage in the sum of $5,837 per month the first payment to be made as and from 15 April 2002 and monthly thereafter until the child attained the age of 18 years. During final submissions Senior Counsel for the wife filed a minute of orders in which was sought pursuant to s 115(c) and s 117(2) of the Assessment Act that there be a departure from administrative child support issued by the Child Support Agency for the periods 1 December 2001 until 28 February 2003 and 1 March 2003 until 1 June 2003 and in the alternative an order pursuant to s 66G Family Law Act 1975 (Cth) for the period 15 April 2002 until 2 June 2003.

    5.      The wife seeks that the husband pay arrears of adult child maintenance for the period from 3 June 2003 until July 2004 in the sum of $37,102.02.

    6. By way of enforcement of the orders for maintenance the wife seeks that the husband’s present wife [Ms RB] be joined as a party and restrained by injunction from dealing with her interest in a property at [North Western Sydney]. Further, the wife seeks pursuant to s 106B Family Law Act that [Ms RB] transfer her interest in the property at [North Western Sydney] to the husband.  The wife then seeks that the [North Western Sydney] property be sold and from the proceeds of sale the amounts due to her in accordance with the orders for spouse maintenance and child support/maintenance be paid. 

    7.      Finally the wife seeks an order that the husband pay her costs of the proceedings on an indemnity basis.

    8. There is pending an application by the wife pursuant to s 79A of the Family Law Act for variation of a property order.  An order for property settlement was made on 28 January 1993.

15. The history of the litigation before 5 December 2005 appears in various judgments including of 17 November 2004 and 5 December 2005.

16. In my judgment of 5 December 2005 I said that on behalf of the Wife it was submitted that curiously, the solicitor for the Husband at one time asserted on behalf of the Husband that the Husband will, in due course, be making disclosure of the Wife’s involvement as a director of the relevant company.  This was despite the implicit rejection of her ongoing contributions in the Husband’s business life.  This allegation has been never pursued by the Husband and frankly I can understand why.

17. On 28 June 2002 the Husband transferred the balance of his interest in the North Western Sydney B property to his present wife for a stated consideration of $1. In my judgment of 5 December 2005 I described this home. The title was then unencumbered. The Husband was overseas at this time. Ms RB remains the sole registered owner of the mansion at North Western Sydney and the majority shareholder of W Company. This transaction is also the subject of the s 106B application of the Wife.

18. On 8 July 2002 the Wife’s costs were reserved in respect of an appearance before a Judicial Registrar.  On 30 July 2002 the costs of both parties were reserved in respect of the failure by the Husband to file and serve a response, affidavit and financial statement in relation to the Wife’s application for leave to institute proceedings.  There were numerous instances where the Husband failed to comply with orders.  On 30 October 2002 the costs of both parties were reserved by a Judicial Registrar in respect of an application by the Husband to set aside a subpoena issued at the request of the Wife. On 8 November 2002 the costs of both parties were reserved in respect of the hearing of a review application filed on behalf of the Husband in respect of a decision of a Judicial Registrar made on 30 October 2002.  The matter was heard by Chisholm J on 8 November 2002.

19. In November 2002 in a signed application to a bank for a credit card the Husband stated that his gross annual income was $1,000,000 plus and further that he had over $11,000,000 in bank accounts.  In an internal memorandum it was stated that he was the sole owner and founder of TR Company which was [a large media corporation].  Further, it was a specialist operation that was launched from the failed AGG.  It was said that the bank held a statement of assets and liabilities from the Husband dated September 1998 which disclosed surplus assets of $109,000,000.  In addition, a media release was issued in which it was announced that TR Company was selling [a licence] to A Company for a cash consideration of $140,000,000.  It was also said that the Husband has extensive property interests, investments and scrip and cash holdings with the bank in excess of $10,000,000.  A limit of $100,000 was sought by the Husband to be utilised for private expenditure.  It was stated that the Husband is known to travel almost constantly and has a lavish lifestyle and a $100,000 limit was recommended.  The … license had been sold in 2000.  However, in 2002, when the Husband was seeking to borrow money, he represented that he had significant wealth.  When the Husband gave oral evidence in March 2006 he suggested that he may have been worth $500,000,000.

20. On 18 March 2003, after a three day hearing, Le Poer Trench J made the following orders:

    1.     That the wife be granted leave to commence proceedings for spouse maintenance out of time and pursuant to section 44 (3) of the Act.

    2. That pursuant to section 66L of the Family Law Act, as and when the child [a son] born […] June 1985 turns 18 years old, the husband pay to the wife or as she may direct in writing by way of adult child maintenance the sum of $3,000.00 per month with the first payment to be made within 7 days from the date when the child turns 18 years and thereafter until the child completes an accredited degree or university course or turns 25 years old whichever event occurs first.

    3.     The maintenance to be paid pursuant to Order 2 hereof be varied on 1 January in each year (“the review date”) commencing on 1 January 2004 to such sum as shall be determined by multiplying the maintenance being paid on the review date by the fraction N/B where “B” is the Consumer Price Index for Sydney (All Groups) published by the Australian Bureau of Statistics (“CPI”) in respect of the quarter year ended on the day 12 months prior to the review date, namely 31 December; and “N” is the CPI in respect of the quarter year ending on the day immediately preceding the review date.

    4.     That the husband shall be responsible for and pay as and when same falls due all of the adult child’s educational expenses associated with the child’s education.

    In his judgment of 12 May 2005 Le Poer Trench J said that the Husband relied on no affidavit or financial statement and that his case was conducted on the basis he had the capacity to meet any proper order of the Court.  The same position was adopted before me in December 2004 when I was informed by the Husband’s senior counsel, and the matter thereafter proceeded on this basis, that the Husband had the capacity to meet any proper order.  This is also dealt with in the judgment of the Full Court.

21. On 4 March 2003 the Husband swore an affidavit verifying his answers to specific questions issued on behalf of the Wife.  He said that BH Company is the beneficial owner of shares in PR Company, BI Company, CW Company and MA Company.  In the judgment of 5 December 2005 I said:

    200   On 4 March 2003 the husband swore an affidavit verifying his answers to the specific questions served on his solicitors on 2 December 2002.  The husband said that he holds two shares in [PR Company] and that the beneficial owner of the shares is [BH Company].  The husband also said that he is a Director of [BH Company] the beneficial owner of the shares of the [G] Trust.

    201   The husband identified the trust structure in paragraph 51 of his Financial Statement of 22 August 2002 as the [G] Trust.  In relation to the [G] Trust the husband said that the Deed of Settlement was dated 29 June 1987 and that the present assets and liabilities of the Trust are shareholdings in various companies (see previous answers).  He also said that the present beneficiaries or potential beneficiaries are as per the Trust Deed namely primary beneficiaries ([the husband], ‘each and every privileged relation of [the husband], [the wife]).  Default beneficiaries are [the husband], [the wife], [Son E], [Son B].

    It will later be seen that the Husband is now attempting to resile from what he said in his verified answers.

22. On 28 March 2003 an application was filed by the Wife in which she sought lump sum spouse maintenance and in the alternative, periodic spouse maintenance.

23. On 28 March 2003 a second amended application was filed on behalf of the Wife in which pursuant to s 98(1) of the Child Support (Assessment) Act1989 (Cth) she sought a variation of the child support agreement so that the Husband pay to the Wife child support of $5,837 per month and also all educational expenses including private school fees, HECS liabilities, text books, excursions and holidays. The Wife also sought payment of any arrears of child support.

24. On 9 September 2003 the Full Court heard an application by the Husband for leave to appeal against the order of Le Poer Trench J.  On 18 November 2003 the Full Court dismissed the application.  The Husband did not appeal against the quantum of the order for adult child maintenance.

25. On […] the Husband filed an application in the High Court for Special Leave to Appeal against the Orders of the Full Court.  On […] the High Court dismissed the application.

26. Between March 2003 and December 2004 there were numerous interlocutory applications.

27. Documents produced by a mortgage Company reveal that in December 2003 the present wife borrowed $3,000,000 secured by mortgage on the title on the North Western Sydney B property (Exhibit AB).  The term of the loan was for one year.  The loan was guaranteed by CW Company.  The Husband provided a Power of Attorney to his present wife to execute the Deed of Guarantee in respect of the loan.  The loan was also guaranteed by the Husband.  The mortgage is dated 24 December 2003.  In a credit assessment submitted to the mortgagee the Husband’s wealth was assessed conservatively at $150 million.

28. On 10 May 2004 the Husband swore a financial statement and in Part L of the document he said “See annexure-companies (are) held by the [G] Trust.”  The Husband also swore an affidavit and said:

    As to the assets of the [G] Trust at that time (being at time of the Consent Orders in January 1993), I will seek to refer to real property searches, and to consent orders themselves.  The Trust also had significant debt, and were being pressed by our bank.

    …

    …[t]he majority of the shares in the ([CW Company]) company were held by [BH Company][ as trustee for the [G] Trust.

    …

    [BH Company].  The Wife was a director of this company.  This company was an ultimate parent company for the trading entities.  [CW Company] and [BI Company], holding its shares as trustee for the [G] Trust.

29. On 4 June 2004 I made the following orders:

    1.      That within 7 days from the date of this order the husband provide or cause to be provided to the wife and her legal and accounting advisers the trust deeds for the [G] Trust together with any amendments made to the said deed from the date the trust was established to the date of this order.

    2.      That within 14 days from the date of this order the husband provide or cause to be provided to the wife and/or her legal and accounting advisers a copy of the financial statements, including balance sheets, profit and loss statements and tax returns of the [G] Trust for the financial years ending 30 June 2000 to 2003, inclusive.

    3.      That the proceedings be listed before me at 9.30 am on 30 June 2004.

    4.      That the wife is to lodge with my associate by 4.00 pm on 29 June 2004 a schedule of the evidence on which she seeks to rely in support of the balance of the orders set out in the “Short Minutes of Orders” sought by the wife filed in Court this day.

    5.      That the husband is to lodge with my associate by 4.00 pm on 29 June 2004 a schedule of the evidence on which he would seek to rely in opposition to the relief sought by the wife in the said Minutes.

    Order 1 was in part complied with on 11 June 2004 when the solicitors for the Husband provided a copy of the trust deed of the G Trust to the solicitors for the Wife. I also said that in relation to an alleged amendment to the trust deed, the documents were not received until 22 July 2004. The issue in relation to the amendment was the subject of an order of 30 June 2004.

1. By facsimile dated 17 June 2004 the solicitors for the Husband advised the solicitors for the Wife that they were informed by Mr P that a document was prepared on 23 September 1997 which varied the trust deed of the G Trust so as to exclude the Husband as a beneficiary and that office records disclosed that the file was recorded as having been sent to the Husband in February 2002 at his Sydney office.  The solicitors went on to say that the person at the Sydney office who conducted the business on behalf of the Husband refused to be involved and that they were presently unable to obtain any assistance in looking at files retained in the office and were pressing the situation with the Husband but “he has his own difficulties being on the other side of the world”.

2. By facsimile dated 17 June 2004 the solicitor for the Husband sent to the solicitor for the Wife a copy of a letter from KPMG together with the balance sheet and receipt and payment statement for the year ended 30 June 2001 for the G Trust and the financial reports for TR Company for the year ended 30 June 2000.

3. By facsimile dated 21 June 2004 the solicitors for the Wife wrote to the solicitors for the Husband complaining that the Husband was still in breach of the orders I made regarding the production of documents relating to the G Trust.  The documents provided by the solicitors for the Husband on 17 June 2004 in relation to TR Company revealed that on 23 October 2000 the company sold certain rights to A Company for $140,000,000 in cash and of the cash consideration $110,000,000 was paid on 20 November 2000 with the remaining amount plus interest to be paid on or before 31 August 2001.  It was also said that an agreement was entered into with a third party for their assistance in the sale and that the sale triggered a success fee payable to the third party of $87,062,218 which was paid on 5 December 2000.  It was also stated in the accounts that on 5 November 2000 the loan of $89,910,461 from the related company of the Husband was converted into equity in the form of convertible notes.

4. By letter dated 15 July 2004 the solicitors for the Husband wrote to the solicitors for the Wife confirming that TR Company had been placed into receivership and “Unfortunately we have had some difficulty with our client in obtaining further instructions”.  It was also said that the Husband “would presumably be fully concentrating on his very stringent obligations involving the receivership and the receiver”.  It was never explained what the Husband was doing because he was overseas at the time.

5. On 19 July 2004 the Husband’s present wife was appointed director and secretary of W Company and she also holds one share.  The company was registered on 19 July 2004.  ….  The company’s business address is in Sydney.  I said:

   257   In summary, it was submitted on behalf of the wife that in July 2004 [TR Company] was placed in receivership.  The liquidator was locked out of the premises.  Within months a new company, [W Company], allegedly owned by [the present wife] miraculously, much like the phoenix from the ashes, arises and commences trading an almost identical business from the former [TR Company] premises owned by [CW Company] using [TR Company] [equipment].  As well, the new enterprise got the benefit of the alleged loan from [L Company].

6. By letter dated 22 July 2004 the solicitors for the Husband sent to the solicitors for the Wife a copy of a letter dated 3 March 1992 from Mr P to the Husband enclosing Minutes by which the Husband and the Wife were excluded from the class of persons constituting beneficiaries of the G Trust.  It also included a copy of a variation of trust deed document.

7. On 28 July 2004 the Wife’s solicitors received a letter from the solicitors for the Husband dated 22 July 2004 which enclosed a one page balance sheet of the G Trust at 20 June 2000, a one page receipts and payments statement for the G Trust at 30 June 2000, a one page balance sheet for the G Trust at 20 June 2001 and a one page receipts and payments statement for the G Trust at 30 June 2001.

8. In July and August 2004 there was correspondence about the difficulties of providing information and documents because of the receivership of TR Company (for example see paras 249, 250, 252, 253, 254 of my judgment of 5 December 2005).

9. On 18 October 2004 I heard an application by the Wife to strike out the response(s) of the Husband to all applications.  On 17 November 2004 I dismissed the Wife’s application. 

10. The hearing then commenced on 29 November 2004 and concluded on 10 December 2004.  The hearing proceeded in the absence of the Husband and the reasons why this happened, notwithstanding the absence of the Husband, are set out in my judgments of 17 November 2004 and 5 December 2005.  However, in my judgment of 5 December 2005 I said:

    270 The hearing commenced on 29 November 2004 and on that day an application was made by the wife seeking a dismissal of the responses of the husband to all applications and that her applications proceed on an undefended basis. This application was made because the husband did not attend. I dismissed the application as it related to the applications I am now dealing with and adjourned until 21 December 2004 the application in relation to all other proceedings including the s 79A application.

    271   I dismissed the application in relation to the present applications because I was of the opinion that the hearing could proceed in the absence of the husband and that he was entitled to put the wife to proof of her claims.  However, I was not prepared to allow the affidavits of the husband to be read (r 15.14(3)(a) Family Law Rules2004) because he was not available for cross-examination.  The husband had every opportunity to appear and I had made it clear on earlier occasions that he should appear.  The trial dates were chosen to suit his convenience.  I received written submissions on behalf of the wife in relation to this issue.  I am not going to repeat what is in those submissions however I accept what is submitted.  I also did not allow an affidavit of the child of the marriage to be read in the husband’s case because he was also not available for cross-examination at least on a face to face basis.

    On 10 December 2004 I reserved judgment.

11. On 5 June 2005 the Australian Taxation Office issued notices of assessment to CW Company, described as a subsidiary company of BH Company, purporting to be in relation to the period 30 June 1995 to 30 June 2002 inclusive and according to the assessments the total gross tax payable was $39,097,853.59.  However, it was stated that CW Company had drafted objections to the assessments.  It will be seen shortly that the Husband and others contend that at extraordinary expense in 2006, various tax returns and financial statements were reconstructed because of the assessments.

12. The Husband included in Volume 1 of the exhibits to an affidavit he swore on 2 November 2006 on behalf of each of the Corporate Respondents a copy of the special purpose financial report prepared by HL Company for BH Company for the year ended 30 June 2005.  A balance sheet revealed that the company had total assets of $49,432,477 and total liabilities of $76,800,324.  There were current liabilities of $14,398,704 and non current liabilities of $60,566,620.  It was also stated that there are contingent liabilities. 

13. On 30 August 2005 orders were made by consent which provided that within seven days the Husband pay to the Wife $29,528.50 in full and final satisfaction of the order for costs made by Le Poer Trench J on 12 May 2005.  This related to the costs of the applications for leave to institute proceedings which were heard by his Honour in March 2003.  The Husband did not comply with this consent order notwithstanding that he did not appeal against the order.  Correspondence was entered into between the lawyers and this is attached to an affidavit of the Wife of 7 March 2006.  Ultimately, the payment was made after the hearing on 23 December 2005.  This is an example where the Husband did not comply with a consent order.

14. Then on 5 December 2005 I made the following orders:

    1. The husband pay direct to the wife by 4.00 pm on 31 January 2006 as lump sum spouse maintenance the sum of $3,750,000 and in the event that the husband fails, neglects or refuses to pay any part of that sum within the time stated then interest shall accrue on such part as may from time to time be outstanding until paid in full, calculated at the rate prescribed from time to time pursuant to Rule 17.03 of the Family Law Rules 2004.

    2. Pursuant to section 66G Family Law Act 1975 (Cth) by 4.00 pm on 31 January 2006 the husband pay to the wife by way of child maintenance in relation to the child [Son B] born on […] June 1985 the sum of $61,000 being $1,000 per week for the period 5 April 2002 to 2 June 2003.

    3.     The husband pay direct to the wife by 4.00 pm on 19 December 2005 the sum of $37,102.02 being arrears of adult child maintenance for the period 3 June 2003 until July 2004.

    4.     Upon payment by the husband to the wife of the amount in Order 3 hereof then Order 2 made on 18 March 2003 be discharged.

    5.     The application by the wife for a Child Support Departure be dismissed.

    The Husband appealed to the Full Court of the Family Court against Orders 1 and 2.  The Husband contended that he complied with Order 3 on 8 February 2006 but gave no explanation for why he did not comply with the order by 19 December 2005.

15. In an affidavit of 10 March 2006 the Husband contended that he did not attend the hearing in 2004 because he was fully engaged in attempting to secure the business which had been conducted by TW Company, one of his “primary financial resources”, and that he was of the opinion that greater financial loss was likely to be suffered by him if he could not secure the business than would be suffered by him as a result of his not attending the hearing.  Some of the inferences I drew from this statement were he was aware of the hearing; he was aware that the hearing would proceed; he knew what the issues were; he deliberately chose not to attend; he knew what the consequences may be if he failed to attend and he gave instructions to senior counsel to appear and represent his interests.  As seen above, others probably wrongly thought that he was fully concentrating on his very stringent obligations involving the receivership of TR Company. 

16. In my judgment of 5 December 2005 I made findings in relation to the financial position of the Wife:

    309.  In her Financial Statement of 7 May 2004 the wife disclosed an estimated total weekly income of $1,532 which comprised a salary of $798, investment income of an estimated $550 and board from her brother of $184.  She pays tax of $404 per week.  Thus her net income was $1,128.

    310.  In her Financial Statement the wife disclosed assets of a gross value of $886,392 which comprised the unit at [T Street], a motor vehicle, household contents, jewellery and antiques, shares in [a private company], bank accounts and investments.  She also has a small amount of superannuation of a value of $18,405.  The unit which is occupied by the wife’s parents was acquired for this purpose.  The wife disclosed liabilities of $184,056.

    311.  The wife has spent a significant amount of money in respect of the costs of litigation in this court.

    312.  The wife is currently residing in rented accommodation and paying rent of $630 per week.

17. So far as the Husband is concerned there was an issue as to his financial circumstances.  In my judgment of 5 December 2005 I said:

    319.  As to the financial circumstances of the husband I am satisfied that, prima facie, he failed to make a full and frank disclosure of his financial circumstances.  I refer to what I said in my reasons for judgment delivered on 17 November 2004 in relation to the conduct of the proceedings and the efforts of the wife to gain relevant documents and information.

    320.  In my view, prima facie, the husband has attempted to obstruct the wife in her endeavours to gain relevant information and documents about a number of matters including his financial circumstances.  As well, he absented himself from the jurisdiction in circumstances where he knew that the wife and those advising her were anxious, for good reason, to examine him in relation to his financial circumstances …

    …

    322.  What I do know is that the husband probably has assets of a net value in excess of $150,000,000 and an income of at least $1,000,000 per annum excluding the income of his present wife.  I know that the husband has the capacity to meet any order I find it is proper to make.

    Before proceeding, I wish to observe a number of matters. The Husband knew that an issue in the proceedings concluded on 5 December 2005 was the extent and value of his financial circumstances and he chose not to participate and instructed senior counsel to say that he had the capacity to meet any order the Court may make. The Husband then appealed against the order I made and, subject to quantum of the order, he failed. The Husband has not sought leave to appeal to the High Court. However, the Husband has filed an application seeking relief pursuant to s 83 of the Family Law Act and the Wife has filed an application seeking summary dismissal.

18. In my judgment of 5 December 2005 I identified as an issue the disbursement of the proceeds of sale of the license owned by TR Company to A Company in late 2000.  I also said that there were issues about the efforts of the Husband and his present Wife to establish a company which would continue to operate a business similar to that of TR Company which was sold.  This refers to W Company.   I said “It is complex but I am of the view that the Husband appears to have tried to hide the true situation and there remain a number of important unanswered questions”. 

19. The Husband was due to pay by 4.00 pm on 19 December 2005 the amount of $37,102.02 to the Wife being the arrears of adult child maintenance for the period 3 June 2003 until July 2004.  The payment was not made until 9 February 2006.  I have no doubt that by this time the Wife would be entitled to believe that she would probably always experience difficulties with the Husband complying with orders.

20. On 22 December 2005, on the application of the Wife, I made the following orders:

    1.     Until further order the husband, […], be restrained from leaving the Commonwealth of Australia.

    2.      Until further order [the husband] be restrained from making application for a passport from Australia or any country including but not limited to a European Passport or any other country.

    3.      The wife, […] be at liberty to serve a copy of these Orders on the:

    (a)Australian Passport Office; and

    (b)The Australian Federal Police.

    4.      Until further order [the husband] as the appointor of the [G] Trust forthwith do all acts and things and sign all necessary documents to ensure that the Trustee of the said Trust does not dispose of, sell or in any way deal with, encumber or further encumber any property owned by the said Trust except in the ordinary course of business.

    5.      The application filed on behalf of the wife on 22 December 2005 be made returnable before me at 10.00 am on 23 December 2005.

    6.      The solicitors for the wife cause to be served on the husband’s solicitors, Firm F, by 1.00 pm on 22 December 2005 a sealed copy of the application of the wife filed on 22 December 2005, the affidavit of [Ms D] of 14 December 2005, the affidavit of the wife of 21 December 2005, the Undertaking of the wife dated 22 December 2005 and a sealed copy of these orders.

    7.      These orders are made subject to the Undertaking as to damages given by the wife dated 22 December 2005.

    IT IS FURTHER ORDERED:

    1.     The husband’s name, […], shall be registered and maintained on the Australian Watch List at all departure points by the Australian Federal Police.

    On 26 April 2006 the Husband filed an application seeking an extension of time to file an application for leave to appeal against the orders of 22 December 2005.

21. By this time the Husband had returned to Australia and in the judgment of 13 November 2006 I said that given the prior history of the proceedings, and the Husband’s attitude towards orders of this Court, I understood why the Wife was concerned to ensure that the Husband would remain in this country, thus avoiding a repetition of what had happened before. 

22. On 23 December 2005 the Husband sought to set aside the injunctions made on 22 December 2005 and also a stay of the orders of 5 December 2005.  His application was wholly unsuccessful.  On 23 December 2005 I made the following orders:

    1.     Until further order the husband as the appointor of the [G] Trust must do all acts and things and ensure that the Trustee of the [G] Trust shall provide to the wife at least 21 days prior written notice of the [G] Trust’s intention to dispose of, sell, encumber, further encumber or in any way deal with any of the assets owned by the [G] Trust.

    2.     It be noted that the injunctions made on 22 December 2005 in terms of paragraphs 1 to 4 of the application filed on 22 December 2005 on behalf of the wife are continued.

    3.     The injunctions are conditional upon the wife filing by 4:00 pm today an undertaking as to damages in which she meets any damages which may be caused not only to the husband but also to others.

    4.     The costs of both parties of and incidental to the application of the wife of 22 December 2005 are reserved.

    5.     The parties are granted liberty to apply in relation to the injunctions.

    IT IS ORDERED:

    1.     The application by the husband […] filed on 22 December 2005 for a stay of the orders made on 5 December 2005 be dismissed.

    2. The costs of the wife of and incidental to the husband’s application referred to in order 1 hereof be reserved.

    3.     The husband file and serve by 4:00 pm on 6 February 2006 an amended notice of appeal against the orders of 5 December 2005.

23. By letter dated 23 December 2005 the solicitors for the Wife wrote to BH Company enclosing a copy of the orders made on 22 December 2005 and providing notice of the order made on 23 December 2005 requiring the Husband as the appointor of the G Trust to provide written notice to the Wife in relation to any dealing with the assets of the trust.

24. On 27 January 2006 an application was filed on behalf of the Wife seeking costs of the proceedings determined on 5 December 2005.

25. The Husband was due to pay to the Wife by 4.00 pm on 31 January 2006 the amount of $3,750,000 in lump sum spousal maintenance and $61,000 in arrears of adult child maintenance.  He failed to comply with these orders.  The Wife then sought to enforce the orders.

26. By letter dated 8 February 2006 the solicitor for the present wife wrote to the solicitor for the Wife and stated:

    Our client is not aware of [the husband’s] ability to pay the sum sought by way of lump sum maintenance.  We have the financial statement sworn by [the husband] on 10 May 2004, but our client has not seen an up to date financial statement, if such was filed by [the husband].

    For reasons I will shortly give prima facie I have considerable difficulties accepting the first contention.

27. The Husband swore an affidavit on 9 February 2006. This was in support of an application filed on 10 February 2006. In this affidavit he said that he did not have the ability to pay the sum sought by the Wife by way of lump sum maintenance and nor has he had the ability to pay that sum at any time. Pausing there, there are two contentions. As to the second contention, this cannot be maintained by the Husband for a number of reasons. The outcome of the Husband’s appeal to the Full Court is that as at 5 December 2005 he had the capacity to pay the sum ordered by the Full Court and he has not further challenged by appeal this finding. This has the consequence that he has to establish that since 5 December 2005 there has been a change in circumstances as required by s 83(2)(a) and/or as provided by s 83(2)(c) that material facts were withheld from me. The Husband will probably not rely on a change in the cost of living as provided by s 83(2)(b) and he will not be able to rely on s 83(2)(c) given the concession that he had the capacity to meet any order of the Court and his legal inability to resile from that position. Thus it is relevant to see what has happened since 5 December 2005.

1. In his affidavit of 9 February 2006 the Husband said that he proposed to file an up to date financial statement.  I note he had said this in an affidavit of 17 December 2005.  He also said that he currently had no income whatsoever and relied on borrowed funds to live.  He said that on the demise of TR Company in July 2004 while he was overseas his present wife proceeded to establish W Company in part to salvage the business that had previously been conducted.  Pausing there, I note the evidence the Husband had previously given as to why he did not attend the hearing.  In any event, he went to say that from 2004 W Company carried on [a large business in Australia and overseas].  He said his current wife is the sole director and holds 55% of the issued shares and that the other shareholder is Mr L.  He described himself as the “designated chairman” and that as such he is the “public face” of the company.  He went on to give evidence about the important role he plays in the conduct of the business and the tasks which he undertakes.  He concluded by saying that his ability to travel overseas on a relatively unrestricted basis was essential to what he described as “these further overseas based businesses”.  In the affidavit he said nothing about the G Trust.  This evidence raised a number of matters including why the Husband would be the chairman of W Company and undertake all the work he did, and is still doing, in circumstances where he derives no income for what he does and is a not a shareholder.  What is apparent is that W Company is carrying on the same business that was carried on by TR Company.

2. On 10 February 2006 the Husband filed a further application seeking a stay of the orders of 5 December 1005.  On 14 February 2006 I made the following orders:

   1.     That execution of Orders 1, 2, 3, 4 and 5 made on 5 December 2005 be stayed pending the determination of the appeal filed by the Husband against those orders, or further order, subject to the following conditions:

   1.1The Husband comply with the order for costs made by Le Poer Trench J. on 12 May 2005 as assessed by Registrar Halbert by provision of a cheque to the Wife’s solicitors for the outstanding sum including interest calculated to 10 February 2006 namely $32,136.34;

   1.2.The Husband, without admission, pay to the Wife’s solicitors for payment out to the Wife the sum of $37,102.02 representing Adult Child Maintenance pursuant to the order made on 5 December 2005.

   1.3The Husband forthwith pay to the Wife $10,000 (by payment to her solicitors), representing ten payments of $1,000 per week, spouse maintenance in part performance of the order for spouse maintenance made on 5 December 2005, and then commencing 7 days from the date of this order, and thereafter weekly in advance, pending the determination of the appeal or further order, pay $1,000 per week to the Wife as part performance of the said order provided however should the Husband’s appeal be successful in relation to spouse maintenance, the Husband’s liability for spouse maintenance be credited with the amounts so paid; and, in the event that the Court finds there is no liability for spouse maintenance, the Wife repay to the Husband the sums so paid.

   1.4The Husband provide security for payment to the Wife of the amount of $3,750,000 provided for by order 1 made on 5 December 2005 in the event that the appeal by the Husband against the said order does not succeed such security to be by bank guarantee or mortgage or some other form of security approved by the Solicitors for the Wife.

   1.5Upon compliance by the Husband with order 1.4 hereof then:

   1.5.1Orders 1 and 2 of 23 December 2005 be discharged, and the Husband’s name be then removed from the Australian Watch list, and a copy of these orders be taken out and served upon the Australian Federal Police, and any other persons or entities served with the orders dated 22 December 2005 and 23 December 2005.

   1.5.2Within 24 hours the Wife’s solicitors notify the Husband’s solicitors in writing of any persons or entities (including their contact details) upon whom the orders of 22 December 2005 and 23 December 2005, were served.

   2.     Liberty to apply.

   The Husband did not comply with Order 1.4 above. However, on 26 April 2006 he filed an application seeking an extension of time to file an application for leave to appeal against the orders of 14 February 2006.

3. In my judgment of 14 February 2006 I said:

   90.    However, in his affidavit of 17 December 2005 the Husband now contends that he does not have the ability to pay the sums sought by way of lump sum maintenance and nor has he had the ability to pay the sum at any time.  He went on to say “I propose to file an up to date financial statement”.  Then in his second affidavit (9 February 2006) the Husband said that he does not have the ability to pay the sum sought by way of lump sum maintenance nor has he had the ability to pay that sum at any time and he proposes to file an up to date financial statement.  However, the Husband has not filed a financial statement and when I asked his counsel if the opportunity was sought to file the statement I was informed that the Husband wished to proceed.

   91.    In his affidavits the Husband said that he currently receives “no income whatsoever”, and relies “on borrowed funds to live”.  I am of the opinion, prima facie, that the Husband has continued to fail to provide a complete and truthful disclosure of his financial circumstances and that there remain a number of matters that require explanation and in respect of which the Wife and those advising her would be entitled to investigate and examine the Husband about if he persisted with his current claims as to his financial circumstances.  Notwithstanding the Husband’s contentions that he currently receives no income and relies on borrowed funds to live there are a number of relevant matters he identified. 

   92.    The Husband lives in a property at [North Western Sydney] which he described as “our family home”.  This is the property at [North Western Sydney B] the title to which is registered in the sole name of [Ms RB]. The parties acquired the property in early 1992 in the name of [CW Company].  I described the property in paragraph 34 of my Judgment.  In October 1996 the Husband transferred the property into the joint names of himself and his present wife for a consideration of $1.  In June 2002 the Husband sold his half interest to his present wife for $1.  Interestingly I observe that in the second Notice of Appeal one ground (Ground 23) is that I gave undue weight to a number of irrelevant matters which includes ((f)) that no evidence had been adduced by the Wife that the Husband was on notice of the Wife’s application at the time he transferred his interest to his present wife.  In December 2003 it was valued at $5,250,000 and at one point may have secured a loan for $3,000,000. 

   93.    The Husband gave no evidence about his assets.  He simply said that he does not have the ability to pay the sum sought as a lump sum amount and nor has he had the ability to pay that sum at any time.  This is in circumstances where at the commencement of the trial I was informed that there was no issue about the capacity of the Husband to meet any proper order.  In any event in her affidavit of 21 December 2005 the Wife gave evidence that an ASIC search in the name of the Husband on 12 December 2005 revealed that he remains a shareholder of [TR Company], [BI Company], [CW Company], [PR Company], [PC Company], [CA Company] and [TT Company].  An ASIC search of 19 December 2005 shows that the Husband owns two shares, not beneficially, in [CW Company] and the balance of shares are owned beneficially by [BH Company].  [BH Company] is also the shareholder of [MA Company].  As previously seen, the Husband contended that the shares in [BH Company] were owned by the [G] Trust.

4. The Husband contended that in consequence of an investigation by the Australian Taxation Office into the affairs of CW Company, in February 2006 HL Company, Chartered Accountants commenced to re-write the books of the Corporate Respondents.

5. On 7 March 2006 an affidavit was sworn on behalf of the Wife by Mr S, who is an official liquidator and trustee.  He consented to being appointed by the Court as trustee for the management and/or sale of inner suburban Sydney A Property registered in the name of MA Company, inner suburban Sydney B property registered in the name of CW Company, inner suburban Sydney C property registered in the name of BI Company and [North Western Sydney C] Property, registered in the name of DI Company.

6. On 10 March 2006 an amended application was filed on behalf of the Wife seeking orders pursuant to s 106B of the Family Law Act in respect of the transfer by the Husband on about 14 October 1996 of an interest in the North Western Sydney B property to his present wife and also the transfer by the Husband on 28 June 2002 of his remaining half interest in this property to his present Wife.  As well, the Wife sought the appointment of Mr S as trustee for sale of the North Western Sydney B property and that the proceeds be applied to meet the Husband’s obligations pursuant to the orders of 5 December 2005.

7. On 10 March 2006 an application was filed by the Wife in which she sought orders for enforcement of Orders 1 and 2 made on 5 December 2005.  The Wife sought that Mr S be appointed to hold the G Trust properties on trust with power to sell and manage, including power to borrow on security of the assets pursuant to orders made for enforcement.  The Wife then sought that BH Company, as trustee for the G Trust and as majority shareholder of MA Company, DI Company, BI Company and CW Company and the Husband, as the appointor of the trustee of the G Trust, which beneficially owns MA Company, DI Company, BI Company and CW Company, vest certain identified properties owned by each of the companies in the trustee on trust for sale.  The Wife then sought that the trustee be empowered to sell the identified real property for the purpose of obtaining funds to satisfy the Husband’s obligations pursuant to the orders of 5 December 2005.  Other ancillary and default orders were sought which I need not repeat.  In support of this application the Wife swore an affidavit on 7 March 2006.  In summary, the Wife is now seeking by way of enforcement to attack the G Trust.  The reasons for doing this are self evident, amongst other things, given the Husband’s position that he could satisfy any order of the Court but failed to do so.

8. The Husband then made a further application in which he sought a variation of the orders made on 22 December 2005 and also that the orders made on 5 December 2005 be stayed pending the determination of the appeal on certain terms. The application was filed on 14 March 2006. In support of the application the Husband swore affidavits on 10 March 2006, 15 March 2006 and 16 March 2006. The Husband contended that in general terms he sought to substitute the security required by Order 1.4 with an order in respect of a second mortgage over a property at U owned by MA Company.

9. In the affidavit the Husband swore on 10 March 2006 he restated that he currently receives no wages.  He had not filed a financial statement.  However, some more information trickled through.  He said that his only source of monies for his personal expenses is from drawings on loan accounts with BI Company, CW Company, MA Company and U Company made either to him or to a joint bank account which he has with his wife.  He went on to give evidence about matters concerning the prosecution of his accountants, matters concerning the lack of access to financial documents, details of TR Company media business, loans from Mr L, the collapse of TR Company which he contended on 20 February 2003 was renamed TW Company, the establishment of W Company and his current financial position.  He gave evidence about other issues.  He contended that in relation to the business activities of W Company he contributed significantly to its initial establishment and that this was the primary reason for him remaining overseas from July 2004 until December 2004.  He was obviously not concerned about the receivership.  He went on to give evidence about how he was engaged in relation to other business activities in Europe and Fiji and his need to travel.  As I indicated on an earlier occasion, in my view the evidence that the Husband gave in this affidavit probably raised more questions than answers.  Importantly he said that BH Company is the trustee of the G Trust and he is the appointor of the trustee.  He also annexed a copy of draft accounts of the trust for 2000.  He said that he is the director of BH Company.  He contended that his current wife is the only shareholder of BH Company. 

10. By facsimile transmission dated 14 March 2006 the solicitor for Ms RB wrote to the solicitors for the Wife referring to a request made on 8 February 2006 for copies of all documents filed by the Husband and the Wife “in the proceedings to date” together with copies of all orders, judgments, transcripts and other documents and contending that Ms RB would require the documents before the Wife proceeded with the application against Ms RB. 

11. The application filed on 14 March 2006 was heard by me on 15 and 16 March 2006.  On 15 March 2006 the Husband was briefly cross examined and what he said is very important, amongst other things, because it provides some insight into his attitude towards the litigation and his attitude towards the Wife.  He also admitted that he is the controller of and has the beneficial ownership of all the assets in the E Group through the G Trust.

12. In my judgment of 20 March 2006 I said that, in my view, the further evidence provided corroboration as to why the Husband should be required to provide security for the payment of the amount of $ in the event that the appeal is not successful.  I said:

    30.    … For example, he made it very clear what his attitude is towards the Wife and that she should receive nothing.  He admitted that he only recently met his obligations under an order he was in breach of because he knew that if he did not comply with the order then he may not be able to travel overseas.

    I also said:

    37.    As a result of what I said in discussion on the first day of the hearing a further affidavit was sworn by the Husband on 16 March 2006 in which he gave evidence of the current balances of his loan accounts.  He revealed the following loan accounts as at 16 March 2006.

    $  

    ·[CW Company]  3,334,749.00

    ·[BI Company]  (1,436,110.00).

    ·[MA Company]   (1,039,620.00)

    ·[U Company]   (767,687.00)

    38.    It can be seen that he could make a drawing on his loan account with [CW Company] put the money in a controlled account as security.  However, he contended that because of the relationship of these companies he sees them as part of the one enterprise and thus I infer he does not believe he could simply draw $3,000,000 from his [CW Company] loan account without meeting his obligations in relation to the companies that he owes money.  As well, there may be an issue about the ability of the company to repay the loan.

    Importantly, I said:

    58.    One of the issues previously agitated by the Wife related to the [G] Trust.  As seen, I made an order that the Husband as the appointor of the [G] Trust must do all acts and things to ensure that the Trustee of the [G] Trust shall provide to the Wife at least 21 days prior written notice of the [G] Trust’s intention to dispose of, sell, encumber, further encumber or in any way deal with any of the assets owned by the [G] Trust.

    …

    60.    As I pointed out in my judgment of 14 February 2006 (para 30) I should have said that the Husband contended that the [G] Trust was the beneficial owner of all of the shares in [BH Company].

    61.    As a result of the Husband’s oral evidence on 16 March 2006, in my view, it is confirmed that the shares in [BH Company] are held by [Ms RB] in trust for the [G] Trust.  Thus the [G] Trust is the ultimate beneficial owner of all of the relevant companies probably including, given what the Husband said, [W] Company.  The Husband said nothing about the [G] Trust in his recent affidavits.  In any event this is how he is able to deal with all of the relevant companies and their assets and for example offer as security for his personal indebtedness assets owned by one of the companies.  It probably also provides an explanation for why the Husband is undertaking all of the unremunerated work because he is doing it on behalf of the [G] Trust.

    I also observed that there was no evidence from Ms RB.  What is important is that the Husband provided a link between the G Trust and W Company.  This explained a lot of things.  What I said in the judgment may also provide some insight into or explanation for the various positions subsequently adopted by the Husband in the litigation including that he will not meet any obligations to the Wife. 

13. During the hearing in March 2006 on behalf of the Husband it was submitted that “it is quite clear, with hindsight, why the husband’s financial position was difficult to fathom”.  I have no doubt that this was so.  In my judgment of 20 March 2006 I concluded by saying that there are, and probably will remain for some time, issues about the extent and value of the financial circumstances of the Husband.  This remains my view.  However, it is not important at least up until 5 December 2005.

14. The Wife swore a financial statement on 17 March 2006 in which she gave evidence that she receives a total average weekly income of $1,204 which includes a gross salary from employment with her employer of $860 per week.  She has total personal expenditure, including tax of $2,335 per week.  She has property of a total value of $467,380, superannuation interests of a total gross value of $28,511 and liabilities, excluding costs, of $92,266.  In order to pay her costs she has applied savings, the proceeds of sale of antiques and jewellery, the majority of proceeds of sale of her home at C, amounts that she has borrowed and since repaid from the proceeds of sale of her home at C and costs orders against the Husband.

15. On 17 March 2006 I made the following orders:

    1.     Application filed on behalf of the husband on 14 March 2006 as amended be dismissed.

    2.     By no later than 28 April 2006 the husband file and serve an Affidavit setting out the following:-

    (a)The total legal fees, disbursements and other related expenses incurred by him (whether paid or unpaid as at the date of the Affidavit) in relation to these Family Law proceedings from mid 2002 to date together with the source of the funds for payment of the said fees, disbursements and related expenses;

    (b)The total legal fees, disbursements and related expenses incurred by him (whether paid or unpaid as at the date of the swearing of the Affidavit) in respect of the hearing determined by His Honour Mr Justice O’Ryan between 30 November 2004 to 10 December 2004 together with the source of funds in respect of the payment of any such fees, disbursements or related expenses.

    3.     By no later than 28 April 2006 the husband shall file and serve an Affidavit particularising each and every aspect of the collateral securities and guarantees that he refers to in paragraph 114 of his Affidavit sworn 10 March 2006 and filed 15 March 2006 and shall include the following;

    (a)The date of each security or guarantee;

    (b)The nature of each security or guarantee;

    (c)The quantum of each security or guarantee;

    (d)The parties to the guarantee or security;

    (e)The real estate to which each guarantee or security relates to; and

    (f)In the said affidavit, the husband must annexe copy of each and every security and or guarantee provided in satisfaction of the husband’s assertion as at paragraph 114.

    4.     By no later than 28 April 2006 the husband shall file and serve a detailed Financial Statement outlining his current financial position.

    5.     By no later than 28 April 2006 the husband file and serve at the same time he files and serves the Financial Statement as provided for in the previous order, a list of supporting documents in respect of each and every assertion the husband makes in relation to his income, his expenditure, expenditure paid by others on his behalf, expenditure paid by him for the benefit of others, property, liabilities, financial resources, any disposal of any assets, superannuation and all other expenditure that he claims in part O of the Financial Statement.

    6.     By no later than 28 April 2006 the husband file and serve an Affidavit setting out in detail by annexing source documents in respect of his assertions in his Affidavit of 10 March 2006 as to the [L] facilities and in such Affidavit the husband must annex all bank statements of the entity or person where monies in respect of the [L] facilities were deposited into together with all source documents evidencing how the [L] facilities monies were disbursed by that entity or person upon transfer of the funds into that bank account.

    7.     By no later than 28 April 2006 the husband file and serve an Affidavit setting out by annexing to the Affidavit all source documents evidencing the movement of funds in relation to the payment of $87million dollars (approximately) following the sale of the […] License to [Mr L] described as “repayment of a loan”. 

    8.     I grant to the parties and their legal representatives leave to obtain a hearing of two days’ duration of the enforcement summons by arrangement with the Listing Coordinator and my Associate.

    The Husband filed an application for leave to appeal against Order 1. The Husband did not comply with Orders 2, 3, 4, 5, 6 and 7. The hearing of the enforcement application was fixed for two days in August 2006.

The reasonable observer

1. In Johnson v Johnson (supra) at 493 the majority discussed the characteristics of the relevant hypothetical reasonable observer and said (footnotes omitted):

   The hypothetical reasonable observer of the judge's conduct is postulated in order to emphasise that the test is objective, is founded in the need for public confidence in the judiciary, and is not based purely upon the assessment by some judges of the capacity or performance of their colleagues.  At the same time, two things need to be remembered: the observer is taken to be reasonable; and the person being observed is "a professional judge whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial".

   Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice.  The rules and conventions governing such practice are not frozen in time.  They develop to take account of the exigencies of modern litigation. 

   See also S & M Motor Repairs Pty Ltd & Others v Caltex Oil (Australia) Pty Ltd & Another (1988) 12 NSWLR 358.

A qualification

1. In Re JRL; Ex parte CJL (supra) Gibbs CJ cited Livesey v The New South Wales Bar Association (supra) with approval and made the additional comment at 349 that “justice must not only be done, but must manifestly be seen to be done”. Mason J reiterated this point and noted at 351 that the principle evolved:

   …from the fundamental rule of natural justice that a judicial officer should be free from bias, reflects a concern with the need to maintain public confidence in the administration of justice.

   However, at 352 Mason J gave the apprehension of bias principle a significant new dimension (footnotes omitted):

   It seems that the acceptance by this court of the test of reasonable apprehension of bias in such cases as Watson and Livesey has led to an increase in the frequency of applications by litigants that judicial officers should disqualify themselves from sitting in particular cases on account of their participation in other proceedings involving one of the litigants or on account of conduct during the litigation.  It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party.  There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties.  But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way.  In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of prejudgment and this must be “firmly established” (R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 553–4; Watson at p 262; Re Lusink; Ex parte Shaw (1980) 55 ALJR 12 at 14). Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour.

   In subsequent cases this qualification to the apprehension of bias principle has been widely cited and approved.

2. In Re JRL; Ex parte CJL (supra) Wilson and Dawson JJ dissented and did not find that the actions of the judge gave rise to a reasonable apprehension of bias. To support his conclusion, Wilson J commented at 359 – 360 (footnotes omitted):

   A court of review must be careful not to exaggerate the significance of actions or statements made by a judge in the course of a proceeding.  There must be “strong grounds” (R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd for inferring the existence of a reasonable suspicion.

   In support of this, his Honour also restated at 360 the comments of Gibbs ACJ in Re Lusink; Ex parte Shaw, a judgment with which three other members of the court agreed, at 41 (supra) (footnotes ommitted);

   Of course, the court which is asked to grant prohibition will not lightly conclude that the judge may reasonably be suspected of bias in this sense; it must be ‘firmly established’ that such a suspicion may reasonably be engendered in the minds of the parties or the public, as was made clear by the court in Reg v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group, in the passage cited in R v Watson; Ex parte Armstrong.

   Wilson J concluded at 364 that the prosecutor failed to dishcarge the onus and firmly establish there was a reasonable apprehension the judge might not bring an impartial or unbiased mind to the matter, which is required in order to warrant intervention by the court.  Dawson J also made the same finding, despite recognising the initial wrongfulness of the judge’s conduct.  In support of his findings his Honour made the following observation at 371 – 372 (footnotes ommitted):

   It is an understandable tendency to assume the existence of a reasonable basis for supposing bias where there is, as in this case, an apparent departure from the proper standards of judicial behaviour.  But the whole of the circumstances must be considered and such a conclusion must be firmly established and should not be reached lightly: R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group; R v Watson; Ex parte Armstrong; R v Lusink; Ex parte Shaw.  Moreover, the whole of the circumstances are not confined to the conduct said to afford reasonable grounds for suspecting a lack of impartiality.  They include what was done by the judge subsequently, which may be sufficient to eradicate any reasonable apprehension of bias notwithstanding an earlier lapse in the observance of proper procedures.

3. Such a view was also adopted by the High Court in Ebner v Official Trustee in Bankruptcy; Clenae Pty Ltd v ANZ Banking Group Ltd (supra) in which the majority (Gleeson CJ, McHugh, Gummow and Hayne JJ) also applied some qualification to the apprehension of bias principle and offered the following limitation at 348:

   Judges have a duty to exercise their judicial functions when their jurisdiction is regularly invoked and they are assigned to cases in accordance with the practice which prevails in the court to which they belong.  They do not select the cases they will hear, and they are not at liberty to decline to hear cases without good cause.  Judges do not choose their cases; and litigants do not choose their judges.  f one party to a case objects to a particular judge sitting, or continuing to sit, then that objection should not prevail unless it is based upon a substantial ground for contending that the judge is disqualified from hearing and deciding the case.

   Their Honours continued at 348:

   This is not to say that it is improper for a judge to decline to sit unless the judge has affirmatively concluded that he or she is disqualified.  In a case of real doubt, it will often be prudent for a judge to decide not to sit in order to avoid the inconvenience that could result if an appellate court were to take a different view on the matter of disqualification.  However, if the mere making of an insubstantial objection were sufficient to lead a judge to decline to hear or decide a case, the system would soon reach a stage where, for practical purposes, individual parties could influence the composition of the bench.  That would be intolerable.

4. In Shelton v National Roads and Motorists Association Ltd [2004] FCA 977 Tamberlin J also commented at [4]:

   The disqualification of a judge from proceedings which are being case-managed by that judge, and in respect of which an important application is listed for hearing in the immediate future, can cause disruption, incur expense, and result in delays to the resolution of the dispute.  It is not a step to be taken lightly.  There must be some real and substantial basis for making the application based on principled submissions, and, where possible, some evidence of matters relied on or circumstances which might give some support to making good a ground for disqualification. It is not an application to be based on speculative supposition, suggestion or mere possibility.

   A similar limitation was also reierated by Kirby J (in the majority) in Antoun v R (2006) 224 ALR 51 at [34] (footnotes ommitted):

   It is true that, in the oft-repeated and oft-applied words of Mason J in Re JRL; Ex parte CJL, this court has “loudly and clearly” expressed a corrective against any view that a judge should too readily accept refusal because a party has demanded it.  In the administration of justice in Australia, the parties do not (at least normally) have an entitlement to choose among the judicial officers who will conduct the trial.  This principle has been reasserted and applied in many cases.  It was not questioned in this appeal.

   His Honour did qualify at [35] however that:

   The duty to discharge judicial functions is necessarily subject to any disqualifying conduct on the part of the judge subject to a recusal submission.  The observations in Re JRL are a corrective to over-ready disqualification.  But they are not a blanket that smothers the effect of disqualification where it has already arisen.

5. Although Wilson and Dawson JJ were in dissent in Re JRL; Ex parte CJL (supra), the case law they cited coupled with the warnings offered by Mason J in Re JRL; Ex parte CJL (supra), Tamberlin J’s statements in Shelton v National Roads and Motorists Association Ltd (supra), the majority’s comments in Ebner v The Official Trustee in Bankruptcy; Clenae Pty Ltd v ANZ Banking Group Ltd (supra) and the observations offered by Kirby J in Antoun v R (supra) demonstrate that the apprehension of bias principle is subject to a high threshold and as such any decision to disqualify a judge from hearing a matter should not be made lightly or too readily.  Nevertheless, as Kirby J pointed out in Antoun v R (supra), such warnings are not intended to smother the effect of disqualification where it has already arisen.  I also note Kirby P’s (as he then was) dissenting views in S & M Motor Repairs v Caltex Oil (supra) in which His Honour stated at 370 that there is a “particular need for sensitivity where questions of the status of the parties may be involved (as in the Family Court)”.

Two-step approach

1. In Ebner v The Official Trustee in Bankruptcy; Clenae Pty Ltd v ANZ Banking Group Ltd (supra) the majority observed at 345:

   …Deciding whether a judicial officer (or juror) might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge or juror will in fact approach the matter.  The question is one of possibility (real and not remote), not probability.  Similarly, if the matter has already been decided, the test is one which requires no conclusion about what factors actually influenced the outcome.  No attempt need be made to inquire into the actual thought processes of the judge or juror.

   At 345 they continued and laid down a two-step test:

   The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty.  Its application requires two steps.  First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits.  The second step is no less important.  There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits.  The bare assertion that a judge (or juror) has an "interest" in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated.  Only then can the reasonableness of the asserted apprehension of bias be assessed.

Examples of circumstances where a reasonable apprehension of bias may arise:

1. In Ebner v The Official Trustee in Bankruptcy; Clenae Pty Ltd v ANZ Banking Group Ltd (supra) the majority at 348 said:

   It is not possible to state in a categorical form the circumstances in which a judge, although personally convinced that he or she is not disqualified, may properly decline to sit.  Circumstances vary, and may include such factors as the stage at which an objection is raised, the practical possibility of arranging for another judge to hear the case, and the public or constitutional role of the court before which the proceedings are being conducted.  These problems usually arise in a context in which a judge has no particular personal desire to hear a case.  If a judge were anxious to sit in a particular case, and took pains to arrange that he or she would do so, questions of actual bias may arise.

   The particular principle or principles which determine the grounds upon which a judge will be disqualified from hearing a case follow from a consideration of the fundamental principle that court cases, civil or criminal, must be decided by an independent and impartial tribunal.

2. The majority restated at [24] the observations of Deane J in Webb v The Queen (supra), who identified four distinct, though overlapping, categories of cases involving disqualification by reason of the appearance of bias being interest; conduct; association  and extraneous information.  Their Honours commented that the utility of these classifications may depend upon the context in which they are employed, however noted that they provide a convenient frame of reference and added at 350 that problems of apprehended bias are not confined to the situations above and may arise from “some other circumstance”. However, whilst their Honours dedicated much time to discussing a judge with a pecuniary interest in a matter, they did not offer any insight into the type of situation facing me in this case.  However in S & M Motor Repairs v Caltex Oil (supra) Kirby P (as he then was) stated at 368 that “the apprehension of bias may be grounded in prior judicial activity” as in Livesey v New South Wales Bar Association (supra).

Case law examples

1. Examples where there was found to be a reasonable apprehension of bias include where a judge had previously heard a related case and made strong findings about the credibility and conduct of a witness pivotal to the defence’s argument in the case: Livesey v New South Wales Bar Association (supra).  Where a Family Court judge had a conversation in chambers with a court counsellor who expressed strong views about the matter before the judge: Re JRL; Ex parte CJL (supra).Where the Judge rejected a “no case” application prior to hearing submissions and commented that he had formed very, very strong preliminary views about the matter before him: Antoun v R (supra).

2. Examples where there was found to be no reasonable apprehension of bias are as follows.  In Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd & Others (1986) 6 NSWLR 272 the trial judge had had some contact/acquaintance with the solicitors of one party in the case. Priestly JA commented at 276 that the practical reality of the court system is that judges are often recruited from the ranks of the legal profession, and as such complete disassociation in every case will be nearly unheard of and cannot always be seen as amounting to bias. In S & M Motor Repairs v Caltex Oil (supra) a judge had appeared frequently and over a long period as counsel for one of the parties many years before.  In Ebner v The Official Trustee in Bankruptcy; Clenae Pty Ltd v ANZ Banking Group Ltd (supra) a judge had, both personally and beneficially, shareholdings in one of the parties.  In Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd [2006] HCA 55 (6 December 2006) a judge expressed strong preliminary views and stated there was “something enigmatic” about one of the party’s claims:

Case management

1. Numerous cases across various jurisdictions, including some High Court decisions, have recognised the exigencies of modern litigation and in particular noted the increased judicial intervention and involvement in matters as a result of legislative trends promoting more active judicial case management.  In light of this, a number of cases have urged the importance of bearing in mind these realities when deciding whether there is reasonable apprehension of bias.

2. In Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (supra) Kirby and Crennan JJ (forming part of the majority) reiterated at [111] that “ it is important to bear in mind the characteristics of modern litigation”, as recognised by Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in Johnson v Johnson (supra) at 493:

   Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice.  The rules and conventions governing such practice are not frozen in time.  They develop to take account of the exigencies of modern litigation.  At the trial level, modern judges, responding to a need for more active case management, intervene in the conduct of cases to an extent that may surprise a person who came to court expecting a judge to remain, until the moment of pronouncement of judgment, as inscrutable as the Sphinx.  In Vakauta v Kelly, Brennan, Deane and Gaudron JJ, referring both to trial and appellate proceedings, spoke of 'the dialogue between Bench and Bar which is so helpful in the identification of real issues and real problems in a particular case'.  Judges, at trial or appellate level, who, in exchanges with counsel, express tentative views which reflect a certain tendency of mind, are not on that account alone to be taken to indicate prejudgment.  Judges are not expected to wait until the end of a case before they start thinking about the issues, or to sit mute while evidence is advanced and arguments are presented.  On the contrary, they will often form tentative opinions on matters in issue, and counsel are usually assisted by hearing those opinions, and being given an opportunity to deal with them."

   In the same decision Callinan J made poignant comments in relation to the Federal Court docket system at [175] and noted that the judge’s sometimes unfortunate expressions in “strong language” in this case needed to be understood in the context of how the Federal Court now operates:

   This system has its disadvantages and dangers.  On the one hand, the trial judge will be well educated in many of the details of the case on each side by the time that the hearing starts.  But on the other hand, it may sometimes be difficult for the trial judge, apparently fully conversant with the facts and issues, not to have formed some provisional view at least of the outcome of the case.

   At [176]:

   I mention these matters because in sum they may well incline a trial judge towards a degree of outspokenness of a kind to which he or she would not be inclined in a conventional trial on largely oral evidence.  That this is so does not provide any excuse for the manifestation of apparent bias on the part of a trial judge but it may explain why a judge finds himself or herself speaking more candidly and strongly than he or she might otherwise do, or even have been able to do, in the past or in other jurisdictions.  The question nonetheless remains whether the fair-minded lay observer might reasonably have apprehended that the judge might not be bringing an impartial and unprejudiced mind to the resolution of the questions he was required to decide.

1. In S & M Motor Repairs v Caltex Oil (supra) Kirby P (as he was then) in his dissenting judgment stated at 370 that “where challenges to the apprehended bias of a judge are made, and disputed, the resolution of the dispute should not ignore the practical reality of the world in which the judges are required to operate”.  He later at 373 emphasised the practicality of courts functioning and the difficulties of constituting particular benches of a court.

Public interest considerations:

1. In Ebner v Official Trustee in Bankruptcy; Clenae Pty Ltd v ANZ Banking Group Ltd (supra) the majority recognised the role of public interest considerations in apprehension of bias cases.  In the Clenae case the trial judge reserved his decision, however following the trial one of the principal witnesses whose credibility was central to the important issues of the case died and attempting to resolve issues of credibility on diary notes would not have been a sufficient substitute.  At 359 in discussing the merits of a retrial their Honours said:

   The judge's clear duty was to give his decision in the case.  What interest, private or public, might be served by a rule that, in the circumstances, required the judge to disqualify himself, and required the parties to embark upon a fresh hearing of the case before a new judge?  Such a consequence would not promote public confidence in the administration of justice. It would have the opposite effect.

2. Whilst a concurrent situation has not arisen in this case, this passage serves to highlight that public interest considerations, which in this case involve things such as the time and money which would be incurred by another judge familiarising him/herself with the matter (especially in light of its complication and length), the implications for the administration of justice as a result of potential perceptions of ‘judge shopping’ (especially as I have already made final orders adverse to one party) and so on, are significantly relevant to the determination of apprehension of bias problems.

Conclusion

1. I have found this a very difficult issue to decide.  I should add that I did not receive any constructive assistance from the submissions made in support of the application except a reference to the established principle. 

2. There are very persuasive arguments in favour of an outcome that I should not disqualify myself and they include the limitations to the apprehension of bias principle cited which strongly warn that judicial discharge from a matter should not be undertaken lightly or too readily.

3. There are numerous judicial assertions and commentary across a variety of jurisdictions which insist that modern characteristics of litigation, such as increased judicial intervention and involvement in cases via case-management strategies, must be accepted and borne in mind when deciding whether there is a reasonable apprehension of bias.

4. Then there is the prevailing public interest considerations which urge against my disqualification, such as the time and money involved in a new judge familiarising themselves with this complicated and long matter and the appearance of ‘judge shopping’.

5. There are then the interests of the Wife who may incur significant costs as a result of the outcome of the application.  Justice has to be done to all parties.

6. However, notwithstanding the above there are unusual features of this case.  It has been before me for a number of years.  If the application was being made on the basis only of what the situation was at or shortly after the final orders of 5 December 2005 I would have no hesitation in dismissing the application.  What however is troubling is that not only have I made final determinations, but since January 2006 I have had to deal with numerous applications and issues and manage what in my view is unrelenting litigation with significant and constant changing of the factual substratum.

7. I have made certain final orders and case-managed the matter for an exceptionally long time and thus as a result may have become inimitably entrenched in this case such that there may objectively be an apprehension that I may no longer be able to bring an impartial and unprejudiced mind to the resolution of the questions involved in it.  This became of particular concern when I received and considered the recent affidavits of the Husband and others about the beneficial ownership of the shares in BH Company.  When I reviewed what has happened since 5 December 2005 and amongst other things considered the behaviour of the Husband and others I accept that the test of reasonable apprehension of bias may be satisfied.

8. I take into account the following observations of Gleeson CJ, McHugh, Gummow and Hayne JJ in Ebner v The Official Trustee in Bankruptcy; Clenae Pty Ltd v ANZ Banking Group Ltd (supra) at [20]:

   In a case of real doubt, it will often be prudent for a judge to decide not to sit in order to avoid the inconvenience that could result if an appellate court were to take a different view on the matter of disqualification.

   I am very conscious of the possibility, for the reasons given, of further appellate proceedings and the cost and delay that this may occasion.

9. In conclusion, I am of the view that it is in the interests of justice that I disqualify myself.  I therefore disqualify myself from hearing any further applications in this case.

10. It is a very troublesome case. There has been debate for some time about the need for review of the prohibition on the publication of the identity of parties to family law property litigation. The need for this protection in children’s cases is obvious and needs no elaboration. However, there can be no justification for the continuation of such protection in financial cases and this case is a very good example of why the prohibition should not apply. There are important matters of public interest involved and they include an awareness of how some cases are determined, the difficulties the Family Court confronts in dealing with some cases and other matters. There are important accountability issues involved. Unfortunately it is the Family Court that often bears the brunt of criticism and an approach of full public awareness is therefore necessary. I would thus urge upon the Government to renew consideration of the provisions of s 121 of the Family Law Act in relation to financial cases.

11. I add that I have not made an order for publication as the issue was not raised and debated before me and thus it may be a matter for others to decide.

I certify that the preceding 217 paragraphs are
a true copy of the reasons for judgment
of the Honourable Justice O’Ryan

………………………………………………………..
Associate: 
Date: 29 May 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as BROWN & BROWN