Brown & Brown

FAMILY LAW ACT 1975

IN THE FAMILY COURT OF AUSTRALIA

AT No. SYF 9777 of 1992

IN THE MATTER OF:	MS BROWN	Applicant Wife
AND	MR BROWN	Respondent Husband

REASONS FOR JUDGMENT

CORAM:	O’Ryan J
DATE OF HEARING:	18 October 2004
DATE OF JUDGMENT:	17 November 2004

APPEARANCES:

Counsel A1	Of Senior Counsel appeared on behalf of the Applicant Wife.
Counsel E1	Of Senior Counsel appeared on behalf of the Respondent Husband.

Introduction

There are pending applications by Mrs Brown (‘the wife”) for variation of a property order pursuant to s 79A Family Law Act 1975 (Cth) varied and for spousal maintenance, enforcement of child maintenance and variation of a child support agreement. The husband Mr Brown opposes the relief sought by the wife.
Before me for hearing is an application by the wife to strike out the Response(s) of the husband to all applications. The consequence would be that the applications of the wife would proceed to finalisation on an undefended basis.
On 28 January 1993 the following final orders were made by consent in the Family Court at the request of the parties:
“1.     That within 28 days of being requested so to do by the wife and at her election:
(a)the husband shall procure a discharge of the mortgage to [P Finance Company] and shall execute and deliver to the wife a transfer to the wife in registerable form of the [JR] property; or
(b)pay to the wife the sum of $500,000.
2.      That within 90 days from the date of these orders the wife shall resign all directorships and all positions and all offices in the companies.
3.      That prior to the wife's resignation the husband and the wife as directors of [BH Company] will pass such resolutions as are necessary and execute such documents as are necessary to cause [CW Company] to cause the [T Street unit] to be transferred to the wife. The benefit resulting to the wife is to be a capital distribution from the [G] Trust, and the husband is thereafter to cause appropriate entries to be made in the accounts of the trust and of [CW Company] as he may be advised to record that distribution.
4.      At the husband's option and upon his request, prior to the wife's said resignation, the husband and the wife as directors of [BH Company], will pass such resolutions as are necessary to cause [CW Company] to cause the home to be transferred to the husband. The benefit resulting to the husband is to be a capital distribution to him from the [G] Trust and the husband is thereafter to cause appropriate entries to be made in the accounts of the trust and of [CW Company] as he may be advised to record that distribution.
5.      The respondent [CW Company] is ordered to execute the transfers referred to in order 3 and 4 hereof.
6.      That within 90 days from the date of these orders the husband prepare and the wife execute a transfer of the whole of the wife's right, title and interest in her shareholding in each of the companies, in favour of the husband or his nominee subject only to any existing encumbrances.
7.      That the husband pay as and when the same fall due the lease payments on the wife's motor vehicle for the duration of the lease and that the husband pay the registration and insurance in respect of the wife's motor vehicle so long as there is any lease liability continuing.
8.      That the husband pay at the expiration of the lease of the wife's motor vehicle the residual amount payable under the said lease.
9.      That the wife vacate the home upon expiration of the time to be fixed in a notice to be given by the husband to the wife in writing, such time being not earlier than 90 days from the date of the giving of such notice.
10.    That the husband within 90 days from the date of these orders obtain at his expense and deliver to the wife duly authorised releases from any creditor to whom the wife has provided a guarantee whether individually or otherwise for or on behalf of the husband and each and any of the companies provided that if within the said time the husband has used reasonable commercial endeavours to obtain any such releases and notwithstanding such endeavours has been unable to obtain such releases then if the husband shall not be able to obtain such releases within a further period of 90 days then the husband shall not be obliged to obtain such releases.
11.    That the husband indemnify and keep indemnified the wife in respect of all liability whatsoever which the wife may have whether now or in the future and whether alone, jointly and/or severally with the husband and/or any other person and/or company to any creditor of any of the companies and/or pursuant to any guarantee and/or arising from her having been a director and/or in any other manner howsoever arising and without limiting the generality of the foregoing pursuant to any guarantee given by the wife whether alone, jointly and/or severally to any person and/or company in respect of any lease from any such person and/or company of any property to any of the companies.
12.    That the husband within 28 days from the date of these orders prepare at his expense and deliver to the wife a deed signed, sealed and delivered by the husband and each of the companies releasing the wife from any liability that she may have to any of the companies or in respect of the affairs of the companies and indemnifying the wife in respect of any liability which she may now have or which may arise in the future in respect of or concerning the affairs of the companies.
13.     That the husband and the wife do all things and give all consents and execute all documents in writing if necessary to give effect to the orders made herein.
14.    That in the event that either party refuses or neglects to execute any document or instrument the Registrar of the Court be appointed pursuant to section 84 to execute such deed or instrument in the name of such parties and do all acts and things necessary to give validity to the operation of the deed or instrument.
15.     That each of the husband and the wife is to remain a guardian of the child of the marriage, [B], born […] 1985.
16.     That the wife is granted custody of the child of the marriage.
17.   That the husband is granted reasonable access of the child of the marriage.”
The wife claims that the effect of the Orders was that the husband retained the benefit of property the net value of which was greater than $30,000,000. The wife contends that the husband presently has a surplus of assets over liabilities of in excess of $250,000,000.
The husband denies these claims and says that although the orders were not performed in precise terms they were met to the wife's apparent satisfaction.
The wife now seeks that these orders be varied and has also made applications for spousal maintenance, enforcement of child maintenance and variation of a child support agreement. The husband opposes the relief sought by the wife.
On 15 November 2002 the wife filed two applications, one titled ‘Third Amended Application’ and another titled ‘Amended Application’. The former includes s 79A and s 79 orders as well as spousal maintenance and child maintenance orders. The latter refers to orders for a variation of the child support agreement.
In the Third Amended Application the wife sought the following orders:
“1.      That pursuant to Section 44(3) the wife be granted leave to commence spousal maintenance proceedings out of time.
2. That in the event that leave is granted pursuant to Clause 1, hereof, then, pursuant to Section 74 of the Family Law Act 1975, the husband pay to the wife or as she may direct the sum of $20,000.00 per month in spousal maintenance with the said sum to be increased each July in accordance with the CPI.
3. That pursuant to Section 79A(1)(a) the Consent Orders made by this Honourable Court on 28 January 1993 be set aside.
4. In the alternative, that pursuant to Section 79A(1A) the Consent Orders made by this Honourable Court on 28 January 1993 be set aside.
5. In the alternative, that time be extended for the review of the Consent Orders made in this Honourable Court on 28 January 1993 and thereafter pursuant to Section 37A(9) and Section 37A(10) of the Family Law Act and Order 36A rule 6 of the Family Law Rules, the Consent Orders be set aside.
6.      That the respondent husband pay to the applicant wife the sum of $20,000,000.00 by way of property settlement.
7. That pursuant to section 66L of the Family Law Act, as and when the child [B] 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 $5,837 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 university course or turns 25 years old whichever event occurs first.
8.      The maintenance to be paid pursuant to Order 7 hereof be varied on 1 January in each year ("the review date") commencing on 1 January 2003 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.
9.      That the husband shall be responsible for and pay as and when same falls due all of the adult child's educational expenses including textbooks, stationary, HECS liability, University Union Fees, and all other expenses associated with the child's education.
10.    That in addition to or in the alternative to the periodic spousal maintenance, that the husband pay within 30 days from the date of the making of these Orders to the wife by way of spousal maintenance the sum of $2,000,000.00 by way of lump sum spousal maintenance.
11.     That the husband pay the wife's costs of and incidental to this Application.”
In the Amended Application the wife seeks the following orders:
“(1) That pursuant to Section 98(1) of the Child Support (Assessment) Act, the Child Support Agreement entered into between the applicant and the respondent and dated 8 December 1992 be varied so that the respondent husband shall pay direct to the wife child support for the child [B] born […] June 1985 the sum of $5,837.00 per month (being a total of $70,044.00 per annum) the first of such payments to be made as and from 15 April 2002 and monthly thereafter until the child completes his secondary school education or becomes self supporting, whichever event occurs first, but in the event that the child attends an accredited degree university course then the said child support is to continue until the completion of the said course or until the expiration of five years from the commencement of the said course, whichever event occurs first.
(2) That the amount of child support shall be varied in accordance with the Consumer Price Index.
(3) That the husband shall be responsible for and pay all of the educational expenses for the child including private school fees, HECS liabilities, text books, excursions and holidays.”
This Amended Application was later further amended in a document titled “Second Amended Application” which was filed by the wife on 28 March 2003. It seeks the following:
“(1) That pursuant to Section 98(1) of the Child Support (Assessment) Act, the Child Support Agreement entered into between the applicant and the respondent and dated 8 December 1992 (hereinafter referred to “the Child Support Agreement”) be varied so that the respondent husband do pay direct to the wife child support for the child [B] born […] June 1985 the sum of $5,837.00 per month (being a total of $70,044.00 per annum) the first of such payments to be made as and from 15 April 2002 and monthly thereafter until the child turns 18 years old and to be paid:
(a) As to amounts accrued from 8 April 2002 to 8 April 2003 totalling $ 75,881.00 to be paid with 14 days; and
(b) As to future periodic payments on 8 May 2003 and monthly thereafter.
(2)     In the event that the relief sought in Order 1 hereof is wholly refused, then, the husband pay the arrears of child support pursuant to the Child Support Agreement from 8 April 2002 to 8 April 2003 in the sum of $32,930.49 (see Schedule 1 attached for calculation) within 14 days from the date of making these orders.
(3)     That the husband shall be responsible for and pay all of the educational expenses for the child including private school fees, HECS liabilities, text books, excursions and holidays.
(4)     Order that the respondent husband do pay the applicant wife’s costs of and incidental to these proceedings in such sum as may be agreed and in absence of agreement within 28 days then as taxed with such taxation to be undertaken on an indemnity basis in respect of all steps taken in exploring and investigating the financial circumstances of the husband and all related entities and otherwise on a party / party basis.”
The wife's applications for spousal maintenance, enforcement of child maintenance and variation of child support agreement are listed for a five-day hearing commencing on 29 November 2004. The s 79A application is not yet fixed for hearing and is the subject of case management.
The husband has an application for Special Leave to Appeal to the High Court against an order granting the wife leave to commence proceedings for spousal maintenance out of time and it is fixed for hearing in the High Court in late 2004.
In support of the present application the wife contends that the husband has failed to make a full and frank disclosure of his financial circumstances and has made every effort to frustrate/obstruct the wife in the preparation of her case. The wife contends that the husband has failed to comply with obligations prescribed by the rules of court and procedural orders made from time to time.

Background Facts

The wife was born in 1951 and is 53 years of age. The husband was born in 1956 and is 47 years of age.
The parties commenced cohabitation in early 1982 and were married in 1984. Their only child B was born in June 1985. He is 19 years of age.
In May 1992 the parties separated although they continued to reside under the one roof.
On 8 December 1992 the parties entered into a child support agreement. The agreement provided for the husband to pay to the wife the sum of $2,000 per month with annual adjustments.
On 28 January 1993 the consent orders were made as to property settlement, custody and access. In broad terms the property orders provided that the wife was to receive a property at JR which had a value of $350,000 and be paid $500,000. The wife was also to receive a property at T Street. This property was the subject of a mortgage and it is unclear from the consent orders whether the property was to be transferred to the wife free of the mortgage or not. Within 90 days of the orders the wife was to resign all directorships in various companies and transfer her shares in same to the husband. The husband was to pay the lease payments and running expenses on the wife's car until the lease expired and then transfer the vehicle to her.
In September 1995 the husband filed an application for dissolution of marriage. The wife sought advice from her solicitor as to inaccuracies in the application. She asserted that the parties had not been separated for a period of 12 months prior to the date of filing the application for dissolution of marriage. As a result of that advice she took no action to oppose the dissolution application. In November 1995 a decree nisi of dissolution of marriage was granted.
On about 1 April 1997 the wife retained Firm E to advise her in relation to spouse maintenance and setting aside the property orders. She terminated that firm’s retainer on 14 May 1997 and thereafter engaged Firm F, solicitors, to act on her behalf in relation to matrimonial proceedings.
On 11 August 1997 the wife filed an application seeking to set aside the property orders and sought leave to commence proceedings for spouse maintenance. The matter was adjourned on a couple of occasions following the return date. After negotiations the wife withdrew the proceedings and filed a notice of discontinuance on 9 January 1998.
On 9 April 2002 the wife filed an application in which she sought that the property orders be set aside and leave to apply for spouse maintenance. On 23 May 2002 orders were made as to implementation of service on the husband.
On 30 May 2002 the wife filed an application for child support.
On 20 June 2002 an order was made for substituted service on the husband.
On 8 July 2002 further orders were made for substituted service upon the husband. As well, an order was made that the husband within 14 days file and serve all documents in reply to the wife’s application filed on 9 April 2002.
On 12 July 2002 substituted service on the husband was effected pursuant to the orders made on 8 July 2002.
On 30 July 2002 an order was made extending the time for the husband to file and serve a response, a financial statement and affidavits in response to the wife’s application for leave to institute proceedings and also the child support application. The husband had to file these documents by 19 August 2002.
On 14 August 2002 a Notice to Produce was served on the husband. He was requested to produce documents on 22 August 2002. There are 14 paragraphs in the Notice and there are a significant number of documents identified. The wife’s solicitor contends that save and except for documents referred to in paragraph 4, documents made available at his solicitor’s office identified in paragraph 21 and the provision of financial documents relating to the G Trust the husband has never complied with this Notice to Produce.
On 22 August 2002 the husband filed a response, a financial statement and an affidavit.
In his affidavit sworn on 22 August 2002 the husband said that he held nominal shares in companies referred to in his financial statement but has “indirect interests through a trust structure”. The husband did not produce any income tax returns or financial statements in relation to any trust that he referred to in his affidavit.
In the Financial Statement filed on 22 August 2002 the husband said (at paragraph 51) in relation to an interest in any trust or deceased estate “See annexure – companies held by trust identified”. However, nowhere in the statement did he identify the companies “held by” any trust and no financial statements or income tax returns were produced in respect of a trust.
I note that O 17 of the 1984 Family Law Rules provided:
“4 Production of documents
(1) Unless the court, or a Registrar, otherwise orders, a person who is required to file a financial statement in accordance with rule 2 must serve on each party who has an address for service in the proceedings the following documents:
(a)copies of the person’s 3 most recent taxation returns;
(b)copies of the person’s 3 most recent taxation assessments;
(c)if the person is a member of a superannuation plan:
(i)if not already filed or exchanged — the completed superannuation information form for any superannuation interest of the person; and
(ii)for a self-managed superannuation fund — the trust deed and copies of the 3 most recent financial statements for the fund;
(d)copies of the 3 most recent financial statements and taxation returns of any relevant partnership, trust or company (except a public company).
(2) The documents must be served no later than 3 days before the case assessment conference or first directions hearing.”
On 22 August 2002 an order was made granting the parties leave to obtain a hearing date with respect to the wife’s application for leave to institute spousal maintenance proceedings and also with respect to the application to vary the child support agreement. Hearing dates were obtained for 18 November 2002. As well, an order was made that the husband file and serve within 42 days prior to the hearing copies of the income tax returns and financial statements for various companies listed in his financial statement including those, if any, of any relevant companies or trusts and further, file and serve within 30 days prior to the hearing copies of his income tax returns for the previous three financial years.

On 21 October 2002 the husband served on the wife’s solicitors his income tax returns for the years ended 30 June 1999 to 30 June 2001 inclusive. He also served copies of income tax returns with attached Profit and Loss Account and Balance Sheet for CW Company for the years ended 30 June 1999 to 30 June 2001 inclusive; income tax returns with attached Profit and Loss Account and Balance Sheet for MA Company for the years ended 30 June 1999 to 30 June 2001 inclusive; income tax returns with attached Profit and Loss Account and Balance Sheet for BI Company for the years ended 30 June 1999 to 30 June 2001 inclusive; income tax returns with attached Profit and Loss Account and Balance Sheet for DI Company for the years ended 30 June 1999 to 30 June 2001; income tax returns with attached Profit and Loss Account and Balance Sheet for U Company for the years ended 30 June 1999 to 30 June 2001 inclusive; an income tax return for TR Company for the year ended 30 June 1999 and financial statements for this company for the years ended 30 June 1999 and 30 June 2000.
On 25 October 2002 the husband filed an application seeking to set aside various subpoena which had been issued on behalf of the wife. The husband’s application was dismissed by a Judicial Registrar on 30 October 2002. On the same day the husband filed an application for review of the decision of the Judicial Registrar and this was heard on 6 November 2002 by Chisholm J. On 8 December 2002 Chisholm J. delivered judgment and made orders with respect to the husband’s application for review. It was successful in part.
On 4 November 2002 the wife served on the husband’s solicitors a second notice to produce addressed to the husband. This notice required the production of documents on 6 November 2002. There are six paragraphs in the Notice to Produce which identify documents required. Paragraph (6) of the Notice required:-
“Originals and/or copies of all documents evidencing the identity including the name, address and telephone number of the third party which received the sum of $87,062,218 as a success fee in the sale of the [Licence].”
The wife contends that the husband has failed to produce the documents requested.
The hearing of the wife’s application did not proceed on 18 November 2002 and was adjourned for three days commencing on 10 March 2003. However, on 18 November 2002 a number of orders were made including that the husband provide by 14 February 2003 a verified response to specific questions made on behalf of the wife. An order was also made that the husband comply with O 17 of the Family Law Rules not later than one calendar month prior to the further hearing, namely on or before 10 February 2003. It is contended by the wife that this order was not complied with. The husband sought to strike out the Notice to Produce served on behalf of the wife and his application was dismissed.
By facsimile dated 3 December 2002 from the wife’s solicitors to the husband’s solicitors the husband was requested to comply with the Notice to Produce by no later than 9 December 2002.
On 8 December 2002 Chisholm J. delivered judgment and made orders with respect to the husband’s application for review. It was successful in part.
By facsimile dated 12 February 2003 from the wife’s solicitors to the husband’s solicitors the husband was requested to comply with Order 17 of the Family Law Rules by 10 February 2003.
On 14 February 2003 Le Poer Trench J. made an order that the husband produce documents in answer to the Notice to Produce by 9.00 am on 20 February 2003 and further, file and serve a financial statement and verified answers to the specific questions by 4.00 pm on 20 February 2003. The wife sought that the husband’s response be dismissed in the event that he did not comply with the orders however this order was not made. This order could have been made pursuant to O 4 r 1A of the 1984 rules.
On 19 February 2003 the husband’s solicitors provided to the wife’s solicitors the last completed financial statements being for the year ended 30 June 2001 with respect to:
·BI Company,
·DI Company,
·U Company,
·MA Company and
·CW Company.
No documents were provided with respect to BH Company or TR Company.
Draft accounts for the year ended 30 June 2002 were provided with respect to:
·BI Company,
·U Company,
·MA Company and
·CW Company.
As well, the husband provided a copy of his income tax returns for the years ended 30 June 1999 to 30 June 2002 inclusive. The solicitors for the husband indicated that they were awaiting copies of the financial statements of TR Company.
By letter dated 20 February 2003 the solicitors for the husband advised the solicitors for the wife that they had available draft financial statements of TR Company for the year ended 30 June 2002. However, they advised that they were instructed to seek a confidentiality agreement on the basis that the material contained information that was highly confidential and extremely sensitive.
By facsimile dated 21 February 2003 from the solicitors for the wife to the solicitors for the husband the wife complained that the husband was in breach of the orders made on 14 February 2003. The husband had not provided an updated financial statement and further, had not provided the documents that were enumerated in the Notice to Produce. A request was made that this material be provided as a matter of urgency.
By facsimile dated 25 February 2003 the solicitors for the husband advised the solicitors for the wife that there were a variety of documents in their office which were available for inspection.
On 28 February 2003 the solicitor for the wife attended at the office of the solicitors for the husband to inspect documents believed to be in answer to the Notice to Produce. On behalf of the wife it is contended that, with the exception of income tax returns and financial statements which had previously been provided, the only additional documents were a small bundle of joint bank statements with Westpac Bank for the period January 2000 to February 2001.
By facsimile dated 3 March 2003 the solicitors for the wife complained that the husband was still in breach of the orders made on 14 February 2003 in that he had failed to make available for inspection all documents in the answer to the Notice to Produce. In particular, it was contended that the husband had not provided copies of the income tax returns and financial statements of TR Company for the financial years 2001 and 2002, BH Company for the years ended 30 June 1999 to 30 June 2002 inclusive and TR Company for the years ended 30 June 1999 to 30 June 2002 inclusive. Again a request was made that such documents be provided as a matter of urgency.
Also on 3 March 2003 the solicitors for the wife advised the solicitors for the husband that they were not prepared to enter into a confidentiality agreement in respect of the inspection of the draft financial reports of TR Company for the year ended 30 June 2002.
On 4 March 2003 the husband swore an affidavit verifying his answers to the specific questions served on his solicitors on 2 December 2002. In the Answers 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 and the beneficial owner of the shares of the G Trust.
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 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 B], [Sone E].”
It is contended that the husband is the sole director of BH Company and the shareholder is Ms RB who holds the two issued shares but they are not beneficially owned. BH Company is a majority shareholder in BI Company. The husband is the sole director of BI Company. BH Company owns the two issued shares of MA Company and the husband is the sole director. BH Company holds the majority of the issued shares in CW Company and the husband is the sole director. BH Company holds the issued shares in DI Company and the husband is the sole director.
As well there is a company called U Company and there are ten management shares which are held by the husband. There are also 808,890 shares which are held by the OB Trust but they are not beneficially owned. The husband is the sole director.
There is also a company called PR Company and the two issued shares are held by the husband although they are not beneficially owned. The husband is the sole director.
There is also a company called TR Company and there are two issued shares. The husband hold one share and one is held by Ms MB, although both shares are not beneficially owned. The directors are the husband and MB.
In a financial statement filed on 5 March 2003 the husband (at paragraph 51) referring to an interest in any trust or deceased trust said “See annexure – companies held by [G] Trust”. He also contended that the value was not known. No financial statements or income tax returns were ever produced in respect of the G Trust or at least by this time. It was also contended in this statement (see paragraph 48) that as to other personal liabilities he had potential claims in relation to shortfalls of various companies of $62,468,424 and a loan account of $94,184 with BI Company. However, at no time has the husband provided any ledger accounts showing the amount allegedly owing to BI Company. As well, he has not provided any documentation showing that he is personally liable in relation to the alleged $62,000,000 shortfall of the companies.
The wife’s applications for leave to institute proceedings, spousal maintenance and also for variation of the child support agreement and adult child maintenance were heard on 10, 11 and 12 March 2003, and on 18 March 2003 Le Poer Trench J. delivered judgment and 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 [B] 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.”
He noted that the application under s 79A of the Act was not listed before him.
On 27 March 2003 the husband filed an application seeking, inter alia, a stay of the orders made by Le Poer Trench J. on 18 March 2003 pending the hearing and determination of an application for leave to appeal to the Full Court, and if leave was granted, the appeal.
The husband also filed an application for Leave to Appeal in the Full Court of the Family Court seeking:
“1.     That the Respondent husband be granted leave to appeal the decision of Justice Le Poer Trench dated 18 March 2003.
2.      That the wife pay the husband's costs of an incidental to this application.
3.      That any future hearing of the first instance matters be before any Judge of the Family Court other than Justice Le Poer Trench.”
On 8 April 2003, by consent, the following orders were made by Le Poer Trench J.:
“1. That subject to the husband promptly prosecuting his application for leave to appeal, the wife's application for spouse maintenance be stayed, pending determination of the application for leave to appeal, and if leave is granted the appeal.
2. That the husband's application to have Justice Le Poer Trench disqualify himself from further hearing in this matter be stood over generally with liberty to restore, by arrangement with His Honour's associate, upon determination of this application for leave to appeal, and if leave is granted, the appeal.
3. That the wife's application pursuant to the Child Support Assessment Act be adjourned with liberty to restore on seven days notice.
4. That the proceedings pursuant to section 79A be referred to Her Honour Justice Moore to consider whether they should be managed as a complex case.”
On 10 April 2003 Ellis J. made the following orders in relation to the husband's application for leave to appeal:
“1.     That within seven days of this date, the Applicant's solicitors provide to the Registry Manager an undertaking in writing signed by the Applicant's solicitors that in the event that the Full Court grants leave to appeal and deals with the appeal without requiring the filing of a formal Notice of Appeal. They will pay any filing fee which would have been payable upon the filing of such a Notice of Appeal within seven days of the grant of leave.
2.      That the application for leave to appeal filed on 27 March 2003 be listed for hearing by the Full Court at such sittings thereof as the Appeals Registrar may fix.
3.      That, subject to any order of the Full Court, the proposed appeal be argued with the application for leave to appeal, upon the basis of a draft Notice of Appeal which is annexure "D" to the Affidavit of [the husband’s solicitor] sworn on 25 March 2003.
4. That in all respects, the application proceed as if it were an appeal pursuant to section 94 of the Family Law Act 1975, from the decree of the Hon, Justice Le Poer Trench of 18 March 2003 and the relevant provisions of the Family Law rules and the relevant Practice Directions apply as if the application were such an appeal.
5.      That each party have liberty to apply for any further directions upon four (4) days notice in writing to the other.
6.      That the costs of an incidental to these proceedings be reserved to the Full Court.”
On 9 September 2003 the Full Court comprised of Ellis, Holden and Brown JJ. heard the appeal. On 18 November 2003 the Full Court delivered its judgement and made the following orders:
“1. That the application by the husband for leave to appeal the order made by Justice Le Poer Trench dated 18 March 2003 be dismissed.
2. That the husband pay the wife's costs of and incidental to the said application, such costs to be as agreed and failing agreement as taxed.”
On 16 September 2003 the Australian Taxation Office simultaneously conducted searches at the office of the husband at inner Suburban Sydney C property, his current wife’s home at North Western Sydney B, his father’s home, the office of Mr C, a Solicitor and various other places and seized various documents.
On 16 December 2003 the husband filed an application in the High Court of Australia for Special Leave to Appeal against the orders of the Full Court.
On 22 December 2003 a letter was sent to the parties in relation to the filing of the Summary of Argument in the High Court proceedings. The husband had to file his submissions within 28 days of 16 December 2003 (i.e. 12 January 2004). On 23 December 2003 the husband applied for an extension of time in relation to the filing of submissions "to 28 days from 31^st January 2004, that is by the 28^th February 2004". On 24 December 2003 the High Court extended the time for the husband to file his Summary of Argument to 4pm on 13 February 2004.
On 27 January 2004 on the wife's application the matter was Iisted for directions before Le Poer Trench J. and adjourned to 29 January 2004. On 29 January 2004 Le Poer Trench J. adjourned the matter to 20 February 2004 before Moore J. for a case management hearing and for her Honour to determine how and when the various pending applications were to be heard.
On 13 February 2004 the husband again wrote to the High Court seeking a further extension of time for filing of submissions to 10 March 2004 because Senior Counsel in the matter had been seriously ill and as a consequence had not had time to settle the Summary of Argument. Notwithstanding the husband's application for extension of time, the husband filed his Summary of Argument on 13 February 2004 and served the same upon the wife's solicitors. The documents were served upon the wife's solicitors under cover of letter from the husband's solicitors on 13 February 2004 together with a draft Notice of Appeal.
On 20 February 2004 Moore J. made the following orders by consent:
“1. The wife file and serve within 42 days a verified statement of those contentions upon which she asserts that section 79A of the Family Law Act applies.
2. The matter be listed for further mention before Justice O'Ryan at 9.30am on Friday 12 March 2004.”
On 25 February 2004 the husband's solicitors sent a letter to wife's solicitors advising that the High Court had provided a verbal extension of time to the husband to file his submissions, however, as the Registrar's decision had not been put in writing, the husband went ahead and lodged the submissions and served them upon the wife's solicitors office. The husband's solicitors then indicated that the amending or additional submissions would be served by 15 March 2004.
On 27 February 2004 the wife's solicitors forwarded a letter to the husband's solicitors in relation to the letter from the husband's solicitors of 25 February 2004 and sought costs from the husband for what the wife’s solicitors described as the “wasted effort” that the wife, her solicitors and counsel had engaged in by reading and considering the husband's submissions as they were served. The wife sought the sum of $500 to be paid by 2 March 2004 otherwise she would object to the husband's filing of further submissions. In early March 2004 the husband's solicitors responded to the wife's request for $500 towards the wife's costs in considering the husband's draft submissions. The husband did not accede to the wife's request for $500 to be paid.
The Application for Special Leave is fixed for hearing in the High Court on 19 November 2004.
On 12 March 2004 I made the following orders:
“1.     That each the husband and wife file and serve by 4.00 pm on 11 May 2004 all affidavits of both lay and expert witnesses they propose to rely upon at the hearing of the wife's application for spousal maintenance.
2.      That the proceedings be listed for mention before me at 9.30 am on 7 April 2004.
3.      That it be NOTED that on the adjourned date both parties should be in a position to indicate to the Court precisely the evidence which is going to be called at the trial of the applications for spousal maintenance and how long that trial will take and on that date the Court will then fix dates for hearing.”
On 7 April 2004 I made the following orders:
“1. That the parties be granted leave to approach the Listing Co-Ordinator to obtain dates for hearing of the wife’s application for spousal maintenance, variation of child support, enforcement of child maintenance and that such hearing be allocated for 5 days.
2. In relation to the s79A proceedings, that each of the husband and wife file and serve by 4.00 pm on 2 June 2004 an affidavit setting out his/her evidence-in-chief and an affidavit setting out the evidence-in-chief of each lay witness that each party proposes to call at the trial.
3. That each of the husband and the wife file and serve by 4.00 pm on 2 June 2004 a financial statement in accordance with the Family Law Rules.
4. That the proceedings be listed for mention before me at 2.15 pm on 4 June 2004.”

On 13 April 2004 the solicitor for the wife wrote to the solicitor for the husband confirming that the solicitor for the husband had advised that TR Company had a major business transaction overseas and accordingly the husband may not be available to come to Sydney for a hearing in August 2004. The solicitor for the wife requested confirmation that this is the case “as we will require your client to be present in person at the hearing. We are instructed to oppose any Application for your client to give his evidence by video or telephone link-up on the basis that there are significant credit issues in this matter and your client will need to give his evidence in person”.
On 4 May 2004 the husband’s solicitor provided the wife’s solicitor with available dates for the husband in respect of the hearing of the maintenance applications being 5-15 October 2004 and 29 November-10 December 2004. The solicitor for the husband said that these were the only dates that the husband would be available in Sydney. The wife’s solicitor then communicated with the Court and the matter was listed for hearing for 5 days commencing on 29 November 2004. These dates were chosen to suit the convenience of the husband. On 5 May 2004 the solicitor for the wife confirmed with the solicitor for the husband the hearing dates and also said “We note that these dates were suitable to your client as he will be in Australia. We also note our previous advice to you that we do require your client for cross examination in person in the Family Court at Sydney”.
On 10 May 2004 a further financial statement was sworn by the husband and it was filed on 11 May 2004. It is relevant to consider what the husband disclosed in this financial statement. He described his occupation as a Company Director employed by MA Company. As to income he disclosed a total weekly salary of $1,923. He also disclosed benefits from employment or business. He said that TR Company pays all of his expenses while he is living overseas but he did not know the amount paid. He gave no evidence indicating the value or quantum of what is paid. He also said that his wife receives $7,692 per week but he did not disclose the source of this amount. As to expenditure he disclosed:
·Income tax  $634.00
·Mortgage/rent paid by TR Company   $697.00
·Credit Cards   $116.00
·Maintenance for son   $697.00
Total   not known
In the Financial Statement he gave evidence of average weekly expenses and said “all expenses paid by [TA Company] whilst I reside there, consequently the section below has not been completed”.
Then as to property the husband disclosed the following:-
·Westpac Bank account   $25,000.00
·Investments  not known
·Interest in business   negative
·Household contents   $150,000.00
·Personal property   $100,000.00
·Loan account U Company   not known
As to liabilities the husband disclosed the following:
·Income tax   not known
·Potential claims   not known
·Loan account, BI Company   not known
Total  not known
As to financial resources the husband said:
“See annexure - companies held by [G] Trust. Appointor but not beneficiary”.
The husband also attached a document entitled “additional information”. This is a very confusing document and frankly I do not understand it. However, I will refer to some parts of what is in it. He said that he is unaware of his precise financial position. He said that KPMG are going through the accounts and he will not be aware of his financial position until KPMG have finished their work and the situation following the investigations by the Australian Taxation Office and the Australian Federal Police become clearer.
In the attachment he identified various companies being:
·BI Company
·DI Company
·U Company
·MA Company
·CW Company
·TR Company
·PR Company
He said that he and his present wife own 65% of TR Company.
In summary, there clearly is an issue about the financial circumstances of the husband and whether he has fulfilled his obligation of providing a comprehensive understanding of his financial position. The husband’s Senior Counsel conceded that there are difficulties in understanding the husband’s financial position from this statement. One example is in relation to the expenses that he claims are paid by TR Company. He contends that he and his present wife own 65% of this company and yet he does not know the amount that is paid by that company on his behalf.
In this document he disclosed for the first time an interest in PR Company which he contended was held in trust. He has not made available to the wife any financial statements or income tax returns in relation to this company. As well, he disclosed a loan account with U Company.
On 4 June 2004 a Minute of Orders sought by the wife was filed in Court and 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.”
In relation to these orders the wife contends that Order 1 was complied with in part on 11 June 2004. 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 on 30 June 2004.
The wife also contends that as to Order 2 on 28 July 2004 her solicitors received a letter from husband's solicitors dated 22 July 2004 which enclosed the following:
·1 page, Balance Sheet G Trust 20 June 2000;
·1 page Receipts & Payments G Trust 30 June 2000;
·1 page, Balance Sheet G Trust 20 June 2001;
·1 page Receipts & Payments G Trust 30 June 2001.
By letter dated 11 June 2004 the solicitors for the husband provided the solicitors for the wife with a copy of the trust deed of the G Trust.
By facsimile dated 17 June 2004 the solicitors for the husband advised the solicitors for the wife that they were informed by Mr C, Solicitor, that a document was prepared which varied the trust deed so as to exclude the husband as a beneficiary and that office records disclose that the file was recorded as having been sent to the husband in February 2002 at his Inner Suburban Sydney C office. The solicitors went on to say that the person at the C 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”.
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.
In relation to the Financial Statements of TR Company for the year ended 30 June 2000 on the last page it is asserted that:
“An agreement was entered into with a third party for their assistance in the sale of [a Licence]. The sale of this licence as noted above triggered a success fee payable to the third party of $87,062,218. The amount was paid on 5 December 2000.”
In the husband’s verified answers to specific questions of 5 March 2003 in relation to the $87,000,000 success fee he said
“There was no “success fee”. The amount represented repayment of loan and interest. It is wrongly recorded in the accounts and the accounts are to be amended to reflect this. The arrangement involves an unrelated overseas based third party whose identity is extremely commercially sensitive.”
In the answers the husband said that the arrangement between he and the third party that received the fee is “a commercial business arrangement”. He also asserted that there is an agreement between TR Company and the third party dated about 4 April 2000. The husband has never disclosed the name of the third party nor the alleged contract between TR Company and the third party notwithstanding the third party received a significant amount of money from TR Company of $87,000,000.
Further on behalf of the wife it is contended that the husband’s evidence in the answers to specific questions contradict what is in the financial statements of TR Company for the year ended 30 June 2000. It is contended that this issue is fundamental as it impacts significantly on the value of TR Company. The wife contends that the husband may have a direct or indirect interest in or control of the third party that received the success fee and that such party or entity is likely to be resident outside the jurisdiction of the Commonwealth of Australia.
It is also contended the husband has failed to disclose the name and address of the third party who received the $87,000,000 amount, the terms of the alleged agreement between TR Company and the third party and finally failed to supply a copy of the alleged agreement.
It is also contended that the husband has not made available to the wife the financial statements and income tax returns for:
·BH Company for the years ending 30 June 2000 and 30 June 2003.
·The complete financial statements and income tax returns for the G Trust for the years ended 30 June 2000 to 30 June 2003.
·PR Company for the years ended 30 June 2000 to 30 June 2003.
·Any amendments to the G Discretionary Trust Deed.
·The financial statements and income tax returns for the year ended 30 June 2002 and 30 June 2003 for BI Company, MA Company, CW Company, DI Company and U Company.
·The financial statements for TR Company for the years ended 30 June 2002 to 30 June 2003.
·The income tax returns for TR Company for the years ended 30 June 2000 to 30 June 2003, inclusive.
The wife also contends that the husband has interests in PC Company; TR (Europe) Company and WD Company. The wife contends that in the answers to specific questions the husband alleged that PC Company has not traded since its underlying assets were sold or transferred to TR Company, however there has been no documentation provided by the husband in support of this contention.
Finally the wife contends that the husband has not complied with Order 17 of the Family Law Rules or its equivalent under the Family Law Rules 2004.
By facsimile dated 21 June 2004 the solicitors for the wife complained to the solicitors for the husband that the husband had not provided the financial statements and income tax returns for the G Trust for the years ended 30 June 2001 to 30 June 2003 inclusive.
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 which I made in relation to the production of documents relating to the G Trust. The documents which were 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. In an answer to a specific question (5 March 2003) the husband in relation to the success fee said “There was no “success fee””. The amount represented repayment of loan and interest. It is wrongly recorded in the accounts and the accounts are to be amended to reflect this. The arrangement involves an unrelated overseas based third party whose identity is extremely commercially sensitive.” The husband contended in his answers to the specific questions that there was an agreement dated 4 April 2000.
In the annual financial report of TR Company for the year ended 30 June 2001 in the Director’s Report the following appears:
“In the 2000 accounts, reference was made in a post balance sheet event note, to the disposal of the [Licence] to [A Company] (see note 4a). The note explained that part of the disposal costs was a success fee payable to a third party. Subsequent to the signing of the accounts, further evidence has been received that indicated that the repayment was in fact the settlement of an inter company loan to the Company. Therefore in the 2001 accounts the payment has been treated as such and not as a disposal cost.
The note also made reference to the conversion of the inter company loan into a redeemable convertible note. However now the repayment has been treated as a loan settlement, the conversion did not take place.”
A copy of this financial statement was sent to the solicitors for the husband by facsimile transmission by TR Company on 10 March 2003.
In response to a subpoena to produce documents KPMG produced various documents including a copy of a letter dated 31 January 2003 from the Finance Director of TR Company to the Australian Taxation Office. In the letter (Exhibit G) it is stated:
“The [BH Company] amount should not have been included in this total at G11, as it relates to the repayment of a loan, rather than an amount subject to GST. Despite this error, the [BH Company] amount was included in label G14 Non-creditable acquisitions, so our net GST payment was nevertheless correct. We apologise for making this error on our BAS.
The [BH Company] amount is the repayment of a loan from that company. [BH Company] itself received a loan from [L Company]. Consequently, this loan became colloquially known as the [L] Loan.”
Further in the letter it is stated that:
“[The husband] met [Mr L] directly through business dealings they had in common with [AU Company], prior to any involvement in the sale of [licences].
…
As noted in 3.5, [Mr L] is a business acquaintance of [the husband]. [Mr L] is the holder of a Convertible Note in [TR Company]. The Convertible Note is attached as Appendix C and is referred to at 3.10 below.
The Agreement sent to you on 6 December 2002 was subsequently typed up and was executed by [Mr L]. This is attached as Appendix D. As noted at 1.1, the [L] loan was provided through [BH Company].”
It was also stated:
“3.11 [Mr L] did not register any security interests over the assets of [TR Company], [CW Company], [BI Company], or any shares held in these companies.”
On 25 June 2004 an affidavit was sworn by the wife’s solicitor.
On 30 June 2004 an Amended Minute of Orders sought by the wife was filed in court. On that day I made a number of orders. I will hereafter set out the orders and also indicate the non-compliance the wife contends:
“1.     That within 21 days from the date of the making of these Orders the husband shall furnish to the wife's solicitors the Financial Statements (including balance sheets, profit & loss statements, cash flow statements, depreciation schedules and notes to accounts) of each corporation, trust or entity in which the husband has an interest (whether directly or indirectly) be it as a director, shareholder, appointor, trustee, beneficiary to a trust or in any way he has an interest, whether in Australia or outside the jurisdiction of the Commonwealth, including but not limited to the following:
(a)[G] Trust for the years ending 30 June 2000 to 30 June 2003 and, when they become available, the year ending 30 June 2004 (Not complied with except for a few pages from the Financial Statements provided);
(b)[BH Company] for the years ending 30 June 2002 to 30 June 2003 and when they become available, the year ending 30 June 2004 (Not complied with);
(c)[DI Company] for the years ending 30 June 2002 to 30 June 2003 and when they become available, the year ending 30 June 2004 (Not complied with except for a few pages from the Financial Statements provided);
(d)[PR Company] for the years ending 30 June 2000 to 30 June 2003 and, when they become available, the year ending 30 June 2004 (Not complied with);
(e)[TR Company] for the years ending 30 June 2001 to 30 June 2003 and when they become available, the year ending 30 June 2004 (2001 Financial Statements produced under subpoena by KPMG. Otherwise, no compliance);
(f)[MA Company] for the years ending 30 June 2002 to 30 June 2003 and when they become available, the year ending 30 June 2004 (Not complied with);
(g)[CW Company] for the years ending 30 June 2002 to 30 June 2003 and when they become available, the year ending 30 June 2004 (Not complied with);
(h)[BI Company] for the years ending 30 June 2002 to 30 June 2004 and when they become available, the year ending 30 June 2004 (Not complied with);
(i)[U Company] for the years ending 30 June 2002 to 30 June 2004 and when they become available, the year ending 30 June 2004 (Not complied with);
(j)[PC Company] for the years ending 30 June 2000 to 30 June 2003 and, when they become available, the year ending 30 June 2004. If this corporation is no longer trading all documents evidencing how its assets were utilised prior to its liquidation/de-registration (Not complied with);
(k)[TR (Europe) Company] for the years ending 30 June 2000 to 30 June 2003 and, when they become available, the year ending 30 June 2004 (Not complied with); and
(l)[WD Company] for the years ending 30 June 2000 to 30 June 2003 and, when they become available, the year ending 30 June 2004 (Not complied with).
2.      That within 21 days from the date of the making of these Orders the husband confirm through his solicitors in writing that no further amendments have been made to the said Trust save and except what his solicitors served on the wife's solicitors under cover of their letter of 17 June 2004. (Not complied with)
3.      That within 21 days from the date of the making of these orders the husband furnish to the wife's solicitors all documents confirming his assertion that he renounced his interest as a beneficiary in the [G] Trust. (Complied with)
4.      That within 21 days from the date of the making of these Orders the husband shall furnish to the wife's solicitors the Corporations Constitutions in respect of each corporation which the husband has an interest in either as a director or a shareholder including but not limited to the corporations referred to in Order 1 hereof. (Not complied with)
5.      That time be extended for the husband to comply with Notice to Produce addressed to him and dated 4 November 2002 and such Notice be complied with by no later than 14 July 2004. (Not complied with)
6.      That time be extended for the husband to comply with Notice to Produce addressed to him and dated 21 August 2002 and such Notice be complied with by no later than 14 July 2004. (Not complied with)
7. That within 21 days from the date of the making of these Orders the husband furnish to the wife's solicitors copies of all documents required pursuant to Rule 12.02 and 12.05(2) of the Family Law Rules 2004. (Not complied with)
8. That within 21 days from the date of the making of these Orders each of the husband and the wife file and serve the Undertaking as to Disclosure pursuant to Rule 13.15 of the Family Law Rules. (Wife complied with order albeit late. Husband did not comply with order).
9.      That by 31 August 2004 the husband disclose by way of a Verified List of Documents identifying:
(a)the documents to which the Duty of Disclosure applies;
(b)the documents no longer in the husband's possession or control to which the duty would otherwise apply (with a brief statement about the circumstances in which the documents left the husband's possession or control); and
(c)the documents for which privilege from production is claimed.
and in such List of Documents the husband must disclose the whereabouts in the Sydney metropolitan area the documents are available for inspection and if requested by the wife's solicitors, provide a copy of a document or documents in the said List of Documents. (Not complied with)
10.     The parties have leave to apply by arrangement with the Associate.
11.     That the matter be adjourned for mention before me at 9.30 am on 10 September 2004.”

On 2 July 2004 CP Accountants were appointed receivers of TR Company.
On 7 July 2004 the solicitors for the wife sent a letter to the solicitors for the husband seeking confirmation that the husband will appear in person at the hearing on 29 November 2004 and for the duration of the hearing. The wife’s solicitor swore an affidavit on 27 August 2004 and he said that as at the date of swearing this affidavit there had been no response received from the husband’s solicitors in relation to that matter.
In relation to the Orders which I made on 30 June 2004 the wife’s solicitor gave evidence that the only documents that have been made available by the husband’s solicitors in compliance with those Orders are a letter from the husband’s solicitors of 22 July 2004 which provided copies of documents recording minutes of a meeting of directors of G Pty Limited together with a letter from Mr C dated 3 March 1992 setting out the date when the document was forwarded by Mr C. It is contended that it can be seen from these documents that the husband and the wife are excluded as beneficiaries of the G Trust and the minutes of meeting are co-signed by the wife.
The wife’s solicitor contended that given the progress of the matter and the husband’s lack of compliance and his failure to make a full and frank disclosure of his financial circumstances the husband should attend at court prior on 29 November 2004 in person for an examination in respect of his financial affairs and also for him to produce documents to the Court at a time and date suitable to the Court.
A letter was sent from the husband’s solicitors to the wife’s solicitors dated 22 July 2004 which enclosed a copy of a letter dated 21 July 2004 from KPMG which it was contended progressed the matter to some extent. The letter from KPMG is dated 21 July 2004 and is addressed to the solicitors for the husband. In the letter KPMG stated that:
“KPMG commenced providing accounting and taxation services to the following entities in 2004:
·          [G] Trust;
·          [BI Company];
·          [DI Company];
·          [MA Company];
·          [CW Company];
·          [BI Company]; and
·          [U Company] (collectively the “identified entities”)
Prior to KPMG’s appointment, we understand that […] was the accountant and Tax Agent for the identified entities.
KPMG has been auditor and Tax Agent for [TR Company], however our appointments may have now ceased due to the appointment of a Receiver to [TR Company].
KPMG has been engaged to prepare outstanding Income Tax Returns and Financial Statements where required for the identified entities. This process is continuing. We continue to experience significant difficulties in obtaining information to complete this process and I am unable to provide a firm date as to when the process will be completed.”
KPMG then proceed to summarise the status of the financial statements and balance sheets for the identified entities for a range of years between 2000 and 2003. KPMG repeated the statements: “KPMG has not been provided with Financial Statements by [the previous accountant] and we do not know whether they exist” and/or “We continue to experience significant difficulties in obtaining information to complete this process and I am unable to provide a firm date as to when the process will be completed” in relation to the following identified entities and years:
·G Trust (2002,2003);
·BH Company (2002, 2003);
·MA Company (2002, 2003);
·CW Company (2002, 2003);
·BI Company (2002, 2003); and
·U Company (2002, 2003).
The letter concludes:
“Difficulties in obtaining information
We believe that [the previous accountants] have defrauded our client, including a number of entities discussed in this document, of in excess of $2,000,000. Further, the media has reported that one of the principals of [the previous accountants] has been charged in relation to a [serious crime]. We therefore expect to continue to encounter significant difficulties in obtaining the required information from [the previous accountants] to prepare the Financial Statements.
Solicitors for the identified entities, Mr C & Co, are pursuing [the previous accountants] through the Supreme Court of NSW for the production of accounting records which are required to facilitate the preparation of the required financial statements. We understand that this process is continuing.”
Another letter dated 22 July 2004 was sent by the husband’s solicitors to the wife’s solicitors in which it is said that the husband’s former accountant was involved in the scheme whereby he prepared false accounts of, amongst other things, the various group entities. Following upon the fraud CW Company, BI Company, U Company and MA Company commenced proceedings against the husband’s former accountant and associated entities. During the course of those proceedings the solicitors have attempted to obtain a number of documents, including documents which come within those documents to be provided to the wife by Orders which I made. It was said that as early as 25 March 2004 a notice to produce was served upon the solicitors for the husband’s former accountant seeking the documents and since that time there have been orders made in the Supreme Court extending the time for compliance with the Notice to Produce. It was said that because of the continued failure of the accountant to provide the documents a notice of motion seeking direct production of the documents has now been filed. It was said that a solicitor from the office of Mr C, Solicitor, advised that the defendants have continually failed to produce documents and that on 13 July 2004 a Mr G advised that the defendants would be unable to produce documents pursuant to the Notice to Produce as all records have been seized by the Federal Police and or by the State Police. It was said that not only is the accountant accused of fraud but the accountant has been charged with being an accessory before and after the fact in relation to a serious crime. The solicitor also said that there are difficulties in relation to TR Company because this company has placed into receivership. It was contended that
“The combination of these unfortunate events is that our client is currently unable to provide the financial documents pursuant to the orders of Justice O’Ryan nor is he able to provide the discovery as requested.
We are using our best endeavours to try and obtain what documents we can but in the circumstances it seems appropriate that you not seek strict compliance with the orders. If you disagree and do seek to re-list the matter because of any failure to comply we put you on notice to produce the original of this letter.”
By letter dated 8 July 2004 the solicitors for the wife wrote to the solicitors for the husband and advised that on 7 July 2004 the wife was informed that TR Company had been placed into receivership and complained that the husband had failed to disclose the receivership in respect of his financial position. A request was also made for all documents and information in relation to the husband placing the company into receivership as well as minutes of meetings with directors and shareholders and all documentation in relation to any demand made by any creditor to pay any sum of money which the company was unable to meet.
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”.
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 C 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.
By facsimile dated 24 August 2004 the solicitors for the wife wrote to the solicitors for the husband and said that TR Company had been placed into receivership after the date when the husband had to comply and provide information and documentation in relation to TR Company and the success fee of $87,000,000 made to a third party. As well, that the solicitor for the husband had indicated that documents could be obtained from the receiver. The solicitors for the wife advised that they had made contact with CP Accountants, the Receiver, and were advised that one of the husband’s company’s which owns the Inner Suburban Sydney C premises where TR Company was conducting its business evicted the Receivers from the premises so that on leaving the Receivers packed as many boxes as they could of documents and in total packed over 200 boxes.
It was also stated that it appears that it might be extremely difficult, time consuming and costly, if not impossible, to find any documents amongst the two hundred boxes in relation to the documentation pertaining to the transaction between TR Company and the third party in relation to the sale of the Licence. It was also said that the wife objects to the husband relying on the fact that TR Company has now been placed into receivership as an excuse for him not providing or producing the documents sought on behalf of the wife under the notices to produce and which have been the subject of a number of orders, the last of which was made on 30 June 2004.
On 27 August 2004 a further affidavit was sworn by the wife’s solicitor and he attached to his affidavit a copy of a search obtained from the Australian Securities and Industries Commission dated 24 August 2004 in relation to the husband. This search reveals that:
·The husband is a shareholder of TI Company.
·The husband is a Director of BH Company and was appointed in August 1984.
·The husband is the Secretary of BH Company and was appointed in October 1996.
·The husband is a Director of BI Company and was appointed in September 1986.
·The husband is the Secretary of BI Company and was appointed in October 1996.
·The husband is a Director of CA Company and was appointed in January 1995.
·The husband is the Secretary of CA Company and was appointed in January 1995.
·The husband is a Director of CW Company and was appointed in July 1987.
·The husband is the Secretary of CW Company and was appointed in October 1996.
·The husband is a Director of DI Company and was appointed in June 1997.
·The husband is the Secretary of DI Company and was appointed in June 1997.
·The husband is a Director of MA Company and was appointed in October 1993.
·The husband is the Secretary of MA Company and was appointed in March 1999.
·The husband is a Director of PR Company and was appointed in April 1992.
·The husband is the Secretary of PR Company and was appointed in April 1992.
·The husband is a Director of PC Company and was appointed in May 1995.
·The husband is a Director of TW Company and was appointed in August 1995.
·The husband is the Secretary of TW Company and was appointed in August 1995.
·The husband is a Director of TF Company and was appointed in May 1996.
·The husband is a TT Company and was appointed in May 1995.
·The husband is a Director of U Company and was appointed in January 1989.
·The husband is the Secretary of U Company and was appointed in February 1997.
The search also revealed that the husband holds shares in:
·R Company.
·BT Company.
·CW Company.
·CA Company.
·TT Company.
·TR Company.
·BI Company.
·CW Company.
·PC Company.
According to the ASIC Search the relevant registered address is at North Western Sydney B.
By facsimile dated 27 August 2004 the solicitors for the wife wrote to the solicitors for the husband requesting confirmation that the husband would attend at the hearing in person on 29 November 2004.
On 1 September 2004 the matter was relisted on the wife's application and short minutes of orders sought by her were filed. The husband's solicitor requested that his client appear at the hearing on 1 October 2004 by video link. I pointed out that this was opposed by the wife (as per correspondence attached to affidavit of the wife’s solicitor filed 30 August 2004). I directed the husband to appear in person and made the following orders:
“1.      Leave be granted to the wife to make an application in the terms of a Short Minutes of Orders dated 27 August 2004.
2.      The hearing of that application be fixed for one day by arrangement with my Associate [hearing listed for 1 October 2004].
3.      That there also be listed for hearing issues in relation to compliance with the orders made on 30 June 2004 and preparation of the case for hearing generally.
4.      The mention on 10 September 2004 be vacated.”
On 17 September 2004 the wife travelled to Singapore where she met the husband and they had two meetings in an effort to try and negotiate a settlement of the proceedings. Prior to the wife’s departure she had a number of conversations with the husband and during one such conversation he said “There’s a warrant for me in Australia. Eventually they will get me wherever I am”. The husband arranged a return first class air ticket to be sent to the wife to enable her to travel between Australia and Singapore.
On 24 September 2004 the husband's solicitors wrote to the wife's solicitors and confirmed that the husband was coming to Australia for the hearing on 1 October 2004.
On 27 September 2004 an affidavit was sworn on behalf of the husband by his solicitor.
On 27 September 2004 the wife had a telephone conversation with Mr S, who is a former business partner of the husband and a very close friend. Mr S said that “Federal Agent [Mr G] rang me today and asked me my whereabouts and to testify in the court hearing next year. [Mr G] told me ‘we are currently negotiating [the husband’s] return to Australia through his lawyers to face criminal charges’”.
On 29 September 2004 an affidavit was sworn by the husband in Europe. The husband gave evidence explaining why he was unable to come to Australia on 1 October 2004. The husband said that for the last two months he has been travelling around from country to country in an effort to try and retrieve contracts and to use his personal connections through which many of the contracts were obtained in the first place and to try and stop the contracts falling into the hands of rival companies. He said that he was hopeful of trying to resurrect TR Company but without the contracts essentially there would be no business. He contended that in that situation both the companies and he would be financially ruined. He said that he has travelled to many countries meeting representatives of content providers including Greece, the Philippines, Hong Kong, Singapore, Turkey, Northern Iraq, and Egypt and that he is shortly to visit Russia, Yugoslavia, Croatia, Poland and Israel.
By facsimile dated 29 September 2004 the solicitors for the wife asked the solicitors for the husband if there is a warrant for the arrest of the husband and if there is no warrant whether the Australian Federal Police are negotiating for the husband’s return to face criminal charges.
By letter dated 30 September 2004 (Exhibit B) the solicitors for the husband sent to the Australian Taxation Office authorities signed by the husband to provide to the solicitors copies of documents held in relation to the husband and (complete).
By letter dated 30 September 2004 (Exhibit D) by facsimile transmission dated 30 September 2004 the Australian Taxation Office advised the solicitors for the husband that the Commissioner did copy documents from various premises but did not seize any documents from any of the premises and is not in any possession of any original documentation. Further, there are a number of documents that are currently the subject of an agreed process to determine whether they are legally professionally privileged. Finally, that in order to consider the request for information the Commissioner requested that information be provided particularising the type of documentation sought and the premises at which the documentation was located.
On 30 September 2004 an affidavit was sworn on behalf of the wife by Mr V, accountant. Mr V attached to his affidavit a copy of correspondence with the solicitors for the wife and importantly, a list of the documents that he requires.
On 1 October 2004 an affidavit was sworn by the wife.
On 1 October 2004 I made the following orders:
“1.      The hearing of the application by the wife to strike out the response of the husband to all applications filed on behalf of the wife be adjourned to 4.00 pm on 18 October 2004.
2.      It be NOTED that on that adjourned date the matter will also be before the Court for case management purposes, depending on the outcome of the application identified in paragraph 1, including the issue as to the attendance of the husband in person at the hearing of the application for spousal maintenance fixed for November 2004.
3.      I grant to the parties and their legal representatives leave to inspect documents produced to the Court in response to subpoena by New South Wales Police Services.”
The hearing of the present application took place on 18 October 2004
On 28 October 2004 counsel for the husband filed amended supplementary submissions of the husband in response to the wife’s application to have the response struck out.
On 1 November 2004 the solicitors for the wife sent a letter to my associate contending that the submissions “go beyond the directions” I made on 18 October 2004 and that they were filed without their consent. A copy of this letter was sent to the solicitors for the husband and they noted that they had “invited the husband’s solicitors to withdraw the Amended Supplementary Submissions”.
The amended supplementary submissions state that they were “made pursuant to leave granted at the conclusion of the hearing on 18 October 2004, and in response to the Wife’s chronology served on 19 October”.
In paragraph 2 of the submissions the solicitors for the husband set out the “alleged defaults identified in the Wife’s chronology” as:
“2.1 “Alleged failure to comply with the "First Notice to Produce", and failure to comply with Order 17 one month prior to the hearing dates (of the s.44(3) application) appointed for 10 February 2003. However, this was plainly in connection with the s.44(3) Application. It is not an appropriate basis on which to rely in connection with the present pending applications.
2.2 Alleged partial failure to comply with directions of 4 June 2004 for production of various documents [See Wife’s Chronology, 04.06.2004].
2.3 Alleged partial failure to comply with directions of 30 June 2004 for production of various documents (O.1, 4, 5, 6, 7), confirmation that no further amendments to trust (O.2), undertaking as to disclosure (O.8), discovery (O.9) [See Wife’s Chronology, 30.06.2004].”
The submissions on behalf of the husband contend that mere non-production of documents is a default which only justifies the matter proceeding undefended when those documents are in the possession, custody or power of the defaulting party. Thus as the documents were not in the husband’s possession, custody or power there is no relevant default. Therefore “For the Wife's present application to succeed, that assertion must be disbelieved - and in the absence of its being put in and tested by cross-examination”. Furthermore, “given the seizures of documentation by various authorities, there could be no more than speculation that the Husband - overseas for nearly four years - has any relevant undisclosed document in his possession custody or power.”

Counsel for the husband also cautions that the power to strike out a defence should be exercised “only if the court is satisfied that the party is endeavouring to avoid giving discovery”. Further, “Even in the case of wilful and continuous default, the court may in the overall interests of justice and not shutting out a party from being heard decline to strike out”.
The submissions conclude:
“striking out the response is not the only way of securing justice for the Wife. If at trial disclosure proves to be inadequate, powerful inferences maybe drawn in the Wife's favour. [The wife’s solicitor’s] affidavits show that, despite her complaints, she has had access to a wife range of documentation and information, even if not to everything she would like. It needs also to be born in mind that the imminent trial is of a maintenance application. While there will be issues as to the Wife's needs and the justice of making an order in all the circumstances, if satisfied that the Husband's disclosure was inadequate the Court would likely draw inferences as to his capacity to pay.”

The relevant law

The previous Family Law Rules (1984) apply in this case because a number of the complaints of the wife relate to the failure of the husband to comply with orders made prior to January 2004. Order 4 rule 1A of the 1984 Rules addressed the “Failure to comply with Rules or court orders” and provided:
“Subject to any dispensation under rule 1, if a party does not do all things required by the Rules, or by an order of the court, the court, or a Registrar, may:
(a)     dismiss the application or response; or
(b)     stay the proceedings, or part of the proceedings; or
(c)     make any other order the court, or the Registrar, thinks fit.”
However O 4 r 1 allowed the Court to dispense with the rules. It stated:
“The court, or a Registrar, may dispense with compliance with any of the requirements of these Rules, either before or after the occasion for compliance has arisen.”
In Tate and Tate (2000) FLC 93-047 the Full Court (Nicholson CJ, Kay and Waddy JJ.) refused leave to appeal where the trial Judge had struck out the husband’s form 7A and made orders providing for an undefended hearing. They ruled as summarised in the headnotes that:
·          “The Family Court is all too frequently confronted with litigants who fail in their duties of full, frank and prompt disclosure of their financial affairs. Where such failure results in a Form 7A being struck out then that party ought have no further right to be heard without further order of the Court which is a matter for the judge in his or her discretion. The aphorism “Justice delayed is Justice denied” is all too frequently manifestly true in this jurisdiction. In doing justice to both parties, the exclusion of a defaulter, whose defaults threaten the achievement of Justice, is not only an option, but, in such circumstances, becomes a regrettable necessity.
·          This was indeed an “exceptional” case. The forfeiture of the right to cross-examine or indeed to make submissions, flowed from the earlier order. There was neither error of law nor miscarriage of her Honour’s discretion. Where non-compliance with the orders and directions of the Court will, in the opinion of the trial Judge, defeat the attainment of justice, then suitable remedies must be found. In this instance the remedy necessarily excluded the husband from any further participation in the proceedings.
·          Whilst such cases are “exceptional”, and indeed unusual, no litigant, whether legally represented or not, should harbour any doubt that manipulation of the Court's processes, through disregard of and deliberate non-compliance with its orders and directions will attract other than the strongest measures from the Court.
Case management
· In attempting to match the limited resources of the Court to the demands of increasing lists, the principles of case management are assuming greater prominence. Never an end in themselves, they are and must always remain subject to and never prevail over the attainment of justice as “the paramount consideration”: State of Queensland v J.L. Holdings referred to. But justice in matters such as this is due to each party to litigation: Allesch v Maunz [2000] HCA 40 referred to.
·          To eliminate or at least greatly reduce unacceptable delays, within the resources available, is a constant goal of the Court. In achieving such reduction as may be possible, the co-operation of all litigants, legally represented or appearing in person, is essential. Thus it is fundamental that case management directions and orders of the court in preparation for trial (or settlement) must be respected and obeyed.”
In Joachim and Joachim [2000] FamCA 729 the wife appealed on the ground that the trial Judge failed to accord to the wife natural justice and procedural fairness by dismissing all applications without notice to the wife, refusing Counsel for the wife's request for an adjournment and by refusing to allow the wife's solicitors to file an amended application. The order had been made pursuant to the power in O 4 r 1A of the Family Law Rules (1984). The Full Court of Finn, Holden and May JJ. dismissed the appeal.
The Full Court approved and adopted what was stated by the majority judgment of the Full Court of the Federal Court in Lenijamar Pty Ld and Ors v AGC (Advances) Ltd (1990) 98 ALR 200 and said:
“76.    Order 10 r.7 of the Federal Court Rules is as follows:
“7 (1) Where a party fails to comply with an order of the Court directing that party to take a step in the proceeding, any other party may move the Court on notice -
(a)if the party in default is an applicant - for an order that the proceeding be stayed or dismissed as to the whole or any part of the relief claimed by him in the proceeding;
(b)if the party in default is a respondent -for judgment or an order against him; or
(c)for an order that the step in the proceeding be taken within the time limited in that order.
(2)The Court may make an order of the kind mentioned in sub-rule (1) or any other order or may give such directions, and specify such consequences for non-compliance with the order, as the Court thinks just.
(3)This rule does not limit the powers of the Court to punish for contempt.”
77.     In Lenijamar, the primary judge, in dismissing an action for damages under s.52 of the Trade Practices Act 1974 because of the failure of the plaintiffs to comply with procedural directions of the Court and their delay in prosecuting the matter, had placed some reliance on the decision of the House of Lords in Birkett v James [1978] AC 297 where at 318, Lord Diplock said:
“The power (to dismiss an action for want of prosecution) should be exercised only where the court is satisfied either (1)that the default has been intentional and contumelious, e.g., disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or (2) (a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party.”
78.     However, the majority in Lenijamar did not consider that the tests in Birkett v James should be applied in exercising the jurisdiction under O.10 r.7. Rather they saw the discretion conferred by the rule as unconfined except for the condition of non-compliance with a direction, but exercisable with regard to the following considerations (at 208-209):
“It is to be noted that the power given by this rule is conditioned on one circumstance only: the failure of a party to comply with an order of the Court directing that party to take a step in the proceeding. There is no requirement of intentional default or contumelious conduct, although the attitude of the applicant to the default and the Court's judgment as to whether or not the applicant genuinely wishes the matter to go to trial within a reasonable period will usually be important factors in weighing the proper exercise of the discretion conferred by the rule. There is no requirement of "inordinate and inexcusable delay" on the part of the applicant or the applicant's lawyers, although any such delay is likely to be a significant matter. There is no requirement of prejudice to the respondent, although the existence of prejudice is also likely to be significant. And it must be remembered that, in almost every case, delay adversely affects the quality of the trial and is an additional burden upon the parties.
…
The discretion conferred by O 10 r 7 is unconfined, except for the condition of non-compliance with a direction. As it is impossible to foresee all of the circumstances under which the rule might be sought to be used, it is undesirable to make any exhaustive statement of the circumstances under which the power granted by the rule will appropriately be exercised. We will not attempt to do so. But two situations are obvious candidates for the exercise of the power: cases in which the history of non-compliance by an applicant is such as to indicate an inability or unwillingness to co-operate with the Court and the other party or parties in having the matter ready for trial within an acceptable period and cases - whatever the applicant's state of mind or resources - in which the non-compliance is continuing and occasioning unnecessary delay, expense or other prejudice to the respondent. Although the history of the matter will always be relevant, it is more likely to be decisive in the first of these two situations. Even though the most recent non-compliance may be minor, the cumulative effect of an applicant's defaults may be such as to satisfy the Judge that the applicant is either subjectively unwilling to co-operate or, for some reason, is unable to do so. Such a conclusion would not readily be reached; but, where it was, fairness to the respondent would normally require the summary dismissal of the proceeding.
In the second of the two situations we postulate, a significant continuing default, it does not really matter whether there have been earlier omissions to comply with the Court's directions. Ex hypothesi the default is continuing and is imposing an unacceptable burden on the respondent. But the continuance of the non-compliance is of the essence of this situation. If, when the Court looks at the matter, the direction has already been complied with, the defaulting applicant may be ordered to pay any wasted costs; but it would be difficult to justify the dismissal of the proceeding solely because of that default.”
79.     As we have said, the wording of O.10 r.7 of the Federal Court Rules and O.4 r. 1A of the Family Law Rules is very similar, although interestingly the Family Law rule does not have an express provision for notice. We would be prepared to adopt the principles stated by the majority judgment in Lenijamar) (which was included in the appellant’s list of authorities) as applicable to the discretion under O.4 r.1A to dismiss for failure to comply with directions.
80.   On the Lenijamar approach, her Honour would not have been in error in failing to identify prejudice or hardship to the husband-although she did express the view that the husband was suffering “severe prejudice” on account of the matter not being concluded.”
In the current Family Law Rules (2004) r 11.01 sets out the court’s powers in relation to case management. It provides:
“The court may exercise any of the powers mentioned in Table 11.1 to manage a case to achieve the main purpose of these Rules (see rule 1.04).

Table 11.1 Court's powers

ItemSubject Power

1 Attendance (a) order a party to attend:
(i) an information session;
(ii) a procedural hearing;
(iii) counselling or mediation;
(iv) a conference or other court event; or
(v) a specialist family court program or post-separation parenting program;

(b) require a party, a party's lawyer or a child representative to attend court

2Case development (a) consolidate cases;
(b) order that part of a case be dealt with separately;
(c) decide the sequence in which issues are to be tried;
(d) specify the facts that are in dispute, state the issues and make procedural orders about how and when the case will be heard or tried;
(e) refer a particular case or a part of a case for special management by a judicial officer;
(f) with the consent of the parties, order that a case or part of a case be submitted to arbitration

3 Conduct of case (a) hold a court event and receive submissions and evidence by electronic communication;
(b) postpone, bring forward or cancel a court event;
(c) adjourn a court event;
(d) stay a case or part of a case;
(e) make orders in the absence of a party;
(f) deal with an application without an oral hearing;
(g) deal with an application with written or oral evidence or, if the issue is a question of law, without evidence;
(h) allow an application to be made orally;
(i) determine an application without requiring notice to be given;
(j) order that a case lose listing priority;
(k) make a self-executing order

Note 1 The powers mentioned in this rule are in addition to any powers given to the court under a legislative provision or that it may otherwise have.
Note 2 Rule 1.10 provides that a court may make an order on its own initiative and sets out what other things the court may do when making an order or giving a party permission to do something.”

Rule 1.04 states that:
“The main purpose of these Rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.”
Rule 11.02 deals with failure to comply with a legislative provision or order and states:
“(1) If a step is taken after the time specified for taking the step by these Rules, the Regulations or a procedural order, the step is of no effect.
Note A defaulter may apply to the court for relief from this rule (see rule 11.03).
(2) If a party does not comply with these Rules, the Regulations or a procedural order, the court may:
(a) dismiss all or part of the case;
(b) set aside a step taken or an order made;
(c) determine the case as if it were undefended;
(d) make any of the orders mentioned in rule 11.01;
(e) order costs;
(f) prohibit the party from taking a further step in the case until the occurrence of a specified event; or
(g) make any other order the court considers necessary, having regard to the main purpose of these Rules (see rule 1.04).
Note This list does not limit the powers of the court. It is an expectation that a non-defaulting party will minimise any loss.”
However r 11.03 provides for relief from orders and states:
“(1) A party may apply for relief from:
(a) the effect of subrule 11.02 (1); or
(b) an order under subrule 11.02 (2).
(2) In determining an application under subrule (1), the court may consider:
(a) whether there is a good reason for the non-compliance;
(b) the extent to which the party has complied with orders, legislative provisions and the pre-action procedures;
(c) whether the non-compliance was caused by the party or the party's lawyer;
(d) the impact of the non-compliance on the management of the case;
(e) the effect of non-compliance on each other party;
(f) costs;
(g) whether the applicant should be stayed from taking any further steps in the case until the costs are paid; and
(h) if the application is for relief from the effect of subrule 11.02 (1) — whether all parties consent to the step being taken after the specified time.
Note 1 This list does not limit the powers of the court. See also subrule 1.12 (3).
Note 2 A party may make an application under this rule by filing a Form 2 or, with the court's permission, orally at a court event.”
It should also be noted that the Court may still dispense with the rules under r 1.12 which provides:
“(1)    These Rules apply unless the court, on application or its own initiative, orders otherwise.
(2)     The court may dispense with compliance with any of these Rules at any time, before or after the occasion for compliance arises.
(3)     In considering whether to make an order under this rule, the court may consider:
(a) the main purpose of these Rules (see rule 1.04);
(b) the administration of justice;
(c) whether the application has been promptly made;
(d) whether non-compliance was intentional; and
(e) the effect that granting relief would have on each party and parties to other cases in the court.”
The power to dispense with the rules reflects the principle that a court should have power if strict compliance with the rules would cause injustice.
It is relevant to consider the Explanatory Statement to the 2004 rules. In relation to r 11.02 the Explanatory Statement firstly notes the policy background:
“This rule and r11.03 are two of the significant rules in the Court’s drive to create a different culture in relation to compliance with procedural requirements in the Family Court.
“By tradition, the conduct of litigation in common-law jurisdictions is adversarial. Without effective judicial control, the adversarial process is likely to encourage an adversarial culture and to generate into an environment in which the litigation process is too often seen as a battlefield where no rules apply. In this environment, questions of expense, delay, compromise and fairness may have only low priority. The consequence is that expense is often excessive, disproportionate and unpredictable and delay is frequently unreasonable. It can be argued that the existing Rules and Practice Directions contain the solution to these problems, if litigation was conducted in accordance with them, but the present system does not ensure this. Rules are flouted on a vast scale. Timetables are largely ignored. Requirements are complied with when convenient or in the interest of one of the parties but not otherwise. Non-defaulters are discouraged from bringing applications to enforce compliance because of the delay and cost of bringing these applications before the Court.
Orders for costs, although important, cannot provide a complete solution. Applications for costs orders are expensive. Orders for costs are often made after the damage is done. Parties may accept an order for costs as a price worth paying for the delay and inconvenience caused to the other party. Case management itself and sanctions must play a part in suppressing misbehaviour.” (Lord Woolf : Access to Justice Report (July 1996),)
Lord Woolf recommended that to address these problems:
(1)     the rules of court themselves should specify what will happen where there has been a breach;
(2)     all directions orders should include an automatic sanction for non-compliance;
(3)     the onus should be on the party in default to seek relief from the sanction, not on the other party to apply to enforce the sanction;
(4)     the inclusion of sanctions in the Rules should not be allowed to generate a subculture of additional litigation;
(5)     sanctions need to be sufficiently powerful to prevent game playing and oppressive behaviour;
(6)     the primary object of sanctions must be prevention not punishment.
These recommendations have been adopted in the Family Law Rules 2004.”
The Explanatory Statement then outlines the effects of r 11.02 as such:
“Subrule (1) has the effect of reversing the onus by requiring a party in default to apply for permission to take a procedural step after a time allowed. Subrule (2) sets out the Court’s powers of case management when there has been non compliance and the Court may order these things on application or of its own initiative.
The consequence imposed must be:
1.      relevant and proportionate to the breach;
2.      appropriate to the seriousness of the breach;
3.      responsive to the particular breach, for example refusing to allow a person to rely on an affidavit filed out of time.”

In relation to r 11.03 the Explanatory Statement notes:
“Under this rule a party may, by Form 2 or if allowed by the Court, orally at an event, seek an order relieving them of the consequences of non-compliance. The Court retains a broad discretion to relieve a party of the requirement to comply with the Rules or procedural orders and Subrule (2) helps the parties direct their mind to the factors the Court will consider on an application under Subrule (1).
Considerations include whether the breach was intentional, whether there has been substantial compliance with other requirements and whether there is a good explanation for the breach.”
If a party fails to take a step prescribed by the Rules or a procedural order then this party cannot take the step because r 11.02(1) provides that it would be of no effect. The defaulting party may however pursuant to r 11.03(1)(a) make an application seeking relief from the effect of r 11.02(1). In determining such an application the Court may consider the matters set out in r 11.03(2). The Court of its own motion may make an order pursuant to r 11.02(2) or the non defaulting party may make an application for such an order. Again, if the Court sought to make an order pursuant to r 11.02(2) either on its own motion or on application by the non defaulting party it may consider the matters set out in r 11.03(2). The powers of the Court are not limited however by the matters set out in r 11.03(2).
In my view, in addition to the matters set out in r 11.03(2), the following are relevant:
·As it is impossible to foresee all of the circumstances under which the power granted by the rule will be exercised it is undesirable to make an exhaustive statement of the circumstances under which the power granted by r 11.02(2) will be exercised.
·There is no requirement of intention or default or contumacious conduct on the part of the defaulting party.
·There is no requirement of inordinate or inexcusable delay by the defaulting party.
·There is no requirement of prejudice to the non defaulting party although this may be relevant.
·It may be relevant to consider the cumulative effect of non compliance.
·It may be relevant to consider if the non compliance is continuing.
What is very clear from the case law and the provisions of the 2004 Rules is that it is fundamental that the rules of Court and/or procedural orders must be obeyed and the Court should not be reticent about exercising the powers in r 11.02(2) in appropriate cases. In my view, it is not necessary that the circumstances be “exceptional”. No litigant, whether legally represented or not, should harbour any doubt that manipulation of the Court's processes, through disregard of and deliberate non-compliance with its orders and directions will attract other than the strongest measures from the Court.
The case law prior to the 2004 Rules was relatively harsh in responding to non-compliance. The new rules have adopted these case law principles as they place great importance on case management and the need to comply with court orders. As such, in my view, the new rules provide severe sanctions for non-compliance.

Conclusion

In this case there has been a significant number of defaults by the husband dating back to 2002. The following are some examples. He did not comply with orders made on 30 July 2002. He did not comply with O 17 r 4 of the 1984 Rules. He did not comply with the notices to produce issued on 14 August 2002 and 4 November 2002. He did not comply with orders made on 18 November 2002. He did not comply with orders made on 14 February 2003. The wife had sought that the responses of the husband be dismissed but no order was made. There are other complaints made by the wife. Then the wife complains that the husband did not comply with orders I made on 4 June 2004 and 30 June 2004. I accept that the wife was entitled to bring the application that I am now dealing with. I am satisfied that the husband has failed to comply with obligations prescribed by the Rules and several court orders relating to discovery which has hampered the preparation of the wife’s case. This alone would justify granting relief to the wife.
However, this is a difficult case. The issues in this case, in my opinion, currently include whether the husband has sufficiently complied with orders made from time to time and his obligations pursuant to O 17 of the 1984 Rules and r 13.01 and in particular r 13.04 of the 2004 Rules. One of the significant issues in the maintenance proceedings and also the s 79A proceedings will be whether or not the husband has made a full and frank disclosure of his financial circumstances. That is an issue which at this stage I cannot resolve. However, it will be dealt with at the trial of the maintenance application in December 2004. As well, the wife will have the opportunity to cross-examine the husband in relation to the various issues which were addressed in correspondence between the parties’ lawyers that I have referred to in this judgment and which may be relevant to both the maintenance application and also the s 79A application.
I am of the view that in the circumstances of this case caution must be exercised in dealing with the wife’s application because the husband has raised excuses in relation to why during 2004 he had difficulties providing relevant information and documents to the wife and these excuses will be “tested” at the hearing of the maintenance application.
When attempting to comply with the orders the husband had KPMG prepare the relevant financial statements however they said:
“We believe that [the husband’s former accountants] have defrauded our client, including a number of entities discussed in this document, of in excess of $2,000,000. Further, the media has reported that one of the principals of [the former accountants] has been charged in relation to a [serious crime]. We therefore expect to continue to encounter significant difficulties in obtaining the required information from [the previous accountants] to prepare the Financial Statements.”
The actions of the husband’s former accountant and the difficulties that has caused in gaining access to the relevant data and preparing financial statements lead me to the conclusion that I should not at this stage grant the relief sought by the wife. As well, there will shortly be a hearing at which a number of the relevant issues will be dealt with. This does not necessarily mean that the accountant’s fraud was the only reason for the husband’s non-compliance, or that the husband would otherwise have been fully co-operative with his discovery obligations, but in my view it is sufficient, at this stage, for the husband to avoid a dismissal of his responses.
I am of the view that the hearing of the maintenance application should proceed at which, as I have said, the wife can raise the relevant matters I have identified in the context of her contention that the husband has failed to make a full and frank disclosure of his financial circumstances.
Notwithstanding the conclusion I have reached in this matter there was discussion with Senior Counsel for the husband about the appropriateness of an application under r 11.2 in circumstances where the issue is one of non disclosure of financial circumstances. Rule 13.04 provides that a party to a financial case must make a full and frank disclosure of his/her financial circumstances and thereafter there is identified in paragraphs (a) to (h), inclusive, various interests which should be disclosed. Rule 13.01 provides that each party to a case has a duty to the Court and to each other party to give a full and frank disclosure of all information relevant to the case in a timely manner and r 13.01(2) provides that this duty continues until the case is finalised. In my opinion, in an appropriate case, an application could be made by a non defaulting party seeking an order pursuant to r 11.02(2) prior to the hearing of the substantive application(s).

Orders

The Application by the wife seeking a dismissal of the Responses of the husband be dismissed.

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

[2004] FamCA 1067

17 November 2004