Burnet and Burnet

[2012] FamCA 1127

FAMILY COURT OF AUSTRALIA

BURNET & BURNET [2012] FamCA 1127

FAMILY LAW – Single expert witness’ fees exceed amount allowed in litigation funding order - interim costs sought by wife to meet extra fees and ongoing fees -  application allowed subject to reserving to final hearing the husband’s right to apply that wife bear all of the expert’s fees – costs of the day

APPLICANT: Ms Burnet

RESPONDENT: Mr Burnet

INTERVENOR:

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLC 4991 of 2011

DATE DELIVERED: 14 December 2012

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Bennett J

HEARING DATE: 14 December 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr J. Williams

SOLICITOR FOR THE APPLICANT: Mcdonald Slater & Lay

COUNSEL FOR THE RESPONDENT: Mr Burnet in person

SOLICITOR FOR THE RESPONDENT:

Orders

IT IS ORDERED THAT

1.This matter be listed before me for mention on Friday 8 March 2013 at 9.00 am and if either party wishes to make application to adduce expert evidence other than from the single expert witness they make such application and file such supporting material as is necessary within a reasonable time prior to mention date.

2.The husband forthwith be responsible for the balance of the C Consultants account of the single expert witness in the sum of $17,500 at first instance.

3.The husband pay and be responsible for the reasonable further costs for preparation of the final report of the single expert witness, such is necessary to enable the single expert witness to complete the assessment of the husband and wife’s interests in the entities disclosed by them including a valuation of them, such further costs to be limited to $10,000.

4.The wife reimburse the husband in respect of one half of the costs payable pursuant to paragraphs 2 and 3 of this order and/or such greater proportion of such costs as may subsequently be ordered by the Court and do so from her entitlement to a final alteration of property interests or a judgment of this Court.

5.The husband fully cooperate with Mr B, the single expert witness, and properly answer all reasonable requests for information and provide all documentation necessary for completion of the single expert’s report and access to such information.

6.In the event that the husband or the wife fail to comply with all reasonable requests of the single expert witness the party who asserts the other has failed to comply have liberty to apply for further orders or directions on short notice.

7.The husband do all acts and things necessary to require his former solicitors, Alan Wainwright J Okno & Co of …, to provide details of all monies paid to them by or on behalf of the husband since 2010 on any basis or for any purpose and the details of such payment include the date, amount of the monies paid by or on behalf of the husband, the source of the funds which were paid so that:-

a)     if the monies were paid by cheque, details be provided of the account on which the cheques was drawn;

b)     if the monies were paid by credit card, details must identify the finance provider, the number and name of the credit card facility;

c)     if the monies were paid in cash, the details must identify the payer.

8.The husband do all acts and things necessary to require his former solicitors, Alan Wainwright J Okno & Co of …, to detail the date and means by which the costs ordered against the husband on 7 November 2011 in the sum of $6,707 was satisfied.

9.The husband’s former solicitors are hereby excused from filing a Notice of Ceasing to Act on his behalf and the husband have leave to file a Notice of Address for Service which he has prepared this day.

10.The husband make a contribution to the wife’s cost of and incidental to this day fixed in the sum of $2,440 and make such payment by 12.00 noon on 19 December 2012.

11.By 12.00 noon on 19 December 2012 the husband reimburse the wife directly an amount equivalent to one half of the real property valuation undertaken on the former matrimonial home in the sum of approximately $550.

12.The reasons for judgment this day be transcribed and when settled copies be made available to the parties and the parties be at liberty to provide them to the single expert witness and to any other witness in the case.

13.Liberty be reserved to the parties to seek an adjournment of the mention date administratively in the even that they agree that the matter would be best mentioned on a subsequent date.

AND IT IS NOTED that the husband will, in correspondence common to both parties, advise the single expert witness of the availability of documents for his information and inspection and where such documents are voluminous, that the documents may be made available to the single expert witness at the premises of the single expert witness for a limited time.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 4991 of 2011

Ms Burnet

Applicant

And

Mr Burnet

Respondent

REASONS FOR JUDGMENT

ex tempore

1. The matter comes before me as a further mention, which is actually a preliminary step to a first day hearing before me. I am the judge to whom this matter is docketed and, in the ordinary course, I will be the judge who determines the matter finally.  There was a telephone mention on 5 December 2012, which was a day or so after the matter came into my Chambers and at that mention there was raised the issue of outstanding fees to an accountant, Mr B, who is a single expert witness appointed pursuant to paragraph 1 of orders made by Young J on 30 July 2012. 

2. That paragraph of Young J’s Order requires the husband and the wife to “do all acts and things and give all necessary instructions so as to appoint and then fully cooperate [Mr B], chartered accountant of [C Consultants], to undertake an initial review of the financial structure and circumstances of the parties on the basis of a joint single expert report”.

3. Paragraph 2 of the Order provides that the husband will “initially pay the fees and disbursements in relation to that report and its preparation up to a sum of $10,000, that the wife hereafter reimburse the husband 50 per cent thereof at the conclusion of these proceedings”.

4. Apparently a preliminary report has been prepared by Mr B but his costs for doing so are claimed at $27,500. That is $17,500 in excess of the amount which was contemplated when Young J made the Order on 30 July 2012.  The husband has paid $10,000 to Mr B. The balance of $17,500 remains unpaid. 

5. The wife’s application today is set out in a minute tendered by Mr Williams of counsel who appears on her behalf. The minute was shown to the husband who appears on his own behalf prior to the matter commencing before me shortly after 12.15 pm.  Counsel for the wife says that he seeks that the court make the order as an interim costs order.

6. The wife seeks that the husband forthwith pay the $17,500 owing to Mr B at first instance whereupon she will reimburse the husband in respect of those costs out of her entitlement by way of a final alteration of property interests or a judgment of this Court.  She also seeks that the husband pay the reasonable further costs for preparation of a final report from C Consultants (Mr B) to complete the assessment of the husband and wife’s interests in the entities disclosed by them. 

7. In discussion with Mr Williams he was prepared to refine the order sought by the wife to include a provision that, whereas she is already required to pay one half of certain costs of Mr B, she may ultimately be required to pay a higher proportion of those costs. Mr Williams acknowledges that the events that are likely to bring about a liability of more than half for the wife would include if ultimately I am satisfied that it was unreasonable for the wife to persist with Mr B as an expert in light of matters raised by the husband, to which I will refer later, and that moneys paid to Mr B were not appropriate expenditures.

8. The wife also seeks liberty to come back to the Court in the event of a lack of cooperation.  She seeks the costs of today but I will deal with that later and she seeks that the husband pay an outstanding costs order that was made against him on 7 November 2011 for some $6707. 

9. The husband opposes the orders sought by the wife. The husband makes no objection to the wife proceeding to make an oral application.

10. The husband filed an affidavit but it was written by hand.  It was messy and I have handed it back to him and invited him to tell me from the bar table what he would say if he was on oath and in the witness box and in the context that he may well be asked to confirm on oath everything he says.

11. The husband’s argument against paying any further money to Mr B, over and above the $10,000 which has already gone, is essentially that it’s throwing good money after bad money.  He says Mr B has not performed his task well. Mr Burnet states that has waited for Mr B to contact him to ask for information that would assist him in his investigations and preparation of his report and expected that certain documents which were lodged with his former solicitors, Alan Wainwright J. Okno & Co, would have been inspected by Mr B. However none of that eventuated.

12. In this respect Mr Williams sought to justify, as it were, the increased cost of the report along the lines of the job that Mr B had been asked to take on was rather understated.  For instance, Mr Williams said that at the time Mr B was briefed the information which had been provided by the husband in the form of a financial statement indicated that there were some two corporate entities and about 25 trusts, whereas Mr B has uncovered and investigated in some sense 60 corporate entities and 30 trust entities.  It submitted by counsel for the wife that the extra entities were in some way responsible for the blowout in costs.

13. The husband says that, whereas Mr B may have uncovered corporate entities in which someone of his name and with his date of birth has an interest or holds an office, those entities are nothing to do with him. He says that the officeholder or interest holder is not him.  The husband says that he knows of at least two other people with the same name.  One is his uncle and his uncle doesn’t share his birth date.  There is another, he surmises, by virtue of the fact that that name appears in the records of ASIC and that person does have his date of birth but he lives up in the country somewhere.  Mr Burnet has never met him but he is sure that those entities that Mr B has referred to are not his and that the person referred to as the officer bearer or interest holder is not him. It is, according to the husband, a case of mistaken identity in respect of which Mr B has purported to have incurred significant professional fees and disbursements unnecessarily which could have been avoided had Mr B just bothered to ask.

14. It would cause me some concern about the competence of Mr B if he had discovered a lot of entities and done nothing to run them to ground to verify that the person he thought was the husband was, in fact, the husband.  My impression is that, it is partially for that reason, that the orders sought by the wife have been amended to make it clear that she may ultimately be responsible for more than one half of Mr B’s fees.

15. The husband’s other complaint is that Mr B has acted inappropriately and in excess of his brief by incurring – having the parties incur - professional fees and probably disbursements well in excess of the amount that the parties indicated they wished initially to spend.  The Order made by Young J does not cap the expenditure for the report, even the initial report, at $10,000. However, the husband referred me to correspondence dated 30 August 2012 from Mr B in which Mr B appears to accept that his fees were capped at $10,000 by use of the words, for instance, “my fees are capped at $10,000”. 

16. Mr Burnet points to the fact that at no stage after the $10,000 was exhausted were the parties or their practitioners notified and advised that the amount of money allowed was insufficient and more money would be charged.  The parties were merely confronted with a fait accompli in the form of a preliminary report and an invoice seeking $17,500 over and above the $10,000 that had already been paid.  I must say that this causes me some disquiet too.  It indicates, without hearing anything further, a certain lack of organisation and transparency in the process and I can well understand why the husband is concerned about it. 

17. My impression is that something has gone badly awry however, it is likely that it can be fixed or adjusted later. My aim at this stage is to get on with the proceedings for which the release of Mr B’s report is but an early step.

18. The orders that I will make today should not in any way be construed as acknowledging that the moneys owing to Mr B cannot be recovered subsequently from him by disciplinary proceedings or in other court proceedings or by negotiation. 

19. What I want to achieve is a report before the Court which can be used as some foundation for the rest of the case insofar as it involves a valuation of a number of entities and trusts which I think even the husband’s submissions concede are fairly complex. 

20. Specifically, the husband does not say that he lacks the capacity to pay the moneys sought by the wife or that they cannot be adjusted later.  He says that he will have to borrow and he may have to rearrange his affairs and that is all well and good but he does not say that he lacks the capacity to pay.  

RECORDED    :    NOT TRANSCRIBED

1. Mr Williams makes his application as an interim costs order.  I am mindful that in proceedings in this Court both parties usually bear their own costs save that there are circumstances which justify one party bearing the costs being responsible for the costs of the other.  Mr Burnet has been referred to s117 in its entirety.

2. In this case I make an interim order only and can be adjusted subsequently as I have indicated. 

3. I take into account the financial situation of both of the parties.  The husband is living in the former matrimonial home.  It is subject to a mortgage.  He is receiving approximately $2000 per week by way of self-funded superannuation pension arrangement.  He says that the Burnet family interests approximate about $15 million and that of those funds the wife in this proceeding, on his calculation, ought be entitled to some $400,000 to $500,000.  The wife is working part time as a secretary.  She has a modest income of about $615 per week.  She rents an apartment for about $500 per week.  She has a relatively small amount of cash at bank of about $43,000 which is the balance of funds she had at separation and some moneys that have otherwise been paid out pursuant to orders of this Court.  The wife is not totally without funds but she is certainly in a precarious situation and I am satisfied that it is not appropriate that she dip into the $43,000 that she has at the bank to meet this particular expense.

4. Neither party receives assistances from Victoria Legal Aid.

5. The conduct by both parties to the proceedings in relation to the proceedings is unremarkable as relates to this issue.

6. Neither party has failed to comply with a previous order of the court.

7. In all of the circumstances, I am satisfied that it is just in the context of s117(2) the order sought by the wife is just. I would also be satisfied that it is proper within the meaning of s114. It enables the matter be advanced to the stage of getting Mr B’s report, the husband deciding what he wants to do in relation to it, and indeed the wife doing likewise, but progressing the case forward rather than sideways or stalling it.

8. Somewhat belatedly, the husband proposed that another accountant be retained in place of Mr B, but the wife does not want that and stands by the consent order for the appointment of a single expert witness.  I have indicated to the husband that, once he receives Mr B’s final report, he may wish to put on an application himself to adduce evidence by his own expert witness.  So, it is not as if Mr B’s evidence must be the only evidence ultimately before the Court.

RECORDED    :    NOT TRANSCRIBED

1. There was discussion about and I have taken submissions in relation to the outstanding costs order which the husband has said that he paid, in the sum of $6707, and heard an application by the wife for costs of this day. The husband has been unsuccessful in opposing the order sought by the wife, in the amended form. It is appropriate that he make a contribution towards the wife’s costs of this day in respect of which there was no opposition (save from me) as to quantum.

I certify that the preceding twenty nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett delivered 14 December 2012.

Associate: 

Date:  5 February 2013