Burns & Burns
[2023] FedCFamC2F 140
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Burns & Burns [2023] FedCFamC2F 140
File number(s): MLC 5056 of 2021 Judgment of: JUDGE O'SHANNESSY Date of judgment: 31 January 2023 Catchwords: FAMILY LAW – ex tempore reasons – vacate final hearing – notice of objection to subpoena filed – subpoenaed person seeks redaction of documents to produce – husband spends substantial superannuation funds purchasing Art C – Art C of little resale value – one party creates multiple impediments to the matter proceeding – transfer to Division 1. Legislation: Family Law Act 1975 (Cth), s 79 Cases cited: Kessey and Kessey (1994) FLC (92-495) Division: Division 2 Family Law Number of paragraphs: 22 Date of hearing: 31 January 2023 Place: Melbourne Counsel for the Applicant: Mr D. Mellas Solicitor for the Applicant: marshalls+dent+wilmoth Lawyers Counsel for the Respondent: Mr S. Lethlean Solicitor for the Respondent: Rf Legal ORDERS
MLC 5056 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR BURNS
Applicant
AND: MS BURNS
Respondent
order made by:
JUDGE O'SHANNESSY
DATE OF ORDER:
31 JANUARY 2023
THE COURT ORDERS THAT:
1.The final hearing listed on Thursday 2 February 2023 (for an estimated 2 days) be vacated.
2.The matter be listed for interim defended hearing on Thursday 2 February 2023 at 10.00am at the Federal Circuit and Family Court of Australia at Melbourne.
AND THE COURT NOTES THAT:
A.If in any proceedings there are allegations of family violence and the provisions of section 102NA of the Family Law Act 1975 apply (see attached Family Violence Information Sheet), any unrepresented party will not be permitted to personally cross-examine the other party/parties.
B.Affected unrepresented parties may apply to the court and then to the Commonwealth Family Violence and Cross-Examination of Parties Scheme (“the Scheme”) for representation but any such application must be made at least 12 weeks prior to the final hearing.
C.Further information about the legislation and the Scheme can be found at Part 4 of the attached Family Violence Information Sheet.
D.If s102NA applies and a party becomes unrepresented after trial directions have been made, that party is required to promptly advise the Court.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Burns & Burns has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR EX TEMPORE JUDGMENT
JUDGE O’SHANNESSY
These are the settled ex tempore reasons.
BACKGROUND
This matter contains competing applications for property settlement orders pursuant to section 79 of the Family Law Act 1975 (Cth). In November 2021 this matter was listed for Final Hearing to commence 31 January 2023. These proceedings were commenced by the Applicant, Mr Burns (‘the Husband’) on 6 May 2021. On 3 June 2021 the Respondent, Ms Burns (‘the Wife’) filed a response. At the time this matter was set down for final hearing, the parties and their lawyers then estimated that the matter would be a hearing of two days.
Pursuant to the trial directions the parties filed their trial material and I am assuming more or less as directed by those trial directions. The Husband filed his Amended Application on 13 January 2023, an Amended Financial Statement on 12 January 2023 and his Affidavit of Evidence-in-Chief on 12 January 2023 and then the Husband filed an Affidavit in reply on 27 January 2023. The Wife filed her Amended Response on 18 January 2023, an Amended Financial Statement on 18 January 2023 and her Affidavit of Evidence-in-Chief on 19 January 2023 and an Affidavit of Evidence-in-Chief from her father, ‘Mr D’, on 20 January 2023.
In those circumstances, the parties were entitled to expect that the dispute that had been hanging over their heads for more than a year and a half would at least be heard on the date set for 31 January 2023. Last week in the week commencing 23 January 2023, a number of further issues commenced to be agitated that would indicate that the matter may not be able to proceed. All of these issues were agitated by the Husband. Those issues included the issue of a subpoena to ‘Mr D’ to produce documents relating to a superannuation fund, such subpoena having been issued with the leave of the Court on 23 January 2023.
On 30 January 2023 Mr D executed a Notice of Objection to that subpoena, but in substance that objection seems to seek that certain documents be redacted to ensure the privacy of himself and his wife. That issue of the subpoena arose from the allegation that the Wife had not produced sufficient documents relating to her superannuation. The parties’ superannuation balances are roughly, on the Wife’s part, about $776,000 and, on the Husband’s part, according to his financial statement, $35,000, but I am told it might only be $13,000.
There are two controversies relating to the superannuation. Post-separation the Husband, in control of his balance of a self-managed superannuation fund, applied approximately the sum of $300,000 towards the purchase of Art C. It is now asserted that the value of the Art C purchased is now only in the order of some thirteen or so thousand dollars. It is conceded that the purchase of the Art C was a decision solely of the Husband’s. The context of that decision is the Husband has for many years been self-employed as a builder and there is no evidence of any knowledge or expertise in the industry or artistry of what is known or described as Art C. The controversy, as I understand it, is the Wife seeks that the loss upon that investment purchase on the Husband’s part rest with him rather than be shared equally with her as I perceive she understands the Husband’s application to be.
The second controversy in regard to the superannuation is that the Wife’s father and the Wife had deposed that over a number of years, due to the financial success of a business of the Wife’s father and unconnected to either of the Husband or the Wife, made contributions to both the Wife and her brother, contributions in the order of $276,000 over a number of years. As I understand it, it is put that those contributions or extrinsic contributions that would have weight pursuant to the principles of Kessey and Kessey (1994) FLC (92-495) are what results in the disparity between the Husband’s pre-Art C purchase superannuation of roughly $300,000 and the Wife’s superannuation balance currently of about $776,000.
The Husband’s response to the Wife’s allegation of a significant extrinsic contribution by her father is to question the precision and details of that. As part of that questioning, the Wife was pressed for details and it was those details have been pressed for during 2022. It is not clear to me why the subpoena to the Wife’s father was not issued until last week, but, anyway, it was not. That subpoena is returnable tomorrow and I propose to deal with the objection of Mr D on the following day, Thursday, 2 January 2023 which would have been the first day of the trial.
The next issue that is presented as an impediment to the matter proceeding is then that the Husband has retained a forensic accountant tasked with identifying the issue or contribution and the consequences of the contribution of the Wife’s father to the Wife’s superannuation. There has not been an application for an adversarial witness and, at this stage, there has not been any agitation of the issue of a single expert being appointed to deal with that issue. The whole issue has arisen in the week or two prior to trial and after the filing of trial material.
The adversarial expert is said to be necessary to run to ground another issue. The Husband asserts that he obtained draft reports of the financial statements for the company ‘Company E’, which is a company wholly owned by another company, ‘Company F’, and Company F are wholly owned by the Husband and the Wife. The Husband and the Wife are the directors of Company E, but only the Husband is the director of Company F. For present purposes, nothing turns on that.
The Husband asserts via his counsel today that some $138,000 is now recorded in the accounts of Company E as a loan to directors, and the Husband asserts that he was not aware of this, and hence needs to know where that money was applied, and to who actually received it.
I am not ruling that the pursuit of that inquiry is or is not relevant to the final property proceedings, however, on this mention-type hearing, I cannot rule that it is not relevant, notwithstanding that on one view that may be merely funds that have been to the benefit of the parties from the business, and it has been convenient for accounting practices to record that as a loan as opposed to a distribution of income. If it is a loan, on one view, it is a loan that the Husband and Wife owe themselves, and that there would need to be a balancing entry if it is to be regarded as a liability or if it is to be regarded as an asset of Company E.
That is the second issue that is asserted that it is necessary to retain the adversarial expert, ‘Mr G’. I am not prepared to have this hearing, which is effectively an application to vacate the hearing, as a backdoor way of appointing an adversarial expert. At this point, I don’t understand why the matter has not been agitated in the appropriate manner of there being retention of a single expert witness to identify and deal with that issue.
I should add that the context to the recent wave of impediments of this matter proceeding for Final Hearing arise from a recent change of Husband’s solicitors. That does not mean that I am attributing any blame or responsibility to either the current or previous solicitors. The next impediment to the matter proceeding was that consequence upon the Husband perceiving that he suffered significant ill health, it appears that his previous solicitors retained a ‘Dr H’, who is not a treating doctor, to provide an opinion as to the Husband’s health. Ordinarily, this is a matter that would have the first starting point being consideration of the appointment of a single expert witness.
Dr H’s Affidavit sealed on 27 January 2023 indicates that he was briefed with a letter of instructions on 4 October 2022, and that the report that Dr H prepared is itself dated 4 November 2022. That report was provided to the Wife’s lawyers, as I understand it, on or about 23 or 27 January 2023. I do not know and it is not apparent why that document, which the Husband seeks to rely upon, was not provided expeditiously to the Wife’s lawyers, but it was not.
It transpired today that Dr H has told the Husband’s lawyers that he is “not available” for cross-examination this week in any event. In any event, taking what at first blush appears to be an attempt to minimise expense and to expedite the hearing, the Wife acquiesces in the Husband’s unilateral retention of Dr H, and were the matter able to proceed on Thursday and Friday of this week, would not seek to cross-examine Dr H.
The next impediment raised in January 2023 is that the parties had reached agreement that the value for the purpose of these proceedings of the company, Company E, was agreed to be $95,000. That agreement seems to have been on foot as late as 12 January 2023, when the Husband filed his Financial Statement, and I infer attributed a value to that company in the order of $97,000 by describing his 50% interest as being $48,659. That agreement as to value has now been retracted. The notice of the retraction of that agreement came about last week. It is practically impossible for the parties, or the Wife, to have a valuation of that company in the time available.
The next impediment to the matter proceeding on the basis that it had been left to proceed over the last more than a year, is that it is apparent form the reciting of those issues that the case will not conclude whenever it starts in two days. Counsel has been moved to say that this matter is, maybe, a three day case. I acknowledge that I do have efficient counsel on both sides of the case who will make every professional effort to minimise time and the length of the case. Notwithstanding the efficiency and expertise of counsel, the events of January, the failure to disclose the Dr H report, notwithstanding it has been available since 4 November 2022, and the multiple hurdles to the matter proceeding, and the multiple issues of substance that are now in dispute, all combined to cause me to form the opinion that the matter is more likely to be a three, or four, or five-day hearing.
The further impediment to the matter proceeding is that the Husband has retained an adversarial expert, Mr D, to deal with what is now the controversial value of Suburb K factory premises, that is, one of the two real properties the parties still retain.
Experience has taught me that where I start a hearing of uncertain length as a general rule, it turns out to be the five-day estimate or more, rather than the three. Were I to fix this matter in this court, I would be able to fix it in July 2023 as a three-day matter. Were it to turn out to be a four, or five, of six-day matter, the further hearing of the matter would be further delayed, and the parties would have the inconvenience and expense of the hearing being in two or more different chunks. The practice of this court is to hear as many matters as possible on the basis that matters should only take no longer than three days or four days in rare event. Matters that are confidently to take four or more days, are expected to be heard within Division 1 of this Court. Division 1 is a very busy court, but its procedures accommodate longer hearings. Hence I have determined that I will vacate the hearing date as it is pointless to have the parties attempt to prepare and agitate the matter commencing on Thursday, 2 February 2023.
I intend, on Thursday, 2 February 2023, to make an order removing the matter from this court to Division 1. As indicated to the parties, I will hear the Notice of Objection to the subpoena, as it appears to me that the matter is stuck in a logjam until the documents that are intended to be produced by Mr D have been produced and examined by the Husband and his experts.
The other aspect is that the Wife had anticipated the Final Hearing proceeding which included her agitation for the sale of the former matrimonial home. Because it’s necessary to vacate the hearing, that can’t be dealt with. The Wife’s counsel has made an oral application that the Husband and the Wife do all things to cause the sale of the former matrimonial home, and further, he has agreed that written particulars of that application will be provided this afternoon. In that circumstance, and it being convenient for counsel, I will hear that application on Thursday.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 15 February 2023
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