Calvin & Calvin
[2022] FedCFamC1F 627
•25 August 2022
Federal Circuit and Family Court of Australia
(DIVISION 1)
Calvin & Calvin [2022] FedCFamC1F 627
File number(s): BRC 4190 of 2019 Judgment of: HOGAN J Date of judgment: 25 August 2022 Catchwords: FAMILY LAW – PROPERTY – ENFORCEMENT – Where the applicant seeks enforcement of property orders and the discovery of documents – Whether to exercise the discretion to enforce the order – Whether it is equitable to enforce the order – Where the third to fifth respondents sought “without prejudice” correspondence be struck out – Where both applications are dismissed. Legislation: Corporations Act 2001 (Cth)
Evidence Act1995 (Cth)
Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021
Cases cited: Austotel Management Pty Ltd v Jamieson (1995) 57 FCR 411; [1995] FCA 1284
Blair v Curran (1939) 62 CLR 464; [1939] HCA 23
McMillan & McMillan [2016] FamCA 387
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45
Ramsey & Ramsey (1983) FLC 91-301; [1982] FamCA 42
Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28
Zetta Jet Pte Ltd v The Ship “Dragon Pearl”(No 2) (2018) 265 FCR 290; [2018] FCAFC 132
Desiatnik, Ronald, Without Prejudice Privilege in Australia (LexisNexis, 2nd edition 2022)
Division: First Instance Number of paragraphs: 34 Date of hearing: 19 August 2022 Place: Brisbane Counsel for the Applicant: Mr Shoebridge Solicitor for the Applicant: Watson Mangioni Lawyers Pty Limited Counsel for the First Respondent: Mr Drysdale QC Solicitor for the First Respondent: Fox and Thomas Solicitors Solicitor for the Second Respondent: Arnold Bloch Leibler Counsel for the Third to Fifth Respondent: Ms Minnery Solicitor for the Third to Fifth Respondent: Phillips Family Law ORDERS
BRC 4190 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CALVIN
Applicant
AND: MR CALVIN
First Respondent
CALVIN PTY LTD
Second Respondent
MR B CALVIN (and others named in the Schedule)
Third Respondent
order made by:
HOGAN J
DATE OF ORDER:
25 AUGUST 2022
IT IS ORDERED THAT:
1.Save as to the issue of costs, the Amended Application – Enforcement filed 11 March 2022 is dismissed.
2.In the event that any party seeks an order that another party pay the costs of and incidental to the Amended Application – Enforcement filed 11 March 2022:
(a)any such party shall, within fourteen (14) days of today, file and serve written submissions in support of such application for costs; and
(b)the party against whom an order for costs is sought shall, within a further seven (7) days thereafter, file and serve any brief written submissions in answer to the submissions filed and served by the party seeking an order for costs; and
(c)the party seeking an order for costs shall, within seven (7) days of being served with the submissions relied on by the party against whom an order for costs is sought, file and serve any further written submissions, strictly in reply, to the submissions served by the party against whom an order for costs is sought,
and any such application for costs shall be considered in Chambers.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Calvin & Calvin has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J:
The parties to the current application entered into final orders which were made by consent by Carew J on 1 April 2021 (“the 2021 order”). The 2021 order resolved the property settlement proceedings between the first respondent and the applicant and third party claims between them and the second to fifth respondents, which proceedings included the applicant’s claims, pursuant to various sections of the Corporations Act 2001 (Cth) and generally, against the third respondent and entities under his control.[1]
[1] The fourth and fifth respondents.
By way of very broad summary, the contentions and causes of action compromised when the 2021 order was made included the applicant’s assertions that the third to fifth respondents used plant and equipment owned by the second respondent (in its capacity as corporate trustee for a trust) without properly accounting for such usage, with the consequence that she suffered financial loss.
The current application
In appreciating what follows, it is important to remember that the Court is not dealing with an application to set aside the 2021 order or an application alleging that the same has been contravened by any of the respondents.
Whilst other relief was initially sought, counsel for the applicant confirmed that the only extant application was the Amended Application – Enforcement filed 11 March 2022 by which the applicant sought to enforce clauses 1.11.3 and 1.33 of the 2021 order.
Counsel for the applicant also confirmed that the applicant no longer sought:
(a)to advance the issue particularised in Notation D(a) to the order made by the Judicial Registrar on 7 June 2022; and
(b)the relief particularised as orders 1(c), 1(d) and 2 under Part E of the Outline of Case filed on behalf of the Applicant on 18 August 2022.
Consequently, the only relief sought,[2] by way of enforcement of the 2021 order, is relief in the following terms:
An order, pursuant to Rule 6.18 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, that each of [Mr Calvin], [Calvin Pty Ltd], [Mr B Calvin], [F Pty Ltd] and [D Pty Ltd] give discovery to [Ms Calvin] of all documents recording: (i) the usage of the plant and equipment referred to in paragraph 1.11.1 of the Orders dated 1 April 2021 for the period 14 August 2019 to date (the Usage); and (ii) all payments for the Usage.
[2] In addition to an order for costs.
In seeking this relief, the applicant relied on the contents of the Outline of Case filed on her behalf on 18 August 2022, albeit that counsel who appeared for her quite properly conceded that, even if otherwise successful, he could not sensibly support an order for discovery which commenced on 14 August 2019 (that is, nearly 20 months before the 2021 order was made).
The respondents all oppose the making of an order in the terms sought by the applicant. They do so on the bases outlined in the various Outline of Case documents which have been filed.[3]
[3] First respondent’s Outline of Case filed 17 August 2022; Third respondent’s Outline of Case filed 16 August 2022.
The application to strike-out correspondence
Before expressing my reasons for the conclusions I have reached about the applicant’s enforcement application, it is necessary that I determine an application by the third to fifth respondents that correspondence from Phillips Family Law dated 29 April 2021 and marked “without prejudice save as to costs” (and any subsequence reference in the evidence to the contents of the same) be struck out.[4]
[4] Evidence Act 1995 (Cth) s 131.
It is trite to note that whether or not the privilege expressed in s 131 of the Evidence Act1995 (Cth) applies to a communication does not depend on whether or not the communication is expressly stated to have been made “without prejudice”: a communication that is not marked “without prejudice” may attract the privilege if the necessary statutory preconditions are satisfied, whilst a communication that is marked “without prejudice” – but does not satisfy such prerequisites – will not attract the privilege; “without prejudice” privilege is not gained merely by using the phrase “without prejudice”.[5]
[5] See, for example: Austotel Management Pty Ltd v Jamieson (1995) 57 FCR 411 at 418 per Burchett J.
For the privilege to exist, there must be, relevantly, a dispute over which litigation exists or might reasonably be contemplated, in which communications take place between the parties to that dispute, being communications that are genuinely aimed at negotiating a settlement of that dispute or part of it.[6]
[6] See: Ronald Desiatnik, Without Prejudice Privilege in Australia (LexisNexis, 2nd edition 2022) 21.
Having regard to the oral and written submissions made on behalf of the parties and the content of the correspondence to which specific reference was made during the same, I decline to accede to the application that the correspondence and any reference to the content of the same be struck out. I arrive at this conclusion because I am not persuaded that, at the time the correspondence was written and sent, the parties were actually in a dispute.
The enforcement application
Section 105(1) of the Family Law Act 1975 (Cth) (“the Act”) provides that:
Subject to this Part, to the regulations and to the applicable Rules of Court, all decrees made under this Act may be enforced by any court having jurisdiction under this Act.
Consequently, this Court may, in the exercise of discretion,[7] determine to enforce the 2021 order.[8]
[7] Ramsey & Ramsey (1983) FLC 91-301 at 78,061.
[8] Which is included in the definition of “decree”: Family Law Act 1975 (Cth) s 4(1).
The applicable Rules
The enforcement of orders is dealt with in Chapter 11 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”). Of the Rules within this Chapter, the following appear to me to be relevant to the determination of the applicant’s application for enforcement:
(a)Rules 11.01–11.09: grouped within Division 11.1.1, which is entitled “General”; and
(b)Rules 11.10–11.14: contained within Division 11.1.2, entitled “Information for aiding enforcement”; and
(c)Rules 11.55–11.58: grouped within Division 11.1.7, which is entitled “Enforcement of obligations other than an obligation to pay money”.
Those obligations which are enforceable under Part 11.1 of the Rules are: an obligation to pay money; an obligation to sign a document under s 106A of the Act; an order entitling the person to the possession of real property; an order entitling a person to the transfer or delivery of personal property.[9] In so far as the enforcement of obligations other than in relation to an obligation to pay money is concerned, specific reference is made to Division 11.1.7 (Enforcement of obligations other than an obligation to pay money), within which Rules 11.55–11.58 inclusive are found.
[9] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 11.01(1).
Rule 11.07 (entitled “General enforcement powers of court”) is found within Division 11.1.1 (“General”) of Part 11.1. This Rule relevantly provides that the court may make an order: in aid of the enforcement of an obligation;[10] requiring a party to give further information or evidence;[11] that a payer must produce documents for inspection by the court;[12] or, dismissing an application.[13] Such power, it seems to me, falls to be exercised for the purpose of achieving the enforcement of an obligation and order and does not exist independently of the same.
[10] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 11.07(e)
[11] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 11.07(j).
[12] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 11.07(l).
[13] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 11.07(m).
The application and those aspects of the 2021 order which the applicant seeks to enforce
The current application does not seek to enforce an obligation to pay money. It does not seek to enforce an obligation to sign a document pursuant to s 106A of the Act. It does not seek to enforce an order entitling the applicant to the possession of real property or an order entitling her to the transfer or delivery of personal property.
That an obligation which is sought to be enforced does not fall within the categories prescribed by the Rules does not, it seems to me, mean that it cannot be enforced. Rule 11.01(1) of the Rules is clear in specifying that the obligations and orders particularised therein are obligations and orders which may be enforced “under this Part”. It seems to me that, where the obligation imposed by an order that is sought to be enforced does not fall within the category specified in Rule 11.01(1) of the Rules, the person seeking to enforce the same is left to rely upon the power to enforce the order accorded to the court by s 105 (1) of the Act.
The principles to be applied in the exercise of the discretion imparted by s 105(1) of the Act are helpfully discussed by Tree J at [38]–[60] in McMillan & McMillan [2016] FamCA 387; they may be summarised as follows: the discretion will be informed by only facts or circumstances which have arisen since the date of the order sought to be enforced; the question for the court is whether, in all the circumstances, it is inequitable (having regard to general notions of fairness and any equitable remedies which may exist) to enforce the order; the party who contends that the order should not be enforced bears the onus of establishing that it is not equitable to enforce it; and delay in the nature of laches is a relevant consideration (albeit one in respect of which the further considerations of the absence of any Commonwealth limitation period for enforcement and the existence of any relevant State limitation period for the enforcement of judgments are relevant).
In addition to those matters which the current application does not seek – as set out in [18] – the application also does not seek, by way of specific order, to compel any of the respondents to act in a particular way so as to give effect to the 2021 order.
As I appreciated the argument advanced by counsel for the applicant, the applicant seeks to enforce:
(a)the restraint imposed on her, the first respondent and the third respondent from dealing with any asset of the “Calvin Trust” (which is the Calvin Trust, established by deed on 24 September 2014[14]) and the “Calvin Trustee” (Calvin Pty Ltd ACN…, which is the trustee of the Calvin Trust and the second respondent to the proceedings) – although the relief sought does not illuminate the manner by which this clause is sought to be enforced; and
(b)the process prescribed by clause 1.11 of the 2021 order and, in particular, the requirement imposed on the second respondent, as prescribed by clause 1.11.3(d) of the 2021 order, to distribute the profits (if any) of the year ended 30 June 2021 and the corpus of the Calvin Trust then remaining as to one third to the applicant, one third to the first respondent and one third to the third respondent unless otherwise agreed – even though the relief sought does not illuminate the manner by which this clause is sought to be enforced and no specific order compelling any of the respondents to do anything in particular was sought for this purpose.
[14] By the applicant, the first respondent and the third respondent as appointors.
Clause 1.33 of the 2021 order is as follows:
That the Husband, the Wife, the Second Respondent and the Third Respondent are restrained from dealing with any asset of the [Calvin Trust], [Calvin Trustee], [D Company] and [D Partnership] save as provided for in these Orders.
The evidence given by the first respondent and the third respondent (which was not the subject of challenge) included that all of the plant and equipment owned by the Calvin Trust has now been sold. Consequently, there remains no asset in existence (insofar as the Calvin Trust is concerned) in respect of which any orders enforcing the terms of clause 1.33 of the 2021 order can be made. Nothing in the evidence seems to me to provide a basis for an order enforcing the obligation cast on all parties by this clause insofar as assets of the D Company and D Partnership are concerned.
Given the above, I am unpersuaded that it is now possible to enforce the terms of clause 1.33 of the 2021 order. Even if I am wrong in this conclusion, I cannot see how discovery of the documents sought by the applicant from the named respondents relating to the usage of plant and equipment and all payments for such usage for the period 14 August 2019 to date are relevant to whatever relief could be ordered by way of enforcement in the circumstances: the 2021 order compromised the parties’ rights vis-à-vis each other in relation to any alleged misuse of equipment or breach of obligations (or other claim or issue so connected with the subject matter of the proceedings as to have made it unreasonable, in the context of the proceedings, for the applicant not to have made such claim or raised such issue)[15] which predated the making of the order on 1 April 2021.[16]
[15] Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 598, 602-603.
[16]Blair v Curran (1939) 62 CLR 464 at 532; Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at [20]; Zetta Jet Pte Ltd v The Ship “Dragon Pearl” (No 2) (2018) 265 FCR 290 at [16], [18], [20], [22], [32], [33] and [51].
Clause 1.11 of the 2021 order provides, in essence, the mechanism by which the parties agreed that the second respondent, in its capacity as Trustee of the Calvin Trust, would sell the plant and equipment owned by the Calvin Trust (save for certain items particularised in Schedule 1 to the 2021 order) and apply the proceeds of sale obtained from such sale. It also provides that the second respondent in its capacity as Trustee of the Calvin Trust will do all acts and things and sign all documents necessary to resolve to cease trading the Calvin Trust as at 31 December 2020 and vest the Calvin Trust as at 30 June 2021, with these acts to include, but not be limited to: appointing an accountant to prepare final financial statements for the Calvin Trust for the year ended 30 June 2020 and final accounts for the year ended 30 June 2021; doing all things to recover all debts owing to the Calvin Trust as at 31 December 2020 (both invoiced and un-invoiced) except for any overdrawn beneficiary’s income accounts; paying all liabilities of the Calvin Trust (including by specifying a mechanism by which the appointed accountant would determine the validity of any liability about which there was dispute between the applicant, first respondent and third respondent) and, distributing the profits (if any) of the year ended 30 June 2021 and the corpus of the Calvin Trust one third to each of the applicant, the first respondent and the second respondent.
The unchallenged evidence before the Court includes that: the sale proceeds received from the sale of the plant and equipment owned by the Calvin Trust have been deposited to an account in the name of the second respondent; financial statements and accounts for the financial year ended 30 June 2021 have been completed; the second respondent has acted to call in any liabilities owed to it (invoiced or un-invoiced) and, save in relation to the remission of GST to the ATO, the liabilities owing by the second respondent have been paid. All that remains, it seems, is for the accountant appointed pursuant to the 2021 order to calculate the profit (if any) of the Calvin Trust and for this and the corpus of the same to be distributed to the applicant, the first respondent and the third respondent and for the second respondent to be deregistered.
The process provided by clause 1.11 of the 2021 order is almost complete.
It is advanced on behalf of the applicant, in essence, that, despite no order compelling any of the respondents to do anything in particular being sought by way of enforcement, the Court would be persuaded to exercise its discretion to require the respondents to provide her with all documents relating to the usage of plant and equipment owned by the Calvin Trust and all payments for such usage of the same for the period from 14 August 2019 to date (or for whatever period is ultimately determined, with alternatives being: from 1 July 2020 to date; or from 31 December 2020 to date) by way of enforcement of the second respondent’s obligation to calculate the profit (if any) of the Calvin Trust and distribute this and the corpus of the same in the manner outlined above. As I appreciated it, the purpose underpinning the relief sought was to accord the applicant transparency, to enable her to address the suspicions that have arisen following the third respondent’s use, after the 2021 order was made, of a piece of the second respondent’s plant and equipment (during which use it was damaged and its subsequent sale delayed until it could be repaired) and to allow her to satisfy herself about the financial statements for the Calvin Trust prior to it vesting.
I am not persuaded that the relief sought by the applicant can properly be regarded as being by way of enforcement of the 2021 order. Whilst discovery can clearly be ordered, it must, in my view, be in aid of the enforcement of an aspect of an order or obligation. Quelling suspicion –even if the same is understandable in the circumstances – does not found enforcement.
Even if an order of the type sought was regarded as being by way of “enforcement” of clause 1.11.3(d) of the 2021 order, there is, it seems to me, no proper basis upon which documents relating to the period from 14 August 2019 to 1 April 2021 (the date on which the applicant’s actions against the respondents were compromised by the making, in Chambers, of orders sought to be made by consent) could be sought. Whatever her concerns at the time, the applicant determined, through the provision of her consent, to compromise the causes of action she had previously sought to prosecute against the respondents. It seems to me that, at best for the applicant, relevant documents would relate only to the period from 1 April 2021 until the sale of the relevant plant and equipment – which, save in respect of two specific items, occurred via an online auction conducted between April 2021 and May 2021.
There was no challenge to the evidence given by the second respondent and the third respondent about the sale of one piece of the […]equipment or to the evidence about how it came to be sold only in 2022. There was no challenge to the evidence that the relevant portion of its sale proceeds have been deposited into the second respondent’s bank account. There was no challenge to the fact that the relevant second piece of equipment was damaged, such that it was no longer operational, on 25 April 2021: that is, no more than about 24 days after the 2021 order was made.
Given the matters outlined above, even if I had been persuaded that the order sought by the application could be made, in these circumstances, by way of enforcement of the relevant terms of the 2021 order, I would not have been persuaded to exercise the discretion to make the order sought.
Costs
Given that those who appeared for the parties agreed that any application for an order for costs be the subject of the provision of written submissions and thereafter be considered in Chambers, the orders to be made provide a timetable for this to occur.
I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 25 August 2022
SCHEDULE OF PARTIES
BRC 4190 of 2019 Respondents
Fourth Respondent:
F PTY LTD IN ITS OWN RIGHT AND ATF THE G TRUST
Fifth Respondent:
D PTY LTD
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