Chatterjee and Woodby-Chatterjee (No 3)

[2016] FamCA 901

FAMILY COURT OF AUSTRALIA

CHATTERJEE & WOODBY-CHATTERJEE (NO 3) [2016] FamCA 901

FAMILY LAW – DISQUALIFICATION – Whether the Judicial Officer has displayed apprehended bias – Where there were a number of exchanges between the bench and the bar – Judicial Officer’s impression of a party’s case.

Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
Isbester v Knox City Council (2015) 89 ALJR 609
Johnson v Johnson (2000) 201 CLR 488
Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 208 CLR 507
Strahan and Strahan (disqualification) (2009) FLC 93-414

Family Law Act 1975 (Cth)

APPLICANT: Mr Chatterjee

RESPONDENT: Ms Woodby-Chatterjee

FILE NUMBER: SYC 3822 of 2013

DATE DELIVERED: 26 October 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Le Poer Trench J

HEARING DATE: 22 August 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lloyd

SOLICITOR FOR THE APPLICANT: Bricknell Legal

COUNSEL FOR THE RESPONDENT: Ms Obrart

SOLICITOR FOR THE RESPONDENT: G & D Lawyers

Orders

1. The matter is referred to the Case Management Judge for further direction.

2. I recuse myself from further hearing in this matter.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Chatterjee & Woodby-Chatterjee (No 3) 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 SYDNEY

FILE NUMBER: SYC 3822 of 2013

Mr Chatterjee

Applicant

And

Ms Woodby-Chatterjee

Respondent

REASONS FOR JUDGMENT

Introduction

1. Before the Court is an application by the husband for recusal which, if successful, would see me no further hear an application by the wife to set aside a Binding Financial Agreement entered into between the parties on 28 January 2003 (“the Financial Agreement”).

2. The substantive proceedings came before the Court for a four day hearing commencing on 25 July 2016. The matter was unable to be finalised within the set timeframe. During that part of the hearing I determined that the wife could not amend her application to include a claim of “presumed undue influence” in order to warrant the setting aside of the Binding Financial Agreement.

3. As the case was not concluded and required the further allocation of hearing dates, I permitted the wife to again apply to expand the grounds upon which she sought her relief to include “presumed undue influence”. The determination of that, and any other matter which needed to be determined prior to the further hearing, was listed to be heard on 22 August 2016. On that day the husband made the application for me to recuse myself from further hearing of the proceedings.

4. In order to precisely record the order made by me I here include the relevant order:

   IT IS ORDERED THAT

   1.    I direct that the wife provide to the husband by close of business 5 August 2016 a notice which specifies any further basis she would seek to proceed upon in this proceeding to that which has been provided by her Further Amended Response filed 15 April 2015 and which is disclosed in her answers to requests for particulars which answers she has annexed to her affidavit filed 12 May 2015.

   2.    The court notes the wife has made the following application today: that the wife be permitted to now include as a ground to set aside the Financial Agreement the equitable doctrine of presumed undue influence.

   3.    If the wife seeks to rely upon any aspects of the husband’s assertion, contained in the Financial Agreement as to his assets liabilities resources or equities, as a ground to set aside the Financial Agreement, she is to specifically set out in her notice to the husband the precise wording she is challenging; the basis of the challenge; and the consequent remedy she is entitled to if successful.

   4.    The matter is listed for the hearing of the wife’s application to be able to include any of the expanded nature of her case in the further hearing of this matter such listing is to be at 10.00 a.m. on 22 August 2016.

   5.    Each party is to provide to my associate by email a document in word document form, being written submission in support of their argument for the application being heard on 22 August 2016 by close of business 18 August 2016.

   6.    The hearing is otherwise adjourned to a date to be appointed on or after 22 August 2016.

   7.    By close of business Monday 1 August 2016, the wife is to provide to my associate any written submission in response to the submission of [Mr Chatterjee Snr], provided to each of the husband and wife, relative to the operation of the orders 16 June 2016 and the requirement contained therein that the said [Mr Chatterjee Snr] was to consent to be a party to the proceeding for the purpose of consenting to the order. The Court notes that in paragraph 3 of the written submission made on behalf of [Mr Chatterjee Snr] that he consents to the orders proposed by the Court on 16 June 2016 and that consent extends to the orders that deal with the sale of the property at [D Street, Suburb B].

   8.    Should the husband wish to respond to any submission provided by the wife pursuant to these directions, he is to do so by close of business 5 August 2016.

5. The parties attended at Court on 22 August 2016. On that day, and before any matter listed for determination on that day was addressed, the husband made his application for recusal, having only given the wife’s lawyers short notice of that application.

6. The parties were in agreement that the recusal application proceed by way of written submissions.

Submissions

Submissions of applicant

1. Written submissions were received from counsel on behalf of the husband on 29 August 2016. In these submissions, the husband specifies that the basis for his application for me to recuse myself from further hearing of these proceedings is apprehended bias.

2. In his submission, the husband traces the timing of the filing of documentation by the parties and highlights those portions of the transcript of the hearing which commenced on 25 July 2016 upon which he relies to establish the case he seeks to make out.

3. The history provided states that the Response upon which the wife proceeded was that titled Further Amended Response to Initiating Application filed 14 April 2015 (the Court file copy bears a stamp date of 15 April 2015). It was this Response which was the subject of a relevant request for particulars sought by the husband.

4. On 22 July 2015 the husband filed his trial affidavit. In that affidavit he made specific reference to a cohabitation agreement which had been signed by the parties on 20 June 2000. That agreement was effectively replaced by the agreement entered into by the parties on 28 January 2003. It is this latter agreement which the wife seeks to set aside.

5. There appears to be a number of reasons why the husband says the recusal application should be granted. One of the reasons is said to arise from discussion between myself and the husband’s counsel as to the recitation of the husband’s assets appearing in the agreement (see Schedule 1 annexed to this judgment) and his affidavit evidence which, on its face, suggests that the description of his beneficial ownership of a real property therein, namely K Street, Suburb L, was not correct. Further, his affidavit at paragraph 26 asserted he had informed the wife, before their marriage, that the subject property “it is not mine.”

6. In paragraph 29 of his affidavit the husband said he had told the wife, in early 2002, that “[Suburb L] is in my name but it really belongs to my father. I don’t want to jeopardise his assets or my inheritance if we break up. It is not mine to lose. I need to exclude it from any settlement we might have if we break up.” Nowhere in the husband’s evidence does he provide any evidence to establish how he might be seen as having any equity in the Suburb L property, as he has clearly set out in the subject Binding Financial Agreement.

7. The wife has set out reliance upon (as counsel for the husband has stated in submission) almost all of the possible grounds specified in s 90K as available to set aside a Financial Agreement. Those grounds include s 90K(1)(a) “he did not disclose he had a mortgage on his [Suburb L] property.” The wife also relied upon s 90K(1)(b), which is that the agreement is void, voidable or unenforceable. Again the wife asserted this was due to non-disclosure by the husband and in particular the same reason as recited for the s 90K(1)(a) ground. A specific of the alleged non-disclosure is “he did not disclose he had a mortgage on his [Suburb L] property.” Such a complaint is not supportive of the husband’s assertion that the wife at all relevant times knew the Suburb L property did not belong to the husband even though registered in his name.

8. As the hearing progressed I was troubled by the circumstance which had emerged from the above facts and raised that concern with the husband’s counsel. I will in due course refer to specific portions of the transcript, as the husband’s counsel has done in the written submission.

9. When I raised my concern with the husband’s counsel I felt assured that she was aware of what I was raising and I accepted she would establish that my concern would not prove problematic for the husband. My recollection was that she informed me that the wife had known the true facts at all relevant times. As we proceeded with the hearing this matter was raised again because I was concerned the husband’s counsel may not have understood why I was concerned. In an exchange the wife’s counsel claimed that the reference in the Financial Agreement to the real estate at Suburb L was a reference only to a legal interest and not an equitable interest.

10. The proposition which emerged, from the facts asserted by the husband’s counsel, was that at the time the parties entered into the subject Binding Financial Agreement the husband was the legal owner not the beneficial owner of the Suburb L property and that fact was known by the wife at all relevant times. It was clear from the husband’s submission that he was asserting both parties entered into the Financial Agreement certain in the knowledge that the husband had no beneficial interest in the property which actually belonged to the husband’s father. I pointed out to the husband’s counsel that, somewhat contradictory to that assertion, the Binding Financial Agreement stated the husband had equity of $747,000 in property at the date of the agreement. That equity included the property at Suburb L. I pause here to recall that I held a concern, at that time, that if the husband did not hold a beneficial interest in the subject property then, in the circumstances now presented to the Court by the husband, it was difficult to see how he could hold “equity” in the property. I did not hold any concluded view on that matter.

11. The relevant transcript on this aspect of the husband’s case can be found between lines 6 on page 81 of 25 July 2016 and continues through to line 29 on page 87 of 25 July 2016. (For convenience I attach those portions of the transcript to this judgment in Schedule 1.)

12. In relation to this application it is important to note the content of that part of the transcript which appears on page 86 line 26 to page 87 line 30. Whilst acknowledging I had not heard any submissions, nor, obviously, had I been exposed to all the evidence which occurs before any final submission is made, and acknowledging what I had raised may be shown to “be completely wrong”, I, as clearly as I could, specified my concern and then clearly proceeded on with the hearing satisfied by the assurance of the husband’s counsel.

13. In the course of trying to understand from the husband’s counsel why the Suburb L property had been described in the Binding Financial Agreement in a manner which, in my then held view, clearly asserted a beneficial interest to all of the value of the property, when the husband said the real fact was that he had no beneficial interest in the property I did ask whether such a circumstance made the agreement a “sham”. I also asked if there was some other possible reason such as attempted avoidance of some revenue requirement. I did so for the purpose of advising the parties that if at the conclusion of the hearing that emerged as the case, then I was under an obligation to refer the matter to the appropriate revenue body.  

14. At paragraph 8 of the husband’s written submissions it is asserted that the words which were exchanged between the husband’s counsel and myself, as have now been included in Schedule 1 hereto, “left the husband in no doubt that the court was of the view that the agreement was a sham potentially covering up illegal activity”. If that was the case then it is not a ground for recusal. The test for a case where a judge should recuse himself on an application based upon apprehended bias is not met by the subjective view of a party.

15. The submission also sought to attribute to ss 90K(1)(aa) and (ab) the only basis upon which a Court could or should refer a case to the Australian Tax Office. Such a referral, if made does not arise from any part of s 90K.

16. The submission of the husband on this application then moves to what has followed the words being spoken by me, namely the wife having now applied to further amend her Response so as to adopt the matters I raised as a concern. It is submitted that, effectively, I had opened an area of potential attack on the  Binding Financial Agreement which the wife had not turned her mind to. Further, it is submitted that the way in which the trial has unfolded has created a forensic advantage to the wife which has been denied to the husband.

17. The husband submits that when taken as a whole, the test as set out in Johnson v Johnson (2000) 201 CLR 488 is satisfied.

Submissions of the respondent

1. The respondent wife’s written submissions were received on 26 September 2016.

2. Counsel on behalf of the wife submits that, in relation to the first ground relied upon by the husband, his submissions do not raise a point capable of founding an argument of apprehended bias. It is submitted that the husband’s submissions do not demonstrate that there is a real likelihood that a reasonable observer would reach the conclusion that I have prejudged or will prejudge an issue, relying on Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 208 CLR 507 at 564 at [185].

3. It was submitted that the husband’s complaint as to the manner in which the hearing proceeded, that is, by way of the wife giving her evidence prior to my determination as to whether she could rely on presumed undue influence, has no basis. Counsel for the wife drew attention to the precursor that I gave prior to commencing the wife’s evidence, namely that I would exclude any parts of the wife’s evidence that apply solely to presumed undue influence. It is argued that my comments in that regard are inconsistent with the husband’s submissions that he would not know what would be included or excluded from evidence, and therefore, that the husband’s submission is incorrect.

4. The wife made the same arguments in relation to the third ground of the husband’s complaints, that it has no substance. The wife, in her response to the husband’s submission that the conduct of the proceedings “allowed the Wife to apparently give her entire evidence in the hope it would catch one or more … of the elements of the Wife’s claim”, argued that this complaint does not meet the test for establishing apprehended bias. Counsel submits that any intention the wife has with her evidence “is irrelevant to any consideration including whether the presiding Judge is impartial or has an open mind to an issue.”

5. It is submitted that the wife’s cross-examination proceeded in the usual way, and the husband was on notice that the wife would advance arguments as to presumed undue influence if permitted to by the Court. It is submitted that this does not amount to what a reasonable person would perceive as unfair.

6. As to the husband’s second ground, counsel for the wife submits that the transcript indicates my approach to the issue of the “sham” transaction as being with an open mind and without having formed a concluded view. It is further submitted that these comments were raised by the Court for the purpose of providing fairness to the husband so that he may turn his mind to the issue, and that they were made in accordance with Family Law Rules 1.06 and 1.07. Counsel submits that from the transcript as a whole, it is beyond doubt that I had not formed a view, and that no fair minded reasonable observer would conclude that my mind was not open on the issue.

7. Counsel submitted that the test is not what the view of the husband was, but what the hypothetical fair minded observer would have perceived. The wife’s submissions indicate that fraud has been a part of her case for some time. It is submitted that my comments would, to a fair minded observer, indicate a careful concern on the part of the Court to provide fairness to both parties and ensure that the real issues in the case were ventilated, rather than some assistance being provided to the wife by raising the question of fraud.

8. It is further submitted on behalf of the wife that the fact and/or form of the wife’s amended Response, filed after my comments in the proceedings were made, is not a proper foundation for an allegation of apprehended bias, and that there is therefore no basis for the husband’s application.

9. The wife seeks that the husband’s application for recusal be dismissed with costs.

Legal principles

1. The apprehended bias principle was articulated by the High Court in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 (“Ebner”), 343–345:

   Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that, subject to qualifications relating to waiver (which is not presently relevant) or necessity (which may be relevant to the second appeal), a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, ^{- 02-12239fn014} a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle.

   The apprehension of bias principle may be thought to find its justification in the importance of the basic principle, that the tribunal be independent and impartial. So important is the principle that even the appearance of departure from it is prohibited lest the integrity of the judicial system be undermined. There are, however, some other aspects of the apprehension of bias principle which should be recognised. Deciding whether a judicial officer (or juror) might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge or juror will in fact approach the matter. The question is one of possibility (real and not remote), not probability. Similarly, if the matter has already been decided, the test is one which requires no conclusion about what factors actually influenced the outcome. No attempt need be made to inquire into the actual thought processes of the judge or juror.

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

1. Their Honours continued, at 348:

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

   …if the mere making of an insubstantial objection were sufficient to lead a judge to decline to hear or decide a case, the system would soon reach a stage where, for practical purposes, individual parties could influence the composition of the bench. That would be intolerable.

2. In Strahan and Strahan (disqualification) (2009) FLC 93-414, the Full Court of the Family Court of Australia adopted the above test enunciated in Ebner.

3. The High Court further commented in relation to the apprehended bias principle in the case of Johnson v Johnson (2000) 201 CLR 488. Their Honours stated, at 492–493:

   It has been established by a series of decisions of this Court that the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias (which, in the present case, was said to take the form of prejudgment) is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide…

   Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice.

4. In Isbester v Knox City Council (2015) 89 ALJR 609 at 613 [20], Kiefel, Bell, Keane and Nettle JJ said:

   The question whether a fair-minded lay observer might reasonably apprehend a lack of impartiality with respect to the decision to be made is largely a factual one, albeit one which it is necessary to consider in the legal, statutory and factual contexts in which the decision is made.

5. Where the fair minded lay observer is a judicial officer, they should have regard to the fact that a judicial officer’s training equips them with the ability to discard the irrelevant, the immaterial and the prejudicial (Vakauta v Kelly(1988) 13 NSWLR 502 at 527, cited in Johnson v Johnson (2000) 201 CLR 488 at [12]).

Determination

1. The application which had been listed for hearing on 22 August 2016 required, inter alia, a consideration, of whether the wife should be permitted to amend her Response further. On 8 August 2016 the wife filed a “Second Further Amended Respondent to Initiating Application (Family Law)”. In that document she sought to expand the grounds for setting aside the Financial Agreement to include “Section 90K(1)(a), (b) – fraudulent misrepresentation as to reason for financial agreement and as to true ownership of [Suburb L] property.” The particulars of the claim outline the very matters which I had raised with the husband’s counsel.

2. The hearing which was scheduled for 22 August 2016 also required consideration of the wife’s further application to be able to rely upon a ground of “presumed undue influence”. This application had been made by the wife at the commencement of the trial and I had refused that application at that time. Part of the reason for refusal included the timing of the application. I accepted the husband’s submission that if the wife was permitted to amend to include such a ground then the husband would be disadvantaged because he had not had an opportunity to address necessary evidence to disprove such a ground. The husband’s opposing of the wife’s application also, in my view, held considerable weight because the wife had been specifically requested, in writing, to state whether she was relying on that category of undue influence and she had replied in the negative. Such response had been made well before the trial and there had clearly been earlier opportunities for the wife to reconsider that matter and make an appropriate application to the court to amend her response document. However, in circumstances where the hearing was not finished in the time which the parties informed the court would be required for the hearing, some of the prejudice which the husband had relied upon fell away.

3. On 26 July 2016 I made the following orders:

   PENDING FURTHER ORDER IT IS ORDERED:

   1.   The wife is restrained pending further order from further pursuing in this hearing a claim of presumed undue influence as a ground upon which the court may grant the remedy sought by her should such claim be established.

   2.   The court notes that the parties have been advised by it that the order now made may be one of the orders available to the court upon the determination of the husband’s application and consequently thereon, each party should consider whether any further application might be made.

   3.   The court will hear any further application which might be made by either party arising from this determination following the luncheon adjournment or at any time thereafter prior to the conclusion of the proceeding.

4. The determination of this case has now reached a point where determination of the wife’s application to be able to amend her Response may well prove crucial to the outcome.

5. I do not accept that my raising of the matters set out in Schedule 1 hereto would establish an apprehension of bias. A judge has an obligation to draw out the real issues and it is a requirement that the judge understands what it is which is sought to be established by each party in the proceeding and how that is said to enable the Court making the order sought by each.

6. In this case, I accept that the drawing out of the husband’s counsel of the issues, has led to an unfortunate outcome in that the Court is now required to determine the application of the wife to amend her Response so as to take up the very matter raised by me with the husband’s counsel.

7. The perception of justice being seen to be done is a cornerstone of our legal system. I consider the test set out in Ebner is met in this case given that the wife has sought to amend her Response document as set out above. I accept it would be an available inference to draw, in the mind of the fair-minded lay observer that the wife has sought amendment because of the words which fell from me and which the husband has drawn to the courts attention. In such circumstances there would exist an apprehension of bias.

8. Accordingly I propose to recuse myself from any further hearing in this matter.

I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench delivered on 26 October 2016.

Associate:  S. Hawkins

Date:  26 October 2016

Schedule 1

HIS HONOUR:   Then the whole of 8 is not pressed.   Right.  Now, before we deal with the objections to the husband’s affidavit, can I just ask you, Ms Bridger – I’ve had an opportunity during the course of the day to have a look at your client’s affidavit 22 July ’15, and there was one part of it I wanted to ask you about, if I could.  Right.  So the part that I want to ask you about starts at paragraph 25 with the heading Cohabitation Agreement.

MS BRIDGER:   Yes.

HIS HONOUR:   So he there sets out, in 20 June 2000, he and the wife entered into a cohabitation agreement.

MS BRIDGER:   And that cohabitation agreement is ‑ ‑ ‑

HIS HONOUR:   Yes, no. 

MS BRIDGER:   Yes.

HIS HONOUR:   I’ve seen that.  It’s also – it’s a part of exhibit A.

MS BRIDGER:   It is.

HIS HONOUR:   Yes.  And then he says:

At the time I informed [the wife] that a property at [K Street, Suburb L] was registered in my name, I said to her words to the effect, “My father has the property at Suburb L in my name.  It’s not mine.”

Then some more conversation.  And then we go to 28 under the heading Financial Agreement.  So in 2002 he said he and the wife spoke about getting married.  He said he should get some advice.  He saw M Lawyers.  After he had that meeting, he then said to the wife:

...to [the wife], “The cohabitation agreement will not operate if we marry. We will need a binding financial agreement under the Family Law Act.” I also said to her my reason for wanting a new agreement are the same as they were for the agreement we already have. [Suburb L] is in my name, but it really belongs to my father. I don’t want to jeopardise his assets or my inheritance if we break up. It’s not mine to lose. I need to exclude it from any settlement –

etcetera.

MS BRIDGER:   Yes.

HIS HONOUR:   Right.  So that’s his sworn evidence.  If I then look at exhibit A ‑ ‑ ‑

MS BRIDGER:   Just excuse me, your Honour, and I will get it.

HIS HONOUR:   Yes.  Which is the financial agreement.

MS BRIDGER:   Yes.

HIS HONOUR:   And also the ‑ ‑ ‑

MS BRIDGER:   Cohabitation agreement.

HIS HONOUR:   ‑ ‑ ‑ cohabitation agreement.  So starting with the financial agreement, where in the financial agreement is there any indication of what it is that your client has said in his affidavit that I have just brought to your attention?

MS BRIDGER:   All right, your Honour. 

HIS HONOUR:   That is, that he does not beneficially own the property at [Suburb L].

MS BRIDGER:   Your Honour, if I can address it in this way.

HIS HONOUR:   Yes.

MS BRIDGER:   I think first of all we have to go back to the cohabitation agreement.

HIS HONOUR:   Right.  So can you answer my question first.

MS BRIDGER:   Yes.

HIS HONOUR:   Is the answer, “Nowhere in this financial agreement is there any explanation that he does not own a” ‑ ‑ ‑

MS BRIDGER:   No.  No.

HIS HONOUR:   Right.

MS BRIDGER:   I accept that.

HIS HONOUR:   Right.  So then you say ‑ ‑ ‑

MS BRIDGER:   And it’s the same ‑ ‑ ‑

HIS HONOUR:   ‑ ‑ ‑ we will have a look at the cohabitation agreement ‑ ‑ ‑

MS BRIDGER:   Cohabitation agreement, and it is the same.

HIS HONOUR:   ‑ ‑ ‑ and where in there does he explain that he doesn’t own it?

MS BRIDGER:   It’s not in there either, your Honour.  And it seems, in my – it will be my ultimate submission that that was what was said and accepted, and I will take you to ‑ ‑ ‑

HIS HONOUR:   Right.  Well, let’s assume that’s the case.  Does that not mean this agreement is a sham?

MS BRIDGER:   No, your Honour.  It does not.

HIS HONOUR:   Well, why does it not mean – I mean ‑ ‑ ‑

MS BRIDGER:   Because the ‑ ‑ ‑

HIS HONOUR:   ‑ ‑ ‑ is it not an admission of – that it’s, you know, absolutely incorrect in respect of a crucial item ‑ ‑ ‑

MS BRIDGER:   No, your Honour. 

HIS HONOUR:   ‑ ‑ ‑ from your own client?

MS BRIDGER:   No, your Honour.  We would say not.

HIS HONOUR:   Right.

MS BRIDGER:   Because at the time, the property was registered in his name, and he has disclosed it as being in his name.  “These are my assets, my separate assets.”

HIS HONOUR:   But they weren’t his assets.

MS BRIDGER:   It is in his name and he has explained to the respondent why it is in his name.  He is under a duty, as he is aware, and has been advised that he has to put down what he – what assets are in his name and what, to all intents and purposes, learns.  But he has explained to the respondent that, “They’re in my name.”  It was done at a time, for whatever reason, he doesn’t know but, “It’s in my name.  I’ve disclosed it, but it doesn’t really belong to me, and this is the reason I want (a) a cohabitation agreement and then, later on, a financial agreement.”  And what it interesting is the wife actually agrees with that.

HIS HONOUR:   Where does she say in her affidavit that “he told me” ‑ ‑ ‑

MS BRIDGER:   If I go to her affidavit, paragraph 28.  Now, it’s not accepted, her evidence there, that she says, “We need to have an agreement to protect my deposit.”  What we would say is that what the husband said to her at the time in 2000 vis a vis the cohabitation agreement is, “Protect my deposit and also to protect my father’s assets.”  And she thought it was fair.

HIS HONOUR:   Well, so there’s no evidence that you can point to that she has put before the court that corroborates what your client says, is there?

MS BRIDGER:   And then we go over to page 6 of the wife’s affidavit.

HIS HONOUR:   Right.  Well, we’re going to come to it, obviously.  Yes.

MS BRIDGER:   Paragraph 49.  This is in relation to the financial agreement during 2002:

We had many conversations on a daily basis.  A typical conversation would go as follows. 

HIS HONOUR:   Yes.  But look ‑ ‑ ‑

MS BRIDGER:   “If we love each other, it’s not about trust.”

HIS HONOUR:   I’ve read that.  I’ve read that.

MS BRIDGER:   “I want to protect my father’s assets.”

HIS HONOUR:   Right.  But where is it that he says, “As you know, the property at Suburb L is not owned by me.  It is owned by my father.”

MS BRIDGER:   Well, your Honour, in my submission, when one looks at it, it will be a matter of cross-examination.  The wife was aware.  And your Honour, in a way it’s sort of flagging the cross-examination which is, you know, not terribly fair to either party, but in any event.  The wife was aware.

HIS HONOUR:   Well, it should be fair.

MS BRIDGER:   The wife was ‑ ‑ ‑

HIS HONOUR:   I mean it’s not a court of ambush, as you know.

MS BRIDGER:   No, no.  The wife was aware that [Suburb L] was in the father’s name.

HIS HONOUR:   Well, it wasn’t in the father’s name at all.

MS BRIDGER:   Was owned by the – was effectively the father.  It was – it registered in the husband’s name.  Why then would he say, “I want to protect my father’s assets?”

HIS HONOUR:   Well, who knows?  Who knows why he might have said that?

MS BRIDGER:   So, your Honour, in my submission, it would be – raising now is a ..... we would say no.

HIS HONOUR:   Well, look.  I’m very concerned about it, and of course these things happen from time to time in circumstances where there’s an underlying illegal purpose which is to defraud the Tax Office or ‑ ‑ ‑

MS BRIDGER:   Well, there’s no evidence of that, your Honour.

HIS HONOUR:   I know there’s not.  But there’s an obligation on me, and I want everybody to understand that if we get to the end of this case and I’m no further enlightened about why this transaction was set up, then there is – I think probably a clear requirement on me to refer the matter to the Tax Office.

MS BRIDGER:   Well, in that case, we might well have to call ‑ ‑ ‑

HIS HONOUR:   And what they do is a matter for them.

MS BRIDGER:   ‑ ‑ ‑ Mr – sorry, I didn’t mean to speak over your Honour. 

HIS HONOUR:   Yes.

MS BRIDGER:   In that case, your Honour, we will seek the court’s leave to adduce some evidence from [Mr Chatterjee Senior].

HIS HONOUR:   Well, that may or may not be allowed.  We might think about that when you’re thinking about the exercise of the evidence coming from this lady in Indonesia as well, but – look, it troubles me, and ‑ ‑ ‑

MS BRIDGER:   You’ve raised it, your Honour.

HIS HONOUR:   ‑ ‑ ‑ I will need you to address it at the end of the time.  At the moment, it seems to me what I’m facing is an application to set aside an agreement which, it is asserted by your client, does not represent the truth.

MS BRIDGER:   No.

HIS HONOUR:   That is ‑ ‑ ‑

MS BRIDGER:   I disagree with that, your Honour. 

HIS HONOUR:   Well, where in the agreement is there any indication at all that he has no beneficial interest in that property?  Everything that’s in there about that property, on the face of it to an ordinary person, I would have thought, it indicates that he owns that property, it’s worth $500,000, and when you look at the – not only that, but it sets out specifically what his equity is.

MS BRIDGER:   Your Honour, at the end of the day, does it really matter?  Because under the agreement, the financial agreement, and under the cohabitation agreement, it is separate property.  Each party keeps their own separate property in the event of a breakdown of the relationship, and it is really only the joint property that they share.

HIS HONOUR:   But it affects whether or not – it must be an effect, one would have thought ‑ ‑ ‑

MS BRIDGER:   Sorry.

HIS HONOUR:   ‑ ‑ ‑ on the wife entering into the agreement.

MS BRIDGER:   No, it doesn’t, your Honour.  Because if you go back to the cohabitation agreement, you have separate property and you have joint property.  So let’s just go to the separate property.

HIS HONOUR:   Yes.  Look, I appreciate that.  But ‑ ‑ ‑

MS BRIDGER:   It doesn’t matter, in my ultimate submission. 

HIS HONOUR:   You can apply your mind to it and I might be completely wrong, and I’m saying this without any submissions at all, and I’m looking forward to the submissions.  But I look at schedule 1.  It says [the husband’s] Assets, Liabilities, and Resources.  It names the subject property we’ve been talking about.  It assesses valuation of 500,000.  It then has net assets, $750,000;  and on the mathematics that appears there, minus 3000, the only liability that’s set out totals $747,000.  Now, unless you can establish that the wife, as you say, was clearly of the understanding that although the agreement said this, she understood that when he said 500,000, he meant, “None of it is mine,” unless you can establish it, then, the circumstance, I would have thought, is that she’s entering into this agreement prepared by your client’s legal representative in the first place – I know that there were some toings and froings about this – on the basis that that was what was represented in clear terms by the agreement. 

MS BRIDGER:   And, your Honour, and when one looks at ‑ ‑ ‑

HIS HONOUR:   So, look, I won’t take it any further.

MS BRIDGER:   One ‑ ‑ ‑

HIS HONOUR:   But I’m raising this for your attention ‑ ‑ ‑

MS BRIDGER:   Yes.

HIS HONOUR:   ‑ ‑ ‑ at some time during the course of the case.

MS BRIDGER:   That’s fine.

HIS HONOUR:   Right.

MS BRIDGER:   I think you have to look at the ..... , your Honour, because it’s exactly the same.

HIS HONOUR:   Well ‑ ‑ ‑

MS BRIDGER:   And when one looks at the separate property, they each keep the ‑ ‑ ‑

HIS HONOUR:   ‑ ‑ ‑ that might compound it, rather and ‑ ‑ ‑

MS BRIDGER:   They each keep their separate property.

HIS HONOUR:   Yes.  That might compound it, rather than ‑ ‑ ‑

MS BRIDGER:   I don’t think so, your Honour.

HIS HONOUR:   ‑ ‑ ‑ assist it.  But, anyway, you will, no doubt, have some submissions about that.  Right.