Cook and Cook (No. 6)

[2010] FamCA 810

FAMILY COURT OF AUSTRALIA

COOK & COOK (NO. 6) [2010] FamCA 810

FAMILY LAW – PRACTICE AND PROCEDURE – Application to re-open case and adduce further evidence – Opposed by other party – Cross application to adduce other facts and evidence – Complex financial and legal circumstances that have arisen post hearing but prior to judgment – Appointment of liquidator and receiver/manager to property development entities – Sale of property not yet settled – Personal guarantees given by husband – Supreme Court proceedings instituted by mortgagee and defence and set-off filed by husband and others – Wife in difficult financial circumstances – Examination of financial embarrassment and prejudice to wife and her other ongoing concerns – Issue of finality of proceedings and cost and delay to date – Overall assessment of the basis upon which a case is re-opened and evidence adduced – Overall justice to the parties

Family Law Act 1975 (Cth)

Watson v Metropolitan (Perth) Passenger Transport Trust [1985] WAR 88
Murray v Figge (1974) 4 ALR 612
Reid v Brett (2005) VSC 18
Smith v NSW Bar Association (1992) HCA 36
Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22
Gaskin v Ollerenshaw [2010] NSWSC 788
Australian Securities and Investments Commission v Rich & Ors [2006] NSWSC 826
Emmett & Emmett [2010] FamCA 56;
Aheb & Aheb (No. 3) [2009] FamCA 524
Summitt & Summitt & Ors [2009] FamCA 365
EB v CT (No. 2) [2008] QSC 306
Gelley and Gelley (No. 1) (1992) 15 FamLR 747

APPLICANT: MS COOK

RESPONDENT: MR COOK

FILE NUMBER: MLF 1997 of 2003

DATE DELIVERED: 14 SEPTEMBER 2010

PLACE DELIVERED: MELBOURNE

PLACE HEARD: MELBOURNE

JUDGMENT OF: YOUNG J

HEARING DATE: 30 AUGUST 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR SPICER

SOLICITOR FOR THE APPLICANT: KENNEDY WISEWOULDS

COUNSEL FOR THE RESPONDENT: MR ST JOHN SC

SOLICITOR FOR THE RESPONDENT: MARSHALLS & DENT

Orders

IT IS ORDERED:

1. THAT leave be granted to the husband to re-open his case and adduce further evidence by affidavit(s) upon the commercial, financial and legal issues and outcomes of the XC project, now in liquidation and under receiver management.

2. THAT the wife be granted leave to file evidence on affidavit in response thereto.

3. THAT liberty be reserved to both parties to make application to file and serve further and relevant affidavit evidence in the proceedings.

4. THAT the proceedings be relisted for mention and case management by the husband before Young J, upon proper notice given to the Court and the other party, on a date within 45 days after the settlement of the sale of the XC land.

5. THAT the husband’s Application in a Case filed 8 July 2010 and the wife’s Cross Application in a Case filed 10 August 2010 be otherwise dismissed (save that the wife be granted leave to re-apply for the orders identified in paragraph 3 of her orders sought).

6. RESERVE liberty to both parties to apply generally upon proper material filed and served.

7. THAT within ten (10) days of the date hereof each of the solicitors for the husband and wife make, file and serve a written submission as to the payment and quantum of costs and disbursements arising from these orders and the costs reserved on 10 June and 10 August 2010 and that such submissions are to be no more than three (3) pages in length.

IT IS CERTIFIED

1. THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Senior Counsel for the wife and Counsel for the husband.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 1997 of 2003

MS COOK

Applicant

And

MR COOK

Respondent

REASONS FOR JUDGMENT

ISSUES

1. The husband was a co-developer of XC, an historic country home and property of approximately 50 acres situated in the outer metropolitan area of Melbourne.  The freehold land was owned by XC Pty Ltd, an entity owned and controlled by X Developments Pty Ltd (“X Developments”) on behalf of the husband and his two siblings.  The development itself was undertaken as a joint venture with another person, Mr BT, by XC Development Pty Ltd (“XC Developments”).

2. Proceedings in this matter were commenced by the wife in this Court in 2003 and for a number of years the matter was managed in the Complex Defended Cases List before Guest J.  The final property and financial hearing was conducted before me over twelve days in July of last year.  Judgment was reserved and has not been delivered.  There has been numerous interlocutory hearings since that date.

3. In his evidence in that defended hearing the husband had deposed to the financial uncertainty then confronting the XC project and his ongoing endeavours to obtain and extend finance to continue the project.

4. Subsequently his efforts were unsuccessful and BankWest, as the mortgagee on title, appointed a Receiver / Manager to XC Pty Ltd and additionally a creditors Liquidator was appointed to XC Developments. 

5. The XC site has now been sold by public tender for approximately $3.8 million as against an agreed valuation, as was in evidence before the Court in the defended hearing, of $8.9 million, based upon an as it was condition and with all buildings included.  Settlement is said to be expected in December of this year and there will likely be a substantial shortfall in monies payable to BankWest. The separate creditors’ claim is currently estimated to be approximately $2.5 million.

6. It is within that background summary of facts that the husband has now sought leave of the Court to re-open his case and adduce further evidence.  That Application is opposed by the wife who otherwise has a Cross Application before the Court for various injunctive and other orders and to adduce further evidence on other commercial matters now in dispute.

ORDERS SOUGHT BY HUSBAND

1. The husband filed his Application to re-open his case and adduce further evidence, and his primary affidavit in support thereof, on 8 July 2010.  It should have been earlier filed.

2. The further hearing before me then was listed on 10 August 2010 and I pronounced two separate orders on that day. 

3. The first of those orders, and my accompanying extempore reasons for judgment, listed the further hearing of the opposed Application to re-open the husband’s case and adduce further evidence to a one day defended hearing before me on 30 August.  Orders were made on a continuing injunctive basis for the husband not to dispose of or deal with shareholdings in his name or any interest in the estate of his late mother and father, or to deal with the real property in North Queensland without the prior consent of the wife or Court order.  Orders were also made for continuing discovery of documents as provided for in paragraph 2 of those orders.

4. The further orders on that day were made as a consequence of the wife’s further Application for leave to re-open her case and update the evidence in the s 79 case otherwise concluded on 29 July last year.  The wife was granted such leave to call evidence as to each of the following events:

   (a)the sale of shares in Y Investments Pty Ltd and NTC Pty Ltd by the husband, including particulars of the sale, the consideration received and the manner in which the proceeds have been dealt with;  and

   (b)the quantum of monies paid by the husband to BDO in satisfaction of the costs of the single expert witness Mr F.

5. Of significance, in the subsequent hearing on the papers of the Applications to adduce evidence and re-open his case, the husband was permitted to make, file and serve any further Application to adduce evidence or any further affidavit in support thereof on or prior to 4.00 p.m. Friday 20 August 2010.  It subsequently was a matter relied upon by Senior Counsel for the wife that the husband failed to file any further updating affidavit of ongoing matters and facts of and related to the XC project and the actions of the appointed Liquidator and Receiver / Manager.  It was alleged that his earlier affidavits were inadequate and did not contain proper or sufficient fresh evidence.

6. Likewise the wife was provided with the same opportunity to file any further Application or affidavit and her solicitors filed no such further documents on her behalf prior to the 30 August hearing.

7. I again provided extempore reasons for judgment and in explanation of those further orders on 10 August and I have re-read and incorporate them as a background to this judgment.

8. In his Application in a Case filed 8 July 2010 (No. 189 in the Court Index) the husband sought the following order:

   “That leave be granted by this Court to enable the husband to re-open his case, and adduce evidence as to the developments in his financial position since the trial concluded, being development arising out of the failure of the [XC] project during the said period.”

9. Additionally the husband sought such further or other orders as the Court may deem appropriate.

10. Significantly, and in paragraph 6.4 of the written submissions of his Counsel, and dealing with the application of law to this case, but not in his order sought, it was recorded that:

    “The death of the husband’s father also substantially affects the finding the trial Judge will have to make.  Other developments affect this matter to a lesser degree”.

11. It was thereafter asserted in paragraph 6.5 of that document that all of the continuing financial and commercial developments to XC have occurred since the date of closing of the s 79 case (on 29 July 2009).  It was alleged that they were not matters upon which evidence could have been put before the Court during the trial as they have all occurred post trial and prior to judgment. 

ORDERS SOUGHT BY WIFE

1. In her Amended Application in a Case filed 30 July 2010 (No. 186A in the Court Index) the wife sought orders as to injunctive relief, disclosure and, only in the event that the husband is granted leave to re-open his case, ongoing financial disclosure of and related to the matters identified in paragraph 3(a), (b) and (c) thereof.

2. Additionally, and as to the issue of leave to adduce evidence, the wife sought leave to re-open her case otherwise concluded on 29 July of last year so as to call evidence as to each of the following events:

   (a)       the death of the husband’s father Mr Cook Senior;

   (b)the sale of shares in Y Investments Pty Ltd and NTC Pty Ltd by the husband, including particulars of the sale, the consideration received and the manner in which the proceeds have been dealt with;  and

   (c)the quantum of monies paid by the husband to BDO in satisfaction of the costs of the single expert witness Mr F.

3. The wife thereafter sought consequential orders or directions as were appropriate and foreshadowed a costs application to be made arising out of and incidental to her Application and related Court hearings.

4. As will be apparent from orders which I pronounced at an interim hearing on 10 August 2010 the wife was then granted leave to re-open her evidence in the case to call evidence as to sub-paragraphs (b) and (c), as outlined above.

AFFIDAVITS RELIED UPON

Husband

1. The husband had sworn and filed an updated affidavit in the proceedings on 6 November 2009 (No. 182 in the Court Index) and the contents thereof have been read and evaluated and incorporated within my earlier judgment delivered 27 January 2010 to which I have hereafter referred to and have relied upon.

2. Subsequently the husband filed a further affidavit on 10 June 2010 (No. 187 in the Court Index) and thereafter a further affidavit filed 8 July 2010 (No. 187A in the Court Index).  I have read and evaluated both documents.

3. Each of those affidavits were filed by the husband to update the corporate and financial circumstances of XC Developments and XC Pty Ltd and in his in latest affidavit filed the husband stated:

   “1.I am the husband and make this affidavit in support of my application filed this day.  That application seeks leave to re-open the case and adduce further evidence ….

   2.In particular I seek to put before the court, either by way of further evidence or further submissions, information relating to developments in relation to my interests held via [X Developments] Pty Ltd in the [XC] project and the consequential effect of such developments upon my personal financial position”.

4. I therefore am required to and have more particularly considered and made findings in this judgment upon the relevance and importance of issues that have occurred post the defended hearing concluded on 29 July 2009.  I have separately and in some limited detail evaluated all aspects of the XC project and other events as they have been disclosed to the Court and are in evidence.

5. The husband did not file any further or updated affidavit in the weeks prior to this hearing and a significant issue in this case is the actual level of proper disclosure made by him and the particular facts that are before the Court and upon which this Application to re-open his case and adduce evidence can and should be determined.  I have examined his evidence on the XC project, as identified by him in his earlier affidavits, under that subject heading.

   Wife

6. The wife’s affidavit was filed 30 July 2010 (No. 186B in the Court Index) and it opposed the Application of the husband to re-open his case and adduce further evidence and was in response to his affidavit filed in support thereof.  I have carefully read and evaluated that affidavit of the wife which carefully and at length identified the alleged prejudice and financial costs to her if the husband were to be permitted to re-open his case, paragraphs 40 – 56 (inclusive) thereof.

7. The wife’s affidavit separately dealt with her Application to adduce further evidence on matters identified, in paragraphs 57 – 62 (inclusive) thereof and otherwise in support of interim injunctions sought, paragraphs 63 – 69 (inclusive) thereof.

8. On 10 August 2010 orders were made on a continuing basis as to the interim injunctions sought and further as to the wife’s leave to adduce further evidence on the issues identified and it is the balance of her responding affidavit that is the foundation of her opposition to the present orders now sought on behalf of the husband.

WRITTEN SUBMISSIONS OF THE PARTIES

Husband

1. I permitted solicitors and Counsel for each of the parties to file written submissions as to facts and law provided that they were no more than three pages in length.

2. The submissions of the husband dealt with general principles evidenced from reported cases which identified the criteria of and circumstances in which the Court should exercise its discretionary power to re-open a case and admit further evidence where the hearing has been concluded but judgment yet to be delivered.

3. A summary of the additional evidence sought to be introduced by the husband is contained in paragraph 4 of the document and it provides that:

   “The husband seeks to adduce evidence as to the developments in the [XC] property project, being developments that have occurred since the case closed.  Whilst during the trial the husband foreshadowed the project was in trouble, in his affidavit, he deposes as to the project company subsequently going into administration and the sale of the key asset of the [XC] property by the receiver / manager.  The husband notes that the property was eventually sold by the administrator for $3.8 million, being in excess of $3 million less than the previous valuation which was before the Court at the time of trial.  He also deposes as to the consequential detrimental effects on his ability to operate as a property developer in the future”.

4. The foundation of the husband’s submission in law was that he asserted the Court has an obligation to do justice between the parties and on that basis, and in the particular facts of this case, then a re-opening of the case and the adducing of further evidence was required.

5. Specifically it was argued in paragraph 6.4 of his submissions, and in the oral address of his Counsel, that the husband’s interest in X Developments and the consequences of the collapse of the XC project upon his financial position do substantially affect the findings that I would be required to determine as the trial Judge as to the net asset pool and s 75(2) factors.  Mr Spicer concentrated his preliminary submissions upon the obligation of the Court in s 79 proceedings to first determine the net asset pool of the parties.  He relied upon the decision of the High Court in Mallett v Mallett (1984) 91-507 and primarily the judgment of Gibbs CJ and reference was made to the subsequent decisions of the Full Court of the Family Court including Clauson v Clauson (1995) FLC 92-595. Aside from that first step there is the further responsibility placed upon a trial Judge to stand back from the assessment of an appropriate division of property and be satisfied, on an overall basis, that such division is just and equitable. On the continuing facts of this case and having regard to all matters considered in these reasons for judgment that would be very difficult to undertake with the evidence as concluded on 29 July 2009. That is a matter that I have relevantly considered in determining the outcome of these current Applications.

6. It was asserted on behalf of the husband that new or continuing issues and circumstances have arisen since the conclusion of the defended hearing and prior to judgment which have significantly impacted upon the available net pool of assets.  It is said that all such evidence could not have been placed before the Court during the trial.  It is further said that there is evidence before the Court from the husband and other documents tendered in evidence to establish sufficient facts to rely upon to justify the re-opening of evidence and the adducing of further and ongoing evidence.  I find that there is merit in those submissions.

7. Mr Spicer’s central submission was that it was not in any way the fault of the husband that the XC project failed.  It was submitted that he was an honest businessman trying at all times to obtain and extend ongoing finance for the project and that he disclosed his endeavours in this regard openly to the Court under cross examination and in the days immediately prior to the conclusion of the defended hearing.  It is asserted that other persons, liquidators and receiver / managers, now control the XC project and they have largely isolated the husband from financial knowledge and information.  A Writ has issued in the Supreme Court of Victoria wherein the husband is one of the three named Defendants and in these circumstances his submission to the Court is that it is wholly unrealistic to expect him to have further and better knowledge of the sale of the XC land and all subsequent financial and commercial decisions made as against his interests and that of X Developments.

8. It was further emphasised in these submissions that the husband has and will continue to suffer a very significant financial loss, which currently cannot be quantified, but that it may conclude with him being declared bankrupt and having no future standing as a property developer.  The issues are not known and cannot be determined at this time.

9. The conclusions identified in the written submissions on behalf of the husband are that:

   §it is in the interests of justice that his case be re-opened;

   §all factors balanced it would be prejudicial to the parties should this case not be re-opened;

   §given the nature of the post hearing events and the financial and commercial developments that have occurred it is appropriate that both parties have leave to adduce new evidence;

   §accordingly the case should be re-opened, both parties be given leave to adduce further evidence as foreshadowed by them.

   Wife

10. The three pages comprising her legal and factual submissions were filed on behalf of the wife on 10 August 2010 (No. 188 in the Court Index).

1. The written submissions commenced by asserting that the onus of proof and of establishing the alleged injustice rested upon the husband as applicant for leave to re-open his case.  I accept that position and the husband must appropriately prove his case.

2. The written submissions identified the legal cases relied upon with very particular emphasis upon the majority judgment in the High Court decision of Smith v NSW Bar Association (1992) 176 CLR 256 particularly at paragraph 32 where it was emphasised in cases after hearing and pending judgment that the primary consideration should be of the embarrassment or prejudice to the other party, that is to the wife on the facts of this case.

3. The written submissions emphasised the necessity to carefully evaluate an application for leave and re-opening of a case within the recognised categories of fresh evidence, inadvertent error, mistaken apprehension of the facts or as to law.  It was strongly asserted that mere reliance upon the justice of the case was both inappropriate and insufficient and did not address the various necessary legal steps established by previous reported decisions such as Murray v Figge (1974) 4 ALR 612; Watson v Metropolitan (Perth) Passenger Transport Trust (1965) WAR 88; Gelley and Gelley (No. 1) (1992) 15 FamLR 747 and Inspector-General in Bankruptcy v Bradshaw (2006) FCA 22 (at paragraph 24). I have subsequently analysed each of these, and other reported cases, relied upon in oral submissions in determining the proper orders in these proceedings.

4. The written submissions of the wife identified further issues to be considered and determined and including:

   §that it was asserted the husband had varied his final orders to be sought in the s 79 proceedings and by his final written submissions had fundamentally departed from his orders sought in a document filed prior to the commencement of the proceedings on 9 July 2009 (exhibit “H4”) in the defended proceedings;

   §the husband had failed to comply with the directions of the Court to file an Application as soon as practicable to re-open his case and adduce further evidence and indeed had actually sought to file but then withheld such an Application on 22 December 2009;

   §it was asserted that the extent of any fresh evidence to be called by the husband, if leave is granted, was unclear and there has been no attempt made to explain the evidence or why it was not earlier called;

   §it was asserted that it was not probable that the ultimate outcome of the case would be significantly affected by any additional evidence;

   §it was asserted that any injustice which may or could arise to the husband was not specifically alleged, nor is it implicit in his argument.

5. Finally, and in summary form, it was a matter substantially emphasised to the Court that the wife would be “hugely prejudiced” by any re-opening granted to the husband for reasons clearly identified in sub-paragraph 10(d)(i) – (iv) thereof and I have carefully analysed these issues which are comprehensively dealt with by the wife in her affidavit material later in this judgment.

DEFENDED HEARING – S 79 ORDERS SOUGHT

Husband

1. The husband filed with the Court, as at 9 July 2009, the final orders that he sought at the commencement of the s 79 hearing.  Those orders are in evidence before this further hearing as the wife’s Senior Counsel tendered a copy of exhibit “H4” from those proceedings.

2. In summary the husband then sought s 79 orders as follows:

   §the transfer to the wife of the jointly owned former matrimonial home in O (“the home”) to her sole name clear of any mortgage liability;

   §the payment of a further sum of $723,245.00 by instalments over the next three years with continuing spousal maintenance to be paid until the first instalment thereof in the sum of $200,000.00 is paid on or before 1 July 2010;

   §for there to be a superannuation splitting order in favour of the wife for the whole of his Tower superannuation and the majority of his Spectrum (but not Strategy) superannuation entitlements;

   §otherwise for the wife to be indemnified against all financial liabilities to family trusts or in respect of projects and developments and then for each party to retain other assets in their name or under their control.

3. In the detailed submissions of the husband filed at the conclusion of the s 79 hearing and at a time when the husband and his legal practitioners were aware of the collapse of finance for the XC project the orders then proposed differed substantially and represented a significantly lesser financial outcome for the wife.  It was then proposed that (in summary):

   §the transfer of the unencumbered home to the wife be completed on or prior to the end of the 2009 calendar year with the husband continuing to pay spousal maintenance and all outgoings on that home until that date;

   §the same superannuation split in favour of the wife be made save that the sum of the Spectrum superannuation entitlement that she was then to receive was defined in the sum of $386,360.00;

   §the wife otherwise was to receive her personal assets, an MLC insurance policy and the transfer of a time share resort at M Club;

   §the significant difference was that no capital sum was then quantified to be paid to the wife but that she was to be informed, in a timely fashion, of all developments of and related to the XC project and if and when any final distribution was paid to the husband out of his entitlements within X Developments then they would be applied as follows:

   ofirst to the husband in the sum $699,506.00;  and

   osecondly, in relation to each distribution thereafter received, such sum to be divided equally between the husband and wife.

4. It was then submitted to the Court that to better secure the wife’s future entitlements to be paid on any remaining distribution of profits or entitlements to the husband upon any completion of the XC project then appropriate injunctions be made as against other assets and interests to restrain him from dealing with those contrary to the interests of the wife and for appropriate indemnities being given to her as to her loan account with the Cook Engineering Trust.

5. In summary there is a very substantial difference, in dollar terms, payable to the wife from the orders as sought by the husband at the commencement of proceedings and those upon which the final address of his Counsel was conducted on 5 October 2009, the catalyst for the variation being asserted to be the collapse of the XC project, the appointment of both Liquidator and Receiver / Manager thereto and the substantial shortfall in expected monies.

   Wife

6. The wife’s detailed submissions filed with the Court at the conclusion of the s 79 proceedings included at Schedule 1 thereof a statement of known assets, liabilities and financial resources.  It was submitted that the asset pool available for adjustment (excluding costs) should be found by the Court to be $11,996,053.00.

7. As to the X Group the financial interest of the husband to be included in such net pool of assets was said to be no less than $1,122,000.00 but, with proper adjustments it was argued that it should be $1,851,682.00 (and it was this sum that was included I her asset pool).

8. The written submissions on behalf of the wife in the defended hearing dealing with the XC project and X Developments were substantial and are contained between paragraphs 75 – 105 (inclusive) thereof.

9. By way of background it is a fact that the property had originally been acquired in 2002 for a sum of $4,000,000.00 and external finance was not then required for its purchase.  Subsequently a secured loan facility was obtained from BankWest and at the date of hearing there was agreed evidence that its then liability was approximately $5.6 million.  A valuation of the property, and its approximate 50 acres and buildings had been obtained from CB Ellis and that valuation on an “as it was” basis was then $8.95 million. 

10. It was on the simple basis of the then equity in the land and project that it was asserted the husband’s entitlement was $1,116,666.00.  The higher valuation of the husband’s entitlement therein was calculated pursuant to paragraph 103 of those earlier written submissions but they are not matters which are necessary to finally determine for the purposes of any re-opening of the evidence and adducing fresh evidence.  What I have identified is the range of valuations submitted by the wife and the corresponding entitlement that the husband could or would have received from his interest in the XC project as valued therein as at that date.

11. From the total asset pool as then calculated on behalf of the wife at $11,996,053.00 she owned or sought transferred to her name real property and other assets, shares and personal chattels, and superannuation entitlements in a sum of $1,784,271.00, as identified in Schedule 2 of those written submissions.

12. Accordingly, and in Schedule 3 thereof, the wife identified the final orders that she then sought and, in summary, they were:

    §that the husband transfer the home to her sole name unencumbered;

    §that the husband pay or cause to be paid to her a sum of $6,013,000.00 on or before 1 September 2010 with interest thereafter to be paid, in default, at a rate fixed at the time prescribed within the Family Law Rules and compounding monthly from the first date, to the date of payment thereof;

    §a transfer of the husband’s shareholding in Y Investments Pty Ltd;

    §a superannuation split of the sum identified in each of the three available superannuation funds of the husband;

    §appropriate indemnities for loan accounts or other financial or corporate exposure to the entities of and controlled by the husband.

13. As can be seen there is a vast difference in the net pool of assets said to be available to the husband and wife.  Their orders sought bore no relationship whatsoever to the net pool of assets as advanced by the other.

14. Fundamental to the husband’s case to adduce further evidence and re-open the proceedings is what is said to be the very significant financial variation in net assets.  The XC land and buildings were subsequently sold at a very substantial discount to the liability owing to BankWest.  The additional claims pursued by the Liquidator on behalf of all creditors are said to be no less than $2.5 million.

15. The wife, on her legal advice, accepted the fact of the sale of the XC land and that there could be a significant shortfall to BankWest, but always subject to the Defence and Set-Off now filed by the husband as one of the Defendants in the current Supreme Court proceedings.  Otherwise the total liabilities owing to the Receiver / Manager and the creditors and also to the Liquidator is unknown and not admitted.

16. A significant argument on behalf of the wife was that it had been agreed in the defended hearing that financial evidence would be confined to the date of 30 June 2008.  There was however some updated financial evidence before the Court on various matters and the husband had detailed at a late stage in that hearing in both his evidence and under cross examination, his ongoing financial concerns of the XC project and its financing.

17. In paragraph 6 of the wife’s written submissions for this present hearing the husband was criticised for his final orders sought and for the fact that they differed from his orders sought at the commencement of the proceedings, in a document as filed by him on 9 July 2009.  It is submitted that no leave had been sought by the husband to pursue such new orders and that they had not been “an issue in the dispute”. 

18. It was now alleged on behalf of the wife that it would be unconscionable to permit the husband to pursue those orders identified in his detailed written submissions filed post the defended hearing.  Senior Counsel for the wife relied upon the decisions of Commonwealth v Verwayen (1990) 170 CLR 394 and Commonwealth v Clark (1994) 2VR 33 to found this argument, which I have concluded I should not accept.

19. It must however be clearly understood that the wife had likewise sought orders at the conclusion of the defended hearing that were different from those requested prior to the commencement of the hearing.  Primarily that was so because of the evidence given in the trial.  The wife’s amended Initiating Application was filed 10 June 2009 and those orders were fine tuned in her Outline of Case document handed to the Court at the commencement of that defended hearing.  The wife’s then orders included a spousal maintenance claim of $1,800.00 per week, the transfers of various properties and shares and a lump sum payment in such an amount to effect a property settlement in her favour of 65% of the net asset pool.  Her final orders sought and the subject of written submissions and an oral address from her Senior Counsel on 5 October 2009 markedly differed from that originally sought, primarily because of the quantum thereof.

20. What has occurred in this case, and I would observe that what occurs in many cases, is that the final orders sought are moulded by Counsel to the evidence and the final net pool of assets.  There is and should be nothing surprising in legal practitioners diligently fine tuning orders sought on behalf of their client in accordance with evidence given or admissions made during trial.  There were of course in the trial many documents subpoenaed to Court, some of which were cross examined upon, and which further refined the evidence and led to a variation in the pool of assets.

21. I do not accept the argument submitted on behalf of the wife in paragraph 6 of her current written submissions.  I do not accept that it would be unconscionable for both the husband and wife to seek orders at the end of the defended hearing that were reflective of the evidence given. 

PREVIOUS COURT HEARING AND ORDERS

1. The twelve day defended property and final hearing before me concluded on 29 July of last year.  Judgment was reserved pending the filing of written submissions and Counsel on behalf of the parties were then permitted to address the Court with oral submissions on 5 October 2009. 

2. Within that context it is therefore important to understand the reasons for the current delay and I have identified and explained the subsequent court orders.  This process, together with the extempore reasons for judgments accompanying certain of the orders, should clearly provide a better understanding of the subsequent developing factual circumstances and the continuing Court proceedings.

3. At the conclusion of the hearing on 29 July 2009 I directed that written submissions be filed by both parties on or before 18 September 2009 and that on an equal shared time basis the matter be listed for a one day further hearing for oral submissions on 5 October 2009. 

4. Pursuant to those Orders the husband’s solicitors delivered his written submissions to be found in August 2009 but these were not then filed and I directed that they be filed on 12 August 2010 and be recorded as document No. 171A in the Court Index. 

5. The wife caused to be filed her written submissions, 258 paragraphs thereof plus schedules, on 18 September 2009 and that is document 171 in the Court Index.

6. On the return hearing date, 5 October of last year, the Court was notified of the appointment of a Receiver/Manager appointed by BankWest to XC Pty Ltd and of a Liquidator appointed by creditors to XC Developments.

7. The Court then ordered that all extant proceedings be adjourned on a part-heard basis to 11 November 2009 and a restraining order was made as against the husband, his servants and agents in respect of dealing with certain superannuation entitlements.

8. Otherwise it was ordered in respect of the XC project and related issues:

   “5.THAT notice of any further orders sought and notice of the adjourned hearing date be given by the wife’s solicitors to [TG Firm], as Receiver Managers appointed, and [J Firm] as Liquidators appointed to appropriate corporate entities identified in these proceedings.

   6.THAT the husband do all acts and things and provide all necessary and ongoing instructions to his solicitors to ensure that the solicitors for the wife are provided with immediate access to all correspondence, applications and other documents forwarded between himself and each of the Liquidator and Receiver Manager in relation to [XC] and its property development project, finance or all related corporate or financial issues.

   7.THAT the wife be at liberty to issue any further subpoenae as may be required to prepare or assist her legal argument in these proceedings.

   8.RESERVE liberty to each of the husband and wife, or to the Liquidator or Receiver Manager, should they wish to make application to this Court, but upon proper documentation filed and served and then the matter is to be listed by prior arrangement with his associate before Young J.

   9.THAT the extempore reasons for judgment be transcribed, be placed upon the Court file and be made available to the parties and, upon request to the Liquidator and the Receiver Manager.

   10.THAT the issue of any costs of the husband or wife of and incidental to the appearance at Court this day be reserved for legal argument and consideration before Young J on the adjourned hearing date.”

9. I delivered extempore reasons for judgment in support of orders pronounced on that day.  Those reasons are of importance because I identified matters that had arisen during the trial with the ongoing commercial endeavours of the husband and others to obtain continuing finance for the XC project, particularly at paragraphs 3, 4 and 5 thereof.

10. The Court was first advised by letter dated 30 September 2009 from the wife’s solicitors of the appointment of the Receiver / Manager by creditors of XC Developments.  Thereafter the appointment of the Liquidator by BankWest to XC Pty Ltd was more fully disclosed and a partner with the firm of accountants appointed as the Liquidator was present at Court on that day.

11. With that background I do not repeat but incorporate within these reasons for judgment the balance of the extempore reasons for judgment which I delivered on that day.  I observe that the then developing commercial and financial issues and the approach of the Court taken and orders made are important for a balanced consideration of all Applications now before the Court.

12. In the hearing before me on 11 November 2009, and in addition to the parties, I identified in orders pronounced the two subpoenaed persons, Mr BT and MP Business Consultants, and they were each represented by their solicitor Mr Harriss.

13. Orders were made with the consent of the wife and the subpoenaed persons but without the consent of the husband though his Counsel was not instructed to oppose the orders then sought. 

14. In summary those orders, which I will not incorporate within these reasons for judgment, provided access to the parties to inspect and copy a bundle of documents and electronic records produced to the Court so as to enable a better and more complete understanding of the financial circumstances and corporate involvement of those other legal persons of and related to the XC project and otherwise generally.

15. The wife filed an Application for a partial settlement of property and that Application was consolidated with other interlocutory hearings before the Court on 22 December of last year.  Those proceedings were heard and determined upon the affidavits filed and with cross examination of the husband.  The solicitors for the Liquidator of XC Pty Ltd filed an affidavit (No. 185 in the Court Index) and that was before the Court and read in the hearing.

16. I delivered reasons for judgment and pronounced orders on 27 January 2010 providing for an interim settlement of property with the transfer to the wife of the P home, and the husband to discharge the National Australia Bank mortgage encumbering its title and further superannuation splitting orders and other ancillary and costs orders.

1. I have re-read those reasons for judgment delivered on that interlocutory Application and they are relevant to and form part of the ongoing issues before the Court from the conclusion of the defended hearing.

2. Additionally, and of significance, I separately ordered on 22 December 2009 the adjournment of the matter before me to Monday 15 March 2010 and for the husband to then have filed any Application for leave to adduce further evidence.  He failed to comply with this order.

3. On 15 March 2010, and within the context of the then proposed sale of XC (the real property) and the continuing liquidation and the ongoing financial and commercial discovery and activities of both the Receiver / Manager and the Liquidator all proceedings were further adjourned to 10 June 2010.

4. I directed that the solicitors for the husband make, file and serve an affidavit of their client deposing, to the best of his then knowledge, information and belief, all matters and facts of and incidental to the sale by tender of XC, and any and all consequential facts arising therefrom.

5. The matter returned before me on 10 June 2010 when the wife was represented by Senior Counsel and the husband represented by his solicitor.  At that time the husband had not complied with the previous order of the Court and filed an Application to re-open the case or adduce further evidence.  That is a matter of significance in support of the wife’s case.

6. I therefore ordered:

   “1.THAT the husband make, file and serve by 4.00pm on 5 July 2010:

   (a)any application wherein he seeks to reopen the evidence in this case and/or to adduce further evidence;

   (b)an affidavit sworn by him deposing as to the facts and circumstances upon which he seeks to rely and including full particulars of his current financial position (personal and corporate) and particulars of monies withdrawn from the Strategy Superannuation Fund on and after 1 July 2009;

   (c)any other affidavits upon which he seeks to rely.

   2.THAT the wife make, file and serve by 4.00pm on 26 July 2010:

   (a)any response to the husband’s application and/or any application as to orders otherwise sought;

   (b)such affidavits in reply, or in support, as she may seek to rely upon.

   3.On or before 4.00pm 5 August 2010 counsel for each of the husband and wife are to exchange written submissions outlining the legal arguments advanced in respect of the respective applications and/or response then before the Court and such written submissions (limited to three pages) are to be then provided by email transmission to the Associate to Young J.

   4THAT all questions of costs of or incidental to the hearing of the matter this day are reserved to the adjourned date.”

7. The matter was thereafter before me on 10 August and I pronounced orders that I have earlier detailed and then for this hearing on 30 August.

XC

Husband

1. In my judgment delivered 27 January 2010, and dealing primarily with the wife’s Application for an interim settlement of property, I set out in some detail the background to the XC project and the evidence that was before me at the conclusion of the trial on 29 July 2009.

2. The commercial and financial issues and the continuing corporate activity and liabilities attached to XC are substantially the basis upon which the husband has sought leave to re-open his case and adduce further evidence and I have therefore included within this judgment that relevant part of my earlier judgment backgrounding the evidence of XC then before the Court.  Accordingly I have included and rely upon paragraphs 29 – 50 inclusive of that judgment hereunder.

   29.“[XC] is a country home and property situate [on Melbourne’s outskirts] of approximately 50 acres upon which is built an historic, heritage protected home and outbuildings.

   30.The freehold of that land is owned by [XC Pty Ltd] an entity owned and controlled by [X Developments] Pty Ltd (“[X Developments]”) (on behalf of the husband, [and his siblings]).  Its purchase price was approximately $4 million plus associated costs.

   31.In 2006 a Joint Venture was established with an arms length partner, [Mr BT], to develop the home and property into an exclusive hotel and tourist facility and to further construct 60 accommodation units on the surrounding land.  The role and scope of the work of [Mr BT] was primarily to assist with management and financing of the project.  He did not contribute to the initial land cost or otherwise to all of the development costs in the years prior to that Joint Venture commencement date.  A copy of the Joint Venture agreement had been tendered as evidence in the final proceedings and marked Exhibit “W24”.  The local Council issued a permit for 110 accommodation units and that planning process had been gazetted by the State Government.  The entitlement of the Joint Venture development was to construct 50 hotel suites / rooms with a further 60 residential dwellings to be constructed on the surrounding land.

   32.Initially the title to [XC] was unencumbered.  The purchase monies were funded by the corporate entities associated with the [Cook] family, namely is the three siblings.  Those monies flowed from [X Developments], [X Land] and the [Cook] Partnership.

   33.Those entities provided $2 million in cash and an additional $2 million was provided from the NAB term deposit, held in a commercial bill facility, and where the family entities had invested money which they received as net proceeds of the sale of inherited family land at […].

   34.Subsequentially the NAB registered and lodged a mortgage in early 2003 against the titles to [XC property].

   35.That mortgage provided $2 million to the [Cook] family entities to contribute to the initial costs of renovation to the exterior of the historic home and to undertake demolition, renovation and reconstruction works to its interior.

   36.The husband’s evidence was that initially a sum of between $600,000 and $700,000 was spent on these preliminary building and construction works.  The balance of the NAB Mortgage Advance, approximately $1.3 million, was spent on further construction requirements, building works, related business operations and expenses and financing requirements.

   37.It is not appropriate in this interim application and otherwise it is difficult to detail all of the works undertaken and monies expended as they were not fully identified by the husband in his affidavit, or in his evidence in chief.  All of these matters arose in cross-examination of the husband upon documents produced by him at court during the hearing, or otherwise from subpoenaed documents and work and investigations undertaken by the wife’s solicitors.

   38.In July 2005 two further mortgages were lodged on the title to [the XC property] ranking after the NAB.  These mortgages were to [X Land[ and jointly to [X Developments] and [X Land].  The sum secured by that [X Land] mortgage was initially $3,050,918 and the sum secured by the further joint mortgage was initially $1,085,328, in total a further sum secured by what effectively were then 2^nd and 3^rd mortgages on title totalling $4,136,246.

   39.The husband emphasised to the court that these further mortgages were debenture mortgages and that they were drawn up and lodged by the [Cook] family entities on specific commercial legal advice.  They were lodged to cover advances and the quantum secured by mortgage equated to the then outstanding loan accounts of those entities as at July 2005.

   40.Throughout the calendar the years 2003 – 2006 (inclusive) the husband explained that there were significant and costly ongoing works under construction at [XC].

   41.In the initial years no Joint Venture existed with [Mr BT] as he was not introduced formally into this project until the Joint Venture agreement was executed on 6 October 2006.

   42.Initially the [Cook] entities had envisaged a redevelopment of [XC] to include a Retirement Village project which was ultimately discontinued for reasons that were not explained to the court.

   43.The husband estimated that by July of 2005 the [Cook] entities had spent a sum in excess of $6 million on [XC], aside from its original unencumbered purchase price of $4 million.  The husband’s evidence was that “we sort of got ahead of ourselves … because we never ever got the permit.  But we started to fill in walls and just clean up the place …”.

   44.Work commenced on the internal demolition of the historic building in early 2008 but all work was halted because of the withdrawal from the project by the financier (BankWest) and a lack of funding.  The husband explained that the concern of that financier was as to the overall cost and viability of the project and it said it was not prepared to stand by its prior financial commitments.  It was also said by the husband to be of importance that BankWest was taken over by the Commonwealth Bank of Australia and a new level of financial scrutiny was brought to the project by bank personnel who did not know the husband and his partners and were not previously committed to the project.

   45.The husband’s evidence was that there was no development or construction work on site since May 2008.  BankWest then issued a Notice of Default and there was a negotiated arrangement requiring interest free payments of $40,000 per fortnight to forestall further recovery actions. 

   46.The husband had caused those payments to be made throughout the early part of last year and up to and inclusive of the period of the trial.  The payments were made from entities within the management or control of the husband or his extended family.  [Mr BT] made no contribution.

   47.BankWest held security over all of the land and the project.  The original loan facility established with them was for a principal sum of $12,000,000 and at the time of the trial that had been drawn down to a sum of $5,600,000 and was then frozen, subject to the continued ongoing payment of fortnightly interest.  The husband’s evidence throughout the hearing was that his joint venture partners in [the XC project] were actively looking to introduce a further finance provider or investor, or indeed a partner to inject cash into the project and to permit construction to recommence. 

   48.[XC Pty Ltd] had entered into a commercial arrangement with [FG Finance] Pty Ltd (“[FG Finance]”) to source and provide finance for the development of the project.  An application was first made to the Adelaide Bank and thereafter evidence was given by the husband that negotiations were in progress with a large private mortgage provider which also proved unsuccessful. 

   49.[FG Finance] was then contracted to undertake an off-shore search for finance of up to US$10,000,000 and their fee, if successful, was to be 10% thereof, or US$1,000,000.  The husband’s evidence was that the principal of [FG Finance] was then in Hong Kong, as at mid 2009, looking to obtain finance from international banks or other substantial financial providers.  The evidence of the husband, given during the substantial hearing of the efforts to re-finance was that “we are fighting to save every cent we can out of the business.  If was can get finance it will give us more opportunity to save the money we have invested … and that is the reason we are doing it”.

   50.With that background the husband, through his Counsel, had advised that he would keep both the Court and the wife’s lawyers advised of all refinancing developments. “

3. As further background to the commercial and financial issues of XC and the evidence that was before the Court in the defended trial and of relevance to the particular Applications now before me it must be understood that the joint venture did not acquire the land but merely the development project and its business.  Mr BT had an entitlement only to the profits of the joint venture if they exceeded the sum of $7.5 million which was the negotiated purchase price at which the ownership of the 60 acres of land was introduced.

4. The husband had given evidence that XC was being developed in two stages, the hotel project and the residential and commercial land allotments.  No capital profits were expected by him to be made from the first stage.  There was evidence of an additional borrowing of $400,000.00 from the Bank of Queensland for the furnishings and fit out of the historic home which was intended to be the centrepiece hotel within the project and there has been no update on this liability.

5. Stage two was for the construction of 60 dwellings surrounding the hotel.  The husband had estimated that all capital profits from the joint venture would be realised from this development stage.  His estimate had been that it could take up to 5 years to construct, develop and then market and sell the dwellings.  I have made no findings on this evidence.

6. The evidence as to the re-financing that I recorded in paragraphs 47 – 49 (inclusive) from my above extract of judgment had largely been discovered during the husband’s cross examination and on about the eighth day of trial.  On that morning he had produced to the Court a bundle of documents of and related to XC.  They had been requested the previous afternoon.  He gave evidence that he was at his office on that evening until approximately 12.30 a.m. collating documents for production.  The various documents were tendered in evidence as exhibits “W20”, “W21”, “W22”, W23” and “W24”.

7. The application for finance to the Adelaide Bank failed and the subsequent finance application was commissioned through FG Finance.  Those additional exhibits which I had previously examined in that hearing included a Deed of Charge, a Guarantee and Indemnity and Memorandum of Set-Off and, in exhibit “W22”, the husband and his brother had executed a Solvency Agreement as of late March 2009 which then confirmed that the trustees of the corporate entity in the development were able to pay their ongoing debts.

8. It is necessary to understand that the husband was “hopeful of getting refinance”.  The principal of the financier had advised the husband of his negotiations, first with a major international bank and then with ABN Amro.  Alternatively the husband had raised the possibility of a further joint venture partner, but always wholly subject to finance and future negotiations. 

9. The husband was somewhat emotional in his evidence on this topic and said that “we are fighting to save every cent we can out of the business.  If we can get the finance it will give us more opportunity to save the money we have invested that is the reason we are doing it”.

10. I accept the husband had, at that time, a priority to salvage the monies invested in the project and if unsuccessful he said in cross examination that he would contemplate selling the whole of the XC project.  That is now not an available option.

11. I have detailed this further evidence from the trial as I was then satisfied that the husband had realised the very serious consequences that would likely arise from the demands made by BankWest.  I am satisfied that his efforts to refinance were genuine, albeit belated.

12. I was then and now remain satisfied that the husband had been extremely slow and unco-operative in providing updated financial documents to the wife’s solicitors, notwithstanding their many requests.  As the liabilities to BankWest increased and as the creditors liabilities mounted there should have been far more current and meaningful discovery of documents and financial information to the wife and her legal practitioners.

13. It was very clearly understood in the proceedings that the design, construction and development work on XC had ceased more than one year prior to trial.  The site was effectively in lock down mode.  Whilst the principal sum owing to BankWest could be calculated what was previously unknown was the then level of indebtedness to the creditors.  The husband said that was $556,000.00 as at June 2008 but had extended to at least $900,000.00 because of additional accounts received from and monies paid to the builder and the architect.  There were further consulting fees outstanding to the project managers, MP Business Consultants.  These had been authorised by Mr BT.

14. At the close of trial the whole of the XC project remained on hold and the liabilities of both XC Pty Ltd and XC Developments were increasing daily.  The first action of the liquidator, when appointed, had been to lodge a caveat on the title to the XC land.  I have no evidence if that caveat now remains secured upon Certificate of Title Volume … Folio … but, if so, that may likely compromise the settlement of the sale scheduled for December of this year.

15. The wife’s affidavit, then filed in support of her partial property application alleged in paragraph 14 thereof that certain ongoing actions had not been contemporaneously disclosed to her and they included that:

    (a)the husband had resigned as a director of XC Developments on 29 April, prior to trial;

    (b)Mr BT was now the sole director of XC Developments;

    (c)a Liquidator had been appointed by the creditors of XC Developments;  and

    (d)the husband was continuing to assert that he had limited knowledge of the then financial circumstances of XC Developments as he was no longer a director.

16. The appointed Receiver / Manager of XC Pty Ltd, Mr BM, of TG Firm, gave evidence before me at the mention on 5 October 2009 though at that time his investigations had barely commenced and he had little current knowledge of the then developing financial issues.

17. Within that context I have now examined the further evidence before the Court in the affidavits of the husband and wife.  There have been no further affidavits filed on behalf of the Liquidator, or the Receiver / Manager and the assertion of the husband is that he has received no level of co-operation or up to date financial information from either of those firms of accountants or their clients.

18. In his affidavit filed 5 June 2010 the husband then asserted that, as to XC Developments, that on 18 November 2009 he received a demand by the Liquidator for payment of unsecured creditors’ claims allegedly occurred whilst he was a director of the company and when the company was said to be insolvent.  That demand was then for the sum of $2,421,993.04.

19. As to XC Pty Ltd the evidence of the husband is that the XC property was listed for sale in December 2009 by the Receiver / Manager via a tender sale basis.  The husband’s affidavit continued:

    “3.2.2 I understand that there was some extension of time but eventually tenders closed in March 2010.  During the tender process several of the tender bidders contacted me for information and assistance which I provided to them;

    3.2.3 I have not been formally advised but understand the property sold via this tender process for about $3.8 million.  [Mr GN], who is one of the bidders whom I had previously spoken to during the tender process, was the successful bidder through an entity which I understand is under his control.  I understand that settlement of the sale has not yet occurred and is not due until about December 2010;

    3.2.4 My commercial solicitors, Madgwicks, have been attempting on my behalf to ascertain more about the sale of [XC].  I understand from my solicitor handling the matter, Nick Fletcher, that just this week he received from Middletons, acting on behalf of the Bank of Western Australia, a draft confidentiality agreement, which they require I sign before information about the sale can be released to me ….”.

20. The husband disclosed that he was served with a Writ, issued by the Bank of Western Australia Ltd., on 10 March 2010, which claimed against him, his brother and Mr BT pursuant to the personal guarantees which they had each provided a sum, calculated as of 22 February 2010 in an amount of $6,451,677.58, inclusive of receivers and managers costs and expenses of $198,198.54.  Interest and costs were said by the husband to be continuing to accumulate at a substantial sum per week.

1. The husband disclosed that he was required to file a Defence to the proceedings and had obtained an extension of time in which so to do.

2. By his further affidavit filed 8 July 2010, and upon which he has not been cross examined, the husband updated his knowledge of the continuing facts and circumstances surrounding the XC project and all associated commercial and financial issues.  In this regard I have carefully read and evaluated paragraphs 14 – 27 (inclusive) thereof.

3. As to XC Developments the husband repeated the demand made on behalf of the creditors and confirmed the appointment of J Firm, Chartered Accountants, appointed as Liquidators to XC Developments on 5 August 2009.

4. The evidence of the husband was that the demand for the sum identified by him in his earlier affidavit remained current and had not been updated and that no further action had been taken against him in relation to that claim over recent months.

5. As to XC Pty Ltd the information disclosed by the husband was substantially as contained in his prior affidavit.  The additional matters deposed to were that:

   “26.     I am unable to say, at this time, what my ultimate personal liability will be, for the monies claimed against me.  If a judgment is entered against me for the full sum of debt and interest claimed then I will be effectively bankrupt.

   27.      I have already spent over $20,000 on legal costs in relation to the BankWest proceedings.  A further $30,000 has been paid to my solicitors, Madgwicks, and is held on trust on account of additional costs.”

6. In paragraph 36 of his affidavit the husband said that:

   “36.     The BankWest proceedings have impacted more generally upon me and my brother.  The proceedings mean that effectively neither my brother nor I can borrow any further monies, so cannot be involved in any further property development projects on our own, or via any entity that requires us to provide personal guarantees.  This will severely limit my ability to earn further monies in the future.  My reputation as a property developer has been severely affected due to widespread publicity as to the failure of the [XC] project and my role in it.  I do not believe anyone would ever employ me to work as a property developer.  My future income earning capacity is therefore much lesser than before.”

7. The husband otherwise updated his financial circumstances both in respect of other property developments that were in progress as at 29 July 2009 and in respect of his superannuation and investments in Y Investments Pty Ltd. 

Wife

1. The evidence of the wife upon the XC issues are detailed in her affidavit filed 30 July 2010.

2. In paragraph 17 thereof she admitted that the evidence of the husband before the Court when the case had closed on 29 July 2009 included comprehensive evidence of significant existing and prospective liabilities of the husband or companies associated with him, some of which were under close scrutiny and demand by the bank.  They required large weekly interest payments which the husband was then paying. 

3. In paragraph 21 thereof the wife acknowledged the evidence of the husband given to Court, though she asserted that it had been variable on the topic in the final days of the hearing, but that it was to the effect that he had been unable, to that time, to obtain necessary refinance for XC Pty Ltd.  The wife stated that the husband had expressed some optimism that such refinance could be obtained in Hong Kong or elsewhere.

4. As to the further matters which the husband had identified and given evidence upon in paragraphs 20 – 23 (inclusive) of his affidavit the wife clearly was at a substantial disadvantage in not having informed and current knowledge and that matter was highlighted in her affidavit, in paragraphs 23 and 24 thereof.

5. The wife, in paragraph 26, deposed to the BankWest Writ being served upon the husband on 10 March and a copy of that document was forwarded by the husband’s solicitors to the wife’s solicitors by letter on 16 March 2010.  A copy of that accompanying letter is marked exhibit “B” to the wife’s affidavit.  The response letter of her solicitors is marked as exhibit “C” to her affidavit and the subsequent response from the husband’s solicitors marked exhibit “D” to her affidavit.  I have read and evaluated each of those solicitors’ letters.

6. Of significance the wife protested as to the vague and speculative nature of the matters asserted by the husband in paragraphs 25 and 26 of his affidavit.  She said, for example, that:

   “The husband does not make clear in his affidavit that he is defending the said Writ, or the nature and extent of his defence, nor does he seek to explain why, when he is but one of three guarantors, he would be rendered “effectively bankrupt”.  I do not admit that he will be “effectively bankrupt” if judgment is entered against him”.

7. As to XC therefore, and save for matters contained within the written submissions of Counsel and the oral submissions before the Court on 30 August 2010, and documents tendered as exhibits on that day, this then comprised the evidence of the commercial and financial issues of and concerning both the appointment of the Receiver / Manager and the Liquidator and their subsequent actions and demands.

8. It was fundamental to the wife’s case that the husband was afforded by the Court an opportunity to file a more complete and updated affidavit in the week prior to this most recent hearing and better explain and detail to the Court and the wife the ongoing further facts and developments.  This he failed to do.  I have evaluated this issue which may also be of relevance to ancillary matters.

9. The submissions of Senior Counsel for the wife emphasised that the husband had not applied for any adjournment of the defended proceedings but instead had concluded his evidence.  It was asserted that the proper conclusion from the husband’s evidence given during the trial was that the XC project development had stalled and there was no then evidence that the project had collapsed.  There was then a valuation agreed and the husband’s case was initially based, at the commencement of the defended proceedings, upon paying a dollar sum certain to the wife.  It was then not expressed to be subject to the evidence to be adduced during that defended hearing.  It was said on behalf of the wife that “the [XC] project did wax and wain but its financing and other problems were developed in the evidence in that defended hearing”.

10. Ultimately I judge those various submissions in the context that the evidence previously was that there was no ongoing work on or commitment to the XC project for some considerable time prior to the commencement of the defended hearing. The project site was in a form of lock down and was wholly dependent upon further and ongoing refinancing to permit resumption of work and pay then outstanding creditors.

11. Exhibit “W4”, in this interim hearing, is a true copy of the Writ issued out of the Supreme Court of Victoria in the Commercial and Equity Division in proceedings No. ….  The Bank of Western Australia Ltd is Plaintiff and the husband is one of three named Defendants.

12. That Writ identified the Facility Agreement between the Plaintiff and XC Pty Ltd and the guarantees given by the husband and others and the subsequent breach and demand for repayment then made.  It was alleged that the Plaintiff had suffered loss and damage as identified within the Writ and the Particulars of Claim made as against the husband and each of the other two Defendants were for the payment of $6,451,677.58 and interest thereon calculated at a default rate of 17.51% p.a., or alternatively pursuant to Statute and costs.

13. Exhibit “W3” in the interim proceedings is the Defence filed on behalf of the husband his brother, but not the other Defendant, Mr BT. 

14. That Defence alleged a breach by the Plaintiff of its financial obligations and available facilities to the detriment of the husband and his brother and their claim is that had it not been for the loss and damage suffered by them as a result of the breach by the Plaintiff then their loan facility would not have fallen into default and they would not have been liable pursuant to the guarantee.

15. Significantly, and a matter focused upon by Senior Counsel for the wife, both the second and third Defendants claim in their Defence that they are entitled in equity to a set-off in extinction of any liability which they might otherwise have to BankWest.  The actual loss and damage allegedly suffered by the husband and his brother is detailed in paragraph 39 of their Defence and quantified in the sum of $5,759,062.00.  Further and in the alternative the husband and his brother alleged that any indebtedness by them to BankWest must be further reduced by the net proceeds of sale received upon settlement of the XC contract.

16. In summary, and on the limited evidence before the Court, it is very apparent that those defended Supreme Court proceedings are a long way off being prepared and ready for trial.  On the evidence before me the XC sale contract is not scheduled to settle until December of this year.  The quantum claimed by BankWest and the loss and damage claimed by the Defendants is continuing to accrue and will not be known until trial in the Supreme Court.

17. An issue that arose between Counsel in their submissions was whether or not the Set-Off claimed on behalf of the husband was for tactical reasons or otherwise genuinely and properly sought that sum claimed as against the Plaintiff.  Senior Counsel for the wife emphasised the difference between a Counterclaim and a Set-Off, that significant difference being that a Set-Off admits the claim but sets up a cross claim to excuse the liability.  The Court was referred to Dalco v Australian Taxation Office (1986) 67 ALR page 605 and Williams v Spautz (1992) 174 CLR 509, the principle relied upon from those cases being that any tactical claim that is not properly based on facts and instructions is an abuse of process.

18. I am not in a position to determine any issue of and related to the Set-Off filed on behalf of the husband.  I have no evidence before me save as to the document itself.  It has not been suggested in evidence (but only in submissions from the Bar table) that there could be any tactics of or associated with its filing in those Supreme Court proceedings.

19. I likewise can make no finding as to the likely success or otherwise of that Set-Off.  The reality is that only the fullness of time will determine the outcome of that claim if it is pursued on behalf of the husband.  If successful it would of course substantially reduce any liability which XC Pty Ltd or the husband had to BankWest.

DEATH OF HUSBAND’S FATHER

1. The husband’s father died in July 2010.  By agreement it is now to be admitted in evidence as to the fact of that death and the date thereof.

2. In the written submissions filed on behalf of the husband it is said in sub-paragraph 6.4 that “the death of the husband’s father also substantially affects the findings the trial Judge will have to make”.

3. At sub-paragraph 5.2 thereof it is further submitted that:

   “5.2     As to in particular the matter of his father’s death, the husband notes that the death of his father took place on […] July 2010 after he swore his affidavit on 7 July 2010.  He notes that the death of his father, the Will made by his father and his potential inheritance were all matters before the Court at the trial, and subject to cross examination.  He concedes however that his father’s death bears upon the Court’s treatment of such matters”.

4. In her Application before the Court the wife, in paragraph 4(a) thereof had sought leave to call evidence as to the death of the husband’s father.  Such an order is unnecessary because of the admissions made by agreement.

5. Much of the evidence in the original hearing had focused upon the Z Group and indeed the wife, in Schedule 1 to her final written submissions had valued the husband’s interest in that extended family entity at $4,688,000.00.  I make no further comment upon or finding as to that purported valuation which was wholly disputed on behalf of the husband.

6. The Z Group had commenced in the 1950’s / 1960’s as a construction business and later moved into earth moving and plant hire and was then and is now involved with property development.  It was initially established by the husband’s father together with two other families all of whom now remain actively involved within that business and its assets are held, as to a one-third interest, by the extended Cook family.

7. In the 1970’s Mr Cook Snr. established a trust, the Cook Engineering Trust and its corporate trustee was Z Nominees Pty Ltd.  The original directors of Z Nominees were the husband’s parents and, as at the close of evidence on 29 July 2009 the then directors were the husband, his brother and his father.

8. The Trust Deed for the Cook Engineering Trust was not in evidence in the proceedings.  There had been very considerable evidence of the significant and unsuccessful search that had been made to locate that document, as evidenced by paragraph 117 of the husband’s then trial affidavit.

9. The husband’s evidence in the defended hearing was that his father then and always continued to have the final say on all issues.  There was evidence from the husband and lengthy cross examination of him on these issues of control and influence of his father.

10. The then primary submission of the husband was that there was no evidence before the Court upon which it could determined that he held a proprietary interest in the Cook Engineering Trust.  That submission was more particularly detailed on pages 23 – 25 (inclusive) of the then written submissions as are identified in document No. 192 in the Court Index.  Notwithstanding those submissions the husband sought to argue that any debt of he and/or his wife owing to that Trust should be brought to account and in that regard an off-setting liability of $77,098.00 was claimed by him.  I carefully do not further develop these issues which were extant at the conclusion of the defended hearing and I make no further comment or finding in that regard.

11. The husband’s father held the position of Managing Director within the Z Group.  Seemingly it was said that he had assumed that position because of his age, experience and longevity in his working relationship within the Group, rather than by any formal appointment by company resolution.

12. Mr Cook Snr. did not file an affidavit in those defended proceedings and there was evidence before the Court that, because of his then age and infirmity, he could not remember past events and facts and could not reasonably and reliably be expected to give evidence to the Court on any issue in dispute.

13. Senior Counsel for the wife had, in re-examination of her, led evidence to identify the various real property assets of the father and they were then said to include, or had previously included:

    §a four bedroom double storey home on the Victorian coast;

    §an apartment in Queensland;

    §a house in Melbourne’s suburbs;

    §a lump sum of $500,000.00 that he held on behalf of the Will of his late wife;  and

    §various personal chattels.

14. The evidence of the husband was that the Queensland property had sold some ten years ago.  The Melbourne property had sold for $1.4 million, its title had been unencumbered and was registered in the joint names of his parents and the husband had understood that the net proceeds of sale were received by and otherwise invested by his father.

15. The husband had estimated the net personal estate of his father to be $4,000,000.00 or thereabouts inclusive of additional loans within the Z Group and further financial interests of and associated therewith.  The assets of the father in his real property and other personal assets had not been included within the net pool of assets which the parties had submitted to Court in their final written submissions.  I now make no finding on his assets.

16. The husband acknowledged that he had an “expectation” to receive an inheritance upon the death of his father.  His evidence was then that he had no more than an expectation though the wife’s case had suggested to the Court that it should have regard to the reality of the future inheritance which each of the husband and his other two siblings would received upon the death of their father.

17. The last Will of Mr Cook Snr., dated 10 May 2007, was an exhibit to the affidavit of the husband’s brother and was relied upon in the proceedings.  It was agreed that this document should specifically be before the Court though it was unknown whether there was then any further Will or Codicil subsequently executed by the father.

18. On the copy of that Will in evidence before the Court in the defended proceedings the husband and his brother were the appointed trustees.  The father had then bequeathed all of his real and personal estate to those trustees and, subject to appropriate debts and liabilities of the estate, for the balance of all monies to be held for each of his three children who then survived him or otherwise for such of the beneficiaries as were defined within clause 1.1.2 of the definition of beneficiaries within that Testamentary Trust.

19. I have briefly summarised, but carefully made no findings upon the evidence that was before the Court and of and related to the father and any expected inheritance by the husband.

20. With the very recent death of Mr Cook Snr. and the agreed admission into evidence of the fact of death and the date of death the further evidence for submissions that may arise, subject to agreement or Court order, are unknown.  It may or may not be that the husband will receive a one-third interest in the net estate.  They perhaps are the matters which generally are conceded by the husband in paragraph 5.2 of his current written submissions before the Court (document No. 190 in the Court Index).  They are matters which the wife has presently not sought to re-open and address the Court upon or introduce further matters of a financial nature.

21. Likewise other issues that may subsequently arise of and related to the corporate structure, directorships and the management and control of trust assets have not been specifically highlighted in the further written submissions and are not matters that I have been asked to deal with in this Application.  Given however the fact that the date and fact or the death of Mr Cook Snr are now in evidence then it could only be expected that there would be leave of the Court sought for further evidence, or at least further submissions on the consequences thereof and the financial benefit to the husband, at least on evidence that was before the Court on or prior to 29 July 2009.

Y INVESTMENTS PTY LTD

1. The evidence in the concluded defended hearing was that the husband then personally owned a 2.18% interest in Y Investments Pty Ltd (“Y Investments”) which was represented by his holding of 247 shares.

2. In a financial statement sworn to and filed on behalf of the husband on 28 June 2008 he had then estimated the net worth of that shareholding to be $420,000.00, calculated upon the basis of monies he had expended to acquire that shareholding.  His evidence was that the had held those shares for seven years and had received no financial return and no monies had been paid to him over that period.  Under careful and well prepared cross examination by Senior Counsel for the wife the husband had acknowledged that he was “optimistic about its long term future” and that “… in the long term – if it could survive it could be worth more than $8,000.00”.

3. That valuation was important because the single expert valuer in those defended proceedings, Mr F, had valued his 247 share portfolio at $8,000.00 and the husband had accepted that valuation for the purposes of inclusion within the net asset pool in those proceedings.

4. There was no debt owing upon the husband’s shareholding and it could have been assigned to the wife pursuant to an order of the Court in the defended proceedings.  The wife sought that such shareholding be transferred to her name at the valuation of $8,000.00.  The husband opposed any such transfer of shares and volunteered in his evidence that he was then “working behind the scenes to help get the company into a better position”.  His evidence was that they required to raise further capital.  Specifically his evidence was that if such a transfer of shares was ordered to the wife then “she could get a bargain or she could get nothing”.

1. In Summitt’s case (supra) reference was made to a recent decision in the Supreme Court of Queensland, EB v CT (No. 2) [2008] QSC 306, a decision of Applegarth J and, in consideration of the High Court’s reported decision in Smith, his Honour there observed that:

   “[5]     Reference by the High Court to prejudice to the other party, and the guiding principle of the interests of justice, require account to be taken of the strain that litigation imposes on personal litigant.  The prejudice cause by the delay in the delivery of an expected judgment at the end of stressful litigation can not always be measured in terms of money or cured by an order for costs.  The interests of justice is served by finality in litigation, particularly where prolonged litigation imposes a strain on personal litigants.”

2. Like Murphy J I consider this passage to be of utmost importance, particularly in the lengthy and unique circumstances of this case where the litigation has been extremely prolonged and expensive to both parties and where the husband has had a very significant financial advantage, as against the wife, because of his commercial activities and family and corporate assets and income.  I have hereafter carefully considered and balanced all of these factors within this above highlighted paragraph from the judgment of his Honour.

3. In EB v CT (No. 2) (supra) the issue before the Court in those de facto proceedings was as to the current market value of an asset of one of the parties.  That application opened up the issue of the current value of all other assets and his Honour concluded (in paragraph 6 thereof) that it would be wrong to determine the matter on the basis of the current value of some assets and the value as at the date of hearing of the balance of assets.  In that context I paused to reflect that the purported and disputed valuation of the husband’s interests in X Developments and arising from the XC project does not now exist given the actions of BankWest, the appointment of the Receiver / Manager and the soon to be settled sale of that land.  Those matters are all qualified by the husband’s Defence and Set-Off in the Supreme Court proceedings.  The further commercial and valuation difficulty is the substantial claims by creditors against the husband and others.  I have catalogued these matters, which are at the very heart of the further evidence to be adduced in this case, as they go directly to the relevant evidence of ownership, currency of valuation and quantum issues.

4. In contrast to Summitt’s case (supra) I am not here concerned with a revaluation issue.  The issues before me involve the likely loss or significant reduction in value of a substantial asset and other outstanding legal and financial claims, the result of which would substantially change the balance sheet of total net assets of the husband and wife as prepared at the conclusion of the s 79 hearing.

FINDINGS

1. I now proceed to more closely evaluate the further evidence identified by the husband in his affidavits filed 10 June and 8 July 2010.  I have hereafter carefully assessed the prejudice and embarrassment caused to the wife by such further evidence and the Applications of the husband now before the Court. 

2. The husband’s evidence was primarily restricted to the XC project and his limited knowledge of subsequent commercial and financial developments.  It would have been more helpful to the Court, and to his own case, if the husband had have taken up the express opportunity provided to him and his legal practitioners to file an updated, detailed and more informative affidavit on or before 20 August 2010.  I have made my decision only on the fresh evidence placed before this hearing by the husband but with the knowledge of all of the evidence previously given in the defended hearing before me.

3. The evidence of the appointment of the Liquidator and the Receiver / Manager is before me.  There is evidence of the sale of the XC land by public tender and its expected settlement date.  The liabilities of XC Pty Ltd to BankWest are generally known.  The extent of liabilities owing by XC Developments to its creditors were identified and are continuing.  The Supreme Court Writ and the Defence and Set-Off documents have been tendered in evidence.  The husband asserted that there has been, on an ongoing basis, a lack of commercial information provided to him.  He has asserted that he does not know his ultimate personal liability but, if judgment were to be entered against him for the full sum of the debt and interest claimed then he said he would be effectively bankrupted.  I do not have to make such a finding at this time.  His financial position was otherwise updated in paragraphs 28 – 39 (inclusive) of his most recent affidavit filed.

4. With the background of the previous evidence in the defended proceedings and in the subsequent interlocutory hearings the fresh evidence upon which this Application must be decided is ultimately limited to those further identified case facts, subject always to the qualification of the wife’s loss, embarrassment and prejudice suffered thereby.

5. The events post 29 July 2009 are significant and potentially financially damaging for the husband, his siblings and their commercial entities and to the assessment of the net pool of assets that must be first determined in these proceedings before a division of property is made between husband and wife. 

6. I conclude that the further evidence identified by the husband and that which reasonably can be expected to be subsequently known from the ongoing legal and commercial circumstances are substantial and material.  I have concluded, subject to all other issues considered, that the interests of justice would require its admission prior to any final s 79 order.  A just and equitable final property division order cannot be reasonably made without such updated evidence.

7. Such evidence would affect the result as the net pool of assets would be substantially different without the inclusion of the husband’s interest in X Developments.  More significantly the current evidence would highlight that there may likely be an additional substantial deficiency in funds to repay to BankWest, subject always to the Set-Off claimed. 

8. The fact that there are Supreme Court proceedings ongoing where the husband personally is named as a Defendant pursuant to Guarantees which he has given, and again subject to the Set-Off to be heard as part of those proceedings, provide further foundation to the claim that the net asset pool will substantially be altered and the property division must be affected.

9. I have evaluated within the context of this hearing the evidence that was given in the defended hearing of and related to XC and in particular the disclosure by the husband of his refinancing endeavours.  I conclude that the husband was then most likely endeavouring to act in the best interests of himself, his siblings and commercial interests and of the wife in refinancing the development project which then had been stalled, or in lock down mode, for more than one year.

10. The simple reality is that the Liquidator and Receiver / Manager were appointed after the conclusion of evidence and whilst the s 79 case was continuing to final addresses.  Their appointments are accepted as a fact and since their appointment they have controlled all aspects of the XC project and the assessment of debt and liability owing by XC Pty Ltd, XC Developments and the husband and others personally.  It should be apparent that this then evidence could not have been available, by reasonable diligence or otherwise as at the close of evidence on 29 July 2009.

11. Whilst the wife’s legal practitioners have offered a criticism of the husband for not seeking an earlier adjournment of the proceedings she likewise could then have but did not seek any adjournment pending the outcome of the appointment of the Liquidator and Receiver / Manager.  Her legal advice was to proceed with final addresses and the quantification of orders in her favour that included the X Developments interest and discounting any other debt or liability of or associated with the husband.  I conclude that to be unrealistic and to wrongly discount the fact that such further financial and commercial evidence, and the litigation pending, would affect the outcome of the distribution of net assts as between husband and wife.

12. Insofar as it was submitted on behalf of the wife that the husband has adduced no evidence of any unexpected debt or liability, or has not demonstrated any error, but merely has highlighted an ongoing enforcement of a known debt, then I reject that submission.  Again I repeat that the husband did highlight to the Court, under cross examination, the then significant refinancing issues and the commercial risk to the XC project.  Perhaps during the defended hearing it was never expected that a Liquidator or Receiver / Manager would need be appointed.  Likely there was a level of confidence by the husband that he could somehow and in some way obtain refinancing and likely the wife was content to accept his commercial abilities in that regard.  The reality is very different, though perhaps the past economic and global financial conditions impacted upon the adverse reaction by BankWest and the increasing financial and refinancing difficulties then confronted by the husband. 

13. Specifically the wife identified in the submissions of her Senior Counsel in this proceeding that the husband did not disclose in his further evidence matters that appropriately dealt with the Guarantees provided, by him and others, and with his potential bankruptcy.  Again I do not wholly accept that submission on behalf of the wife, qualified by my observations that the husband could have been more diligent and expansive in the further evidence that he identified.  These ongoing issues remain unknown.

14. Specifically I do not know of the impact of any Guarantee provided by Mr BT though I observe he is not one of the parties claiming a Set-Off to the Writ and more particularly there was evidence before me in the defended hearing that he had encountered his own financial difficulties and could not then financially meet interest payments to BankWest or otherwise contribute to the joint venture in accordance with his 50% interest therein.

15. I have separately considered the public interest in the timely conclusion of litigation.  This matter has now been current in this Court for seven years.  It has had many hearings and the financial expense and emotional cost to both parties has been enormous.  There have been approximately eight further hearings post 29 July 2009.  I have previously, in many extempore judgments, called upon the parties and legal practitioners to show commercial and financial common sense and adjust their dispute out of court.  This has never occurred.  Whilst that is a matter entirely for the parties it is a fact that I have balanced that other litigants and their cases are disadvantaged by the inordinate time and Court resources that this proceeding has occupied.  Nevertheless such criticism cannot be aimed solely at the husband.

16. The issues upon which further evidence are sought to be adduced are important and there is both relevance and a probative value to that evidence.  It could not be classified as “an undue waste of time” in the words pronounced by Austin J in ASIC v Rich (supra).

17. For all of the findings that I have made pursuant to the discretionary guidelines identified in cases such as Watson (supra) and Reid (supra) and as an overriding principle of the justice of the case there remains the significant question of prejudice and embarrassment to the other party within the guidelines of the High Court’s decision in Smith v NSW Bar Association (supra), to which I now turn.

18. Senior Counsel for the wife has submitted that the wife would be very significantly prejudiced if the husband were permitted to re-open his case and adduce further evidence.  In paragraph 10(d) of his written submissions his foundation upon which this submission was based was identified to be:

    (i)that the wife has already incurred crippling legal and accounting expenses and has little capacity to pay further costs;

    (ii)justice would require fundamental re-examination of the husband’s financial circumstances and conduct of associated companies and co-guarantors, not only as to XC but generally before and after 1 July 2008;

    (iii)the wife’s case commenced in 2003.  Any further examination of the husband’s financial affairs would cause her very substantial delay and anguish in what is already a hugely extended case.  It was said that it will be difficult to foresee a case more deserving of prompt resolution;

    (iv)the husband has strategically delayed his application to keep his options open and to delay payment to the wife of her additional entitlements.  The Court should therefore give substantial weight to the studied inaction of the husband.

19. In his oral submissions Senior Counsel for the wife extended his written submissions by identifying the further fact that the husband does not volunteer that he could or would assist the wife with her ongoing legal and professional costs.  The wife has received an interim distribution of property but the Court has been advised that the O home has been encumbered to partially pay her very significant legal fees.  The wife additionally had litigation funding and that advance was of a sum in excess of $300,000.00 and, from past evidence before the Court, was incurring interest at a rate of approximately 17.5% p.a.

20. The wife is largely ostracised from the children of the marriage and certainly from the extended family of the husband and it is said, and I accept, that she has no other access to funds or ability to borrow to continue these proceedings.  She had intended to pay all of her costs from her judgment sum.

21. Substantially Senior Counsel emphasised the need for finality of all proceedings given that they have been ongoing for seven years and that is a matter to which I have given substantial weight.

22. The difficult balance in this case is to fairly and properly assess the financial, commercial and legal developments of and associated with the XC project, the fresh evidence and the substantial financial impact upon the net pool of assets when contrasted to the financial prejudice and other legal and emotional embarrassment which would then confront the wife.

23. All matters considered the question that I must determine is whether the Court is more able to do justice to both parties in all of the particular facts and circumstances of the case if the Application to re-open and adduce further evidence is granted.  That question must be answered within the ambit of all of the issues and the legal requirements that I have raised within these reasons for judgment and I again highlight with the certain financial and other prejudices which the wife would then confront.

CONCLUSION

1. In the exercise of my discretion, guided by the interests of justice as balanced and analysed throughout my reasons, I have concluded upon the exercise of my discretion that the husband should be granted leave to re-open his case and adduce further evidence.  The timing of any further hearing and the extent of evidence to be adduced are matters largely unknown at this time.  Those matters will depend upon the settlement of the sale of XC, any shortfall of funds, the outcome of Supreme Court proceedings and all of the related legal and commercial aspects, including the claims by the Liquidator and Receiver / Manager and the extent, if at all, to which the husband must personally stand responsible for or repay liabilities.  All of these issues involve substantial and significant financial and legal related matters that directly impact upon the net asset pool.

2. I am particularly aware of the evidence given in the defended hearing of the other assets and corporate interests of the husband in other entities and property developments.  The outcome of my orders in these proceedings will most likely mean that evidence upon all related assets and interests of the husband will need to be updated.  That would be a difficult, expensive and time consuming task but I presently see no realistic alternative if I am to determine orders to divide the property of the parties on a just and equitable basis.

3. I have carefully balanced the submissions made on behalf of the wife in paragraph 10(d) of her final written submissions in this hearing.  Whilst I endorse the benefit of prompt resolution of all proceedings to both parties, and not just the wife, any judgment of the Court must be delivered on all relevant and available evidence and the re-opening of the husband’s case would enable, over time and subject to cross examination, that evidence and outcomes to be before the Court.  I again carefully repeat my very clear understanding of the issues identified by Senior Counsel for the wife in sub-paragraphs (i) and (ii) thereof.

4. I do not find on all of the evidence that the husband has strategically delayed this application to re-open evidence so as to keep all of his options open and further delay payment to the wife.  Both the circumstances requiring the need of a Liquidator and Receiver / Manager and their appointment were not dictated by, or otherwise made, by the husband.  They were imposed upon him and I do not agree with the alleged “studied inaction” of the husband.  Such a phrase does not fairly identify his financial and corporate concerns and his endeavours to refinance XC in and about the months of July and August 2009.

5. The wife has already received an interim distribution of property and whilst there is no extant Application for any further interim division of property in her favour, and dependent upon her instructions to her legal advisors, and I carefully make no further comment upon this issue, that does remain a matter that could likely be open to a further interlocutory hearing.  I have been advised by her legal practitioners that a mortgage was taken out upon the title to the home to reduce her outstanding legal liabilities to them and as they incurred on her behalf.  I have no evidence as to whether that mortgage interest was capitalised or otherwise how it is now being paid by the wife.  What it does mean is that her interim property division has already been partially reduced by the very substantial legal fees and disbursements that she has incurred in these proceedings.  She will be confronted by ongoing legal fees and disbursements and again that is a matter I have balanced in the justice of this case.

6. The wife has not presented as a commercially astute person and as a background thereto I have listened to her evidence given in the defended proceedings.  She made her various contributions to the marriage which were of real importance but which were different in nature to the work, business and financial contributions of the husband.  I carefully make no assessment of contribution under s 79(4) of the Act but the wife has no meaningful earning capacity and cannot be expected to have a full commercial understanding of the ongoing developments in this case, both during and post the defended hearing.  I would be confident that the length and content of the legal proceedings have had a marked impact upon both her emotional state and her lifestyle.  She has and will continue to be, in all ways, financially and personally disadvantaged, when compared to the husband, by these ongoing proceedings.  That is a matter of real significance to which I have given weight.  Such factors however do not overweigh the necessity to do justice to both parties by a just and equitable division of assets and property and, as I have outlined, the events in this case after 29 July 2009 are complex and substantial and directly impact upon the determination of the net pool of assets.

7. There must be some flexibility as to when these proceedings are next relisted.  Subject to any urgently required application court could reasonably expect that the parties should await the settlement of the sale of the XC land and a more detailed and responsible knowledge of the claims made by the Liquidator and the Receiver / Manager.

1. I raised with the legal practitioners for the parties, but do not further comment upon, the requirement for the husband to forthwith file a detailed updated statement of his current financial assets, to include all of his other property developments and business interests so that both the wife and the Court have an ongoing disclosure, on a sworn basis, by the husband of his assets, financial resources and income.

2. I have reserved the issue of costs, including costs reserved in the interim hearings before me on 10 June and 10 August of this year. I require both parties to file written submissions, of no more than three pages, on the costs issues (if any) and in particular to detail therein the quantum of costs claimed, and the basis upon which such claims are made having particular regard to s 117(2A) of the Family Law Act 1975 (Cth). I will decide that issue on the papers.

3. I have reserved liberty to both parties to apply to me on any urgent matters that may arise but only upon proper material filed and served.

4. I will certify for the attendance of Counsel including Senior Counsel in these proceedings.

I certify that the preceding Two Hundred and Twenty Eight
(228) paragraphs are a true copy of the reasons for judgment
of the Honourable Justice Young 14 September 2010

Associate: ……………………………………………………………

Date:  …………………………………………………………………