Cross and Cross (No. 2)

[2007] FamCA 1095

FAMILY COURT OF AUSTRALIA

CROSS & CROSS (NO. 2) [2007] FamCA 1095

FAMILY LAW – PROPERTY – Value of Property – Conflicting evidence
FAMILY LAW – PRACTICE AND PROCEDURE – Affidavits  

Family Law Act 1975 (Cth)

APPLICANT: Mr Cross

RESPONDENT: Mrs Cross

FILE NUMBER: MLF 1136 of 2006

DATE DELIVERED: 10 September 2007

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Young J

HEARING DATE: 12 September 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Bartfeld QC with Ms Johns of Counsel

SOLICITOR FOR THE APPLICANT: Kennedy Wisewoulds

COUNSEL FOR THE RESPONDENT: Mr North SC with Mr Sweeney of Counsel

SOLICITOR FOR THE RESPONDENT: Glezer Lanteri & Associates PTY LTD

ORDERS

1. The wife have leave to file her affidavit, sworn 7 September 2007. 

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 1136 of 2006

MR CROSS  

Applicant

And

MRS CROSS

Respondent

REASONS FOR JUDGMENT

1. Mr and Mrs Cross were married for approximately 18 years and have remaining before this court a property and financial dispute.  It was intended, pursuant to a direction given by his Honour Cronin J, and relying upon the informed indications from senior counsel and solicitors, that this was a three day and potentially four-day hearing.  On that basis the matter was listed before me to commence a defended hearing and to resolve finally all issues, inclusive of a child support departure application and property settlement matters.

2. I ­listed the matter for mention last Thursday to ascertain the issues in the proceedings and, with a view to an overview of the case, to understand witnesses to be called and the specific orders sought.  On that occasion Mr North, of senior counsel, and Mr Sweeney, instructed by Mr Glezer, appeared for the wife and they again appear at the commencement of the hearing this day.  Mr Bartfeld, one of her Majesty's counsel, and Ms Johns, instructed by Ms Thompson, appear for the husband.  Both parties are in court today.

3. I set that preliminary background to what is shaping up as a property and financial dispute that will likely substantially exceed the time and hearing indications given to the court.  It may well be, for any number of reasons upon which the court is yet to hear argument, or otherwise merely on the time set aside for hearing this matter, that the parties will not have their case heard or determined this year or indeed, in the foreseeable future. 

4. With that very general overview and in the knowledge of the matters that were raised before me at the mention last week, senior counsel for the wife commenced the proceeding today by highlighting four preliminary issues.  The first of those was the availability of advice from senior counsel to the effect upon value of a covenant encumbering the former matrimonial home (the T property).  The wife and children of their marriage continue to reside in that property, and as I understand the property orders sought pursuant to section 79 of the Act and as itemised by the wife in her summary of argument to the court, she seeks it transferred to her sole name and for her retain absolutely the lot upon which the matrimonial home is now located; that is Certificate of Title volume …, folio …, free of all encumbrance.

5. The remaining lot comprising that residential address primarily is occupied by the tennis court and swimming pool.  The wife does not seek the transfer of that lot to her sole name and it would seem, on her case, that the husband may subdivide, sell or deal with that property as he may think proper.  In contrast, and for the purposes of the background to this preliminary judgment delivered extempore, I record that the husband would have the court granting him the whole of the property, inclusive of both lots.  For completeness, and so I had an understanding of the specific valuation issues, it does seem as if valuers agree that the property as a whole is now worth $6.75 million.

6. The real conflict in this case is as to the value of the separate lots comprising the whole property.  The home block is seemingly valued by agreement at $4 million.  The current dispute as to the value of the other allotment, and subject to the covenant and all complex legal issues that may hereafter arise, is now valued by the expert engaged by the husband at $1.8 million; whereas the wife's valuer maintains a value of $3 million.  I have eluded to these valuation issues only by way of background but it does emphasise that there has been considerable time, effort and negotiation previously entered into by valuers trying to strike a proper valuation of this substantial residential property.

7. The second of the preliminary issues related to disclosure of financial documents relating to loan accounts between corporate entities and for the purposes of these preliminary reasons, I do not further develop this matter, save to note that the difference is now $534,339 and there remains a number of days required by accountants to collate documents and then to read, interpret and advise upon documents.  Why that was not done, or if it was done whether it was done adequately or whether the wife's complaint is somewhat misplaced, are matters that I do not address in these extempore reasons.

8. The third significant issue before the court, and which may flow from the preliminary matters upon which I have heard argument and submissions is whether the husband should in any event be permitted to have his valuers and accountants, identified as experts and be regarded as independent and he therefore be entitled to call them as witnesses and rely upon their evidence in the proceedings.  That issue is extended not just to the valuers but also to the expert financial witnesses.  Again, I do not develop that submission and make no finding or ruling thereupon at this stage of the proceedings.

9. Finally I flag, notwithstanding all issues of valuation, that it may be and one party may wish to keep open the possibility of the sale of the residential property, notwithstanding orders that are now sought.  That is always a possibility for the court in the exercise of discretion in determining a just and equitable settlement of property.  It is not currently a matter that is before the court and again, it is a matter that I do not in any way develop, nor have I heard argument upon.  All parties have reserved to each of them a facility to argue any order that is appropriate, just and equitable if and when this case is ever prepared and ready first proceed and secondly, proceeding within an agreed time frame.

10. With that overview, the initial specific issue which has been the subject of submissions is whether the wife should have leave and thereafter whether the whole of the affidavit of a wife now prepared and sworn by the wife should be accepted into evidence, inclusive of the various annexures thereto.  By way of background, when the matter was before me for mention last Thursday, the solicitor for the wife, Mr Glezer, had sworn and filed an affidavit before the court taking objection to the filing and reliance by the husband and his legal practitioners of various affidavits prepared by partners or consultants of the firm C Consultancy.

11. I have already indicated to the parties and all practitioners that I have not read the affidavits of the various valuers filed by and on behalf of the husband, and therefore for balance I have not read each of the affidavits of Mr H and the substantial bundle of annexures, being valuations, annexed thereto.  Arising out of comments that I made last Thursday, leave was sought this morning to uplift from the file and to wholly remove from evidence in the proceedings the affidavit of Mr Glezer.  There was no objection to that course of action and that affidavit has been returned by me to the file and I do not intend to rely or hereafter refer to that affidavit.

12. I highlight that course of action was almost certainly undertaken because I had expressed a very preliminary view that myself, and indeed any judge in the Melbourne Registry, may have some level of issue if there were to be in evidence and in dispute matters of fact, conversation, credit or otherwise which might touch upon, first, Mr Glezer, or secondly, any other member of counsel or solicitor identified in that affidavit.  That may be a prudent, over cautious indication given by the court last week, but in the circumstances I think it was appropriate and it has now been acted upon by the legal practitioner for the wife. 

13. An affidavit has now been prepared by the wife and that was sworn by her on Friday and is now before the court.  Mr Bartfeld, on instructions, does not oppose leave being granted for that document to be read by the court and thereafter filed in the proceedings.  On that basis I have received the document and have read the affidavit and the various annexures thereto. 

14. The issue that next arises with leave having been granted is the acceptance and admissibility of the affidavit and its annexures.  I firstly record that no objection was taken to annexure A, which are various cover sheets of reports where C Consultancy have prepared documents of various developments or projects undertaken by or on behalf of, or in conjunction with the husband.  As to the affidavit, Mr Bartfeld identified initially that paragraphs 2 and 5 thereof were not properly known to the wife or admissible and should be removed from the affidavit.  Subsequently his objection to paragraph 5 was more properly confined to it being relevant to the issue of notice and not to admissibility.  In line with that proper concession annexures "B" and "C" would otherwise remain before the court as to issues of notice.

15. Paragraph 2 of the wife reads as follows:

    "The husband over many years has had an ongoing commercial relationship and to a degree, friendship, with Mr [S], the director of [C Consultancy] and formerly a director of [H Consultancy].  The relationship between the husband and Mr [S] is such that upon the death of Mr [S'] wife approximately three years ago the husband attended her funeral.”

16. The issue of the independence of the various experts is a matter that awaits submission and argument subject to the admissibility of this paragraph.  I have otherwise read the affidavits in this case that were properly identified and are before me in evidence.  I therefore have read the earlier affidavit of both the husband and wife and have a specific understanding of the length of this marriage and the work and property development of the husband or of the parties, and I carefully make no finding, over the years of the marriage.

17. It is with that background that I bring to the disputed paragraph, paragraph 2, my approach to the preliminary issue.  Section 75 of the Commonwealth Evidence Act provides the exception to the admissibility of evidence and is as follows:

    "In an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who adduces it, also adduces evidence of its source."

18. What has developed before me is in effect a preliminary argument or a voir dire.  As to the admissibility of this paragraph I have had regard to section 189 of the Commonwealth Evidence Act which provides in subparagraph (1) thereof that the determination of a question whether evidence should be admitted depends upon the court finding that particular fact exists and the question whether that fact exists is, for the purposes of the section, a preliminary question.  Subsection (7) directs the court to the application of Chapter 3 to a hearing to determine a preliminary question, the facts in issue there are to be taken to include the fact to which the hearing relates.  Within the provisions of Chapter 3 I have otherwise been referred to section 55 which deals with evidence that is relevant and to the applicability of section 75.

19. I first regard the preliminary issues before me as being the nature of an interlocutory hearing, I do not regard them as interim.  This matter was listed before me as a defended hearing.  The court certainly expected it would proceed as a defended hearing.  I would trust that the parties understood that they were coming to court for a defended hearing.  It was prepared on the basis of a defended hearing, witnesses were no doubt informed this was the final hearing and the intent was that all matters be concluded. 

20. I have listened carefully to the submissions of experienced counsel for both parties.  I certainly do not intend a scenario that whatever ruling I now deliver is an interim ruling and can be revisited immediately hereafter.  As Mr North indicated, that would be somewhat of an abuse of process and I agree with that submission.  I, of course, leave open the right of appeal on each and every ruling or each and every determination that I pronounce and that is a basic right of all clients.

21. I was referred by Mr North to the reported decision of the High Court in Rogers v the Queen (1994) 181 CLR at 251 and in particular at pages 278 - 279 thereof, which I have read. I again emphasise that I make no distinction as between the impact and applicability of Rules of evidence to criminal proceedings or to these proceedings. It is important that the Rules and the law apply evenly and uniformly. The matter that I am concerned to provide to the parties is one of, insofar as I am able so to do, finality in this ongoing proceeding. Clarity and certainty would also be of some assistance and my determination on the basis that this interlocutory proceeding is that paragraph 2 should be admitted into evidence.

22. As I analyse that paragraph in the context of the marriage of the husband and wife, it would be very reasonable to understand that the wife knew of an ongoing commercial relationship with the named firm of valuers, that is not to draw any conclusion but to understand that was a fact known to the wife, that the valuer firm did work for and on behalf of the family entities.  The separate fact that is recorded in that paragraph is that the husband attended a funeral some three years ago when Mr S' wife died.  What is ultimately to be drawn contrary to the admissibility of valuation evidence from that fact will be a matter of weight and my discretion.  Upon an analysis of paragraph 2 the key elements which might also include a level of friendship are matters that would or should have been known to the wife.  I would certainly accept that that paragraph can and should remain at this stage in evidence and subject then to submissions as to the matters that might flow therefrom, by way of findings or ultimately support any conclusions that can properly be drawn.

23. As I indicated, these really are matters that go to the probative value of the wife's evidence and the weight that I will give thereto.  For those very brief extempore reasons, and leaving aside some of the more intertwined and complex submissions that counsel were inclined to deliver to the court, and leaving aside an aide memoire which was intended to show the independence of valuation as alleged and upon which I make no finding at this stage, of the valuers, I generally conclude on the preliminary issues that the wife's affidavit by agreement is and should remain before the court.  Paragraph 5 is before the court and is relevant as to notice and paragraph 2 will remain. 

24. Accordingly, the only order of the court will be that the wife have leave to file that affidavit, sworn 7 September 2007.  At the conclusion of these brief extempore reasons Mr Bartfeld has highlighted paragraph 9 of the affidavit to the court with the helpful position that he applies the reasoning of the court to paragraph 2, to what is contained in paragraph 9, which highlighted a relationship of a personal and business nature over years which the husband had with Mr S.  I likewise would have allowed, subject to the probative value and weight of that paragraph, for it to be before the court, but Mr Bartfeld has helpfully conceded that issue and no ruling is required in that regard.

I certify that the preceding twenty four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young 

Associate

Date: 19 September 2007