CROSSLEY & CROSSLEY

[2015] FCCA 3017

FEDERAL CIRCUIT COURT OF AUSTRALIA

CROSSLEY & CROSSLEY [2015] FCCA 3017

Catchwords:
FAMILY LAW – Practice and procedure – transfer to the Family Court of Australia – issues for consideration in transferring the proceedings – court’s resources.

Legislation:

Federal Circuit Court Rules 2001, r.8.02

Federal Circuit Court of Australia Act 1999
Family Law Rules 2004

Applicant: MR CROSSLEY

Respondent: MS CROSSLEY

File Number: AYC 371 of 2015

Judgment of: Judge Harman

Hearing date: 2 October 2015

Date of Last Submission: 2 October 2015

Delivered at: Albury

Delivered on: 2 October 2015

REPRESENTATION

Solicitors for the Applicant: Ms Howlett of Keating Avery

Counsel for the Respondent: Ms Dart

Solicitors for the Respondent: Rama Myers Family Lawyers

ORDERS

1. By consent, each of the parties shall forthwith and within 7 days do all things, sign all documents and give all consents, authorities and instructions as may be necessary together with such cooperation and assistance as may be required to ensure that each party is able to obtain and each party has provided to the other all documents which would be relevant or tending to prove or disprove any allegation of fact presently raised in the proceedings, together with all documents which have been requested by either party in the nature of income tax returns and assessment notices, bank statements, superannuation statements, source documents for the preparation of income tax returns (whether for the parties individually or with respect to the Crossley Family Trust or any corporate entity in which the parties own shares or are shareholders).

2. The parties shall as soon as practicable attend mediation with an accredited Family Dispute Resolution Practitioner as agreed between the parties or failing agreement, within 14 days of this Order as nominated by the Law Society of New South Wales Solicitors Settlement Service.

3. The parties shall be responsible for ensuring that a copy of their documents as filed are provided to the mediator not less than 7 days prior to the Mediation.

4. Forthwith upon a Family Dispute Resolution Practitioner being agreed or appointed then each party shall:

   (a)Do all things, sign all documents and give all consents, authorities and instructions necessary to instruct and retain that practitioner;

   (b)Pay one half of all fees charged by the practitioner;

   (c)Attend at such times, dates and places necessary to complete mediation.

5. These proceedings are transferred to the Family Court of Australia sitting at Melbourne.

6. The Court requests that the Registrar of the Family Court of Australia, Melbourne list the proceedings for procedural directions and/or determination of the Application for interim relief contained within the Application and Response of each party as soon as practicable and otherwise deal with the matter as they considered appropriate.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ALBURY

AYC 371 of 2015

MR CROSSLEY

Applicant

And

MS CROSSLEY

Respondent

REASONS FOR JUDGMENT

1. These proceedings involve complex financial issues. It may be that with greater time and resources and vigorous case management that complexity could be explored and significantly reduced.

2. The parties to the proceedings are a husband and wife. They have a lengthy relationship. There is no issue as to jurisdiction. 

3. The Applicant in the proceedings, Mr Crossley, commenced the matter by an Application Initiating Proceedings filed on 9 September 2015. That Application is somewhat deficient in that it does not seek final relief in a fashion that is capable of being ordered by the Court.  On an interim basis, certain injunctive relief, together with Orders as to disclosure, are sought. 

4. The wife, by a Response filed 21 September 2015, seeks specific Orders on a final basis. No doubt the transactions required to achieve the outcome referred to in that Response will need some fleshing out, as it were, but in any event, the general intent of the outcome the wife desires is clear. The wife also seeks certain interim relief, including Orders to facilitate the sale of a substantial property owned by the parties. That is a property referred to throughout the evidence as “Property B”.  

5. A statement of assets and liabilities is tendered in the wife’s case, which will, for today’s purposes, be Exhibit A. It suggests that the parties have total tangible assets of approximately $10,725,000. However, the parties have a significant burden of debt. That debt would appear to be somewhere in the order of $8,300,000, or thereabouts, to $11,125,000, such that the maximum net equity in assets of the parties is described as being $2,827,219.

6. The parties are both accurate in their assessment that the matter has some pressing urgency. There are issues which require urgent attention.  There is potential financial disadvantage, significant disadvantage, for one or both of these parties if that attention is not given. However, this Court has no capacity to give it.

7. The Court’s circuit this week, one of 10 weeks of sittings in Albury for the year, has been dominated by the hearing of one case. That is no criticism of those involved in the case or the parties. They are entitled to access justice. It has had the consequence, however, that a number of matters have now been marked not reached. That hearing is due to resume this morning, this being a hearing list, not a duty list.  It is now 11.15am and the prospect of that matter even commencing today is beginning to look remote. That matter will go over part-heard, consuming further resources of the Court and of the parties involved therein.

8. The state of today’s list, 600% over listed and with a dozen or so mentions, urgent listings and interim hearings to be dealt with before the hearing list commences is, sadly, representative of the “typical day” on this circuit. The work pressures at this Registry are significant. Filings at this Registry exceed over 270 new matters per year (not including Divorces which are dealt with by a sessional Registrar). Those filings are sufficient to accommodate a fulltime Judge. 

9. The asset pool of these parties, from the material that is filed to date, involves, inter alia, a family trust of which a company would appear to be the Trustee. That company is controlled by the parties as joint shareholders and directors. A number of other companies are involved, including a company, it would seem, involves an adult child of one or both of the parties and which company has now gone into liquidation. The parties have had another business with friends, which business had owned an asset the disposal or transfer of which is the subject of some controversy.

10. There have been a significant number of transactions since separation which are in dispute, both as to their timing and their nature and effect. A significant tracing and forensic accounting exercise will be required.

11. The consequences of the relief that the wife seeks would be to frustrate and render nugatory the position that the husband advances. The husband indicates, although his Application does not make it clear – but again, I am not critical of he or his attorneys for that uncertainty, an explanation having been provided as regards disclosure and valuation issues which rendered the husband, at this time, incapable of further precision and particularisation – that he seeks to retain the Property B property, the most significant asset of these parties. 

12. That Property B property is security for a number of liabilities, including but not necessarily limited to, what is referred to as a “core (omitted) bank loan”, with an outstanding balance of $5,300,000, together with a (omitted) bank overdraft with a balance somewhere between $162,000 and $132,000. 

13. There are myriad other debts, some secured against plant, equipment and chattels, some unsecured. Some debts are the subject of guarantees by the parties or one of them.

14. What is readily apparent from reading the material of the parties is that the financial transactions involved arriving at the present asset position is complex and will require some significant disentangling to do justice between these parties. 

15. If the wife were successful in the Application which she brings seeking to sell the Property B property, (which property was advertised for sale with the agreement of the parties but as to which offering for sale and ultimate sale the husband is no longer in agreement with), the husband’s venture of farming and associated activities would come to an end. It would also require the wife to move, although that is a concession and sacrifice she is prepared to make to preserve the overall asset position of these parties. 

16. The husband, if he is successful in his position of seeking to retain the property, would need to address, and will no doubt be advised as to his responsibilities to address in the foreseeable future, the debt which must be serviced to enable that property to be kept from mortgagee possession and sale.

17. The interest payments with respect to those combined liabilities run at approximately $1,000 per day. Arrears of $75,000 to $80,000 have already accrued. And whilst that may seem a significant amount, and indeed it is, clearly on the basis of the daily interest rate, that represents arrears of two months or a little more. 

18. The parties are in the process of selling further parcels of real estate, and they are agreed that those sales are due to settle at the end of this month. That will realise a little over a million dollars. Those funds will all be consumed by the bank, and it is unclear what position that will leave the parties in as regards their indebtedness to the (omitted) Bank if not their myriad other creditors. 

19. All of the above makes it impossible for this matter to be dealt with today in the brief period of time that is available. As indicated, the matter has been listed today, it would seem as a consequence of an Application for abridgement of time, and listed before a hearing list. The hearing listed to proceed today has already been delayed in its commencement by an hour and a half. The other hearings listed today have already been advised that they will be marked not reached unless a settlement can be achieved. I am conscious that this matter is simply emblematic of the difficulties which this Court presently faces. 

20. As I have indicated, the level of filing in this registry is such that a full-time or close to full time Judicial Officer would be warranted. The Court has no resources to provide a Judicial Officer for more than the 10 weeks that are available, and indeed those 10 weeks take away from sittings at primary Registries, in this case, Parramatta, where delays continue to increase, judicial resources having shrunk from five to three in the space of 18 months. The workload does not abate. It, in fact, increases.

21. I am conscious that the oath of office that was taken by me at the time of my appointment was to “do right to all manner of people” according to the law. It is simply not possible for that oath of office to be fulfilled with the resources available. 

22. This matter requires at least half a day, if not a full day, before a Judge to be able to fully and properly ventilate the issues that arise from this interim Application alone. The Final Hearing, absent any resolution or restriction of issues to be ventilated, will clearly take more than the two days that the Federal Circuit Court’s protocol for hearing of cases on circuit dictates. I am satisfied that the Final Hearing, unless there is a significant reduction in issues in dispute and factual complexity of the matter, will take more than four days. The completion of this matter will consume considerable resources of the parties. It will consume considerable resources of the Court. They are resources that this Court simply does not have. 

23. Counsel for the parties, particularly the wife, have submitted that in light of the urgency of the case, and as this matter clearly falls within this Court’s jurisdiction, there being no monetary limit applicable with respect to financial proceedings, that the matter can and should be dealt with here There is simply no possibility that it would be so, or that if it were so, that it could occur other than by either:

    a)Sending away all other work before the Court today, including a part-heard matter; or

    b)Dealing with the matter in such a cursory and summary fashion as to do injustice to one or both (and in all probability both) parties. It is impossible to deal with the matter in accordance with the law, in 10-15 minutes and that amount of time is more than I have.

24. To deal with the matter “on the run” (as it were) would be a grave injustice. The margin for error would be enormous and the consequence of error disastrous. That would also, in all probability, simply expend further Court resources, those of the Full Court, together with public moneys, as the parties would inevitably, if successful in prosecuting an Appeal, be granted Costs Certificates. The further delay that would arise in those circumstances would be entirely prejudicial to both parties.

25. It is unacceptable in a first world nation that parties requiring access to justice cannot obtain it or obtain it conveniently and readily. But this Court has no capacity to deal with this matter and give it the attention it needs today or, as regards Final Hearing, for in excess of 3 years.

26. The other alternative to transfer is to simply adjourn the matter to enable it to be dealt with and to enable the parties to take further steps towards limiting issues. I am urged if the matter cannot be dealt with today to adjourn it to the next available duty circuit in November. That circuit is already so over listed that it is improbable that even sitting well beyond normal sitting times, that all of the work already listed could possibly be dealt with. To deal with this matter would see a dozen or so interim and urgent cases being adjourned not reached or part-heard.

27. This Court has reached its saturation level particularly on this circuit.  There is no capacity to absorb further work. There is no capacity to deal with a matter such as this in an appropriate manner in accordance with law, and to do justice, to do that which society expects, being that matters will be judicially determined in accordance with the law. It is as though the Court is a bucket into which water is tipped and a small hole at the base allows a trickle to escape as matters settle. The bucket is full, the stream of settled matters does not increase and thus all of the new work, like further water being tipped into the bucket, simply spills out and overflows.

28. In transferring the proceedings, I make clear that I do not do so purely as this Court does not have sufficient resources to deal with the case. I am satisfied that the matter meets all relevant criteria with respect to the protocols between the Courts as to the allocation of work and, more significantly by reference to Part 8 of the Federal Circuit Court Rules 2001. I will address each of the issues that I am required to address in transferring the proceedings by reference to those Rules, the relevant portion of which I incorporate herein:

    Rule 8.02 Transfer to Federal Court or Family Court

    (1) The Court may, at the request of a party or of its own motion, transfer a proceeding to the Federal Court or the Family Court.

    (2) Unless the Court otherwise orders, a request for transfer must be made on or before the first court date for the proceeding.

    (3) Unless the Court otherwise orders, the request must be included in a response or made by application supported by an affidavit.

    (4) In addition to the factors required to be considered by the Court under subsections 39(3) and (4) of the Act for transfer of proceedings to the Federal Court or the Family Court, the following factors are relevant:

    (a) whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court or the Family Court on one or more of the points in issue;

    (b) whether, if the proceeding is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceeding is not transferred;

    (c) whether the proceeding will be heard earlier in the Court;

    (d) the availability of particular procedures appropriate for the class of proceeding;

    (e) the wishes of the parties.

29. I am required to consider whether the proceedings involve questions of general importance such that it is desirable that a decision be made by the superior Court. In these proceedings the parties make a myriad of allegations with respect to each other and other persons as to what might be described as “wastage” and financial wrongdoing, especially with respect to their responsibilities as Directors or Trustees.

30. There are potentially issues that would arise with respect to the application or at least consideration of Corporations law, issues potentially outside of this Court’s jurisdiction. There are significant issues to address as regards liabilities that will be generated from particular transactions, including, potentially, the very transaction that I am urged to address today – the sale of a significant parcel of real estate owned by a family trust and the Trustee of which is a corporation of which the parties are Directors.

31. The significant basis upon which the attention of the superior Court would be preferred relates not so much to issues of general legal importance as much as the factual depth and complexity of these proceedings. There will need to be significant tracing and accounting and there are already apparent significant issues with respect to disclosure and discovery. In that regard, this Court, as made clear by the Federal Circuit Court of Australia Act 1999, is required to act with informality. In that regard, Part 14 of the Federal Circuit Court Rules 2001 precludes formal discovery without leave.

32. The parties are significantly at odds as to what is required for full and frank disclosure as well as being unable to agree what disclosure has occurred already and what needs to occur in the future. I am satisfied that the procedures of the superior Court in relation to discovery, interrogatories and the like, as well as specific judicial management would benefit this case

33. This case requires significant judicial resources. This Court simply does not have them. I do not suggest that the superior Court’s judicial resources are any better. But the management that can occur through Registrars, for example, is needed.

34. I am required to consider whether, if the proceedings are transferred, they are likely to be heard and determined at less cost and more convenience to the parties. I cannot suggest that this is necessarily so. The cost that these parties will incur will be substantial, irrespective of the Court the matter is dealt with by.

35. The parties would certainly benefit from the provisions of the Family Law Rules 2004 applying to their dispute rather than this Court’s Rules, focussed and based upon informality as they. Certainly, it will be less convenient for the parties. They live in rural New South Wales. They will be required to travel to Melbourne to address the proceedings.  Their attorneys are also in this region. That will create some inconvenience and possibly cost with the instruction of town agents.  It cannot be avoided as even if the matter remained in this Court it would need to be transferred to a major Registry.

36. I am required to consider whether the proceedings will be heard earlier in the superior Court. I do not know whether that is so or not. I am not aware of the present listing delays in the Family Court of Australia generally, let alone in the Melbourne Registry. I am, however, intimately aware of the hearing delays in this Registry.

1. These proceedings, doing the best that I can, could not possibly be listed for hearing, assuming that listing dates were given today, prior to November 2016. Indeed, it would be difficult for it to be accommodated even in those dates at this point in time. More importantly, the matter is not ready to be listed for hearing. Realistically, the matter could not be heard before 2017 and possibly 2018.

2. There is much to be done.  The parties are agreed that they need to attend some form of Mediation or Conciliation. I propose to make an Order for the parties to attend Mediation as soon as practicable. That may well assist not only the parties but future case management of the proceedings. It may also, subject to how quickly that can be arranged, aid them in addressing the disclosure issues and interim issues presenting today.

3. The matter could not be heard later in the superior Court than it could be heard in this Court. 

4. There is simply no capacity to list this matter at this point in time.  There is no listing to which the matter could even be adjourned for mention before March 2016. The 2016 Hearing diary is nearly full. The few remaining listings are required for part-heard and not reached matters. The matter will clearly need more than a 2 day hearing making it unsuitable for hearing on the circuit. It will need a final hearing of more than 4 days.

5. I must consider the availability of particular procedures. This is a complex financial matter which would benefit from the application of strident judicial management with the assistance of Registrars and other case management tools available in the Family Court of Australia but not this Court. 

6. Whilst I have great belief in and support for the docket system, the difficulty with it is that all management must be undertaken by a single Judge addressing the matter. There is, particularly on circuit, no prospect of assistance from other Judicial Officers nor Registrars or case managers. It all falls to me. I have no capacity to devote the attention to this matter which it warrants, deserves and is entitled to expect.

7. The matter requires the Family Law Rules 2004 in relation to disclosure and discovery if it is to continue with the level of complexity presently presenting and the level of factual dispute and controversy apparent, even at this early stage.

8. I must also consider the wishes of the parties.  Clearly, the parties do not wish the matter to be transferred. They wish it to be heard today. I have no capacity to hear it today. I could not hear it today with the limited time available and could not, in that time, do justice to the parties. There would be the potential to do great injustice.

9. In those circumstances, I am satisfied that whilst it is inconvenient for the parties – and I accept that it is so – it would be preferable to transfer the proceedings to the Family Court of Australia.

10. Transfer will, no doubt, require that the parties file an Application in a Case seeking urgent listing, perhaps to repeat the pleas for relief that they already have placed before the Court in relation to interim and Interlocutory relief. That cannot be avoided. The matter simply cannot be addressed in this circuit or this Court with what is available.

11. In those circumstances and for those reasons I make Orders as follows (see Orders).

I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Judge Harman

Associate: 

Date: 10 November 2015