D’Cruz and Pierce and Ors

[2010] FamCA 959

FAMILY COURT OF AUSTRALIA

D’CRUZ & PIERCE AND ORS [2010] FamCA 959

FAMILY LAW – PROPERTY – Case management

APPLICANT: Ms D’Cruz

RESPONDENT: Mr Pierce

SECOND RESPONDENT: C Pierce

FIFTH RESPONDENT: Mr T

SIXTH RESPONDENT: MT Trustees Ltd

INTERVENORS: O’Donnell Salzano Lawyers Pty Ltd

FILE NUMBER: MLF 3135 of 2004

DATE DELIVERED: 29 September 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Young J

HEARING DATE: 29 September 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Brown SC

SOLICITOR FOR THE APPLICANT: KENNEDY WISEWOULDS

COUNSEL FOR THE RESPONDENT: Mr Kiernan

SOLICITOR FOR THE RESPONDENT: GRIFFIN SWEENEY LAWYERS

COUNSEL FOR THE SECOND RESPONDENT: Mr Nicholson

SOLICITOR FOR THE SECOND RESPONDENT: PEARCE WEBSTER DUGDALES

COUNSEL FOR THE FITH RESPONDENT: MR FILDES

SOLICITOR FOR THE FIFTH RESPONDENT: MIDDLETONS

COUNSEL FOR THE SIXTH RESPONDENT:

SOLICITOR FOR THE SIXTH RESPONDENT:

COUNSEL FOR THE INTERVENORS: MR DALE

SOLICITOR FOR THE INTERVENORS: O’DONNELL SALZANO LAWYERS PTY LTD

Orders

IT IS ORDERED BY CONSENT:

1. THAT the Third and Fourth Named Respondents be removed from the proceedings.

IT IS FURTHER ORDERED:

1. THAT leave be granted to the wife’s solicitors to make, file and serve this day an Application in a Case (Court Index document 264) and the wife’s affidavit in support thereof (Court Index Document 265).

2. THAT within 7 days the wife’s solicitors serve each of the above documents upon the firm of solicitors, WH Firm, and the managing partner or senior partner of that firm file an affidavit of such service forthwith with the Court.

3. THAT within a further 7 days, both the firm WH and its partners, other than the Fifth Named Respondent, advise all parties and the Court if they intend to intervene or otherwise be heard in the proceedings.

4. THAT the Fifth Named Respondent make, file and serve any Response and affidavits upon which he intends to rely by 22 October 2010.

5. THAT the Respondent and the Second Named Respondent make, file and serve any Response or affidavits upon which each of them intends to rely by 29 October 2010.

6. THAT any further intervening persons (or applicants to intervene) make, file and serve any further Responses or affidavits upon which they intend to rely by 29 October 2010.

7. THAT the wife make, file and serve any further Amended Application or responding affidavit upon which she intends to rely by 3 November 2010.

8. THAT the further case management hearing of this matter be listed for 10:00 a.m. on Wednesday 10 November 2010 before Young J.

9. THAT the ex tempore reasons for judgment be transcribed and placed upon the Court file.

10. THAT the costs of and incidental to this application and its Orders made this day (and which took less than 1 hour of Court time) be reserved to the adjourned case management date.

IT IS CERTIFIED

THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Senior Counsel for the wife, counsel for each of the husband and Second Named Respondent and the solicitor appearing as counsel for the Fifth Named Respondent.

IT IS ORDERED BY CONSENT:

1. THAT the Application in a Case filed on behalf of the wife on 11 August 2010 be discharged (it having been replaced by the subsequently filed amended orders sought).

2. THAT the Second Named Respondent, C Pierce, do all acts and things and sign all such documents as may be necessary to authorise and direct AX & Staff, real estate agents, to provide all information and documentation to the wife or the solicitors acting on behalf of the wife with respect to the sale of the property situate at and known as … in the State of Victoria (“the coastal property”) as may be reasonably requested by the wife or her solicitors from time to time.

3. THAT the wife be at liberty to register a caveat secured against the title to the coastal property pending settlement of its sale (as was Ordered by Dessau J in paragraph 1 of her Orders pronounced 10 September 2010).

4. THAT upon the compliance by the Second Named Respondent with Orders 5 and 6 hereof, the husband and the Second Named Respondent do all such acts and things and sign all such documents as may be necessary and required to effect the retirement of the Second Named Respondent as appointer of the MT Trust and appoint in lieu thereof the husband and the wife as joint appointers of the MT Trust.

5. THAT within 7 days of the date of these Orders, the Second Named Respondent do all such acts and things to direct and authorise MT Trustees Ltd to provide to the solicitors for the wife a copy of the following:

   a.an accounting of all assets held by the MT Trust and/or the DM Trust from the date of inception of the said trusts to the financial year ended 30 June 2010;

   b.financial statements or reports and tax returns of the MT Trust and the DM Trust, from the date of inception of the said trusts to the financial year ended 30 June 2010;

   c.statements for all accounts held by or on behalf of the MT Trust at any bank or financial institution from the date of inception of the said account to date; and

   d.all documents and correspondence including email correspondence passing between MT Trustees Ltd or DM Ltd and the Second Named Respondent.

6. THAT within 7 days of the date of these Orders, the Second Named Respondent do all such acts and things and give all necessary instructions to direct and authorise the trustee of the Education Trust (“the Education Trust”) to provide to the solicitors for the wife a copy of the following:

   a.an accounting of all assets held by the Education Trust from the date of inception of the Education Trust to the financial year ended 30 June 2010;

   b.financial statements or reports and tax returns of the Education trust, from the date of inception of the Education Trust to the financial year ended 30 June 2010;

   c.statements for all accounts held by or on behalf of the Education Trust at any bank or financial institution from the date of inception of the said account to date;

   d.all documents and correspondence including email correspondence passing between the said trustee and the Second Named Respondent and/or the Fifth Named Respondent; and

   e.an accounting of all education fees and expenses paid from the Education Trust to date.

IT IS FURTHER ORDERED (NOT BY CONSENT):

1. THAT the Orders sought in paragraphs 2 and 3 of the wife’s Amended Application in a Case filed 31 August 2010 be adjourned for case management and further hearing at 10:00 a.m. on 10 November 2010 before Young J.

2. THAT within 21 days of the date of these Orders the Second Named Respondent do all acts and things and make all reasonable and proper investigations and provide documents as are or should be within his power, possession and control so as to wholly ascertain and disclose:

   a.the source of funds previously paid to EB Finance Ltd and the validity and quantum of the mortgage debt as claimed; and

   b.the proper identification and disclosure of funds held by the Education Trust being provided as an offset security for the EB Finance mortgage; and

   c.all repayments or other financial dealings andl transactions by or on behalf of or associated with the Second Named Respondent in repaying any monies, costs, interest or penalties pursuant to that mortgage liability.

3. THAT all questions of costs of and incidental to the hearing this day be reserved to the further hearing on the adjourned date of 10 November 2010.

4. THAT the ex tempore reasons for judgment be transcribed, placed upon the Court file and made available to all parties.

IT IS DIRECTED:

1. THE applicant and the respondents (and all of them) be present in Court at the adjourned hearing date of 10 November 2010.

IT IS CERTIFIED:

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 each of the husband and Second Named Respondent.

IT IS NOTED:

A.THAT the proceedings dealt with in these Orders occupied approximately 2 hours of Court time this day.

B.THAT Mr Dale, solicitor, whose legal firm is an intervener in the proceedings was present at Court this day. On an amicus curiae basis, he advised that he and the solicitor engaged to represent G Investments Pty Ltd, Mr Keith James of Hall and Wilcox, would be available to confer and provide timely information and advice to the various respondents in the proceedings as to the ongoing financial and taxation discussions with the Australian Taxation Office.

C.AT the conclusion of this hearing counsel for all parties raised or endorsed the request for the costs judgment to be delivered pursuant to the costs reserved by Dessau J in paragraphs 11, 12 and 13 of her Orders pronounced on 29 October 2008. The Court was advised that all written submissions including supplementary submissions for costs were filed in this matter on or prior to her Honour’s removal of herself from the hearing on 10 September 2010.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 3135 of 2004

MS D’CRUZ

Applicant

And

MR PIERCE

Respondent

And

C PIERCE
Second Respondent

And

MR T
Fifth Respondent

And

MT TRUSTEES LTD
Sixth Respondent

And

O’DONNELL SALZANO LAWYERS PTY LTD
(Intervenors)

REASONS FOR JUDGMENT

1. The matter of Pierce & D’Cruz and Others has now been transferred to my Judicial Docket.  The first application in a case that comes before me is identified as number 264 in the Court Index of case documents.  It is an application which, by consent with those at the bar table today, I have given leave to be filed and made returnable this day.  The wife is applicant and seeks an order against the Fifth Respondent, Mr T, to do all acts and things as are necessary to pay a sum of $555,885.63 to an interest bearing account held on behalf of the husband and wife by the wife’s solicitors, pending further order of the Court. 

2. In support of that application a substantial affidavit with many annexures has been filed by the wife.  In particular paragraph 27 of that affidavit provides a breakdown of the three categories of moneys in respect of which repayment is sought.  That affidavit has also been filed today, and is document 265 on the Court Index.  It would seem that both the application and the affidavit have only recently been served upon the solicitor now appearing for the Fifth Respondent.  Time is sought for that application and affidavit to be read and responded to. 

3. In the proceedings before me today, Mr Brown of Senior Counsel appears for the wife.  Mr Kiernan of Counsel appears for the husband, who is designated as Respondent. The Second Respondent is represented by Mr Nicholson of Counsel. Mr Fildes, solicitor, represents the Fifth Respondent, the named solicitor Mr T.  For the purposes of this discrete application before the court I do not further identify the various continuing respondents or those who, by agreement, will shortly be struck from the court record. 

4. Dealing with the application in a case the first issue is that it must have been served upon all potential respondents.  On a reading of the documents, particularly paragraph 27 of the wife’s affidavit, orders are sought not merely against the Fifth Respondent, who is the individual solicitor, but, otherwise, against the legal firm WH.  It will, therefore, be necessary for that firm and now, seemingly by agreement, the managing partner of that firm on behalf of other equity or salaried partners, should also be served.  I require service of all documents upon the firm and the managing partner to be completed within seven days.  What then must occur is that there must be a nomination by both the firm and/or other partners of that firm who may personally be affected by the orders sought, as it may involve a repayment of moneys previously distributed to indicate whether they will also seek to be heard in the proceedings.  If they wish to intervene I will hear their applications on the further case management day that I will shortly affix for these continuing proceedings.

5. I will require the Fifth Respondent to file any response and affidavit by 22 October.  I will require both the Respondent and the Second Respondent to file any further response or affidavits by 29 October.  I do not encourage any further affidavits from the wife but, if in reply, and if both necessary and of assistance to the Court, any responding affidavit may be filed on her behalf by 3 November.  I will fix this matter for further case mention and case management on Wednesday, 10 November.  I will prepare discrete orders to facilitate that outcome, and, seemingly by agreement with those at the bar table, Mr Fildes may then be excused, and the remaining considerable matters before the Court this day can be mentioned.  I will have these brief ex tempore reasons transcribed and placed upon the court file.

ORDERS DELIVERED

RECORDED  :  NOT TRANSCRIBED

1. This is the second of my brief reasons given, and orders made, this day in the matter of Pierce & D’Cruz and Others.   Mr Brown of Senior Counsel appears for the wife, Mr Kiernan of Counsel appears for the husband (who is absent from Court for these proceedings today) and Mr Nicholson of Counsel appears for the Second Respondent who is in court. Mr Dale, solicitor, and professionally associated with the Intervenors, was at Court on an amicus curiae basis, and has provided some level of assistance to the Court by way of information provided.  The previous structure of orders in this matter included the Third and Fourth Respondents and, by consent, they will be now removed from orders to be pronounced this day. 

RECORDED  :  NOT TRANSCRIBED

1. The wife’s application in the case was filed 11 August 2010 and is document 250 in the Court Index.  That application was surpassed by the amended application in the case filed on behalf of the wife on 31 August, document 253 in the Court Index.  It is the orders sought in that application that have occupied the further time of the court this morning.  It is agreed, and I will make, orders in the terms of paragraphs 7 and 9, by consent.  I observe that her Honour, Dessau J has previously provided in her orders of 10 September 2010 for the sale of the coastal property, and that sale has yet to occur. 

2. As to paragraph 1, an order was sought to effect the retirement of the Second Respondent as appointer of the MT Trust, and, in lieu thereof, for the husband and wife to be jointly appointed to that position.  That, seemingly, is agreed by all parties, save as to the timing.  I will require that effective retirement and the co-appointment of the husband and wife to occur 21 days hereafter.  I do so to ensure that within that 21-day period the Second Respondent may account to each of the solicitors for the husband and wife for the documents and information sought in paragraphs 5 and 6 of this application now before the Court.  I will not make the order in paragraph 2 as sought. 

3. I do not dismiss that application and it can be adjourned to a further case mention date on 10 November of this year before me.  I have expressed in discussion with Senior Counsel for the wife that more material is required from her to support that application and, in particular, she must deal with the position and circumstances of both Mr James, solicitor, and Mr Dale, solicitor, and views that they may have upon the importance of the current trustees remaining.  I carefully make no finding on any aspect of this application, be it as to the removal of trustees, the appointment of Mr OW, or any other trustee, or requiring there to be co-trustees, including Mr OW and the incumbent trustees.  All of those matters are properly for another day and largely depend upon the continued level of co-operation, disclosure and assistance provided professionally, and to the interests of the MT Trust.  As to Order 3 that was not pursued at this time by Senior Counsel for the wife and, likewise, that is a matter which can remain before me on the adjourned hearing date.

4. As to paragraph 4, and after much discussion with those at the bar table, I will pronounce an order but will not do so for the purpose of procuring a discharge of the mortgage identified therein.  What is necessary is that there be a full and proper investigation and disclosure of the source of funds, and management of funds by EB Finance Limited, including as to supporting the validity or otherwise of the mortgage debt as claimed.  Mr Brown has requested the Second Respondent provide and disclose all information and documents reasonably within his power, possession or control, and which identify circumstances leading to funds held by the Education Trust being provided as offset security to EB Finance Limited.  The second aspect of disclosure is as to any moneys paid by way of principal interest by, or on behalf of, the Second Respondent as any form of loan repayment to the EB Finance Trust, or by way of repayment of mortgage or otherwise, whether directly by, or on behalf of, the Second Respondent.  As such, and if any such moneys were paid, they would be known to the Second Respondent, and he certainly would be in a position to provide careful and correct information to the Court.

5. As I earlier said, the orders sought in paragraphs 5 and 6 thereof are to be provided to both solicitors for the husband and the wife, and within the 21 days.  Thus, that is to be undertaken by the Second Respondent while he remains in his positions within the MT Trust.  Order 8 is not pursued before me, as those matters were the subject of orders made by Dessau J.  Otherwise, as to costs of this day, and with the caveat that reservation of costs hereafter creates difficulties, particularly when barristers, solicitors and sometimes judges are different in the hearing from time to time, I will reserve them, but only to me on 10 November 2010.

6. The other matter that did become apparent today was that there needs to be constructive and meaningful discussion between all parties, and professional advisers, on the Australian taxation claim, and the quantum, and basis thereof.  I record in these brief ex tempore reasons that Mr Dale volunteered to the Court that he and Mr James would provide the parties, including the wife, and her legal and accounting advisers, ongoing information and knowledge.  What Senior Counsel for the wife highlighted was more their involvement in the negotiating process, and effectively for “a seat at the table” with the Australian Taxation Office.  I carefully do not make that order today, but it may be a matter in the interests of justice that can, and should, arise.  I first leave that matter to informed discussion between the professional advisers. 

7. The other matter that I highlight is that, in my various discussions with Counsel across the bar table, and in the presence of those clients who are here today, I emphasised the necessity to concentrate upon the available net pool of assets.  The division of assets under section 79 is a task required of the Court, but generally that is not the most difficult and certainly not the most time-consuming issue.  All efforts and financial expenditure currently in this case are directed towards ascertaining the assets and liabilities of the parties.  It is when that net asset pool is known that there will able to be held a meaningful hearing of the division of property aspects of the case, inclusive of all interested parties, intervenors and respondents.  Currently that seems a long way off and much time, effort and money will be expended by the parties as they pursue that net asset position.  Again, I do not comment further.  I say, only, what all experienced lawyers and accountants know to be the case, that it is good to remind the clients of that scenario.  I will have these brief reasons transcribed, placed upon the court file and made available to the parties.

I certify that the preceding thirteen
(13) paragraphs are a true copy of the reasons
for judgment of the Honourable Justice Young
delivered on 29 September 2010.

Associate: ……………………………………………………………

Date:  …………………………………………………………………