D'Cruz and Pierce and Ors

[2007] FamCA 1514

FAMILY COURT OF AUSTRALIA

D'CRUZ & PIERCE AND ORS [2007] FamCA 1514

FAMILY LAW – PRACTICE AND PROCEDURE – Application by third party for wife to particularise her application for final orders and relief sought against third party not granted – Wife’s application for further discovery and provision of information by third party granted

Family Law Act 1975 (Cth)

Gould & Gould; Swire Investments Ltd (1993) FLC 92-434

APPLICANT: Ms D’Cruz

1^ST RESPONDENT: Mr Pierce

2^ND  RESPONDENT: Mr C Pierce

3^RD RESPONDENT: DM Pty Ltd

4^TH RESPONDENT: D Nominees Ltd

5^TH RESPONDENT: Mr T

FILE NUMBER: MLF 3135 of 2004

DATE DELIVERED: 20 December 2007

PLACE DELIVERED: Melbourne

JUDGMENT OF: Bennett J

HEARING DATE: 26 & 30 October 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr D. Brown

SOLICITOR FOR THE APPLICANT: Kennedy Wisewoulds

COUNSEL FOR THE 1^ST RESPONDENT: Mr P.M. O'Shannessy

SOLICITOR FOR THE 1^ST RESPONDENT: Griffin Sweeney & Co

COUNSEL FOR THE 2^ND RESPONDENT: Mr T. North SC

SOLICITOR FOR THE 2^ND RESPONDENT: Taylor Splatt & Partners

COUNSEL FOR THE 3^RD RESPONDENT: No Appearance

SOLICITOR FOR THE 3^RD RESPONDENT:

COUNSEL FOR THE 4^TH RESPONDENT: No Appearance

SOLICITOR FOR THE 4^TH RESPONDENT:

COUNSEL FOR THE 5^TH RESPONDENT: Mr M. Grant

SOLICITOR FOR THE 5^TH RESPONDENT: White Cleland

Orders

1. That the wife have leave to join MT Trustees Limited (ATF the MT Trust) as a party in these proceedings. 

2. That by not later than 30 January 2008, Mr C Pierce make file and serve an affidavit deposing to:

   (a)All funds received by him, PK Pty Ltd, D Nominees Pty Ltd and/or DM Limited from G Investments or from funds which at any stage due to G Investments as a consequence of his commercial enterprises with the husband;

   (b)The sale of shares in ARC and/or ADL Ltd by DM Limited including the quantum of the funds received;

   (c)How the funds received and/or proceeds of sale of shares referred to in (a) and (b) hereof have been applied since their receipt;

   (d)The current whereabouts, quantum and nature or investment of such funds (including the current assets and investments of PK Pty Ltd);

   (e)Particulars of all success fees or other payments paid by DM Limited to MFG Limited;

   (f)Particulars of all funds paid to the … Education Trust.

3. That Mr C Pierce forthwith make available to an expert nominated by the wife the original of the agreement dated 14 June 1996 (being annexure B of to his October 2005 affidavit) for the purpose of expert analysis by the wife’s nominated expert provided that the wife be and is hereby restrained from taking possession of the document personally.

4. That the application of the wife for injunctive relief against MT Trustees Ltd, being paragraph 2 of the wife’s Form 2A amended response filed

   
   

   10 September 2007 be adjourned sine die. 

5. Any party seeking to make application for another party to pay their costs of and incidental to this interim proceeding file and serve a written submission to that effect within 28 days and any party against whom the costs application is made file and serve any written submission in response thereto within a further 28 days.

6. Any party making a written submission in relation to costs accompany that submission by a memorandum of such costs calculated in accordance with the scale provided in the Family Law Rules 2004.

7. That all interim applications be and are hereby dismissed. 

IT IS NOTED that publication of this judgment under the pseudonym D’Cruz & Pierce 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  

First Respondent

And

MR C PIERCE  

Second Respondent

And

DM PTY LTD

Third Respondent

And

D NOMINEES LTD

Fourth Respondent

And

MR T

Fifth Respondent

REASONS FOR JUDGMENT

1. This matter comes before me, in my capacity as the Judge manager, for determination of interim applications brought by three of the five parties to the litigation. 

2. Apart from the interim issues the matter is to be allocated a special fixture for final determination in May 2008.  I have ascertained from the parties and their practitioners that 19 to 30 May 2008 inclusive are dates suitable to all of them and I had referred the matter for allocation of a final hearing to Mushin J or, in his absence, Young J.  The matter has now been allocated to Dessau J and the parties should await notification from her Honour’s chambers as to a mention date. 

3. The issues in respect of which interim applications have been made were reduced in light of the matter being allocated a final hearing in the first half of next year, estimated to take two court sitting weeks.  That is not a unanimous estimate.  Of the five parties concerned, the second-named respondent, Mr C Pierce, who is represented by Mr North SC, was not able to give an estimate of time.  Mr North made clear that in the absence of particularisation of the wife's claim against his client, he is unable to say how long the litigation will require or to say whether the matter will be ready for trial in May 2008.  There is an element of chicken and egg here because one of the principal interim issues which I am required to determine is the time by which the wife is to particularise her claim which she says she cannot do until the further information is provided by the second named respondent.  

4. The interim applications fell under the following categories:

   a)The application of Mr T, who is trustee of the M Pierce Trust to permit him to borrow further sums against a trust property in the Bayside area in which the wife lives and the children N born … April 1997 and L born … November 1993 reside whilst in her care.  Orders had been made by consent on 6 September 2007 permitting Mr T to borrow $650,000 on account of the $800,000 he sought by way of borrowings.  The wife seeks an interim sale of farm property which the M Pierce Trust owns (the coastal property), and the trustee Mr T was opposing such sale.  This is an interim issue which has been eliminated by virtue of the matter proceeding to final determination in the first half of next year. 

   b)The application of the second-named respondent, Mr C Pierce, for the wife to particularise the relief she seeks under s 106B and to otherwise articulate whatever other claim she has against him or entities associated with him.  I will determine this application.

   c)There is also the application of the wife for Mr C Pierce to particularise funds which were received by him from the sale of a business and settlement of litigation which was concluded in 2003.  I will come to the fairly detailed and far-reaching orders sought by the wife later.

   d)There is the wife's application for Mr C Pierce to make available the original document dated 14 June 1996 which is an agreement governing the distribution of the proceeds of the sale of business and fruits of litigation referred to earlier.

   e)The wife makes application to join MT Trustees Pty Ltd being an entity incorporated in New Zealand and trustee of the MT Trust.  This entity received some $14 million in cash by way of a resettlement of property from DM Trust.  DM Ltd is named as the third respondent in the proceedings before me but, since I assumed management of this matter in 2006, DM Ltd has not been an active participant in the proceedings.  It has now been ascertained that some $14 million of moneys which the wife asserts are proceeds of the sale of business and fruits of litigation has been transferred to MT Trustees Pty Ltd.  The wife seeks to enjoin MT Trustees Pty Ltd from dealing with those moneys pending a final determination of these proceedings.  That is an application which the wife concedes is not in a position to proceed. 

5. No-one opposes the joinder of MT Trustees Ltd and I will order it accordingly.  It is convenient to set out here some details about MT Trustees Ltd and its significance vis a vis DM Ltd.  It is that the corpus of the DM Trust has been transferred to the MT Trust.  This is one of the more significant events which has recently come to light in these proceedings. 

6. At paragraphs 10 to 16 of the wife's affidavit sworn 3 September 2007, she deposes as follows:-

   10. Amongst the documents also provided by [Mr C Pierce] was a document being a copy of a Deed of Resettlement of [DM] Ltd (as disposing trustee) and [MT] Trustees Ltd (as the receiving trustee).  In that document paragraph 4 discloses:-

   The disposing trustee has disclosed to the receiving trustee that there was an initial attempt to join the disposing trustee in some matrimonial proceedings of [the husband] and his wife in the Family Court of Australia.  The disposing trustee has not acknowledged the proceedings.  It is further acknowledged that [Mr C Pierce] the appointor and guardian of both the disposing and receiving trust has been served with proceedings in Australia.  Some of the claims against Mr [Pierce] ([Mr C Pierce]) relates to his positions with the disposing trustee.  To ensure the disposing trustee and [Mr C Pierce] are not put in the position of being in contempt of court for any future judgments, [Mr C Pierce] and the disposing trustee have only approved of this resettlement and the appointment of property to the receiving trust on the basis that if there is any court imposed decision on either of them which requires the payment of funds or other terms by the disposing trustee of any other liability, then the receiving trustee accepts and acknowledges that it will pay upon demand any such liability or where possible take over and comply with any conditions as may be imposed on the disposing trustee and will indemnify the disposing trustee accordingly.

   11. [Mr C Pierce] used to live at [the M Street property] and that is the registered address of [PK] Pty Ltd, an entity of the shares in which are owned by him.

   12. In the financial statements for the [DM] Trust for the year ended 31 March 2006, disclosure is made of funds totalling $12,391,468 being held as current assets of that trust.  Those accounts also disclose that during the year ended 31 March 2006 that $12 million sum has been transferred from the trust.  Annexed hereto and marked with the letter JDC7 is a copy of the financial statement for the year ended 31 March 2006, together with the minute book resolution of trustees dated 15 June 2006.

   13. In the financial statements for [MT] Trustees Ltd, as trustee for the [MT] Trust for the year ended 31 March 2006, the balance sheet discloses the existence of the said $12 million sum having been deposited into the accounts of that trust.  The 2007 financial statements continue to disclose current assets totalling $12 million.  Significant distributions have been made from the [MT] Trust but I am unable to identify as to whom those distributions were made and for what purpose.

   14. Further annexed hereto and marked with the letter JDC8 is a copy of the New Zealand Companies Office Search of the company [MT] Trustees Ltd company number […] as at […] June 2007.  The directors of the company [Mr WN], appointed […] January 2006, and [Mr ES], appointed […] January 2006.  They also hold equal shares in the trustee company.

   15. The directors and shareholders of [DM] Ltd were also [Mr ES] and [Mr WN].  Annexed hereto and marked with the letter JDC9 is a copy of the New Zealand Companies Office Search in relation to [DM] Ltd as at […] June 2005.

   16. Given the depletion of funds and the movement from [DM] Trust to [MT] Trust of all of [DM]'s assets apparently in response to these court proceedings, I am concerned that the funds may be further depleted or moved, and seek an order preserving such funds until my application for final orders is heard and determined.

7. The directors of MT Trustees Ltd are ES and WN Accountants in New Zealand.  The appointor and settlor of MT Trust is the second named respondent Mr C Pierce. 

8. I was informed by counsel for the second named respondent that the only material difference between MT Trustees Ltd and DM Trust is that the beneficiaries of the DM Trust were the grandchildren of Mr C Pierce, the paternal grandmother of the children in these proceedings, and MRG Limited.  The trustees of the MT Trust are Mr C Pierce and the paternal grandmother and MRG Limited. 

9. I was informed by counsel for the second named respondent that the purpose of the resettlement was to obtain for the trust "better reporting provisions" than pertained to the DM Trust.  I was also informed that notwithstanding that Mr C Pierce is the appointor of the MT Trust, as well as a beneficiary of it, that he could not play any part in the acknowledgment by MT Trustees Ltd of these proceedings. 

10. Insofar as the wife seeks injunctive relief against MT Trustees Ltd, senior counsel representing her acknowledges that the wife is not in a position to proceed with that application today as MT Trustees Ltd has not been served with notice of today's proceedings.  In that respect, the affidavit of Ms LC sworn 3 October 2007 states that she sent the wife's Form 2A response filed 3 September 2007 to the trustees, together with a copy of the affidavit of the wife sworn 3 September 2007 and a copy of the wife's amended Form 2A response to an application in a case filed 10 September 2007 to the trustees on 14 September 2007.  She deposes to having received notification from New Zealand Post that the documents were duly delivered and signed for on

    
    19 September 2007

    at 6:16am.  It is common ground that the documents with which MT Trustees Ltd has notice did not disclose today as a hearing date of the proceedings. 

11. Apparently, neither the MT or DM trusts is prepared to acknowledge these proceedings.  The second named respondent is not prepared to facilitate any acknowledgment by, or service on, the trusts notwithstanding that he has effective control of both.  Ultimately, the ability to prove service may be a matter which goes more to enforcement of an order than to due process or procedural fairness.  However, if the wife seeks to proceed with applications against MT Trustees Ltd, she may have to effect service in accordance with the arrangements in force between Australia and New Zealand or our Rules (or both).  Counsel for the wife was not prepared to make submissions in this respect. The application for injunctive relief will be adjourned sine die with liberty to the wife to bring it back on.

12. The only live issues on an interim basis are those between the second named respondent Mr C Pierce, and the wife. 

13. The second named respondent relies upon the following documents:-

    a)submissions drawn by Mr North SC which run to 13 pages but which are not dated and do not bear a date stamp for filing;

    b)the application in a case filed on behalf of Mr C Pierce on 24 August 2007;

    c)the affidavit of Mr C Pierce sworn 23 August 2007;

    d)the affidavit of Mr C Pierce sworn 19 September 2007;

    e)the affidavit of Alan Henry Splatt (solicitor for Mr C Pierce) sworn 22 October 2007;

    f)the affidavit of Mr C Pierce sworn 24 October 2007.

14. The wife relies on the following documents:-

    a)her amended response to an application in a case filed 10 September 2007;

    b)her outline of submissions filed 3 October 2007;

    c)her submissions in response to the submissions of the second respondent (Mr C Pierce) filed 24 October 2007;

    d)the affidavit of the wife sworn 3 September 2007;

    e)the affidavit of service by Ms LC, to which I have earlier referred, sworn 3 October 2007.

15. Reference was made to the wife's amended form 1 application filed 16 August 2005, as well as to the order made by Guest J on 6 September 2007.  Each party made reference to some of the other party’s earlier sworn evidence.  Additionally there were several exhibits. 

Particularisation of the wife’s claim

1. Mr North’s written submissions state:-

   [4].The relief sought by Mr [C Pierce] in his application is that each party seeking final orders in this matter provide the Respondent thereto within 30 days hereof with a statement setting out full particulars of:-

   (a) each order sought by that party against the other;

   (b)full particulars of the facts or matters or documents upon which that party relies in support of that application; and

   (c) copies of any documents so relied upon. 

2. Mr North relied on the decision of the Full Court in Gould & Gould; Swire Investments Ltd (1993) FLC 92-434 and, in particular, to the following comments of Fogarty J (with whom Nicholson CJ & Finn J agreed) at 80,449:-

   Ordinarily, where in litigation orders are sought against a person, that person is made a party in the proceedings as the respondent or defendant (as the case may be). The process also identifies the nature and basis of the claim. It is then served upon that person in accordance with the practice of the Court in question. This is an aspect of the overall principles of natural justice, namely, that a person against whom a claim is made must be given notice of that claim and a reasonable opportunity to be heard: see the discussion by the High Court in Taylor v Taylor, (1979) FLC 90 -674, esp. per Gibbs J at p.78,589.

3. Gould’s case was largely concerned with the constitutionality of the precursor to s 106B and some consideration was given as to the mechanics of joining third parties.  The passage above follows a discussion about the merits of naming the third parties in the title to proceedings as well as according them due process. It was no where suggested in Gould’s case, and I do not understand it to be suggested by the wife in the present case, that third parties should not have notice of orders sought against them and a reasonable opportunity to be heard in respect of the relief claimed.  

4. Mr North’s seeks that the wife reduce her claim against the second named respondent to a statement of claim and, vis a vis his client at least, a return to pleadings.  The difficulty with Mr North’s application for the wife to articulate her claim within 30 days is that he concedes that in some respects the wife does not have adequate information for her to be able to do so and that the most that could be ordered (or produced) at this juncture is articulation of the wife’s claim in piecemeal fashion.  That is, she should file and serve an application which specifies the orders sought but that would, more likely than not, require further amendment when the wife obtains further and wider discovery.  The information that the wife seeks is largely under the control of Mr North’s client and he opposes further discovery on the basis that the wife is yet to articulate a claim which makes the documents sought under discovery relevant to a matter in issue in the proceedings. It is a circular to say the least.

5. Mr North submits that his client is in the unsatisfactory position of having been joined as a party to these proceedings two years ago and still not having seen the wife’s case in the form of specific orders sought.  Mr North points to the fact that his client cannot formulate his defences, draw cross claims against other parties to the proceedings or make a claim against other people who are not yet joined.  

6. Mr North submits that the wife’s case is so obscure at this point that his client cannot be advised of the legal basis for it, be it under s 106B to set aside transactions and instruments, under s 78 for declaratory relief and “there may be facts that give rise to some claim under s 95.” Furthermore, that if transactions or instruments are set aside, he seeks details of the consequential relief is going sought by the wife.  In particular, does the wife seek that the asset pool be reconstituted with cash and interest or by an accounting of profits or does she claim an interest in the investment in something akin to a tracing exercise or some other equitable relief? 

1. I accept that Mr North’s client is unable at this juncture to go forward with filing his response or cross claims or joining other parties who have an interest in the proceedings.  However, that is to no small measure because the wife is still seeking to refine her case and, to that end, has sought some information and documents from Mr North’s client that he is not prepared to provide unless ordered to do so.  

2. These proceedings have not been straightforward as far as discovery is concerned. In the context of making the orders for discovery, I have made clear my views about the need to tailor discovery to the needs of the case. My decision in that regard is [2006] FamCA 1411 at paragraphs 91 to 105 inclusive. As I will discuss later in the context of further relief sought by the wife against the second named respondent, there has been some resistance by Mr North’s client to providing documentation, not by any means all information or documents but some documents and information.

3. One of the principal contentions by Mr North is that his client ought not be required to make discovery or commit to affidavit about matters which are not “in issue” between the parties.  Mr North submits that the orders sought by the wife at a final hearing must be particularised so that issues can be identified.  Once issues are identified, the question of relevance is easy to resolve and his client will discover relevant material. On the other hand, it is submitted on behalf of the wife that she cannot formulate precise orders on her application without having access to documents in the possession of control of the second named respondent.  Both parties are correct.  The issue is which should yield. 

4. I give weight to the difficulty that Mr North has in trying to formulate the precise response to a case which is not yet particularised.  However, I am satisfied that the justice of the case requires that the wife have more than the

   
   

   30 days in which to particularise her claim.  The wife’s case is not vexatious or frivolous.  She has identified her cause of action as being s 106B of the Act.  What is not known is what transactions or instruments she will seek to set aside and what consequential orders she will seek be made.  I do not limit the wife to s 106B.  However, the wife, and those who advise her, must be cognisant of the fact that the longer they leave the wife’s case not particularised, the greater will be the jeopardy that the trial dates may have to be vacated.  It will not be easy, indeed possible, to accommodate this matter later in 2008.  The wife is on notice from the second named respondent that he requires months not weeks to formulate his response to her case. 

5. An outline of each party’s case is not normally required until a few weeks before a trial. It is likely in this case that such a course would not be satisfactory or fair. It does not follow, however, that the wife should be required to specify the precise orders she seeks against all parties at a premature stage.

6. The Family Law Rules 2004 do not provide for delivery of a statement of claim or other pleadings when third parties are involved in litigation in this court. That is not to say that I cannot make orders requiring same.  However, in this case, I am not satisfied that it is warranted or reasonable to do so now.  Any statement of claim now delivered would be confined to the facts as the wife knows them and would be prone to change when further facts and information come to hand. The respondents would merely waste time and money formulating a defence or response which would have to be re-done upon any further refined claim being delivered.  It may be that the Rules should provide a regime of pleadings when the interests of third parties are concerned provision is not otherwise made.  Such rules would provide a consistent starting point for parties and those who advise them and an arrangement from which the court could depart if the justice of the case required it to be modified.  

7. In the written submissions of the wife it is stated that “in order to plead what consequential relief she seeks, the wife needs to know how much money was paid to whom, on what dates and where the money is now.”[1]

   [1] Wife’s submissions filed 24 October 2007

8. There was extensive discussion between counsel and myself. Mr North characterises this as a complex matter. I agree with his assessment. It is partially borne out by the fact that, on many occasions, Mr North had to turn to his client to get instructions about the composition of entities or the sequence of events.  Had there been lesser period of time under consideration and fewer transactions, I am confident that Mr North would have been in control of all facts.  That was not possible in this case. 

9. In the course of Mr North’s submissions on the second day of the hearing, he identified that one of the problems in a complex matter such as this one is trying to respond faithfully to inquiries “you can make honest mistakes”.  

   
   

   Mr North referred to a description which was deposed to by his client and described by him from the bar table as involving shares in one entity being partial consideration for a transaction when the shares were actually shares in another entity, ADL Ltd.  I accept that Mr North promptly corrected an impression which was otherwise misleading.  Mr North went on to make the following statement which, for the sake of accuracy, I have obtained from transcript.  He said:-

   At all times your Honour can take it that I will, if it's appropriate and proper to answer a question from your Honour about matters of fact or history, endeavour to do so with accuracy and endeavour to obtain instructions from my client, who is present in court, and hopefully not mislead your Honour - certainly wouldn't do so intentionally.  But your Honour will appreciate that many of the transactions about which your Honour made inquiry on Friday occurred the best part of a decade ago, and they themselves have their own complexity, and even without intention to mislead with respect to … any of those transactions, so far as they're within the knowledge of my client, any answer given in response to questions asked in court may well contain inaccuracy, and it's important for a number of reasons to say that.  The first is we don't seek to mislead.  The second is it's important to have it recorded that any answer is so qualified in the event that someone seeks to use it against us on a subsequent occasion, and people who may seek to act in reliance upon the answer ought properly be made aware of the qualification. 

10. That said, it is difficult to see what the wife, or the court for that matter, can rely on as having been accurate. 

11. There is sufficient complexity in the facts of this case that I am satisfied that it is quite pointless to require the wife to articulate her case, by setting out with precision what orders she seeks, until she has been able to follow the money trail and identify transactions and instruments. The provision of further information and discovery should precede the wife having to particularise her case.  I will make orders in relation to discovery.  However, as this matter is to be heard by another judicial officer in 2008, I will merely reserve to the trial judge the time frame to be imposed on the parties as to the articulation of relief sought.  

Wife’s application for the second named respondent to depose to history of financial matters

1. The next matter which I am required to decide is the wife’s application at paragraph 6 of her amended response filed 10 September 2007 in which she seeks:-

   6. [Mr C Pierce] make file and serve an affidavit deposing with particularity to:

   (a) All funds received by him, [PK] Pty Ltd, [D] Nominees Pty Ltd and/or [DM] Limited from [G Investments] or from funds which at any stage due to [G Investments];

   (b) The sale of shares in [ARC] by [DM] Limited including the quantum of the funds received;

   (c) How the funds received and/or proceeds of sale or shares have been applied since their receipt;

   (d) The current whereabouts, quantum and nature or investment of such funds (including the current assets and investments of [PK] Pty Ltd);

   (e) Full particulars of all success fees or other payments paid by [DM] to [MFG] Limited;

   (f) Full particulars of all funds paid to the […] Education Trust.

2. Mr North opposes the order.  He refers to it as a “further indulgence’ sought by the wife from which I infer that orders which I made requiring the second named respondent to make discovery may well qualify as initial indulgence(s).  It is timely to note that I regard the second named respondent as being far from lavish in his provision of material and information to the wife to date.  That is not to say that she has not been given discovery and or that he is currently in breach of orders.  However, it has not been an easy road to hoe for the wife.  

   
   

   I will set out below a few examples. 

3. On 10 October 2005 the second named respondent swore a detailed narrative[2] of his commercial dealings with the husband which he describes as “a summary of our time in business together.”  His express purpose was “to explain my claim that neither myself nor any other entity associated with me received anything to which I or it was not entitled[3].”  Inter alia, he deposed that it was agreed between the husband and himself in 1997 that from the proceeds of their business interests the husband would receive the first $6 million and the second named respondent would be entitled to the balance[4] and that is what occurred[5].  However, by paragraph 14 of the affidavit sworn by the second named respondent on 19 September 2007[6], he appears to adopt the wife’s summary of a discovered document to the effect that the distribution of the first $6 million was significantly different and largely to the benefit or at the direction of the second named respondent.[7] From the restricted vantage point of an interlocutory hearing, this appears to be a significant recasting of the evidence.  It brings into focus the submission of Mr North, in discussion, that I have recorded as follows:-

   We say that she has the information. She can piece it together for herself and then she can make her claim … [and the second named respondent will be able to assess what is relevant by way of discovery].

   [2] Folio 29 on the court file

   [3] Affidavit of Mr C Pierce sworn 10 October 2005, paragraph 8

   [4] Affidavit of Mr C Pierce sworn 10 October 2005, paragraph 37

   [5]Affidavit of Mr C Pierce sworn 10 October 2005, paragraph 43

   [6] Folio 119 on the court file

   [7] See wife’s affidavit sworn 3 September 2007, paragraph 44.1

4. As I have described in paragraph 30 above, during this hearing, Mr North rectified the description of shares which were transferred as consideration. The clarification was directed to affidavit material sworn by the second named respondent as well as to Mr North’s submissions. In a case under s106B, where particular transactions may be set aside, precision is important. If the husband and/or the second named respondent provide incorrect information and the wife acts on it, she may well seek inappropriate relief or relief against the wrong entity. 

5. I accept the submission of Mr North to the effect that the second named respondent will incur expense and have to devote time to preparation of the affidavit sought by the wife and, in the end, it may transpire that the wife already had the information.  However, that cannot be determinative of pre-trail preparation.  The second named respondent has the advantage of having been a participant in the transactions under investigation, he knows what documents he has, he knows what versions of events to which he has deposed are correct and which ones have been incorrectly stated as “honest mistakes”.  If it is so easy to join the dots to obtain an accurate picture of the financial history, then it will not be an unduly onerous task for the second named respondent and those who advise him to undertake. Ultimately, the case must be run. It is not desirable for a litigant in the position of the wife to have a piece together a jigsaw which she does not know is complete and which may contain some rogue pieces from another picture. The main purpose of the rules of court, which make provision for discovery and the like, is expressed to be “to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.”[8]  It is clear that

   
   

   I have to have regard to the circumstances of the case when determining what is appropriate by way of procedural orders and obligations for discovery.  

   [8] Rule 1.04 Family Law Rules 2004

6. On 21 December 2006, I ordered, inter alia:-

   (7) That on or before 28 February 2007 the second named respondent

   
   

   Mr [C Pierce] make discovery of:-

   (a) All documents relating to the receipt and application of all monies received by and/or paid to [D] Nominees Pty Ltd and any entity subsequently receiving such monies including but not limited to [DM] Pty Ltd and the [DM] trust;

   (b) All correspondence (including email communication) between [Mr C Pierce] and [Mr T] for the period 1 January 1995 to date. 

7. Subsequently, the second named respondent denied having power to produce documents in the possession or control of the DM Trust. Enforcement proceedings were issued by the wife and eventually it was conceded that he had the capacity to produce documents.  That was the back ground to the Order made 16 May 2007.  Pursuant to that Order documents were made available including those documents which I have referred to early on in this judgment as evidencing a transfer of the corpus of DM Trust to MT Trustees Limited in March 2006, a transfer of more than $10 million. 

8. I should also deal here with a communication which was discovered under paragraph 7(b) of the Order made on 16 May 2007.  The wife quotes from an e-mail sent by the second named respondent to the fifth named respondent, she does so at paragraph 47 of her affidavit sworn on 3 September 2007 as follows:-

   For myself I intend to shut down and forget about the whole thing until we get a trial.  They can’t even articulate a case against me and I’ve got history and the pile of evidence on my side, Bugs Bunny could win my case.

   As trustee I think you should do the same.  Ignore [Justice] Bennett, do what is right in your view.  Pay people to do what has to be done and get on with your own life. 

   In respect of which the second named respondent deposed:-

   … The contents of paragraph 47 are both mischievous and misleading.  Whilst I certainly wrote the e-mail in question it must be taken in context and read in light of the fact that I have spent a huge amount of money, time and effort in defending proceedings in the Family Court which in my view are ill founded and speculative.  I intend to defend those proceedings to the very end. 

9. The second named respondent’s email is disrespectful of the court process and reflects poorly on him. I accept Mr North’s submission that his client’s appreciation of the state of the evidence and the strength of his case is not a matter which I ought to take into account.  By the same token, there is nothing in the presentation of Mr North’s case (by way of affidavit, written or oral submission) which persuades me that, absent me making the order sought by the wife, information and documents will be presented to the wife by the second named respondent in an informative and easily reconcilable manner.  Mr North submitted that all the information has been deposed to or provided “all [the wife] has to do is join the dots.”  

10. I am not persuaded by Mr North’s submission that all information has been provided and it is a matter for the wife to now formulate her case.  Mr North’s submission must also be assessed in light of his attempt to clarify one document produced by the second named respondent.  The document is entitled “Schedule of payments made by [D] Nominees 1998-2002” and appears as annexure “JDC18” to the wife’s affidavit sworn on 3 September 2007.  It is too cumbersome a document to re-produce in these reasons but which justifies a look.  It goes into particularity about dates, quantum and parties to transactions such that, at first blush, it looks helpful and comprehensive.  Then, Mr North took issue with the description by senior counsel for the wife, Mr Brown, of the document as a narrative by the second named respondent. There followed a discussion between Mr North and myself in which Mr North stated the following in relation to the document which is annexure “JDC18”;

    a)his client may or may not be the author of the document;

    b)his client is not verifying the accuracy of the contents of the document;

    c)his client is not saying anything about the authenticity of the document;

    d)the only matter of which production of the document is probative of is that the second named respondent believes that it is a document that relates to matters about which he is obliged to make discovery.

11. With such qualifications as to the information provided to the wife by the second named respondent, it is easy to see how the wife lacks confidence in taking much information at face value and without the benefit of explanation by the second named respondent. 

12. It was submitted on behalf of the second named respondent that the information which the wife seeks that the second named respondent provide on affidavit in relation to the assets of PK Pty Ltd is too remote from any relief proposed by the wife’s advisers to be relevant. I am satisfied that only recently, and probably in the last half of this year, has the wife known that PK Pty Ltd received $1.4 million of the first payment of $6 million which was previously described by the second named respondent as having been received by the husband or by entities under his control.  

13. PK Pty Ltd is an entity solely under the control of the second named respondent.  Mr North’s submission is that the documents of PK Pty Ltd are in the control of his client but that the current whereabouts, quantum and nature of investments by other entities insofar as Mr C Pierce knows them, can only be relevant incidentally for forming an assessment as to whether they're worth pursuing.  He contends that, at the end of the day, all that was received by these entities was money and that all that the wife could be entitled to get ordered back is money with or without interest.  Again, Mr North’s submission is that wife should be required to frame her application precisely and then the court can consider whether the disclosure which has taken place to date has been adequate for the purpose of the application (as framed) and consider what, if any, further disclosure is then appropriate.  In the circumstances of this case, I do not accept Mr North’s submission.  I accept that finding out what has become of the money received by entities is relevant to making an assessment as to whether a set of transaction ought to be sought to be set aside.  However, the use to which the monies have been put may also be relevant to an assessment of beneficial entitlement. 

14. Mr North also made submissions in opposition to his client having to provide full particulars of funds paid to the education trusts run for the benefit of his eight grandchildren, of whom two grandchildren are the children of the husband and the wife.  It was submitted that the second named respondent has no interest in nor control over those entities.  In discussion I was informed that the second named respondent had paid some $2.5 million to the trustee (or its predecessor) by way of “success fees” or distributions to it as a beneficiary of DM Trust.  However, there are no documents which can be provided by the second named respondent and the trust is administered in the Pacific Islands.  

    
    

    Mr North relayed his instructions that the dealings between his client and MRG Limited and before that an international trust Company were mostly verbal and if there were any documents then the second named respondent no longer has them.  I am satisfied that this is another aspect in respect of which the second named respondent can commit his knowledge to affidavit form.   

Production of original agreement dated 14 June 1996

1. The wife seeks production of an agreement which, as I understand it, the husband and second named respondent maintain was created and executed on 14 June 1996. In any event, there is no controversy about the wife’s entitlement to have the document assessed. It is not to go into the personal possession of the wife.

Generally

1. I will determine any applications for costs of these interim proceedings in chambers and on written submissions. Parties can seek that costs be quantified on any basis they see fit but they must also provide the costs calculated on a party/party basis in accordance with the family law scale. It is my preference to fix costs rather than to send them for assessment.

2. I will now cease to be judge manager of this matter. As best I can recall, there may be one or two cost applications floating about, by which I mean that written submissions have been filed and served but I have not dealt with them. Perhaps the parties have been too polite to bring the outstanding matters to my attention or they too have been distracted. If there are any such applications, the parties should bring those to the attention of my Associate together with the date of filing of the submissions and I will deal with them in 2008. It is not my intention that cost disputes arising from interim proceedings before me need to be determined by Dessau J merely because the prospective management of this matter passes to her Honour.

I certify that the preceding forty nine (49) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett

Associate

Date:  20 December 2007