Daniels & Findlay (No 2)

[2011] FamCA 89

FAMILY COURT OF AUSTRALIA

DANIELS & FINDLAY (NO. 2) [2011] FamCA 89

FAMILY LAW – ENFORCEMENT OF ORDERS
FAMILY LAW – ORDERS – Contravention

Family Law Act 1975 (Cth)

Bennett v Bennett (2001) FLC 93-088

APPLICANT: Mr Daniels

RESPONDENT: Ms Findlay

FILE NUMBER: MLC 1996 of 2008

DATE DELIVERED: 17 FEBRUARY 2011

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: DESSAU J

HEARING DATE: 21 JANUARY 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr A COMBES

SOLICITOR FOR THE APPLICANT: Holt & McDonald

COUNSEL FOR THE RESPONDENT:

SOLICITOR FOR THE RESPONDENT:

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 1996  of 2008

MR DANIELS

Applicant

And

MS FINDLAY

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. These are my reasons for judgment for the orders I made on 21 January 2011, dismissing applications brought by the wife, providing for the Registrar to sign certain documents on her behalf, restraining her from obtaining an auditor’s report that would have conflicted with the final orders, restraining her under s 118 of the Family Law Act  from instituting proceedings without the leave of a court, and providing for her to pay $5,000 towards the husband’s costs of the proceedings.

2. I pronounced orders, without the reasons, in light of the urgency to ensure compliance with the final property orders made by me on 9 March 2010.  I was also conscious of the need to avoid further applications by the wife that were otherwise likely to arise between reserving the reasons and pronouncing orders (as occurred in a previous round of proceedings).

3. Although the case had the appearance of a complex matter when it came before me on 21 January 2011, it was not, or at least it should not have been.  The complexities, such as they were, arose mainly from the fact that the final property orders were yet to be fully executed, and from the wife’s conduct.  Aggrieved by the property decision, and fundamentally by the breakdown of her marriage, the wife had created obstacles, failed to sign documents and provide accurate information as requested, and had issued various applications, (including an unsuccessful application for leave to appeal the property orders out of time), all contributing to the delay in the execution of final orders.

4. That short snapshot does not include reference to her applications in the few weeks between the end of the property hearing and my delivery of judgment (in December 2009).  Nor does it refer to the various hearings and applications that delayed the pronouncement of final orders for several months after judgment was given (between December 2009 and March 2010), again mainly arising from the wife’s resistance to orders, but in fairness, also because further information was sought from N Firm, the forensic accountants who, under the orders, were responsible for the winding up of the parties’ entities.

5. Details of the wife’s attitude and conduct are woven through my Reasons for Judgment on the substantive issues as well as the subsequent proceedings.  In addition to the matters referred to above, I have referred to her appalling conduct in the course of these proceedings, including taking documents from amongst the husband’s counsel’s papers in Court, and sending a barrage of unproductive, mischievous and/or threatening emails to the husband, his solicitors Holt & McDonald, N Firm, the Court, and others.  My reasons clearly stated the need to remove from her hands any responsibility for the winding up of the various entities, or the distribution of the relevant assets.

6. This time there were four applications filed by the wife. Three purported to be Applications in a Case, although there was no case on foot. Under the Family Law Rules 2004, I was able to ensure that the proceedings were not impeded because of that technicality. In addition, even though several of the applications were not served on the husband, the case still proceeded, with his consent to that course. He disputed all applications.

7. The fourth application was an application for contravention, it seems against the husband, N Firm, and Holt & McDonald.  Although the latter two were not parties, and there were other significant difficulties in the way the contraventions were alleged, I need not dwell on that, as part way through the hearing the wife sought leave to withdraw that application (a course I note she took with another contravention application before me on 6 August 2010).

8. The wife’s three Applications in a Case were filed respectively on 17 December 2010, 21 December 2010, and on the day of the hearing on 21 January 2011.  They sought a range of orders, 45 in total, many traversing old ground, many against non-parties including N Firm, Holt & McDonald, the solicitor Mr Ryan, Ms Molyneux QC (the husband’s former counsel), and Auscript the court reporters.  Other orders were not easily understood or in a viable form.  I shall return to the relevant detail.

9. The wife relied upon two affidavits, one filed on 17 December 2010, the other on 21 December 2010.  She also relied on the affidavit of an accountant, Mr Z, filed on 17 December 2010.

10. The husband relied upon his response filed on 14 January 2011.  In it, he sought that the wife’s application filed on 17 December 2010 (the only application he had received at that time) be dismissed, that a Registrar be appointed to sign all documents to give effect to the property orders, that the wife be declared a vexatious litigant and restrained from filing further material without the leave of the Court, and indemnity costs in his favour.

11. His application was supported by his affidavit filed on 14 January 2011, and the affidavits of his solicitor Mr Ryan and Mr I from N Firm both filed that day, and a short affidavit from the wife’s neighbour, Mr Y, filed on 18 January 2011.

12. I do not propose setting out the background to the substantive property case.  It is set out in detail in the Reasons for Judgment delivered on 22 December 2009.  It is sufficient to say that the orders provided for a 50/50 division of the assets, comprised mainly of cash, shares and real estate, either in the parties’ names or entities mainly controlled by them or one of them.  Overall, the husband was to receive cash, equivalent to the real estate and shares to be retained by the wife.  Central to the orders was that N Firm was to effect the winding-up of the entities, instructed by the husband, in order to ensure clarity and finality, about which I had no confidence if the wife remained in charge.

13. There were other details in the orders, but what I have just recounted is an overview sufficient for these reasons.  The detail was worked through painstakingly across three sittings (on 4 February 2010, 19 February 2010, and 9 March 2010), and included a new Application in a Case filed by the wife only on the morning of court on 4 February 2010.  On 9 March 2010, I gave detailed Reasons for Judgment as to the form of the final orders, and in relation to the wife’s Application in a Case, and the husband’s Costs Application. 

14. Since those final orders, there have been another four appearances before me, to deal with the husband’s enforcement application, the wife’s application for a stay of orders pending her Application to Appeal out of Time (the latter of which was dismissed by Strickland J with costs ordered against her on 24 September 2010), and the Contempt Application that she ultimately withdrew.

15. From the husband’s perspective, the proceedings since 9 March 2010 have all been directed towards effecting the final property orders.  Whatever she states as her intent, the wife’s acts, omissions or applications since then have mostly placed obstacles and created issues that have interfered with the orders.  With the addition of occasional hurdles put up by banks or share registries, and some minor errors or delays on the part of the husband’s solicitor or N Firm, it became urgent to conclude these proceedings.

The Wife’s Application Filed 17 December 2010

1. It is most efficient to consider the orders sought in this application in “clusters”. 

2. The first cluster, contained in paragraphs 1 to 7 of the application, related to the completion of share transfers in the wife’s favour. 

3. The protracted process of having these forms properly completed pursuant to the final orders can best be described as “a saga”.  There were issues of lost or wrong Security Reference Numbers, and issues with the name of the transferee.  Either way the transfers could not be accepted by the relevant share registries.  The settlement provided for in the orders, whereby a transfer of shares was to be effected to the wife, and the bank monies withdrawn by the husband, was thus held up. 

4. So far as the bank monies are concerned, there were also issues.  Some accounts had been opened without the wife’s three forms of identification.  The banks would not permit the withdrawal of funds until that was rectified.  That was only achieved when I stood the case down during a hearing on 26 July 2010, for the husband’s solicitor to accompany the wife to the banks to provide the required documents.

5. As to the share transfers, although at various times and in various places the wife explicitly or implicitly suggested that the husband had caused deliberate delay so share prices would then go down, her suspicions never made sense.  He always stood to receive the equivalent in cash to the value of shares as at the date of the transfer. 

6. In any event, although the wife’s material alleged incompetence and dishonesty against the husband, N Firm and Holt & McDonald in relation to the share transfers, I was satisfied that the husband and his legal representatives, as well as N Firm, were faithfully recounting the obstacles put up by the wife in having these documents prepared in the form required to achieve a transfer to the wife or an entity nominated by her.

7. In addition to creating the most basic difficulties as to which method of communication she would accept, or where and how meetings would occur for documents to be exchanged, the wife, whose property case was based on her “special skills” in handling the parties’ financial affairs and share portfolios (and there was no dispute that she looked after them), did not provide the accurate Security Reference Numbers required for every share transfer.  When she did supply the numbers, and it appeared (last November) that the share transfers were effected, some transfers were returned to the wife by the relevant share registries. Some were rejected as they still had incorrect Security Reference Numbers, others because the transferee’s name had been crossed out and a new company name inserted by, and signed only by, the wife.  The share registries required all parties to the transaction to sign.  This problem could have been avoided had the wife informed the husband’s solicitor of the transferee details in accordance with paragraph 5(a)(ii) of the Orders.  But she had not.

8. Ultimately the share transfer issue was finalised at court on 21 January 2011 before me.  The transfers were signed and handed to the wife, apparently in the form and with the alterations requested by the share registries.  I then ordered that any outstanding bank withdrawal authorities, required in return by the husband, were to signed by the Registrar on the wife’s behalf, an order I considered essential in light of the wife’s obstruction that far. 

9. Otherwise, so far as this cluster of orders sought in paragraph 1 to 7 of the 17 December application were concerned, I could not grant an order that “Holts…desist from being uncooperative, forceful and ‘bullying’ in their communications with [the wife]”.  In any event, I could not be satisfied on the evidence of the need for such an order.  N Firm and Holt & McDonald are both firms that had shown on-going fortitude in their dealings with the wife, particularly in the face of her harassing emails, and what seemed like misdirected complaints to professional bodies. 

10. In paragraph 7 of the application, the wife purported to withdraw her consent to N Firm continuing as the jointly appointed accountants.  However, it was not something she could choose to withdraw.  It was a final court order made 10 months before this hearing.

11. The next cluster of orders sought in the first application, (in paras 9, and 11 to15), related not only to the wife’s desire to appoint, but indeed her actions to appoint a chartered accountant and auditor, Mr Z, to audit A Pty Ltd as trustee for the A Superannuation Fund. 

12. The wife’s application was accompanied by an affidavit from Mr Z.  He referred to the “directors” of A Pty Ltd having “expressed concerns regarding various matters relating to the Financial Reports of the Fund for 2006-2007; 2007-2008; 2008-2009 prepared by [N Firm], appointed by CONSENT of the parties in November 2008.”

13. He also said:

    There are allegations that the TRUSTEE may be in breach of various Acts, principally the Corporations Act 2001 and the Superannuation Industry Supervision Act 1993 [SIS Act].

14. What he swore thereafter was simply a recitation of the orders sought by the wife, before offering his opinion (at para 6) that the orders requested were “fair and reasonable”.  He went on to swear that as he was “not aware of any allegations made against [Findlay] … security is therefore only equired [sic] over [Daniels’s] assets at this juncture.”  I pause here to note that his reference to Findlay and “Daniels” bears a striking resemblance to the way the wife refers in particular to the husband.

15. Mr Z then swore:

    Furthermore, I am not aware of any allegations against [the wife] regarding the [A] Superannuation Fund and that any legal proceedings that may be instituted by [A] P/L as TRUSTEE of [A] Superannuation Fund are more likely to relate to [the husband] and his actions in relation to trust assets.  [The wife’s] offer of voluntarily providing a Caveat over her property and being subject to orders of this Honourable Court appear to be genuinely made in the interests of fairness to both parties.

16. I did not accept Mr Z’s affidavit as truly objective or independent.  It was stark that a purportedly independent auditor, appointed by “majority” as he put it (that being the wife alone), would approach matters from such a partisan perspective.  That however was immaterial in that there was no role for him in any event, when the final orders were absolutely clear as to how the winding-up was to occur.  Those orders were based on my specific findings that the wife should not be involved in the process.

17. I do not propose reciting the detail of the allegations she made against N Firm.  Many simply repeated issues that were dealt with at trial.  Others were part of a vexatious campaign against them and the husband, and there was nothing in any objective material to suggest that N Firm had been endeavouring to do anything other than properly conclude these dealings. 

18. Paragraph 8 of the wife’s application sought an order for Holt & McDonald “to provide a detailed explanation of their mis-use of TRUST monies to [Findlay]”, and that monies either disbursed or received via their trust account be paid to “the appropriate company or TRUST together with compensation for loss of interest thereon.” 

19. In addition to various complaints about Holt & McDonald and Mr Ryan in the course of her affidavits, including that Mr Ryan had been a “bully”, and that the wife proposed lodging a contempt application against him for “perjury”, her reference to his mis-use of trust funds seemed to be contained in paragraph 12 of her affidavit accompanying the 17 December application.  Apart from her assertion, there was no evidence.  She said she had referred the matter to the Legal Services Commissioner.  She attached a response from the Legal Services Commissioner, indicating that it seemed that the practitioner had acted appropriately, but inviting her to comment on any of the material contained in the Commissioner’s letter.  She did so.  That is where the evidence rested.  It provided no basis for any order pursuant to paragraph 8 of her application.

20. Otherwise, in paragraph 10 of that application she sought an order for Holt & McDonald to establish an interest-bearing trust account for the husband in the sum of $450,000 from monies received by him pursuant to Order 5(b) of the final orders.  There was no basis in her affidavit material to support an order for $450,000 or any other sum to be paid into a trust account as she sought.

21. It may be that the wife’s complaint was that the husband received bank monies before she received an effective transfer of shares.  I am satisfied that some funds were released to the husband in late November 2010 and early December 2010, at a time Mr Ryan had every reason to believe that the wife had in turn received share transfers with accurate Security Reference Numbers and in proper registrable form.  Unbeknownst to him, some numbers were still wrong, and the wife had altered the name of the transferee so that the transfers were no longer in acceptable form for registration.

The Wife’s Application Filed 21 December 2010

1. Although many of the 18 orders sought by the wife in this application were not in a coherent form, they can again be clustered or categorised. 

2. Paragraphs 1 and 2 relate to the Auscript recording of these proceedings.  They are as follows:

   1.ORDER [Mr CN] of Auscript Australasia Pty Ltd to provide [the wife] with VERBATIM TRANSCRIPT OF PROCEEDINGS (with ALL persons recorded as speaking being clearly identified on the Transcript) within 5 days of this ORDER

   2.ORDER [Mr CN] to provide evidence of the claimed AGREEMENT between Auscript Australasia Pty Ltd and the FAMILY COURT AUTHORISING Auscript Pty Ltd to EDIT Transcripts and if such does not exist that Auscript be ORDERED to compensate [the wife] in the amount of $6,365 being payments made to Auscript by her.

3. On 4 February 2010, between Reasons being delivered, and orders pronounced, the wife filed an Application in a Case.  Amongst other orders, she sought CDs of the transcript of evidence at the property trial.  That part of her application succeeded, and on 9 March 2010, along with the final property orders, I made an order permitting her to obtain from Auscript, at her expense, CDs of the transcript of evidence of the trial and subsequent proceedings. 

4. In her affidavit accompanying this recent application, the wife alleged that the tapes were “edited”, and that she had been unable to produce evidence that she needed for her application for late notice of appeal when it was heard by Strickland J in August 2010. 

5. In her affidavit, the wife referred to “concessions” purportedly made on behalf of Auscript, that the recording of proceedings is edited.  She attached some of the correspondence between herself and Auscript staff.  It disclosed that what was actually said to her (in an email dated 3 August 2010) was that the audio tapes were “edited to remove any judgments or orders, and any audio that was not a part of official proceedings”.  It was further explained to her that she could request access to any final judgments through the court.

6. Following more email traffic, on 4 October 2010, the wife was again advised by Auscript that any audio not provided was either not part of the official proceedings, or was constituted by judgments or orders handed down by the judge.  Auscript noted that in any event there were no orders or judgments between 30 November 2009 and 4 December 2009, that is the duration of trial.

7. It could be gleaned from the on-going emails that the wife appeared to be asserting that towards the end of the trial, I had said that I would be granting, as she put it in a letter to Auscript, “lump-sum spousal maintenance and the balance would not be 50/50 but not too far apart”.  It seemed she may have been asserting that as they were “intended orders”, they had been edited out.  Auscript again attempted to make clear to her, by email on 11 November 2010, that “Auscript does not edit judges’ comments; we simply do not include anything relating to judgments, orders, or reasons for judgments.” 

1. Thereafter, it is apparent that Auscript advised the wife that a check of the audio had been undertaken, that there was a discussion about the topic referred to at a particular time on a particular date, and that she already had the relevant recording.

2. Unfortunately, as has been the experience in other quarters (noted by me in various judgments), it seemed from the documents attached to the wife’s affidavit that the emails continued.  By 26 November 2010, she was asserting that the transcripts were “unintelligible”, and that Auscript had “EDITED OUT numerous statements and comments.”

3. The wife’s material did not substantiate an editing of the audio tapes of the proceedings in the manner she claimed, but did indicate the vast number of emails that she sent to Auscript, even after repeatedly patient responses on their part.  There was no basis to make the orders she sought, given that she had already received the audio CDs of the proceedings.  The orders she sought, to receive agreements between Auscript and the Court, and compensation, were not substantiated.

4. The balance of the orders sought in the 21 December 2010 application fell into three main categories.  Between paragraphs 3 and 14, the wife sought orders relating back to matters already dealt with in final orders, including independent valuations of particular property, the collection of trade debts, the re-registration of entities, or how N Firm should wind-up the companies.  Final orders are final orders.  It is not useful to add anything further in this respect. 

5. There was also an application to compel “[Daniels]” to “complete” (presumably meaning to accept) an earlier offer of settlement, something not within the court’s power after the final orders.

6. Otherwise, a number of the orders sought related to the wife’s allegations of perjury against the husband, his solicitor, Mr I of N Firm, and Ms Molyneux QC.  So far as the latter is concerned, in a breathtakingly cheeky application, the wife sought an order for “C Molyneux” to explain how “HER papers came to be in my possession”, a reference to the incident when papers belonging to Ms Molyneux and left in the court-room, came to be in the wife’s possession, to the very obvious consternation of Ms Molyneux and her client. 

7. An illustration of the calibre of the orders sought by the wife was contained in paragraph 13, as follows:

   Order Ryan, Molyneux and [Daniels] to consider ADMITTING to perjury, unprofessional conduct, obstruction of justice because if such has to be PROVEN by me making complaints to the FEDERAL POLICE, Legal Services Commissioner to investigate, that this Honourable Court will make judgements against those persons.

8. It was not a coherent application.

9. In paragraphs 16 and 17 of the application, the wife sought a stay of the final orders pending Mr Z’s audit.  I have already ruled on the inappropriate nature of the audit unilaterally commissioned by her.  There was no basis for a stay of the final orders for that or any other reason.  Last year, I did adjourn a stay application brought by her until after Strickland J had dealt with the appeal issues.  Once the wife’s application was dismissed by Strickland J, I dismissed her application for a stay of the final orders, on 29 October 2010.

10. That left paragraph 15 of her application in which she sought that the Registry explain why the orders dated 9 March 2010 were not sent to her by email until 10 December 2010, and why it was not registered that 10 March 2010 was the date upon which such orders were issued. 

11. The wife had often complained as to the method by which documents had been forwarded to her by the husband’s solicitors, N Firm, or the Court.  What was clear however is that she had received them.  As she litigated in relation to the 9 March 2010 orders, with several court appearances between March 2010 and December 2010, it was absurd that the Court’s time was wasted by this application.  It is illustrative of the need for the orders I made to ensure no further applications by her, without the leave of the Court.  I shall return to that below.

The Wife’s Application Filed in Court on 21 January 2011

1. This application, seeking 12 orders, overlapped with her other applications and affidavits, effectively disputing N Firm’s version of their efforts, and of the obstructions caused by the wife while they had been trying to prepare accounts, wind-up the entities, and effect the transfers under the final orders.  It also again sought orders in relation to Mr Z being put into a position to become involved in order to prepare a report to the Court.  There is no need to repeat my previous observations and findings in relation to these applications, that simply indicate the wife’s incapacity to accept the final orders.

2. I do note however that I made an order that a Registrar could, pursuant to s 106A of the Act, sign all documents on behalf of the wife to remove her as director of the relevant entities.  I also restrained the wife thereafter from signing any documents or doing any action on behalf of any of those entities, including but not limited to appointing Mr Z to audit accounts.

3. That order was essential to ensure that the wife could no longer manipulate directors’ powers to circumvent the final orders.  And there was no reason to have any confidence that she would co-operate in her own removal as a company office holder. 

The Husband’s Response filed 14 January 2011

1. I had no hesitation in granting the husband’s application for an order that a Registrar sign documents necessary to give effect to the final orders.  As noted above, the share transfers appeared to be successfully brought to conclusion in court, but it was apparent that some bank transfers still awaited the wife’s signature.  Again for reasons already given, it was impossible to be confident that she would respond in a co-operative or timely manner.

2. Similarly, the husband’s application that the wife be declared vexatious and be precluded from bringing further proceedings without the leave of a court, was easily substantiated on all of the material. 

3. It is sad that the wife’s mental health had so apparently declined during the life of these proceedings, particularly since the final hearing.  I cannot base that observation on direct expert medical evidence, but on the decline in her presentation and demeanour from an apparently robust, intelligent woman at trial (albeit with serious limitations in her behaviour, as noted in my Reasons for Judgment), to an apparently frail and less coherent person.  Her material certainly referred to her having been hospitalised and having struggled with serious mental health issues at times since the trial. 

4. I make the observation about her mental health, first to note that it is impossible not to feel sorry for her in that light, and secondly, to urge her to seek and accept whatever medical assistance she can, in order to achieve better health, to be able to put the property case behind her, and to use her share of the parties’ assets. 

5. All that said, I am satisfied that the applications by the wife are, for the collective reasons set out above, frivolous and/or vexatious.  I am conscious that it is a serious matter to preclude a party from freely commencing proceedings.  The case law is clear that the power should be exercised only with caution as it is important to preserve a person’s access to courts and their fundamental right to invoke their jurisdiction (see for example, Bennett v Bennett (2001) FLC 93-088).

6. The wife has abused the court system with applications fixated upon her unhappiness with final orders, and directed towards obstructing their being given effect.  She has made numerous and repetitive applications, some directed towards people who are not parties to the proceedings, some simply ill-founded, and some plain mischievous as illustrated above in relation to when she received the final orders. 

7. The precious community resources directed to courts cannot be wasted by that sort of frivolous litigation, nor can a party be required to keep responding to such applications.  The emotional and financial expense are untenable.  In any event, the wife is not shut out of the courts.  If she has what appears to be a reasonable basis to litigate, she can apply for leave to do so.

I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dessau delivered on 17 February 2011.

Associate: 

Date:  17 February 2011