Dawson and Brown

[2012] FamCA 887

FAMILY COURT OF AUSTRALIA

DAWSON & BROWN [2012] FamCA 887

FAMILY LAW – Interim case management hearing and further directions – Full and complete financial disclosure – Payment of arrears of mortgage debt – Appointment of accounting witness for one of the parties – No single expert witnesses appointed – Dismissal of an application for costs

Family Law Act 1975 (Cth)

APPLICANT: Ms Brown

RESPONDENT: Mr Dawson

FILE NUMBER: MLC 2578 of 2011

DATE DELIVERED: 19 October 2012

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Young J

HEARING DATE: 19 October 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Mort

SOLICITOR FOR THE APPLICANT: Morgan Legal

COUNSEL FOR THE RESPONDENT: Mr Nehmy

SOLICITOR FOR THE RESPONDENT: McDonald Slater & Lay

Orders

IT IS ORDERED BY CONSENT:

1. THAT paragraph 12 of the orders of Senior Registrar FitzGibbon made 2 July 2012 be discharged.

2. THAT within twenty-one (21) days the husband instruct his solicitors to make available to the wife’s solicitors the final and completed report of Mr B, accountant, which has been commissioned by the husband as part of his case and which will deal with financial issues, contributions and valuations as asserted by the husband.

IT IS OTHERWISE ORDERED, UNTIL FURTHER ORDER:

1. THAT as and from 1 October 2012 the husband pay, as and when they fall due, all repayments or instalments due to the National Australia Bank pursuant to the flex plus mortgage and all rates, taxes, outgoings and domestic accounts for the property at C Street, Suburb D in which he has resided since early 2011.

2. THAT the question of the payment of any and all arrears now said to be owing under that National Australia Bank flex plus mortgage, estimated to be in the sum of approximately $18,000, be reserved for further hearing on the adjourned date or as part of the final defended trial.

3. THAT within fourteen (14) days the husband do all acts and things and provide to the wife’s solicitors all documents identified in paragraph 11(a) and (b) of the orders of the Senior Registrar pronounced 2 July 2012.

4. THAT within twenty-eight (28) days the husband provide to his solicitors and instruct them to provide to the wife’s solicitors:

   a.his personal taxation returns for the financial years ended 30 June 2008, 2011 and 2012;  and

   b.all statements with respect to the loan accounts identified as Nos. … and ….

5. THAT both parties, subject to their strict compliance with Family Law Rule 13.26, be entitled to ask specific questions, provided that such documents are filed with the Court on or before 19 November 2012 and that they then be answered strictly within the twenty-one (21) days provided for within Rule 13.27.

6. THAT the applications of each party for costs of and incidental to the hearing this day be dismissed.

7. THAT otherwise the application in a case filed by the wife on 26 September 2012 be dismissed.

8. THAT the extempore reasons for judgment be transcribed, be placed upon the Court file and be made available to the parties.

9. THAT all extant applications otherwise be listed for further case management and direction before Young J at 10.00 a.m. on Wednesday 19 December 2012.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Brown & Dawson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 2578 of 2011

Ms Brown

Applicant

And

Mr Dawson

Respondent

REASONS FOR JUDGMENT

1. The matter of Dawson & Brown is before me on property and financial matters.  Mr Mort of Counsel appears for the wife, who is in court.  Mr Nehmy of Counsel represents the husband, who, for reasons unexplained to the Court, has been unable to be at Court to hear what was said in his matter.  No doubt he will make a better effort to be at Court on future occasions when his matter is listed and to at least show some demonstrable level of interest in his own case.  I do record however that Mr Nehmy has, on instructions, put all matters before the Court upon which he was briefed and which has been of assistance to the Court on matters in dispute.  There are children and parenting proceedings otherwise before the Court, but none of those matters are relevant to the issues that have been raised today.

2. The Application that brings the matter to Court was filed by the wife on 26 September 2012 and in summary, she sought orders for the payment of arrears of a mortgage in favour of the National Australia Bank encumbering the property at C Street, Suburb D.  The husband lives in that property and also has his office for his work as a project management consultant conducted there from.  The wife lives elsewhere at E Street, Suburb F, in an unencumbered property registered in her sole name.

3. The wife sought orders for the husband to be responsible for the payment of mortgage and outgoings for the home in which he resides.  Otherwise the issue is substantially about full and frank discovery and disclosure of financial documents and some level of financial explanation of what is said to be substantial withdrawals which the husband has made from nominated bank accounts.

4. The wife’s Application was supported by an affidavit and substantial letters and correspondence passing between solicitors evidencing the level of disagreement and conflict that they each have with the other’s production of documents on behalf of their clients.  The husband’s Response was filed 18 October 2012, and he seeks a dismissal of the wife’s Application, with costs to be paid.  That Response is supported by an affidavit of his solicitor, Ms Bradford, again with substantial correspondence annexed thereto.

5. Also annexed is a somewhat curious statement of property, assets and liabilities as at 18 January 2012 that is not evidence of matters therein, that is not helpful to the Court, that is more appropriate to mediation and, in due course, and pursuant to orders that will be hereafter made on another occasion, there will be proper financial disclosure and an Outline of Case document encompassing a summary of current assets and liabilities.

6. This is an ex tempore judgment delivered without leaving the Bench.  Thus, I intend only to identify matters before me and give the briefest of reasons for my orders.  I do so because I have a primary matter that is stood down that involves significant issues of and concerning a young child, and that case is my priority today.

7. Previous orders were made by Senior Registrar FitzGibbon on 2 July 2012.  Those orders were seemingly made both by the Court and by consent.  I leave to one side any and all issues of and concerning the child, G.  There is a notation to the order that the reasons for judgment of the Senior Registrar be transcribed, sent to the parties and placed upon the Court file, and I merely observe there is no transcript of such reasons for judgment on this Court file.

8. Paragraph 9 of that order deals with retrospective valuations of various properties, including a property in New South Wales, and other superannuation entitlements and the assets of a family trust.  That seemingly has been reignited as an issue.  Other orders were made as to discovery and disclosure of financial statements, various bank accounts and the provisions of tax returns.  I will make various orders today enforcing aspects of those orders that have either been ignored or not fully complied with.

9. Paragraph 12 of that order was a curious consent order.  It provided for the parties jointly to retain a nominated single expert for a forensic explanation and report to be used in evidence of all issues in dispute, and that person was charged with the obligation of quantifying the respective interests of the parties, identifying initial contributions and particularising the respective interests of parties from the time of cohabitation to the date of the report, inclusive of property, shares and superannuation.

10. I remain wholly mystified by what the parties intended that report to provide, other than the opinion of that accountant.  I most likely would not have admitted the document into evidence, because it is not an expert report; it is a statement identifying past contributions or financial issues, but I would not accept any conclusions drawn as either being binding upon the Court or taking from the Court its role in the exercise of its discretion to determine a proper division of the property of the parties.

11. In any event and by consent, both Counsel today have indicated that they do not seek to retain that nominated single expert and that the order can be discharged, again, I emphasise, by consent.  I will so order.

12. The husband has now engaged a Mr B, and he is preparing a report with respect to the financial transactions of the parties and various drawdowns made by one or other of them, and primarily, it seems, by the husband, on various accounts.  I understand that Mr B was engaged by the husband for the purposes of preparation of his case and better advising the solicitor and Counsel engaged by the husband in the issues under challenge.  It was never intended to be a joint forensic report to be admitted into evidence.  It will not be admitted into evidence.  I have made it very clear in the hearing that Mr B is the husband’s witness.  He is not a joint witness.  He most certainly is not a single expert.

13. Somewhat generously, Mr Nehmy has instructions to provide to the wife a copy of that report, and, although initially somewhat reluctant, the wife’s Counsel is now prepared to receive that report.  It certainly cannot inconvenience the wife.  It might provide a better understanding of the financial issues in dispute, because certainly the parties are in serious financial conflict – indeed, in serious disagreement and non-communication on many financial issues which are the subject of countless letters passing between solicitors at a personal cost to both parties.  I emphasise that my understanding is the parties are fully aware of and are encouraging the legal process to date, and it has been significantly non-productive.

14. I do intend to make various orders for the production of documents or to put a time limit upon the enforcement of the exchange of documents intended by paragraph 11 of the earlier order of the Senior Registrar.  I raised with the parties that specific questions would likely be appropriate, at least when financial information is known to both of them.  Without reading all of the financial background of this case or earlier affidavits filed, it does seem this is a case where both parents have substantial jobs and significant income, and both of them are likely aware of financial and commercial issues and maybe (though this is not a finding) that they are on a somewhat equal footing with their level of understanding of past financial conduct, transactions and the like.

15. Specific questions can be asked pursuant to Family Law Rule 13.26 after the matter has been allocated to a first day before a Judge.  If necessary, I would either treat today as a first day, or otherwise I will specifically order and allow both parties to ask questions.  They must be in writing.  They must be limited to 20 questions and no more, and they must not be vexatious or oppressive.  If they were to offend any of those requirements, I would simply strike them out at a subsequent hearing.  Those questions must then be answered within 21 days.  I intend the answers to be full, frank and accurate, and the parties will be bound by their answers unless there is very good reasons given in evidence for a genuine misunderstanding or other acceptable explanation.  I will give some little time for the answering of those questions because they need be asked following upon the appropriate information to be further discovered. 

16. The previous orders of the Court have not provided for any order as to the payment of the mortgage on the property in which the husband resides and which is registered in the joint names of the parties.  I accept that it is more accurately described as a mortgage rather than a line of credit.  There are arrears.  They are approximately $18,000.  The husband has been in use and enjoyment of that property, both for residential and business purposes, since early in 2011.  I am not going to order the arrears today, though I reserve that as a live issue.  I prejudge the matter in no way. 

17. However, an important fact will be when the husband took occupation of the property, and I will need some level of convincing that it is not appropriate that he be responsible for direct outgoings and expenditure of and identified to the property at C Street, Suburb D from the date that he took possession thereof.  However, as I said, that matter remains undetermined today, but, hopefully, there can be some level of common sense between solicitors which might assist the parties and somewhat limit their continued expenditure.

18. I certainly will require the husband to pay from 1 October of this year all financial expenditure and outgoing of and related to the property in which he now lives, and that includes the National Bank Flexi Mortgage, instalments or repayments, and all rates, taxes and outgoings including domestic accounts for that property.  The husband’s Counsel has provided to me a minute of order that his client would propose.  I emphasise these are not consent orders and they are to be made until further order.  In that document, there is a consent to the provisions of taxation returns and statements relating to various bank accounts, they being the two documents identified by the wife in paragraph 3(a) of her current application.  I will so order.

19. Both parties and their legal advisers need understand that the obligation is on them to prepare their own case.  Whilst I may now become the docket Judge to hear this matter, I will not set it down for a defended hearing until it is ready and, if that takes time, then so be it.  The parties and their solicitors can sort out their knowledge and understanding of all financial issues and prepare their case on contribution and section 75(2) factors so that it is ready to proceed, and when it is ready to proceed it might then get a date, notwithstanding that there is a backlog of cases to be heard and the matter will be waiting for some period of time. 

20. Whilst I will shortly pronounce orders both by consent as to the discharge of paragraph 12 of the prior order of the senior registrar, and otherwise orders that I think are appropriate, I have had submissions from counsel on costs.  Both of them in their respective application and response have sought costs.  The husband’s counsel’s brief was marked at $1,500 and he had no instructing solicitor at Court.  The wife’s counsel had his brief marked at $2,200 and he sought no less than $1,200 for the attendance of his instructing solicitor at Court and, most certainly, she has been at Court for at least three hours.

21. Orders for costs are made when the Court determines it is just.  The principal requirement of section 117 of the Family Law Act 1975 is that each party pay their own costs.  Subsection 2A thereafter identifies the various factors that need be analysed to determine whether a departure from the principal scenario is appropriate.  Mr Mort has emphasised the financial conduct of the husband, the failure to make proper disclosure in discovery, his conduct or inappropriate conduct in his instructions given to solicitors, and his refusal to simply adjourn the matter from today and/or comply with past orders, including his oral but not Court‑ordered obligation to pay the mortgage and other expenses on his current residence. 

22. The husband’s Counsel has certainly argued to the contrary, both in rejecting the application for costs made by the wife, and in asserting that the husband should have his costs paid because, primarily, of the conduct of the wife in giving inappropriate instructions and the letters written by her solicitor on her behalf in rejecting compromised scenarios on interim issues, and in seeking arrears that have not been the subject of prior Court orders.  I have a strong view in the exercise of my discretion that there is no requirement to make a costs order in this case.  I cannot imagine how it falls within any requirement of justice.  These parties need to work through the financial issues involved in disclosure and discovery and get their case in order, meaning get their case ready, and then it can be in the queue for a hearing. 

23. I do not mean to be unduly harsh in saying what I have said, but I see abundant correspondence and/or failure to disclose one way or the other, and I am not going to determine that issue today if I am going to be the trial judge.  I am not going to make prior determinations of who is at fault or who is not at fault.  The bigger issue in this case is for solicitors and clients to prepare the case and get it ready for hearing, have it heard.  Orders can be made and the parties can then move on to their own life independent of each other.  Again, I do not mean to be lecturing anyone and I do not intend to.  For those very brief reasons, as I said, given ex tempore, I will pronounce Court orders.

24. I again take the opportunity to emphasise the requirement of the husband, though I will not order, to be at Court when his case is listed, so he can hear, have some level of understanding of the issues, and simply be involved.  Otherwise, he will have no cause for complaint whatsoever if he absents himself from his own Court hearings.  I know that message will be passed on to him, but I say that as I will read these ex tempore reasons for judgment before the next time this matter is listed, and I will be well aware if it is his decision not to attend Court or refusal to attend Court, whatever it may be.  Nevertheless, that is his choice and I will never order him to be here for his own case.  I say no more on that topic.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young delivered on 19 October 2012.

Associate: 

Date: