Ding and Ding (No 2)

[2016] FamCA 824

FAMILY COURT OF AUSTRALIA

DING & DING (NO 2) [2016] FamCA 824

FAMILY LAW – PROCEDURAL – Where the wife fails to serve her Amended Application on joined parties – Where the wife files and serves her supporting affidavit out of time – Where the wife seeks an adjournment – Where any unreadiness for interim hearing is the wife’s own fault – Ordered that the application for adjournment is dismissed

FAMILY LAW – DISCLOSURE – Where the wife seeks orders for disclosure by the husband and third parties – Ordered that the parties file undertakings confirming compliance with their obligations of disclosure – Ordered that the wife have leave to issue subpoenae to the third parties – Ordered that the wife be permitted to interrogate the husband pursuant to Part 13.3 of the Family law Rules 2004 (Cth)

FAMILY LAW – VALUATION – Where the husband concedes he transferred property either to family members or for no consideration – Where the husband no longer has legal or beneficial interest in certain property – Where valuations of such property can be conducted without trespass – Current owners of the property do not need to consent to its valuation – Where the wife does not have resources to meet the cost of valuation – Ordered that the husband pay the costs of the single expert valuer

FAMILY LAW – INJUNCTION – Where the wife is a judgment debtor under a judgment entered in a State court – Where the wife seeks an injunction restraining enforcement of the debt against her – Where no argument is advanced for why the judgment creditor, who is not a party to these proceedings, should be denied the fruits of its litigation – Ordered the application is dismissed

Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) rr 2.02, 5.02, 9.08, 13.3, 13.15, 13.20

Katsilis v Broken Hill Pty Ltd (1977) 18 ALR 181

APPLICANT: Ms Ding

RESPONDENT: Mr Ding

FILE NUMBER: ADC 4389 of 2012

DATE DELIVERED: 23 September 2016

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Austin J

HEARING DATE: 23 September 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr McQuade

SOLICITOR FOR THE APPLICANT: Harry Alevizos

COUNSEL FOR THE RESPONDENT: Mr Oaks

SOLICITOR FOR THE RESPONDENT: Jaak Oaks Lawyers

Orders

1. The applicant wife’s application to adjourn the hearing of the Application in a Case filed on 9 September 2016, either in whole or in part, is dismissed.

2. The parties shall:

a.Make disclosure pursuant to Rule 13.20(2) of the Family Law Rules and file a written undertaking as to disclosure pursuant to Rule 13.15 by 14 October 2016: and

b.Arrange for inspection and copying of any disclosed documents deemed relevant by 4 November 2016.

1. Leave is granted to the applicant wife to:

   a.Issue a subpoena to Ding Pty Ltd;

   b.Issue a subpoena to the trustee of the Ding Family Super Fund; and

c.Forthwith interrogate the respondent husband pursuant to Part 13.3 of the Family Law Rules.

1. The parties must within seven days confer for the purpose of:

   a.Agreeing on the identity of the person to be appointed as the single expert witness for the purpose of preparation of a report in relation to the following issues:

   i.The current value of the property situated at G Street, Suburb H, South Australia; and

   ii.The current value of the property situated at I Street, Suburb J, South Australia.

b.Agreeing on the letter of instructions to be provided to the single expert.

1. If the parties do not agree on the expert to be appointed, then at a further procedural hearing before the court each party must provide to the court:

   a.A list of not less than two persons willing to be appointed;

   b.The qualifications and expertise of each person on that list;

   c.The fees each person will accept for preparing the report and attending court to give evidence; and

   d.The reasons why the party would support or oppose the appointment of each person nominated on the opponent’s list.

2. If the parties do not agree on the letter of instructions to be provided to the expert, then at a further procedural hearing before the court each party must provide to the court a draft letter of instructions.

3. Each party has liberty to apply to re-list the matter before Justice Austin on seven days notice for further procedural orders.

1. The parties shall ensure that in the letter of instructions provided to the expert the expert is furnished with copies of, or has his or her attention drawn to, the provisions of Divisions 15.5.2 and 15.5.6 of the Family Law Rules.

2. Pending further order, the husband shall pay the costs of the single expert witness.

3. Otherwise:

   a.The Application in a Case filed on 9 September 2016 is dismissed;

   b.The application for interim relief contained within the Amended Application filed on 15 September 2016 is dismissed; and

c.Any and all other outstanding applications for interim relief are dismissed.

1. The applicant wife shall file and serve any further Amended Initiating Application by 4 November 2016.

2. In the event the applicant wife seeks any final or interim relief against Ms K Ding (the party named as the second respondent to the Amended Application filed on 15 September 2016), leave is granted to the wife to effect substituted service upon the husband on behalf of that party.

3. The substantive proceedings are adjourned to 9:00 am Adelaide time (9:30 am EST) on Friday, 25 November 2016, for further procedural directions in the Adelaide Registry of the Family Court of Australia (via video link with Justice Austin in the Newcastle Registry of the Court).

4. The parties shall file a collaboratively prepared Balance Sheet containing their property and superannuation interests by close of business on Wednesday, 23 November 2016.

5. I entertain the oral application for costs made by the respondent husband against the applicant wife, but the application for costs is dismissed.

6. I entertain the oral application for costs made by the applicant wife against the respondent husband, but the application for costs is dismissed.

NOTATION

A.The applicant wife does not require the publication of Reasons for Order 16.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Ding & Ding (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth)

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: ADC 4389 of 2012

Ms Ding

Applicant

And

Mr Ding

Respondent

EX-TEMPORE

REASONS FOR JUDGMENT

1. Somewhat remarkably, these parties have been engaged in litigation about adjustment of their property interests under Part VIII of the Family Law Act 1975 (Cth) in the Adelaide registry of the Court since November 2012.

2. Despite the passage of nearly four years, they seem no closer to final hearing.  They are still in dispute about basic procedural directions, including financial disclosure and the valuation of past and existing property interests.

3. The proceedings were first listed before me for procedural directions several weeks ago on 1 September 2016. The proceedings were in a state of disarray and so the orders made that day re-listed the case before me again today (23 September 2016) for two purposes: first, to hear and determine their respective claims for interim relief (which had not then been filed or clearly articulated), and secondly, to make procedural directions to enable the case to progress towards final hearing. 

4. I ordered the wife to file and serve her Amended Application in a Case by 9 September 2016. She filed it by that date, but she did not serve the second, third, fourth, fifth or sixth respondents that she joined to that application. Moreover, in breach of rr 2.02 and 5.02 of the Family Law Rules 2004 (Cth), she did not file or serve her supporting affidavit until 20 September 2016, though no objection was taken by the respondent husband in that regard (though objection was taken close to the conclusion of delivery of ex tempore judgment). 

5. I also ordered the applicant wife to file and serve any Amended Application by 14 September 2016. She filed it on 15 September 2016, but she did not serve the second, third, fourth, fifth or sixth respondents she joined to that application. The interim relief she sought in that document replicated the interim relief she sought in the Application in a Case filed the week before. 

6. There were, however, two significant problems with the Amended Application (apart from the failure to serve it either at all or in a timely way on most of the respondents). First, some of the claims for relief made within it relate to three named parties (at proposed Orders 4, 5 and 6) who have still not been joined as parties to the proceedings. Secondly, the fourth, fifth and sixth respondents have seemingly been joined in error because, although they apparently have joint interests with the husband in certain assets, the wife does not seek any specific relief in respect of those assets contrary to the interests of the fourth, fifth and sixth respondents. In any event, the applicant wife asserted difficulties serving the second respondent, who is the husband’s sister. 

7. I intend to address the problems with the Amended Application by making further orders giving the wife leave to file and serve another Amended Application within about the next six weeks (which will enable her to finalise the entities she wishes to join to the proceedings as parties) and by giving her leave to serve the respondent husband in substitution for personal service upon the second respondent. 

8. On 1 September 2016, I also ordered the respondent husband to file and serve by 16 September 2016 his Response to any Application in a Case filed by the wife. As at the time of hearing this afternoon, he has still not filed any Response in answer to the Application in a Case filed by the wife on 9 September 2016. Nor has he filed any affidavit in rebuttal of her evidence, contrary to the requirement of r 9.08(3) of the Rules.

9. Consequently the only outstanding interim application is that contained within the Application in a Case filed by the wife on 9 September 2016 and the only evidence adduced is the wife’s affidavit filed on 20 September 2016.

Adjournment application

1. The wife sought an adjournment of the hearing. The application was not clearly explained but, as I understood it, the application was only to adjourn the hearing insofar as it related to proposed Order 4 of her Application in a Case, which sought an interim injunction against the unserved second respondent and another third party not joined to the proceedings. 

2. The adjournment application is dismissed. The matter was listed for hearing today. Any unreadiness on the part of the wife was her own fault. The evidence she adduced in support of proposed Order 4 was inadequate to satisfy the grant of an injunction, even if the second respondent had been served and even if the third party had been joined and served. The wife asserts her impecuniosity, so she is unable to pay costs to the respondent husband that might be thrown away by reason of pointless delay.

Issues for determination

1. The wife’s interim application before me therefore raises four issues:

   (a)spousal maintenance;

   (b)disclosure;

   (c)valuation of real property and other entities; and

   (d)injunctions against the second respondent and a third party.

Spousal maintenance

1. As was conceded by the wife’s counsel, there is no evidence at all before the Court as to either the wife’s need for support or the quantum of the support needed. Nor did she adduce any evidence of the husband’s capacity to pay spousal maintenance. 

2. It is to be noted that the wife seeks exactly the same relief by way of spousal maintenance on a final basis. If she thereby concedes it is necessary to conduct a final hearing to test the evidence in order to vindicate her entitlement to spousal maintenance, inferentially, it is precipitous for her to seek such relief at an interlocutory stage. 

3. Ultimately, the wife’s counsel conceded there was no evidence before the court that would enable any interim spousal maintenance order to be made in her favour and, as a consequence, that part of her application is dismissed. 

Disclosure

1. By proposed Order 2 of the Application in a Case, the wife seeks disclosure of a litany of documents by both the husband and an unjoined third party. 

2. There is no utility making an order which simply admonishes the husband to comply with his existing obligation of financial disclosure imposed by Chapter 13 of the Rules. I intend to make orders obliging the parties to file undertakings as to their respective disclosure, as there will then likely be costs consequences for them in the event that their undertakings prove to be false. 

3. I am not satisfied that I have power to order an unjoined third party to disclose documents to the wife. In my view, the problem the wife perceives in procuring relevant documents from third parties can be satisfactorily addressed by the grant of leave to issue subpoenae to the entities in which she is interested, namely Ding Pty Ltd and the trustee of the Ding Family Superannuation Fund. 

4. I will additionally grant leave to the wife to interrogate the husband pursuant to Part 13.3 of the Rules, though she probably already has that entitlement.

5. The wife’s counsel, as I understood it, conceded that such measures would be a satisfactory substitute for the orders proposed in Order 2 of the Application in a Case, the application for which will therefore be dismissed.

Valuations

1. I will shortly make orders for the valuation of two parcels of real property, which the husband concedes he transferred to family members and/or for no consideration. Those parcels of real property are:

   (a)G Street, Suburb H, South Australia; and

   (b)I Street, Suburb J. 

2. The husband asserts he no longer has any legal or beneficial interest in either of those two properties, but that is not an impediment to orders requiring valuation of the properties. The current owners of the properties do not need to consent to such procedural orders. The appointed single expert valuer could undertake the valuation exercise without trespassing upon the properties if the current owners refuse him/her access. 

3. I intend, as the wife asks, to order that the husband pay the costs of the valuation of those two properties. That is because, despite the paucity of evidence, I draw an inference of the wife’s penury from the following facts and circumstances. It is common ground she has recently suffered a District Court judgment against her in the sum of several hundred thousand dollars. That debt is the subject of her application for an injunction, which I am yet to address.  The fact she seeks an injunction to restrain enforcement of the judgment against her suggests she is unable to satisfy the liability. She also made an application for spousal maintenance, which implies her perception of her need for financial assistance. It is also common ground that the husband has been on notice for the last couple of weeks of her proposal for him to pay for the valuations, due to her professed inability to contribute. Similarly, I draw an inference about the husband’s capacity to pay from these facts and circumstances: he had knowledge of the wife’s proposal that he pay for the valuations but he failed to file any evidence to substantiate his now asserted financial incapacity to do so. The power to adduce such evidence lay entirely with him.  His decision not to adduce the evidence is of course his prerogative, but it enables an adverse inference to be drawn (see Katsilis v Broken Hill Pty Co Ltd (1977) 18 ALR 181 per Barwick CJ at 197).

4. The wife’s application for the valuation of several other parcels of real property is rejected for the following reasons:

   (a)In respect of the property at L Street, Suburb M, the husband asserted the property has been sold. He alleged it was formerly held by him as a trustee on behalf of the Ding Family Super Fund and, in that event, the property and its estimated value must have been disclosed as an asset in the Fund’s past prudential documents. I intend, as I have already indicated, to permit the wife to issue a subpoena to the trustee of the superannuation fund to procure such financial documents as she sees fit. 

   (b)As to the property at N Street, Suburb M, although the husband admits he still has a current legal interest in that property, he asserted he holds the interest merely as trustee for the beneficial interest of the superannuation fund. The same considerations as applied to the last property apply to this property. The wife’s procurement of financial documents from the superannuation fund should be sufficient, for the time being, to facilitate her investigation about the past and current values of all properties owned by the superannuation fund. 

   (c)As to the property at O Street, Suburb P, the husband asserted he sold the property to a third party, named Ms Q, at arm’s length for proper consideration. It is clear from the evidence adduced by the wife that she has not yet taken steps to obtain from the Land Titles Office a copy of the transfer document to verify the consideration paid for that transfer. Ms Q is not joined to the proceedings, and I am not prepared to order that the property be valued (particularly at the husband’s cost) until the wife has explored the value for which the property was transferred, which may have been a proper commercial price. 

5. Aside from those parcels of real property, the wife also proposed that various entities be valued, but that proposal is rejected for the following reasons:

   (a)As to Ding Pty Ltd, in which the husband formerly held a shareholding and was formerly a director, I am not prepared to put the husband to the cost of commercial valuation of that company pending proper preliminary investigation by the wife. In discourse with the wife’s counsel, he seemed to accept the proposition that leave to issue a subpoena to that company, requiring it to produce past financial data in the form of balance sheets and profit and loss statements (which should reveal its profitability and the assets it holds) would be a sufficient forensic technique to employ at this point in time.

   (b)As to the Ding Family Super Fund, similarly, the wife’s counsel accepted that the grant of leave to the wife to issue a subpoena to the trustee of that superannuation fund, requiring production of historical financial data, would be satisfactory for the time being. 

   (c)As to the Ding Family Investment Trust, there was not a skerrick of evidence adduced to indicate any connection between it and either of the spouses. There was no evidence as to the identity of the trustee and no evidence that the husband has any proprietary interest in the Trust, either as a trustee or beneficiary. Nor could the wife’s counsel fill that evidentiary gap when it was raised with him. I am unable to conclude on the available evidence that either party has any legal or beneficial interest in that entity and, accordingly, the wife’s application in respect of that entity is dismissed.

Injunction

1. The wife deposed in her affidavit that a judgment was delivered against her in favour of Ding Pty Ltd in the District Court of South Australia on 26 August 2016. She did not depose to the value of the judgment. I was told at the time of the last Court event on 1 September 2016 that the judgment debt is yet to be entered, but will certainly be in the vicinity of several hundred thousand dollars. What is plain is that the judgment creditor is Ding Pty Ltd and the judgment debtor is the wife. However, the wife seeks the injunction not just against the third party judgment creditor, but also the second respondent. 

1. The second respondent, whom I have already remarked has not been served and is not her creditor anyway, has not been given any undertaking as to damages by the wife. I decline to make the injunction sought against the second respondent. 

2. As for the third party judgment creditor, there was no reason advanced for why it should be denied the fruits of its litigation in a State jurisdiction. The third party has not been joined to these proceedings and has not been served.  Similarly, it has not been given any undertaking as to damages. Importantly, in the most recent iteration of her final application filed on 15 September 2016 (at proposed Order 10), the wife only ultimately seeks relief in the form of an indemnity from the husband against her liability for the debt she does or will owe to Ding Pty Ltd. Even if such relief is eventually granted, an indemnity is not the same as her absolution from liability for the judgment debt. Whether such an indemnity should be granted will abide the evidence as tested at final trial.

3. In my view, the evidence placed before the Court falls well short of that required to justify the injunction proposed against either party. 

4. For those reasons I make the following orders.

ORDERS DELIVERED

1. These additional reasons are given for refusal of the husband’s application for costs of the interim hearing.

2. I have just given reasons for why an interim hearing between the parties was necessary today, despite the matter being listed before me for procedural directions several weeks ago on 1 September 2016. 

3. Self-evidently, because the parties were unable to agree between themselves, it was necessary for the applicant wife to file an Application in a Case. The application was successful in some respects but failed in others. The husband’s obfuscation precluded me from clearly ascertaining what parts of the application might have been the subject of his consent. If any part of the application was not genuinely opposed, then the relevant consent could have been given on 1 September 2016, or subsequently, and that part of today’s hearing was unnecessary. If the whole of the wife’s application was genuinely in dispute then orders have been made today which facilitate progression of the litigation in the manner the wife desired, albeit that many of the orders made were not in the form she proposed.

4. Under s 117(1) of the Act, the orthodox position is that parties should bear their own costs of proceedings under the Act, though the Act specifically envisages that costs orders can be made. In such circumstances, the Court is required to take into account the considerations specified under s 117(2A) of the Act in determining what, if any, costs order should be made.

5. In making submissions in support of the costs application, the husband’s solicitor did not advert to any of the factors prescribed by s 117(2A). His submissions were, therefore, insufficient to make out the husband’s entitlement to costs. It is best to say no more than that the process of determining what procedural orders were needed by these parties to enable the litigation to progress to final trial would have been much easier but for the submissions made on behalf of the husband. The hearing was unnecessarily difficult and, had it been capable of the easy resolution asserted by the husband’s solicitor, this hearing would have been concluded much earlier than nearly 5.00 pm in the afternoon after nearly three hours of debate.

6. The application for costs is dismissed.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the ex-tempore reasons for judgment of the Honourable Justice Austin delivered on 23 September 2016.

Associate: 

Date:  29 September 2016