Ding and Ding & Ors

[2017] FamCA 206

FAMILY COURT OF AUSTRALIA

DING & DING AND ORS [2017] FamCA 206

FAMILY LAW – PRACTICE AND PROCEDURE – Hearing – Where the applicant wife objects to the proceedings being listed for final trial – Where the wife seeks further time to value the husband’s former shareholding in a corporation – Where the wife failed to issue a subpoena on the corporation despite previously being granted leave to do so – Where the documents the wife seeks be produced on subpoena have been readily available to her for some time – Decided progression of the proceedings to trial should not be delayed any longer by the dereliction of the wife or her lawyers

FAMILY LAW – PRACTICE AND PROCEDURE – Application to adduce expert evidence – Where the wife seeks to call expert evidence – Where her intention to adduce expert evidence ignored the preference of the Family Law Rules 2004 (Cth) for single expert evidence over adversarial expert evidence – Where leave to adduce expert evidence would delay the allocation of a trial date at consequent prejudice to the husband – Decided less prejudice flows to the wife in the appointment of an early trial date – Order the proceedings are fixed for final trial

Family Law Act 1975 (Cth), s 106B

Family Law Rules 2004 (Cth), rr 1.04, 1.06, 1.07, 1.08, 15.42, 15.51, 15.52

Aon Risk Services Australia Limited v ANU (2009) 239 CLR 175

APPLICANT: Ms Ding

FIRST RESPONDENT: Mr Ding

SECOND RESPONDENT: Ms K Ding

THIRD RESPONDENT: Mr R Ding

FILE NUMBER: ADC 4389 of 2012

DATE DELIVERED: 23 March 2017

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle/Adelaide

JUDGMENT OF: Austin J

HEARING DATE: 22 March 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr McQuade

SOLICITOR FOR THE APPLICANT: Harry Alevizos

COUNSEL FOR THE 1^ST RESPONDENT: Ms Pyke QC

SOLICITOR FOR THE 1^ST RESPONDENT: Jaak Oks Lawyers

COUNSEL FOR THE 2^ND RESPONDENT: Not Applicable

SOLICITOR FOR THE 2^ND RESPONDENT: Not Applicable

COUNSEL FOR THE 3^RD RESPONDENT: Not Applicable

SOLICITOR FOR THE 3^RD RESPONDENT: Not Applicable

Orders

1. The trial of this matter is listed before Justice Cronin at 10:00 am on Monday, 3 April 2017, for a period of two days.

1. The setting down and trial fees shall be paid by the parties in equal shares within seven days of the date of these orders.

2. The parties shall file and serve by Wednesday, 29 March 2017:

   a.The affidavits upon which they rely at trial; and

   b.Updated Financial Statements.

3. The parties shall by Friday, 31 March 2017 file and serve upon one another a Case Outline document containing:

   a.Short Chronology;

   b.Short Summary of Argument; and

   c.List of Authorities.

4. Liberty to restore to the list on seven days notice for further procedural directions.

5. The proceedings are adjourned until 10:00 am Adelaide time (10:30am EST) on Thursday, 23 March 2017, in the Adelaide Registry of the Family Court of Australia (via video link with Justice Austin in the Newcastle Registry of the Family Court of Australia).

NOTATIONS

A.The parties agree with the valuations procured from the single expert witness in respect of the parcels of real property at Suburb H and Suburb J, South Australia. As a consequence, the single expert will not be required for cross examination at trial.

B.The wife’s oral application to either appoint an employment consultant and forensic accountant as single expert witnesses, or alternatively call such witnesses as adversarial experts in her case is refused, the reasons for which will be provided tomorrow.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Ding & Ding 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

1^st Respondent

And

Ms K Ding

2^nd Respondent

And

Mr R Ding

3^rd Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. Due to the recusal of the only sitting trial judge in the Adelaide registry of this Court, these proceedings were first listed before me on 1 September 2016 to make procedural orders enabling progression of the litigation to final trial. 

2. On 23 September 2016, when delivering ex tempore reasons to resolve a procedural dispute, I was moved to observe as follows:

   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.

   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. Not much changed thereafter. Notwithstanding suites of procedural orders later made by me in September 2016, November 2016, and February 2017, the applicant wife was unready to accept the trial dates sought by the respondent husband when the proceedings came before me again on 22 March 2017. 

4. Over the wife’s objection, the proceedings were listed for trial in the Adelaide registry on Monday, 3 April 2017. Both parties conceded their capacity to be ready for trial about two weeks hence, but the wife opposed the proceedings being listed for trial because she wanted to obtain more evidence. 

5. These reasons explain why the wife’s proposals about the acquisition of more evidence were rejected and the case was listed for trial at the husband’s request over the wife’s objection. 

History

1. Some history is needed to contextualise the wife’s application for some reprieve and the opportunity of more time within which to prepare her case. 

2. She commenced the proceedings over four years ago in 2012, presumably because she sought reasonably expeditious determination of her application for property adjustment. For unknown reasons, the proceedings languished until 2016. 

3. The applicant wife could not articulate the procedural orders she needed or desired to advance the case when the matter was first listed before me on 1 September 2016, so I adjourned the case for several weeks until 23 September 2016.  

4. Relevantly, on 23 September 2016, I made orders to the following effect:

   (a)The parties were to give full and frank disclosure and file undertakings confirming their compliance with that obligation (Order 2); 

   (b)Leave was granted to the wife to issue a subpoena to Ding Pty Ltd (Order 3(a)); 

   (c)The parties were to procure single expert evidence about the value of two parcels of real property (Orders 4 to 9); 

   (d)The wife was to file and serve an Amended Application to cure existing procedural defects (Orders 11 to 12);  and

   (e)The parties were to file a collaboratively prepared balance sheet (Order 14). 

5. The wife did not comply with any of those orders – either at all or in a timely way. 

6. Consequently, on 25 November 2016, the proceedings were again adjourned to 6 February 2017 and some further procedural orders were made. 

7. By 6 February 2017, relevantly for present purposes, the wife had still not availed herself of the leave granted in September 2016 to issue a subpoena to Ding Pty Ltd, so leave was granted afresh for the subpoena to be issued and made returnable by 10 March 2017 (Order 2). The parties were also ordered to file individual balance sheets if they were incapable of jointly preparing a balance sheet (Order 4). 

8. By 23 March 2017, the wife had not filed a balance sheet, but the husband had.  The husband was anxious to secure a trial date, but the wife was not. 

9. The wife’s opposition to an early hearing date was premised upon: 

   (a)Her apparent desire to conduct further investigation of the value of the husband’s former shareholding in Ding Pty Ltd;  and

   (b)Her stated intention to adduce evidence at trial from an “employment consultant” and “forensic accountant”, which evidence could not be procured quickly enough to be ready for the trial dates prospectively available in April 2017.

Ding Pty Ltd

1. It is common ground the husband formerly held a one per cent shareholding in the corporation. 

2. The wife’s prayer for relief in respect of the corporation is set out as follows in her Further Amended Initiating Application filed on 23 November 2016:

   8.That, pursuant to section 106B of the Family Law Act 1975 (Cth), the transfer of the husband’s shareholding in [Ding] Pty Ltd in or about May 2015 to [the second respondent] be set aside, or alternatively [the second respondent] be declared to hold her interests in the said shareholding on trust for the husband.

3. The wife recently suffered a judgment entered against her in favour of the corporation before a South Australian State Court for a sum in excess of $200,000. In relation to that liability, the wife seeks an order in the following terms in these proceedings:

   10.That the husband indemnify the wife in respect of her debt to [Ding] Pty Ltd.

4. On 23 September 2016, I refused the wife’s application for the appointment of a single expert to value the husband’s former shareholding in the corporation for the following reasons:

   25.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.

5. That was why I granted the wife leave in September 2016 to issue a subpoena to the corporation for production of its financial records. For reasons never explained by the wife, she failed to issue the subpoena to the corporation. She only did so months later when I extended the grant of leave on 6 February 2017. 

6. The wife asserts the corporation has not complied with the subpoena, but she did not ask, when offered, for it to be enforced by the issue of a warrant for the arrest of the corporation’s director/s.

7. Instead, the wife asked for an order compelling the husband to disclose the corporation’s financial statements.  However, there was no need to make such an order because the husband informed the Court that, pursuant to the orders made on 26 September 2016, he filed and served an Affidavit of Documents in which he disclosed the corporation’s financial statements up to and including 30 June 2015. He could not produce any more recent financial statements in respect of the corporation because, as already indicated, he transferred his shareholding and ceased his directorship of that corporation in or about May 2015. The husband asserted that, in breach of Order 2(b) made on 26 September 2016, the wife had neither inspected nor copied the discovered documents. The upshot is that, for many months, the financial documents the wife now seeks from the corporation under subpoena have been readily available to her from the husband. She just has not bothered to look at them. 

8. The progression of these proceedings to trial should not be delayed any longer by the dereliction of the wife or her lawyers. She has had more than enough time within the last six months, let alone the three years before that, to obtain and scrutinise the financial statements of Ding Pty Ltd and to decide whether its valuation was worthwhile. The husband has admitted his former shareholding in the corporation is valued at about $20,000, so there is some valuation evidence before the Court for use at trial.

Expert Evidence

1. Upon enquiry about the likely duration of trial for listing purposes, the wife informed the Court of her intention to call expert evidence at trial from an “employment consultant” and a “forensic accountant” – both chosen by her. 

2. Her intention to do so ignored the preference of the Family Law Rules 2004 (Cth) (“the Rules”) for single expert evidence over adversarial expert evidence. When alerted to the problem, the wife instead sought their appointment as single experts, but her amended oral application overlooked that:

   (a)She had not raised the issue at any of the preceding procedural Court events; 

   (b)The application took the husband by surprise;  and

   (c)Success of her application would inevitably delay listing the trial beyond the earliest available trial dates. 

3. To avoid the problems of partiality potentially caused by parties’ reliance on adversarial witnesses, Part 15.5 of the Rules sets out the regime for the procurement of expert evidence. Its overriding purpose is to ensure that, if practicable and without compromising the interests of justice, any necessary expert evidence should be given by a single expert (r 15.42(c)). However, a party may apply to adduce evidence from an adversarial expert if it is necessary in the interests of justice (r 15.42(e)).

4. Any application for permission to adduce adversarial evidence should be supported by an affidavit containing prescribed information (rr 15.51(1) and 15.52). In that regard, the affidavit filed in support of such an application must state whether the party concerned has attempted to agree on the appointment of a single expert witness with the other party and, if not, why not (r 15.52(2)(a)). Self-evidently, in this case, the wife had not attempted to agree on the appointment of a single expert witness with the husband and had no explanation for why not.

5. When considering whether to permit a party to adduce evidence from an expert witness, the Court may take into account the purpose of the Rules and the likelihood of the appointment expediting or delaying the case (r 15.52(3)(a) and (c)). I have already adverted to the likely delay of the trial by reason of the wife’s belated joinder of this issue.

6. Other considerations under the Rules bear upon this determination. In particular, the main purpose of the Rules is 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 (rr 1.04 and 1.07(a)). In promoting the main purpose of the Rules, the Court is obliged to actively manage each case by, among other things, monitoring and controlling the progress of each case (r 1.06(e)), ensuring that the parties and their lawyers comply with the Rules (r 1.06(f)), and dealing with as many aspects of the case as possible on the same occasion (r 1.06(h)). It is the obligation of each party and their lawyers to assist in the promotion of the main purpose of those Rules by, in particular, ensuring their readiness for court events (r 1.08(c)), complying with time limits (r 1.08(e)), and assisting the just, timely and cost-effective disposal of cases (r 1.08(g)).

7. The question of the need for appointment of single experts was expressly raised with the parties in September 2016. Orders were then made for the procurement of single expert evidence about the value of two parcels of real estate. If the wife had raised the issue of the current proposed single expert witnesses then, or at any procedural event afterwards when the trial was still not ready to be set down, orders for the appointment of more single experts could have been made. That did not occur because the issue of more expert evidence was never raised by the wife. 

8. As the High Court observed in Aon Risk Services Australia Limited v ANU (2009) 239 CLR 175, avoidance of undue delay and efficient use of public resources are considerations which may transcend the interests of the parties (at 189-190, 211-215). The times are long gone when the Court left the parties to control the course of litigation. The resolution of litigation serves the public as a whole, not merely the parties to the proceedings (at 217). Costs orders are not always a panacea that heals all (at 213-214).

9. To grant the wife’s application for the belated appointment of some single experts would necessarily have delayed the allocation of a trial date at consequent prejudice to the husband. By comparison, less prejudice flows to the wife in the appointment of an early trial date. If she blames her lawyers for her unreadiness for trial, that is a matter between her and her lawyers. 

10. The wife only wanted the “employment consultant” to give evidence about the husband’s income-earning prospects. She knows what his past income was so, against that background, predictions about his income-earning capacity are possible and are not precluded by an absence of expert prognostication.

11. The wife only wanted the “forensic accountant” to analyse the financial performance of Ding Pty Ltd, but her case is not thwarted by the absence of that evidence. Her primary application is for the husband’s one per cent shareholding in the company to be reinstated under s 106B of the Act or for a declaration he retains his equitable interest in it under a trust. The current value of that shareholding is of only ancillary relevance to her primary applications, which could fail. If her primary applications for relief under s 106B of the Act or in equity do not fail, the circumstances at trial may then justify an adjournment to procure accurate valuation evidence. It is arguably precipitous to delay the trial to obtain valuation evidence which may never be needed.

12. For those reasons, the proceedings were fixed for final trial. As already noted, the wife conceded she could be ready for trial, assuming her application for leave to call single or adversarial expert witnesses was refused. 

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 23 March 2017.

Associate:

Date:  7 April 2017