Eberson and Kendall and Ors

[2013] FamCA 1116

FAMILY COURT OF AUSTRALIA

EBERSON & KENDALL & ORS [2013] FamCA 1116

FAMILY LAW – REVIEW – Where applicant sought review of and Order made by Registrar – Where the order made by the Registrar was an order for general discovery made in advance of the wife identifying what her case was, which is not the purpose of discovery – Where the subject order is set aside.
FAMILY LAW – COSTS – Where no order for costs is made.

Family Law Act 1975 (Cth) s 106B

APPLICANT: Ms Eberson

FIRST RESPONDENT: Ms Kendall

SECOND RESPONDENT: Mr Karas

THIRD RESPONDENT: Mr Karwood

FOURTH RESPONDENT: Mr Staunton

FILE NUMBER: SYC 7163 of 2010

DATE DELIVERED: 18 September 2013

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Aldridge J

HEARING DATE: 18 September 2013

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Horowitz & Bilinsky

COUNSEL FOR THE FIRST RESPONDENT: Ms Pender

THE FIRST RESPONDENT IN PERSON: Ms Kendall

THE SECOND RESPONDENT IN PERSON: Mr Karas

THE THIRD RESPONDENT IN PERSON: Ms Karwood

THE FOURTH RESPONDENT IN PERSON: No appearance

Orders

(1)That Order 9, of the Orders made 8 July 2013 for disclosure, is hereby set aside.

(2)That Ms Eberson shall set out in writing, within seven (7) days of today, the payments received in respect of the proceedings between Ms Kendall and Mr Karas identifying the payee(s) that were not the subject of the letter dated 13 May 2013.

(3)That on or before 1 November 2013 the wife shall file and serve her points of claim particularising the claims she is making against the 2^nd , 3^rd  and 4^th respondents in the substantive proceedings.

(4)That, by consent and within seven (7) days, Mr Karas shall provide to the applicant wife copies of up to date bank account statements covering from the period previously provided to the present date.

(5)That there shall be no order as to costs.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Eberson & Kendall and Ors 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 SYDNEY

FILE NUMBER: SYC 163 of 2010

Ms Eberson

Applicant

And

Ms Kendall

First Respondent

And

Mr Karas

Second Respondent

And

Mr Karwood

Third Respondent

And

Mr Staunton

Fourth Respondent

REASONS FOR JUDGMENT

Introduction

1. These reasons were delivered orally.

2. This is an application by the applicant Ms Eberson for review of Registrar Cameron’s order made on 8 July 2013.  The only order sought to be reviewed is Order 9 made by the Registrar on that day which required the third respondent in the substantive proceedings, Ms Eberson of Eberson Family Lawyers, to provide to the lawyers for the applicant wife:

   All relevant documents in relation to payment and costs disbursements to [Eberson Family Lawyers] in this matter including, but not necessarily limited to.

3. Therein followed a list of specified documents.  In other words, an order for general discovery was made. The wife’s claim appears to be that the husband had a number of assets under his control which would otherwise have been available for distribution in the property proceedings between him and the wife, but that he sold those assets and either retained the benefits for himself, or that third parties received the benefit of those assets.  The wife further alleges that those steps were taken in the face of an injunction restraining him from doing so.  The wife asserts that it was the proceeds of those sales that were used to pay the fees of Ms Eberson when she was acting for the husband. 

4. In order to prosecute those claims, an Amended Initiating Application was filed by the wife which joined, as parties, Mr Karwood, to whom it is alleged at least a car was sold and Ms Eberson in relation to the claim in respect of the fees that she received.

5. It is asserted, at least insofar as Ms Eberson is concerned, that the receipt of the fees by her from Mr Karas is liable to be set aside pursuant to section 106B of the Family Law Act.  That section entitles the court to set aside a disposition made by a party to defeat an existing or anticipated order for which, irrespective of intention, is likely to defeat such order. 

6. In order to quantify the costs that were paid to Ms Eberson on 6 May 2013 at a time when Ms Eberson was still acting for the husband to provide an updated list of her fees paid since March 2012, Ms Eberson was also asked to provide updated copies of her client’s bank accounts and any other assets disposed of by her client. These requests in anticipation of the property hearing which was shortly to take place before what was then the Federal Magistrates Court. The hearing was listed for 25 May 2013. On the day before, according to a judgment of Federal Magistrate Altobelli, as he then was, the wife purported to amend her application to join three further respondents making claims against them under section 106B of the Family Law Act.

7. On the day the matter was before Altobelli FM he apparently heard some limited cross-examination of the parties on the application to amend.  Altobelli FM found that he was satisfied, on the evidence, that the wife had an arguable case, but that several times during the day he sought to test the reality of the case with the counsel for the applicant.  He said that there must be some doubts about the courses of some actions that are pursued against the further parties.  His Honour then transferred the matter to this Court, granted leave to the applicant to amend her application to join the three further respondents and made the following order:

   I direct the applicant to further amend her application so that it particularises her claim against the further respondents with such application be filed and served within 28 days.

8. No such amended application has yet been filed.  On 2 July 2013, the wife wrote to Ms Eberson asking her, as a matter of urgency, to provide her with a complete list of what had been paid in legal costs and disbursements by the husband.  On 13 May 2013, Ms Eberson had responded to the request that had been made on 6 May 2013 by enclosing a list of fees paid by the husband since March 2012 to date. 

9. When the matter came before me today the solicitor appearing for Ms Eberson informed the court that, in addition to those payments made by the husband, there had been some subsequent payments made to Ms Eberson by persons other than the husband and that Ms Eberson was prepared to provide, within a short period of time, a list of those payments and the identity of the payer. 

10. Ms Pender, of counsel, who appears for the wife, says that that may not be adequate disclosure because she is not prepared to accept its accuracy.  She says in order to determine that such disclosure is accurate the discovery ordered by Registrar Cameron should be provided. 

11. The position, then, is that the wife was to file a particularised amended application by the end of June.  There was no application, at least as emerges from the reasons of Altobelli FM or the orders he made, for the provision of any further information by any of the respondents prior to that particularised claim being made.  The position then was that where the matter came before the Registrar on 8 July the wife was in breach of that order.

Conclusion

1. The making of a claim under section 106B is a serious claim. It is a claim in respect of which, if it is properly made, discovery would, to the extent necessarily, ordinarily be granted. However, discovery is limited to matters that are in issue between the parties and in the ordinary event discovery is not given prior to a cause of action to enable a party to determine what its case is prior to making it.

2. Given the orders of Altobelli FM, and the fact that they had not been complied with, I do not think that the order for disclosure should have been made.  It was an order for general discovery made in advance of the wife identifying what her case was.  That is not the purpose of discovery.  Accordingly, on review that order is set aside. 

COSTS APPLICATION

1. An application has been made for costs.  It is true that the wife is in breach of the order of Altobelli FM, but for at least a significant part of that time the wife had the benefit of the order of Registrar Cameron that had been made for discovery.

Conclusion

1. Taking into account the financial position of the applicant wife, the fact that for a significant period of the time she has been in default, that there has been an order of Registrar George on foot for discovery, bearing in mind that it emerged today that there are further payments received, and noting that I do not intend to say by that improperly not disclosed because the requests that had been previously made were for payments by Mr Karas which apparently were not provided, the appropriate order is that there be no order as to costs.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge J delivered on 18 September 2013.

Legal Associate: 

Date:  28 March 2014