Erington and Erington & Anor

[2017] FamCA 397

FAMILY COURT OF AUSTRALIA

ERINGTON & ERINGTON AND ANOR [2017] FamCA 397

FAMILY LAW – INTERIM JUDGMENT –  issues associated with enforcement, discovery, spousal maintenance, child maintenance – Litigant in person whose evidence does not sustain orders sought.
FAMILY LAW – CASE MANAGEMENT – matter set down for trial over opposition from the wife – Parenting orders sought which need resolution, and in respect of property, creditors pressing.

Family Law Act 1975 (Cth)

APPLICANT: Mr Erington

RESPONDENT: Ms Erington

OTHER PARTY: S Pty Ltd

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLC 9064 of 2015

DATE DELIVERED: 8 June 2017

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 1 June 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Smallwood

SOLICITOR FOR THE APPLICANT: Lander & Rogers

THE RESPONDENT:	In Person
SOLICITOR FOR THE OTHER PARTY:	Mr Brygel, Brygel Lawyers
COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER:	Ms Smith

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Victoria Legal Aid

Orders

1. That the application of the wife filed 31 May 2017 is dismissed.

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 Erington & Erington and Anor 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 MELBOURNE

FILE NUMBER: MLC 9064  of 2015

Mr Erington

Applicant

And

Ms Erington

Respondent

And

S Pty Ltd

Other Party

INDEPENDENT CHILDREN’S LAWYER

REASONS FOR JUDGMENT

1. The reasons concern the interim dispute between the applicant husband, Mr Erington (the husband), and the respondent wife, Ms Erington (the wife) about issues of parenting, property, spousal maintenance and child support.

Background

1. This case has been before the Court since September 2015 when the husband filed proceedings. It has had something like 13 interim hearings. The Court must take some responsibility for those because the wife maintains she has brought various applications and the matters have not been determined. Much of her complaint revolves around disclosure of documents and (in one form or another) spousal maintenance.

2. The wife is unrepresented and, I accept, with all of the difficulties of trying to navigate around a complicated legal system where evidence is critical, she is doing the best she can. She acknowledged that it is not the Court’s function to run her case. She said she hopes to obtain lawyers in the future but that obviously depends on access to money. She asserts (as distinct from proves) that the husband has access to money such that he can be comprehensively represented. No overt inquiry appears to have been made of how the husband is funding his legal proceedings.

Creditors

1. The husband is represented not just by family lawyers but another commercial law firm which is apparently separately dealing with issues such as claims by the Australian Taxation Office (the ATO) and the ANZ Bank. In the case of those matters, the husband is the debtor and the ATO and the ANZ are his creditors. His commercial lawyers have indicated through his family lawyers that the ATO has now sued him personally for over $700,000 arising from a tax liability apparently associated with a company and/or trust that has been liquidated. I have assumed that the entities had a tax obligation which has not been satisfied and the ATO is now pursuing him.

2. In respect of the two major creditors, the Court was told by the husband’s counsel that he has negotiated with the ATO a tenuous arrangement under which he will enter into a Part X Bankruptcy Act arrangement by 11 July 2017. The ANZ bank is said to have been co-operative. The alternative to that course (and indeed a failure to comply with such an arrangement) is bankruptcy.

3. The husband is a businessman involved in car retailing. I do not profess to say that from the material provided by either party, I have a clear understanding of what his financial position currently is.

Setting down for trial?

1. The husband’s position is that this case has dragged on and needs a final hearing. The wife opposes that setting down but gives no indication of when she will be ready for trial. Her explanation for that is simply that she has had orders since 2015 relating to discovery and the husband has not complied. That is denied by the husband and I shall deal with his more definitive responses below.

2. The wife’s position as she articulately put was that she did not want to go into a final hearing “blindfolded” nor in any event, without a lawyer facing not just the complicated process but also experienced lawyers acting for the husband. Whilst common sense dictates that what the wife says is sound, the difficulty for the Court is that this wandering cannot continue indefinitely where the wife has, on my assessment of the orders made thus far, had opportunities to get her house in order.

Discovery

1. In my view, the discovery issue is the most critical one. I made orders on 24 March 2017 that the husband provide to the wife an opportunity to inspect documents she sought by no later than 4 pm on 10 May. Minutes after that deadline expired, the wife emailed the husband’s lawyers complaining that the husband had not complained. At 11 pm that night, the husband’s lawyer responded to the wife advising that she had been in a conference all afternoon and had been “unable to sign” a letter but then enclosed it in the email but indicated that “the enclosure” presumably to the letter, would follow “by express post” the next day. I am unable to decipher whether the enclosure satisfied the order I made in March but in any event, lawyers need to be very careful that they have responsibilities under the Family Law Rules to ensure order compliance. In this case, caution should have been the order of the day having regard to the constant complaints of the wife not just about discovery but also about not getting an accurate picture of the husband’s finances. It is clear to me that the husband disputes the assertion of non-compliance and as such, I am unable to determine the truth of any allegation but diligence in this case about compliance on time is more called for than usual because of past complaints and the wife’s lack of legal representations.

2. More importantly, I am also unable to find whether the husband had otherwise complied with his lawyer’s requirements and would have been within time save for his lawyer’s activities that day. Even if there was some problem for the husband of his lawyer’s making, it is not at all clear to me how that would impact on the setting of the matter down for trial for reasons that I turn to in a moment.

3. After 10 May (according to the affidavit of the wife), the lawyer for the husband did not write again to her until 6 days later. That letter seems to suggest that there was a schedule attached to both the 10 May and 16 May letters. The wife was offered the opportunity to either attend to inspect the documents or, at her own expense, to have them copied.

4. Whatever criticism should be levelled at the husband and/or his lawyer for the failure to meet the deadline, in a case where the wife was complaining that there had not been compliance and that discovery was holding up her progress towards a final hearing, I am perplexed that she did nothing further over the ensuing 15 days to endeavour to inspect.

5. Having complained that the Court has contributed to the dilemma with the many hearings, the wife’s lack of diligence to discovery is odd where she says that she is not employed.

6. Just to be clear, the wife is an articulate person who was able to forcefully put arguments and who made observations that suggest she not only understands the legal process but also the way in which the husband has operated the business. Three things stand out to support that conclusion.

7. First, so confident is she of her own business acumen that she has sought an order that she be given the opportunity to take over the husband’s corporate structure.

8. Secondly, she produced documents from her papers which she said came from the ATO which showed that the husband had control of a lot of money and had used it improperly as little as only a few months ago. Those documents were not included in her evidence but it is apparent that the wife has done some investigation.

Sale of Queensland properties

1. Thirdly, the wife annexed to her affidavit two contracts for the sale of real property. These give the appearance of pro forma documents but they anticipate a settlement of the sale on 2 June 2017. Curiously, I am told that the properties are jointly owned yet the vendor in both cases is the wife alone. Nothing in the documents records what the arrangement is as between stated vendor and purchaser and I was not informed by the wife what would happen if the contract as annexed was not performed. I do not know whether a damages claim would be raised. It is obvious that the wife had anticipated that the Court would make an order that the husband transfer his interest to her and she could do what she thereafter wished. She told the Court that the arrangement included her being able to rent back the T Street property for a year. The wife’s explanation for all of this was that she had seen the husband’s position about the two properties including that they should be sold but there is no apparent agreement as to what should happen to all of those proceeds and nor could there be with the husband facing a personal claim for over $700,000 from the ATO. For that reason alone, the Court would be reluctant to make a transfer order on an interim basis when the creditor had not been notified. It could, for example, be seen as putting the asset beyond the reach of the creditor.

2. On the untested evidence and being unable to make any findings which would support the relief that the wife seeks, I have little choice but to rely on the denial by the husband of non-disclosure noting he maintains that he has fulfilled his obligations and is ready for trial. On that same evidence and without the benefit of any comprehensive explanation, the only conclusion I can come to is that in respect of discovery, the wife has an opportunity for access to the relevant documents but has not followed that through.

Weeks to trial

1. It is comforting that the trial I have available is some weeks away so there is time for her to conclude her discovery. Counsel for the husband said openly that the solicitors would continue to make the documents available for inspection.

2. In addition to my concern about the wife’s approach to discovery, I have to consider the husband’s desire to conclude the proceedings. That desire  is, I accept, exacerbated by the pressure from the ATO and the ANZ Bank. Although the wife seemed to dismiss that as an issue, it is logical that unless the issue is properly addressed, the property of the parties may be lost. That along with the matters mentioned justifies a balancing of the prejudice to both parties in favour of the husband.

Past interim hearings

1. Because the wife has complained that the Court has previously not dealt with a lot of her matters and also because she asserts that she needs legal representation for any trial hearing, it is important to deal with each of the orders she seeks now on an interim basis. I propose to deal with them sequentially but before doing so, to mention the parenting matter.

Parenting dispute

1. The parties have a 12 year old daughter who lives with the wife. The written positions of the parties as to what final parenting orders they propose to seek here are modestly different. In reality, this case is predominantly a dispute about two contact days. The parties agree on alternate weekends otherwise. The wife’s position is that the husband cannot manage (or does not do) what he currently has with their daughter so there is no point in making the extra days he wants. No doubt the evidence will reveal the reality.

2. The Independent Children’s Lawyer’s main concerns were to get the case heard so that there might be an end to the exposure of the daughter to the parental conflict but also that much depended upon what the evidence was that the parties presented.

3. The only expert witness is psychologist Mr U but he last dealt with the matter in 2015. There would seem little point in him doing any extra work interviewing everyone if the dispute is simply about two days contact. The Independent Children’s Lawyer said that she had spoken to the child and knew her views. There is little more that the Court needs to do other than to hear that part of the case and as the evidence should be restricted to the dispute about the two days, a decision can quickly end that problem.

The wife’s interim application

1. I turn then to the wife’s application in a case and to the relief there sought. The application and its supporting affidavit were only filed the day before the hearing but no objection was taken to that. I shall ignore a number of paragraphs where there has either been a doubling up or there is no relief sought.

Proposed order 2

1. This order sought that the Court appoint “an internal accountant” to supervise the husband’s compliance with State laws and that such be at his expense. Why that was necessary was not clear and I note the wife’s reference [25] to the husband having “extremely reputable and expensive” accountants.  She submitted that the husband was not managing the car business appropriately, but the dilemma is what that means.

2. The evidence presented [2] said that the wife appoint such an accountant to ensure the husband operate the “companies” pursuant to the “Commercial Act” until the final proceedings were completed. Leaving aside what that sentence means and what legislation the wife was intending to rely upon, there is no evidence which supports an order that presumably would require contractual terms obligations to be drawn as well as consideration about to whom this accountant would be responsible. Additionally, it is not the function of the Court to unilaterally determine who such a person should be. The wife did not nominate anyone nor indicate at whose expense that role would be performed.

3. There is no justification for order 2.

Proposed orders 4, 7, 13 and 14

1. The wife sought that the husband forthwith cause payment to be made to a named company to cover invoices for work done.

2. This issue can be quickly determined. Whatever order was made in 2015, the relevant company B Pty Ltd is now said to be in liquidation. The wife did not dispute that. It is hard to understand how as a matter of law, the order could be so enforced if the liquidator was not a party to any such request.

3. At [20] of her affidavit, the wife said that the husband had offered her compensation of $10,000 p/m (presumably “per month”) to “allow him to breach” the relevant orders and employ another “… company”. She asserted that the husband not only ceased the “services” but also “withheld” payments. She went on to mention her inability to meet her rental payments presumably on the basis that she had some connection with the company that the husband had ceased to use. Indeed, she referred to an email where he terminated that company’s services which on the face of the relevant orders could amount to a breach.

4. The difficulty lies in the fact that the relevant invoices for V Pty Ltd are due by two companies even if the husband was the person to whom the in personam orders were made. I also remain uncertain whether any new entity is covered by the relevant injunction and the issue was not argued.

5. As this part of the wife’s application was apparently an enforcement of orders application, I decline to make the order sought in number 4 on the basis that of the contracting parties, I am informed by the husband and it is not denied by the wife, the company responsible for the invoices is in liquidation. I know nothing about the obligations, contractual obligations, invoices and debts are for the other company, C Pty Ltd.

6. The next order seeks that the husband solely engage V Pty Ltd to complete various things presumably associated with the car retailing business. The evidence as to who controls this particular company is unclear but I have presumed it is the wife. Why the court would order her company as distinct from her to be recipient of that, I am unsure. Nothing in the evidence indicates how that would work having regard to the wife’s complaint about the unco-operative nature of the husband’s disclosure obligations. Understandably, the wife did not point to any power of the Court to make such an order. It is not the court’s job to try and fashion something.

7. Proposed order 13 seeks that the husband pay the wife’s costs incurred in the 2015 proceedings for his breaches of those orders. There being no evidence of details and because of my reticence to contemplate enforcement of those orders, that I find there is no basis to make order 13. Similarly, the wife’s argument was that the default position should be that she should take over the business as I earlier mentioned. She having not satisfied me of such breaches, the condition precedent is not met.

Proposed order 6

1. The wife seeks an order that the husband comply with paragraph 5 of orders made on 4 November 2015 to “facilitate the wife and child utilising for their benefit” a credit with Qantas and the consequently, the husband transfer to her a $16,000 voucher.

2. Thornton J made an order by consent of the parties that reads:

   The husband forthwith use his best endeavours to facilitate the wife and child utilising for their benefit the credit with Qantas. E$16,000.

3. As this is also an enforcement application, the court must know what it is being asked to enforce. I do not know what requests were made of the husband nor whether he made any “endeavours” (as the order requires) nor, more importantly whether Qantas will transfer the “credit” and from whose account. In many ways, it is concerning that this order was made but also by the consent and request of the parties. Presumably it was drawn on the basis that it could only be an “endeavour” by the husband because there was no indication of the position of Qantas.

4. I decline to enforce that order because of uncertainty as to its enforceability but also because I do not know what requests by the wife were made.

Proposed order 8

1. The wife seeks that paragraph [10] of the orders of 1 December 2015 be enforced although she does not say how.

2. That order reads:

   The parties jointly engage an agreed Single Expert Valuer to value the businesses conducted by those entities.

3. Albeit the Court made the order, the parties drew it. They have obviously proceeded with this litigation for almost 18 months now knowing that that order stood even if there was some uncertainty about what it meant. Importantly, it is the function of a court to order parties to do things but in this case as is evident from what I have underlined, they were ordered to agree. How one orders parties who are self-evidently in significant disagreement to agree, is beyond me.

4. There is a process in chapter 15 of the Court’s rules for the determination of the appointment of experts and the parties have obviously not followed it. I need say nothing more than the order is unenforceable.

Proposed order 9

1. The wife sought to enforce an order that she have the use of a 4WD car with fuel card, etag and services.

2. The order provided :

   The wife today return to the business the [4WD] (sic) recently removed by her.

3. What the wife seeks, cannot be construed as an enforcement of the order mentioned.

1. In her evidence, the wife referred [16] to the husband having breached the orders of 1 December 2015 by deregistering “the family drive car”.  There is nothing in the order otherwise that would enable me to conclude that the return by the wife of the 4WD required the husband to provide a substitute vehicle nor that he was not entitled to “deregister” the registration.

2. Again, it is not appropriate for the court to guess what the wife was referring to. Insofar as this was not an enforcement application but rather an application for the husband to provide with a vehicle, the issue was not put that way nor was there any evidence to indicate that the court should exercise its Part VIII power particularly under s 79 of the Family Law Act 1975 (Cth) (“the Act”)to make such an order.

Proposed order 11

1. The wife then seeks enforcement of discovery.

2. I made the order on 24 March 2017 that I have already mentioned in paras [9] to [18] above. Nothing more needs be said.

Proposed order 12

1. The wife seeks $10,000 per month “as compensation offered and agreed by the husband for the loss of income generated by V Pty Ltd as a direct result of the husband’s failure to comply with paragraph 3 of the orders made on 1 December 2015”.

2. The wording of this would suggest that it is either a compensation claim (in which case there is no obvious jurisdiction) or it is a partial property distribution against any entitlement of the husband or it is reliant upon the spousal maintenance power. In respect of the last possibility, if it was intended to be a replacement for the wife’s lost income because the contract between the company that then operated and some company called V Pty Ltd, that is not at all obvious from the wife’s evidence.

3. The wife maintains that she has no money upon which to live but there is no evidence that would enable me to make the relevant required findings under ss 72, 74, 75(2) or 77 of the Act. I well appreciate that the wife says that she has no money, no ability to pay her rent, has borrowed money and is being pressed by her creditor and so forth. But this court does not have a compensation jurisdiction per se. It is conceivable that the power to compensate someone may be part of the s 79(2) adjustment but the wife’s evidence was so focused on what complaints she had about the husband that the critical evidence was not readily apparent.

4. There is therefore no basis upon which I could make that order.

Proposed order 15

1. The wife then proposed the sale of the two Queensland properties. I have dealt with those above. There being no agreement about what would happen to the proceeds, no indication of creditors being made aware of the sales, no indication of what the wife’s proposed purchasers would agree to do, there is no basis upon which the power of sale which could only lie in s 114 of the Act could be made. The injunctive power is designed to protect assets so that the jurisdiction and power of the court are not thwarted. The evidence is no such that I could make any finding as required by s 114 that an injunctive order was proper or that the balance of convenience favours the wife here taking into account her own unilateral action in executing the contracts as she did.

2. That being so, I decline to make that order.

Proposed order 16

1. The wife sought costs “arising from this application”.  As will be apparent, she has been wholly unsuccessful.

2. Section 117 of the Act provides that in proceedings under the Act, each party shall pay their own costs unless there are circumstances which would justify a departure from that principle. No such justifying circumstances are apparent here from the wife’s evidence.

Proposed order 18 and 20

1. Next, the wife sought “child and spousal” maintenance of $150,000 per annum.

2. I have already mentioned the absence of evidence about spousal maintenance. In respect of child maintenance, the wife submitted that the Act provided that if the husband had not been forthcoming in respect of financial issues, it could make an order of some magnitude.

3. The parties disagree (and there is no evidence by the wife) as to whether or not there is a child support assessment in existence. I am perplexed that one says there is and the other says there is not but particularly so when the husband is the one saying it exists. The wife’s evidence does not assist me and this is a critical issue because it goes to both jurisdiction and power.

4. If such an assessment exists, the wife’s remedy lies in the departure provisions of the relevant child support legislation.

5. Being unable to work out what the correct status is, I am inclined to the view that the wife needs to establish that jurisdiction and she has not done so.

6. If there is no assessment, one must wonder why there has been no such application. In addition, if that is the case, why an application has not now been made and the relevant provisions relied upon for the purposes of any pending assessment.

7. In my view, either way, the evidence would not enable me to establish the relevant needs of the child save that the wife’s financial statement suggested she required $1800 per week. But that assertion included “children’s activities” of $500 per week, telephone and other expenses. In circumstances where the wife says she has none of these benefits at the moment, some evidence would be required to show how those amounts were calculated. As I am setting the matter down for trial, there is no point in me adjourning that issue to another interim hearing where I suspect the evidence will be as difficult to follow as it is here.  That claim cannot succeed both because of jurisdiction but also evidence.

8. The same unfortunately has to be said of [20] which seeks that the husband be responsible for educational and “extra curriculum requirements”.

Proposed order 19

1. I can do no more here than set out the proposal of the wife:

   Make available $10,000 to the wife on a monthly basis to obtain counsel equivalent to the husband in order to eliminate current bias of the husband utilising the family of funds to improve his own financial position.

2. I have no ideas what that means save that it looks like an application for litigation funding which is consistent with what the wife said about her desire to have lawyers appearing for her. There is no evidence however that would enable to be satisfied that a lawyer would act for her. There is no evidence that a particular amount would be required. To the extent that the wife is seeking a “level playing field”, I have no idea how the husband is funding his costs but to the extent that he is, she might seek a “dollar for dollar” type of order but I am unsure that I could interpret her application that way. Even so, it is unclear what power would then be being exercised. If it is the s 117 power, I would need to be satisfied that there was justification for such an order and that it could be met. If it was the property alteration power, the assertion of the husband is that there are significant creditors and I remain unclear as to what entitlement either party has to, or is likely to receive from, their current assets.

3. It would be unreasonable to guess here.

Setting the matter down for trial

1. As might be apparent, this case is crying out for a resolution and there is little prospect that I can see that the internecine war is getting close to conclusion. I am very troubled that the creditor position remains unclear. That may be clear if the husband’s Part X arrangement is concluded but the wife is entitled to know those details.

2. There is also the additional unresolved parenting dispute and insofar as that remains outstanding, the matter festers. Unlike some cases, it is hard to see a justification for a bifurcation here because the wife maintains that she cannot adequately support the parties’ child without money yet I do not know what the financial position of the parties is until the property situation crystalizes because of what action the creditors might take.

3. To the extent that courts often urge (if not order) parties to go to mediation, I have detected no trust between the parties such that, with the wife unrepresented, any prospect of a resolution is unlikely and possible could delay matters.

4. The wife needs to have representation because of the complexities which can be seen from what I have laboured through above. That exercise is time-consuming and takes judges away from maters which are ready to proceed. I am prepared to bring this matter back on before trial if the wife can satisfy the registrar that there is evidence that would enable a court to make a litigation funding order.

Subpoenae

1. I propose to order that the registrar may issue subpoenae if requested but the wife will have to show relevance. As will be evident from the orders made at the commencement of the hearing, the wife agreed that her subpoena to S Pty Ltd was flawed but with their co-operation agreement was reached but to her substantial costs. That highlights the necessity to question what relevance there is to that sort of subpoenae where there is a Part X application looming, creditors pressing and companies in the past now in liquidation.

2. This case sadly has all of the hallmarks of “The War of the Roses”.

I certify that the preceding Seventy Five (75) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 8 June 2017.

Associate: 

Date:  8 June 2017