Fong & Guo
[2023] FedCFamC1F 1125
•7 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Fong & Guo [2023] FedCFamC1F 1125
File number: SYC 1341 of 2020 Judgment of: BRASCH J Date of judgment: 7 December 2023 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE –Matter listed for de facto threshold hearing – Where trial directions ignored by both parties – Where orders are not options, guides or recommendations – Where no reasons for non-compliance – Where unbecoming informality in communications with the Court – Where “applications” by email are improper – Proceedings dismissed. Legislation: Corporations Act 2001 (Cth)
Federal Circuit and Family Court of Australia Act 2021 ss 67, 68(2)
Federal Circuit and Family Court of Australia Rules 2021 (Cth) rr 1.33, 10.26, 10.27
Legal Profession Uniform Law Australian Solicitors’ Conduct Rules2015 r 18.1
Cases cited: Amirbeaggi (Trustee), in the matter Billiau (Bankrupt) v Billiau [2023] FedCFamC2G 949 Division: Division 1 First Instance Number of paragraphs: 64 Date of hearing: 7 December 2023 Place: Sydney Solicitor for the Applicant: Juris Cor Legal Counsel for the Respondent: Mr Lawrence Solicitor for the Respondent: Dsplaw ORDERS
SYC 1341 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS FONG
Applicant
AND: MR GUO
Respondent
ORDER MADE BY:
BRASCH J
DATE OF ORDER:
7 DECEMBER 2023
THE COURT ORDERS THAT:
1.The Initiating Application filed by Ms Fong on 28 September 2020 is dismissed in its entirety.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
BRASCH J:
These reasons were given ex tempore, with the transcript corrected for grammatical error and to make the spoken word more amendable to reading.
The matter comes before me on the Court’s own motion yesterday afternoon, when it became apparent that there was absolute non-compliance with the trial directions.
These proceedings were begun by the applicant with her Initiating Application filed 27 February 2020. The applicant asserts that she was in a de facto relationship with the respondent from 2016 to August 2019. The respondent denies that was ever the case and says that they were only ever in a business relationship. It is quite the understatement to say very little has happened since 27 February 2020. I am not clear how much of that is because of the Court’s resources, or lack thereof, or because of the parties.
I observe the applicant was born in 1974 and the respondent in 1943. The respondent is not here today. The applicant, however, is. What is meant to be before me next week is a threshold hearing about the de facto relationship, being whether it existed or not. One would have thought it was in the applicant’s interests to prosecute her case with diligence and efficiency. That would include, for example, filing material as and when it was due.
On 21 November last year [2022], the matter was first before me. I tentatively set the matter down for four days commencing 11 December [2023]. That is more than a year ago. The parties – and, in particular, the applicant, who is the one moving the Court for relief – had notice of the trial dates for more than a year. I listed the matter for a further callover on 20 January [2023]. Before that 20 January hearing, I required the applicant to file an affidavit setting out:
(a) whether she proposed to be physically here for the trial, or not;
(b) if not, why not; and
(c) if not, how she proposed the trial be conducted.
The affidavit that was filed was, as I said on the subsequent [January] hearing date, inadequate. It was a hope and a maybe. However, the applicant is here physically in Court today.
It is instructive to the issue of non-compliance and default that is ultimately before me today, to read the notations I made on 21 November [2022]. One of the notations said this:
A.The matter was before me today for a callover to allocate trial dates. The applicant did not appear either in person or by electronic means. The applicant’s solicitor indicated he had trouble getting her to sign a Request to attend by electronic communications.
The next notation is:
B.The hearing today was listed on 9 August 2022 to be in person, when the applicant was self acting…
I then dealt with the applicant’s solicitors going on and off the record and discussing whether the applicant should be here for the threshold hearing. It was the respondent’s position that she should be. I formed a preliminary view that the administration of justice required her to be here.
The matter was next before me on 20 January [2023]. I told the applicant’s counsel, Ms Carr, that I thought the applicant’s affidavit was deficient, but nothing really turns on that for today’s purposes because the applicant is here. I made the following trial directions:
2.These proceedings are listed for final hearing for 4 days commencing at 10.00 am on 11 December 2023 in relation to the threshold matter of whether there is a relevant de facto relationship, or not.
So, in November last year, I tentatively set it down for those dates, for four days on 11 December, and in January of this year, I set it down. Each party has had ample time and ample opportunity to get themselves in order. I made trial directions on that day as well. I ordered:
3. The parties are required to appear in person.
...
5.The applicant and respondent are to file and serve one consolidated trial affidavit each together with affidavits of any witnesses on which they intend to rely at hearing no later than 30 October 2023.
(Emphasis added)
Neither party complied with that order. The trial directions go on and say:
7.Except as already provided by these orders, the parties will not be permitted to file any further affidavits and may not rely upon any past affidavits at the final hearing without the leave of the Court.
(Emphasis added)
I highlight “past affidavits” because that was an argument from Mr Hou [for the applicant], that he could rely upon the applicant’s 2021 affidavit. However, the problem with that was he then had no evidence of a recent sale of the property. He accepted that to be so.
The case outline order (Order 8) was that outlines were due on 4 December at 4.00 pm, but neither party gave the Court the respect of complying with that either. Order 15 was:
15.The applicant and the respondent must pay the setting down and hearing fees in equal amounts (or seek an exemption) no later than 4.00 pm on 13 November 2023.
When I listed the matter yesterday, my associate ascertained that the money had not been paid. I am since told the applicant has paid, but the respondent has not. In other words, the setting down fee has not been paid in compliance [with the order]. I also made some notations that if parties asked for witnesses to appear by Microsoft Teams, they were required to file a request to attend by electronic communication in the approved form. This was raised with my associates in the compliance email, which I will deal with in a minute. No forms have been filed.
The respondent says he is going to rely upon 10 witnesses, and there is certainly a suggestion some of those are overseas. Those requests were to be filed 28 days before [trial]. No requests have been made. In terms of, again, the idea of complying with Court orders, Notation D said this:
D.The Court offered the parties the opportunity to mediate the matter by way of a Court provided mediation. The applicant accepted that opportunity however the respondent refused, even to the point of saying he would not comply with an order to do so. In those circumstances, it seems futile to provide a mediation to the parties.
I considered it was futile to provide a mediation to the parties.
The way that the two solicitors in the matter dealt with the compliance check is less than satisfactory. I would encourage the parties’ [lawyers] to read the decision of Judge Given in Amirbeaggi (Trustee), in the matter Billiau (Bankrupt) v Billiau [2023] FedCFamC2G 949. That is about dealing with the Courts with formality and observing dates that are given. I will deal with the emails that came from the solicitors in the compliance check.
It is also the case that legal practitioners in Australia, whether solicitors or barristers, have a duty of formality before the Court, and the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules2015 (“Solicitors’ Uniform Rules”) speak in this term:
18.1A solicitor must not, in the presence of any of the parties or solicitors, deal with a court on terms of informal personal familiarity which may reasonably give the appearance that the solicitor has special favour with the court.
It is timely now to deal with the compliance check. On 10 November [2023], my associate asked the parties, via their legal representatives, whether the trial directions had been complied with. One might have thought that [compliance check] on 10 November might have been a big heads up to the parties to comply with the orders, keeping in mind the directions were for the affidavits to be filed on 30 October [2023]. The 10 November [compliance check]; did that cause anybody a moment to comply? No. I will deal with some of the things that each of the parties’ solicitors said in response.
The applicant responded on 15 November [2023]. Five days it took her or her solicitor to respond, and it is useful to keep in mind that it is the applicant who is the moving party, wanting the Court to say, “yes, there was a de facto relationship”.
When asked about the trial directions and if they had been complied with, the emailed answer from Mr Hou was this:
The consolidated Affidavit has not been filed due to the outstanding subpoena documents to be produced by subpoena recipients which the Applicant intended to rely upon and include into the trial affidavit.
(As per the original)
I do not accept that. The trial affidavits were due on 30 October [2023]. The subpoena that ended up being the product of some dispute was not filed until 1 November [2023]. There is absolutely no reason why the applicant’s trial affidavit could not have been filed by 30 October. And then, steps taken either to tender documents in the usual way, or for the applicant to correct some things in her affidavit, or for the applicant or her counsel to seek leave to provide an update, but that did not happen.
The 30 October date is not a recommendation. It is not an option; it is not a guideline. It has no provisos to it. It is not conditional on, “everybody is happy with subpoena documents”. It is not conditional on, “subpoenas and we want to wait”. 30 October was the date. No one did the Court a courtesy in filing an Application in a Proceeding asking for that date to be extended.
I am told in the applicant’s response [to the compliance check email]:
…subpoenas are concerning disposal of marital assets in September 2023 potentially under the instructions of the Respondent.
(As per the original)
September 2023 was before the trial affidavits were due. There was certainly ample opportunity for the applicant to at least mention the disposal of marital assets, if not in her affidavit if she had filed in time, but to tell me about it next week and seek asset preservation orders. Somewhat alarmingly, the applicant has not sought any asset preservation orders, but that is an issue for another day.
The form also asked “are there any further documents to be filed? If so, what documents?”. The response said:
The Applicant is intended to rely on the affidavit of 27 February 2020 which forms the basis of the wife’s affidavit…
(As per the original)
That, however, is contrary to the direction I made (and no leave was sought for her to do so) that the parties were to have one consolidated trial affidavit, and past affidavits cannot be relied upon unless by leave. No leave was sought. It goes on to say:
…the applicant is seeking an extension of a further 14 days to file additional materials...
There was no Application in a Proceeding to do so. The Court does not conduct itself on “application” by email.
When asked had the trial directions been complied with and if not, why not, the respondent replied:
No, cos the other party issued a few subpoenas and we are instructed to prepare the trial affidavit after inspecting the documents.
(As per the original)
(Emphasis added)
It is breathtaking that an officer of the Court, that a lawyer, would thumb his nose so completely at trial directions. The trial directions are clear. The material was due on 30 October [2023], but the officer of the Court took it upon himself to go, “no, we will not comply with those”.
I also repeat that the trial affidavits were due before the subpoena that caused some issue had been filed. It is all very nice for the respondent to instruct the solicitors to prepare the trial affidavit after inspecting documents, but that is not how it works. It is yet another demonstration of wilful disregard for the Court’s directions. They [the respondent’s solicitors] were still confirming counsel. I was told by the respondent they had 10 witnesses, and in another audacious disrespect for the Court, when asked: “do they need to appear by Microsoft Teams?”, the reply was:
The witnesses will appear online cos, they are all overseas. We request that they be allowed to appear via [an online service]. A lot of the witnesses are older people and have no access to computers and Microsoft Teams.
(As per the original)
(Emphasis added)
I immediately acknowledge that Mr Lawrence of counsel has only come into this matter, and in no way had anything to do with these completely woeful responses by both parties that not only disregard the Court orders, but, in Mr Lawrence’s instructor’s case, speak in that kind of informal way about which I referred to the Solicitors’ Uniform Rules before.
Asking for the online service was quite odd too. The Court works on Microsoft Teams. We do not have the other service. What this also shows is a disregard for the process of the Court that the requests to appear by electronic means are not to be filed by email, but by the actual request form which is easily available on the website. That form makes it very clear that such requests for a trial are to be filed 28 days before the trial.
I have had regard to an old affidavit of the applicant’s filed 27 February 2020. She told me about a Suburb E property, but it turns out that has since been sold. She told me that the respondent had a shop overseas in City C, and that there is a company in City C. She deposed that she gave money or otherwise loaned money to, perhaps, a City C company, and she gave the respondent money as well in 2008 and 2014, amongst other dates. Insofar as she may say they are loans, then in all likelihood, they would be statute barred. There was a company the parties registered in 2015, D Pty Ltd, which the applicant now says has been deregistered. I really do not know what I am meant to do with that.
The respondent has an affidavit as well, and filed his Response in May 2020. He disputes they were in a de facto relationship. He disputes the applicant has any equity in the Suburb E property.
He said when the applicant gave him money, that was simply paying him back. He said they were in a business together.
The difficulty though for the applicant now, is she has known for some time that Suburb E had been sold – and has taken no steps to preserve that asset. I appreciate the matter is set down for a de facto [threshold] hearing next week, but there is no reason why an application and affidavit could not be brought to preserve the assets, so there might be something [realisable] if she is successful on the de facto [threshold] case, and, then successful on a property adjustment.
I am told the proceeds are now with the respondent’s [current] wife’s son, who is not a party to the proceedings. There was some suggestion from Mr Hou that they could just join him in next week, but that is not how litigation works.
I listed the matter, as said, yesterday afternoon, and in the terms of the order, I very clearly brought to the parties’ attention that I would, today, be considering orders in default, including vacating the trial dates or dismissing the matter in its entirety. After that, two affidavits were filed last night, but from [the applicant’s] witnesses. No leave has been sought for the filing of those.
This morning, the morning of 7 December, there was an affidavit filed by the applicant. It is woefully late. Leave would be needed to rely upon it. I raised that with Mr Hou a number of times, and he did not ask for leave. In any event, if he had, I would be disinclined to give such leave given the woeful non-compliance without any reason; it is the applicant who is moving the Court. The affidavit itself, which I have looked at, is replete with conclusions, speculation and hearsay. It might be that Mr Lawrence, if the matter did proceed, would be able to successfully object to a lot of it.
The fact is though: it remains late, and remains late for no particular [good] reason.
The reasons were these, from Mr Hou: on 30 October [2023] they discovered that the title to the Suburb E property had been changed – and changed, I understand, to the son in law. “So what,” to that I say. That is important, but that does not prevent the applicant from filing the 30 October affidavit. To make the failure in filing even more egregious, I was told by Mr Hou that the draft was largely done [then] – there is no reason why it could not have been filed – and that the draft was very similar to what the applicant had filed back in 2020. So, there does not seem to me to be any reason – any good reason or any reason at all - why that affidavit could not have been filed on time.
I was then told that the affidavit was not filed on time because the applicant, or solicitors, were considering options to preserve assets. That has not happened either, and that certainly does not stop the affidavit from being filed. I would have thought that if there was an application to preserve assets, it would be done as an Application in a Proceeding with its own affidavit. There is no reason why that had to delay the filing of the applicant’s trial affidavit by 30 October. There was some suggestion by Mr Hou that he could rely upon the old affidavit. He did not seek leave, but he accepted the problem with that, then, would be there is no evidence before me about the Suburb E property being sold.
The respondent too has been woefully deficient in his dealings with the Court, and I have already read out what was said in the compliance check. It was said, in his defence, why he failed to comply with the Court orders was that he was awaiting the applicant’s affidavit. That is not what Order 6 says. It is for contemporaneous filing, and it certainly is not conditional on, “but if the respondent wants to wait to see the applicant’s affidavit, then he can ignore the Court orders”.
There is no decent or reasonable explanation for either of the parties’ woeful non-compliance. Case outlines have not been filed either. They were due on 4 December. But, critically, I really do not know how the trial was meant to proceed next week on an affidavit for which no leave had been sought. The respondent had no affidavit. No asset preservation orders have been sought, and, ultimately, it all seems rather futile when it turns out the main Australian proceeds are with the respondent’s [current] wife’s son, who is beyond the reach of this Court.
I have already identified each party’s default and non-compliance. It has been woeful. The matter was listed tentatively, as I said, in November 2022. The trial directions were made on 20 January 2023. There was plenty of time for the parties to comply. I was not given the courtesy of any party filing an Application in a Proceeding to be relieved from their compliance. As I said to the parties before, I do not consider an approach by email to be sufficient. That is the reference to the compliance check email, that the applicant’s solicitor was going to ask for an extension of time. That is not how litigation works. I do not accept any excuses about the subpoena dispute. That was filed after the evidence-in-chief was due.
There is no excuse for the parties’ non-compliance. As I discussed with Mr Hou earlier when submissions were being taken, if something happened after 30 October, then he, or his counsel, would have been able to try and rely upon an updating affidavit or seek leave from the Court to adduce some further evidence from the client in the witness box. But none of that happened. The idea of the subpoena being necessary for the parties to finish their evidence is also not something I accept. The parties’ evidence is their evidence. It ought not depend on subpoenaed documents. Parties can – on inspection of subpoena – go into the witness box and correct things that they said in their affidavit or seek leave, as I already said, to update things. The subpoena is no excuse.
I also note, in terms of non-compliance, it was the respondent’s intention that, had I ordered mediation, he was not going to comply.
How the trial was going to run next week is a mystery. Equally, it is a mystery what actually was going to be there for the applicant to seek a de facto division order, if she was successful on the de facto proceedings next week. I say next week simply as being the trial because it would not have been until the new year that I would have given a decision. I again highlight that asset preservation orders are not dependent on there being a de facto relationship. The Court has power to preserve assets, but it is my great concern here that even if the applicant was successful in the de facto outcome there may be nothing left, and I certainly cannot compel the respondent’s wife’s son to do anything.
Rule 1.33 of the Federal Circuit and Family Court of Australia Rules 2021 (Cth) (“the Rules”) provides, in part, that if a party to a proceeding does not comply with a procedural order, then an option available to me is to dismiss all or part of the proceedings. It says other things: set aside, determine the proceedings as if they were undefended, order costs, various other things.
Obviously, trial directions, to which I have made reference, are procedural orders. That is, they are orders of a practical nature.
Similarly, I find powers under r 10.26 of the Rules that says when a party is in default:
(1)For the purposes of rule 10.27, an applicant is in default if the applicant fails to:
(a) comply with an order of the court in the proceeding; or
(b) file and serve a document required under these Rules; or
…
(e) prosecute the proceeding with due diligence.
It is not necessary for me to engage with (b) and (e) because, quite plainly, the applicant has failed to comply with a number of orders of this Court in this proceeding.
The respondent, under that same r 10.26, is in default if the respondent fails to comply with an order of the Court in a proceeding or defend the matter with due diligence. Both would apply to him as well.
Rule 10.27 tells me:
(1) If an applicant is in default, the court may order that:
(a)the proceeding be stayed or dismissed as to the whole or any part of the relief claimed by the applicant; or
Unusually, both parties are in default.
If a respondent is in default, then I could give judgment or make order against the respondent (r 10.27(2)(b)), but that is not really where this matter is at. If I dismiss the Initiating Application, there is nothing for the respondent to respond to, therefore, in the premises, r 10.27(2)(b) applying to the respondent becomes obsolete. It is also the case that there are a lot of old affidavits before me and no requests to attend by electronic means 28 days before the trial.
The Court’s resources are precious. The applicant and respondent have both disregarded the solemnity of Court orders and the Court’s resources. The applicant and respondent, in their attitude towards the directions that were made and how they have dealt with the compliance check – their responses there – were in woeful disrespect to the Court. Their conduct has also been contrary to the overarching principles in s 67 of the Federal Circuit and Family Court of Australia Act 2021 (“FCFCOA Act”), which require the efficient use of judicial resources, quick and inexpensive and efficient problem solving. Interestingly, s 68(2) of the FCFCOA Act imposes an obligation on lawyers to assist the parties to comply with their duty.
It was said it would cause the applicant some prejudice if I dismissed the matter. That is, though, against a backdrop where she has taken no steps to preserve the asset that seems to be about the only asset here. Her solicitor, Mr Hou, is unable to tell me the value of the respondent’s interest in a company, and, as I have said too many times already, the main, if not the sole asset, seems to be with a non-party.
So will it cause the applicant prejudice if I dismiss the matter? As I expressed a number of times to Mr Hou for the applicant, it may be that there is no actual pot of gold at the end of the rainbow. It seems that the money has long gone. It seems that, as of 30 October, Mr Hou was well aware of the title being changed. He gave that as a reason, which I do not accept, for why he did not file the trial affidavit.
But, far more importantly, the applicant and the respondent may have some other options available to them – although I accept, in the premises of the matter, this is really more about detriment to the applicant. The applicant may have a course of action against her solicitor. I do not know. She may – I do not know, but probably not now that the proceeds have been dissipated – have some property law options regarding Suburb E. But if the proceeds have gone and she has not secured them, then they may well have gone.
Insofar as there is a company, she may, I do not know, have some actions or relief under the Corporations Act 2001 (Cth). It is also the case that a number of the assets are beyond this Court’s control to make any orders in rem. There is a shop, and there seems to be a company or some form of business in City C. Even though I can make orders against the parties in personam, I cannot make orders about those properties in rem. But that is really getting ahead of myself because what was before me next week was the applicant’s application for the threshold issue of a de facto relationship.
I have just articulated the sources of power and the rules and what they allow me to do when it comes to default and non-compliance. I am not satisfied that vacating the trial to another date, would see compliance with any further orders I have made. The parties, through their solicitors, have demonstrated an ability to completely disregard the Court’s orders. In those circumstances, I could not be satisfied that vacating the dates will see any improvement.
ADDENDUM
After completing my reasons, Mr Hou for the applicant sought to clarify something with me. He says, of the sale proceeds of Suburb E, the respondent’s wife’s son has $600,000. $200,000 is with the respondent’s wife, and the balance is with the respondent. He takes that from a settlement statement dated 13 September [2023]. He cannot tell me today that those monies exist. The same problem remains. The respondent’s [wife’s] son, with his $600,000 or whatever he might have now, is beyond my reach. He has not been joined. The respondent’s wife – if she still has the $200,000 – is beyond my reach as well. And the settlement statement of two months ago is not proof of anybody, including the respondent, having the sums that are in the settlement statement now. That still, however, does not change the fact of the woeful non-compliance.
I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Brasch. Associate:
Dated: 22 December 2023
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