Galip & Galip (No 2)
[2023] FedCFamC1F 968
•13 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Galip & Galip (No 2) [2023] FedCFamC1F 968
File number: SYC 1278 of 2023 Judgment of: REES J Date of judgment: 13 November 2023 Catchwords: FAMILY LAW – PROCEDURAL – INTERIM ORDERS – Where the husband seeks to set aside orders – Where the husband failed to comply with filing directions – Where the husband and his legal representative were both absent at hearing – Where the husband’s legal representative could have appeared on his behalf – Where the husband’s legal representative did not provide a reasonable explanation as to why the husband was not represented at hearing – Where a costs order is made against the husband in the sum of $10,000 Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021, Rules 5.07, 10.13 Cases cited: Kioa v West [1985] 159 CLR 550;
Matten & Munayallan [2023] FedCFamC1A 147;
Pelkas & Dellis [2023] FedCFamC1A 195;
Division: Division 1 First Instance Number of paragraphs: 52 Date of hearing: 10 November 2023 Counsel for the Applicant: Mr McCrudden Solicitor for the Applicant: Futurelegal Pty Ltd Counsel for the Respondent: Mr Young Solicitor for the Respondent: Abbas Jacobs Lawyers ORDERS
SYC 1278 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR GALIP
Applicant
AND: MS GALIP
Respondent
ORDER MADE BY:
REES J
DATE OF ORDER:
13 NOVEMBER 2023
THE COURT ORDERS:
1.That the application to set aside the orders of Campton J made 27 October 2023 is dismissed.
2.That not later than 4pm on 12 December 2023, the husband pay the wife’s costs of this application in the sum of $10,000.
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 the pseudonym Galip & Galip has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
REES J:
On 24 October 2023, Campton J heard an application for interim orders in financial proceedings between Ms Galip (“the wife”) and Mr Galip (“the husband”).
Neither the husband not his legal representatives appeared at the hearing.
Judgement was delivered and orders made on 27 October 2023. Those orders were made in the absence of the husband or his legal representatives when the matter was heard on 24 October 2023.
The orders now sought to be set aside appointed the wife as trustee for sale of a property; provided for the payment to the wife of $800,000 by way of interim property settlement; made orders requiring specified disclosure and restrained the husband from dealing with property and corporate entities.
The proceedings were instituted by the wife on 28 February 2023 and were listed for directions on 4 April 2023. On that day, the husband was ordered to file and serve any affidavit he relied upon in relation to the wife’s interim applications, by 4pm on 18 April 2023. The husband was also ordered, inter alia, by 4pm on 18 April 2023, to file an affidavit relating to specific disclosure. The orders, relevantly, are reproduced below:
2. Not later than 4.00pm on 18 April 2023 that the Respondent file and serve:
a.Response to Initiating Application setting out with precision the final orders sought;
b.Response to an Application in a Proceeding setting out with precision the interim orders sought
c. Financial Statement;
d. Genuine Steps Certificate;
e. Supporting affidavit for interim orders only, noting the provisions of:
(i)Rules 2.13 and 5.08 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021;
(ii)Rule 2.02 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021; and
(iii) FCFCOA Practice Direction 2021.
Disclosure
3.By 18 April 2023, the husband provide an affidavit producing and deposing as to:
(i)documentation, such as loan agreements, establishing the existence, purpose and enforceability of the “personal/investor liabilities” identified on annexure [MSG]-3 to the wife’s affidavit,
(ii)the full names of each lender together with an explanation of their relationship to the husband, the circumstances in which the loan was requested and the reason for the high interest rates,
(iii)deeds of trust and any further documents required to ascertain the identity of the trustees, appointors and beneficiaries of the [Galip Trust], [EE Trust], and [FF Trust], and
(iv)historical company searches, constitutions, shareholders’ agreements and any further documents required to identify the managers and owners of [FF Pty Ltd], [EE Pty Ltd], [GG Pty Ltd], [HH Pty Ltd], [J Pty Ltd], [JJ Pty Ltd], [KK Pty Ltd] and [Q Pty Ltd] and the extent to which their interests in those companies are held beneficially.
Undertaking as to Disclosure or Affidavit
4.By 4.00pm on 12 May 2023 each party must do all things necessary to satisfy their duty of full and frank disclosure and, forthwith thereafter, file and serve an undertaking as to disclosure in accordance with Rule 6.02 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
5.In the event that a party has not satisfied their duty of full and frank disclosure and is thereby unable to file an undertaking as to disclosure, as ordered herein, then by 4.00pm on 12 May 2023 such party must file and serve an affidavit that precisely:
a.Identifies all information and documents the party has a duty to disclose but has not disclosed;
b.Sets out each reason why such information and documents have not been disclosed;
c.Details all steps the party is taking or will take to satisfy the duty of disclosure in relation to such documents; and
d. The date by which the party’s duty of disclosure will be completed.
Valuations – real property
6.By 4.00pm on 11 April 2023, the wife nominate three valuers to provide an independent valuation of the following properties:
(i) [LL Street, Suburb MM]
(ii) [NN Street, Suburb CC]
(iii) [1 PP Street, Suburb QQ]
(iv) [2 PP Street, Suburb QQ]
(v) [3 PP Street, Suburb QQ]
(vi) [E Street]
(vii) [RR Street]
(viii) [SS Street (Units 1-4)]
(ix) [TT Street]
(x) [1 D Street, Suburb G]
(xi) [UU Street]
(xii) [BB Street, Suburb CC]
(xiii) [B Street, Suburb C]
7.By 4.00pm on 18 April 2023, the husband nominate one of the valuers nominated by the wife to perform the above valuation and should the husband not nominate the valuer by 4.00pm on 18 April 2023, the wife shall nominate the valuer.
8.The cost of the valuation shall be paid equally by both parties.
Valuations – business interests
9.By 4.00pm on 11 April 2023, the wife nominate three valuers to provide an independent valuation of the following companies in which the husband does, or is asserted to, have an interest:
(i) [P Pty Ltd];
(ii) [FF Pty Ltd];
(iii) [EE Pty Ltd];
(iv) [GG Pty Ltd];
(v) [HH Pty Ltd];
(vi) [J Pty Ltd];
(vii) [JJ Pty Ltd];
(viii) [KK Pty Ltd];
(ix) [Galip Investments Pty Ltd]; and
(x) [Q Pty Ltd].
10.By 4.00pm on 18 April 2023, the husband nominate one of the valuers nominated by the wife to perform the above valuation of the husband’s business interests and should the husband not nominate the valuer by 4.00pm on 18 April 2023, the wife shall nominate the valuer.
11.The cost of the valuation of the husband’s business interests shall be paid equally by both parties.
12.By 4.00pm on 11 April 2023, the husband nominate three valuers to provide an independent valuation of the following company in which the wife does, or is asserted to, have an interest:
(i) [DD Pty Ltd].
13.By 4.00pm on 18 April 2023, the wife nominate one of the valuers nominated by the Husband to perform the above valuation of the wife’s business interests and should the wife not nominate the valuer by 4.00pm on 18 April 2023, the wife shall nominate the valuer.
14.The cost of the valuation of the wife’s business interests shall be paid equally by both parties.
Interim Hearing
15.The Applicant Wife’s interim application filed 28 February 2023 is listed for interim hearing in person, unless otherwise advised, before Senior Judicial Registrar […] on 23 May 2023 at 10.00am.
Readiness for Interim Hearing
16.On or before 4.00pm on 16 May 2023 each party are to eFile on the Commonwealth Courts Portal and serve the following:
a.One consolidated, consecutively paginated document being no longer than 5 pages in length and formatted using 12 point New Times Roman font and 1.5 line spacing being an Outline of Case (Interim Hearing), setting out:
(i) List of documents;
(ii) List of authorities;
(iii) Chronology;
(iv)Outline of submissions and contentions with respect to the relevant legislation;
(v) The affidavit/s relied upon by the party, noting that:
i.for Division 2 matters, pursuant to Rule 2.02 (Table 2.1, Item 7 & 8) of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021, affidavits in support or opposition to an application for interim orders must not exceed 10 pages and must not contain more than 5 annexures.
(vi) A precise Minute of Orders sought.
(As per original)
The husband did not comply with those directions.
The matter was transferred to Division 1 of the Court on 25 September 2023. The matter came before Campton J in Chambers on 26 September 2023 and the following orders were made,
1.The Application in a Proceeding of the wife seeking orders as to disclosure, the sale of real property, interim property settlement and spouse maintenance filed 28 February 2023 and the husband’s Response to an Application in a Proceeding seeking that the net asset pool be divided “70% to the husband and 30% to wife” filed 25 May 2023 be listed for hearing in person at 10am on 23 October 2023.
2.That each party file and serve an updated financial statement by 6 October 2023.
3.For the purpose of the interlocutory hearing on 23 October 2023, neither party shall file any further affidavit evidence, save and accept as provided for by these orders or with leave of the Court.
4.The wife shall serve upon the husband by 12 October 2023 a joint draft balance sheet to include all assets, liabilities, superannuation interest and financial resources suggested to be relevant and to include values as she understands are alleged by each party.
5.The husband shall by 17 October 2023 make any additions to the balance sheet as required to reflect his contra allegations and any values that are agreed (if applicable).
6.Wheresoever controversy exists as to the inclusion of an item or the value of an item a footnote shall be appended to explain the controversy.
7.A final, settled version of the draft joint balance sheet shall be filed and served by the wife by no later than 19 October 2023.
8.On or before 19 October 2023, each party is to file and serve a Case Outline document in the approved form in respect of financial issues and shall include:
(a) a list of the material relied upon;
(b)a brief chronology listing significant events that are relevant to the issues to be determined by the Court;
(c) short submissions in support of the relief sought.
9.The Court puts the husband on notice as to the obligations as to disclosure as codified by Chapter 6 of the rules and to his failure to file pursuant to Order 3 made 23 May 2023 and as further ordered on 1 August 2023 an undertaking as to disclosure such that in the event his undertaking as to disclosure is not filed and served on or before 19 October 2023, consideration will be given to striking out his Response to Initiating Application filed 22 May 2023 and for the wife to proceed as against the husband on an undefended basis.
On 19 October 2023, the listing on 23 October 2023 was vacated and the matter was instead listed at 2.15pm on 24 October 2023.
The wife filed her material in compliance with orders 2, 3 and 4 made on 26 September 2023.
The husband filed no material in compliance with those Orders.
In Pelkas & Dellis [2023] FedCFamC1A 195, the Full Court stated,
Directions made for the preparation of a hearing are orders of the Court and must be complied with. The consequence for not complying can be severe (see r 1.33(2) and r 10.27 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”)). They are not some form of aspirational guideline that can be ignored with impunity.
The husband now seeks to set aside the orders of Campton J pursuant to the provisions of Rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules2021 (“the Rules”) which provide, relevantly,
10.13 Varying or setting aside orders
(1) The court may at any time vary or set aside an order, if:
(a) it was made in the absence of a party; …
In his reasons for judgement published on 27 October 2023, his Honour stated,
14I find that the husband has failed to comply with his positive obligation to disclose material facts, information, and documents to provide a comprehensive understanding of his relevant financial conduct. I need not be unduly cautious in making findings on topics related to those disclosure failures in favour of the wife.
15I find that the husband failed or neglect to comply with the orders made on 26 September 2023 as to filing and serve an updated financial statement and a case outline document. Implicitly, he elected to ignore the notice contained in those orders as to his obligations as to disclosure and as to the possibility of the striking out his Response to an Initiating Application filed 22 May 2023 and for the wife to proceed on an undefended basis. The husband additionally failed to engage with the wife as ordered in the preparation of a joint balance sheet. That document prepared by the wife alone, noted as to the source of the value of each item, was filed on 20 October 2023 (Exhibit 3).
16Cast against the husband’s failure to comply with his obligations as codified in Ch 6 of the Rules and his failure to comply with orders of the Court, there was no appearance by or on his behalf when the matter was called three times outside the courtroom at 2.15pm on 24 October 2023. Two minutes prior to the hearing commencing, at 2.13pm, an email was received from the husband’s solicitor to chambers (Exhibit 1) recording:
Afternoon Associate,
I am deeply sorry about such a late email noting the proceedings being listed at 2:15pm. My wife and I had a rough night as it seems we have contracted a virus to which I have only been able to get up and write this quick email after making sure my client would be in attendance. I advised him of my illness early in the morning and that he would be there to advise the court.
In my call to my client, he advised me via phone that he had a medical emergency at his worksite with an employee taken by ambulance earlier and he is at the hospital. This is in addition to our Counsel being unavailable due to the change in date and this has left us in a very bad position.
I am very sorry about the current circumstances and I will provide to the Court an Affidavit confirming my illness once I am able to get to a doctor tonight. I understand my client will also provide evidence about the accident onsite.
I note this is very late and the best I can do is seek a short adjournment via email of a few days so that we can deal with this.
Kind regards,
Steve Kassem
(Emphasis added)
17The solicitor for the wife who was present at court advised through counsel, and I accept, that there has been no contact between his firm and the husband’s solicitors since an email on 25 September 2023.
18There is no explanation as to the husband’s failure to afford any courtesy to the wife, to her legal representatives, or to the Court. It is inappropriate to contact chambers unilaterally. Applications are not made by email.
In Matten & Munayallan [2023] FedCFamC1A 147, Austin J, sitting as the Full Court, held,
The [applicant] is at liberty to apply to set aside the dismissal orders made in his absence (r 10.13(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), though he will of course then need to explain his absence from the hearing to properly excuse it and demonstrate good reason to doubt the conclusions reached in his absence.
Thus the husband now bears the onus of satisfying the Court that he had a reasonable explanation for his absence on 24 October 2023 and demonstrating that there is good reason to doubt the conclusions reached in his absence.
The husband’s application pursuant to Rule 10.13 was filed on 3 November 2023 and came before Campton J on 8 November 2023. The husband was not ready to proceed. His Honour made orders that the husband file and serve evidence upon which he sought to rely by close of business on 8 November 2023 and listed the application for hearing before me on 10 November 2023.
The husband relies on the following material:
·Application in a Proceedings filed 3 November 2023.
·Affidavit of Steve Kassem (the husband’s solicitor) sworn 3 November 2023.
·Affidavit sworn by the husband on 7 November 2023.
·Affidavit sworn by the husband on 8 November 2023.
I will deal firstly with the husband’s explanation for his non-appearance.
These were interlocutory proceedings and the husband was entitled to appear through a legal representative. There is no requirement in the Rules for the husband to be personally in attendance in circumstances where the matter was to be dealt with on the paper and by submissions. The husband could have sought to be excused and appeared by solicitor or counsel.
The orders made on 26 September 2023 required the husband to file and serve an updated Financial Statement by 6 October 2023 and to finalise the joint balance sheet by 17 October 2023. Those orders specifically provided that no further affidavit evidence was to be filed.
The husband deposed, in his affidavit sworn 7 November 2023,
I met my solicitor on Monday 23 October 2023 and finalised instructions regarding my updated Affidavit and information to provide to the Court …
I had planned to meet at my solicitor’s office to finalise the Affidavit and my documents at 9am.
The husband has provided no explanation for his failure to comply with the orders made on 4 April 2023 or the orders made on 26 September 2023.
Further Rule 5.07 provides that,
5.07 Time for filing affidavits
Each affidavit in support of or in opposition to an interlocutory application must be filed and served at least 2 business days before the date fixed for the hearing.
Had the husband sworn an affidavit on 24 October 2023, he would not have been entitled to rely upon it.
The husband’s reasons for not attending at Court on 24 October 2023 are contained in his affidavit sworn 7 November 2023. The husband received a text message at 10.35am from a contractor (not an employee) stating, “Just called an ambulance for [Mr VV]”. He responded at 11.51am, “Is he ok” and the contractor replied, at 11.53am, “He went to the hospital”. At 12.48pm the husband messaged, “Did he hurt him self?” There are no further texts in evidence.
The husband deposed that he ascertained that Mr VV had been taken to hospital and went to the hospital, forgetting that he was to go to Court.
There is no evidence that the husband was Mr VV’s employer, that Mr VV was hurt or why he was taken to hospital by ambulance. In those circumstances, I do not accept that the husband has established that he had a reasonable explanation for his absence.
However, in circumstances where the husband could have appeared by his legal representatives, it is not the husband’s absence that is relevant.
The husband’s present legal representatives have been on the record since 24 April 2023
Mr Kassem swore an affidavit on 3 November 2023. Mr Kassem gave no explanation for the failure to file the husband’s material in accordance with the orders to which reference has been made above.
The affidavit of Mr Kassem attaches the email sent to “Associate Justice Campton” which is reproduced in his Honours reasons. There is no medical evidence in support of the assertions that Mr Kassem was unable to attend. In the email, Mr Kassem stated,
I will provide to the Court an Affidavit confirming my illness once I am able to get to a doctor tonight.
The affidavit sworn by Mr Kassem on 3 November 2023 does not provide any evidence on that matter.
The solicitor provides no explanation for his failure, between 9am when he spoke to the husband and 2.14pm when he sent the email, to arrange for either an agent or counsel to appear at 2.15pm. He does not assert that he was too ill to do so. There is no medical evidence to support such an assertion, had one been made.
The Rule is one of procedural fairness to ensure that parties are given the opportunity to be heard before matters are determined. In Kioa v West 159 CLR 550 at 582, Mason J said,
It is a fundamental rule of the common law doctrine of natural justice expressed in traditional terms that, generally speaking, when an order is made that will deprive a person of some right or interest or the legitimate expectation of a benefit, he is entitled to know the case sought to be made against him and to be given an opportunity of replying to it.
The husband had the opportunity to reply to the wife’s case by filing the material he was ordered to file and by instructing counsel or an agent to appear. He chose not to do so.
I am not satisfied that the solicitor has provided a reasonable explanation for his failure to ensure that the husband was represented on that day.
I turn now to the reasons advanced on behalf of the husband to doubt the conclusions reached in his absence.
In essence, the husband now seeks to put before the Court material which he was ordered to provide both in the orders made on 4 April 2023 and on 26 September 2023.
The affidavit of the husband, sworn 8 November 2023 discloses that, after the commencement of these proceedings, the husband has sold three of the properties referred to in order 6 made on 4 April 2023 for a total of $11,680,000. The husband was on notice that the wife sought orders restraining the disposition of those properties because, in May 2023, when the matter was heard in Division 2, but no judgement was delivered, the wife’s Minute of Orders included an application for an order restraining the husband, inter alia, from “registering any dealing in relation to any real property of which the husband, or a company of which the husband is a director, is the registered proprietor”. The proceedings before Campton J were a re-hearing of that application.
I note that, in relation to the last of those transactions, a sale for over $2,300,000, the transfer was signed in late 2023 by Mr Kassem as the legal representative of the vendor.
While the husband, in his affidavit, purports to set out his assertions as to the assets and liabilities of both himself and the corporate entities, that evidence is not admissible and is not persuasive.
As to the value of the assets, on 4 April 2023, the husband was ordered to co-operate with the wife in obtaining valuations of the real estate and of the corporate entities.
The husband has not done so and neither the real estate nor the entities have been valued.
The husband was also given the opportunity, by the orders made 26 September 2023, to participate in the preparation of a joint balance sheet. He did not do so.
The husband asserts that the corporate entities have liabilities of $21,970,640 but, despite orders requiring him to do so, he has provided no documents to support those assertions.
Further, in his affidavit, he deposes to liabilities to “investors” and sets out a table of asserted investors’ loans. The table is reproduced to demonstrate its inadequacy and lack of probative value:
NAME / INVESTOR Ms WW 1,382,400 XX Company 2,125,000 Ms YY 650,000 ZZ Company 1,728,000 Mr AB 800,000 Mr AC 1,800,000 Mr AD 3 PP Street 2,250,000 Mr AE 450,000 Total 11,185,400
These are the investors in relation to whom the husband was ordered to provide evidence, including full names and an explanation of the relationship between each investor and the husband, and including source documents, by order 3 made on 4 April 2023.
No weight can be given in these circumstances to the husband’s assertions as to the value of his assets or the liabilities of the husband or his corporate entities.
The husband has not demonstrated that there is any reason to doubt that the conclusions reached in the reasons for judgement and the orders made on 27 October 2023 were not available to his Honour. In the case of the restraining orders, the evidence of the sale of properties by the husband supports the making of those orders.
The husband’s application will be dismissed.
COSTS
Counsel for the husband conceded that the husband will pay the costs of this application, whether he is successful or not, and does not challenge the wife’s estimate of $10,000.
An order will be made that the husband pay the wife’s costs of $10,000.
I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 13 November 2023
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