Garwood and Garwood and Anor

[2014] FamCA 1040

FAMILY COURT OF AUSTRALIA

GARWOOD & GARWOOD AND ANOR [2014] FamCA 1040

FAMILY LAW – PROPERTY SETTLEMENT – Interlocutory Application – Where the applicant wife sought orders vacating the final hearing and directing the procurement of a supplementary report from a single expert witness about the valuation of a significant parcel of real property – Where prospective Local Environment Plan amendment may affect the present valuation of the property – Trial date vacated – Where whether the procurement of a supplementary report is required will be determined at the next procedural hearing  

Family Law Act 1975 (Cth) ss 38, 79, 80
Family Law Rules 2004 (Cth) rr 1.09, 1.10, 11.01, 15.65, 16.03

APPLICANT: Ms Garwood

FIRST RESPONDENT: Mr Garwood (by his Case Guardian Mr B)

SECOND RESPONDENT: Mr Garwood as Trustee for the Mr Garwood Will Trust

FILE NUMBER: NCC 517 of 2013

DATE DELIVERED: 20 November 2014

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Austin J

HEARING DATE: 18 November 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr White SC

SOLICITOR FOR THE APPLICANT: Michael Conley Lawyers

COUNSEL FOR THE 1^ST RESPONDENT: Mr Johnston

SOLICITOR FOR THE 1^ST RESPONDENT: Conditsis Lawyers

COUNSEL FOR THE 2^ND RESPONDENT: Mr Johnston

SOLICITOR FOR THE 2^ND RESPONDENT: Conditsis Lawyers

Orders

(made on 18 November 2014)

1. The trial of these proceedings listed to commence at 10.00 am on Monday, 15 December 2014 is vacated.

2. The proceedings remain listed at 10.00 am on Monday, 15 December 2014 for further procedural directions.

3. Orders 3, 4, 5 and 10 made on 23 October 2014 are discharged.

4. Leave is granted to the parties to attend the next court event by telephone (Genesys Link).

1. Leave is granted to the respondent husband to issue a subpoena to The Proper Officer of C Town City Council, provided that subpoena is returnable by 9.30am on Monday, 15 December 2014.

2. Otherwise:

   a.The Application in a Case filed on 14 November 2014 is dismissed; and

   b.Any and all outstanding applications for interim or procedural orders are dismissed.

NOTATIONS

A.The applicant wife is desirous of procuring a supplementary report from the single expert witness relating to re-valuation of the subject land at D Town following the publication in the government gazette of an LEP Amendment which is capable of affecting the land. At the next Court event a decision will be made as to whether the supplementary report should be procured and/or whether the proceedings should be re-listed for hearing at the earliest available opportunity.

B.The applicant wife informs the Court that the C Town City Council is planning to meet on Thursday, 11 December 2014 at which time the proposed LEP Amendment is expected to be discussed and a resolution passed.

C.The respondent husband does not require the publication of Reasons for these Orders unless he notifies the Associate to Justice Austin and the legal representatives of the applicant wife in writing by 10.00 am on Wednesday, 19 November 2014.

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

FILE NUMBER: NCC 517 of 2013

Ms Garwood

Applicant

And

Mr Garwood (by his Case Guardian Mr B)

First Respondent

And

Mr Garwood as Trustee for the Mr Garwood Will Trust

Second Respondent

REASONS FOR JUDGMENT

Introduction

1. On 23 October 2014, with the consent of the parties, these proceedings for alteration of the parties’ property interests, pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”), were fixed for final hearing commencing on 15 December 2014.

2. On 14 November 2014 the applicant filed an Application in a Case seeking orders vacating the final hearing and directing the procurement of a supplementary report from a single expert witness about the valuation of a significant parcel of real property (“the land”).

3. The respondents opposed the applicant’s application in all respects.

4. The interlocutory application was determined on 18 November 2014. The trial date was vacated, but the proceedings were left listed on 15 December 2014 for further procedural directions. No order was made about the procurement of the supplementary single expert report, with the decision on that issue to be influenced by what further information the parties could furnish to the Court at the next court event about any actual or prospective changes to local government planning regulations that might conceivably affect the current valuation of the land.

5. Counsel for the respondents informed the Court it would be unnecessary for the Court to publish reasons for the orders made, unless notified to the contrary in writing by 10.00 am the following day. At 9.19 am the following day the respondents’ solicitors notified the Court in writing of the need for publication of reasons, which are hereby provided.

The application and evidence

1. The applicant pressed for the orders set out within the Application in a Case filed on 14 November 2014.

2. In support of that application, the applicant relied upon the affidavit of her solicitor, Ms Camilleri, filed on 14 November 2014. That evidence was not controversial.

3. The respondents only sought to rely upon a medical certificate, dated 5 November 2014, attesting to the grave medical condition of the first respondent, whose condition is terminal. The medical certificate was not formally marked as an exhibit, but nonetheless formed part of the evidence. The first respondent’s condition and prognosis are, apparently, uncontroversial.

The issue

1. The first respondent’s proprietary interest in the land is a significant feature of these proceedings. He holds a one-third interest in the land as a tenant in common.

2. The single expert reported in his affidavit filed on 17 November 2014 that the land is currently valued at $4.6 million. Consequently, the first respondent’s interest in the land is worth about $1.533 million.

3. The land is situated on the north coast of NSW, within the shire of the C Town City Council (“the Council”).

4. It is known that the Council presently intends to amend the Local Environment Plan (“LEP”) that governs use and development of land within its boundaries.

5. Although an amendment is proposed by the Council, whether the amendment will be successfully gazetted and made operational remains moot. Even if it becomes operational, the elapse of time before that eventuates is contentious.

6. The applicant asserted implementation of the LEP amendment may bear upon the current valuation of the land and hence affect the outcome of these proceedings. In expectation the LEP amendment might be operational within the next couple of months, following an initial resolution by the Council as soon as 11 December 2014, the applicant wanted to push back the trial date and obtain a supplementary report from the single expert about the manner in which the proposed amendment might affect the current value of the land.

7. The respondents asserted the proposed LEP amendment would not affect the value of the land, or at least it was highly doubtful, and it would be a waste of time and expense to procure the supplementary single expert report and to delay the final hearing.

Conclusions

1. The respondents relied upon written submissions filed with the Court on 17 November 2014, which their counsel only sought to elaborate orally.

2. Without repeating those submissions, in essence, the respondents propounded two arguments.

3. First, the existing single expert report already values the land at its “highest and best use” and the single expert has already answered questions posed to him by the applicant, pursuant to rule 15.65 of the Family Law Rules 2004 (Cth) (“the Rules”), asserting that the highest and best use of the land will not change irrespective of any LEP amendment. Accordingly, the applicant’s proposal is misconceived.

4. Secondly, regardless of the first argument, the first respondent’s terminal condition means he will be unduly prejudiced unless the proceedings are concluded very quickly.

5. Ultimately, neither argument was decisive, but the issue will be re-visited when the proceedings are next before the Court for procedural directions on 15 December 2014.

6. The respondents’ first argument was premised on the provisions of s 79(5) of the Act, it being contended there should be no adjournment because the applicant could not demonstrate any “likelihood” of a “significant change” in the first respondent’s financial circumstances during any period following the adjournment.

7. There is, of course, no doubt about the terminology utilised in s 79(5) of the Act, but the respondents overlooked an important portion of it. The sub-section begins with the caveat that it does not purport to limit the power of the Court to grant an adjournment, and there are plenty of other sources of power, both procedural and substantive, enabling the Court to grant an adjournment if it is warranted (see ss 38, 80(1)(k) of the Act; rr 1.09, 1.10, 11.01, 16.03 of the Rules).

8. It was accepted the value of the first respondent’s interest in the land will be an important component of the disposition of these proceedings, since the applicant lays claim to a share of it. Whether she can validly do so is, of course, an issue for determination at final hearing.

9. Although the single expert was satisfied his valuation methodology and the highest and best use of the land would remain unchanged in the face of any amendment to the LEP, he was equivocal about whether the proposed amendment will have any effect upon his valuation of the land. He said in his letter to the parties’ solicitors on 13 November 2014:

   [The LEP amendment] may, or for that matter, may not affect the opinions detailed within our report.

   …we are aware of the LEP amendment but are not privy to the details contained.

   …we requested an extension of timeframe to prepare our assessment of value post release of the LEP Amendment…

10. It is unlikely the single expert would have thought it appropriate to await the outcome of any amendment to the LEP before undertaking the valuation process unless he considered it might actually affect his ultimate valuation of the land. Furthermore, his current understanding of the provisions of the amendment is apparently limited, and his thorough understanding of the implications of the amendment will logically tend to bear upon his valuation.

11. If there is a reasonable chance his valuation opinion might change then, subject to any such change occurring within a reasonable time, the applicant should not be precluded from investigating the possibility.

12. Of course, no case can be indefinitely prolonged to accommodate one party’s wish to investigate the value of property which is integral to the proceedings, for otherwise no case would ever be determined. That is because “value” is a fluid concept. The value of property changes all the time. The value of shares in publicly listed corporations changes daily. The value of realty may change less rapidly, but still more quickly than it takes to conduct litigation from start to finish.

13. The applicant commenced these proceedings in March 2013, presumably because she wanted her rights and entitlements determined under the Act within a reasonable time. The proceedings were transferred by the Federal Circuit Court to this Court in December 2013 and listed for final hearing in December 2014. It is not unreasonable to delay the final hearing for some time, but a point must be reached at which any further delay would be unreasonable.

14. The single expert reported the Council intended releasing the proposed LEP amendment for public comment on 13 November 2014, but the applicant informed the Court the Council meeting was postponed to 11 December 2014, at which time it is anticipated the Council will resolve to release the proposed amendment for public comment. If that ensues, the amendment will likely be released for public comment in January 2015 and any chance of the amendment being published in the government gazette and made operational will be delayed by several more months.

15. If the applicant’s expectations are realised, it remains feasible the LEP amendment will be operational in time for a supplementary report to be obtained from the single expert and the proceedings re-listed for final trial in or about mid 2015.

16. The respondents want no delay at all, but that is equally unreasonable as any request that may be made by the applicant to delay the final hearing beyond a reasonably short period of months.

17. The first respondent’s condition is terminal. As it is, he is unable to give evidence at final hearing even in December 2014, so pushing back the trial date will not result in him being unable to give evidence when he otherwise would have been able to do so at the hearing in December 2014. The quality of the evidence he will be able to adduce at any subsequent hearing will not therefore be compromised by delay.

18. According to the medical certificate upon which the first respondent relied, his life expectancy beyond 12 months is not guaranteed. The medical certificate was prepared in early November 2014, so on present indications he will likely survive to know the result of the proceedings if they are concluded by mid or late 2015.

19. In such circumstances, the prejudice to the applicant in being deprived of the chance to procure further advantageous evidence is greater than the prejudice to the respondents in having to wait several more months for the determination of the proceedings.

20. When further procedural orders are next considered on 15 December 2014 the expected Council meeting should have taken place several days beforehand and the parties will be able to make further submissions about the likely delay in implementation of the proposed LEP amendment. As would be obvious, if it becomes apparent the delay will be more protracted than originally anticipated, it may be the balance of convenience tips back in the respondents’ favour.

21. I was therefore satisfied the existing final trial dates should be vacated.

22. The proceedings will remain listed for further procedural directions on 15 December 2014, at which time a further determination will need to be made about whether orders should be made for the procurement of a supplementary single expert report and when the proceedings should be re-listed for final hearing.

23. Leave was granted to the first respondent to issue a subpoena to the Council, returnable at the next Court event, which will enable the first respondent to obtain from Council any source documents that may illuminate the dispute about when the LEP amendment might be implemented.

I certify that the preceding thirty eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 20 November 2014.

Associate:

Date:  20 November 2014