GAYNOR & TSEH

[2018] FamCA 164

FAMILY COURT OF AUSTRALIA

GAYNOR & TSEH [2018] FamCA 164

FAMILY LAW – INTERLOCUTORY ORDERS – dispute over the extent of discovery – where there is asserted no knowledge of the business dealings of the applicant and the respondent seeks extensive documents in circumstances where the applicant is said to have not told the truth to his bankers and otherwise conducts business by a “handshake”.

FAMILY LAW – PROPERTY – interlocutory order – interim property proceedings – where the parties dispute ownership and possession of a dog – where a pet is property within the meaning of the Family Law Act and the approach to the determination of an interim property dispute is the same – where there is not sufficient evidence to justify the exercise of power – application for interim relief refused.

FAMILY LAW – COSTS – where despite findings of incomplete discovery, a large number of matters were otherwise resolved by consent and where a significant portion of the litigation was around orders associated with the dog.  Where the court finds there is no justifiable circumstance to depart from the principle that each party pays their own costs.

Family Law Act 1975 (Cth)

APPLICANT: Mr Gaynor

RESPONDENT: Ms Tseh

FILE NUMBER: MLC 3090 of 2017

DATE DELIVERED: 20 March 2018

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 13 March 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Jenkins

SOLICITOR FOR THE APPLICANT:	Taussig Cherrie Fildes
COUNSEL FOR THE RESPONDENT:	Ms Smallwood

SOLICITOR FOR THE RESPONDENT: Blackwood Family Lawyers

Orders

1. Within 5 days, the applicant MR GAYNOR comply with paragraph 3 of the orders made 16 November 2017 including the payment of any interest accrued on any outstanding sum.

2. That forthwith, the applicant produce to the respondent details of all storage costs’ arrangements in respect of payment for the period from 16 November 2017 to date.

3. That within 14 days, the applicant make disclosure of all contracts and memoranda of understanding for the period from 1 July 2015 to date relating to services either as an individual or by an entity in which he has an interest including any partnership or joint venture.

4. That the respondent’s application that the applicant pay the costs of these proceedings is dismissed.

5. BY CONSENT that there be orders in terms of the attached minute.

6. That the solicitors for the respondent engross the minute and provide it in a Word format.

7. That otherwise, the application in a case filed 1 February 2018 and the response thereto filed 8 March 2018 are 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 Gaynor & Tseh 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 3090  of 2017

Mr Gaynor

Applicant

And

Ms Tseh

Respondent

REASONS FOR JUDGMENT

1. In these interlocutory proceedings between Mr Gaynor (“the applicant”) and Ms Tseh (“the respondent”) most of the issues in dispute were resolved between the parties themselves and I shall make orders now in the terms agreed.  These reasons address the issues that were not resolved.

2. There were four categories of issues in dispute.  They relate to:

   (a)An application for the return of a dog;

   (b)The enforcement of an outstanding money obligation of the applicant;

   (c)Discovery issues; and

   (d)A claim for costs.

3. The application was brought by the applicant on 1 February 2018 seeking orders for property injunctions against the respondent which were very widely drawn.  In addition to injunctions, the applicant sought access to various storage facilities and the return of items of chattels not stored in those facilities.  Then, the applicant sought the following order that the respondent:

   (d)cause the dog known as “[B]”, the ownership of which is registered in the Respondent’s name, to be delivered to the Respondent’s nominated agent.

4. A curious part of the application was that the applicant sought that the matter be dealt with urgently.  Much of the evidence to which I now turn focusses on what happened as long ago as April 2017.  There was significant litigation between the parties throughout that year but the urgency is not apparent.

5. When the proceedings initially began, the jurisdiction of the court was denied by the applicant who was the respondent to the substantive proceedings.  It was not until 28 August 2017 that a concession was made.  All of that puts the current dispute over non-payment of the ordered obligation (which is not disputed by the applicant), the unresolved issues associated with discovery and the return of the dog, in some context.

6. The evidence of each of the parties was set out in their respective affidavits filed 1 February 2018 and 8 March 2018.  It is only necessary that I deal with some of the matters there raised because of the discrete issues requiring determination.

The dog

1. In his affidavit filed 1 February 2018 which ran to 52 paragraphs, the applicant devoted 22 paragraphs to the issue of B.  He referred to this dog as his, having “first met” B in 2010 which was prior to his relationship with the respondent.  He then went on to say how the dog was cared for.  The respondent does not agree with the applicant.  She also devoted 15 paragraphs to the same issue saying that she was concerned that the applicant was seeking the dog’s return to “further isolate, intimidate and punish” her for pursuing a property settlement and spousal maintenance.  She devoted much of the affidavit to how the dog was currently being housed.  She met B for the first time about a year after the applicant did. 

2. The Family Law Act 1975 (Cth) (“the Act”) makes no reference to pets. It was conceded by the applicant that a dog does not fit within any other category of property than a chattel. Hard as that may be for the applicant, and perhaps other dog lovers to accept, the law here concerns the alteration of interests in property. Most significantly, the issue is the question of the alteration of a property interest on an interim basis. Thus, the interest must be determined by reference to s 90SM and s 90SF of the Act.

3. The application in relation to the return of the dog was treated by the applicant as an application for interim property settlement.  The principles to be applied were set out by the Full Court in Strahan and Strahan (interim property orders) [2009] FamCAFC 166; (2011) FLC 93-466. The first of two steps is the court must consider whether there is jurisdiction to make the orders sought. Both parties agree that the dog is property. The second step requires a consideration of the relevant factors under s 90SM of the Act.

4. In Strahan, Boland and O’Ryan JJ, articulated the test at [132] as follows:

   In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order, the “overarching consideration” is the interest of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

5. A fair reading of the respective positions of the parties as set out in their affidavits would not indicate that there is some overarching consideration here warranting the intervention of the court on an interim basis, the intervention of the court. Although the reference in the quote is to s 79 of the Act, the same provision is found in s 90SM. In Strahan, as Thackray J observed (at [226]) the court should approach an application by first identifying the circumstances that make it appropriate to give consideration to the exercise of its power to make an interim order as distinct from a final order.  As his Honour observed, the conditions upon which the power is to be exercised, are governed only by the obligation to make an order that is appropriate in the circumstances and to ensure that that order is just and equitable.

6. It is clear from reading the affidavits of the parties that there is much angst about whether this dog is being treated properly.  The various claims for ownership by reference to registration, or undertaking the attendances on a vet, are hardly matters that would indicate it is appropriate in the circumstances to make an order here.  Whilst one might sympathise with the applicant who asserts that he has an “emotional attachment” to the dog, so too, the respondent asserts a similar feeling but she desires the issue to be determined as part of an overall property settlement.  Indeed, it will be obvious that there are significant factual disputes at play as to who undertook what tasks in relation to this dog.

7. It is also significant to note in determining whether it is appropriate to make an order here, the dog has been in the possession of the respondent for some time.  There appears no logical reason why it is urgent for the court to intervene to protect property.

8. In the circumstances, I could not be satisfied that it is appropriate to exercise the relevant power. 

9. The second issue relates to the enforcement of money orders.  Bizarre as it may seem, the difficulty here really relates to the timing of a payment rather than whether it would be paid.

10. Orders were made on 16 November 2017 by the Senior Registrar, at the urging of the parties, based on their consent.  The order provides for a regime of significant payments which were not only precise as to quantum but also as to the relevant dates.  Similarly, the order provided for the applicant to pay the storage costs.

11. The applicant filed his application in a case on 1 February 2018 but sought no variation of the orders of 16 November 2017.  It was when the respondent filed her application that she sought not only an outstanding payment but also interest on it.  In her affidavit, the respondent said that the payment was due on 28 February 2018 and by a week later, payment had not been made.  Correspondence followed during which the applicant’s lawyer’s advised that the payment could not be made due to “cash flow difficulties”.  That prompted the respondent’s lawyers to request details as to the financial records that might have enlightened them as to why there were “cash flow difficulties”. 

12. In submissions, counsel for the applicant said that despite the difficulties, the payment could be made on 29 March 2018, not within 24 hours as the respondent had sought by her application filed on 8 March. 

13. The applicant’s counsel observed that as interest was an accruing obligation, the respondent was not prejudiced.  That submission has no merit in circumstances where someone is unemployed and reliant upon a payment which was not only the subject of a court order but one to which the payer had consented. 

14. The problem however was exacerbated by the fact that having received certain documents, it came to light that the applicant had paid $8000 to his lawyers on 6 March which was the day upon which the solicitors wrote to indicate that there were cash flow difficulties.  No explanation was given (nor probably could be given) as to why a priority was given to the lawyers. 

15. Counsel for the respondent also observed that various records showed significant cash sums in banking accounts but I am not confident that I can draw any inference adverse to the applicant because I am not sure what legal obligations there were involved.  However, subsequent to the order in November 2017, the applicant paid $17,000 rent on a beach house.  He concedes that he has also given his daughter accommodation because her partner who has arrived from overseas, is not able to earn an income at this stage.  Other payments were made in December including $6600 to the applicant’s former wife.  It was submitted that if one examined his credit cards after November 2017, a significant sum of money would be then seen to have been spent. 

16. I am not in the position to make a finding one way or the other as to whether or not there is a plausible explanation for the “cash flow problems” but at the time the applicant’s affidavit was sworn on 25 January 2018, one would have to conclude that there was a paucity of evidence of the nature to which the submissions just mentioned were directed.

17. In my view, there is no justification for this payment not having been made having regard to the evidence before the court.  In my view, the payment should be made within five days of the delivery of these orders.

18. The third issue relates to discovery.  Again, the issue was discrete.  Much work was done between the respective counsel to arrive at a consensual position but the issue that was contentious related to the following order sought by the respondent:

    Within 14 days of these orders, the de facto husband provide copies of the following documents to the wife (sic):

    Any deeds, agreements, contracts and memorandums (sic) of understanding entered into by the de facto husband (individually or on behalf of a company or trust in which the de facto husband holds an interest) for the period 1 July 2015 to date that relate to:

    (i)The de facto husband providing services (individually or on behalf of a company or trust in which the de facto husband holds an interest).

    (ii)The de facto husband (individually or on behalf of a company or trust) receiving interest in real estate and/or money benefits.

    (iii)The de facto husband otherwise entering into a partnership or joint venture (individually or on behalf of a company or trust).

19. The width of the proposed order is perplexing.  Obviously, the draftsperson saw some distinction between a deed and an agreement or a contract.  Obviously, an agreement, in a commercial sense, having regard to (i), (ii) and (iii) concerns the same thing.  Counsel for the applicant did not disagree. 

20. Counsel for the applicant said that her client’s objection was to the “memorandums (sic) of understanding” because (it was said) various commercial arrangements were entered into but not fulfilled and the exercise was cumbersome.  That is not at all clear from the material provided by the applicant.

21. The respondent’s counsel submitted that the modus operandi of the applicant was to operate commercially by doing “handshakes”.  There could be no suggestion of any confusion about his understanding of legal obligations because he has a law degree.

22. It defies logic to say that the applicant did not know what was discoverable and what was not in the circumstances of this case.  He must understand what earns an income either for him, as an individual or in some corporate sense, in the same way that he must understand his obligations in relation to taxation and the need to explain expenditure.  I found the submission difficult to understand in a jurisdiction where disclosure obligation is absolute.  Both parties are represented by lawyers so there can be little excuse for confusion about the extent of the obligation.  Absent that plausible explanation, the applicant must provide not only the memoranda if they have a relevance to any of the financial circumstances of the applicant but also any correspondence surrounding those obligations.  In my view, the applicant must fulfil his obligations.  He has not done so to date. 

23. No explanation was given that would justify a conclusion that the exercise was cumbersome albeit the assertion was made.  The applicant conducts a business which appears to have property development as its base.  Exhibit R1 showed that his financial circumstances had altered by almost $1 million from what he last year told his commercial bankers.  His explanation for some of the figures that show the disparity was that he did not tell the truth to his bank.  That gives me little comfort but more importantly, it shows that there are commercial operations going on and nothing I heard, indicated that there was a reason for not fulfilling the disclosure obligations.  Orders will therefore be made.

24. The fourth issue relates to costs.  Counsel for the respondent sought costs in the sum of $7184.  Those fees are not within the scale.  Counsel for the applicant submitted that time had been used productively and a mechanism had been put in place for a variety of actions including stock takes and valuation not to mention the fact that there had been a resolution of a number of issues. 

25. Section 117 of the Act provides that in proceedings under the Act, each party shall bear their own costs unless there are circumstances that justify a departure from that principle. If the court finds that the circumstances justify a departure from that principle, it must take into account the matters set out in s 117(2A) of the Act.

26. Notwithstanding my reservations about the approach taken by the applicant, both parties had come to court focussing on a number of different issues; the only common ones seemed to be the dog.  The case has moved forward and both parties spent the day productively as submitted by counsel for the applicant. 

27. I accept the submission by counsel for the respondent that the applicant had to be brought to court to fulfil his obligations in relation to discovery including those that I have just mentioned but it still seems to me that the costs incurred would have largely been incurred for the day including counsel’s fees to deal with other matters that had advanced the proceedings to the point where some serious consideration to a resolution can be made. 

28. In a jurisdiction where each party is expected to pay their own costs, there is nothing unusual about the matter, notwithstanding my reservations as expressed.  There is nothing here that I find justifies a departure from the main principle.  I decline therefore to make any order for costs.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 20 March 2018.

Associate: 

Date:  20 March 2018