Giacobetti & Giacobetti
[2023] FedCFamC1F 802
•19 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Giacobetti & Giacobetti [2023] FedCFamC1F 802
File number(s): SYC 5998 of 2021 Judgment of: CURRAN J Date of judgment: 19 September 2023 Catchwords: FAMILY LAW – PRACTICE & PROCEDURE – interim hearing – where wife seeks adjournment of final hearing dates – where husband seeks to retain hearing dates with one further day being adjourned part-heard – where final hearing was set to commence one day following this determination – where wife alleges late disclosure by husband – where husband contends no impact on original expert valuation – where wife contends the true value of the shares impacts the relief sought overall – application granted – final hearing dates vacated – matter adjourned to 15 December 2023 Legislation: Family Law Act 1975 (Cth) s 75
Federal Circuit Court and Family Court of Australia Family Law Rules 2021 (Cth) r 1.04
Federal Circuit and Family Court of Australia, Central Practice Direction – Family Law Case Management, 28 November 2022
Cases cited: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175
Mertens & Mertens [2016] FamCAFC 136
Division: Division 1 First Instance Number of paragraphs: 34 Date of hearing: 19 September 2023 Place: Sydney Counsel for the Applicant: Ms Mahony Solicitor for the Applicant: Uther Webster & Evans Counsel for the Respondent: Mr Othen Solicitor for the Respondent: Newnhams Solicitors ORDERS
SYC 5998 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GIACOBETTI
Applicant
AND: MR GIACOBETTI
Respondent
ORDER MADE BY:
CURRAN J
DATE OF ORDER:
19 SEPTEMBER 2023
THE COURT ORDERS THAT:
1.The final hearing listed for three days commencing on 20 September 2023 is vacated.
2.The matter is adjourned for final hearing for four days commencing 15 December 2023.
3.Within 14 days, the parties are to file an agreed minute as to the timetable for the filing of any updated evidence and the filing of the updated expert report.
4.In the event that there is no agreement pursuant to order 3, directions will be issued from chambers.
5.By consent, Order 2 of the Orders made 18 October 2021 be varied as follows:
(a)That the Husband pay to the Wife the sum of $1,283.50 per week; and
(b)That the Wife be authorised to draw down up to $1,283.50 per week from the funds held in the parties' Controlled Monies Account; with such draw down funds to be characterised by the trial judge at Final Hearing.
6.Leave is granted to each party to issue such subpoena as they consider relevant to the issue in the proceedings.
7.The costs of and incidental to this application be reserved to the final hearing.
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 Giacobetti & Giacobetti has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CURRAN J:
These reasons for judgment were delivered orally and have been corrected from the transcript.
This matter comes before the Court in relation to the parties’ competing applications for an adjustment of their property interests. The matter was originally listed to commence in July 2023 for five days but due to my unavailability it was adjourned to 20 September 2023. The listing was reduced from five days to three days in circumstances where a significant factual issue in dispute as to the existence of an alleged loan of around $600,000 to the estate of the wife’s mother was abandoned.
On 13 September 2023, a week prior to the scheduled date for the hearing to commence, a joint email was sent to chambers at 5.02 pm which said:
Dear Associate,
We refer to the above proceedings which are listed for final hearing before Curran J on 20 to 22 September 2023.
An issue has arisen in respect of the valuation of shares held by the Husband (through a trust) in [B Pty Ltd].
In those circumstances, the parties have agreed upon the need to approach a previously engaged expert valuer, [Ms D], to provide an updated opinion in respect of the value of those shares ahead of the final hearing. That approach was made to the valuer on 17 August 2023. On 11 September 2023, [Ms D] wrote to the parties seeking further documents and information necessary for an updated valuation to be possible. Whilst the husband is endeavouring to obtain the information and documents needed, it is likely that further subpoenas will be necessary.
The parties therefore propose, on a joint basis, that the listing of the final hearing on 20 to 22 September 2023 be vacated.
We expect her Honour may require the matter to be relisted, or leave the matter listed on 20 September 2023 for directions, in order to arrange future hearing dates.
The parties also seek an Order that leave be granted to the parties to issue such subpoenas as they consider relevant to the issues in these proceedings.
We look forward to hearing from you at your earliest convenience.
No application to vacate the hearing dates or any evidence upon which the court should consider the application to vacate was filed at that time.
The matter was listed on 15 September 2023 for mention. At that time, I indicated that my next availability in the court diary for 3 to 4 days was likely to be in November 2024, as other matters has been earmarked for judicial time. In that case I advised the parties that I was disinclined to adjourned the matter in circumstances where the identification of one issue (of an updated valuation of shares held by the husband through a trust) could be dealt with, it seemed to me, in a single day, rather than adjourning the whole matter which has other apparently unrelated issues in dispute including the wife’s earning capacity, the husband’s earning capacity and health issues, and the value of other assets.
Noting the obligation to other court users, particularly given the number of legacy cases, some of which date back over three years that are desperately in need of finalisation, let alone recently filed matters dealing with allegations of significant risk of harm to children, it is a significant concern to the court that resources are used efficiently and properly used. I note the comments of the High Court of Australia in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175. At the time the court was notified on 13 September 2023 of the difficulties that had arisen, it was simply not possible to bring another matter forward to utilise a hearing date of three days.
The applicant in oral submissions at the directions hearing advised the court of the basis for the need to adjourn, and there was alleged to be a significant late disclosure relevant to valuation of issues of shares, which had previously been valued by single expert Ms D at an agreed date of 2022.
It was contended by the applicant that the share value arising from the subsequent matters could impact the pool by as much as $6,000,000, in a pool that is currently around $2,500,000. I note that there is an updated joint balance sheet which indicates the pool as it currently sits, with this value not known, between $2,200,000 and $2,600,000. The pool is currently $2,500,000, with ongoing orders for payment of and an application for spousal maintenance in the future. Given what is contended, that is that the valuation of the shares could significantly impact the pool, it is obviously something of significance in this hearing.
A second issue that emerges is the question of why there was such late disclosure, if it is true as alleged, of the change to the share structure, and whether that alleged late disclosure has any bearing on the outcome of the matter. It is squarely asserted by the wife in her submissions that the husband failed to disclose material that was known to him, and that he is in breach of an injunction made on 15 November 2021 in respect of an order preventing him from disposing, encumbering or dealing with the assets of the company without written agreement or order of the court. Those orders were made by a judicial registrar. The wife contends, given the existence of the injunctions and the obligation of disclosure being an ongoing one, that it was reasonable for her to rely upon the representations made by the husband, to which she refers in her submissions, prior to the original valuation being undertaken by Ms D.
Ultimately the issue of whether or not the husband breached the injunction and failed to provide disclosure in accordance with his obligations is a matter for consideration in any costs application and the final trial of this matter, but not for determination today.
It does not appear to be in contest that the primary issue that has arisen follows the transfer of 250,000 shares at a notional price on 70 cents per share. The husband contends that it may have no impact on the valuation undertaken by Ms D as, in effect, it is in nature simply raising capital. This, however, as acknowledged by the husband’s counsel, is a matter for expert opinion.
However, the information about the share transfer is that it is agreed it is quite “late breaking”. It is contended by the wife that she came across a news article in mid-2023 about the transfer, which set about some enquiry of the husband and, on 8 August 2023, for the first time according to the wife the husband disclosed transfers on three occasions in late 2022.
If the issues of late disclosure as alleged are accurate, then this has created the situation where the wife would otherwise have had an opportunity to obtain whatever legal and accounting advice she needed to, prior to now.
The timeline of events as asserted by the wife is set out in her case outline and the evidence is contained in the affidavit of the wife’s solicitor. I do not propose to go through the evidence, but I have read all of the material that has been filed.
I am satisfied that the wife has acted promptly in seeking disclosure (which if it had not been provided, should have been provided by the husband pursuant to his obligations). I am also satisfied that the wife has acted promptly in seeking an updated report.
I note that the wife was only advised by the expert on 11 September 2023, as referred to in Exhibit DAB-8, that the expert was not in a position to provide a valuation of the husband’s interests in circumstances where the expert was still awaiting further information.
I had understood that it was agreed that updated valuation that is being sought was going to be available prior to15 December 2023. I now understand that it is not certain, that is, that Ms D has not confirmed to the instructing solicitors for either party that it will be able to be available prior to that date. However, in circumstances where Ms D had previously understood there was a hearing date looming and had indicated her endeavours to prepare and provide the updated report in advance of that hearing, and noting that both parties have indicated that they are endeavouring to communicate with Ms D about ensuring that the report is available by that time, it is reasonable for me to assume that Ms D is going to be able to provide the report in that time.
If it transpires that it is not going to be available prior to 15 December 2023, I direct that the parties relist the matter before me as a matter of urgency.
The question then becomes whether this late disclosure and the consequences in the wife requiring updated valuation evidence is a basis for an adjournment of the proceedings.
The Court has a wide discretion to grant adjournments, but determination of any adjournment application is a careful balancing act. Although it is a wide discretion to grant adjournments, it is not an unfettered discretion.
Kent J summarised the matters that should be taken into account in determination of an adjournment application in Mertens & Mertens [2016] FamCAFC 136. The factors to be weighed include the reasons for the adjournment, the period of delay such adjournment would give rise to, any prejudice or disadvantage to other parties that cannot be compensated by an order for costs and the impact upon other litigants before the Court were an adjournment granted.
Both counsel in their submissions acknowledge the overarching purpose as set out in the Federal Circuit Court and Family Court of Australia Family Law Rules 2021 (Cth) (“the Rules”). That purpose is set out at Rule 1.04 of the Rules, and provides as follows:
The overarching purpose of these Rules, as provided by section 67 of the Federal Circuit and Family Court Act, is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.
I note in particularly rule 1.04(2) of the Rules that:
Parties to family law proceedings must conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose.
Both counsel also acknowledge that trial dates should be viewed as a valuable resource to the community and not lightly vacated, and they acknowledge the limited court resources and need comply with the Central Practice Direction – Family Law Case Management, 28 November 2022 (“Central Practice Direction”) to ensure efficiency. The wife, however, contended that “efficient resolution cannot replace the proper conduct of the proceedings” and that the husband’s conduct is inconsistent with the Central Practice Direction and has impeded the wife’s capacity to properly conduct her case.
The wife contends that an adjournment is necessary in order to do justice between the parties, as she says “the wife is entitled to understand fully the issues in dispute in order to meet her obligations to conduct proceedings in an efficient and directed manner.” She contends that the husband’s conduct has failed to afford the wife the opportunity to properly assess the issues in dispute for the company including the value of his interest, and probably more importantly in this application, she contends that she fails to have an opportunity to properly assess “the effect of the husband’s interest on issues, including s.75(2) and his future needs, which is identified as an issue of relevance in his case”, and the “likely income to be available to the husband from the now publicly listed company and the effect that this may have on any assessment of s.75(2) and the issue of spousal maintenance.”
The wife further contends that there is a significant prejudice to her in proceeding to a hearing without the opportunity for her to receive, consider and be advised on the identified issues, and for her to fully consider the relief she seeks in issues in dispute.
In my view, despite my initial reluctance to vacate the hearing dates and adjourn the singular issue, as I thought it was, of the valuation, the intersection between the valuation of this potentially significant asset according to the wife (or not so significant asset according to the husband) on the other aspects of the case is significant. I am satisfied that significant prejudice would be occasioned to the wife in not having the opportunity to understand the impact of this asset on all other aspects of the case, prior to commencing the matter. To otherwise commence the hearing and adjourn the last day part-heard would create an unfair prejudice for the wife. I am also not confident that the matter would be able to be limited to one day where the wife’s counsel would be available.
Issues in relation to alleged non-disclosure alone are not matters in my view that found an adjournment of proceedings, but in this case, given the matters referred to above I am satisfied that the potential prejudice to the wife in balancing all of the competing factors supports the matter being adjourned. As referred to earlier, through adjusting the diary I have been able to allocate dates in December 2023, and although I note the wife’s counsel will be unavailable, which is regrettable because she has had conduct of this matter and knows the matter, I am satisfied that any further delay in the hearing would place a significant burden upon the parties, particularly in terms of cost and delay that is unacceptable.
I note in particular the circumstances of the husband and his ongoing obligation to meet a current spousal maintenance order that would continue on or cause an application for that to be varied in the next 12 months.
Having regard to all of the circumstances, I grant the application of the wife to vacate hearing date and I list the matter for 4 days commencing on 15 December 2023.
I direct that the parties file an agreed minute as to the timetable for the filing of any updated evidence and the filing of the updated expert report within 14 days.
If parties do not file their agreed minute, I will issue directions from Chambers.
Leave is granted to each party to issue such subpoena as they consider relevant to the issues in the proceedings.
I note that the husband seeks, and the wife consents, to Order 4 in the husband’s Response to Application in a Proceeding sealed on 18 September 2023 and I make that order by consent. That is:
4. That Order 2 of Orders made 18 October 2021 be varied as follows:
a. That the Husband pay to the Wife the sum of $1,283.50 per week;
b.That the Wife be authorised to draw down up to $1,283.50 per week from the funds held in the parties’ Controlled Monies Account with such drawn down funds to be characterised by the trial judge at Final Hearing.
I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Curran. Associate:
Dated: 16 October 2023
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