Goodridge and Beadle and Ors
[2019] FamCA 709
•11 October 2019
FAMILY COURT OF AUSTRALIA
| GOODRIDGE & BEADLE AND ORS | [2019] FamCA 709 |
| FAMILY LAW – EXAMINATION OF WITNESSES – rule 15.71 of the Family Law Rules – whether an abuse of process – whether examinations should be stayed – held, no abuse, no stay. |
| Bankruptcy Act 1966 (Cth) ss 60, 116 Corporations Act 2001 (Cth) s 596A Evidence Act 1995 (Cth) s 128 Family Law Act 1975 (Cth) ss 4(1), 34, 69ZP(1), 69ZQ(1)(c), 69ZX(1)(e), 78, 79, 90SM, 92, 106, Family Law Rules 2004 (Cth) r 15.71 Federal Circuit Court of Australia Act 1999 (Cth) s 39 Livestock Disease Control Act 1994 (Vic) Migration Act 1958 (Cth), pt 7AA |
| An v Minister for Immigration and Citizenship (2007) 160 FCR 480 Baker v The Queen (2004) 223 CLR 513 Barbaro v Director of Public Prosecutions [2004] VSC 404 Barton v The Queen (1980) 147 CLR 75 BVZ16 v Minister for Immigration and Border Protection [2017] FCA 958 Cabal v United Mexican States [2001] HCA 42 Clyne v New South Wales Bar Association (1960) 104 CLR 186 Connelly v Director of Public Prosecutions [1964] AC 1254 CSJ17 v Minister for Immigration and Border Protection (2018) 328 FLR 431 Dietrich v R (1992) 177 CLR 292 Director of Public Prosecutions v Humphrys [1977] AC 1 Faden & Faden (No 3) [2011] FamCA 897 Gilding v Eyre (1861) 142 ER 584 Goldsmith v Sperrings Ltd [1977] 1 WLR 478 Goodridge & Beadle (2017) 57 Fam LR 425; [2017] FCCA 3219 Grainger v Hill (1838) 132 ER 769 Griffiths v The Queen (1989) 167 CLR 372 Guildford Industries Ltd v Hankinson Services Ltd (1973) 40 DLR (3d) 398 Hadley v Baxendale (1854) 156 ER 145 Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648 Hasim & Ors v Attorney General (Cth) (2013) 218 FCR 25 Hatcher v Cohn & Ors (2004) 139 FCR 425 Hatton v Attorney-General(Cth) (2000) 26 Fam LR 570 Ho v Professional Services Review Committee No 295 [2007] FCA 388 In the Marriage of Alexander (1982) 8 Fam LR 289 In the Marriage of Nieuwstraten (1987) 11 Fam LR 681 In the Marriage of Sahari (1976) 2 Fam LR 11,126 In the Marriage of Smit & Pickworth (1981) 7 Fam LR 387 Jago v District Court of New South Wales (1989) 168 CLR 23 Kioa v West (1985) 159 CLR 550 Maan v Minister for Immigration and Citizenship (2009) 179 FCR 581 Martin & Martin (No 4) [2014] FamCA 442 Martin & Martin (No 5) [2014] FamCA 954 Medlow & Medlow [2017] FamCAFC 159 Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391 Metropolitan Bank Ltd v Pooley (1885) 10 AC 210 New South Wales v Canellis (1994) 181 CLR 309 Platt v Ong [1972] VR 197 Prough v Entriken (1849) 11 PA 81 R v Derby Magistrates’ Court; ex parte Brooks (1984) 80 Cr App R 164 R v Kelly (Attorney General’s Reference No 53 of 1998) [2000] 1 QB 198 R v Sang [1980] AC 402 Re KL Tractors Ltd (1961) 106 CLR 318 Re Majory [1955] Ch 600 Rosemont Enterprises Inc v Random House Inc (1966) 261 F. Supp. 691 Sala & Habner [2018] FCCA 2321 Varawa v Howard Smith Co Ltd (1911) 13 CLR 35 Whitecross & Reilly [2016] FamCA 254 Williams v Spautz (1992) 174 CLR 509 |
| APPLICANT: | Mr Goodridge |
| FIRST RESPONDENT: | Ms Beadle |
| SECOND RESPONDENT: | The Trustee of the Property of Mr Goodridge (A Bankrupt) |
| THIRD RESPONDENT: | Mr Celan and Mr Handke in their capacity as Joint and Several Liquidators of J Pty Ltd (In Liquidation) |
| INTERESTED PARTY: | Ms Goodridge |
| FILE NUMBER: | MLC | 10573 | of | 2015 |
| DATE DELIVERED: | 11 October 2019 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | The Honourable Justice Wilson |
| HEARING DATE: | 1 October 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr D Whitchurch |
| SOLICITOR FOR THE APPLICANT: | Blackwood Family Lawyers |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr J Williams |
| SOLICITOR FOR THE FIRST RESPONDENT: | Berry Family Law |
| COUNSEL FOR THE SECOND RESPONDENT: | No appearance |
| SOLICITOR FOR THE SECOND RESPONDENT: | Wisewould Mahony Lawyers |
| COUNSEL FOR THE THIRD RESPONDENT: | Ms C Gobbo |
| SOLICITOR FOR THE THIRD RESPONDENT: | Mills Oakley Lawyers |
| COUNSEL FOR THE INTERESTED PARTY: | Mr L Wraith |
| SOLICITOR FOR THE INTERESTED PARTY: | Kennedy Partners |
Orders
Ms Goodridge has leave to make viva voce submissions to the court on 1 October 2019.
All applications advanced in her application in a case dated 23 September 2019 are dismissed.
Mr Goodridge has leave to make viva voce submissions to the court on 1 October 2019.
All applications advanced in his application in a case dated 24 September 2019 are dismissed.
The further hearing of the examinations ordered pursuant to my orders made on 15 July 2019 is fixed for one day on 6 April 2020 at 10am.
Forthwith, Ms Goodridge and Mr Goodridge comply with my orders made on 5 June 2019 and 15 July 2019 in relation to the production of documents.
Costs are reserved.
Certify for all counsel.
On or before 4pm on 18 October 2019 any party seeking to do so is to file and serve written submissions as to costs.
Each party has liberty to apply generally.
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 Goodridge & Beadle and Ors 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 10573 of 2015
| Mr Goodridge |
Applicant
And
| Ms Beadle |
First Respondent
And
| The Trustee of the Property of Mr Goodridge (A Bankrupt) |
Second Respondent
And
| Mr Celan and Mr Handke in their capacity as Joint and Several Liquidators of J Pty Ltd (In Liquidation) |
Third Respondent
And
| Ms Goodridge |
Interested Party
REASONS FOR JUDGMENT
introduction
Almost two years have elapsed since handing down my reasons for judgment following the trial of this proceeding.[1] Over that two year period the case has travelled in a manner that has been less than linear. In the most recent skirmishing, on the application of the first respondent various persons have been cross-examined and the applicant is yet to be cross-examined about the fate of certain livestock mentioned in my reasons at paragraph 192 and following, especially at paragraph 218 of those reasons.
[1] (2017) 57 Fam LR 425
Ms Goodridge and a stock and station agent were cross-examined on 15 July 2019. The applicant should have been cross-examined on that day. However the day’s hearing time expired prior to the applicant entering the witness box. The proceeding was adjourned for further hearing on 1 October 2019. On that day two persons (one [Ms Goodridge] not presently a party to the proceeding and the other the applicant, an undischarged bankrupt) applied to be heard in respect of applications for orders stopping the further conduct of the examination of witnesses in relation to the fate of the livestock.
Shortly after appearances were announced, Mr Williams for the respondent helpfully suggested that questions of standing should be determined first after which the applications for a stay of the proceeding should be determined. All parties agreed. I proceeded accordingly.
On the issues of standing and the stay application, representation of the parties was as follows –
a)for the respondent, Ms Beadle, Mr Williams of counsel appeared;
b)for the liquidators, Ms Catherine Gobbo of counsel appeared;
c)for the trustee-in-bankruptcy (there being only one now consequent upon the retirement of one of the joint trustees) Ms Pulverman, solicitor, appeared;
d)for the proposed new party Ms Goodridge, Mr Lachlan Wraith of counsel appeared; and
e)for the bankrupt, Mr David Whitchurch appeared.
After hearing a full day of debate on the two issues presently before me, namely the question of standing and the question of staying the proceeding, I reserved my decision, agreeing to produce a decision and reasons with all due expedition. This I now do.
Synopsis
For the reasons that follow, in my judgment –
a)I am unable to definitively say that pursuant to s 60(2) of the Bankruptcy Act the bankrupt has no standing to be heard on this application so I permitted him to be heard;
b)the questioning of Ms Goodridge has been completed so the application in relation to her was hypothetical yet I heard her counsel on the issues she raised;
c)the examination of Mr Goodridge should continue;
d)no basis for staying the examination of Mr Goodridge has been shown; and
e)this proceeding should resume with the cross-examination of Mr Goodridge.
Some procedural facts
On 19 December 2017 I handed down reasons for judgment in the parenting and property aspects of this proceeding, directing the parties to bring in minutes that gave effect to those reasons.
Slightly earlier, on 29 November 2017 joint and several liquidators had been appointed to J Pty Ltd on the application of the Australian Taxation Office (‘ATO’). On the applicant’s petitioning for his own bankruptcy, on 7 December 2017 joint and several trustees-in-bankruptcy were appointed. By reason of the fact that J Pty Ltd was placed in liquidation, the Federal Circuit Court of Australia lacked power to make orders under the Corporations Act. On the urging of counsel for the respondent as well as the solicitor then appearing for the trustees-in-bankruptcy and the solicitor then appearing for the liquidators of the company in liquidation, on 13 February 2018 I made orders transferring this proceeding to the Family Court of Australia. As is customary, when an order is made under s 39 of the Federal Circuit Court of Australia Act for the transfer of a proceeding from that court to the higher court, and in accordance with certain protocols between the two courts I recorded the reasons for the transfer to include the following –
THIS MATTER is transferred to the Family Court of Australia because –
a.this court has no power to deal with insolvency issues under the Corporations Act 2001 (Cth);
b.the Supreme Court of Victoria has dealt with only the liquidator’s application yet it has no power to deal with the wife’s residual applications;
c.this court has power to deal with the parties’ residual applications as well as the trustee-in-bankruptcy’s applications yet not the liquidator’s; and
d.the parties indicated (the applicant and the respondent as of right and the solicitors for the liquidators and the trustee-in-bankruptcy with leave) that the only court with power to deal with all extant applications involving the parties, the liquidators and the trustee-in-bankruptcy is the Family Court of Australia.
The proceeding went before the Honourable Justice Bennett on 14 March 2018. Her Honour was addressed by Mr John Williams of counsel for the respondent, Mr McGibbon the applicant’s trustee-in-bankruptcy and Ms Catherine Gobbo for the liquidators. Bennett J made orders –
a)joining Philip McGibbon, (the bankrupt’s trustee-in-bankruptcy) as the second respondent;
b)joining the liquidators of the company in liquidation as the third respondents;
c)forbidding any step being taken in the proceeding by the company in liquidation without leave of the court;
d)transferring the proceeding back to me then as a member of the Federal Circuit Court of Australia; and
e)reserving all costs.
By amended application in a case dated 19 March 2018 Ms Beadle applied for leave to re-open the proceeding so as to call further evidence and to cross-examine Mr Goodridge. She also sought an extensive array of other orders mostly in the nature of restraints enjoining the liquidators from distributing funds to unsecured creditors from the sale of assets of the company in liquidation. She also sought orders restraining the liquidators from distributing funds in favour of the ATO. So far as disclosure orders were concerned, in her amended application in a case dated 19 March 2018 Ms Beadle requested the liquidators to supply to her, among other things, –
a)all documents relating to head counts of livestock at all locations;
b)all communications of whatsoever nature with Mr Goodridge and his parents about the 317 unaccounted head of livestock;
c)all national livestock identification system database reports; and
d)all national vendor declarations.
Ms Beadle also sought leave to issue an array of subpoenae. She sought orders for all applications to be adjourned to a date to be fixed.
On 20 March 2018 I made orders for the hearing of the proceeding on 12 April 2018.
Prior to 12 April 2018 Ms Beadle issued a collection of subpoena. Mr Goodridge objected to those subpoenae. They were a subpoena –
a)dated 21 March 2018 directed to Ms K Goodridge; and
b)dated 21 March 2018 directed to Mr L Goodridge; and
c)dated 21 March 2018 directed to Agriculture Victoria, Department of Economic Development, Jobs, Transport and Resources.
On 12 April 2018 I made orders in the nature of final parenting orders as well as property orders. I also made orders dismissing three contravention applications brought by Mr Goodridge. So far as the property orders were concerned, they were described as interim property orders, and they included orders –
a)dismissing Mr Goodridge’s objections to the three subpoenae issued by Ms Beadle;
b)granting each respondent leave to bring such further application in a case as may be advised;
c)granting leave to any respondent to issue further subpoenae; and
d)adjourning sine die all extant property applications.
Those orders were set against a factual backdrop in which Mr Williams for Ms Beadle, Ms Pulverman the solicitor for the trustee-in-bankruptcy and Ms Gobbo of counsel for the liquidator as well as Mr Goodridge in person explained their respective positions as they prevailed at that time.
On 12 April 2019 Mr Williams for Ms Beadle canvassed the matters before the court on that occasion as follows –
MR WILLIAMS: Your Honour, pursuant to your Honour’s leave to issue subpoena on the last occasion, my instructor issued three subpoenas, one to the department, I think loosely termed, the Department of Agriculture, secondly to Ms K Goodridge and, thirdly, to Mr L Goodridge, the parents of the father in these proceedings. Ms Goodridge, namely Ms K Goodridge, and Mr L Goodridge have complied and filed documents with the court compliance with the subpoena. The father in these proceedings has issued a notice of objection, which will be on the court file. And the date of the objection in relation to the three subpoena is 27 March 2018. In that objection his ground for objection is that the respondent has exceeded the limit of five subpoenas in a proceeding.
Mr Goodridge expressed a desire to direct the course of the proceeding that day to further resolving parenting matters –
MR GOODRIDGE: I would just like to have the parenting orders sorted out and the rest, I’m happy for the liquidators and the trustees to continue on without me or however see fit.
Ms Gobbo’s contribution on that day was confined to the subpoenae issue. She stipulated her position as follows –
MS GOBBO: So on that basis I understand the only issue that would touch upon the liquidators today is the subpoena and otherwise I would seek to be excused from today’s hearing.
Ms Pulverman as the solicitor for the trustee-in-bankruptcy did not make submissions on the subpoena issue, nor did she ask to be heard on the contravention application filed by Mr Goodridge in relation to parenting matters. Ms Pulverman stated her position as follows –
MS PULVERMAN: The issue in relation to the subpoenas and the livestock don’t concern the trustees-in-bankruptcy. They’re property that belongs to or is the property of the company. And we have no issue with the subpoenas.
When the parties addressed me on 12 April 2018 the overwhelming thrust of the first respondent’s position was that –
a)investigations about the state of assets were ongoing;
b)by arrangement between the respondents, Mr Williams had the carriage of those investigations, irrespective of whether or not the liquidator was in law the proper party to be undertaking those investigations;
c)the focus of those investigations was on the location, identity and recovery of a collection of livestock described as “livestock unaccounted for” together with the proceeds of sale of any such livestock since my decision in December 2017;
d)by reason of orders made on 16 May 2017 Mr Goodridge had been restrained from selling or otherwise disposing of livestock –
2.Until the hearing and determination of this proceeding or further order, the applicant, whether by himself, his servants or agents or howsoever otherwise, in his personal capacity or as a director of J Pty Ltd, as trustee for the Goodridge Trust, is restrained from –
a.selling, gifting or otherwise disposing of livestock, plant and equipment, water licences and freehold land (‘the assets’) except in the ordinary course of business;
b.further encumbering or increasing the level the indebtedness secured thereon of the assets, except in the ordinary course of business;
c.extending any borrowings or other liabilities, except in the ordinary course of business;
d.doing any other act or thing or permitting any other act or thing to be done that is reasonably calculated to diminish the assets or income of the applicant.
All parties acquiesced in orders adjourning the further hearing of property applications in this case sine die.
But for an appearance in November 2018 concerning subpoenae, this proceeding was not the subject of judicial attention until April 2019. A month earlier, in March 2019 I was elevated to the Family Court of Australia.
On 3 April 2019 Ms Beadle filed an application in a case pursuant to which she sought the transfer of this proceeding from the Federal Circuit Court of Australia to the Family Court of Australia and for the proceeding to be docketed to me. Her Honour Judge Boymal made an order in those terms and listed a directions hearing before me on 10 April 2019. On that day, 10 April 2019, I adjourned the further hearing of the proceeding to 5 June 2019.
Prior to embarking upon the hearing on 5 June 2019, I read several important affidavits that had been filed. The first was an affidavit sworn by Ms Beadle’s solicitor on 3 June 2019. In that affidavit, Ms Beadle’s solicitor swore, among other things that –
a)on 16 May 2017 an asset preservation order was made, relevantly, restraining Mr Goodridge from selling, gifting or otherwise disposing of livestock except in the ordinary court of business;
b)according to the liquidator’s summary of investigations, from October 2017 payments by N Pty Ltd as the purchaser of small quantities of meat from the company in liquidation were deposited into an account in the name of Ms Goodridge;
c)the sum of $114,791.04 being the proceeds of sale of 94 head of livestock was deposited into the account of Ms Goodridge after the appointment of the liquidators;
d)108 head of livestock were unaccounted for as at the date of the liquidator’s report;
e)immediately prior to 29 November 2017 Mr Goodridge had estimated to the liquidators that 480 head of livestock existed then immediately following the liquidators’ appointment Mr Goodridge stated the number of head of livestock had reduced to 416.
f)on a date after 28 November 2017 Mr Goodridge informed the liquidators that 43 head of livestock had been sold to [N Pty Ltd] for a sale price of $43,000 which amount was deposited into the account of Ms Goodridge;
g)[N Pty Ltd] informed the liquidators that 94 head of livestock were sold to [N Pty Ltd] rather than 43 head as stated by Mr Goodridge;
h)Ms Goodridge informed the liquidators that Mr Goodridge had used her account for the purpose, so she said, of paying Mr Goodridge’s unpaid wages; and
i)between 15 November 2017 and 18 December 2017 various deposits of money into and transfers of money out of Ms Goodridge’s NAB account were made.
Ms Beadle’s solicitor recorded her client’s conclusions about the matters mentioned in the liquidator’s report. Those included the following –
a)a significant number of livestock had been sold or otherwise disposed of notwithstanding the terms of the asset preservation order made prior to the trial of this proceeding;
b)Mr and Ms Goodridge had misled the liquidators in the manner set out in paragraph 9(b) of that affidavit; and
c)rather than applying to sale proceeds of livestock to creditors of the company in liquidation, Mr and Ms Goodridge have otherwise appropriated those funds to their own use and benefit.
Ms Beadle’s solicitor addressed in her affidavit aspects of the involvement of the stock and station agent Mr M. In essence, Ms Beadle’s solicitor deposed to transactions in May 2018 relating to the sale of livestock on the instructions of Mr Goodridge pursuant to which –
a)Mr M was shown as the vendor of the livestock (rather than the company in liquidation);
b)the livestock were collected from Mr M’s property;
c)the PIC number …was used for the transaction; and
d)certain livestock transacted at sale by or through Mr M formed part of the unaccounted for livestock in this case.
Mr Handke, liquidator, also swore an affidavit on 6 March 2019 ahead of the appearance on 5 June 2019. In that affidavit Mr Handke swore to the more important matters as follows –
a)he was one of two chartered accountants appointed to be liquidator of J Pty Ltd, formerly controlled by Mr Goodridge over whose estate Mr Mulry and Mr Hanley were joint and several trustees-in-bankruptcy;
b)prior to its being placed in liquidation, the company operated a farm business as well as a transport business;
c)the liquidators applied to the Supreme Court of Victoria for orders in relation to the realisation of assets held by the company;
d)the liquidators traded the farm business until 19 January 2018 deriving a net trading position of $67,315;
e)on 17 January 2018 the liquidators entered into a contract for the sale of the property in which the company in liquidation conducted its farming operations, settlement of the sale of which was effected on 16 February 2018;
f)certain livestock was sold yet the liquidators were investigating the transfer of 317 head of livestock to the parents of Mr Goodridge;
g)as at 6 May 2018 being the date of Mr Handke’s affidavit the liquidators anticipated realising $3,549,111 from the sale of assets of the company in liquidation;
h)of that sum of $3,549,111, the sum of $745,775 was expected to be realised from the sale of livestock;
i)the liquidators expected paying out priority creditors;
j)estimated funds available to unsecured creditors were $235,498 whereas claims by unsecured creditors stood at an estimated amount of $1,317,698; and
k)Mr Handke stated it was unlikely unsecured creditors would be paid in full.
Mr Handke stated there was no utility in orders being made against the company in liquidation and against the liquidators.
The application on 5 June 2019
This proceeding came before me on 5 June 2019. By that stage the case had been re-transferred to me, this time in the Family Court of Australia following my elevation to that court in March of that year. On 5 June 2019 Mr Williams for Ms Beadle appeared before me along with Mr Goodridge who appeared in person and who, at my invitation, sat at the Bar table despite the fact that he was a bankrupt with no trustee-in-bankruptcy in attendance. The liquidators were not represented on that day. The appearance was short, commencing at 10:02am and concluding at 10:28am, during which Mr Goodridge said nothing as the only exchanges were between Mr Williams and me. The following is a distillation of the main propositions put to me by Mr Williams –
a)Mr Goodridge had no standing on that occasion except insofar as parenting matters may have been concerned;
b)final parenting orders had been made;
c)the stock and station agents Q Group, whose employee Mr M, had been served with one or more subpoenae in relation to the sale of certain stock;
d)rule 15.71 of the Family Law Rules permitted the court to require certain persons to be called for cross-examination;
e)Ms Beadle proposed to invoke that rule to require the calling and cross-examination of Mr M and Ms Goodridge;
f)the applications brought on 5 June 2019 were brought pursuant to leave granted by me on 12 April 2018;
g)in this case the asset preservation order made on 16 May 2017 permitted assets to be disposed of only in the ordinary course of business and my reasons handed down in December 2017 showed that Mr Goodridge had not disposed of a variety of assets in the ordinary course of business;
h)on 28 November 2017, being the day prior to the appointment of the liquidators, Mr M was involved in the selling of livestock and paying the proceeds of that sale or those sales to Ms Goodridge causing the sum of $93,208 to be deposited in Ms Goodridge’s bank account, some of which was applied towards paying Mr Goodridge’s trustee-in-bankruptcy;
i)Ms Goodridge had failed to respond to the liquidator’s request to return that sum of money held by her;
j)on 24 May 2018, based on investigations undertaken to date, a further payment was deposited into Ms Goodridge’s account of $75,340 following livestock sales effected by Mr M of Q Group pursuant to one or more transactions in which Mr M declared on relevant sale documentation that he (Mr M) was the legal owner of that livestock, capable in law of transferring legal title to the livestock for valuable consideration;
k)documentation created and provided under the National Livestock Identification System is sacrosanct in relation to recording the movement of livestock and ownership thereof;
l)Ms Goodridge used some of the money derived from the sale of livestock towards the acquisition of more livestock;
m)those further livestock were acquired in Ms Goodridge’s own name;
n)Ms Beadle will pursue remedies under s 106 of the Family Law Act in relation to some or all of those livestock transactions effected subsequent to the appointment of the liquidators in this case; and
o)a criminal fraud may have been committed.
I asked Mr Williams whether those contentions left Mr Goodridge in such a position that he should seek separate representation so as to protect himself from possible liability in another forum. Mr Williams said in response that the issue raised was a matter for Mr Goodridge. As it happened, at no stage prior to the events on 1 October 2019 did Mr Goodridge raise any issue about matters arising from the propositions outlined by Mr Williams on 5 June 2019.
At all events, returning to the events on 5 June 2019, Mr Williams described the behaviour of those associated with the sale of livestock subsequent to the appointment of liquidators as “contemptuous behaviour” which was “as serious as they can get”.
In debate I raised with Mr Williams the probability that any witness cross-examined by him was likely to rely on s 128 of the Evidence Act. Mr Williams submitted that any certificate given pursuant to s 128 of the Evidence Act did not protect that witness from the offence of perjury. Mr Williams proffered to me a form of order that I eventually made on 5 June 2019.
A discussion ensued about the person properly entitled to the proceeds of sale of the livestock. I asked whether it was the liquidator or the trustee-in-bankruptcy. Mr Williams firmly submitted it was the liquidator on the basis that the livestock were the property of the company in liquidation. Mr Williams submitted that the liquidators have a strong interest in pursuing Mr M because he was a knowing participant in a breach of trust under the second limb of the rule in Hadley v Baxendale.[2] Mr Williams said civil and criminal remedies were enlivened on the facts of this situation including contempt and fraud.
[2] (1854) 156 ER 145
Mr Goodridge rose to his feet. I said the following –
Okay. Well, Mr Goodridge is on his feet. He wants to be heard. I understand you say he has no standing to be heard, but I do have to recognise that he’s a litigant in person and I can’t shut him out.
Mr Williams complained about my hearing from Mr Goodridge in view of his status as a bankrupt and that his representative, by operation of law, was the trustee-in-bankruptcy. Mr Williams was correct in those contentions. Nevertheless I invited Mr Goodridge to address me. Mr Goodridge did not address on any issue, at all, beyond Mr M’s availability in July by reason of his ill health. Even recognising that Mr Goodridge has no legal training and that a courtroom was most likely a very alien place for him, Mr Goodridge said nothing about any of Mr Williams’s submissions concerning –
a)the sale of livestock subsequent to the appointment of liquidators;
b)the involvement of Mr M in that process;
c)how livestock owned by the company in liquidation could be sold by a person other than the liquidators;
d)the application of the proceeds of the livestock;
e)how some of the proceeds of the sale of that livestock were deposited into his wife’s account;
f)whether he knew of that and approved it;
g)fraud and contempt;
h)civil remedies; or
i)claims under s 106 of the Family Law Act.
Mr Goodridge did not assert any denial of involvement nor did he assert his innocence in respect of any of the propositions advanced by Mr Williams. I attach no weight to that and mention it merely as part of the narration of events on 5 June 2019. In argument before me on 2 October 2019 Mr Wraith of counsel for Ms Goodridge asserted that Mr Williams had squarely identified that from that date of 5 June 2019 Mr Goodridge, Ms Goodridge and Mr M had been alerted to the fact that each was henceforth likely facing criminal sanctions of some form and each therefore needed to be appraised of that, in default of which each had been denied natural justice (or procedural fairness as it is more commonly known nowadays). For the reasons that will become apparent in the passages below, I disagree.
Let me return to the chronological evolution of events.
The hearing on 15 July 2019
Mr Williams appeared for Ms Beadle on that day. There was no appearance on behalf of Mr Goodridge, the liquidators or the trustee-in-bankruptcy. An appearance was announced by Mr A. Robinson who, he said, sought leave to appear for Ms Goodridge. In response I asked Mr Robinson whether a witness had an entitlement to be represented by counsel. Perfectly properly and legally accurately Mr Robinson said that ordinarily a witness is not entitled to be represented by counsel. Authority on the point is scarce. However as Fullagar J highlighted in the High Court decision of Re KL Tractors Ltd “a not uncommon reason for dearth of direct authority on a point is that there has been a general consensus of opinion that the point is not tenable”.[3]
[3] (1961) 106 CLR 318
The decision in Dietrich v R[4] established the authority of a court to adjourn or stay a proceeding to facilitate the entitlement of legal representation for a person accused of a serious criminal offence, a principle vested in a party’s overarching right to a fair trial. However, two years later the High Court in New South Wales v Canellis[5] rejected the extension of that principle from Dietrich. There the majority held as follows –
Furthermore, and this is of decisive importance in the present case, the principle in Dietrich is concerned with the right to a fair trial of a party to criminal proceedings; the principle has nothing at all to say about the protection of the interests of a witness, let alone the protection of the interests of a witness at an inquiry. Finally, Dietrich enunciated a principle governing the exercise of inherent jurisdiction by a court with respect to proceedings in that court; Dietrich did not consider the power of a tribunal with respect to the adjournment or stay of proceedings for the purpose of securing legal representation for a witness.
[4] (1992) 177 CLR 292
[5] (1994) 181 CLR 309
Mr Robinson submitted that leave should be granted for Ms Goodridge to be legally “represented solely for the purpose of making objections where necessary or seeking a s 128 certificate” (his words). Mr Robinson explained that Ms Goodridge had received a letter from the liquidators to the effect that in July 2018 Ms Goodridge had breached criminal laws and civil legislation. Mr Robinson put the position in the following terms –
MR ROBINSON: So the allegations in the letter suggested that she was facing prima facie criminal conducts – breach criminal conduct – I will try again. Her conduct had breached the criminal sections pertaining to obtaining property by deception, obtaining a financial advantage by deception, handling stolen goods ‑ ‑ ‑
HIS HONOUR: Well, that’s all Crimes Act.
MR ROBINSON: ‑ ‑ ‑ aiding and abetting theft, and it went on to talk about section 590 of the company code ‑ ‑ ‑
HIS HONOUR: Right.
MR ROBINSON: ‑ ‑ ‑ and talked about failing to disclose property of the company, concealment of fraudulent disposal of company property and fraudulent or material omissions in statements relating to the affairs of the company.
It must be pointed out at this stage that Ms Goodridge’s own counsel informed me that Ms Goodridge had been alerted to possible criminal liability as well as civil liability. Specifically, the liquidators had told Ms Goodridge that her conduct revealed possible offences of obtaining property by deception, obtaining a financial advantage by deception, handling stolen goods, aiding and abetting theft, concealment of fraudulent disposal of company property and fraudulent or material omissions in statements relating to the affairs of the company. In other words, even before Ms Goodridge gave her evidence on 15 July 2019, her own counsel was fully aware that Ms Goodridge was facing allegations that she had engaged in criminal conduct. While Mr Robinson did not identify the legislation allegedly contravened, Mr Williams did by pointing out that the provisions of the Livestock Disease Control Act was also contravened by Ms Goodridge. In the end, Mr Robinson contended that Ms Goodridge sought a s 128 certificate in respect of her evidence and Mr Williams agreed that the giving of that certificate cured all procedural issues associated with Ms Goodridge’s entitlement to be represented by counsel. In the upshot I made an order for the entirety of Ms Goodridge’s evidence on 15 July 2019 to be impressed with a certificate given under s 128 of the Evidence Act.
During debate on 1 October 2019 Mr Wraith and Mr Whitchurch contended that Mr Williams (and, inferentially no one else) foreshadowed that a prosecution would be commenced in relation to the movement of assets. I do not agree. Mr Robinson raised the nature of the criminal behaviour alleged against Ms Goodridge. While true, Mr Williams used the word “prosecution”, it could scarcely be contended that Ms Goodridge was oblivious to the fact that her conduct subsequent to the appointment of liquidators amounted to criminal conduct in the eyes of the liquidators and Ms Beadle.
Mr Robinson sat in the well of the court while his client Ms Goodridge was cross-examined.
Following the cross-examination of Mr M and Ms Goodridge, there was insufficient time to address the cross-examination of Mr Goodridge or his father. A new date had to be found. I fixed 1 October 2019.
The hearing on 1 October 2019
Prior to the hearing on 1 October 2019, each of Mr Goodridge and Ms Goodridge filed an application in a case supported by affidavit. Ms Goodridge’s application in a case was filed on 23 September 2019 and her affidavit was made on 18 September 2019. Mr Goodridge’s application was filed on 24 September 2019 and his affidavit was made the same day. The material filed on behalf of Mr Goodridge was prepared by a firm of solicitors who did not represent Mr Goodridge during the trial of this proceeding in 2017. Ms Goodridge’s application and affidavit was prepared by Kennedy Partners who were new to this litigation. The orders each sought differed in their applications yet counsel for Mr Goodridge, Mr Whitchurch, told me in the final breath of the appearance on 1 October 2019 that Mr Goodridge sought the very same relief as did his wife. It is necessary to shortly recite the orders each sought.
Ms Goodridge sought six orders. They were as follows –
(1)the applicant have leave to intervene in these proceedings pursuant to section 92 of the Family Law Act 1975;
(2)the orders made by this Honourable Court on 15 July 2019 be stayed as an abuse of process;
(3)until further order, the whole of these proceedings be stayed as an abuse of process;
(4)the evidence of Mr M and Ms Goodridge be excluded from this proceeding and no person refer to or use in any way a transcript of such evidence or any notes made during the giving of the said evidence without first obtaining leave of a Judge;
(5)the second respondent, Ms Beadle, pay the applicant’s costs of:
5.1the hearing on 15 July 2019; and
5.2these proceedings;
on an indemnity basis or alternatively on a party-party basis; and
(6)such further or other orders as this Honourable Court deems appropriate.
Mr Goodridge sought two orders. They were as follows –
(1)that pursuant to sections 4(1), 78, 79(1), 79(2), 79(4) and 79(10)(b) of the Family Law Act 1975 (Cth); and sections 116(2)(b), 116(2)(ca) and 116(2)(d) of the Bankruptcy Act 1966 (Cth), this Honourable Court declare that the applicant has standing to separately appear in these proceedings; and
(2)that order 1 made by this Honourable Court on 15 July 2019 be stayed pending determination of the orders sought by the fourth respondent, Ms Goodridge in her application in a case filed 23 September 2019.
Soon after appearances were announced Mr Williams told me he took exception to the presence of counsel for Mr and Ms Goodridge on the return of the cross-examination of Mr Goodridge. Extensive debate then followed although, as mentioned above, it was limited to questions of standing and the stay application. A variety of grounds were advanced about –
a)the entitlement of Mr Goodridge to be separately represented;
b)the entitlement (independent of anything Mr Goodridge may have said on point) of Ms Goodridge separately represented;
c)the role of the trustee-in-bankruptcy; and
d)the role of the liquidators.
It is necessary to take each in turn, as I have done below. Given that Ms Goodridge was most strident in her application and given that Mr Whitchurch adopted the principle contentions advanced by Mr Wraith it is convenient to turn first to the grounds advanced on behalf of Ms Goodridge.
The position of Ms Goodridge
Mr Wraith informed me that he was being led in this case by Mr Bartfeld QC although his leader was elsewhere retained on 1 October 2019 and so Mr Wraith appeared on his own. He did not produce or rely on written submissions and at times Mr Wraith’s contentions meandered. Doing the best I can, in summary his contentions are best summarised in the following way –
a)the examination of his client by Mr Williams was an abuse of the process of the court;
b)rule 15.71 of the Family Law Rules, on which Ms Beadle relied to obtain the orders made on 5 June 2019, is to be used with circumspection rather than in the manner that was invoked in this case;
c)the cross-examination of his client is not a legitimate forensic purpose in relation to an application under s 90SM of the Family Law Act;
d)Ms Goodridge has a sufficient “interest” to advance in order to be heard in this litigation;
e)natural justice required Ms Goodridge to have been informed, prior to her giving evidence on 5 June 2019 that her evidence was being adduced to be used against her as well as other people.
Certain of those propositions overlap, as is apparent below.
Mr Wraith candidly acknowledged that his contentions about his client’s standing and his contentions about the process on 5 June and 15 July 2019 being an abuse of the process of the court went hand in glove. Chronologically, Mr Wraith’s contentions commenced with his criticisms about the propriety of the procedure invoked for the examination of his client, namely rule 15.71 of the Family Law Rules. It is logical to commence my consideration of Mr Wraith’s contentions with rule 15.71.
Rule 15.71 of the Family Law Rules
The orders for the examination of Mr M along with Mr and Ms Goodridge were made pursuant to rule 15.71 of the Family Law Rules. That rule is in the following terms –
(1) The court may, on its own initiative:
(a) call any person as a witness; and
(b)make any orders relating to examination and cross- examination of that witness.
(2)The court may order a party to pay conduct money for the attendance of the witness.
Mr Williams told me on 5 June 2019 that he invoked that rule. Mr Wraith described rule 15.71 as a rule “that is very sparingly used”. He said the invocation of that rule was “an extremely unusual process” (his words). Mr Wraith submitted that the better way to have procured his client’s attendance at court was by way of subpoena. Whether or not that was correct was largely beside the point because Mr Williams invoked rule 15.71. That rule speaks of the court “on its own initiative” making any order relating to examination and cross-examination of a witness. Importantly, Mr Wraith did not suggest that it was erroneous in fact or in law for me to have made the order under rule 15.71. Instead, he said it was unusual for such a course to have been proposed.
I do not agree.
The property aspect of this case was adjourned sine die some time prior to June 2018. No active process in this court was underway on 5 June 2019. Conversely, since December 2017 the liquidator, the trustee-in-bankruptcy and Ms Beadle were actively engaged in a search for assets that could be applied in the administration of the winding up and ultimately towards a finalisation of the property aspects of this case, so long as a surplus existed. It must not be forgotten that the liquidators’ investigations had earlier revealed a sum in excess of $275,000 as possibly being available for distribution to unsecured creditors. It appeared to me that the activities of the liquidators, the trustee-in-bankruptcy and Ms Beadle (and her legal team) were fruitful.
That said, this litigation in court had become dormant. No application was on foot returnable on a particular day, hence any subpoena that may have been issued had no return date nor purposeful application in a case to which it or they related. I took the view that each of Mr M, Mr Goodridge and Ms Goodridge were capable of giving evidence about relevant issues subsequent to 19 December 2017 especially in relation to the sale of livestock. I took the view that Ms Beadle’s application for the examination and cross-examination of those three witnesses was proper and so I made the order. Based on the material set out in the affidavits of Ms Beadle’s solicitor, the liquidator and in the liquidator’s report, the examination and cross-examination about the fate of company assets immediately prior to and subsequent to the appointment of the liquidators was a matter of very real importance in this case.
In support of his contention that rule 15.71 involved “an extremely unusual process” (Mr Wraith’s words) Mr Wraith relied on the decision of Le Poer Trench J in Faden & Faden (No 3).[6] On my reading of his Honour’s reasons, nothing was said to support the submission that the process under rule 15.71 of the Family Law Rules was extremely unusual. It must be observed that the decision in Faden & Faden (No 3) concerned an altogether different rule, namely rule 15.17 as his Honour cited in paragraph 6 of his Honour’s reasons. While Mr Wraith did not cite or rely on other decisions, Cronin J made various observations about rule 15.71 in Martin & Martin (No 4).[7] Nowhere in his Honour’s reasons did his Honour describe that rule as an “extremely unusual process”, as did Mr Wraith. Likewise, in Martin & Martin (No 5)[8] Cronin J referred specifically to rule 15.71 as being one source of power for the examination of a witness, the other being s 34 of the Family Law Act. Nowhere in that decision did Cronin J speak of the unusual nature of process under rule 15.71. In Whitecross & Reilly[9] Cronin J addressed rule 15.71 stating that his Honour told the parties that his Honour wanted to hear from a particular witness who was readily available so his Honour exercised powers conferred by s 69ZQ(1)(c), s 69ZP(1) and s 69ZX(1)(e) of the Family Law Act along with rule 15.71 to give effect to the calling of that witness.
[6] [2011] FamCA 897
[7] [2014] FamCA 442
[8] [2014] FamCA 954,[79]
[9] [2016] FamCA 254
I do not share Mr Wraith’s characterisation of rule 15.71 and the process prescribed under it as extremely unusual. The cases mentioned above illustrate that its utility is mainstream.
Accordingly, it seemed to me that no complaint could properly be made about the order made for the examination and cross-examination of Mr M, Ms Goodridge and Mr Goodridge.
Next Mr Wraith submitted that the purpose in seeking the order for the examination of Mr M, Ms Goodridge and Mr Goodridge was not legitimate. This contention dovetailed into Mr Wraith’s contention that the whole examination process was an abuse of process. In essence, Mr Wraith argued that Mr Williams’s cross-examination of Mr M and Ms Goodridge was seemingly at large and was being used for the collateral purpose of gathering evidence to enable some other proceeding to be launched for remedies for fraud and contempt of court. In support of that contention Mr Wraith called in aid the decision of the Full Court (Finn, Kay & Dessau JJ) in Hatton v Attorney-General(Cth).[10] In his address before me Mr Wraith relied on the passage from that decision concerning the issue of a subpoena involving an abuse of process such as where a subpoena were used to inspect documents in another proceeding or in collusive proceedings to give them publicity. I put to Mr Wraith that such a proposition was not evident in this case. Mr Wraith said it was. His submission was as follows –
MR WRAITH: In any event, it seems to be self-evident that the purposes of this inquiry is not to identify the whereabouts or fate of assets which could cogently be relevant to the division of assets between the parties because whatever happened with them, the creditors of Ellerslie’s claims far exceed the values of that company. It is clear that the wife cannot expect that any of the evidence elicited will lead to the location of property which could become her property or enhance her claim under the Act.
[10] (2000) 26 Fam LR 570
The exchange between Mr Wraith and I continued. It is as well to record it in the following terms –
HIS HONOUR: Well, hang on a second. If money has been wrongly dispersed, may not there be claims in rem against the funds?
MR WRAITH: By the liquidator of the company?
HIS HONOUR: Well, by any party. I mean, your fundamental premise is the liabilities outstrip the value of the assets by such a factor as to lead to the conclusion that no money will ever be realised by this inquiry; am I right about that? Is that what you – your contention?
MR WRAITH: Without wanting to be pedantry, your Honour, it’s the assets that are being – in question, the livestock, as I understand it, there’s – it’s suggested by everyone, with the exception perhaps of the husband – but that the livestock, if they belong to any person or entity that relates to this proceeding, it’s Ellerslie. And that being the case, whatever the fate of those livestock is – it may be a matter that’s of significant relevance to the creditors of that company but it is not a matter which has any relevance to the size of the asset pool or the assets available for division between the husband and the wife and
HIS HONOUR: Well, how is it that your client comes to be the recipient of part of the proceeds thereof?
MR WRAITH: That is, your Honour, an absolutely legitimate question.
HIS HONOUR: Well, I’m very interested in the answer.
MR WRAITH: But not a legitimate question in the context of this proceeding or this application.
HIS HONOUR: Well
MR WRAITH: And that is the fundamental point, your Honour, that the clear purpose – and it’s stated on many occasions, maybe half a dozen or around that, by Mr Williams at different times to your Honour in the transcript that the purpose of these proceedings is to gain evidence to facilitate prosecutions for contempt of court or fraud or other offences.
Several matters emerge from that short exchange. First, the decision in Hatton was of little to no utility in this case as Hatton involved the alleged improper use of a subpoena. No issue about a subpoena arose in this case. Next, in this case an extremely important issue had arisen since my delivery of judgment in December 2017, namely, the sale of assets that at first blush belonged to the company in liquidation by persons other than the liquidator and the appropriation of the proceeds of the sale of those assets by persons who, prima facie at least, were not entitled to those proceeds. Mr Wraith submitted that such an issue may have relevance in the context of a liquidator’s examination or in a contested winding up. However, he said such an issue was not relevant in family law litigation.
In my view the issue has very real relevance in this family law litigation. That is for the simple reason that the ascertainment of the totality of the assets in this case that may be available for division is a fundamental task ahead of any actual division of assets under s 90SM of the Family Law Act. And when ascertaining the totality of assets that may be available for division, improper dissipation of those assets (especially by one of the parties to the de facto relationship or his privies) is highly relevant.
I do not accept Mr Wraith’s fundamental proposition that Ms Beadle’s purpose or the purpose of the liquidators or the trustee-in-bankruptcy in pursuing the enquiry about what happened to the livestock and their sale proceeds has at its core the search for evidence to support a contempt application. Self evidently, those parties for their own reasons are keen to enlarge the totality of assets available for division. Whether Mr M, Ms Goodridge or Mr Goodridge have additionally been involved in nefarious activities is, to my way of thinking, a secondary consideration. The position of the liquidator, as advocated by Ms Gobbo, correctly recorded the situation. At various junctures during the debate on 1 October 2019, Ms Gobbo informed me –
a)proofs of debt from all unsecured creditors had not been lodged with the liquidators (which I took Ms Gobbo to mean that while the total sum due to unsecured creditors has been notionally quantified at about $1.3m, creditors to claim that sum have not come forward yet);
b)in an insolvency context in a state Supreme Court or in the Federal Court of Australia process under s 596A of the Corporations Act could be issued on an ex parte basis by a liquidator for the examination of a former director of the relevant corporation into the examinable affairs of the corporation;
c)a similar position applied in the bankruptcy of a natural person;
d)under either of those processes the proposed examinee would have no prior notice of the making of the ex parte application for orders for the examination of the person; and
e)under either of those processes the person being examined would have very little scope to object to the questions put to that witness about the examinable affairs of the corporation.
Returning to the contentions advanced by Mr Wraith, considerable attention was devoted to the characterisation of the examination of Mr M, Ms Goodridge and Mr Goodridge as a contempt proceeding. In my view that characterisation is erroneous. No process is currently on foot for contempt. The only process currently on foot is an application for the division of property under s 90SM of the Family Law Act. No particulars have emerged of acts said to constitute acts of contempt. Consequently, cases that have addressed the need for strict conformity with procedures in relation to contempt are not yet relevant, those being, for example In the Marriage of Sahari,[11] In the Marriage of Smit & Pickworth,[12] In the Marriage of Alexander[13] and In the Marriage of Nieuwstraten.[14]
[11] (1976) 2 Fam LR 11,126
[12] (1981) 7 Fam LR 387
[13] (1982) 8 Fam LR 289
[14] (1987) 11 Fam LR 681
In similar vein, Mr Wraith placed considerable store on the observations of the High Court of Australia in Williams v Spautz.[15] That authority is one of the most important cases of recent times from the High Court on the subject of orders for the stay of a proceeding for being an abuse. Mr Wraith’s main contention in this case was that the process in which Mr Williams engaged on 15 July 2019 was an abuse of the process of the court. Mr Wraith said that the High Court’s decision in Williams v Spautz had immediate application therefore. Before going to the detail of the High Court’s decision it is important to highlight at once the points of differentiation of the facts of this case from those in Williams v Spautz rendering inapplicable the observations of the High Court on which Mr Wraith relied to the circumstances of this case.
[15] (1992) 174 CLR 509
First, in Williams v Spautz a university lecturer sued the university for wrongful dismissal and concurrently laid various criminal informations against various university officials for criminal conspiracy to defame and conspiracy to injure without justification and by illegal means. Some of the university officials applied for declarations that the informations brought against them were an abuse of process. On the hearing of the application for declarations, the trial judge Smart J found that the lecturer’s predominant purpose in instituting and maintaining the criminal proceedings was the exertion of pressure upon the university to reinstate him or to procure the result that a favourable settlement was reached in the wrongful dismissal case he brought. The Court of Appeal allowed the appeal brought by Dr Spautz. Professor Williams and two other university officers appealed to the High Court. The plurality of the court (Mason CJ, Dawson, Toohey & McHugh JJ) allowed Professor Williams’s appeal and permanently stayed the informations laid by Dr Spautz. In separate reasons Brennan J also allowed the appeal restoring the orders of Smart J. Also in separate reasons Deane J and Gaudron J dismissed the appeal, preferring the decision of the Court of Appeal of the Supreme Court of New South Wales to prevail.
Before turning to the reasons in that case, and at the risk of repetition, in this case no informations alleging criminal conduct have been filed. For that matter no application is on foot in this case alleging contempt against Mr M, Ms Goodridge or Mr Goodridge. That seems to me to be an insuperable obstacle rendering the parallel Mr Wraith seeks to draw from that case wholly inapposite.
Several points of principle about the law applicable to stay applications emerged from the decision of the plurality. They may be synthesised in the following manner –
a)Australian superior courts possess an inherent jurisdiction to stay proceedings that are an abuse, as has been held in Clyne v New South Wales Bar Association,[16] Barton v The Queen[17] and Jago v District Court of New South Wales;[18]
b)the existence of that jurisdiction has been recognised in the House of Lords, as was held in Metropolitan Bank Ltd v Pooley,[19] Connelly v Director of Public Prosecutions[20] and Director of Public Prosecutions v Humphrys;[21]
c)the jurisdiction to grant a stay has the dual purpose of preventing an abuse of process or the prosecution of a criminal proceeding that will result in a trial which is unfair, as was held in Barton v The Queen, Jago v District Court of New South Wales and R v Derby Magistrates’ Court; ex parte Brooks;[22]
d)if a permanent stay is sought to prevent the accused from being subjected to an unfair trial the court should refrain from granting a stay unless satisfied that an unfair trial will ensue in the absence of a stay, as was held in Jago;
e)if a stay is sought to stop a prosecution which has been instituted and maintained for an improper purpose it may not be necessary for the court to satisfy itself in such a case that an unfair trial will ensue in the absence of an order stopping the prosecution, a proposition established in the United States decision in Rosemont Enterprises Inc v Random House Inc;[23]
f)every court is in duty bound to protect itself against an abuse of its process, as Lord Scarman held in R v Sang;[24]
g)historically, Australian jurisprudence concerning abuse of process has been influenced by the English, American and Canadian decisions in relation to the tort of collateral abuse of process in cases such as Grainger v Hill,[25] Gilding v Eyre[26] and Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc,[27] Prough v Entriken[28] and Guildford Industries Ltd v Hankinson Services Ltd;[29]
h)neither English nor Australian authorities insist on the need for an improper act as an essential ingredient in the concept of abuse of process although the authorities do speak of the “use” of process for a purpose which stamps it as an abuse, as was held in Varawa v Howard Smith Co Ltd;[30]
i)the onus of satisfying the court that there is an abuse of process has upon the party alleging it, the onus being a heavy one, as was held in Goldsmith v Sperrings Ltd;[31] and
j)the power to grant a permanent stay is one to be exercised only in the most exceptional circumstances, as was held in Jago.
[16] (1960) 104 CLR 186
[17] (1980) 147 CLR 75
[18] (1989) 168 CLR 23
[19] (1885) 10 AC 210
[20] [1964] AC 1254
[21] [1977] AC 1
[22] (1984) 80 Cr App R 164
[23] (1966) 261 F. Supp. 691
[24] [1980] AC 402
[25] (1838) 132 ER 769
[26] (1861) 142 ER 584
[27] [1990] 1 QB 391
[28] (1849) 11 PA 81
[29] (1973) 40 DLR (3d) 398
[30] (1911) 13 CLR 35
[31] [1977] 1 WLR 478
In any consideration of abuse of process, the purpose of the impugned proceeding must be examined. Brennan J addressed the concept of purpose in reference to a proceeding in his Honour’s separate judgment in Williams v Spautz. His Honour stated he generally concurred with the observations of the majority in the result. Brennan J stated in the early formulation of the test of an abuse of process, as for example in Grainger v Hill, emphasis was placed on the scope of the process to determine the legitimacy of the purpose of a proceeding. Citing Varawa v Howard Smith Co Ltd, Brennan J held that to amount to an abuse of process, the commencement or maintenance of the proceeding must be for a purpose which does not include to any substantial extent the obtaining of relief within the scope of the remedy. Importantly, his Honour held as follows –
For these reasons, I would hold that an abuse of process occurs when the only substantial intention of a plaintiff is to obtain an advantage or other benefit, to impose a burden or to create a situation that is not reasonably related to a verdict that might be returned or an order that might be made in the proceeding.
Under no circumstances could it be said that the examinations in this case conducted on 15 July 2019 amount to an abuse of process according to that formulation.
Deane J held that the question whether the informations should be permitted to run their course was not to be answered by a consideration of the subjective purpose of filing the information because a committal proceeding is administrative in nature intended to determine whether the defendant should be committed to trial.
Gaudron J held that the kind of purpose that will indicate that a proceeding should be stayed as an abuse of process is the same kind of purpose that marks out the tort of collateral abuse of process, they being different remedies deriving from the same law and based on principles that protect the court and their processes. Her Honour drew heavily on the English decision in Re Majory[32] in that regard.
[32] [1955] Ch 600
In the upshot, based on the holding of the plurality and Brennan J the appeal was allowed and the private informations against Professor Williams and various other university officials were stayed as being an abuse of process.
In my view the examinations currently under way are not an abuse of this court’s process and such examinations should not be stayed. I say that for several reasons, namely –
a)the examinations are being undertaken for the legitimate and proper purpose of uncovering assets that fall for division in this case under s 90SM of the Family Law Act;
b)it is true that on 5 June and 15 July 2019 Mr Williams indicated in broad generic terms what may take place once the examinations are concluded (he having already asserted that a contempt proceeding will be commenced, for example). No such contempt proceeding is currently on foot and no other “proceeding” is alive to be stayed; and
c)according to the formulation of the test to found an order staying a proceeding for being an abuse as propounded by Brennan J, the facts of this case do not meet that test.
To the contrary, the examinations currently under way are likely to assist in the identification of assets. It will be necessary to identify assets in order to undertake the task that I must perform under s 90SM of the Family Law Act. Where assets that would otherwise be available for division have been disposed of, those assets might be recovered or their value ascertained. It must be kept in mind that there is no certainty that the unsecured creditors of the company will lodge proofs of debt with the liquidators of or even close to $1.3m as has been the estimated quantum of unsecured debts. In my view, the tasks presently under way of seeking to recover the assets has a very real and legitimate purpose associated with this litigation. I reject any suggestion that the examinations are for an improper or collateral purpose. Wherever the examinations may lead, in terms of the sanctions, if any are pursued at some later date, that cannot now be gainsaid and I expressly reject the proposition that I should stop the examination in their tracks merely because some utterance has been made to the effect that in due course an application may hereafter be made to the effect that one or more of the examinees may later face some presently undefined issue in relation to contempt.
In my view there is no improper purpose in the examinations. They will proceed.
The foregoing may have rendered it unnecessary to descend into a detailed examination of Ms Goodridge’s standing to be separately represented so as to make submissions on 1 October 2019. Mr Williams contended that she had no standing and that she was merely a witness. It was true that Ms Goodridge was a witness only and she was not a party to the proceeding. However, it seemed to me that it was important to hear from her counsel in relation to her main propositions in the case and so I heard at length from Mr Wraith. That is not to say that I accept that she had standing, as a matter of law, to bring her application in a case filed 23 September 2019. However, with a view to understanding precisely her argument about the stay application I heard from her counsel. To have refused her counsel an opportunity to be heard when she sought to agitate for a stay would have denied her procedural fairness, in my view. As it happens, after hearing from her at length and considering in detail her contentions on the stay application, I am against Ms Goodridge.
Let me now address the position of Mr Goodridge because the consequences of his bankruptcy introduced a particular complexion to questions of his standing, aside from the contention he wished to advance in relation to the stay application.
Mr Goodridge’s Standing
The terms of the application in a case filed on behalf of Mr Goodridge have already been set out above and no useful point is served in repeating them here. That said, it will be recalled that Ms Pulverman appeared to represent the trustee-in-bankruptcy, the statutory representative of the bankrupt following the presentation of his own petition for bankruptcy. Despite the appearance of the solicitor for the trustee-in-bankruptcy, Mr Whitchurch of counsel announced his appearance on behalf of the bankrupt. Even before Mr Williams announced his own appearance he informed me that he took the view (I inferred he meant he submitted) that the applicant (Mr Goodridge) had no standing in this application by force of the operation of s 60 of the Bankruptcy Act and that Mr Goodridge’s interests in this case were being advanced by the trustee-in-bankruptcy. The point was not entirely clear because Ms Pulverman submitted that the trustee-in-bankruptcy exercised control over property that vests in the bankrupt estate and in relation to non-vested assets the trustee has no role. Ms Pulverman contended that her investigations in relation to the livestock revealed that the livestock were non-vested assets with the consequence that the trustee-in-bankruptcy had no present role in relation to them.
Mr Williams put the trustee-in-bankruptcy to his election under s 60(2) of the Bankruptcy Act. That section is in the following terms –
(2) An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action.
Ms Pulverman conceded the trustee-in-bankruptcy had not made the election contemplated by s 60(2) and (3) of the Bankruptcy Act. She said that was due to the late service of the application to participate in the hearing on 1 October 2019. In response Mr Williams submitted that by reason of the fact that ss 60(2) and (3) of the Bankruptcy Act not having been satisfied, then (so he submitted) s 79(12) and (13) of the Family Law Act prevented Mr Goodridge from making a submission in connection with any vested bankruptcy property in relation to Mr Goodridge. Yet that was the wrong section because the de facto nature of the relationship between Mr Goodridge and Ms Beadle rendered s 90SM of the Family Law Act the applicable section. Mr Williams corrected himself to invoke the provisions of ss 90SM(15) and (16) of the Family Law Act. Those provisions are as follows –
(15)if a bankruptcy trustee is a party to property settlement proceedings in relation to the parties to a de facto relationship, then, except with the leave of the court, the bankrupt party to the de facto relationship is not entitled to make a submission to the court in connection with any vested bankruptcy property in relation to the bankrupt party.
(16)the court must not grant leave under subsection (15) unless the court is satisfied that there are exceptional circumstances.
It will be at once apparent that s 90SM(15) speaks of “any vested bankruptcy property”. A dispute emerged in this case about whether the livestock were in fact and in law “vested bankruptcy property”. Mr Williams proceeded on the basis that no dispute on that issue existed and so he contended that Mr Goodridge did not have the entitlement to make submissions before me and that the bankrupt needed leave to do so after demonstrating the existence of exceptional circumstances within the contemplation of s 90SM(16) of the Family Law Act. In view of the fact that Ms Pulverman contended that the livestock were not vested bankruptcy property, the point had not been definitively decided. Serious issues were being agitated on this application and (in case the livestock were in fact vested bankruptcy property properly so called) exceptional circumstances for the grant of leave to make submissions may have existed. I took the view that the justice of the circumstances favoured giving Mr Whitchurch the opportunity to make submissions. I took that course over Mr Williams’s protest that no application had been made by Mr Goodridge under ss 90SM(15) or (16).
When Mr Whitchurch developed his argument I pointed out to him that at no stage prior to 1 October 2019 had the issues he wanted to raise on 1 October 2019 been agitated. Mr Whitchurch did not squarely answer that question. Instead, he contended that the examination was travelling down a corridor (his phrase) that was leading to a contempt proceeding. Mr Whitchurch grounded his submissions in respect of standing on procedural fairness. He said exceptional circumstances were shown by Mr Goodridge for the grant of leave for him to make submissions. Mr Whitchurch said in support of the existence of exceptional circumstances –
a)the application on 15 July “had not been defined by any particular application” (his words);
b)Mr Goodridge did not wish to be questioned at all in the examination;
c)Mr Goodridge had an entitlement to superannuation of an amount in the order of $14,000; and
d)Mr Goodridge was potentially facing criminal charges.
The phrase “exceptional circumstances” has been judicially defined. It means circumstances that are beyond ordinary.
As I held in Sala & Habner,[33] many, although not all, of the relevant authorities were drawn together by White J in the context of part 7AA of the Migration Act in the BVZ16 v Minister for Immigration and Border Protection.[34] Those authorities may be catalogued in the following manner –
a)the word “exceptional” is to be construed as an ordinary, familiar English adjective and not as a term of art, describing a circumstance that is such as to form an exception, being something out of the ordinary, something unusual, something special or uncommon yet it need not be unique, unprecedented or very rare but it cannot be something that is regularly, routinely or normally encountered (Lord Bingham of Cornhill CJ in R v Kelly (Attorney General’s Reference No 53 of 1998)[35] and Maan v Minister for Immigration and Citizenship);[36]
b)all relevant circumstances must be examined in order to determine whether exceptional circumstances exist because even though no single factor may be exceptional, in combination the circumstances may be such as reasonably to be regarded as exceptional (Brennan and Dawson JJ in Griffiths v The Queen,[37] Baker v The Queen,[38] Ho v Professional Services Review Committee No 295[39] and Hasim & Ors v Attorney General (Cth));[40] and
c)subject to the particular statutory context, circumstances will be exceptional if they are out of the ordinary or they are unusual (Keifel J in Hatcher v Cohn & Ors,[41] Lindgren J in An v Minister for Immigration and Citizenship[42] and my own decision in CSJ17 v Minister for Immigration and Border Protection[43]).
[33] [2018] FCCA 2321
[34] [2017] FCA 958
[35] [2000] 1 QB 198
[36] (2009) 179 FCR 581
[37] (1989) 167 CLR 372, 379
[38] (2004) 223 CLR 513
[39] [2007] FCA 388
[40] (2013) 218 FCR 25
[41] (2004) 139 FCR 425
[42] (2007) 160 FCR 480
[43] (2018) 328 FLR 431
Other decisions of the High Court that have construed the phrase “exceptional circumstances” include (in the context of extradition law) Cabal v United Mexican States[44] and (in the context of a deportation order) Haoucher v Minister for Immigration and Ethnic Affairs.[45] In other contexts, bail most notably, the phrase has been interpreted extensively (Barbaro v Director of Public Prosecutions)[46] or exceptional circumstances grounding a claim for relief against forfeiture of a lease in Platt v Ong.[47]
[44] [2001] HCA 42
[45] (1990) 169 CLR 648
[46] [2004] VSC 404
[47] [1972] VR 197
Mr Williams submitted that the examination of Mr Goodridge should proceed. He said –
a)a certificate under s 128 of the Evidence Act could be given for the entirety of Mr Goodridge’s evidence when giving it in the examination; and
b)no claim was being pressed about Mr Goodridge’s superannuation.
After a short period during which I stood down, Mr Whitchurch altered the direction of his submissions. He said the situation in which Mr Goodridge found himself was comparable to an accused being questioned by police. He said the observations of the Full Court in Medlow & Medlow[48] were apposite. He relied on Kioa v West[49] as well as Dietrich v R to the effect that in the circumstances of this application, Mr Goodridge was entitled to legal representation.
[48] [2017] FamCAFC 159
[49] (1985) 159 CLR 550
Section 90SM(16) is mandatory in terms. It requires the court to not permit the bankrupt from making submissions in relation to vested property unless exceptional circumstances exist. I was not persuaded that exceptional circumstances existed in this case. To my mind, the situation that confronted Mr Goodridge on 1 October 2019 was entirely of his own making. Evidence existed about his involvement in relation to the livestock subsequent to my decision in December 2017. It was likely that Mr M had been retained by Mr Goodridge to sell the livestock. It was possible (dare I say likely) that Ms Goodridge had come into possession of the proceeds of sale of livestock subsequent to December 2017 at the direction of Mr Goodridge. Yet it is not necessary to make any findings in that regard at this stage.
However, I am unable to find definitively that the livestock that have been disposed of since December 2017 are livestock that are vested property of the bankruptcy. That finding will need to be made at a later date. As a result, I am unable to say that the mandatory provision of s 90SM(16) applies. Therefore I was unable to refuse leave to Mr Goodridge to be heard. In any event, it was readily apparent that he was potentially affected by the examination so it was desirable to hear from his counsel on any aspect of that.
In the circumstances I granted Mr Whitchurch leave to make submissions on behalf of Mr Goodridge.
Mr Goodridge’s position on the substantive application
During debate before me Mr Whitchurch said he expressly adopted the submissions advanced by Mr Wraith in relation to the stay application. The arguments advanced by Ms Goodridge on the stay application have already been canvassed above. Mr Whitchurch did not rely on any additional basis for Mr Goodridge’s contention in relation to the stay application. For the reasons set out above I have rejected Ms Goodridge’s contentions concerning the stay application. Mr Goodridge’s arguments on point suffer the same fate. I reject them.
Documentation
Mr Williams renewed his call for the production of documents that I previously ordered to be produced on 5 June 2019 and 15 July 2019. On 1 October 2019 Mr Williams submitted that both Ms Goodridge and Mr Goodridge had failed to produce documents in conformity with my previous orders. On 5 June 2019 I initially required Ms Goodridge to produce various documents by making the following order –
1.Pursuant to rule 15.71 of the Family Law Rules –
(a)Mr M of Q Group; and
(b)Ms Goodridge;
attend the Family Court of Australia at Melbourne before the Honourable Justice Wilson on 15 July 2019 at 10am for the purposes of examination and bring with him and her all documents relating to the sale, receipt and transport of livestock relating to the Goodridge family including such sale, receipt and transport of livestock in May 2018.
On 15 July 2019 I then made an order requiring the production of the following documents –
1.Pursuant to rule 15.71 of the Family Law Rules Mr Goodridge attend the Family Court of Australia at Melbourne before the Honourable Justice Wilson on 1 October 2019 at 10am for the purposes of examination and bring with him all documents relating to the sale, receipt and transport of livestock relating to the Goodridge family including such sale, receipt and transport of livestock in May 2018.
2.That within seven days the witness Ms Goodridge deliver to the liquidators of J Pty Ltd the following documents –
(a)all documents evidencing the PIC number related to the property known as P Street, Suburb O; and
(b)all National Vendor Declarations in respect to –
(i) the sale of livestock through Mr M and Q Group on 9 May 2018; and
(ii) the purchase of livestock through Q Group on 22 May 2018.
None of those orders have been complied with. They must.
Forthwith, Ms Goodridge is to comply with the terms of my orders made on 5 June 2019 and 15 July 2019 and Mr Goodridge is to comply with the terms of my order made on 15 July 2019.
Conclusion
In my view, the examination currently under way is legitimate. It is not being advanced for an improper purpose. I see no basis for interrupting it. I propose to re-list the resumption of the examination for one further day so that Mr Goodridge can be examined. In those circumstances, the orders I make are as follows –
(1)Ms Goodridge has leave to make viva voce submissions to the court on 1 October 2019.
(2)All applications advanced in her application in a case dated 23 September 2019 are dismissed.
(3)Mr Goodridge has leave to make viva voce submissions to the court on 1 October 2019.
(4)All applications advanced in his application in a case dated 24 September 2019 are dismissed.
(5)The further hearing of the examinations ordered pursuant to my orders made on 15 July 2019 is fixed for one day on 6 April 2020 at 10am.
(6)Forthwith, Ms Goodridge and Mr Goodridge comply with my orders made on 5 June 2019 and 15 July 2019 in relation to the production of documents
(7)Costs are reserved.
(8)Certify for all counsel.
(9)On or before 4pm on 18 October 2019 any party seeking to do so is to file and serve written submissions as to costs.
(10)Each party has liberty to apply generally.
This case has been on foot for too long at an expense that is too great. It must proceed with expedition henceforth.
I certify that the preceding one hundred (100) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 11 October 2019.
Associate:
Date: 11 October 2019
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