Jepson & Jepson (No 6)
[2024] FedCFamC1F 290
•2 May 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Jepson & Jepson (No 6) [2024] FedCFamC1F 290
File number: SYC 2100 of 2016 Judgment of: CAMPTON J Date of judgment: 2 May 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – INJUNCTIONS – Where the wife seeks for an adjournment of the final trial, litigation funding by way of a dollar-for-dollar order, for the discharge of an order restraining her from dealing with her entitlements received on the distribution of the estates of her late parents without first giving notice to the husband and to provide a copy of orders made in this proceeding to the NSW Director of Public Prosecutions as an adjunct to the husband’s pending criminal charges – Where the husband opposes the relief sought by the wife and seeks orders to provide copies of affidavits and case outline documents filed by the wife in these proceedings to be provided to the NSW Department of Public Prosecutions and/or the District Court and Supreme Court of NSW, and for the previous injunctive orders to be varied to require his written consent to any dealings of those funds by the wife – Where these proceedings have been on foot for over eight years – Where the husband does not particularise the prejudice to him of the wife accessing her own property – Application for adjournment of the trial dates and for a litigation funding order dismissed – Injunctive orders discharged – Costs reserved to trial. Legislation: Family Law Act 1975 (Cth) ss75 and 79
Federal Circuit and Family Court of Australia Act 2021 (Cth)
Cases cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Franklin & Ennis [2019] FamCAFC 91
Gollings & Scott (2007) 37 Fam LR 428; [2007] FamCA 397
Jepson & Jepson (No 4) [2023] FedCFamC1F 937
Division: Division 1 First Instance Number of paragraphs: 50 Date of hearing: 2 May 2024 Place: Melbourne (by video conference) Counsel for the Applicant: Mr Watkins Solicitor for the First Respondent: Powe & White Family Lawyers Solicitor for the Second Respondent: Did not participate ORDERS
SYC 2100 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS JEPSON
Applicant
AND: MR JEPSON
First Respondent
MS B JEPSON
Second Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
2 MAY 2024
THE COURT ORDERS THAT:
1.The wife’s application to vacate the trial dates listed to commence over five days commencing 1 July 2024 is refused.
2.Orders 3 and 4 made 18 January 2019 are discharged.
3.The Application in a Proceeding of the wife filed 22 April 2024, save as to costs, be otherwise dismissed.
4.The Response to an Application in a Proceeding of the husband filed 26 April 2024, save as to costs, be dismissed.
5.The costs of and incidental to the Application in a Proceeding filed 22 April 2024 and Response to an Application in a proceeding filed 26 April 2024, be reserved to the trial listed to commence on 1 July 2024.
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 Jepson & Jepson has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CAMPTON J:
These reasons determine an Application in a Proceeding of the Ms Jepson (“the wife”) filed 22 April 2024, seeking:
(a)For the final trial dates in the property adjustment dispute currently listed over five days before the Deputy Chief Justice to be adjourned or vacated;
(b)To discharge Orders 3 and 4 made on 18 January 2019 restraining her by injunction, save by way of the provision of notice to the Mr Jepson (“the husband”), from dealing with her entitlements received from the estates of her late mother and father;
(c)For litigation funding by way of a “dollar-for-dollar” costs order in her favour;
(d)To provide a copy of any orders made by way of this application to the NSW Director of Public Prosecutions;
(e)For the husband to pay her costs of the Application in a Proceeding;
and an Amended Response to an Application in a Proceeding of the husband filed 1 May 2024, seeking:
(a)The wife’s Application in a Proceeding to be dismissed;
(b)An order to allow for him be to provide a copy of affidavits and case outline documents of the wife filed in these proceedings to the NSW Department of Public Prosecutions and the NSW District Court;
(c)For Orders 3 and 4 made 18 January 2019 to be varied such that the wife must receive the husband’s express written consent prior to dealing with any of her entitlements in the estates of her late mother and father; and
(d)For the wife to pay his costs of his Response to an Application in a Proceeding on an indemnity basis.
For the reasons that follow, the wife’s application for the trial dates to be vacated or adjourned, and for a litigation funding “dollar-for-dollar” order, is dismissed. Orders 3 and 4 made 18 January 2019 will be discharged. The balance of the wife’s Application in a Proceeding filed 22 April 2024 and the husband’s Response to an Application in a Proceeding filed 26 April 2024, save as to costs, is dismissed.
BACKGROUND
The husband and the wife commenced cohabitation in 1997 and were married in 1998. They separated in November 2015 and were divorced in 2018. There are two children of the marriage, both of whom are now adults.
The background to the litigation in this forum informs and gives context to the current application of the wife. As such, I will provide a brief outline of background facts and contentions as they are relevant. One of the issues in these proceedings pertains to ownership of, and value of, a substantial collection of valuables.
These proceedings were commenced in what was then Family Court of Australia, by way of an Initiating Application filed by the husband on 7 April 2016, as amended on 4 October 2016, seeking orders as to the adjustment of property pursuant to s 79 of the Family Law Act 1975 (Cth), including:
(a)That the wife transfer to the husband her right, title and interest in a property at L Street, Suburb P (“the Suburb P property”) and a property at V Street, Suburb U (“the Suburb U property”);
(b)For the husband to discharge the mortgages secured on the Suburb P property and Suburb U property; and
(c)For the husband to pay the wife a “cash lump-sum” property settlement.
The husband has not amended his final relief sought for a period approaching eight years. The relief he seeks is not competent. The Suburb P property, of which the wife was the sole registered proprietor, has been sold. $1,494,541, being the current remaining balance of the proceeds of sale, are held in a controlled monies account by a firm of solicitors. The sale of Suburb U was completed in 2016 for around $1,600,000. During the hearing the husband’s solicitor submitted that the husband is impecunious and in receipt of a Centrelink benefit.
The husband in his affidavit filed yesterday afternoon gives evidence as to the wife being deficient and/or tardy in disclosing particulars of the receipt and application of funds she received from Y Company (then applied to acquire her Suburb FF property) and as to the receipt and value of the benefits she received from her parents’ estates. That said, it does not appear that the husband contends that his disclosure complaints will lead to a submission at trial that the wife has property secreted from the Court such that the significance of her contributions are all but eliminated; instead, it may be that the effect of non-disclosure was no more than to complicate the fact finding process (Franklin & Ennis [2019] FamCAFC 91 at [9]).
By way of a Response to an Initiating Application filed 28 September 2016, as amended 11 December 2023, the wife contends that it is not just and equitable to make orders adjusting property between the parties. The wife’s affidavit identifies that she has received, after the date of separation, by way of inheritance approximately $1.256 million from her parents’ estate and that she has acquired a property at Suburb FF valued at $1.725 million, applying the proceeds of a Y Company payment she received.
The husband’s current criminal charges originate in 2017. They are anchored from corporate banking transactions (said by the wife to be fraud charges) and relating to his dealings of the substantial collection of valuables (said by the wife to have a value in the range of $5,000,000 but not in her possession or control), as well as two other charges. The wife is a crown witness in some of those criminal proceedings.
The wife says that the husband has engaged in significant pre-distributions of property that would have formed that of the parties available for adjustment valued in the range of $35 million, and that he has caused property to be wasted, including paying just under $1 million in legal fees for his criminal proceedings.
By way of further context to the proceeding, the second respondent is the husband’s mother, Ms B Jepson. She and K Pty Ltd, as the third respondent and fourth respondents were joined to the proceedings on their own application on 14 November 2017.
The second respondent asserts that she is the owner of a specified valuable collection, two vehicles, an instrument and other personalty. It is unclear if the specified collection is the same as, or part of, the collection being the subject of the husband’s criminal charges. In her Amended Response to an Initiating Application filed 18 December 2023, she seeks that the wife (and not the husband) deliver to her those specified items and in default of return to pay monies in the range of $1,047,000. Failing the payment, she seeks orders for the wife to sell her property at EE Street, Suburb FF (“the Suburb FF property”) and to pay the specified default sum to her.
On 20 December 2023 orders were made for K Pty Ltd to be removed as a party from these proceedings and notations were made that it has no claim to any portion of the proceeds of sale of the Suburb P property held in the solicitors-controlled monies account. It was further noted that the now removed third respondent is pressing to recover monies advanced to the husband and the wife of $417,624, implicitly, by way of processes other than these proceedings.
The second respondent appeared, but did not file any material, in the hearing before me. She advised that she did not wish to participate in the hearing of the Application in a Proceeding filed 22 April 2024 and Response thereto.
The wife gives evidence that the husband’s mother said in an affidavit filed on 22 October 2023 that she has provided to the husband:
a. Legal Costs $4.27 million (at para 41).
b.His other expenses $2.043 million (Company, school fees, Home and contents insurance, income disability insurance)
c.His living expenses
The husband says he is currently unemployed. The wife asserts that the husband has not received any income since 2013, and that since that date, the second respondent has met the costs of his “food, petrol, medical appointments and the like” of not less than $1,500 per week.
Orders were made on 30 June 2020 listing the matter for hearing over 10 days commencing 31 May 2021 before McClelland DCJ. On 19 April 2021 the husband successfully made an application to vacate the trial dates upon the basis that the criminal charges were not concluded. Cast against that background, on 23 April 2021 the Deputy Chief Justice made further trial directions and orders listing the matter for trial over 10 days to commence on 13 December 2021. On 14 September 2021, in circumstances where the parties agreed to attend a mediation, orders were made such that the trial listed to commenced on 13 December 2021 was vacated.
On 16 December 2022 directions were made for the matter to be listed again for final trial over five days commencing 23 October 2023 before McClelland DCJ. Each of the husband and the wife filed their trial evidence. On the first listed day of the trial, the proceeding was adjourned due to the late filing of an affidavit of the second respondent, and a change in her legal representation. The trial was then listed to commence on 1 July 2024. It was expected that the husband’s criminal proceedings, then listed for trial to commence in early 2024, would be concluded by mid-2024 (Jepson & Jepson (No 4) [2023] FedCFamC1F 937 at [9]).
On 9 February 2024 the McClelland DCJ dismissed a second application of the husband for interim property settlement.
It is the wife’s evidence that in early 2024, the husband appeared on his own behalf in the District Court and made a successful application for an adjournment of the criminal proceedings on the basis that his relief for property adjustment in this forum listed for final trial on 1 July 2024 meant that he expected to obtain the benefit of a s 79 order adjusting property in his favour, that in turn would fund his criminal legal representation. The criminal matter is now listed for directions in mid-2024. The expected dates of a trial in the future are currently somewhat uncertain.
The wife filed a draft balance sheet attached to her Case Outline document filed 30 April 2024. It recorded that her current real property in Suburb FF, the proceeds of sale of the Suburb P property, and entitlements in the estates of her late mother and father, are valued at a total of approximately $4,528,563. The husband asserts he has no property.
THE WIFE’S APPLICATION TO VACATE THE TRIAL DATES
It is the wife’s case that the family court proceedings ought not be heard until the husband’s criminal proceedings conclude as the subject matter in these proceedings “overlaps the subject matter in the criminal proceedings”. She implicitly submits that the criminal proceedings will produce findings of fact as to whether the valuable collection forms an asset of the parties for the purpose of the s 79 proceedings, and as to the beneficial ownership of the collection.
The husband resists the wife’s application to adjourn or vacate the trial. Notwithstanding the husband’s current contentions juxtaposing those he adopted in April 2021 when he successfully vacated the then trial, his current sworn evidence in an affidavit prepared by his solicitor includes:
33.There is nothing in the criminal proceedings which are before the District Court that will significantly or substantially weigh on these proceedings.
34.The criminal proceedings have been on foot since or about 2017 and they remain unresolved.
35. The proceedings in the District Court of New South Wales relate to s
36.I say that, the running of the Family Law matter will not prejudice the Court’s ability to determine the matters required for adjudicating under section 79 of the Act.
37.Instead, if the final hearing is not conducted in these proceedings and rather they are delayed until after the proceedings in the District Court are resolved (and allowing for appeal processed to be exhausted) this case may not end for years and years.
38.As a consequence, I will continue to have no access to a property settlement and the capital which is presently available for distribution.
39.I will continue to suffer extreme financial hardship and an inability to support myself.
This proceeding has torturous history since it commenced in 2016, characterised by multiple applications and the parties not adhering to orders and obligations of disclosure. Since the commencement of these proceedings over eight years ago, five defended interlocutory judgments have been delivered. The parties have consumed 66 court events, including:
(a)23 case management, duty list and directions hearings before delegated judicial officers;
(b)11 interlocutory defended hearings;
(c)14 chambers hearings; and
(d)Two conciliation conferences.
They have filed a total of 19 Applications in a Proceeding. 49 sets of orders have been made. Extensive trial directions were made on 22 March 2023, more than twelve months ago. The parties have all filed their substantive trial evidence. As recorded in the notations to those orders, there has been a disproportionality as between the legal costs incurred and the issues in these proceedings.
The litigation between the husband and the wife has not been confined to that pursuant to the Act. They have engaged in Supreme Court proceedings as to access by the wife to the Suburb P property.
I am mindful as to the mandatory provisions identified in the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCOA Act”) in that the Court has a responsibility to ensure that management of litigation and its workload occurs, in accordance with law, as efficiently and inexpensively as possible. The adjournment of the trial will occasion further substantial costs. The Court is required to efficiently use its judicial and administrative resources and exercise its powers to ensure the timely disposal of all proceedings, in a way that is proportionate to their complexity. In the event the Court does not allocate its resources to hear this matter as currently allocated on 1 July 2024, it is important to consider:
(a)The fact that there would be a further delay until the conclusion of the criminal proceedings, being potentially at the earliest, in early 2025, incurring a delay of a at least another further twelve months; and
(b)The effect not only on these parties, but on all other litigants and stakeholders of the Court.
The decision of the High Court in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 provides authority for courts to take into account case management principles in determining adjournment applications, even to the prejudice of a party in the proceeding. The High Court made it clear that just outcomes are not determined merely by reference to the interests of the parties to the particular proceeding.
The effects of an adjournment of the trial as sought by the wife fails to take into account the notion that these parties are not entitled to consume an unlimited amount of public resources in pursuit of their own interests.
Each of the husband and wife did not object, on 16 December 2022, to the s 79 application being listed for trial commencing on 23 October 2023, being a trial to be heard and determined prior to the husband’s criminal matters being concluded.
Each the husband, the wife and his mother will be cross-examined at trial as to the collection, prior to the criminal proceedings relating to the husband’s dealings with the collection. The tenor of submissions suggested that the NSW Police hold a quantity of the collection that is the subject of the husband’s charges. It appears that the husband, on a prima facie basis, is the person that would be prejudiced if the property proceedings are heard and determined by way of him being cross-examined prior to the criminal proceedings. Implicitly, he does not perceive such cross examination, with the benefit of legal advice, will pose any prejudice or risk to him. The criminal determination of the charges relating to dishonestly obtaining an advantage by deceit do not appear to assume relevance to the s 79 litigation at this juncture.
Any incapacity to value the interest of the parties in the collection until the criminal proceedings have been determined is a matter that can be properly considered by the trial judge. A myriad of methodologies are available to deal with that circumstance, including an order being made that any part of the collection found to be that of the husband can be adjusted on its sale by way of a percentage. The Deputy Chief Justice may adopt an alternate course to take into account any contended disclosure failures on the husband’s part as to the collection.
The balance of convenience does not currently favour the adjournment of the trial. The wife’s application to vacate or adjourn the trial dates will be refused.
PROVISION OF DOCUMENTS TO THE DPP AND THE NSW DISTRICT COURT
The husband’s affidavit asserted that the District Court has made a “non-publication order” applicable to the proceedings in that forum. The husband did not adduce that order in evidence. The wife disputes that such an order was made.
The relief sought by each party on this subject matter, in the circumstances where the trial will occur in eight weeks’ time, is both premature and deficient in evidentiary foundation. Any application to provide affidavits or any other material from these proceedings to the NSW DPP or the NSW District or Supreme Courts can be the subject of a considered application made at the trial, after all the evidence has concluded. The relief sought by each the husband and the wife on this subject matter will be refused at this time.
DISCHARGE OF ORDERS 3 AND 4 MADE 18 JANUARY 2019
Orders 3 and 4 of the orders made on 18 January 2019 are as follows:
3.The wife cause the husband through his solicitors to be advised forthwith upon her receiving any notice that there will be a distribution to her from the estates of her late father and/or mother.
4.The wife be restrained, pending further order, from dealing in any way whatsoever with any entitlements that she has received or is to receive from those estates without giving the husband, through his solicitors, at least 28 days prior written notice.
(Emphasis added)
The wife provided notice to the husband pursuant to the orders on 5 March 2024 that she proposed to access $61,500 from the injuncted funds to pay for legal and accounting fees. After a protracted process of negotiation only recently concluding, the husband says it was “ultimately agreed” they would each access $61,500 from those monies. The husband said he applied the money he received from the distribution to “reduce his debts”.
Each of the husband and wife implicitly concede, by way of their relief sought, that there has been a sufficient change in circumstances to warrant a variation of the 18 January 2019 injunctive orders. The wife seeks for the orders to be discharged. The husband seeks for variation such that his written consent is required for the wife to be able to deal with any of her entitlements in those estates.
The current value of her interest in the relevant estates is $1,190,997.
There is some complexity to the husband’s financial conduct that requires forensic enquiry at trial. The wife’s evidence is that she seeks to access her own funds by way of her inheritance to pay for her further legal costs for trial, to pay funds to her children, a buy a new car, and to take a holiday.
The husband opposes the wife being able to access to her own property without his written consent. He contends that given “the proximity to the final hearing and need to preserve the assets in a manner that maximises the asset pool”. He submitted:
12.…[The wife] should be mandated under a specific order to continue to keep me appraised of her interest in the Estate. I say this as:
a.The value of the Estate must variably change due to the nature of the assets held; and
b.[The wife] has a ‘track record’ of failing to disclose and make available important information as to her financial position.
The wife submits that, in circumstances where she asserts that it is not just and equitable to make an order adjusting property between the parties, and where she retains in the range of $3,219,541 by way of an unencumbered real property and funds held in the solicitors-controlled monies account, the husband will suffer no prejudice by her access of these funds.
The husband did not particularise his prejudice should the wife access her own property. The husband submitted that if the wife applies funds to purchase a car for an adult child, being a “non-party”, such funds are lost to the s 79 proceeding, being incapable of being “clawed back”. I do not accept that submission. Longstanding authority permits the notional add-back of property subject to predisposition or waste. The trial judge can take into account the use of funds post separation in making orders if it is just and equitable to adjust property.
Currently, the integers of the husband’s s 79 case are unclear. His final relief sought is not competent. He did not identify the finding as to contribution he seeks to be made in his favour, expressed as a percentage of what he asserts is the pool of property of the parties, or any adjustments thereto pursuant to s 75(2) factors. He did not identify what sum he, at least implicitly, seeks ought to be paid to him by the wife pursuant to s 79 of the Act.
There is no evidence to suggest that the wife will waste her own property. She proposes a reasonable use of it, consistent with her getting on with her life (see Gollings & Scott (2007) 37 Fam LR 428).
In circumstances where the wife holds other items of property with substantial value, I do not accept that the husband has identified any prejudice should the wife access her entitlements produced from the estates of her late parents. The current order as to the provision of notice to access her own property will almost certainly produce further interlocutory disputes prior to the trial should it continue in operation. The relief sought by the husband on this subject matter is, cast against the history of the proceeding, for the same reasoning, also produce further disputes. Such circumstances should be avoided.
An order will be made discharging Orders 3 and 4 made 18 January 2019.
THE APPLICATION FOR A DOLLAR-FOR-DOLLAR ORDER
The wife will have ample resources to fund her legal costs. Her application for a dollar-for-dollar costs order will be dismissed.
CONCLUSION
Costs will be reserved to trial.
For all of the above reasons, orders are made as set out.
I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 2 May 2024
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