Kardari and Kardari and Anor

[2008] FamCA 510

FAMILY COURT OF AUSTRALIA

KARDARI & KARDARI AND ANOR [2008] FamCA 510

FAMILY LAW – PRACTICE AND PROCEDURE – Case Management listing – Value of business – Further witness to be called – Overseas evidence as to value of assets in Lebanon

APPLICANT: Ms Kardari

RESPONDENT: Mr Kardari

SECOND NAMED RESPONDENT: Mrs M Kardari

FILE NUMBER: DGF 2450 of 2003

DATE DELIVERED: 3 July 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Young J

HEARING DATE: 3 July 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms C.E. Gray

SOLICITOR FOR THE APPLICANT: Galbally and O’Bryan

COUNSEL FOR THE RESPONDENT: Mr G. Ainger

SOLICITOR FOR THE RESPONDENT: Goddard Elliot

COUNSEL FOR THE SECOND NAMED RESPONDENT: Mr G. Ainger

ORDERS

This application coming on before this Court  AND UPON HEARING Ms Gray, solicitor, for the applicant wife, Mr Ainger, solicitor, for both the husband and the second named respondent

IT IS ORDERED BY CONSENT:

1. That Mrs M Kardari be joined as the second respondent to the proceedings but that the solicitor for the husband be at liberty to act for her and to engage the same counsel to represent her interests in the proceedings.

IT IS FURTHER ORDERED:

1. That leave be granted to the solicitors to forthwith issue subpoenae for the production of documents and that all such subpoenae be returned before the subpoenae clerk of the Melbourne Registry on Tuesday 22 July 2008.

1. That the further listing of this matter before Cronin J for case management purposes.

1. That the solicitors engaged by the parties to investigate and give evidence on the Lebanese property dealings, and associated issues, are to confer as soon as practicable and produce a joint report on matters that are and remain in issue and for a copy of that report to be filed with the Court on or prior to 28 July 2008.

1. That if the wife’s solicitor in Lebanon, Ms S, is to give evidence then it is not to be by telephone or video link and such evidence is to be given personally in this Court and all questions that might arise of her travel or other costs or expenses be reserved to the trial judge as an issue in the proceedings.

1. That on or before the adjourned case management date the wife is to make file and serve an updated trial affidavit dealing with all matters and issues in dispute and in the presentation of her evidence in the section 79 property proceedings.

1. That on or before the adjourned case management date the husband is to update his trial affidavit and the second named respondent is to make file and serve an affidavit of her evidence.

1. That both the husband and the wife file an updated form 13 financial statement inclusive of all income, assets and liabilities as at 30 June 2008.

1. That the ex-tempore reasons for judgment be transcribed, placed upon the court file and made available to all parties.

1. That on or before 28 July 2008 both solicitors, on behalf of their clients are to exchange a list of all debts and liabilities of the clients, or associated with the clients (such as are not covered in the expert report of B Company), such debts to be updated to 30 June 2008.

2. That the value of the husband’s and the wife’s superannuation entitlement in their self-managed superannuation fund be updated and agreed as at 30 June 2008.

IT IS NOTED:

A.     That both parties have advised the Court that this matter requires a five day hearing.

B.     The husband will require the in-court assistance of an Arabic interpreter.

C.     The solicitors appearing today jointly submitted that the matter could not be made ready for a hearing to commence in the week of 21 July 2008.

IT IS NOTED that publication of this judgment under the pseudonym Kardari & Kardari is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  DGF 2450 of 2003

MS KARDARI

Applicant

And

MR KARDARI

Respondent

And

MRS M KARDARI
Second named Respondent

REASONS FOR JUDGMENT

1. The matter of Kardari was listed before me for mention and case management issues this day.  The matter remains in my docket, with an estimated hearing time of five days.  The matter is not yet ready to proceed and the purpose of this mention and the reason for this extempore judgment are to highlight the issues that solicitors are to forthwith attend.  Ms Gray, solicitor, and Mr Ainger, solicitor, appeared today.  They intend in the proceedings hereafter to brief Mr Mawson of counsel for the husband and second named respondent, and Mr Spicer of counsel for the wife.

2. First, the husband's now wife has been previously named as a second named respondent.  The reason seemingly is that she owns the property at C, which has an agreed value of $650,000.  The dispute is as to what financial contribution or equity, if any, the husband should have in that property and what moneys should be brought to account, if at all, in the pool of assets available for distribution as between the husband and wife to the proceedings.

3. By consent it is submitted to me today that I should make an order joining her as a second named respondent, but with leave for the current solicitor and counsel for the husband to act on her behalf, so as to reduce costs and hopefully  have a more efficient hearing.  That I will do.  As an overview the assets in this case otherwise comprise three properties and a business, together with various entities of and related to the husband and it is alleged substantial liabilities.  There are also superannuation interests. 

4. The properties have been updated and seemingly are agreed in value, and they are as follows:

   - N property $850,000

   - A Street property $970,000

   - F (unit) property $220,000

5. The bigger issue in this case is associated with the value of the husband's interests in the business known as T Business and/or other associated entities, but excluding the value of the F unit.  A single expert witness, Mr H of B Company has prepared an updated valuation of the business and that is to be filed annexed to an affidavit within seven days of this day.

6. Seemingly the dispute that centres around the business is as to the quantity of raw material purchased and the way in which raw material is used, the amount of product that should be produced from that raw material and therefore the level of turnover for the business and profit allegedly available to the business.

7. There is an assessment prepared by Dr Q, who is a resident of New South Wales and who has prepared a report on business product usage and that has formed the basis for one of the valuation options prepared by Mr H.  The husband wholly contests Mr Q’s affidavit and the allegations made of his misuse of or failure to disclose product and or income.

8. There is intended by legal practitioners to be an investigation of the husband's practises in the purchase and use of his various raw material products and some development of the argument of available income.  There may or may not be allegations of misappropriation moneys, or failure to disclose moneys.  I have raised in open court the option of some form of audit of the parties and the business, and/or a betterment statement of the parties, and/or the involvement of the Australian Taxation Office.  All practitioners and parties are formally on notice that there are many and varied options before the court subject to evidence and what is proper.

9. The further complicating issue is the ownership of properties in Lebanon and/or the proceeds of sale or profits derived from sale or other dealing with properties.  The wife has engaged a Lebanese based solicitor, Ms S, and the husband a Melbourne based solicitor but with knowledge of Lebanese business practices, Ms Janette Eid.  They have each prepared a report, though there has been a great difficulty in their level of communication because of the current prevailing economy and living conditions in Lebanon.

10. I do require these two solicitors to confer immediately and to produce a report on any matters where they are in dispute.  I have foreshadowed that it would be impossible to manage and conduct the hearing if Ms S was to give evidence by telephone from Lebanon.  Whist I will not pronounce any formal order my expectation is that she will be here for the trial, at least for her to give her evidence and to listen to or otherwise respond to issues raised by the husband's solicitor in that regard. 

11. There is also the issue of the wife having evidence provided on subpoena by a Mr Y. That evidence is of and related to the business practices of the husband, and again his use of raw materials, the quantum of the product produced and no doubt cash and other income associated issues.  The wife seeks leave to consolidate all of her affidavits, and to file one relevant complete updated trial affidavit and I will provide that by order today.

12. The husband will give evidence himself as will his new wife.  Additionally as to the business, he will have evidence before the court from a Mr O, and in relation to an explanation of documents produced at court intends to call a Mr R, from Crown Casino Melbourne.  Both parties have asked leave to issue further subpoenas and I will make that order today provided that the subpoenas are returnable in the subpoenas clerk list on 22 July 2008. 

13. They must be issued within the next seven days for documents to be there produced.  I intend to list this matter before me for further case assessment on Monday 28 July 2008.  I have already explained to the parties that I do not have five consecutive days for the balance of this year, but it may be that there can be another judge from interstate to hear the matter.  I will not allot the matter to the case management judge for further fixing unless all of the evidence is complete and up to date and the matter is in a position to proceed to hearing.

14. For completeness I observe that the husband requires the assistance of an Arabic interpreter.  I will require the parties to file updated Form 13 financial statements.  I am advised that both of them have filed their tax returns for the financial year ended 30 June 2007. 

15. For those very brief reasons I will have this summary produced and put on the court file and made available to both solicitors.  I intend it to serve as a reference point for the further review that I will have before me on 28 July 2008 when I expect to be told that all affidavits are filed and the matter is ready to proceed.  I am further advised that a financial conciliation conference was held last week before Registrar Lethbridge.  The parties did seemingly cooperate in the discussions and move the matter forward, but certainly a dispute remains and there is no contemplated settlement of the section 79 proceedings. 

16. Otherwise I make no further inquiry about that conference.  I would strongly recommend that as soon as the matter is ready, the solicitors and the experienced counsel brief on both sides do endeavour to narrow the financial and evidentiary issues and disputes.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young

Associate: 

Date: