Keach and Keach (No 4) - [2009] FamCA 1376

FAMILY COURT OF AUSTRALIA

KEACH & KEACH (NO. 4)

[2009] FamCA 1376

FAMILY LAW – TRIAL – DISCLOSURE – Application of second respondent to tender documents after the respondent’s case closed – documents not produced as part of discovery prior to trial – whether prejudice to respondent if tendered – non-compliance by second respondent with rule 13.02 – application dismissed.

Family Court Act 1975 (Cth)
Family Law Rules 2004 r 13.02

APPLICANT:

Mr Keach

RESPONDENT:

Ms Keach

THE SECOND RESPONDENT:

J Pty Ltd

FILE NUMBER:

SYF

2181

2006

DATE DELIVERED:

25 September 2009

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Strickland J

HEARING DATE:

25 September 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT:

In person

COUNSEL FOR THE FIRST

RESPONDENT:

Mr North SC

with Mr Kearney

SOLICITOR FOR THE FIRST RESPONDENT:

Barkus Doolan Kelly

COUNSEL FOR THE SECOND RESONDENT

Mr Maiden SC

with Mr Emmett

SOLICITOR FOR THE SECOND RESPONDENT

Esplins Solicitors

Orders

That the oral application made by the second respondent to tender the general ledger for the loan accounts of the Junior Trust from 2000-2009 be dismissed.

FURTHER ORDER

That the document the subject of objection be marked as MFI1.
That leave is granted to the second respondent to file the affidavit of Mr P and rely on it for the purpose of these proceedings.
That further consideration of all outstanding issues be adjourned to a date to be advised in the week commencing 5 October 2009.
That leave is granted to the parties and their legal representatives to attend that hearing by way of telephone.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 2181 of 2006

MR KEACH

Applicant

And

MS KEACH

First Respondent

And

J PTY LTD

Second Respondent

EX TEMPORE REASONS

In this continuing matter I now have an application before me by the second respondent seeking leave to tender what is described as general ledgers for the loan accounts of what has been referred to in these proceedings as the junior trust, from the financial year ending June 2000 to the financial year ending June 2009.
The starting point perhaps in relation to this application is a document contained in the bundle of four volumes of documents which have been tendered jointly by the parties pursuant to orders of Watts J.
The relevant document is at tab 59 and is a document headed “Loan [Mr Keach] Junior to [Keach] Junior Trust”, and then there are several columns. There is a column of years stretching back to 1996 and concluding at 2009. Then there is a column for opening balance, a column for funds linked to trust, a column for loan repaid and a column for closing balance. Now that document emanated from the second respondent in this way. There was an order made by Watts J on 18 November 2008, and in particular paragraph 15.4 which required the second respondent to provide to the wife - and the wording is important:
“All ledger accounts of the junior trust identifying transactions on the loan account of the husband.”
Now pausing there, yesterday I was referred to a number of documents in relation to an issue similar to the one that is before me now or really, preparatory to the hearing of the issue that is before me now, and indeed I was referred to some documents that preceded the order of 18 November 2008.
The importance of starting these reasons with that order is that it was made following upon the joinder of the second respondent to these proceedings which as I understand occurred in September 2008. Prior to that the proceedings had been conducted between husband and wife and they commenced some time in 2006.
In any event there is this order of Watts J. Next I have been provided with an email from the solicitors for the second respondent dated 9 December 2008 addressed to the wife’s solicitor, and in the email there is reference to the orders made by Watts J on 18 November 2008 and then it reads, “Find attached the following documents” and there is a series of six documents identified. The important document for the purpose of this argument is document number four which reads “Loan account ledger of the trust for the husband” and the document attached is the same document which now appears at tab 59 of the tendered bundle.
I jump ahead to the affidavit of the husband filed on 4 March 2009 which is his affidavit of evidence-in-chief. In paragraph 124 of that affidavit the husband attaches a document marked “T” which is described as:
“A ledger in respect of the loan funds provided to me by my father between 1996 and 2006 inclusive.”
Again “T” is the same document which was attached to the email that I have referred to and the same document which is at tab 59.
In the lead up to the commencement of this trial there were requests made on behalf of the wife for the second respondent to produce documents. I have not been provided with copies of those requests again, but I was given them as an aide-memoire yesterday, and I have a recollection of them, and it is common ground that in those requests there was no specific request by the wife for the production of what can be described as loan account ledgers or journals in relation to loan accounts relating to the husband and the junior trust.
On 16 September 2009 there was an affidavit filed by Mr H who is an accountant in a firm which does the accounting work for the Keach group of companies, including the junior trust. Yesterday I heard an application for leave to file that affidavit and rely upon it for the purposes of these proceedings and I delivered reasons and made an order giving leave.
To go back a step though. On 17 September 2009, namely the day after that affidavit was filed, there was a further request for the production of documents by the wife as a result of that affidavit in order, as I understand it, for the wife and more particularly her legal representatives to determine their position in relation to the late filing of that affidavit. As I mentioned yesterday all affidavits were supposed to be filed by 12 June 2009, and thus, this affidavit was clearly well out of time.
And as I understand, and as I referred to yesterday, and it has been repeated today before me, the second respondent arranged for Mr H to gather together over the weekend documents in response to the request, and certain documents were brought to court on Monday and Mr H attended as I understand it as well. Included in those documents was a general ledger in relation to the loan accounts of the junior trust up to 2006.
Now as I say there was no specific request for such a document, but as Mr Maiden SC put to me that it was recognised at that late stage that these were documents which were or would be relevant in these proceedings and despite there being no specific request for them and I should add, despite there being nothing in the affidavit of Mr H referring to, for example, loan account ledgers, the second respondent took it upon themselves to arrange for Mr H to provide these ledgers.
Now the ledgers for the subsequent years, namely 2007, 2008 and 2009 were not available on Monday and as I understand it by late on Wednesday night they were provided. Mr Maiden SC explains the reason for that is they had to be extracted from the computer, whereas up to 2006 there was a hard copy of the ledger which was available for production and was made available on Monday.
This case is now in its fifth day. I have heard the evidence on behalf of the applicant, the husband, and he has closed his case. I have heard the evidence on behalf of the respondent wife, who has also closed her case, and we have embarked upon the case of the second respondent. I am in the middle of hearing the evidence of Mr Keach Senior, and he is currently under cross-examination by the wife’s senior counsel.
The application is opposed. Mr Kearney has referred me to the submissions he made yesterday and without repeating all of them he has incorporated them in his submissions today. In short the position of the wife is that the order of November 2008 provided for all ledger accounts of the junior trust identifying transactions on the loan account of the husband to be provided or produced to the wife. The document which is now at tab 59 and which was attached to the email of 9 December is described in the email as “Loan account ledger of the trust for the husband”. Thus Mr Kearney puts to me that the wife was entitled at that point to consider that this document was the ledger account and that there were no other documents to be produced.
What Mr Maiden SC puts to me is that this is a summary prepared by Mr H from underlying documents. Now it is apparent only this week that there are underlying documents because such documents, namely the ledgers, have now been produced and are available. And to pick up again the submissions of Mr Kearney, to repeat, puts to me that the wife was entitled to proceed on the basis that there were no other documents to be produced pursuant to that order and that that is the reason why subsequent to that order and the provision of this document there has been no specific request by the wife for the production of ledger accounts of the junior trust.
Mr Kearney says that if these ledger accounts are now allowed to be tendered in evidence by the second respondent, that will seriously prejudice the wife. The wife would need to, as was put to me yesterday, take time to look at these ledgers and have them assessed by an expert instructed by her to be in a position to in effect reopen her case if that is necessary as a result of that inspection and assessment.
In those circumstances it does not take much thinking to realise that what the wife is saying is that she would be seeking an adjournment of this case to enable that to occur and that that will delay, obviously, the finalisation of these proceedings, and although that is the immediate position put to me by Mr Kearney, and this is my gloss on it, that may not necessarily be the end of the exercise. For example, there is an expert opinion that has been provided in this case by Mr G, who was appointed as the single expert to value the trust, and it is not beyond the realms of possibility that any further documents prepared by an accountant instructed by the wife may need to be put to Mr G, at the every least, for him to consider whether there should be an update to his valuation.
Now that is speculation but it is not beyond the realms of possibility that one thing might lead to the other and delays beyond the initial delay that Mr Kearney has mentioned to me, which would inevitably flow from acceding to this application, might ultimately flow. Mr Maiden SC puts to me that it should have been obvious to the wife and her advisers that this was a summary of underlying documents, and yet there has been no request made since then for production of those underlying documents. Now there is a request for documents flowing from the affidavit of Mr H, and these documents which have always been available are now produced and the second respondent should be allowed to tender them as part of the second respondent’s case.
Now, I made some comments in the ex tempore reasons I delivered yesterday in relation to this which will bear upon this issue, but in my view I accept the submission of Mr Kearney that when one looks at the precise wording of the order and the response to the order by the second respondent, the wife was entitled to assume that there were no other documents and that logically explains the fact that subsequent to that there was no request by the wife for any so-called ledgers of loan accounts.
If it is being suggested that the response of 9 December and the document which is now at tab 59 is compliance with the order of 18 November, then I reject this suggestion entirely. It is not compliance with the order. The order required all ledger accounts and a summary is not compliance with the order. The underlying documents which we now know exist and have existed should have been made the subject of production in response to the order of Watts J or at the very least made the subject of discovery.
As I said yesterday, and I repeat, the onus on the second respondent as much as any other party, but subject to the precise words of rule 13.02 is an ongoing requirement of disclosure. If it is suggested that that this summary in some way avoids the ongoing obligations of the second respondent to disclose the ledger accounts in the knowledge that that they were the precise documents sought in the order then again I reject that suggestion entirely.
To seek to present documents of the nature now with the history that I have outlined is not something I am prepared to allow. Although it is not on all fours I refer in general terms to the recent High Court decision in Aon Risk Services Australia Ltd & Australian National University. It seems to me that the principles emanating from that case in terms of the effect of rules of court and the compliance with those rules of court and adjournments that might be sought and the issue of ensuring justice to both parties all apply in this case and I accept also the prejudice that would be suffered by the wife if I allow this to occur on day five of this hearing.
For all those reasons I dismiss the application.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland

Associate