Lawson and Crawford & Ors (No 2)

[2015] FamCA 417

FAMILY COURT OF AUSTRALIA

LAWSON & CRAWFORD AND ORS (NO 2) [2015] FamCA 417

FAMILY LAW – PROPERTY SETTLEMENT – Interlocutory Application – Where the wife sought the joinder of several more corporations as parties to the proceedings – Where the parties conceded that the final relief sought by them could be granted by the Court without the need to join any of those corporations – Application dismissed

FAMILY LAW – PROPERTY SETTLEMENT – Interlocutory Application – Where past Orders provided for the parties to procure both single expert and adversarial expert evidence – Where the wife sought more information and documents from the respondents for furnishment to her adversarial expert witness – Where the wife had not articulated with precision what further information and documents she required –  Where it is impossible to find whether the respondents have provided full and frank disclosure – Where orders are made allowing the wife’s immediate and broader interrogation of the respondents under the Family Law Rules – Where it is ordered that the parties are to ensure the single expert and their respective adversarial experts meet in conclave before the trial

Family Law Act 1975 (Cth), ss 81

Family Law Rules 2004 (Cth), rr 13.26, 15.65, 15.69, 15.76, 19.50

APPLICANT WIFE: Ms Lawson

RESPONDENT HUSBAND: Mr Crawford

THIRD RESPONDENT: Ms A Crawford

FOURTH RESPONDENT: Mr B Crawford

FIFTH RESPONDENT: D Pty Ltd (in its own capacity, and ATF D Investments Trust)

SIXTH RESPONDENT: E Pty Ltd (in its own capacity and ATF E Trust

SEVENTH RESPONDENT: F Pty Ltd (in its own capacity and ATF F Trust)

FILE NUMBER: MLC 4101 of 2013

DATE DELIVERED: 19 March 2015

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Austin J

HEARING DATE: 19 March 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT WIFE: Mr O’Bryan SC

SOLICITOR FOR THE APPLICANT WIFE: Lander & Rogers

COUNSEL FOR THE RESPONDENT HUSBAND: Mr Bartfeld QC

SOLICITOR FOR THE RESPONDENT HUSBAND: Taussig Cherrie Fildes

COUNSEL FOR THE THIRD RESPONDENT: Mr Dickson QC

SOLICITOR FOR THE THIRD RESPONDENT: Kenna Teasdale Lawyers

COUNSEL FOR THE FOURTH RESPONDENT: Mr Dickson QC

SOLICITOR FOR THE FOURTH RESPONDENT: Kenna Teasdale Lawyers

COUNSEL FOR THE FIFTH RESPONDENT: Mr Dickson QC

SOLICITOR FOR THE FIFTH RESPONDENT: Kenna Teasdale Lawyers

COUNSEL FOR THE SIXTH RESPONDENT: Mr Dickson QC

SOLICITOR FOR THE SIXTH RESPONDENT: Kenna Teasdale Lawyers

COUNSEL FOR THE SEVENTH RESPONDENT: Mr Bartfeld QC

SOLICITOR FOR THE SEVENTH RESPONDENT: Taussig Cherrie Fildes

Orders

1.Pursuant to Part 13.3 of the Family Law Rules:

a.The applicant may by Wednesday, 25 March 2015, serve upon the respondents or any of them a request to answer no more than 100 questions in total;

b.The respondents may by Wednesday, 25 March 2015, collectively serve upon the applicant a request to answer no more than 100 questions in total; and

c.Any party served with such a request must answer the questions in an affidavit to be filed and served by Monday, 30 March 2015.

2.Leave is granted to the applicant to issue a subpoena to produce any document not already disclosed or discovered upon any one or more of the following entities, provided the subpoena is made returnable no later than Wednesday,
8 April 2015, and served no later than seven days in advance thereof:

a.H Ltd;

b.H One Pty Ltd;

c.H Two Pty Ltd;

d.Crawford Developments Pty Ltd; and

e.N Pty Ltd.

3.In the event that any party seeks to serve upon another party a notice to produce documents pursuant to Rule 15.76 of the Family Law Rules, the time for service of the Notice to Produce is extended to Wednesday, 8 April 2015.

4.The time for the parties’ compliance with Rule 15.65 of the Family Law Rules with respect to questions they may wish to pose to the single expert,
Mr K, is extended to Thursday, 2 April 2015.

5.The parties must do all reasonable acts and things necessary to ensure that:

a.A conference pursuant to Rule 15.69 of the Family Law Rules is convened on Thursday, 9 April 2015, between the single expert witness, Mr K, and any adversarial expert witness engaged by any of the parties to report upon any of the issues reported upon by
Mr K; and

b.The joint statement prepared by the experts is available before the trial commences on Monday, 13 April 2015.

6.Orders 4, 5, 6, 7, 8, 9, 10, 11 and 18 made on 21 November 2014 are discharged.

7.The time for compliance with Order 15 made on 21 November 2014 is extended to 4pm on Friday, 10 April 2015.

8.The parties shall by Wednesday, 8 April 2015, file and serve:

a.The affidavits of evidence in chief for all lay witnesses upon which they wish to rely;

b.The affidavits of evidence in chief of all adversarial expert witnesses upon which they wish to rely, and for that purpose the parties are granted leave to adduce evidence from:

i.An expert offering expert opinion evidence upon any matter which is the subject of report by the single expert, Mr K;

ii.An expert quantity surveyor offering expert opinion evidence about the past and prospective construction costs actually or likely to be borne by Crawford Developments Pty Ltd as and from
1 July 2013;

iii.Expert opinion evidence about the value of real property relevant to the dispute between the parties; and

iv.Any other expert opinion evidence permitted by former procedural orders.

c.Update undertakings confirming fulfilment of their duty of disclosure.

9.The applicant, first respondent and seventh respondent shall by Wednesday,
8 April 2015, file and serve an update Financial Statement that complies with Chapter 13 of the Family Law Rules.

10.The parties shall do all acts and things reasonably necessary to ensure that the applicant’s superannuation interest currently held in the H Pty Ltd Staff Superannuation Fund is rolled out to another compliant superannuation fund of the applicant’s choice on or before Thursday, 26 March 2015.

11.Otherwise, save as to costs:

a.The applicant’s application for interim orders contained within her Further Amended Initiating Application filed on 17 February 2015 is dismissed;

b.The applicant’s application for interim orders contained within her Application in a Case filed on 12 March 2015 is dismissed;

c.The husband and seventh respondents’ application for interim orders contained within their Response to an Application in a Case filed on
12 March 2015 is dismissed;

d.The third, fourth, fifth and six respondents’ application for interim orders contained within their Response to an Application in a Case filed on 12 March 2015 is dismissed; and

e.Any and all outstanding applications for interim orders are dismissed.

12.Costs of the applications referred to in the preceding order are reserved until the final trial.

13.It is directed pursuant to Rule 19.50 of the Family Law Rules that these proceedings warranted the instruction of Counsel, including Senior Counsel.

NOTATIONS

A.The trial of these proceedings remains listed to commence on Monday,
13 April 2015.

B.The parties agree it is unnecessary to join as parties to the proceedings any of the corporations referred to in Order 2 hereof because the final relief sought by the parties can be capably granted without the need for such joinder.

C.The respondents acknowledge that the applicant is at liberty to rely upon the following affidavits at final trial without the need to file any updating affidavits pursuant to Order 8 hereof:

i.The affidavit of Mr O filed on 23 September 2014; and

ii.The affidavit of Ms P sworn on 16 February 2014.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lawson & Crawford has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 4101 of 2013

Ms Lawson

Applicant Wife

And

Mr Crawford

Respondent Husband

And

Ms A Crawford
Third Respondent

And

Mr B Crawford
Fourth Respondent

And

D Pty Ltd (in its own capacity, and ATF D Trust)
Fifth Respondent

And

E Pty Ltd (in its own capacity and ATF E Trust
Sixth Respondent

And

F Pty Ltd (in its own capacity and ATF F I Trust)
Seventh Respondent

EX-TEMPORE

REASONS FOR JUDGMENT

1.These proceedings concern property settlement between the husband and wife pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”), though they have seemingly metamorphosed into a much broader and bitter dispute.

2.The husband and wife separated in May 2013 and the proceedings were commenced in ensuing months. The proceedings have grown to encompass the husband’s two adult children and three corporations in which they and the spouses have interests. The proceedings are presently listed for final trial before Macmillan J, commencing little more than a month hence.

3.The interim dispute that requires immediate attention concerns, principally, two issues: first, the joinder to the proceedings as parties of several more corporations, and secondly, the procurement by the wife of more information and documents from the respondents for furnishment to her adversarial expert witness so that he may conduct a “forensic review and audit” of the parties’ corporate structure. The first issue was far more easily determined than the second.

4.There were supplementary issues to consider, but they were the subject of far less angst.

5.

The wife sought to prosecute the interim applications contained within both her Further Amended Initiating Application, filed on 17 February 2015, and her Application in a Case, filed on 12 March 2015.  In support of those applications she relied upon her affidavit filed on 12 March 2015, her affidavit filed on

17 March 2015, the affidavit of her adversarial expert witness, Ms Q, filed on 17 March 2015, and two further documents which were tendered as exhibits (marked exhibits A1 and A2).

6.The husband and the seventh respondent sought to prosecute the interim application contained within the Response to an Application in a Case they filed on 12 March 2015. In support of that application they relied upon the husband’s affidavit filed on or about 12 March 2015. 

7.

The third, fourth, fifth and sixth respondents sought to prosecute the interim application contained in their Response to an Application in a Case, filed on

12 March 2015, in support of which they relied upon the affidavit of the third respondent, filed on 12 March 2015.

Joinder of more parties

8.This issue arises out of the interim application contained within the wife’s Further Amended Initiating Application filed on 17 February 2015. The wife wished to join several more corporations to the proceedings, including, as it transpired, a further corporation not even disclosed in the application.

9.Ultimately, the respondents each conceded that the final relief sought by the wife, and I infer the relief sought by them also, could be granted by the Court without the need to join any of those corporations to the proceedings. The parties conceded that they all, in one combination or another, hold proprietary interest in, or control over, all of the other corporations it was contemplated may be joined. In the face of such concessions the wife did not need to press the application and it is consequently dismissed. 

The wife’s procurement of further information and documents

10.At the heart of this dispute lay three problems. 

11.The first is that the wife alleged the respondents had failed to give full and frank disclosure, which allegation the respondents refuted. 

12.The second is that the wife has so far failed to precisely particularise the nature of the additional information and documents she requires from the respondents.

13.The third and most profound problem is one of the parties’ own making.  Shortly after the proceedings commenced, on 4 October 2013, the parties consensually obtained orders from the Court that both obliged and permitted them to obtain single expert and adversarial expert evidence on the one subject. That subject was “the value of the companies and trusts comprising the Innovative Care Group and the companies and trusts controlled by [the spouses]”.

14.Order 5 made on that date ordered them to obtain single expert evidence on that subject from Mr K. 

15.Order 6 made on that date permitted them to adduce evidence at trial from their own adversarial experts on exactly the same subject. 

16.The mischief caused by the multiplicity of conflicting expert evidence, sought to be avoided by Part 15.5 of the Family Law Rules 2004 (Cth) (“the Rules”), has been eloquently illustrated by what has occurred since those orders were made long ago in October 2013.

17.The wife is seriously dissatisfied with the contents of the single expert report prepared by Mr K. She engaged an adversarial expert in Mr Q and intends to adduce evidence from him at trial, as the orders made in October 2013 permit. The alleged impediment to him doing so in a timely and efficient way is his uncertainty about the probity of financial dealings between a network of corporations and trusts over the past two years or so.

18.The wife alleges the respondents have surreptitiously siphoned funds from corporations and trusts to deliberately depreciate the value of the parties’ interests in those entities, thereby decreasing the value of their property amenable to distribution between them pursuant to property settlement orders under Part VIII of the Act. The respondents refute the allegations.

19.That brings me back to the first two problems to which I adverted. It is, of course, impossible to adjudicate whether or not the respondents have given full and frank disclosure as required by the Rules. This is an interlocutory dispute and the parties’ assertions are untested by cross-examination. That will occur at trial. The Court previously made procedural orders in July and November 2014 that were designed to ensure proper disclosure. Repercussions will flow if it subsequently transpires a party contravened his, her, or its obligations.

20.That leaves for consideration the problem about precisely what further information and documents the wife requires from the respondents. It was not particularised in the wife’s Application in a Case, in the evidence adduced in support of the Application in a Case, or in the oral submissions made by senior counsel for the wife. Simply put, it has still not yet been articulated with precision, but the wife contended the task of particularisation could be completed very quickly.

21.

After many hours of hearing, concessions were made by senior counsel for all parties that the dispute could be fairly resolved by: firstly, permitting the wife to interrogate the respondents at greater length than is permitted by

Rule 13.26 of the Rules and Order 5 made by Macmillan J on

14 November 2014; and secondly, by the wife’s resort to use of subpoena and notices to produce documents.

22.Those concessions were appropriately, though perhaps belatedly, made and orders can therefore be fashioned to minimise prejudice to all parties.

23.

Orders allowing the wife’s immediate and broader interrogation of the respondents under the Rules, coupled with short service of subpoena, will enable her to procure and furnish to her adversarial expert the extra information and documents she believes is necessary for him to complete his task. It is important that she not be unreasonably thwarted in her earnest attempt to demonstrate that the parties have property interests worth up to some

$60 million more than the husband concedes.

24.However, the prejudice to the respondents must also be minimised. They should not be deprived of the final trial date in circumstances where one prior trial date has already been vacated. They collectively run a vast and remunerative commercial empire which is impeded by their involvement in these proceedings. The respondents are currently subject to interlocutory injunctions restraining the manner in which they can freely conduct their business activities.

25.

Although the single expert report was not released until January 2015, it was released in draft format in November 2014 and the wife deposed to her concerns about the respondent’s failure to give proper disclosure as early as September 2014. Her present Application in a Case was not filed until

12 March 2015 and she did not engage her adversarial expert until

29 January 2015. The matter was set down for trial in April 2015 as far back as November 2014. Consequently, some delay has attended prosecution of the wife’s application.

26.The respondents submitted, without contradiction by the wife, that the wife told Macmillan J at the Court event on 5 March 2015 the trial date in April 2015 need not be lost if she obtained the information and documents she needed swiftly.

27.Much of the wife’s concern was submitted to relate to financial accommodation granted by the ANZ Bank to the respondents to enable pursuit of their business activities, but that concern was cured by the respondent’s open concession on the record that no such financial arrangements exist. The ANZ Bank has only financed the husband in respect of two parcels of real property, neither of which are involved in the respondent’s business activities, and the existence of both of which are already known to the wife. 

28.There is no need for the trial date to be lost. The wife’s adversarial expert report is already comprehensive, albeit perhaps still only in draft form. It runs to more than 150 pages and includes precise mathematical calculations. It is the subject of qualifications and certain assumptions, but expert reports almost always are.

29.It is desirable for the wife to be as fully informed as she can possibly be before trial, but not at any cost. Any anomalies the wife’s adversarial expert identifies in the single expert report can and should be the subject of a conclave between the experts and then cross-examination at trial. 

30.Another potentially significant problem with the loss of the current trial date is the prospect of further dispute over the currency of the evidence. If the trial date is vacated, the proceedings will not likely be relisted for trial before the latter months of 2015. The single expert and the wife’s adversarial expert are calculating their valuations as at 30 June 2014. By the end of 2015 the 2014/2015 financial will have concluded and there is a risk one or more parties may then complain about the staleness of the expert evidence and the need for update reports. Although senior counsel for the wife submitted she would not do so, it should be noted she complained in her first affidavit about her potentially being kept ignorant of important financial data by the respondents until as far into the future as May 2016, so the possible staleness of information is at the forefront of her mind.

31.The orders that will be made to dispose of the wife’s application will allow her urgent interrogation of the respondents, her issue of subpoena with short service, an extension of time to serve notices to produce documents, and extra time to ask questions of the single expert.

32.The parties will also be required to ensure the single expert and their adversarial experts meet in conclave before the trial and produce a joint statement setting out the areas of their agreement and disagreement. 

33.Otherwise, past procedural orders are modified to allow the parties extra time within which to file and serve their evidence in readiness to commence the trial on 13 April 2015.

34.The respondents also sought the wife’s disclosure of her letter of instructions to her adversarial expert. There is no need to make such an order because the subject letter was produced to them by the wife pursuant to a call made during the course of the hearing. 

Extra quantity surveying evidence 

35.The husband and seventh respondent sought permission to adduce adversarial expert evidence from a quantity surveyor. The wife did not oppose the application, presumably because she also intends to rely upon evidence of the quantity surveyor already retained to assist her adversarial accounting expert. The orders accommodate the parties’ desire to adduce such evidence.

Superannuation

36.The wife has a superannuation interest which is held in the Innovative Staff Superannuation Fund, the trustee of which is Innovative Super Fund Investments Pty Ltd. 

37.Until recently, the wife was a director of the trustee corporation. She ceased to be so when she was not reappointed at a recent annual general meeting of the corporation. 

38.

It is common ground the Super Fund cannot remain compliant with the Superannuation Industry (Supervision) Act 1993 (Cth) unless, by

26 March 2015, either she is reinstated as a director of the corporate trustee or her superannuation interest is rolled-out to another fund. The wife wanted the former and the respondents wanted the latter. 

39.The wife’s interest will need to be rolled-out of the Super Fund following the trial in April 2015 anyway, so as to properly divide and segregate the spouse’s financial interests, as s 81 of the Act implores. The wife would accrue no material advantage by being reinstated as a director for a period of weeks and she will suffer no material disadvantage by rolling-out a superannuation interest to another compliant fund now instead of in several weeks time. The orders therefore provide for the roll-out.

Costs

40.The parties maintained cost applications against one another arising out of the interim dispute. No submissions were made about costs, so the question of costs is reserved until the final trial.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 19 March 2015.

Associate: 

Date:  7 May 2015