Leventis & Leventis (No 5)
[2023] FedCFamC1F 285
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Leventis & Leventis (No 5) [2023] FedCFamC1F 285
File number MLC 7710 of 2018 Judgment of WILSON J Date of judgment 19 April 2023 Catchwords FAMILY LAW – PRACTICE AND PROCEDURE – application by second and third respondents to again rely on a proposed affidavit the draft of which was already the subject of a ruling rendering large portions of the draft inadmissible.
FAMILY LAW – TRUSTS AND TRUSTEES – evidence purportedly of the reasons for the creation of a family trust and of its intended operation is inadmissible where a comprehensive executed deed of trust is before the court and where no claim of rectification, fraud or non est factum is advanced.
Legislation Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rules 1.04, 8.19 and 8.20 Cases cited Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Byrnes v Kendle (2011) 243 CLR 253
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Curley v Duff (1985) 2 NSWLR 716
Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588
Dunne v English (1874) LR 18 Eq 524
Leventis & Leventis (No 4) [2023] FedCFamC1F 58
Goodridge v Beadle (2017) 57 Fam LR 425
GPI Leisure Group Ltd v Herdsman Investments Pty Ltd (No 3) (1990) 20 NSWLR 15
Honeysett v R (2014) 253 CLR 122
In the Marriage of Chang & Su (2002) 29 Fam LR 406
Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896.
Keevers & Keevers [2021] FedCFamC1F 338
Kioa v West (1985) 159 CLR 550
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
The Parisian (1887) 13 PD 16
Willans & Enmore (No 2) [2021] FamCA 340
Books cited John Levingstone, The Law of Affidavits (2013), Federation Press, chapter 18 entitled “Attendance by Deponent” Division Division 1 First Instance Number of paragraphs 74 Date of last submission 12 April 2023 Date of hearing 12 April 2023 Place Melbourne Counsel for the applicant Dr E. Kelly Solicitor for the applicant Lander and Rogers Solicitor for the first respondent Vadarlis & Associates Counsel for the second and third respondents Mr S. K. Wilson KC with Mr P. Panayi Solicitor for the second and third respondents Ms W Conveyancing & Legal ORDERS
MLC 7710 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN MS LEVENTIS
Applicant
AND MR LEVENTIS
First Respondent
MR B LEVENTIS
Second Respondent
MS C LEVENTIS
Third Respondent
order made by
WILSON J
DATE OF ORDER
19 APRIL 2023
THE COURT ORDERS THAT –
1.The second and third respondents’ application for leave to rely on the affidavit of Mr J made on 2 March 2023 is granted.
2.The second and third respondents’ application for leave to rely on the affidavit of Mr N made on 5 April 2023 is refused.
3.The second and third respondents’ ore tenus application in relation to the use of the report of the expert Mr K is refused.
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 a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J
INTRODUCTION
At the request of the parties for the hearing of an urgent application, at 5:00pm on 12 April 2023 I heard argument concerning the resumption of the trial of this proceeding. The hearing of an urgent application outside of normal court hours is an ordinary incident of cases in my docket especially when they are part-heard.
This case has travelled very little distance despite it having already occupied six hearing days of trial, culminating in the delivery of reasons for judgment on 14 February 2023.[1] In those reasons issues concerning the admissibility of a draft affidavit of one Mr N were determined adversely to the second and third respondents who wanted to rely on Mr N’s evidence after the commencement of the trial. On a date not presently known to me, the second and third respondents terminated the retainer of senior and junior counsel who had appeared for them for six days of the trial up to 14 February 2023 and now Mr S. K. Wilson KC with Mr Panayi represent the second and third respondents.
[1] Leventis & Leventis (No 4) [2023] FedCFamC1F 58.
THE APPLICATIONS BROUGHT URGENTLY
The second and third respondents relied on their application in a proceeding dated 10 April 2023. In that document two orders were sought. The first was for an order granting the second and third respondents leave to rely upon the affidavit of Mr N made 5 April 2023. The second was for an order granting them leave to rely on the affidavit of Mr J dated 2 March 2023. Dr Kelly of counsel for the wife did not oppose the application concerning the grant of leave for the second and third respondents to rely on the affidavit of Mr J.[2] The wife opposed the application concerning Mr N’s affidavit.
[2] Transcript 12 April 2023 T19 L14-16.
Most of the debate on 12 April 2023 was consumed by an application made ore tenus and not particularised on the second and third respondents’ application in a proceeding in relation to the use to be put of the report of the expert Mr K.
It was therefore necessary for me to determine –
(a)whether the affidavit of Mr N made 5 April 2023 was admissible and if so whether the second and third respondents should have leave to rely on it; and
(b)whether to accede to the urgings of the second and third respondents to remove the report of Mr K from the court file and thereafter to forbid any cross-examination based in any way on information in that report.
As these reasons record, I refuse the application for leave to rely on the affidavit of Mr N made 5 April 2023 and I also refuse the application to remove the report of Mr K from the court file as well as the application to forbid cross-examination on any aspect of it.
THESE APPLICATIONS IN A TEMPORAL CONTEXT
The trial of this proceeding moved at near glacial speed on 6, 7, 8, 9, 13 and 14 February 2023. After lengthy openings, counsel negotiated, unsuccessfully, and spent a large portion of those days debating whether the second and third respondents should have leave to rely on a draft affidavit of Mr N. I ruled that his draft affidavit and proposed expanded version of that document were not admissible. Since 14 February 2023, the solicitors for the second and third respondents have reworked the draft affidavit of Mr N, replicating portions already the subject of my reasons[3] as well as including additional passages not previously put forward. Dr Kelly submitted[4] that when the draft N Document the subject of my 14 February 2023 ruling was put alongside the 5 April 2023 N Affidavit, and a direct comparison made, certain duplication was evident, whereas other aspects were new. Dr Kelly submitted that paragraphs 4 to 24 and 26 to 28 of the 5 April 2023 N Affidavit were replications of the document described in my 14 February 2023 reasons as the unsworn statement of Mr N, all of which were determined to be inadmissible. Mr Wilson KC submitted that new material emerged from paragraph 29 and beyond.
[3] Leventis & Leventis (No 4) [2023] FedCFamC1F 58.
[4] Transcript 12 April 2023 T18 L30 et seq.
The solicitor for the second and third respondents deposed in her 10 April 2023 affidavit to the circumstances of the creation of Mr N’s 5 April 2023 affidavit. Relevantly paraphrased, she stated as follows –
(a)she was engaged by the second and third respondents in early 2019 at which time she became aware that the second and third respondents’ accountant was Mr N who was also the accountant for the second and third respondents’ family trust;
(b)during 2021 and 2022 (although she did not say when) while preparing this case for a particular hearing the solicitor discussed with the second respondent her (the second respondent) telephoning Mr N to enquire about his availability to give evidence;
(c)during 2022, Mr N’s wife told the second respondent who told the solicitor that Mr N was unable to assist by reason of his medical condition and general poor health;
(d)in June 2022 the third respondent was told by Mr N that Mr N had suffered another medical episode and the solicitor narrated that by reason of that episode Mr N was prevented from assisting in this litigation;
(e)at about the same time the solicitor stated that Mr U visited Mr N when Mr N told Mr U who told the second respondent who told the solicitor (triple hearsay) that Mr N would not be assisting with this litigation;
(f)the solicitor made a forensic decision “at around this time” (which I took to be around June 2022) that the solicitor stopped pursuing the second respondent to follow up Mr N;
(g)in October 2022 the solicitor told the second respondent to enquire whether Mr N’s health had improved to such an extent that he was able to give evidence and that on 5 February 2023 Mr N finally responded to the second respondent’s telephone and email enquiries;
(h)on 5 February 2023 Mr N attended at the office of the second respondent’s solicitor when she (the solicitor) read to Mr N the affidavit of Mr Leventis made 1 September 2022;
(i)on 7 February 2023 the second and third respondents’ solicitor instructed the former junior counsel to prepare an outline of evidence of Mr N which junior counsel did by telephoning Mr N;
(j)after the trial was adjourned (14 February 2023) new counsel were engaged on behalf of the second and third respondents leading to the following assertion –
Following this, a further attempt was then made to contact [Mr N], who clearly had relevant and pertinent evidence to give;[5]
(k)on 31 March 2023 the second and third respondents’ solicitor, their senior and junior counsel and Mr N conferred on a face-to-face basis; and
(l)after that conference, Mr N’s affidavit made 5 April 2023 was produced and sworn.
[5] The italics are mine to highlight the objectionable nature of this passage and for its deviation from stating facts as an affidavit must do.
Dr Kelly informed me that he had undertaken the task of physically comparing the document entitled “unsworn evidence of [Mr N]” with Mr N’s 5 April 2023 affidavit. So did I. Dr Kelly submitted that insofar as I had ruled on the contents of the unsworn evidence document, then that ruling should apply to the extent that the information ruled on was repeated in the 5 April 2023 affidavit. Conversely, Mr Wilson KC submitted that he did not cavil with my ruling on 14 February 2023 yet he persisted in a contention that despite my 14 February ruling, the N Affidavit of 5 April was nevertheless admissible.
Mr Wilson KC submitted that the general gravamen of Mr N’s 5 April 2023 affidavit went to the best evidence available about the version of the relevant trust that should be before the court. He further submitted that the documents exhibited to Mr N’s affidavit go a considerable way to illuminating the answers to an important question in this case, namely, the document or documents that constitute the trust instrument in this case. Mr Wilson also argued that the evidence of Mr N, if admitted, went to contradicting the wife’s evidence that she was involved in creating the trust.
I confess to encountering significant obstacles in the acceptance of the submissions of Mr Wilson KC. I say that for several reasons. First, the relevant instruments are signed and so, in the case of the deed of trust, evidence of the circumstances surrounding the entry into the deed is inadmissible, as I held in paragraph 16 of my 14 February 2023 decision, with particular emphasis on the decision in Byrnes v Kendle.[6]
[6] (2011) 243 CLR 253.
Subjective intention of the settlor or any other person is irrelevant to the question whether a trust exists and to the question what its terms are. Mr N was the settlor. He is not permitted to give evidence about his hopes, his aspirations or what he expected to achieve in the creation of the Leventis Family Trust.
Mr Wilson KC submitted[7] that the wife seeks to shut out the evidence of the person who recommended a trust in the first place and his reason for doing so. The wife is on firm ground (Byrnes v Kendle) for seeking to shut out Mr N from giving that evidence. The deed was executed. It falls to be construed in accordance with its terms. I do not accept that this is a matter of the parties having time to cope with the consequences of Mr N being permitted to adduce evidence about the circumstances leading to the preparation and execution of the trust. The fact remains – the trust was prepared, then the instrument was signed and the trust was thereby settled. Who devised the strategy for the trust is beside the point. Who wanted a particular term included and why is likewise beside the point. I examined that in excruciating detail in my ex tempore judgment handed down on 14 February 2023. To my mind, it is neither here nor there for the second and third respondents to contend that they wish versions of the trust deed to be put to the wife so as to impeach her credit. While true, the wife stated in paragraph 125 of her trial affidavit that she was involved in setting up the Leventis Family Trust, precisely what she meant by “setting up” that trust may very well be the subject of cross-examination by counsel for the second and third respondents. But whether counsel for the second and third respondents would be permitted to put various iterations of the draft trust deed to her would first depend on her evidence about her involvement, if any, in the creation of the trust deed. Yet even if she asserted some limited involvement in the creation of one or more iterations of the trust deed, it cannot be overlooked that one version of the deed is executed and therefore that document assumes a high degree of importance in this case. But one wonders why that matter is said to be relevant at all because Mr N himself states that he cannot recall whether the wife was present but if she was she did not participate. Mr Wilson KC argued that such a matter is “clearly relevant” (his words) to an issue of credit (in relation to her contention that she was involved in setting up the trust) as well as to an issue about an inference arising that there was something wrong with her only seeing the documents late in the day.
[7] Transcript 12 April 2023 T15 L25.
That makes little sense to me. Even if I were to find that the wife was not materially involved in any aspect of discussions leading to the creation of the trust, to vetting of any iteration of the trust or to examining and approving any version of the trust, the trust deed is executed in this case. It must be construed in accordance with the observations in Byrnes v Kendle. But that is not licence for the second and third respondents to trawl generally, under the guise of credit, about issues anterior to the execution of the deed. It is no answer for Mr Wilson KC to submit that the other parties have several weeks to absorb and address the material in Mr N’s 5 April 2023 affidavit. If the material is inadmissible it should not be received with the consequence that those potentially affected by it need not be vexed by it.
Mr Wilson KC submitted[8] that authority exists to the effect that it is permissible to examine the surrounding circumstances to ascertain that a trust exists. In this case an express trust exists. There is no warrant to examine surrounding circumstances to ascertain the existence of a trust. For that matter, debate continues to abound about whether the observations of the High Court in Codelfa[9] or whether the more recent statements of principle in Investors Compensation Scheme[10] prevail, as I surveyed at paragraph 18 of the 14 February 2023 decision. I am unwilling to admit information as proposed by Mr N on the possibility that it goes to surrounding circumstances of the settlor’s intention when direct High Court authority in Byrnes v Kendle holds against such a course.
[8] Transcript 12 April 2023 T17 L25.
[9] Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337.
[10] Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896.
Mr Wilson submitted[11] that it would be unconscionable to forbid Mr N from giving evidence of his role and his activities in setting up the Leventis Family Trust. No authority was cited for that proposition. I am unable to reach the conclusion that it would be unconscionable to refuse the second and third respondents to adduce evidence from Mr N in accordance with his 5 April 2023 affidavit.
[11] Transcript 12 April 2023 T18 L21.
It became necessary to examine Mr N’s 5 April 2023 affidavit and to compare it to the document styled “unsworn evidence of [Mr N]” which was the subject of my 14 February 2023 ruling, to which I now turn.
Paragraph 1 of Mr N’s 5 April 2023 affidavit recorded his name and address. Nothing turned on that.
Paragraphs 2 and 3 of Mr N’s 5 April 2023 affidavit corresponded largely with paragraph 3 of Mr N’s unsworn evidence document.
In paragraph 42 of my 14 February 2023 ruling I held that those paragraphs of Mr N’s unsworn evidence were uncontroversial but irrelevant. Nothing has changed. When embedded in Mr N’s 5 April 2023 affidavit, those paragraphs remain uncontroversial and they also remain irrelevant.
Between paragraphs 4 and 9 of the Mr N’s unsworn evidence document on which he previously relied Mr N addressed a collection of health issues from which he said he suffered. Between paragraphs 43 and 47 inclusive of my 14 February 2023 ruling I determined that those paragraphs were irrelevant for the several reasons there stated. In his 5 April 2023 affidavit Mr N addressed his health issues in a single paragraph, number 46, in which he asserted that he is now well enough to depose to the matters set out in his affidavit. It must be said that in his 5 April 2023 affidavit Mr N has fundamentally recalibrated the otherwise inadmissible evidence he purported to give about his health between paragraphs four and nine of his unsworn evidence document.[12] However, the mere fact that he now states that he is able to give evidence does not render that statement probative nor relevant to any fact in issue. I remain of the view that Mr N’s evidence of his health is irrelevant. Paragraph 46 of Mr N’s 5 April 2023 affidavit is irrelevant and therefore inadmissible.
[12] Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588, Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 and Honeysett v R (2014) 253 CLR 122.
Paragraph 4 of Mr N’s 5 April 2023 affidavit corresponded closely, although not precisely, with paragraph 10 of the document styled “unsworn evidence of [Mr N]”. In the new paragraph 4 Mr N altered his reference to knowing members of the Leventis family for “a number of years” to a general date being “since the mid-1990’s” (with the error in the original).[13] After examining the contents of paragraph 10 of the unsworn evidence document I concluded that its content was irrelevant and therefore inadmissible. Paragraph 4 of Mr N’s affidavit remains inadmissible for irrelevance. Accepting that Mr N acted as the tax agent and accountant for one or more members of the Leventis family since the mid-1990s, that fact goes nowhere to advancing the evidence in relation to a fact in issue in this case.
[13] The phrase “mid 1990’s” is not possessive and an apostrophe was erroneous.
Paragraph 5 of Mr N’s 5 April 2023 affidavit corresponded to paragraph 11 of his unsworn evidence document. In paragraph 49 of my 14 February 2023 ruling I held that paragraph 11 was inadmissible. The wording of paragraph 5 of Mr N’s affidavit preserves precisely the wording of paragraph 11 of his document called “unsworn evidence of [Mr N]”. Having already ruled that paragraph to be inadmissible, there being no change to the paragraph, it follows axiomatically that paragraph 5 of Mr N’s 5 April 2023 affidavit is likewise inadmissible.
Stripped to its core, the assertions in paragraph 5 of Mr N’s 5 April 2023 affidavit amount to his stating that on a date prior to the establishment of the Leventis Family Trust, Mr N became aware (from a source he is unable to say) that according to someone an amount of money was expected. To my mind that information is much on the periphery of probative evidence. In paragraph 49 of my 14 February reasons I said that the entirety of paragraph 11 (equivalent to the current paragraph 5) was of next to no probative value and that no useful purpose was served in admitting hearsay evidence. Nothing has changed. Paragraph 5 is likewise inadmissible.
Paragraph 6 of Mr N’s 5 April 2023 affidavit is in large measure a replica of paragraph 12 of Mr N’s unsworn evidence. In paragraph 50 of my reasons handed down on 14 February 2023, I observed that paragraph 12 of Mr N’s document styled “unsworn evidence” addressed two of Mr N’s thoughts and that his subjective thoughts were not evidence. In paragraph 6 of Mr N’s 5 April 2023 affidavit, Mr N converted statements of his thoughts to evidence that he actually advised the second and third respondents to create a family trust with a view to minimising tax payable on their receipt of funds payable for the compulsory acquisition of 2 D Street, Suburb F.
Even accepting that Mr N may have given advice to the second and third respondents to that effect, it is no more than one fact in the chronological lead-up to the execution of the Leventis Family Trust. The deed itself is in evidence. That document in its executed form seems to supersede all events about why the deed was created or upon whose advice the deed was created. I am unable to see how evidence that Mr N advised the second and third respondents in relation to a trust is probative in circumstances when all the preparatory activity anterior to the creating of the trust merged in the execution of the deed of trust itself. To my way of thinking paragraph 6 of Mr N’s affidavit is inadmissible.
Paragraph 7 of Mr N’s 5 April 2023 affidavit corresponded closely, although not word perfectly verbatim, with the details in paragraph 13 of Mr N’s unsworn evidence document and I examined paragraph 13 in paragraphs 51, 52, 53 and 54 of my 14 February 2023 reasons for judgment. In its current form, in paragraph 7 of Mr N’s 5 April 2023 affidavit he purports to having given advice to the second and third respondents to set up a family trust “for [Ms C Leventis] and [Mr B Leventis]” so as to hold money derived from the compulsory acquisition of their land in Suburb F and that the second and third respondents accepted that advice.
To the extent that paragraph 7 of Mr N’s 5 April 2023 affidavit is limited to the proposition that Mr N advised the second and third respondents to establish a family trust to hold the payment they received from the compulsory acquisition of 2 D Street, Suburb F, then paragraph 7 remains objectionable on the basis that the manner in which the trust operated fell to be construed in accordance with the provisions of the deed, not based on the information Mr N gave his clients.
Paragraph 8 of Mr N’s affidavit made 5 April 2023 corresponded with the third sentence and following of paragraph 13 of Mr N’s unsworn evidence document that I addressed in paragraph 53 of my 14 February 2023 reasons. In essence, in paragraph 8 of Mr N’s affidavit he persists in his contention about the way the Leventis Family Trust operated. In paragraph 53 of my earlier reasons I held that it was not permissible for Mr N to purport to give that evidence because the manner in which the Leventis Family Trust operated was a matter of construction of the trust instrument itself. Those observations continue to apply. Accordingly, in respect of paragraph 8 of Mr N’s affidavit made 5 April 2023, his statement of the way the Leventis Family Trust operates is inadmissible.
Paragraph 14 of the document styled “[Mr N’s] unsworn evidence” corresponded to the first sentence of paragraph 9 of Mr N’s 5 April 2023 affidavit, except that the word “any” appeared in paragraph 9 whereas the word “an” appeared in paragraph 14. In paragraph 55 of my 14 February 2023 reasons I held that paragraph 14 of Mr N’s unsworn evidence was inadmissible by reason of it having no probative value. I remain of that view.
As to the balance of paragraph 9 of Mr N’s 5 April 2023 affidavit, Mr N purported to depose to discussions in mid-2010 with Ms C Leventis, Mr B Leventis and Mr Leventis that Mr Leventis would “assist [Ms C Leventis] and [Mr B Leventis] in the administrative management of their funds in the capacity as trustee of the family trust” (sic). That concept was picked up in part in paragraph 15 of Mr N’s unsworn affidavit. The point of differentiation between the information in paragraph 15 of the unworn evidence document and paragraph 9 of Mr N’s 5 April 2023 affidavit lay in the deletion in paragraph 9 of phrases that appeared in paragraph 15 of the unsworn affidavit such as “I was aware that”, “I did not think they”, “I formed the view that” and “I know of” various matters. Instead, in paragraph 9 of Mr N’s 5 April 2023 affidavit Mr N stated that “there was discussion that [Mr Leventis] as their eldest and best educated son, would continue to assist [Ms C Leventis] and [Mr B Leventis] in the administrative management of their funds in the capacity as the trustee of the family trust”.
Several points emerge from the second sentence of paragraph 9. First, whether the discussions unfolded in the manner asserted by Mr N or not is largely beside the point. The relevant issue is what the trust deed provided for in respect of management of trust property. Second, fraud is not alleged in this case. Third, as paragraph 9 is concerned with events anterior to the day‑to‑day conduct of the trust, the discussions about management of funds and how Mr Leventis was to assist Ms C Leventis prospectively is irrelevant. In those circumstances, the whole of paragraph 9 is irrelevant.
Paragraph 10 of Mr N’s 5 April 2023 affidavit corresponded largely with paragraph 15 of the document styled “unsworn evidence of [Mr N]”. While the wording of paragraph 10 of Mr N’s affidavit was tightened so as to convey the notion that Mr N took the view that Ms C Leventis and Mr B Leventis’s ill-health and unfamiliarity with technology hampered their ability to handle the tasks of a trustee, the unmistakable point of paragraph 10 of Mr N’s 5 April 2023 affidavit is that he (Mr N) took the view that Mr Leventis should be trustee of the Leventis Family Trust by reason of his computer skills, financial literacy and higher education.
To my mind, the relevant issue is the person named in the trust instrument as trustee. Why he or she was so appointed is neither here nor there. Paragraph 10 is irrelevant and therefore inadmissible.
Paragraph 11 of Mr N’s 5 April 2023 affidavit was largely consistent with, although not identical to, paragraph 16 of Mr N’s unsworn evidence document. Certain details from paragraph 16 were improved by greater precision. Yet the theme of paragraph 16 of the unsworn document was preserved in paragraph 11 of Mr N’s 5 April 2023 affidavit, namely, that Mr Leventis would be the trustee. In paragraph 57 of my 14 February 2023 reasons I held that the whole of paragraph 16 of Mr N’s unsworn evidence document was inadmissible for the simple reason that information about antecedent discussions leading to the entries on the trust instrument were taken to be subsumed by the entries on the trust instrument themselves. I adhere to that view. Why the trust was so named by the settlor is irrelevant as the key issue was the name on the trust instrument, in like manner that the reason why a particular provision appeared was unimportant – the fact the provision read as it did was the important issue. Paragraph 11 of Mr N’s 5 April 2023 affidavit is replete with information from Mr N about why the Leventis Family Trust was established. That is inadmissible, as was held in Byrnes v Kendle.[14] Consonant with those observations, paragraph 11 of Mr N’s 5 April 2023 affidavit is inadmissible.
[14] (2011) 243 CLR 253.
Paragraph 12 of Mr N’s 5 April 2023 affidavit is largely correspondent with paragraph 17 of the styled “unsworn evidence of [Mr N]”, the subject of paragraph 59 of my 14 February 2023 judgment, pursuant to which I ruled that paragraph 17 of the unsworn document was inadmissible. Paragraph 12 of Mr N’s 5 April 2023 affidavit preserved the key information from paragraph 17, namely, Mr N instructed a third party to prepare a deed of trust and that the purpose of the deed was to a particular effect. In paragraph 58 of my 14 February 2023 reasons I held that the critical factor was the settled trust instrument itself. Accordingly, whose idea it was to name the trust in a particular way was irrelevant as was it irrelevant to know Mr N’s view of the purpose of the trust because the relevant issue was the proper construction of the provisions of the deed itself. I adhere to those views in relation to paragraph 12 of Mr N’s 5 April 2023 affidavit. I accept that Mr N’s evidence that he procured the relevant trust deed to be obtained from a particular third party solicitor is part of the chronological sequence of evidence in this case. However, Mr N’s instructions to that third party solicitor cannot be admissible on the manner in which the trust operates because that fell to be determined on the proper construction of the deed itself. No useful purpose is served in allowing paragraph 12 of Mr N’s affidavit into evidence. Accordingly I remain of the view that despite the tweaking to paragraph 17 of Mr N’s unsworn evidence document so as to become paragraph 12 of Mr N’s 5 April 2023 affidavit, the content of paragraph 12 remains objectionable rendering that paragraph inadmissible.
Paragraph 13 of Mr N’s affidavit made 5 April 2023 had its genesis in paragraph 18 of the document styled “unsworn evidence of [Mr N]”, although certain additions to paragraph 18 were made in paragraph 13. In paragraph 59 of my 14 February 2023 reasons I held that the whole of paragraph 18 was inadmissible because the reason why Mr N as settlor named Mr Leventis as the designated beneficiary was irrelevant – the fact was, Mr Leventis was so named and that was the important issue. In my view, paragraph 13 of Mr N’s 5 April 2023 affidavit perpetuated the vice revealed in paragraph 18 of the unsworn evidence documents. Paragraph 13 is inadmissible.
In paragraph 14 of his 5 April 2023 affidavit Mr N stated that he included Mr Leventis as the appointor in the schedule of the Leventis Family Trust where Ms C Leventis and/or Mr B Leventis should have been the appointors. That provision was identical to paragraph 19 of the document entitled “unsworn evidence of [Mr N]”, the subject of paragraph 60 of my 14 February 2023 reasons. There I held that the deed speaks for itself. Importantly, no claim for rectification of the trust instrument is made in this case. Mr N’s statement that Ms C Leventis and/or Mr B Leventis should have been the appointors is contrary to the information in the schedule to the trust deed. I consider that paragraph 14 of Mr N’s 5 April 2023 affidavit is inadmissible.
Paragraph 15 of Mr N’s 5 April 2023 affidavit deposed to a meeting he had with Mr Leventis on 1 February 2011 (12 years ago). In that paragraph Mr N purported to record that he explained to Mr Leventis the meaning and role of the appointor, of a trustee and of a designated beneficiary. He did not say in that paragraph what he actually told Mr Leventis. However, in the final sentence of that paragraph Mr N did state that he provided Mr Leventis with an explanation of the manner in which “the family trust would work, consistent with our previous discussions set out above”. Mr N did not state in paragraph 15 the words he used when explaining the way the family trust would work. Nor did he identify to which “previous discussion” he was referring when asserting that his discussions about the manner in which the family trust would work was consistent. The information in paragraph 15 of Mr N’s 5 April 2023 affidavit was largely consistent with the information in paragraph 20 of Mr N’s unsworn evidence document. Of paragraph 20 of Mr N’s unsworn evidence document I held in paragraph 61 of my 14 February 2023 reasons that paragraph 20 of Mr N’s unsworn evidence document was inadmissible because the trust deed speaks for itself. It follows that Mr N’s interpretation of the deed is not evidence (for that matter his interpretation may be erroneous compared to the proper construction of the deed). But one major vice in respect of paragraph 15 was its failure by Mr N to record what he actually told Mr Leventis. I remain of the view that his evidence of what he told Mr Leventis is inadmissible. The deed speaks for itself.
Paragraph 16 of Mr N’s 5 April 2023 affidavit replicated the substance of paragraph 21 of his unsworn evidence document, although paragraph 16 was more expansive. In paragraph 16 of Mr N’s affidavit made 5 April 2023 he deposed to a conversation with Mr Leventis in which Mr Leventis expressed his concern about being the appointor and beneficiary under the Leventis Family Trust. Mr N stated what his response was to Mr Leventis upon Mr Leventis expressing to Mr N his concerns. In my reasons dated 14 February 2023 I recorded that Mr Leventis’s state of concern with the deed was irrelevant because the deed was executed and that no claim for rectification was made in the case nor was a claim of non est factum made. Those comments remain valid. Paragraph 16 of Mr N’s 5 April 2023 affidavit is irrelevant.
Paragraph 17 of Mr N’s 5 April 2023 affidavit largely corresponded with paragraph 23 of his unsworn evidence document. In that paragraph Mr N recorded that Mr Leventis informed him that he (Mr Leventis) wanted changes made to the trust deed before he would execute it. Mr N deposed to his telling Mr Leventis that the changes Mr Leventis wanted to make could be made after the deed was signed. In paragraph 18 of his affidavit Mr N said Mr Leventis accepted Mr N’s explanation then executed the trust deed.
Why Mr Leventis signed the trust deed is irrelevant in circumstances where no claim of duress, misleading and deceptive conduct, non est factum or rectification is being advanced. I am unable to see how it could be said that Mr N’s evidence of what he said to Mr Leventis as somehow explaining why Mr Leventis signed the deed is admissible where no claim in respect of false inducement is made. To my way of thinking both paragraphs 17 and 18 of Mr N’s 5 April 2023 affidavit are inadmissible. The deed was signed. It speaks for itself.
In my reasons dated 14 February 2023 I made various observations about the applicability of principles about the admissibility of evidence on the basis that it goes to the matrix of fact of which the High Court spoke in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales.[15] No serious attempt was made by counsel for the second and third respondents to rely on the concept of the matrix of fact so as to enliven the admissibility of Mr N’s evidence of his conversations with Mr Leventis that purport to address issues otherwise covered by the written deed of trust.
[15] (1982) 149 CLR 337.
The Leventis Family Trust as executed on 1 February 2011 was exhibited by Mr N as exhibit “MN1” to Mr N’s 5 April 2023 affidavit.
In paragraph 19 and 20 of that affidavit Mr N deposed to his attending Ms C Leventis and Mr B Leventis’s home on a date after 1 February 2011 but prior to 9 February 2011, which date he estimated to be 6 February 2011. Mr N said Mr Leventis, Mr B Leventis and Ms C Leventis were present at that meeting. Mr N said that Mr Leventis produced a letter he prepared resigning as appointor. Mr N exhibited that letter. He also exhibited a letter prepared by Mr Leventis pursuant to which Mr B Leventis accepted the role as appointor. Mr N also produced a resolution prepared by Mr Leventis along with another document being a resolution changing the designated beneficiaries from Mr Leventis to Ms C Leventis and Mr B Leventis. Mr N purported to exhibit those documents as exhibit “MN2”. In fact, only three of the documents were exhibited. Those documents are exhibited elsewhere in the evidence in this case. No useful purpose was served duplicating the production of them as exhibits through Mr N.
In paragraph 27 of Mr N’s unsworn evidence document he stated that at the meeting held on 6 February 2011 or thereabouts, there was no discussion about Mr Leventis or Ms Leventis having any interest in the Leventis Family Trust, other than Mr Leventis having a role as trustee. I held in paragraph 69 of my 14 February 2023 reasons that paragraph 27 of Mr N’s unsworn evidence document (corresponding to paragraph 21 of his 5 April affidavit) was irrelevant. I remain of that opinion.
Mr N’s unsworn evidence stopped at paragraph 27. In his affidavit made 5 April 2023, Mr N deposed to matters between paragraphs 22 and 46 inclusive.
In paragraph 22 of his affidavit made 5 April 2023 Mr N deposed to preparing what he called “the financials” for the Leventis Family Trust and that he liaised with Mr Leventis in the performance of that task after which Mr Leventis executed them as trustee. Mr N gave no details of the years over which he prepared “the financials” nor did he say what documents answered the description of “the financials”, although he did speak of draft accounts and financial statements. The absence of precision of the years involved diminished the probative value of his evidence on point. Having regard to other evidence that Mr Leventis resigned as trustee soon after the trust deed was executed, it is unlikely that Mr Leventis was involved for very long at all doing the things to which Mr N deposed in paragraph 22 of Mr N’s 5 April 2023 affidavit. Having said that, paragraph 22 of Mr N’s 5 April 2023 affidavit is admissible. One can only wonder the fact in issue it addresses, however.
Paragraph 23 of Mr N’s affidavit fitted into a similar category. It is not easy to see what probative value lay in Mr N’s evidence that signed tax returns were lodged with the ATO whereas financial statements were not. Having regard to the bulk of Mr N’s affidavit being ruled inadmissible, it is difficult to see the utility in Mr N persevering in an affidavit that addressed an issue so peripheral as the nature of the documents that were lodged with the ATO.
In paragraph 24 of his affidavit Mr N stated that he prepared tax returns for Mr Leventis and Ms Leventis. No fact in issue in this case existed about Mr N preparing tax returns for Mr Leventis and for Ms Leventis. I am unable to see the relevance of paragraph 24. Unless relevant, paragraph 24 is prima facie inadmissible.
Paragraph 25 of Mr N’s 5 April 2023 affidavit addressed Ms C Leventis’s and Mr B Leventis’s status as landowners who were not amenable to lodging personal tax returns from 2011. The information imparted by Mr N in the second sentence of paragraph 25 was highly imprecise. The significance of paragraph 25 was not explained by Mr Wilson KC. Mr N did not identify the manner in which Ms C Leventis and Mr B Leventis were at all times the beneficial owners of the land and buildings nor which parcels of land or the buildings were concerned. It was none too easy to divine the relevance of paragraph 25 of Mr N’s affidavit.
In paragraph 26 of his affidavit Mr N stated that he did not discuss the financial management of the Leventis Family Trust with the applicant, Ms Leventis, and that she did not raise with him or Mr Leventis any suggestion that she or Mr Leventis had any interest in that trust. Mr Wilson KC submitted[16] that such evidence on point as was given by Mr N was to be contrasted with the applicant’s statement that Mr Leventis, Mr Leventis’s parents and she set up the Leventis Family Trust. It seemed to me (although Mr Wilson KC did not submit, in terms, to that effect) that Mr N’s evidence in paragraph 26 of his 5 April 2023 went directly to a credit challenge of the applicant. In other words, the applicant asserted an involvement in setting up[17] the Leventis Family Trust whereas Mr N put a different complexion on events, especially in relation to the second sentence of paragraph 26. I accept that it is and should be permissible for the second and third respondents to be able to challenge the applicant on that issue. Precisely how far that challenge may go then remains to be seen. However, I will not interfere with a legitimate challenge to the veracity of the applicant on the issue there raised.
[16] Transcript 12 April 2023 T 15 L 18 – 20.
[17] It must be recognised that the acts said to constitute “setting up” the trust may be a matter of subjective assertion.
In paragraph 27 of his affidavit Mr N deposed to distributions to various beneficiaries and that he determined how best to minimise the imposition of income tax. That did not seem to be a disputed fact. The information in that paragraph was generic as no dates nor amounts were given in evidence by Mr N. The utility of that paragraph seemed peripheral. That said, the evidence is not inadmissible. Similarly, the information in paragraph 28 was very general and imprecise. The relevant epoch over which those events occurred were likely short because Mr Leventis was trustee for a short period. While general and imprecise, the information in paragraph 28 was not inadmissible.
Paragraph 29 and 30 of Mr N’s affidavit refers to a joint statement of experts. In paragraph 30 Mr N states that “insofar as some of the matter therein[18] are within my knowledge, I refer to the same as set out hereinafter”. That statement makes no sense. Mr N did not state what aspect of the joint statement he had read and what portion of the joint statement was in fact within his knowledge. Unless and until he identified those two issues the information in paragraphs 29 and 30 was largely meaningless and if meaningless it was bereft of probative value hence inadmissible.
[18] That is to say, in the joint statement of experts.
In paragraphs 31, 32 and 33 of his 5 April 2023 affidavit Mr N purported to depose to unknown deposits aggregating $785,848. In essence, he deposed to the following –
(a)from time to time the Leventis Family Trust held many deposits and upon maturity of those deposits the proceeds of those deposits were paid into one of the three accounts maintained by the trust, being bank accounts ending 0939, 0454 and 0680;
(b)no source hard copy material existed to show the maturity of term deposits whereas electronic versions of that material was kept;
(c)funds paid into the trust bank account ending 0939 were sourced from the maturity of term deposits; and
(d)a loan made by the trust to one Mr V was repaid into account 0680.
Dr Kelly on behalf of the applicant protested about Mr N being permitted to introduce the evidence Mr N purports to introduce between paragraphs 29 to 45 of Mr N’s 5 April 2023 affidavit. Dr Kelly submitted that the second and third respondents had enjoyed several opportunities prior to the commencement of the trial for Mr N to put before the court his version of the evidence he wished to give. Dr Kelly submitted that according to case management principles as espoused in Aon Risk Services Australia Ltd v Australian National University,[19] had the evidence Mr N now wishes to adduce assumed the significance now asserted, the need to put that evidence before the court before now must have been obvious to the legal representatives of the second and third respondents. Dr Kelly relied on my observations in paragraphs 27 to 30 of the 14 February 2023 reasons in this case.
[19] (2009) 239 CLR 175.
To my mind Dr Kelly is correct in his contentions about the application of Aon to Mr N’s latest attempt to adduce evidence unsatisfactorily late. Not only does Mr N purport to rely afresh on a large swathe of evidence already ruled inadmissible, but no meaningful explanation was given about why the information in paragraphs 29 to 45 was not given earlier. In my view –
(a)no sufficient explanation was given for the inclusion in Mr N’s 5 April 2023 affidavit of the material in paragraphs 29 to 45;
(b)if that information emerged so readily following a conference between the legal representative of the second and third respondents and Mr N following my 14 February 2023 ruling, it beggars belief that the same information was not available when Mr N’s document emerged styled “unsworn evidence of [Mr N]”;
(c)it is no answer for the second and third respondents’ late adduction of that evidence to suggest that the evidence should be admitted on the basis that sufficient time exists between now and the resumption of the trial for the applicant to cope with the late introduction of Mr N’s evidence;
(d)to permit the affidavit of Mr N made 5 April 2023 to be adduced would be antithetical to the overarching purpose of rule 1.04 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021;
(e)Mr N has not explained why he could not have earlier brought to the attention of the applicant the contents of paragraphs 29 to 45 of the 5 April 2023 affidavit;
(f)the trial is now underway;
(g)if the N Affidavit of 5 April 2023 were admitted the resumption of the trial would almost certainly be torpedoed; and
(h)no guarantee exists that I could resume the trial by the end of the 2023 calendar year if the 8 May 2023 resumption date were prejudiced.
In my view, it would orchestrate a very considerable prejudice to the applicant if Mr N’s 5 April 2023 affidavit were allowed to go into evidence, except insofar as I have earlier explained.
MR J’S AFFIDAVIT
The second and third respondents sought leave to rely on an affidavit of Mr J made 2 March 2023 to which Mr J exhibited an amended report correcting what she said were obvious amendments. The precise terms of the amended report were in the form of exhibit MW2 to the affidavit of Ms W made 10 April 2023. Dr Kelly did not oppose[20] the grant of leave for the second and third respondents to file and serve the amended report of Mr J being exhibit MW2 to the affidavit of Ms W made 10 April 2023.
[20] Transcript 12 April 2023 T 7 L 19.
Accordingly, leave in those terms is granted.
While not a component of their application in a case, a large amount of the time devoted to the urgent application on 12 April 2023 related to an application made seemingly ore tenus for orders consequent upon the evidence of the expert Mr K not being relied on by the applicant. Mr K had prepared a report in the nature of a single expert report yet the applicant, on advice, elected not to rely on it. In debate on 12 April 2023 I was informed that the K Report had not become part of the court book nor had the joint instruction given to him. The K Report was in fact part of the documentation in the court book. On behalf of the second and third respondents, Mr Wilson KC submitted that I should make an order removing the K Report from the court file and that I should forbid any cross-examination of the expert on which the second and third respondents rely where such cross-examination is based in any shape or form on the information in the K Report. So far as the source of my power to make the orders sought concerning the K Report, Mr Wilson KC did not take me to any authority on point yet Mr Panayi addressed on the issue submitting that the relevant source of power was reposed in rule 8.19 and rule 8.20 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. On behalf of the applicant, Dr Kelly opposed the ore tenus application made by Mr Wilson, contending that no prior notice had been given of the application and the issue was not raised during the conference ordered pursuant to paragraph 1 of the consent orders made on 14 February 2023. Dr Kelly further submitted that no basis existed for such prescriptive orders.
To better understand the nature of the application to limit the use to which the K Report may be put it is necessary to put the K Report in context. The first observation to be made is that the K Report was a report of an expert appointed as a joint single expert. A large body of learning exists in the family law jurisdiction about single expert evidence, especially the history of the relevant rules which arose from procedural amendments orchestrated in the United Kingdom, a matter I surveyed in Keevers & Keevers.[21] One of the reasons for amending the Family Law Rules (as they then were) related to the desirability of reducing the number of experts giving evidence in a case. That was achieved by requiring the parties to select a single expect on whose evidence each would rely. The rules made provision for the parties to put questions to the single expert once her or his report had been provided so as to clarify the evidence the single expert was proposing to give.
[21] [2021] FedCFamC1F 338.
In this case two experts were to be called, at least that was the state of affairs as at 14 February 2023 when consent orders were made relating to the evidence of Mr K and Mr J. On that date a discussion emerged about the possibility of a hot tub of experts being conducted of the sort I canvassed in Willans & Enmore (No 2)[22] and, as a necessary precursor to any such hot tub being conducted I required the experts Mr K and Mr J to confer with a view to agreeing or disagreeing on a list of issues, giving reasons for any such disagreement.
[22] [2021] FamCA 340.
The experts were ordered to confer by 4:00pm on 11 April 2023, that is to say, the day before I heard the urgent application brought by the second and third respondents. Whether the experts actually conferred, as ordered by consent on 14 February 2023, was not stated by counsel on 12 April 2023.
Dr Kelly was correct when he submitted that no basis had been advanced by the second and third respondents for such prescriptive orders as those they sought. Mr Wilson KC did not take me to any authority on point.
In debate on point with Mr Wilson, some endeavour was made to focus on the practical implication of the order he sought about the use to be put of information in Mr K’s report. Mr Wilson sought an absolute prohibition in the wife’s counsels’ cross-examination of the expert for the second and third respondent on the use of information in the K Report. Mr Wilson somewhat theatrically asserted that to do otherwise, in circumstances where the wife had stated she will not rely on the K Report, was a fundamental denial of natural justice, as he put it.[23] I do not share Mr Wilson’s enthusiasms for his proposition. It seems to me that the issue must be examined in discrete segments.
[23] The phrase “procedural fairness” has replaced the phrase “natural justice” since the High Court’s decision in Kioa v West (1985) 159 CLR 550.
Ordinarily, the affidavit of a deponent who does not subject herself or himself to cross-examination should not be received in evidence. I examined the issue in Goodridge v Beadle,[24] citing authorities of considerable veneration such as The Parisian[25] and Dunne v English.[26] There, I held as follows –
176.A strong line of authority has held that the inability to cross-examine a deponent is a matter going to weight, not admissibility. In that camp are cases such as GPI Leisure Group Ltd v Herdsman Investments Pty Ltd (No 3)[27] and Curley v Duff.[28] But a different body of equally strong authority of considerable antiquity has held an affidavit is unlikely to be allowed where the deponent has absconded, is overseas or is temporarily ill. In that camp are The Parisian[29] and Dunne v English[30] (“Dunne”). A very useful discussion on point is to be found in the textbook by John Levingstone, The Law of Affidavits.[31] Similarly, in the decision of the Full Court of the Family Court of Australia in In the marriage of Chang & Su[32] (“Chang”) the court held that no error was made by the trial judge in that case excluding affidavit evidence where the deponent was not available for cross-examination. The Court relied on order 16 rule 10 of the Family Law Rules 2004 (Cth) for that result.
[24] (2017) 57 Fam LR 425.
[25] (1887) 13 PD 16.
[26] (1874) LR 18 Eq 524.
[27] (1990) 20 NSWLR 15.
[28] (1985) 2 NSWLR 716, 718.
[29] (1887) 13 PD 16.
[30] (1874) LR 18 Eq 524.
[31] (2013) Federation Press, chapter 18 (entitled “Attendance by deponent”).
[32] (2002) 29 Fam LR 406.
Authorities exist in the family law jurisdiction to the effect an affidavit of a deponent who does not subject herself or himself to cross-examination may nevertheless be received in evidence yet the weight to be attached to such an affidavit where the deponent does not subject himself or herself to cross-examination is a matter for the judge.
Rule 8.19 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 makes provision for a deponent’s affidavit to be received without the need for a deponent to attend for cross-examination.
But that is not the situation here. In this instance, the second and third respondents want orders not only removing the K Report from the court file but also orders concerning the use that may be put of information in the report of Mr K.
I do not agree that the issue is one of procedural fairness. Nor do I accept that by reason of a decision having been made to not use the K Report an absolute and unqualified embargo thereafter inures about the use that can be made of any information in Mr K’s report. Had Mr K given evidence, for example, about the application of accounting standards, it would be absurd to suggest that the cross-examiner of Mr J could not ask questions about the relevant accounting standard. Similarly, where expert evidence from either camp has proceeded on agreed facts, it would be equally absurd to suggest that those agreed facts would not be the subject of cross-examination merely because the agreed fact appeared in Mr K’s report.
That said, I accept that it would not be proper for cross-examination on behalf of the wife of Mr J to proceed on the basis that Mr K had given evidence of a particular matter for the simple reason that he is not now giving evidence. Where, for example, Mr K had theorised that a particular number was to be attributed to a particular issue which stood in contrast to a figure on the same issue as was given by Mr J it would also not be proper for the cross-examiner of Mr J to put Mr K’s figure and formula for arriving at that figure in circumstances where Mr K’s report will not now go into evidence.
In my view the cross-examination of Mr J must be assessed on a question-by-question basis. Only when the precise question is put will it be known whether and if so the extent to which the question is premised on any act, fact, matter or thing in Mr K’s report. Suffice it to say that at this stage –
(a)I do not regard it as necessary or appropriate to impose prohibition on the use of any form of questioning based on Mr K’s report; and
(b)it is not a matter of the applicant “having her cake and eating it” (to adopt the colourful words of Mr Wilson KC) by refusing to apply any such absolute prohibition on the use of any aspect of the K Report.
The trial will resume on 8 May 2023.
I certify that the preceding seventy-four numbered paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson. Associate:
Dated: 19 April 2023
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