LGM v CAM
[2008] FamCA 185
•20 March 2008
FAMILY COURT OF AUSTRALIA
| LGM & CAM AND ORS | [2008] FamCA 185 |
| FAMILY LAW – EVIDENCE |
| Evidence Act 1995 (Cth) |
| GPI Leisure Corp Ltd v Herdsman Investments Pty Ltd (No 3) (1990) 20 NSWLR 15 |
| APPLICANT: | (Mr) CAM |
| RESPONDENT: | (Ms) LGM |
| SECOND RESPONDENT: | (Mrs) LY |
| THIRD RESPONDENT: | (Mr) MY |
| FOURTH RESPONDENT: | (Ms) SY |
| FIFTH RESPONDENT: | K Inc |
| SIXTH RESPONDENT: | Company Z (In Liquidation) |
| FILE NUMBER: | SYF | 3359 | of | 1997 |
| DATE DELIVERED: | 20 March 2008 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | O'Ryan J |
| HEARING DATE: | 12 March 2008 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Bedrossian of counsel |
| SOLICITOR FOR THE APPLICANT: | Etherington's Solicitors |
| RESPONDENT: | Wife in person (via video-link) |
| FOURTH RESPONDENT: | SY in person |
| COUNSEL FOR FIFTH RESPONDENT: | Mr Kintominos of counsel |
| SOLICITOR FOR FIFTH RESPONDENT: | J R Gibb & Co |
| COUNSEL FOR SIXTH RESPONDENT: | Mr Cohen of counsel |
| SOLICITOR FOR SIXTH RESPONDENT: | Deacons |
Orders
The Fifth Respondent, K Inc, not be permitted to cross examine any of the First to Fourth Respondents inclusive, being the Wife, Mrs LY and Mr MY and Ms SY.
IT IS NOTED that publication of this judgment under the pseudonym LGM & CAM & Ors is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYF 3359 of 1997
| (Mr) CAM |
Applicant
And
| (Ms) LGM |
Respondent
And
| (Mrs) LY |
Second Respondent
And
| (Mr) MY |
Third Respondent
And
| (Ms) SY |
Fourth Respondent
And
| K Inc |
Fifth Respondent
And
| Company Z (In Liquidation) |
Sixth Respondent
REASONS FOR JUDGMENT
I am currently hearing applications for property settlement pursuant to s 79 of the Family Law Act 1975 (Cth). The proceedings were commenced by an application filed on 4 March 1997 and finally came on for hearing in November 2007. However, there have been numerous proceedings in other courts that have contributed to the delay in the conclusion of the Family Court proceedings.
The Applicant is CAM who I shall refer to as the Husband.
The First Respondent is LGM who I shall refer to as the Wife.
The Second Respondent is Mrs LY who is the Wife’s mother. I shall refer to her as such.
The Third Respondent is Mr MY who is the Wife’s father. I shall refer to him as such.
The Fourth Respondent is Ms SY who is the Wife’s sister. I shall refer to her as such.
The Fifth Respondent is K Incorporated Association which I shall refer to as K Inc.
The Sixth Respondent is Company Z (in liquidation) which was incorporated in March 1985. I shall refer to this company as Z Pty Ltd.
Z Pty Ltd is now in liquidation. The current Liquidator is Mr G of B Chartered Accountants who was appointed on 21 December 2004. The former Liquidator was Mr W of W Chartered Accounts. Mr W was appointed on 7 May 2001 by order made in the Supreme Court of New South Wales. He was removed on 2 December 2004.
The Husband and the Wife are the shareholders of Z Pty Ltd and they each hold one ordinary share being 50 per cent of the issued shares. The Husband and the Wife were also the directors however their powers as directors ceased with the appointment of a liquidator. The Wife was the secretary. Z Pty Ltd carried on an importation and retail sale business.
There are other entities, which although not parties to the current proceedings are relevant to what has happened. One such entity is Company X which was incorporated in Taiwan in June 1976. I shall refer to this company as X Pty Ltd. The current status of X Pty Ltd is not known. However the shareholders are the Wife, the wife’s mother and the wife’s father, the wife’s sister SY and JC. JC is the Wife’s sister. During the marriage X Pty Ltd carried on an export business.
Subsequent to the separation of the Husband and the Wife there were proceedings in the Supreme Court of New South Wales between X Pty Ltd as plaintiff and Z Pty Ltd and the Husband and the Wife as defendants.
The hearing commenced before me on 6 November 2007. It was fixed for four weeks but continued for 23 days to 7 December 2007. I then adjourned the hearing for a further 17 days commencing on 10 March 2008.
The Husband, Z Pty Ltd and K Inc were represented by counsel. The Wife appears without legal representation. The wife’s sister Ms SY also appears without legal representation however, at all times, she has the assistance of a translator. I will later explain the participation of the wife’s father and mother.
CURRENT PROCEEDINGS
On 10 March 2008 Z Pty Ltd gave notice that pursuant to s 26(a) of the Evidence Act 1995 (Cth) it sought that K Inc:
·not be permitted to cross-examine any of the First to Fourth Respondents inclusive;
·be limited to calling any of the First to Fourth Respondents as witnesses in its case in chief against Z Pty Ltd;
·provide to Z Pty Ltd, not less than two days prior to calling any of the First to Fourth Respondents as witnesses in its case in chief against Z Pty Ltd a proof of evidence that is proposed to be led from such persons;
·lead such evidence by affidavit sworn by such persons, unless the Court otherwise orders.
On 11 March 2008 I heard the application and on 12 March 2008 I made an order that K Inc not be permitted to cross-examine any of the First to Fourth Respondents. I was satisfied that it was in the interests of justice to make the order and these are my reasons for doing so.
I had intended to include in my final judgment my reasons for making from time to time various procedural orders during the course of the hearing and I made this clear in discussion. However counsel for K Inc sought that I provide my reasons for making the order identified in the preceding paragraph and thus during the course of the trial I have written this judgment. For this reason I will have to set out some of the history that is relevant to the order I made.
BACKGROUND
There is a very significant amount of relevant background evidence including the history of the litigation in the Family Court, what I call related proceedings in other courts and the participation by K Inc which time does not permit me to include in these reasons but which at some point I will have to deal with. For example I am yet to provide reasons for why during the hearing I made certain procedural orders which included granting indulgences to K Inc.
Between 1997 to date there has been very complex litigation between the Husband and the Wife and X Pty Ltd and/or the wife’s parents and/or the wife’s sister SY and/or the former liquidator of Z Pty Ltd. The Husband contends that his total costs of conducting proceedings in the eleven year period between 1997 and 2008 were about $5.1 million gross.
The significant issue in the case is to determine the extent and value of the net assets of the parties to the marriage. As so often occurs in cases involving the interests of third parties, it is substantially about step one of the preferred approach.
The Husband contends that the Wife has failed to make a full and frank disclosure of her financial circumstances. This is denied by the Wife. It is a complex issue and involves the interests of third parties being persons or entities who are not parties to the marriage. There are issues of credit. There are issues in relation to the adequacy of discovery and the production of documents.
The Husband seeks orders for the distribution to him, by way of final property settlement, of all of the substantive assets that are ultimately held to be assets subject to my jurisdiction pursuant to s 79 of the Family Law Act.
The dispute between the Husband and K Inc and between Z Pty Ltd and K Inc relates to a property, L property in New South Wales.
By transfer dated 24 January 1992 the estate remainder expectant upon the death of Mr L in L property was purchased in the joint names of the Husband and the Wife and the wife’s mother and the wife’s father in equal shares as tenants in common for a price of $360,000 from Mr L. Mr L retained the life estate. There is an issue as to the source of money to pay the purchase price and the costs of purchase.
L property adjoins a property that the Husband and the Wife previously purchased described as L2.
By transfer dated 22 July 1996, the interest held by the Husband and the Wife in L property was transferred into the names of the wife’s father and the wife’s mother for a stated consideration of $175,000. There is an issue as to whether the stated consideration was paid.
On 29 August 1996 Mr L died.
Significant improvements have been made to L property since 1996 and I will have to consider precisely what has happened and the source of funds to pay the costs of improvements. There is an issue as to the source of funds to pay for the improvements.
On about 4 November 1996, the Husband and the Wife finally separated.
Since 4 November 1996, the Husband has had no involvement in the operation of Z Pty Ltd.
On 9 January 1997 Z2 Pty Ltd was registered. The directors were the wife’s father, the wife’s mother and the wife’s sister. The secretary was the wife’s mother. The wife’s mother held two ordinary shares and the wife’s sister held 900,002 ordinary shares. The Husband contends that there was a seamless transition between the operations of Z Pty Ltd and Z2 Pty Ltd.
On 4 March 1997, the Husband commenced proceedings in the Family Court seeking a property settlement. Since March 1997 the matter has been before the court on numerous occasions. At some point I will have to deal with the history of the proceedings both in the Family Court and related proceedings.
On 17 September 1997 X Pty Ltd commenced proceedings in the Common Law Division of the Supreme Court of New South Wales as plaintiff against Z Pty Ltd as first defendant, the Husband as second defendant and the Wife as third defendant. X Pty Ltd sought repayment of around $4.8 million of loans said to have been made between 30 June 1992 and 30 June 1996, plus interest. Both the Husband and the Wife were also joined as defendants on a number of alternative bases, which included negligence and breach of s 232 of the Corporations Law 2000. In November 2001, when the matter was listed for hearing, the claim had been amended to a claim for about $7.6 million plus interest making a total claim in excess of $11 million. The claim was ultimately resolved by Mathews AJ on 14 February 2002.
On 15 October 1997 the applications for property settlement were listed for final hearing for five days commencing on 2 February 1998. In early January 1998 the Wife made an application to vacate the hearing and on 14 January 1998 Maxwell J by consent, vacated the hearing.
On 12 June 1998 the applications for property settlement were then listed for final hearing for five days commencing on 9 November 1998. However, on 9 November 1998 the Wife made an application for an adjournment because of the pending X Pty Ltd proceedings in the Supreme Court. Cohen J found that if the claim by X Pty Ltd was successful then the Husband and the Wife would “each be insolvent”. Orders were made by his Honour adjourning the Family Court property proceedings pending the conclusion of X Pty Ltd proceedings in the Supreme Court.
On 3 May 1999 an application for incorporation of the K Association was lodged with the New South Wales Department of Fair Trading.
In May 1999, K Association was incorporated as an association pursuant to the Associations Incorporation Act 1984 (NSW) (K Inc).
By transfer dated 1 June 1999, the wife’s parents transferred L property to K Inc for nil consideration.
K Inc contends that it is an uncontested fact that title to the L property was at the time of completion of the purchase registered in the names of the Husband, the Wife and the wife’s parents and in those circumstances the provisions for indefeasibility provided for under sections 42 and 43 of the Real Property Act 1900 (NSW) absent fraud being established would confirm title in the registered proprietors. It is contended that this would apply equally to the subsequent transfers by the Husband and the Wife to the parents in 1996 and the final transfer of title to K Inc in June 1999. It is contended that the burden of proof of fraud to upset the indefeasibility provisions is a burden imposed upon Z Pty Ltd.
K Inc contends that the burden of proof of all of the foregoing matters is a burden of proof imposed upon Z Pty Ltd on the balance of probabilities although where allegations of "fraudulent concealment" have been made that burden of proof must be viewed in the context of the Briginshaw v Briginshaw [(1938) 60 CLR 326 at 361-2] test. It is contended that the burden of proof is not a burden upon K Inc, or for that matter the Husband, the Wife or the wife’s parents, unless and until a proper basis has been established to require a response which if not provided would give rise to either an acceptance of allegations or an inference in accordance with the principles of Jones v Dunkel (1959) 101 CLR 298. If such a response is required it is merely because an evidentiary onus has shifted, but not the burden of proof. The onus will always remain upon Z Pty Ltd to prove fraud to the requisite standard in light of the explanation that has been proffered.
The Husband contends that L property was transferred to the wife’s parents in the knowledge that there was a pending matrimonial dispute between the Husband and the Wife.
The Husband contends that the subsequent transfer to K Inc was a manufactured transaction, for the purpose of depriving him of access to that property. He also contends that the transfer to K Inc was part of a larger scheme of behaviour of the Wife, the wife’s sister and the wife’s parents, where they attempted to reduce the matrimonial pool that he would otherwise be entitled to a distribution of in these proceedings.
The Husband contends that there is a close relationship between K Inc and the Wife, the wife’s sister and the wife’s parents based on evidence given by K Inc and or its members in the course of public examinations conducted in the Supreme Court by the Liquidator for Z Pty Ltd.
Z Pty Ltd also seeks orders in relation to L property. In the event that I accepted the contentions of Z Pty Ltd regarding the equitable ownership of the property, then the Husband acknowledged that he is not entitled to any orders in respect of that property.
On 11 February 2008 an affidavit was sworn by Christopher Cruikshank, a solicitor for Z Pty Ltd. Mr Cruikshank said that the central issue between K Inc and Z Pty Ltd is the identity of the person or entity who paid for the L property and the improvements.
As between the Husband and Z Pty Ltd, there is no relief sought by the Husband against Z Pty Ltd. Z Pty Ltd, however, seeks relief both in respect of real property, to which the Husband also seeks orders; and against the Husband directly.
Significant improvements have been made to L property. K Inc contends that it has expended monies on the improvement of the property. There is an issue as to what money was expended and the source of the money. This will involve consideration of the costs of the improvements on the property and the source of money to pay the costs. The Husband and Z Pty Ltd contend that such monies as may have been expended were, in reality, monies from Z Pty Ltd and the wife’s family, which monies were themselves monies of the Husband and the Wife.
There is in evidence a valuation report dated 10 May 2007 of L property. The valuer is of the opinion that the current improved market value is $1,400,000. He is of the opinion that the current unimproved market value is $700,000. He is of the opinion that the unimproved market value as at 22 July 1996 was $400,000 and as at 1 June 1999 was $445,000. On 20 December 2006 I made various orders including for the appointment of a Joint Expert Real Property Valuer and in relation to K Inc I noted that the subject matter of any joint expert report include an assessment of the market rental available for such property during the period of time of its ownership or occupation by K Inc. On 2 February 2007 I noted that subject to agreement as to the payment of costs and expenses, the Husband and K Inc agreed that the single expert referred to in the orders made on 20 December 2006 would undertake a valuation of both the improved and unimproved value of L property.
In March 2001 X Pty Ltd commenced winding up proceedings against Z Pty Ltd in the Supreme Court of New South Wales. On 28 March 2001 X Pty Ltd served on Z Pty Ltd an application to wind up the Company. In May 2001 on the application of X Pty Ltd, orders were made in the Supreme Court for the winding up of X Pty Ltd and the appointment of Mr W as the liquidator.
On 14 May 2001 Mr W, as liquidator of X Pty Ltd, notified the Husband of the winding up order and his appointment as liquidator. The Husband contends that the Wife did nothing to oppose the winding up proceedings.
In July 2001 the proceedings in the Supreme Court between X Pty Ltd and the Husband were listed for final hearing for five days commencing on 5 November 2001.
In August 2001 Einstein J granted leave to the Husband to act on behalf of Z Pty Ltd to apply to set aside the default judgment entered by X Pty Ltd.
It is contended that the official opening of a building on L property occurred in August 2001.
On 7 September 2001 the Husband filed a Notice of Motion in the Supreme Court on behalf of Z Pty Ltd seeking to set aside the default judgment entered by X Pty Ltd and leave to Z Pty Ltd to file a defence and cross claim. On 25 September 2001 Sully J set aside the default judgment against Z Pty Ltd and granted leave to file a defence and cross claim.
On 5 November 2001 the hearing of the claim by X Pty Ltd commenced in the Supreme Court before Mathews AJ. It was fixed for five days but concluded on 26 November 2001 after 15 days.
When the hearing commenced before Mathews AJ, senior counsel for X Pty Ltd submitted that X Pty Ltd supplied goods to Z Pty Ltd and the action was for goods sold and delivered, which after payment was the balance as at 31 December 1996 in the X Pty Ltd accounts receivable ledger, as recording monies owing to it by Z Pty Ltd.
In her judgment of 14 February 2002 Mathews AJ observed that the pleadings had been amended on numerous occasions and that in the most recent further amended Statement of Claim for $7,484,466 this amount was said to be the price of goods supplied by X Pty Ltd to Z Pty Ltd between about 1988 and 1996. The claim was no longer for loans made but for the recovery of unpaid money for goods supplied. The claim against the Husband was based on s 232 of the Corporations Law. The claim against the Wife was based on s 232 of the Corporations Law and a negligence count. The Wife was a principal witness for X Pty Ltd. The cross claim by Z Pty Ltd claimed that Z Pty Ltd overpaid X Pty Ltd by an amount in excess of $1.3m.
The issues raised at the hearing before Mathews AJ were complex and difficult. In essence it was the case of Z Pty Ltd and the Husband that the claim initiated by X Pty Ltd was a fraudulent one, based on fabricated documents.
On 25 January 2002 the liquidator of Z Pty Ltd commenced proceedings in the Supreme Court seeking a transfer of a number of items of real property and other assets in the name of Z Pty Ltd.
On 14 February 2002 Mathews AJ delivered judgment in the X Pty Ltd proceedings. Her Honour dismissed the claim by X Pty Ltd and dismissed the cross claim by Z Pty Ltd. Her Honour dismissed the claim by X Pty Ltd because she decided that she could not accept the evidence of the Wife and the wife’s sister SY and their sister JC, and that the financial records of both X Pty Ltd and Z Pty Ltd were unreliable. Her Honour made a finding that the Wife admitted falsifying the records of Z Pty Ltd so as to conceal the misapplication of company funds. Further, that the Wife and her sisters falsified the records of X Pty Ltd so as to support a false claim against Z Pty Ltd. Her Honour also said that the motive for doing this was easy to find and it was that had the judgment not been set aside then recourse would have been made against the Husband and the Wife and if successful, the properties the subject of the property dispute in the Family Court would have been sold to meet the judgment of X Pty Ltd. As to the cross claim it was dismissed essentially because her Honour was not persuaded that the attempt by the Husband to re-create the accounts between Z Pty Ltd and X Pty Ltd was accurate or complete.
On 5 March 2002 Mr W swore an affidavit to which was attached a copy of his report dated 4 March 2002 into the affairs of Z Pty Ltd. He also swore an affidavit on 10 April 2002. Mr W was of the view, based on his investigations, that between about 1989 and 1997 the Husband and the Wife applied funds of Z Pty Ltd in the sum of $4,294,776 for their personal use. In his opinion the funds “are monies properly belonging to [Z Pty Ltd]”.
On 22 March 2002 Judicial Registrar Loughnan made the following orders:
2.That, until further or other order of this Court, [the wife’s father], [the wife’s mother] and [K Inc] be immediately restrained from, by themselves, himself, herself, or itself, or by any servant or agent of theirs, selling, charging, mortgaging, or otherwise dealing with or disposing of, or causing or permitting to be sold, charged, mortgaged or otherwise dealt with or disposed of, the real property in folio identifier […] in the State of New South Wales otherwise known as [L property] in the State of New South Wales.
3.That, until further or other order of this Court, [the wife’s father] and [the wife’s mother] be restrained from exercising or using any position held by either or both of them within [K Inc] for the purpose of procuring or otherwise allowing to occur any of the conduct otherwise restrained by Order 2 of these orders.
Thus it was in March 2002 that K Inc became involved in the proceedings in the Family Court.
The wife’s sister SY contends that in March 2002 she resigned as the chairperson of K Inc.
In June 2002 Mathews AJ delivered a judgment in relation to an application for costs in the X Pty Ltd proceedings. The hearing of the costs issues took place over five days. Her Honour made an order that X Pty Ltd and the wife’s sister SY pay the Husband’s costs of the entire proceedings on an indemnity basis being the costs incurred for himself and for his conduct of the proceedings in the name of Z Pty Ltd in respect of the entire proceedings.
On 5 August 2002 Judicial Registrar Johnston made an order that the injunction at paragraph 2 of the orders of 22 March 2002 continue pending further order and further, that the Husband serve on K Inc an application for orders sought against K Inc not later than 29 August 2002 and further, that K Inc produce to the Husband’s solicitors all documents the subject to a notice to produce in a subpoena served in April or May 2002. Subsequently on 3 September 2002 Judicial Registrar Loughnan made an order that the time in which parties were to comply with notices to produce be extended to 14 days from 3 September 2002.
In August 2003 an appeal by the wife’s sister SY against the costs order of Mathews AJ in the Supreme Court proceedings was dismissed by the New South Wales Court of Appeal and an order made that she pay costs of the appeal.
In September 2003 a hearing commenced in the Supreme Court before Campbell J of a claim by the liquidator of Z Pty Ltd to certain assets. The liquidator sought to recover 11 parcels of real estate, investments in 12 managed funds, a timeshare and a 41 foot boat. The hearing concluded on 16 September 2003 and judgment was delivered in November 2003. In November 2003 orders were made in the Supreme Court by Campbell J to reflect his reasons for judgment. The liquidator was successful.
On 2 December 2004 in the Supreme Court an order was made by Gzell J removing Mr W as the liquidator of Z Pty Ltd. The Husband sought the removal of Mr W as liquidator of Z Pty Ltd. On 16 December 2004, Mr W was removed as liquidator of Z Pty Ltd and Mr G of B Chartered Accountants was appointed as liquidator of Z Pty Ltd. On 4 September 2006 Mr M of B Chartered Accountants was appointed as liquidator of Z Pty Ltd to fill the vacancy upon Mr G’s retirement from practice and resignation from the office of Liquidator.
On 3 August 2005 an order was made assigning the proceedings in the Family Court to what is described for case management purposes as the complex cases list. The proceedings came before me in September 2005 for case management purposes and thereafter were before me on numerous occasions. For example I made orders on 9 and 23 September 2005, 21 October 2005, 22 November 2005, 3 March 2006, 7, 16 and 30 June 2006, 28 July 2006, 22 September 2006 and 13 October 2006, 24 November 2006, 20 December 2006, 2 February 2006, 8, 22 and 29 March 2007, 17 April 2007, 3 May 2007, 10, 20 and 24 August 2007, 28 September 2007 and 19 and 26 October 2007 and 2 November 2007. I will set out at a later time what has happened before me.
On 20 October 2006 a further amended application was filed on behalf of the Husband. In this amended application the Husband sought orders against, and named as respondents, the wife’s father and the wife’s mother, the wife’s sister SY and K Inc. The Husband sought as part of his entitlement L property.
On 20 November 2006 a response was filed on behalf of K Inc and it sought that the Husband’s application be dismissed. K Inc had been a party to proceedings in this court for some years prior to November 2006. On 5 June 2002 a Notice of Address for Service was filed by Patrick Lim & Associates.
On 5 December 2006 a response to the Husband’s amended application for final orders was filed on behalf of the wife’s sister SY and she sought that the Husband’s application be dismissed. On 15 December 2006 a response to the Husband’s amended application for final orders was filed on behalf of the Wife. On 15 December 2006 a response to the Husband’s amended application for final orders was filed on behalf of the wife’s father. On the same day a response was filed on behalf of the wife’s mother. The Wife and the wife’s parents and the wife’s sister sought that K Inc retain L property.
The matter was before me in December 2006 and on one occasion I noted that although a date for the final hearing of the matter was not yet fixed, the then estimate of the duration of the final hearing was three to four weeks and the timetable set by me was done with a view to fixing a hearing date in the vicinity of October 2007.
On 9 February 2007 the solicitors for the Husband wrote to each of the Wife and the solicitors for the wife’s sister and K Inc. In the letter it was stated that the purpose was to provide “ample notice of the compelling factual circumstances that present in this matter and that ground an application for indemnity costs in the event that the orders sought in relation to the [L] property continue to be opposed”. It was stated that the Husband asserted that L property was purchased with funds of Z Pty Ltd and therefore the property is held on trust for Z Pty Ltd. I am not going to repeat all of what is in the letter however, it was also said that it was understood that K Inc would assert that if the L property is in fact held on trust for Z Pty Ltd then K Inc would seek recompense for the dwelling constructed on the property purportedly using funds of K Inc. It was also requested that K Inc identify the source of all of its funding for any alleged improvements, including, if such funds are said to have been sourced from donations or charitable contributions, the identity of all donors of such funds.
On 22 March 2007 I made various orders including that the hearing of all applications be listed for a period of four weeks by arrangement with my Associate and I noted that it was anticipated that that hearing would not be until November 2007. [Monday 5 November 2007]
On 17 April 2007 a response to an application for final orders was filed on behalf of Z Pty Ltd. The relief sought was pleaded and particulars provided. On 27 April 2007 an amended response to an application for final orders was filed on behalf of Z Pty Ltd.
On 27 April 2007 a reply was filed on behalf of K Inc to the Response of Z Pty Ltd.
I observe that on behalf of K Inc it is contended that to the extent that the claims sought to be maintained by Z Pty Ltd are founded upon a breach of the statutory duties, it is clear that whichever way the matter is considered, namely, firstly, the timing of the commencement of proceedings by the Husband against K Inc in March 2002; or secondly, the commencement of proceedings by Z Pty Ltd against K Inc in relation to the transaction in April 2007, a period of six years has elapsed since the cause of action became available to Z Pty Ltd. As such the time bar provided for under section 1317K of the Corporations Act will have expired and would preclude Z Pty Ltd commencing and maintaining the proceedings. It is also contended that to the extent that the claims for breach of duty are grounded upon the general law entitlement then the provisions of the Limitation Act 1969 (NSW) would apply. Again the timing commenced from the date upon which the relevant cause of action arose namely 16 December 1991 and or January 1992. It is contended that the relevant time bar as provided under the Limitations Act had expired and again would preclude, absent an application by Z Pty Ltd for an extension of that time bar in accordance with relevant statutory provisions (an application which has not, to date, been made or suggested to be available), the continued maintenance of those claims.
On 30 April 2007 a reply was filed on behalf of the wife’s sister SY to the Response of Z Pty Ltd. On 2 May 2007 a response was filed on behalf of the wife’s father to the Response of Z Pty Ltd. On 2 May 2007 a response was filed on behalf of the wife’s mother to the response of Z Pty Ltd. On 3 May 2007 a response was filed on behalf of the Wife to the Response of Z Pty Ltd. Consistent with what the Wife and the wife’s parents and sister had sought in relation to the relief sought by the Husband in relation to L Property, in their response to the claim by Z Pty Ltd they sought that the application be dismissed and that K Inc retain the property.
On 16 May 2007, upon the application of the liquidator of Z Pty Ltd, Summonses for Examination of the examinable affairs of Z Pty Ltd were issued by the Supreme Court of New South Wales, being in the proceeding in which the order of that court was made for Z Pty Ltd to be wound up; and Orders for Production also were issued by that Court. On 13 July 2007, Mr D Durston of counsel, being counsel briefed to appear for K Inc in the proceedings in this Court, until his instructions were withdrawn by K Inc on 5 November 2007, appeared and was instructed by Patrick Lim & Associates, the former solicitors upon the record for K Inc in this Court.
On 14 July 2007 the solicitors for the Husband sent a letter to all parties and advised:
We have on numerous occasions indicated to the respondents, in open court before O’Ryan J (on transcript) and in pleadings and correspondence, the case that our client intends to make in this matter. So that the respondents are under no misunderstanding, and have ample time to prepare their case, we repeat our client’s position as follows.
Thereafter there is set out what is contended for by the Husband.
On 16 August 2007 the Husband swore his affidavit of evidence in chief.
On 24 August 2007 I made the following orders:
1.The First, Second, Third, Fourth, Fifth and Sixth Respondents file and serve all evidence upon which they intend to rely by 4.00 pm on 24 September 2007.
2.It be NOTED that the Husband and the Sixth Respondent will be seeking orders for the filing of evidence in reply.
3.All parties, with the exception of the Fifth Respondent, have leave to serve upon each other by 7 September 2007 a notice to admit facts and the parties upon whom a notice to admit has been served are to provide a response in accordance with the Family Law Rules to such notice by 4.00 pm on 24 September 2007.
On 20 September 2007 Z Pty Ltd served a notice pursuant to s 97 and s 98 of the Evidence Act and clause 6 of the Evidence Regulations (Cth).
On 27 September 2007 the Wife swore her affidavit of evidence.
On 28 September 2007 I made various orders including the following:
…
4.The Fifth Respondent provide to each of the parties by 4.00 pm on 5 October 2007 a proof of evidence of the two witnesses currently overseas.
5.The Fifth Respondent file and serve by 4.00 pm on 5 October 2007 an affidavit setting out the evidence in chief of each member of the Committee “of [K Inc]”.
6.It be NOTED that the Fifth Respondent may seek to call evidence from some members of the Association in relation to the issue of “the genuiness” of [K Inc].
7.It be NOTED that the Sixth Respondent proposes to file and serve as soon as practicable an affidavit of the former liquidator Mr [W] and as well provide a copy of any outstanding transcript of the public examination conducted in accordance with provisions of the Corporations Act.
…
11.The Sixth Respondent file and serve by 4.00 pm on 28 September 2007 an amended response.
…
13.It be NOTED that the Sixth Respondent will by 4.00 pm on 28 September 2007 provide to all parties a notice pursuant to sections 97 and 98 of the Evidence Act.
…
IT IS FURTHER ORDERED (IN CHAMBERS):
15.The Sixth Respondent to file and serve its amended response to an application for final orders by 4.00 pm on 28 September 2007.
16.The Applicant and First, Second, Third, Fourth and Fifth Respondents to file and serve his/her or its Points of Defence in response to the Sixth Respondent’s amended response on or before 4.00 pm on Friday, 12 October 2007.
17.The parties, by their respective Points of Defence, shall set out:
17.1 whether they admit, do not admit, or deny each fact alleged by the Sixth Respondent’s amended response;
17.2 as to each fact alleged upon the Sixth Respondent’s amended response which is not admitted or is denied, all Contentious Factual Issues, if any, which they propose to raise at trial;
17.3 all such particulars of Contentious Factual Issues as are necessary to understand the issue which will be advanced at trial;
17.4 all grounds of affirmative defence to the allegations contained within the Sixth Respondent’s amended response, if any, which they contend flow from the Contentious Factual Issues proposed to be raised at trial;
17.5 any alternative final orders or relief for which the party will contend at trial.
18.Sixth Respondent to file and serve its Reply to Points of Defence, if any, on Friday, 19 October 2007 at 9.30 am.
19.All parties to file and serve any Notices to Admit as they may be advised and consequential upon the filing of the respective pleadings required by these directions, on or before 22 October 2007.
20.In respect of the obligation upon parties to file Points of Defence, each such party shall have liberty to apply in respect of such obligation pursuant to the provisions of Rule 11.03 of the Family Law Rules, subject to such liberty being invoked no later than 12.00 midday on Friday, 5 October 2007.
On 29 August 2007 an affidavit was sworn by the wife’s father and the wife’s mother.
On 28 September 2007 Z Pty Ltd filed an amended response to an application for final orders. In this amended response the relief sought was set out. There was also set out the facts relied on and particulars were provided.
On 19 October 2007 I made various orders including granting leave to the Husband, the Wife, the wife’s father, the wife’s mother, the wife’s sister and Z Pty Ltd to rely upon documents produced under Subpoena to Produce in Supreme Court proceedings … of 2005 at the hearing of Family Court proceedings SYF 3359 of 1997 and also to rely upon documents produced under Subpoena to Produce in Supreme Court proceedings … of 2006 at the hearing of Family Court proceedings SYF 3359 of 1997. I also made an order that K Inc file and serve by 4:00 pm on 23 October 2007 any amended points of defence. Further that Z Pty Ltd file and serve by 4:00 pm on 25 October 2007 an outline of argument in relation to the oral application seeking dismissal of the defence by K Inc.
On 26 October 2007 I made various orders including that K Inc file and serve by 2:15 pm on 31 October 2007 a notice objecting to jurisdiction, if any, together with any affidavit material in support of that notice and further, a brief but concise written outline of argument in which the basis of the objection was identified and the reasons in support of why it was contended there was a jurisdictional issue and in so far as there was any constitutional issue arising then the appropriate notice to the Attorney-General be attached to the notice. I also adjourned an application by Z Pty Ltd opposing the filing of points of defence proposed by K Inc to the first day of the hearing. As it transpired an objection to jurisdiction by K Inc was not proceeded with.
Then on 26 October 2007 a response was filed on behalf of the Wife to the amended response filed on 28 September 2007 on behalf of Z Pty Ltd. In the response the Wife sought and stated that the amended response filed on 28 September 2007 by Z Pty Ltd be dismissed. On 26 October 2007 a response was filed on behalf of the wife’s parents to the amended response filed on 28 September 2007 on behalf of Z Pty Ltd. The response repeats what was in the response filed by the Wife. Counsel for Z Pty Ltd has submitted that the responses are substantially similar if not truly identical.
On 29 October 2007 an amended response was filed on behalf of K Inc to the amended response of Z Pty Ltd filed on 28 September 2007.
On 29 October 2007, pursuant to directions I previously made, a Case Outline Document was filed on behalf of K Inc. Included in the document were the objections of K Inc to the evidence of the Husband and Z Pty Ltd and an Outline of Submissions. This document in its entirety was subsequently abandoned.
Between 24 September 2007 and 30 October 2007 there were about 44 affidavits of evidence in chief filed on behalf of K Inc including an affidavit by the wife’s sister.
On 30 October 2007 a case summary document was filed on behalf of Z Pty Ltd pursuant to directions which I previously made. In this case summary document, among other things, particulars were provided of the use of Z Pty Ltd funds to acquire real property and other matters.
On 31 October 2007 the solicitors for Z Pty Ltd sent to the wife’s mother by facsimile transmission a copy of a letter dated 26 October 2007 in which Z Pty Ltd gave notice that on the first day of the hearing it proposed to seek an order that the amended response filed by the wife’s mother be struck out. As well, there was set out, in a succinct and comprehensive way, an outline of the argument of Z Pty Ltd. On 31 October 2007 the solicitors for Z Pty Ltd sent to the wife’s father by facsimile transmission a copy of a letter dated 29 October 2007 in which Z Pty Ltd gave notice that on the first day of the hearing it proposed to seek an order that the amended response filed by the wife’s father be struck out. As well, there was set out in a succinct and comprehensive way an outline of the argument of Z Pty Ltd. On 31 October 2007 the solicitors for Z Pty Ltd sent to the Wife by facsimile transmission a copy of a letter dated 29 October 2007 in which Z Pty Ltd gave notice that on the first day of the hearing it proposed to seek an order that the amended response filed by the Wife be struck out. As well, there was set out in a succinct and comprehensive way an outline of the argument of Z Pty Ltd.
On 31 October 2007 a response was filed on behalf of the wife’s sister to the amended response filed on 28 September 2007 on behalf of Z Pty Ltd. The response repeated what was in the response filed by the Wife which I have set out above. On 2 November 2007 the wife’s sister served on Z Pty Ltd a copy of her Amended Response filed on 31 October 2007. On 5 November 2007 the solicitor for Z Pty Ltd sent to the wife’s sister by facsimile transmission a copy of a letter dated 5 November 2007 in which Z Pty Ltd gave notice that on the first day of the hearing it proposed to seek an order that the amended response filed by the wife’s sister be struck out. As well, there was set out in a succinct and comprehensive way an outline of the argument of Z Pty Ltd.
On 5 November 2007 a document titled proposed points of defence was filed on behalf of the Wife, the wife’s father, the wife’s mother and the wife’s sister to the amended response filed on behalf of Z Pty Ltd on 28 September 2007.
The hearing commenced before me on 6 November 2007.
On 6 November 2007 there was no appearance by or on behalf of the wife’s parents. The Wife provided me with certificates that she contends revealed that both her parents were in hospital. I had been told this before and no application was made on their behalf to vacate the trial. I decided to proceed with the hearing.
On 6 November 2007 a further case summary document was filed on behalf of Z Pty Ltd which largely repeated what was in the previous case summary document.
So far as K Inc is concerned when the hearing first commenced on 6 November 2007 I was told by Mr Durston of counsel that his instructions were withdrawn. Mr Durston then filed in court a Notice of Ceasing to Act prepared by his instructing solicitor, Patrick Lim & Associates. Mr Durston and Mr Lim left the Court. I then ascertained that Mr K, the public officer of K Inc, was in Court and I invited him to make submissions. Mr K informed me that during the afternoon of 5 November 2007 K Inc understood that it would no longer have representation from Mr Durston and Mr Lim. Mr K sought an adjournment to enable K Inc to obtain legal representation. At no time prior to the morning of 6 November 2007 was this outcome ever foreshadowed to me even as a possibility. The application was opposed by Z Pty Ltd. As it transpired, I adjourned the hearing to 10:00 am on 7 November 2007 to enable K Inc to retain other lawyers.
When the hearing resumed on 7 November 2007 I was informed by Mr K that he had consulted with Mr Gibb, solicitor of JR Gibbs & Company. Further, that Mr Gibb had been provided with various documents which he was going to look at and consider whether or not he would accept instructions. Mr Gibb did not appear before me. As well, Mr K was unable to indicate whether there was any timeframe within which Mr Gibb would advise K Inc as to whether he would accept instructions. I inferred, as a result of the discussion, that K Inc was seeking a further adjournment. During this discussion Mr K sought to tender a letter which Mr K said had been prepared by him and another member of K Inc and Mr Gibb had been consulted about its contents. I did not receive this letter into evidence because I understood from discussion that it was common ground that it attracted the settlement negotiations privilege provided for in s 121 of the Evidence Act. The further application by K Inc for an adjournment was strongly opposed by Z Pty Ltd. The Husband, through his counsel, indicated that he did not oppose an adjournment for a short period. After hearing submissions I determined that the trial would proceed but on the basis that I would still provide K Inc with a brief opportunity to ascertain whether or not it would have the benefit of legal representation for the purposes of the hearing.
On 7 November 2007, as a result of what I was told the previous day, I enquired of the Wife as to the representation for the wife’s parents. Again there was no appearance by or on behalf of the wife’s parents. The Wife informed me that both her parents were hospitalised and that it was resolved that the representation of her parents would be undertaken by the wife’s sister.
On 7 November 2007, after the identification of various applications, counsel for Z Pty Ltd proceeded to make submissions in respect of the applications for summary dismissal which were foreshadowed prior to the commencement of the trial.
On 8 November 2007, when the hearing resumed there was an appearance by Mr Kintominas of counsel on behalf of Mr J Gibb of J A Gibb & Co on whom a subpoena had been served on behalf of Z Pty Ltd in consequence of what I had been told by Mr K on 7 November 2007.
On 8 November 2007, without notice, and notwithstanding what I have been told on 6 and 7 November 2007 the wife’s father appeared in person. Thereafter, with the assistance of the interpreter, I asked the wife’s father a number of questions in order to make my own assessment of his ability to participate in the hearing without legal representation. The wife’s father made clear to me that he cannot talk and this was not controversial. The wife’s father is 90 years of age and I accept that he is not in good health. Thereafter, there was discussion as to how I should proceed and ultimately I resolved that I would proceed with the hearing on the basis that the wife’s father was a party, that he sought the relief set out in his response and that he had a common interest with the Wife, the wife’s mother and the wife’s sister. Further, that the wife’s father would be available to attend at Court, as required. I made clear to the wife’s father that he could attend the hearing each day if he chose to do so but that was a matter for him.
Then on 8 November 2007 counsel for Mr Gibb told me that he had instructions to appear for K Inc if there was any further issue in relation to waiver of legal professional privilege by K Inc. Mr Kintominas also indicated that he had instructions from K Inc to make an application for an adjournment of the hearing so far as it concerned the interests of K Inc. At one point counsel described it as an application for a postponement. As it transpired I adjourned until 12 November 2007 the application by Z Pty Ltd to summarily dismiss the response of K Inc to the application of Z Pty Ltd and also the application by K Inc for a postponement of the hearing.
I then heard submissions from the Wife and the wife’s sister in reply to the submissions made on behalf of Z Pty Ltd for summary dismissal. I then had discussions about the responses of each of the Wife and the wife’s sister and it was resolved that I would receive from Z Pty Ltd a schedule of relevant evidence.
On 8 November 2007 an application was then made on behalf of K Inc to file an amended response to the amended response of Z Pty Ltd. This was objected to. I granted leave to file this further amended response, but reserved the position of Z Pty Ltd in respect of certain paragraphs.
Submissions were then made on behalf of K Inc in relation to the application by Z Pty Ltd for summary dismissal of the further amended response of K Inc. Counsel for Z Pty Ltd then said that his client did not seek to proceed with the summary dismissal application of the further amended response of K Inc. Submissions were then made on behalf of K Inc in relation to the application for postponement of the hearing.
On 8 November 2007 further submissions were made on behalf of Z Pty Ltd in support of the application for dismissal of the response of each of the Wife, the wife’s father, the wife’s mother and the wife’s sister. I then heard submissions from the Wife and the wife’s sister in reply to the submissions made on behalf of Z Pty Ltd for summary dismissal. There was then discussion as to whether I should also receive into evidence, subject to objections, the affidavits of the Wife, the wife’s father, the wife’s mother and the wife’s sister.
On 9 November 2007 counsel for Z Pty Ltd informed me that it was accepted that having regard to the interests of justice and that the Wife, the wife’s father, the wife’s mother and the wife’s sister were unrepresented, objectively there could be facts and circumstances that allowed for the identification of a triable issue even if they had not been put in the relevant responses.
On 9 November 2007 I received into evidence the affidavits of evidence in chief of the Wife, the wife’s father, the wife’s mother and the wife’s sister. I also began to deal with the objections of the Husband and Z Pty Ltd to these affidavits (Exhibits K and L).
When the hearing resumed on 12 November 2007 counsel for K Inc foreshadowed an application to amend its pleading to include a defence relying on s 43 of the Real Property Act.
On 12 November 2007 I completed taking objections to the affidavits of evidence in chief of the Wife, the wife’s father, the wife’s mother and the wife’s sister. Counsel for the Husband then put into evidence certain documents in relation to the wife’s father (Exhibits N and O).
I then heard further submissions from the Wife and she simply contended, among other things, that Z Pty Ltd was completely wrong in relation to the source of monies to acquire various properties. I then heard further submissions from the wife’s sister. The wife’s sister said that she agreed with what the Wife had said and further contended that Counsel for Z Pty Ltd was dishonest.
On 12 November 2007 a further amended response was filed on behalf of K Inc. I granted leave to amend and this occurred in circumstances where the trial had been in progress for one week and K Inc had the benefit of adjournments.
During submissions in relation to the cross-examination issue I was referred to some parts of the transcript of what was said subsequent to 6 November 2007. I am not going to repeat all of what was said that may be relevant but will identify some matters. On 12 November 2007 counsel for the Husband expressed concern about cross-examination of the Wife by K Inc and said that he “… would not want a situation occurring where having prepared and made the efforts to cross-examine on relevant issues helpful evidence-in-chief was "cross-examined", double inverted commas, from [the wife] in circumstances where it's quite plain from the last few days, including last week, that [the wife] would be quite happy for this property to pass to [K Inc]”.
On 13 November 2007 a Notice of Address for service was filed by on behalf of K Inc by J.W. Gibb & Co, Solicitors.
On 13 November 2007 the solicitor for K Inc wrote to the solicitor for Z Pty Ltd and identified an assertion of fraud pleaded by Z Pty Ltd against K Inc. It was said that an allegation of fraudulent concealment is taken seriously by K Inc and its relevant officers. Further, the author of the letter referred to issues of public policy and rules of professional conduct associated with allegations of fraud where they cannot be made out; where they are not fully and properly particularised.
On 13 November 2007 I made the following orders:
In relation to the response filed on 28 September 2007 on behalf of [Z] Pty Ltd (In Liquidation).
1. The response filed on 26 October 2007 on behalf of the First Respondent [the wife] be dismissed.
2. The response filed on 26 October 2007 on behalf of the Second Respondent [the wife’s mother] be dismissed.
3. The response filed on 26 October 2007 on behalf of the Third Respondent [the wife’s father] be dismissed.
4 The response filed on 31 October 2007 on behalf of the Fourth Respondent [the wife’s sister] be dismissed.
I delivered judgment on 17 December 2007.
On behalf of Z Pty Ltd it was submitted that the controversy which existed as between Z Pty Ltd, and each of Wife, the wife’s father, the wife’s mother and the wife’s sister, was quelled on and from the time of the making of the above orders on 13 November 2007, by which the respective responses filed by the Wife, the wife’s father, the wife’s mother and the wife’s sister were dismissed.
On 14 November 2007 Z Pty Ltd served an amended notice pursuant to s 97 and s 98 of the Evidence Act and clause 6 of the Evidence Regulations.
On 15 November 2007 I made orders to give effect to the orders I made on 13 November 2007.
I note that on 15 November 2007 Counsel for K Inc addressed remarks to both the wife’s mother and the wife’s sister that if there were documents relating to L Property, being original documents not photocopies but documents that were actually created at the time, not a copy made later, then they should be brought to the Court. He contended that the wife’s family may not have appreciated that for the purposes of their case photocopies would not be admitted into evidence and that he did not want any misunderstanding that might apply to them to affect the prospects of success for K Inc. He repeated that if they knew where the originals of documents are then they should be produced. He described what he said as a “little soapbox speech”. I then indicated that I proposed to treat what he said as a call for the originals of documents relating to L property and counsel for K Inc agreed. He then identified letters from banks, anything showing deposits and transfers and repeated that the request was for original documents not photocopies made later.
By facsimile of 16 November 2007 the solicitors for Z Pty Ltd replied to the letter of 13 November 2007 from the solicitors for K Inc and, among other things, identified documents which it was contended set out a significant and detailed particularisation of the case of Z Pty Ltd including the case in fraud against K Inc. In the letter of 16 November 2007 it was stated:
Your client has never previously enunciated any difficulty in comprehending the case that it was to meet. Your client has been on notice of this claim from no later than 27 April 2007, the date that such allegations first were articulated by our client’s service of its Response to an Application for Final Orders. We note that our client’s Amended Response to an Application for Final Orders, which was filed with the leave of the court on 28 September 2007, made no further or alternate allegations as against your client.
We refer you to our client’s Amended Chronology and its Amended Case Summary Document, along with our client’s Amended Notice under Sections 97 and 98 of the Evidence Act 1995 [being the amended notice dated 14 November 2007 served on that day] . Those documents set out a significant and detailed particularisation of its case, including our client’s case in fraud against [K Inc]. We particularly refer you, in this regard, to paragraphs 67-112 of our client’s Amended Case Summary Document.
On 19 November 2007 counsel for Z Pty Ltd commenced his opening. During his opening on 20 November 2007 counsel for Z Pty Ltd put into evidence the correspondence identified above and said that he needed to deal with the suggestion that his client might not have acted properly or professionally and that what he proposed to do was provide some significant detail of the elements of fraud that he submitted would be received in evidence but in any event constituted such allegations against this background. Counsel for Z Pty Ltd stated that prior to the current legal representation for K Inc coming onto the record it had never been suggested that there was any impropriety or that those representing Z Pty Ltd were not acting properly in terms of the allegations they made. I do not propose at this stage to repeat all of what thereafter was put however some considerable time was then spent by counsel for Z Pty Ltd taking me through a substantial number of documents to demonstrate that a considerable amount of money of Z2 Pty Ltd was deposited to the credit of a bank account of K Inc. On 21 November 2007 the opening of counsel for Z Pty Ltd concluded
On 22 November 2007 I made the following orders:
1.I affirm the leave previously granted to the Sixth Respondent, [Z] Pty Ltd (In Liquidation), to rely upon the amended notice pursuant to s 97 and s 98 of the Evidence Act 1975 (Cth).
2.I admit into evidence the transcripts of proceedings in the public examination and also in the proceedings before Mathews AJ in the Supreme Court of New South Wales identified in the outline of argument filed on behalf of the Fifth Respondent being in support of objections to evidence.
Then on 22 November 2007 a further amended response was filed on behalf of K Inc. Z Pty Ltd objected to leave being granted to K Inc to rely on this further amended response.
On 28 November 2007 an application was filed on behalf of the Wife and the wife’s sister seeking a stay of orders I made on 15 November 2007 and also leave to appeal against the orders. Leave was sought by the Wife to appeal on behalf of Mr H, the widower of Mrs H and or Mrs E, the sister of Mrs H against each of orders 4, 5, 6. 7, 8, 9 and 10 made on 15 November 2007. Leave was also sought by the wife’s mother, the wife’s father and the wife’s sister to appeal on behalf of Mr H, the widower of Mrs H.
On 29 November 2007 during discussions, counsel for K Inc informed me that he did not propose to have a conference with the Wife. Counsel for Z Pty Ltd made clear that his client contended that as there is no issue between the Wife, the wife’s father, the wife’s mother, the wife’s sister and K Inc as between themselves there was no basis for cross examination by counsel for K Inc of any of the Wife, the wife’s father, the wife’s mother or the wife’s sister. Counsel for K Inc contended that as Z Pty Ltd had tendered transcripts he could require that the Wife be called.
On 29 November 2007 I made the following orders:
1.The matter be adjourned for three weeks commencing 10 March 2008.
2.All affidavits be filed and served by 14 January 2008.
3.Written submissions be filed and served by Friday 11 April 2008.
4.It be NOTED the closing arguments will commence on 21 April 2008 for four days.
However, the hearing continued to 7 December 2007.
The order I made with respect to filing all affidavits by 14 January 2008 was made upon the oral application by counsel for K Inc and constituted an extension of time in relation to an order previously made that all such further affidavit material was to be filed and served by 31 December 2007. I had directed that any further evidence be filed “by the end of the calendar year” but this was not entered as an order.
I had earlier, subject to objections, received into evidence the affidavits of evidence in chief of all parties. This included affidavits by the wife’s sister, the Wife and the Husband. So far as K Inc is concerned I had earlier received many affidavits including of the wife’s sister, Ms LL, Ms AT and Mr K. Objection was taken by Z Pty Ltd to a number of the affidavits of K Inc and all of the objections were conceded.
On 3 December 2007 I made an order that Order 1 of the application in a case filed on 28 November 2007 by the Wife and the wife’s sister seeking a stay of the orders made by me on 13 and 15 November 2007 be dismissed.
On 3 December 2007 counsel for K Inc made clear his desire to ask questions of the Wife, the wife’s father, the wife’s mother and the wife’s sister. Counsel for Z Pty Ltd again made clear that he would object to any cross-examination and wished to agitate the entitlement of counsel for K Inc to do so.
The hearing of the application by K Inc for leave to amend commenced on 6 December 2007. During his submissions counsel for K Inc outlined that pursuant to the order made on 29 November 2007 it proposed to file and serve 47 affidavits and that the evidence would address the following matters:
·The minutes of meetings of K Inc.
·The source of funds to construct the building on L property.
·An explanation for the deposit of Z2 Pty Ltd cheques into an account of K Inc.
·The criticisms of a journal relating to donations.
·Lack of knowledge of members of the K Inc committee.
·The loan from Mr T.
In discussion I said that it appeared that the evidence could be described as follows:
·Evidence that was not filed in accordance with the pre trial orders.
·Evidence in reply to some of the evidence of Z Pty Ltd.
·Evidence in an admissible form in relation to material that had been objected to by Z Pty Ltd
On 6 December 2007 there was considerable discussion about proposed evidence in chief of K Inc and the objections of Z Pty Ltd to granting any further indulgence to K Inc. During the discussion counsel for K Inc referred to what I had earlier said about the entitlement to cross-examine and in particular the cross examination of the Wife and the wife’s sister. He then said:
Now, suffice to say this, I have taken the view that although there is a choice of action none of which I would have found absolutely palatable in an ideal world, I take the view that I'm going to conduct this examination or cross‑examination without having interviewed them. I take also the view that I am going to conduct as far as possible, an examination without leading questions so that there won't be any suggestion that I'm feeding them Dorothy Dix's but I propose to reserve and argue my right at the appropriate time that I be permitted to cross‑examine them in the event that certain things arise.
Counsel for K Inc also said:
I say no more about that, but just to indicate that they're not witnesses being called by me, they are witnesses here. They are available for me to ask them questions. They are obviously in a position where they can shed relevant light and obviously I would hope that they would do so truthfully, but it's not a situation where I would consider that I should be irrevocably stuck with evidence with which we might take the view is not factual.
On 7 December 2007 I made the following orders:
1By 4 pm on 13 December 2007 the Fifth Respondent file and serve particulars of each of Paragraphs 1A and 1B and the Points of Defence in the Further Amended Response to an Application in a Case filed on behalf of the Fifth Respondent on 22 November 2007.
2.By 4 pm on 13 December 2007 the Fifth Respondent file and serve an amended outline of argument.
3.The hearing of the application by the Fifth Respondent for leave to rely upon the Further Amended Response filed on 22 November 2007 be adjourned to 9.30 am on 17 December 2007.
Order 1 made on 7 December 2007 was not complied with. However on 14 December 2007 a case summary document was filed on behalf of K Inc.
On 17 December 2007 I made the following orders:
1.The 5th Respondent is granted leave to rely upon the further amended response to an application in a case filed on the 22 November 2007.
2.I note that the 5th Respondent will also incorporate in that further amended response the case summary document of the 5th Respondent.
3.The costs of the Applicant Husband and the 1st, 2nd, 3rd, 4th, and 6th Respondents of and incidental to the hearing of this application for leave to amend be reserved.
4.The costs of the Applicant Husband and the 1st, 2nd, 3rd, 4th, and 6th Respondents of and incidental to any issues that may arise in relation to the protraction of the hearing by reason of the amendment granted in order 1 hereof be reserved.
5.I grant liberty to apply on short notice with respect to any directions which are sought by any of the Applicant Husband and the 1st, 2nd, 3rd, 4th, and 6th Respondents in consequence of order 1 hereof.
On 17 December 2007, as a result of the orders I made on that day, Z Pty Ltd served on the solicitors for K Inc a request for particulars and also a minute of proposed orders. In relation to the short minutes, a covering email was sent by the solicitors for Z Pty Ltd in which a request was made that consent or comments on the draft short minutes be provided by the close of business on 20 December 2007 and that I would then be approached on 21 December 2007 to make orders in the terms of the short minutes subject to any comments or amendments. No comments or amendments were received by the solicitors for Z Pty Ltd on behalf of K Inc. On 21 December 2007 I made the following orders:
1. The Fifth Respondent is to provide further and better particulars of its Further Amended Response to an Application in a Case dated 12 November 2007 to the Sixth Respondent on or before midday on Monday, 24 December 2007.
2.In default of compliance with Order 1 by the Fifth Respondent, it thereafter may not adduce in evidence any further document or thing beyond that which is contained within the Tender Bundle of Documents filed and served by the Fifth Respondent pursuant to the orders of the Court made on 19 October 2007, without the further leave of the Court.
3.The Fifth Respondent to give discovery of all documents which it contends to be relevant to an issue in the case on or before Monday, 7 January 2008.
4.Each of the parties to have access to documents discovered by the Fifth Respondent for the purpose of inspection and copying by Friday, 11 January 2008.
5.All parties to have leave to issue subpoenae for the production of documents on or before Monday, 21 January 2008.
On 22 December 2007 an email was sent by the solicitors for Z Pty Ltd to my associate and I was informed that it was agreed by K Inc and Z Pty Ltd that K Inc would provide its response to the request for particulars by 2 January 2008 and that no issue would be taken by Z Pty Ltd with the provision of the response to the request of particulars provided on or before 2 January 2008.
On 3 January 2008 Danielle Funston, a solicitor employed by Deacons, the solicitors for Z Pty Ltd telephoned Mr Gibb the solicitor and advised that the solicitors had not received from K Inc the replies to the request for particulars. Mr Gibb said that Mr Johnson of counsel had sent an email to Mr Mathas of Deacons seeking an extension to 7 January 2008. Ms Funston requested that she be sent a copy of the email and she attached to her affidavit of 23 January 2008 a copy of the email which she received. In the email Mr Johnson said that for various reasons K Inc would be unable to comply with the agreed arrangement and he had been instructed to seek an extension until 4:00 pm on 7 January 2008 to supply the particulars and that this was the time which was needed in order to complete and supply the particulars. Mr Johnson also said that one of the reasons for the delay was because “we have been focusing on drafting and settling of affidavits to be relied upon by [K Inc] which are due in by 14 January 2008”.
On 3 January 2008 the solicitors for Z Pty Ltd wrote to the solicitors for K Inc and confirmed that on 21 December 2007 it had been agreed to grant to K Inc an extension of time within which to provide a reply to the request for particulars namely by 2 January 2008 and that the particulars had not yet been provided.
On 8 January 2008 the solicitors for Z Pty Ltd wrote to the solicitors for K Inc and referred to order 3 made on 21 December 2007 which provided that K Inc was to provide on or before 7 January 2008 discovery of all documents which it contended to be relevant. The solicitors confirmed that K Inc had not yet provided discovery and was therefore in breach of the orders. The solicitors also advised that Z Pty Ltd would oppose any further application that may be made by K Inc in relation to discovery
On 9 January 2008 the solicitors for K Inc served on the solicitors for Z Pty Ltd a sealed copy of “disclosure by service of a list of documents” dated and filed 9 January 2008 which was referred to as the “first discovery” and a sealed copy of “disclosure by service of a list of documents” dated and filed on 9 January 2008 which was referred to as the “second discovery”.
On 9 January 2008 the solicitors for Z Pty Ltd wrote to the solicitors for K Inc requesting confirmation that inspection and photocopy access would be made available with respect to discovered documents.
On 10 January 2008 the solicitors for Z Pty Ltd wrote to the solicitors for K Inc referring to the list of discovered documents filed on 8 January 2008 and specifically referred to part 3 which identified the “[K] tender bundles”. Reference was made to exhibit AI, being the notice of objections by Z Pty Ltd to the evidence of K Inc and reminding the solicitors that I had upheld the objections of Z Pty Ltd to the K tender bundles.
On 10 January 2008 the solicitors for K Inc wrote to the solicitors for Z Pty Ltd enclosing an unsealed copy of a “disclosure by service of a list of documents” dated 10 January 2008 and advised that it would be filed on 11 January 2008.
On 10 January 2008 the solicitors for K Inc wrote to the solicitors for Z Pty Ltd and advised that there were three separate “disclosures”. There was then correspondence and discussion about how such documents would be photocopied and agreement was reached. I note that in a letter of 14 January 2008 written by the solicitors for K Inc to the solicitors for Z Pty Ltd it was contended that the Wife, the wife’s sister and the wife’s parents were disadvantaged by reason of lack of legal representation, having little or no money to protect what they perceived to be legitimate interests and an inability to understand, converse in and write English and also old age and ill health. There was further correspondence between the respective solicitors dated 15 January 2008 and 23 January 2008.
On 15 January 2008 the solicitors for K Inc by way of email served on the solicitors for Z Pty Ltd draft forms of five affidavits being of Mr K; Mr PK; Mr CN; BH and AT.
On 15 January 2008 the solicitors for K Inc wrote to the solicitors for Z Pty Ltd referring to the orders made in December with respect to the filing of affidavits and advised that some affidavits had been settled, some affidavits had been drafted, some affidavits “are proposed” and that no affidavits had been filed. The solicitors identified nineteen affidavits which it was contended had been drafted but not approved in a form capable of being circulated as truly representing the matters which the deponents had instructed they were able to swear to. The solicitors also advised of the identity of the deponents of two proposed affidavits. The solicitors also said that some of the affidavits may proceed and some may not and that it very much depended upon an ongoing review of the materials which had been tended without qualification by Z Pty Ltd being business records and other materials “relative” to the affairs of K Inc.
On 24 January 2008 K Inc served on Z Pty Ltd a reply to the request for further and better particulars dated 17 December 2007. This was in breach of order one made on 21 December 2007 as amended by agreement.
The matter was listed before me on 24 January 2008 because I was concerned to ascertain, whether or not as a result of orders of the Full Court in contempt proceedings and also the proposed appeal of the Wife and the wife’s sister against the orders I made in respect of the summary dismissal application, the further hearing dates fixed for March 2008 may be prejudiced.
When the matter came before me on 24 January 2008 Z Pty Ltd noted that K Inc had failed to comply with the terms of the directions made on 29 November 2007, or the orders made on 21 December 2007; that particulars requested on 17 December 2007 had only been served at Court just prior to the directions hearing then being conducted; and that subject to assessment of the prejudice occasioned to it, it reserved its position to raise the matter at the time of the further directions hearing scheduled for 8 February 2008.
On 24 January 2008 I vacated a listing on 5 February 2008 and listed the matter on 8 February 2008.
On 24 January 2008 three affidavits were purported to be served by K Inc upon Z Pty Ltd. On 4 February 2008 two further affidavits were purported to be served upon Z Pty Ltd by K Inc. On 5 February 2008 one further affidavit was purported to be served upon Z Pty Ltd by K Inc.
Under cover of letters dated 24 January 2008 K Inc served affidavits of PK dated 16 January 2008, Mr K dated 16 January 2008, and AT dated 20 January 2008.
The Wife wrote a letter addressed to the Court dated 26 January 2008, which I believe may have been received on or about 11 February 2008, and she stated “I wish to inform the Honourable Family Court that I will not participate the Etheringtons solicitor and the Deacons solicitors litigation on behalf of the Husband and the [B Chartered Accountants] liquidator in the current Family Court proceedings whether by phone, video link or in person”.
On 4 February 2008 K INc served affidavits of BH dated 17 January 2008, and Mr CN dated 31 January 2008. On 5 February 2008 K Inc served an affidavit of YG dated 2 February 2008.
On 5 February 2008 the wife’s sister delivered to the solicitor for K Inc a number of documents which are identified in paragraph 15 of an affidavit of Mr Gibb sworn on 7 February 2008.
On 7 February 2008 the solicitors for K Inc wrote to the solicitors for Z Pty Ltd and noted that K Inc intended to rely upon a further 20 affidavits.
On 7 February 2008 an affidavit was sworn by Mr Gibb on behalf of K Inc. He contended that there were difficulties encountered by himself and counsel retained to assist in the finalisation of affidavit evidence in the context of the case as contained in the case outline of K Inc and such difficulties included language difficulties, the absence of several members of K Inc overseas and other matters which I need not repeat. Mr Gibb said that affidavits sworn by Mr K; PK; Mr CN; BH, AT and YG had been filed and served on Z Pty Ltd. Mr Gibb said that there were some 18 affidavits which had been drafted and were awaiting approval of the deponents. He contended that the original directions consented to by K Inc “did not in hindsight permit sufficient time to undertake the necessary tasks required to complete these affidavits”.
On 7 February 2008 I received written submissions dated 6 February 2008 on behalf of Z Pty Ltd consequent upon the failure of K Inc to comply with the orders I made on 29 November 2007 and 21 December 2007. Z Pty Ltd sought that as a result of the breach by K Inc of the orders I made that I make various orders set out in para 42 of the submissions including (pa 42(d)) that at the commencement of the resumed hearing on 10 March 2008 I resume hearing the adjourned application by Z Pty Ltd that it have judgment by direction as against K Inc upon the footing enunciated in the outline of written submissions dated 26 November 2007 on behalf of Z Pty Ltd.
On 8 February 2008 I made the following orders:
1The Fifth Respondent file and serve by 2 pm on 11 February 2008 submissions in response to the submissions of the Sixth Respondent titled Consequent Upon the Failure of the Fifth Respondent to Comply, with the Orders of the Court Made on 29 November 2007 and 21 December 2007 together with any further affidavits on which the Fifth Respondent will seek to rely with respect to that application.
2The Fifth Respondent file and serve by 2 pm on 11 February 2008 the foreshadowed application to vacate the further hearing dates currently listed as from 10 March 2008 together with any affidavit material in support of that application.
3I grant to all parties leave to obtain a photocopy of all documents that have been marked for identification and all documents which have been received into evidence as exhibits at the cost of the party seeking the photocopies.
4I grant leave to the Sixth Respondent to issue further subpoena to produce documents. Such subpoena to be made returnable 10 am on 15 February 2008.
5I note that documents have been produced to the Court by the Fifth Respondent in answer to a Notice to Produce served on it on behalf of the Sixth Respondent.
6Leave be granted to all parties and their legal representatives to have access to the documents referred to above produced by the Fifth Respondent in answer to the Notice to Produce.
7It be noted that if the Second and Third Respondents seek to oppose the proposed application by [K Inc] to vacate the further hearing then they should arrange for an appearance to be made before me or communicate to the legal representatives for [K Inc], the Husband and [Z Pty Ltd] their position with respect to the foreshadowed application.
8The matter be listed before me at 2.15 pm on 12 February 2008.
On 11 February 2008 Mr Gibb swore a further affidavit to which he attached the copy of correspondence of 8 February 2008.
On 11 February 2008 I received written submissions on behalf of K Inc with respect to an application to vacate the further hearing of the proceedings and an application for an extension of time to comply with the orders I made. K Inc sought an extension of time until 4:00 pm on Monday 25 February 2008 in which to file and serve evidence in chief.
I received further written submissions on behalf of Z Pty Ltd dated 11 February 2008. It was submitted that on 7 February 2008 K Inc filed the affidavits of Mr Gibb by which it was testified that the original direction to which K Inc had consented did not in hindsight permit sufficient time to undertake the necessary tasks required to complete the affidavits.
On 11 February 2008 on behalf of Z Pty Ltd an affidavit was sworn by Christopher Cruikshank. Mr Cruikshank contended that the affidavit evidence fell under two broad categories, namely, the general information about K Inc and its management and operation, and financial information about alleged donations by various members of K Inc and their families to K Inc. Mr Cruikshank said that the central issue between K Inc and Z Pty Ltd is the identity of the person or entity who paid for the L property and the improvements. He said that several of the affidavits included assertions that the deponent or those associated with him/her made significant donations to K Inc. Mr Cruikshank said that based on the assumptions made as a result of the affidavits that were filed, in order for Z Pty Ltd to properly investigate the proposed evidence of K Inc, Z Pty Ltd would ordinarily issue a subpoena to produce documents on each of the deponents of the affidavit, issue a subpoena to produce documents on any banks and financial institutions referred to in the affidavit or annexed documents, obtain access to documents produced under any subpoena, conduct an investigation and analysis of the primary documents in order to determine who is the ultimate source of any funds which were deposited into the account of K Inc or which otherwise were used in the purchase and or improvement of the L property and prepare a report to identify the flow of funds from the alleged owners to the L property. Mr Cruikshank also gave evidence in relation to his experience with respect to the time it takes to gather the information which he identified and that as at the day of swearing his affidavit there were only 19 working days until the resumption of the hearing on 10 March 2008. Mr Cruikshank said that in his opinion it would not be possible for Z Pty Ltd to undertake the various tasks which Mr Cruikshank identified and that in consequence Z Pty Ltd would suffer procedural and substantive injustice if K Inc was granted the indulgence of relief from its breach of the orders made in November and December 2007.
On 12 February 2008 an affidavit was sworn by Mr Dominello, the solicitor for the Husband.
On 12 February 2008 I arranged for the Wife to be in attendance before me by way of telephone conference facility and she informed me that she did not wish to participate any further in the hearing except to have the opportunity to make submissions at the conclusion of the evidence. In consequence of what the Wife said the solicitor for the Husband foreshadowed an application pursuant to rule 21.07 of the Family Law Rules.
On 12 February 2008 K Inc made an oral application to vacate the further hearing of the proceedings until the release of the Wife from gaol and a reasonable time thereafter for her to prepare and otherwise participate in the present hearing. An application was also made to extend the time within which K Inc was required to file affidavits and or provide particulars and or provide continuing discovery.
In relation to the application to vacate the further hearing dates, rule 16.12 (3) of the Family Law Rules makes it very clear that the trial may only be vacated “in exceptional circumstances”. In relation to this application I accepted the submissions that were made on behalf of Z Pty Ltd and the Husband in relation to the application and was of the opinion that in the circumstances of this case K Inc had not established exceptional circumstances.
In Cheers v El Davo Pty Ltd (in liq) [2000] FCA 144 (per Weinberg J) a ruling was sought preventing counsel for cross-respondents from asking leading questions of any of the witnesses called by the applicants, and that - in the event questioning of the witnesses did take place - that questioning should occur immediately after the witnesses had given their evidence in chief. In substance, the ruling sought against the cross-respondents was described as having the following claim as its underlying premise (at 6):
…[t]he obvious fact that the interests of the Davis cross-respondents are closely aligned to those of the applicants. This can be demonstrated by even the most cursory perusal of the amended defence filed by the Davis cross-respondents in answer to the tenth respondent’s cross-claim. That amended defence picks up and relies upon a number of the same contentions as are relied upon by the applicants in their pleadings against the respondents. Both Mr Martindale and Mr Magee submitted that it would be unfair, in those circumstances, to allow Mr Herskope to cross-examine the witnesses upon whose evidence his clients seek to rely in support of their own defence to the cross-claim brought by the Capital respondents.
In Cheers v El Davo Pty Ltd (in liq) (supra) Weinberg J ultimately made the following finding at 12-13:
Applying the principles set out above, I am not persuaded that Mr Herskope should be prevented from asking leading questions of any of the witnesses to be called on behalf of the applicants. It may be accepted, as the pleadings demonstrate, that the interests of the applicants and the interests of the Davis cross-respondents are indeed closely aligned in a number of important respects. Those interests are not, however, identical, as may be seen from the allegation made by the Capital respondents that the Davis cross-respondents are guilty of the tort of inducing breach of contract. It cannot be said that the applicants and the Davis cross-respondents are “in precisely the same interest”………
I can discern no other considerations which would warrant a departure from the ordinary practice to which Young J referred in GPI Leisure Corp Ltd (supra) of permitting cross-examination of all witnesses by all counsel.
Cheers v El Davo Pty Ltd (in liq) (supra) also cites GPI Leisure Corp Ltd v Herdsman Investments Pty Ltd (No 3) (supra) with approval, as well as NMFM Property Pty Ltd v Citibank Ltd (No 8) (1999) 161 ALR 581 per Lindgren J. In Cheers v El Davo Pty Ltd (in liq) (supra) Weinberg J summarised the principle set out in NMFM Property Pty Ltd v Citibank Ltd (No 8) (supra) as follows (at 10-11):
His Honour [Lindgren J] held that ordinarily, where two or more parties were “in the same interest”, the trial judge’s discretion would properly be exercised if not more than one counsel were permitted to cross-examine.
For present purposes the principles that I propose to apply can be summarised as follows. Cross examination is the testing of a witness as to the facts in issue or credit. There is no right of cross examination and it is permitted by a Judge in the exercise of his or her discretion to ensure that parties have a fair trial. A witness that is called to give evidence may be cross examined. In general, the party or the legal representative of the party may cross examine a witness not called by that party. It is not necessary that the witness has given evidence against the party seeking to cross examine. It is permissible to ask leading questions in cross examination but there is no absolute right.
The Court has a wide discretion to decide whether or not permission will be granted to cross examine witnesses. There is no right to cross examine witnesses in the course of a hearing, but rather the right of all parties to a fair trial.
As well as its ‘undoubted discretion’ to permit or disallow further cross-examination, under secs 11 and 26 of the Evidence Act the Court has the power to control the conduct of proceedings except in so far as the Evidence Act does not explicitly or by necessary intent provide otherwise and “may make such orders as it considers just in relation to the way in which witnesses are to be questioned, and the presence and behaviour of any person in connection with the questioning of witnesses” (s 26 EA and also, Lakatoi Universal Pty Ltd & Ors v Langley Alexander Walker & Ors (supra) at 48).
The established practice is that a party will not be permitted to cross examine another party with which it has a common interest. (Cheers v El Davo Pty Ltd (supra); NMFM Property Pty Ltd v Citibank Ltd (No 8) (supra)).
This practice may be departed from, but when departing from such a practice, it is usual that the Court will seek special circumstances to justify the departure (Doe v Roe (supra), cited with approval in Lakatoi Universal Pty Ltd & Ors vLangley Alexander Walker & Ors (supra)).
Considerations such as the complexity, involvement of very large sums of money and whether there were important claims in relation to the credit of various material witnesses have in certain circumstances being considered relevant factors in the Court’s exercise of its discretion regarding examination of witnesses (Lakatoi Universal Pty Ltd & Ors v Langley Alexander Walker & Ors (supra)).
SUBMISSIONS
I am not going to set out all of what was submitted but will refer to some parts of the submissions. I had the benefit of both written and oral submissions.
On behalf of K Inc it was submitted that if cross-examination is not permitted of the nominated persons, albeit in a restricted form, K Inc would not be in a position to test substantial portions of the evidence sought to be tendered against it by Z Pty Ltd.
It is then argued that the inability to test that evidence would result in serious prejudice against K Inc, particularly evidence relied upon by Z Pty Ltd in regards to allegations made by Z Pty Ltd of concealment, “fraud” and of the parties acting in concert.
K Inc then listed the matters to which it argues the Wife, the wife’s mother and the wife’s sister can give relevant evidence (see paragraph 13 of submissions).
K Inc further argued that it is permitted to test any matter and any matter of credit of the Wife, the wife’s father, the wife’s mother, and the wife’s sister which could rationally affect evidence given by that witness that is relevant to the claims brought against K Inc, especially but not limited to the matters referred to in the Tendency and Coincidence Notice.
I note that at no point in its submissions did K Inc point to any substantive law to support its submissions, or to refute the claim made on behalf of Z Pty Ltd that there is no dispute or fact in issue as between K Inc and any of the Wife, the wife’s father, the wife’s mother and the wife’s sister and therefore, there should be no cross-examination permitted. K Inc did not contest Z Pty Ltd’s interpretation of the Evidence Act, whereby Z Pty Ltd submitted that since there is no dispute as between the parties, there can be no relevant fact in issue that K Inc could adduce in cross-examination.
I also note that at no point in their submissions did K Inc address Z Pty Ltd’s submission that the ‘relevant evidence’ – which K Inc argued can be given by the Wife, the wife’s father, the wife’s mother and the wife’s sister – may be submitted in affidavit form, as evidence-in-chief, in light of the fact that K Inc and the Wife, the wife’s father, the wife’s mother and the wife’s sister have a common interest. In its submission on this issue, Z Pty Ltd made clear that it does not oppose the relevant evidence being submitted to the Court in affidavit form, so long as a proof of evidence in chief is submitted to Z Pty Ltd not less than two days before any of the Wife, the wife’s parents and the wife’s sister are called as witnesses. K Inc made no argument as to why it would cause it prejudice or result in an unfair hearing if the evidence was submitted in this form.
As well as failing to show why I should not adhere to normal practice, in requiring that evidence to be put before me as evidence-in-chief and in written form, K Inc did not show any prejudice or unfairness that it would incur as a result of the evidence in question being submitted as evidence-in-chief.
Counsel for K Inc said:
…I take the view that in terms of the efficacy of any evidence that’s going to be adduced and the probability of it being accepted by your Honours is going to be best served by that examination being conducted as in-chief examination, or should I put it not as a cross-examination. That still remains to be the case.
Counsel for K Inc was also concerned about what he described as “subtexts” namely that even if I ruled against K Inc in terms of whether counsel should be permitted to question the Wife, the wife’s father, the wife’s mother and the wife’s sister without making them witnesses in K Inc’s case – it is not accepted that any onus lies on K Inc.
In brief, Z Pty Ltd argued that there is no fact in issue between K Inc and the Wife, or indeed between K Inc and any of the Wife, the wife’s parents and the wife’s sister. As such, it is submitted that nothing put by K Inc – either in evidence in chief or in cross examination – will raise any issue of fact requiring proof by K Inc as against any of the Wife, the wife’s parents and the wife’s sister.
Z Pty Ltd further contended that since there is nothing in issue between the Wife and K Inc, anything put by K Inc to the Wife will not be in relation to a fact in issue, thus not relevant to the proceedings and therefore inadmissible.
CONCLUSION
Notwithstanding what I set out above this application can be readily disposed of. In summary, I accept the submissions made on behalf of Z Pty Ltd.
There is no issue about the relevant principles to be applied in determining this application nor the source of power to make the order sought. The issue is what I should do, as a matter of discretion, to ensure a fair trial.
I am hearing applications for final orders that have been before the Court for a number of years. The litigation in this Court and the related proceedings has been protracted and costly. It is my understanding that the parties are seeking to bring closure to what has happened as soon as practicable. This is understandable given the nature and extent of the litigation, some of which I briefly outlined above.
K Inc has been a party to the proceedings in this Court since 2002 and with the exception of the passing reference to an objection to jurisdiction has not sought to have the proceedings which affect its interests dealt with in another Court.
K Inc was a party to all relevant procedural orders and directions which were made in 2006 and 2007 to get the matter ready for final hearing in relation to pleadings, affidavits of evidence in chief, discovery and other matters. The relevant issues in relation to the source of funds to purchase of L property, the transfer of the interest of the Husband and the Wife in this property to the wife’s parents, the transfer by the wife’s parents of their interest in the property to K Inc and the source of funds to pay for the construction of the improvements were identified.
K Inc prepared its case prior to 6 November 2007. However what transpired is that subsequent to 6 November 2007, K Inc gave instructions to lawyers who previously had no involvement with or knowledge of the proceedings. Thereafter I have had to deal with a number of procedural applications made by or against K Inc.
Since the trial commenced, K Inc has been given the opportunity to amend its pleadings on more than one occasion, to file its evidence in chief, to provide disclosure and to provide answers to a request for particulars. As well since the trial commenced, K Inc made a request for particulars which was answered by Z Pty Ltd. K Inc had the opportunity to file its evidence in chief for the second time after all of the evidence in chief of the Husband and Z Pty Ltd was filed and after it had an opportunity to cross examine the Husband.
During the course of the trial in November 2007, from time to time, there was discussion about such topics as the burden of proof and the right to cross examination. In my view a consideration of all that was said makes it clear that Z Pty Ltd wanted to agitate the issue of whether K Inc could cross examine each of the Wife, the wife’s parents, and the wife’s sister.
It was not until shortly before the resumed hearing on 10 March 2008 that the case of K Inc as to its pleadings and evidence in chief was finalised. Z Pty Ltd then sought to have the issue resolved. It is also relevant that, on a number of occasions prior to 10 March 2008, counsel for K Inc made clear that he would not seek to ask leading questions of the Wife, the wife’s mother, the wife’s father and the wife’s sister.
Although K Inc sought to orally examine each of the Wife, the wife’s parents and the wife’s sister, it also became clear that in reality it may only be the Wife to whom this application is relevant. The wife’s sister is a witness in the case of K Inc.
The Wife, the wife’s father, the wife’s mother and the wife’s sister have made clear for a considerable period of time that they support the relief sought by K Inc. Each of the Wife, the wife’s parents and the wife’s sister gave evidence in chief in relation to the issues of the source of funds to purchase L Property, the transfer of the interest of the Husband and the Wife in this property to the wife’s parents, and the transfer by the wife’s parents of their interest in the property to K Inc. A great deal of this evidence was ruled as inadmissible. As well there is controversy about documents produced in relation to the transactions. K Inc has filed a number of affidavits including of the wife’s sister, and by and large the evidence does not address the issues identified above. On one view, with the exception of the Husband, the Wife, the wife’s father, the wife’s mother, and the wife’s sister, no witness in the case of K Inc would be able to give evidence in relation to the first two relevant transactions as they were not parties to such transactions.
Allthough there is no claim between the Wife and K Inc, the Wife and evidence she would be in a position to give in relation to her actions may be relevant to a number of the facts in dispute between Z Pty Ltd and K Inc, and therefore relevant to facts in issue.
However, as was submitted on behalf of Z Pty Ltd, the controversy which existed as between Z Pty Ltd, and each of the Wife, the wife’s parents and the wife’s sister was quelled on and from the time of the making of the Orders of 13 November 2007, by which the respective responses filed for the Wife, the wife’s father, the wife’s mother and the wife’s sister were dismissed.
Further, as was submitted on behalf of Z Pty Ltd, the distillation of the disputes that may be identified as having been joined in the proceeding by the amended response to an application for final orders filed on 28 September 2007 on behalf of Z Pty Ltd, and the respective responses filed by each of the Wife, the wife’s father, the wife’s mother, the wife’s sister and K Inc in answer thereto, disclose that no fact is in issue, and thereby no dispute inter se, as between any of the Wife, the wife’s father, the wife’s mother, the wife’s sister and K Inc.
The controversy which flows from the amended response filed for Z Pty Ltd and the issues joined by reason of the further amended response to an application in a case filed by K Inc pursuant to leave granted on 17 December 2007, raises or asserts no controversy as between K Inc and any of the Wife, the wife’s parents and the wife’s sister.
There is nothing alleged by K Inc by way of any affirmative ground of defence, or alternatively by way of any originating process that might be characterised as a Cross Claim, that raises any issue of fact requiring proof by K Inc as against any of the Wife, the wife’s parents and the wife’s sister.
Given what I had been told by counsel for K Inc as to non-leading questions and the very clear common interest between the Wife, the wife’s mother, the wife’s father and the wife’s sister, I had difficulty understanding why counsel for K Inc was seeking to cross-examine the Wife, the wife’s mother and the wife’s father. I further had difficulty understanding why the interests of K Inc could not be served by seeking to put on evidence in chief in a written form from each of the Wife, the wife’s mother and the wife’s father. Counsel for K Inc said that there are various matters which it is not appropriate to deal with in the confines of an affidavit; particularly with the Wife, who is in prison. Counsel submitted that there are numerous matters that are raised by the material that has been tendered by Z Pty Ltd. There are various matters relating to examinations about which they need to be asked “…clarificationary questions, further questions, questions which might or should put some of the things they have to say in perhaps a different light. To do that sort of thing by way of affidavit is unduly restrictive”. I am satisfied that K Inc has provided no convincing arguments as to why cross-examination is required to assure the right to a fair trial.
I am of the view that nothing that could be put to any of the Wife, the wife’s father, the wife’s mother and the wife’s sister by K Inc in cross examination would have any relevance to any of the facts in issue joined upon the pleadings filed in this proceeding.
In conclusion, in my opinion no adequate reason was put on behalf of K Inc as to why it could not seek to call evidence in chief from the Wife, the wife’s father and the wife’s mother. K Inc has called evidence in chief from the wife’s sister. In fact I was informed that in 2008 counsel for K Inc did interview the Wife and although it is not in evidence I understand that a statement has been obtained by K Inc from the Wife and the wife’s father and mother and that these statements were obtained in 2008 which is after the trial had commenced, after the evidence in chief had been received and after cross examination of the Husband.
K Inc has failed to demonstrate why cross-examination of any of the Wife, the wife’s parents and the wife’s sister would be required in order to guarantee a fair trial, both in light of the parties’ common interest and also the more than adequate opportunity that has been given to K Inc to put its case in full before the Court.
Further, I am not persuaded that there is any reason - in relation to my duty to ensure a fair hearing - to depart from the usual practice that parties with a common interest will generally not be granted leave to cross-examine.
Not only do I remain unconvinced that a fair trial would be prejudiced in the event that cross-examination of the Wife, the wife’s father and the wife’s mother were to be disallowed, I am persuaded by the arguments of Z Pty Ltd that to allow counsel for K Inc the right to cross examine, in circumstances where there are no facts in issue between the parties, gives K Inc a forensic advantage which does in fact prejudice the rights of the other parties to a fair hearing.
Relevantly, I can see no reason why the relevant evidence that K Inc submits that it seeks to adduce from the Wife, the wife’s father and the wife’s mother could not be submitted by way of affidavit or as evidence-in-chief, as would be more appropriate in this case with witnesses or parties not in dispute.
Submissions were also made in respect of recent requests made by K Inc pursuant to s 167 of the Evidence Act in relation to transcripts of the public examinations and the hearing before Mathews AJ. There are time limitations, set out in s 168 of the Evidence Act, which apply to when a request may be made and submissions were made in relation to such time limits. However, despite these time limitations, s 168 of the Evidence Act further sets out that the court may give the other party leave to make a request relating to the evidence in question after the end of the 21 day period if it is satisfied that there is good reason to do so.
The finding that there is a common interest between K Inc and the Wife, the wife’s father, the wife’s mother and the wife’s sister entails that there need be further inquiry into whether the time limitation set out in s 168 of the Evidence Act may be extended, so as to allow K Inc the opportunity to test the Wife’s evidence as per s 167. However, further to this, even if leave were granted to extend the time limitation period, s 167 of the Evidence Act allows for witnesses to be called and/or evidence to be tested. At no point does this section guarantee the right to cross-examine and once again, it is relevant that K Inc has had, at all relevant times, the ability to call the Wife, the wife’s father, the wife’s mother and the wife’s sister as its witness in these proceedings and admit an affidavit sworn by them. The transcript of the evidence given in the public examination in the Supreme Court of LL, AT and Mr K was admitted into evidence and they have provided affidavits of evidence in chief for K Inc.
I certify that the preceding two hundred and forty nine (249) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Ryan
Associate:
Date: 20 March 2008
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