Limousin & Limousin
[2007] FamCA 505
•1 June 2007
FAMILY COURT OF AUSTRALIA
| LIMOUSIN & LIMOUSIN | [2007] FamCA 505 |
| FAMILY LAW – APPEAL FROM FAMILY COURT OF AUSTRALIA – APPLICATION TO ADJOURN PROCEEDINGS – That the trial Judge erred in failing to adjourn proceedings to allow the appellant to obtain discovery and inspection of the respondent’s financial affairs not established. British American Tobacco Australia Services Ltd v Cowell (as representing the estate of Rolah Ann McCabe, deceased) (2002) 7 VR 524 and Stead v State Government Insurance Commission (1986) 161 CLR 14; [1986] HCA 54 considered. FAMILY LAW – APPEAL - FAILURE TO ACCORD NATURAL JUSTICE – Assertion that the trial Judge denied the appellant natural justice by failing to grant adjournment or make further orders for discovery not established. |
| British American Tobacco Australia Services Ltd v Cowell (as representing the estate of Rolah Ann McCabe, deceased) (2002) 7 VR 524 Stead v State Government Insurance Commission (1986) 161 CLR 14; [1986] HCA 54 |
| APPELLANT: | Mrs Limousin |
| RESPONDENT: | Mr Limousin |
| 2ND RESPONDENT: | Mr McV |
| FILE NUMBER: | MLF | 10522 | of | 1996 |
| APPEAL NUMBER: | SA | 36 | of | 2004 |
| DATE DELIVERED: | 1 June 2007 |
| PLACE DELIVERED: | Melbourne |
| JUDGMENT OF: | Kay, Coleman and Boland JJ |
| HEARING DATE: | 31 January 2007 and 1 February 2007 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 14 May 2003; 24 July 2003; 18 May 2004; 25 May 2004 |
| LOWER COURT MNC: | [2003] FamCA 769; [2003] FamCA 1449; [2004] FamCA 493; [2004] FamCA 504 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Levine |
| SOLICITOR FOR THE APPELLANT: | Issac Brott and Co |
| COUNSEL FOR THE RESPONDENT: | Mr St John, SC with Mr Strum |
| SOLICITOR FOR THE RESPONDENT: | Michael Lipshutz Cohen Woolf and Weinberg |
| COUNSEL FOR THE 2ND RESPONDENT: | No appearance |
| SOLICITOR FOR THE 2ND RESPONDENT: | No appearance |
Orders
That grounds 9 and 14 of the Notice of Appeal filed 22 June 2004 and/or any applications for leave to appeal in the terms of such grounds be and are hereby dismissed.
That any written submissions in respect of costs relative to grounds 3, 9 and 14 of the Notice of Appeal be filed and served within 21 days.
That written submissions in response to submissions in support of any application for costs be filed and served within 21 days thereafter.
That the wife notify the husband’s solicitors in writing within 28 days of today’s date as to whether or not she intends to proceed to have the balance of the grounds of appeal in the Notice of Appeal filed 22 June 2004 determined by the Full Court.
IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Limousin & Limousin
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SA36 of 2004
File Number: MLF10522 of 1996
| Mrs Limousin |
Appellant
And
| Mr Limousin |
Respondent
And
| Mr McV |
Second Respondent
REASONS FOR JUDGMENT
Introduction
By Notice of Appeal filed 22 June 2004 Mrs Limousin (“the wife”) appealed against orders made in proceedings between herself and Mr Limousin (“the husband”) as First Respondent and Mr McV (“the Controlling Trustee”) as Second Respondent. The Notice of Appeal raised some fourteen grounds. As a consequence of a decision of a differently constituted Full Court on 30 December 2005, only grounds nine and fourteen of the Notice of Appeal have been argued before this Court. The husband has resisted the challenges articulated by those grounds. The Controlling Trustee has not participated in the appeal.
The Notice of Appeal filed by the wife on 22 June 2004 does not on its face disclose the dates of the orders appealed against. It emerged during the hearing of the appeal however that orders made by the trial Judge on a number of separate occasions were sought to be challenged, including orders made well prior to June 2004. For the sake of completeness, we set out the orders which we understand the wife to complain of under the umbrella of her Notice of Appeal filed 22 June 2004.
On 14 May 2003 the trial Judge ordered that the wife’s application for further discovery be dismissed.
On 24 July 2003 the trial Judge ordered:
1) That the Form 8 Application of the wife filed 16 July 2003 be dismissed. [That application sought that the trial Judge be disqualified from hearing contested property and spousal maintenance applications; that the further hearing of the proceedings be adjourned and/or that the wife be given leave to tender documents in rebuttal and/or to reopen her case.]
2) That the costs of the parties of and incidental to the application be reserved for further written submissions upon the conclusion of the proceedings.
3) That pursuant to Order 38 rule 25 of the Family Law Rules this matter reasonably required the attendance of Counsel.
4) That the extempore judgment delivered this day be transcribed and when transcribed a copy be placed on the court file and made available to each party.
On 18 May 2004 the trial Judge ordered:
[T]hat the Form 3 Application of the wife filed on 23 September 2003 and the Form 3A Response of the husband filed on 30 October 2003 be dismissed. I reserve all question of costs.
The Form 3 Application sought leave for the wife to reopen her case and adduce further evidence regarding the financial implications for the husband of the husband’s father’s death. The Form 3A Response sought an order, inter alia, that the wife’s application be dismissed.
On 25 May 2004 the trial Judge ordered:
1.That the husband do pay spousal maintenance to the wife in the sum of $1,907 per calendar month, the first of such payments to be made on 25 June 2004 and calendar monthly thereafter.
2.That the order for spousal maintenance referred to in paragraph 1 hereof be discharged upon the expiration of two years from the date of these orders or upon the wife commencing full-time employment, whichever shall first occur.
3.That the wife do within seven days advise the husband’s solicitors in writing of her obtaining full-time employment.
4.That paragraph 2 of the orders made by the Honourable Justice Frederico on 6 September 2002 be discharged, and it is FURTHER ORDERED that the husband be at liberty to enter into a Composition with his creditors pursuant to the provisions of Part 10 of the Bankruptcy Act 1966 (Cth) or otherwise as he may be professionally advised.
5.That all arrears of spousal maintenance and arrears otherwise arising pursuant to the orders of this court made 29 March 1999 be discharged.
6.That each of the husband and the wife do retain to the exclusion of the other all motor vehicles, furniture, insurance policies, bank accounts, shares and choses-in-action presently within their respective possession, power and control.
CHILD SUPPORT
7.That from the date of these orders until 31 December 2004 the husband do pay for the support of each of [Z], born in 1987, and [G], born in 1990 the sum of $125 per week (being $250 per week in all) AND THAT he maintain the existing health insurance cover for each of the said children.
8.That all previous assessments of child support be varied to the extent necessary to discharge all or any arrears of child support arising thereunder.
FURTHER ORDERS
9.That the Form 7 Application of the wife filed on 20 February 1998, the Further Amended Form 3A of the husband filed on 20 March 2004 and the Form 63 Application of the wife filed on 4 March 1999 be otherwise dismissed.
10.That pursuant to rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel.
These orders rejected the wife’s further application to adjourn the hearing of the proceedings and effectively dismissed the wife’s application for settlement of property.
Background
Guest J heard contested proceedings for financial relief between the parties on 28 and 31 March, 1, 2 and 3 April, 12, 13, 14, 26, 27 and 28 May, 21, 22, 24 and 31 July, 1 August and 3 November 2003. Between 3 November 2003 and the delivery of judgment in the substantive proceedings on 25 May 2004 his Honour received extensive written submissions.
The substantive proceedings which the trial Judge determined on 25 May 2004 had been commenced by the wife on 20 February 1998 and included claims for property settlement, lump sum settlement and/or spousal maintenance. At trial, the husband, by further amended response, sought the dismissal of all claims by the wife, the effect of which would be that he pay the wife nothing whether by way of past or future financial provision. The husband sought a variety of orders with respect to the children of the marriage of the parties, the details of which are not of assistance for present purposes.
On 28 March 2003, the first day of the trial, an application for adjournment of the trial was made by the wife. As the transcript confirms, and is not in doubt, that application was withdrawn during the course of that day. The trial commenced on the Monday following, 31 March 2003.
The husband’s case before the trial Judge was that he had virtually no assets, and certainly insufficient assets to meet relief of the magnitude sought by the wife. The wife’s case at all material times was that the husband had failed to make a full and frank disclosure of his financial circumstances and that his true worth, if revealed, was more than sufficient to satisfy the orders sought by her.
The husband was born on …1946 and was aged 57 years at the date of his Honour’s substantive judgment. The wife was born on … 1955 and was accordingly 49 years at that time. The parties married on 1 June 1980. The eldest child of the parties, J, was born … 1984 and was thus aged over 18 years at the date of his Honour’s substantive judgment. There were two other children of the marriage: Z born 1987 and G born 1990, they being aged 15 and 12 years respectively at the date of his Honour’s judgment. The parties separated in April 1993 and thereafter lived continuously apart. Their marriage was dissolved by Decree pronounced in March 1997.
From the date of separation in 1993 until an order of the Court of 29 March 1999 the husband paid the wife a weekly sum which increased from $740.00 to $880.00. He also paid utility charges of approximately $617.00 per calendar month, together with additional monies from time to time with respect to the wife’s credit card and clothing and sundry expenses for the children. The husband continued to pay private school fees for the children. The trial Judge recorded, and it seems uncontroversial, that by 1998 the husband was “paying for the collective benefit of the wife and the children approximately $107,000.00 per annum”.
In the post separation period the wife completed a Bachelor of Arts Degree at University majoring in psychology and subsequently completed a Graduate Diploma in Human Resource Management. The wife derived a modest income from personal exertion in the post separation period.
In the post separation period the children lived with the wife until 2001 when the child J commenced to reside with his father. The youngest two children remained with their mother and were residing with her at the date of his Honour’s substantive judgment.
The former matrimonial home of the parties had been sold in 1994. The whole of the proceeds of sale had been received by the bank which held the mortgage over the property, after which a shortfall of $72,000.00 remained.
The wife had not re-partnered as at the date of the trial Judge’s substantive judgment. The husband had been in a de facto relationship with Ms G since 1997, initially living in property owned by Ms G at B which was later sold.
The trial Judge concluded that the husband had “no assets of significance” but had, “substantial debts” and “a financial resource as a discretionary beneficiary of the JZG Trust of which the husband is one of two joint appointors”. His Honour found that “[t]here is no evidence to suggest that Mr K [co-appointor of the trust] is his [the husband’s] ‘puppet’. The potential beneficiaries of the Trust are the husband, Ms G and their respective children. Ms G is the sole director of the trustee company.” The trial Judge concluded that “[t]he real assets of that Trust… are not substantial and are in the main set off by the debenture charges and guarantees to Ms G’s companies.”
The trial Judge noted that in March 1999 the husband disclosed information about litigation in the New South Wales Supreme Court. For reasons which he detailed, his Honour concluded that he did “not regard the New South Wales litigation as being an asset capable of definition or properly to be made the subject of any orders of this court”.
It is apparent from his Honour’s reasons for judgment that he rejected the wife’s claim that the husband had substantial assets of approximately $2.5 million within his possession or control. The husband was found to have “substantial debts” whilst “[h]is assets on the other hand are minimal”. His Honour thus declined to make any order for settlement of property.
The trial Judge dismissed the wife’s application for a final order for spousal maintenance, essentially on the basis that the wife ought to be able to support herself adequately without spousal maintenance after a period of 2 years, but ordered the husband to pay $440.00 per week by way of spousal maintenance for a period “not to exceed two years”. The wife’s claims with respect to arrears of spousal maintenance, were dismissed. For reasons which he detailed, the trial Judge was “not satisfied that the husband has the capacity to pay the arrears as sought”.
In relation to the child support proceedings before him, the trial Judge concluded, for reasons which he detailed, that the wife’s application should be dismissed, the effect of so doing being that the husband was to pay for the support of each of the two younger children of the marriage “the sum of $125 per week” and “he maintain the existing health insurance cover for each of the said children”.
Trial Judge’s reasons
Reasons for Judgment 14 May 2003
As noted earlier, and confirmed by the course of the submissions of Counsel for the wife, three interlocutory decisions of the learned trial Judge were sought to be challenged in this Court pursuant to the two grounds of appeal which this Court has entertained. The orders made on 14 May 2003, 24 July 2003 and 18 May 2004 were not final decrees. No application was filed by the wife seeking leave to appeal such orders, however, during the hearing before us we permitted the wife’s counsel to make an oral application for leave to appeal those orders. It was conceded so far as the orders of 24 July 2003 dealt with an application for disqualification of the trial Judge, an appeal against that order was not pursued before us. The references to the trial Judge’s reasons for judgment on each of those occasions which follow are the result of that approach.
The trial Judge recorded that on the eighth day of hearing the substantive proceedings, Counsel for the wife applied for an adjournment of the proceedings. Two grounds were then advanced in support of that application. The first of the grounds was that “there has not been adequate discovery by the husband”. His Honour recorded that “[t]he application arose at a time when it became patently clear that … cross examination of the husband was, in the main, directed thus far at least to the issue of an alleged failure on the husband’s part to make adequate discovery so as to enable to the wife to fully understand his financial affairs”.
His Honour recorded that:
A prominent feature throughout the conduct of these proceedings thus far has been the wife’s bitter complaint that the husband has not adequately disclosed his financial position nor provided sufficient documents to enable her accounting and legal advisers to properly advise her of his financial position. She has relied upon the examination of documents by Mr M, who has, on the wife’s evidence, spent years on this task.
His Honour further recorded that:
On the other hand, it is the husband’s position that he has discovered all relevant documents within his possession, custody or control and which have been inspected by the wife’s advisors. In several affidavits filed in this court, Mr M has complained about what he asserts to be a failure by the husband or persons on his behalf to undertake full and frank disclosure.
The trial Judge then recounted the history of case management of the proceedings, commencing with orders made on 16 November 2001. In the course of that analysis, the trial Judge referred to orders made on 11 February and 12 April 2002. His Honour then referred to the matter having come before him on 29 May 2002 at which time the wife was represented by Senior and Junior Counsel. He recorded that on that occasion Senior Counsel appearing for the wife had submitted that “the husband had frustrated the process [of discovery and inspection], either by renumbering documents at inspection, asserting that they did not exist or, … making it ‘well nigh impossible’ to peruse any of the documents under inspection.” Counsel then appearing for the husband asserted that “the husband’s position was that full discovery had been made”.
The trial Judge referred to the issue on 4 September 2002 of “a number of subpoenas duces tecum which, in summary, were directed to some 20 commercial and trust entities and named witnesses.” His Honour also referred to orders made on 4 September 2002 obliging the husband to file and serve affidavit material and produce for inspection a variety of documents. He recorded that “[t]he husband asserts that he complied with that order on 4 November 2002” and that “[a]s I see it, there was no enforcement application.”
The trial Judge noted that “[t]he contentious issue of discovery continued and on 3 December 2002, Carter J made consent orders of a most detailed and comprehensive nature” which he understood the husband to have complied with by 19 December 2002. As was the case with the earlier orders, the trial Judge concluded that there was “no enforcement application brought by the wife” with respect to the orders of 3 December 2002.
His Honour then referred to Senior Counsel for the wife having “warranted the matter was ready to proceed to trial” on 20 December 2002. He pointed to the following portion of the transcript of the proceedings on 20 December 2002:
HIS HONOUR: I have an understanding of where the issues are, but (sic) worries me is that the course of the trial is going to also be used in the process of discovery. That may, as you would know as well as anyone, better than many, involves a lot of stopping and starting from time to time whilst documents are produced and read, examined and further cross-examined upon. In the result, it becomes a bit like a self-feeding nuclear reactor; one event leads to another, it becomes Hydra-headed and it has a capacity to take many, many days, not that the court should shrink from that.
MR HAYES: Your Honour, the answer to that is this (a) we already have enough material to be able to make powerful arguments in support of appropriate property settlements and maintenance on the principle that even though we’ve been given the equivalent of the 1200-page Iraqi manifesto on nuclear weapons the silences tell us a lot. Secondly, nothing short of some kind of physical torture, it would seem, would make Mr Limousin come clean. Now, if we wait for him to be ready and if we wait for us to be able to say to the court that it’s ready, then Mrs Limousin will have to continue living out in her shanty town.
The truth is I assure the court (a) I intend to do the matter, (b) we have enough to run the case and (c) I’m well aware of the difficulties in a matter where the parties can’t sign off on the interlocutory steps. But if it should turn out that we’re right and that itself is the deliberate attitude of Mr Limousin, that’s the very reason to set the matter down. We’ve taken every interlocutory step that is known to humankind and we have been unable to get Mr Limousin to provide basic information. Instead, he just simply runs us from one palace (sic) to another, one set of accountants to another. The fact is I assure the court it’s worthwhile setting this matter down. Mrs Limousin is in the most distressed and dire circumstances and I will do everything in my power to make sure the court’s time is not wasted any more than normally happens.
HIS HONOUR: Mr Hayes, how long would it take?
MR HAYES: Mr Brott has shown me he’s got two clean palms, which I take it means 10 days. I would have thought we’re looking at five to seven days, and even that might well be shorter.
The emphasis in each of these passages is that of the trial Judge.
Thereafter, his Honour noted the matter was before the Court on 10 February 2003, 14, 19 and 26 March 2003 at which time the trial Judge considered that “[t]he matter went through all necessary processes to bring it up to readiness for trial”. His Honour then referred to the adjournment application filed on behalf of the wife on 26 March 2003 which came before the Court two days later. He recorded that Senior Counsel who then appeared for the wife withdrew the application to adjourn the hearing of the proceedings and the matter was “left to proceed to trial on the material to hand”. His Honour then referred to a further (and unsuccessful) application to adjourn the proceedings which had been made on 12 May 2003, the fifth day of the trial of the proceedings.
The second argument in support of the adjournment application on 14 May 2003 was that “it would enable the wife to obtain a valuation of the husband’s interests, if any, in the S Group of Companies.” The trial Judge held that this “ran counter” to the submissions previously accepted by the Court and also those made by Counsel then appearing for the wife “at the opening of the case on 31 March 2003”. During the course of the latter submissions Counsel was considered by his Honour to have “repeated that the wife alleged the husband had not made proper disclosure of his financial position and submitted that, therefore, it was not possible for her or the court to precisely formulate the asset pool” but that “at the conclusion of the case [the trial Judge] would be satisfied that in fact the husband was the ‘beneficial owner of substantial assets’, the main asset being ‘a web of income-producing companies’ that significantly exceeded, but to an unknown extent, $2 million.”
The trial Judge referred to seeking the “clarification of, as the matter then stood, the identified assets thus far for [his] determination” and Counsel’s response in that regard. Having thus recounted the background to the application for an adjournment on the eighth day of the trial his Honour recorded that Counsel had “thus far, pursued an investigatory course during cross examination, the relevance of which, at times, I was left to speculate upon”.
Having made reference to the grounds upon which Senior Counsel for the husband resisted the wife’s adjournment application, his Honour concluded:
The parties have had sufficient time to prepare and bring this matter to trial; several years in fact. They both urged, throughout 2002, that I list the matter for hearing. I did this. It may be helpful to point out, yet again, that my task in proceedings such as this has been clearly laid down in law. I have a broad discretion to make orders as I consider appropriate tempered by the requirement for orders that I make being just and equitable. I am required to take account of those matters set out in s 79 of the Family Law Act (1975) (as amended). That legislation, as I said, provides me with a discretionary power to adjust the property interests of the husband and the wife in a manner that will do justice and equity between them. That discretion is not only broad, it is extensive”.
After referring to a number of substantive provisions of Part VIII of the Family Law Act (“the Act”), his Honour rejected the application for an adjournment “having been urged for so long to have the matter heard”. He emphasised:
I am entitled to take into account the strain which litigation places upon those involved and the fact that any orders for costs (even assuming they could be paid) is an inadequate balm to the party prejudiced by such an application. These proceedings have been pending now for a very long time, and being sufficient time for both the wife’s solicitors and counsel to have raised this earlier and not urged I proceed to trial as I was in December 2002 and then abandon this very application on 28 March 2003. The Court lists are congested. There is prejudice to the husband and in my view on balancing the factors for and against the application I am satisfied it should be dismissed.
His Honour added:
I have been and will continue to be alert in the proceedings to the principles laid out in Black v Kellner (1982) FLC 92-287 and Weir v Weir (1993) FLC 92-338, and accordingly, some leeway must be given. But the cross-examination nonetheless should be directed to the determination of assets and liabilities of the parties, not a blind and wild thrust in the dark akin to a scatter gun approach. In coming to my determination I am also cognisant of the principles laid down in Oriolo v Oriolo (1985) FLC 91-653. But I repeat, these proceedings are not now an inquiry into the adequacy or otherwise of discovery with the possibility that at the end of the day, as Mr O’Shannessy [Counsel for the wife] submitted, there may be an application for an adjournment.
The trial Judge concluded his reasons for refusing the adjournment of the proceedings in the following terms: “[t]here has been sufficient time and opportunity for discovery. In my view, the justice of the case and the responsible use of the Court’s resources dictates [sic] the matter proceed. I propose to do so. The application is dismissed”.
Reasons for Judgment 24 July 2003
On 16 July 2003 the wife applied to the trial Judge, inter alia, for an order that the proceedings be adjourned or, in the alternative, that “the wife be given leave to tender documents in rebuttal and/or to reopen her case”. The trial Judge referred to the written submissions of Counsel for each of the parties in respect of the application. His Honour concluded that:
A significant aspect of the proceedings over of [sic] the past several years has been the issue of discovery by the husband of relevant documents in his possession, power or control. As I pointed out in my Judgment delivered 14 May 2003, it has been the wife’s complaint that the husband had not adequately nor fully disclosed his financial position or provide significant documents to her to enable her accounting and legal advisers to advise her with any degree of precision about his financial position. She has relied upon an examination of documents by Mr M who, as I said, has spent some two years on the task. The husband’s position however has been that he has discovered all relevant documents within his possession, custody or control and which have been inspected by the wife’s advisers. In several affidavits earlier filed in this court, Mr M has complained about what he asserts was a failure by the husband or persons on his behalf to undertake full and frank disclosure.
The trial Judge reiterated:
As I said earlier, it is important to consider the background and history to these proceedings so as to understand the basis upon which these bitterly contested applications were listed for trial in the Long Defended List. In so doing I refer to my Judgment dated 14 May 2003 which traces a short history encompassing the wife’s complaints concerning the alleged inadequacy of the husband’s discovery and resurrected from time to time in the course of the trial. I refer to and take into account paragraphs 6 to 17 (inclusive) of that Judgment in coming to my determination in this application. A consideration of those matters provides some insight into the difficulties faced at trial and the requirement for both focus and direction to relevance.
Having dealt with the application for disqualification, the trial Judge, under the heading “The application for adjournment” referred to his judgment of 14 May 2003 and recorded that the present application “must fail” as:
There is no material fact or change of circumstances alleged to have occurred subsequent to my judgment of 14 May 2003. The application relies upon facts, circumstances or comments made prior to that date. No new matters are asserted or relied upon.
The remainder of his Honour’s reasons for judgment dealt with issues having no present relevance which need not be referred to.
Reasons for Judgment 25 May 2004
In his substantive judgment of 25 May 2004, the trial Judge addressed “The issue of a further adjournment” made in written submissions after the trial had concluded but prior to the delivery of judgment. His Honour then recorded, accurately there is no doubt, that Counsel for the wife sought that the trial should be “adjourned until ‘further’ and ‘proper’ discovery is provided by the husband and completion of the New South Wales litigation, or the likely recovery therefrom quantified.”
His Honour recorded the submission that:
[T]he Court did not have sufficient information about the husband’s financial affairs, particularly his interest in the [S] Group of Companies, the [G1] and [G2] companies, the value of the software to which I have adverted within the S Group and the value of the ‘…chose in action and judgment debts involved in the New South Wales litigation’.
Reference was made to his Honour’s earlier judgments of 14 May and 24 July 2003 with respect to adjournment applications and his Honour stated that he would “bring into account my reasons set out in each of those judgements”. His Honour then noted, uncontroversially, that there had been “no appeal” with respect to the earlier judgments.
Reference was made to the competing submissions before the trial Judge in relation to the further application for adjournment. His Honour concluded in that regard:
I do not accept the submission of Mr O’Shannessy [Counsel for the wife] and do not propose to further adjourn the proceedings. I have earlier in this judgment and elsewhere in the judgments to which I have already referred made findings in the exercise of my broad discretion and nothing has since been put by Mr O’Shannessy that causes me to change that view”.
His Honour added:
As I have said, the submission concerning the New South Wales litigation would permit an open ended situation to prevail, any closure to which is highly speculative. Furthermore, in arriving at that determination I have accepted and preferred the evidence of the husband on this topic. It is, in the exercise of my discretion, the appropriate order to make. In doing so, I also prefer the submissions of Mr St John [Counsel for the husband] to those of Mr O’Shannessy.
Leave to appeal
As noted at the outset, the grounds in the Notice of Appeal which gave rise to the hearing before this Court in January/February 2007 were filed on 22 June 2004, and included submissions seeking to impugn the decisions of the trial Judge of 14 May and 24 July 2003.
As Counsel for the wife appeared to acknowledge during the course of argument, there being no Notice of Appeal, or application for leave to appeal, filed with respect to either of the two earlier decisions of the trial Judge, the wife needed to apply to this Court for an extension of time to apply for leave to appeal and/or appeal against those orders. Such course was opposed by Senior Counsel for the husband. As we have already noted, we permitted the wife’s counsel to make an oral application for leave to appeal the interlocutory orders. He did not seek however an extension of time in which to appeal those orders.
For reasons which will become apparent, objectively, if the appeal against the trial Judge’s refusal to grant an adjournment after the trial had concluded on 25 May 2004 succeeds, the correctness or otherwise of refusing to grant previous applications for adjournment becomes purely academic. The same is true in the event that the appeal against the trial Judge’s refusal to grant an adjournment on 25 May 2004 fails, given that the earlier refusals to adjourn the proceedings resulted in the further days of hearing during which additional evidence was able to emerge as a consequence of such refusals. The wife’s case for an adjournment is best considered for appellate purposes on the evidence as it was after she had been afforded the opportunity to fully explore the aspects of the husband’s finances through the adversarial process.
No formal application for an extension of time within which to seek leave to appeal and/or to appeal the trial Judge’s earlier orders was made. More than three and a half years have passed since the later of those orders. There is no explanation for the failure to apply and/or appeal within time, or seek an extension of time, notwithstanding that the matter has in fact been to the Full Court on other occasions in the intervening period. In these circumstances we are not disposed to allow Counsel for the wife to bring such applications.. Nothing to which we have been referred persuades us that we should. However, that is not necessarily the end of the matter, as will be seen. The submissions of Counsel for the wife with respect to the order refusing an adjournment on 25 May 2004 clearly rely upon the earlier rulings and reasons for them. Albeit not in themselves issues requiring determination, the issues raised in the appeal which is before this Court do, in the circumstances of this case, require that this Court consider submissions made which criticise the trial Judge’s refusal to grant adjournments in May and July 2003. We perceive no possibility of injustice to the wife in adopting this approach.
Whilst superficially separate and distinct applications and orders and reasons, in reality the adjournment applications in this matter form part of a continuum which can be seen as having ended with the trial Judge’s refusal of an adjournment on 25 May 2004. Successfully criticising the trial Judge’s earlier refusals of an adjournment could potentially enhance the challenge to his refusal of an adjournment on 25 May 2004. The converse may also be the case.
Grounds of Appeal
Against that background we proceed to consider the grounds of Appeal. The somewhat unusual nature of the proceedings in this Court, and overlapping manner in which the various complaints were agitated on behalf of the wife are to an extent reflected in the course taken by the reasons which follow, hopefully without obscuring the bases upon which we have determined those complaints.
Grounds 9 and 14 of the Notice of Appeal provided:
9. His Honour erred in failing to adjourn the further hearing of the case to enable the appellant to have full discovery and inspection of the Husband’s financial affairs.
14. His Honour failed to accord the appellant natural justice.
Adjournment Ground (Ground 9)
After a series of assertions, not supported by any authority or reference to the Appeal Books, it was submitted, inferentially in support of the challenge embodied in Ground 9, that the trial Judge “failed to take into consideration that the husband was the owner of and in control of at least 37 – 45 companies, of which limited and outdated financial documents were only provided in respect of four entities” and further “that significant sums of money in the vicinity of several million dollars were reported as flowing through these entities.” (Summary of Argument of the Wife, page 2, para 2).
In support of that submission the Court was referred to the reasons for judgment of the trial Judge of 14 May 2003 wherein his Honour said:
After some six days of hearing, and at the conclusion of the wife’s case I sought clarification of, as the matter then stood, the identified assets thus far for my determination. Mr O’Shannessy [Counsel for the wife] responded by submitting they were as follows:
·firstly, the sum of $1.2 million “based on old and deficient information”,
·secondly, the S Group of Companies and to which Mr O’Shannessy gratuitously added that “the wife concedes the husband was successful in preventing her from having a valuation of that Group”,
·thirdly, the New South Wales litigation, and to which I have already made reference, and
·fourthly, assets that should have been acquired by the husband with funds that he held “in his hand”, and had not explained “where they went”.
As is plain, the trial Judge was there recounting the submissions made by Counsel then appearing for the wife. The accuracy of such recounting has not been disputed. We fail to perceive there, or anywhere else on page 57 of the Appeal Book, anything supportive of the submission made by Counsel for the wife. The assertion that “significant sums of money in the vicinity of several million dollars were reported as flowing through these entities” (Summary of Argument of the Wife, page 2, para 2) was unsupported by any reference to the Appeal Book.
It was also submitted that “the [refusal of the] application for an adjournment precluded the wife from obtaining further documents that would have enabled a proper valuation of the said companies to be conducted on conventional accounting principles and that would have enabled the court to make an order in her favour” (Summary of Argument of the Wife, page 2, para 2). It was further submitted to be of significance that the husband’s “accounting expert” had also “not been provided with sufficient financial documents to conduct a valuation” (Summary of Argument of the Wife, page 2, para).
In support of these contentions, we were referred to a number of passages in the transcript of the proceedings before the trial Judge. Although lengthy, the following in cross-examination of Mr R, the husband’s expert accountant who was being cross examined about the wife’s expert accountant, Mr M’s opinion, is instructive:
Was he saying it was for current value? Was he saying it was a value in the future? Was he saying it was a valuation in the past?---Well, probably to answer that, this is where we disagree. My obvious statement was that there can’t be a current valuation because it’s historical earnings based on earnings that happened several years prior and that weren’t current to date or last year, and that’s where Mr M and I had our differences of opinion in the valuation methodology, that to capitalise earnings there must be future maintainable earnings. I struggled with the methodology with Mr M in that regard.
…
The purpose of the 20 August 2001 report that you made being attached to your affidavit was, I take it, to show what your opinion was based on the documents that you had at the time as at 20 August 2001?---Yes, I was asked to provide that if I had any relevant information relating to the group and Mr St John asked me to give him a copy of it, which he included it [sic].
…
It was in fact your position at the time you saw Mr M that to property [sic] undertake the valuation exercise that more recent documents, that is, more recent income figures were required?---That’s correct.
…
That’s what you were told?---That’s what I was told. There weren’t any documents.
Which effectively was post-30 June 2001?---And Mr M and myself struggled with the valuation on that basis of not having more recent information to see if that income stream held true or what was the nature of the income stream.
HIS HONOUR: You’re addressing his attention to the four---MR O’SHANNESSY: Yes, your Honour, this is to the M group.
…
The issue of the value of the M group which you dealt with, you say that has no value to an external purchaser?---I said I couldn’t, yes, reasonably conclude a value.
Sorry, I apologise. In fact you said you couldn’t value it. You don’t say it has no value?---No, and as I discussed with Mr M, that if there was a book of loans or a book of trail commissions, you know, we could value that, I could value that and there is industry guidelines, but without any other figures or current figures or income projections or earnings in that group, I can’t put a value on it and I would say---
Without the documents that show what trailing commissions are being received, for example?---Correct.
So your position is not that a zero valuation should be put at the M group, if I can use that phrase, but rather that on the information available to you, you were unable to put any valuation on it?---That’s correct, without knowing what other activities it’s undertaken since that day. I mean, it could be zero but it could be something.
The issue of the value to Mr Limousin of the M group, have you turned your mind to that? Firstly, you weren’t asked to do that?---No, I haven’t turned my mind to it.But give what’s in H9, on your view of H9---?---Sorry, Mr O’Shannessy.
…
MR O’SHANNESSY: This is a question, your Honour, that relates back to the interest and the income received.
If the income that is recorded is not actually received there should be a balancing entry of a debtor, should there not?---Not necessarily. I don’t know who recorded it. That’s what I’ve said.
Is that what you would ordinarily expect?---I don’t know who recorded it or the quality of people that recorded it or what they were told or at different times or if it was on a cash basis or not on a cash basis. I mean, you know, there’s no assumptions in there, there’s no statements as to the method of accounting, whether it’s accrual, whether it’s cash. There’s so many other things that, you know – I don’t understand your question.Just as a matter of principle based on the profit and loss statement that we have for 1997?---I can’t say that as to what’s been presented to me. As a matter of principle, I would ask about debtors.
As is apparent from those passages of transcript, the fact that Mr R did not have those documents was potentially evidence that they existed and had not been made available, or that there was not any reason to consider that the entities in question were, at that time, of value. Their absence was thus equivocal. The trial Judge was clearly alive to those possible scenarios as his comments during the proceedings and subsequent reasons confirm.
It was then asserted that the trial Judge “also had decided that the expert for the wife was not fair and impartial and that there were grave concerns about his testimony” (Summary of Argument of the Wife, page 2, para 2). It was sought to support this submission by reference to the following passage from the transcript:
HIS HONOUR: I mean, there’s thousands of pages and it just seems to me that on the face of it it may be argued that Mr M is derelict in his duty. The hurdle that I cannot climb at the moment is the involvement of a senior counsel, one of the most senior counsel at the Victorian bar in commercial litigation – hasn’t appeared in the Family Court before, if ever – and is obviously engaged on the basis of his commercial expertise.
It was submitted that the trial Judge should have granted the adjournment sought on behalf of the wife in May 2003 having regard to the fact that the husband had filed a “supplementary affidavit on 12 May 2003 to disclose the existence of litigation involving FML Securities Ltd. (receiver appointed, M Finance Corporation (Vic) Pty. Ltd. and S N R, a debtor… and there had been no proper or reasonable opportunity to conduct investigations and provide expert evidence on the likely proceeds of the litigation” (Summary of Argument of Wife, page 3, para 2). Reference was made to two pages of his Honour’s reasons for judgment of 14 May 2003 in support of that submission (found on pages 56 & 57 of the Appeal Book, Volume 1). The relevant passages commence at paragraph 18 of his Honour’s reasons and read:
That, however, was not the end of the matter for on the fifth day of the trial and following a break of several weeks from the commencement of the trial and the resumption of proceedings on 12 May 2003, Mr O’Shannessy in the course of a preliminary submission, announced that at the conclusion of the hearing an application may be made to further adjourn the matter pending, firstly, the hearing and determination of proceedings in the Supreme Court of New South Wales involving FML Securities Ltd (Receiver Appointed), M Finance Corporation (Vic) Pty. Limited and one S N R, a debtor. These proceedings are referred to in an affidavit filed by the husband without objection on 12 May 2003. It is not difficult to conceptualise the open-ended nature of such an event which may take many years to eventuate. Its impact however, if any, upon the husband was never clearly articulated to me.
Elsewhere in the pages of the Appeal Books referred to by Counsel for the wife are further references to the NSW Supreme Court litigation, the existence of which was inaccurately alleged to have been only recently disclosed. To the extent that other matters appearing in those pages related to the adjournment application, they did not relate to the NSW Supreme Court litigation.
It was then submitted that the trial Judge had “erred in failing to adjourn the further hearing of the case in response to the application of Counsel for the wife in the closing address.” (Summary of Argument of the Wife, page 3, para 3) The Court was referred to that address in which it was submitted that:
The wife contends that this trial is concerned with;
1. Firstly, an application for alteration of property pursuant to Section 79 and consequential orders arising therefrom (the Bankruptcy relief injunctions).
2. Secondly, whether that application can be dealt with finally or whether that application should be adjourned until after;
(i) Further (and the wife contends proper discovery) is provided by the husband and;
(ii) The NSW litigation partly described in exhibit Wl4 is completed or the likely recovery therefrom is quantified.
3. Thirdly, the determination of the proper level of child support by way of departure order in accordance with The Child Support (Assessment) Act.
4. Fourthly, the determination of whether the wife is entitled to spousal maintenance, the quantum thereof and whether that maintenance should be periodic, lump sum or both.
5. Fifthly, whether or not the agreed and common ground non payment of the husband of all amounts specified in the orders of unpaid since April 2001 amount to arrears of spousal maintenance or whether such order should effectively be discharged retrospectively.
It was submitted to have been “clear at that stage that the wife had been unable to identify any asset capable of valuation…, [and] that sufficient documents had not been provided to enable a valuation to occur” (Summary of Argument of the Wife, page 3, para 3). That submission was sought to be supported by reference to the trial Judge’s conclusion in the following paragraph that:
Mr M is an investigating accountant engaged on behalf of the wife and has been involved in the proceedings since May 2001. There have been a number of lengthy affidavits filed on his behalf, detailing, from his perspective, his assertion of inadequate discovery of financial material by or on behalf of the husband. He, in my view, appears to have stepped outside his role as an expert forensic witness to one whereby he has sought (for example) to argue interlocutory matters on behalf of the wife. I propose to address the issue of his role more thoroughly later in my judgment.
Our reading of that paragraph reveals nothing which supports Counsel’s submission, although it was undoubtedly the fact that Counsel for the wife had at all times been “unable to identify any asset” (Summary of Argument of the Wife, page 3, para 3) in respect of which relief in the terms the wife sought could be enforced or secured, as Counsel then appearing frankly conceded to the trial Judge. It was further submitted on behalf of the wife that the trial Judge erred in failing to adjourn the proceedings when it was “clear at that stage” that “the credibility of the expert witness for the wife had been successfully impeached by the husband” (Summary of Argument of the Wife, page 3, para 3).
The Court was referred in this context to the following conclusions of the trial Judge as they emerge from his reasons for judgment:
He [Counsel for the wife] said its relevance related “… in a secondary way” in the event that he persuaded me there was a pool of assets. It was in those circumstances I would look at the “… substance of those liabilities”. He later conceded in discussion that even if I disregarded the C Investments debt, “… that still doesn’t cure the difficulty that your Honour has frankly pointed out as you perceive the case of where’s the asset” (sic). It concerned me, throughout the proceedings, that there was associated with the wife’s case a speculative inquiry to determine an asset, a problem accurately identified by Mr Udorovic QC on 19 March 2003.
Reference was also made to the following passages of his Honour’s reasons for judgment:
Mr M is an investigating accountant engaged on behalf of the wife and has been involved in the proceedings since May 2001. There have been a number of lengthy affidavits filed on his behalf, detailing, from his perspective, his assertion of inadequate discovery of financial material by or on behalf of the husband. He, in my view, appears to have stepped outside his role as an expert forensic witness to one whereby he has sought (for example) to argue interlocutory matters on behalf of the wife. I propose to address the issue of his role more thoroughly later in my judgment.
To the extent that anything turns upon it, which we doubt, we do not interpret either of those passages as having been critical of the credibility of the expert witness for the wife but rather the reliability of his evidence by reference to his impartiality and his methodology. It is to be remembered that the passages relied upon by Counsel for the wife appear in the trial Judge’s substantive judgment, after the trial of the proceedings over many days had concluded. During the trial Mr M had been extensively cross-examined.
Reliance was placed on the assertion that it was “clear at that stage” that “the husband had disavowed the accuracy of a number of financial accounts” (Summary of Argument of the Wife, page 3, para 3) relating to entities of his. In support of that submission the Court was referred to a number of passages of the transcript of the cross-examination of the husband during the trial.
MR O’SHANNESSY: Mr Limousin, both of these documents describe that $305,000 as having been received by MLS Corporation Pty Ltd in the 1998 financial year. Is that correct?---It’s clearly wrong.
Clearly wrong?---Yes.
…
MR O’SHANNESSY: Mr Limousin, if I could take you to page 42. You’ll see at the top of the page – it’s a reference to the M L Securities mortgage book sold to the Macquarie Bank for $208,000. Again the order 19 answers that I took you to before put it at a total of $209,000 and your affidavit put it’s [sic] at a total of $252,000. Again this is an error in this particular---?---Yes, it is.
…
[MR O’SHANNESSY:] They were what?---Mark M and Mark K on behalf of Arthur Andersens were running the company on behalf of the bank and they handed it back to us and that was the position that they gave us that time. There was no money handed over whatsoever, nothing, just a shell.
[MR O’SHANNESSY:] You’ll see under Current Assets, you’ll see cash at bank for the 2000 year, 59,263 and you’ll see “bank account: E Group: 347,797”?---Yes. That’s clearly wrong.
It was further submitted “that the husband’s own accounting expert queried the accuracy of the accounts” (Summary of Argument of the Wife, page 3, para 3), a submission made in reliance upon the following passages from the transcript of the cross-examination of Mr R during the trial:
[MR O’SHANNESSY:] It was in fact your position at the time you saw Mr M that to property [sic] undertake the valuation exercise that more recent documents, that is, more recent income figures were required?---That’s correct.
Was any explanation provided to you why what are described as more recent documents were not provided to you?---To me or Mr M?
To either of you?---That they just weren’t available.
That’s what you were told?---That’s what I was told. There weren’t any documents.Which effectively was post-30 June 2001?---And Mr M and myself struggled with the valuation on that basis of not having more recent information to see if that income stream held true or what was the nature of the income stream.
…
MR O’SHANNESSY: In your meeting with Mr M you said to Mr M, did you not, that you wouldn’t want to do business with Mr [M] Limousin?---I probably did say words to that effect.
HIS HONOUR: You said what?
MR O’SHANNESSY: That you wouldn’t want to do business with Mr [M] Limousin.
HIS HONOUR: Right.
MR O’SHANNESSY: So you probably did say words to that effect?---Probably did, and Mr M said a few interesting things to me and I agree. My experience with Mr Limousin has been a financial disaster since I’ve been involved with the S 101 group to the stage where it’s gone into administration and I think a lot of people have lost a lot of money out of it.Another reason is the paucity of financial documents that you received from him?---Well, I think it’s best practice that accountants are sort of – if you’re doing one part, you should do all parts of documents otherwise you’re going to miss bits. You’re not going to be able to tie up loan accounts. You’re not going to be able to do that. But I mean, it has been an absolute financial disaster”.
By virtue of these matters it was submitted to have been “not possible to conduct a proper valuation of the financial entities on the basis of the information that had been supplied” (Summary of Argument of the Wife, page 4, para 3).
In the face of the evidence thus referred to, it was submitted that the trial Judge had erred in refusing Counsel for the wife’s application to adjourn the proceedings.
It was then submitted that the trial Judge had erred in dismissing the wife’s application of 16 July 2003 “to reopen her case, recall Mr M and to adduce further evidence inter alia concerning the financial benefits that would flow to the husband under his father’s will” (Summary of Argument of the Wife, page 4, para 4). The Court was referred in this context to page 128 of the Appeal Books, where the trial Judge referred to the application of the wife filed 23 September 2003 the relevance of which for present purposes eludes us, and to a letter from the husband’s solicitors of 29 August 2003 advising that the husband’s father, Mr Limousin Snr, had died on 22 August 2003. The Court was also referred to the Form 8 Application filed by the wife on 16 July 2003.
It was submitted that the trial Judge had erroneously held that the wife’s submissions were “misconceived” (Summary of Argument of the Wife, page 4, para 4). In support of that contention the Court was referred to the following passages of the trial Judge’s conclusions.
Insofar as the Will of the late [Mr Limousin Snr] was concerned, Mr St John pointed to the husband’s Order 30 Affadivit [sic] (par 131) that he anticipated his father would leave a bequest for the benefit of his grandchildren. The Will is clearly consistent with that intention. Mr St John submitted that the proposition the husband had been “carefully omitted” from the Will was “speculative smear without foundation”, as was the proposition that “his interests” were represented by Ms G. He pointed out that Ms G was one of three trustees of the JZG88 Trust, in which the primary beneficiaries were the children. She was bound by the terms of the Trust. She did not control the Trust. Mr St John pointed out that it was quite incorrect to assert that Ms G was the recipient of moneys under the Estate of the late [Mr Limousin Snr]. In the circumstances, he submitted that this issue had no relevance to the proceedings.
…
I see nothing in the material advanced by and on behalf of the wife that would cause me to grant leave to her to re-open the evidence at this particular time, following all that I have heard thusfar and reading some 100 pages of written submissions also filed and served on behalf of the parties. I am satisfied, on the face of the documents alone that this, in the exercise of my discretion, is the appropriate order to make. The thrust of the wife’s submissions, insofar as the factual and legal implications were concerned resulting from the death of the husband’s father, were misconceived. There is sufficient on the husband’s affidavit material and submissions alone to satisfy me that nothing would be gained by taking the step proposed by Mr Brott at this extraordinarily late stage in the proceedings.
Thus it was submitted that the trial Judge’s decision “denied the wife natural justice and prevented the wife from adducing evidence and cross-examining the husband and other relevant witnesses upon the dispositions made in the will of the husband’s father” (Summary of Argument of the Wife, page 4, para 4). It is common ground that the husband (unlike his siblings) had not been included as a beneficiary under the last will and testament of his father Mr Limousin Snr. Nor was it in dispute that the interest that might otherwise have been the husband’s inheritance was left to the trust to which the husband had no specific or absolute legal entitlement.
Whilst the intention of the husband’s late father may have been to avoid vesting “property” in the husband by way of inheritance in respect of which the wife might obtain orders in the proceedings pending in the Court, nothing to which this Court has been referred establishes any basis for concluding that the wife could have productively adduced evidence or cross-examined the husband in relation to those matters. The husband’s late father’s will spoke for itself, as did the deed which governed the trust which received what otherwise might have been the husband’s inheritance. The “other relevant witnesses” who might have given probative evidence with respect to the “dispositions made in the will of the husband’s father” (Summary of Argument of the Wife, page 4, para 4) were never identified.
It was submitted on behalf of the wife that the trial Judge “erred in holding that the wife had failed to issue enforcement proceedings in respect of discovery despite the wife having issued applications and having further orders for discovery made” (Summary of Argument of the Wife, page 4, para 5). Reference was then made to a series of orders for discovery in 1999, 2000, 2001 and 2002.
Nothing to which the Court was referred establishes that the wife had ever brought enforcement proceedings in respect of the orders thus made, which was the point the trial Judge made. Save that it is not made out, nothing more needs to be said about this aspect of the complaints made on behalf of the wife.
It was then submitted that the trial Judge had “denied the wife natural justice by failing to adjourn the matter and permit further discovery in order for the wife to have access to documents with which to challenge the evidence of the husband, Ms G and Mr H.” (Summary of Argument of the Wife, page 5, para 6). It was further submitted to have been “impossible for the wife, who did not work in the business and who had been separated from the husband for approximately 10 years to be in personal possession of any information with which to challenge and/or test the evidence of the husband.” (Summary of Argument of the Wife, page 5, para 6).
The Court was referred to a number of passages in support of the submission that the trial Judge “expressly took into consideration that the evidence was unchallenged in making findings of fact in favour of the husband” (Summary of Argument of the Wife, page 5, para 6). The following are the relevant paragraphs from his Honour’s judgment. Their length is indicative of the careful attention the trial Judge gave to these matters.
The wife explained that she was aware of the contents of that letter and made enquiries from Mr M as to that which was alleged. She said that Mr M “totally denied” saying anything in those terms, or to that effect. That denial, I will say at this stage does not sit happily at all with the evidence of Mr McV, who I found to be an impressive witness and whose evidence I accept. Mr St John then referred the wife to the fact that on 19 March 2003, Mr Udorovic QC, then appearing for her had submitted to the court that he had conferred with both the wife and Mr M and inquired of them what assets were available for distribution? To that, “there was a deafening silence”. The wife said that the comment made by Mr U had surprised her. The wife said that she had always been informed by Mr M that the husband’s financial structure was so complicated it would “take a genius to work it out”, and that he had worked it out. Mr M, she said, had been involved in the proceedings for “three or four years”, when in fact it had been since May 2001. (para 38).
…
The husband then addressed his attention to the “financial history” during marriage, and it is clear that by the time the parties separated in April 1993 he was in severe financial difficulty both with the ANZ Bank and otherwise arising from a commercial dispute with his then business partner. There was no acceptable evidence to the requisite standard of persuasion led by or on behalf of the wife that could suggest otherwise. The burden of debt was substantial, evidenced for example by the sale in 1994 of their former matrimonial home at A (purchased and renovated earlier at a total cost of about $1,500,000). It was sold for $1,050,000, and the proceeds were applied towards meeting the ANZ Bank mortgage. Notwithstanding however, there remained a shortfall of $72,000. (para 135).
…
The husband explained that the Deposit Bond Centre commenced in about the year 2000 and is operated by [G2] to originate and issue deposit bonds for persons wishing to acquire real estate without using their own capital. A bond is issued by the insurance underwriter at a premium of one to two per cent of the sum sought. That business is conducted by a Mr H and is one in which, the husband explained, he has no day to day involvement. Any income received is paid to the [S] Group. He said that Mr H would be better able to expand upon its current situation. It was the husband’s belief in any event that the business itself had diminished by reason of changed business practices and that the income derived was not significant. There was no evidence advanced to the contrary. (para 162).
…
I have carefully considered the husband’s evidence and the circumstances in which the evidence was given. No further evidence of a compelling nature was adduced to suggest that his evidence was incorrect and in the circumstances, I accept his explanation and its direct impact on the available revenue for that particular financial year. When first cross examined about the revenue for that particular financial year, I observed the husband to be quite perplexed when viewing the relevant financial statements, whilst clearly maintaining that he did not have available “in real terms” that amount of available income. In the result, such was demonstrated to my reasonable satisfaction to be the case for this particular financial year, and it is that sort of evidence that casts doubt upon propositions that the husband (or the relevant entities) had in each of the other years received, or had the use of the alleged profit after tax in “real terms”, or at least without regard to the servicing of his other considerable debts and commitments. (para 186).
…
The contents of the husband’s affidavit filed without objection on 12 May 2003 are both clear and helpful. There was nothing put in cross examination by Mr O’Shannessy that successfully challenged in a material way and to my satisfaction that to which the husband deposed. The litigation has now spanned some 10 years. It is currently, but in another form, before the Supreme Court of New South Wales and there is no evidence helpfully explaining its present position in the list of cases awaiting trial or when, if at all, it is likely to be heard. There may even be the possibility of an appeal. The wife’s attribution to relevance has, in the practical sense, left much to be desired, for in the result, it appears to me that any gain to M Finance is speculative and remote as matters presently stand. Mr O’Shannessy frankly conceded when I asked that he clarify how I am to assess the value of this litigation as opened by him, that I “… could only apply a common sense approach if I were to evaluate it now”. (para 211).
Later in the course of cross examination when, Mr O’Shannessy yet again re-visited this issue, he put to the husband that if the potential outcome of the New South Wales litigation was of “such little value”, why couldn’t the entire benefit be transferred and/or assigned to the wife?. That, in my view, was a rather simplistic approach and certainly the husband’s answer confirmed that view. He made it clear that there were outstanding monies, fees and costs to be paid and that, in any event, even a percentage of any recovery (after costs and the like) was not appropriate by reason of the debenture in favour of JZG over M Finance. The husband denied that JZG was effectively his alter ego (which evidence I accept) and the cross examination was simply left there. There is no evidence before me explaining the extent of the debenture charge, and no cross examination suggesting that the husband’s denial was false or incorrect. (para 212).
…
Yet again, I sought clarification from Mr O’Shannessy as to the relevance of his cross examination. He submitted that the document set out the husband’s assets/liabilities as at November 1999 “as represented by him” to the lender. In my view, and for the most obvious of reasons, particularly in the absence of any other evidence, I have no difficulty whatsoever in rejecting that submission. I do not propose to canvass the separate items of cross examination by Mr O’Shannessy as to the contents of that document for in my view, it possessed no logical or evidentiary base, and in any event, the husband, I observed, answered all questions put both directly and to the best of his ability. (para 215).
…
I have also considered the written submissions of counsel commenting upon the husband’s evidence. I do no propose to comment upon the same in detail for I have thusfar recounted the evidence relevant to my determination and made findings. I reject the submissions of Mr O’Shannessy that the husband’s interest in the [S] Group, the property marketing business and the loan originator business “… are valuable”. It is plainly out of touch with the evidence before me. I reject as ludicrous the submission that the husband’s exercise of Part 10 of the Bankruptcy Act and the recording of his debt as “… a dishonest attempt to mislead the court”. There were otherwise criticisms addressed to the husband that were, in my view, extravagant and misplaced, included for example, that he indulged in “… calculated misrepresentation”. The criticisms included, as Mr St John pointed out, convoluted alleged discrepancies or inconsistencies which were not put to the husband. I have regard to the submissions. (para 239).
…
Overall, it was the opinion of Mr R that S 101, and the software within it was of no significant value. He said that its software faced competitive products in the market “of at least equal sophistication and which are well marketed”. He deposed that the software which was of a high level of sophistication and originally intended to be developed and marketed to banks and financial planning specialists had not, in fact, eventuated. The evidence too is consistent with the evidence of the husband and of Mr H. Furthermore, there was no evidence led by the wife that can persuade me to the requisite level that such is not the case. In the circumstances, I am satisfied that the [S] Group of Companies has little, if any, value. As matters presently stand, its future prospects are dismal, if not, gloomy. (para 256).
…
When proceeding with this issue, Mr O’Shannessy again sought to rely upon the Aide-Memoire prepared by Mr M (p 7 of Exhibit “W29”) showing a movement in the balance of the loan account of the [M] Unit Trust between 30 June 1996, 16 December 1996 and 30 June 1997 to underpin his point. The response by Mr R was clear and, in my view, particularly in the absence of any further evidence, convincing. For the sake of clarity I propose to set out that evidence in this judgment.
“(MR R): … Yes, you’ve said that, Mr O’Shannessy, payment, and quite clearly even on page 1 of this it purports to be cash flow. You’ve got receipts, you’ve got payments and you’ve got opening cash of zero, closing cash of zero. So it’s purporting to be cash. I can’t see that it is cash. I think it’s an accounting entry. For example ‘Management fees, receipts of income, 268,000,’ and then we’ve got that payment. Well, I don’t think it’s a receipt in or a payment out. I think it’s a journal entry, just like with the reduction…
(MR O’SHANNESSY): Sorry, which is the journal entry?... I believe they all are journal entries by the looks of it, but ‘management fees’, for example, on page 1, the one below ‘litigation income’ and …
Just so you’ll know, that’s taken from the statements in W15?... So there was an actual receipt into the bank of 268,000? I can’t see that
HIS HONOUR: Received into the bank is what this witness is saying.
MR O’SHANNESSY: We’ve never seen a bank statement for that, Mr R, so I’m not going to ...? ...lt says ‘receipts’ and likewise with the litigation income
Look …
HIS HONOUR: Let the witness finish, please.
MR O’SHANNESSY: Yes? ... So I’m saying that the payments offsetting these loan accounts may just be journal entries, they’re not actually payments. It just happens to be the balancing on it. So I can’t say that it’s a payment off the loan account.
Why would the loan account be reduced if not by way of payment? ... If that loan account was in substitute for the indebtedness of the ANZ and they received litigation income, there would be nowhere else to journal that. If the ANZ received that litigation income, you would have to reduce that loan balance [T 33-34].
[Later]
MR O’SHANESSY: Mr R, on page 3, ‘Income, $352,000; Management Fees, $268,000,’ are they book entries or are they real income? ... I believe that they’re book entries.
Why would they be made if there was no such income? ... I didn’t say that there wasn’t income but you’re asking me to isolate periods which I just can’t do and you’re purporting that it’s cash received on this front page which just appears not to be.
If it is income received as opposed to cash received, what’s the difference? ... A person may never have received that income. If it’s cash and you pay that cash out, then they have that income. It [sic] it’s income that’s been offset against a debt, then you don’t have that income. It just reduces a debt.
So your position is that this profit and loss statement does not record income?... I never said that, Mr O’Shannessy.
Your Honour can see with the look on my face that I’m lost and Your Honour may…HIS HONOUR: I’m not too sure that I’m lost, Mr O’Shannessy. This witness, in the circumstances in which he finds himself, is commenting upon the propositions put to you. Yes, go on.” [T 35-6]. (para 285).
In response to these complaints, Senior Counsel for the husband submitted that it was necessary to consider the “prior listing history of the proceedings” (Summary of Argument of the Respondent/Husband, page 4, para 11). Reference was made to the application made on behalf of the wife on 28 March 2003 that the trial of the proceedings be adjourned. It was submitted that:
The basis of the application was the inability of the Wife’s previous Senior Counsel to continue to represent the Wife, … an inability of the Wife to present a broad but accurate picture of the assets and liabilities of the relevant companies because of the unusual complexity of the corporate structure… and an asserted failure of the Husband to comply with previous Orders for discovery. (Summary of Argument of the Respondent/Husband, page 4, para 11(c)).
The Court was referred to the transcript of the dialogue between the trial Judge and Mr Maxwell QC (Senior Counsel then representing the wife), the matter having been stood down to enable Senior Counsel to take further instructions, after which the application for adjournment was withdrawn, thereby leaving the matter to proceed on the following Monday 31 March 2003. Reliance was placed upon what was then said, and it is instructive to consider the exchanges.
MR MAXWELL: Your Honour, we’re indebted for the time which has been wholly productive in this sense. My instructions are that the form 8 application is withdrawn in both respects; that is to say, no adjournment is sought and no hearing on discovery is sought and we would wish to take up your Honour’s proposal to commence on Monday.
HIS HONOUR: That seems in the circumstances, Mr St John, something that should be received by you positively.
MR ST JOHN: Indeed, your Honour. The only issue obviously, your Honour, is some issue of costs arise from the application and otherwise we are content of course for the matter to be put over to 2.15. I don’t say your Honour should proceed to hear the costs ---
HIS HONOUR: I’ll consider the case as having commenced today and stood down and so any record of – an order will record that this is the case, having been heard on 28 et cetera and onwards.
MR ST JOHN: Yes, thank you.MR MAXWELL: Your Honour, might I say this: what your Honour said in the course of my submissions was very salutary and of great assistance to my client in appreciating her position. I just want to indicate that, as your Honour would I think have inferred, it was as a result of what your Honour said putting the matter into its context which has prompted the withdrawal of the application. So we’re indebted for that assistance. There are two procedural issues. I won’t be here on Monday. I’m retained in the matter generally and my learned junior will be appearing for my client. There are some subpoenas which will need to be issued. My learned junior understands about that in a way I don’t. Your Honour may require now or on Monday to be told more about how those fit into the case.
In fairness to Counsel for the wife, and to better contextualise the above exchange, we set out at length the exchange between the trial Judge and Mr Maxwell QC which preceded the matter being stood down to enable Mr Maxwell QC to take further instructions.
MR MAXWELL: I am applying for an adjournment of the trial to a date to be fixed and I am applying on behalf of my client for a contested hearing about what the wife asserts is repeated noncompliance with discovery orders. If there has been noncompliance, as we contend, that is a contempt of court. It’s wilfull.
HIS HONOUR: For a contested hearing on discovery?
MR MAXWELL: On the discovery application. Your Honour has before you a form 8 in which both those applications have been foreshadowed; that is to say, an adjournment of the trial to a date to be fixed - - -
HIS HONOUR: What is the date of filing of that application?
MR MAXWELL: It was mentioned on Wednesday but wasn’t before your Honour. It’s filed 26 March and it is that to which Mr M’s more recent affidavit relates.
HIS HONOUR: I don’t have that form 8.
MR MAXWELL: Your Honour, I’ll hand up - - -
HIS HONOUR: The last document I have is the affidavit of Mr M filed 24 March. This was filed 26 March?
MR MAXWELL: Which was the day it was before your Honour but I think Mr Udorovic said it wasn’t for your Honour. He foreshadowed it. That was only a mention on Wednesday, as I understand it. Your Honour gave leave to file that, thank you.
10 HIS HONOUR: Yes, I dare say I did but I don’t have it. I recall it being mentioned to me.
MR MAXWELL: Would your Honour wish a moment to read it?
HIS HONOUR: Yes, I’ll just have a look at it. Yes?
MR MAXWELL: Those are the applications, your Honour, which we press this morning. If I might deal with the adjournment second and deal first with the matter of discovery. Your Honour knows from the discussion by the court---
HIS HONOUR: This case won’t be on this year if this was the course. First of all, the application for discovery would take days.
MR MAXWELL: I accept that.
HIS HONOUR: That means going back into a standard track list to get a hearing months down the track at considerable cost and then again waiting your turn in the long defended list.
MR MAXWELL: My client understands that and, your Honour, my instructions are clear. For the fair trial of this matter it is respectfully submitted the two orders in the form are necessary; that is to say, an adjournment of the trial because it cannot on any conceivable view be prepared for Monday given that senior counsel dropped out yesterday, and that there is a proper basis for investigation of noncompliance with discovery orders. That has been asserted before but never investigated by the court and it is, in our respectful submission, necessary that it be investigated, not only because it’s a serious issue, noncompliance with the rules; secondly, because failure to give discovery prevents a fair trial occurring; and, thirdly because we’re not in a position to present a proper analysis of the financial position without those documents. I was about to refer to what the Court of Appeal said in the McCabe case which, as your Honour knows, is about wilful destruction of documents. That’s not what we’re saying here but there is discussion by the Court of Appeal of the concept of fair trial.
…
[MR MAXWELL:] If your Honour was of the view that the interests of justice required that the trial take place without that interlocutory hearing, then it would, in our respectful submission, have the consequence that there will need to be lengthier and potentially interrupted cross-examination of the husband because the issues identified in Mr M’s affidavit will have to be explored, as your Honour was foreshadowing a moment ago.
HIS HONOUR: This is the very thing that Mr Hayes says was not going to happen. “We have enough.” His words resonate in this court.
MR MAXWELL: But with respect, your Honour, my learned friend Mr Udorovic, who’s an experienced practitioner in this jurisdiction, said to your Honour on Wednesday his view is completely the opposite of Mr Hayes’s. Now, your Honour would not take the view that what Mr Hayes said should forever bind my client. There has been a change of counsel. Mr Udorovic said on Wednesday, “This case is not ready in my assessment.” I’m not in a position to give an assessment myself, your Honour, but it’s unnecessary in the circumstances. The view expressed by Mr Hayes - it’s not being said that was an unauthorised statement but new counsel has given advice and has expressed it to your Honour on Wednesday.
HIS HONOUR: What is Mr M saying? Is he identifying assets now or the potential assets or is he looking at the past and saying, “Look, what happened to this”? You see, I mean, there’s lots of cases in which this situation arises, Mr Maxwell, referred to in a number of decisions but take, for example, the case of Weir v Weir, a decision of the Full Court in 1993 Family Law Cases. That involved an allegation by the wife that the husband had concealed income from the business and had applied it for his own use. It was an appeal by the wife against Family Court orders made in property proceedings. One of the issues in the proceedings concerned the allegation that the husband had concealed property. In the course of their judgment, the Full Court referred to the habit of the husband in pocketing cash payments. The court said this:
This court has pointed out in a line of cases leading up the recent decision of the Full Court in Black v Kellner - cited - that it is the duty of a party involved in property proceedings in this jurisdiction to make full disclosure of their financial affairs.
The court then referred to cases of Giunti and Mezzacappa, but of course you need go no further really, Mr Maxwell, than to refer to the reasonably hallowed decision in this court of Oriolo v Oriolo back in 1985. In Weir v Weir their Honours went on to say:
It is clear enough from his Honour’s findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact, let alone establish a quantum of what has been taken. It seems to us that once it has been established that there has been a deliberate nondisclosure, which follows from his Honour’s findings in this case, then the court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
The court then went on to consider a case of Monte v Monte and said that that court did not believe the law to be as stated in Monte. You see, the court would take a broad approach to that. If it was seen that there was a stream of money that had been used and unaccounted for, it would be open for the submission to be made of how that should be treated in terms of orders to be made in favour of the wife. The husband just has to pay it. He’ll have to wear the consequences himself. He’d be the market master or architect of his own problems. It’s not a novel position. This court often finds itself in situations, particularly in large corporate and trust cases, that in the broad brush some tricks have been played. Most often they’re not, I might say.
The assertion is that this husband has been less than frank, has been contemptuous of the court orders and has wilfully failed to provide and he is sitting on a large financial resource or control of funds that he’s secreting from the court. Well, there’s been two years of discovery. There’s been production of documents. At one of the hearings before me this month when we were discussing the readiness for trial and I allowed yet again more time by leapfrogging another case over the top of Limousin on the basis that documents would have been produced that very day, your junior appeared. He produced the list of documents required.
It was asserted by the other side that Mr M had been sitting on his hands in relation to this. I’m not criticising him. This is how it was asserted. He, on the other hand, was saying, as I understand it, “Well, look, I’ve been wanting them. They’ve never been given to me.” Whose fault is that? Was it then Mr Brott, that he should have been following it up between September or November 2002 and early March? In any event, be that as it may, I solved the problem with the cooperation of Mr St John. Such documents as they required – “(but we’ve already given them to you) we’ll give them to you again” – and they were then couriered over. I then was left with a very firm view that this has solved the problem and the matter will be proceeding. And now we get more, more and more and more. There’s no end to this. There has to be an end.
I am conscious as any judge of this court and the Commonwealth of Australia on the need for procedural fairness and a fair hearing, but there comes a time when the hearing has got to be heard and determined. If it transpired in the course of the hearing that there had been fraud, there had been nondisclosure and that it was utterly prejudicial to the wife, that the position was made perfectly clear, I rather suspect that it would not be inappropriate then if an application was made to stand the matter down. There would be an application for costs because of that adjournment, and I know that section 117 says, as well as anyone knows, that each pay their own but I also know that it’s subject to subsection (2) of that act [sic] as to circumstances which prevail otherwise. That would be a circumstance that would prevail and costs would have to be ordered.
MR MAXWELL: Your Honour, I, with respect, accept the force of what your Honour puts to me and I don’t seek to press the discovery argument at any length. Your Honour has essentially foreshadowed the view your Honour is coming to. Might I just say this: accepting, with respect, that it’s always open to the court to draw an adverse inference against a party who---
HIS HONOUR: Sorry, just another concept came into my mind which is important, and that is, the general policy and administration of this court and the right of litigants to have their case heard, other litigants. The court has devoted a lot of time to the matter of Limousin. It’s had judge managership, it’s had numerous callovers and costs have been incurred corporately between the two of them to nearly three-quarters of a million dollars. I don’t think it’s unfair to say that that’s an enormous sum of money. But other cases are waiting and cases just have to be heard. There is a consideration of managership of this court, this registry, and that’s another matter. You see, if there’s going to be, as you suggest, an interlocutory hearing on the basis of discovery, a contested hearing and discovery, that’s going to take, I would have thought, with this sort of litigation and the production of documents and tracing days and days-. it’s something, Mr Maxwell, that I see as being port of last call.
Reliance was placed upon events at the commencement of the trial of the proceedings on the following Monday 31 March 2003, at which time Mr O’Shannessy of Counsel, who had appeared with Mr Maxwell QC on the preceding Friday appeared for the wife alone and without a leader. It was submitted to be significant that “[r]ather than seeking to re-visit an application for adjournment, the comments made by the Trial Judge concerning the undesirability of the adjournment application on the preceding Court day were described as ‘most appropriate’ during the course of [Counsel’s] opening” (Summary of Argument of the Respondent/Husband, page 5, para 11(e)), a submission which is accurate having regard to Mr O’Shannessy’s statement that “[t]here were most appropriate comments made by your Honour and following those the application for adjournment for further discovery was desisted with.” It is also of significance, as the transcript of proceedings makes clear, that there was no suggestion at that time of any inability on the part of Counsel for the wife to prosecute her case.
For reasons which are not known to us, despite the hundreds of pages of transcript produced in the Appeal Book, the first eight pages of the transcript of the proceedings on 31 March 2003 have not been provided. Notwithstanding this, Counsel for the wife’s opening of the case included suggesting that “at the conclusion of the case your Honour will be satisfied that in fact, as opposed to in law, and given the form of the multiplicity of holdings, the husband is the beneficial owner of substantial assets, the main asset being a web of income producing companies that significantly exceed, but to an unknown extent, $2 million.” During the course of his opening Counsel for the wife further indicated:
MR O’SHANNESSY: The way the wife puts her case, your Honour, is this: she says that she will demonstrate to your Honour that the husband has not been truthful about his financial position, has, in fact, be [sic] significantly misleading and has not disclosed sufficient for her to accurately identify the assets. The consequence of that when the matter comes on before trial is that she cannot identify which particular asset or company should be used up in default”.
So far as the trial Judge’s refusal of an adjournment on 14 May 2003 was concerned, having referred to the submissions on behalf of the wife, Senior Counsel for the husband submitted that “none of the factors [now] listed were relied upon in submissions made by the Wife’s Counsel wherein the adjournment was sought [in May 2003]” (Summary of Argument of the Respondent/Husband, page 5, para 13). It was thus submitted to not be open to the wife to rely upon “factors not put to the Trial Judge” (Summary of Argument of the Respondent/Husband, page 5, para 13). The Court was referred to the following passage of transcript with regard to the submissions that were made by Counsel for the wife commencing in the following terms:
HIS HONOUR: Your basis is to adjourn it. Adjourn it why firstly?
MR O’SHANNESSY: Firstly, your Honour, on the basis that there has not been adequate discovery by the husband, and secondly that within the time parameters of this case, the issue of disclosure by the husband of his financial affairs is unable to be satisfactorily pursued.
HIS HONOUR: The issue of what?
MR O’SHANNESSY: The issue of whether the husband has disclosed his financial affairs sufficiently is unable to be pursued.
HIS HONOUR: Yes. Is that it?
MR O’SHANNESSY: That’s it.
HIS HONOUR: I’ll deliver a ruling at 2.15.
It was submitted that the “summation of the evidence” advanced on behalf of the wife concerning entities which the husband was purported to have owned and controlled before this Court was incorrect in a number of respects (Summary of Argument of the Respondent/Husband, page 6, para 14). It was submitted that in reality the evidence revealed that:
(a) The Husband over the course of cohabitation had been associated with a multitude of companies but it was unchallenged that at or shortly following the time of separation in April, 1993 (see Husband’s Affidavit of Evidence in Chief Vol 2 item 21 at paras.21 & 22) the Husband was insolvent and almost all of the companies with which he was then associated (and constituting especially the M Group of companies) had ceased to be of significance and/or were defunct. (M Finance (Vic.) Pty Ltd, whilst in receivership, remained extant at the time of hearing and was involved in the so-called “New South Wales litigation” – see later). He reinvigorated a “shell” company which became J Pty Ltd (AB 407 paras. 31 – 33). In late 1993 and in association with others he had commenced further business enterprises through M L Securities Pty Ltd, Ea W and L Pty Ltd and subsequently the “E Group” of companies (AB 407 paras.31 & 33, AB 409 commencing at para.41 to AB 411 para.46) but over time they also fell into financial or administrative difficulty and were sold or became defunct (AB 409 at para.38, AB 410 para.43, AB 411 para.47). He subsequently became associated with the S 101 Group of companies (AB 411 para 48) which, whilst largely extant at the time of hearing (one had been placed into receivership), the Husband, Mr R, Ms G and Mr H deposed were in a parlous financial state. At the time of hearing the Husband was an employee of G Pty Ltd (AB 413, para.57), a company incorporated at the time of the S 101 Group.
(b) Exhibit HIA (Vol.7 Item 21 commencing AB 2407) is a detailed and agreed statement of the many companies with which the Husband has been associated, or alleged to have been associated, to 30 April, 2003. It was not asserted by the Wife or her counsel that the financial history of 37 – 45 companies, and the documents associated with each of them, were now relevant to the Husband’s financial position. Large quantities of documents relevant to the Husband’s financial position had been discovered. (For two examples see para.7 of the final judgment (Vol 1, AB 143) at which the Trial Judge noted that some 11,300 pages of documents had been photocopied by the Wife’s solicitor during the discovery process and his earlier finding that that [sic] the husband at the request of the Wife’s solicitor had given written authority to approach relevant accountants and companies but the Wife’s solicitor had not done so (AB 120 para.16).
(c) The four entities upon which the Wife’s case centred (all of which had corporate trustees) were those valued by her forensic accountant Mr M, being M Unit Trust, JZG Trust, MLM Trust and M L Management Unit Trust. Two of those entities were defunct and one, whilst extant, had ceased trading. (Summary of Argument of the Respondent / Husband, pages 6 – 7, para 14 (a) - (c)).
The submission that “sums of money in the vicinity of several million dollars were reported as flowing through these entities” was submitted by Counsel for the husband to have been unsupported in any respect (Summary of Argument of the Respondent/Husband, page 7, para 19). As we have noted, not only was there no identification of the report or of the entities allegedly involved, but as Senior Counsel for the husband submitted, and the transcript of the adjournment application confirms, none of these matters was put to the trial Judge as a basis for the adjournment sought on behalf of the wife in May 2003.
In response to the submission on behalf of the wife that “the refusal to accede to the application for adjournment precluded the Wife from obtaining a proper valuation” (Summary of Argument of the Respondent/Husband, page 7, para 20), it was submitted that the companies implicitly referred to in the submission were not identified and that:
It was not submitted to the Trial Judge by counsel for the Wife during any of the subsequent applications for adjournment that M [the wife’s expert accountant] was unable to value on appropriate commercial principles the entities he had initially valued at not less than $2 million, and later, $1.2 million. Rather, the validity of the M valuation was being promoted, and its acceptance urged, as late as the final written submissions of the Wife’s counsel. (Summary of Argument of the Respondent/Husband, page 7, para 20).
The absence of anything in the passages of transcript to which we have been referred, or have read for ourselves supports that submission.
It was then submitted on behalf of the husband that the complaint with respect to the husband’s forensic accountant Mr R not having “been provided with financial documents sufficient to conduct a valuation” was “not only not submitted as a basis of adjournment but could not have been as Mr R did not give evidence until 24 July, 2003, over two months later” (Summary of Argument of the Respondent/Husband, page 8, para 21).
Nothing in the submissions of Counsel for the wife in support of the application for adjournment reveals this matter to ever have been advanced in support of the adjournment application. The matters submitted by Senior Counsel for the husband may explain why that is so, but that is not something about which we need to speculate. So far as the response to complaints by Counsel for the wife in relation to the trial Judge’s conclusions with respect to the wife’s expert accountant, Mr M, are concerned, of particular relevance for present purposes is the submission by Senior Counsel for the husband that “it was not asserted by Counsel for the Wife that M’s evidence and/or the Trial Judge’s attitude to his evidence, had been such as to justify or require an adjournment so a further evaluation could be conducted”. So too is the assertion that “the Wife’s submission seeks to give retrospective effect to the subsequent final judgment and is not indicative of the position espoused during the course of the hearing by Counsel for the Wife”. There is merit in these submissions.
So far as the reliance of Counsel for the wife upon the husband’s affidavit of 12 May 2003 in relation to the litigation in the Supreme Court of NSW involving FLM Securities Ltd, M Finance Corporation (Vic) Pty Ltd and S N R was concerned, it was pointed out, correctly, that the NSW litigation had been referred to by Counsel for the wife in opening her case before the trial Judge on 31 March 2003. Counsel for the wife then said, “Now, Mr McV, his affidavit says that it’s at this date this effectively brought the operations of the M group of companies to an end, but he was told this by the husband, and that is part of his investigation as to the appropriateness of the Part X. That was what he asserts”. The Court was reminded that the learned trial Judge had referred to this matter in his judgment, recording:
The husband raised the issue of the New South Wales litigation in his affidavit filed on 15 March 1999. That was four years before the commencement of the trial before me. As I understand it, it was never the subject of any procedure pursuant to Order 19 of the Rules, nor is there any evidence before me of it being the subject of inquiry despite the extensive discovery sought by the wife’s legal advisors. It was mentioned merely by way of passing by Mr O’Shannessy, but one that emerged as an issue with the progress of the proceedings.
There is thus little doubt that, as was submitted by Senior Counsel for the husband, “[t]he opportunity to investigate the litigation had accordingly been available for in excess of 4 years as at the time the case commenced” (Summary of Argument of the Respondent/Husband, page 9, para 23(b)). It was submitted further on behalf of the husband that “no expert evidence could be obtained which would have materially advanced the position of the Court as to the value of an action which on any reasonable view, and the Trial Judge subsequently found, was ‘highly speculative’ and ‘remote’ … and no submission to that effect was made.” Nothing to which this Court has been referred by Counsel for the wife rebuts that assertion.
It was then submitted on behalf of the husband that:
At the time of the Wife’s final submissions it was not the position of the Wife that there had been an inability to identify any asset of value and counsel continued to press that the M valuation should be accepted (see para 20 hereof). Further, the documents supplied when supplemented with the evidence of the Husband and his various witnesses satisfied the Trial Judge that findings as to the extent and value of the Husband’s assets could be made. He had found the Husband’s witnesses to be reliable and truthful. He found the evidence of M to be entirely unacceptable. The findings of the Trial Judge as to the Husband’s financial position were open on the evidence and it is not submitted to the contrary. The submission seems to carry within it the curious assumption that in adversarial proceedings where the Wife had failed to establish, (indeed had called no evidence whatever to substantiate), that the Husband had not appropriately discovered documents, and where the evidence of her expert valuer was rejected but other witnesses called which satisfied the Trial Judge as to the parlous state of the Husband’s finances, that the matter should have been adjourned so that the Wife could thereafter seek to improve her case, notwithstanding the fact she had pursued and prepared the litigation for almost six years. The Husband too was entitled to natural justice.
In our view there is force in these submissions. As is plain from the course the proceedings took, before, during and after trial, the wife’s case was that the figures asserted on her behalf should be accepted by the trial Judge, inter alia, in reliance upon the various shortcomings in relation to the husband’s financial disclosures which were persistently asserted by a succession of Counsel (including Senior Counsel) from time to time appearing for the wife. Those contentions were all agitated before the trial Judge, over many days during the course of very lengthy cross-examination of the husband by Counsel who represented the wife at trial.
As the submission on behalf of the husband recognises, the submissions of Counsel for the wife assume that documents in fact existed when nothing in the evidence to which we have been referred establishes that such was the case. The reliance by Counsel for the wife on the decision in the BAT case (British American Tobacco Australia Services Ltd v Cowell (as representing the estate of Rolah Ann McCabe, deceased) (2002) 7 VR 524) highlights the important distinction between documents which clearly did exist ceasing to be available and the failure to produce documents the existence of which at any time has not been established. In our view, with great respect to Counsel for the wife, reliance upon the decision in BAT was misplaced.
In that case it was said by the Court (Phillips, Batt and Buchanan JJA):
It surely cannot be the case that the prospective defendant, learning that litigation was about to be commenced against it, could simply destroy all relevant records bearing upon the principal issue, for the purpose only of defeating the claim when brought against it. On the other hand, if it be supposed, for the sake of argument, that there is some impediment to such conduct by a person apprehensive of litigation against him or her, how far back does the obligation to preserve documents reach? It surely cannot be, as suggested by the plaintiff in argument, that the defendant was in this instance at fault in destroying documents in 1985 because those documents might well be (or perhaps were) relevant in this proceeding which the plaintiff commenced against the defendant in 2001.
…
In Coleman v Dunlop Ltd [Court of Appeal, England, 20 October 1999, unreported] in the course of a retrial in the County Court after a successful appeal by the plaintiff, the plaintiff obtained an order striking out the defence as to liability and entering judgment for the plaintiff with damages to be assessed. The order was based upon the failure of the defendants to provide adequate or proper discovery of documents relevant to liability in the context of what had become quite protracted litigation. The decision was affirmed by the Court of Appeal.
…
The application to strike out the defence as to liability was based upon two grounds: first, non-compliance with requirements for discovery and, secondly, abuse of process making a fair trial impossible. The trial judge rejected the second ground, but concluded the first was established. The defendants appealed against her conclusion and the plaintiff sought, if necessary, to uphold the decision on the second argument as well as the first. The Court of Appeal, speaking through Judge LJ, upheld the judge’s decision in so far as it rested upon non-compliance with the provisions for discovery, and found it unnecessary to consider the second ground. The trial judge had held that the missing documents went to the core of the plaintiff’s case and that the deficiencies in discovery could no longer be made good so that a fair trial was not possible. Judge LJ said that he found himself “entirely persuaded without the slightest difficulty, by the judge’s approach and analysis of the submissions made to her”. (footnotes omitted).
So far as the criticism of the trial Judge in relation to the husband’s father’s estate is concerned, it was submitted on behalf of the husband, correctly in our view, that, even if the learned trial Judge did err, which was not conceded, in refusing to grant the wife’s application for adjournment so that evidence in relation to the husband’s father’s estate might be adduced, so doing could not have resulted in evidence which could have advance the position of the wife (Summary of Argument of the Respondent/Husband, page 11, para 27(e)). It was submitted, correctly in our view, in the context of the proceedings before the trial Judge that “the Husband’s father was entitled to distribute his Estate in such manner as he saw fit and his Estate could not be the subject of any proper Family Court Order to the contrary.” (Summary of Argument of the Respondent/Husband, page 11, para 27(e)).
In the proceedings which the trial Judge was obliged to determine, reliance was placed on the statement by the High Court in Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145; [1986] HCA 54 at 9 – 10:
The general principle applicable in the present circumstances was well expressed by the English Court of Appeal (Denning, Romer and Parker L.JJ.) in Jones v National Coal Board [[1957] 2 QB 55, at p 67], in these terms:
“There is one thing to which everyone in this country is entitled, and that is a fair trial at which he can put his case properly before the judge… No cause is lost until the judge has found it so; and he cannot find it without a fair trial, nor can we affirm it.”
That general principle is, however, subject to an important qualification which Bollen J. plainly had in mind in identifying the practical question as being: Would further information possibly have made any difference? That qualification is that an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial. An order for a new trial in such a case would be a futility.
For this reason not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial.
As noted earlier, there is no suggestion that the trial Judge was under any misapprehension as to the terms of the husband’s father’s last will and testament or the impact of them. Nothing to which we have been referred establishes the prospect of the wife advancing her case as a result of anything she may have adduced in evidence, from any source, as a result of an adjournment of the hearing to enable her to further pursue aspects of the husband’s late father’s estate.
We are not persuaded that the trial Judge erred in refusing the adjournment sought by the wife for that purpose, but even if we are wrong in that regard, the fact that the adjournment, on the evidence, would not have achieved anything would preclude us from interfering with the exercise of his Honour’s discretion.
In concluding his submissions with respect to the matter of the adjournment, Senior Counsel for the husband made three further submissions with which we are in substantial agreement. They were:
(a) The asserted inability of the Wife to have access to documents to challenge the evidence of the Husband and his witnesses must be seen in the context of the fact that notwithstanding frequent complaint during the hearing of an alleged failure to produce relevant documents, no evidence was adduced by the Wife as part of her case which was indicative of any such failure. The only witness who could have given such evidence was her solicitor Mr Brott who neither filed an affidavit deposing as to such matters nor gave oral evidence.
(b) Insofar as the Summary complains of a denial of natural justice or a refusal to adjourn and/or permit further discovery to enable proper challenge to be made to the evidence of the Husband’s witnesses Ms G and Mr H, no submission was made in such terms during any application made by counsel for the Wife. Indeed, the relevance and significance of the evidence given by both Ms G and Mr H was marginalised by counsel for the Wife during his final submissions, and even those brief references were not included in the Appeal Book by the Appellant as being relevant to this hearing.
(c) The evidence of both Ms G and Mr H was accepted by the Trial Judge and noted to be unchallenged. This however, it is submitted, is reflective of the fact that their evidence, in the aspects here relevant, was not the subject of contradicting or challenging cross-examination.
As is plain from the material to which we have been referred, and to which we have referred, the wife’s case at all material times was that the husband had not made and would not make a full and frank disclosure of his financial affairs such as to enable the wife and her advisers to provide comprehensive and reliable valuation evidence. Notwithstanding that, and on the basis clearly indicated by Counsel on a number of occasions, the wife elected to run her case before the trial Judge. If, which was not established at trial, the wife’s complaints about the level and accuracy of the husband’s financial disclosures had substance, thus allowing the Judge not to be “unduly cautious” with respect to the husband’s financial affairs, then electing to pursue that course would no doubt be seen as having been a sound tactical option. If the submissions in relation to the husband’s implacable resistance to making a full and frank disclosure were well founded, which the trial Judge did not find to be the case, then an adjournment of any duration was of no potential utility given that the wife, as a succession of Counsel appearing on her behalf made no secret, did not herself have the kind of detailed knowledge of the husband’s financial affairs that would have enabled her, notwithstanding the network of subpoenae her lawyers caused to be issued and the thousands of pages of records which they inspected, to have elicited reliable expert opinion evidence of the probable value of the husband’s assets or interests. It can be fairly said that an adjournment of the proceedings was inconsistent with the basis on which Counsel for the wife had consistently stated that her case was to run, and would not have benefited her in any event. The trial Judge was clearly aware at all times of the cases in relation to non-disclosure, and the inferences which he could draw with respect to the husband, and nothing to which we have been referred reveals any error or misunderstanding in that regard.
As the transcript of proceedings on 28 March 2003 makes clear, notwithstanding that Senior Counsel then appearing elected to run the case on the basis we have indicated, as did Counsel who actually conducted the trial on behalf of the wife, the trial Judge left open the prospect of an adjournment in the event of things changing in ways that rendered that cause appropriate. As the transcript of submissions to the trial Judge with respect to the adjournment of the proceedings on the various occasions to which we have referred makes clear, save perhaps in one respect (the NSW Supreme Court litigation), nothing new or different or changed was asserted as the basis for the adjournment. As we have explained, the NSW litigation was not a new or recent development.
So far as the NSW Supreme Court litigation was concerned, as is not in dispute, the existence and nature of that litigation, and identity of the parties to it, had been known for more than four years prior to the trial commencing. The filing of an affidavit on 12 May 2003 could not meet the requirement of new and unanticipated evidence, and significantly was not submitted by Counsel then appearing to have been so. It is also of significance that nothing put to this Court demonstrates that the learned trial Judge’s conclusion with respect to that litigation was not reasonably open to him.
In this Court, Counsel for the wife was repeatedly requested to refer the Court in the transcript of proceedings to the submissions of Counsel for the wife in support of the adjournment to submissions then made asserting that some new or unexpected development had arisen which rendered an adjournment necessary or appropriate. The inability of Counsel for the wife, who had clearly thoroughly prepared his brief and demonstrated commendable knowledge of the voluminous material relevant to the Appeal, to take the Court to anything which met that description is significant.
We are not persuaded that the exercise of discretion by the trial Judge in refusing adjournments on any of the three occasions to which we have been referred involved error. We find these challenges fail.
The Asserted Denial of Natural Justice (Ground 14)
It remains to consider the “natural justice” issue. To the extent that the refusal of the adjournment was submitted to have constituted a denial of natural justice, which we understand to be part of that complaint, nothing to which we have been referred in relation to the adjournment persuades us that such was the case, for the reasons we have thus far detailed. We turn to consider the submissions of Counsel for the wife which refer more directly to that issue.
It was submitted that the trial Judge “denied the wife natural justice by failing to make further orders for discovery after the husband obtained leave to file the affidavit of Mr. R and a supplementary affidavit of the husband and when the husband and Mr. R denied the accuracy of the financial accounts that had been presented to him” (Summary of Argument of the Wife, page 6, para 8).
In response to those assertions, it was submitted that “[t]he affidavit of Mr R and the supplementary affidavit of the Husband were both filed by leave of the Court”, without objection “to the granting of leave in either case” and in the absence of “any condition” being sought to be imposed on the filing of those documents.” (Summary of Argument of the Respondent/Husband, page 13, para 31(a)). It was further submitted that “no application was then made for further discovery or production of documents”. It was further submitted, correctly in our view, that “[w]hilst subsequent application was made for adjournment and/or production of documents, the application was not based upon the granting of leave to file either of the said affidavits.” (Summary of Argument of the Respondent/Husband, page 13, para 31(b)). In our view these submissions are conclusive of, and fatal to, the complaint made on behalf of the wife. We also agree that the “denials of the accuracy of some of the draft accounts presented to the Husband and Mr R during cross-examination appears to have no relevance to this submission” (Summary of Argument of the Respondent/Husband, page 13, para 31(c)), a conclusion in which we are fortified by the absence of any submission made to us on behalf of the wife to establish such relevance.
The trial Judge was criticised on behalf of the wife for having “denied the wife natural justice by only permitting Counsel for the wife 50 seconds to cross examine the husband in respect of each liability of the husband and which amounted in total to approximately $2,500,000”. Reliance was placed upon this statement of the trial Judge: “You’ve got 50 seconds per item. I’m going to start imposing limits on this”.
In response to that complaint, it was submitted that this comment occurred “following already detailed cross-examination of specified debts” (Summary of Argument of the Respondent/Husband, page 13, para 32) and after, on the trial Judge’s calculations, approximately 11 hours of cross-examination of the husband. The following exchange during the trial which preceded the “50 second limit” directive was relied upon:
HIS HONOUR: How much longer do you think you’ll be, Mr O’Shannessy?
MR O’SHANNESSY: I’m hoping to finish by 1o’clock, your Honour.
It was thus submitted, correctly in our view, that “the comments were more an observation as to the time available for cross-examination if it was to conclude by 1.00 pm rather than an implacable imposing of a time for each question.” (Summary of Argument of the Respondent/Husband, page 13, para 32(b)). Significantly, as was submitted on behalf of the husband, Counsel for the wife did not complain about the trial Judge’s comment and, more significantly and decisively in our view, subsequent cross-examination of the husband was neither limited to the time referred to, or at all, and Counsel for the wife at trial did not then submit that the time had been insufficient for him to “properly explore any matter he wished to pursue” (Summary of Argument of the Respondent/Husband, pages 13 – 14, para 32(c)). It is also significant, as Senior Counsel for the husband submitted that, notwithstanding the indication by Counsel as to when he believed cross-examination would conclude, “upon resumption he was permitted without impediment by the Trial Judge to ask further questions which proceeded for a further 12 pages of transcript” (Summary of Argument of the Respondent/Husband, page 14, para 32(c)). That additional cross-examination appears at pages 2111 – 2123 of the Appeal Books, Volume 6.
As Senior Counsel for the husband submitted, the complaint in relation to time for cross-examination arose in the appeal. At no time did Counsel for the wife at trial raise the complaint now sought to be advanced. We thus consider this complaint to be utterly without merit.
It was then submitted that the trial Judge “erred in law and denied the wife natural justice by simply relying upon the evidence of Mr. McV in respect of the liabilities of the husband, particularly when many of the debts related to entities in which the husband’s expert either expressed concerns about their accuracy or reported amounts that varied with the evidence of Mr. McV” (Summary of Argument of the Wife, page 7, para 10). We have already noted Mr McV, the Controlling Trustee, is the second respondent to this appeal.
It was submitted on behalf of the husband, correctly in our view, that the trial Judge had not “simply” relied upon the evidence of the Controlling Trustee but that, having regard to paragraphs 375 and 389 of his Honour’s judgment, had also relied upon the evidence of the husband “whom the Trial Judge found to be an honest and dependable witness” and who “also gave substantial evidence as to the existence of his liabilities and was cross-examined by Counsel for the Wife as to them.” (Summary of Argument of the Respondent/Husband, page 17, para 38 (a) & (b)). It was submitted that in addition to the husband and the Controlling Trustee other “witnesses who gave substantiating evidence” were referred to by the trial Judge, they being Ms G “and the Wife’s witness Mr [D] Limousin” (Summary of Argument of the Respondent/Husband, pages 17 – 18, para 38(c)). The trial Judge’s finding that the husband had substantial debts has not been shown on the evidence before us to have not been open to him nor to have been based “simply” on accepting the evidence of the Controlling Trustee, as his Honour’s reasons for judgment make clear. His Honour said in relation to that issue
I have no doubt whatsoever that the husband has substantial debts. His assets on the other hand are minimal, being in the range claimed by him in his Form 17 Statement of Financial Circumstances. I propose, as part of my orders, to dissolve the injunction made by consent by Frederico J on 28 August 2002 and later on 6 September 2002 and to permit the husband to proceed with his application pursuant to Part 10 [sic] of the Bankruptcy Act or such other application pursuant to the provisions of that Act as he may be professionally advised. (para 390).
We thus find this complaint lacks merit.
Finally it was submitted that the trial Judge had “denied the wife natural justice in failing to permit the wife to tender documents that were either discovered during the hearing of the matter, or were relevant to new matters raised during the hearing”.
In response Senior Counsel for the husband submitted that “[n]o transcript reference(s) is given as to the occasion(s) when it is submitted that the Trial Judge fell into error. It is assumed the reference may be to the four rulings delivered by the Trial Judge on 1 August 2003”. It was further submitted “[i]f so, the submission amounts to no more than a complaint that the Trial Judge, upon application to tender documents, found it inappropriate they be tendered at the time when belated application to tender was made. In each case full and proper reasons were given for such refusal. It is a complaint as to the exercise of a discretion to admit evidence rather than a ground of natural justice and/or relevant to the issue of refusal of an adjournment.” (Summary of Argument of Respondent/Husband, page 18, para 39(e)). There is substance in that submission.
Nothing to which we have been referred on behalf of the wife persuades us that his Honour’s rulings constituted a denial of natural justice, and how they are said to has not been explained. If there was error, which we do not find to have been the case, that issue falls beyond the ambit of the grounds which have been argued before us.
Conclusion
Neither ground of appeal, or potential ground of appeal, having been made out and no challenge to any of the trial Judge’s rulings or decisions relevant to these proceedings having been made out, the appeal and/or application(s) for leave to appeal should be dismissed.
Costs
At the conclusion of the hearing we sought submissions in respect of costs. The husband sought the opportunity to make written submissions in respect of an application for costs against the wife and her solicitor in respect of ground 3 of the Notice of Appeal regardless of whether or not the grounds argued before us were successful, on the basis the wife abandoned her appeal against ground 3 shortly before the hearing date. The husband also sought to make written submissions in respect of costs sought against the wife and Mr Brott in respect of the challenge to grounds 9 and 14 in the Notice of Appeal. He also sought an order that the wife be required to notify the husband within 28 days of delivery of our reasons for judgment as to whether or not she was proceeding with the balance of the appeal.
Counsel for the wife submitted that each party should file a Financial Statement together with a statement of legal costs paid from the commencement of the appeal, and the source of payment for such fees. He advised that if required Mr Brott was prepared to provide a financial statement to the Court on a confidential basis.
We propose to make the orders sought by the husband’s Senior Counsel.
I certify that the preceding one hundred and twenty two (122) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 1 June 2007
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