MACKINTOSH & GREER

[2010] FamCA 1170

FAMILY COURT OF AUSTRALIA

MACKINTOSH & GREER [2010] FamCA 1170

FAMILY LAW – PRACTICE AND PROCEDURE – discovery of documents – where it was held that a party is required to make proper enquiries and efforts to identify and disclose relevant documents not in their possession – held that the husband could not merely rely upon the secondary documents as they were described – orders for production of certain documents by the husband

FAMILY LAW – PRACTICE AND PROCEDURE – where the parties are unable to agree as to the appointment of a single expert – where an order for costs could be a possible remedy for any issues that could arise – orders made appointing a single expert

FAMILY LAW – PROPERTY – interim orders – where the wife seeks orders to reopen the parties’ business – where the wife previously made an undertaking not to return to the business – where the wife is not in receipt of any independent income – just and equitable – orders permitting the wife to reopen the business

FAMILY LAW – COSTS – where the wife seeks costs for the applications in relation to discovery and the appointment of a single expert – consideration of the factors in s 117 – where the husband has been unsuccessful in those applications – orders that the husband pay the wife’s costs

Family Law Act 1975 (Cth) ss 80 & 117

Re McGorm; Ex parte Co-operative Building Society of South Australia (1989) 86 ALR 275

APPLICANT: Ms Mackintosh

RESPONDENT: Mr Greer

FILE NUMBER: ADC 2242 of 2009

DATE DELIVERED: 8 December 2010

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Dawe J

HEARING DATE: 8 December 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr R.J. Whitington QC
[with Ms Nikoloudakis]

SOLICITOR FOR THE APPLICANT: BBS Lawyers

COUNSEL FOR THE RESPONDENT:

Mr D. Berman SC

[with Mr Howe]

SOLICITOR FOR THE RESPONDENT: Howe Martin  & Associates

Orders

1. On or before 30 January 2011 the husband file and serve an affidavit on oath of discovery of documents including making full and frank disclosure and produce to his solicitors copies of the following documents in his power, possession, custody or control:

   1.1The Financial Statements for:

   1.1.1Greer Investments Pty Ltd, for the financial years ended 30 June 1999 to 30 June 2004 and 30 June 2009; and

   1.1.2K Proprietors, for the financial years ended 30 June 1999 to 30 June 2005.

   1.2Taxation returns and Notices of Assessment for:

   1.2.1Greer Investments Pty Ltd, for the financial years ended 30 June 1999 to 30 June 2004 and 30 June 2009;

   1.2.2Greer Rural Pty Ltd, for the financial years ended 30 June 1999 to 30 June 2004;

   1.2.3K Proprietors, for the financial years ended 30 June 1999 to 30 June 2005; and

   1.2.4The Husband’s taxation returns, for the financial year ended 30 June 2004.

   1.3Copies of the Partnership Agreements for the partnerships the Husband is a partner of, including but not limited to the Partnership Agreements between:

   1.3.1K Proprietors and Greer Rural Pty Ltd;

   1.3.2K Proprietors and Greer Pty Ltd;

   1.3.3K Proprietors and the Greer Partnership Trust; and

   1.3.4K Proprietors and A Pty Ltd; and

   1.3.5If the husband is able to locate the same.

   1.4The Bank SA Business Cheque Plus Account Statements in the name of the Husband, Account Number …, for the following periods:

   1.4.11 May 2000 to 31 May 2000;

   1.4.21 August 2000 to 31 August 2000;

   1.4.31 October 2000 to 31 December 2000;

   1.4.41 March 2001 to 31 March 2001;

   1.4.51 July 2001 to 30 June 2002;

   1.4.61 July 2003 to 30 June 2004; and

   1.4.71 July 2008 to date.

   1.5The Bank SA Business Cheque Account Statements in the name of K Proprietors, Account Number …, for the following periods:

   1.5.130 June 1999 to 30 June 2000;

   1.5.21 November 2000 to 30 November 2000;

   1.5.31 January 2002 to 30 June 2002; and

   1.5.41 July 2008 to date.

   1.6The Bank SA Business Cheque Account Statements in the name of Greer Rural Pty Ltd, Account Number …, for the following periods:

   1.6.130 June 1999 to 19 November 2000;

   1.6.231 December 2000 to 30 June 2002; and

   1.6.31 July 2003 to date.

   1.7All documents relating to the Ministerial and Council approval for the subdivision of K property.

   1.8All Documents relating to the purchase of the remaining one third interest in K property from Ms CM and Mr TR.

   1.9Documents relating to the net sale proceeds received as a result of selling land previously owned by:

   1.9.1E Ltd;

   1.9.2E Pty Ltd; and

   1.9.3K Pty Ltd.

   1.10Copies of the Husband’s agent’s accounts detailing the livestock sales as well as the Wool Statements, including private sales for the period 30 June 2008 to date.

   1.11All documents relating to the terms of the joint venture with Mr GT and income and expenses of the joint venture, including any financial statements.

   1.12Documents evidencing the loan of $340,000.00 that Mr GT asserts is payable under the P joint venture agreement in his letter of 5 August 2010 to the Husband or any monies owed at all in relation to the said joint venture.

   1.13Documents evidencing the amount outstanding under the P joint venture agreement as reflected in the Greer Rural Co Pty Ltd Financial Statements for the period 30 June 2004 to 30 June 2009.

   1.14Documents evidencing the financial contributions by the husband to R (both capital, contents and ongoing expenditure).

   1.15The wife’s files from the filing cabinet in the study in the K homestead that contain documents relating to the furniture and effects and artwork, including photographs and insurance documents.

2. The Husband file and serve an Undertaking as to Disclosure, pursuant to the Orders made by Registrar Paxton on 20 April 2010, within seven (7) days of filing and serving his Affidavit of Documents, as set out in paragraph one (1) herein.

3. That the wife and her legal representatives be at liberty to attend the Husband’s solicitor’s office, at a mutually convenient time and after 1 February 2011, to inspect to documents as set out in the Husband’s Affidavit of Documents.

4. Pursuant to Rule 15.46 (c) of the Family Law Rules the Court appoints Mr O of O Valuations to perform the historical valuation of the real estate known as K property at December 2000, as a single expert at the joint equal cost of the parties.

5. Pending delivery of final judgment in relation to the property settlement proceedings the wife be at liberty to occupy the premises known as “Z property” being the property comprised and described in certificate of title register book Volume … and Folio … and to reopen the business and trade in the restaurant known as “Z Restaurant”.

6. All Applications in a Case currently before the Court are dismissed.

7. The husband pay the wife’s costs of and incidental to the wife’s Applications in a Case filed on 17 November 2010 including today’s attendance such costs to be agreed and in default of agreement as taxed by the Registrar.

8. The question of the husband’s application for costs in relation to the wife’s Application in a Case filed on 9 June 2010 (document 40) is adjourned to the compliance check date of 18 April 2011 at 9.15 am before the Honourable Justice Dawe.

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

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADC 2242 of 2009

MS MACKINTOSH

Applicant

And

MR GREER

Respondent

EX-TEMPORE REASONS FOR JUDGMENT

1. The parties indicated at the commencement of the hearing that the matters now outstanding under the application of 9 June 2010 (document 40) are all now encompassed by other applications.  The only remaining issue being issues related to livestock.

2. I turn to the wife’s Application in a Case filed on 17 November 2010 (document 57).  In that Application in a Case, the wife seeks disclosure of a large number of documents set out in the paragraph 2, from 2.1 through to 2.21.

3. Originally the wife was seeking that the husband disclose by way of a list to the wife’s solicitors, copies of those documents which were in his power, possession, custody or control.  In the minutes presented this morning, counsel for the wife seeks that it be an affidavit on oath in relation to those matters.  The affidavit was opposed by the husband’s solicitors indicating that such an affidavit was not necessary. 

4. In view of the material in the file, and in particular the level of disagreement between the parties on many minor matters, I consider it appropriate that the husband swear on oath that he has or does not have the documents in his power, possession, custody or control and I propose to make orders in those terms. 

5. The husband agreed in his response which was filed on 29 November 2010, in paragraph 3, that he provide discovery of documents referred to in the wife’s application paragraphs 2.12, 2.13, 2.17, 2.18, 2.19 and 2.20 by 31 January 2011.  I am assuming that those are covered by the matters in the draft of the orders prepared by the wife’s solicitors.  At the hearing today, it was agreed that I could make those orders for the disclosure but not on oath.

6. The matters which are in dispute commence with paragraph 1.3 (which refers to the copies of the partnership agreements for the partnerships in which the husband is a partner, including but not limited to, partnerships agreements between the entities 1.3.1 to 1.3.4.  1.3.5 “if the husband is able to locate the same”.  The husband is under an obligation (as I will discuss later) to ensure that documents under his power or control are located by taking all reasonable steps to obtain the same. 

7. The husband’s affidavit suggested he is not satisfied that this is a significant issue or of significant relevance to require the production of the documents.  However, the issue of the trading of, and the activities of, the husband, so far as it relates to the husband’s financial circumstances and his contributions during the period of cohabitation and subsequently, are relevant.

8. In relation to paragraphs 1.4, 1.5 and 1.6, the husband says he does not have those documents, save and except for the possibility of some more recent dates.  The documents referred to relate to a business cheque account and statements and a Bank SA business cheque account and Bank SA cheque account for K Properties, and Bank SA statements for another company, Greer Rural Company Limited.  Again, the question of relevance is put in issue, however the question of parties’ contributions during the marriage, is an issue, and I accept that the production of the cheque accounts may assist in determining relevant issues concerning contributions. 

9. Counsel for the wife referred to the decision of Re McGorm;  Ex parte Co-operative Building Society of South Australia (1989) 86 ALR 275 a Federal Court decision of Von Doussa, J and the quotation from that case indicating the obligation resting on a party obliged to give discovery, requires that he make proper enquiries and efforts to identify and disclose all relevant documents that are not in his possession. The obligation extends to making enquiries from the person in whose possession the documents now are. The husband asserts that he has not kept old bank accounts, but I accept the submission that it is within his power and control to request copies of those documents from the bank and obtain them.

10. The wife’s counsel indicates that the wife is not currently pressing orders sought in paragraphs 1.7, 1.8, 1.11 or 1.13.  I make no orders at this stage in relation to those matters. 

11. Paragraph 1.9 is “All documents relating to the ministerial and council approval for the subdivision of [K property].”  The husband has disclosed some documents in relation to the subdivision which brought about the separation of the Z property from the other property but has not disclosed any other material.  There is an issue as to whether any other disclosure would be relevant to the issues to be determined bearing in mind that the Court has been informed the parties have agreed the current value of the assets to be considered.

12. I accept, however, that the submission in relation to the other subdivision, which is asserted to have been proposed or existing, in relation to the “T Paddock” could be relevant to the value of the property and the comparison of the value of the property in the year 2000 when the parties commenced cohabitation and the current value of the property. 

13. Paragraph 1.14 is the reference to the agent’s accounts dealing with the livestock sales for the period 30 June 2008 to date.  The question of the number of livestock and, in a subsidiary way, the valuation of the livestock has been an issue in these proceedings for a considerable period of time.  There has been correspondence indicating significant issues about the number of livestock.  The husband has disclosed in his affidavit material that he does not keep the original documents from the agents in relation to the sales of livestock, but merely enters them into what is described variously as a “green book”.  I repeat the reference to Re McGorm;  Ex parte Co-operative Building Society of South Australia (Supra) case.  It is clearly an obligation on the husband to obtain the relevant material held by the agents in relation to livestock sales from the period 30 June 2008 to date this being relevant to a significant issue in dispute between the parties.

14. The husband cannot merely rely upon the secondary documents as they were described.  In view of the considerable dispute about the number of livestock, it will be in his best interest to produce the primary documents.

15. The other remaining item is paragraph 1.19, where the wife seeks disclosure of “the wife’s files” from the filing cabinet in the study in the K  homestead that contain documents relating to the furniture and effects and artwork, including photographs and insurance documents.  The husband is in possession of the K property.  The husband says he will disclose these documents “if he has them”.  There is no evidence on the Court file about any steps the husband has taken to ascertain the existence of those documents before this hearing.

16. The other matters outstanding relate to paragraphs 3 and 4 of the Application in a Case filed on 17 November 2010.  Paragraph 3 seeks an order that the Court appoint Mr O of O Valuations to perform an historical valuation of the real estate known as K property at December 2000, as a single expert at the joint equal cost of the parties.  Paragraph 4 relates to the Court settling the instructions to the expert. 

17. The wife seeks the appointment of Mr O. The husband opposes that appointment and seeks the appointment of Mr W.  It is agreed that the valuation, as at December 2000, is relevant to the matters the Court will be required to determine at the final hearing.  The only dispute is about who should be the expert appointed to carry out that valuation. 

18. Mr O was the single expert appointed by the Court to carry out the valuation at the K property.  Thereafter, there was some concern expressed by the wife in relation to the valuation, however the wife is not now challenging Mr O’s valuation but seeks to have Mr O appointed to carry out the historical valuation of the property. 

19. The husband opposes Mr O being the single expert.  He expresses concern about the wife’s previous challenge and the risk that might occur if the wife were to again seek to challenge the work of the single expert, or not be supporting his valuation.  There is some prior involvement of Mr W in relation to the property.  It is submitted that Mr W knows the property, having previously attended to valuations of the property, for persons connected with the husband.

20. The Court must weigh up the various relevant factors in this matter.  It is alleged that Mr W is likely to be cheaper than Mr O, however, there is some validity to the submissions that whilst there is no clear indication that he would be cheaper, even if he were cheaper in the short term, it would not necessarily be cheaper for the parties in the long term to have the one valuer attend to the current valuation and another valuer attend to the historical valuation. 

21. I am satisfied that it is necessary to weigh up the arguments of each of the parties.  In accordance with the objects of the Rules of this Court, it is appropriate to refer the historical valuation back to Mr O.  If there is any further challenge or concern expressed by the wife, the remedy would obviously be an order for costs.  This may offset the concerns expressed by the husband, if those concerns about challenges come to fruition. 

22. I will not make the order sought in paragraph 4 on the understanding that I will dismiss it now, but that will not prevent the parties coming back to Court if they are unable to agree the appropriate letter of instructions to Mr O. 

23. In document 59 the wife makes an application that:

    “Liberty be granted to the wife to return to and re-open to trade the restaurant known as [Z Restaurant], being the property comprised in and described in Certificate of Title Register Book Volume […] folio […].” 

24. The reasons for her application are set out in the affidavit filed by the wife.  In particular, the affidavit filed on 25 November 2010, refers to her current circumstances about accommodation and the storage of equipment.  There is a brief reference to her current financial circumstances. 

25. The husband has filed an answering affidavit in which he specifically refers to previous correspondence between the parties’ solicitors in relation to the Z property and the concerns of the wife previously set out in correspondence in which the wife indicated that she was not proposing to return to Z property. 

26. In particular, the Court’s attention is drawn to the correspondence from the husband to Mr Jamieson of 18 July 2008 (being part of annexure “O” to the husband’s affidavit filed on 3 December, and annexure “N”, being a letter between the solicitors of 22 November 2010 from Howe Martin to BBS Lawyers).  The latter letter sets out clearly the basis upon which the husband opposes the orders; namely, that the wife made an allegation of violent and physical assault that the husband strenuously denied.  This was an example of the reasons the wife gave that she could not continue to run the restaurant (and had no intention or desire to re-open the Z restaurant).  That correspondence was in late 2009. 

27. In the husband’s affidavit paragraph 37 onwards deal with the application in relation to Z property.  In particular, the husband sets out the history of the correspondence and then says in paragraph 45:

    “In light of the contents of the wife’s letter of 16 November 2009, including the wife’s open undertaking that she would not attend at [k property] without my express invitation, I oppose the order sought in the wife’s [Z] application.”

28. The primary issue therefore is whether it is appropriate to allow the wife to resume the occupation of the property and the running of the business, notwithstanding the allegations she has made (strongly denied by the husband) of violence in 2009. 

29. The husband appears to say in his affidavit and correspondence recently that the wife did not accept the offer earlier, and gave an undertaking that she would not attend upon the premises, and therefore, notwithstanding that he previously offered the wife the capacity to occupy the premises and run the business, he is now opposing that arrangement.

30. It is clear from the correspondence and from the ongoing applications in this Court that there is a high level of distrust evidenced by considerable litigation and animosity between the parties who were, at one time, husband and wife. 

1. It is conceded that the Z property is now separate from the other K properties and has separate access.  The submission by the wife’s counsel was that the attitude of the husband now indicates, what he described, as “bloody-mindedness”.  That is one possible interpretation of the correspondence. 

2. However, there is also a significant factor to be weighed carefully, and that is the risk of further allegations or confrontations occurring between the parties.  At the same time there is a need to consider the possible increase in value of the Z property if the asset is developed again as a going concern.  There is limited information before the Court as to possible income or loss to be made by the wife.  However, I do not consider that her failure to provide a business plan is necessarily significant when considering the interim orders.

3. Obviously, any action taken by the wife which brings about a loss or reduction in value would clearly be a factor to be attributed to the wife in the final hearing, if she does not set up a suitable business and make the profit which she currently anticipates will allow her to live a more comfortable lifestyle. 

4. Section 80 of the Family Law Act permits an order to be made as an interim order.  The trial has already been set for May 2011.  It is also appropriate to consider, as far as possible, the factors in section 79.  I accept the allegation of the husband, that the wife has property in Scotland, which is a relevant factor to be taken into account.  The husband also has the ongoing use of significant major assets.

5. It was conceded that the wife was previously successful in establishing and running the Z restaurant and is currently not in receipt of other independent income.  There has been no application for spouse maintenance.  The husband asserts that he would not have the capacity in any event to pay spouse maintenance. 

6. Having weighed up all of the factors before the Court, I consider it just and equitable on an interim basis, to make an order permitting the wife to re-open the business. 

7. The other orders sought have been covered in the previous applications.  Therefore I dismiss all the applications in a case currently before the Court.

8. I now have an application for costs in relation to the applications brought by the wife in relation to the question of disclosure and in relation to the appointment of the single expert.  The wife has brought the application for disclosure before the Court.  The rulings I have made indicate that she has been successful.  The wife has been successful and the husband has been wholly unsuccessful. 

9. Counsel for the husband seek to delay the ruling on the order for costs, pending the completion of the trial, on the basis that it will only be then that the significance or relevance of the document sought to be disclosed, will be capable of determination.  That overlooks the fact that the question of disclosure and discovery does not require that every document be tendered or relied upon or used in the final proceedings between the parties.

10. It is the requirement that the matters be disclosed to enable the party to prepare their case bearing in mind the available evidence.  That evidence, once available, may in fact encourage a party to agree with many matters put by the other side, or not to pursue certain factors that might otherwise be pursued, if the discovery had not taken place. 

11. The provisions of section 117, requires me to consider subject to subsection (2), that each party to the proceedings shall bear his or her own costs.  The other exceptions in section 117 and subsection (1) are not relevant. 

12. Subsection (2) says that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to the other subsections and the Rules of the Court, make such order as to costs as the Court considers just.

13. In section 117(2)(a), the Court is required to take into account the various factors set out in subparagraphs (a) to (g).  The most significant in relation to these proceedings is the subsection (c), the conduct of the parties to proceedings in relation to the proceedings, and without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery inspections, directions to answer questions, admission of facts, production of documents and similar matters.  To that extent, the opposition of the husband in not providing discovery and disclosure of documents requested by the wife is a significant factor.  The husband has many of the documents requested within his power or control, and has chosen not to make them available, requiring the wife to come to Court to seek orders.

14. The other significant factor is subsection (e), “where any party of the proceedings has been wholly unsuccessful in the proceedings”.  The orders which I have made indicate that in relation to the interim application for production and disclosure, and in relation to the question of who should be the single expert, the husband has been wholly unsuccessful in those interim applications. 

15. The other factors set out in section 117(2)(a) are not as persuasive.  The financial circumstances of the parties to the proceedings, whilst a factor, is not a significant factor in making an interim order in relation to costs.  I am satisfied, having weighed up the factors that the provisions of subsection (2) are made out namely, that there are circumstances that justify the Court making an order for costs and that such an order would be just. 

16. I am loath to make an order that requires the assessment of costs by a Registrar, but if there is no agreement this will be necessary.

I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 8 December 2010.

Associate: 

Date:  22 December 2010