May and Jonas and Ors

[2013] FamCA 1074

FAMILY COURT OF AUSTRALIA

MAY & JONAS & ORS [2013] FamCA 1074

FAMILY LAW – Adjournment – Costs – Subpoenas

APPLICANT: Ms May

RESPONDENT: Mr Jonas

SECOND RESPONDENT: Mr B

THIRD RESPONDENT: B Pty Ltd

FIRST INTERVENER: Gillian Coote Family Law

SECOND INTERVENER: Deputy Commissioner Of Taxation

FILE NUMBER: MLC 2485 of 2010

DATE DELIVERED: 11 November 2013

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Bennett J

HEARING DATE: 11 November 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr O’Shannessy

SOLICITOR FOR THE APPLICANT: Taussig Cherrie Fildes

COUNSEL FOR THE RESPONDENT:  Mr Swanwick

SOLICITOR FOR THE RESPONDENT: Mendelsons Lawyers

COUNSEL FOR THE SECOND RESPONDENT:	In Person
COUNSEL FOR THE THIRD RESPONDENT:	In Person

SOLICITOR FOR THE THIRD RESPONDENT:

COUNSEL FOR THE FIRST INTERVENER: Mr G Dickson

SOLICITOR FOR THE FIRST INTERVENER:	Gillian Coote Family Law
COUNSEL FOR THE SECOND INTERVENER:	Mr Linden

SOLICITOR FOR THE RESPONDENT: Australian Government Solicitor

Orders

IT IS ORDERED THAT:

1.The final hearing of this matter set down to commence on 12 November 2013 be adjourned to 16 June 2014 at 10.00 am.

2.This matter be otherwise listed for mention in Court before me on 3 April 2013 at 9.00 am for the purpose of checking on the readiness of the matter for trial.

3.To the extent that they have not already done so current to November 12 2013, by not later than 10.00 am on 12 November 2013 the practitioner for each party provide notice in writing to their client and a copy to each other party to the proceedings, of the following:-

a)     the actual costs incurred by the client up to and including 12 November 2013;

b)     any expenses paid or payable to expert witnesses or, if those expenses cannot be ascertained after the making of all reasonable enquiries, an estimate of those expenses;

c)     the estimated costs payable for each day of the trial;

d)     the estimated length of the trial; and

e)     the date of payments made and the source of the funds for the costs paid or to be paid so that:-

i.if costs have been paid by cheque, details must be provided of the account on which the cheque was drawn;

ii.if costs have been paid by credit card, the details must identify the finance provider and number and name of the credit card facility; and

iiiif costs have been paid in cash, the details must identify the payer.

4.The subpoena directed to the Director of G Pty Ltd, which subpoena is returnable on Wednesday 13 November 2013, be abridged so that subpoena is returnable this day.  The documents which have been produced be released for inspection and photocopying to each party to the proceedings but no party is permitted to remove the documents from the precincts of the section for the subpoenaed documents clerk.

5.The subpoena directed to the Proper Officer of Hill Legal, which subpoena is returnable on Wednesday 13 November 2013, be abridged so that subpoena is returnable this day.  The documents which have been produced be released for inspection and photocopying to each party to the proceedings but no party is permitted to remove the documents from the precincts of the section for the subpoenaed documents clerk.

6.In the event that documents are produced by or on behalf of H Pty Ltd prior to the return date, issued at the behest of the wife, being 13 November 2013, the subpoena be made returnable on the day that the documents are received and what documents are produced be released for inspection and photocopying, save that no party is to remove the documents  from the subpoenaed documents section of this Registry.

7.The return of any subpoeanas be listed before me this week and in the event that there is no appearance by any party I will release the documents produced for inspection and photocopying.

8.The costs of all parties this day be reserved.

9.My reasons for decision this day be transcribed and when settled a copy be made available to the parties.

IT IS ORDERED BY CONSENT THAT:

10.The husband provide to the second respondent Mr B, through his solicitors, any document in his possession or control which Mr B says is necessary for his case.

IT IS FURTHER ORDERED THAT:

11.Before the parties leave the precincts of the Court today a photocopy of the court file index be taken and given to each party.

AND IT IS NOTED that upon receiving the Court file index each party knows what documents have been filed in this proceeding and it is their sole responsibility to know and obtain what documents are relevant to their case and do so at their own expense.
AND IT IS FURTHER NOTED THAT the court file index was photocopied this day and a copy given to counsel for the wife who remained at Court to collect it.  The other parties had left the precincts of the Court before collecting their copy and they will be sent to the parties with this Order.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 2485 of 2010

Ms May

Applicant

And

Mr Jonas

Respondent

And

Mr B
Second Respondent

And

B Pty Ltd
Third Respondent

And

Gillian Coote Family Law
First Intervener

And

Deputy Commissioner Of Taxation
Second Intervener

REASONS FOR JUDGMENT

1. This matter was listed today for the commencement of a hearing estimated to take 10 days.  It is a case with an extremely unfortunate history.  In practical terms, it appears that the fruits of the litigation are far outweighed by the efforts that will be put into it.  Very broadly speaking, there is some $257,000 invested in the trust account of Taussig Cherrie.  Some interest will have accrued on that and I assume that the parties have turned their mind to the liability for taxation arising on that interest income.  Mr B, the second respondent, claims all of those moneys in his capacity as a registered mortgagee of a property which has since been sold.

2. The husband agrees with Mr B’s claim; the wife does not.  She seeks to set aside the transaction which constituted the mortgage upon which Mr B relies. If that occurs, the $257,000 would be available to be divided between the husband and the wife in the event that it was just and equitable for a property settlement to be effected and I considered that orders could be made which are proper. 

3. The Deputy Commissioner of Taxation is a party to the proceedings.  Previously, the wife had a liability owing to the Deputy Commissioner of Taxation but she has been released from that liability and nothing attaches to her personally now.

4. The husband owes some $1.1 or $1.2 million to the Deputy Commissioner of Taxation which, it would appear, prima facie, is a debt recoverable now notwithstanding there might be some process to challenge the assessment.  At the moment, the Deputy Commissioner of Taxation says that he seeks orders be made to satisfy his debt out of the $257,000 in the trust account.  I don’t know whether that situation will change but the options that appear to be open to her are to either take whatever moneys the husband is entitled to as a result of an alteration of property interests or to seek a ranking against the wife.

5. The wife has been represented throughout these proceedings.  Taussig Cherrie Fildes acts on her behalf.  It would have cost a small fortune if conventionally billed.  Previously, Gillian Coote Lawyers acted on the wife’s behalf.  The latter law firm is a party to the proceedings to safeguard her interest in any proceeds of settlement to which the wife becomes entitled.  I am advised by Mr O’Shannessy that, broadly speaking, in the event that his client receives a final alteration of property interests in her favour and gets a cash sum, approximately two thirds of it will be apportioned between the wife’s current and former solicitors, so the wife will only retain something in the vicinity of one third of whatever entitlement (if any) she has under any final property order.

6. Of course, the wife says that the $257,000 is the tip of the iceberg and that the husband has had and misappropriated some hundreds of thousands of dollars more.  Today, the matter was discussed in detail with a view to commencing evidence tomorrow.  There are four matters which were raised as difficulties to the matter proceedings, however I must say that the Deputy Commissioner of Taxation was at all times ready, willing and able to proceed and that Mr O’Shannessy, for the wife, was most reluctant in finally conceding after some hours that his opposition to an adjournment was weak.  I will merely record the issues as raised so I don’t forget them later.

7. The first matter is that the wife was required to file and serve subpoenas some time ago if she sought to do so at all.  She did so late with the effect that some documents will not be produced in this registry before Thursday or Friday of this week and the earliest other documents will be produced is Wednesday. Today is Monday. In circumstances where it seems that documents have been produced before the date that they had been required, I have today released them for inspection and photocopying without objection for any party, but it is the case that Mr O’Shannessy will not relinquish his entitlement to rely upon documents which will be produced in two days time or in four days time.  That’s understandable; I doubt that the subpoenas would have been issued in the first place unless they were necessary.

8. The second issue is that Mr B says that he has no documents relevant to these proceedings.  Mr B serially becomes unrepresented in these proceedings.  It frequently is before he has to come to Court.  Today, the reason for his lack of representation appears in a letter which is an exhibit in the proceedings (“Exhibit R1”) which, omitting formal and irrelevant parts, is addressed to the Court and reads as follows:

   We refer to the above matter wherein we act for [Mr B] and his company, [B Pty Ltd].  Our clients have failed to provide us with instructions and materials that we require and is also unable to fund counsel for the hearing of this matter which is scheduled to commence on 11 November 2013.  We are, therefore, serving on our client a notice of ceasing to act of this day.

9. It is Mr B’s position in this case that he is asset rich and income poor but it is not the first time that it appears he has not been able to pay his lawyers to appear for him.  It is untenable that I could commence a 10 day hearing in a matter of this complexity with a litigant who comes to Court without any documents.  It’s not something that can be cured overnight.  This, in my view, is the principal reason for the adjournment of these proceedings. 

10. The next issue is that the Deputy Commissioner of Taxation may have changed her position.  I haven’t heard from Mr O’Shannessy finally on this point.

11. My notes of the appearance in February 2013 indicated that the Deputy Commissioner of Taxation said through her counsel that there appeared to be two alternatives.  One is that they would seek to recover against anything to which the husband was entitled as a result of these proceedings or, alternatively, they would seek to rank with the wife.  If they take the latter course, that is less favourable to the wife and whilst Mr O’Shannessy says that it may well have been without notice, it’s not something that would have necessarily impeded the running of the case and I must agree with that because it’s ultimately a matter of submissions with some relevance on the way through.

12. The next issue is that a Mr I has not been served personally with the proceedings.  Mr I is an accountant.  Mr I was given notice of the wife’s application to set aside what amount to fraudulent transactions.  It appears that Mr I was not personally served and the only proof of service that Mr O’Shannessy’s client has is an affidavit of service by post, that is, someone from Taussig Cherrie Fildes posted documents to Mr I.  Those included an order which required him to file a notice of address for service within a certain number of days.

13. Mr I did not file a notice of address for service and, in the circumstances and given the gravity of the relief sought, I wouldn’t be prepared to proceed on the basis that I was satisfied he had notice, merely because documents were posted to him at an address, notwithstanding that address corresponds with one from which he sent a letter to the wife’s practitioners shortly prior to service.  They are the four matters which were discussed today, a combination of which coalesce to mean that justice requires the matter be adjourned.

14. I did have dates and I do have dates in February that I could allocate to this matter but, on reflection, I also have a lot of other work which has been managed rather more successfully than this matter. I can’t see my way clear to prioritise this case over cases which are otherwise ready to proceed and are not beset with the same problems as this case seems to suffer constantly.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett delivered on 11 November 2013.

Associate: 

Date:  5 February 2014