Merrill and Burt
[2017] FamCA 102
•28 February 2017
FAMILY COURT OF AUSTRALIA
| MERRILL & BURT | [2017] FamCA 102 |
| FAMILY LAW – SPOUSAL MAINTENANCE – whether the de facto husband could bring an urgent application for spousal maintenance – De facto husband sought spousal maintenance hearing be expedited – Court emphasised that spousal maintenance would be heard on or before final trial. |
FAMILY LAW – PRACTICE AND PROCEDURE – Leave to file specific questions – Application brought by de facto husband during part heard trial – Husband seeking orders to file specific questions – Application is opposed by de facto Wife – Queen’s Counsel for the Wife submitting that such an application would be an abuse of process or vexatious where wife was previously subject of detailed cross-examination.
| Legislation Considered: Family Law Rules 2004 (Cth) r 13.26, 15.17 |
| APPLICANT: | Ms Merrill |
| RESPONDENT: | Mr Burt |
| FILE NUMBER: | MLC | 9912 | of | 2013 |
| DATE DELIVERED: | 28 February 2017 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Berman J |
| HEARING DATE: | 20 & 22 February 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Bartfield QC on 20/2/17 and Ms Fisken on 22/2/17 |
| SOLICITOR FOR THE APPLICANT: | Farrar Gesini Dunn |
| COUNSEL FOR THE RESPONDENT: | Mr Scriva on 20/2/17 and Mr Effron on 22/2/17 |
| SOLICITOR FOR THE RESPONDENT: | Effron & Associates |
Orders
That the respondent’s Application for urgent spousal maintenance and Response filed 20 January 2017 are adjourned for mention to 3 April 2017.
That leave is given for the parties to approach the Registrar of the Melbourne Registry of the Family Court of Australia to seek access to the audio recordings and, if available, to obtain copies of same subject to the payment of any fee or charge that may be levied and any terms and conditions of access PROVIDED THAT the audio recordings shall be those available as and from 22 August 2016.
That the respondent have leave to file and serve the following affidavits:-
(a) Mr W sworn 21 September 2016;
(b) Mr X sworn 21 September 2016;
(c) Mr Y sworn 25 August 2016;
(d) Dr Z sworn 23 September 2016;
(e) Mr AA sworn 11 October 2016;
(f) Mr BB sworn 13 October 2016; and
(g) Mr CC sworn 11 October 2016
with further consideration as to whether the respondent shall be permitted to rely upon the said affidavit evidence adjourned to 3 April 2017.
That the respondent have leave to file one further affidavit in response to the affidavit of Ms F sworn 19 August 2016.
That neither the applicant or the respondent shall cause the issue of any further subpoena without leave.
That the parties jointly instruct a single expert to undertake a valuation of the furniture and effects in the possession of each of them, with such valuation to be released by no later than 4 pm on 27 March 2017.
AND IT IS ORDERED BY CONSENT:
That within seven (7) days the applicant and respondent do all such acts and things and sign all such documents as may be required to jointly engage the single expert Charter Keck Cramer to prepare update valuations of the following properties:-
(a) L Street, Suburb E;
(b) 2 and 3, M Street, Suburb D;
(c) 1 M Street, Suburb D;
(d) N Street, Suburb D; and
(e) Carparks Lot 5, 6 and 7 at N Street, Suburb D
with such valuations to be released by no later than 4 pm on 27 March 2017.
That in accordance with paragraph 2.3 of the orders made on 8 February 2016 the applicant’s solicitors be authorised and/or permitted to pay the costs of the valuation of the real property and personal property from the funds held by the applicant’s solicitors in the interest bearing trust account and otherwise the balance of such funds remain held in accordance with paragraph 2.3 of the said orders pending further order of this Honourable Court.
That each party promptly comply with all reasonable directions of the single experts appointed in respect of the real estate and personal property of the parties (including permitting access to the real properties identified in this order) to facilitate the preparation of the updated valuation of real properties and the valuation in respect of personal property.
That further consideration of the Response filed 17 February 2017 is listed for mention on 3 April 2017.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Merrill & Burt has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: MLC 9912 of 2013
| Ms Merrill |
Applicant
And
| Mr Burt |
Respondent
REASONS FOR JUDGMENT
introduction
The Further Amended Initiating Application filed on 19 February 2016 by Ms Merrill (“the applicant”) and the Amended Response filed 31 May 2016 by Mr Burt (“the respondent”) came on for final hearing in the Melbourne Registry of the Family Court of Australia on 22 August 2016.
By order made 31 August 2016 the trial was adjourned part-heard for mention to 17 October 2016. The evidence of the applicant has concluded with further evidence to be called from Ms F, an accountant who has been assisting the applicant in negotiations with the Australian Taxation Office (“ATO”) seeking to crystalize the outstanding tax liability. The issue of the outstanding tax liability of the applicant both in respect of personal liability but also in terms of associated related entitles has been a matter of conflict and dispute between the parties.
The matter was considered by me in reasons delivered on 1 August 2016 with respect to orders sought by the respondent in his application filed 31 May 2016.
The respondent filed and Application in a Case on 7 December 2016 seeking orders that the applicant pay periodic spousal maintenance to him of $2,500 a week from 23 November 2016 together with various outstanding invoices “resulting from the ordinary living expenses of the de facto husband and their son”.
The application was the subject of amendment and on 28 December 2016 the respondent filed a Second Further Amended Application in a Case. The substance of the orders sought have not changed, but the amended application recognises that the respondent’s relief (if granted) is pursuant to s 90SG of the Family Law Act 1975 (Cth) (“the Act”).
On 20 January 2017 the respondent filed an Amended Response to an Application in a Case and sought the following orders:-
(1)That the injunctions contained at paragraph 1 of the orders made 31 August 2016 be and are hereby set aside.
(2)That the Applicant de facto wife (“the wife”) do all things and sign all documents necessary to allow the Respondent de facto husband (“the husband”) to proceed with the general meeting for the company O Pty Ltd, that had been scheduled to take place on the 14 September 2017, in accordance with the Agenda set out in the Notice of General Meeting signed by Mr R and dated 30 August 2016.
(3)That the parties do all things and sign all documents necessary to enable the husband to have sole carriage of negotiations with the Australian Taxation Office relating to the tax liability of the following companies:
(a)C Pty Ltd;
(b)O Pty Ltd;
(c)S Pty Ltd;
(d)T Pty Ltd; and
(e)U Pty Ltd (“the companies”)
(4)That, in the event that order proposed at paragraph 2 herein is not granted, a jointly appointed single expert be appointed to negotiate with the Australian Taxation Office, instructed by both parties, the tax liabilities of the companies.
(5)Such further or other order as the Honourable Court deems fit.
(6)That the applicant de facto wife pay the husband’s costs of and incidental to this application in a case.
The respondent relies upon his affidavit of 20 January 2017.
By Response filed by the applicant on 17 February 2017 she seeks a raft of orders enabling her to obtain finance in the sum of $500,000 to be secured over the property at L Street, Suburb E (“the L Street property”) being the house in which the respondent currently resides.
In addition, the applicant seeks orders that upon the ATO issuing notices of assessment to the de facto wife and the various corporate entities, the L Street property be placed on the market for sale. Paragraph 15 of the orders is in the following terms:-
That within 14 days of orders being made, the funds held by the de facto wife’s solicitors on trust for the de facto wife totalling $271,927 be applied in the following manner and priority:
15.1 firstly, the sum of $45,000 to Noble & Co Solicitors;
15.2 secondly, the sum of $11,550 to Foster Nicholson Jones;
15.3 thirdly, the sum of $30,000 to the de facto wife;
15.4 fourthly, the sum of $32,500 to V School; and
15.5 the balance, being approximately $152,877 to Farrar Gesini Dunn.
On 21 September 2016 orders were made listing the applicant’s oral application seeking an update valuation of the L Street property was to be listed for hearing on 17 October 2016.
On 17 October 2016 the Court was advised that proceedings had been issued by the respondent in the Supreme Court of Victoria in suite number 04001/ 2016 seeking damages against the applicant, her accountant and the firm for whom she works.
It was foreshadowed that there would be an application filed seeking to stay the proceedings in the Supreme Court.
The matter was listed for hearing on 2 November 2016.
On that date the application for a stay or perhaps more properly described as an application seeking an anti-suit injunction was discontinued by the de facto husband and the de facto wife’s application for costs was to be listed on a date to be fixed.
The proceedings came before me on 20 February 2017 and I received submissions in respect of a minute of proposed orders that had been tendered to me by the respondent’s counsel.
During the course of the hearing I became aware of the response of the applicant, her financial statement and affidavit in support together with an affidavit of William James Dunn, the CEO of Farrar Gesini Dunn e-filed on 17 February 2017.
The documents were detailed and it was not foreshadowed that the date set aside for further consideration of the proceedings would also involve a consideration of the orders sought by the applicant in her response.
TAXATION ISSUES
The unilateral negotiations undertaken by the applicant with the ATO have been the source of much conflict and litigation between the parties. Whilst the trial was part-heard because no further Court days were available to me, it was generally agreed that the resumption of the trial was likely to be dependent upon either a resolution of the outstanding taxation issues or at the very least a determination by the ATO which would serve to crystalize the liability.
It is the applicant’s contention that the current structure of the companies under her control put her at significant risk liability in respect of the outstanding tax. The applicant argues that the Court should find it is not just and equitable to embark upon a consideration of the property interests of the parties and that effectively all of the remaining property subject to outstanding liabilities (the ATO tax liability included) should remain with her without further claim by the respondent.
The respondent considers that it is just and equitable to make orders for property settlement recognising the parties legal and equitable interests in property and arguing that a significant sum representing monies that the applicant has dissipated without explanation should be brought to account or added back into the pool. The respondent’s case therefore focusses on the quantum of outstanding tax and he is keen to ensure that the figure is accurately calculated and as low as possible.
The respondent’s application seeking spousal maintenance was listed for hearing on 10 April 2017. My refusal to recognise the urgency of the application arising from the respondent’s purported dire financial circumstances is the subject of a Notice of Appeal filed number SOA3 of 2017 filed 6 January 2017.
On 20 February 2017 Queens Counsel for the applicant advised the Court that there has been significant movement in the assessment of taxation liability by the ATO and he gave clear indication that I could safely consider listing the matter for a resumption of the part-heard proceedings.
Whilst there was some scepticism by the respondent’s counsel, I proposed the resumption of trial to commence on 3 April 2017.
The date is acceptable to counsel, the parties and their legal advisors.
RESPONDENT’S APPLICATION FOR URGENT SPOUSE MAINTENANCE
Paragraph 1 of the proposed orders seeks that the hearing of the respondent’s application fixed for 10 April 2017 be expedited “by allowing it to be heard by the next available judicial officer”. The respondent’s counsel conceded that it was unlikely that the respondent’s application would be listed before the resumption of trial on 3 April 2017. I advised counsel that it was my intention in any event to adjourn the respondent’s application for urgent spousal maintenance to the first day of trial. If the trial proceeds then further consideration can be given at the conclusion of the trial, however, if for some reason the trial does not proceed then at the very least the respondent’s application for spousal maintenance will be heard.
ORDERS MADE 31 AUGUST 2016
At the conclusion of the part-heard proceedings orders were made until further order restraining the respondent, his servants or agents from doing anything or taking any steps in relation to:-
(a)C Pty Ltd;
(b)O Pty Ltd;
(c)S Pty Ltd;
(d)T Pty Ltd; and
(e)U Pty Ltd
without further order of the Court or the written consent of the parties being first obtained.
The respondent seeks a discharge of the order of injunction. There are significant complexities in relation to the circumstances by which the applicant has effective control over the five companies as described.
Given that the trial is now listed for resumption, it is conceded that the respondent will not pursue his orders on an interim basis, but again it is understood that if the part-heard proceedings do not resume then the respondent’s application will be heard.
PERMISSION TO LISTEN AND OBTAIN COPIES OF AUDIO RECORDINGS
There is no opposition to an order being made that would permit the parties to access the audio recordings of the hearing. I do not consider that it is necessary for me to make an order, but rather it is a matter of negotiation and agreement between a party wishing to access the audio recordings, the registry and transcript provider. I have not been advised of any attendant cost to such an application, nor what terms and conditions are imposed upon a party wishing to access the audio recordings.
To that extent I propose to do no more than give leave to the parties to approach the Registry Manager of the Melbourne Registry of the Family Court of Australia to request access and if available, obtain copies of the audio recordings in respect of the proceedings as and from 22 August 2016 subject to the payment of any stated fee or charge.
LEAVE TO SERVE A SET OF SPECIFIC QUESTIONS
The respondent seeks leave pursuant to rule 13.26 of the Family Law Rules (“FLR”) to serve upon the applicant a set of specific questions seeking “clarification of the applicant’s explanation of her expenditure of family funds since separation”.
Rule 13.26 provides:-
(1)After a case has been allocated to a first day before a Judge, a party (the requesting party) may serve on another party (the answering party) a request to answer specific questions.
(2)A party may only serve one set of specific questions on another party.
(3)The specific questions must:
(a)be in writing;
(b)be limited to 20 questions (with each question taken to be one specific question); and
(c)not be vexatious or oppressive.
(4)If an answering party is required, by a written notice served under rule 13.20 or an order, to give the requesting party a list of documents, the answering party is not required to answer the questions until the time for disclosure under Part 13.2 or an order has expired.
(5)The requesting party must serve a copy of any request to answer specific questions on all other parties.
The application is opposed by the applicant. The applicant’s Queen’s Counsel argues that no good purpose is served by a request to answer specific questions in circumstances where the focus is as to “an explanation of [the applicant’s] expenditure” in circumstances where she has been the subject of protracted cross examination by the respondent’s counsel.
The intention of rule 13.26 is to limit any request for specific questions to a period after the case has been allocated to a first day before a Judge, but by necessary implication not after the trial has started other than with leave. More relevantly, it is difficult to see the purpose of any request when the applicant was the subject of detailed cross examination and the balance of the applicant’s case will not touch on any issue of purported expenditure.
The submission of the applicant’s Queen’s Counsel is that to seek answers to questions at this stage of the proceedings may well constitute an abuse of process or be vexatious.
Such a submission was not explored, but I consider that there is merit in the opposition to the application and I am not persuaded that there would be any advantage in the answers being served, nor would it be proper to do so at this stage of the trial. In any event, without a draft of the proposed specific questions to be answered, it is not possible to consider what purpose would be served by giving leave at this stage.
LEAVE TO FILE AND SERVE FURTHER AFFIDAVITS
The respondent seeks leave to rely upon affidavits from the following deponents:-
·Mr W sworn 21 September 2016
·Mr X sworn 21 September 2016
·Mr Y sworn 25 August 2016
·Dr Z sworn 23 September 2016
·Mr AA sworn 11 October 2016
·Mr BB sworn 13 October 2016
·Mr CC sworn 11 October 2016
It is conceded that the respondent has not provided copies of the affidavits for the applicant’s consideration. It may be that some or all of the documents are uncontroversial and whilst it would ordinarily be objectionable for affidavits to be relied upon at this stage of the proceedings without good reason, no point may have been taken.
It is not appropriate for leave to be given without the applicant having an opportunity to consider the proposed affidavit material and for the Court to consider whether if leave is allowed, the effect that it may have on the length of the proceedings.
Accordingly, I propose to give leave to the respondent to file and serve the affidavits, but further consideration of whether leave will be given for the respondent to rely upon the affidavit material will be adjourned to the first day of trial.
LEAVE TO FILE FURTHER AND SUPPLEMENTARY AFFIDAVITS BY THE RESPONDENT
The respondent seeks leave to file and serve further affidavit material in response to specific allegations contained in the affidavit of Ms F sworn 19 August 2016. Ms F has not yet been called and providing the respondent files and serves the affidavit sufficiently in advance of her evidence, I do not consider that any prejudice will be occasioned to the respondent.
I see no need for a response to be made to a purported allegation in the applicant’s Case Outline document dated 22 August 2016. A Case Outline document is not evidence. If the respondent is challenged with an allegation that he had in some way attempted to properly defeat his creditors in bankruptcy then the respondent will have an opportunity to be heard.
I propose to give leave to the respondent to file one further affidavit in response to the allegations contained in the affidavit of Ms F.
LEAVE TO ISSUE SUBPOENA
The respondent seeks leave to issue a number of subpoena seeking the production of documents from the following organisations:-
·Commonwealth Bank of Australia
·National Australia Bank Limited
·Australia and New Zealand Banking Group Limited
·Foley’s List Pty Ltd
·Holmes List
·Farrah Gesini Dunn
·Dr H
·Department of Immigration and Border Protection
·Mr DD of EE Accountants
The respondent has not provided the proposed subpoena in draft form and whilst the applicant has no objection to subpoena being issued to the three banks as named, there is objection to the balance of the named entities.
Rule 15.17 provides the mechanism in respect to the issuing of a subpoena. There is no time for issuing a subpoena in circumstances where the matter has been brought to my attention, I consider it part of necessary case management to consider whether restriction should be placed upon a party wishing to issue a subpoena, particularly where the proceedings are advanced.
The purpose for subpoena is not to be an alternative process to discovery, but rather to seek the production of documents which is known to exist and is likely to be relevant to the proceedings.
No assistance was provided as to the range of documents that are to be sought for production and until that occurs it is not possible to assess the relevance to the proceedings of the foreshadowed subpoena.
UPDATE VALUATION OF ASSETS
There has been some argument between the parties arising from the applicant’s request to obtain an update valuation of the L Street property.
To date the respondent’s position has been to resist the application for updated valuation of the said property on the basis that it was unnecessary.
The respondent’s position has now changed and he seeks that the parties obtain an updated valuation of all assets (unless there is agreement) prior to the resumption of the proceedings now to occur on 3 April 2017.
There was some uncertainty as to the status of the current valuations and whether the valuation reports that have been obtained in or about November 2015 are likely to be out of date.
Subject to any agreement between the parties, I consider that the Court should have the advantage of updated valuations. The single expert retains the confidence of the parties and enquiries have revealed that the cost of the valuations may well be in the region of $15,000.
The solicitors needed to obtain some further instructions and that aspect of the proceedings was adjourned until 22 February 2017.
Counsel for the applicant produced a proposed Minute of Order and upon enquiry the respondent’s solicitor confirmed that the proposed orders could be made by consent.
He did however raise the unresolved issue of evidence of value of the furniture and effects in the possession of each of the parties.
There has been no valuation conducted nor is there any agreement in respect of a valuation taking place of the personal effects of the parties.
An order was made in 2015 which provided for a valuation of real and personal property to be undertaken, but by reference to the identity of the single expert in respect of personal property it seems that the focus may well have been upon a valuation of the applicant’s jewellery in her possession rather than furniture and other personal effects.
The applicant opposes the respondent’s application for valuation of furniture and effects on the basis that it has not occurred, was not raised the respondent’s counsel at the commencement of the proceedings and it is now too late for that to occur.
The respondent’s solicitor argues that evidence was given by the applicant that she spent significant money on the purchase of furniture and effects. The figure spent may be as high as $250,000.
Irrespective of what may now promote the respondent’s application to seek a value of furniture and effects, it is difficult to see how prejudice could be caused to the applicant if that was not to occur.
I propose to order that the parties jointly instruct a single expert to value the furniture and effects in and around the homes of the applicant and the respondent with the cost the valuation to be paid from funds held by the applicant’s solicitors in the interest bearing trust account.
The balance of the Response filed 17 February 2016 is listed for mention on 3 April 2017.
I certify that the preceding sixty three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 28 February 2017.
Associate:
Date: 28 February 2017
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Expert Evidence
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Jurisdiction
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Procedural Fairness
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Remedies
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