Mitford and Mitford & Ors
[2018] FamCA 1067
•14 December 2018
FAMILY COURT OF AUSTRALIA
| MITFORD & MITFORD AND ORS | [2018] FamCA 1067 |
| FAMILY LAW – PROPERTY – Interim – Discovery and production of documents – Trusts – Orders for production of documents listed in husband’s List of Documents. FAMILY LAW – PROPERTY – Interim – Whether the wife has a right of occupation at the matrimonial home pending final property settlement – Where the wife seeks to retain the matrimonial home as part of any settlement – Where the husband and the Trust are concerned about interference with ongoing farming operations and the presence of house guests during the wife’s absences from the property. |
| Family Law Act 1975 (Cth) s 114 Family Law Rules 2004 (Cth) ch 13, rr 12.02, 13.01, 13.04 13.07 Federal Court Rules 2011 (Cth) rr 20.14, 20.15 |
| Ascot Investments Pty Ltd v Harper (1981) FLC 91-000 Briese & Briese (1986) FLC 91-713 Coventry, Coventry & Smith [2004] FamCA 249 Davidson& Davidson (1991) FLC 92-197 Dennis v Chambers Investment Planners Pty Ltd [2012] FCA 63 Goodwin v Goodwin Alpe (1991) FLC 92-192 Harris & Dewell & Anor (2018) FLC 93-839 Kelly & Kelly (No 2) (1981) FLC 91-108 Martin & Martin & Anor (No 2) [2014] FamCA 232 Masoud & Masoud [2016] FamCAFC 24 Stein & Stein (1986) FLC 91-779 Stowe & Stowe (1981) FLC 91-027 Woley & Humboldt (No 3) [2009] FamCA 546 |
| APPLICANT: | Ms Mitford |
| 1st RESPONDENT: | Mr Mitford |
| 2nd RESPONDENT: | B Pty Ltd |
| 3rd RESPONDENT: | C Pty Ltd |
| FILE NUMBER: | ADC | 41 | of | 2017 |
| DATE DELIVERED: | 14 December 2018 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Berman J |
| HEARING DATE: | 27 November 2018 and 7 December 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Wells QC with Ms Lewis |
| SOLICITOR FOR THE APPLICANT: | Scales & Partners |
| COUNSEL FOR THE 1ST RESPONDENT: | Ms Pyke QC |
| SOLICITOR FOR THE 1ST RESPONDENT: | Mellor Olsson |
| COUNSEL FOR THE 2ND RESPONDENT: | Mr McGinn |
| SOLICITOR FOR THE 2ND RESPONDENT: | Welden & Coluccio Lawyers |
| COUNSEL FOR THE 3RD RESPONDENT: | Mr McGinn |
| SOLICITOR FOR THE 3RD RESPONDENT: | Welden & Coluccio Lawyers |
Orders
That the wife shall have the right of occupation at the premises situate at D Street, E Town, Victoria … (“the B Homestead”).
That the wife be restrained and an injunction granted restraining her from:-
(a)Interfering with any assets owned by B Pty Ltd and the day to day farming operations of B Pty Ltd;
(b)Engaging with farming staff employed or contracted by B Pty Ltd;
(c)Entering areas of the farm situate at E Town, Victoria other than the B Homestead and its curtilage;
(d)Authorising, suffering or permitting:-
(i)Any other person to reside or remain at the B Homestead should the wife’s absence from the homestead extend beyond 72 hours;
(ii)Any other person to be in possession of or consume any illicit drugs whilst residing at or remaining on the B Homestead.
That the wife grant access to any employee of B Pty Ltd and personnel (including but not limited to the director of B Pty Ltd and the respondent husband) on 24 hours written notice, or without notice in the case of an emergency.
That the husband produce the following documents for inspection by the wife (and if copies are sought then at her cost):-
(a)The documents set out in Items 1, 2, 3, 4 and 6 of Schedule 2 of the husband’s List of Documents filed 6 December 2018.
(b)The financial statements for the Mitford Family Trust for the years ending 30 June 2015, 2016 and 2017.
(c)Any independent valuation report in relation to the Mitford Family Trust property.
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 Mitford & Mitford and Ors 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: ADC 41 of 2017
| Ms Mitford |
Applicant
And
| Mr Mitford |
Respondent
And
B Pty Ltd
2nd Respondent
And
C Pty Ltd
3rd Respondent
REASONS FOR JUDGMENT
INTRODUCTION
By Initiating Application filed 2 March 2018 Ms Mitford (“the wife”) seeks the following final orders:-
(1)That by way of property settlement the property and the assets of the Trusts of the parties be divided equally between the parties.
(2)That this Honourable Court identify the asset pool available for distribution; and
(3)That this Honourable Court make such adjustments necessary in the property of the marriage to equalise the parties’ interests in such property.
By his Response filed 1 June 2018 Mr Mitford (“the husband”) opposes the orders sought by the wife and seeks the following orders:-
(1)That the following sums advanced post separation to the wife or for the wife’s benefit be declared as part property settlement to the wife:
a.$71,496 cost of new [4WD] vehicle,
b.$20,714 payment of Westpac Credit Card debt;
c.$20,000 payment of Westpac overdraft debt;
d.Drawings from [B Pty Ltd] from separation to 30/6/16;
e.Weekly payments from the husband from 1/7/16 to the current date.
(2)That the net assets of the husband and the wife be divided as ordered by this Honourable Court.
On the first return date before Judge Mead consent orders were made that provided for the parties to serve formal Lists of Documents on or before 30 April 2018. Agreement was also reached that:-
5.The Parties are restrained and an injunction is hereby granted restraining them from disposing of, further encumbering or dealing with the assets of the marriage except in the ordinary course of business or with the written consent of the other party or by Order of the Court.
The proceedings were transferred to the Family Court of Australia on 14 June 2018 and on 9 October 2018 the interim argument was listed for hearing on 27 November 2018 and completed on 7 December 2018.
The interim argument concerns the wife’s application that the husband make further and better discovery and that she be permitted to continue to reside at the former matrimonial home at E Town, Victoria (“the B Homestead”).
The husband’s Response filed 14 November 2018 concedes paragraphs 4 and 6 of the wife’s application, is silent on the topic of further discovery and seeks that the wife vacate the B Homestead and that he have “exclusive use and occupation of the said home and property”.
B Pty Ltd (“BPL”) filed a Response on 21 November 2018 seeking orders that the wife’s Application in a Case be dismissed, but if in the alternative an order is made that permits the wife to reside in the B Homestead then BPL seeks orders by way of injunction to restrict the wife’s conduct in relation to its day to day farming operations.
A Response was filed on 21 November 2018 by C Pty Ltd (“CPL”) seeking that they be removed as the third respondents to the proceedings.
The status of BPL and CPL will be further discussed.
BACKGROUND
The wife is 60 years of age. The husband is 61 years of age. The parties were married and commenced cohabitation in 1978 at F Town, South Australia.
The parties have three surviving adult children namely Ms G, Mr H and Mr J. Tragically the parties’ second eldest child passed away in infancy.
The parties separated on 13 March 2015 and a Divorce Order became final on in March 2017.
The relevant history of the parties is generally uncontroversial.
As at the date of marriage the husband worked for his parents farming business. Mr K Mitford was the husband’s father. He died in 2017. Ms L Mitford is the husband’s mother.
The husband’s parents married in 1953. Mr K Mitford was farming with his family and following their marriage and with some assistance from the Mitford family, Mr K and Ms L commenced farming in their own right.
In 1966 the family moved to F Town and purchased farming property that was known as “M Farm”.
The farming enterprise purchased other parcels of land in the area, some of which was held in the names of Mr K and Ms L, some in the name of the eldest son Mr J and other property was held jointly.
On 8 October 1976 Mitford Pty Ltd (“Mitford”) was incorporated to become the sole trustee of the Mitford Family Trust. The Mitford Family Trust was settled on 13 December 1976. On 26 September 2014 Mitford was removed as trustee of the Mitford Family Trust and Mr K Mitford in his capacity as appointor appointed CPL as trustee.
The husband’s brother Mr N Mitford passed away in 2014.
Following the death of Mr K Mitford it appears that his Power of Appointment in respect of the Mitford Family Trust passed to the husband.
The current position is that the husband and his mother are joint appointors.
Ms L is the sole director and shareholder of CPL.
The Trust Deed for the Mitford Family Trust was not provided to the Court. The husband’s understanding is that the beneficiaries of the Mitford Family Trust are the descendants of Mr K Mitford and their spouses. He asserts that he has not received any distribution from the Trust but is employed part-time in his capacity as an administration manager for CPL. It is conceded that the Mitford Family Trust owns substantial landholdings and valuable farm equipment utilised in the F Town farming enterprise.
The husband’s brother Mr O died in 1983. He held farm land known as “P Farm” and a one third interest with his parents in “Q Farm”. Mr O bequeathed his interest in the farming land to the husband and his brother Mr R.
In 1988 the husband transferred his interest in P Farm to Mr R in exchange for Mr R’s interest in Q Farm. Consequent upon that transaction Mr R became the sole owner of P Farm and the husband held a one third share in Q Farm.
The husband and his parents sold Q Farm in 1988 and purchased substantial farm land at E Town in Victoria, known as BPL. The husband and wife lived at the B Homestead and Mr R and his family lived at P Farm.
The family incorporated BPL in 1988 to be the trustee of the Mitford Land Trust which holds the BPL farming land. The husband and his father were the appointors of the Trust. The husband’s parents, Mr R and the husband each held one share in BPL.
In 2004 the husband contends that a restructure occurred that had the effect of dividing up and separating the ownership and operation of the F Town and E Town farming enterprises.
During the marriage the parties and their children lived in the B Homestead. The parties’ son Mr J works for BPL and his partner and children live in another house on the property. A farm manager is employed and the husband’s duties in relation to BPL are generally restricted to administrative and marketing tasks.
The husband considers that the gross value of the Mitford Land Trust would be in excess of $9 million. The wife contends that the value would significantly exceed this amount.
Following the commencement of proceedings the husband resigned as co-director of BPL but retains his equal shareholding with his mother.
CURRENT ORDERS
On 27 November 2018 orders were made that orders 3 and 4 of orders made on 9 April 2018 be extended until further order. Those orders provide for the husband to cause to be paid to the wife the sum of $1,500 per week to be categorized at trial and the wife’s legal fees and disbursements also to be similarly categorized. The payments made to the wife appear to be by way of the husband’s drawings pursuant to his Beneficiary Loan Account with Mitford Land Trust as at 1 June 2018 in the sum of $887,222 as disclosed in the husband’s Financial Statement.
The order of 27 November 2018 reflects the first involvement of BPL and CPL as second and third respondents. They do not appear to have been formally joined by the wife and other than BPL and CPL seeking to be heard on the interim proceedings and in particular the wife’s application for occupation of the E Town homestead, I do not consider that they are parties to the substantive proceedings.
WIFE’S APPLICATION FOR FURTHER AND BETTER DISCOVERY
The parties have each exchanged lists of documents.
The husband’s list (filed 7 December 2018) discovers documents that generally related to the husband’s personal financial circumstances, but the documents set out in Schedule 2 which relate to the Mitford Family Trust and the Mitford Land Trust, are the subject of objection on the ground that the documents are privileged. It is not legal professional privilege which is claimed but rather that the husband does not have the “legal control” of the documents and in the absence of consent or permission from BPL and CPL he is not prepared to permit the documents in Schedule 2 to be produced and inspected.
The wife’s Application filed 10 October 2018 provides little assistance as to the category of documents that are sought. It refers to the wife’s affidavit filed contemporaneously. The best that I can do to better particularise the wife’s application is by reference to [17] and [32] of her affidavit where she seeks that “the husband make full and proper discovery of all documents that he has in his possession or has had in his possession” in relation to the Mitford Land Trust and the Mitford Family Trust respectively.
Chapter 13 of the Family Law Rules 2004 (Cth) (“the Rules”) imposes an obligation of full and frank disclosure on parties to Family Court proceedings and provides specific mechanism by which that obligation must be fulfilled.
As noted in Briese & Briese (1986) FLC 91-713 at 75,180:-
The need for each party to understand the financial position of the other party is at the very heart of cases concerning property and maintenance.
Despite the breadth of the duty to disclose, there are concerns about the over broad disclosure of documents in Family Court proceedings.
Rule 13.01 imposes a general duty to give “full and frank disclosure of all information relevant to the case, in a timely manner”, whilst r 13.07 narrows the scope of the duty to “each document that is or has been in the possession, or under the control, of the party disclosing the document; and is relevant to an issue in the case.”
In Martin & Martin & Anor (No 2) [2014] FamCA 232, Cronin J found at [28] that: “the focus of the Court should be whether it was “on the cards” that the documents would materially assist.” His Honour considered his own comments in Woley & Humboldt (No 3) [2009] FamCA 546 where he said at [39]:-
In Hudson Timber & Hardware Ltd v Chaudhary Group Pty Ltd [2002] FCA 832 the Full Court of the Federal Court examined the issue of apparent relevance and said that the relevant principles governing the obtaining of documents on subpoena which have “apparent relevance” were that inter alia:
(1) The relevance of documents was not limited to documents directly admissible in themselves in proof of an issue raised in pleadings; and
(2) If a class of documents which has material forensic relevance could be shown to exist, then a subpoena would not normally be set aside.
The obligation to make discovery is not in the abstract but rather requires the party to consider the relevance that the documents may have to an issue in dispute. The objective should be to assist the Court in the disposal of an issue or the dispute in general.
At an early stage in the proceedings it is not necessarily easy to define the issues and therefore the extent to which a document or a category of documents may have a sensible relevance. As the proceedings progress, the issues are cast more clearly and accordingly the parties are better able to ascertain what documents are truly relevant and germane to the task that the Court is required to undertake.
In recent years superior courts have taken a more modern approach to general discovery. In part this is as a result of the enormous documentation that is involved and the burden and cost of discovery in many cases where it may not be necessary. The discovery process has been criticised as having disadvantages including the swamping of parties with masses of material which tend to delay the proceedings and to fog the real issues.
On 1 August 2011 the Federal Court of Australia adopted the Federal Court Rules 2011 (Cth) and its revised regime for discovery in pt 20. These changes have impacted upon the extent and cost of discovery.
Part 20 provides for:-
·Increased judicial control of discovery;
·A default or standard form of discovery (r 20.14) that require the documents to be “directly relevant” to issues in the pleadings and in the party’s “control” after conducting a “reasonable search”;
·A more flexible and responsible non-standard discovery regime (r 20.15) that can be tailored to the specific case, such as those that are likely to be document intensive, especially where the documents are stored electronically.
Therefore the new regime for discovery in Federal Court proceedings is on the basis of two principles, namely, that a party must not apply for discovery unless the making of an order will, facilitate the just resolution of the proceedings as quickly, inexpensively and efficiently as possible and that a party is not able to provide discovery unless the Court has made an order.
The focus is therefore to prevent unnecessary discovery: see Dennis v Chambers Investment Planners Pty Ltd [2012] FCA 63.
For discovery to be the subject of an order the document must pass the “directly relevant” test.
The direct relevance test is aimed at narrowing the scope of discovery. The meaning of direct relevance is that of relevance in the sense of requiring the document to be directly on point and that it tends to prove or disprove the allegation in issue.
It is understood that the current proceedings do not necessary fall within the category of “commercial proceedings”. It is important to differentiate proceedings under the Family Law Act 1975 (Cth) (“the Act”) where the parties may have different level of control and advantage. In many cases, without the clear obligation on a party to make full and frank disclosure, matters that could well be relevant to the issues that the Court needs to determine may not be known by any other means.
Accordingly the Rules impose a more generous obligation in respect of discovery than might now be the practice in other superior courts. The obligation falls short of discovery without forensic focus.
The wife’s application is not directed to BPL or CPL. It seeks that the husband disclose documents in his capacity as a joint appointor of the Mitford Land Trust and the Mitford Family Trust, in his capacity as a director of CPL and in his capacity as a beneficiary of the Trusts.
The husband concedes that he holds a quantity of documents that related to the operation and governance of the two trusts.
The issue is whether he has the legal right to possession.
In Masoud & Masoud [2016] FamCAFC 24 at [20], the Full Court considered the meaning of possession and control as follows:-
The meaning of “possession and control” has been considered extensively. For a document to be within the power of a party, the party must be in actual possession of it or must have an immediate indefeasible right at the time of discovery to demand possession from the person who has physical possession of it: see Lonrho Ltd v Shell Petroleum Co Ltd (No 1) [1980] 1 WLR 627. In Schweitzer & Schweitzer [2012] FamCA 445, O’Reilly J held at [45] that “possession” as contemplated by r 13.07 “means not mere physical possession (custody) but “possession” within the accepted meaning being “the legal right to possession”: see in B v B, per Dunn J at 805; 807”. Further, her Honour stated at [50] that a beneficiary of a discretionary trust “has no interest in the corpus, but only the right to require due administration of the trusts, and … is entitled to access to the financial documents of the trustees only for the purpose of ascertaining that there is due administration.” In the present case, therefore, the husband has no access to the financial documents of the trustees beyond that required to ascertain there is due administration. It cannot be said that he has the requisite “control” of the trust deed that would warrant its disclosure.
The Full Court did not consider that the duty of disclosure should obligate “a party to garner documents by any means”.
Even within the broad parameters of the Family Law Rules there must be some consideration of the nature of the claim relied upon.
The final orders sought by the wife is:-
That by way of property settlement the property and assets of the Trusts of the parties be divided equally between the parties.
It is assumed that the reference to “the Trusts of the parties” refer to the Mitford Land Trust and the Mitford Family Trust.
At [6] of the wife’s Affidavit filed on 2 March 2018 she asserts that:-
[The husband] remains in control of the farm and associated entities following separation and uses those entities as he sees fit.
At [7] she contends that the issues for final determination are:-
a.the determination of the value of the farming assets;
b.how those assets have been used since separation;
c.how those assets are divided.
It is the wife’s belief as set out in [15] and [30] of her Affidavit filed 10 October 2018 that the assets of the Mitford Land Trust and Mitford Family Trust are assets “of the Husband or at the least a financial resource of the Husband.”
The wife does not allege that at this stage either she or the husband have an equitable interest in respect of the assets of the two Trusts, nor does she seek any order by way of declaration.
The wife supports her application for discovery by reference to the authorities of Coventry, Coventry & Smith [2004] FamCA 249, Ashton & Ashton (1986) FLC 91-777; [1986] FamCA 20 and Davidson& Davidson (1991) FLC 92-197. Those cases are concerned with the extent to which a party could be considered to control a trust even though the third party was the Trustee. In Coventry (supra) it was relevant that the husband was the principal beneficiary and the appointor of the trust since his death.
Discretionary trusts should not automatically be deemed “property” for the purposes of division under s 79 of the Act. There may be third party entitlements and in any event it is likely that there will be other potential beneficiaries. The limits on the power of the Court to deal with third party interests were discussed by Gibbs J in Ascot Investments Pty Ltd v Harper (1981) FLC 91-000 at 76,061:-
It can safely be assumed that the Parliament intended that the powers of the Family Court should be wide enough to prevent either of the parties to a marriage from evading his or her obligations to the other party, but it does not follow that the Parliament intended that the legitimate interests of third parties should be subordinated to the interests of a party to a marriage, or that the Family Court should be able to make orders that would operate to the detriment of third parties. There is nothing in the words of the sections that suggests that the Family Court is intended to have power to defeat or prejudice the rights, or nullify the powers, of third parties, or to require them to perform duties which they were not previously liable to perform. …
Gibbs J did consider that there were two exceptions which might enable the Court to deal with the interests of a proprietary company (or a trust). The first is in the case of a sham. The second is where the entity is completely controlled by one party to the marriage “so that in reality an order against the company is an order against the party”.
In Goodwin v Goodwin Alpe (1991) FLC 92-192 the question of control was examined by the Full Court who applied the principles in Reynolds Case (Unreported 27 April 1990). The Full Court in Reynolds said:-
… once again we emphasise that the question whether the property of the trust is, in reality, the property of the parties or one of them, or a financial resource of the parties or one of them, is a matter dependent upon the facts and circumstances of each particular case including the terms of the relevant Trust Deed.
In Goodwin (supra) the Court found that the Trust property was in reality the property of the husband. The Court held:-
The husband had the sole power of appointment of the Trustee, which was a creature under his control, and he was a beneficiary to whom the Trustee could make payments exclusively or other beneficiaries as the husband saw fit. If further evidence was needed that the husband controlled both the Trustee and the trust for his own purposes, it is to be found in the fact of the removal of the wife and her son as beneficiaries of the trust following the separation. This evidence confirms both the power of the husband and the fact that the Trustee acted as his creature.[1]
[1] See also Ashton & Ashton (1986) FLC 91-777; Stein & Stein (1986) FLC 91-779; and Davidson & Davidson (1991) FLC 91-197.
It is not suggested in the present case that the Trusts are shams.
The focus therefore at this stage of the proceeds is upon the wife’s assertion that the husband has effective control.
In Harris & Dewell & Anor (2018) FLC 93-839 the following appears at [58]:-
Common to both Ashton and Davidson is the capacity of a party to the marriage (the husband in each case) to use existing powers pursuant to the trust deed, or through the trustee company, so as to effect the lawful distribution of property to himself. That is, despite the structure not being ostensibly indicative of a party holding an interest in property, the powers available to that party could affect their receipt of a beneficial interest in trust property.
In Kelly & Kelly (No 2) (1981) FLC 91-108 the Full Court considered whether the assets of a trust could be brought to account as a “financial resource” of the husband.
It is not conceded that BPL and CPL are “mere puppets” of the husband, nor that the Trustee would do the husband’s bidding.
Ms L Mitford sets out her involvement with the Mitford Land Trust and the E Town farming enterprise whilst conceding that the husband effectively oversees the general operation of the farm, a farm manager is employed in conjunction with an agronomist to make “day to day decisions in relation to cropping on the properties owned by Mitford Land Trust and on occasions the farm manager would discuss with [the husband] and myself (and Mr K when he was alive) about crops to be raised and their handling”.
At [52.8] of her affidavit the following is stated:-
I deal with the farms accountants in relation to all critical aspects associated with the farms financials and distributions including signing company resolutions and financials including taxation returns.
Rule 13.04 provides the extent to which a party may make full and frank disclosure of their financial circumstances including:-
(f) any trust:
(i)of which the party is the appointor or trustee;
(ii)of which the party, the party’s child, spouse or de facto spouse is an eligible beneficiary as to capital or income;
(iii)of which a corporation is an eligible beneficiary as to capital or income if the party, or the party’s child, spouse or de facto spouse is a shareholder or director of the corporation;
(iv)over which the party has any direct or indirect power or control;
(v)of which the party has the direct or indirect power to remove or appoint a trustee;
(vi)of which the party has the power (whether subject to the concurrence of another person or not) to amend the terms;
(vii)of which the party has the power to disapprove a proposed amendment of the terms of the appointment or removal of a trustee; or
(viii)over which a corporation has a power mentioned in any of subparagraphs (iv) to (vii), if the party, the party’s child, spouse or de facto spouse is a director or shareholder of the corporation…
By reference to r 12.02 , documents that must, as far as practicable, be exchanged before the first event include:-
(d)for a trust in relation to which a party has a duty of disclosure under rule 13.04:
(i)a copy of the financial statements for the 3 most recent financial years, including balance sheets, profit and loss accounts, depreciation schedules and taxation returns; and
(ii)a copy of the trust deed.
The parties have not as yet attended a financial conciliation conference. The documents that are required to be exchanged in preparation for the conference are those as set out in r 12.02 supplemented by any further documents as may be the subject of order at the case assessment conference.
Given the lack of any detailed claim put forward on behalf of the wife, whilst I am satisfied that the wife at least raises an arguable case, I am not able to make any finding that the husband has effective legal control over the Trust to the extent that it should be considered as a “mere puppet” of the husband, or that it is effectively his alter-ego. Ms L Mitford speaks against that proposition and there may be a range of other competing interests and potential beneficiaries in respect of each of the Trusts.
At this stage I am satisfied that the husband in his capacity as a beneficiary has a right to such records of the Trust and other documents that are relevant to the due administration of the Trusts.
That does not mean that all documents required to be kept by a trustee relating to the due administration of the Trust should be the subject of disclosure and production.
Queen’s Counsel for the wife refers to s 84B of the Trustee Act 1936 (SA) as to the records to be kept and reg 5 of the Trustee Regulations 2011 (SA) which sets out the records that a trustee must keep relating to administration of the trust property.
The wife’s case is not that there has been any mal-administration of the Trust but rather that the property of the Trusts should be considered as property of the husband and therefore brought to account in the proceedings.
The alternate contention is that at the very least the husband’s beneficial interest in the Trust may well be a financial resource which is entitled to be explored by the wife.
The husband has discovered documents that relate to the Mitford Family Trust and the Mitford Land Trust. Schedule 2 to his List of Documents details the documents held by him.
It seems to me that there could and should be no opposition by the husband to the production of the documents detailed at Items 1, 2, 3, 4 and 6 of sch 2 of the husband’s List of Documents. In addition, the husband should also discover and produce the following documents:-
(1)Council rate notices for the farming land held by the Mitford Family Trust;
(2)Financial statements for the Mitford Family Trust for the years ended 30 June 2015, 16 and 17;
(3)Each Deed of Agreement or other instrument varying distribution of the Trust’s property;
(4)Any independent valuation report in relation to Trust property.
There may be other documents which are capable of identification that may touch on an issue to be determined in the proceedings. Subject to the test of relevance there is no impediment to the wife resorting to the subpoena process providing that:-
·the subpoena is not used for an improper purpose, namely to obtain discovery against the third party;
·the subpoena should not be oppressive;
·the purpose of the subpoena should not be a “fishing expedition”; and
·if the subpoena lacks relevance to the proceedings it should be set aside.
WIFE’S OCCUPATION OF THE E TOWN HOMESTEAD
Following the parties’ separation in March 2015 the wife continued to reside at the B Homestead.
The dispute between the parties was such that the wife sought an intervention order. The husband asserts that she was unsuccessful but that he agreed to stay away from the homestead.
The husband believes that the wife has no real interest in the B Homestead but asserts a right of occupation in order to provide accommodation for Mr H.
The wife acknowledges that Mr H has had issues with illicit drug use including methamphetamines but she considers that he is now drug free. She acknowledges that Mr H lives on the B Homestead and now concedes that his partner resides with him.
The wife acknowledges that following separation she lived in rental accommodation in Adelaide and then spent time living with her friend in S Town. The husband contends that the wife has re-partnered with this person.
The husband contends that the wife now lives predominantly with her partner and only visits the B Homestead occasionally. The husband alleges that there is some history of Mr H’s girlfriends parents also spending some time at the B Homestead.
His assessment is that over the past 12 months she spent the following time at the B Homestead:-
(1)From November 2017 to the end of June 2018 - 0 days;
(2)July 2018 – 1 day;
(3)August 2018 – 22 days;
(4)September 2018 – 22 days;
(5)October 2018 – 15 days.
Whilst it may have been a matter of some contention, the wife agrees that she has no interest in attempting to interfere with the day to day operation of the farming enterprise.
Scant evidence has been placed before the Court as to the circumstances which would elevate the claim of either party from one of mere occupation to sole occupation.
In Stowe & Stowe (1981) FLC 91-027 the Full Court held at 76,265:-
The specific power under sec. 114(1) to make orders relating to the use and occupation of the matrimonial home may incidentally preserve the prospective right to seek an order for the settlement or transfer of property under sec. 79 (Sieling (1979) FLC 90-627, at p. 78,262). Though the grounds upon which it is granted may be different, essentially it is an order which prevents the asset in question (i.e. the home) from being dealt with adversely to the applicant until the property and maintenance issues are determined. Thereafter, any continuing right of occupation of the wife and children would depend upon what order was made in respect of property or maintenance.
The Full Court then went on to consider the following:
In Re Dovey; Ex parte Ross (1979) FLC 90-616, it was held that proceedings for an injunction to restrain a husband from exercising his rights as a director or shareholder to sell or encumber the matrimonial home were a matrimonial cause within para. (e) of the definition. As Gibbs J. said [at p. 78,191]:
“… proceedings brought by a wife to protect her right to continue to occupy the matrimonial home, when that right is threatened by some action of the husband, appear to lie at the very heart of the matters described in para. (e)”.
Accordingly, an order for “sole use and occupation” should be seen as “in personam” right. It is not an interest in property and accordingly whether a sole use and occupation order is made is entirely dependent on the circumstances that exist from time to time. If the wife’s position is that it is not her principal place of residence then no proper purpose is served by such an order being made.
I do not consider that the wife’s entitlement to seek an order of occupation pursuant to s 114(1) could or should extend to third parties even if they include an adult child.
I accept the uncontroversial history that the family and in more recent years the husband and wife lived in the B Homestead until separation. Thereafter the husband arranged for the wife to move to rental accommodation in Adelaide. It appears that she subsequently relinquished those premises and has lived variously between S Town and the B Homestead.
I am not able to determine whether the wife intends that her principal place of residence will be elsewhere other than the B Homestead. I accept that the wife does not have any other rental accommodation and as such it is reasonable in the circumstances that she be permitted to reside at the B Homestead providing it represents her principal place of residence and she does not interfere with the farming operation.
I do not consider that the wife’s in personam entitlement extends to other third parties if the wife is absent from the premises for any significant length of time.
I propose to make an order in favour of the wife’s occupation of the B Homestead subject to the terms and conditions as sought in the Response of BPL filed 21 November 2018 with the following further conditions:-
(1)That the order of occupation be subject to the B Homestead being the wife’s primary place of residence.
(2)In respect of [2.1.4.1] of the orders sought the condition will be qualified by the wife being absent for more than 72 hours.
(3)No order will be made in terms of [2.3] of the Response.
The difficulty for the Court is that the wife provides scant evidence as to the nature of her relationship (if any) with her friend in S Town, nor is there any better understanding as to the extent to which Mr H is implicated in the theft of property from BPL as alleged by the husband.
The wife’s Queens Counsel contends that the wife may seek to retain the B Homestead as part of her property settlement. At this stage of the proceedings, no final orders have been sought against BPL or CPL.
I make orders as appear at the commencement of these reasons.
I certify that the preceding one hundred and ten (110) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 14 December 2018.
Associate:
Date: 14 December 2018
7
3