Nevett and Nevett and Anor

[2007] FamCA 701

FAMILY COURT OF AUSTRALIA

NEVETT & NEVETT AND ANOR [2007] FamCA 701

FAMILY LAW - DISCOVERY - Enforcement of orders - Wife attempts to relitigate issue determined by court claiming that circumstances that gave rise to the original order no longer prevail - Matter appropriate for appeal not relitigation - Discovery by third party

Family Law Act 1975 (Cth)

APPLICANT: MRS NEVETT

RESPONDENTS: MR NEVETT

SECONDNAMED RESPONDENT M Pty Ltd

FILE NUMBER: MLF 2459 of 2006

DATE DELIVERED: 6 July 2007

PLACE DELIVERED: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 4 July 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: In person

SOLICITOR FOR THE APPLICANT:

COUNSEL FOR THE RESPONDENT: Mr Korfiatis

SOLICITOR FOR THE RESPONDENT: Webb Korfiatis

COUNSEL FOR THE SECOND RESPONDENT: Mr Berger

SOLICITOR FOR THE SECOND RESPONDENT: Berger Kordos Lawyers

Orders

1. The application in the case, Form 2, filed by the wife on 15 June 2007, the husband's response to an application in the case, Form 2A, filed 2 July 2007 and the third party's response to an application in the case, Form 2A, filed 27 June 2007 all be dismissed.

2. All interim proceedings be removed from the list of cases awaiting the hearing, noting that the matter is now to await a trial notice listing by a registrar.

3. All documents produced by the Commonwealth Bank pursuant to a subpoena issued by the husband filed 18 April 2007, returnable 26 April 2007, be returned to the Commonwealth Bank of Australia by the Registrar of this Court, with a request that the bank clarify that it has complied with the items referred to in the subpoena on the basis that the husband suggests that there are documents contained in the provided material which do not fit within the description in the subpoena.

4. A return date for subpoenae be fixed for Tuesday, 24 July 2007, at 9.30 am in the Registrar's Subpoena list and any party wishing to issue a subpoena returnable that day do so by filing such subpoena, up to a maximum of three, and serving a copy on all other parties by no later than 4 pm on Friday, 13 July 2007.

5. The Registrar of this Court request that the Commonwealth Bank provide a response to the matters set out in paragraph 3 and such material be placed before the Registrar at 9.30 am on 24 July 2007 for the Registrar to then determine any objections to the release and inspection of material in such subpoenas.

6. The list of documents sought by the wife from the husband and the second respondent be marked Exhibit A and placed on the Court file pending the final hearing of the matter.

7. Notwithstanding the dismissal of all interim proceedings, any application by any party for costs arising out of these orders be made in written submission form and filed with the associate to Cronin J by 4 pm on Friday, 13 July 2007, and any response to such applications be in written form in the same way by no later than 4 pm on 20 July 2007 and the determination of such submissions be determined in chambers to the extent that they can be.

8. The reasons for judgment this day be transcribed and copies be made available to the parties.

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 2459 of 2006

MRS NEVETT

Applicant Wife

And

MR NEVETT

Respondent Husband

M PTY LTD
Secondnamed Respondent

REASONS FOR JUDGMENT

1. On 15 June this year, the wife filed a Form 2 application seeking interim orders.  I shall deal with the background in a moment, but the wife, who was self-represented, seeks orders which are structurally complex but articulately sound.  I hope that I do not do her application an injustice by setting out my understanding.

2. She seeks the following orders and I have listed them as follows: 

   (1)the husband comply with paragraphs 3 and 4 of orders of Kay J made 26 April 2007;

   (2)the husband provide disclosure of "correspondence, documents and information" about a bank loan and guarantees made after 26 April 2007 between T Pty Ltd and the husband;

   (3)the husband provide documents relating to the refinancing of a loan facility of $440,000 secured over a W property;

   (4)the wife be reinstated as director and co‑secretary of T Pty Ltd pending final hearing;

   (5)if the refinancing and restructuring of guarantees has not occurred as envisaged in item 2 above, the orders for the wife's removal as a director and secretary be revoked;

   (6)the husband undertake to be financially responsible for increases in liabilities in T Pty Ltd as a result of the court's removal of the wife as a director;

   (7)the husband file a Form 13 financial statement and a list of his financial contributions to the pool of assets;

   (8)the husband pay the wife's costs incurred since April 2007 because of the advice she sought after the court removed her as a director;

   (9)that a joined third party, M Pty Ltd, provide documents and correspondence with the Commonwealth Bank about its loan to M Pty Ltd, including details about the loan guarantees by T Pty Ltd;

   (10)that M Pty Ltd provide documents showing the refinancing of the loan of $440,000 referred to in item 3 above and particularly its loan obligation and the release of the wife from her guarantee of the M Pty Ltd loan;

   (11)that M Pty Ltd provide the list of documents that the wife sought in a letter dated 3 October 2006;

   (12)that the husband and M Pty Ltd tell the wife of anything done by them without her authority or consent and reverse any such action;

   (13)the case be given a judicial settlement conference or be dealt with under Division 12A of the Family Law Act 1979 (Cth) (“the Act”).

3. The husband filed a response on 2 July 2007 seeking a dismissal of the wife's application and an order for costs.  The third party filed a response on 27 June 2007 seeking a dismissal of the wife's application and an order for costs. 

4. By way of background, this case has had an extraordinary amount of judicial time in a very short space of time having regard to the fact that discovery proceedings are still being pursued.  Kay J made similar remarks recently. 

5. I have read the transcript of the proceedings before Guest J on 4 September 2006.  The wife was then represented by counsel.  Guest J referred to the respective financial positions as they then were declared to the Court and determined that there was about $130,000 in equity for division.  Mr Davis, who appeared for the wife, said to his Honour that that was right.  His Honour was then told that the wife was 34 years of age and the husband 37. 

6. The parties commenced living together in June 2004, married in October 2004 and separated in April 2006.  To use his Honour's words, it was a "short union". 

7. His Honour set the scene, further encouraged by Mr Davis.  The wife was, he guessed, earning about $71,000 as a researcher and the husband about $150,000 as a manager employed by a major Bank.  His Honour was puzzled about why a negotiated settlement could not be achieved, ironically a statement repeated by the wife herself before me.  The wife wanted various steps ordered so that negotiations could occur.  That will also be seen from the 13th item that I have just mentioned.

8. I was informed by Mr Korfiatis for the husband that the prospects of negotiation are not good. 

9. Guest J went on to inquire about costs and was told that the wife had spent approximately $30,000 to $35,000 and the husband $8000 to $10,000, or as his Honour observed, about one-third of the pool.

10. His Honour was told by counsel for the wife that the significant issue was disclosure notwithstanding his Honour's disbelief that that could be the case after an 18-month relationship. 

11. The dialogue with his Honour resulted in consent orders which, although not apparently having been engrossed, were clearly made.  Those orders provided for the provision of a variety of documents.  They also included an order for the sale of a property in D.  Importantly, all interim applications were dismissed. 

12. Less than three weeks later, the husband issued an application for interim orders.  This related to the sale of the D property. 

13. On 25 September 2006, then unrepresented, the wife filed a response seeking a variety of orders, including the transfer of the D property to her and that the husband comply with his duty of disclosure, particularly that he comply with disclosure orders of Guest J. 

14. Young J heard the matter on 29 September 2006.  His Honour gave an extempore judgment. 

15. I have read his Honour's reasons for the orders he made.  His Honour permitted the wife to have control of the D property notwithstanding that she had previously consented to its sale.  It is clear Young J found the wife had changed her mind about the D property after the orders were made by Guest J. 

16. Although the subject of the disclosure was raised, it was not dealt with.

17. Young J ordered the wife to contribute towards the husband's costs but he stayed the payment of them.

18. The matter came back again before Young J on 19 October.  His Honour made orders in the following terms:

    Each of the husband and wife forthwith provide full and proper disclosure of financial documents as have been identified in these Court proceedings or otherwise specifically requested by them of the other.

19. His Honour's reasons for that order were:

    …The wife's claim is that she does not have available to her all of the documents that were identified in annexure A to the orders of 4 September 2006 made by consent before Guest J.  In part it seems that an explanation could be that the wife is in a financial dispute with her former solicitors and they hold documents by way of some form of lien for payment of costs.  Again, I make no finding and do not traverse that issue.

20. His Honour went on to say:

    The wife has raised the requirement for third-party disclosure or discovery and I am satisfied that she has her rights and procedure under the Family Law Rules (2004) as amended.  I propose to make no order on these issues today but I do emphasise to the husband that full and total cooperation is required by him or any associated entities to facilitate a discussion at the conciliation conference.  That is not to in any way be taken that I am suggesting that there has been a lack of cooperation.  I simply make no finding whatsoever on those issues.

21. His Honour then made this observation:

    There are requirements on both parties in relation to the Form 13 financial statement and producing financial documents. 

22. The parties then attended a conciliation conference on 8 November 2006.  Needless to say, the matter did not resolve. 

23. On 28 March 2007, the husband filed an application wanting the wife to sign loan documents.  The wife filed a comprehensive response seeking orders, including that the husband refinance a loan.  The wife sought other orders about mail, a Form 13 to be filed and importantly:

    That the husband comply with Consent Orders in relation to disclosure made by his Honour Justice Guest on 4^th September 2006 and Court Orders by his Honour Justice Young on 19^th October 2006, and provide to the wife within 7 days all documents specifically requested by letter dated 24^th October 2006. 

24. On 26 April 2007, the matter was heard before Kay J.  His Honour made the following orders:

    The wife forthwith sign all documents and do all acts and things necessary to resign as a director and/or secretary of [T Pty Ltd].

25. The next order:

    That the husband forthwith provide all correspondence in the name of the wife presently in his possession which he received whilst in residence at [the [D] property].

    That the husband forthwith provide the wife with

    (a)any documents addressed to her that he received at [R property] by way of Australia Post redirection;

    (b)copies of any documents addressed to the parties jointly or to [T] Pty Ltd that he received at [R property] by way of Australia Post redirections.

26. His Honour then made these orders:

    That upon payment of reasonable charges the husband within 7 days comply with his obligations under orders made by Justice Guest on 4 September 2006 and Justice Young on 10 October 2006 to provide the wife with copy documents.

    That the application in the case filed by the husband on 28 March 2007 and the response to the application in the case handed to the court by the wife this day be otherwise dismissed.

27. His Honour then made an order:

    That the wife pay $1000 towards the husband's costs of this day, the execution of that order to await the outcome of the parties' property proceedings.

28. On 1 May 2007 the husband filed a further application for interim orders, seeking that the Registrar of this Court sign documents arising out of Kay J's orders.  The wife's response was inter alia

    (1)      she remain as a director of T Pty Ltd;

    (2)      Kay J's orders of 26 April 2007 be discharged;

    (3)that there be injunctions about the husband and his lawyers contacting her other than at court.  She also sought other orders, including that the husband pay all of her costs.

29. Kay J made the following orders.  The Registrar of the Melbourne Registry of the Family Court of Australia be appointed to execute all deeds and instruments in the name of the wife to give effect to the order made 26 April 2007 that she forthwith resign as a director and/or secretary of T Pty Ltd and the application filed 1 May 2007 and the response filed this day be otherwise dismissed.

30. His Honour gave reasons as follows:

    The wife has not complied with the order and an application has now been brought, seeking to have the Registrar sign the documents on her behalf.  The wife has indicated firstly she does not intend to comply with the order, other than to sign a conditional resignation and, secondly, she wishes to move to have the order set aside on the basis, she says, that she now has further information available that will obviate the necessity for the order.

    My view in relation to the second aspect of that is that if the wife is dissatisfied with the order, she can appeal to the Full Court of the Family Court of Australia in relation to the judgment on 26 April 2007 and if she says there is further evidence available that makes the order inappropriate, then she has the capacity to apply to the Full Court for leave to call that further evidence.  Whether or not she would be granted that leave to give the evidence is a matter for the Full Court.

31. His Honour then went on to say:

    …That dispute has now involved the court in two hearings.  It has added some two and a half centimetres of file thickness.  It has lost all sense of proportionality.  It has been brought about, I would have thought, significantly by the distrust that the wife has in the husband and her inability to cope with what appears to be a very simple and reasonable request on behalf of the husband…

32. His Honour went on to say:

    Additionally, one fears that the heat that has been generated by this part of the dispute may lead to further escalation of these arguments over what appears to be a modestly small estate between two educated people.  They seem to be more focused -  or at least one of them seem to be more focused - on not obtaining a simple, cheap and early resolution to these matters but continuing the fight for the sake of continuing the fight, perhaps with some other unknown agenda. 

33. Undeterred, the parties are back. 

34. I have set out the wife's application in the 13 points I mentioned at the start of these reasons. 

35. The wife’s logic is set out in a complex affidavit filed 15 June 2007.  I join with Kay J in saying that the wife at least, has lost all sense of proportionality.  Her affidavit says in respect of discovery:

    The husband sought a court order for my resignation as company director supposedly to refinance a company loan of $440,000 towards which I have previously provided a personal guarantee.

    The husband has failed to provide any disclosure whatsoever in relation to a company bank loan refinance or the release of my personal guarantee.

    …

    The second respondent has failed to provide any disclosure whatsoever despite several requests since October 2006 and recent specific requests in relation to the loan refinance and the release of the company guarantee.

    The bank is now unwilling to disclose any information to me in relation to the company banking issues, including the refinance of the loan(s) or the release of prior guarantees, as they have been notified by the husband that the Family Court has enforced my resignation as company director and secretary.

    The husband has failed to comply with court orders made in September 2006 and enforced in April 2007, in relation to the provision of correspondence, including those received from the bank, all currently in his possession.

36. In respect of the "refinancing" of the bank loan, the wife said:

    I have several concerns in relation to this matter in particular:

    a)The lack of any supporting documents from the bank whatsoever despite an application and enforcement application before the court based on banking matters.

37. She then sets out a series of other issues indicating her concerns, but the ones that I find of relevance are:

    (f)Recent information suggesting the husband had already acted in anticipation of my resignation in relation to company banking and taxation matters prior to the hearing of 26^th April 2007

    (g)The consistent lack of disclosure in relation to company matters by the husband and recently by third parties who have been advised by the husband that I am no longer a company officeholder based on Court enforced Orders.

38. The wife then goes on in paragraphs 36 to 39 of her affidavit to say that she has received no response from the Commonwealth Bank in relation to her queries about the loan refinance and the release of guarantees and that she was contacted by the bank and advised that the bank was not able to confirm any release of the guarantees and not able to provide any further information in relation to banking matters of T Pty Ltd.  She said that she was unclear what scenario the husband had professed to the bank surrounding the court-enforced resignation.  She then says:

    Since there has been no disclosure from the husband on this matter whatsoever, I am requesting Orders that the husband and [M Pty Ltd] provide all bank documents evidencing a full refinance of the [T Pty Ltd] loan solely by the husband, a full refinance of the [M Pty Ltd] loan and specifically the release of all prior bank guarantees signed by the wife personally or on behalf of [T Pty Ltd], in favour of [T Pty Ltd] or [M Pty Ltd]. 

39. Finally the wife says:

    It is important to note that [T Pty Ltd] is not a party to these proceedings.  The only issue before this court in relation to the company [T Pty Ltd] is the shareholding of the husband and the wife in the company, the shareholders (sic) loans towards the purchase of the [W] property which are currently unsecured, at call and part of the asset pool to be considered in the property settlement, and any costs/losses/liabilities/responsibilities incurred as [T Pty Ltd] shareholders.

40. There are a number of other matters that do not assist in my determination. 

41. The husband filed an affidavit in reply, as did Mr B on behalf of the company M Pty Ltd. 

42. The husband asserts that the wife is trying to relitigate issues determined by Kay J.  I agree. 

43. The orders I have set out and the reasons behind them seem to me to be obvious and clear.  I therefore do not propose to permit further consideration of the items I have marked 4, 5, 7 and 8 to be relitigated.

44. In respect of the discovery or disclosure issue, insofar as it relates to the husband, Mr Korfiatis said not only that everything that the husband had has been provided but that there will be ongoing disclosure as the situations arise.  The husband said in paragraph 3 of his affidavit:

    …I am the sole Director and Secretary of [T] Pty Ltd.  Notwithstanding I am not required to obtain my wife's prior consent or authority to take action [on] behalf of the Company, I am cognisant of my obligations as a Director, and otherwise arising out of these proceedings.  At all times I have provided my wife with full and frank disclosure of, all relevant information relating [to] the Company and its investment in [W property].  I have taken no substantive action on behalf of the Company save to refinance the loan secured by the real property in [W].  Additionally I have instructed the Company accountant to provide my wife with all information sought by her at all times and am advised the accountant has done so. 

1. I have tried to explain to the wife in the hearing that her assertions and in some cases suppositions, are not supported by the husband's evidence.  If he has not been truthful, the issue will come back in a more serious way in the future.  In the meantime, the wife can pursue and I shall make orders in relation to return dates for subpoenae should she so desire to issue them.

2. In respect of an outstanding subpoena, the wife complains that Mr Korfiatis issued a subpoena on her behalf.  Kay J apparently refused to release documents for inspection because there had not been appropriate notice.  Mr Korfiatis says there are documents provided by the bank that do not fit within the definition of documents required by the subpoena.  I propose to rectify that position by my orders.

3. I have also canvassed with all parties why the M Pty Ltd company is a party.  Mr Burgess says he has instructions to seek to have it discharged.  The wife says it was joined because it was a joint owner of property with T Pty Ltd and that there are cross-collateral guarantees and a sale of the property is sought.  The Family Law Rules provide for the joining of a person likely to be affected by orders but I am told that the two companies are tenants in common in equal shares and the guarantees are in fact personal to the parties. 

4. The necessity of M Pty Ltd being involved or embroiled at this point in time eludes me because if they were to be affected, they could be asked to voice their view at the trial.  In respect of the wife's pursuit of documents from M Pty Ltd, it seems to me to be an invasion into that company's privacy, but I understand the wife wants confirmation about the loan and the guarantee position because they affect her.

5. Mr B’s affidavit says that the documents sought by the wife have been provided.  I cannot determine on the evidence whether that satisfies the company's obligations under the rules or not because I do not understand what involvement it has as a party other than what I have set out above. 

6. The issue of the confirmation of the indebtedness of M Pty Ltd seems not to be a significant issue in the proceedings between the husband and the wife.  One or both of those parties will have to sort out how that indebtedness is dealt with.  I suspect the issue, which is similarly worded to the documents and information sought by the wife against the husband, is really a double-checking or cross‑checking way of pursuing the husband in respect of the same debt. 

7. Both the husband and the company say there are no more documents to give to the wife.  As such, if she does not accept that, she can pursue a subpoena remedy. 

8. The wife says because the company is a party, that procedure is not the right way to go.  I disagree.  The wife says that Kay J told her to enforce the orders in the way she is now doing.  What occurred, according to the transcript, is this:

   [THE WIFE]:  Yes, your Honour.  I still have not received documents from Mr Korfiatis in compliance with your orders made about disclosure.

   HIS HONOUR:  You can bring an application to enforce the order if you're not satisfied with the compliance with the order; bring the file, a proper application, document the alleged breach and Mr Korfiatis can answer your complaints and some judge will hear the matter.

9. Whilst the wife's application is not, strictly speaking, an enforcement action, it is certainly repetitive of the previous application.  As I explained to the wife, the respondents say they have complied.  The wife continues to assert that that is not so.  I am not satisfied that that is the case. 

10. Finally, the wife asked for a JSC or judicial settlement conference and, as she described it, a Division 12A procedure.  I explained that whilst Guest J might have encouraged that in September 2006, nine months worth of litigation has so far embittered the parties to the litigation that it just needs to be heard.  I will not permit further Court resources to be wasted in such a way with little confidence of a successful settlement.  If the wife wants to go down that path, she can organise a private mediation and encourage all parties to attend.  The Division 12A issue is not appropriate as the husband does not consent.

11. Accordingly, I have dealt with items 1, 2, 3, 9, 10 and 11 on my list.  In respect of item 8, this is similar to a compensation issue raised before Kay J.  His Honour said that there was no power to order compensation.  If that is what the wife seeks to do, I cannot order it.  These are matters more appropriate for determination at trial.

12. In respect of item 6, the wife wants the husband to be responsible as a director as a consequence of her removal as a director.  This is also an issue that could be litigated at trial.  The wife can show that the husband's contribution has affected the pool in some adverse way.  The wife provided two lists of documents that she now seeks.  I have marked them as an exhibit.  They do not assist the determination of the matter but the record will show that that is what the wife still pursued.

13. In respect of item 7 on my list, I propose to decline ordering further documents as the trial notice list hearing will resolve those issues.  To order the filing of material today would serve no purpose.  I am told that the husband is aware of his obligations under the Family Law Rules.

14. Accordingly, I propose to dismiss the wife's application. 

I certify that the preceding Fifty Eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate:

Date:  17 July 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as NEVETT & NEVETT.