Parker and Jacks
[2009] FMCAfam 290
•19 March 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PARKER & JACKS | [2009] FMCAfam 290 |
| CHILD SUPPORT – Interim application – application to reopen hearing – principles to be applied – allegation of non disclosure – full and frank disclosure – duty absolute. |
| Child Support (Assessment) Act 1989 (Cth) Federal Magistrates Court Rules 2001 (Cth) r.24.03 |
| Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471 Granitgard Pty Ltd v Termicide Pest Control Pty Ltd (No 3) (2009) FCA 82 Luton v Lessels (2002) 210 CLR 333 Kannis & Kannis [2002] FamCA 1150 Radic & Radic [2007] FamCA 559 Black & Kellner (1992) FLC 92-287 Weir & Weir (1993) FLC 92-338 Briese (1986) FLC 91-713 K & K [2002] FamCA 1150 |
| Applicant: | MR PARKER |
| Respondent: | MS JACKS |
| File Number: | MLC 236 of 2008 |
| Judgment of: | O'Sullivan FM |
| Hearing date: | 19 March 2009 |
| Date of Last Submission: | 19 March 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 19 March 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr M.L. Pavone |
| Solicitors for the Applicant: | Littleton Hackford & D’Alessandro |
| Counsel for the Respondent: | Ms B.A. Tulloch |
| Solicitors for the Respondent: | Jane M Curtis & Associates |
ORDERS
THE COURT ORDERS THAT:
The husband be granted leave to re-open the hearing of this matter and the wife be recalled and cross examined.
The wife file and serve submissions on or before 20 April 2009.
The husband file and serve submissions on or before 4 May 2009.
The wife file and serve any submissions in reply on or before 18 May 2009.
The question of all parties costs of this day be reserved.
The matter be otherwise be adjourned to a date to be fixed.
THE COURT NOTES THAT:
(A)The wife has foreshadowed this day that she may seek to obtain a transcript of the proceedings of 5 November 2008 at her expense and if so she provide a copy of the transcript to the husband’s solicitors (on the basis that the husband pay reasonable photocopying expenses) on or before 2 May 2009.
IT IS NOTED that publication of this judgment under the pseudonym Parker & Jacks is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 236 of 2008
| MR PARKER |
Applicant
And
| MS JACKS |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
Introduction
Before the Court today 19 March 2009, are proceedings involving an application in a case filed on 9 December 2008 seeking to reopen the hearing of an application made under the Child Support (Assessment) Act 1989 (“the CSA Act”).
The applicant in these proceedings, Mr Parker (“the husband”) is approximately 61 years of age. The respondent, Ms Jacks (“the wife”) is currently 56 years of age.
The parties married in 1985. There are three children of the marriage namely, [X], [Y] and [Z], only one of whom is under 18 (being [Z]). The parties separated in 2000.
Following separation there were proceedings in the Family Court of Australia and in September 2002 the parties entered into a Child Support Agreement (“the Agreement”). It is the Agreement that forms the background to these proceedings.
The substantive application between these two parties was commenced in January 2008. There were directions made for the hearing of that application on 20 February 2008. The matter eventually proceeded to hearing on 5 November 2008. The husband was represented by
Mr Pavone of Counsel and the wife by Ms Tulloch of Counsel.
At the conclusion of the hearing of the evidence on that day, there were directions made for the filing of submissions.
Before the timetable for those submissions had closed, the Court was approached on an urgent basis by solicitors for the husband. At a mention on 5 December 2008 Mr Pavone appeared for the husband, Ms Tulloch for the wife. There were orders and directions made and the matter came back to Court on 12 December 2008.
On 12 December 2008, for reasons which are not presently relevant, the matter could not proceed and was adjourned to 20 February 2009. However, also for reasons which are not presently relevant, the matter was adjourned 19 March 2009, where Mr Pavone has appeared again for the husband and Ms Tulloch for the wife.
Application in a case
Before the Court today is the husband's application in a case which was filed on 9 December 2008. That application sought the following orders:
“1.That the husband be granted leave to re-open the Hearing of this matter.
2.That the Court grant leave to the husband to adduce evidence as the Court deems appropriate.
3.That the wife pay the costs of the husband of and incidental to this proceeding.
4.Such further Order or Orders as this Court deems fit.”
That application was accompanied by an affidavit of the husband's solicitor, Mr D’Alessandro, also filed on 9 December 2008.
The wife filed a response on 10 December 2008 which was:
“1.That the applicant’s form 2 application dated 8 December 2008 be struck out.
2.That the applicant pay for in full the costs of the transcript of all of the proceedings in this matter and make the transcript available to all parties and the Court.
3.That the applicant file and serve submissions by 2nd of February 2009.
4.That the respondent file and serve submissions by the 16th February 2009.
5.That the applicant file and serve submissions in reply by the 23rd of February 2009.
6.That the applicant pay the respondent’s costs of this application on an indemnity basis.
7.Such further or other order as this honourable Court shall deem appropriate.”
The response was accompanied by an affidavit of the wife also filed on 10 December 2008.
Approach to application
The principles that apply to the husband's application are not in dispute. They are summarised in the decision of the New South Wales Court of Appeal in Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471 at 476 where their Honours stated:
"The principle which should guide the court in determining whether to grant an application for leave to re-open is whether the interests of justice are better served by allowing or rejecting the application as the case may be. No doubt it is relevant to take account of a number of matters such as likely prejudice to the party resisting the application and the reasons why the evidence was not led in the first place, but there is not, in my opinion, any hard and fast rule which requires the court to reject an application where the decision not call the witness in the party’s case was a deliberate one. Of course that does not mean that that is not a very relevant consideration. It is. Where, for instance, a decision was based on tactical grounds it may be difficult to resist the conclusion that the interests of justice were better served by the rejection of the application. But even in that circumstance there may be cases in which it is felt that the client whose application it is should not have to suffer for his or her counsel's deliberate decision. Where the decision is not made for tactical reasons and is based on a mistaken apprehension of the law or the facts the case is more appropriately to be considered as one in which the application has resulted from an error by counsel."
Those principles are also referred to in the decision of Logan J in Granitgard Pty Ltd v Termicide Pest Control Pty Ltd (No 3) (2009) FCA 82 at paragraphs [5]-[6] as follows:
“5.That there is a jurisdiction to permit a party to reopen its case, so as to adduce further evidence, even after a statement has been made to the court that the party’s case in evidence has closed is not in doubt: see, for example, Smith v The New South Wales Bar Association[1992] HCA 36; (1992) 176 CLR 256 at 266 to 267.
6.A useful starting point, in the context of an application such as this, is a passage which appears in Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471 at 478:
The principle which should guide the court in determining whether to grant an application for leave to re-open is whether the interests of justice are better served by allowing or rejecting the application as the case may be. No doubt it is relevant to take account of a number of matters such as likely prejudice to the party resisting the application and the reasons why the evidence was not led in the first place, but there is not, in my opinion, any hard and fast rule which requires the court to reject an application where the decision not call the witness in the party's case was a deliberate one. Of course that does not mean that that is not a very relevant consideration. It is. Where, for instance, a decision was based on tactical grounds it may be difficult to resist the conclusion that the interests of justice were better served by the rejection of the application. But even in that circumstance there may be cases in which it is felt that the client whose application it is should not have to suffer for his or her counsel's deliberate decision. Where the decision is not made for tactical reasons and is based on a mistaken apprehension of the law or the facts the case is more appropriately to be considered as one in which the application has resulted from an error by counsel.”
That decision summarised the principles that the Court should apply in approaching an application of this sort and is authority for the proposition that there is jurisdiction to permit a party to reopen a case so as to adduce further evidence, even after the Court has reserved its decision.
The substantive application before the Court concerns applications under both the CSA Act and also a claim for adult child maintenance. In relation to the CSA Act, as was said in Luton v Lessels (2002) 210 CLR 333 at paragraph [340]:
“Although the legislation is enacted in the furtherance of a clearly defined public policy, it creates a distinctly personal liability. The natural and moral obligations of a parent to support a child becomes, by force of the legislation a legal obligation reflecting in a debt calculated in accordance with the Assessment Act owing by a parent to a carer of the child.”
The parties in this matter entered into the Agreement and it is the Agreement and its consequences that appear to have vexed them ever since.
The essential intention of that CSA Act is to ensure that a child receives the proper level of child support and that the contributions to that support as between the parents is determined according to the respective abilities of those parties to meet the needs. There are a number of procedures set out in the CSA Act that enable the parties to meet the primary objective of the legislation. One of those procedures is being invoked by the parties in the substantive proceedings that is, a departure order is one of the orders sought by the parties. The substantive proceedings also involve, broadly speaking, financial issues.
The approach that this Court should take to the obligations of parties involved in financial proceedings has been summarised by the Full Court of the Family Court in Radic v Radic [2007] FamCA 559 at paragraphs [75] to [78] as follows:
“75. The requirement of parties in financial matters before the Court to make a full, frank and complete disclosure of their financial affairs is not in doubt. The husband signed a financial statement before a lawyer affirming he had read
r 24.03 of the Federal Magistrates Court Rules 2001. That rule provides as follows:(1) A party required under this Part to file a financial statement or affidavit of financial circumstances must make in the statement or affidavit a full and frank disclosure of his or her financial circumstances, including details of:
(a) any vested or contingent interest in property (including real or personal property, superannuation and legal and equitable interests); and
(b) income from all sources, including any benefit received in relation to, or in connection with, the party's employment or business interests; and
(c) the party's other financial resources; and
(d) any trust:(i) of which the party is, or has been since the separation of the parties, the appointor or trustee; or
(ii) of which the party, or the party's child, spouse or de facto spouse is, or has been since the separation of the parties, an eligible beneficiary as to capital or income; or
(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, or has been since the separation of the parties, a shareholder or director of the corporation; or
(iv) over which the party has, or has had since the separation of the parties, any direct or indirect power or control; or
(v) of which the party has, or has had since the separation of the parties, the direct or indirect power to remove or appoint a trustee; or
(vi) of which the party has, or has had since the separation of the parties, the power (whether subject to the concurrence of another person or not) to amend the terms; or
(vii) of which the party has, or has had since the separation of the parties, the power to disapprove a proposed amendment of the terms or the appointment or removal of a trustee; or
(viii) over which a corporation has, or has had since the separation of the parties, a power mentioned in subparagraphs (iv) to (vii), if the party is a director or shareholder of the corporation; and
(e) any gift or other disposition of property made by the party since the separation of the parties; and
(f) if there is a partnership, trust or company (except a public company) in which the party has an interest, copies of the 3 most recent financial statements and the last 4 business activity statements lodged by the partnership, trust or company.
76. The purpose behind the obligation to make a full and frank disclosure is succinctly set out in Briese and Briese (1986) FLC 91-713 where Smithers J said at 75,180 – 75,181:
I believe that a person in the position of the husband in this case has a positive obligation to set out at an early stage his financial position in a clear and comprehensive manner. The Regulations, and now the Rules, are not intended as a vehicle to mask the true position, or as an aid to confusion, complexity or uncertainty. They are not intended as the outer limits of the obligation of financial disclosure, but as providing avenues towards disclosure. 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. Unless each party adopts a positive approach in this regard delays will ensue with the consequent escalation of legal, accounting and other expenses, always assuming that a party has the strength to continue the struggle for information and understanding.
...
In my view it is fundamental to the whole operation of the Family LawAct in financial cases that there is an obligation of the nature to which I have referred. Livesey v. Jenkins makes it clear that mere compliance with rules of court or practice directions does not alter the basic principle of the need for full and frank disclosure by the parties.
77. The relevant authorities, including the above statement in Briese and Briese (supra), are conveniently and fully discussed in the decision of the Full Court in K and K [2002] FamCA 1150. Although lengthy, the discussion is apposite to this matter, particularly to the issue of value to be attributed to undisclosed assets:
47. There have been a series of reported cases in which the Full Court has discussed the task of a trial judge in a property case where the trial judge is unable to ascertain the extent of the pool of assets due to a lack of full and frank disclosure on behalf of one of the parties. Those cases were most recently summarised in the decision of Chang and Su (2002) Fam CA 156.
Mr Chang was a Taiwanese businessman who, in an application to immigrate to Australia lodged in 1991 indicated that his net assets exceeded A$4.55 million. After his marriage to Ms Su broke down and she brought property proceedings in Australia he asserted that his financial position had deteriorated. He was eventually ordered by Moore J to transfer a home to the wife and to discharge an encumbrance upon it. He asserted that there was no evidence before the trial Judge of his capacity to discharge the mortgage. The trial Judge had said:
“I am satisfied that the husband has not made a full and proper disclosure of his financial position and I could make no finding as to the extent of his assets now...but it is likely he remains a person of substantial means in Taiwan.”48. In the course of dismissing the appeal the Full Court quoted extensively from a line of cases discussing how the Court can make orders where there is no visible pool of assets. The Court said:
“Ground 2 - no visible pool of assets.
57. The submissions put to us were that as a necessary prerequisite to making an order under the provisions of s 79 of the Act the Court must determine that there exists adequate property to meet the order and make the order appropriate in the circumstances of the case. An order can only be seen to be appropriate or just and equitable if it can be measured against the whole of the available assets of the parties.
59. Counsel acknowledged that there exists a class of cases where the Court cannot be satisfied as to the extent of the property and can thus be less cautious than might otherwise be the position when making an order. Particular reference was made to Mezzacappa v Mezzacappa (1987) FLC 91-853; 11 Fam LR 957. In that case the trial Judge held that the husband had failed to adequately account for $200,000 which had been in his possession some 15 months earlier. The trial Judge said:
‘I can only conclude that the husband has the vast bulk of that money and has invested it wisely over the last two years since he removed it from the parties' bank accounts.’
...
67. The law to be applied and the approach that may be adopted in cases where, through the lack of a full and frank disclosure, the Court is unable to fully ascertain the extent of a party's wealth, is well settled (see Stein v Stein(1986) FLC 91-779; 11 Fam LR 353; Mezzacappa v Mezzacappa (1987) FLC 91-853; 11 Fam LR 957; Black and Kellner (1992) FLC 92-287; 15 Fam LR 343 and Weir v Weir(1993) FLC 92-338; 16 Fam LR 154).
68. In Black and Kellner (supra) the appellant had submitted that, absent findings as to the extent of his wealth, the order made by the trial Judge was plainly unjust. The key finding of the trial Judge was:
‘...the failure on the part of the [husband] to disclose his financial position to the court and his attempts to conceal this matter from the court, which has left the court in the position of not knowing what the [husband’s] financial position is, except that he deliberately underestimated it.’
69. Chief Justice Nicholson (with whom Ellis and Cohen JJ agreed), said in dismissing the appeal:
‘As senior counsel for the wife pointed out, the first step in proceedings for a property settlement is for the court to ascertain the wealth of the parties and in this regard it is of interest to note the remarks of the Full Court in the case of Giunti and Giunti (1986) FLC 91-759, particularly at 75,555 where the court commented:
“It is obviously desirable as a general principle that the court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs- see Briese and Briese; (1986) FLC 91-713, affirmed by the Full Court in Oriolo v Oriolo (1985) FLC 91-653, there is no problem, although there may be disputes as to valuation.
However if, as here, one party fails to fulfil that obligation, is it open to that party then to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require? It would be simple, if that were the case, to evade the jurisdiction of this court, not by outright refusal which would attract sanctions but by obfuscation and evasion.”
The Full Court in Oriolo and Oriolo, supra, referred with approval to the remarks of Smithers J in Briese and Briese, and it is perhaps worth reiterating a portion of his Honour's statement at 75,181 where he said, after referring to the decision of the House of Lords in Livesey v Jenkins (1985) All ER 106:
“... I believe that the conclusion of the House of Lords in the case of Livesey v Jenkins... is apposite, namely that in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In that case it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of discretion. This is quite different from common law litigation between strangers, in which such a general duty does not exist, and obligations would only exist in so far as statute or court rules required.
In my view it is fundamental to the whole operation of the Family LawAct in financial cases that there is an obligation of the nature to which I have referred.”
Regard also may be had to the decisions of this court in Stein and Stein (1986) FLC 91-779 at 75,676 and Mezzacappa and Mezzacappa (1987) FLC 91-853.
In the present case a similar situation arose. The assets of the parties could not be ascertained in full because of obvious non-disclosures.
It is apparent that if his income was more substantial than he claimed, then this would be reflected in the value of his practice and in this regard it is perhaps of interest to note that the wife's former husband's practice of a similar nature, was capable of being sold for a figure in 1973 terms which would if reflected in 1991 terms, represent a very substantial asset indeed. Finally, another part of a judge's obligation in cases of this nature in considering s 75(2) factors is to consider the respective incomes of the parties. Again, through the behaviour of the husband, this was something which the learned trial judge could not do.
It follows from what I have said that I do not believe that his Honour's judgment can be attacked upon the basis relied upon by the husband.’
70. In Weir v Weir(1993) FLC 92-338;16 Fam LR 154 the Full Court (Nicholson CJ, Strauss and Nygh JJ) dealt with an appeal against the refusal by the trial Judge to make orders in respect of unascertained property because he could not quantify it. The Court said at 79-593:
‘This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black and Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti and Giunti (1986) FLC 91-759, and Mezzacappa and Mezzacappa (1987) FLC 91-853. It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
It is true that in the case of Monte and Monte (1986) FLC 91-757, the Full Court said that to found jurisdiction under s. 79 in relation to property other than that which had been identified, the trial judge was obliged to make a finding as to the existence and value of other undisclosed property, even though the unsatisfactory nature of the evidence made it necessary to express that finding in the most general terms both as to identify and value.
We confess to some difficulty with this proposition. We should have thought that the Court's jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.
The difficulty then arises as to what order should be made. However, we are troubled by the proposition which seems to arise from Monte and Monte that if a party is either cunning enough or vague enough to cover his or her tracks sufficiently to prevent a Court making a finding as to the amount that has not been disclosed, then the other party fails. We do not believe this to be the law and in so far as the decision in Monte and Monte supports such a proposition, we do not believe that it should be followed.’
71. It was clearly open to Moore J to apply these principles to the matter before her. Her Honour concluded that the extent of the husband's wealth, whatever it might have been, was sufficient to justify the order she was proposing to make. This is not an appeal based upon the lack of reasons why her Honour concluded it would be just and equitable to put the wife in a position of having an unencumbered home. It is an appeal which is based upon the inability of the trial Judge to make any order under s 79 without first ascertaining the pool of assets.
72. For reasons which we have explained, we conclude that her Honour made findings sufficient to indicate that the husband was a man of substantial wealth and well able in the circumstances to meet the order made and still retain for himself adequate assets so as to make the outcome in the proceedings just and equitable, having regard to the matters highlighted by her Honour that she was obliged to give consideration to under s 79. These were issues of contribution and factors that could be identified under s 75(2). She was extremely hampered in the exercise of that discretion by the non-disclosure by the husband of his financial position and in those circumstances was entitled to take the more robust view that she did. Accordingly this ground of appeal has not been established.”
49. On 5 November 2002 the High Court dismissed an application by Mr Chang seeking Special Leave to appeal from the Full Court’s decision. In the course of argument Callinan J observed:
“It does not matter what the principle might be said to be, a court has to do the best it can. It does the best it can, having regard to the evidence that is adduced and if the parties are not frank then naturally there is going to be a measure of imprecision about any findings that the court can make.”
50. [Counsel for the appellant] submitted that the cases discussed above were authority for the proposition that where there was a finding of deliberate non-disclosure the Court could act more robustly in making findings adverse to the party who had actively misled it. We do not see that the principle should be so confined.
51. Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour. This is the course the trial Judge adopted. It was a course clearly open to him and one that does not merit appellate interference.
78. The evidence before the Federal Magistrate in this case disclosed:
· the husband had been served with a subpoena to produce documents;
· the husband brought documents to the Court which are not identified in the transcript and they were inspected by the wife’s legal representative;
· the husband did not bring bank statements to the Court in accordance with the subpoena and said he did not do so on the basis of legal advice;
· the husband’s tax return disclosed he held equipment having a cost price of $32,595.00 prior to 2005 and acquired equipment in 2005 for $52,042.00. The total assets had a written down value after depreciation of $67,052.00;
· the husband gave evidence he acquired an Ihi excavator for about $50,000.00. His income tax return corroborated his evidence disclosing an excavator purchased for $49,131.00;
· the husband disclosed the theft of a Bob Cat purchased with proceeds of sale of the second property, and an insurance payout in respect of that equipment. That evidence was corroborated by his income tax return;
· the husband disclosed in his first financial statement ownership of a Daihatsu truck. His income tax return disclosed a Daihatsu truck with a slightly different registration number acquired for $35,730.00 but written down to $13,902.00;
· the husband’s evidence was he had sold the Daihatsu truck for $20,000.00 and purchased a Mitsubishi Truck for $14,000.00 which he estimated to have a value after repairs of $20,000.00; and
· the husband’s affidavit evidence was he replaced some of the machinery/equipment by hire purchase/lease of other equipment, and his first financial statement disclosed hire purchase/lease commitments to C Leasing and E Finance Corporation totalling $75,859.88.”
In that decision, the Full Court deals with Rule 24.03 of the Federal Magistrates Court Rules 2001 which is the rule requiring parties to financial proceedings to make full and frank disclosure.
At paragraph [77] of that decision, the Full Court notes that the principles to be applied in such proceedings where full and frank disclosure is required are summarised in Kannis v Kannis [2002] FamCA 1150. In particular the Full Court in Radic (supra) notes at paragraph 51 of the decision in Kannis, it was said:
“51. Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour. This is the course the trial Judge adopted. It was a course clearly open to him and one that does not merit appellate interference.”
Consideration of submissions
Each of the parties made submissions. Submissions were made by
Mr Pavone for the husband, relying on exhibit “A1.” That exhibit is a deed of release entered into by the wife, in settlement of a professional negligence claim she brought against the firm of solicitors and the barrister who provided advice to her in relation to the Agreement. He also relied on the affidavit of his instructor, Mr D’Alessandro, which annexed various correspondences between his instructing solicitor and the solicitors for the wife following the conclusion of the hearing on 5 November 2008.
Mr Pavone's submission was that the wife was required to disclose exhibit “A1” in the course of the substantive proceedings. Mr Pavone’s submissions were that such a requirement was consistent with the duty of a full and frank disclosure imposed not only by the Rules of this Court by the authorities of the Full Court of the Family Court. Mr Pavone's submission was especially in this case the wife was required to make that disclosure given the substantive proceedings were to a significant extent about the liability of each of the parties for school fees of the youngest child and this dispute arose because of the Agreement.
Mr Pavone submitted that the Court had been misled by the failure by the wife to disclose to the Court not only exhibit “A1” but that she had received a payment in the settlement of professional negligence proceedings. The writ in relation to those proceedings is exhibited to Mr D’Alessandro's affidavit. Mr Pavone submitted that both the wife and her solicitor knew about those proceedings. Indeed it was submitted, the wife's solicitor had acted for her in the professional negligence proceedings and the wife could not hide behind a confidentiality agreement referred to in exhibit “A1” to say that they could not disclose those proceedings, the settlement of those proceedings and the payment she received in the face of the clear orders made by this Court, on 20 February 2008 and the obligation of full and frank disclosure.
Mr Pavone said the above matters were clearly relevant in the context of the substantive proceedings between the parties given:
a)they concerned the Agreement;
b)the liability for child support, particularly in relation to school fees was an issue in the case; and
c)the position taken by the wife before the Court regarding what she had been liable for and what she should be liable for into the future.
Given this counsel for the husband submitted that it would be ludicrous to say that the wife had made full and frank disclosure in the context of this matter.
Counsel for the husband submitted the requirement to make full and frank disclosure was relevant as there was a departure application in the substantive proceedings. As such the Court was required to consider, as a step in those proceedings, whether it would be just and equitable to make any departure order at the end of that process and could not do so if there had not been.
Mr Pavone noted that counsel for the wife had conceded that the payment that her client had received was relevant. Mr Pavone said to maintain in the face of that concession that the deed or the writ or indeed those proceedings themselves were not relevant flew in the face of logic.
In summary, Counsel for the husband maintained that there was the need to reopen proceedings as in the circumstances the tests required by the authorities for such discretionary orders were met.
Counsel for the wife denied the issues raised by the husband were relevant. Counsel for the wife said the question in the substantive proceedings involving the departure order application would be who had the capacity to pay.
Counsel for the wife maintained that her client denied she had not made full and frank disclosure as at November 2008. Counsel for the wife pointed to the documents that had been discovered, including bank statements provided by her client where settlement moneys were, she said, clearly ascertainable. Counsel for the wife acknowledged that those moneys were contained in two lines in one bank statement where the statements themselves formed a large bundle of documents.
Counsel for the wife maintained her client was concerned about disclosure of the professional negligence proceedings and the deed of release, given the confidentiality terms of that agreement and said that it put her client in a very difficult position. Counsel for the wife said that the monies received as a result of that settlement were outside the ambit of the obligation of her client to make disclosure in this case. Moreover, Counsel for the wife said reopening the hearing in this matter would serve no purpose.
Conclusion
I note the decision in Radic (supra) and the comments of the other decisions of the Full Court which make clear that the rule of the full and frank disclosure is absolute. Rule 24.03 and its attendant obligations in my view extends not to just providing financial records but also includes presenting the information in a way that can be reasonably and readily understood and examined.
I note that in the substantive proceedings the wife had filed an affidavit of documents on 1 September 2008. The wording of that document is in particular important in my view in the context of this particular application. In her affidavit, she says that she has in possession, custody or control the documents relating to the matters in question in these proceedings, enumerated in parts 1 and 2 of schedule 1 hereto, and schedule 1, part 1 at paragraph [1] says "Court documents common to both parties in relation to all proceedings between them.” That wording is remarkable for its precision given the subsequent discovery of exhibit “A1”.
That is not the end of the matter. There are also the orders and directions requiring complete discovery of all matters in relation to the Agreement and also the parties' financial circumstances.
It appears that it is common cause that after the Agreement had been entered into, the wife commenced the professional negligence proceedings. The writ in those proceedings is exhibited to
Mr D’Alessandro's affidavit. Exhibit “A1” and exhibit “R1” before the Court today are both the deed of release and the terms of settlement that saw the wife receive a payment arising from those proceedings.
In my view an issue arises as to whether the wife has failed to make full and frank disclosure. If that is the case, the Court may well be in a position not to be able to properly deal with any departure application or any financial application.
For those reasons, I intend to grant leave to the applicant to reopen the case in the exercise of the Court's discretion and in the interests of justice.
However, before doing so, I propose to hear from the parties as to the extent of the grant of that leave. In coming to that view, I have taken into account the time since 5 November 2008. I have taken into account, when this issue was first raised. I have also taken into account that the grant of leave may require more Court time. However, all of the parties are here today and in my view, the interests of justice necessitate the grant of leave sought in the application in a case filed in December 2008.
I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of O'Sullivan FM
Associate: Rachelle Lombardo
Date: 19 March 2009
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