PEARSON & COLI

[2020] FamCA 843

FAMILY COURT OF AUSTRALIA

PEARSON & COLI [2020] FamCA 843

FAMILY LAW – PRACTICE AND PROCEDURE – ruling in a trial – accountant purporting to adduce evidence of expenditures without giving evidence about having inspected source documentation or the basis of his information and belief – held, evidence in its present form inadmissible – leave given to expert to adduce evidence in proper form – amount involved very considerable – trial adjourned part heard.

Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth) ss 117(2A)

APPLICANT: Ms Pearson

RESPONDENT: Mr Coli

FILE NUMBER: DGC 1112 of 2014

DATE DELIVERED: 30 September 2020

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Wilson J

HEARING DATE: 28, 29 & 30 September 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms M. Smallwood SC with Mr C. Dunlop

SOLICITOR FOR THE APPLICANT: Australian Family Lawyers

COUNSEL FOR THE RESPONDENT: Dr R. Ingleby

SOLICITOR FOR THE RESPONDENT: Berger Kordos Lawyers

Orders

1. The further hearing of this proceeding is adjourned part heard to a date to be fixed for a duration of five further days.

2. On or before 4pm on 14 October 2020 the applicant must file and serve a statement of facts and contentions fully particularised in respect of the fraud allegations in relation to the amount of $4.7 million.

3. On or before 4pm on 3 November 2020 the respondent has leave to file and serve a further affidavit of Mr WW addressed solely to paragraph 29 of his current affidavit made 26 August 2020.

4. On or before 4pm on 30 January 2021 the applicant has leave to file and serve any affidavit material in response to the affidavit referred to in paragraph 3 of these orders. 

5. On or before 4pm on 14 February 2021 the experts in this proceeding must confer to prepare a fresh, separate report specifically addressing accrued directors’ fees said to be in the sum of $2 million or thereabouts and to report on the impact of realising the accrued fees from the value of the parties’ interests. 

6. The costs of and incidental to the adjournment must be paid by the respondent.

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 Pearson & Coli 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 MELBOURNE

FILE NUMBER: DGC 1112 of 2014

Ms Pearson

Applicant

And

Mr Coli

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. On day two of the trial of this proceeding, objection was taken to paragraph 29 of the affidavit of Mr WW made 26 August 2020. In it Mr Coli did not address source documentation but rather expressed conclusions about certain transactions that he described in that paragraph. Counsel for the wife took objection to the information in paragraph 29 of Mr Coli’s affidavit on the ground that the basis of Mr Coli’s belief was not stated in accordance with the relevant requirements under the Evidence Act. 

2. That led to my requiring the parties to set out their contentions about the main components of debate in relation to $4.7 million worth of items that the husband said should be taken into account in this proceeding. 

3. That provoked the wife to circulate an aide-mémoire and the husband to do likewise.  Both documents are not easy to follow.  The wife’s aide-mémoire does not admit of ready interpretation without recourse to other documents.  It certainly does not take the form of anything even remotely approximating a pleading.  The husband’s document is narrative and at one level a commentary of material that might have, at this stage, dubious provenance in this litigation.  In my view neither document on its face supports or explains the wife’s contentions that she was, to use the words of her senior counsel, “dudded”. 

4. I took the view that paragraph 29 was not admissible. The amount involved was substantial. I invited Dr Ingleby of counsel to consider whether he wanted to mend his hand. He took instructions and said he would avail his client of that opportunity, especially as the risk of a ruling adverse to him may have resulted in his client being foreclosed on relying upon the information in paragraph 29 of the affidavit of Mr WW. That led to the consequences of such a course being debated because an adjournment inevitably followed. Ms Smallwood of Senior Counsel did not oppose the grant of an adjournment but quite properly she said it should be on terms.

5. Ms Smallwood SC objected to being required to file a pleading about the facts supporting the contentions that the wife has been “dudded” about $4.7 million.  She said her aide-mémoire was self-explanatory and that would suffice.  In my view this case has suffered from inception from being denied pleadings, especially having regard to the fact that allegations of fraud or other improprieties were involved.  In every other jurisdiction of courts across this country, allegations of fraud must be exquisitely pleaded and they must be supported by all relevant states of mind together with all acts, facts, circumstances, omissions and things that give rise to the contentions advanced. 

6. No such identifiable self-standing document is the source and solitary repose of those allegations in this case.  The time has come for that to be fixed.  I accept that a pleading need not be required but there is considerable merit in a statement of facts and contentions fully particularised being provided in respect of fraud allegations.  Based on the consequences of where we find ourselves on day three of the trial of this proceeding, it seems to me that the case is not in its most orderly form and that it should not be permitted to go forward in its current form.  Senior counsel for the wife is right that I am at very real risk of falling into appealable error if this case, in its present juggernaut form, launches forward without constraint. 

7. In the circumstances, and there are costs consequences, it seems to me that the further hearing of this proceeding must be adjourned part heard to a date to be fixed.  I estimate with an untutored mind that a further five days is most likely to be required, making eight days in all.  If it is short of that, so much the better.  It seems to me that there is no escape from the requirement for the wife to provide and serve by Wednesday 14 October 2020 a statement of facts and contentions fully particularised in respect of the fraud allegations in relation to the amount of $4.7 million, in respect of which the wife asserts that she was “dudded”, as her senior counsel described it on 30 September 2020. 

8. The husband has leave to file and serve a further affidavit of Mr WW addressed solely to paragraph 29 of his current affidavit. That affidavit must be filed and served on or before 4 pm on 3 November 2020. The wife has leave to file and serve such material in response as she is advised to the affidavit referred to in paragraph 3 of these orders, and she should do so by 30 January 2021. It seems to me that there is sufficient uncertainty in the material about the $2 million that is far from clear on the existing experts’ evidence to warrant an order that the experts should confer on or before 4pm on 14 February 2021 to prepare a fresh, separate report specifically addressing accrued directors’ fees said to be in the sum of $2 million or thereabouts and to report on the impact of realising the accrued fees from the value of the parties’ interests.

9. There remains the questions of costs. It seems to me that the costs of and incidental to the adjournment must be paid by the husband for reasons to be given more fully after the completion of the trial. Under s 117(2A) of the Family Law Act, a sufficient ground exists as to the conduct of the case which has been torpedoed at this unfortunate third day, requiring the evidence to be seriously repaired.  That should have been done well prior to today. 

10. There also remains the question of mediation.  I asked whether there is any appetite anywhere in either camp for them undertaking a mediation before the provision of this extra evidence or after, having regard to the fact that the parties are a little better informed as to their respective contentions.  If they are, I would be pleased to hear from the parties by 4pm tomorrow, Friday.  If they are not, the orders and directions that I have pronounced will remain.

I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 30 September 2020

Associate: 

Date:  2 October 2020