Quoc and Quoc
[2009] FamCA 98
•6 February 2009
FAMILY COURT OF AUSTRALIA
| QUOC & QUOC | [2009] FamCA 98 |
| FAMILY LAW – PROPERTY – Partial property settlement – Disclosure – Single Expert – Hogan order |
| Family Law Act 1975 (Cth) |
| Breen & Breen (1990) 65 ALJR 195 |
| APPLICANT: | Ms Quoc |
| RESPONDENT: | Mr Quoc |
| FILE NUMBER: | BRF | 2737 | of | 2006 |
| DATE DELIVERED: | 6 February 2009 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Murphy J |
| HEARING DATE: | 6 February 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Dick |
| SOLICITOR FOR THE APPLICANT: | Ryan Kruger Lawyers Brisbane |
| RESPONDENT: | Respondent in person |
Orders
IT IS ORDERED
Payment towards Single Expert’s estimated costs and outlays
That the Husband and the Wife do all such acts and things and sign all such documents as may be necessary to release the sum of $11,000 from the ANZ Equity Manager Account Number … and thereafter deal with same in accordance with these Orders.
That the Husband and the Wife pay or cause to be paid to P Partners Trust Account, within seven (7) days of the date of these Orders, the sum of $11,000 referred to in Order 1 hereof on account of the Single Expert Witness, Mr M’s initial estimated costs and outlays in valuing the financial interests in these proceedings.
Interim Costs (“Hogan Order”)
That the Husband and the Wife forthwith do all such acts and things and sign all such documents as may be necessary to release the sum of $60,000 from the ANZ Equity Manager Account Number … and thereafter deal with same in accordance with these Orders.
That by way of Interim Costs Order the sum of $60,000 referred to in Order 3 be paid to the Wife’s Solicitors Trust Account (Ryan Kruger Trust Account) within seven (7) days of the date of these Orders, on account of legal costs and outlays anticipated as being incurred by the wife in these proceedings and to be used solely for such purposes.
That the sum referred to in Orders 3 and 4 hereof be taken into account and appropriately characterised by the Trial Judge at the final determination of this matter.
Partial Property Settlement
That, by way of partial property settlement, the Wife retain as her property absolutely, the 2002 silver Mitsubishi Pajero motor vehicle currently in the possession of the Wife (“the motor vehicle”) and that the Husband relinquish any right, title, claim and/or interest in and to the motor vehicle.
That the husband do all acts and things and sign all documents necessary including but not limited to counter-signing two (2) cheques drawn on the ANZ Equity Manager Account Number … as detailed below:
(a) within seven (7) days of the Wife providing to the Husband a tax invoice or such other documentation evidencing the Compulsory Third Party (CTP) insurance payable in respect of the motor vehicle, a cheque payable to the CTP insurer nominated by the wife, in respect of the CTP insurance costs for the motor vehicle; and
(b) within seven (7) days of the Wife providing to the Husband a tax invoice or such other documentation evidencing the amount payable to a registered mechanic nominated by the Wife to obtain a Safety Certificate (Roadworthy) in respect to the motor vehicle, a cheque made payable to that mechanic nominated by the wife for the sum required to obtain a Safety Certificate (Roadworthy) for the vehicle.
Husband’s Notice for Address
That within seven (7) days the Husband file a Notice of Address for Service that complies with Rule 8.05 of the Family Law Rules 2004, including an address for service in Australia.
Disclosure
That within seven (7) days the Husband provide to the Wife’s solicitors, and the Wife’s solicitors provide to the Husband, a consolidated and updated List of Documents for each of the Husband and the Wife.
10. That within seven (7) days the Husband, at his own cost, make available for inspection and/or authorise his Accountants to make available for inspection by the Wife’s Solicitors and the Single Expert Witness, Mr M all financial documents set out in Annexure F to the affidavit of Bronwyn Hay filed by leave on 6 February 2008, in addition to any documents provided by the Husband to the Husband’s previous Solicitors, Bronwyn Hay & Associates, Attorneys at Law, and produce such documents, including but not limited to the following:
(a) The books and records of his business interests in the Solomon Islands, including but not limited to:
i. Q Holdings Pty Ltd;
ii. MI Ltd;
ii. DS Ltd; and
iii. H Ltd
(a) The books and records of his business interests in the Solomon Islands, including but not limited to:
i. Q Holdings Pty Ltd;
ii. MI Ltd;
iii. DS Ltd; and
iv. H Ltd
and the books and records of any company and/or trust with which he is associated, including but not limited to, the financial statements for the three (3) most recent financial years (including balance sheets, profit and loss accounts, depreciation schedules and taxation returns), a copy of the corporation’s constitution (if relevant), a copy of the trust deed and any business activity statements for the last 12 months;
(b) Records including source documents held by the husband’s accountants or advisors in regard to the husband’s business interests;
(c) The husband’s tax returns and assessments for the last three (3) financial years;
(d) The bank records of the husband and any company and trust with which he is associated for the last 12 months;
(e) Any document, file or other paper writing regarding the income derived by the husband from his business interests in the Solomon Islands and in Australia; and
(f) All documentation requested by the single expert witness, Mr M, in particular the documents set out in the “List of Information Required” referred to in the letters from P Partners dated 26 February 2008 and 1 April 2008.
Appointment of single joint expert valuer
11. That:
(a) within seven (7) days the wife shall provide a list of all real properties held in Australia registered in the names of the parties and/or the Quoc Trust together with an estimated value of each real property;
(b) within seven (7) days thereafter the Husband shall indicate whether he agrees or disagrees with each estimated value being used as an agreed value for each such property for the purposes of the final hearing of this matter;
(c) if there is no agreement reached regarding the value of any (or all) property then, within 14 days of the conclusion of the process contemplated by the previous sub-paragraphs of this order, NPValuers be appointed to value each such property in respect of which no agreement is reached.
12. That each party do all acts and things and sign all documents to give effect to these Orders and in the event that either party neglects or refuses to do so within 14 days of being requested in writing to do so, then pursuant to S106A Family Law Act 1975 the Registrar of the Family Court of Australia at Brisbane hereby be appointed to execute all deeds in the names of the parties and do all acts and things necessary to give validity and operation to all such deeds and documents as to effect the transfers referred to in these Orders.
13. The Husband have leave to provide a copy of the Reasons for Judgment delivered on 6 February 2009 to his former solicitor, Bronwyn Louise Hay.
14. The matter be adjourned for a continuation day before Justice Murphy on 30 March 2009 at 9.00am.
15. The costs of each of the parties shall be reserved.
Notation
Consequential upon:
§the requirement of the orders that Mr M will commence a process of investigating and reporting;
§that the parties have various obligations regarding disclosure; and
§the Reasons for Judgment delivered today;
it is intended by the Court that the trial proceed with all due expedition, and it is expected that that wife’s legal representatives and the husband and/or his legal representatives will confer with a view to consenting to directions for trial, or in the alternative, formulating the precise terms of directions sought by each party in an application to that effect.
IT IS NOTED that publication of this judgment under the pseudonym Quoc and Quoc is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRF2737/2006
| MS QUOC |
Applicant Wife
And
| MR QUOC |
Respondent Husband
EX TEMPORE
REASONS FOR JUDGMENT
By an application in a case filed on 12 November 2008, the wife in these proceedings seeks a number of orders, substantively 14 in total, grouped under a number of headings. For ease of reference, those headings are:
1) Payment towards single expert's estimated costs and outlays;
2) Interim costs ("Hogan order");
3) Partial property settlement;
4) Husband's notice of address;
5) Disclosure, and,
6) Appointment of single joint expert valuer.
A seventh order seeks a financial statement from the father. He filed a financial statement on 2 February 2009. That order is, then, not pursued.
Background
By way of short background, this matter has a lengthy and extremely unfortunate litigation history.
The dispute can be seen as stretching back now some two-and-a-half years to August 2006 when preliminary processes with respect to proceedings in this Court were engaged.
Since that time, there have been proceedings before a former Judge of this Court, Carmody J, and proceedings before myself. The proceedings before Carmody J involved various matters, essentially unconnected with these current proceedings, although, of course, there is some overlap in some of the issues.
The matter came before me for the first day firstly in the Less Adversarial Trial process. At that time, final orders were made by consent in respect of parenting issues.
A number of the issues in this case, whether parenting or financial, emanate from the fact that the parties each have connections with the Solomon Islands.
I gave reasons for judgment on 5 December 2007, to which I will make more detailed reference in a moment. Those reasons related to parenting matters. Pursuant to s 69ZX(3) of the Act, I adopted findings made by Carmody J, in His Honour’s earlier reasons for judgment.
What His Honour said (which is not challenged for the purposes of these proceedings) is provided in these reasons by way of background to at least some of the current dispute between the parties:
"12.The father is an Australian citizen with Chinese cultural heritage who is habitually resident in the Solomon Islands. He is the director of the [family] business in [Honiara]. The [Quoc] family is highly respected in the Solomon Islands […].
13.The father has a permanent residence in the Solomon Islands and owns business and private assets there. The [Quoc] family compound is well protected and surrounded by high security gates and a full-time security employee as well as four full-time staff members who live in. He also has more than $3.3 million invested in Australian based property trusts. His family and business relationships have been adversely affected by the considerable amount of time he currently spends in Australia in parenting time.
14.The father considers his real home is in the Solomon Islands even though he says he has significant real property there compared to Australia, and his business interests in Honiara are neither significant nor extensive."
The “property of the parties or either of them” within the meaning of s 79 of the Act is a significant and live issue in the substantive proceedings. As examples, there are issues such as alleged debts owing by the husband and members of his family; the alienation of property by the husband is asserted by the wife and the identification and valuation of property in the Solomon Islands is also an issue.
Various approximations of the "pool" of property have been provided from time to time. They vary between a little over $3 million (in the reasons of Carmody J just referred to); up to about $4 million, which was an amount asserted from the Bar table by counsel then representing the husband.
In very broad terms, the parties, according to the wife at least, commenced living together in about 1994, married in April 1997 and separated in December '05/January '06. There are factual disputes between the parties about some of those matters including the nature and extent of cohabitation pre marriage and issues relating to the date of separation.
Litigation was instituted by the husband in the Solomon Islands. Various jurisdictional complexities resulted and ultimately sounded in the orders and reasons for judgment given by Carmody J.
The 11-year relationship (as the mother contends) produced two children; a son D who was born in June 1997 and a daughter R born in October 1998. The children are, then, about 11 and 10, and there is what might be described as a month about arrangement with respect to the co-parenting of them.
Disclosure Generally
The proceedings in this Court have been plagued by assertions and counter assertions about issues such as disclosure. Those issues took a somewhat unusual turn in relatively recent times.
The father had for some time been represented by Ms Hay, a solicitor practising under the firm named Bronwyn Hay & Associates. An affidavit by Ms Hay is filed by leave today, in respect of this application.
Ms Hay deposes to the fact that, on 19 June 2008, her firm was placed into receivership. She also deposes:
"My firm is currently in receivership as a result of the fact that in March 2007 a client complained to the Queensland Law Society ... in respect to proceedings, which my firm ran, seeking an injunction from the Supreme Court at 5 pm on a Friday afternoon. The client made allegations against myself and a solicitor of my firm, (who was my "right-hand man" at this time)."
Given that there are issues about what documents have been produced, to whom and when, the event just referred to, has of course created, potentially, significant difficulties.
Nevertheless, it needs to be observed that Ms Hay in her affidavit goes on to depose:
"I spoke with the husband from Europe and he asked if I would authorise the release of his documentation in the files held by the Law Society receivers as soon as I returned from Europe. Accordingly, I authorised the receivers that despite the lien, all files should be made available to the husband. I subsequently personally travelled to the Law Society on my return and retrieved the many arch lever files".
The appropriate legal basis for the alleged lien by Ms Hay has been the subject of comment by Mr Dick, counsel who appears for the mother in this application. It is of course beyond the scope of these proceedings to examine that issue, but I must say, I find aspects of the claim form lien to be curious to say the least.
Nevertheless, what seems clear from what the father told me from the Bar table today, is that the "many arch lever files" referred to by Ms Hay, may relate to lists of documents said by Ms Hay to have been prepared on behalf of the husband (and it must be presumed on his instructions).
Paragraph 13 of her affidavit refers to the first of those three listed documents being completed on 12 September 2007 (that is, it is to be noted some 18 months ago). The second list is entitled "Separate listed documents prepared by my firm in early October 2007" disclosing all further information which the husband had gained access to through his Australian and Solomon Island accountants.
Despite there being sworn reference by Ms Hay of her having possession of "many arch lever files" of documents, and listed documents having been prepared which purport, on their face to, list documents in the power, possession or control of the husband relevant to the proceedings, it seems that very few of those documents have been produced to the solicitors for the wife. No satisfactory explanation is given for that.
Given the lengthy litigation history of this matter, which has included reasons for judgment by two Judges of this Court (albeit in respect of different aspects of the conflict) it seems remarkable to me that we have reached this stage of the proceedings without there being an appropriate and proper exchange of documents which are in the power, possession or control of each of the parties.
The wife alleges that the husband has been recalcitrant for a purpose. She alleges that he has attempted through delay to prolong these proceedings and prolong the involvement in the litigation by the wife with consequent expense to her. The husband denies this assertion.
I interpose here in respect of that assertion, and indeed all other controversial assertions of fact, that these are interim proceedings conducted within the confines of the restrictions referred to by decisions of the Full Court in cases such as C & C. It is plain that I cannot make determinations of fact where those facts are controversial, and might be the subject of significant evidence and potential cross-examination at a trial.
I can though, take account of matters which are notorious, admissions, or matters which are less controversial, in attempting to arrive at orders in the interests of justice, within the confines of those restrictive proceedings.
The allegations by the wife, and the orders sought by her, also need to be seen against the background of further matters.
I was referred in particular to threats made by the husband which are deposed to at paras 73, 76, 77 and 80 of an affidavit filed by the wife on 16 November 2007.
Some of those paragraphs depose hearsay to conversations that have occurred with other people. However at para. 73, it is deposed:
"[The husband] has previously threatened to 'destroy the trust' if I did not agree to a property settlement that was acceptable to him. In a letter I received from [the husband] dated 1 February 2006, he writes amongst other things, 'If you want to challenge me I will destroy the trust and we leave the kids with nothing and in 20 years time you can do the explanations'."
The letter from which the quotation comes is exhibit CMQ4 to the affidavit just described.
The husband says that this comment is in effect taken out of context, that he speaks other languages. I heard him speak today for over an hour. I have no doubt that he is fully conversant with the English language, fully comprehends it, and is fully able to use it.
Additionally, all of the material filed by him that has been prepared by him personally is indicative of that fact. I take at face value, albeit subject to what might ultimately be some challenge to its tone, the statement by the husband that he will "destroy the trust".
Further Background – Hogan Order and Expert Fees
The second matter that needs to be borne in mind when considering the terms of the specific orders sought by the parties is the fact that the husband has been ordered to pay the wife's costs of and incidental to two separate proceedings.
An estimate of those costs has been provided by the solicitors for the wife, totalling about $34,000. He, of course, has no obligation to accept such an estimate and is, of course, fully entitled to seek an appropriate itemisation and assessment and to engage in the processes provided for in Sch. 6 to the Family Law Rules 2004.
However, it is of note, and indeed uncontroversial, that:
1) Two separate costs orders have been made against him, and,
2) Not one cent has been paid by the husband, irrespective of what he says may or may not be any amount due pursuant to those orders despite the orders now having been made for some time.
When I asked the husband why that was the case, he said, "He could not afford it", or words to that effect.
I should also indicate by way of background, that orders made by me on 6 December 2007 provided for the dismissal of two applications brought by the husband. The orders also provided (I note some 14 months ago) that a single expert prepare a report with a view to properly ascertaining the property of the parties.
This is, as has been made clear by a number of Full Court authorities, is the “first step”, and indeed a fundamental step, in arriving at a just and equitable settlement of property pursuant to s 79.
At that time I ordered that the matter be listed before a Registrar for case management, by reason of the issues likely to be involved in the process just described, including the fact that assets were owned both in Australia and in the Solomon Islands.
It seems that, in real terms, very little has been done to advance the case towards a trial. Indeed, it is possible to say that the matter is no further progressed today than it was on 6 December 2007 when I made those orders.
In the circumstances of this case, including the respective financial circumstances of the parties and the extremely high conflict between them, that in my view is an intolerable situation and this trial needs to proceed as quickly and expeditiously as can possibly occur.
That is particularly so because the Court, pursuant to s 81 of the Act, has an obligation to end the financial relationship between the parties to the extent that is reasonably possible.
The Court desires, in every single case, that this be done by agreement between the parties. Where that is not possible, the Court has, in my view, an obligation to ensure that the Court process proceeds expeditiously and without undue delay so as to achieve that statutory obligation.
This matter is not moving at the pace it should. That will cease from today.
The need to bring this matter to a conclusion in circumstances where I note the conflict between the parties occurs in circumstances where they have a co-parenting relationship in respect of two relatively young children, is a significant and important matter in the exercise of my judgment today including those aspects of the judgment that require me to exercise my discretion.
Specifically, also by way of background, I need to make reference to some significant events that have occurred in the period between the order made by me on 6 December 2007 and the instant application.
Consequent to the making of those orders (and delivery of reasons) the husband transferred 3900 ordinary shares, 1"B" class share and 1"C" class share in the corporation Q Holdings Ltd.
I note that this is one of the entities in respect of which disclosure of documents is sought from the husband.
The consideration for that transfer, which is said to be evidenced by a stamped transfer of shares (Exhibit CM1 to the affidavit of the wife filed on 12 November 2008) was $832,839. That is Solomon Island Dollars, which the husband says equates to about $200,000 Australian.
When I asked the husband during the course of argument what had become of the $200,000, he advised me that, essentially, it had been paid in legal fees.
It transpires that the former solicitor of the husband, Ms Hay, whose firm is in receivership in the circumstances earlier referred to, found it necessary to travel to the Solomon Islands at the husband's expense. The husband said that the purpose of that visit was so that she could, "see how things were on the ground" because potential danger to the children was a live issue in parenting proceedings then taking place before Carmody J.
If the husband is correct about that, then, at his expense, his solicitor travelled to the Solomon Islands so that she might then potentially become a witness in her own client’s case. That remarkable proposition is the only one advanced for why it was necessary for the husband to pay his solicitor about (he estimates) $10,000AUD is respect of that trip. Of course, the husband asserts he has been unable to afford to pay for any part of costs orders made by the court.
The transfer of shares just referred to took place approximately six months after the orders made by me. During that time, the wife deposes to, and it seems the father accepts, that, in addition, judgments were entered against him in civil proceedings in the Solomon Islands. The judgment debts were respectively for $33,500 and $95,000. They were each entered with the consent of the husband. Those judgments were entered against him by, in one case, his mother, and in the second case a corporation which he, or members of his family, are alleged to control.
In the husband's own case, those judgment debts, totalling about $128,500 Australian, are continuing to attract interest at 5 per cent.
No documents have yet been produced in respect of either of the debts said to found those judgments. Interestingly, the husband told me from the Bar table, in respect of the production of documents generally, that his brother was looking in the Solomon Islands for documents which might substantiate either those debts or indeed any other debts that are said to be relevant by him to the property proceedings.
He tells me, and for the purposes of these proceedings, where I cannot make actual findings, I accept that, record keeping in the Solomon Islands is significantly more lax and less formal than it is in this country. He also tells me that there are different accounting processes and procedures and requirements in that country than there are in this country.
The husband swears in his statement of financial circumstances to a number of other debts.
Apart from $30,000 said to be owed to his former solicitors, he alleged he owes his sister $60,000, a member of his extended family $35,000 and other individuals respectively, $4300 and $1560.
Significantly, as it seems to me, the husband swears in one of the many affidavits relied upon by him for the purpose of today's proceedings, that real properties, the subject of the claim pursuant to s 79 made by the wife were funded very extensively by members of his family.
Again it seems that the husband is as yet unable to produce significant documentation with respect to any such funding. This is despite him deposing to family funding being extensive.
I note he does not use the word “loan”, although in his affidavit he says in other parts of the same paragraph, that family members "advanced", between $1 million and $1,500,000.
On the husband's own case, then, he has been able to access funds from members of his family, whether to purchase properties as part of an investment portfolio in Australia, or otherwise by way of unspecified borrowings, totalling somewhere between $1,500,000 and $2 million.
The nature and extent of those liabilities is, I gather, likely to be a significant issue at the trial of these proceedings.
Hogan Orders and Payment of Experts Fees
Against that background, the wife makes application for the orders earlier indicated. The husband too applies for orders set out in a response to an application in the case filed on 2 February 2009.
He, too, seeks a number of orders and they, too can, I think, be conveniently grouped.
The first general order is that the wife's application be dismissed. The second set of orders relate to the orders seeking funding of $11,000 to allow Mr M from P Partners to commence his forensic accounting process ordered to occur with Mr M as the Court's single expert, and the payment of funds whether by way of a "Hogan order" to the wife or the husband. The orders sought in that respect are contained in paras 2 through 5 of the response.
In broad terms, it seems that the husband does not oppose the wife receiving moneys on account of costs, nor does he oppose Mr M being paid the $11,000 necessary to commence his investigation process. The husband contends, though, that the $11,000 payable to Mr M and moneys payable to both he and the wife in respect of legal fees, should come from the sale of a property owned by a trust (which the husband advised from the Bar table today has a corporate trustee which he controls).
The husband’s affidavit refers to a number of matters that would need to be paid from the gross proceeds, most of which are uncontroversial, relating to costs, expenses and the like. The husband also deposes to the fact that some capital gains tax in respect of the sale of a previous property should also be paid.
Accordingly, the dispute in respect of the payment of the amount of money to Mr M and any "Hogan order" for each of the parties, seems to come down to this:
i)The husband does not oppose the payment of the $11,000 to Mr M but says it should come from the sale of the N property. The wife says that it should be paid from a line of credit available to the trust which is able to be accessed by the parties.
ii)The husband says he should also receive a "Hogan order". The husband in that respect says that the amount of the respective "Hogan orders" for each of the parties should be 50 per cent of the net proceeds of the N property (i.e. after payment of the amounts that he swears to in his affidavit).
iii)Thee funding for any "Hogan order" (whether for the wife or him or both), should come from the sale of the N property as distinct from the line of credit which is the source sought by the wife.
I have taken it, then, that the husband (who today represents himself) also applies for a "Hogan order" in an as yet unspecified amount but calculated in the manner just referred to.
The evidentiary requirements that form the pre‑requisites for the granting of such an order apply just as much to him as an applicant as they do to the wife. There is no principle of which I am aware, or to which I have been referred, which suggests that, merely because one party receives a "Hogan order", that the other party ought also receive such an order.
A number of factors point to the opposite conclusion. First, different evidentiary considerations may be applicable to each such applicant. Secondly, the purpose of a "Hogan order" is to ensure that both parties are, as it were, put on a "level playing field". In addition, there are, of course, all of the other requirements which the authorities have laid out.
In that respect, I record that I have been referred by Mr Dick and am aware of the authorities which govern the application of the discretion to make such an order.
The source of power for this Court to make such an order has been, and remains, a source of some contention. Various sections of the Act have been put forward as providing an appropriate foundation for the power to make such an order. In particular, I am aware for example, of what the High Court has said in Breen & Breen (1990) 65 ALJR 195 and Re JJT & Ors ex parte the Victoria Legal Aid (1998) FLC 92-812.
What seems plain, however, is that the Court does have such power.
I am also aware of what the Full Court said in the case of Zschokke & Zschokke (1996) FLC 92-693. I am aware of the requirements for the making of such an order referred to in that case, and also requirements, which might be seen as additional pre-requisites for the exercise of the power, referred to in earlier decisions of this Court, for example, in Poletti (1990) 15 FamLR 794, Wilson & Wilson (1989) FLC 92-033 and Hogan & Hogan (1986) FLC 91-704.
Those same cases reveal that it is necessary when making an order to consider not only the position of the applicant but the position of the respondent, and I do so in the context of this application.
It seems to me plain that any order made in favour of one or other of the parties for a "Hogan order", is "reversible" in the sense in which that expression is used by the Full Court in Zschokke & Zschokke.
Insofar as the wife is concerned, there is good evidence of the other pre-requisite requirements necessary for the exercise of the power:
i)I am satisfied that her financial circumstances are such that she is in need of an order being made;
ii)She has carefully set out in material filed on her behalf, the reasons why she finds herself in such a state with respect to her legal fees, including the moneys that she has paid previously to a commercial funder and small amounts of money which she has accessed;
iii)There is very little doubt in my view that this matter will need to proceed to a trial. I am extremely pessimistic about the prospects of the parties being able to agree upon a just and equitable division of property between the parties. The fees mooted as being potential for the wife, by no means fall outside the range of fees which this Court sees as estimates of the cost of a trial, and might also be seen as modest in light of significant concerns in respect to overseas assets and the like;
iv)I also have concerns that there may be continuing issues in respect of disclosure by one or other of the parties;
v)The wife has identified a fund from which those fees can be paid;
vi)I consider that, by reason of the amounts the husband has been able to access from his family that there is a significant potential for injustice in the wife not continuing to receive advice and representation from her established legal advisers;
vii)The wife says the funds should be paid from the line of credit. There is about $220,000 available. There is no doubt that the line of credit, even on the husband's case, has the capacity to, as it were, meet the order sought by he wife.
The husband says that the order sought by the wife should be met from the sale of a property at N. There is absolutely no doubt on the material before me that there has been significant, profound and ongoing conflict between these two parties. The issue of the Pajero motor vehicle to which specific reference will be made shortly is a stark current example of the nature and extent of that conflict.
There is, in my view, an extremely high likelihood that any negotiations or consultations with respect to the sale of a property would involve further conflict between the parties, and are highly likely to involve further delay and further disputes about even relatively minor matters that in other circumstances might be readily resolved between parties who are willing to reach agreement.
It is also submitted on behalf of the wife that any such sale would be attended by what has been called the economic downturn, applicable not only in this State but throughout the country and the world.
It is submitted that utilising the sale of property in order to meet either Mr M’s costs or the "Hogan order", is attended with significant potential delay in the provision of the money and significant further consequent delay in the matter proceeding to trial.
I have already indicated that I consider it imperative that this matter proceed to trial as expeditiously as possible and that is a significant, indeed compelling, factor in the exercise of my discretion in this matter.
The husband submits that, in respect of the wife's proposal, the line of credit is a borrowing as distinct from an asset. He says, "Why go borrow when you can sell?" That point is of course well made.
In usual circumstances, that may indeed be a telling point. He goes on to submit, in addition, that the trust will bear the burden of the interest payments in respect of the matter, and that there are other properties owned by the trust that require maintenance and repair and that there is a capital gains tax debt that may need to be paid (although there is no evidence as to precisely what that amount is or precisely when such amount may be payable).
Mr Dick submits in reply that, even if the additional interest was payable over a year by the trust, that amounts to some $4500 which, when seen in the context of the "pool" of property in this case, and the other issues live between the parties, is an insignificant matter.
There is also no evidence before me, despite the submissions made by the husband, in any of the many, many affidavits filed by him in respect of the proceedings today, that the imposition of the additional borrowing (or more accurately the imposition of any additional interest payments payable in respect of any such additional borrowing) would cause dramatic or irreparable burdens to the trust, or prejudice it in any significant way.
I am not prepared to tolerate the delay, which would, in any event, attend the sale of a property in order to pay the money and in particular, the money due and payable now to Mr M so that the investigation and valuation process can take place, particularly when combined with what I anticipate to be the likely delay which is inherent it seems, resulting from the conflict which infects every aspect of the proceedings so far.
I repeat that I am satisfied that the wife satisfies all of the criteria about which I need to be satisfied before making a "Hogan order". It seems to me the amount of the "Hogan order" is reasonable and the wife has identified a fund, albeit a "borrowing fund" as it were, from which moneys can be obtained and it seems to me, in the circumstances of this case, that it is reasonable that that fund be used in lieu of the sale of a property.
As I indicated earlier, it seems to me that I should take the application made by the husband (although not in terms) as an application for a "Hogan order" to be made in his favour.
Mr Dick submits that the evidence produced by the husband does not come close to that which the Court would require in circumstances where it was being asked to make a "Hogan order" in his favour.
With respect, I agree with that submission.
Moreover, as the facts and circumstances earlier outlined indicated, the husband seeks a "Hogan order" in circumstances where two costs orders have been made against him, and in respect of which he has made no offer to pay any amount whatsoever in respect of those costs.
The current indication, and it is no better than a ballpark indication by the solicitors for the wife, made at my request, indicate that those costs might be in the region of $34,000. Of course, the precise amount awaits an assessment. The husband says he wants that assessment to take place. The wife deposes to the fact that such an assessment is likely to cost in the region of $5000. That too, she says, is a cost which she cannot currently bear. On the evidence before me, it seems clear that assertion is made out.
Accordingly, the husband seeks a "Hogan order" in circumstances where, by reason of the impecuniosity of the wife, and a need to obtain further funding for the further progress of the action, she is unable to obtain an assessment which is the next step in recovering the two costs orders made in her favour, whilst at the same time, offering not a cent in satisfaction of either of those costs orders.
Secondly, the husband makes application for a "Hogan order" in circumstances where a series of facts would, even on an interim application, require some explanation, particularly:
i)The failure to clearly identify admitted money, assets and the like in another country;
ii)The apparent failure to list or produce documents relating to alleged borrowing of, on his case, somewhere between$1.5 million and $2 million;
iii)The Failure to provide any meaningful details of these alleged borrowings;
iv)The alleged sales to his brother of approximately $200,000AUD worth of shares in a private company, in respect of which he apparently was a director, within six months of an order of the Court;
v)The apparent failure to notify the wife of that sale ahead of it;
vi)The failure to adequately explain in any sworn material the disbursement of the proceeds; and
vii)The apparent failure to produce for inspection documents contained on lists of documents apparently prepared by a solicitor on his behalf, and apparently prepared some time ago.
The issues of lack of disclosure and the true financial circumstances of the parties, have been live for some time, yet I know very little, for example, from the husband's material about the circumstances in which the shares were transferred by him to his brother, in circumstances where financial proceedings were live in this Court and where I had made orders and delivered reasons for judgment some seven months previously. I have no explanation from the husband of what happened to the $200,000AUD received. Certainly, the husband's material reveals no accounting of that $200,000, nor, I gather, has the husband produced any documents which suggests or establishes where that $200,000 has gone.
He says from the bar table that it has gone on legal fees. Again, there are no documents yet provided which substantiate that claim. Moreover, that $200,000 received by the husband is received in circumstances where, it seems, even on his case, he has been able to access significant funds from his family in the past, and where, in circumstances which are completely without satisfactory explanation, he has consented to judgments, one of which I note is to his mother in a significant sum.
Furthermore, it seems to me that if such an order is to be made, then, she needs to have evidence of those matters which have been indicated as being necessary in the Full Court decisions to which I have earlier made reference, including not only those matters raised in Zschokke but also those matters addressed in cases such as Polenti, Hogan, Wilson and the like. I consider, having looked at the husband’s material in some detail, that it does not satisfy those pre-requisites.
For those reasons, I propose making orders in terms of the orders sought by the wife for the $11,000 payable to Mr M and the "Hogan order" sought by her, and I propose to refuse the orders sought by the husband in respect of that "Hogan order" payable to him.
I will also make orders that the sums so provided for are to be paid from the line of credit account in terms of the orders sought by the wife as opposed to from the sale of the N property as proposed by the husband.
Partial Property Settlement – Pajero Motor Vehicle
The next issue litigated today is the wife's application for the receipt by her of the Pajero motor vehicle, as a partial property settlement.
This is an issue related to the previous issue, because the husband makes it clear that he has no difficulty with the wife receiving that motor vehicle, except that, he says, from the sale of the N property, he should receive an effectively equivalent sum, so that he can buy a motor vehicle.
There are a number of factual issues relating to this motor vehicle. In particular, the husband alleges that there was an agreement between the parties that the motor vehicle was to, as it were, follow the parents so that each of the parents in the month about parenting arrangement had access to that motor vehicle while they had the children with them.
I repeat, I am unable to make findings about controversial factual issues in the context of these interim proceedings.
I also repeat that I am against the sale of the N property for the reasons earlier identified. The state of the material before me is such that there is considerable uncertainty surrounding the property of the parties, its valuation and whether proper disclosure has been made (and if not, why not,).
In those circumstances, I am extremely hesitant to liquidate any assets within Australia, particularly in circumstances where the asset position of each of the parties in the Solomon Islands and disputed debts allegedly payable by the husband to people in that country, are so much a live issue in these proceedings.
In that respect, I cannot even be confident on the material before me of what proportion of the property of the parties in Australia represents when compared to the property of the parties in the Solomon Islands.
Accordingly, I am not minded to make an order that would see the sale of any asset so as to make available funds for any purpose, whether the payment to Mr M or "Hogan orders" as made clear earlier, and in this context, the purchase of a motor vehicle.
That being the case, the issue then is what should happen in respect of the existing Pajero motor vehicle.
It seems to me that it should, for the moment, remain where it is, given that the order sought is by way of partial property settlement.
I am aware of decisions such as In the Marriage of Harris, which talk about the necessity for there being one proceedings at which all issues with respect to settlement of property are determined. However, here, although the estimates of the total pool of property vary widely, it seems abundantly plain, on either party's case, that the motor vehicle could not constitute more than 1 per cent of the property pool.
It seems to me just and equitable that that aspect of the settlement of property between the parties be determined now so as to provide the wife a motor vehicle. I do not know (and cannot determine) whether there is an agreement that the vehicle follows the parents. In any event any such agreement would not be determinative.
I repeat that I am very concerned that I do not know adequately the financial circumstances, and in particular, those transactions and transfers occurring in the period after I delivered judgment on 6 December 2007 about which I have virtually no information at all.
In that context, as said more than once during argument: the first and fundamental obligation of parties engaged in financial proceedings in this Court is to make proper, full, adequate and timeous disclosure. There is rarely any excuse for failing to do so.
I am by no means satisfied – on an interim basis – that the husband has made the disclosure required of him. That is a telling matter in the exercise of my discretion in making the order sought by the wife.
Accordingly, I propose to make an order in accordance with paras 6 and 7 of the orders sought in this application.
I should say for the sake of completeness that the husband seeks a specified sum ($1,000) to be used for the purpose of reregistering the vehicle and the like. In contrast the order sought by the wife does not specify any such sum.
Whilst the compulsory third party insurance, registration fees and the like might be capable of precise calculation, it is pointed out that, as an incident of the roadworthy certificate process, there may be maintenance or other repair tasks required to be carried out so as to again make the vehicle roadworthy and capable of registration.
I am satisfied that the wife, in possession of that vehicle, should have possession of sufficient funds in the manner suggested by her, in order for that to occur.
Notice of Address for Service
The issue of the husband's notice of address for service has been addressed significantly in argument.
The husband points out that he moves between Australia and the Solomon Islands on, effectively, a month about basis. I understand his position in that respect.
However, as I indicated during the course of argument and as I indicate again now in these reasons, it is imperative that every party to proceedings in this Court have a reliable address at which it is possible, at any given time, for both the Court and the other party to be able to serve documents or send orders, communications or other notifications.
I appreciate that the order sought by the husband in that respect takes account of the fact that he divides his time between the two countries. However, it seems to me he is obliged to provide to this Court an address in Australia.
That might from time to time create some difficulties in the timing of documentation being received by him. It seems to me that this is not a reason for not providing the address; it is a reason for intelligent litigants in the proceedings to take account of that fact by allowing sufficient time for documents to be served and received at that address.
Accordingly, I make the order sought at para 9 of the wife’s application.
I note that the husband has, through my Court Officer, been provided with a blank Notice of Address for Service document today. I order that he file it, with an address in Australia which can be used for service of all documents and notifications in writing of all matters necessary for him to be notified of, within seven days of today.
Further Disclosure
The issue of disclosure has significant complexities and is attended, as is, regretfully, so often the case, with numerous assertions and counter assertions.
What is abundantly clear on the material before me is that the husband's former solicitor has compiled what appear to be three lists of documents. One extends back some 18 months. Argument today produced some confusion (and more assertions and counter-assertions) about who had done what and when. It seems to me that to prevent ant present or potential confusion, each of the parties should be obliged to provide to the other within seven days, a consolidated and updated list of documents, and I so order.
That will have the advantages, as it seems to me, of allowing each of the parties to see what the other asserts as being all of the documents as at the date of the list, in their possession, power or control. I attempted to explain that concept the husband during the proceedings.
It will also allow the husband to have a document which will comprise, as it were, a “fresh start” before me.
Should there be any future argument about disclosure, the Court will have, and each of the parties will have, a list of documents which, after proper care and attention, has been put forward by each of them, as being all of the documents that are within their possession, power or control.
I have considered the burden that such an order requires. The wife through her solicitors, agree to undertake that burden. So too does the husband. I am aware, though, that the husband is representing himself and, so, I have independently of that recognition, taken account of the fact that a solicitor acting on his behalf has, according to her sworn evidence, on three separate occasions prepared a list and, therefore, the task for the husband in consolidating, checking and updating that list should be a relatively simple one.
Production of Documents
Further orders sought by the wife are that documents are produced.
The documents comprising the three lists set out in annexure F of the affidavit of Ms Hay are all documents that the husband, according to the sworn evidence of his then solicitor (who acts at all times on his instructions) has indicated are within his possession, power and control. There should clearly then be no reason whatsoever why those documents are not immediately available for inspection. Indeed, that is the whole purpose of providing a list of documents in the first place.
It is said by the husband, though, that some complexity attaches to this obligation, because of Ms Hay’s firm’s circumstances earlier referred to.
I earlier quoted para 8 of Ms. Hay’s affidavit. It seems that she has possession of the "many arch lever files" to which she deposes.
Although there is no sworn evidence to this effect, the husband advises me from the Bar table that Ms Hay is practising as an employed solicitor in Sydney. If that is true, she can only be employed as such if she continues to owe to the Court significant, ongoing, ethical obligations that are her primary obligations as an officer of the Court.
I cannot imagine that a solicitor, an officer of the Court, knowing that a Court is desirous of documents being obtained for disclosure in a matter in respect of which (whatever be the reason), there has been very significant delay, would not move heaven and earth to ensure that those documents are given to her former client so that they could be given in turn to the other side at the earliest possible opportunity.
To the extent that it is necessary, I give leave to the husband to provide a copy of my reasons for judgment in this matter to his former solicitor.
I have an expectation that those documents will be produced urgently. They are said to exist, indeed, they are sworn as existing. They have been the subject of the list of documents that have been extant for some considerable period of time.
I have already found that the delay in these proceedings is intolerable, and I will not stand for any longer delay. I expect those documents to be produced. I order that they are produced within seven days.
So too, any documents requested by the husband and not produced by the wife already, shall be produced within seven days of the date of this order.
I note that the husband says that he has produced all documents relevant to the corporation DS Ltd. Nevertheless, I make orders in accordance with para. 11 of the wife’s application ( with the amendment in respect of annexure F of Ms Hay's affidavit as earlier indicated)
There is no difficulty in such order referring to the documents of DS Ltd, because, in respect of that corporation, the husband can indicate when disclosing and producing all such other documents as he has there listed, those that he has produced (and the date of producing them) with respect to DS Ltd.
Statement of Financial Circumstance
As I said earlier, the application in respect of the husband's financial statement is not pursued.
Appointment of Single Expert – Real Estate
The wife seeks the appointment of a single joint expert valuer to value the real properties which are owned by either the parties and which are the subject of the substantive s 79 proceedings. The husband says that his former solicitor has what he described as “valuations” with respect to those properties, or at least some of them. Further discussion with the husband revealed that, in fact, those “valuations” were real estate appraisals.
Mr Dick indicated on behalf of his solicitors and his client, that in any event, those real estate appraisals had not as yet been provided to them.
I indicated to the husband that, in the absence of agreement about valuation in respect of real property which is the subject of the substantive proceedings, that, for myself, I would not consider real estate agent appraisals to be sufficient evidence of valuation upon which I would be prepared to act at the hearing of this matter.
The husband then indicated that he would like the opportunity to “do some background” on NP Valuers, who are the valuers proposed to be appointed as the single expert valuer by the wife.
The order sought by the wife, in terms, contemplates first the prospect of the parties being able to reach agreement. I am pessimistic about the prospects of that but, nevertheless, intend to provide a short time frame within which that can occur.
I order that within seven days of the date of these orders, the wife, through her solicitors, shall provide to the husband, a list of all the real properties said to be the subject of the proceedings in this Court in Australia and her estimated value of each such piece of real property and within seven days thereafter, the husband shall advise the in writing whether he agrees or disagrees with each such value, and, if he disagrees, the value that he places on each such property.
In the event that there is no agreement between the parties about the valuation of the real estate to be used for the purposes of this trial, then within 21 days of the date of these orders, I will order that NP Valuers be appointed as the single expert valuer in order to value such real property.
The husband says he would like the opportunity to “background” NP Valuers and their qualifications and experience, and to have the opportunity to propose alternative valuers of his own.
I have already indicated many times in these reasons, the significant ongoing conflict and my profound concerns about the delay in these proceedings. I am not prepared to allow what I think is highly likely to be a further matter of conflict between the parties about who, how and when valuations should take place, to occur.
I have appraised the husband of his entitlement under the Rules. If he is dissatisfied with the valuation obtained from NP Valuers (in the event that such a valuation is necessary), then he is perfectly at liberty to fund and obtain a valuation of his own from an appropriately qualified and experienced valuer and to make application to this Court for permission to adduce evidence from that valuer at the trial.
In those circumstances, I am not prepared to countenance further delay and the potential for further conflict between the parties, by countenancing a process of negotiation about who, how and when a single expert valuer might value real property, in the event that the parties are unable to agree.
Order Pursuant to s.106A
Finally, the wife seeks an order pursuant to s 106A of the Family Law Act, in the event that signatures are not obtained on any document necessary to carry into effect the terms of the orders that I have indicated that I will make.
The husband seeks a similar order. He frankly admits that he included the order in his response because he saw the wife's and essentially copied it. There is no shame in doing so and it seems to me appropriate that each of the parties should have the benefit of an order pursuant to s 106A of the Act in the event that either party fails reasonably to comply with any requirement with respect to the signing of any document necessary to give effect to the orders I am about to make.
Other Matters
I will not make Order 8, I will reserve the issue of how the payment referred to at paras 6 and 7 is to be treated, to the trial. It seems to me that, to make that order, I would need to either make factual findings or at the least, what I might describe as Clayton's factual findings, and I am not prepared to do that in these interim proceedings.
I will note formally in these orders, that, consequent upon the requirements of the orders that Mr M commence a process of investigation and report, and that the parties have various obligations, particularly in relation to disclosure.
I will also formally note that I have, in my reasons for judgment, made it clear that this trial should proceed with all due expedition and, with that in mind, it is expected that the legal representatives of the wife and the husband (or as the case may be) the husband's legal representatives, confer with a view to consenting to directions for the further progress of the trial, or in the alternative, formulating the precise terms of directions for an application to that effect.
An additional order will be that the matter will be adjourned for a continuation day before me at 9.00am on 30 March 2009.
I certify that the preceding one hundred and sixty-three (163) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy
Associate:
Date: 19 February 2009
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Family Law
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Civil Procedure
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