R(formerly B) and B

[2008] FCWA 55

[2008] FCWA 55

JURISDICTION	:	FAMILY COURT OF WESTERN AUSTRALIA
ACT	:	FAMILY LAW ACT 1975
LOCATION	:	PERTH
CITATION	:	R(formerly B) and B [2008] FCWA 55
CORAM	:	CRISFORD J
HEARD	:	7 APRIL 2008
DELIVERED	:	20 MAY 2008
FILE NO/S	:	PT 4732 of 2001
BETWEEN	:	R (formerly B) Applicant/Wife
AND
B Respondent/Husband
Catchwords:

Property settlement - application to set aside orders pursuant to s 79A - failure to disclose between trial and judgment - whether miscarriage of justice - application for summary dismissal

Legislation:

Family Law Act 1975, s79A

Category: Not Reportable

[2008] FCWA 55

Representation:

Counsel:

Applicant:	Mr M Rynne
Respondent:	Mr J Hanly

Solicitors:

Applicant:	Klimek & Co
Respondent:	Hotchkin Hanly

Case(s) referred to in judgment(s):

Bain Pacific Associations & Ors and Kelly & Ors (2006) FLC 93-270
Barker v Barker (2007) Fam LR 650
Beck and Beck (2004) FLC 93-181
Bigg v Suzi (1998) FLC 92-799
Black and Kellner (1992) FLC 92-287
Boege & Boege [2002] FamCA 276
Briese and Briese (1986) FLC 91-713
Browne & Green [2002] FamCA 94
Browne v Green (2002) FLC 93-115
Clifton and Stuart (1991) FLC 92-194
Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55
Custodio and Pinto & Ors (2006) FLC 93-279
Geremin & Morton [2002] FamCA 788
Giunti and Giunti (1986) FLC 91-759
Kannis and Kannis (2003) FLC 93-135
Lindon v The Commonwealth [No. 2] (1996) 70 ALJR 541
Livesey v Jenkins [1985] 1 All ER 106
Morrison and Morrison (1995) FLC 92-573
Mulley v Manifold (1959) 103 CLR 341
Norman & Howath [2003] FamCA 1284
Oriolo and Oriolo (1985) FLC 91-653
Pelerman v Pelerman (2000) FLC 93-037
Rauh (formerly Bajada) and Bajada [2007] FCWA 12
Suiker and Suiker (1993) FLC 92-436
Tate v Tate (2000) FLC 93-047
Vernon v Bosley (No 2) [1997] 1 All ER 614
Weir and Weir (1993) FLC 92-338

[2008] FCWA 55

1 The Court is asked to determine [Mr B]’s application for summary dismissal of

[Ms R]’s application that orders made 30 January 2007 in relation to property
settlement be varied or set aside pursuant to s 79A of the Family Law Act 1975.

2 The orders of 30 January 2007 disposed of financial matters between the parties

on a final basis save for the issue of child support. The proceedings had been commenced by [Ms R], initially, on 14 August 2001. The trial proceeded between 27 and 30 March 2006.

3 [Mr B] says the present application of [Ms R] is completely without merit, is an abuse of process of the Court and should be summarily dismissed.

Brief chronology

4 It is helpful to understand the progress of this matter generally and through the

Court to date.

5 The husband was born [in] December 1950 and is 57 years of age. The wife was born [in] November 1955 and is 52 years of age.

6 It appears that the parties commenced cohabitation sometime in 1978. They

were married [in] December 1979. There are three children of the marriage, [D] born [in] June 1989 and twins, [P] and [J], born [in] October 1995. The parties were divorced on 20 December 2001.

7 In his Judgment delivered 18 January 2007 the former Chief Judge of this Court

sets out:

“Section 79(5) application

3. At the commencement of the trial, counsel for the wife sought an adjournment pursuant to s 79(5) of the Family Law Act 1975. The application was made on the basis that there was likely to be a significant change in the husband’s financial circumstances. The complaints generally were:

(a)	that the asset pool was unable to be determined conclusively because the husband had shares in [AE] Limited and [BE] Pty Ltd held by the husband but which were in escrow and the true market value could not be determined until they were no longer in escrow. Furthermore, the only valuation of the shares was the husband’s estimate of value;
(b)	the husband was engaged in Supreme Court proceedings with [a finance company] relating to [an investment] which, if he was unsuccessful, would result in his having to pay in the vicinity of $150,000 together with costs; and
(c)	shortly before trial the husband disclosed a self-managed superannuation fund.

[2008] FCWA 55

After hearing argument I dismissed the application for an adjournment indicating that I would give reasons for so doing in the principal judgment in this matter.

4. On 17 March 2006, I dismissed an application brought on behalf of the
wife that a trial date of 27 March 2006 be vacated.

5. The primary reason given for the application to vacate the trial date was that the husband had made inadequate disclosure and given inadequate discovery and that it was likely that he had hidden and/or overseas assets. The only matters for determination at trial are financial. These proceedings have been on foot since 2001. The file comprises some nine volumes and occupies two full boxes. It has already occupied far too much of the Court’s time.

6. This is because from the beginning the wife appears to have convinced
herself that the husband has hidden assets.

7. The wife has made extensive enquiries. As was stated in a judgment of Martin J, delivered on 2 December 2005, up until August 2004 the wife had issued at least 22 subpoenas to various companies. On 2 December 2005, Martin J granted the wife leave to file a further nine subpoenas and on 13 February 2006 she was granted leave to issue another nine subpoenas. It appears that she has made numerous personal enquiries of institutions and business associates of the husband.

8. Notwithstanding all of these enquiries, counsel for the wife was unable to point me to the discovery of even 1 cent of hidden or overseas assets. Nor did he point me to any documents that would tend to establish that the husband had hidden assets.”

8 After delivery of judgment on 30 January 2007 counsel for the wife raised an

issue that the shares of [AE] and [BE] which had been a contentious trial issue were
“substantially now out of escrow and are much more readily quantifiable”.

9 Despite what appeared to be concerns over a change in the financial landscape

there was no application to re-open matters before the Honourable Chief Judge Holden
(as he then was) and orders were pronounced.

10 The wife now makes her application pursuant to s 79A of the Act. It was filed on 29 January 2008.

Legal Principles – summary dismissal

11 Kirby J in Lindon v The Commonwealth [No. 2] (1996) 70 ALJR 541 at 544-5 (references omitted) sets out the principles which govern an application for summary relief:

“The approach to be taken by the Court to the Commonwealth's
application for summary relief is not in doubt:

[2008] FCWA 55

1. It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against Government and other powerful interests. This is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the Court, is rarely and sparingly provided;

2. To secure such relief, the party seeking it must show that it is clear, on the face of the opponent's documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious;

3. An opinion of the Court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment;

4. Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of demurrer. If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts;

5. If, notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading. A question has arisen as to whether O 26, r 18 applies to part only of a pleading. However, it is unnecessary in this case to consider that question because the Commonwealth's attack was upon the entirety of Mr Lindon's statement of claim; and

6. The guiding principle is, as stated in O 26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the Court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the Court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit”.

12 Those principles have been consistently referred to and adopted by the Family

Court of Australia. Bigg v Suzi (1998) FLC 92-799 referred to them and that case was later quoted and adopted by the Full Court in Pelerman v Pelerman (2000) FLC 93- 037 at page 87,582 as follows:

[2008] FCWA 55

“(a)	The power of a summary dismissal is a discretionary one.
(b)	Relief “is rarely and sparingly provided”.
(c)	The parties seeking summary dismissal must show that the application is “doomed to fail” or has been otherwise described “that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious”.
(d)	A weak case or one that is unlikely to succeed is not “sufficient to warrant termination”.
(e)	“If there is a serious legal question to be determined, it should ordinarily be determined at a trial”.
(f)	“If notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a Court will ordinarily allow that party to reframe its pleadings”.”

13 These principles were also adopted in Beck and Beck (2004) FLC 93-181 at page 79, 051 and most recently by Chief Justice Bryant in Bain Pacific Associations & Ors and Kelly & Ors (2006) FLC 93-270.

14 The Family Law Rules 2004 also make provision for applications for summary orders in r 10.12. Relevantly here, that rule provides for such an application where a party claims that an application or response is frivolous, vexatious or an abuse of process or that there is no reasonable likelihood of success. The Explanatory Statement considers this process should only be used when the respondent has no realistic prospect of success.

15 The matter of law for the Court to determine is whether the evidence put forward by the Applicant, if accepted, is capable of supporting the claim made.

16 In Custodio and Pinto & Ors (2006) FLC 93-279 Finn J noted (at 80,760) that there are limitations on the material upon which an applicant for summary dismissal can rely in establishing a case for that relief. She noted that in order to secure relief by way of summary dismissal, the party seeking it must show that it is clear on the face of the opponent’s documents that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious. This was also considered in Bigg v Suzi (supra) where the Full Court referred at paragraph 6.31 to the fact that the wife, who was the applicant for summary dismissal of a s 79A application filed by the husband:

“….had no right to adduce any evidence at the summary hearing to contradict the evidence of the husband or to seek to contradict any inference which it might be submitted should be drawn from that evidence.”

17 Kirby J in Lindon (supra) pointed out that the parties seeking the relief must show that it was clear on the face of the opponent’s document that there was a lack of

[2008] FCWA 55

a reasonable cause of action or were advancing a claim that was clearly frivolous or
vexatious.

18 Finn J in Custodio (supra) referred to the decision in Bain Pacific Associations & Ors and Kelly & Ors (supra) in which the Full Court referred to the consideration of the issue in Beck (supra) at 80,761 observing:

“21…..that apart from material in the case of the respondent to an application for summary dismissal, the court may have regard to relevant non-contentious facts, even if raised by the applicant for summary dismissal.”

19 In Beck (supra) the Full Court set out certain passages from the joint judgment of Mason CJ, Dean and Dawson JJ in Webster v Lampard (1993) 177 CLR 598:

“………The power to order summary judgment must be exercised with ‘exceptional caution’ (General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, at p 129) and ‘should never be exercised unless it is clear that there is no real question to be tried’ (Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, at p 99). As Dixon J commented in Dey v Victoria Railways Commissioners ((1949) 78 CLR 62 at p 91):

‘A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his (or her) case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether a fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.’”

20 Apart from non-contentious material I have disregarded any evidentiary material on behalf of the Applicant for summary dismissal.

Facts relied upon by the wife

21 The gravamen of the wife’s s 79A application is that there has been material non

disclosure by the husband between the date of the trial, at least, and the giving of
Judgment.

22 The main company in question is [AE] Ltd, incorporated on 16 November 2004 and of which the husband is the chairman of the Board of Directors. At the time of trial it was a privately owned company. The company was listed on the Stock Exchange on 1 July 2006.

23 [Ms R] says there are specific documents that should have been disclosed:

[2008] FCWA 55

•	Notice of the 2005 Annual General Meeting of [AE] Ltd lodged with the Australian Securities and Investment Commission on 20 September 2005;
•	Documents showing lodgement of the prospectus with the
Australian Securities and Investment Commission on

24 April 2006;

• 2006 Annual Report for [AE] Ltd signed 23 March 2007 but relating to activities in 2006 about which she says documents existed.

24 She says that the shares owned by the husband and referred to in the judgment

although in escrow at the time of the trial, were substantially undervalued. She says the value and character of the shares were known to the husband at the time the orders were pronounced on 30 January 2007 but were not made known to her. The effect of this if she had known about it, she says, would have been a substantial increase in the asset pool such that her entitlement would have been greater.

Section 79A

25	Section 79A(1) provides as follows: S 79A
(1) Where, on application by a person affected by an order made by a court under s 79 in property settlement proceedings, the court is satisfied that:

(a)	there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance;
…....

the court may, at its discretion, vary the order or set the order aside, and if it considers appropriate make another order under s 79 in substitution of the order so set aside.

26 The authorities are clear that the notion of a miscarriage of justice concerns the

integrity of the judicial process. Any miscarriage must arise out of that process (Clifton and Stuart (1991) FLC 92-194, Bigg v Suzi (supra)). In Suiker and Suiker (1993) FLC 92-436 at 80,472 the Full Court observed that the expression “judicial process” can refer to a variety of matters and circumstances which had an influence on the outcome of the litigation.

27 It is also well established that a miscarriage of justice can only occur by reason

of a fact or event which occurs before or at the time of the making of the order which
is sought to be set aside (Bigg v Suzi (supra), Barker v Barker (2007) Fam LR 650).

[2008] FCWA 55

28 To succeed in a s 79A application an applicant in the wife’s position must show

that something which occurred prior to or at the time the orders were made resulted in the exercise of judicial power miscarrying. Events which occur after the order is made cannot provide the foundation for an order to be set aside pursuant to s 79A(1)(a).

29 The husband’s position is as follows:

1.	The husband had no obligation of ongoing disclosure after the trial but before the judgment was given;
2.	If there was such an obligation upon him then:

• the relevant documents were publicly available documents and thus in the domain of the wife;

• ultimately the disclosure of the documents would have made no material difference to the value of the shares either at trial, at judgment or presently;

3. The wife’s s 79A application is an abuse of process.

The nature and extent of the obligation to disclose

30 There is a clear obligation under the Family Law Rules 2004 to make a full, frank and complete disclosure of financial circumstances in a timely fashion. This need for parties to make such disclosure in financial matters is not in doubt. (See Oriolo and Oriolo (1985) FLC 91-653; Black and Kellner (1992) FLC 92-287; Weir and Weir (1993) FLC 92-338 ; Tate v Tate (2000) FLC 93-047) and Kannis and Kannis (2003) FLC 93-135. Smithers J in a seminal passage in Briese and Briese (1986) FLC 91-713 at 75,180 said:

“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 Law Act 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

[2008] FCWA 55

of court or practice directions does not alter the basic principle of the need
for full and frank disclosure by the parties.”

31 Does this obligation to disclose continue after trial but before a judgment has

been given?

32 Pursuant to r 13.01(1) and (2) of the Family Law Rules 2004 the parties to a case have a general duty of disclosure of all information relevant to their case, continuing from the pre-action procedures until the end of the case. This position is reiterated at Part B, point 4 in the non-prescribed Court form titled “undertaking as to disclosure” which states “I undertake to continue to comply with my duty of disclosure until the conclusion of the case.”

33 When has a case “concluded” or “ended”?

34 The Full Court in Morrison and Morrison (1995) FLC 92-573 at 81,670

observed:

“The constant emphasis of the cases is that in order for there to be a just and equitable and appropriate order altering the interest of parties in their property there must be full and frank disclosure between them of all circumstances which may be relevant to the determination of their true financial position both presently and in the foreseeable future”.

35 Although it has not been widely dealt with, there are some cases that have interpreted the duty of disclosure to extend beyond the conclusion of the trial.

36 Stuart-Smith LJ in Vernon v Bosley (No 2) [1997] 1 All ER 614 in case relating to a damages claim for post-traumatic stress disorder considered the duty to disclose relevant information to be an ongoing one:

“If there is a continuing obligation to disclose after-acquired documents, up until what point of time does the obligation extend? Clearly in my view it must extend up to the close of the evidence; in most cases where judgment follows shortly afterwards, this in practice will no doubt suffice. But I can see no logical reason to take that as a cut-off point rather than the conclusion of the proceedings, as expressly provided in Lord Woolf’s draft rules. If the party to whom discovery of the after-acquired document is disclosed has closed his case, or the evidence as a whole is concluded, he will have to obtain the leave of the judge to recall relevant witnesses or to reopen the case. Recalling witnesses does not usually present a serious problem. An application to reopen the case in the light of the disclosure is unlikely to be entertained unless the document is of real significance and there is otherwise a risk of injustice. An unwarranted application is likely to be visited with an order for costs.

It seems to me immaterial how the further discovery is made, whether by a further formal list or simply by letter. This will probably depend on the amount of documents involved. Moreover, I do not think the existence of documents that are clearly privileged need to be disclosed.”

[2008] FCWA 55

37 His Honour went on to say at p. 629:

“It is the duty of every litigant not to mislead the court or his opponent. He will obviously mislead the court if he gives evidence which he knows to be untrue. But he will also do so if, having led the court to believe a fact to be true, he fails to correct it when he discovers it to be false. This duty continues in my opinion until the judge has given judgment.”

38 In dismissing the husband’s application for costs Moore J in Browne & Green [2002] FamCA 94 took into account the husband’s failure to disclose certain information before the judgment was delivered:

“Mr Browne’s failure to disclose his activity prior to the delivery of judgment at first instance left the wife and the court with the understanding that he had an undisputed obligation to repay $300,000 ATG and the liability to that extent was taken into account in determining the value of his net assets. That he was ‘seriously considering’ pursuing a claim to be relieved of that obligation to repay his creditor, along with substantial damages for their actions/representations, was a material fact at that point. No one could have predicted the outcome at the time, as Mr Lloyd accurately pointed out at one stage. But the claim he was working up was a substantial one and, as later events revealed, he ended up pledging a lot of money to the pursuit of it. That he actually did pursue it prior to the time his appeal was argued in the Full Court and that he pursued it actively during the time judgment there was reserved, was also a material fact.”

39 The husband successfully appealed the decision. On appeal the Full Court in

Browne v Green (2002) FLC 93-115 held that Moore J placed too much weight on the husband’s failure to disclose certain information before the judgment was delivered in dismissing the costs application. However, the Full Court did not necessary deal with whether it was correct to impose an ongoing obligation of disclosure:

“So, why then should a post hearing but pre-judgment failure to make disclosure of a prospect of litigation coupled with a financial disparity between the parties in circumstances where the applicant was herself worth in excess of $1 million be of such weight that it can be equal to the total failure of the proceedings on behalf of the wife seen in light of an open offer to settle the matter made in writing? Notwithstanding the arguments of the respondent that it was within the range of discretion, we think that such an outcome is untenable.

Had the failure of the husband to make discovery meant that the parties had wasted money in the proceedings on issues which did not have to be fought, or had the failure to make discovery had the real potential of avoiding the proceedings or somehow minimising the costs involved in the proceedings, then it would have been appropriate to give it significant weight. But in these circumstances, where the failure to make the disclosure happened after the trial and ultimately had little or no consequence for the outcome of the proceedings, it is difficult to say that it

[2008] FCWA 55

merits the removal of what might have otherwise be seen to be an
appropriate costs order in favour of the husband.

We conclude in the circumstances that far too much weight and attention was given to this issue and too little attention was given to the issue that a wife of not insubstantial means brought a wholly unsuccessful application against a husband of greater means and persisted with that application in face of what turned out to be a more than reasonable offer to settle the matter.”

40 In Geremin & Morton [2002] FamCA 788 Boland J considered the first instance decision in Browne & Green (supra):

“I must consider whether the failure of the wife to disclose, either before the trial or during the period between the judgment of O’Ryan J and the judgment of the Full Court, her changed superannuation position as a result of the legislative amendments constituted a miscarriage of justice.

The question of whether a party has an ongoing obligation to make a full and frank disclosure to the Court if a material change occurs during a period a judgment is reserved or pending appeal to the Full Court was considered in respect of a costs application by Moore J in Browne v Green (supra).

…

Her Honour in considering the requirement to make a full and frank disclosure and whether such an obligation was an ongoing one referred to Vernon v Bosley (supra).

…

Moore J concluded at paragraph 70 of her Judgment that the husband had a duty to disclose an action brought by him against the third party to the wife, both prior to the delivery of Judgment at first instance and prior to the delivery of the Judgment on appeal.

The obligation of parties before the Court to make a full and frank disclosure of their financial circumstances goes to the core of the Court's ability to make an adjustment, if appropriate, of their property under s79 which is just and equitable. It appears to me to enable the Court to fulfil its function, a party's obligation cannot cease at the conclusion of a hearing, but must be an enduring obligation to disclose any material matter relevant to a party's financial position until the delivery of judgment, or in the case of an Appeal, until the judgment of the Full Court.”

41 In Boege & Boege [2002] FamCA 276 Boland J again referred to the duty of disclosure as an ongoing one:

[2008] FCWA 55

“Clearly property proceedings in the Court can only be properly conducted so that parties receive a just and equitable division of their property if each makes a full frank and proper disclosure of their financial affairs. That duty must be an ongoing duty where there has been a material change in one party’s circumstances including during any period from hearing until the delivery of a reserved judgment or pending the determination of an appeal.”

42 I have no hesitation in finding [Mr B] had an obligation to disclose all relevant documents to [Ms R] between the date of trial and the date of judgment.

Publicly available documents – does this make a difference?

43 The rules of the Court state that a party must disclose “all relevant information”

to his or her case. If a public record is relevant to a parties’ case then on one reading of the rules the party is under an obligation to disclose the document regardless of its public accessability.

44 In Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 at 63 Brett LJ held that every document is relevant which would not only be evidence upon the issue, but which also may either directly or indirectly enable the party requiring disclosure either to advance his own case or damage the case of his opponent.

45 In Giunti and Giunti (1986) FLC 91-759 in relation to a party’s obligation to make full and frank disclosure of their financial affairs the Full Court said at 75,555:

“....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”.

46 In Norman & Howath [2003] FamCA 1284 Le Poer Trench J considered the husband’s application to permanently stay the wife’s s 79A application to set aside consent orders. As a part of his reasons his Honour considered the merits of the wife’s application, one of which was that the husband failed to disclose his superannuation details. The husband argued that the wife had access to the information because she was a director of the relevant companies, and a trustee of the superannuation fund. The wife denied she was aware of the details of the superannuation fund. His Honour referred to cases which he stated as “differing decisions of the Court in relation to whether knowledge can be imputed in circumstances where a party has had the opportunity to acquire relevant knowledge but choses [sic] not to”, and later concluded:

“It seems to me that the Court has not really determined how much action, if any, a represented party to a consent property order, such as the wife in this case, should be expected to take. Where the wife was a director of each relevant corporate entity, the Trustee of the Superannuation Fund and

[2008] FCWA 55

physically working in the companies on a full time basis, where she has a legal right, outside of the Family Law Act, to inspect any relevant company document. Where she has legal obligations as a Trustee. Then, in those circumstances, in the absence of any other relevant fact, why should this Court not expect her, as a matter of ordinary prudence, to take at least the most basic steps of looking at any such documents as are reasonably available to her? If she doesn’t know what companies she is a director or shareholder of then these matters are easily searched through publicly available records.”

47 There is a clear distinction between this particular case and the wife’s position in

the case before this Court. These were not consent orders, the company in question was established post separation by the husband and the wife had no easy access to knowledge of its developments and workings. There was no obligation upon the wife to seek out information but rather for the husband to comply with his positive obligation to disclose all relevant documents, publicly available or otherwise, that have been in his possession or under his control.

Nexus between “suppression of evidence” and a miscarriage of justice

48 It is important to note that a failure to disclose certain evidence does not always

amount to a miscarriage of justice. In Livesey v Jenkins [1985] 1 All ER 106, Lord
Brandon noted at 119:

“I would end with an emphatic word of warning. It is not every failure of frank and full disclosure which would justify a court in setting aside an order of the kind concerned in this appeal. On the contrary, it will only be in cases when the absence of full and frank disclosure has led to the court making, either in contested proceedings or by consent, an order which is substantially different from the order which it would have made if such disclosure had taken place that a case for setting aside can possibly be made good. Parties who apply to set aside orders on the ground of failure to disclose some relatively minor matter or matters, the disclosure of which would not have made any substantial difference to the order which the court would have made or approved, are likely to find their applications being summarily dismissed, with costs against them, or, if they are legally aided, against the legal aid fund.”

49 Thus this Court needs to consider whether there is evidence, which if accepted,

would support [Ms R]’s claim that there has been a miscarriage of justice because [Mr B] failed to disclose the documents in relation to [AE] Ltd and another company, [BE] Ltd.

50 On the second day of the original trial, counsel for the husband handed up

a schedule of assets and liabilities which apparently highlighted the difference
between the parties. In so far as it is relevant the schedule sets out:

[2008] FCWA 55

Assets	Husband’s value	Wife’s Value
Shares [AE] Ltd E H	$60,000	$100,000
Shares [BE] Ltd H	$60,000	$75,000

51 The learned trial judge went on to say:

“28. The second area of difference is the value of the shares held by the husband in [AE] Ltd and [BE] Ltd. The wife does not accept the husband’s valuation but there is no other valuation and because generally I accept the credibility of the husband, I am prepared to accept that his estimates are an honest estimate of their value. The difference comes about because the husband has discounted the value of the shares because they are held in escrow and their value is subject to commercial success. There is no expert evidence as to whether or not a discount and if so, what discount, is appropriate by reason of these factors. I do not intend therefore to discount their value and they will be included in the asset pool at $100,000 and $75,000 respectively.”

52 The evidence of the husband at trial was that there was a two year escrow period on directors’ shares from the date they are listed on the Stock Exchange.

53 It is also of some relevance to refer to the husband’s affidavit at trial (paragraph 5 of affidavit sworn 22 March 2006):

“I estimate that these shares have a present value of $120,000 ($60,000 in [SN] Pty Ltd and $60,000 in [SS] Fund). This takes into account a discount for the fact that those shares will be held in escrow, the fact that their value in two years time is completely unknown and subject to market conditions and takes into account an estimate for tax if they were sold after coming out of escrow.”

54 [SN] Pty Ltd was established by [Mr B] in 2002. The wife deposes that he is the

sole director and sole shareholder of [SN] Pty Ltd. She says he has predominantly used [SN] Pty Ltd as the entity through which he operates his corporate consultancy business.

55 The husband was cross-examined during the course of the trial about his involvement with [AE] Ltd.

56 It became apparent the husband had disclosed a number of documents. He had

provided [Ms R]’s solicitor with a sample of application forms for pre-initial public offer applications. These showed the shares being offered at 10 cents each. This was the basis upon which the husband had arrived at a value for the two million shares he was to receive if a float went ahead.

57 Additionally he provided pages 12 to 15 and page 30 of a draft financial

statement of the company. He said that the draft financial statement was still being

[2008] FCWA 55

prepared but he had specifically requested that some documents be provided to show to [Ms R]’s solicitor some of the capital structure in place at December 2005. He accepted that it was not a complete set of the company documents as they had not been audited or completed. The documents provided had not been available any earlier. They were specifically prepared at his request.

58 The Court has some disquiet in relation to the exchange between [Mr B] and

cross-examining counsel. At times it appears [Mr B] had made a subjective decision
about what is to be provided pursuant to a duty to disclose and what is relevant.

59 In Barker (supra) the Court observed that relevance is an objective, not a subjective test to be determined in the context of factual matrix of the case. The fact that an honest but erroneous determination of relevance is made does not discharge the obligation to make discovery or disclosure and the ultimate significance of the fact or document in light of other matters is for the Court, not the litigant, to determine. The Court referred to a decision of Menzies J in Mulley v Manifold (1959) 103 CLR 341 where his Honour held that if it appears that a party when making discovery “has excluded documents under a misconception of the case”, then further discovery will be ordered.

60 It is clear that [Ms R] did not have access to all available information before or

at the time of the trial. The Notice of the 2005 Annual General Meeting and proposed resolutions although lodged at the Australian Securities and Investment Commission on 20 September 2005 had not been disclosed to her.

61 Attached to the Notice of the 2005 Annual General Meeting as “annexure A –

valuation of preference shares” is correspondence from BDO Consultants (WA) Pty Ltd to the directors of [AE] Ltd dated 16 June 2005. BDO had been engaged by [AE] Ltd to prepare a valuation of the convertible preference shares in relation to which the company was seeking shareholder approval for their issue to director related parties. Based on the valuation methodology adopted and the assumptions made, BDO valued the convertible preference shares at $149,000 for class A shares and $89,500 for class B shares.

62 At the Annual General Meeting a resolution was passed authorising the directors

of the company to grant 2 million options to [SN] Pty Ltd or its nominee and also to authorise the directors to issue two convertible preference shares, comprising one A class convertible preference share and one B class convertible preference share to [SN] Pty Ltd or its nominee.

63 The correspondence of 16 June 2005 was not disclosed. [Mr B] appears to be

saying it was attached to publicly available documents. I do not accept this to be
appropriate compliance with his obligation of disclosure.

64 The husband, for the purpose of his application for summary dismissal deposes:

“26. The convertible preference shares (CPS) to which the applicant refers in paragraph 25 of her affidavit had no value at the time of the trial because their coming into existence depended on the company becoming publicly listed. Even now that the company has listed the CPS are not

[2008] FCWA 55

saleable or transferable and are dependent upon the company meeting various milestones before I am entitled to take up the CPS’s. CPS’s are incentive shares for company executives but have no actual value until certain milestone events are achieved. The milestone events are set out in the prospectus (which hadn’t been printed at the time of the trial) but has subsequently become publicly available information since June 2006, that is, 6 months prior to the Reasons being delivered.

27. Convertible preference shares cannot have any value as they cannot be sold by me, they cannot be traded by me and they rely on future events happening over which I do not have any personal control. They therefore cannot at any time have any value until the future events have occurred. Even if those future events occur, they are then in escrow and still cannot be sold or traded.”

65 I accept that at the trial there was no guarantee whatsoever that [AE] Ltd would

actually list. However by the date of judgment it had listed and the class A convertible preference shares had actually converted. There was a two year escrow period from 1 July 2006 on all the shares. The converting of the class B shares is dependent on the performance of the company and it achieving certain milestones.

66 It is also likely that the content of the 2006 annual report may well have become

available, although perhaps on a piecemeal basis, between the time of trial and the date of judgment. The original Court was not appraised about the share options being granted to [SN] Pty Ltd or its nominee or the convertible preference shares being held, one of which was converted due to the listing on 1 July 2006.

67 The total net assets as found by the learned trial judge were $433,849. In

June 2005 BDO had valued the convertible preference A class shares at $149,000 and the B class shares at $89,500. If a value was attributable to the shares or it was a matter for consideration pursuant to s 75(2) of the Act, taking into account the total pool of assets, a different outcome may have been appropriate.

Abuse of process

68 I now turn to [Mr B]’s contention this application is an abuse of process by

[Ms R].

69 The judgment delivered on 18 January 2007 is critical of the wife’s conduct of

the proceedings.

70 [Mr B] deposes “some time ago orders were made by Judge Thackray that the

applicant not be permitted to bring any further application without first seeking leave
of Judge Thackray to do so.”

71 Mr S E Thackray SM (as he then was) made an order on the 26 March 2003, in

the context of child related matters, that certain interim applications were not to be relisted until a report from Relationships Australia had been distributed or there was leave of the Court. I do not see this as being relevant to the present application.

[2008] FCWA 55

72 Despite previous criticism of the wife and her behaviour it is necessary to ascertain whether her application before me is an abuse of process.

73 I am satisfied the wife has been able to demonstrate, on the face of it, a failure

by the husband to comply with his obligation to make a full and frank disclosure. The information the wife subsequently obtained has warranted her application. She sought appropriate legal advice and was represented by counsel in the summary dismissal application.

74 However, [Ms R] has adopted a scattergun approach. I am not satisfied that the

failure to disclose specific documents in relation to [AE] Ltd automatically means there has been a failure to disclose in relation to another company [BE] Ltd or a failure to disclose generally.

75 I am not satisfied that her actions in relation to the s 79A application do represent an abuse of process.

Conclusion

76 I am not satisfied [Ms R]’s application is “doomed to fail”. There is some

evidence which if accepted, may warrant a different result in the s 79A proceedings
such that the orders are varied. This requires determination at a s 79A hearing.

Security for costs

77 I am not satisfied that there are grounds upon which an order for security for

costs can properly be made in this matter given my preliminary view of the husband’s failure to comply appropriately with his obligation of disclosure. However I will hear further from counsel in that regard and also in relation to the question of having the s 79A application dealt with as a preliminary issue.

Orders

78 The orders I intend to make are:

1.	The Respondent’s application for the summary dismissal of the Applicant’s s 79A application filed 29 January 2008 be dismissed.
2.	Costs in relation to this matter be reserved pending the outcome of the s 79A application.

I certify that the preceding [78] paragraphs are a true copy of the reasons for

[2008] FCWA 55

judgment delivered by this Honourable Court

Associate