Reagan and Reagan (No 2)

[2011] FamCA 212

FAMILY COURT OF AUSTRALIA

REAGAN & REAGAN (NO 2) [2011] FamCA 212

FAMILY LAW – PROPERTY SETTLEMENT – Where injunctions prevent the husband from dealing with property relevant to proceedings that exceed $5000 – Where injunctions exist over property that includes the family superannuation fund – Where the interests of other family members are disrupted by the current injunctions – Previous orders varied by consent to exclude the family superannuation fund from the property over which the injunctions are granted

FAMILY LAW – PROPERTY SETTLEMENT – Where each party has filed complex material immediately prior to hearing dates – Where the husband seeks the appointment of single expert witnesses – Where the wife has engaged a forensic accountant to value the matrimonial assets – The burden of injunctions upon the husband’s business dealings to be balanced against the wife’s entitlement to protective relief – Issues in dispute can only be determined by further expert opinion – Matter adjourned to a later date that will allow time for expert consultation but also ensure expeditious resolution of injunctions – Consent orders made as to disclosure of relevant documents – Costs reserved to trial judge

APPLICANT:

Ms Reagan

RESPONDENT: Mr Reagan

FILE NUMBER: BRC 728 of 2010

DATE DELIVERED: 28 March 2011

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Barry J

HEARING DATE: 28 March 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Looney of Counsel with Mr Shoebridge of Counsel appearing for the Applicant Wife

SOLICITORS FOR THE APPLICANT: Schultz Toomey O’Brien Lawyers

COUNSEL FOR THE RESPONDENT: Mr Foley of Counsel with Mr Houghton of Counsel appearing for the Respondent Husband

SOLICITORS FOR THE RESPONDENT: North Coast Law

Orders

UPON THE UNDERTAKING OF THE WIFE TO REMOVE THE CAVEATS WITHIN SEVEN (7) DAYS HEREOF, IT IS ORDERED THAT:

1. The Wife’s Application in Form 2 filed 15 February 2011 be adjourned before a Registrar at 3.00 pm on 31 March 2011 at the Brisbane Registry of the Family Court, for the making of further directions for an interim hearing to be listed at a mutually convenient time before the Honourable Justice Murphy.

IT IS ORDERED BY CONSENT UNTIL FURTHER ORDER THAT:

1. On or before 18 April 2011, each party make, file and serve an affidavit of disclosure annexing a list of documents to which the duty of disclosure applies and then make available for inspection by the other party, all documents so disclosed which are not the subject of an objection to produce.

1. Without limiting the generality of paragraph (2) above, the Husband is to make disclosure to the Wife of the documents described in Annexure A to the original application insofar as they are in his possession or control.

1. Without limiting the geniality of paragraph (2) above, the Wife is to make disclosure to the Husband of the documents:

a.copied by the Wife from the computer disc referred to in paragraph 37 of her affidavit filed on 15 February 2011, provided that the provision of an electronic copy of same shall satisfy this clause;

b.        in relation to her superannuation funds; and

c.in relation to her income tax return and assessment notice for the financial year ended 30 June 2010.

1. The directions made on 27 January 2011 by Registrar Coutts be set aside.

1. The Orders made on 28 February 2011 be varied so as to include the following Order:

“3(a) The property referred to in Order (3) herein excludes all property held by or

on behalf of [N Pty Ltd] as Trustee for the [Reagan Superannuation Fund].”

1. Costs of each of the parties be reserved.

It is noted that publication of this judgment under the pseudonym Reagan & Reagan (No 2) is approved pursuant to s 121 (9) (g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER:  BRC 728 of 2010

Ms Reagan

Applicant

And

Mr Reagan

Respondent

REASONS FOR JUDGMENT

1. On 15 February 2011 the applicant in these proceedings, Ms Reagan, amended her initiating application.  The orders sought cover nine pages and include 29 separate orders, many with subclauses in them.  By way of example, they include detailed orders in relation to the company M Pty Ltd, as trustee for the Reagan Family Trust.  By paragraph (1) she seeks the transfer to her of a property, Lot … on registered plan … .  By paragraph (2) she seeks that the property at P Street, be transferred to her in exchange for the payment of $620,000.  There are detailed orders sought in relation to various trust assets. 

2. There are detailed provisions about default. There is a separate order sought in relation to the property at S. She seeks that she retain, for her own use and benefit, all her interest in the Ms Reagan Superannuation Fund, estimated at $1.95 million and that the husband retain, for his sole benefit, all his interest in the Reagan Superannuation Fund, subject to paragraphs (3)(c), (8)(a) and (8)(b). Paragraphs (8)(a) and (8)(d) the wife is seeking an order under section 90MT (1)(a) of the Family Law Act, that whenever a splittable payment becomes payable in relation to the husband’s fund, she be entitled to be paid an amount calculated in accordance with the regulations, using a base amount as at the date of these orders, in the sum of $2 million.  At paragraph 15 she seeks a further order for a base amount of $500,000 in relation to another superannuation fund.  She seeks orders for cash payments in paragraph (19), issue of outstanding loans, caveats and a variety of orders.  Suffice to say, the orders sought are complex, indeed.

3. The wife engaged a forensic accountant, Mr M, to prepare a report valuing the matrimonial assets.  Mr M prepared a preliminary report on 19 May last year, that is, with the second report annexed to an affidavit he swore on 25 February this year.  The matter was listed before the Court on

   
   

   28 February 2011, a Monday, and the wife filed this very detailed report on the Friday before the hearing.  The husband, not unreasonably, protested about the late filing. 

4. At paragraph (2.1) of that report, I note, in summary form, Mr M says:

   “My indicative assessment of value of the pool of those assets that I have reviewed to date is $16,484,125, as set out in schedule (1) hereto.” 

5. At paragraph (1.4) of his report, he notes:

   “I have to date requested that the husband provide further documents, information and explanations that I have identified from my review and it obviously would be required if I am instructed to undertake a detailed financial analysis of all entities, assets and investments, etcetera, that comprise the parties’ asset pool.”

6. In schedules 4 to 9 of his report, Mr M poses a series of detailed questions to the respondent husband.  It would be fair to observe that the matters raised in schedules 4 to 9 certainly raise more questions than answers.

7. For reasons I gave on 28 February 2011, orders were made, the most important of which were a series of injunctions as sought by the wife, relating to the operation of the various business entities operated by the husband.  I then proceeded to adjourn the matter through to today’s date.  On today’s date, it is pleasing to note there has been some progress, albeit rather tentative and somewhat slight.  I am being asked to make consent orders for discovery.  There is also a consent order that the injunctions covering the superannuation assets be lifted.  There is also agreement to lift caveats over the various items of real estate, subject, of course, to conditions if the injunctions remain.

8. Two issues of significance remain for determination, on an interim basis.  The first is whether the injunctions of 28 February 2011 should remain in place.  The second is whether the Court should make orders for the appointment of single experts as sought in the application filed by the husband on 25 March 2011.   At paragraph (1) of that application he seeks the appointment of Accounting firm 1 to value certain assets as set forth in a schedule annexed to the application and in paragraph (2), a single expert be appointed for the purposes of investigating and reporting on the issues raised by Mr M.  I indicated that if an order was to be made, I would have thought rather than being a critique of Mr M’s report, it should simply be a single expert appointed to value the matrimonial assets and that suggestion was not opposed.

9. The affidavit filed on Friday last by Mr Reagan was, on one view, responsive and not particularly lengthy.  It is a nine-page affidavit covering only some 29 paragraphs.  However, there are 16 annexures.  By way of example, annexure 14 contains 40 pages.  Annexure 15 contains 20 pages.  Many of the other annexures are multiple pages.  Suffice to say, in the time that I have had available to examine this document, it is a lengthy, complex document.  There has been no opportunity for the wife or Mr M to consider the contents of the document and to adequately respond.  It may be, for example, that it clarifies all of the detailed queries raised by Mr M.  On the other hand, it may lead to even more questions being asked by Mr M.  I am unable to predict what the response will be.

10. I note in paragraphs (8) and (9) of this affidavit, the respondent husband deposes as follows. 

    “8.The affidavit of [Mr M] filed on 25 February 2011, contains as an annexure ‘A’ a report which is dated 19 May 2010.  [Mr M] deposes at Point 7 in his affidavit as to my being not forthcoming with information required to complete his investigations and then goes on to provide at Annexure ‘D’ a report of outstanding items dated 25 February 2011.  In this affidavit I deal with only the outstanding matters arising from that further report since I assume that other matters raised in the earlier report are therefore dealt with.  I further deny that I have failed to provide information as requested.  Now produced and shown to me and marked “[…]03” are true copies of cover emails and summaries of all of the information provided to
    [Mr M] or the wife’s Solicitors during the course of his investigations.  I have available to tender a copy of the more important communications which are voluminous.

    9.The updated report of [Mr M], dated 25 February 2011 is somewhat unclear as to matters which he considers to be outstanding.  In this affidavit I will endeavour to address those items which appear to be at issue.”

11. I accept that, for present purposes, the husband has largely set about on that task.  The reality of determining the outstanding issues is that because of impending retirement, I am unable to offer any more dates.  I have made arrangements for another Judge, in this registry, to take over this matter.  I fully appreciate the injunctions are capable of imposing a considerable burden on the efficient operation of the various business enterprises.  Balanced against this, the wife is entitled to the protection of injunctive relief in the event there is evidence the husband has not acted, at all times, in good faith.  I note the husband is a chairman of a publicly listed company.  I expect he is fully aware of corporate obligations and director’s duties.

12. However, from the wife’s perspective, she says that the two current issues in dispute can only be adequately determined by ascertaining the further opinion of Mr M and with that proposition, I totally agree. 

13. I offered the parties two dates before Murphy J, being 13 April and 15 April 2011.  Those dates, to my mind, balanced the need for expeditious resolution of the injunction issue, with the fairness to the wife to consult further with

    
    

    Mr M.  Unfortunately, the dates were not suitable for either counsel and it was further submitted by the wife’s side, that they would in fact require more time than that to adequately respond to the complex issues.

14. Counsel have urged me to deal with the outstanding issues.  I decline to do so.  I am of the view that it would be unwise of me to take this course.  Counsel for the husband may use his powers of advocacy to persuade me to remove the injunctions, but in two to three weeks time, Mr M may provide a damning assessment of the information supplied.  Counsel for the wife may use his powers of advocacy to persuade me to leave the injunctions in place, only to have Mr M confirm the legitimacy and accuracy of all the transactions engaged in by the respondent.

15. The matter will be in Murphy J’s docket.  Experience tells me that pre-trial determinations of this nature are best conducted by the ultimate trial Judge.  I am firmly of that view.  I have not had the opportunity to discuss this matter in any way, shape or form, nor would I, with Murphy J, other than to make the necessary arrangements to have it transferred into his list.

16. This matter is already listed before Registrar Coutts.  I will list this matter before the Registrar on this Thursday and she will organise the setting of dates before Murphy J, to determine whether the injunction orders of 28 February should remain in place and whether the orders sought in the husband’s application in the case, filed 25 March 2011, should be made - that relates to the appointment of two single experts.  In addition, the Registrar is to make directions for the filing of material by the wife’s legal representatives in response to the material filed by the husband on Friday last.  That would include the filing of some form of response opposing the orders sought in the application in the case.

17. I do not accept the submission made by counsel for the husband that such material by the wife would fall into the category of a reply to a reply.  The requests were made for some time, principally through Mr M’s reports, for the husband to provide information.  I accept he may have provided that information by virtue of emails and such like.  In a court setting, I accept the provision of that material detailed and complex as it is, could well take considerable time to provide.  Effectively, it was provided in affidavit form, for the first time on Friday last.  The wife is entitled to respond to that material with the assistance of her expert, prior to the making of any further orders.

18. I will set aside the directions the Registrar has made.  Paragraph (4)(a) will be the directions made on 27 January 2011, by Registrar Coutts, be set aside.  (4)(b), the matter is adjourned to a directions hearing before Registrar Coutts on 31 March 2011, for the making of further directions for an interim hearing, to be listed at a mutually convenient time before Murphy J.  I will not make an order in terms of paragraph (5), in other words, adjourning it to10 May.  I am not sure where that date came from.  I will make an order that costs of each of the parties be reserved.  Paragraphs (3) and (7) of those draft orders will be incorporated in the draft orders.  I have now initialled and formally make the orders. 

19. There were two further matters raised by counsel for the husband and that is altering the orders of 28 February so that instead of the husband having the obligation of obtaining the approval of the applicant wife, he simply has to notify her.  I am not minded to go down that pathway at 4.30 pm on a Monday.  It is a matter that can be raised between the parties and if no satisfactory response is received, it can be determined by Murphy J, when looking at the injunction issues. 

20. There was a further matter raised by counsel for the husband, calling upon the wife to purchase what is known as the Property at P Street, on terms as set out in paragraph (2) of her amended application of 15 February.  I accept the force of the submissions made by counsel for the wife that the wife is not required to enter into any particular orders where she has filed an application seeking some 29 separate orders.  It is a matter for the parties to negotiate. 

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Barry delivered on 28 March 2011.

Associate: 

Date:  28 March 2011