REAGAN & REAGAN (RE-OPENING)
[2013] FamCA 167
•18 March 2013
FAMILY COURT OF AUSTRALIA
| REAGAN & REAGAN (RE-OPENING) | [2013] FamCA 167 |
| FAMILY LAW – PROPERTY – Application in a Case – leave to re-open – where a judgment debt is entered into against the wife in the District Court of Western Australia – whether the interests of justice require re-opening of the case – where the application is granted |
| EB v CT (No. 2) [2008] QSC 306 Emaas Pty Ltd v Mobil Oil Australia Ltd [2003] QCA 232 at paragraph 19 Finbrough Investments Pty Ltd v Airlie Beach Pty Ltd (1995) 1 Qd R 12 Reid and Brett (2005) VSC 18 Summitt and Summitt (Re-opening) [2009] FamCA 365 |
| APPLICANT: | Ms Reagan |
| RESPONDENT: | Mr Reagan |
| FILE NUMBER: | BRC | 728 | of | 2010 |
| DATE DELIVERED: | 18 March 2013 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Forrest J |
| HEARING DATE: | 18 March 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Cameron |
| SOLICITOR FOR THE APPLICANT: | Schultz Toomey O'Brien |
| SOLICITOR FOR THE RESPONDENT: | Mr Carstensen as Town Agent for |
Orders
Leave is granted to the applicant wife to re-open the case and put into evidence further affidavits filed 1 March 2013 and 15 March 2013.
The parties’ costs of and incidental to this application are reserved.
Certify for counsel.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Reagan & Reagan has been approved by the Chief Justice 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
EX TEMPORE
REASONS FOR JUDGMENT
This matter is a property division proceeding between the parties that went to trial before me over several days on two different occasions during the course of 2012 and in which I am still reserved in respect of the determination of the dispute and the making of my judgment. The wife comes before the Court again today on an Application in a Case in which she, I have determined, effectively asks for leave to re-open her case in respect of one very particular aspect of the matters that were dealt with in the trial.
As I indicated in discussion with counsel today, my understanding of the authorities in respect of an application to re-open is that the guiding principle in deciding whether to grant leave to re-open is whether or not the interests of justice are better served by allowing or rejecting the application for leave to re-open. In that respect, I refer to the decision of the Queensland Supreme Court in Finbrough Investments Pty Ltd v Airlie Beach Pty Ltd (1995) 1 Qd R 12 at 16-17, that was cited with approval by the Court of Appeal of the Supreme Court of Queensland in a case of Emaas Pty Ltd v Mobil Oil Australia Ltd [2003] QCA 232 at paragraph 19. I also refer to the decision of his Honour Justice Applegarth in a case of EB v CT (No. 2) [2008] QSC 306 and the decision of his Honour Justice Murphy in this Court in Summitt and Summitt (Re-opening) [2009] FamCA 365.
The granting of leave to re-open is a discretionary matter to be determined on the basis of whether or not justice would be better served by granting it or refusing it. Some of the matters that are relevant to the determination of the exercise of the discretion were listed in a case called Reid and Brett (2005) VSC 18 at paragraph 41. As I said in exchange between bench and bar earlier, they are as follows:
(a)The further evidence is so material that the interests of justice require its admission;
(b)The further evidence, if accepted, would most probably affect the result of the case;
(c)The further evidence could not by reasonable diligence have been discovered earlier; and
(d)No prejudice would ensue to the other party by reason of the late admission of the further evidence.
The application before me to re-open the wife’s case at trial is not one to somehow overcome a technical defect in the evidence that she put before the Court, nor is it an application to tender evidence that was omitted to be tendered into evidence by inadvertence on her part or the legal representatives who represented her at trial. The application seeks to put before me fresh evidence about one very discreet issue.
The parties agreed for the purposes of the trial that there was a liability that they were jointly responsible for in respect of borrowings that had been made some years prior to the breakdown of their marriage for the purposes of entering into managed investment schemes that involved timber plantations. At some point the liability was assigned from one party to another insofar as the creditor was concerned and then ultimately assigned again to a further third party creditor. As I said, the parties were never in any dispute that the debt was a debt they were both responsible for. I was taken to a paragraph in the husband’s affidavit of evidence in chief that he relied upon at the trial that confirmed that was his position. The parties did not spend, from my memory, any time really at all exploring this issue at trial. There was not really any dispute between them about it.
They both presented to me in their written submissions, filed after the conclusion of the trial, schedules that they were contending for in respect of the assets and liabilities of the parties. These schedules were filed in October 2012. In those schedules they presented this particular liability in an interesting way, notwithstanding the fact that they each agreed that it was a joint liability of the parties. I say “interesting” because they presented it as one of 50% responsibility to the husband on one side and 50% responsibility to the wife on the other. That effectively presented me with the position of putting each party’s responsibility for half of the debt on each side of the asset/liability ledger when I was undertaking the process of determining my decision in the matter.
The evidence that the wife seeks to put before the Court on the re-opening of the case is that she learned in December 2012, after the case had concluded, that a judgment had been entered against her in the District Court of Western Australia by the creditor for the full amount of the debt. When this fact was brought to her attention by solicitors acting for that judgment creditor, she was informed by them that if it was not paid in full within a fairly short period of time, steps would be taken to cause her to be made bankrupt.
Evidence before me today suggests that the husband has thought for some time that the parties had a possible defence to the claim against them. Indeed in 2010, his solicitors sent a letter to the wife’s solicitors where they drew the wife’s solicitors’ attention to the existence of the debt but pointed out that the husband considered there were possible defences and advised the wife’s solicitors that the parties’ best prospects of successfully defending the claim would be achieved if the wife’s solicitors and the wife took no further steps in the matter that might potentially compromise the steps that the husband was taking to cause the debt to be successfully defended or at least avoided.
It seems that the wife’s solicitors and the wife at least took that to heart. I do not have any evidence before me that suggests they did anything other than sit back and consider it to be a liability, doing nothing about seeking to have it avoided or somehow set aside before some time last year when the wife was actually served with a Writ of Summons and a Claim in the Western Australian Court for the entire amount. Although, on the face of the document it appeared that the husband’s name was also listed as a defendant, I have no evidence that the husband actually was served with the Claim or has been dealt with in respect of it in any way or that he dealt with it in any way by putting in a Defence.
Relevantly, upon the wife being served with the Claim, the evidence that is before me shows that the wife’s solicitors appropriately went back to the husband’s solicitors asking them whether or not the husband had been served with the Claim and what was going to happen about the notion of putting in a joint Defence to the Claim, having regard of course to the husband’s position that there might be a possible defence. The request was initially ignored and then pursued quickly because of the time within which a person must file a Defence and the fact that such time was expiring.
Eventually, the wife’s solicitors, on pressing, got a response from the husband’s solicitors which was effectively that the husband believed that it was best for the wife to take her own steps and own advice about defending the matter. The wife’s position was then and at the time of trial that the matter could not be defended and the amount was owing. The husband, on the evidence that I have before me, took no further steps to assist her or to appraise her in respect of what he considered to be the possible defence or to help her in any way defend that matter.
It seems, therefore, in my view, that having left the wife to fend for herself in that regard with that position resulting in the wife having judgment entered against her for the full amount of the liability, that to proceed on the basis of the positions that the parties left the Court in at the end of the trial would result in injustice and inequity when I ultimately come to do my judgment in this matter. In such circumstance, the wife would only be treated on the positions that the parties left me in at the end of the trial, having responsibility for half of that liability, when in actual fact she is now entirely liable for the full amount.
Accordingly, I am satisfied the interests of justice require the exercise of my discretion in favour of granting the wife leave to re-open her evidence and to include the affidavit material that she filed in respect of today’s application as evidence in the trial so that the position that I understand the parties are left in moving forward is one where the wife is treated as having full responsibility for the entirety of that debt, as the evidence shows it now seems that she has. I do grant leave to the wife to re-open the case and to put further evidence before me in that respect.
The second part of the application involves how I might otherwise on an interim basis, further deal with the issue in respect of the money owed. The wife came today on her Application in a Case seeking an order that I split superannuation from the husband’s superannuation interests across to her using the relevant superannuation splitting provisions of the Family Law Act, so that his half of that debt is borne by him even at this interim stage. She, alternatively, asks for an order that he pay a cash amount across to her representing that half.
After discussions between me and counsel for the wife, he took further instructions and came back to the Court acknowledging that the wife could indeed pay the entirety of the judgment debt and interest thereon from her own superannuation fund. He then made an application for an order that enjoined the husband from disposing of a sum of money represented by assets in his superannuation fund equal to half of that amount, effectively to somehow try to protect at least the retention of that much money until I decided the case and given judgment.
The husband was represented by Mr Carstensen, solicitor, who opposed the orders sought by the wife and the husband filed an affidavit of evidence in which he deposed to some issues in respect of the superannuation fund that he suggested made it inappropriate to be ordering that an amount be split out of the superannuation fund at this interim stage to cover that particular amount, being his half share of that debt.
Counsel for the wife took me to the balance sheet of the husband’s superannuation fund that is exhibited to the husband’s affidavit that was filed in respect of this application. It shows the assets and liabilities and financial position of the Reagan Superannuation Fund as at 30 June 2012, which was before the end of the trial last year, as compared to the position as at 30 June 2011. A submission was made that the difference between the figure standing as the net amount at the bottom of the balance sheet as at 30 June 2011, namely $2,056,056, and the amount standing at the bottom of the balance sheet for the year 30 June 2012, namely $409,078, represented evidence of the serious dissipation of the funds and that there is a risk if that continues of the wife’s entitlements to property division being prejudiced without the injunction sought. Counsel for the wife was at the disadvantage of not having appeared at the trial or on the way through the preparation of the trial and was not possessed of some of the knowledge that the Court was in respect of matters pertaining thereto.
I particularly refer to the most obvious explanation for the difference between those two amounts which is the alleged failure of some overseas managed investment to the sum of $1.5 million that is clearly reflected on that balance sheet. Indeed I recall that the husband attempted to put evidence before me for the trial going to that issue. That evidence was objected to and successfully kept out by the wife because of the lateness of it and the lack of disclosure in respect of it at the time. I am satisfied at this point in time that that particular matter, namely the difference between the two figures at the bottom line of the superannuation fund 30 June 2011 and 30 June 2012 is not really a matter directly pertinent to the need to restrain the husband from further dissipating the funds out of that superannuation fund now as opposed to the position as it stood at the end of the trial.
I am informed by counsel for the wife this morning that the wife’s expectation, if her case is accepted in respect of what makes up the pool and as to the just and equitable percentage division in respect of the pool of property at the end of the trial, was that the husband would be ordered to pay or transfer property to her of a value in the order of $1 million and the expectation was that it was to come from the super fund. However, that said, the facts that I have just been over in respect of the value of the superannuation fund as at 30 June 2012 suggests that might have been at least something that was hoped for, although not necessarily something that can be achieved.
I am mindful of the fact that at the end of the trial no application was made to the Court to grant any injunction against the husband. I am not sure though from memory whether or not there were any injunctions in existence prior to the trial that may have indeed continued through from the trial given the fact that I have remained reserved in the matters since trial. In all the circumstances, I am not persuaded this morning on the material that is before me that there is a compelling case for the injunction against the husband that the wife seeks and I dismiss that part of her application.
I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 18 March 2013.
Associate:
Date: 20 March 2013
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