Richards v Dare and Ors

[2001] VSC 365

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

FORMERLY FAMILY COURT OF AUSTRALIA
PROCEEDING NO. ML 6590 OF 1994

No. 6863 of 1999

DEBORAH SUSAN RICHARDS (as Executrix of the Will of EVELYN MAY RICHARDS deceased)	First Plaintiff
and
GARNET STEWART FIELDING (as Administrator of the Estate of RONALD STUART DARE, deceased)	Second Plaintiff
And
DENNIS WILLIAM DARE	First Defendant
and
ROBYN LEE FROST	Second Defendant
and
REGISTRAR OF TITLES	Third Defendant

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JUDGE:	HARPER, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	25 SEPTEMBER 2001
DATE OF RULING:	25 SEPTEMBER 2001
CASE MAY BE CITED AS:	RICHARDS & ANOR. v. DARE & ORS.
MEDIUM NEUTRAL CITATION:	[2001] VSC 365

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CATCHWORDS:      Ruling – Fraud – Application to adduce evidence from retired Family Court judge – Allegation that the defendants sought Family Court orders for the division of property to defeat the potential creditors of the first defendant – Evidence sought to be adduced about the reliability of an accountant's report used in the Family Court proceedings – Evidence of likely outcome of a contested hearing had all relevant facts been presented to the Family Court – Whether expertise in accounting required – Whether evidence relevant to the issues in dispute – Application allowed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr. P. Jewell	Barry Kenna & Co.
For the First Defendant	Mr. Ellinghaus	Ellinghaus & Lindner
For the Second Defendant	Mr. R. McInnes	Mahonys

HIS HONOUR:  

1. I have before me an application to admit the proposed evidence of The Honourable John Fogarty, a retired judge of the Family Court.  Mr Fogarty was a member of that court from 1976 to 1998.  For the latter 15 years of this period he was a permanent member of the Court's Appeal Division.

1. It is alleged by the plaintiffs that proceedings in the Family Court which were commenced by Ms Robyn Frost, the second defendant in the case before me, on 20 June 1994, were part of a scheme which is caught by s.172 of the Property Law Act 1958. So far as is relevant, that section provides that "every alienation of property made whether before or after the commencement of this Act with intent to defraud creditors shall be voidable at the instance of any person thereby prejudiced".

1. According to the plaintiffs, Ms Frost was at all material times the de facto wife of Dennis Dare, the first defendant in the case before me.  He was contingently indebted to the late Evelyn Richards whose executrix is the first plaintiff in this case.  He did not want to pay Ms Richards what he owed, or might owe, to her.  He and Ms Frost therefore devised a scheme to avoid such payment.  She instituted the Family Court proceedings alleging an irretrievable breakdown in their relationship.  It was brought on quickly:  a preliminary hearing date was fixed for 14 July, barely three weeks after the proceeding began.  At that hearing, which took place on 1 August, proposed orders were put forward by  Ms Frost.  If made, they would dispose of the litigation entirely.  Mr Dare, through counsel, informed the presiding judge, Frederico J, that while his client did not consent to those orders, he conceded that they were proper for His Honour to make.  They were made without the court's attention having been drawn to the contingent indebtedness of Mr Dare to Ms Richards, or indeed to the true financial position of either Mr Dare or Ms Frost. They resulted (or so the plaintiffs' allegations continue) in Mr Dare transferring to Ms Frost so much of his assets as would leave nothing which could be used to repay Ms Richards.  This transfer resulted in the acquisition by Ms Frost of far more than she would have received following a full hearing from the Family Court in which all relevant facts were put to the court.

1. All this of course is no more at this stage than allegation.  The plaintiffs wish to give these allegations substance by calling Mr Fogarty.  If called, and if he gives evidence in accordance with a statement of evidence prepared on his behalf, he will say that an accountant's report put before the Family Court by Ms Frost was unreliable, and that a contested hearing in which the court was fully informed of all relevant facts would have resulted in orders far less favourable to Ms Frost than those which Frederico J, unassisted by full disclosure, in fact made.

1. Objection is taken to the admissibility of the proposed evidence.  This objection is put under two heads.  First, it is submitted that Mr Fogarty has no relevant expertise.  Secondly, it is submitted that the evidence is irrelevant.

1. Expertise may be obtained through formal study, or it may be obtained through experience.  Most often it is obtained through both.  In this case, Mr Fogarty has, as well as his formal legal qualifications, 22 years experience as a Family Court judge.  He is thus well qualified in my opinion to give evidence about the range of decisions as to the distribution of property, assuming the irretrievable breakdown of a de facto relationship; and assuming also that the financial circumstances of the plaintiffs are fully revealed to the court, and that the court is properly aware of the existence and needs of any dependent children.  Accordingly, I find that Mr Fogarty does have expertise in a relevant field, which qualifies him to give opinion evidence that is receivable as that of an expert.  This includes evidence about how a judge in those circumstances would assess the credibility of an accountant's report.

1. The question then becomes whether the evidence to be called from Mr Fogarty is relevant.  In my opinion, it is.  If the defendants were minded to call evidence to the effect that the disposition of property following the Family Court proceedings was one which did entire justice to both Mr Dare and Ms Frost, that evidence would, in my opinion, be admissible in the defendants' case.  It could be relied upon then to negative an inference which the plaintiff would have me draw, that is, that by the results of the Family Court proceedings, I should infer an intent in both Mr Dare and Ms Frost to defraud Mr Dare's creditors.  If evidence of this kind were called on behalf of the defendants, and if I am correct in thinking that such evidence would be admissible on their behalf, there  seems to me to be no basis upon which I could deny like evidence called on behalf of the plaintiffs to prove the opposite.

1. The question of intent to defraud is necessarily one that can only be resolved by reference to circumstantial evidence, unless by chance some document or documents properly admissible reveal the relevant mind at the relevant time.  There may or may not be documentary evidence of this kind called in this case.  In any event it seems to me that evidence going to the outcome of the Family Court proceeding, and the likely outcome were facts put to the court along the lines suggested by the plaintiffs, would be evidence that would assist me in deciding whether or not to draw an inference of the kind upon which the plaintiffs will rely.  For these reasons, it seems to me that the proposed evidence is both relevant and admissible, and I will allow the plaintiffs to call Mr Fogarty accordingly.

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