Romano and June (No 2)

[2011] FamCA 537

FAMILY COURT OF AUSTRALIA

ROMANO & JUNE (NO. 2) [2011] FamCA 537

FAMILY LAW – PROPERTY – Dispute between the husband and wife as to the property that is to be included in the property division proceedings – Whether the property of the husband includes all of the assets of a company where the husband is a director.

FAMILY LAW – EVIDENCE – Interrogation – Whether leave should be granted for the wife to ask the husband to provide a sufficient answer to a specific question pertaining to the property – Court satisfied that questions of fact surrounding the property are relevant – Order that the husband answer the specific questions relating to the names and addresses of the directors and shareholders of the company.

Family Law Rules 2004 r 13.28, r 13.26, r 13.26(2), r 13.26(3), r 13.27, r 13.28(1), r 13.28(2)

Romano & June [2010] FamCA 1027
Acacia Sportswear Pty Ltd v Segenhoe Ltd, Federal Court 20 July 1994, Davies J
Potter’s Sulphide Ore Treatment Ltd v Sulphide Corporation Ltd (1911) 13 CLR 101
Cumming v Matheson (1970) 92 WN (NSW) 339
Clime Capital Limited v Credit Corp Group Limited (No 2) [2010] FCA 343
Abduramanoscki v Aidan Nominees Pty Ltd [1987] FCA 607
Fischer and Another v City Hotels Pty Ltd (1970) 92 WN (NSW) 322

APPLICANT: Ms Romano

RESPONDENT: Mr June

FILE NUMBER: BRC 3679 of 2010

DATE DELIVERED: 3 June 2011

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 26 May 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr P. Hackett

SOLICITOR FOR THE APPLICANT: Hirst & Co Family Solicitors

COUNSEL FOR THE RESPONDENT: Mr T North SC

SOLICITOR FOR THE RESPONDENT: Bowen Buchbinder Vilensky Lawyers

Orders

1.The husband further answer Question 4(ii) of the Specific Questions delivered to him by the solicitors for the wife within twenty-one (21) days of the date hereof by:

(a)providing the name, or names, of the natural person or persons, if any apart from the husband himself, representing the owner, of the … yacht named “[SSS]”:

(i)with whom the husband made any arrangement or arrangements for the Husband’s use of the said vessel; and/or

(ii)who authorised the husband’s use of the said vessel.

2.Leave is granted to the wife to deliver further Specific Questions to the husband as follows with such further Specific Questions to be answered by the husband within 21 days of the date hereof:

(i)“What are the names and addresses of all of the directors of [X2] Limited?”;

(ii)“What are the names and addresses of all of the shareholders of [X2] Limited?”.

IT IS FURTHER DIRECTED THAT

3.Order 6 of the Orders made on 12 April 2011 requiring the wife to file and serve all affidavits of evidence in chief by 4.00 pm on 22 June 2011 be extended to 4.00 pm on 29 June 2011.

4.Order 7 of the Orders made on 12 April 2011 requiring the husband to file and serve all his affidavits of evidence in chief by 4.00 pm on 12 July 2011 be extended to 4.00 pm on 19 July 2011.

5.Order 8 of the Orders made on 12 April 2011 requiring the wife to file and serve any affidavit in reply by 4.00 pm on 29 July 2011 be extended to 4.00 pm on 5 August 2011.

6.All parties’ costs of and incidental to today are reserved to the trial.

IT IS NOTED that publication of this judgment under the pseudonym Romano and June (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 3679 of 2010

Ms Romano

Applicant

And

Mr June

Respondent

EX TEMPORE REASONS FOR JUDGMENT

Introduction  

1.This is an Application in a Case filed by the Applicant Wife on 20 May 2011 in substantive property division proceedings. The application is for orders, pursuant to Rule 13.28 of the Family Law Rules for the Husband to be ordered to better answer certain Specific Questions previously delivered to him and for the wife to be given leave to ask him further questions.

2.Rule 13.26 of the Family Law Rules entitles a party to serve on another party a request to answer specific questions after a case has been allocated to a first day before a Judge. Rule 13.26(2) provides that a party may only serve one set of specific questions on another party and Rule 13.26(3) provides that the questions must be in writing; must be limited to 20 questions; and must not be vexatious or oppressive.

3.Rule 13.27 provides that a party on whom specific questions are served must answer the questions in an affidavit that is filed and served within 21 days after the questions were served and that the party must answer, fully and frankly, each specific question or object to answering a specific question. If the party objects to answering a specific question then the grounds of the objection must be specified along with a brief statement of the facts in support of the objection.

4.Rule 13.28(1) provides that a party may apply to the Court for an order that a party answer or further answer a specific question that has been served on the party or determining the extent to which a question must be answered or requiring a party state specific grounds of objection or determining the validity of an objection or that a party be required to attend court to be examined if that party has not answered a specific question or given an insufficient answer.

5.Rule 13.28(2) sets out three things that the Court may take into account when considering to make an order under 13.28(1). I say here that I do not consider that the three things that are listed there are exclusive matters for consideration when exercising this discretion, but just simply exemplify matters that are to be considered. They are whether:-

(a)the requesting party is unlikely, at the trial, to have another reasonably simple and inexpensive way of proving the matter sought to be obtained by the specific questions;

(b)answering the questions will cause unacceptable delay or undue expense; and

(c)the specific questions are relevant to an issue in the case.

6.The wife filed an affidavit of evidence in support of the Application in a Case on 20 May 2011. Annexure DPLR1 to that affidavit is a letter from the wife’s solicitors to the husband’s solicitors dated 10 March 2011 which enclosed the Request for Answers to Specific Questions. Relevantly, those included the following questions:

Introduction

(a)The following questions relate to each of vessels named “[SSS]” in each of the identified periods, namely:

(i)       …

(ii)      the […] yacht, in the period 2006 to date.

(b)      In the questions:

(i)       …

(ii)“use” includes step foot on, stay upon, operate or otherwise put the vessel to any usage.

Questions

1.        Who was the owner of the vessel during each period?

2.What is or was your relationship to the owner of each vessel in the respective periods identified above?

3.        Did you use the vessels in the respective periods identified above?

4.        If the answer to the preceding questions is “yes” then, specify:

(i)the terms of the arrangement or understand that enabled you to use the vessels?

(ii)with whom you made such arrangement or understanding?

(iii)whether the arrangement or understanding is written or oral or partly written and partly oral and identify any writing?

(iv)The dates you used the vessels?

5.        …

7.Annexure DPLR2 to the wife’s affidavit is a letter dated 18 March 2011 from the husband’s solicitors in which they advised that the husband relied on the fact that, pursuant to the Rules, such a Request to Answer Specific Questions can only issue after the first day of a trial is allocated and so no answers were provided by the husband, a first day of trial not having been allocated to that time.

8.On 21 March 2011, I ordered that the first day of trial be 12 April 2011, a day on which I listed a different Application in a Case that had been filed by the wife for hearing and determination as well.

9.Annexure DPLR4 to the wife’s affidavit is a letter from the wife’s solicitor to the husband’s solicitor enclosing another Request to Answer Specific Questions. That Request included the same questions as previously asked, in addition to a few extra ones. On 13 May 2011 the husband swore an affidavit in which he set out his answers to the Specific Questions and a scanned copy of an unsealed copy of that was sent to the wife’s solicitors on 16 May 2011.

10.Relevantly, the husband’s answers to the Specific Questions asked that the wife and her legal representatives are not now satisfied with are set out in paragraph 3 of that affidavit. They are as follows:

With respect to the vessel “the … yacht” and the period 2006 to 13 April 2011 referred to in (a)(ii) of the Introduction to the Wife’s Questions, I say as follows:

(a)In answer to Question 1, the registered owner of that vessel from in or about the first part of 2007 is and was [X2 Limited] (“the Owner”);

(b)In answer to Question 2, I say that I was at 13 April 2011 one of four directors of the owner and I believe that I have been one of its directors since 2007;

(c)In answer to Question 3, I say I have used the vessel during a part of the period 2005 to 13 April 2011;

(d)In answer to Question 4(i) I am unable to specify the terms of the arrangement or understanding pursuant to which I have made use of the vessel as I have kept no particular record of each such use or nor have I kept any particular record of each or any such arrangement or understanding. Further, pursuant to the laws of Monaco, I am precluded from revealing the affairs of the Owner.  Subject to the above, in addition to making “use” of the vessel in fulfilment of my obligations as a director, I have with the consent of the Owner, made use of it for private purposes on infrequent occasions by staying on it briefly in company with others, with the knowledge of the Owner.

(e)In answer to Question 4(ii) as to with whom I have made such arrangement or understanding or such arrangements and understandings, I say that each arrangement and each understanding has been entered into with the Owner;

(f)In answer to Question 4(iii) as to whether the arrangements or understandings or any of them were written or oral or partly written and partly oral, and to identify writing I say, I am unable to say anything about the records maintained by the Owner with respect to any arrangement or understanding entered into by the Owner with respect to the vessel during that period by reason of the laws of Monaco.  However, I know of no document in my possession or power whereby any terms of any arrangement or understanding relating to the use of the vessel are recorded and it is my recollection that such arrangements or understandings as were entered into with respect to my use of the vessel for personal purposes were oral;

(g)In answer to Question 4(iv) relating to the date upon which I have used the vessel, I say as follows:

(i)I did not use the vessel prior to in or about April 2007;

(ii)I recall that I have been infrequently on board the vessel in 2007, 2008, 2009 and 2010, but as I have kept no particular record of the occasions upon which I have been on board the vessel, I am unable to more particularly identify the dates upon which I have been on board;

(iii)To date, in the calendar year 2011, I have been on board the vessel on 3 or 4 occasions in discharge of my obligations as a director, but not otherwise.

(h)      …

11.The wife’s solicitors wrote to the husband’s solicitors on 17 May 2011 setting out their concerns that the husband’s answer did not satisfy the wife and seeking further answers. A copy of that letter is annexure DPLR 7 to the wife’s affidavit

12.The Husband’s solicitors wrote back on 18 May 2011 advising, effectively, that they did not consider it necessary for the husband to answer further. A copy of that letter is annexure DPLR 8 to the wife’s affidavit. The wife’s solicitors then advised that they would bring this application and that they would also seek leave to deliver a further question or questions about the company, X2 Ltd.

Some Background

13.In the substantive property division proceedings, there is a dispute between the parties as to the property that is to be included in “the property of the parties to the marriage or either of them”.

14.The wife asserts that the property of the husband includes all of the assets of a company, X1 Limited, that is incorporated in the Caribbean and has its registered office in Monaco. The wife asserts that property to be worth many millions of dollars. The husband denies that it is his property and asserts he is merely employed as a consultant to that company. It is part of the wife’s case that that company is a “mere puppet” and/or the “alter ego” of the husband and, as such, its assets are to be included in the “property of the parties to the marriage or either of them” in the property division proceedings.

15.The husband who lives, and has lived, in the Principality of Monaco for many years now, has previously deposed as to the names of the directors of X1 Limited and it is known there is one share in that company and it is held by Q Trustees SA as trustee of the X Trust. The beneficiaries of that trust are not known, it being described, at least by Mr Hackett, counsel for the wife, as a ‘blind’ trust. The husband holds no position or office in Q Trustees SA and does not know if he is an eligible object or beneficiary of the trust (see the Reasons for Judgment of O’Reilly J in Romano & June [2010] FamCA 1027, 29 October 2010 at paragraph 6).

16.Relevant to this application, the wife also asserts, and again the husband denies, that the yacht named “[SSS]” is also property of the husband.  That is the background to the delivery of the Specific Questions and the Answers made by the husband that bring this Application in a Case before the Court.

17.Specifically, and relevantly, the wife’s Application in a Case seeks the following orders:

1.Pursuant to Rule 13.28 of the Family Law Rules, the Husband be ordered to provide a sufficient answer to specific question 4(i)-4(iii) and in particular that the Husband specify in his answer the terms of the arrangement or understanding that enabled him to use the … yacht, the names of the natural person or persons with whom he made any arrangement or understanding to use the … yacht and whether the arrangement or understanding is written or oral or partly written and partly oral and identify any writing.

2.That leave be given to the wife to ask the Husband a further question or questions limited to requiring the Husband to answer on oath as to the name or names of any other Directors of [X2 Limited] and their contact telephone numbers, address and email addresses as known to him.

3.Such further or other order as the Honourable Court may deem necessary.

4.…

18.The Application was heard by me on Thursday 26 May, 2011 and I reserved my decision that day.

19.For the wife, it was submitted, in essence, that the answers given by the husband to the Specific Questions about the said vessel were insufficient and that, in the interests of justice, he ought to be ordered to provide further and better answers. Further, for the wife, it was submitted that the husband has previously deposed to the names of the directors of X1 Limited and, therefore, the wife should now, in the absence of the husband having already deposed to or divulged the names of the other directors of X2 Limited, be given leave to deliver a further Specific Question to the husband seeking that information to assist in the preparation of her case particularly in respect of the serious issues in dispute about what constitutes the property of the husband for trial.

20.For the husband, it was submitted, in essence, that the wife has delivered her single set of Specific Questions as provided for in the Rules and that she has her answers which now she must deal with; that any further questions arising from dissatisfaction with the husband’s answers are now, most appropriately left to trial, that being the “simple and inexpensive” way of proving the matter sought to be obtained by the Specific Questions.  Further, it was submitted that seeking names of persons as now sought is not a proper purpose of Specific Questions as it is simply seeking the names of potential witnesses.  Further, it was submitted in respect of the matter of the further question about the names of directors, that the identity of the shareholders of the company is far more relevant to the determination of the matter in issue, so, therefore, the wife should not be given leave to ask any further questions about the identity of other directors of the company.

21.After inviting counsel for the applicant to consider that proposition as put by Senior Counsel for the respondent, and asking whether he wanted to, effectively, orally amend the wife’s Application in a Case to seek an order that a further question going to the issue of the shareholding of X2 Limited be allowed, counsel for the applicant indicated that he would do so. This was met with an objection from Senior Counsel for the husband on the basis that such an invitation from the Court was inappropriate and amounted to “getting down into the fray”.

22.The Rules providing for delivery of Requests for Answers to Specific Questions make clear provision for what is akin to the age old civil procedural practice of delivering Interrogatories after pleadings have closed but before trial.

23.The objects of interrogatories have been, relevantly, described as:-

(i)the obtaining of admissions as to facts which will support the case of the interrogating party;

(ii)the obtaining of admissions which will destroy or damage the case of the party interrogated.

See Acacia Sportswear Pty Ltd v Segenhoe Ltd, Federal Court 20 July 1994 per Davies J.

24.Interrogatories may be sought as to matters which enable a party to maintain his own case or to destroy the case of his adversary. See the High Court decision of Potter’s Sulphide Ore Treatment Ltd v Sulphide Corporation Ltd (1911) 13 CLR 101 cited in Cumming v Matheson (1970) 92 WN (NSW)339.

25.The matters set out in Rule 13.28(2) as matters for the Court to take into account when considering whether to make an order under Rule 13.28(1) conveniently, in my view, set out in rule form the matters which, at law, have been considered to be relevant matters on the hearing of such applications, namely, and principally, the relevance of the inquiry to the facts in issue, and the necessity for, and utility, of the proposed questions, having regard to the fair and expeditious conduct of the proceedings. See Clime Capital Limited v Credit Corp Group Limited (No 2) [2010] FCA 343 and Abduramanoscki v Aidan Nominees Pty Ltd [1987] FCA 607.

26.I am, in this case, satisfied that questions of fact surrounding the registered ownership of the subject vessel and its use by the husband are certainly relevant to the fact in issue, that is, whether or not the said vessel is truly beneficial property of the husband regardless of its ostensible ownership.

27.After considering the questions that were actually asked, the answers that were given and that which the wife seeks me to order, in addition to the submissions that have been made for the wife and the husband, I consider that the husband ought to provide further answers, including to fresh questions, but I consider that the questions need to be specifically formulated now, rather than left open, as the applicant seeks, by way of an order that simply orders the husband to “provide a sufficient answer” and, in the other instance, by simply giving the wife leave to ask a further question or questions about a specified topic.

28.Having considered the husband’s sworn answers to the Specific Question, his Senior Counsel’s submissions and the fact that the husband himself is a qualified professional and international business consultant, I consider there is no utility in ordering him to “provide a sufficient answer to question 4(i) – (iii)”.  I would not expect any order worded like that would generate any different an answer than already provided.

29.I do not accept that seeking the name or names of the natural person or persons, if any, apart from the husband himself, who represented the registered owner of the said vessel, X2 Ltd, and with whom the husband made arrangements for the use of the said vessel, can be considered as simply seeking the identity of witnesses.

30.The husband admits he is a director of X2 Ltd, the company he says owns the said vessel. He says he is only one of four directors of that company. He says he has used the vessel in fulfilment of his obligations as a director, whatever that means, and, relevantly, he says he has made use of the vessel for private purposes with the consent of the owner. In such circumstances, whether he has had the use of the vessel on his own authority as a representative of the owner or on the authority of another or others representing the owner, and, if so, who, are facts in my opinion relevant to the determination of the fact in issue.  Identifying the person or persons, if any, representing the owner, with whom the husband made arrangements for use of the vessel is relevant, in my mind, to considering whether the husband is truly the beneficial owner of the subject vessel and cannot be considered the same as seeking to identify persons who might have been witnesses to events, the factual circumstances surrounding which are in dispute.

31.As such, I consider that the circumstances under consideration here are more comparable with those that were being considered by Helsham J of the New South Wales Supreme Court when determining the matter of Fischer and Another v City Hotels Pty Ltd (1970) 92 WN (NSW) 322 rather than those being considered by Hope J when he decided Cumming v Matheson (1970) 92 WN (NSW) 339 and thus I will allow a further question that asks the husband to provide names of persons with whom he dealt.

32.I add that I have not had consideration to the issue of the husband claiming that he is prevented by Monaco law from answering the question.  If that is the way he determines to honestly answer the question next time, that is a matter for him.  I had no submissions on behalf of the applicant wife in respect of that and if the further questions that I order today to be answered are answered in the same way then that is a matter for the wife and her legal representative to consider further.

33.I consider that the timely provision of the answer to such question, that is at this interim stage of the proceedings, is indeed far more conducive to the fair and expeditious conduct of the proceedings, particularly surrounding this critically important disputed issue as to the ownership of the said vessel, which presumably, is a vessel of substantial value.  I do not consider that the applicant has any more simple and inexpensive way of proving the matter sought to be obtained by the question or that leaving such questions to the trial will make the proceedings any fairer to both of the parties.

34.I have also determined, having regard to the submissions that fell from Senior Counsel for the husband, that the shareholding of the company is more relevant to the fact in issue than the directorship.  I have determined to give leave to the wife to deliver the further Specific Questions that I hereafter order in respect of the company, X2 Limited. In doing so, I also have regard to the fact that the husband has previously deposed to the identity of the directors of X1 Limited and the shareholding of that company, is at least to a limited degree, known to all. There is no evidence before me nor has there been a submission made that the wife could obtain the answers sought by her own inquiries otherwise directed. I consider the answers requested in such questions as I shall order to be very relevant to the fact in issue. That the wife only asked for leave to ask for the identity of the shareholders at the hearing of the Application in a Case, and, effectively, on my invitation, does not, in my view, prevent me from granting leave to the wife to ask that question. The answer might very well assist me in the ultimate determination that will be before me at trial, namely the fact currently in issue, the beneficial ownership of this vessel.

35.The trial in the substantive proceedings is currently tentatively set for 14 days in October this year, subject to ongoing compliance with trial readiness expectations of the Court.  There is accordingly ample time before trial for the husband to answer the questions and ordering that to be done within 21 days of today will not cause any unacceptable delay nor, in my mind, such undue expense that would mitigate against making the orders proposed.

36.Accordingly, I order as follows.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 3 June 2011.

Associate: 

Date:  12 July 2011