Sargood and Winters

[2008] FamCA 264

FAMILY COURT OF AUSTRALIA

SARGOOD & WINTERS [2008] FamCA 264

FAMILY LAW – PRACTICE AND PROCEDURE – Case management

APPLICANT: Mr Sargood

RESPONDENT: Ms Winters

FILE NUMBER: MLF 1492 of 2004

DATE DELIVERED: 19 March 2008

PLACE DELIVERED: Melbourne

PLACE HEARD:

JUDGMENT OF: Bennett J

HEARING DATE: 19 March 2008

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Susan Snyder

SOLICITOR FOR THE RESPONDENT: Michael V Stapleton

Orders

IT IS ORDERED:

1. That any previous direction limiting the issuance of subpoenae by reference to number of subpoenae or time at which subpoenae can be returnable, be discharged. Until further order, each party is at liberty to cause subpoena to issue returnable in any subpoena list until the final hearing or on any date appointed by Registrar Riddiford for the return of subpoenae.

2. That this matter will remain fixed for final hearing before me on 16 June 2008 at 10.00 am estimated to take approximately four (4) days.

3. That the matter be referred to Registrar Riddiford for active pre-trial management including the timetabling of each party’s obligation to obtain expert evidence in time for the final hearing.

4. That the reasons for judgment this day be transcribed and when settled and placed on the file copies be made available to the parties.

5. That the parties do all acts and things to ensure that valuations of relevant commercial entities are completed by 15 May 2008.

6. That by 28 April 2008 the practitioners for the parties provide to Registrar Riddiford an agreed list of business entities to be valued.

7. That on or before 4.00 pm on 28 April 2008 the applicant husband file and serve any amended application and the respondent wife file and serve any amended response, each specifying with precision the orders they seek for final alteration of property interests.

8. That in anticipation of the final hearing:-

   a)The applicant husband file and serve any affidavit material or proof of evidence in support of his case by not later than 5 May 2008; and

   b)The respondent wife file and serve affidavit material or proof of evidence in support of her case by not later than 19 May 2008.

9. That any party who proposes at the final hearing to seek orders against a superannuation trustee do all acts and things necessary to ensure that the superannuation trustee has been accorded procedural fairness in relation to the order proposed to be sought and that party be in a position to prove that procedural fairness has been accorded if called upon to do so.

10. That not later than 10.00 am 11 June 2008 before the final hearing each party file and serve and provide to my Associate by e-mail an outline of case which includes:-

    a)a list of documents upon which that party will rely at trial;

    b)a list of assets divisible between the parties (including any add-backs);

    c)a summary of argument including but not limited to the following matters relating to a final alteration of property interests:-

    i.the contribution based entitlement claimed, expressed as a percentage of the net value of assets -

    1.as at final separation;

    2.at the time of trial;

    ii.in dot point form the different types of contribution being financial contributions (s79(4)(a)), non-financial contributions (s79(4)(b)) and contributions to the welfare of the family (s79(4)(c)) upon which that party relies to support the contribution based entitlement for which they contend:-

    1.during cohabitation;

    2.since separation

    iii.any other matters relevant to a division of property  including any adjustment to the contribution-based claim (if any) expressed as a percentage of the net value of the assets divisible between the parties having regard to the factors in s79(4)(d), (e), (f) and (g);

    iv.in dot point form what relevant s75(2) or other factors relied upon by that party for any adjustment;

    d)a summary of any matters upon which evidence is adduced from experts and is not agreed, including but not limited to:-

    v.the date and outcome of the last conference between experts;

    vi.the particular matters upon which there is no agreement between experts;

    vii.what the difference there would be to the final outcome in the event that one expert’s view of any particular matter is accepted over the other experts view;

    e)a minute of the Orders which he / she seeks be made at the final hearing.

11. That each party must serve an undertaking as to disclosure by 19 May 2008.

12. That without limiting the operation of paragraph 3 of this Order, each party has leave to contact Registrar Riddiford to arrange to have this matter listed for mention before himself or before me, on notice to all other parties, to seek any further directions as any party considers are necessary to ensure that the matter is ready for trial or to narrow the issues in dispute.

13. That notwithstanding anything in the Family Law Rules 2004 to the contrary, the time for compliance by the practitioner for each party with Rule 19.04 of the Family Law Rules 2004 be not later than 12 noon on Friday 23 May 2008(“the time for compliance”).

14. That by way of compliance with Rule 19.04 of the Family Law Rules 2004, the practitioner for each party provide notice in writing to his/her client of:-

    a)the actual costs incurred by the client up to and including the first day of the trial;

    b)any expenses paid or payable to an expert witness or, if those expenses cannot be ascertained, after the making of all reasonable enquiries, an estimate of any expenses;

    c)the costs payable for each day of the trial, excluding the first day;

    d)the estimated length of the trial;

    e)the date of any payments and the source of the funds for the costs paid or to be paid so that:-

    i.if costs have been paid by cheque, details must be provided of the account on which the cheque was drawn;

    ii.if costs have been paid by credit card, the details must identify the finance provider and number and name of the credit card facility; and

    iiiif costs have been paid in cash, the details must identify the payer.

15. That by not later than the time for compliance, the practitioner for each party provide to my Associate, by facsimile a copy of the notification given to his/her client pursuant to paragraph 14 of this Order.

16. That in the event that this matter resolves prior to the hearing date, the solicitors for the parties notify my Associate promptly.

IT IS NOTED that publication of this judgment under the pseudonym Sargood & Winters is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  MLF 1492 of 2004

Mr Sargood

Applicant

And

Ms Winter

Respondent

REASONS FOR JUDGMENT

ex tempore

1. I make the following comments in anticipation of orders which I will make to get the matter ready for the final hearing set down for 16 June 2008.  It is currently estimated to take four days but it may take longer and, if it does, it will be accommodated somehow.  I am referring the matter to Registrar Riddiford for active case management.  These reasons are intended to provide the Registrar with a record of some discussions which have taken place today between me and the parties’ solicitors.

2. The original application in this matter was filed on 14 May 2004.  There has been chronic and ongoing noncompliance with orders to ready the matter for trial in both 2006 and 2007. I required the parties to attend court personally today as well as through any representatives.  I commented to the parties that this case is one of the most delinquent cases I have come across in terms of disregard for orders and directions to ready the matter for trial.  It was not hyperbole.  I also informed the parties that it was possible to reach agreement as between themselves whereby the proceedings may be struck out of the list with an ability in either of them to have them re-listed when he or she (or both) is interested in progressing them to a determination.  Both parties through their practitioners state that they want the matter to remain listed as a current matter.

3. There are three broad areas that require attention.  Within those areas there are sub-issues but I will start with the big three.

4. The first is preparation of taxation returns for various entities relevant to the parties.  Without going into a history of the noncompliance to date, the task has now been given to Mr W, an accountant, to prepare the taxation return documents.  There is apparently some difficulty with him retrieving the primary source material from the previous accountants, G Accountants. 

5. Second, there are various real properties owned by the parties or owned by entities over which he or she has control.  Those properties are being valued by Mr M.  I will not go into why Mr M has not valued them sooner, but I am advised that that is under control. 

6. Third, there is a valuation of business interests relevant to a final alteration of property interests. Both parties have businesses.  Some have operated only after separation.  In submissions, both solicitors on the record, Mrs Snyder for the husband and Mr Stapleton for the wife, refer to “the business interests to be valued”.  However, neither could provide a comprehensive list of businesses or entities such is the lack of focus in the case.

7. On my examination of the file, there has not been a list of business interests to be valued or entities to be forensically assessed.  It seems that there are some entities which may not need to be valued at all.  I will give the parties fourteen days to formulate between themselves a list of relevant entities and make an order that the valuation of those agreed entities be completed by 15 May 2008.  That will result in the evidence being available approximately a month before the trial. 

8. There is a fourth group of assets of which the single expert witness, accountants Y Accountants, have raised queries.  They are landholdings by an entity called P Nominees Pty Ltd (which is an entity which acts as a trustee for trusts associated with the wife's family of origin).  There is also S Pty Ltd (which is trustee for trusts or entities controlled by the husband's family of origin).  Annexure W1 sets out the queries which have recently been raised.  I am informed that that information should be forthcoming from each quarter.

9. There have been several matters of which I am informed this morning.  They arise out of the fact that each party has now apparently filed an up to date financial statement.  I will record them briefly.

10. On behalf of the wife, the following matters are raised:

    a)The wife contends that the husband has lent approximately $1.7 million to an entity called T Corporation Pty Ltd.  They have no documents in relation to that transaction.  Ms Snyder for the husband says that T Corporation Pty Ltd is an entity which is to be valued as part of the relevant business interests and a valuation of that will necessarily consider the effect or impact of a loan to a related entity such as the husband.  It seems appropriate to leave that to a valuation by Y Accountants who will be doing the business valuations.  However, any documents in relation to the advances of $1.7 million or any other moneys should be made available by the husband to the wife via their solicitors as soon as practicable.

    b)The wife says that the husband has failed to disclose a certain entity in which he owns all the shares.  It was not stated what control he had over the entity but it is called A - or M - Pty Ltd.  Mrs Snyder for the husband says that that business was established some time ago and at the time of establishment the then solicitors for the wife (who are different from Mr Stapleton who is now on the record) were provided with disclosure of all relevant documents.  However, that entity has not traded for the last three years and as far as the husband is concerned he believes it to be a deregistered entity.  It seems to me that the first thing that the wife should do is get a company search and then make inquiries of the practitioners for the husband about any facts the wife wants to know, and those inquiries should be answered.

    c)The wife says that the husband has given insufficient disclosure of the value of his interest in D Trust.  I am informed that the entity is a trust, not a company.  I am not informed of the identity of the trustee. The solicitor for the husband says that it has only operated for two years, it is an entity which should be valued under the umbrella of the relevant business interests but it is an entity in which the husband has only a 20 per cent entitlement.  The assets of the entity are equipment and cash.  I am currently unaware of whether his entitlement is fixed or the trust is discretionary.  I do not know whether the husband is an object or a beneficiary of the Trust.  Documents should be provided by the husband to the wife via their respective practitioners in relation to this interest and it would seem to start with a copy of the trust deed and all of the financial returns for the trust or the trustee company to date.

    d)The wife asserts that the husband has not provided a valuation or sufficient information in relation to L Company Pty Ltd.  Mrs Snyder for the husband says that this is a business interests which will be valued under the umbrella of the relevant business interests. 

11. On behalf to the husband it is said that the wife has disclosed in her financial statement affirmed on 13 March 2008 an interest in J Pty Ltd as trustee for the J Trust. That appears at paragraph 41 of her financial statement. The current value of the share is given at $775,000 by reference to an annexure to the financial statement.  Mrs Snyder for the husband says the husband has not previously been aware of the wife's interest in this regard.  He seeks the trust deed and financial returns for that entity if it has operated for more than 12 months.  Those should obviously be provided. 

12. This is a matter that has significant history and I have reservations about the motivation and willingness of the parties to have a final hearing.  Certainly if they had complied with orders that have been made from time to time, the proceedings would be well over by now.  I have given it a trial date of 16 June and we will do all that we can to ensure that it is ready by that stage.  Of course not every case has to be perfectly ready in order to proceed.  The parties and their practitioners should approach the matter on the basis that the trial will proceed on the best evidence then available.  Of course, if valuations are not to hand, various assets can be sold instead of valued. 

13. I have said at the previous mention of this matter that the taxation matters may be able to be remedied by inviting the Deputy Commissioner of Taxation to intervene in the proceedings and the DCT can take over an ascertainment of the taxation liabilities for various entities.  However, I will not invite that intervention at this stage because the parties seem to have retained Mr W to prepare documents. 

14. I intended and had hoped that all of the matters that we have dealt with this morning could have been actually dealt with by the practitioners for the parties prior to today.  This is the second mention of the matter just to get it ready for trial.  However, rather than call the practitioners and the parties back to court on a date in the future, I will refer the matter to Registrar Riddiford who will familiarise himself with it and then start to contact the practitioners for the parties at regular intervals.  This is not intended to be the soft option.  Registrar Riddiford will manage the matter proactively.

15. If it seems to Registrar Riddiford that his involvement is not productive and constructive or preparation is lagging behind what is acceptable, then the matter can be referred to me and the parties will be required to come into court with their practitioners and, through their practitioners, explain what is required to get the matter ready for trial and/or why it has not already been attended to. 

16. In discussion, I have raised with the parties the desirability of considering mediation.  They have had a mediation some time ago, however the solicitors who now act for the wife did not act for her then and the mediation was not successful.  It seems that at least the real properties over which the parties have direct control or ownership as well as the business interests would need to be valued before there would be sufficient information or sufficient agreed facts to proceed to a mediation. 

17. I do not require the parties to mediate.  It is not compulsory.  It just seems to me that this is a case which might benefit from it at some time in the future where the parties are freer to approach the matter at their own pace rather than at my specific directions.  In any event, on the current timetable, mediation would seem to be premature until sometime in late May 2008.  The husband’s solicitor anticipates retaining Mr Ackman QC and Ms MacMillan to appear at the final hearing.  The solicitor for the wife does not know who he will retain but, when he does, he had no objection to contacting my Associate to advise her.  No doubt he will advise Registrar Riddiford also.

18. As indicated, I have referred the matter to Registrar Riddiford for pre-trial management.  I will not set the Registrar a timetable.  He can set that timetable himself and then contact the practitioners for the parties regularly to see how it is progressing.  It has been agreed between the practitioners and it seems sensible to me that at this stage, when some report is finalised, it need not be sworn up to; it can be filed under cover of a cover sheet and the author must be available at the trial to confirm that the report is true and correct and to be available for cross-examination. 

19. As indicated, the trial is 16 June 2008.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett

Associate: 

Date:  14 April 2008