Sebastian and Sebastian

[2012] FamCA 601

FAMILY COURT OF AUSTRALIA

SEBASTIAN & SEBASTIAN [2012] FamCA 601

FAMILY LAW – PRACTICE AND PROCEDURE– Interim hearing – Case management and direction orders

Family Law Act 1975 (Cth)

APPLICANT: Ms Sebastian

RESPONDENT: Mr Sebastian

INDEPENDENT CHILDREN’S LAWYER: Timothy Mulvany

FILE NUMBER: MLC 6522 of 2010

DATE DELIVERED: 20 July 2012

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Young J

HEARING DATE: 20 July 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Geddes QC

SOLICITOR FOR THE APPLICANT: Taussig Cherrie Fildes

COUNSEL FOR THE RESPONDENT: Mr Gates

SOLICITOR FOR THE RESPONDENT:	Moores Legal
COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER:	Mr Mulvany

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: T. J. Mulvany & Co

Orders

IT IS ORDERED:

1. THAT an interim determination of children and parenting issues be listed for a one day hearing before Young J commencing 10:00 a.m. Monday 13 August 2012.

2. THAT on or before Monday 30 July 2012 each of the husband and wife make, file and serve a document identifying the further interim children’s orders sought, if any, by way of a variation of paragraphs 1, 2 and 3 of the Orders pronounced 1 February 2012.

3. THAT the Independent Children’s Lawyer make, file and serve a document containing his further interim orders sought on or before 2 August 2012.

4. THAT each of the husband and wife make, file and serve an affidavit, of no more than 8 pages in length, in support of their orders sought or other matters of and relevant to the interests of one or both children, such documents to be filed and served on all parties on or before 4:00 p.m. Monday 6 August 2012.

   PROPERTY AND FINANCIAL PROCEEDINGS

5. THAT the applicant wife make, file and serve an amended initiating application on or before 4:00 p.m. Thursday 26 July 2012 detailing with particularity all orders sought.

6. THAT on or before 4:00 p.m. Tuesday 31 July 2012, the husband make, file and serve an amended response detailing with particularity all orders sought.

7. THAT on or before 4:00 p.m. Monday 6 August 2012, each of the husband and wife make, file and serve:

   (a)their trial affidavit;

   (b)an updated statement of financial circumstances;

   (c)the affidavits of any other witnesses, if any, upon who they intend to rely.

8. THAT on or before 4:00 p.m. Wednesday 8 August 2012, each of the husband and wife make, file and serve a case outline document which is to include:

   (a)a summary balance sheet of assets and liabilities of the parties and their associated corporate entities;

   (b)a chronology;

   (c)a letter pursuant to Family Rule 19.04;

   (d)a list of witnesses, if any, required for cross examination;

   (e)a summary of legal argument.

9. THAT each of the husband and wife forthwith instruct their solicitors and use their best endeavours and make a genuine effort to fully and properly disclose documents and financial information as requested;

   (a)by the wife’s solicitors in their letter dated 17 July 2012 addressed to the husband’s solicitors: and

   (b)by the husband’s solicitors in their letter dated 18 July 2012 addressed to the wife’s solicitors.

10. THAT all property and financial proceeding be listed for final defended hearing before Young J to commence at 10:00 a.m. on Tuesday 14 August 2012.

11. THAT for case management and further directions, the matter is otherwise listed at 10:00 a.m. on Thursday 9 August 2012 and it is directed that the parties attend at court on that day, together with their retained legal practitioners.

12. THAT the extempore reasons for judgement be transcribed, placed upon the Court file and be made available to all parties.

    IT IS CERTIFIED
    THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Senior Counsel appearing for the wife and Counsel appearing for the husband.
    IT IS NOTED

A.THAT the Court has returned to the Independent Children’s Lawyer his letter dated 17 July 2012.

B.THAT the Court has returned to the husband’s solicitor his letter dated 18 July 2012 and the husband’s assert pool prepared as at 30 April 2012.

C.THAT the court has returned to the wife’s solicitors the draft minute of proposed orders submitted this day and her letter dated 17 July 2012.

D.THAT the wife’s solicitors have asserted, but the Court makes no finding as to whether she has already complied with the financial request made by the husband’s solicitor in their letter dated 18 July 2012.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Sebastian & Sebastian 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 MELBOURNE

FILE NUMBER: MLC 6522 of 2010

Ms Sebastian

Applicant

And

Mr Sebastian

Respondent

And

INDEPENDENT CHILDREN’S LAWYER

REASONS FOR JUDGMENT

1. The matter of Sebastian was listed before me today to determine various case management and interim issues, both in relation to the hearing of the children and parenting matter and as to the division of property.  Mr Geddes, Senior Counsel, represented the wife.  Mr Gates of Counsel represented the husband.  Mr Mulvany appeared as the Independent Children’s Lawyer representing the interests of the two children.

2. This matter was listed for a defended hearing of up to eight days’ duration commencing Monday, 13 August 2012.  I have been the case management judge of this case for a quite lengthy period.  On 1 February of this year the matter was before me with Ms Johns then appearing for the wife, and both Mr Gates and Mr Mulvany then appearing for their respective clients.  Substantial case management orders along with other discovery and financial disclosure orders were made on that day. 

3. I have been referred to those minutes of orders and I have carefully read what was ordered in contemplation of a defended hearing.  I will not recite all of the financial disclosure orders that are embraced within paragraphs 4-11 thereof.  I do know, as it gas been a matter identified in the hearing this day, that real estate valuers and an actuary were appointed by order 9.  I am told that all real property has been valued and updated, and the actuary has prepared a report as to the calculations of the value of a particular life interest, and those matters have been acted upon by the parties with no noted objection to the experts’ reports.

4. By those orders there was a timetable for the filing of documents, and both Mr Geddes and Mr Gates have identified and made submissions upon the comfortable timetable that was earlier adopted by the court, but which has been ignored by the parties and their solicitors.  The structure of those orders was:  for the wife to file an amended initiating application;  thereafter the husband to respond;  for financial statements and trial affidavits to be filed; and ultimately for case documents, including an outline of argument, a single balance sheet, a chronology and a summary of argument, to be filed within a proper timetable.

5. The filing of all of those documents then lead to the defended hearing before me scheduled for Monday, 13 August of this year.  The matter was before me on 20 June with differing Counsel, though Mr Gates was present then with his leader Mr Sweeney and as usual, Mr Mulvany was in court representing the interests of the children. 

6. There was initially planned by the court for there to be an earlier hearing of this matter in July, to commence Monday, 16 July 2012.  That date had been vacated and the August hearing date substituted to give both parties and their legal advisors further time to ready the property proceedings for trial.  With the matter before the court today there are no updated applications or responses filed, no trial affidavits and no updated financial statements. 

7. It is within that umbrella that the court must now determine whether these proceedings or either part of the financial or the children’s proceedings should proceed on the 13 August hearing date.  The parties and their solicitors have been somewhat active in the writing of letters, the request for financial particulars but the hearing is not prepared and is not ready to commence. 

8. I am advised that there was a financial mediation conference held yesterday, that is 19 July, before an experienced and independent barrister, Mr Melilli.  I am told that conference was unsuccessful in resolving all financial aspects of this case.  Otherwise I do not know and do not wish to know of any of the detailed particulars of financial issues therein discussed.

9. What I have been provided with today is a document headed “Mr Sebastian Asset Pool and Contributions as at 30 April 2012”.  That was handed to the court by the wife’s Senior Counsel but with no opposition from the husband’s Counsel.  It is not a document that I will retain on the file, and I will shortly return the document to Mr Geddes.  What is significant is that it is a document prepared by the husband, where he asserted to the wife and her financial advisers that the pool of assets was slightly in excess of $16 million.

10. An issue has arisen about a subsequent asset pool contribution document also prepared by the husband and shortly after the 30 April date.  That additional document evidently identified a potential income tax assessment.  It also may have identified other assets and/or included the wife’s assets which were excluded from the original document.  I record those matters largely by way of background to highlight that there has already been considerable work and focus upon the net asset pool of the parties. 

11. Mr Geddes, on behalf of his client, had indicated that the wife’s asset pool would likely be $20 million of thereabouts, but that is inclusive of her assets and various other add-backs of which I have no particular knowledge.  What is a matter of significance is that there is no dispute upon real property as all valuations have been independently obtained by a single appointed expert as at March of this year, thus they are current.  Otherwise the assets seemingly are monies at bank or publicly listed shares or personal chattels. 

12. Whilst I have had counsel refer to further evidence required of the add-back of various assets and to the potential tax liability, all of those matters can and may need to be dealt with either in evidence, in cross-examination or in further documents filed.  The preliminary overview I have of this asset pool is that the central assets are all identified and valued, and the issue is either the addition or the subtraction therefrom of particular items.  If some appropriate evidence is required, then all that does is to highlight the primary task of the court and what has been identified in the first step of the procedure of identifying what are the assets and liabilities of the parties.

13. The background that I have given must be understood in the context that the wife’s Senior Counsel has asserted there are ongoing questions to be answered by the husband or his legal advisers, and they are all incorporated within a letter dated 17 July 2012.  I have been shown that letter which likewise I will shortly return to the wife’s solicitors.  That letter identified 15 paragraphs requiring further disclosure, most of which are drafted in a way to arise out of matters discussed at a recent financial conference between the parties and the Banks Group.

14. I have perused the questions asked by the wife and the balancing aspect that I have turned my mind to is whether they are reasonable, whether they ask of matters that should be known to the husband or whether they arose from partial disclosure.  Mr Geddes has highlighted that they have been recorded in this letter on the basis that the husband had requested that the matters be put in writing.  That scenario is largely rejected by Mr Gates on behalf of his client, and he asserted that it is wholly unreasonable for his client to have to provide further information on a limited timetable basis given that the hearing date remains 13 August.

15. The husband’s solicitors have likewise provided a letter dated 18 July to the wife’s solicitors seeking limited financial information, and five paragraphs of that letter are before the court, and likewise I will shortly return that letter to the husband’s solicitors.  Of what is asked of the wife and her solicitors I can see no reason for any delay whatsoever, and those matters should immediately be satisfied by the wife answering those questions or providing the information. 

16. To return briefly to the 17 July letter from the wife’s solicitors, a reading of the letter and understanding the context in which it arose after the meeting, one can only be left with the preliminary conclusion on a case management basis that what is being asked of the husband is to provide documents or information that are clearly within his knowledge, management and control of those assets, or of the reasons why particular payments were made or were not made.  I have no issue that the husband could or should answer those questions.  The issue that is exercising my discretion is the timetable for the provision of that information.

17. I pause to reflect on the wider aspects of this case.  There are children and parenting issues before the court.  Mr Mulvany identified these matters at the commencement of these proceedings, some two hours ago, and at that stage handed to me a letter dated 17 July which he had sent to the solicitors for each of the parents.  I have read that letter. 

18. The current background is that the wife currently sees the two children, G and M, each Monday from after school until 6.30 p.m., although it does otherwise provide additional time as agreed from time to time by the parents.  The essence of Mr Mulvany’s letter is to identify the involvement of Dr A to deal with some initial issues of the appointment of a “more neutral therapist if necessary” and then proceed to move to questions of other possible interim increases in time that the boys could or should enjoy with their mother. 

19. These are particularly identified in paragraph 2 of the letter and there is no agreement between the parents on any one or other of these various matters which include an extension of time for Monday overnight, a brief holiday period in Queensland, removing the restriction on the mother driving whilst she is proven to be free of alcohol, and other matters more particularly developed in the eight sub-paragraphs of paragraph 2 thereof.

20. Mr Mulvany advised the court that he has had discussion with the wife and her solicitor and is soon to have – and he regards it of a matter of importance that he has – a level of discussion with the husband and his legal advisers.  Thus the finalisation of Independent Children’s Lawyer’s position, vis-a-vis the children and what is in their best interest,  is still a matter of work-in-progress.  More particularly, Dr A is yet to produce his final report though Mr Mulvany indicated to the court that could be done as a matter of some urgency.

21. The significant recommendation of Mr Mulvany was that the issues in this case be split and that the property and financial matters be heard and determined first and prior to any final hearing of the children and parenting issues.  However, the caveat to that submission of Mr Mulvany is that there is need for an urgent interim hearing on certain children’s issues as identified in his letter and that, therefore, this court should proceed on an interim basis and upon limited further material from the parties to determine, on the papers, various adjustments as are sought or would be recommended by the Independent Children’s Lawyer to the current spend-time arrangement that the children have with their mother.

22. It is suggested by Mr Mulvany that those interim issues be heard and determined on Monday, 13 August.  That would mean that on his recommendation to the court, to which I give due and proper regard, the property case would start on the morning of Tuesday, 14 August. 

23. Mr Geddes objected to the delay in any way of the property hearing.  His primary contention was that the property and financial matters must be heard and determined, and thus he largely endorsed the submission of Mr Mulvany that the resolution of the property and financial matters are somewhat of a priority for this family.  He likewise endorsed the need for an interim hearing or resolution of children’s issues on the basis that he sought extensions for his client, though ultimately the test is what is best for the two children and each of them. 

24. The father’s position was strongly contended that the property matter is not able to proceed primarily because of the available time for preparation.  Notwithstanding that the husband has been able to produce a balance sheet and further questions are sought of the husband, the suggestion is that he does not have time to fairly prepare and file an affidavit of himself and/or his witnesses, and be in a position to make further proper disclosure as sought and then to answer the questions that will be asked of him in trial of and related to assets, financial transactions, bank statements, deposits, share purchases and the like, all of which can be seen by a close examination of his summary pool of assets as is presently before me.

25. The other issue is that this court has for a number of months set aside up to eight days for this family to finally have heard their property and children’s issues.  There have been a number of indulgences given over the time to this family, and at least one and if not more adjournments of various issues.  There is no other time this calendar year, there may not be any available time early in the new year.  That raises a number of issues, such as the potential need for any updated valuation. 

26. Mr Gates briefly touched upon the allegedly depressed property market but then was reminded by his solicitor that the valuations were obtained only in March of this year.  That is not a relevant issue today, but if the matter were to go to next year it may become a relevant issue.  Likewise actuarial calculations, likewise publicly listed shares which fluctuate on a daily basis. 

27. Any delay in the hearing of the property case would certainly inconvenience the court in that there would be a further adjournment and a limited opportunity to find other cases to fill the void but, more particularly, it would greatly add to the further costs of preparation of the parties, though that issue seemingly is of minimal, if any, importance to the parties in this case.  Significantly, it moves assets into a new financial year, it may or may not give rise to other taxation issues for past years, and none of that information is before the court and it was certainly not ever suggested by the husband in his 30 April document.  Ultimately what is, will be and can be established by evidence.

28. The first matter the court must determine is whether the children and parenting issues should be split from the property issues.  My position throughout the case management has been to resist any splitting of issues.  The eight days was always provided on the basis that all issues would be heard together.  However, I must give very considered weight to Mr Mulvany’s submissions and the best interests of the children. 

29. In essence, I repeat, that they were that the property be decided first and orders be made in the property, the inference being that the children talk of or know of the property proceedings and the division of assets and have or want to express an opinion and will be more comfortable knowing that those matters are concluded.  As an aside, children, particularly teenage children, should know little of property disputes in this court, but in this case and in other cases there is a reality that they hear and they know of matters and that cannot be changed. 

1. Certainly Mr Mulvany’s position is that they do know, it is influencing them, it is a matter of importance to them and the property matters should be finalised first.  I do understand the objection to the timetable as argued on behalf of the father.  On balance, and I must say reluctantly because it was never my intention to split the hearing of property from children’s issues, I will split the hearing.

2. The issue then is what first proceeds and/or what other interim hearings are required.  Overwhelmingly the most significant factor must be the welfare of the children and their interests, and that overrides financial issues, and both parents would know and understand that is and must be the approach the court adopts.  If a legal practitioner of the seniority and experience of Mr Mulvany urges that upon the court, then it must be given proper and serious weight.  Ultimately it is the deciding factor. 

3. For all the concerns I have of the timetable and the expedition of material, the interests of the children outweigh that and thus I will not hear the children’s issues on a final basis until I have determined the property financial aspects of the case.  I will, however, hear the interim issues of the children on a one-day only basis on submissions and on the papers, but with a right for an affidavit to be filed.  I will hear that on 13 August and I will make orders shortly requiring on an interim basis, and dealing particularly with the issues that Mr Mulvany has identified in his letter, that the parties file their orders sought in that regard supplemented by an affidavit, that each of them may file, of up to but no more than eight pages.

4. I intend to list the property on 14 August.  I emphasise that is done upon due reflection and understanding that it is a short timetable.  However, the position that I have concluded is a right and proper approach, is that the husband does have a very substantial, if not unique, knowledge of his own position.  There are not forensic accountants valuing business entities or the value of businesses.  This is a case about real property, shares, cash money and other personal assets, an actuarial assessment by an independent expert who has been accepted by the husband in his preparation of the 30 April asset pool, and other than that various purported add-backs both ways which may or may not be accepted, and the overriding issues of any actual tax assessment.

5. If ultimately, and without flagging any outcome, the court concludes there is a genuine potential for a tax payment the court can always quarantine a sum of money to be held for several months in a trust account pending inviting the Deputy Commissioner to issue an assessment of tax.  That may or may not be appropriate, it may or may not be in the parties’ interests, or the court may be asked not to do that.  However, there are many options open to a court in justly and equitably dividing assets of the parties; all such options will be open to me in my hearing of this matter.

6. I therefore propose a timetable and further case management which will put initially upon the wife a very substantial onus in the preparation of her application to which the husband will shortly thereafter respond.  I emphasise that I have finally determined that it is in the best interests of these parties to hear the property and I do not regard either of them to be unduly inconvenient by a tight timetable.  If anyone is inconvenienced it more likely the person who is out of financial knowledge, than the person who is in control of the knowledge and of the financial answers.  However, that can be determined by some level of appropriate cross-examination. 

7. To the extent that Mr Gates flagged his client might be disadvantaged by the lack of availability of any particular Senior Counsel – and I think Mr Sweeney was certainly mentioned and he is not Senior Counsel but very experienced Counsel – then ultimately if they cannot accept the brief to lead Mr Gates then there are other well-experienced members of the bar who would likely be available.  I do not adjourn matters for the convenience of Counsel unless in unique circumstances, and this is not one those circumstances.

8. I, therefore, will shortly order a timetable whereby the wife files her amended financial and property application in a very tight framework, the husband’s response will be several days thereafter, and thus he can commence working with his solicitor on that document today.  Each of them will have the right to file a trial affidavit.  Each of them will have the right to file an affidavit of a supporting witness, though I have already heard that the only likely witnesses from the wife’s side, other than herself, will be her mother, and from the husband’s side potentially his father.  Though Mr Gates did caveat that it might be necessary to call other witnesses if necessary on financial matters in dispute. 

9. Realistically, the issue before the court is a proper assessment of contribution under section 79(4) of the Family Law Act 1975 and, thereafter, what are the relevant, if any, section 75(2) factors. They are matters that will be determined on the evidence, both in affidavit and orally given to the court. I will require both parties to file a financial statement and I will order that in a moment. Likewise, there will be the appropriate practice direction outline of argument and single balance sheet documents which are obviously well-advanced from that which I have already had tendered to me.

10. I will fix before me on 9 August at 10.00 a.m., a case management mention to ensure that everything is filed.  These are ex tempore reasons given without leaving the Bench, and thus they are not as comprehensive as otherwise might be given with an adjournment to prepare the detailed judgment.  Time, however, did not permit any adjournment for the purposes of judgment, and these reasons certainly encompass the case management reasons why this matter can and must proceed in the priority that I have dictated. 

11. I will require Mr Mulvany to attend at court only on the 13^th of next month.  I emphasise that the proceedings in relation to the children will be heard on the papers filed and the submissions of Counsel, and what is before the court is intended to be the limited issues by way of any extension if that be in the interests of both children to the current time-spent order of the mother.

12. I take this opportunity to address solicitors that in the drafting of the affidavits there is to be careful compliance with the Rules.  There is not to be – and I repeat – not to be a loading of annexures so as to infringe Family Law Rule 15.12.  I do not accept books of documents that are said to be required as exhibits.  Counsel will no doubt prudently in conference determine what exhibits are appropriate and they can be dealt with in the evidence or in accordance with the Rules.

13. I will have these ex tempore reasons transcribed, placed upon the court file and made available to all parties.  I will now proceed to pronounce the orders.

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young delivered on 2 July 2012.

Associate: 

Date: