Srbinovska and Srbinovska & Anor (No 2)

[2012] FamCA 261

FAMILY COURT OF AUSTRALIA

SRBINOVSKA & SRBINOVSKA AND ANOR (NO 2) [2012] FamCA 261

FAMILY LAW - PRACTICE AND PROCEDURE – Objection to subpoena – legal professional privilege

FAMILY LAW - PROPERTY - Appointment of trustee – Sale of property – Expedition of final hearing

Family Law Act 1975 (Cth)

APPLICANT: Mr R Srbinovska

1^st RESPONDENT: Ms J Srbinovska

2^nd RESPONDENT: Mr S Srbinovska

FILE NUMBER: SYC 1484 of 2010

DATE DELIVERED: 4 April 2012

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Le Poer Trench J

HEARING DATE:

6 February 2012

9 March 2012
3 April 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Campton

SOLICITOR FOR THE APPLICANT: Swaab Attorneys

COUNSEL FOR THE 1^ST RESPONDENT: Mr Gould

SOLICITOR FOR THE 1^ST RESPONDENT: Wilshire Webb Staunton Beattie Lawyers

COUNSEL FOR THE 2^ND RESPONDENT: Mr Todd

SOLICITOR FOR THE 2^ND RESPONDENT: One Group Legal

Orders

1. The second respondent’s application to be appointed as trustee for sale of the properties at … K Street, Suburb M and … N Street, Suburb M together with all associated orders sought by him is adjourned to the hearing of the husband and wife’s Application for Final Orders and the Response to Application for Final Orders.

2. The application for final orders sought by the wife is expedited and listed for hearing to commence at 10am on 6 August 2012 for 5 days.

3. The subpoena issued against the second respondent’s solicitors T Law Firm and objected to by the husband is set aside.

4. Each of the husband and second respondent is to serve on the wife, at the time of serving the other party, any document filed in Supreme Court proceedings commenced on 20 March 2012 by the husband against the second respondent.

5. The second respondent is relieved of the obligation of filing a Financial Statement and any order made in the Federal Magistrates Court in relation to same is hereby set aside.

6. The matter is listed for further directions to ready it for trial at 10am on 31 May 2012 for 1 hour.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Srbinovska & Srbinovska and Anor (No 2) has been approved by the Chief Justice pursuant to s121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1484 of 2010

Mr R Srbinovska 

Applicant

And

Ms J Srbinovska

1^st Respondent

And

Mr S Srbinovska

2^nd Respondent

REASONS FOR JUDGMENT

1. Before the Court is an application by Mr R Srbinovska, the second respondent and husband’s brother. This application was heard over several days being 6 February, 9 March and 3 April 2012.

2. The second respondent identified two matters for determination in his document titled “Second Respondent’s List of Documents”. The first related to an objection taken to a subpoena addressed to T Law Firm.  That notice of objection was filed on 20 January 2012. The second matter for determination is contained in a Response to Initiating Application by the second respondent, and was filed on 21 July 2011.  In support of that Response the second respondent relied upon an affidavit of Mr R Srbinovska, sworn 17 January 2012, an affidavit of Ms A Srbinovska, sworn 17 January 2012, and another affidavit of Ms A Srbinovska, not filed at the time of the commencement of the hearing, but subsequently filed.

3. In the second respondent’s case-outline document, the second respondent sought interim orders that he be appointed trustee for himself and the husband to remove the remains of a burnt residence on the property at K Street, Suburb M.  He also sought that he sell the property and pay funds to meet all outstanding rates and taxes. The balance of funds then be held upon trust pending the outcome of the property proceedings between the husband and wife.

4. On 9 March 2012 the second respondent tendered a further minute of order which was marked as exhibit 2R2.  That document formalised the interim order being sought by the second respondent, as outlined above.  The second respondent provided evidence to establish that the council had taken proceedings against the husband and the second respondent to recover outstanding rates in relation to the property at K Street, Suburb M (which includes the property known as N Street, Suburb M) the amount of about $14,000 was claimed as outstanding council rates.  The council has served notice that it intends to take possession of the property in order to sell it and recover the rates.  The second respondent also said the council had issued a demolition order on the property because the original house on the property had been largely destroyed by fire and needed to be demolished.  Additionally the second respondent claimed the property was subject to a mortgage to the Commonwealth Bank and the mortgage was in substantial arrears. 

5. There is work to be done in relation to creating separate water metering for each property and for a carport to be built before separate titles for the two properties can be obtained.  The second respondent seeks the wife vacate the property so he can complete the subdivision and sell the property.  In the Federal Magistrates Court the second respondent was required to file a financial statement, he seeks that order be discharged.

6. In relation to the subpoena addressed to T Law Firm, the second respondent opposes the production of the document sought in the subpoena.  The subpoena called for production of the file kept by T Law Firm relating to proceedings in the Supreme Court between the second respondent and the husband relative to their mother’s estate.  A claim for legal professional privilege is raised by the second respondent.  He submits that there may be an abuse-of-process point to be argued because the husband has now advised the Court and the parties that he will reinstate proceedings in the Supreme Court between the second respondent and himself relative to his mother’s estate and their respective entitlement therein. 

7. The wife opposes the order that she vacate the premises.  The wife said she had entered into a payment plan with both the council and the water authority to pay outstanding accounts.  The wife said that the proceedings between the husband and the second respondent in the Supreme Court about their mother’s estate had been settled on a basis which saw the husband retain the property at K Street and the property at N Street, Suburb M.  The second respondent agreed that was so, however he said that the husband has not complied with the terms of the agreement and consequently it is now null and void.  There is an issue between the husband and the second respondent about that position.

8. The wife provided written submissions in relation to the subpoena issued to T Law Firm.  The wife said she was prepared to narrow the class of documents sought to documents which evidenced the second respondent’s instructions which gave rise to the final deed containing the settlement between the second respondent and the husband in the Supreme Court proceedings relative to their mother’s estate.  The wife submits that legal professional privilege has been waived in relation to the instructions because the deed is now in evidence in these proceedings. 

9. The second respondent says there are serious penalties which can be imposed on landowners who do not comply with demolition notices issued by councils.  These include hefty fines for each day the notice is ignored.

10. On 9 March 2012 I invited submissions on the possibility of expediting the hearing of the final property applications, rather than dealing with the interlocutory application in circumstances where the consequences to the husband and wife of granting the orders on an interlocutory basis may be very significant.  On 9 March 2012 further submissions were made, however time limits meant some of the submissions needed to be provided in writing.  I ordered the husband file and serve submissions he wished to rely on by 14 March 2012, with the wife to respond by 15 March 2012 and the second respondent by 16 March 2012.  All of the parties managed to comply with that order.  The submissions were to address the further written application of the second respondent which had been hand-drawn on 9 March 2012 and marked as exhibit 2R3.

11. The husband provided a written submission by 14 March 2012, the wife by 15 March 2012 and the second respondent by 16 March 2012.

12. The husband, in his submissions, advised he was in the process of seeking declaratory relief against the second respondent in the Supreme Court.  If successful the second respondent would retain no interest in the Suburb M properties.  Consequently the husband submits the second respondent’s application is premature.  In relation to the minute of order sought by the second respondent and being exhibit 2R3, the husband says the second respondent cannot act as a trustee as he is in conflict with one of the beneficiaries of the trust.  He submitted the second respondent’s application should be adjourned until the Supreme Court proceedings are resolved or concluded.  The wife submitted the second respondent is an inappropriate trustee for sale of the relevant properties.  The wife otherwise supported the submissions of the first respondent.  The wife proposed that the second respondent be permitted to spend up to $20,000 in complying with the demolition order and pay out the mortgage on the property, that the husband then compensate the second respondent for his expenditure.  She also sought she be served with all documents filed in any Supreme Court proceedings between the husband and the second respondent.

13. The second respondent in his submissions rejected the submissions of both the husband and the wife.

14. I was on the point of delivering orders and reasons in this matter when the husband applied to reopen the case.  The Court was convened on 3 April 2012 to hear his application.  In support of his application the husband relied on the following documents:

    a)Affidavit sworn by the husband on 20 March 2012; 

    b)Affidavit sworn by Mr Y (the husband’s solicitor) on 21 March 2012; and

    c)Affidavit sworn by Mr Y on 2 April 2012.

15. The affidavit evidence established the following:

    a)On 20 March 2012 the husband received $25,000 which he had borrowed;

    b)He paid outstanding water rates of $10,418.30 on the K Street property;

    c)He paid $5,070.85 for council rates in respect of the K Street property;

    d)He paid $9,900 for demolition work in respect of the said property;

    e)He paid $926 to the Supreme Court as a filing fee for the declaratory proceedings he then commenced against the second respondent; and

    f)A Supreme Court summons was filed on 20 March 2012.

16. Neither the wife nor the second respondent opposed the reopening of the case.  The wife sought an order for costs which I dealt with on 3 April 2012.  I reserved the second respondent’s costs.

17. When the matter was before me on 9 March 2012 I discussed with the parties the possibility of expediting the second respondent’s application, along with the applications for final orders.  Dates were discussed and 6 to 10 August 2012 were reserved in my diary as being suitable to the parties should the matter be expedited.  The husband’s actions in borrowing $25,000 and paying outstanding rates and costs of complying with the demolition order have, in my view, removed this matter from a position of being urgent and the expedition of the proceedings ought satisfy any prejudice the second respondent otherwise suffers of having been involved in the married parties’ property proceedings for some time.  I propose therefore to adjourn the second respondent’s application to the final hearing and set the matter down for hearing for 6 to 10 August 2012. 

18. In submissions the second respondent brought to the attention of the Court that the payment by the husband of council rates of $5,070.85 only discharged the debt owing on the K Street property and did not otherwise pay out the outstanding rates owing on the property at N Street, Suburb M.  It seems that although the parties have not registered the subdivision with the Land Titles Office the council have been rating each of the blocks separately, and accordingly there are still some thousands of dollars outstanding to the council as rates on the N Street property.  The husband’s counsel gave an undertaking on the husband’s behalf to remedy that outstanding rate situation forthwith.

19. In relation to the subpoena requiring documents from T Law Firm to be made available to the husband and the wife I do not accept that the second respondent has, at this time, waived legal professional privilege in the manner specified by the wife.  In my view, the requirement for production of documents by the second respondent’s solicitor relative to the Supreme Court proceedings between the husband and the second respondent at a time when the husband has instituted further proceedings in that Court seeking declaratory remedies against the second respondent is entirely inappropriate.  It may be an abuse of process.  In any event I do not require the husband’s solicitors, T Law Firm, to produce the documents called for in the subpoena at this time, I will order that the subpoena be set aside. 

20. The second respondent seeks the discharge of an order made in the Federal Magistrates Court requiring the second respondent to file and serve a financial statement in the proceedings.  I see no necessity for such an order and I propose to release the second respondent of the need to comply with the direction. 

21. The wife seeks that she be served with all documents filed by either the husband or the second respondent in the Supreme Court proceedings now instituted by the husband.  Given that the wife has a direct interest in the outcome of the proceedings I propose to make the order sought by the wife in that regard.

I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench J delivered on 4 April 2012.

Associate: 

Date:  23 April 2012