Sresbodan & Sresbodan and Ors
[2013] FamCA 480
FAMILY COURT OF AUSTRALIA
| SRESBODAN & SRESBODAN AND ORS | [2013] FamCA 480 |
| FAMILY LAW – PARTIAL PROPERTY SETTLEMENT – Whether just and equitable in the circumstances of the case to make an order for the interim distribution of funds – Where the primary proceedings are between the husband and wife to a marriage – Where the Trustees of the husband’s bankrupt estate are intervenors in the proceedings – Where the husband seeks funds by way of interim distribution – Consideration of the “adjustment issue” and whether on a final hearing the quantum of funds sought by the husband would give him so much that it could not be adjusted on a final hearing FAMILY LAW – PRACTICE AND PROCEDURE – SUBPOENAS – Where the husband issued a subpoena against the Trustees of his bankrupt estate – Where the Trustees seek that the subpoena be set aside by the Court – Whether the subpoena may be set aside on the grounds that it seeks discovery or is oppressive or is otherwise an abuse of process |
| Family Law Act 1975 (Cth) Family Law Rules 2004 |
| Gabel v Yardley (2008) FLC 93-386 Harris and Harris (1993) FLC 92-378 Hatton v Attorney-General of the Commonwealth of Australia & Ors (2000) FLC 93-038 National Employers’ Mutual General Association v Waind and Hill [1978] 1 NSWLR 372 Relationships Australia v Pasternak (1996) FLC 92-699 Strahan and Strahan (2009) 241 FLR 1 Zschokke and Zschokke (1996) FLC 92-693 |
| APPLICANT: | Mr Sresbodan |
| RESPONDENT: | Ms Sresbodan |
| INTERVENORS: | Mr Vanin and Mr Cox |
| FILE NUMBER: | SYF | 4345 | of | 2006 |
| DATE DELIVERED: | 20 June 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Fowler J |
| HEARING DATE: | 23 May 2013 |
REPRESENTATION
| APPLICANT: | Mr Sresbodan |
| SOLICITOR FOR THE RESPONDENT: | Mr Richardson of Adrian Twigg & Co |
| COUNSEL FOR THE INTERVENORS: | Mr Ash |
| SOLICITOR FOR THE INTERVENORS: | Watson & Watson |
Orders
The husband’s Amended Application in a Case filed 1 May 2013 is dismissed.
The subpoena sought by the husband to be issued on the Trustees in the terms set out in the subpoena returnable on 15 May 2013 is set aside.
The costs of the parties are reserved to the hearing.
The wife’s Application for Final Orders filed on 24 November 2006 is listed for Callover before me at 10.00 am on Friday, 19 July 2013 unless the parties are in the meantime otherwise advised.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sresbodan & Sresbodan and Ors 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 SYDNEY |
FILE NUMBER: SYF 4345 of 2006
| Mr Sresbodan |
Applicant
And
| Ms Sresbodan |
Respondent
And
| Mr Vanin and Mr Cox |
Intervenors
REASONS FOR JUDGMENT
Introduction
The proceedings before the Court are proceedings commenced by
Mr Sresbodan (“the husband”) by Amended Application in a Case filed on 1 May 2013.
The husband was self-represented.
At the commencement of the hearing, the husband made an oral application for the adjournment of the hearing of this application. The reason given by the husband for his desire to have the proceedings adjourned was that he was waiting for evidence on which he intended to rely to arrive from Brisbane. The said evidence was a transcript of court proceedings, which was apparently due to come into the husband’s possession at around lunchtime on the day of the hearing.
The other parties each opposed the husband’s application for an adjournment. Mr Ash informed the Court that the transcript on which the husband wished to rely was a transcript of proceedings that had taken place the day prior in the Full Court of the Federal Court of Australia in Brisbane. The Court was also informed that each of the parties present in the present proceedings had been present in those proceedings.
The Court refused to grant the adjournment, however, the husband was granted leave to tender the document in due course and, if he so wished, to make a submission on the document provided that he did so within 48 hours and served the other parties with a copy of any such submission. The husband did not do so.
In his application the husband sought three orders in the following terms (reproduced as written in the original document):
1.I urgently need a minimum of $250,000 (two hundred and fifty thousand Australian Dollars) for legal costs already incurred and for future cases in District, Local, Supreme, Federal and Courts of Appeal, and mostly likel [sic] into the High Court, to repay monies lent to me by friends and for living expenses.
2.I demand that the persons, [Mr Vanin] and [Mr Cox], cited as the Respondents in addition to the actual Respondent, who is [Ms Sresbodan], be struck out of the proceedings because they have not standing to take party in any way in what goes on between me and my ex-wife. They falsely claim to be “Trustees” to my estate but that it [sic] totally wrong I have never been bankrupt and what the Official Receiver, [Ms A], did on 18 May 2009 was to ISSUE A FALSE INSTRUMENT.
3.AND THAT [Law Firm D] and [Mr E] NOT be allowed to participate in ANY WAY in these proceedings because they have ALREADY been STRUCK OUT of the Family Court by the Full Bench of the Family Court and ordered to pay ME costs in the proceedings … and … of the Family Court of Appeal.
In support of his application the husband relied on two affidavits: one filed on
1 May 2013 and the other filed on 20 March 2013 which covered in part the same ground. The husband also tendered a number of documents and addressed the Court orally on the orders that he sought on the hearing of the application.
The husband’s application was opposed by Mr Vanin and
Mr Cox, who are the intervenors in these proceedings and the Trustees of the bankrupt estate of the husband (“the Trustees”).
The husband’s application was also opposed by the Respondent,
Ms Sresbodan (“the wife”).
Mr E appeared on the basis that he represented creditors in the husband’s bankrupt estate (“the creditors”) who have an interest in the outcome of the proceedings, since the first order sought by the husband, if granted, would see a reduction of the estate such that there would be, Mr E contended, insufficient funds remaining in the estate to fully satisfy payment of the creditors’ debts. The creditors did not seek to become a party to the proceedings.
The Trustees relied on an affidavit (and certain annexures thereto) of
Dennis Grant, a solicitor acting on their behalf, filed on 17 May 2013. The Trustees also made written and oral submissions on the evidence.
The primary proceedings before this Court are proceedings between the husband and the wife in which orders for property settlement are sought under the provisions of section 79 of the Family Law Act 1975 (Cth) (“the Act”). Whilst those proceedings were pending determination the husband’s estate was sequestrated. The husband has been discharged from bankruptcy after the effluxion of time but the estate remains presently undistributed.
The husband asserts that the Trustees, illegally and with fraud and for the purpose of benefiting unnamed persons (possibly the Trustees, the Suburb F Shire Council, the solicitors then acting for the husband or others), sought to deprive him of his interest in a property at Suburb K, NSW (“the Suburb K property”).
The husband and the wife owned the Suburb K property however, following the husband’s bankruptcy, it was sold (it is understood the husband asserts at under market value).
The sale proceeds have been the subject of orders of the Court and some have already been paid to the husband and wife in the following amounts:
a)the wife has received the total sum of $1,150,000 and
b)the husband has received the total sum of $150,000.
In addition, there has been an outbreak of litigation in other courts with respect to the husband’s bankruptcy.
There was an application by the husband to the Federal Court asserting that the property held by the trustees was protected property, being derived certainly in part from the proceeds of a compensation claim. With respect to that application, the Honourable Justice Emmett made a determination on
… December 2012 that it should partially succeed and that, of the funds presently held by the Trustees, some 15.05 per centum should be earmarked as protected property of the husband.
From the decision of Emmett J there has been an appeal by the husband to the Full Court of the Federal Court, in which a decision and judgment has been reserved.
A separate Originating Application and Statement of claim, both dated
12 October 2012, have been filed by the husband in the Federal Court. In that application the husband seeks, inter alia, relief by way of an annulment of his bankruptcy and restoration of the Suburb K property to the husband or, in the alternative, restitution and damages in the sum of $35,000,000. The relief in damages is sought against a number of respondents, including the Trustees and former solicitors of the husband.
The allegations contained in the husband’s Statement of Claim canvass the issues which underlie his assertions as to the alleged lack of legal correctness in the making of the sequestration order in relation to his estate.
In his Statement of Claim the husband contends that an application for sequestration of his estate was initiated by the Suburb F Shire Council
(“the Council”) over a debt in the sum of $22,007.87, which it claimed the husband owed to it arising from a prior Order of the Land and Environment Court of New South Wales (“the LEC”). The husband, however, asserts that the action in the LEC was dismissed on 16 February 2005.
The Statement of Claim goes on to explain that the Council’s application for sequestration came before Federal Magistrate Raphael (as His Honour then was) on 12 May 2009 in the then Federal Magistrates Court of Australia. It is contended by the husband that, at the hearing of the application, the proceedings were stayed for a period of 21 days. In his oral submissions at the hearing of the present application, the husband told the Court that the 21 day stay had been granted in order for him to pay the debt owing to the Council. The husband asserts that he paid the debt to the Council on 25 May 2009 but that, notwithstanding this, the Trustees were appointed as trustees in bankruptcy of his estate. He states that he was declared bankrupt as and from 12 May 2009 and that he was discharged from bankruptcy on 13 July 2012.
The Statement of Claim then sets out the husband’s contentions in relation to the sale of the Suburb K property by the Trustees as administrators of his estate, and his complaint that, through being prevented from developing and selling the property, he is entitled to damages in the sum of $35,000,000.
The Statement of Claim goes on to recite that on 20 May 2009 the husband filed an application for an annulment of the bankruptcy order. In respect of that application, the husband asserts that Mr G (his former solicitor) without instruction consented to the withdrawal of the husband’s application to annul the bankruptcy on two occasions.
The husband also asserts in his Statement of Claim that he had an agreement with Law Firm D (also former solicitors of his) to act on a contingency fee basis in relation to the subdivision and development of the Suburb K property, but nevertheless that Law Firm D charged him contrary to that agreement and the Trustees prevented him from disputing the charges.
In response to the husband’s Statement of Claim the Trustees have filed a number of strike-out applications in the Federal Court, which are due to be heard before the Honourable Justice Foster on … June 2013.
The Trustees assert that the amount retained by them for payment of creditors and for the administration of the husband’s bankrupt estate is now likely to be insufficient to achieve payment of the estate’s creditors in full. At annexure “H” (incorrectly labelled “G”) to the affidavit of Dennis Grant, the Trustees set out a statement of position of the estate as they see it. This is set out hereunder:
RECEIPTS $ $ Part Portion of Sale of [Suburb K] Property 1,858,396.16 Proceeds from Drawdown Loan Application by Trustees 50,000.00 Funds Recovered from [Suburb F] Shire Council 25,420.00 Interest Income 8,065.67 Total Receipts: 1,941,881.83 Less: PAYMENTS Cost related to [Suburb K] Property Accounting Fees 9,453.95 Allowance advanced to [the husband] (as per Court order) 4,500.00 Marketing Expenses of [Suburb K] Property 19,877.86 Printing and Copying 385.8 Repairs and Maintenance (tidy up the Property) 12,144.00 Other expenses (claim assessments outsourced) 4,235.00 Valuation Costs 12,870.00 63,466.61 Costs of Securing and Protecting the [Suburb K] Property Payment of Loan Arrears to Suncorp Metway Ltd 4,704.12 Repayment of the Drawdown Loan 50,000.00 § Accrued Capitalised Interest 1,517.88 § Administration Fees/Establishment Fees 2,985.65 59,207.65 Legal Legal Expenses 587,279.34 587,279.34 Other Expenses Storage 2,354.00 2,354.00 Creditors Petitioning Creditor Costs 14,060.00 [Law Firm D] – costs 28,100.00 42,160.00 Trustees’ Fees & Disbursements Trustee’s Remuneration 304,922.50 GST on Trustees’ Remuneration 30,492.25 Trustees’ Disbursement 17,875.24 GST on Trustee’s Disbursement 443.44 353,733.43 ITSA Interest Charge Paid to ITSA (Federal Government charge/levy)
7,592.30Realisations Charge Paid to ITSA (Federal Government charge/levy)
75,081.5582,673.85 Total Payments: 1,190,874.88 PRESENT FUNDS HELD AT BANK AS AT 17 May 2013 $751,006.95 CREDITOR PROOF OF DEBTS RECEIVED $809,477.00
In relation to the third order sought by the husband, the Court has concluded that Mr E does represent third parties who have an interest in the current application. Mr E did not and does not seek that those third parties be joined as a party to these proceedings. Rather, he wanted to be heard and in a very short time he was heard, supporting in effect the position of the Trustees. It is not the view of the Court that this degree of participation was unreasonable.
The matters raised by the husband in the second order which he seeks are those which will, it seems, be canvassed by the Federal Court in the proceedings due to come before Justice Foster in June. That Court having been seized of the matters referred to it, it is not the intention of this Court to embark on a consideration of them.
The first order sought by the husband is an application for the release of funds held by the Trustees in the bankrupt estate of an amount to assist the husband in repaying debt and otherwise funding litigation. The Court will now turn its attention to a consideration of that application.
In support of his application the husband filed an affidavit on 1 May 2013 in which he deposed as follows (reproduced as written in the original document):
1.I URGENTLY need at least $250,000 (two hundred and fifty thousand Australia dollars) for legal representation and preparation of all my cases in the Local, District, Supreme, Federal, Federal Magistrates, Family, Courts of Appeal, and very possibly into the High Court. This money is so that I can ay for what I am already in arrears for and to continue to FIGHT for my RIGHTS and to get back what is LAWFULLY MINE.
2.I have debts to friends and, of course, on-going ordinary living costs.
3.I demand that the persons, [Mr Vanin] and [Mr Cox], cited as the Respondents in addition the actual Respondent who is my ex-wife, [Ms Sresbodan]. I want them struck out because that call themselves my “Trustees” which they most certainly are not because I have never been bankrupt and what transpired in 2009 with an illegal Sequestration Orders that was STAYED for 21 days but, even in spite of this STAY, the Official Receiver, [Ms A], went ahead and ISSUED A FALSE INSTRUMENT. there was NEVER any bankruptcy Judgment. Also, once that FALSE INSTRUMENT had been issued by that PUBLIC OFFICIAL, all the lawyers and the people at the [Suburb F] SHIRE COUNCIL disregarded the unlawfulness of that document and even when I PAID the one and only supposed “Creditor”, IN PROTEST, well before the expiration of that STAY, again everyone involved continued on to steal MT PROPERTY and RUIN MY HEALTH and DESTROY MY FAMILY.
4.My wife has already received $1,145,000 for HER LEGAL fees and her LIVING even though she is WORKING FULL TIME and I am living of the DISABILITY PENSION and I have only, so far, received only $150,000 for my LEGAL FEES what I have already SPENT.
5.It must be pointed out that [Law Firm D] have already been STRUCK OUT in my cases in the Family Courts and ordered to pay me costs. Because of this [Law Firm D] should not be allowed to interfere in any way is these proceedings.
6.I go back again to the BIGGEST FRAUD in my case is [Ms A], the OFFICIAL RECEIVER, ignored the STAY of 21 days and issued a FALSE INSTRUMENT in the form of a WRIT OF COMMISSION on 18 MAY 2009 well before the EXPIRATION of the 21 days STAY which was TOTALLY, TOTALLY WRONG that a PUBLIC OFFICIAL should do such a thing. By her action, she is destroying the LIVES of many INNOCENT PEOPLE.- and one of those INNOCENT PEOPLE is ME, [Mr Sresbodan]. This action is PUNISHABLE by a term of IMPRISONMENT for 5 years and I demand that she appear in the WITNESS BOX to answer the question of why she commit such a TERRIBLE FRAUD against the person who PAID all his debts what is ordered by Federal magistrate RAPHAEL on 12 MAY 2009. the only reason what I can see is the CONFLICT OF INTEREST commitian a FRAUD and the destruction of innocent lives, families and so on. Because of her action I am forced to live on the street. I am almost 70 years old and I am forced to live on the streets for the last 3 years with no facilities any mormal human being is entitled to - and my condition is that I have many chronic diseases and those chronic diseases are chronic bac disease, chronic heart disease, chronic type 2 diabetes, chronic breathing and chronic leukaemia. Should such a sick person be orced out of his own property and live on the street worse than an Australia dog.. a dingo.. I am not a dingo and I work so hard in the country for the last 45 years from 5:30 in the morning till 8 - 9 - 10 PM seven days a week as a [tradesman] - me, myself and [Mr J], we was openinga dna closing the factory 7 days a week, never seen family to grow up - what I dearly miss, today. Surely, I desrve better better treatment in this so-called DEMOCRATIC COUNTRY is a terrible, terrible condition – FORCED BY THE FRUD and GREED in the legal system..
7.The so-called “COSTS” from the Land & Environmet Court was AFTER the case was DISMISSED with NO further hearings, what is totally, totally wrong what is happened. Council choose NOT to APPEAL against the DISMISSAL and therefore “COSTS” are a FRAUD.
8.Because of the FRAID of Watson & Watson (firm) and the lawyers and barristers, Justice WATTS have to stand down from the proceedings in the FAMILY COURT because they all KNOW I PAIDon the time the “DEBT” what I am ordered to pay by Federal Magistrate RAPHAEL but was IGNORED and the DEFRAUD someone from their PROPERTY - what is a BANKRUPTCY RACKET what, as other Australians, can see as our systemof Justice works and ordinary Australians CAN NOT receive Justice. From what i can see, “Justice” is only for barristers and lawyers. I will never give up and I will fight for MY RIGHTS for as long as I am alive. My RIGHTS is more imprttant for me - and I am fighting for the RIGHTS of every single Australian HUMAN BEING. What has happened to me shoud not happen to any born and unborn human being. I hope that JUDGES will administer and deliver JUSTICE.
The Court notes that the husband filed a shorter affidavit on 10 April 2013 on which he relies and which largely contains the same information as above.
Applicable Law
The law in relation to interim property settlements is well settled.
Any interim property orders that the Court makes in these proceedings must be granted under a power to make such orders and the issues attaching to the exercise of such power must be taken into account.
Section 79 of the Family Law Act 1975 (Cth) (the “Act”) confers on the Court a power to make orders for property settlement. While there is only a single exercise of power under s 79, the Court may exercise the power through
“a succession of orders until the power ... is exhausted”or until a final order dealing with all the known property of the parties is made: Gabel v Yardley, cited in Strahan and Strahan [2009] FamCAFC 166 at [113] (“Strahan”).
Section 80(1)(h) of the Act confers on the Court a power to “make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order”. Together,
s 79 and s 80(1)(h) confer on the Court a power to make orders for interim property settlement.
The manner in which applications for interim property settlement are to be approached was articulated by the Full Court in the case of Strahan.
Boland and O’Ryan JJ stated at [118] of that decision that there are two stages to the hearing of such an application.
The first stage of the two-part process was said to be the “procedural step” which requires an analysis of whether the circumstances of the case trigger the Court’s power to invoke s 80(1)(h) to make an order for partial property settlement before a final hearing. In Strahan it was held that the circumstances which may trigger the exercise of such power need not be “compelling”. In the words of Boland and O’Ryan JJ at [132]:
... when considering whether to exercise the power under s 79 and
s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.The Full Court at [133] provided an example of a circumstance that would warrant an appropriate exercise of the power, that being the situation “where one party requires funds to assist in defraying the costs of litigation without which funds an injustice may be caused.”
The second stage of the two-part process for considering interim property settlement applications is the “substantive step”. In relation to this stage the Full Court in Strahan stated at [135] the following:
... as the jurisdiction under s 79 of the Act is being exercised the provision of that section must be considered and applied but with limitations given that it is not the final hearing. There is also no requirement of compelling circumstances in relation to the substantive step.
Regard must therefore be had to the usual s 79 considerations when determining whether to make orders for interim property settlement, but a detailed analysis of those considerations is not required.
The Full Court proceeded to discuss a third matter, the “adjustment issue”, which is to be considered after completion of the two-stage analysis described above. The adjustment issue had been identified in the earlier case of
Harris and Harris(1993) FLC 92-378 at 79,930 and its importance was also stressed by the Full Court in Zschokke and Zschokke (1996) FLC 92-693.
The essence of the adjustment issue is whether an interim property order would give a party so much that it could not be adjusted on a final hearing. In Strahan, the Full Court at [136] accepted that this is a relevant consideration for an exercise of power under s 80(1)(h) for the following reason:
... the discretion conferred by the power in s 79 is to make such order as the Court considers appropriate provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order.
Citing Finn J in Gabel v Yardley (2008) FLC ¶93-386, the Full Court in Strahan went on to state as follows:
... the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal. As Finn J said at [126] the interim order must be “capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power.” (emphasis added)
The Full Court in Strahan also emphasised that, when considering if it is appropriate to make an interim property settlement order, a finding that the applicant would on a final hearing receive the amount sought on an interim basis is not enough. Their Honours at [139] held as follows:
… more is required than the mere fact that upon a final hearing the applicant would receive the property being sought (or an amount in excess of the funds being sought) from the other party.
Determination
In the primary proceedings before this Court the wife argues for a division of property in the order of 63 per centum to her and 37 per centum to the husband. The husband seems to have asserted that the interests of the parties in property should be divided equally.
The wife asserts that some of the creditors who form part of the bankrupt estate would properly be regarded as creditors of the parties for the purpose of ascertaining the property of the parties or either of them available for division between them. Some of the creditors, however, and particularly those which are related to the husband’s unilateral actions, do not in her view properly fall within that ambit.
Mr Richardson tendered an aide memoir at the hearing which sets out the wife’s assertions as to what the result would be if her substantive claim were met on the assets presently available. That aide memoir was marked Exhibit 4 and the contents of it are reproduced below.
Net sale proceeds of [Suburb K]: $6,700,000 Less agreed joint matrimonial debts (see Wife’s affidavit of 17 May 2012):
$654,604Subtotal: $6,045,396 Plus net interest: $344,911 Net Pool: $6,390,307 Less Wife’s best case (63% of net pool): $4,025,893 Subtotal: $2,364,414 Less Pool available to creditors (36.95% of Gross value): $2,200,000 Subtotal: $164,414 Less Creditors Costs (30.05% of approx. $400,000): $120,000 Subtotal: $44,414 Less sum already received by Husband by way of partial property settlement
$150,000TOTAL Remaining sum available to Husband if Wife is wholly successful:
-$105,586
Even if the wife is not wholly successful (and the amount she seeks it seems on the information available could well fall within a range of possible results), the Court takes the view that in a marriage of this length and with the relative earning capacities of the parties, the wife is likely to achieve an adjustment under the provisions of s 75(2) of the Act.
In addition, the further costs to be incurred by the husband are not known. If he is successful and recovers some costs that may well be one event. Equally, however, if he loses he will have paid money to no purpose and will in addition have perhaps some further liability for costs. The Court will need to await the outcome of the determinations by the Federal Court to determine the possible outcomes of the husband’s litigation. They are, presumably, likely to be known shortly unless there are as the husband seems to suggest in speaking of his need multiple appeals or applications for leave to appeal.
Upon application of the test for adjustment identified in the case law set out above, even assuming that the Court found in favour of the husband on the other steps specified in Strahan, the Court is satisfied that the adjustment problem would alone cause its rejection of the husband’s application. The Court would on that basis find that it would not exercise the power.
Additionally, in terms of the utilisation of the monies if granted, the husband says that he needs the money to repay loans incurred for legal fees and for personal costs. The husband points the Court to what he says is his residence in a car and he points out that he is a human being who is entitled to live with dignity.
The Court can empathise with the views that the husband holds, however the law requires that more detail be provided than was provided by him. For example, with respect to the asserted loans that he has taken, the husband provides no detail as to whom these loans were from, when they were taken, on what terms they were taken and for what purpose. The husband says that he has no money but he makes no full disclosure of his current financial position. He says that he needs to meet future legal costs but gives no details of to whom, for what amount and for what purpose those costs will be incurred.
Clearly, once money is spent in the matter, it is spent and the husband’s financial position will not at the end of that process be necessarily any better than it is now; it may be worse. He contends that he has a claim for $35,000,000 before the Federal Court, but no particulars are given of the way in which that sum was calculated.
All of the husband’s evidence was unsatisfactory in that it lacked detail. Of course, if the husband could establish an entitlement to an amount which met the criteria of the decided authorities on partial property settlement, it would be up to him to determine what he spent his money on. However, a determination of whether the husband’s expenditure on legal fees meets the requirements of a consideration of “the justice of the case” depends on a consideration of more information than is presently available to the Court.
The Trustees’ case is that the payment to the husband should not be made. In support of their case, the Trustees in a document that was tendered and marked Exhibit 3 submitted that the issues are as follows:
aWho owns what, in what proportion?
bWho owns what, in figures?
cIf the Husband owns anything at all, should this Court exercise its discretion to allow him access to any of it?
The orders of the Federal Court dated 12 December 2012, which were subject to an appeal hearing the day prior to the hearing of the present application, at this time remain in force. Those orders allocated to the wife, husband and Trustees percentages of the sum held in the husband’s estate. They are as follows:
a)The wife has the beneficial ownership of 50 per centum.
b)The husband has the beneficial ownership of 15.05 per centum.
c)The Trustees have the beneficial ownership of 34.95 per centum.
Justice Emmett, having determined that the husband is entitled to a protected amount of 15.05 per centum of the estate, declared that the Trustees have a right to a lien over 50 per centum of the estate (that being the aggregate of the husband’s and the Trustees’ share), for the payment of costs reasonably incurred by them. No such lien was declared to be applicable to the wife’s entitlement.
The Court is informed that the Trustees do have a lien over a 50 per centum share of the estate for the payment of their costs with the burden of the lien to fall proportionately between the husband’s and the Trustee’s share. That means that, in respect of the husband’s entitlement to 15.05 per centum of the estate, the Trustees have a lien to the extent of 43 per cent of their costs.
A number of interim orders have been made by this Court in these proceedings. On 6 June 2010, when the matter was before Justice Watts, interim orders were made to the following effect:
a)the husband was required to vacate the Suburb K property
b)the Trustees were to take possession of the property
c)the Trustees and the wife were appointed as Trustees for the sale of the property
d)the sale proceeds were to be distributed in a manner and order prescribed in the Orders, including to the Trustees in a sum necessary to discharge the husband’s creditors.
In further interim orders made by Watts J on 27 February 2011, the following was noted:
9.The former matrimonial home has been sold. The sale price was $6,670,000. The trustee in bankruptcy has retained $1,800,000. The husband’s bankruptcy has not yet been annulled.
Each of the parties has made applications for partial property settlements. The wife has received the total sum of $1,150,000 by way of interim distributions made pursuant to the orders of this Court as set out below:
a)on 27 January 2011, the wife received the sum $150,000
b)on 18 July 2011, the wife received the sum of $300,000
c)on 17 July 2012, the wife received the sum of $700,000.
The husband has received by way of interim distribution the sum of $150,000, which sum was ordered to be paid to him by Orders dated 30 March 2012.
The Trustees assert that prior to any orders being made, the parties’ putative entitlement to the distribution is as follows:
a)the wife is entitled to $2,223,571
b)the trustees are entitled to $296,979
c)the husband is entitled to $903,158 but this is subject to a lien in favour of the Trustees which it is asserted is presently around $450,000.
It seems clear that the husband is not able to access the Trustees’ share, since to do so would mandate paying out other than in accordance with statutory priority, with the former bankrupt being paid before the creditors.
The Trustees did not wish to be heard on whether the husband could access the wife’s share.
The husband cannot access his own share since there is a lien over those funds for, it is asserted, up to half of it at present. It is the Court’s view that it ought not displace at this time the Trustees as a secured creditor.
The wife has not disclaimed any entitlement to the Trustees’ own share, nor would one expect her to. In those circumstances she would have access to two asset pools: her own pool, and the husband and Trustees’ pool. The Trustees do not wish to subsidise in effect the conduct of the litigation by the husband against the wife.
The litigation sought to be supported by the husband in the payment of legal fees is, in significant part, litigation being fought out in Courts other than this one over issues which are raised by him alone and not by he and the wife.
The funds, if distributed to the husband, would be utilised to pay creditors of the husband and perhaps give preference to those creditors over the creditors within the bankruptcy.
The total of the costs of the Trustees is $1,138,687. Given that there is presently a lien over the husband’s share of the estate for 43 per centum of the Trustees’ costs (which amounts to $489,635.41), it may be ultimately less than that the Trustees argue but even so, it is a reasonable assumption it is submitted that the costs are unlikely to be less than 50 per centum of the $903,158 referred to above.
The Court declines for these reasons to make any order for the distribution of funds to the husband at this time.
Subpoena Issue
The husband sought to issue a subpoena to the Trustees, returnable on 15 May 2013, to produce documents in the following terms:
The complete file for the Estate of [Mr Sresbodan] held by your firm resulting from the Order in the Federal Magistrates Court of Australia, NSW Division, in the case of The [Suburb F] Shire Council v [Mr Sresbodan], Case No: … .
The Trustees did not comply with the subpoena and seek to have it set aside.
There is no express power to set aside a subpoena in the Family Law Rules 2004, however, at common law the Court’s power to do so is well established.
In Hatton v Attorney-General of the Commonwealth of Australia & Ors (2000) FLC 93-038 (“Hatton”), the Full Court of the Family Court considered the issue of setting aside a subpoena and noted as follows at [35]:
[T]he existence of a power in this court to set aside subpoenae seems to have long been assumed or accepted by this court (see in this regard: In the Marriage of Sharpe and Dalton (1990) 14 Fam LR 339;
FLC 92-167; Epstein, above; White and Tulloch v White (1995) 19 Fam LR 696; FLC 92-640; Re Z (1996) 20 Fam LR 651; FLC 92-694 at 83,240 and Relationships Australia v Pasternak (1996) 20 Fam LR 604; FLC 92-699).In Hatton, the Full Court cited extensively from the New South Wales Court of Appeal decision in National Employers’ Mutual General Association v Waind and Hill [1978] 1 NSWLR 372 (“Waind and Hill”) and described the principles set out in that decision to be of continuing “persuasive authority” in this Court, save for one exception (discussed below).
Of relevance to the present proceedings is the discussion in Hatton with respect to the production and/or objection to production of documents. In Hatton the Full Court at [39] cited the following extracts from Waind and Hill:
Upon the first step the person to whom the subpoena is addressed may seek to, and have, the subpoena set aside on the ground that it was improperly issued and an abuse of the power to compel the production of documents in any one of a number of ways. Such a case is where the subpoena is used for the purpose of discovery. The essential feature of discovery in this connection… is that the person to whom the subpoena is addressed will have to make a judgment as to which of his documents relate to issues between the parties. It is oppressive to place upon a stranger the obligation to form a judgment as to what is relevant to the issue joined in proceeding, to which he is not a party. Hence it is an abuse of the use of subpoena to impose this obligation. It follows that it is an abuse to use any subpoena, i.e. even to a party to obtain discovery.
…
The issue of a subpoena may involve an abuse of power in other ways and… objection to production to the court may be on other grounds. Thus, it would be an improper use of the subpoena if it were not sought for the purpose of the litigation, but for some spurious purpose, such as to inspect the documents in connection with other proceedings, or for some private purpose, or in collusive proceedings to give them publicity.
The exception to the Waind and Hill principles is based on a finding in the
Full Court decision of Relationships Australia v Pasternak (1996)
FLC ¶92-699. The exception was described in Hatton at [42] to be as follows:
[T]o the extent that Waind and Hill might be seen as permitting the subpoena process to be used in a situation where the more appropriate process would be the third party discovery process, that decision should not be followed in this Court. That this was the limited scope of the rejection of Waind and Hill by the Full Court in Pasternak is clear when the passage from the Full Court’s reasons for judgment which concludes with that rejection, is read (citations omitted).
The documents sought in a subpoena must be relevant to the issues before the Court in which it is issued. There are issues in court proceedings to which the information in the subpoena issued by the husband might be relevant, but at the present time those issues are it appears before the Federal Court. It is that Court’s process which should be first engaged by the husband to procure the information that he seeks. To use the processes of this Court for the purpose of acquiring documents for use in other proceedings is contrary to authority, as outlined above.
In addition, the issue of a subpoena is a process designed to effect the production of specified documents. This subpoena simply relates to a file in its entirety and is therefore deemed too general and oppressive in form.
In the circumstances the subpoena is set aside.
This matter is otherwise stood over for a callover on 19 July 2013 on which date the matter will be allocated to a docket Judge.
I certify that the preceding eighty-one (81) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 19 June 2013.
Associate:
Date: 20 June 2013
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