Starkey and Starkey and Anor

[2009] FamCA 105

FAMILY COURT OF AUSTRALIA

STARKEY & STARKEY AND ANOR [2009] FamCA 105

FAMILY LAW – PROPERTY – Sale of business before trial

Family Law Act 1975 (Cth)

APPLICANT: Mr Starkey
By his Case Guardians
Mr C & Mr T

RESPONDENT: Ms Starkey

INTERVENOR: Mr D Starkey

FILE NUMBER: LEC 245 of 2007

DATE DELIVERED: 13 February 2009

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Murphy J

HEARING DATE: 13 February 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Cameron

SOLICITOR FOR THE APPLICANT: SP Lawyers

COUNSEL FOR THE RESPONDENT: Mr Page SC

SOLICITOR FOR THE RESPONDENT: Somerville Laundry Lomax

COUNSEL FOR THE INTERVENOR: Mr Balzamo

SOLICITOR FOR THE INTERVENOR: Somerville Laundry Lomax

Orders

1. The Case Application filed by the Husband on 19 January 2009 be adjourned to the final hearing of the matter which is listed to commence at 10.00am on 23 March 2009 in the Brisbane Registry of the Family Court of Australia.

1. The costs of today are reserved to the final hearing.

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: LEC245 of 2007

MR STARKEY

By his Case Guardians: Mr C & Mr T

Applicant Husband

And

MS STARKEY

1^st Respondent Wife

And

MR D STARKEY

2^nd Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. The husband, through his case guardians, brings an application in a case filed 19 January 2009 seeking, in effect, a mandatory injunction with respect to property the subject of substantive s 79 proceedings between the husband and wife.

2. Already in this matter I have made 10 orders and delivered three sets of reasons.  It need hardly be said, then, that the instant application occurs against a significant history of conflict. 

3. That conflict (which I have referred to in earlier reasons as an apparent internecine family dispute) forms an important part of the background in the current application.

4. After standing the matter down so as to allow the parties to have discussions this morning application is made by Mr Page SC, who appears on behalf of the wife, which application is supported by Mr Balzamo, who appears as counsel for Mr D Starkey, that the matter be adjourned and determined as part of the trial which has previously been set down to commence before me on 23 March, which is approximately five weeks from now.

5. Before the proceedings commenced today I passed comment about my concerns as to whether the wife and Mr D Starkey needed to be separately represented in the proceedings. I made comments in that respect about my perception of a potential conflict, namely a conflict between the duty to appraise a client of all matters relevant to the retainer with that client and the possibility of that duty conflicting with another duty owed by solicitors to their clients, namely the duty to keep all matters passing between them confidential.

6. I should say that those comments were made by me in circumstances where I had received no indication that an adjournment was foreshadowed or sought. 

7. I indicate for the record that earlier reasons given by me are redolent of precisely the same sorts of concerns that I expressed at the commencement of the hearing.

8. Subsequent to the matter being stood down, and after discussions between the parties, and in particular Mr Page SC speaking to his client, Mr Page SC (who I should point out is a highly experienced Senior Counsel in this jurisdiction) informs the Court that he is very concerned that his client - who is the wife in proceedings that have at their core a 40 year marriage - has not received independent advice with respect to the issues at the centre of the proceedings.

9. Mr Page's submissions in that respect mirror, in a sense, some of the concerns expressed by me at the outset of this application. 

10. I emphasise that it is not for me to say, in the context of this application, what solicitors should or should not do or to pass judgment in any way on their past or current actions in that respect.  Material directly relevant to that issue is not before me and it is not my intention to pass judgment in respect of any conduct in that respect.

11. However, it is important to note that the wife, as part of her responding material in the application before me, indicates that her position with respect to the substantive application pursuant to s 79 is that the Court ought not exercise its discretion to make an order pursuant to s 79 at all. 

12. That is, in my view, a highly important and significant background fact to the application made by Mr Page this morning.

13. On the face of the material - and again, without, obviously, passing any judgment in the context of these interim proceedings about the merits of any such position - it is possible to say that that application, or that position, is neither frivolous nor without at least a basic foundation.

14. The discretion to adjourn the application as sought by Mr Page depends for its exercise upon the justice of the case. 

15. Crucial in the exercise of the discretion is the consideration of what prejudice, if any, is occasioned to the husband, through his case guardians, if the adjournment is granted. 

16. I consider that there is a substantial basis for the application for adjournment, that being what in my view is a clear need for the wife and, for that matter, Mr D Starkey, to receive independent advice with respect to their respective positions and, in particular, in the case of the wife, to ensure that all such advice as might be received independent of Mr D Starkey is understood by her. 

17. In saying that I indicate that, on previous occasions, reference has been made to the relative incapacity of the wife to understand English, it not being her native tongue.

18. If, as I find, there is a substantial basis for the application, then attention needs to turn to the potential for prejudice to the respondent husband.  It is said that the business needs to be sold because, on the evidence, there are issues relevant to the business that are pressing, namely some inspections that need to take place and the potential for the purchase of new equipment, the latter of course involving very significant expense.

19. There is, apparently, a current purchaser willing to pay what a real estate agent, (who is on the face of his affidavit, one of two experienced brokers of such businesses in New South Wales), describes as a good offer. 

20. The offer is, apparently, now not subject to finance and is in the sum of about $875,000 in circumstances where an agreed single expert valuer has valued the business at $900,000.

21. What is plain in the context of the current application, however, is that the wife, (and it seems for that matter Mr D Starkey to the extent that his position in the substantive applications is at all relevant), seek that the wife retain as part of her property settlement, the business. 

22. I make it clear that, in the wife’s saying that, in the material presented for the application today, I have considerable concerns based on what Mr Page has told me of his concerns and what he says is the need for his client to obtain independent advice.

23. Nevertheless, the wife says she will retain the business.  If that is taken at face value then, on any view of the husband's maximum entitlement as pleaded by him, she can retain the business and the husband nevertheless be afforded what he asserts is a just and equitable settlement of the property pursuant to s 79.

24. The potential exists on the evidence before me for the business to lose value by reason of the prospective purchaser looking elsewhere for an investment and/or by reason of the inability of a Mr S to continue in his current position within the business, the expenditure of further sums, including, potentially, a significant capital sum and the like.

25. As I said during the course of arguments to Mr Cameron, counsel for the husband, through his case guardians, if such events which can clearly be seen to be potentially prejudicial to the husband were to unfold then, the husband would nevertheless have arguments open to him at trial that could meet any such alleged prejudice.

26. For example, he could argue that the particular part of the "pool" should be taken in as at its value now as distinct from the date of trial (if there is a variation in the two) or arguments with respect to what is commonly described as "waste" might be mounted potentially in respect of any such diminution in value. 

27. In light of that prospect, and in light of the fact that, as things currently stand at least, the retention of the business by the wife is the case that she intends to run at the hearing (although noting that her primary position is that there should be no s 79 order) I consider that any potential prejudice to the husband if the adjournment is granted is outweighed by potential prejudice to the wife in not granting the adjournment

28. Balancing the relevant considerations, it seems to me that I should exercise my discretion in favour of the adjournment and to, in effect, consider the application for sale, if it still be live, at the hearing of the trial between the parties. 

29. I note for the purposes of these proceedings that Mr Page informs the Court that it is intended that his client, the wife, immediately seek independent advice, including independent advice that would ensure that such advice is understood by her both in English and in her native language.

30. For those reasons, I grant the adjournment sought on behalf of the wife by Mr Page. 

31. Mr Cameron makes application for costs. 

32. It seems to me that the issue of costs is better determined when further evidence is before the Court, including of course evidence directly relevant to s 117(2A) of the Act.

33. In my view that evidence is better able to be considered properly if it is considered within the context of the evidence available to the Court at a trial. 

34. That factor, together with the factor earlier mentioned, namely the position of the wife and the desire of experienced counsel on her behalf for her to have independent advice, causes me to order that the costs of the parties be reserved to the trial.

35. I will direct that the parties receive a copy of my perfected reasons.

I certify that the preceding thirty five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy

Associate: 

Date:  19 February 2009