Strahan and Strahan

[2014] FamCA 1150

FAMILY COURT OF AUSTRALIA

STRAHAN & STRAHAN [2014] FamCA 1150

FAMILY LAW – PRACTICE AND PROCEDURE – Adjournment - where both parties sought to vacate the trial date – where both parties had failed to comply with trial directions made by consent – neither party offered adequate explanation for the delay – orders made vacating the trial with the matter relegated to the bottom of the trial list – where trial not to be listed until the Court is satisfied the parties are ready to proceed to trial.

Family Law Act 1975 (Cth) s 97
Family Law Rules 2004 (Cth) r 1.04, 1.08, 11.02, 15.45, 19.10

AON Risk Services Australia Ltd v Australian National University (2009) 250 CLR 175
Expense Reduction Analysts Group Pty Ltd & Ors v Armstrong Strategic Management and Marketing Pty Ltd & Ors (2013) 250 CLR 303
Tate & Tate (2000) FLC 93-047

APPLICANT: Ms Strahan

RESPONDENT: Mr Strahan

FILE NUMBER: ADF 228 of 2005

DATE DELIVERED: 16 December 2014

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Dawe J

HEARING DATE: 16 December 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Heinrich

SOLICITOR FOR THE APPLICANT: Winter & Co

COUNSEL FOR THE RESPONDENT: Ms Khung

SOLICITOR FOR THE RESPONDENT: Kennedy Partners

Orders

(1)The Application in a Case filed by the husband on 16 December 2014 is dismissed and removed from the active pending cases list.

(2)The trial date for the final hearing of this matter listed to commence on 9 February 2015 for ten [10] days before the Honourable Justice Dawe is vacated.

(3)The compliance date listed for 27 January 2015 at 9.15 am before the Honourable Justice Dawe is vacated.

(4)The orders in relation to the payment of the setting down and trial fees are discharged.

(5)The directions orders for the parties to attend to procedural matters in January 2015 are discharged.

(6)The final determination of the property settlement proceedings are referred to the bottom of the trial pool list of matters awaiting allocation of trial dates.

(7)The hearing of the trial date may be brought forward PROVIDED THAT an Application in a Case is filed and each of the parties’ solicitors file affidavits confirming that all single expert valuations have been received, that all necessary disclosure and discovery has been obtained and that the matter is ready for trial directions; such application to be filed by the applicant wife.

(8)Each of the parties have leave to bring further proceedings by way of an Application in a Case in relation to further procedural matters PROVIDED THAT any dispute in relation to those procedural matters has been the subject of private mediation attended by both parties and their legal representatives at the joint cost of the parties to resolve any of the outstanding procedural issues.

(9)No order for costs in relation to the Application in a Case filed today and the listing of the matter before the Court today.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Strahan & Strahan 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 ADELAIDE

FILE NUMBER: ADF 228 of 2005

Ms Strahan

Applicant

And

Mr Strahan

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1.In relation to this matter, I regret that it is necessary to set out the history of the behaviour of the parties and their respective solicitors, so that consideration can be given to the material which is before the Court and the proper context of the applications that are listed before me. 

2.The current listing this morning is as a result of a letter being received by the Court (a letter dated 5 December 2014, but received by the Court on 11 December 2014) addressed to my associate requesting that the listing of the matter for trial be vacated.  It refers to:

The parties have been advised that the report of the single expert,                   Ms [E], will not be available in its final form until March 2015 at                    the earliest.

It then says:

It may well be later, depending upon the supply of further information            to her.  As a result, it is the view of the parties that it will not be   possible for them to be adequately prepared for the trial which is                currently scheduled for 9 February 2015.

and the letter continues:

The parties respectfully ask that the Court vacate the present trial dates and relieve the parties of their respective obligations to file trial documents without requiring the attendance of the parties.  Furthermore, it is suggested to list the matter for directions at a convenient time in say, late January 2015 to enable the Court to be advised of Ms [E’] s progress.  Yours Faithfully

3.It then appears to be signed by two different persons on behalf of the solicitors for the wife and the solicitors for the husband

4.As a result of the Court receiving that letter, the parties were informed, through their solicitors, that the matter was listed before me this morning.  Both parties were required to attend.  The parties and their legal representatives have permission to attend by telephone link, provided the appropriate landline numbers were advised to the Court by 11.00 am on Monday 15 December.  The information also sent to the parties’ solicitors required:

An affidavit of evidence is required indicating why Ms [E] has not been able to finalise the report pursuant to the orders of 4 April 2014.

A further affidavit of evidence is to be filed, explaining the failure to comply with other parts of the order of 4 April 2014.

5.That was sent to the parties’ solicitors on 11 December 2014 in the morning.  Subsequently, the Court received the affidavits which are now relied upon, being the affidavit of the solicitor for the wife, the affidavit of the husband and the affidavit of the solicitor for the husband.  There has also been received this morning, by post, an Application in a Case and supporting affidavit filed on behalf of the husband in which certain orders are sought.

6.The Court did receive copies of the Application in a Case and the supporting affidavit as a result of reading the affidavit which had been filed by the husband which referred to that Application in a Case and the Court staff making inquiries about the matter through the solicitors. 

7.The material before the Court needs to be seen in the background of this matter and in particular, the failure to comply with Court orders and the failure to make any application or provide the Court with any explanation until specifically asked. 

8.The Court has previously referred to the long history of this matter.  There are now over 660 documents on file and the proceedings were commenced in February 2005.

9.The listing of this matter in February 2015 coincided with the tenth anniversary of this long running litigation.  Orders were made for listing the matter for trial on previous occasions and on a quick viewing of the file I could only locate the following listings.  In October 2009 the matter was listed for trial in February 2010 and subsequently vacated.  In May 2010 directions were made for Ms E’s report to be updated and the matter listed for conclusion of the trial for what was then estimated to be 23 days in November 2010.  Orders were made again in August 2010 for directions in relation to Ms E’s report and directions in relation to witnesses.  Subsequently, orders were made in September 2010 by her Honour Justice Ryan concerning the joint instructions in relation to Ms E.

10.In October 2011 the matter was given a tentative listing of trial of 14 days in June 2012.  Notes were made in relation to Ms E’s report.  In December 2011 the June 2012 dates were vacated and the matter listed for trial for 15 days in August 2012.  Orders were again made for Ms E’s report to be updated. 

11.In December 2013 I made final consent orders in relation to the child, S, who had been the subject of proceedings for a considerable part of his life.  I made those consent orders concerning the child when he was approximately seventeen and a half years old. 

12.Orders were then made in March 2014, including a request that the parties file within seven days a short note setting out the date by which Ms E’s updated report would be prepared.

13.That order was made on 17 March 2014.  Some documents were filed subsequently indicating that in her letter of 2 April 2014, Ms E said that she would require six months from the receipt of the appropriate documents.  This information was annexed to an affidavit filed on behalf of the wife’s solicitors on 4 April 2014.

14.On 4 April 2014 the matter was listed for trial and specific orders made in relation to the preparation of the matter for trial.

15.The parties were well aware of the ongoing difficulties that the Court has faced in preparing this matter for trial.

16.In particular, the Court has received a copy of the transcript of the proceedings of 4 April 2014 in which there was emphasis placed by the Court upon the concern the Court had in relation to procrastination, the delay, failure to comply with the rules and lack of prompt and diligent preparation of the matter for trial.  In particular, the Court referred on that occasion to the Full Court decision in Tate & Tate (2000) FLC 93-047 in which the Full Court had considered the difficulties in the failure to comply, in a prompt and diligent way, with the orders of the Court and the question of procrastination and deliberate disobedience of Court orders. There was also reference made during that hearing of the need to attend to the matters promptly. After those comments the matter was stood down and subsequently the orders of 4 April 2014 were made by consent.

17.Those orders specifically provided for the parties to instruct the various single experts by 16 May 2014.  The issues in relation to Ms E’s report were dealt with by the parties being ordered to instruct Ms E to value the parties’ corporate and other interests, including the Strahan Trust and including those referred to in annexure 1 of Ms E’s letter dated 2 April 2014. 

18.That general background to the matter needs to be considered when I am dealing with the matters now before the Court. In particular, I also need to consider significant parts of the legislation which relate to these proceedings. Section 97 of the Family Law Act 1975 (Cth). (Not a rule, it is in the Act):

In proceedings under this Act the Court shall proceed without undue formality and shall endeavour to ensure that the proceedings are not protracted.

19.Anyone with any understanding of Family Law matters would consider that 10 years is considerably protracted.  This should be a matter that the parties and their instructing solicitors and counsel should bear in mind. 

20.The rules also make it clear (and none of those have been waived in these proceedings) that there are obligations to provide for matters promptly.  Rule 1.04 says:

The main purpose of these rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the Court that is reasonable in the circumstances of the case.

21.Rule 1.08 provides that:

Responsibility of parties and lawyers in achieving the main purpose:

(1)      Each party has a responsibility to promote and achieve the main purpose.

22.The main purpose is a just and timely resolution of the matters. 

23.Rule 1.08 lists the matters to include:

…

ensuring readiness for Court events;

…

complying with time limits;

…

assisting the just, timely and cost effective disposal of cases.

(Rule 1.08(1)(c), (e) and (g)). 

24.Rule 1.08(2) provides:

A lawyer for a party has a responsibility to comply, as far as possible,             with subrule (1).

25.Therefore the rule does not only apply to the parties, but also to lawyers. 

26.Rule 11.02 clearly sets out that:

If a party does not comply with these Rules, the Regulations or a procedural order, the Court may:

dismiss all or part of the case;

…

make any of the orders mentioned in rule 11.01;

or order costs.

27.That summary of rule 11.02(2) should be taken into account, not only by the parties, but their solicitors and legal representatives. 

28.Rule 15.54 refers to instructions to expert witnesses.  I am concerned that there may be, on the face of it, some difficulty in interpretation, but the use of the word, “however” would make subrule (4) the overriding factor. 

29.Subrule (3) says:

The parties must give the expert an agreed statement of facts on which   to base the report.

30.Subrule (4):

However, if the parties do not agree on a statement of facts:

(a)      unless the court directs otherwise -  each of the parties must give to the expert a statement of facts on which to base the report; and

(b)      the court may give directions about the form and content of the statement of facts to be given to the expert.

31.I have some difficulty in ascertaining from the correspondence, which is annexed to the more recent affidavits, whether any of the legal representatives of the parties have given proper consideration to rule 15.54(4) in the instructions for the preparation of the report, albeit I do acknowledge that there now appears to be some ongoing dispute as to which items or interests are to be valued which goes beyond the question of a statement of facts upon which the expert will rely.

32.Rule 19.10 provides that a person may apply for an order under subrule (2) against a lawyer for costs thrown away during a case for various reasons, which include failure to comply with a pre-action procedure or failure to comply with orders of the Court.  Subrule (2) makes it clear that the Court may, in certain circumstances, make orders which would hold the lawyer responsible for any costs or deem the lawyer not able to receive costs. 

33.In the discussions with counsel, I have previously referred to the question of the issues which remain unresolved and which I will not deal with today.

34.The parties are on notice that I have taken into account the Australian Solicitors’ Conduct Rules 2011 which refer to professional misconduct which is defined to include a failure to reach or maintain a reasonable standard of competence and diligence, and a definition of unsatisfactory professional conduct which also refers to the standard that falls short of the competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.  I place emphasis upon the question of diligence and competence. 

35.The solicitors for the parties would be well aware of the High Court decision of AON Risk Services Australia Ltd v Australian National University (2009) 250 CLR 175 which has often been quoted and approved since its decision in matters dealing with case management.

36.In particular, Expense Reduction Analysts Group Pty Ltd & Ors v Armstrong Strategic Management and Marketing Pty Ltd & Ors (2013) 250 CLR 303, a case again in the High Court referred to the authority of AON Risk Services Australia Ltd v Australian National University (supra) and stated that:

…speed and efficiency, in the sense of minimum delay and expense, are essential to a just resolution of proceedings.  The achievement of a just, but timely and cost effective resolution of a dispute has effect not only upon the parties to dispute, but upon the Court and other litigants.

37.The decision then refers to the decision of AON RiskServicesAustralia Ltd v Australian National University (supra) and sets out the duties in relation to parties in civil proceedings, and emphasises the obligation of the parties to comply with the directions and orders of the Court. 

38.I also refer the parties and their instructing solicitors and legal representatives to the decision of AON RiskServicesAustralia Ltd v Australian National University (supra) in which emphasis is made upon the need to consider the compliance with orders of the Court, the limited resources of the Court and that the administration of justice should not be wasted by failure to adhere to trial dates of which parties have proper notice (paragraphs 25 and 30 of the decision of French CJ).  The majority judgment of the other judges in paragraphs 113 to 114 of that decision emphasised that it is recognised by the Courts that the resolution of disputes serves the public as a whole not merely the parties to the proceedings.

113.    In the past it has been left largely to the parties to prepare for trial and to seek the court's assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy.  It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.

114.    Rule 21 of the Court Procedures Rules recognises the purposes of case management by the courts. It recognises that delay and costs are undesirable and that delay has deleterious effects, not only upon the party to the proceedings in question, but to other litigants. The Rule's objectives, as to the timely disposal of cases and the limitation of cost, were to be applied in considering ANU's application for amendment. It was significant that the effect of its delay in applying would be that a trial was lost and litigation substantially recommenced. It would impact upon other litigants seeking a resolution of their cases.  What was a "just resolution" of ANU's claim required serious consideration of these matters, and not merely whether it had an arguable claim to put forward.  A just resolution of its claim necessarily had to have regard to the position of Aon in defending it. An assumption that costs will always be a sufficient compensation for the prejudice caused by amendment is not reflected in r 21. Critically, the matters relevant to a just resolution of ANU's claim required ANU to provide some explanation for its delay in seeking the amendment if the discretion under r 502(1) was to be exercised in its favour and to the disadvantage of Aon. None was provided.

39.The question now remains what should the Court do in relation to the request to move the trial listing.  As at this stage it does not appear that I should dismiss all proceedings because the parties and, in particular, the wife’s solicitors, claim not to have been put on notice that that was a matter that could be considered.  The correspondence from the associate to the parties clearly made it known to the parties that an explanation was required for their failure to comply with the Court orders of 4 April 2014. 

40.The affidavits now on the Court file, which have been received very recently, attempt to explain the failure to obtain the valuation of Ms E, but there is no explanation given in the affidavit material for the failure to make any prior application to this Court, notwithstanding the clear knowledge of the parties (presumably through their solicitors) that there had been failure to comply with the order of 4 April 2014.  The orders of 4 April 2014 required the parties to instruct the experts by 16 May 2014. 

41.As I have indicated rule 15.54 would permit some agreed facts and some separate facts to be provided to the expert.  There is no evidence of any attempt to instruct Ms E or any of the other valuers before 16 May 2014 save and except that there was a draft letter sent to the wife’s solicitors dated 2 May 2014 and a reply from the wife’s solicitors on 27 May 2014 indicating discussions about the proposed instructions to Ms E.  The 2 May 2014 was approximately a month after the orders of 4 April 2014.  The 27 May 2014 is well outside the ordered date of 16 May 2014.  The delays in the correspondence passing between the solicitors for the parties, on the face of it, indicate a somewhat casual approach to the orders of this superior Court of record. 

42.There was no application to this Court until the Court received the letter on 11 December 2014 and the Court replied requiring the parties to explain their delay. 

43.The Application in a Case filed today appear to have been signed by the solicitor for the husband on 9 December 2014 well after the letter dated 5 December 2014 (which was not received by the Court until 11 December 2014). 

44.In any event, the Application in a Case on the face of it simply refers to the expert reports of Ms E and the real estate valuers of the Hong Kong properties.  It does not specifically seek a variation or further orders which would overcome the difficulties of the failure to comply with most of the orders of 4 April 2014 even if the affidavit filed at the same time with that application does make reference to that sort of order. 

45.The material before the Court indicates that it is clear that many months earlier, and at least by 28 October 2014, Ms E had indicated that she would not be able to complete the report by Christmas 2014.  It was also clear from Ms E’s correspondence that she had not received all of the information that she requested in her letter of 2 April 2014 and had only received some of that information on 29 August 2014.  The material before the Court is material which leaves open the question of the explanation for this long delay. 

46.It is alleged in some affidavit material that it is the husband’s failure to provide updated material and necessary documents.  It is not clear from the affidavit material before the Court whether the failure is due to the lawyer’s unprofessional conduct, lack of diligence, or if it is related to client failure to promptly obtain documents from other persons or require persons such as accountants to promptly attend to the provision of the necessary records. 

47.The Court is not in a position at this stage to make any determination as to the explanation for the failure to comply with the orders of the Court, nor is the Court able to clearly make any finding as to the explanation for the failure by either of the parties or their legal representatives to bring the matter back before the Court well before today. 

48.It is this Court’s clear role to apply justice in the case, but it also this Court’s clear role to consider the benefit of other litigants in this Court.  In other circumstances where parties have failed to comply with orders of the Court the Court has dismissed the proceedings.  That can be done in appropriate circumstances.  The matter needs to be considered, but as I have already said, if the parties are not clearly on the understanding that that was a risk I will not deal with that matter today, but will consider the other options.  Other options include that the parties and the legal representatives of the parties consider what I have said today and try to act in a manner which will assist the parties in resolving the matters in dispute. 

49.In this matter the parties have been unable to agree issues of property settlement.  I understand they have paid millions of dollars to their legal representatives.  

50.I have considered, therefore, the need to balance all the appropriate factors.  I will not adjourn any further consideration of the question of whether the proceedings should be dismissed, but will make orders which take into account the material before the Court, and the issues which will in the future need to be determined by the Court. 

51.The orders will provide for the trial dates to be vacated and for the matter to be adjourned to the bottom of the trial list.  The parties will then be given an opportunity to resolve the disputes in relation to the single expert valuations, and for those matters to be attended to promptly.  When and if the matter is ready for listing for trial the matter can come back before the Court.  I would also propose to only list further directions for procedural matters in this Court after the parties have confirmed that they have attended to appropriate mediation in relation to any ongoing procedural matters that are in dispute, and that the Court and other parties are given at least 21 days notice. 

52.In relation to the Application in a Case which is now before the Court the suggestion is that I should adjourn that matter to enable responses to be prepared by the wife’s solicitors.  The matters relate to preparation of valuations.  I consider that the matters referred to in the application so far as it relates to Ms E’s valuation will need to be the subject of sensible negotiations and, if necessary, mediation, and that the issues in relation to the valuation of the Hong Kong properties have already been the subject of a Court order.  The wife needs to obey the Court orders.  I will, therefore, dismiss the Application in a Case. 

I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 16 December 2014.

Associate: 

Date:  18 December 2014