STRAHAN & STRAHAN
[2011] FamCA 728
•16 September 2011
FAMILY COURT OF AUSTRALIA
| STRAHAN & STRAHAN | [2011] FamCA 728 |
| FAMILY LAW – PRACTICE AND PROCEDURE – application by the wife seeking leave to cross-examine the husband at the interim property settlement hearing – where the wife alleges that the husband has not disclosed all of his assets – whether exceptional circumstances exist – where the main purpose of the Family Law Rules 2004 seeks to ensure that each case is resolved in a just, timely and cost-effective manner – where the Court was not satisfied that exceptional circumstances existed – wife’s application refused. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 rr 1.04, 1.06, 1.07, 1.08, 1.12 & 5.10 |
| Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 Appleton & Appleton [2011] FamCA 70 British American Tobacco Australian Services Limited v Laurie (2011) 273 ALR 429 In the marriage of C and C (1996) FLC 92-651 McIntyre & McIntyre [2004] FamCA 640 McMillan & McMillan (2000) FLC 92-048 |
| APPLICANT: | Mr Strahan |
| RESPONDENT: | Ms Strahan |
| FILE NUMBER: | ADF | 228 | of | 2005 |
| DATE DELIVERED: | 16 September 2011 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Dawe J |
| HEARING DATE: | 9 September 2011 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Berman, SC |
| SOLICITOR FOR THE APPLICANT: | Robinson & Mason Pty Ltd |
| COUNSEL FOR THE RESPONDENT: | Mr Holland |
| SOLICITOR FOR THE RESPONDENT: | Winter & Co |
Orders
The husband is not required for cross-examination on the interim application which is fixed for hearing on 5 October 2011 before the Honourable Justice Dawe.
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
| Mr Strahan |
Applicant
And
| Ms Strahan |
Respondent
REASONS FOR JUDGMENT
Introduction
In these long running proceedings the husband filed an Application in a Case on 24 June 2011 seeking orders for the release of funds and the sale of assets with the proceeds to be paid to him by way of partial property settlement and for the payment of expenses related to the litigation and expenses relating to the child of the parties, the parties and businesses.
In the wife’s Response filed on the 5 July 2011 she sought that the husband’s application be dismissed, that he pay her costs and that “leave be granted for the wife to cross-examine husband upon the hearing of this application”.
Hearing
The issue in relation to the cross-examination of the husband was heard on the 9 September 2011. The wife was represented by Mr Holland of counsel. The husband was represented by Mr Berman, SC.
Submissions
Counsel for the wife submitted that the affidavits of the parties filed in relation to this application for interim property settlement and the sale of certain assets, indicated that there were exceptional circumstances. During submissions from counsel agreement was reached that the husband could access the remainder of the funds available to him in EI Limited. The agreement between the parties was reached on the basis that the husband could access the remainder of EI Limited monies in order to make payment to the wife of the balance of the monies owing pursuant to the order of the Full Court of the Family Court of Australia made on 10 June 2011 which required the husband to pay the wife the sum of $862,250.
Counsel for the wife submitted that it was only in recent times that the husband had begun to suggest that he was experiencing financial difficulties. Counsel referred to the affidavit of the husband filed in support of his application which he submitted lacked sufficient or necessary details. His submissions referred to the wife’s view that the husband had sufficient assets currently under his control and therefore that it was not necessary for him to sell any assets to raise the funds required.
Counsel for the wife acknowledged that the wife raised issues in relation to the husband’s credibility about his financial circumstance. He emphasised the fact that the wife did not want assets in Australia sold claiming that this would put at risk any possible enforcement of an eventual property settlement.
Counsel for the husband submitted that it was necessary to consider the nature of the Application in a Case which was being brought by the husband. He emphasised that this was an interim property settlement application connected to injunctions made by the Court on 13 August 2010 which ordered:
(16)Until further order the husband be restrained from selling, encumbering or otherwise dealing with the following (except in the ordinary course of business):
(a)the husband’s interests, whether legal or equitable, in any of his interests in the companies and trusts and entities valued by Ms [E] in her valuation reports dated 16 October 2008 and 28 November 2008;
(b)the husband’s interests in [WA Company] and [EO Company];
(c)the husband’s interests in any real estate in Hong Kong, [southern Europe], Switzerland, Australia and Austria
without first having given the wife twenty eight [28] days notice in writing of his intention to do so.
Counsel submitted “the real issue” was the wife’s opposition to the sale of Australian assets.
Counsel also maintained cross-examination of the husband may create a situation where there was more prejudice to the ongoing proceedings than the possible probative value of such cross-examination. He also expressed concern about the possible open-ended length of such cross-examination and the time it might take, emphasising that there was no management plan or specific list of the questions to be asked. It was submitted that the issue of interim property settlement and sale of assets could be adequately dealt with on the papers.
In response counsel for the wife indicated that he would be in a position to provide a list of topics upon which the cross-examination would proceed if allowed.
Both counsel referred to various Family Court Rules and cases which are dealt with hereafter.
The Law
Rule 5.10 of the Family Law Rules 2004 states:
Hearing time of interim or procedural application
(1)The hearing of an interim or procedural application must be no longer than 2 hours.
(2)Cross‑examination will be allowed at a hearing only in exceptional circumstances.
The main purpose of the Rules is set out in r 1.04:
1.04Main purpose of Rules
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.
Rules 1.06, 1.07, 1.08 and 1.12 state:
1.06Promoting the main purpose
The court must apply these Rules to promote the main purpose, and actively manage each case by:
(a)encouraging and helping parties to consider and use a dispute resolution method rather than having the case resolved by trial;
(b)having regard to unresolved risks or other concerns about the welfare of a child involved;
(c)identifying the issues in dispute early in the case and separating and disposing of any issues that do not need full investigation and trial;
(d)at an early stage, identifying and matching types of cases to the most appropriate case management procedure;
(e)setting realistic timetables, and monitoring and controlling the progress of each case;
(f)ensuring that parties and their lawyers comply with these Rules, any practice directions and procedural orders;
(g)considering whether the likely benefits of taking a step justify the cost of that step;
(h)dealing with as many aspects of the case as possible on the same occasion;
(i)minimising the need for parties and their lawyers to attend court by, if appropriate, relying on documents; and
(j)having regard to any barriers to a party's understanding of anything relevant to the case.
(Emphasis added)
1.07Achieving the main purpose
To achieve the main purpose, the court applies these Rules in a way that:
(a)deals with each case fairly, justly and in a timely manner;
(b)encourages parties to negotiate a settlement, if appropriate;
(c)is proportionate to the issues in a case and their complexity, and the likely costs of the case;
(d)promotes the saving of costs;
(e)gives an appropriate share of the court's resources to a case, taking into account the needs of other cases; and
(f)promotes family relationships after resolution of the dispute, where possible.
(Emphasis added)
1.08Responsibility of parties and lawyers in achieving the main purpose
(1)Each party has a responsibility to promote and achieve the main purpose, including:
(a)ensuring that any orders sought are reasonable in the circumstances of the case and that the court has the power to make those orders;
(b)complying with the duty of disclosure (see r 13.01);
(c)ensuring readiness for court events;
(d)providing realistic estimates of the length of hearings or trials;
(e)complying with time limits;
(f)giving notice, as soon as practicable, of an intention to apply for an adjournment or cancellation of a court event;
(g)assisting the just, timely and cost‑effective disposal of cases;
(h)identifying the issues genuinely in dispute in a case;
(i)being satisfied that there is a reasonable basis for alleging, denying or not admitting a fact;
(j)limiting evidence, including cross‑examination, to that which is relevant and necessary;
(k)being aware of, and abiding by, the requirements of any practice direction or guideline published by the court; and
(l) complying with these Rules and any orders.
(2)A lawyer for a party has a responsibility to comply, as far as possible, with subrule (1).
Note The court recognises that a lawyer acts on a party's instructions and may be unable to establish whether those instructions are correct.
(3)A lawyer attending a court event for a party must:
(a)be familiar with the case; and
(b)be authorised to deal with any issue likely to arise.
NoteThe court may take into account a failure to comply with this rule when considering costs (see subrule 19.10 (1) and subclause 6.10 (1) of Schedule 6).
…
1.12Court may dispense with Rules
(1)These Rules apply unless the court, on application or its own initiative, orders otherwise.
(2)The court may dispense with compliance with any of these Rules at any time, before or after the occasion for compliance arises.
(3)In considering whether to make an order under this rule, the court may consider:
(a)The main purpose of these Rules (see rule 1.04) ;
(b)The administration of justice;
(c)Whether the application has been promptly made;
(d)Whether non‑compliance was intentional; and
(e)The effect that granting relief would have on each party and parties to other cases in the court.
Prior to the introduction of the Family Law Rules 2004 consideration was given by the Court to cross-examination of parties at interim or interlocutory hearings.
The Full Court in the decision of In the marriage ofC and C (1996) FLC 92-651 said at 82,675:
We would add that in Australia at least, while a Judge always retains the discretion to permit the calling of evidence and cross examination on interlocutory hearings, as a general rule this should not be permitted.
In McMillan & McMillan(2000) FLC 93-048 at paragraph 103 and 104 the Full Court said:
103.In any event, however, as the Full Court has made clear in the following passage from its reasons in D and Y (1995) FLC 92-581, whether or not to permit cross-examination in a case (whether the case be of an interlocutory nature or not) is very much a matter of discretion (at 81,765):
‘We now turn to the argument that his Honour unduly limited and prevented cross examination.
As Collin’s case [(1990) FLC 92-149] and Re B [English Court of Appeal – [1994] 2 FLR 1]…show, the question of whether and when cross examination should be allowed is very much a matter of discretion, applying the principles to which we have referred.
There is, on occasion, too much of a tendency in this jurisdiction to expect that every issue should be the subject to extensive and often unnecessary cross examination. This is very much the case in interlocutory matters and particularly in interim custody proceedings bit it also extends to proceedings such as this which is not a full custody hearing but rather a preliminary hearing to determine whether a full custody hearing should take place.
We think that there was more than sufficient material before his Honour to enable him to arrive at his decision in this case and that he was in no sense obliged, either to permit cross examination of Mr G, the husband and Ms Y, before the cross examination of Dr CH, or at all.’
104.In the present case, his Honour clearly gave careful consideration to whether he should permit cross-examination, particularly on certain issues. Ultimately he decided that he should not do so. We see no basis for interfering with his exercise of discretion in this regard.
In McIntyre & McIntyre [2004] FamCA 640 the Full Court (consisting of Ellis, Holden and Young JJ) said:-
23.In C and C (1996) FLC 92-651 the Full Court, in commenting on the practice of the Court of limiting the time of hearing, or the length of submissions, or the opportunity to cross-examine in an interlocutory matter, recorded the following at 82,674:-
‘…[I]t is obvious that if the Court could not and did not place limits on the time taken in interlocutory proceedings and the mode by which they are conducted, its workload would mean that many other litigants would suffer serious injustice by reason of increased delays. Further, there must also be concern for litigants themselves in these circumstances, where lengthy hearings of interlocutory matters are both expensive and emotionally draining and do not lead to a final determination of the issues between them. It may be that in some cases…one party is prepared to undertake this expense, but this does not mean that they should be able to dictate the terms to the other.
We should also make it clear that the approach to interlocutory matters and to interim custody proceedings in particular, is not confined to the Court’s Brisbane Registry…but is a widespread approach throughout the Court and one that we consider should be encouraged if the Court is to efficiently conduct its business and that of its litigants. This is not to say that there cannot be deviations from it in circumstances thought appropriate by the Judge or other judicial officer hearing the matter, but is an approach that, as a general rule, should be followed.’
In Appleton & Appleton [2011] FamCA 70 Austin J said at paragraph 39
Both parties cited and relied upon the following observations made in Venson & Venson (No. 2) [2010] FamCA 963 at [99-100]:
‘The test of “exceptional circumstances” has been the subject of judicial interpretation in respect of s 136(2)(d) of the Act (see Balzano & Balzano (2010) FLC 98-048 at [38-41] and also s 79A of the Family Law Act 1975 (Cth) see Christian & Donald [2008] FamCAFC 44 at [34-45]; Marriage of Simpson & Hamlin (1984) 9 Fam LR 1040 at 1045). The term “exceptional circumstances” has not been defined with precision, but generally encompasses events which are quite extraordinary, which occurred unexpectedly, and which could not have been reasonably foreseen or contemplated. Those features incorporate both subjective and objective considerations. Although that is the general characterisation, neither one nor all of those characteristics is either necessary or sufficient to meet the test. It is a question of fact and degree in each case.’
(Emphasis added)
In Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 the High Court said at paragraph 98:
Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a “just resolution” is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule’s reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs.
The High Court of Australia discussed the principles of apprehended bias which may result in a judge’s disqualification in British American Tobacco Australian Services Limited v Laurie (2011) 273 ALR 429. In particular at paragraph 139 the majority said:
It is fundamental to the administration of justice that the judge be neutral. It is for this reason that the appearance of departure from neutrality is a ground of disqualification[1]. Because the rule is concerned with the appearance of bias, and not the actuality, it is the perception of the hypothetical observer that provides the yardstick. It is the public’s perception of neutrality with which the rule is concerned. In Livesey it was recognised that the lay observer might reasonable apprehend that a judge who has found a state of affairs to exist, or who has come to a clear view about the credit of a witness, may not be inclined to depart from that view in a subsequent case. It is a recognition of human nature.
[1] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at 344-345 [6]-[7] per Gleeson CJ, McHugh, Gummow and Hayne JJ; Forge v Australian Securities and Investments Commission [2006] HCA 44; (2006) 228 CLR 45 at 77 [66] per Gummow, Hayne and Crennan JJ [2006] HCA 44.
Background
As the numerous judgments of the Family Court of Australia Judges at first instance and Full Court of the Family Court of Australia indicate the litigation between the parties has been before the Court for many years. The Court has attempted to list the matter for final determination but the parties have not been ready for trial.
There are now 598 documents on the Court file. For the present purposes the most significant documents are the Application in a Case brought by the husband seeking the interim property settlement orders and other orders filed on 24 June 2011, the affidavit of the husband which accompanied that application and the wife’s Response and affidavit filed in response.
The husband has more recently also filed a further affidavit on 31 August 2011 responding to some of the questions raised by the wife in her affidavit.
In effect the husband is seeking an amendment or discharge of the interim injunction made by this Court on 13 August 2010 which prevents him from dealing with assets except in accordance with the conditions of that injunction.
In the wife’s affidavit filed in response to the husband’s application, the wife submits that the husband has not provided sufficient information on various aspects of his financial circumstances.
The wife does not dispute the sum claimed by the husband as an amount that he will incur for legal costs to complete this litigation (Annexure “A” to the husband’s affidavit filed on 24 June 2011). His fees and disbursements for preparation for the trial and for the trial are estimated to be $1,496,036.
The wife seeks further information about some of the husband’s financial arrangements. This is the basis for the request to cross-examine the husband at the interim property settlement hearing.
Discussion and findings
Whilst the length of these proceedings and the amount of money spent by the parties on these proceedings is unusual, the claim by the wife that the husband has not disclosed all of his assets is not an exceptional circumstance.
An application by one party for interim property settlement is not unusual or exceptional particularly in cases where litigation is lengthy and complex, as is frequently the case in Family Court of Australia proceedings.
The obligation to establish the necessary factors which would form the basis of any interim or partial property settlement order falls upon the applicant husband.
It is clear from the documents that the wife does not admit or agree to many of the matters which the husband asserts in his affidavit. This is not exceptional in the context of Family Court of Australia property settlement proceedings.
Even the combination of the length of the ongoing proceedings and the type of disputes between these parties does not necessarily create exceptional circumstances within the meaning of r 5.10.
The provisions of r 5.10 should be considered bearing in mind the main purpose of the Rules which seeks 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.
Rule 1.06 requires the Court to manage its case in accordance with the particular guidelines, including sub-section (g) “considering whether the likely benefits of taking a step justify the cost of that step” and r 1.07 which requires the Court to apply the Rules in a way that, (a) “deals with each case fairly, justly and in a timely manner”; (c) “is proportionate to the issues in a case and their complexity and the likely costs of the case” (d) “promotes the saving of costs” and (e) “gives an appropriate share of the court's resources to a case, taking into account the needs of other cases”.
One of the factors to be considered in this context is the risk that if the Court is required to hear the cross-examination of the husband and based upon that cross-examination make rulings as to credit, then following the decision of British American Tobacco Australia Services Limited v Laurie (Supra) there is a risk that the judge who hears the interim issues will be disqualified from hearing further interim or final proceedings in this matter. Such a risk is not a determinative factor in deciding whether to allow cross-examination of the husband in relation to the interim property settlement issues, but it is a factor to be considered under the provisions of the Rules which refer to the manner in which a Court must manage a case to its conclusion.
It is clear from the material on the Court file, and in particular the most recent affidavit filed by the wife, that she does not accept the evidence of the husband and seeks to challenge many of the matters raised by him in his affidavit.
As previously indicated this does not establish exceptional circumstances in this type of proceedings in the Family Court of Australia.
The interim application brought by the husband and the wife’s opposition to the orders which he seeks are matters which are capable of being dealt with in the ordinary course of interim matters on the papers.
Conclusion
The submissions of counsel for the wife and the matters raised in the wife’s affidavit set out the basis of the wife’s opposition to the orders sought by the husband and a clear indication that she does not accept many of the facts asserted by the husband. The wife has however not established the exceptional circumstances necessary to form the basis upon which the Court would require the husband to be cross-examined.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 16 September 2011.
Associate:
Date: 16 September 2011
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