Toma & Doyle
[2022] FedCFamC1F 215
•8 April 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Toma & Doyle [2022] FedCFamC1F 215
File number(s): SYC 2425 of 2020 Judgment of: WILSON J Date of judgment: 8 April 2022 Catchwords: FAMILY LAW – MAJOR COMPLEX FINANCIAL PROCEEDINGS LIST – single expert – application to discharge – whether express power in rules to do so – whether implied power to do so – held – no power, application refused. Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rules 7.07, 7.09, 7.18, 7.21, 7.22, 7.23, 7.25, 7.26, 7.28 and 7.29
Cases cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27
Bass & Bass [2008] FamCAFC 67
Black v Black (2008) 38 Fam LR 503
Bunbury v Fuller (1853) 156 ER 47
Cao & Trong (No 2) [2019] FamCA 941
Carr v Western Australia (2007) 232 CLR 138
Chen & Chen and Anor (No. 3) (2020) 63 Fam LR 448
Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1
Commissioner of State Revenue v Kimiora (2016) 309 FLR 277
Cooper Brooks (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297
Dieter & Dieter [2011] FamCAFC 82
DJL v Central Authority (2000) 201 CLR 226
DMW v CGW (1982) 151 CLR 491
Danell & Saller (2015) 54 Fam LR 416
Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588
Director of Public Prosecutions for Victoria v Le (2007) 232 CLR 562
Federated Engine Drivers and Firemen’s Association of Australasia v Broken Hill Pty Co Ltd (1911) 12 CLR 398
Gabel & Yardley (2008) 40 Fam LR 66
Grassby v The Queen (1989) 168 CLR 1
Hazeldell Ltd v Commonwealth (1924) 34 CLR 442
Honeysett v R (2014) 253 CLR 122
In the Marriage of Zschokke (1996) 20 Fam LR 766
In the Marriage of Yunghanns (1999) 24 Fam LR 400
Jackson v Sterling Industries Ltd (1987) 162 CLR 612
Jago v District Court of New South Wales (1989) 168 CLR 23
K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309
Karjala & Gallard [2020] FamCA 110
Keevers & Keevers [2021] FedCCamC1F 338
Kennon v Spry (2000) 204 CLR 158
King & King [2014] FCCA 163
KL Tractors Ltd (1961) 106 CLR 318
Makita (Aust) Pty Ltd v Sprowles (2001) 52 NSWLR 705
Marsh v Marsh [2011] FamCA 193
Marvel v Marvel (2010) 43 Fam LR 348
Minister for Lands (NSW) v Jeremias (1917) 23 CLR 322
Northern Territory v Collins (2008) 235 CLR 619
Norton & Locke (2013) 50 Fam LR 517
Official Trustee in Bankruptcy v Nedlands Pty Ltd (in liq) (2000) 99 FCR 554
Old UGC Inc v Industrial Relations Commission of New South Wales (2006) 225 CLR 274
Payne & Payne [2009] FamCA 1005
Peacock v Newtown Marrickville and General Cooperative Building Society No 4 Ltd (1943) 67 CLR 25
Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435
Polland & Nordberg [2019] FamCAFC 361
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355.
Public Service Association of South Australia Inc v Industrial Relations Commission of South Australia (2012) 249 CLR 398
R v Gray; ex parte Marsh (1985) 157 CLR 351
Re Macks; ex parte Saint (2000) 204 CLR 158
Redmond & Redmond [2014] FamCAFC 155
Robins v Incentive Dynamics Pty Ltd (1999) 91 FCR 423
Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (2001) 207 CLR 72
Saller & Danell (No 2) [2017] FamCA 712
Southwest Water Authority v Rumble’s [1985] AC 609
SS & AH [2010] FamCAFC 13
Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 224 CLR 193
Strahan & Strahan (2009) 42 Fam LR 203Taylor v Public Service Board (NSW) (1976) 137 CLR 208
Taylor v Taylor (1979) 143 CLR 1
TheCommonwealth v Baume (1905) 2 CLR 405
Toronto Suburban Railway Co v Toronto Corporation [1915] AC 590
Verdon & Verdon (2020) 62 Fam LR 573
Willocks v Anderson (1971) 124 CLR 293
Yanner v Eaton (1999) 201 CLR 351
Yarmirr v Northern Territory (2001) 208 CLR 1
Zhang v Zemin (2010) 79 NSWLR 513
Journals Cited Mark Leeming, Authority to Decide – The Law of Jurisdiction in Australia (Federation Press, 2012) paragraph 2.5
Statutes, Intentions and Courts: What Place Does The Notion of Intention (Legislative or Parliamentary) Have in Statutory Construction? (2014) 13(2) Oxford Commonwealth Law Journal 271
Division: Division 1 First Instance Number of paragraphs: 48 Date of hearing: 1 April 2022 Place: Melbourne Counsel for the Applicant: Mr S. Williams QC Solicitor for the Applicant: Dorter Family Lawyers and Mediators Counsel for the Respondent: P. Cummings SC Solicitor for the Respondent: Clinch Long Woodbridge Lawyers ORDERS
SYC 2425 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS TOMA
Applicant
AND: MR DOYLE
Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
WILSON J
DATE OF ORDER:
8 APRIL 2022
THE COURT ORDERS THAT:
1.The applicant’s application to discharge the single expert is dismissed.
2.On or before 4:00pm on 6 May 2022, pursuant to s 79 of the Family Law Act, the respondent must do all acts and things and sign all documents to cause the sum of $1,000,000 be paid into a bank account nominated by the applicant in writing and be characterised as an interim partial property distribution.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Toma & Doyle has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J
INTRODUCTION
By application in a proceeding dated 25 February 2022, the wife sought orders –
(a)for the discharge of the single expert appointed by orders made by Senior Registrar Campbell (as his Honour then was) on 18 November 2022; and
(b)for an interim property distribution of $1,000,000.
This proceeding is in the Major Complex Financial Proceedings List and is fixed for trial commencing on 25 July 2022.
In essence, the wife contended in respect of each separate application that –
(a)no purpose is served in the single expert attributing a value to the relevant shares because the share price of the shares in the relevant entity is determined by the relevant board of directors and in any event, the husband’s compliance with his disclosure obligations has been derelict; and
(b)the wife needs $1,000,000 to pay legal fees in order to progress this case to trial.
The husband opposed each application.
These reasons explain why –
(a)I dismiss the application to discharge the single expert; and
(b)I grant the application for the wife’s interim part property application.
THE APPLICATION TO DISCHARGE THE SINGLE EXPERT
This matter was debated before me on 15 March 2022. The wife was represented by Mr S. Williams QC and the husband was represented by Mr P. Cummings SC. After the conclusion of submissions, each party sought an opportunity of addressing issues not previously canvassed in written submissions so I made consent orders giving leave to file further submissions by late March with a further viva voce hearing on 1 April 2022. In the course of debate I brought to counsels’ attention my decision in Keevers & Keevers,[1] although that case concerned the refusal of an application for the appointment of an adversarial witness when the parties had agreed on the appointment of a single expert. The factual parallels of that authority with this case were opaque, it must be acknowledged.
[1] [2021] FedCFamC1F 338.
So far as the legislative foundation for the orders discharging the appointment of the single expert was concerned, Mr Williams QC did not address the issue in his written submissions. In his reply submissions on 15 March 2022 Mr Williams QC referred me to certain authorities,[2] contending that none squarely held that express power existed authorising orders for the discharge of a single expert. However, Mr Williams argued that this Court (then, the Family Court of Australia) has assumed that such a power existed.[3]
[2] Danell & Saller (2015) 54 Fam LR 416, Bass & Bass [2008] FamCAFC 67, Payne & Payne [2009] FamCA 1005 as well as the decision of a judge of the Federal Circuit Court of Australia in King & King [2014] FCCA 163.
[3] In support of that proposition, the authorities cited immediately above were prayed in aid. In the passages below I have examined the precise reach of those authorities, concluding that no such power exists.
A threshold point emerged about the power to make an order for the discharge of a single expert. So far as the issue was said to have been canvassed in Bass & Bass, nothing in the reasons of the Court addressed the point. Similarly, nothing in Payne & Payne addressed the issue. The decision in King & King turned on a different point, namely the assertion of bias and nothing in the reasons of the learned judge can be taken to have considered a specific provision or rule of court dealing with the dismissal of a single expert.
In Marsh v Marsh,[4] Le Poer Trench J held that the Family Law Rules do not provide a guideline for the court in considering an application to discharge a single expert. In Saller & Danell (No 2)[5] McClelland J (as the Deputy Chief Justice then was) cited the decisions in Bass & Bass, Payne & Payne and King & King as representing the proposition that it has been assumed that power exists (inferentially, under the rules) to discharge a single expert. In Marsh v Marsh the application for orders discharging the single expert was dismissed.
[4] [2011] FamCA 193 (at [49]).
[5] [2017] FamCA 712.
With the very greatest respect to the decision of McClelland DCJ in Saller & Danell, I am unable to distil from any of the authorities already mentioned any assumption that a power exists in the Family Law Rules 2004, or for that matter in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”), empowering a justice of this Court to make an order for the discharge of a single expert, still less the grounds to be established on any such application.
The starting point in any examination of legislation or subordinate legislation is the text of the relevant piece of legislation or subordinate legislation. A collection of authoritative principles, pronounced by the High Court, provided definitive statements collected in the following[6] –
Ultimately, it is the primacy of the words used in the legislation itself that determines the proper construction of the legislation. Since the decision of the High Court of Australia in Project Blue Sky Inc v Australian Broadcasting Authority (“Project Blue Sky”),[7] Australian law has held that the primary object of statutory construction is to construe the relevant provisions so that it is consistent with the language and purpose of all of the provisions of the statute.[8] That much is consistent with the observations of Barwick CJ in Taylor v Public Service Board (NSW).[9] According to Lord Scarman’s speech in the House of Lords in Southwest Water Authority v Rumble’s[10] as well as the observations of Wilson and Mason JJ in Cooper Brooks (Wollongong) Pty Ltd v Commissioner of Taxation,[11] the meaning of a particular legislative provision must be determined by reference to the language of the instrument viewed as a whole. The context, the general purpose and policy of the provision of a piece of legislation as well as its consistency and fairness are surer guides to meaning than is the topic with which the legislation is constructed.[12] As was held in Toronto Suburban Railway Co v Toronto Corporation,[13] Minister for Lands (NSW) v Jeremias[14] and K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd,[15] the process of construction must always begin with an examination of the context of the provision that is being construed.
High Court authority of very long standing has prescribed that a court construing a statutory provision must strive to give meaning to every word of the relevant provision. So much was held in TheCommonwealth v Baume[16] as well as in Chu Kheng Lim v Minister for Immigration.[17] No sentence, clause or word is superfluous, void or insignificant if by any other construction they may all be made useful and pertinent.[18]
In Project Blue Sky the majority pointed out that the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended those words to have.[19] Ordinarily, that meaning will correspond with the grammatical meaning of the relevant provision.
More recently, in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue,[20] the majority (Hayne, Heydon, Crennan and Kiefel JJ) held that the task of statutory construction must begin with a consideration of the text itself and that historical considerations and extrinsic material cannot be relied upon to displace the clear meaning of the text.[21] Other decisions of the High Court reflect similar reasoning such as Yanner v Eaton,[22] Yarmirr v Northern Territory,[23] Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue,[24] Stevens v Kabushiki Kaisha Sony Computer Entertainment,[25] Carr v Western Australia,[26] Director of Public Prosecutions for Victoria v Le[27] and Northern Territory v Collins.[28]
In many respects, modern Australian jurisprudence on the subject of statutory interpretation has placed former High Court Justice, the Honourable Justice Kenneth M Hayne at the vanguard. His extra-judicial writing on point is illuminating: The Honourable Justice Kenneth Hayne AC, Statutes, Intentions and Courts: What Place Does The Notion of Intention (Legislative or Parliamentary) Have in Statutory Construction?[29]
[6] Commissioner of State Revenue v Kimiora (2016) 309 FLR 277.
[7] (1998) 194 CLR 355.
[8] (1998) 194 CLR 355 (at [69]).
[9] (1976) 137 CLR 208.
[10] [1985] AC 609.
[11] (1981) 147 CLR 297.
[12] (1998) 194 CLR 355 (at [69]).
[13] [1915] AC 590, 597.
[14] (1917) 23 CLR 322
[15] (1985) 157 CLR 309.
[16] (1905) 2 CLR 405, 414 and 419.
[17] (1992) 176 CLR 1, 12.
[18] R v Berchet [1794] ER 1806.
[19] (1998) 194 CLR 355 (at [78]).
[20] (2009) 239 CLR 27.
[21] (2009) 239 CLR 27 (at [47]).
[22] (1999) 201 CLR 351, 366 (at [17]).
[23] (2001) 208 CLR 1, 38–39 (at [13]–[14]).
[24] (2001) 207 CLR 72.
[25] (2005) 224 CLR 193.
[26] (2007) 232 CLR 138.
[27] (2007) 232 CLR 562.
[28] (2008) 235 CLR 619.
[29] (2014) 13(2) Oxford Commonwealth Law Journal 271.
At once it will be apparent that Part 7.1 of the Rules contains no express stipulation conferring power on a justice of this Court to make an order for the discharge of an order for the appointment a single expert. Mr Williams QC was unable to direct my attention to any provision of the Rules on point. I enquired of Mr Williams whether the Rules of the High Court applied in the manner I surveyed in Chen & Chen and Anor (No. 3).[30] As it transpired, s 38(2) of the Family Law Act which incorporated the Rules of the High Court, by reference, was repealed.[31]
[30] (2020) 63 Fam LR 448 (at [14]).
[31] Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions) Act 2021.
Mr Williams QC then submitted that this Court has an inherent jurisdiction the breadth of which was sufficiently wide to permit the order sought being made. I do not agree. In Karjala & Gallard,[32] I held as follows –
74.It is well settled that every court, superior or otherwise, undoubtedly possesses implied jurisdiction upon the principle that a grant of power carries with it everything necessary for its exercise. The High Court has so held in Grassby v The Queen[33] and in Pelechowski v Registrar, Court of Appeal (NSW).[34] As Dr Mark Leeming SC wrote (prior to his Honour’s elevation as the Honourable Justice Leeming) –
That implied jurisdiction includes the authority to decide whether the court’s jurisdiction has been validly invoked, whenever an issue arises (say, because a defendant asserts an immunity from service or that a subject matter limitation has been exceeded).[35]
75.In Hazeldell Ltd v Commonwealth[36] Isaacs ACJ held that the very first duty of any court in approaching a cause before it is to consider its jurisdiction. That proposition has been repeated, at length, in such cases as Federated Engine Drivers and Firemen’s Association of Australasia v Broken Hill Pty Co Ltd,[37] Old UGC Inc v Industrial Relations Commission of New South Wales,[38] Robins v Incentive Dynamics Pty Ltd[39] and Zhang v Zemin[40] to name a few.
76.Even if parties do not raise the court’s jurisdiction, it is competent and proper for the court to do so of its own motion as was held in Official Trustee in Bankruptcy v Nedlands Pty Ltd (in liq).[41]
77.Parties cannot consent to jurisdiction if jurisdiction does not exist. That statement is generally attributed to Coleridge J in Bunbury v Fuller.[42]
78.Where highly contestable questions of fact arise upon which the court’s authority depends, the grant of jurisdiction carries with it power to determine the existence of facts upon which jurisdiction depends. Authority at High Court level has repeatedly so held in such cases as DMW v CGW,[43] R v Gray; ex parte Marsh,[44] Re Macks; ex parte Saint,[45] Kennon v Spry[46] and Public Service Association of South Australia Inc v Industrial Relations Commission of South Australia.[47]
79.If a court finds that it has no jurisdiction to determine the controversy presented in the application, then in the exercise of implied jurisdiction, it has authority to stay or dismiss the proceeding for want of jurisdiction making a costs order. The High Court so held in Peacock v Newtown Marrickville and General Co-operative Building Society No 4 Ltd[48] and Willocks v Anderson.[49] The Full Court of the Family Court of Australia has also considered matters on point in such authorities as In the Marriage of Yunghanns,[50] Black v Black[51] and Norton & Locke,[52] to name but a few.
[32] [2020] FamCA 110.
[33] (1989) 168 CLR 1.
[34] (1999) 198 CLR 435.
[35] Mark Leeming, Authority to Decide – The Law of Jurisdiction in Australia (Federation Press, 2012) paragraph 2.5.
[36] (1924) 34 CLR 442.
[37] (1911) 12 CLR 398.
[38] (2006) 225 CLR 274.
[39] (1999) 91 FCR 423.
[40] (2010) 79 NSWLR 513.
[41] (2000) 99 FCR 554.
[42] (1853) 156 ER 47.
[43] (1982) 151 CLR 491.
[44] (1985) 157 CLR 351.
[45] (2000) 204 CLR 158.
[46] (2008) 238 CLR 366.
[47] (2012) 249 CLR 398.
[48] (1943) 67 CLR 25.
[49] (1971) 124 CLR 293.
[50] (1999) 24 Fam LR 400.
[51] (2008) 38 Fam LR 503.
[52] (2013) 50 Fam LR 517.
Of course, an equally authoritative line of authority exists to the effect that a court possessed of statutory jurisdiction has inherent jurisdiction to control its own process, especially in the prevention of an abuse of its process.[53]
[53] Taylor v Taylor (1979) 143 CLR 1, Jackson v Sterling Industries Ltd (1987) 162 CLR 612, Grassby v R (1989) 168 CLR 1, Jago v District Court of New South Wales (1989) 168 CLR 23 and DJL v Central Authority (2000) 201 CLR 226.
The question then became whether an order discharging orders for the appointment of a single expert was properly characterised as being order in the exercise of this Court’s inherent jurisdiction in the control of its own process. The answer to that is in the negative.
The provisions of the Family Law Rules 2004 and their more recent iteration following the enactment of the Rules[54] about single experts have their genesis in the far reaching report of Lord Woolf into the British justice system. McCelland J (as the Deputy Chief Justice then was) examined the history of Lord Woolf’s recommendations in Danell & Saller where his Honour recited a central theme of those recommendations, recorded in the New South Wales Law Reform Commission paper on expert witnesses,[55] being proportionality between the importance and complexity of a dispute, the procedural means employed, and costs incurred in its resolution.[56]
[54] Part 7.1 of the Rules.
[55] NSW Law Reform Commission, Expert witnesses, Report No 109 (2005) 4. That theme was also mentioned in the Explanatory Statement to Statutory Rules 2003 No 375, later becoming the Family Law Rules 2004.
[56] [2015] FamCA 859 (at [24]).
In Keevers & Keevers,[57] I examined in considerable detail the operation of Part 7.1 of the Rules. While not relevant to the determination of the issue in this case, it must be recognised that Part 7.1 of the Rules makes express provision for particular aspects of single expert evidence and the report produced by the single expert. The report must be in writing (rule 7.07), the court may impose restrictions on the nature and length of any cross examination of the single expert (rule 7.09), the duties of the expert to the court are expansive (rule 7.18) and requirements on the content of single expert’s report are prescribed (rule 7.21 and rule 7.22). If the single expert fails to comply with the prescriptions in Part 7.1, the court may do any of the things set out in rule 7.23 including refusing to allow the expert’s report in toto to be relied on or any answer to any question, or the court may allow the report to be relied on but take the non-compliance into account when consideration the weight to be given to the expert witness’s evidence. In the resolution of any issues calling for clarification of the expert’s evidence, rule 7.25 makes provision for a conference with the expert and rule 7.26 makes provision for questions to be addressed to the single expert. Rule 7.28 deals with costs and rule 7.29 addresses directions a party can seek on certain issues.
[57] [2021] FedCCamC1F 338.
Nowhere is there any provision for discharging a single expert.
It is true that some of the authorities already mentioned have considered the treatment of a single expert’s evidence when actual or apprehended bias is alleged against the expert. That is because Part 7.1 expressly deals with bias. Actual or apprehended bias is not alleged in this case, however.
REASONS WHY THE WIFE SEEKS THE DISCHARGE OF THE SINGLE EXPERT
In support of her two applications debated before me, the wife relied on the evidence in her affidavit made 25 February 2022 and the exhibits thereto. In paragraph 6 of that affidavit the wife deposed as follows –
I seek that the Single Expert be discharged as –
(a)The methodology opined is compromised by [Mr Doyle’s] failure to provide information/documentation requested by the expert;
(b)The methodology opined is limited in scope and likely to be an inaccurate valuation;
(c)The methodology opined is erroneous having regard to the nature of shares being held in an Employee Equity Trust; and
(d)The value of the share price is determined by the Board of Directors. At no time has any discount ever been applied for lack of control.
Between paragraphs 9 and 84 of that affidavit the wife purported to adduce evidence on an array of matters. Those matters went to such issues as –
(a)the circumstances surrounding the appointment of the single expert whose appointment she wanted discharged;
(b)her rejection of the evidence purportedly given by Mr B, valuer, retained by the husband;
(c)her assertion that the husband had failed to provide Mr B with full and frank disclosure;
(d)her commentary on the reasons for the husband’s asserted non-compliance with orders made on 2 and 18 November 2020;
(e)the correspondence passing between solicitors on the appointment of the single exert and the matters he was asked to address;
(f)her assertion that correspondence between 29 September 2021 and the date of her affidavit on issues of disclosure by the husband was “outdated”;
(g)the asserted failure of the husband’s disclosure in relation to the sale price of certain shares;
(h)her assertion that the husband “unilaterally caused” his solicitors to send “correspondence to the single expert”;
(i)her assertion that a conference between the single expert and the parties’ solicitors took place; and
(j)other issues beyond her direct knowledge.
In making that observation I recognise that this application is an interlocutory application on which evidence that is based on information and belief is admissible where it would not be at trial. However, this deponent was required to despose to facts, not arguments. Her evidence would be more useful if given of her own knowledge except where she gave evidence on information and belief and stated the source of that information along with the basis of her belief. She did neither. The value of her evidence without those issues having been addressed necessarily diminished. Much of her affidavit between paragraphs 9 and 84 was better given by her solicitor. She offered no information that enabled me to assess whether she was capable of giving evidence about disclosure, the husband’s alleged deficiencies in disclosure, her criticisms about the single expert’s report and on matters relating to share prices. Whether she possesses the requisite expertise at all to give that evidence in the manner addressed in such cases as Makita (Aust) Pty Ltd v Sprowles,[58] Honeysett v R,[59] Dasreef Pty Ltd v Hawchar[60] was not stated.
[58] (2001) 52 NSWLR 705.
[59] (2014) 253 CLR 122.
[60] (2011) 243 CLR 588.
Further, her affidavit between those paragraphs contained submissions or the expression of her views, neither of which were admissible from a witness of fact.
It is readily apparent that the wife disagrees with certain observations expressed by the single expert. At trial she can seek leave to cross examine the single expert so long as she complies with r 7.09 of the Rules.
It must not be overlooked that the wife consented to the order for the appointment of the single expert whose appointment she now wishes to discharge.
Mr Cummings SC for the husband advanced written and viva voce submissions in opposition to the wife’s application to discharge the single expert. Among the several propositions he advanced was the following –
(a)“most of the wife’s ‘evidence’ in support of her application is not only inadmissible (but) it is preposterous”;[61]
(b)the wife’s application to discharge the single expert is “utterly misconceived and at best premature”;[62]
(c)the wife’s application is brought prior to the single expert providing his report;
(d)the wife has expressed concern about the methodology the single expert may employ in circumstances where her concerns are not supported by admissible expert opinion;
(e)the discounting proposed to be adopted by the single expert is “classically a matter for the expert, not the unqualified wife”;[63]
(f)when the single expert provides his report, clarification can be sought in the manner provided for in the rules;
(g)the trial of this proceeding is fixed for July of this year; and
(h)the wife seeks orders for the discharge of the single expert yet concurrently proposes no alternative for the expert evidence to be given in this case.
[61] His words, paragraph 13 of his written submissions.
[62] Ibid.
[63] Ibid.
On 15 March 2022, Mr Cummings SC did not address me on the jurisdictional foundation for the order for the discharge of the single expert.
CONSIDERATION OF THE APPLICATION TO DISCHARGE THE SINGLE EXPERT
The Rules do not provide for the discharge of a single expert. In my view, the inherent power of this Court, possessed as it is of a statutory jurisdiction, does not extend to the making of an order for the discharge of a single expert. The limited inherent power that a justice of this Court possesses is confined, for the most part, to controlling the Court’s own process and to preventing an abuse of its process. The single expert regime prescribed in Part 7.1 of the Rules is a creature of subordinate legislation, that is to say, rules of court. Those rules are to be read and construed in the manner prescribed by the High Court in Project Blue Sky, Brooks, Taylor v Public Service Board (NSW), Southwest Water Authority v Rumble’s, Cooper Brooks (Wollongong) Pty Ltd v Commissioner of Taxation, Toronto Suburban Railway Co v Toronto Corporation, Minister for Lands (NSW) v Jeremias, K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd, TheCommonwealth v Baume, Chu Kheng Lim v Minister for Immigration, R v Berchet and Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue. Nowhere in Part 7.1 does an express power exist to discharge a single expert, despite the very detailed provisions of that Part on all matters relating to single experts. Despite the intricacies of those provisions, none confer on me power to make the orders the wife seeks for the discharge of the single expert. None of the authorities on which the wife relied speak about any such power. The nearest the authorities come to the proposition the wife advances is the statement that the power to make such an order is assumed to exist. That is not borne out by the authorities there cited. No such power may be assumed to exist. As the High Court held in ReKL Tractors Ltd,[64] the absence of authority on some point is frequently explained by the fact that a general consensus exists to the effect that the point is not maintainable.
[64] (1961) 106 CLR 318.
Aside from the criticisms made by the husband about the absence of probative value of the wife’s evidence in support of her application concerning the single expert, in my view no foundation exists for the making of the order sought, whether under the Rules, the decided cases or the inherent jurisdiction of the Court.
In those circumstances, the wife’s application in paragraphs 1 and 2 of her application in a proceeding dated 25 February 2022 is dismissed.
THE WIFE’S APPLICATION FOR AN INTERIM PAYMENT OF $1 MILLION
Pursuant to paragraph 3 of her application in a proceeding dated 25 February 2022, the wife sought an order for the payment to her of $1 million as an interim partial property distribution. Alternatively, the wife sought orders for the redemption of a quantity of unit shares in the C Trust in a particular manner and upon redemption, that $1 million be paid to the wife with any surplus being distributed in the manner set out in paragraph 6.
The husband opposed the wife’s application for $1 million by way of partial property settlement. He sought orders for the dismissal of the wife’s application as well as costs.
The relevant principles that guide a court on the hearing of an interim application for property settlement orders are usefully drawn together in Verdon & Verdon.[65] The synthesis of authority is as follows –
[65] (2020) 62 Fam LR 573.
88. In Cao & Trong (No 2)[66] I distilled the relevant principles mostly from Strahan. They were as follows –
[66] [2019] FamCA 941.
34.In relation to interim property orders, certain guiding principles are applicable to the facts of this case. They include the following –
(a)the majority of the court in Strahan & Strahan[67] held that when consideration is being given to the appropriateness of an order being made for an interim property settlement order, 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;
(b)balance must be given to the risks of unduly limiting the final orders that can be made against the circumstances said to show that it is just and equitable to make interim orders;
(c)in Strahan it was held that the first stage of any consideration of an application for a partial property settlement order requires a determination of whether the interests of justice require the exercise of power under s 79 and s 80(1)(h) on an interim basis;
(d)compelling circumstances need not be shown by an applicant for a partial property settlement order, as was held in Strahan;
(e)ordinarily an order under s 79 is made once only after a final hearing, as was held in Strahan at [132];
(f)consideration must be given to the reversibility of the order, as was held in In the Marriage of Zschokke[68] and Gabel & Yardley;[69]
(g)in addition, a court entertaining an application for a partial property settlement should consider the need for and effect of interim orders weighed against the risks that the exercise of the power on an interim basis will interfere with the power of the court to make just and equitable orders on a final basis;
(h)further, a court entertaining an application for a partial property settlement order should consider whether the order is just and equitable according to at least a preliminary view of the likely range of outcomes;
(i)further, a court entertaining an application for a partial property settlement order should balance the risks by considering not only the quantum of the orders but also the risk of unduly limiting the final orders that can be made or even potentially defeating parties’ claims; and
(j)a court entertaining an application for a partial property settlement should take into account that a party should not be denied the ability to liquidate assets where there are real needs for those resources such as meeting debts due to creditors.
[67] (2009) 42 Fam LR 203.
[68] (1996) 20 Fam LR 766.
[69] (2008) 40 Fam LR 66.
Counsel for the wife relied on that authority as well as others. Counsel for the husband did not rely on any authority.
On behalf of the wife, Mr Williams QC advanced a collection of submissions in support of his application for a part property settlement. Relevantly distilled, he contended as follows –
(a)the wife earns $900 gross per week as a part-time educator;
(b)she is 42 years of age as is the husband;
(c)they commenced living together in 2004, married in late 2007 and separated finally in early 2017;
(d)they have a 13 year old and an 11 year old, each having certain medical issues;
(e)the husband is manager of a group compendiously called D Group;[70]
(f)several employee equity trusts are relevant;
(g)the husband’s annual remuneration is in the vicinity of $900,000;
(h)the parties commenced cohabitation with no material assets;
(i)during the marriage the parties agreed that the wife would be the primary homemaker and carer of the two children;
(j)the value of the parties’ total asset base is in the vicinity of $30 million;
(k)of that amount of $30 million, the sum of $25 million is referable to the value of shares and interests in trusts;
(l)litigation funding of $200,000 previously obtained by the wife is rapidly diminishing;
(m)the husband’s shares represent something in the vicinity of 85% of the divisible net asset pool; and
(n)the husband has disposed of shares valued at $14.23 million.
[70] This term incorporates E Pty Ltd, F Ltd, H Pty Ltd, N Company, P Pty Ltd, G Pty Ltd, O Pty Ltd, R Company, J Pty Ltd, K Pty Ltd and L Pty Ltd.
Mr Williams QC contended that at trial the wife is likely to receive a very substantial property adjustment order and at present, her pressing existing financial needs include legal fees, an upgraded motor vehicle and renovations to the Suburb M property.
The husband opposed the making of a part property order. He made an affidavit on 3 March 2022 to which he exhibited an array of documentation. Relevantly paraphrased, the husband deposed to the following –
(a)from 2007 or thereabouts most of his income was applied in the acquisition of shares in D Group and its affiliates (although he did not identify those companies);
(b)following separation he spent upwards of $1.2 million in his acquisition of shares;
(c)he paid the wife a little over $67,000 as an interim property settlement in late 2019;
(d)his current shareholding is valued at in excess of $22 million;
(e)the entities in which he holds shares are private companies which are not listed on any stock exchange; and
(f)his shareholding in each entity represents no more than 1% of the issued capital in each entity and he does not have the authority to control or influence any corporate restructure, capital raising, share price or times for sale.
Between paragraphs 39 and 47 of his affidavit the husband volunteered a collection of assertions, all unsupported by documentation, about his ability to freely trade in the shares he owns. The following is a sample of those assertions –
(a)I cannot realise the "value" of any of my units even if I am required at any time by the Court to sell or transfer any shares or share units currently held, other than in compliance with the company rules;
(b)If I want to transfer or sell any shares in these entities, I need to provide written notice to the Board of Directors or the relevant company;
(c)If a relevant Board permits a sale, the shares are then offered to existing shareholders first pursuant to the rules and, if no one wishes to purchase them, they can be offered to any other persons;
(d)As a senior employee, I have historically received an ongoing performance incentive ('bonus') each quarter that I can either take in cash or use to acquire further shares in the employee share trust. On most occasions, I am significantly pressured by the relevant Board to use most of the ongoing performance incentive each quarter to acquire shares. During COVID-19, my "performance incentives" were suspended for approximately 6 months;
(e)I am not permitted to transfer or assign any shares held in the employee entity trusts to any other person. I am also not permitted to create an equitable, contingent, future or partial interest or other security interest in a Share Unit;
(f)I am permitted to sell units subject to approval by the Board of Directors and the availability of potential buyers within the Employee Equity Trust;
(g)In the event that I wish to sell any shares in the employee equity trusts, I am liable for capital gains tax at the time of any sale;
(h)I am required to hold an equal number of shares in both [P Company] and [O Pty Ltd] at all times; and
(i)To maintain my position as [manager], I must be mindful of the impact of my behaviour upon other employees and also investors. I am expected to strongly participate in all new ventures of the group. This means that, in the absence of a liquidity event such as the introduction of an institutional investor seeking substantial shareholding, I am unable to sell large parcels of shares in any entity at any time if I expect to remain [manager].
Several things must be said of those assertions quoted immediately above. First, to the extent that the relevant constitution of each company to which he referred made provision for the circumstances in which shares in each entity could be sold, the husband did not produce the relevant constitution to enable me to verify its precise provisions. I am not willing to accept a lay person’s statement about the legal effect of a company’s constitution, without more.
Second, notwithstanding all the impediments the husband asserted existed in any endeavour to sell shares, he successfully acquired the shares mentioned in paragraph 21of his affidavit upon some other shareholder selling them. He offered no evidence about complications in his acquisition of those shares.
Third, he offered no evidence about the circumstances in which the board of the relevant entity permits or refuses permission for a shareholder to effect a sale. If the board refused any such sale, the husband offered no explanation or evidence about whether any such refusal contravened the Corporations Act.
Fourth, his statement about his being required to hold an equal number of shares in P Company and O Pty Ltd was unsubstantiated. Even if true, the consequence of that statement was not articulated.
Fifth, the quoted statement from paragraph 47 of his affidavit was nonsensical. I do not accept that he was not free to sell his shares if he was to remain manager. Such a requirement, if indeed it as one, may very well be unlawful although I express no view about that.
Sixth, this is an interlocutory application and authority compels me to avoid making findings of fact at this juncture.[71]
[71] Marvel v Marvel (2010) 43 Fam LR 348, Redmond & Redmond [2014] FamCAFC 155, Dieter & Dieter [2011] FamCAFC 82, SS & AH [2010] FamCAFC 13 and Polland & Nordberg [2019] FamCAFC 361.
Applying the authorities I distilled in Cao v Trong[72] and repeated in Verdon & Verdon[73] I do not accept the husband’s contention that a part property order is not just and equitable. It is. In my view, consonant with the observations in Strahan v Strahan,[74] the interests of justice require the making of the part property order the wife seeks. Such an order in the sum sought is reversible. And, such an order in the sum sought is within the range of likely outcomes at the end of the trial.
[72] [2019] FamCA 336.
[73] (2020) 62 Fam LR 573 (at [88] et seq).
[74] (2009) 42 Fam LR 203.
The trial is fast approaching. The wife says she must meet expenses to advance her case. That is understandable.
I make the order in paragraph 3 of the wife’s application in a proceeding dated 25 February 2022 and otherwise dismiss the applications in it.
Costs are reserved.
I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 8 April 2022
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48
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