Trustees of the Property of Batavia (Bankrupt) and Batavia and Ors

[2018] FamCA 1146

FAMILY COURT OF AUSTRALIA

TRUSTEES OF THE PROPERTY OF BATAVIA (BANKRUPT) & BATAVIA AND ORS [2018] FamCA 1146

FAMILY LAW – PROCEDURAL ISSUES – case management – where there are multiple parties and various issues

Family Law Act 1975 (Cth)

APPLICANT: Mr Russo and Mr Yates (as trustees of the property of Mr Batavia) a bankrupt

1^ST RESPONDENT: Mr Batavia

2^ND RESPONDENT: Ms Batavia

3^RD RESPONDENT: Ms Vacanu

4^TH RESPONDENT: U Pty Ltd (ACN …)

5^TH RESPONDENT: M Pty Ltd (ACN …)

6^TH RESPONDENT: B Pty Ltd (In Liquidation) (ACN …)

8^TH RESPONDENT: Mr Vacanu

9^TH RESPONDENT: Ms V Batavia

10^TH RESPONDENT: Mr W Batavia

FILE NUMBER: MLC 3497 of 2017

DATE DELIVERED: 15 May 2018

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 9 May 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Fary

SOLICITOR FOR THE APPLICANT: Craddock Murray Neumann

COUNSEL FOR THE 3^RD, 4^TH, 5^TH AND 8^TH

RESPONDENTS:

Mr Atkinson

SOLICITOR FOR THE 3^RD, 4^TH, 5^TH AND 8^TH

RESPONDENTS:

HWL Ebsworth Lawyers

COUNSEL FOR THE 6^TH RESPONDENT: Mr Mckillop

SOLICITOR FOR THE 6^TH RESPONDENT: MA Legal

1^ST, 2^ND, 9^TH AND 10^TH RESPONDENTS No Appearance

Orders

1. ALL APPLICATIONS ARE ADJOURNED AND FIXED FOR FINAL HEARING before the Honourable Justice Cronin at 10.00am on 16 October 2018 subject to any part heard case as a five day case.

2. The evidence in chief of all witnesses shall be given by affidavit.

   TIMETABLE:

3. By 4 pm on 1 August 2018 the applicant trustees file and serve upon all other parties all affidavits of evidence to be relied upon.

4. The applicant pay all required court fees by 4 pm on 1 August 2017.

5. By 4 pm on 15 June 2018 each of the 1^st and 2^nd respondents (the husband and the wife) file and serve upon all other parties:

   (a)an amended response setting out with precision the orders to be sought;

   (b)all affidavits of evidence to be relied upon; and

   (c)a financial statement.

6. That in the event that either or both of the husband and wife fails to comply with paragraph (5) of these orders, subject to any further order, any other party may seek to proceed against them on an undefended basis including by application in a case filed before 16 October 2018.

7. By 4 pm on 31 August 2018 the 3^rd, 4^th and 5^th respondents file and serve upon all other parties all affidavits of evidence to be relied upon.

8. By 4 pm on 14 September 2018 the 6^th respondent file and serve upon all other parties all affidavits of evidence to be relied upon.

9. That all participating parties have a right to file and serve any affidavit in reply if they are so advised by no later than 30 September 2018.

10. Without leave of the Court, any affidavit filed beyond the timetable set out in these orders may not be relied upon.

    SUBPOENAE

11. All parties have leave to issue subpoenae for the production of documents. If a party is represented by a legal practitioner, the registrar shall, upon the certification of the legal practitioner, be satisfied as to relevance.

12. By 4 pm on 12 October 2018 all parties file electronically to …@familycourt.gov.au  a case outline in one document setting out:

    (a)     the outline of the issues in dispute;
    (b)     the formal pleadings relied upon as to relief;

    (c)a concise set of orders to be sought if different from that set out in the pleading;

    (d)     the list of objections to evidence requiring a ruling.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Trustees of the Property of Batavia (Bankrupt) & Batavia and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 3497  of 2017

MR RUSSO and MR YATES (as trustees of the property of Mr Batavia) a bankrupt

Applicants

And

MR BATAVIA

1^st Respondent

And

MS BATAVIA

2^nd Respondent

And

MS VACANU

3^rd Respondent

And

U PTY LTD (ACN …)

4^th Respondent

And

M PTY LTD (ACN …)

5^th Respondent

And

B PTY LTD (IN LIQUIDATION) (ACN …)

6^th Respondent

And

MR VACANU

8^th Respondent

And

MS V BATAVIA

9^th Respondent

And

MR W BATAVIA

10^th Respondent

REASONS FOR JUDGMENT

1. Mr Batavia (“the husband”) is apparently still married to Ms Batavia (“the wife”).  The husband was made bankrupt upon a petition of the Commissioner for Taxation.  Although material on the court’s voluminous file would indicate that the husband disputed the bankruptcy, he remains a bankrupt.

2. In October 2015, the husband and the wife entered into, what on the face of the documents would appear to be, financial agreements under the Family Law Act 1975 (Cth) (“the Act”). Mr Russo and Mr Yates, as the trustees of the husband’s bankrupt estate, sought to set aside the financial agreements or more particularly, the transactions that occurred thereunder.

3. Again, according to the court file, the wife owned the legal title to a real property known as D Street and in return, the husband retained shares in companies one of which was the law firm of which he was the principal.  That law firm has now been wound up.

4. Upon the trustees of the husband’s bankrupt estate bringing the proceedings to set aside the financial agreement, the wife filed a Notice of Address for Service notifying a firm of lawyers were acting for her. On 28 August 2017, that firm of lawyers filed a Notice of Ceasing to Act nominating the wife’s address at the D Street property as the place to which the court should address correspondence.  As best I can determine from an examination of the file, the wife has not attended any of the hearings in this court but more importantly, has not filed any document in the current proceedings indicating what, if any, relief she is seeking.  If I am wrong about that, and no counsel at the hearing on 9 May 2018 was able to indicate otherwise, the orders that I now propose to make setting this case down for trial will give the wife an opportunity to rectify that situation.  If she fails to do so, the other parties may seek to proceed against her interests on an undefended basis.

5. The position of the husband is also unclear from the file.  As a bankrupt, any property he owns vests in the trustee but that does not mean that he has no standing in relation to matters outside of the interests of the trustees.  Again, as best I can determine, the husband has not participated in this court and like the wife, a failure to comply with the timetable may see the same outcome.

6. In the early stages of the litigation under federal law, there were proceedings in the Supreme Court of Victoria between B Pty Ltd (in liquidation) and the wife.  The originating process in that court was for a recovery of compensation against the wife for what was alleged to be involvement in contraventions of her duties as a director of the company said to be the wrongful payment of funds used towards the purchase of D Street.  Those proceedings were transferred to this court not long after they were commenced.

7. Also after the proceedings were commenced in this court, a number of other parties were joined, the details of which I do not need now to set out because they have taken an active part throughout.

8. Accordingly, whilst there are numerous parties and various actions, there seems to be three contentious issues. First, should the financial agreement between the husband and the wife be set aside on a statutory basis as set out in the Act? If that agreement is set aside, the issue of the ownership of property then becomes a matter for determination and the interest of the trustees of the husband’s bankrupt estate, pursue property that belonged to him as it would now vest in them. The wife’s position remains unclear because of the absence of her participation.

9. The second issue and therefore connected to the first is what is to happen to D Street.

10. The joinder of the various parties to these proceedings brings into contention a second property which is the subject of the dispute involving the other parties. 

11. Whilst all of these issues are inextricably linked, the most efficacious way to deal with the litigation seems to me to be to deal with the financial agreement first because that may very well lead to questions of the entitlement to the other properties.

12. The conduct of litigation is a matter for the parties and I shall be guided by how each considers the most efficacious way for the case to be heard.  Whilst there was some suggestion of a bifurcation of part of the proceedings, I would resist that here because there is significant overlap from an evidentiary point of view.  If, as the record seems to show, the husband and wife are not participating in the proceedings, the issues become less complicated.

13. At the hearing on 9 May 2018, I was informed that the wife had been corresponding with the court.  As I observed at the time, and I reiterate now, the court is not a repository for parties’ correspondence.  As a court of law and a superior court of the Commonwealth of Australia, its function is to carry out the law of the Commonwealth.  As such, it deals with litigants who require determination of issues associated with relief.  It is also not the function of the court to give legal advice whether the litigant (or proposed litigant) has legal representation or not.  Giving advice is inconsistent with judicial function.  Accordingly, I place formally on the record that I have not read any of the correspondence of the wife and do not intend to do so as, having regard to what I have already said, she does not appear to be a litigant participating in these proceedings.  I understand that she and the husband are in Romania and the tyranny of distance no doubt creates some problems for her.  That is a dilemma that she will have to face.

14. Although outside of my preferred timetable, I have set this case down for hearing in October to give all parties ample time to clarify what relief they are seeking and what pleadings underpin that relief.  It will also give them ample opportunity to complete any investigations and file relevant evidence.  The same applies to the husband and the wife.

15. In my view, the orders I have now made best deal with those problems and I shall give liberty to apply on formal application (not on a letter) for interlocutory issues to be determined prior to trial.

I certify that the preceding Fifteen (15) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 14 May 2018 in chambers.

Associate:

Date:  15 May 2018