Vilas & Vilas
[2023] FedCFamC1F 1141
•15 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Vilas & Vilas [2023] FedCFamC1F 1141
File number(s): NCC 3703 of 2019 Judgment of: SMITH J Date of judgment: 15 December 2023 Catchwords: PRACTICE AND PROCEDURE – Orders: –– Child being called as a witness –s 100B of the Family Law Act 1975 – child 17 by Trial – child mature – child advised ICL in prior parenting proceedings that maternal grandfather intervenor said he would take all matrimonial assets by recovering loans in these proceedings and then give that money to wife – child lives with father - evidence relevant - potentially highly significant to major issues at final hearing – child may give evidence.
PRACTICE AND PROCEDURE – Production of documents.
Legislation: Evidence Act1995 (Cth) Pt 3.1, s 55
Family Law Act 1975 (Cth) Pts VIII, XI, ss 75(2), 100B
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Pts 1.3, 8.2, rr 1.31, 8.10
Cases cited: Hall & Hall (2016) 257 CLR 490; [2016] HCA 23 Division: Division 1 First Instance Number of paragraphs: 43 Date of hearing: 14 December 2023 Place: Newcastle Counsel for the Applicant: Mr Wong Solicitor for the Applicant: Millyard Family Lawyers Counsel for the Respondent: Ms Evelyn Solicitor for the Respondent: Clarity Lawyers Counsel for the Intervener: Mr Bland Solicitor for the Intervener: Catherine Henry Lawyers ORDERS
NCC 3703 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR VILAS
Applicant
AND: MS VILAS
Respondent
MR KILIAN AND B1 PTY LTD
Intervener
ORDER MADE BY:
SMITH J
DATE OF ORDER:
15 DECEMBER 2023
THE COURT ORDERS THAT:
1.The matter be listed for mention only at 9:30 am on 2 February 2024 by Microsoft Teams for the making of directions for a Final Hearing.
2.The Intervenor’s foreshadowed Application in a Proceeding be listed for Interim Hearing by Microsoft Teams at 10:00 am on 14 March 2024.
Child’s evidence
3.Pursuant to s 100B of the Family Law Act 1975 (Cth):
(a)The child X born 2007 be permitted to swear an affidavit in these proceedings generally in the form as set out at annexure A-2 to the Application in a Proceeding filed 17 November 2023, and the Applicant and his solicitors be permitted to do all things reasonably necessary to effect the settling and swearing of that affidavit.
(b)The child X be permitted to be called as a witness at the final hearing of these property proceedings on the subject matter of her Affidavit and her email dated 3 August 2023 (as redacted) to the Independent Children’s Lawyer.
(c)If required for cross examination, the child X shall give her oral evidence by audio-visual means by way of Microsoft Teams.
(d)The Respondents are to notify the Applicant whether or not the child is required for cross examination as soon as a decision is made.
Disclosure and subpoena
4.The Applicant has leave to issue subpoenas on any executor or executors of the estate of the Respondent’s late grandmother, and on any solicitor or solicitors who act or who have acted for the executor or executors.
5.The Applicant has leave to issue subpoenas on any executor or executors of the estate of the Respondent’s late mother, and on any solicitor or solicitors who act or who have acted for the executor or executors.
6.That within fourteen (14) days of the date of these Orders, the wife produce disclosure to the Husband as follows:
(i)A complete record of all bank statements for all bank accounts the wife holds in her name or in an associated entity from the period 22 July 2022 to the current date;
(ii)The wife’s income tax returns and notices of assessments for the financial year 2022.
(iii)The wife’s income tax returns and notices of assessments for the financial year 2023.
7.That within fourteen (14) days of the date of these Orders, Mr Kilian and B1 Pty Ltd (“the Intervenors”) produce disclosure to the Husband and the Wife as follows:
(i)Copy, Trust Deed for the Kilian Family Trust in existence as at 28 March 2011, with the original to be made available for inspection at the offices of the for the Intervenor by C Lawyers for the Husband and by the Wife’s Solicitors;
(ii)Copy, Deed of Variation for the Superannuation Fund 1 and completed Schedule B to this Deed with the originals to be made available for inspection at the offices of the Solicitors for the Intervenor by C Lawyers for the Husband and by the Wife’s Solicitors;
(iii)Copies of any binding death benefit nomination made by Ms D (deceased) with respect to payment of the deceased’s death benefit from her member interest in the Superannuation Fund 1 with the original to be made available for inspection at the offices of the Solicitors for the Intervenor by C Lawyers for the Husband and by the Wife’s Solicitors;
(iv)Copy of any resolution of director(s) of B2 Pty Ltd with respect to payment or transfer of Ms D’s (deceased) death benefit member entitlement from her member interest in the Superannuation Fund 1 to MR KILIAN date of birth 1948 and/or to MS VILAS date of birth 1979 with the original to be made available for inspection at the offices of the Solicitors for the Intervenor by C Lawyers for the Husband and by the Wife’s Solicitors;
(v)Copies of any documents relating to the appointment of the executors of the Estate of Ms D (deceased) as replacement directors for Ms D in B2 Pty Ltd after her death in 2011 for the period that Ms D remained a member of the Superannuation Fund 1;
(vi)A copy of the Income Tax Returns for Superannuation Fund 1 for the financial years 30 June 2011 to 30 June 2013;
(vii)Auditor’s reports for Superannuation Fund 1 for the financial years 30 June 2011 to 30 June 2013;
(viii)Any correspondence (electronic or otherwise) given to the Intervenors by their accountant as to the existence of any loan alleged between them and either of the spouse parties or entities under their control;
(ix)Any correspondence with the Wife and/or her Solicitors with regards to alleged loans between the Intervenors and either of the spouse parties or entities under their control.
8.If any documents ordered to be disclosed are not disclosed on the basis that they are not available, an affidavit attesting to the fact that they are not available and to the efforts and inquiries undertaken to locate the documents is to be sworn by the party not disclosing the documents.
9.If privileged is claimed in respect of any documents required to be disclosed, the documents are to be produced instead to the Court in a separate bundle marked “Privileged”, as if documents subject to subpoena, and the party claiming privilege is to prepare and provide to the other parties a list of the documents produced and the basis of the claim for privilege, for determination in due course by the Court.
Balance sheet and identification of outstanding valuation issues
10.The Applicant and First Respondent are to prepare and file a Joint Balance Sheet identifying all agreed values, and specifying values that are not agreed, with appropriate notations including whether any further expert valuation evidence is required, by 16 January 2024.
Parties
11.The Intervenors are to file any affidavit evidence in support of order 1 on the Application in a proceeding filed 24 September 2021 by 9 February 2024.
12.The Applicant and First Respondent are to file any Response and affidavit evidence in relation to order 1 on the Application in a proceeding filed 24 September 2021 by 1 March 2024.
13.Each party to file Court books and submissions bundles in relation to the Application in a proceeding filed 24 September 2021 by 4:00 pm on 11 March 2024.
14.Reserve all parties’ costs of and ancillary to the application in a proceeding filed 17 November 2023 to the final hearing.
15.Otherwise dismiss the remaining prayers in the Application in a proceeding filed 17 November 2023.
NOTATIONS:
A.The Intervenors indicate that the contract and debt question may take up to 5 (five) days to hear. There are apparently a number of witnesses who were allegedly present during a conversation in which there is a dispute about whether a debt was forgiven. The Court accepts it may be appropriate to call these witnesses.
B.The Court presently estimates a hearing of 10 days.
C.The matter will be given priority for hearing for 10 days, if required, in July-September 2024 and the matter is to be prepared on the basis that no further time will be given for preparation beyond that time-frame.
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 Vilas & Vilas has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX-TEMPORE REASONS FOR JUDGMENT
SMITH J:
This is an Application in a Proceeding filed on 17 November 2023 by Mr Vilas, the applicant husband, in the property proceedings between him and Ms Vilas, the respondent wife, jointly, the parties. The application deals with a number of matters which I will consider in turn in due course. The wife’s father, Mr Kilian, and B1 Pty Ltd, which, for the purposes of this application, I will merely say is Mr Kilian’s company, are intervenors and additional respondents.
It is alleged as part of the property proceedings that either Mr Kilian and/or B1 Pty Ltd and, as I understand it, potentially also another related company, “[B2 Pty Ltd]”, which is not currently a party, loaned substantial sums to the husband and wife. The sums alleged, including interest and potentially unpaid rent, are in the millions of dollars and, on one view, could consume most of if not the entire matrimonial pool or certainly a large part of it.
Because of that, the terms of any contract and the parties to any contract in terms of the loans are very significant facts in issue in the proceedings. Further, if there are loans which are repayable, they are repayable to the wife’s father or his company. There is a question of whether or not, if the loan is required to be repaid, Mr Kilian will then exercise his authority in person or as the owner and director of B1 Pty Ltd, or by using other funds in his possession to then effectively give that money back to the wife. His capacity to do that may depend on the net financial position of B1 Pty Ltd and tax and other liabilities, whether it has retained profits which he can distribute to himself, and significantly whether he has other assets from which he can achieve the same end, as well as a range of other matters, but those are all questions of fact.
The issue was brought into stark relief in terms of Mr Kilian’s intentions, either in his personal capacity or in his capacity as a director of a company or companies which he controls and beneficially owns, by evidence in the now-resolved parenting proceedings, which were originally part of the same overall matter before bi-furcation.
The parenting proceedings involved the parties’ two children, X and Y. The parenting and property proceedings were bifurcated with the parenting proceedings listed to be heard first. The parenting proceedings commenced before me several months ago. Evidence was led. The parents ultimately settled those proceedings with the assistance of the Independent Children’s Lawyer. Among the evidence that was led and admitted into evidence in those proceedings, which related inter alia to the time the children were spending with the mother in the presence of the maternal grandfather Mr Kilian, was evidence from the ICL about the child’s concerns and views. There was evidence from the ICL of an email communication from X dated 3 August 2023 that included, inter alia, her statement of a then-recent discussion with Mr Kilian about his intentions in terms of the disposition of moneys to be recovered in these proceedings.
The email of X dated 3 August 2023 at 10.10 pm to E Lawyers, the Independent Children’s Lawyer in those proceedings, has been produced in a redacted form. The material that has been redacted related to information which X provided in respect of parenting questions and her and Y’s views, which are not relevant to the property proceedings. The parties have been provided with a copy of that email, and it is before me on this application.
In order to provide context for the argument before me about whether or not X, who is now 16, should be permitted to give evidence of that conversation in the property proceedings, I set out the unredacted portions of the email which deal with the questions of a conversation she had with Mr Kilian. The email from X is addressed to the Independent Children’s Lawyer, Ms F and states:
Hi [Ms F],
I hope you’re doing well. I apologise for the late reply to your email, with everything that has been going on I have been behind in my schoolwork and am trying to catch up on everything.
There are a few things I want to talk to you about.
… [redacted] …
Something else happened on Friday that has me really worried and confused. My Mum told me I needed to go up to see my grandpa […] because they were going overseas soon. When I went to visit Grandpa […], Grandpa was really angry, he told me he was suing dad for 4 million dollars and is going to bankrupt him. When I got upset grandpa told me not to worry because he would give the money he got off my dad to my Mum, so [Y] and I wouldn’t miss out.
Grandpa doesn’t even realise how important it is for [Y] and I to be able to have support from Dad. I’m worried for Dad, can grandpa do this to him?
Grandpa also said that my dad is a bad person and he abandon us, he had planned everything, even buying a house months before he left. Grandpa said Dad has been too worried about fighting for us kids and he should have been more worried about the businesses and money. I’m finding it hard to process all of this. I feel like grandpa is only worried about money and they are trying to convince me that my Dad isn’t worth any of our love or time.
… [redacted] …
Thank you again for your help we really appreciate it. I’m really worried what my Grandpa will do to my dad, I’m not sure what to do, I just thought you should know.
Kind regards,
[X]
That evidence of Mr Kilian’s statement of intent, if accepted, as is the test under section 55 of the Evidence Act1995 (Cth) (‘the Evidence Act’), is clearly relevant to at least the issue of the mother’s financial resources.
It was immediately apparent when this evidence was admitted in the parenting proceedings that the issue would arise as to whether X, who was born 2007 and who is now 16 and a half and will be 17 by the time of final hearing in July or August next year, should be permitted to give evidence of this conversation in the upcoming property proceedings. As leave is required pursuant to 100B of the Family Law Act 1975 (Cth) (‘the Act’) and the mother indicated she would probably object, the father was directed by my orders of 6 October 2023 to file an Application in a Proceeding if he sought to call X.
I note that that the process in respect of X has all occurred under my case management supervision. There may have been failure by the father to strictly comply with the rules, and in particular, rule 8.10 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’). However, given that this process has occurred with complete transparency, and is not a case where a party has gone off and, unbeknownst to anybody, sought to obtain evidence from a child, but was rather a matter raised with the Court and discussed as a result of evidence given in the parenting proceedings, to the extent to which the father has not strictly complied with rule 8.10, and pursuant to my power under rule 1.31 to dispense with or waive compliance with any of the rules at any time, including before or after the time for compliance, I formally waive the father’s obligation to comply with rule 8.10 of the Rules.
I understand that the father issued the intervenors with a notice to admit facts in relation to the conversation as reported, and that occurred on about 12 October 2023. I understand that a number of contentions were admitted by the intervenors on 27 October 2023, but there are still issues. The husband then filed this Application as required and foreshadowed by my orders. The intervenors oppose the application.
Now, I should say that although the issue of an Application being listed before me started with the question relating to X, there are also other issues that are outstanding, and they have been included in the Application that has been heard by me. The material that is before me which I take into account includes the father’s case outline, MFI 1, which indicates the material being relied upon, and the Outline of Argument, which was supplemented in respect of various matters by oral argument, and that includes the Application in a Proceeding filed on 17 November 2023, the affidavit of the applicant of 17 November 2023 in support, and also the affidavit of the applicant which was sworn on 12 December 2023, but may not have been filed until 13 December 2023 because of issues around what was happening in terms of City G and a natural weather event.
In terms of the respondent wife, she very helpfully prepared a court book of 81 pages, MFI 2, and I treat as part of MFI 2 and have read the Outline of Case of the mother filed on 13 December 2023 as submission.
I treat that in the same way as the father’s outline, which is written submissions in support of oral submissions. I have the mother’s response dated 22 November 2023 and her affidavit filed 8 December 2023. She also provided from pages 54 to 81 a tender bundle which goes to issues relating to payment of the expert, and I treat those as being before me and forming part of the evidence.
In terms of the intervenor, I have the intervenor’s case outline, MFI 3, which indicates material relied upon, and the intervenor also helpfully provided a court book, MFI 4, which includes that material. Now, the material includes the Response dated 22 November 2023 and the affidavit of Mr Kilian of 8 December 2023.
I should note that the material that was put before me also included an Amended Application in a Proceeding filed on 24 September 2021. I will come to that in due course. That application, which has lain dormant, was not strictly before me although there were discussions about it, and I will make orders in terms of advancing that. I note, so there is no confusion that the only issues that are pressed are the orders at order 1 of that Application to be dealt with at a future stage, and that, in effect, is an Application to join the additional company, B2 Pty Ltd as opposed to B1 Pty Ltd. There is an application for Mr Kilian to be removed as a party because he says that the two companies are the only relevant parties, and he also seeks orders to join two companies, H Pty Ltd and J Pty Ltd as party to proceedings. My understanding is that they are entities owned or controlled by the applicant husband. These are matters that will need to be dealt with at a later stage.
The Applications that were before me, in terms which they were argued as set out in the Application, were the orders from 11 to 14 relating to whether or not X should be allowed, pursuant to s 100B of the Family Law Act 1975 (Cth), to give evidence in the proceedings, noting that she is not yet 18. There were also orders sought at Order 1 with various suborders concerning the wife producing material in terms of disclosure. There were orders at 2 in terms of the intervenors producing material. There were orders at 3 also about material to be produced to Ms K, which is the single expert. There were orders sought in respect of the payment for the single expert’s report, Ms K at orders 4 and 5, effectively asking that I set aside an agreement that was made on 6 May 2022, and then there were general orders sought in respect of the appointment of experts.
I will start with the first issue that was argued, which was whether or not X should be permitted to give evidence, in the husband’s case, pursuant to section 100B of the Family Law Act 1975 (Cth).
The submissions against in writing, which were substantially reiterated in oral argument, are set out at paragraphs 10 to 27 of MFI 3, the intervenor’s case outline, under the heading “Evidence of the child”. The submission is made that the evidence of the child is irrelevant to the application brought by the intervenors. That may be true, but that is certainly not the end of the matter. It is said that the child’s recording of the conversation with the grandfather is inaccurate. That is a question of fact. It says the topic of the father’s debt to intervenor was raised by the child and not the grandfather. That is maybe a question of fact and, in any event, does not go to whether the statements allegedly made by Mr Kilian are relevant. It was submitted that the conversation between a grandfather and a grandchild was not between litigants or commercial operators and it was the grandfather seeking to allay the fears of his grandchild. Again, that does not affect the relevance. If he wishes to give evidence that he mislead the child to allay her fears he may do that. None of that affects the test of relevance.
It was submitted that any assistance offered by the grandfather to the children or the mother is assistance which flows directly from the grandfather and his available resources, and not from any debt owed to the intervenor, and Mr Kilian’s argument seemed to be based upon the false premise that the only extent to which evidence can be relevant is if it is relevant in his case or relevant on the factual basis that he asserts. It is quite clear, that if Mr Kilian said, and therefore it may be suggested to him it is true, that if he gets $4 million back, he is going to give some or all of it to the mother, that is clearly relevant to 75(2) question of financial resource which is an aspect of the proceedings before me. The submission at [20] that the Court is unlikely to find the representation to be probative, is a question of fact. The question of relevance is to be determined by reference to section 55 of the Evidence Act. The first part of that section makes it clear that if the test is if it, ie the evidence, were accepted.
Now, if the evidence were accepted that Mr Kilian said the alleged things to the child, then it’s clearly relevant to at least the financial resource issue.
The questions raised by the intervenors of whether or not Mr Kilian will be legally or financially able to use the specific eg $4 million recovered in these proceedings through the company to give that precise $4 million to the mother is a question for Trial. If the company then has $4 million in retained earnings, he may be able to take that out and give it to the mother. Further, even if he is not, but otherwise has the capacity to give her a different $4 million, because he has millions of dollars elsewhere, then that is still a question for trial and still relevant. The implicit suggestion that it is only relevant if the money referred to as being given to the mother can and does come from the monies recovered by the company in these proceedings and not from some other source available to Mr Kilian is misconceived. The child’s evidence is relevant and goes to a major issue. The other matters are for Trial.
It’s quite clear that if the child’s evidence, as set out in that email, were to be accepted, and that he did say that, and if it was held to be, and I understand these are all going to be contentious facts, if it was held that he made truthful statements of his intention, and if it appears he has or is likely to have the capacity to carry out that intention, then that would clearly be extremely relevant and highly probative to the question of the mother’s future financial resource. It may also be relevant, and this may be a question of argument, as to whether or not it was really a loan that was ever intended to be recalled if it were found that the intervenor intends to just take the money from the matrimonial pool and gift it immediately back to the wife. All of this is for Trial.
There’s no doubt that it’s relevant, and I do not accept any of Mr Kilian’s written submissions to the contrary. There was nothing said in the oral argument which advanced that. The wife also objects, as set out in her case outline in MFI 2, at [34] and [39]. She refers to the fact that X is not independent of the proceedings, as the orders provide for the husband to have sole parental responsibility and X is to live with the husband, and to spend time with the Wife as agreed, and she says X has not spent time with her since 23 August 2023. On that basis, it is submitted the child is likely influenced by the father. But the difficulty with that submission is X’s statements of her conversation with Mr Kilian were made to the ICL and they were made prior to the final hearing. I understand that if it’s contested as to what he said, that’s one thing. But at that stage, X had expressed views which weren’t necessarily consistent with the final orders I made. Those orders were made based upon the parties’ agreement, but also based upon the clear evidence in the case of certain issues. If the mother wants to cross-examine X to suggest she has made this up, well then that will be a forensic decision for the mother to make. Although, she wasn’t there, one suspects she will be bound, in effect, by what instructions the grandfather, Mr Kilian, gives to his counsel, since it’s not said that there was no conversation. And I note what’s in his affidavit. I don’t intend to go through it all. But obviously there are nuances and issues that may need to be tested.
The mother also submitted that one extra witness, being X, will increase the length and cost of the trial. I can’t see how X giving limited evidence and being cross-examined can have any substantial effect upon the length or cost of the trial. The wife also suggests the evidence is not relevant, citing Hall & Hall (2016) 257 CLR 490. I reject that. It’s clearly relevant. And if evidence that may lead to a finding that the paternal grandfather, if he gets all that he asked for, is in effect going to give all or half of it to the mother, however he does that, is clearly highly relevant to these proceedings. And it may also be relevant, I don’t know, it will be a question for trial, to the question of whether or not this really was a contract that was ever going to be enforced, or if there was some understanding otherwise.
Now, the court will not generally allow a child to give evidence, as pursuant to section 100B, even though their evidence will often be highly relevant. The mother says it’s only allowed under exceptional circumstances. No authority is provided for that submission, but clearly there is a general rule for a reason.
I take into account the fact that X is 16 and given that, I had set aside 4 March 2024 but the parties aren’t ready. I am going, indeed, yesterday I did give that date to another parenting proceeding. I will now be looking at a trial date in July or August. By then she will be 17. So she won’t be an adult, but she will be of a certain age. The evidence at the parenting proceeding trial is that she is a mature and sensible child. She has already been involved in the issue. Her evidence is, in my view, highly significant and highly relevant, potentially, to the major issues at Trial.
And on balance, I am satisfied that the interests of justice require that X be permitted to be called as a witness in the father’s case. I note, again, there may have been some misunderstanding because the intervenor wasn’t previously involved. But to the extent to which the father and his lawyers have obtained a draft affidavit, as I understand her evidence to be, I see nothing wrong has been done. Perhaps I should have made more clear orders along the way. X may swear an affidavit. I will make orders that that affidavit will stand as her evidence in chief. It will be a question for the other parties whether she is required for cross‑examination. If it is, I will order her cross-examination be undertaken by Microsoft Teams, as permitted by the rules, and also by my general discretion, to minimise any trauma associated with being a witness in the proceeding. That deals with that first issue.
We then come to the next issue relating to the wife’s disclosure. There are issues around the wife’s potential rights which relate to the Administration of the estate of the wife’s late grandmother and of the wife’s late mother, as set out in applications 1(a) and 1(b). To reduce the issues of argument about what material the wife, as a beneficiary, or as a potential beneficiary, or as a potential beneficiary of a potential trust. Given that it is clearly relevant to either her property rights or her financial resources if she is going to be inheriting substantial sums, or indeed any sums. Or if there is going to be trusts, what the size of those trusts are, who the beneficiaries are, and etcetera, I note Hall & Hall has been referred to previously. Rather than having those arguments as proposed during oral argument, I grant the husband leave to issue subpoenas on the executors and solicitors for each of the estates of the wife’s deceased grandmother and mother.
There are documents, bank records and tax returns that set out at 1(c) and 1(d), they’re the usual documents to be produced. The wife says she can produce them. In those circumstances, I will just make orders 1(c) and (d). So I won’t make order 1(a) and 1(b) as proposed, but I will make orders instead for subpoenas to be issued if the husband wants to on the executors and solicitors. I will make orders 1(c) and 1(d). The wife says, in terms of 1(e), which relates to the property at L Street, that in fact, she didn’t own a one third interest, and that that should be caught up by the estate. In those circumstances, I will accept that. I won’t make Order 1(e).
In terms of Order 2, the husband seeks production of documents by the intervenors. There’s been a long, complicated process relating to the valuation of the companies. I note that the application sets out items 2(a), (b), (f), (g), (h), (i), (j), (k), (l), (m), and (n). There is no (c), (d) or (e). The intervenors say, as I understand it, in their case outline, at paragraph 1, that the orders sought by the applicant, numbered 2(a), (b), (f), (g), (h), and (j), and as required by the subpoena filed 9 March 2021 was answered by the letter dated 4 June 2021. If that’s the case, then I can see no difficulty making that Order again, and they can just resend that letter. Or if they have managed to find the documents in the meantime, they can update it.
In terms of the written intervenors’ submissions don’t deal, as far as I can see, with (i), which are income tax returns for the superannuation fund. I understand the superannuation fund, there’s an argument. I don’t know what the merits of it are, but there’s an argument that the superannuation fund may have had an involvement, which is relevant, to the debts – I can’t determine that at the moment. The assertion is made. I can see that it’s possible. There’s no objection taken in writing so I will make (i). In terms of (k) and (l) are said to be improper; (k) is “(a)ny correspondence (electronic or otherwise) given to the Intervenors by their Accountants as to the existence of any loan alleged between them and either of the spouse parties or entities under their control”. I don’t understand why that’s improper. There’s an issue about the loan of the kind which occurs in many cases where the loan comes either directly from a parent or from an entity owned by the parent, and there’s a whole lot of issues around how real that loan is. Whether it was ever actually intended to be enforced, whether there was an understanding that it would never be enforced, who the parties were. It seems to me that if there’s any material, its not privileged material if given by the intervenors to their Accountants, and it would be relevant. It says “(a)ny correspondence” - that’s suggested to be too broad. Well, any correspondence by the intervenors to their accountants would be too broad. But it’s limited to the question of the loan. The loan is what this entire case is about as far as the intervenors are concerned. I can’t see that it’s improper or too broad. I will make the order (k).
Order (l) is “(a)ny correspondence with the Wife and/or her Solicitors with regards to alleged loans between the Intervenors and either of the spouse parties or entities under their control”. It’s said to be inappropriate - however, again, I don’t see that it is. It’s the question of these loans, their veracity, whether it was ever intended to actually enforce them, what the real terms were, and all the rest of it, are matters in dispute. It may be that, ultimately, everything the intervenors say is held to be accurate and true and the entire claim is allowed and everything the father says is dismissed. But this is an interim question about the production of evidence that may be relevant. It seems to me it’s not too broad. And I will allow (l).
Obviously, in terms of (l), if there is privilege, any material in respect of which privilege is claimed can be produced as is required and marked separately as privileged in the usual way. I will indicate, I don’t understand why people keep not producing material, saying, “I’m not producing because it’s privileged”. Privileged material must be produced, and privilege claimed. In terms of (m), it’s also said to be too broad. I agree with that submission. Given that there’s a single expert valuing the business, I can’t see that it’s appropriate at the moment to require all documents evidencing the purchase of plant and equipment in the two companies is relevant. But it must be on the books. I think it’s too broad. I won’t allow (m). And I make the same finding in respect of (n). I will make orders according to what I have just said.
In terms of application 3, I understand that the intervenors say they provided, recently, a company profile and capability statement, which meets the expert’s request. I understand that that was considered to be sufficient. Obviously, if the intervenors have documents that the expert has requested, they should provide them. But otherwise, I was told I didn’t need to make an order at the moment.
I come now to the question of the costs of the expert report. On 6 May 2022, I made the following notation:
G. The parties have advised the Court that they have agreed on the appointment of [Ms K], through her business, to act as the valuer to undertake the valuation of the wife’s interest in [B1 Pty Ltd], which is likely to include a valuation of [B2 Pty Ltd]. Certain other agreements were reached concerning the valuation of items within that valuation process. The husband is ordered to pay the entire costs of all the valuations in the first instance, with the wife’s contribution to those costs to be determined at a final hearing in circumstances where the wife submitted that the monetary value of her interest did not make the valuation process appropriate. The parties have advised that a minute will be circulated on Monday 16 May 2022. The parties will forward to Chambers consent minutes for the making of orders in Chambers.
It was quite clear that the husband had agreed, and I indicated that he was ordered to pay the entire costs of all the valuations in the first instance, with the wife’s contributions to be determined at a final hearing, given that the wife submitted that the monetary value of her interest did not make the valuation process appropriate.
The husband says that should now be changed in respect of the $9,350 which is to be paid on the basis that what the wife said isn’t correct. That may well be the case. And if the valuation cost was $100,000, I might think it was appropriate to reconsider this on an interim basis. But the simple fact is, it’s not appropriate for the court’s time to be spent relitigating every issue of $5,000 at an interim hearing. The husband’s rights are protected by the order of 6 May 2022. He is to pay, as ordered, and that will be one of many issues that can be raised at the final hearing. He can cross-examine her as to the credibility of what she said, and he can make submissions that they should include, if he wants to, on the balance sheet, on the basis that what she said was misleading. Or else he can seek costs generally, but that can be dealt with then and I am not dealing with it now.
There is also a general application by the husband in respect of any property of the marriage in dispute to be valued. I am not making such a general order as I indicated during the argument. These are applications 6 to 10. It’s unfortunate that the matter won’t be ready for March. It’s an old matter. I also told the parties that I would prioritise it given the resolved parenting, which the reality is, I am not going to give it the March date where I can’t be satisfied it will get on, and I can’t afford to not have a hearing week used. As I said, I have given that date to another parenting matter which is ready and requires determination.
I do want the parties to actually work out this balance sheet because the matter is going to get a hearing date in July or August of 2024. It’s going to be heard. And I am not going to have these issues still dragging on, with people saying to me two weeks out, “no, we want to value something”. What I'm going to order is that the husband and wife are to prepare and file a joint balance sheet identifying all valuations agreed, items in dispute, with the appropriate notations by 4.00 pm on 16 January 2024. If the intervenor wishes to have any say in any of those valuation questions, then they can also file a document to the extent to which that may be relevant.
That then brings us to the question of who the parties should be. We clearly need to sort that out sooner rather than later. As I have said, certainly if it seems to me, given that both B2 Pty Ltd and B1 Pty Ltd are being valued and given there may be some uncertainty about where the loans went, and these company parties will have the same representation as I understand it, I would have thought that both of the B2 Pty Ltd and B2 Pty Ltd and B1 Pty Ltd, who is already a party, should be parties. Whether or not Mr Kilian should be removed, I do not know. If there is agreement, then that can be done easily. If the husband believes that Mr Kilian should still be a party, well, then, it would be very difficult at this late stage to argue he should not be, I would have thought, particularly since I may need to make findings of fact before I can determine that.
The same issue arises around the other additional companies. I am not sure exactly why they need to be joined, given that the husband is a party if he is the sole owner of the companies, but it may be that is appropriate if there is going to be orders particularly in respect of the companies. The parties should try and work that out if they can, but I say that noting that they do not seem to have worked out too much out so far. I am not going to give it a hearing date at the moment.
Those are my reasons.
I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Smith. Associate:
Dated: 1 March 2024
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