Wexler & Wexler
[2021] FedCFamC1F 48
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
Wexler & Wexler [2021] FedCFamC1F 48
File number(s): SYC 9270 of 2020 Judgment of: HENDERSON J Date of judgment: 15 September 2021 Catchwords: FAMILY LAW – PROPERTY – Interim property – Application for interim costs order – Application dismissed.
FAMILY LAW – PRACTICE AND PROCEDURE – Review of a Registrar’s decision – Application dismissed.
Legislation: Family Law Act 1975 (Cth) s 79 Cases cited: Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 Division: Division 1 First Instance Number of paragraphs: 71 Date of hearing: 17 August 2021 Place: Sydney Counsel for the Applicant: Mr Schonell SC Solicitor for the Applicant: Karras Partners Lawyers Counsel for the Respondent: Mr Lloyd SC Solicitor for the Respondent: Swaab Attorneys ORDERS
SYC 9270 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR WEXLER
Applicant
AND: MS WEXLER
Respondent
ORDER MADE BY:
HENDERSON J
DATE OF ORDER:
15 SEPTEMBER 2021
THE COURT ORDERS THAT:
1.Orders 4 and 5 of the wife’s Amended Application in a Case filed 13 April 2021 seeking a review of a registrar’s decision are dismissed.
2.Orders 7 and 8 of the wife’s Amended Application in a Case filed 13 April 2021 seeking injunctions and litigation funding are dismissed.
3.The wife has leave to file subpoenas in relation to the documents she seeks as set out at paragraph 5 of annexure “A” to her interim application filed 22 February 2021.
4.The wife is permitted to seek from the husband tax returns and bank details that are in his possession or control going back five years from the date of filing of her application for Review filed 13 April 2021.
5.The wife’s Amended Application in a Case filed 13 April 2021 is otherwise dismissed.
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 Wexler & Wexler has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
This was an interim application whereby both the husband Mr Wexler (“the husband”) and wife Ms Wexler (“the wife”) sought interim relief.
The wife was represented by Mr Lloyd of senior counsel and the husband by Mr Schonell of senior counsel.
The documents read were as follows:
(1)For the wife:
(a)Response to Initiating Application filed 22 February 2021;
(b)Amended Application in a Case filed 13 April 2021;
(c)Consolidated affidavit filed 6 August 2021;
(d)Financial Statements filed 22 February 2021 and 9 August 2021;
(e)Submissions filed 19 March 2021;
(f)Court book consisting of 300 plus pages filed Friday evening at 5.00pm for an interim hearing the following Tuesday and outside any directions of the Court;
(g)The wife relied on the following tenders as attached to her various affidavits and court book:
(i)The husband's 2016 personal taxation return;
(ii)B Pty Ltd 2018 financial statements;
(iii)B Pty Ltd 2019 company taxation return;
(iv)Letter from C Lawyers to Swaab dated 16 September 2020;
(v)Letter from Swaab to C Lawyers dated 28 July 2020;
(vi)Letter from Swaab to C Lawyers dated 16 November 2020;
(vii)The documents produced under subpoena from page 911 of the wife’s court book filed Friday 13 August 2021 being, effectively, the three letters of intent of the husband's late father.
(h)Case Outline.
(2)For the husband:
(a)Amended Initiating Application filed 14 April 2021;
(b)Consolidated affidavit filed 16 April 2021;
(c)Tender book consisting of some 60 pages;
(d)Financial Statement of 22 December 2021;
(e)Submissions on disclosure filed 19 March 2021; and
(f)Case Outline.
I heard submissions on behalf of both parties’ counsel.
The husband did not seek any orders at the interim hearing nor did he join in the review of the Registrar's directions for disclosure of 30 March 2021. He had sought that a caveat currently on the former matrimonial home be lifted to allow him to obtain finance to secure independent accommodation himself and/or exclusive occupation of the former matrimonial home. That application was abandoned at the interim hearing.
The wife sought an interim costs order in the sum of $400,000, exclusive occupation of the former matrimonial home, which the husband effectively conceded, and various voluminous additional orders in relation to disclosure by the husband and as sought in her Response filed 22 February 2021.
THE SHORT, RELEVANT CHRONOLOGY
The husband was born in 1962 and the wife was born in 1973.
In 2000 the husband and wife commenced cohabitation.
In 2003 the parties married.
In 2006 the parties’ child X was born.
The wife asserts the parties separated on 30 December 2017.
On 13 June 2020 the parties divorced.
On 22 December 2020 the husband commenced family law proceedings.
On 22 February 2021 the wife filed documents in response to the husband's application.
On 11 March 2021 the husband exchanged contracts for the sale of the Suburb D property, which property is not owned by the husband but is owned by a trustee company, Wexler Pty Ltd.
On 18 March 2021 the husband sold a luxury vehicle for $226,000
On 20 April 2021 the Suburb D property settled for $1,430,000.
The husband repaid a loan to the Wexler Group for the luxury vehicle.
THE PROCEDURAL CHRONOLOGY
The matter first came before the Court before Senior Judicial Registrar Bastiani on 23 February 2021 for a Case Assessment Conference concerning property only.
The matter came before the Court on 30 March 2021, again before Senior Judicial Registrar Bastiani in chambers and she made orders in relation to discovery and the production of documents by the husband.
On 14 April 2021 the matter was transferred to Justice Harper where his Honour noted the wife had filed a review of the Registrar's decision made 30 March 2021 in relation to disclosure and filed an amended application seeking restraint upon dispersal of the $400,000 from the net proceeds of sale of the property at Suburb D. It was noted the husband sought exclusive occupation of the Suburb E property. Directions were made for the husband to respond and for the sum of $400,000 from that sale to be placed in a trust account pending further order of the Court.
On 19 April 2021 the matter came before Registrar Turner in the judicial duty list on the wife's Application in a Case filed 6 April 2021 for a review of a registrar's decision with the application having been amended on 13 April 2021 to include production of voluminous documents by the husband, her application for orders for exclusive occupation of the home, applications for injunctions, and interim costs as well as the husband’s Application in a Case filed 14 April 2021 for the same occupation, delivery of items to him from the former matrimonial home and capacity to raise a mortgage against the home to provide accommodation for himself.
The learned Registrar noted the parties had resolved some issues and the balance requiring hearing time included the wife's application for interim costs, injunctions and a review of a registrar's decision and that they were the matters before me on 17 August 2021.
On 3 May 2021 the matter came before Registrar Chayna. The learned Registrar noted the matter was financial only, that both parties sought exclusive occupation of the former matrimonial home, that there was a review of Senior Judicial Registrar Bastiani’s disclosure directions of 30 March 2021, that the wife was seeking litigation funding and injunctions, that the balance sheet dispute ranged from $23 million as asserted by the husband to $170 million as asserted by the wife and that the parties had agreed on single experts to value artwork, the former matrimonial home and the husband's various business interests.
On 10 June 2021 the matter again came before Registrar Chayna, and she noted the parties had resolved an interim issue contained in Applications in a Case filed 4 June 2021 and 7 June 2021. Consent orders were made, noting the interim defended hearing on 17 August 2021, injuncting the husband from dealing with the Suburb E property until that date and it was noted that the wife would not re-lodge a caveat over the Suburb E property, her initial caveat having lapsed.
On 10 August 2021 the matter came before Justice Wilson for a callover and his Honour directed the parties to complete all disclosure by 15 October 2021, for the parties to attend private mediation prior to 29 November 2021 and listed the matter for compliance hearing on 10 December 2021 before himself.
SHORT SYNOPSIS
The matter relates to property only, does not include parenting orders and neither party is a vulnerable litigant. Fortunately there are no risk issues in this matter.
The Friday night before this interim hearing which was listed on the following Tuesday, and which had been listed for some months, the wife filed a court book consisting of in excess of 300 pages.
The documents the wife had previously filed in accordance with directions and which I had read for this interim hearing consisted of some 400 pages.
At the interim hearing I was referred to perhaps 30 pages of the court book. In fact all but three of the documents I was referred to at the interim hearing were contained in material the wife had previously filed in support of her application. The three additional documents the wife relied upon were discovered under subpoena being three letters of intent of the husband's late father asserted by the wife to indicate the husband's late father's intention in relation to his assets at his death which impacted positively upon the husband's wealth.
For legal practitioners to file such lengthy, voluminous and unnecessary material so close to an interim hearing is poor conduct particularly in circumstances where there was no covering letter or indication of the particular documents that the wife would be relying upon at the hearing. It is an affront to both the Court and the other parties to litigation to behave in this fashion.
There was no justification or reason why it was necessary or prudent to file so close to an interim hearing a court book consisting of over 300 pages without any indication as to what it was the wife would be relying upon within those 300 pages. This is particularly so in circumstances where the wife previously filed material consisting of some 400 pages, 911 in total, of the evidence upon which she sought to rely and the three additional documents relied upon could have been tendered at the interim hearing.
It behoves practitioners to minimise expense for their clients at interim hearings and also to minimise costs for all parties particularly in matters such as this where there are contests in relation to factual issues, in particular, the asserted wealth of the husband which the wife says approaches over $100 million in his late father's estate and which assertion is denied by the husband. This litigation has a long way to go. In an interim hearing the more precise the orders sought by parties, the more contained the documentation a judge is required to read in order to make a determination and the respondent to respond to, the less will be the cost and stress incurred by both parties and ultimately the more focussed and on point will be the decision.
Family law litigation is private, inter partes litigation. It behoves practitioners to at all times seek to, by their conduct, the manner by which they run the proceedings and the issues they raise to assist their client and thereby the other party, resolve the dispute between them or, at a minimum, minimise the issues in dispute. This is the antithesis of how this matter has been conducted at this early stage.
The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) is now law and practitioners are to conduct proceedings pursuant to a new Central Practice Direction.
That Practice Direction is clear at part three which is headed “CORE PRINCIPLES”:
3.1The following 10 core principles underpin the exercise of the family law jurisdiction of the Court and are designed to facilitate the resolution of family law proceedings. All steps taken in proceedings before the Court, including commencement of proceedings, should follow these principles.
CORE PRINCIPLE 1 – Risk
3.2The prioritisation of the safety of children, vulnerable parties and litigants, as well as the early and ongoing identification and appropriate handling of issues of risk, including allegations of family violence, are essential elements of all case management.
CORE PRINCIPLE 2 – Parties’, lawyers’ and the Court’s obligations and overarching purpose
3.3The overarching purpose to be achieved is to facilitate the just resolution of disputes:
(a) according to law; and
(b) as quickly, inexpensively and efficiently as possible.
3.4 The overarching purpose includes the following objectives:
(a) the just determination of all proceedings before the Court;
(b)the efficient use of the judicial and administrative resources available for the purposes of the Court;
(c) the efficient disposal of the Court’s overall caseload;
(d) the disposal of all proceedings in a timely manner;
(e)the resolution of disputes at a cost and by a process that is proportionate to the importance and complexity of the issues in dispute.
This was not a final hearing but an interim hearing and the issues were easily defined and able to be dealt with without the necessity to file voluminous material and expect a judge of this Court to read that material and a respondent to respond in such a short time frame.
EVIDENCE
The wife's Application in a Case in relation to the interim issues was filed on 13 April 2021.
The wife sought at order four of that Application in a Case that orders made by Senior Judicial Registrar Bastiani on 30 March 2021 be reviewed as set out below.
The wife sought in order 5 that in addition to the documents required to be provided by the husband to the wife, the husband provide further documents to her being all the documents she sought be provided in her Application in a Case filed 22 February 2021 which was the application then before Senior Judicial Registrar Bastiani.
This review is a nonsense. The wife is at liberty to seek further documents from the husband pursuant to the Family Law Act 1975 (Cth) (“the Act) and the Rules and parties have an ongoing obligation of disclosure whilst litigation is pending in this Court and the review was otiose.
Secondly, Senior Judicial Registrar Bastiani did not dismiss the Application in a Case included in the wife's Response filed 22 February 2021 when making her orders and thus the wife was at perfect liberty to ask for those documents to be disclosed at some point in time.
On these facts the wife's application for a review is dismissed.
Going now to the voluminous additional documents the wife seeks the husband disclose which are as set out in annexure “A” to her Response filed 22 February 2021.
At paragraph “1” the wife seeks disclosure of savings of $200,000 that the husband had in 1999 by way of bank statements and ATO taxation returns. I will not make that order. This is 22 years after the event and prior to the marriage and would be of no compass in a matter where, on the wife's asserted values, the parties are worth $175 million and the husband's value is $23 million
Paragraphs 2 and 3 seek documents for events occurring some 20 years ago when the reality is the husband did develop a property at F Street, Suburb G and purchase a property at H Street, Suburb E.
The submission that this information will assist the wife's case that the husband has been provided or has access to significant funds from the trusts set up by his late father is not accepted by me.
At paragraphs 43 and 44 of his affidavit filed 16 April 2021 the husband sets out his understanding of his late father's estate called the “J Wexler Family Trust” (“the Trust”). That it is a discretionary trust set up by his father and that after his father's death his mother became the controller of the Trust. That the appointers of the Trust are his mother Ms K Wexler, Mr L, who is Chairman of the Board, and Mr M.
The husband outlines at paragraph 45 of his affidavit that that the trustee of the Trust is J Wexler Pty Ltd and that his mother holds 100 per cent of the shares in that company. That the directors of the trustee company are himself, his brothers Mr N Wexler and Mr O Wexler, his mother Ms K Wexler and Mr L.
At paragraph 46, that he is a beneficiary of the Trust whose benefits are at the discretion of the board of the trustees in the J Wexler Family Trust. That there are a significant number of companies involved in the Trust and he is appointed as a director of some of them. He has not been actively involved in running the companies or the Trust and as a mere beneficiary is not permitted to be provided with financial records. The husband sets out clearly how the wife can obtain the documents she wants which are not in his power, control or possession from his late father's group and identifies the lawyers who act on behalf of the Trust, P Lawyers of South Australia.
The husband says he has disclosed all he is able to disclose and is aware he has an obligation to disclose all documents he has access to or control over concerning those trusts and its various entities. The reality is the husband has disclosed voluminous documents to the wife despite the wife's assertion to the contrary. He has provided disclosure in relation to the parties’ assets, his assets and, most particularly, the benefit that he and the wife have received from the various trusts and other entities comprised in his late father's estate over the period of the marriage and, for the husband, continuing.
He has disclosed his knowledge of the extent of his late father’s estate and that it comprises various trusts and entities and has provided these parties with over $16 million during their marriage. Clearly this Trust and its entities are a financial resource for the, or of the, husband from which the wife has benefited over the years. I accept the husband has the benefit at times and the parties have each had the benefit of distributions from his late father's estate during the relationship and marriage but these distributions are outside the control of the husband.
In a letter dated 16 September 2020 from the husband's prior lawyers, page 72 of the husband’s court book, significant documentation was disclosed to the wife including bank statements, cheque accounts, tax returns, insurance certificates, bank accounts in Country Q, contracts regarding the purchase and sale of real property, motor vehicles, company/partnership financials and taxation returns, disclosure of his interest in R Ltd and, most importantly, advising the wife at paragraph 9(b) of that letter:
We understand that P Lawyers [who act on behalf of the common group trusts] are in the process of writing to your firm. Any and all requests for documents and information referrable to the Wexler Group Trusts must be addressed to P Lawyers.
Further, and importantly, at paragraph 12(a) of that letter the husband’s lawyer wrote:
Our client was unaware of any letters of wishes of his late father. You may care to advise as to the source of your client’s knowledge about the existence of a letter of wishes when our client himself did not know that there was one in existence. Your client has an obligation of full and frank disclosure and we require the same to be provided. If your client has been provided with a copy of it from an unknown or known source to her, we require her to produce it and identify the source.
12(b). Since your letter, our client has made enquiries and been informed that there is a letter of wishes. Again any queries referrable to this topic must be referred to P Lawyers who act for the Trust and estate of the late Mr J Wexler…
The wife issued a subpoena and lo and behold the three letters of wishes or intention were produced, found at page 911 of the wife’s court book.
On 26 May 2020 C Lawyers sent to the solicitors for the wife's some 558 pages of documents, then again, on 16 September 2020, sent a detailed and informative letter enclosing a further 148 pages of documents.
The husband confirms he has provided full disclosure of the assets over which he has control including his beneficial interest in the Trust.
The evidence supports the husband's position of his status and/or interest in the Trust and its assets, which assets I accept are extremely valuable. He is clearly a beneficiary, a director with others of some of the companies comprised in the Trust but little else. The husband admits to a beneficial interest in the Trust set up by his late father but he is not a trustee, settlor or exercises any control over the Trust by way of ownership of shares in the groups and companies comprised in the Trust
If the wife requires further documents as set out in paragraph 5 of annexure “A” to her interim application filed 22 February 2021 I will give her leave to file subpoenas for I am satisfied the husband has made disclosure of that which is in his possession or that which he has control over.
I will not permit the wife to seek the husband produce taxation returns, financial statements, the husband's bank accounts or other financial accounts or entities going back any further than five years from the date of filing the review.
The wife has mounted a fishing expedition and sought documents which will have little bearing on the outcome of the matter.
The purpose of discovery is for parties to provide full and frank disclosure of their financial circumstances of documents in their possession or control. The husband has done this. The purpose of discovery is not for the other party to make out your case by the provision of documents you insist will prove your case. The wife can pursue the provision of documents that she asserts will prove her case from those in whose possession or control they are.
Accordingly, I uphold Senior Judicial Registrar Bastiani's decision in relation to the provision of documents and dismiss the wife's application in its entirety for a review of the Registrar’s orders and for the provision of further documents as sought.
I will permit the wife to seek from the husband tax returns and bank details that are in his possession or control going back five years from the date of filing of her application for review.
Going now to the wife's application for the fund of money to pursue her litigation.
There is a fund of money in trust amounting to some $400,000 from the sale of the property, however it is not the husband's money. This money is owned by the Trust which was the registered owner of the property that was sold. The husband is the settlor of the Trust and there will be tax implications on the disposition of this fund and they are not known and will not be known for some time.
However, most importantly, the wife is a woman of means, to her credit, and she earns an income approaching $250,000 per annum and is not, as is so often the case in these matters, a vulnerable spouse with no access to the parties’ wealth.
The wife lives in the former matrimonial home valued at some $8 million to the exclusion of the husband for which he pays all outgoings and the paternal family pay the child's private school fees.
The father's child support obligations will be a matter for the Child Support Agency and the mother is at liberty to make any application to that Agency on any occasion she so chooses.
The wife’s Financial Statement discloses over $100,000 cash in various bank accounts and this, combined with her significant income in circumstances where she has no ongoing expenses for her or her daughter's accommodation, indicates she is not a woman who has been locked out of the parties’ matrimonial money or unable to fund her own litigation expenses.
In an application for interim funds I must identify the head of power I am exercising and it would appear to me it is pursuant to section 79 of the Act. From the decision of Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 I must be satisfied in the exercise of my discretion to make an interim order for a fund of money to a party under section 79 of the Act that it is otherwise proper for the Court to make the order sought. I accept the wife receiving some hundreds of thousand dollars will in no way defeat the husband's claim however the evidence does not support that at this time it is proper I make the orders sought by the wife from the fund she has identified, given her income and the liquid assets available to her to fund her litigation, and the wife’s application for litigation funding is dismissed.
I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Henderson. Associate:
Dated: 15 September 2021
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