Whiteley and Price

[2008] FamCA 195

FAMILY COURT OF AUSTRALIA

WHITELEY & PRICE [2008] FamCA 195

FAMILY LAW – PROPERTY – Expert witness

Family Law Act 1975 (Cth)

Applicant: Ms Whiteley

Respondent: Mr Price

File Number: MLF 1612 of 2006

Date Delivered: 21 February 2008

Place Delivered: Melbourne

Place Heard: Melbourne

Judgment of: Carter J

Hearing Date: 21 February 2008

Representation

Counsel for the Applicant: Mr M G Klemens

Solicitor For The Applicant: Findlay Arthur Phillips

Counsel for the Respondent: Mr M Bartfeld QC

Solicitor for the Respondent: Kenna Teasdale Lawyers

Orders

1. That pars (1), (2) and (3) of the wife’s Form 2 Application filed 6 December 2007 be dismissed.

2. That pars (4) and (5) of the said application be struck out.

3. That the affidavit of Mr G filed 6 December 2007 and the affidavit of Mr Michael Witt filed 14 December 2008 be removed from the Court file and placed in a sealed envelope to be kept with the file, the envelope to be marked with words to the effect that it must not be opened except by order of a Judge.

4. That the wife pay the husband’s costs of and incidental to her Form 2 Application filed 6 December 2007 and the husband’s Form 2 Response filed 21 February 2008 and in default of agreement as to quantum the costs will be referred for assessment.

5. Save as aforesaid the Form 2 and Form 2A both be dismissed and removed from the list of cases awaiting determination.

IT IS CERTIFIED

1. That pursuant to r 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel and Senior Counsel.

IT IS NOTED that publication of this judgment under the pseudonym Whiteley & Price is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 1612 of 2006

MS WHITELEY

Applicant

and

MR PRICE

Respondent

REASONS FOR JUDGMENT

1. There are proceedings pending in this Court for alteration of interests in property between Ms Whiteley and Mr Price.  For convenience, I will refer to them as “husband” and “wife”, even though I am aware that their marriage has been dissolved.

2. The proceedings commenced back in 2006 and have returned to Court on a number of occasions since.  On 14 November 2007 at a hearing before Registrar Williams, the proceedings were placed in the Trial Notice List pool and priority was given to this matter as from 9 October 2006.  On that occasion, the husband’s solicitor, Mr Teasdale, appeared on his behalf and Mr Thompson of counsel appeared on behalf of the wife.

3. Prior to 9 November 2007, the wife had been represented by another firm of solicitors and her present solicitors filed a Notice of Address for Service on 13 November 2007, a day prior to the proceedings before Registrar Williams.  On 6 December 2007 the wife caused to be filed an application by way of Form 2, seeking interim orders.  It was supported at that stage by an affidavit by Mr G.  It had been sworn on 28 November 2007 but, as seen, was not filed until 6 December 2007.

4. It was not until comparatively recently, namely on 14 February 2008, that the wife filed an affidavit of her own in support of her application as well as an affidavit by a Mr Witt, her solicitor.  On the same day, the wife also filed an updated Financial Statement.  Those documents to which I have just referred are the documents relevant to the proceedings so far as the wife is concerned.

5. An affidavit of the husband’s solicitor, Mr Teasdale, was filed on 19 February 2008 and this day I have granted leave, unopposed, for the husband’s Response also to be filed.

6. I will deal with the wife's application and its various parts in the same order as the application itself.

7. The first application is for the appointment of a forensic accountant, Mr G.  That application must be seen in light of an earlier order made by the Court, appointing a single expert who was to value, amongst other things, a number of entities.  As far as I am aware, that has never been done and this is a matter to which the parties will need to give some attention in due course.  It must also be looked at in light of the knowledge and information that Mr G has had made available to him and has relied upon.  He has referred in his material to one document which I highlight, namely a Conciliation Conference list which was prepared for the purposes of a Conciliation Conference between the husband and the wife.  It is convenient to note here that Mr G’s affidavit refers on a number of occasions to matters raised or said at that Conference and indeed he has annexed to his affidavit the relevant document.

8. I raised my concerns about this in view of the confidential nature of conciliation conferences and after some discussion, Mr Klemens, who appears on behalf of the wife, has conceded that this was inappropriate.  In turn, that led to a situation so far as Mr G’s affidavit was concerned which was that his report was tainted and accordingly, I was told that an adjournment was sought on behalf of the wife to enable another report to be prepared.  Again, after further discussion, it was conceded that there would be no point in an adjournment if the application in this regard was not to be granted.  So the matter proceeded firstly on the basis of whether or not the wife should have leave to call evidence from Mr G.

9. Mr Witt’s affidavit is possibly in a different category, in the sense that there could possibly be deletions from it where references to the Conciliation Conference were made but that is not something which needs to be dealt with at this stage of the proceedings in any event.

10. The wife’s case is that she needs the assistance of an investigative and forensic accountant in order to properly present her case to the Court.  There is no dispute of course that the wife is entitled to seek advice from any qualified person that she wishes.  That is not a matter of any controversy whatsoever.

11. I was told by counsel on behalf of the wife that the accountant’s report was an expert report and that of course then brings us to the consideration of the rules relating to experts.

12. The objects of the amendments to the Rules in relation to expert evidence was to ensure that situations did not arise such as took place in W v W (2001) FLC ¶ 93-085. Commencing at par 145 of that case, the majority of the Full Court (the then Chief Justice and O’Ryan J) dealt with the features of Dr W’s involvement in the case which should have, in the view of the majority, led to the trial judge regarding it with considerable reservation. They made it clear in par 148 that their comments were not to be interpreted as necessarily involving a personal attack upon Dr W, but rather as a criticism of the system of calling expert witnesses as it then operated in this jurisdiction. I make the same observation in the present case.

13. At par 149, their Honours refer to a chapter titled “Problems Relating to the Expert Witness in Personal Injury Cases” which appeared in Seminars On Evidence published by the Law Book Co, and it is worthwhile to refer to some small part of the extract that their Honours set out:

    “The criticism made of the expert witness may be justified.  But, in justice, it should be directed not at the witness himself but at the role which the lawyers have forced him to adopt.  It was they who originally altered his function from that of an assessor to that of a witness;  and it is not his own corruption which had brought him into low repute, but the circumstances in which this function has to be discharged. The allegation of undue adherence to his client's cause is made by those have created and who perpetuate the forensic techniques to which he has been forced to adapt himself. It is not the expert's own choice to be a partisan but a consequence of the adversary system in which he has to play a part.”

14. The instructions given to Mr G appear in Annexure “A” to his report (p 24).  Omitting formal parts, the instructions from the wife’s solicitors dated 27 November 2007, requested a report covering the following items:

    “(1)     the contributions of [the wife];

    (2)the financial difficulties of the husband’s business at the commencement of the relationship;

    (3)the improvement of the husband’s business during the relationship;

    (4)the history and composition of the matrimonial asset pool;

    (5)any financial impropriety on behalf of the husband.”

15. Rule 15.43 of the Family Law Rules contains certain definitions, including the definition of “expert”.  An expert is defined as meaning an independent person who has relevant specialised knowledge based on the person's training, study or experience, and an expert’s report means a report prepared by such a witness.  An “expert witness” means an expert who has been instructed to give or prepare independent evidence for the purpose of a case.  I need not define “single expert witness”.

16. Rule 15.59 provides that an expert witness has a duty to help the Court with matters that are within the expert witness's knowledge and capability and that duty prevails over the obligation of the expert witness to the person instructing or paying the fees and expenses of the expert witness.

17. Under r 15.59(3) the expert witness has a duty to give an objective and unbiased opinion that is also independent and impartial on matters that are within the expert witness’s knowledge and capability.  He or she is required to consider all material facts, including those that may detract from the expert witness’s opinion.  The expert witness is to produce a written report that complies with rr 15.62 and 15.63.

18. A duty to the Court arises according to r 15.59(4) when an expert receives instructions under r 15.54 or when he or she is informed by a party that may be called to give evidence in a case.  Pursuant to r 15.54, a party who instructs an expert witness to give an opinion for a case or an anticipated case is required to ensure that he or she, that is, the expert witness, has a copy of the most recent version of and has read divisions 15.5.4, 15.5.5 and 15.5.6 of these Rules.

19. I pause here to say that none of that appears in the letter of instructions.

20. The expert’s report must be in the form set out in r 15.62 and must be verified by affidavit as set out in r 15.62(2).

21. The impartiality of the expert witness in the present case has been called into question and I have to say in my view, when one looks at the letter of instructions given to him, it would be hard to signal more obviously to him what the wife seeks to obtain from him.

22. As I have said, the single expert rules and the Rules relating to expert evidence in this Court followed what could be described as years of litigation in this Court when expert evidence was called, often by both parties, who were keen of course to promote their own cases.

23. The Rules were introduced in 2004.  It was far from uncommon, previously, to see, for example, in valuations by experts of real estate a very low valuation filed by the person who wanted to keep the property, usually a house.  The valuation of the person engaged by the party who wanted to sell the house and did not want to keep it in any event were very often very high.  In any event, in order to improve the situation which the majority of the Full Court referred to in W v W, new Rules were introduced in this Court.

24. The purpose of the Rules is quite clear:  the aim is to avoid partisanship, lack of clarity and the expense which has been engendered over years and years of adversarial expert evidence.  That does not of course necessarily mean that in an appropriate case, for example, adversarial evidence cannot be called.

25. It is perhaps not surprising, given his instructions, that Mr G has gone so far as to raise in this Court his view that the husband has engaged in tax evasion.

26. It was said on behalf of the wife and in support of this part of her application that this witness was to conduct a tracing exercise or something of that nature.  Those of course were not his instructions.  His instructions were in many ways to form conclusions on issues which will be the subject of determination by the Court, sometimes referred to as “the ultimate issue”.  It could not be said to be impartial.  It relies of course, understandably perhaps, on instructions obtained from the wife which have been, it seems, accepted without hesitation.  Much of it is argumentative and in many respects, consists of bald assertions.

27. The decision of Heydon JA in Makita (Australia) Pty Ltd v Sprowles (2001) NSWCA 305 appears not to have been the subject of any consideration by those acting for the wife and reference may be made, if they so wish, to par 85 of his Honour’s decision.

28. To my mind, the affidavit, and in particular the letter of instructions, make it clear that the Rules of the Court have not been complied with.

29. The utility of Mr G as an expert witness is in my view not at all warranted.  I accept Mr Bartfeld’s submissions, that in reality, it is not expert evidence at all, it is argument.  Sometimes it is evidence as to matters which the gentleman is really not competent to be giving and I agree, there appears to be confusion between the wife getting assistance from a person, which of course she can do, and getting a person to give evidence.

30. At this stage, I agree that there is no foundation for leave being granted or evidence to be given.  That is partially influenced of course by the contents of the report and the matters referred to in the report which should not have been included, as has been conceded.  So the first application will be dismissed.

31. The second order sought is that the husband forthwith provide discovery and inspection of certain documents which are set out in Schedule A attached to the application.  At the outset, and I am going to be speaking more about the Rules, I acknowledge that the Court has power to dispense with noncompliance with the Rules and inasmuch as, in my view, there has been noncompliance with the Rules, I would be inclined to do so in this regard if it had not been for the fact that, in my view, the husband's legal practitioners have bent over backwards to provide the wife's solicitors, both present and former, with documents requested or alternatively, with the means to obtain information which is really what was requested.

32. Rule 13.20 provides that after the final resolution event, a requesting party may by written notice ask another party, who is called the disclosing party, to give the requesting party a list of documents to which the duty of disclosure applies.  When that is done, the disclosing party must, within 21 days, serve on the requesting party a list of documents which identifies the matters set out in r 13.20(2)(a), (b) and (c).  After that takes place, then the requesting party may, by written notice, ask the disclosing party to produce a document for inspection or provide a copy of a document.  When that happens, then the disclosing party must, within 14 days, after receiving such a notice, give the requesting party at the requesting party’s expense, the copies requested other than copies of documents in relation to which, for example, privilege is claimed.  If a document that must be disclosed is located by or comes into the possession or control of the disclosing party afterwards, then that document must be disclosed within seven days after it is located or comes into the party's possession or control.

33. Pursuant to r 13.22, at or after the final resolution event, a party may seek an order that another party comply with a request for a list of documents in accordance with r 13.20 or, for example, for another party to produce a document for inspection.  The person who makes such an application must satisfy the Court that the order is necessary for disposing of the case or an issue or reducing costs and I should add that pursuant to r 5.03, before making an application under Ch 13 a party must make a reasonable and genuine attempt to settle the issue to which the application relates.

34. When the Court comes to consider whether or not in the exercise of its discretion an order will be made, the Court takes into account, amongst other things, whether the disclosure sought is relevant to an issue in dispute, the relative importance of the issue, likely time, cost and inconvenience involved, likely effect on the outcome of the case of disclosing or not disclosing the document or class of documents.

35. Pursuant to r 13.23, if the cost of complying with the duty of disclosure would be oppressive to a party, the Court may order another party to either pay the costs, contribute to the costs, or give security for costs.

36. It was conceded on behalf of the wife at first that a written notice or a list of documents pursuant to r 13.20 had not been provided.  Subsequently, after reconsideration of the matter, it was suggested that a particular letter which is annexed to one of the affidavits before the Court was sufficient to constitute such notice and constituted a request under the relevant Rule.

37. We have gone to and fro about a Notice to Produce which was issued and required the production of a number of documents at proceedings on 14 November and it seems to me that there is confusion as to whether it is the Notice to Produce which is now sought to be enforced, even though the event at which the documents were sought to be produced has passed, or whether it is in fact a request for discovery or order for discovery or whether it is an amalgam of them both.

38. In Mr Teasdale’s affidavit, reference is made to copious, indeed fulsome provision of documents, particularly, I may say, to the wife’s former solicitors.  The documents themselves have been provided.  No claim for photocopying has been made, although complaints about the cost of it all over the years have indeed been made.  Sixteen subpoenas have been issued and documents have been produced pursuant to those subpoenae and according to Mr Teasdale’s evidence, even though objection could have been taken at least to some of the documents sought to be produced, it was not.

39. It is not clear on the evidence how the documents sought to be produced are necessary for the purposes of resolving the case or for limiting the issues.  It is clearly not the case that an order under r 13.22, if I was disposed to make it, will reduce costs.  I have not been satisfactorily informed as to whether the disclosure now sought is relevant to which issue in dispute, nor have I been informed satisfactorily as to the relative importance of the issue to which the documents allegedly related

40. The Notice to Produce of course was filed prior to the last resolution event.  I said I would not let that formality stand in the way in certain circumstances, but I am just not at all satisfied in the circumstances of this case, in circumstances where transparency has been the rule rather than the exception, as far as I can tell on the evidence, that this should be done.

41. I take into account that the wife or those acting for her can in due course go away and prepare a proper written notice for a list of documents to which the duty of disclosure applies.  If they intend to do that, they should bear in mind, both as a question of proportionality and as a matter of commonsense, that they themselves, either through their own endeavours or their predecessors, through their own endeavours, one hopes, and certainly through the provision of various documents over the years by those acting for the husband, have substantial documents.  If they simply forward a request saying, “Give me a list of documents to which the duty of disclosure applies,” that may well be sufficient to comply with the rule on a technical basis, but those acting for the wife would be well advised in my view to make sure that those acting for the husband do not have to repeat a list of documents which have already been provided.  It would be advisable, I would also think, for the wife to ensure that all documents which have been obtained or inspected pursuant to authorities to banks and the like which have been earlier provided have also been, or not been, produced.  Otherwise, in my view, the cost of complying with all of this, and indeed lack of attention to matters which I have just raised could well mean that any such request would be regarded as oppressive and could give rise in any event to substantial costs, which would need to be paid by the wife pursuant to the Rules.  Bearing in mind that the entitlement is to inspect and if copies are to be obtained, then payment has to be made.  That application will also be dismissed.

1. The third application by the wife was for the husband to make, file and serve a Statement of Financial Circumstances in accordance with the Rules and disclose all interests, either directly or indirectly, and in his capacity as a director and trustee in real and personal property and financial resources.  The husband filed a Financial Statement in 2006.  It is a two-part volume.  It is of considerable length and I do hope all the pages are numbered.

2. I am told that the cost of the document was in the order of $20,000 and that does not seem to be unlikely.  I asked counsel for the wife the purpose of another Form 13 at this stage, bearing in mind that at the Trial Notice hearing itself, orders for updated material would be made, and bearing in mind the likely expense attached to having - and of course at that stage to redo - the document.

3. To test the importance, I inquired whether the wife would be prepared to pay for the preparation of such a document because it seemed to me, at least on a tentative basis, that there was nothing put before me which would justify the preparation at this stage of such a document.  Instructions were obtained from the wife and the information provided to the wife, I would accept, was that the cost would be in the order of $20,000 and the time involved in the preparation of the document would be six to eight weeks.  I was told that the wife would be prepared to fund such preparation.

4. Mr Bartfeld, on behalf of the husband, raised certain other matters which were, largely at least, ancillary to these matters.  However, one matter was not and that was whether $20,000 would be the likely amount, and when information was sought and instructions obtained, I was eventually told that the amount would be likely to be $25,000.  Because of the nature of the husband's business activities, his financial situation can change almost on a daily basis.  In the absence of payment of such an amount or security being provided for payment of the costs of preparation, I was told that the husband objected to the provision of a Form 13 Financial Statement at this stage.  However, the cost of preparation is now academic because the wife has changed her position and does not wish to make payment for the cost of doing it.

5. In my view, it is an unwarranted and oppressive request for the husband to go to these lengths and expense at this stage of the proceedings, particularly bearing in mind that when the matter comes to a Trial Notice hearing, orders will be made for a new and updated Financial Statement.  Nothing in the evidence or submissions makes me inclined to think that the application should be granted, and it will be dismissed.

6. Paragraph 4 of the wife’s application sought various orders for injunctive relief under the heading of Mareva Injunction.  When the matter commenced earlier this morning, I was told that that aspect of the wife’s application was sought to be adjourned.  Quite frankly and properly so, it was conceded that it could not proceed at the present time.  I note that Mr Witt's affidavit contained a paragraph in which he reserved, on behalf of the wife, the right to bring a further application should the situation change as a result of discovery for example.

7. It seems to me patently clear that the application for a Mareva injunction or any other sort of injunctive relief against the husband is premature.  It is not warranted on the evidence put before the Court.  I do not propose to dismiss it but I certainly do propose to strike it out.  The wife and her solicitors will be hard pressed, but may persuade me, that costs are not an appropriate remedy in this regard.

8. The other matter I should raise is that in par 5, it was sought that the husband take all steps and do all things necessary to bring back into the jurisdiction of the Commonwealth of Australia all assets and moneys owned by him or on his behalf and removed from the jurisdiction since the date of separation.  Nothing has been submitted in support of that.  I have assumed that this is not pursued, and it will also be struck out.

9. The question of costs falls for decision at this stage.  The general situation under s 117(1) of the Act is that each party is responsible for his or her own costs.  That is subordinate to s 117(2) which is to the effect that if a party establishes justifying circumstances, then an order for costs can be made.  The Court is required to take into account, in determining whether to make an order and, if so, what order, the matters set out in s 117(2A).

10. I have heard brief submissions which cover all I think was really necessary in the circumstances from Mr Bartfeld, who seeks costs on behalf of the husband.  Counsel for the wife does not choose to respond.  Even so, I am required to consider all the parts of s 117(2A).

11. Another subsection which would be relevant is the financial circumstances of each of the parties.  It is more probable than not, I think that the husband’s financial circumstances are better than those of the wife but she, according to a recent Statement of Financial Circumstances is by no means destitute.  She has deposed in that - and I am looking simply at the summary - to considerable assets.  She has a total weekly income of $2,307 and somehow manages to expend on a weekly basis personal expenditure of $12,528.  She has not disclosed ownership of any real estate but she does disclose having funds in the Westpac Bank of $134,000 and investments of $1.4 million by way of shares in various companies, not all of which are detailed.  So even though the husband's financial circumstances are better than those of the wife, as I said, she is not destitute.

12. So far as the other matters are concerned, it is proper to take into account my findings that the application was basically misconceived and it is also proper to take into account that the husband was wholly successful in the proceedings or perhaps the reverse is the case, the wife was wholly unsuccessful in the proceeding.  It is possible, I suppose, to take into account the matters raised by Mr Bartfeld which emerged in the correspondence under either conduct or any other circumstances under sub-par (g).  I do not think I need to do that.  So when I balance the matters which I have noted which I think are the relevant matters to be considered in this case, on balance, an order in my view should be made in favour of the husband.

I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carter.

Associate:                 

Date:    26 March 2008