YAMADA & BERNARD - [2016] FamCA 977

FAMILY COURT OF AUSTRALIA

YAMADA & BERNARD

[2016] FamCA 977

FAMILY LAW – PROPERTY – long relationship – two adult children – contributions.

FAMILY LAW – PRACTICE & PROCEDURE – UNDEFENDED HEARING – where the respondent failed to participate in the proceedings – where there was evidence that the respondent had left the jurisdiction – where the respondent had been given ample opportunity to participate in the proceedings but had failed to do so.

FAMILY LAW – PRACTICE & PROCEDURE – referral of papers to Legal Service Commission, Queensland Law Society and Queensland Bar Association

Family Law Act 1975 (Cth)
Evidence Act 1995 (Cth)
Foreign Judgments Act 1991 (Cth)
Family Law Rules (2004)

Barristers’ Conduct Rules (23 December 2011)
Australian Solicitors’ Conduct Rules 2012

Allesch & Maunz (2000) 203 CLR 172
Attorney General (NT) v Kearney (1985) 158 CLR 500
AWB v Cole (No 5) [2006] FCA 1234
Brandt & Brandt (1997) FLC 92-758
Gartner v Carter [2004] FCA 258
Hoffman & Hoffman [2014] FamCAFC 92
Kennedy v Wallace (2004) 208 ALR 424
Mallet & Mallet (1984) 156 CLR 605
Norbis v Norbis (1986) 161 CLR 513
Stanford & Stanford (2012) 247 CLR 1008
Steinbrenner & Steinbrenner [2008] FamCAFC 193

APPLICANT:

Ms Yamada

RESPONDENT:

Mr Bernard

FILE NUMBER:

BRC

1690

2015

DATE DELIVERED:

17 November 2016

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Hogan J

HEARING DATE:

5 & 6 March 2015,
2 April 2015,
1 May 2015,
13 July 2016, and
12 & 29 September 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Linklater-Steele on
5 & 6 March 2016, and
12 & 29 September 2016

SOLICITOR FOR THE APPLICANT:

Ms Murray, HopgoodGanim Lawyers on
5 & 6 March 2016.
2 April 2016,
13 July 2016, and
12 & 29 September 2016

RESPONDENT:

No appearance

SOLICITOR FOR MR U:

Mr McLeod,
Bartley Cohen on
6 March 2016,
2 April 2016, and
1 May 2016

COUNSEL FOR MR U :

Dr Brasch of Queen’s Counsel by written submissions on 25 April 2015

COUNSEL FOR MS N:

Ms Carew of Queen’s Counsel on
2 April 2016 and 1 May 2016

SOLICITOR FOR MS N:

Carter Newell on
2 April 2016 and 1 May 2016

Orders

IT IS ODERED BY WAY OF FINAL ORDER PURSUANT TO s 90SM OF THE FAMILY LAW ACT 1975 (Cth) THAT

The Applicant retain as her own absolute property:
(a)the real property situated at B Street, Suburb S in the State of Queensland; and
(b)her bank accounts (including her ANZ account and three Suncorp accounts); and
(c)her furniture, chattels, personal effects and jewellery, including the furniture in the Suburb P property.
The Respondent retain as his own absolute property:
(a)his bank accounts, including funds held by him in the accounts in the names of Mr C and Mr E Bernard; and
(b)the furniture, chattels and personal effects and jewellery in his possession; and
(c) the motor vehicle; and
(d) the two transport businesses and associated licenses held in Island F; and
(e)any interest in any other property or assets in Island F he has an interest in.
The Respondent transfer to the Applicant all his right title and interest in the property situated Gold Coast D Street, Suburb P in the State of Queensland, more particularly described as Lot … on RP … Parish of J County of K within thirty (30) days of the date of this Order.
The Respondent shall, within thirty (30) days of the date of this Order, pay the Applicant the amount of $406,924.64.
The Respondent is restrained and an injunction issue restraining him from accessing or in any way dealing with any funds held in any bank account operated by him and from disposing or dealing in any way with any other property owned by him in Australia until such time as the cash payment referred to in Clause (4) of this Order is made.
Save as is otherwise provided for in this order, each party shall retain as his or her own property absolutely all property and/or financial resources of whatsoever description and wherever situate in respect of which that party is the legal owner and/or which property is in that party’s possession and/or under that party’s control as at the date of this Order.
Each party sign all relevant documents and do all necessary things to give effect or to transfer the ownership of real property to the entitled party in accordance with this Order within seven (7) days of a written request to do so.
Should either party fail to sign any documents necessary to implement this Order, a Registrar of the Court is appointed pursuant to s 106A(1) of the Family Law Act 1975 (Cth) to sign any such document in lieu of the non-signing party.
Within 30 days of the date of this Order, the Respondent pay the Applicant’s costs of and incidental to the proceedings calculated on an indemnity basis and fixed in the amount of $55,324.34.

AND IT IS FURTHER ORDERED THAT

The undertaking as to damages proffered by the Applicant on the 5 March 2015 is discharged.

AND IT IS FURTHER ORDERED THAT

I direct that a Registrar of the Court forward the following documents to the Queensland Law Society, the Bar Association of Queensland and the Legal Services Commissioner, Queensland for their consideration:
(a)       a copy of the Applicant’s affidavit filed 12 August 2016; and
(b)       a copy of these Reasons for Judgment; and
(c)       a copy of the Reasons for Judgment delivered 5 March 2015; and
(d)       a copy of the Transcript of the proceedings on 5 March 2015; and
(e)       a copy of the Transcript of the proceedings on 2 April 2015; and
(f)       a copy of the Transcript of the proceedings on 12 September 2016; and
(g)       a copy of the Transcript of the proceedings on 29 September 2016; and
(h)       a copy of Exhibit 6, being correspondence dated 26 February 2015; and
(i)a copy of the written submissions prepared on behalf of the Applicant, Mr U and Ms N.

AND IT IS FURTHER ORDERED THAT

All extant Applications are dismissed.

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

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

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 1690 of 2015

Ms Yamada

Applicant

And

Mr Bernard

Respondent

REASONS FOR JUDGMENT

The Applicant, who is currently about 61 years of age, and the Respondent, who is currently about 64 years of age, commenced their relationship in Island F in about 1973. They never married. They immigrated to Australia in November 1989 after which time the Applicant remained living permanently in Australia. The Respondent, who is not a resident of Australia, continued to run a transport business (which included associated licences) in Island F and moved between that country and Australia.
There are two adult children of their relationship: Ms N (who is now about 35 years of age) and Mr Y (who is now about 41 years of age).
The parties separated on a final basis in January 2014. Thus, theirs was a relationship of approximately 41 years duration. During it, on the Applicant’s evidence - which I accept - the Respondent was the person responsible for the management of the parties’ financial affairs.
After the parties’ separation, both parties engaged legal representation in Australia. Correspondence passed between the Applicant’s solicitors and the Respondent’s then solicitors. For example, correspondence dated 28 July 2014 from the Applicant’s solicitors to the Respondent’s solicitors sought that the Respondent disclose information about his bank accounts and assets and requested that he provide certain documents. Such correspondence was in accordance with the requirement imposed on prospective parties (as the Applicant and Respondent then were) to litigation in the Family Court of Australia to comply with the pre-action procedures as outlined in Schedule 1 to the Family Law Rules (2004).[1] The Respondent’s then solicitors replied by correspondence dated 6 August 2014 in which they acknowledged receipt of the correspondence dated 28 July 2014, informed that they were in the process of obtaining instructions from the Respondent and noted that they would write again once those instructions were received.
[1] Rule 1.05 Family Law Rules (2004).
On 20 August 2014, the Applicant’s solicitors wrote[2] to the Respondent’s then solicitors seeking a response to their earlier correspondence. They expressed the Applicant’s concern about the Respondent’s delay in making full and frank disclosure and noted that “pending the effecting of a financial settlement between the parties, your client is on notice that our client does not consent to your client dealing with or disposing of any assets in his possession or control”.
[2] Applicant’s affidavit filed 12 August 2016, “MY-1”.
On 2 September 2014, the Respondent’s then solicitors wrote to the Applicant’s solicitors outlining that they were finalising the Respondent’s instructions and expected to be in a position to provide a detailed response on or before 12 September 2014.
On 9 September 2014, the Respondent’s then solicitors forwarded a substantive response[3] to the Applicant’s solicitors. This correspondence outlines the Respondent’s assertions that he had term deposits in a total amount of $980,000.00, about $196,064.00 in a bank account in Island F, owned two business licences in Island F which he put no value on (as a consequence of information from the L City Council) and that he had no interest in any bank account in the name of a Mr C.
[3] Applicant’s affidavit filed 12 August 2016, “MY-2”.
This latter assertion dealt with the Applicant’s contention that the funds, in a total amount of about $426,500.00 in bank accounts in the name of the Respondent and Mr C were sourced in and from the de facto relationship.
The parties were in dispute about the ownership of these funds. The Respondent asserted that they belonged to Mr C. The Applicant asserted that, irrespective of the names on the accounts in which they were held, these funds did not belong to Mr C (who she said did not even know about them) but, rather, were ‘property of the parties.’
On 8 October 2014, the Applicant’s solicitors wrote to the Respondent’s then solicitors outlining some complaints in relation to his disclosure; they noted that she would have to commence proceedings and file subpoenae if the Respondent did not produce the documents she requested.
On 8 November 2014, the Applicant’s solicitors wrote to the Respondent’s then solicitors seeking a response to the previous correspondence: they reiterated that the Applicant did not consent to the Respondent dealing with or disposing of any asset in his possession or control before final property settlement.[4]
[4] Applicant’s affidavit filed 12 August 2016, “MY-3”.
On 19 November 2014, the Respondent’s then solicitors corresponded with the Applicant’s solicitors and provided further disclosure in relation to bank accounts held by him (which included two accounts held in Island F). [5]
[5] Applicant’s affidavit filed 12 August 2016, “MY-4”.
The Applicant’s positon has always been that she retain or receive the property owned by the parties (or either of them) in Australia and that it was necessary for the Respondent to ensure she receive a cash payment so as to do justice and equity between them. She proposed that, once the cash payment was made, he retain the balance of funds standing in bank accounts in Australia and the property owned in Island F.
On 6 February 2015, Mr Y (the parties’ adult son) told her that the Respondent had told him:
a)he was in the process of transferring money from his Australian bank accounts to Island F; and
b)he had already, in fact, transferred funds to overseas bank accounts but the Island F Tax Office was investigating the origin of these deposits, or deposits made by him in that country; and
c)his lawyer had advised him to remove the money in his bank accounts from the Australian jurisdiction.
On 9 February 2015, the Applicant’s solicitors sent correspondence to the Respondent’s then solicitor. They raised her understanding that the Respondent may be depleting or transferring matrimonial funds to Island F despite their previous correspondence in which she outlined that she did not consent to such actions. They called upon the Respondent to provide evidence that matrimonial funds were still in Australia and, if no such evidence was provided, they foreshadowed an urgent application for injunctive relief.[6]
[6] Applicant’s affidavit filed 12 August 2016, “MY-5”.
On 18 February 2015, the Respondent’s then solicitors made contact with the Applicant’s solicitors to advise that they were meeting with the Respondent on 24 February 2015 and hoped to be able to respond to the correspondence dated 9 February 2015 after this.
On 25 February 2015, the Respondent’s then solicitors sent correspondence to the Applicant’s solicitors by fax advising that they were meeting with the Respondent at 4.00 pm that afternoon and would respond to the 9 February 2015 correspondence regarding the bank accounts after the conference.
On 26 February 2015, the Applicant filed an Initiating Application. She instructed her solicitors not to serve the Initiating Application upon the Respondent until she had received a response to the 9 February 2015 correspondence because she was concerned that, if he was given notice of proceedings, he would transfer funds overseas.
On 3 March 2015, Mr Y telephoned the Applicant and told her he had been at one of the real properties owned by one of the parties to check mail. He emailed his sister (Ms N) saying ‘find attached docs received in mail yesterday’. The attached document, sent by electronic means, is a copy of correspondence, dated 26 February 2015, from the Respondent’s then solicitor to the Respondent.
The original of the same is Exhibit 6 in these proceedings.

Proceeding undefended[7]

[7]I incorporate into the reasons for my decision to proceed to determine this matter as an undefended proceeding, any reasons previously expressed by me during the course of the hearing.

The Respondent has not filed a Response or participated in the proceedings.
After the Applicant brought an urgent ex parte application for the preservation of assets, an Order made on 5 March 2015 restrained the Respondent from dealing with property and funds held in various bank accounts. Additionally, on the basis of evidence filed for that application, Orders were made requiring the Applicant’s solicitors to serve copies of the Orders made on the Respondent’s then solicitors.
When the matter returned on 7 March 2015, those solicitors appeared before the Court to inform the Court that they no longer acted for the Respondent. They filed a Notice of Ceasing to Act on 16 March 2015. By that document, the Respondent’s last known residential address was recorded as “G Street, City L, Island F”. The Notice of Ceasing to Act also contained a telephone number and an email address at which the Respondent could be reached. The information contained within the Notice of Ceasing to Act has, since then, been that recorded by the Court as the Respondent’s address for service: it has been the address to which all correspondence from the Court has been sent.
Affidavits of Service filed on behalf of the Applicant on 12 May 2015, establish that, on 6 May 2015, the Respondent was personally served[8] in Island F with a copy of the documents particularised therein.[9] In addition, Mr C was also served with a copy of the relevant documents.
[8] by a Mr H.
[9]namely: a copy of the Initiating Application filed by the Applicant on 25 February 2015; a Financial Statement of the same date; the Application in a Case filed 4 March 2015; affidavit of the Applicant filed 4 March 2015; subpoenae; Orders made by the Court on 5 March 2015, 6 March 2015, 9 March 2015, 26 March 2015, and 31 March 2015; a copy of the Reasons for Judgment delivered 5 March 2015; a copy of the Transcript of proceedings of 5 March 2015; and an affidavit of the Applicant’s solicitor, Fraser Murray, filed on 5 March 2015.
On 10 June 2015, the Applicant’s solicitors wrote to the Respondent to confirm that he had been personally served with the relevant documents. They received no response to this correspondence.
An order made by Registrar Stoneham on 18 August 2015 contained a notation that the Respondent had failed to comply with an order made on 18 May 2015 and had not participated in the proceedings and that, pursuant to Rule 11.02 (2) of the Family Law Rules (2004), the matter may proceed on an undefended basis. That day, the Applicant’s solicitors wrote to the Respondent to indicate they intended to seek orders on an undefended basis.
Further correspondence was sent to the Respondent by the Applicant’s solicitors on 17 November 2015, 6 April 2016 and 7 June 2016. No response has been received by them in relation to this correspondence.
On 13 July 2016, an order was made listing the matter for final hearing to 12 September 2016. Further directions were made for the Respondent to file and serve material and it was ordered that, in the event of non-compliance with these trial directions, the matter may proceed on an undefended basis on that date, with the non-defaulting party to have liberty to seek orders by default on 12 September 2016.
The Applicant’s solicitors wrote again to the Respondent on 18 July 2016. They received no response.
Despite these communications, the Respondent has not filed any document or attended any Court event, whether in person or by electronic means.
Authority[10] makes clear that it is critical that, where orders may be made affecting the rights or interests of persons, those persons be afforded the opportunity to be heard.
[10] Allesch & Maunz (2000) 203 CLR 172.
In the circumstances of this case, I was easily persuaded that the Respondent had been afforded ample opportunity to participate in these proceedings but, for whatever reason, had elected not to do so.
Given the circumstances outlined above and the duty imposed on the Court by s 90ST of the Family Law Act 1975 (Cth)(“the Act”) to end financial relationships between parties, I was also easily persuaded to hear the matter on an undefended basis.

Is it just and equitable that orders are made under s 90SM of the Act?[11]

[11] s 90SM(3) Family Law Act1975 (Cth).

I consider that, given the parties’ voluntary separation (which has meant that they no longer enjoy the common use of property in which their existing legal and equitable interests were acquired during their cohabitation and has brought to an end any “assumption that any adjustment to those interests could be effected consensually as needed or desired”)[12], it is just and equitable that orders altering the interests of property owned by the Applicant and the Respondent are made.
[12] Stanford & Stanford (2012) 247 CLR 108.

The manner in which the proceedings are to be determined and the Applicant’s proposal

The manner in which the Court is to approach proceedings for property settlement is well known.[13] In considering the relevant matters mandated by s 90SM of the Act, I note, of course, that:
a)there is no presumption of equality of contribution between parties to a de facto relationship, irrespective of the length of their union; and
b)the exercise of the discretion conferred must not proceed on an assumption that the parties’ interests in the property are, or should be, different from those determined by common law and equity.[14]
[13]See, for example : Pastrikos & Pastrikos (1980) FLC 90-897; Lee Steere & Lee Steere (1985) FLC 91-626; Ferraro & Ferraro (1993) FLC 92-335; Waters & Jurek (1995) FLC 92-635; Clauson and Clauson (1995) FLC 92-595 and Hickey & Hickey (2003) FLC 93-143.
[14] Bevan & Bevan [2013] FamCAFC 116 at [73] where reference was made to Stanford.

The Applicant submits that it is just and equitable she receives property valued at 55 per cent of the total value of the property of the parties. In order to give effect to this proposal, she seeks:
a)to retain all of the property currently in her name or possession; and
b)the transfer of real property, owned by the Respondent, located at D Street, Suburb P in the State of Queensland to her; and
c)that the Respondent make a cash payment to her in such amount as is necessary to ensure that, after the value of the property referred to in (a) and (b) is taken into account, she receive property valued at 55 per cent of the total value of the property of the parties.

The property of the parties

Doing the best that I can on the material before me, I conclude that the property of the parties – and its value ‑ is as set out below:

Description	Ownership	Value
Real property
D Street, Suburb P	Respondent	$660,000.00
B Street, Suburb S	Applicant	$420,000.00
Bank accounts
Suncorp Account #...361	Applicant	$26,286.27
Suncorp Account #...513	Applicant	$8,406.15
Suncorp Account #...559	Applicant	$146,446.84
Suncorp Account #...030	Applicant	$605.00
Societe Generale …019	Respondent	$128,230.24
Societe Generale …019	Respondent	$45,767.27
Funds removed from bank accounts by the Respondent
$1,153,201.69
Motor Vehicles
Motor vehicle	Respondent	$5,000.00
Business
Transport business and associated licences in Island F	Respondent	$440,000.00
Total			$3,033,943.46

The manner in which I have arrived at the property of the parties and the value attributed to two of the items of property listed above requires some short discussion.
Transport business and associated licences
There is no expert evidence before the Court about the value of the business and the business licences owned by the Respondent in Island F. Given the Respondent’s determination not to participate in these proceedings, such omission is perfectly understandable.
The only direct evidence before the Court about the issue of the value to be attributed to the business and the business licences is that given by the Applicant. Her evidence deals with the purchase price of the licences and the price at which the Respondent has previously disposed of other business licences in Island F.
Despite the fact that the Respondent has been made aware that the Applicant contends that these licences should, for the purpose of these proceedings, be valued in the amount outlined above,[15] he has done nothing – other than asserting in correspondence[16] that each of the business licences are worth approximately $150,000.00 ‑ to contradict this assertion nor to advance evidence (which can only reasonably be particularly available to him given that he lives in Island F and operates the businesses via the licences he owns) to the contrary.
[15]Exhibit 5: correspondence dated 28 July 2014 from Applicant’s solicitors to Respondent’s then solicitors.
[16] Exhibit 4: correspondence form the Respondent’s then solicitors dated 18 July 2014.
In such circumstances and noting that my task in affixing a value to the licences involves a common sense endeavour to fix a sum that is satisfactory after consideration of the material before me,[17] I accept the Applicant’s evidence and, for the purpose of these proceedings, value the Respondent’s business licences as set out in the table above.
[17]see, for example, McGregor v McGregor (1996) FLC 92-710 in which Commonwealth v Milledge (1952-3) 90 CLR 157 is cited; Chang v Su (2002) FLC 93-117.
Funds removed by the Respondent from Australia
I accept the evidence establishes that, after the parties separated in January 2014 and without notice to the Applicant, the Respondent removed funds totalling $1,153,201.69 from bank accounts in Australia to bank accounts in Island F. Given this, I consider the most appropriate course is to regard his actions as constituting a premature distribution to himself of an asset in which the Applicant had a legitimate interest.[18] Given the Respondent’s decision not to participate in the proceedings to challenge the continued existence of the funds in this amount, or at all, I consider it appropriate to include the entire amount of the funds removed for the purpose of determining the total value of the property of the parties or either of them.
[18] see, for example, In the Marriage of Townsend (1994-95) 18 FamLR 505.
The February 2015 correspondence
On 27 September 2016, the Applicant’s solicitors wrote to the Respondent to inform him that he could claim privilege and oppose the correspondence (being correspondence from his then solicitor to him dated 26 February 2015) being admitted into evidence. They informed him that, if he wanted to take this course, he should put his objection into writing and submit it.[19]
[19] Exhibit 2.
No submission or any correspondence taking objection to the tender of the 26 February 2015 correspondence on the basis of the existence of legal professional privilege was received from the Respondent. Even if it had been, I consider that the correspondence is admissible in these proceedings.[20]
[20]s 125 Evidence Act (1995); see also Kang v Kwan [2001] NSWSC 698 at [37] and thereafter, including particularly at [47].
The February 2015 correspondence[21] contains the following:
We note that you attended along with the writer in conference with [N] of Counsel yesterday. The writer has been speaking with [N] this morning and she advised as follows:
1.It may be prudent to you to remove your bank accounts from Australia to make it difficult for the Applicant to freeze such accounts and/or seek a distribution from such accounts.
…
…
We do not advise you lightly to remove your monies from Australia, because in family law matters, adverse inferences can be made (the Court will think you are dishonest and this may cause the Court to find against you important issues in the proceedings) because you have moved such monies and put them/tried to put them out of the reach of the Court. There may also be some commercial issues which you need to look into if you were to move such monies including, but not limited to movement of exchange rates and generally, losses/costs which you will incur if you move such monies. We advise you to obtain advices from an expert in such area prior to moving the monies. That being said however, the risk of an adverse inference is not as bad as the Applicant potentially obtaining an order that she receive a large proportion of such monies. Thus, as long as there are no significant commercial difficulties/costs in moving such monies, it is our advice to you that you do move such monies out of the jurisdiction of the Australian Courts.
[21] as anonymised.
The correspondence also contains an acknowledgement[22] that the Respondent’s then solicitors had, for eight months, been “negotiating with the Applicant’s solicitors” on the Respondent’s behalf on a particular basis. Further, a copy of a ‘Trust Matter Ledger’ printout records that the Respondent’s then solicitors received a deposit of $2,000.00 from him on 1 July 2014 and a further deposit in the same amount on 10 September 2014.
[22] during discussion of a different issue.
Does legal professional privilege attach to and/or protect the 26 February 2015 correspondence?
Legal professional privilege may be regarded as the outcome of a balancing process associated with the administration of justice. When it attaches it is conclusive, absolute and often unqualified.
However, communications between a lawyer and client which facilitate a crime or fraud are not protected by legal professional privilege; whilst this principle has often been referred to as the “fraud exception” to legal professional privilege, it has also often been said that this does not capture its full reach.[23]
[23]AWB & Cole (No 5) [2006] FCA 1234 @ [210] onwards; Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 515; Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 546; Clements, Dunne & Bell Pty Ltd v Commissioner of Australian Federal Police (2001) 188 ALR 515 at 521-522.
It is clear that the principle covers a wide species of fraud, criminal activity or actions taken for illegal or improper purposes.[24] It is also clear, I think, that authority establishes that, before the conclusion can be reached that legal professional privilege does not attach to a communication because of the “fraud exception”, the communication must be considered to have been or to constitute a communication in furtherance of, or for the purpose of:
a)a ‘crime or fraud’[25]; or
b)a ‘criminal or unlawful proceeding’[26]; or
c)‘all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery, and sham contrivances’[27]; or
d)‘frustrating the processes of the law itself, even though no crime or fraud is contemplated’[28]; or
e)perpetrating a “fraud on justice” in a broad sense.[29]
[24]see: AWB v Cole (No 5) @ [211] and the reference there to "North J’s review of the authorities in Clements at 522-526."
[25]        R v Cox and Railton (1884) 14 QBD 153.
[26]        Bullivant v Attorney-General (Vic) [1901] AC 196.
[27]        Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553.
[28]Kearney per Gibbs CJ (with whom Mason and Brennan JJ agreed) at 515; R v Bell, Ex parte Lees (1980) 146 CLR 141
[29]see, for example Gartner v Carter [2004] FCA 258 per Lander J where the court denied protection to a communication between a lawyer and client for the purpose of the client putting assets beyond the reach of the legitimate claims of secured creditors.
Additionally, the application of the ‘fraud exception’ requires more than a mere assertion or allegation of fraud or impropriety; there must be ‘reasonable grounds’[30] for believing that the communication was for an improper purpose, or there must be a ‘prima facie’ case[31], or there must be ‘something to give colour to the charge’.[32] It must also be established, on these same bases, that the communication was made in furtherance of, or as a step preparatory to, the commission of the fraud or wrongdoing.
[30]        Propend per Brennan CJ at 514.
[31]        Kearney per Gibbs CJ at 516.
[32]        see: Propend.
Further, where a client is engaged in fraudulent conduct, it does not matter whether that person’s lawyer is a party to any fraud or not: communications are not privileged.[33]
[33] see, for example: Clements at 562; R v Bell; Ex parte Lees (1980) 146 CLR 141 at 145.
In AWB & Cole (No 5) , the Court said, at [215]:
It is important to bear in mind that the fraud exception is based on public policy grounds. The principle is sufficiently flexible to capture a range of situations where the protection of confidential communications between lawyer and client would be contrary to the public interest: see Kearney at 514-515; R v Cox at 614. This aspect of the principle is reflected in the statement that ‘[t]he privilege takes flight if the relationship between lawyer and client is abused’: Clark v United States [1933] USSC 52; (1933) 289 US 1 at 15; see also Kearney at 514 and 524.
In Gartner v Carter, Lander J said, at [130]”
In my opinion the communication between a client and the client’s lawyer for the purpose of the client putting his assets beyond the reach of the legitimate claims of his secured creditors is a fraud on justice. Such a purpose is a fraud on the creditor and there is no public interest in protecting that communication.
In my view, the Applicant has established to the requisite level of satisfaction that the communication was for the purpose of the Respondent putting property in which the Applicant had at the very least a prima facie interest beyond her reach and, therefore, privilege does not attach to it. Given the circumstances – which have in fact seen the Respondent remove funds from the Commonwealth of Australia and place them beyond the reach of the Applicant in these proceedings – I considered that no public interest was served by allowing legal professional privilege to attach to the correspondence.
Matters arising from the Applicant’s actions after separation
It is also necessary that two additional matters relating to the Applicant’s conduct vis-à-vis items of property are the subject of comment.
The first of these is her actions, in late February 2014, in withdrawing $18,000.00 from the parties’ Westpac account. I accept that she did so after discovering that the Respondent had withdrawn $75,000.00 from that account on 28 February 2014. I also accept that she did so in circumstances where she was concerned that she would not have the benefit of ongoing financial support from the Respondent (as had been the case before the parties’ January 2014 separation). Her fears were, in fact, well-founded as the Respondent in fact acted to remove from her the ability to access those credit facilities - which she had previously used - and also ceased to pay her funds which had (before separation) consistently been provided to her for her use in Australia. In such circumstances, I accept that the Applicant used these funds for her own support and I decline to add them back notionally the purpose of determining the total value of the property of the parties.
The second issue is that, after separation, the Applicant sold the 1994 motor vehicle in her possession to the parties’ son for $200.00. She now has the use of a motor vehicle provided by her son-in-law. Whilst the sale of this 1994 motor vehicle is clearly the disposition of an asset after separation, the sum received for it is such that I am persuaded it is just and appropriate to take the Applicant’s receipt of $200.00 for it into account during my consideration of the relevant s 90SF(3) matters. Consequently, I decline to notionally add back the sum of $200.00 for the purpose of determining the total value of the property of the parties.

The parties’ contributions to the acquisition, conservation or improvement of property and to the welfare of the family constituted by them and the children of their de facto relationship [34]

[34] s 90SM(4)(a), (b) and (c ) Family Law Act1975 (Cth).

In 1978, the parties purchased a house on Island F, which they later sold in 1998. In 1978, the parties purchased a store on Island F. The Applicant was responsible for establishing the business and conducting and supervising staff and other matters of a day to day nature in the operation of the business. They jointly operated this business until it was sold in 1989 prior to the parties’ relocation to Australia.
In 1989, the parties purchased a number of real properties in Australia:
a)on 6 March 1989: real property in Queensland Suburb O, Australia, in the Respondent’s sole name, with funds saved from the operation of the parties’ business. They continued to reside at this property until it was sold in March 1996; and
b)on 17 March 1989: real property at Suburb Q for $170,000.00, in the Respondent’s sole name; the parties rented this property until its sale in May 1996 for $125,000.00; and
c)in early 1989: real property at Suburb R in the Respondent’s sole name; this was sold in late 1991.
They also purchased land at Suburb T in the Respondent’s sole name with joint funds and sold this land in late 1996 for $92,000.00.
In 1993, the Respondent purchased a business and the necessary licence in Island F for approximately $150,000.00. He sold this business for approximately $230,000.00. The Applicant says she is unsure how the Respondent applied the proceeds of sale. At some time after 1993, the Respondent purchased a second business and the necessary licence for approximately $150,000.00. This business was later sold for approximately $230,000.00. The Applicant says she is further unaware how the Respondent applied these proceeds of sale.
In the 1990s, the parties purchased land in City L, Island F. A house was later built on this land. I accept that the Applicant actively assisted with the management of the construction process. This property was sold at some time between 1995 and 1998.
On 13 December 1995, the parties purchased land in the Respondent’s sole name at D Street, Suburb P for $125,000.00. In about 1997, a house was built on this land. I accept that the Applicant managed this construction. She then lived in that property until late 2015.
In 2005, the parties purchased real property at B Street, Suburb S for $334,000.00 in the Applicant’s name. Whilst their son, Mr Y, initially lived in the property and met all costs associated with its upkeep, he moved out from the same in about November 2015 and, since then, the Applicant has applied monies received from its rental in making capital improvements to the property.
I accept the Applicant’s contention that, whatever the legal ownership of the properties, all real property purchased by the parties during the course of their relationship was purchased with jointly owned funds accumulated from the operation of their business.
I accept the Applicant’s evidence that she was solely responsible for the homemaking duties throughout the parties’ relationship, undertook the washing, ironing cooking and cleaning for the household and for the Respondent while he was in Australia. I also accept that she was solely responsible for the care of the children when they were younger and that she prepared their meals, dressed them, transported them to and from school and assisted them with their homework.

Conclusions as to Contributions

In assessing the contributions made by the parties the Court embarks upon a process involving the exercise of a broad discretion in respect of which reasonable minds may differ. Whilst this process is neither an accounting or mathematical exercise,[35] it does involve a movement from “a qualitative evaluation of contributions to a quantitative reflection of such evaluation” – that is, a “leap” from words to figures.[36]
[35] See Norbis v Norbis (1986) 161 CLR 513 at 522; Brandt & Brandt (1997) FLC 92-758.
[36] Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234] per Coleman J.
In Hoffman & Hoffman[37], the Full Court said, at [61]:
…The task is to make findings as to the nature, form, characteristics and duration of each and all of the contributions made by each of the parties referenced to s 79(4), without adjectival qualification.[footnote omitted] Thereafter the Court must undertake the exquisitely difficult task of assessing how those respective contributions, often of differing types (a task which his Honour referred to below as a comparison of apples and carrots…), find expression in qualitative assessments.[footnote omitted] In the context of a case such as the present one, the duration of the marriage has an important influence upon what evidence is relevant in respect of contributions. There is no need to conduct a minute forensic examination of the details of contributions over many years with each party extolling their own efforts and attempting to diminish the other’s.
[37] [2014] FamCAFC 92
I accept that the Applicant made the vast majority of the homemaker and parenting contributions during the marriage and to the care of the parties two children. Her contribution in this regard must be assessed, not in any “merely token way”, but in terms of its ‘true worth’ to the accumulation of property during the cohabitation.[38]
[38] Mallet & Mallet (1984) 156 CLR 605
I accept the broad thrust of the submissions made by Counsel for the Applicant in relation to the issue of the assessment of the contributions of the parties to separation. I accept that neither party had any assets of significant value at the start of their relationship (at which time the Applicant was 20 years of age and the Respondent was 24 years of age). I also accept that, whilst different, their respective contributions during their lengthy cohabitation (which was productive of two children and the accumulation of the not insubstantial property referred to in the Applicant’s affidavit material) and thereafter is such as to persuade of a conclusion of equality of contributions to trial.

I am not persuaded that the orders proposed will have any effect on the earning capacity of either party.[39]
[39] s 90SM(4)(d) Family Law Act1975 (Cth).

Relevant s 90SF(3) matters[40]

[40] s 90SM(4)(e) Family Law Act1975 (Cth).

The Applicant is currently 61 years old, and the Respondent is currently 64 years old. The Applicant is not currently engaged in paid employment. She has not worked outside the home for remuneration since her migration to Australia in 1989.
The Applicant believes the Respondent continues to work in his business in Island F. Correspondence dated 18 July 2014 from the Respondent’s then solicitors asserts that he operated one business and received $1,500.00 per month from the second business.[41] It appears it was asserted, at that time, that his income was in the amount of $48,000.00 per year together with the income he received from the second business and interest on monies invested, presumably at bank. Whatever the actual amount, I am persuaded that, in an income – received sense, the Respondent’s financial situation is more likely than not to be significantly superior to that of the Applicant.
[41] Exhibit 4.
Both the Respondent and the Applicant are in good health and neither have the care of children under the age of 18 years. Both of their children are financially independent.
Whilst the Respondent has re-partnered, his failure to participate in the proceedings has meant that there is no evidence beyond this fact.
I accept the submission made by Counsel for the Applicant that the Applicant has a limited ability to provide for herself by way of income and that, in contrast, the Respondent has available to him an income stream associated with the operation of the two business licences he will retain. I further accept that, in addition, the Respondent will have available to him those funds removed by him from Australia: that is, he will have the benefit of holding approximately $1 million in cash which can, I conclude, be invested by him (as was previously the case during the parties’ relationship) and, thereby, provide him with a further source of passive income.
I also take into account that the Respondent’s actions in removing the funds from the Commonwealth of Australia has had the consequence that he has had the opportunity to retain for his own benefit absolutely any interest earned upon such funds.
The combination of these factors persuades me that an adjustment of 5 per cent in the Applicant’s favour is required to ensure a just and equitable outcome in the circumstances of this case.

Justice and equity of the proposed orders

The consequence of the conclusions outlined above is that, having regard to the parties’ respective contributions to trial and the relevant s 90SF(3) matters, at the conclusion of a long de facto relationship into which the parties initially contributed little and which was productive of two now financially independent and established adult children and during which each otherwise contributed fully and to the best of their respective abilities and from which the Respondent has retained an income earning asset which enables him to receive passive income (namely, the second business licence) and the funds he removed from Australia, the parties will share in the nett value of their property such that the Applicant will retain and/or receive property valued at 55 per cent of the nett value of the property of the parties and the Respondent retain and/or receive property valued at 45 per cent of the nett value of the property of the parties.
I am satisfied in all the circumstances of this case that it is just and equitable and appropriate that orders be made adjusting the existing interests of the Respondent and the Applicant in their property so as to give effect to these conclusions.
I accept that the Applicant currently owns property valued at $601,744.26. This is comprised by the Suburb S property (valued at $420,000.00) and cash at bank in the total amount of $181,744.26.
After the transfer of the Suburb P property, valued at $660,000.00 to her, it is necessary that the Respondent pay her the amount of $406,924.64 in order that she receive the property I have determined that it is just and equitable that she receive.
I otherwise accept the submissions made by Counsel for the Applicant in relation to the continuation of the injunctive orders restraining the Respondent from dealing with or disposing of any property he may have in Australia until he has paid the Applicant the necessary amount.

Costs

Section 117(1) of the Act provides that each party to proceedings under the Act shall bear his or her own costs. However, if the Court is satisfied there are circumstances which justify it, the Court may make such order as to costs as it considers just.[42]
[42] Section 117(2) Family Law Act (1975) (Cth).
In considering what order, if any, as to costs should be made, the Court must have regard to the matters set out in s 117(2A) of the Act.
The financial circumstances of the parties are as outlined earlier. Neither party was in receipt of Legal Aid. I accept that the Applicant has appropriately prosecuted the proceedings in circumstances where the Respondent has failed to take any part in them. There is no suggestion that the overall proceedings were necessitated by any failure on the part of the Respondent to comply with previous orders of the court. In the sense that she has obtained orders, in default, for the finalisation of the proceedings in exactly the manner she has sought, the Applicant has been entirely successful in the proceedings. Given his lack of participation in the proceedings, it is difficult, in my view, to conclude that the Respondent has been wholly unsuccessful.
Whilst the Applicant may well have been put to additional cost as a consequence of the fact that the Respondent lives in Island F, this was the reality for periods of their de facto relationship.
I accept that the Respondent’s conduct in respect of the removal of funds from Australia was such as to necessitate the Applicant applying to the Court, ex parte, on an urgent basis for relief. I am persuaded that the circumstance of his conduct in this respect are such as to justify the making of an order that he pay her costs of and incidental to that Application in a Case filed 4 March 2015. Given that the parties were engaged in the necessary pre-action procedures as mandated by the Family Law Rules at this time, I am also satisfied that it is warranted that such costs should be ordered to be paid on an indemnity basis rather than on a party and party basis.[43]
[43] Colgate- Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225.
I also accept the thrust of the submissions as to costs made on behalf of the Applicant and am persuaded that the circumstances of this case are such as to justify the making of an order that the Respondent pay the Applicant’s costs of and incidental to the proceedings and that such costs be calculated on an indemnity basis.
Given the fact of the Respondent’s non-participation in the proceedings and the evidence before me about the quantum of the Applicant’s costs (as calculated on an indemnity basis), I consider that it is appropriate and just that I fix such costs in the amount of $55,324.34.

Referral of papers to Legal Services Commission, the Queensland Law Society and the Bar Association of Queensland

On 9 March 2015, I made an order that Mr U and Ms N show cause as to why the papers should not be referred to the Queensland Law Society, the Queensland Bar Association and the Legal Services Commissioner, Queensland. This discrete issue was listed for further hearing on 2 April, 2015.
Mr U and Ms N both previously acted for the Respondent in these property settlement proceedings. Mr U is the author of the 26 February 2015 correspondence and Ms N is the Counsel to whom reference was made in that correspondence.
Both Mr U and Ms N complied with the requirement, contained within the March 2015 Order, to file and serve any written submissions on which they intended to rely prior to the hearing on 2 April 2015. Each set of submissions raised the contention that the Respondent had not waived privilege in his communications with them. Additionally, the submissions prepared on behalf of Ms N raised that no determination had been made in the Court that privilege attaching to, or associated with, such communication has been either waived or lost.
Given these two matters and further reflection, I decided that the appropriate course was to refrain from determining the issue of the referral until the proceedings between the Applicant and the Respondent were finally concluded.
I did so because I considered that, until then, it may work an injustice to proceed to finalise this issue because, until the proceedings between the parties were concluded, I was not in a positon to know the course that would ultimately be taken by the Respondent.
As I noted in the Reasons I delivered ex tempore on 5 March 2015, it was relevant to the grant of the injunctive relief seeking to prevent the Respondent from removing funds from the Commonwealth of Australia that:
a)he was then out of the jurisdiction; and
b)he is not a resident of Australia; and
c)he retained a presence and living arrangement in Island F; and
d)Island F is not a country in respect of which the operation of the Foreign Judgments Act1991 (Cth) and/or Regulations would mean that an Order obtained by the Applicant here could be enforced in Island F against property held by the Respondent in Island F; and
e)when regard is had to the property of the parties, there was a significant risk that, if funds were removed from Australia, the Applicant may have been deprived of the opportunity to receive those funds which a Court may have been persuaded to conclude it was just and equitable she receive on the final determination of the issues between the parties.
The fact is that, since the Order was made on 5 March 2015, the Respondent has taken no further part in the proceedings. Further, the funds sought to be protected by the ex parte application which resulted in the making of the March 2015 Order were, in fact, been removed from the Commonwealth of Australia by the Respondent. They are outside the jurisdiction of the Court.
The consequence for the Applicant is that, as already adverted to earlier, there is a shortfall of approximately $406,924.64 in the property available to meet her appropriate entitlements as I have found them to be. But for the Respondent’s actions in transmitting the funds overseas, the Applicant would have been able to receive a cash payment in such amount as part of the resolution of the property settlement proceedings between them. The removal of the funds from the jurisdiction appears, therefore, to have had a real and significant effect on the Applicant’s practical ability to obtain that to which she is justly entitled.
Such consequence is, in my view, relevant to the exercise of the discretion to refer papers to the appropriate professional organisations charged with overseeing the conduct of members of the legal profession.
Given this, the contents of the February 2015 correspondence and that I consider that the proper administration of justice requires that members of the public involved in litigation in this Court maintain confidence in the integrity of the legal system in this country and in those who are entitled to practice as legal practitioners, I consider it appropriate that the papers be referred to the Legal Services Commission, the Queensland Law Society and the Bar Association of Queensland for their proper consideration in the discharge of their respective responsibilities.
Subject to any further application by any of the Legal Services Commission, the Queensland Law Society and the Bar Association of Queensland, the order made on 9 March 2015 (whereby the names of Mr U and Ms N are to be made anonymous in any copy of Reasons for Judgment available to anyone other than the Court, the parties and the respective professional bodies) shall remain in force.

I certify that the preceding one hundred and two (102) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 17 November 2016.

Associate:

Date: 17 November 2016