Yan and Yu and Anor
[2014] FamCA 423
•30 April 2014
FAMILY COURT OF AUSTRALIA
| YAN & YU AND ANOR | [2014] FamCA 423 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Adjournment – Application to proceed undefended refused. |
| Evidence Act 1995 (Cth) Family Law Act 1975 (Cth) |
| A & Z [2006] FamCA 179; (2006) FLC 93-257 |
| APPLICANT: | Ms Yan |
| RESPONDENT: | Mr Yu |
| 2ND RESPONDENT: | Ms Yao |
| FILE NUMBER: | MLC | 4849 | of | 2012 |
| DATE DELIVERED: | 30 April 2014 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Cronin J |
| HEARING DATE: | 30 April 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Love |
| SOLICITOR FOR THE APPLICANT: | Australian Legal Advisory Centre |
| COUNSEL FOR THE RESPONDENT: | Mr James |
| SOLICITOR FOR THE RESPONDENT: | JK Lawyers & Co |
| THE 2ND RESPONDENT: | In person |
Orders
That the application in a case filed 14 April 2014 is dismissed.
That all outstanding applications are adjourned to 10.00am on 1 May 2014.
That the husband and the second respondent have leave to rely upon their respective trial affidavits notwithstanding they were filed outside of time.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Yan & Yu and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 4849 of 2012
| Ms Yan |
Applicant
And
| Mr Yu |
Respondent
And
| Ms Yao |
2nd Respondent
REASONS FOR JUDGMENT
This is an application brought by the applicant at trial, to preclude the husband and the second respondent from, effectively, proceeding with their side of the argument. The application seeks that the court proceed on an undefended basis. The definition of undefended remains unclear. This court has taken a number of different views, from excluding parties in their participation, through to limiting their role.
I have understood the applicant to desire to exclude the husband and I am not entirely sure what the position is in relation to the second respondent, but I suspect it does not matter. The application is supported by an affidavit drawn by the solicitor for the applicant, in which she makes reference to paragraphs in the trial affidavit of the wife. That is the evidence upon which I am determining this discrete application.
On the determination of this application, the matter has to proceed one way or the other, whether with the husband and the second respondent or without. Doing the best I can, there seemed to be four discrete issues and those four fit into two categories. The first relates to what has been described by counsel for the applicant as the contemptuous behaviour of the husband, such as to justify excluding him from the proceedings.
The second relates to the failure to comply with the timetable orders that I made in February 2014, at which point the parties were all participants. It is clear from the court file that the husband was approximately three weeks late and the second respondent much the same. But that said, the applicant’s counsel properly concedes that they have read the material – or he and his client have read the material and have had an opportunity to digest the material. There is no suggestion in this case of any application to adjourn the proceedings on the basis of the delay having occurred or the prejudice that flows from the delay.
I propose to deal with the two categories separately. In the first category relating to discovery, it is observed by the submission on behalf of the applicant that the husband transferred a property in China to his mother at C Street. It is perhaps unusual, but in this case, the wife having filed not only her application, but also her outline of case, in which she says that she wants the husband to keep that property as part of the ultimate division of the assets of either of the parties. It is submitted by the wife that what the husband was doing was putting beyond the reach of the court that particular asset. But the reality is that the court is always entitled to take into account assets that have been disposed of by parties and those assets can be factored into the calculations in the ultimate division.
That particular issue seems to me to give ground for the wife to attack the credibility of the husband for doing what he did. At this stage the evidence is contested and it would not be appropriate for me to simply exclude the husband on the basis that he had made a transfer of a property accordingly. The second issue is that the husband has said to have declined to discover business documents relating to a business in Shanghai.
The nub of this dispute is relatively modest. It was said that the husband had a connection with a woman by the name of Ms W in China and that Ms W originally agreed in a telephone discussion involving the applicant’s solicitor, to provide the documents that the wife wanted to see. The husband’s evidence now is that he has had a falling out with Ms W and cannot get the documents. One might be somewhat cynical about that approach, but that too seems to me to be an issue associated with credibility.
In the directions hearing in February 2014, when I set the matter down, this issue was not raised. The issue arose in 2013 and it was not brought as a contested interim or interlocutory issue prior to the February 2014 hearing. It was certainly made clear to me in that hearing that there were unresolved discovery issues and the consequence of that was that I made an order that the parties have a timetable, which included sending a letter requesting the production of documents for inspection.
Indeed, Annexure CFX7A to the affidavit before me today says that on 17 February 2014 that very order was carried out by the applicant. She requested documents. The affidavit goes on, however, to say that the husband had not complied. However, in the annexure there is a reference to the husband having written an email letter to the solicitor on 25 February and that has not been produced to me, so I am not entirely sure whether that letter from the husband is consistent with his affidavit evidence, which I understand to be that he cannot get Ms W to cooperate.
That too seems to be an issue that can be tested. And having regard to the fact that the court can adjust assets that are in the possession of the parties, there is no prejudice to the wife, in my view, based upon those assertions. And it seems to me that that would not be a ground to exclude the husband.
The third of the first category relates to Business D. As I understand it, this is a business that no longer is in the control of the husband. It was a corporate entity and the husband was the sole director and shareholder. It is asserted that the husband sold it in 2013. This issue too was not raised in the hearing before me on 7 February 2014. There was certainly some evidence from the husband’s side that the business had been valued or had been attempted to be valued by Mr A and the husband offered to transfer the property to the wife for a dollar and obviously the wife was not interested.
Mr James, of counsel, on behalf of the husband says that the tax returns were all filed, so there’s no suggestion that the value, at least on an asset backing basis, could not be ascertained. And Mr A, presumably, if he is a sworn valuer, could actually do a future maintainable earnings valuation, based upon the revenue stream of the business at the time that it was sold. But, again, all of those issues can be taken into account in the adjustment between the parties.
Having regard to the fact that that issue was not raised before me on 7 February as a problem that might delay or cause problems for the production of the hearing, I see no reason why it should now be raised. I point out what the Full Court said in Chang & Su [2002] FamCA 156; (2002) FLC 93-117 about the obligations of parties and what the court can do. If someone does not comply, the court’s approach ought to be more a robust one than it would normally have to undertake.
The second category relates to the delay. I find this somewhat disconcerting. From the husband’s point of view, his explanation was that he had intended to be on time and at the February hearing he was not represented. He then went and obtained legal advice, because he thought it was in his interests to do so and the solicitor’s found their task much greater than what they had anticipated and were not able to assist him to get the documents filed on time. That evidence seems clear.
What is disconcerting is that the solicitor for the applicant in her supporting affidavit said that the husband had made no effort to get her consent to an extension of time. That is clearly not right. I expect better from legal practitioners than to take those sorts of statements and know that they are going to be the basis upon which the Court is being asked to determine the matter, where the evidence cannot be tested.
That said, it is clear that the husband was going to be late and his solicitors endeavoured to do the right thing and ask for an extension of time. Without the consent of the applicant by that time, the Court was not prepared to extend the time without a proper application. The husband did not make the application and, of course, there was the Easter period intervening. It seems to me that that is not necessarily a basis upon which the Court should exclude the husband.
The second respondent too was late. I find this even more bizarre, because her view was that shortly prior to the due date, she decided that she would endeavour to approach the applicant and suggest a mediation. I find that explanation bizarre, having regard to the duration of this litigation and more importantly, the fact that no one could suggest that the parties did not know what the dispute was about, particularly in relation to the second respondent, because it has been asserted by the applicant that the second respondent is holding property on trust for the parties.
How a mediation could resolve that sort of factual dispute, I am not sure. But I am not at all convinced that the second respondent made a serious attempt to get the affidavit material in on time. That said, she will live or die by her sword, effectively, because she has prepared her affidavit herself and yesterday I observed that if the material was struck out because it was inadmissible, then that is a problem that she will have to face. Counsel for the applicant drew my attention to the Full Court decision in a case in 2006 of A & Z [2006] FamCA 179; (2006) FLC 93-257. I have not read that in any great detail, but it clearly refers to an appeal and the question of whether or not matters should proceed on an undefended basis. Much of that decision revolves around well known authorities such as Alesh & Maunce [1998] FamCA 172 and Lanceley & Lanceley (1994) FLC 92-491 but their Honours also referred to the High Court’s decision in the State of Queensland & Anor v JL Holdings [1997] HCA 1; (1997) 189 CLR 146.
I cannot say that I understand exactly what the Full Court was saying but there is no doubt that the subsequent decision of the High Court is Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 took a totally different view to what their Honours had previously said in the State of Queensland case. In Aon Risk the High Court considered the various decisions of not only the Australian but also English courts on the issue of whether case management principles whilst relevant, should or should not be able to prevent a party from litigating a fairly arguable case.
There was specific contemplation of what had been said by the High Court in Sali v SPC Limited & Anor [1993] HCA 47; (1993) 67 ALJR 841 about shutting a party out from litigating a case which was fairly arguable on the basis of non-compliance with the principles of case management. The particular application before me goes further and is based upon an argument that the husband is in contempt because he has failed to comply with discovery obligations and taken steps to dispose of assets. The difficulty I have with that is that I could not conclude at this stage that he is contemptuous of the court without that evidence being tested.
As was said by the High Court in Aon Risk (supra), the question that needs to be contemplated is whether the husband has a fairly arguable case which would otherwise be excluded if the strict compliance with the orders which flow from the principles of case management will follow. In the High Court’s decision, there was reference to the court’s view that someone should not be excluded except in extreme circumstances. It was observed in that case that case management was not amending itself. It was described as an important and useful aid for ensuring the prompt and efficient disposal of litigation.
The court went on to say that it ought always be borne in mind that the ultimate aim of a court is the attainment of justice. That is the focus of my attention this morning. Case management involves the efficiency of the procedures of the court to ensure that other litigants are not delayed. As such it is not just noncompliance with timetables that causes injustice to other litigants but also lack of concentration to detail about issues that genuinely lead to be litigated. Along with practitioners observing the rules of evidence to ensure that time is not wasted on unnecessary rulings on objections to evidence.
If the attainment of justice is the ultimate objective, poor pleading makes poor litigation. It is clearly understood that Part VII of the Family Law Act 1975 (Cth) (“the Act”) has a division relating to less adversarial trials under which the rules of evidence are relaxed to enable the courts to get to the nub of what facts assist the Court to determine what it is in a child’s best interests. Ameliorated though the rules of evidence may be, ss 55 and 56 of the Evidence Act 1995 (Cth) pertaining to relevance have not been altered.
The question here seems to me to be whether compliance with orders resulting to timetables and compliance with principles such as those that I have just mentioned, should be allowed to prevail over the injustice of shutting the respondents out from raising an arguable case. As I earlier said, the reference to undefended means different things to different courts. In this jurisdiction, the property operation order cannot be made unless s 79(2) is satisfied and the importing into that determination of the mandatory requirement that the decision is just and equitable to both parties makes it harder to exclude someone from participating or indeed giving evidence about the issues that will make up that determination.
Thus far, this case has been a waste of public resources, predominantly in the Federal Circuit Court because of the lack of the responsiveness not so much to the request inter partes about discovery but the lack of readiness for trial. The fundamental principle of which is the absolute obligation of all litigants to make full and frank disclosure. I suspect the case was transferred here, not so much because of its complexity but because of its haphazardness in approach to being finalised between the parties. There have been undue delays and the wife has submitted that she has made requests for discovery and those have not been successful.
I have already referred to my concerns about the fact that those related to issues last year and not much seems to have been done about enforcement. In this particular case, the application for enforcement of the procedural orders was made three weeks after the deadline for the husband to file his affidavits of evidence in chief, that was just before Easter and only a short time before the trial was due to commence. In the intervening period, the husband did comply, as did the second respondent but he needs leave to rely on the affidavit as does the second respondent. In this particular case, having regard to the fact that it has not been suggested by counsel for the applicant that the wife has not had an opportunity to read that material, I propose to grant that leave.
The nub of this dispute really is not about the lateness but about the aberrant approach to discovery. Nothing I saw suggested the wife has sought to overcome the husband’s lack of responsiveness with subpoena. There may obviously be some difficulties associated with that because there are business and assets in China but those problems should have been raised in the directions hearing I held in February. It is conceded they were not. I am very conscious of two things, first, there is an enormous strain and uncertainty carried by litigants who desperately in most cases want to end their association with the person with whom they were in a relationship.
To not be able to conclude the proceedings exacerbates the pain. Here the wife said she was ready to proceed even though there was an absence of discovery. Secondly, an adjournment because of the absence of readiness or the reticence of the court to enforce its own orders has the potential for loss of public confidence in the legal system. Not only do parties have a duty to assist the Court in achieving its objective but so to do lawyers, who have a responsibility to ensure that material is properly prepared and the cases are ready to proceed.
The Court has the duty to provide the resource but it cannot use it efficiently if the parties and their lawyers do not assist. As the plurality in Aon said “the torpid languor of one hand washes the drowsy procrastination of the other”. Are these phenomena indications of something chronic in the modern state of litigation, or are they merely acute and atypical breakdowns in an otherwise functional system? Are they a sign of a trend, or do they reveal only an anomaly? One hopes for one set of answers. One fears that in reality there must be another.
I am satisfied that an injustice would be done here if the husband and the second respondent were excluded from the proceedings in any way. Indeed the reduction of their entitlements to simply cross-examine would not enable the court to get to the problem that it has to face because of s 79(2). The wife has had sufficient time to digest the material. It is not suggested she is seeking an adjournment, accordingly I dismiss the application.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 30 April 2014.
Associate:
Date: 18 June 2014
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