Zao and Lee

[2019] FamCA 99

FAMILY COURT OF AUSTRALIA

ZAO & LEE [2019] FamCA 99

FAMILY LAW – PRACTICE AND PROCEDURE – Where the wife seeks summary dismissal pursuant to rule 11.02 of the Family Law Rules 2004 (Cth) – where failure to give proper disclosure is not a ground for summary dismissal – where the husband must have the opportunity to file affidavit evidence before the matter can be heard undefended – Application for summary dismissal dismissed.

Family Law Rules 2004 (Cth) r 10.12, 11.02

Bigg & Suzi (1998) 22 Fam LR 700.
Lindon v The Commonwealth(No 2) (1996) 136 ALR 251

APPLICANT: Ms Zao

RESPONDENT: Mr Lee

FILE NUMBER: SYC 8556 of 2015

DATE DELIVERED: 27 February 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: 21, 25 February 2019

REPRESENTATION

SOLICITOR FOR THE APPLICANT:	Legal & Company Legal Services
SOLICITOR FOR THE RESPONDENT:	Ren Zhou Lawyers

Orders

IT IS ORDERED

1. That the wife’s application for summary dismissal is dismissed.

2. That the wife’s application pursuant to Rule 11.02 is 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
Zao & Lee 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 SYDNEY

FILE NUMBER: SYC 8556 of 2015

Ms Zao

Applicant

And

Mr Lee

Respondent

REASONS FOR JUDGMENT

1. Ms Zao (“the wife”) and Mr Lee (“the husband”) commenced their co-habitation in August 2010 and married in 2010.

2. They separated in December 2014.

3. They had no children together.

4. On 28 March 2017, the husband commenced proceedings seeking a distribution of property. In simple terms, he sought an order that the wife transfer two properties in Australia to him and declarations that, as between the parties, he be declared to be the owner of two properties in City B.

5. The wife filed a response to the husband’s application on 24 April 2017 seeking an order that the husband transfer his interest in a jointly owned property in Australia to her and pay her $250,000.

6. The wife filed an application in a case on 5 September 2018 seeking an order for summary dismissal of the husband’s initiating application. She also sought an order pursuant to Rule 11.02 that the Court make orders in terms of her response.

7. That application was listed in a duty list on 3 December 2018 and transferred to the listing co-ordinator for the allocation of a date for hearing.

8. The matter was listed before me on 21 February 2019. On that day, an email was sent to the Court, received shortly before 10am, stating that the solicitors for the wife had insufficient notice of the listing and would not appear. The email stated, inter alia, “We will require at least 24 hours’ notice to make someone available.”

9. The solicitor for the husband appeared on 21 February 2019 and made submissions.  On behalf of the husband it was submitted that the husband had disclosed the documents available to him and that he wanted his application heard. The matter was stood over to 25 February to give the wife an opportunity to be heard and the husband was excused from attendance on that date. The solicitors for the wife were advised of the further listing.

10. On 22 February 2019, the solicitors for the wife sent a further email to the Court advising that 25 February was an unsuitable date and asking that the matter be listed on 5 or 6 March. A further email was sent later on 22 February, asking that the matter be listed at 2pm on 5 or 6 March.

11. The wife’s solicitor appeared on 25 February 2019 and sought an adjournment which was refused. There had been ample time to prepare submissions in relation to the application and submissions were then made by the wife’s solicitor.

12. The wife relies on an affidavit by herself sworn 4 September 2018 and an affidavit of her solicitor sworn the same date. No documents have been filed by the husband in response to the application in a case.

13. The wife deposed that the husband has significant assets in China including bank accounts at various banks, a share portfolio, real estate and a trading business operated through a corporation.

14. In his Financial Statement sworn on 23 March 2017, the husband disclosed two real properties in China.

15. In his Financial Questionnaire dated 20 June 2018, the husband disclosed an interest in three real properties in China, an income from rent of $24,000 per annum and savings of $100,000. The husband stated that he brought $680,000 in savings into the relationship. He asserted that he contributed the whole amount into the wife’s account and that those funds were then used for the purchase of subsequent properties.

16. On 3 May 2017, a registrar made the usual orders for the provision of documents including but not limited to the provision of the documents referred to in Rule 12.02.

17. On 6 July 2017, further orders were made requiring the husband to provide, inter alia, bank statements for named accounts, documents relating to his businesses in China, rental statements for property in China, and documents evidencing asserted payments.

18. On 13 December 2017, further orders were made requiring the provision of documents by both parties by 19 January 2018.

19. Non-disclosure remained an issue when the matter was before the court on 8 February 2018.

20. On 28 February 2018, the husband’s solicitor informed the court that the husband had been unable to obtain copies of documents, despite having travelled to China. A costs order was made against the husband.

21. On 29 March 2018 when the matter was again before the court, the registrar noted that there were outstanding valuation issues in relation to property in China.

22. On 24 April 2018, further orders were made for the exchange of documents in preparation for a conciliation conference.

23. The husband attended on 9 August 2018 without representation. The registrar directed him to file written submissions directed to why his application should not be struck out and the response listed on an undefended basis. The registrar noted that disclosure remained an issue.

24. No submissions were filed on behalf of the husband.

25. The wife’s solicitor deposed to extensive correspondence forwarded to the husband’s solicitors seeking disclosure by documents and attempts to arrange a valuation of the husband’s assets in China.

26. It is the wife’s case that the husband has still not complied with the various orders requiring disclosure in relation to his assets in China and I accept that he has not.

27. The application is couched in two parts. Firstly, the wife sought summary dismissal. Further, but not in the alternate, the wife sought “Orders pursuant to Rule 11.02”. At hearing, I understood that the solicitor for the wife abandoned the second application and sought only summary dismissal. However, lest I am in error, I will deal with both applications, which have separate foundations.

THE LAW IN RELATION TO SUMMARY DISMISSAL

1. The principles guiding the exercise of discretion under a court’s inherent power to dismiss proceedings were explained by Kirby J in Lindon v The Commonwealth(No 2) (1996) 136 ALR 251 and referred to by the Full Court in Bigg & Suzi (1998) 22 Fam LR 700. Kirby J said (at 256):

   1.It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against government and other powerful interests. This is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the Court, is rarely and sparingly provided;

   2. To secure such relief, the party seeking it must show that it is clear, on the face of the opponent's documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious;

   3. An opinion of the court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment;

   4.Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of demurrer. If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts;

   5.If, notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading…

   6.The guiding principle is, as stated in O 26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the Court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.

   (Footnotes omitted)

2. Those statements of principle find their way into the Family Law Rules in similar terms.

3. Rule 10.12 of the Family Law Rules 2004 (Cth) provides:

   A party may apply for summary orders after a response has been filed if the party claims, in relation to the application or response, that:

   (a) the court has no jurisdiction;

   (b) the other party has no legal capacity to apply for the orders     sought;

   (c)  it is frivolous, vexatious or an abuse of process; or

   (d)  there is no reasonable likelihood of success.

4. This is a jurisdiction where matters are not commenced by pleading. Until such time as the parties have sworn and filed affidavits of evidence, it is impossible to ascertain with any degree of accuracy whether a party has an arguable case.

5. In the present case, the husband has filed an Initiating Application, a Financial Statement and a Financial Questionnaire.

6. It is not submitted in the wife’s case that any of the provision of Rule 10.12 could be argued to apply in the instant case.

7. Rather, as the solicitor for the wife deposed, her case is that:

   Over a period of over one and a half years, the case has not proceeded in any substantial manner owing to the [husband’s] continuous disregard of the Court’s rules as to disclosure and complete disregard for its orders.

8. That is not a ground for summary dismissal.

9. It could not be argued, based on the husband’s Financial Questionnaire, that he does not have a case to advance. He claims to have contributed $680,000 to the acquisition and conservation of the assets in Australia.

10. His alleged persistent failure to give proper disclosure is not a ground for summary dismissal.

11. The application for summary dismissal will be dismissed.

RULE 11.02

1. Rule 11.02 relates to the consequences of failure to comply with legislative provisions and orders in the following terms:

   (1)  If a step is taken after the time specified for taking the step by these Rules, the Regulations or a procedural order, the step is of no effect.

   Note: A defaulter may apply to the court for relief from this rule (see rule 11.03).

   (2)    If a party does not comply with these Rules, the Regulations or a procedural order, the court may:

   (a)dismiss all or part of the case;

   (b)set aside a step taken or an order made;

   (c)determine the case as if it were undefended;

   (d)make any of the orders mentioned in rule 11.01;

   (e)order costs;

   (f)prohibit the party from taking a further step in the case until the occurrence of a specified event; or

   (g)make any other order the court considers necessary, having regard to the main purpose of these Rules (see rule 1.04).

2. No directions have been made for the filing of affidavits for the purpose of a final hearing. The matter has not been allocated to a docket and sits in the pool of matters waiting for allocation to a judge’s docket.

3. Procedural fairness would dictate that before the Court took the step of determining the proceedings in the absence of the husband, it would be necessary to give him the opportunity to file any affidavit evidence and to participate in a hearing.

4. If the husband chooses not to file any evidence or to participate in the preparation of the matter for trial, a judge might determine that the matter should be heard on an undefended basis. Such a determination, at this stage, would be premature.

5. That application will be dismissed.

6. If, ultimately, the trial judge finds that the husband has not made full and proper disclosure, the consequences of that finding will fall in accordance with established principles of law.

I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 27 February 2019.

Associate:

Date: 27/02/2019