Bakker & Kane (No 2)

[2020] FamCA 770

FAMILY COURT OF AUSTRALIA

BAKKER & KANE (NO. 2) [2020] FamCA 770

FAMILY LAW – PROPERTY – Interim – Where the wife failed to establish the "special circumstances" for a child support departure order – Where the wife sought an order for spouse maintenance - Where the wife failed to establish she was unable to support herself – Where the husband does not have the capacity to pay interim spouse maintenance – Where the wife seeks partial property settlement of $300,000 – Where the Court cannot make an assessment of the wife's probable entitlements pursuant to section 79 of the Family Law Act 1975 (Cth) – Where it is unclear if the lump sum payment could be "clawed back" in an overall financial resolution between the parties – Orders made for valuations – Injunctive Orders made.

Child Support Assessment Act 1989 (Cth) s 117
Family Law Act 1975 (Cth) ss 72, 79, 90RD
Family Law Rules 2004 r 15.5

APPLICANT: Ms Bakker

RESPONDENT: Mr Kane

FILE NUMBER: SYC 8109 of 2018

DATE DELIVERED: 9 September 2020

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 2 July 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Cumming SC

SOLICITOR FOR THE APPLICANT: Lander & Rogers

COUNSEL FOR THE RESPONDENT: Mr Schonell SC

SOLICITOR FOR THE RESPONDENT: Linden Legal

Orders pending further order

1. The application of the applicant Ms Bakker ("the applicant") for interim spouse maintenance is dismissed.

2. The application of the applicant for a lump sum payment by Mr Kane ("the respondent") as a partial property settlement is dismissed.

3. The application of the applicant for a child support departure order is dismissed.

4. The respondent is restrained from selling, further encumbering and in any way dealing with the property situate at and known as P Street, Suburb Y in the State of New South Wales being the whole of the land contained in Folio Identifier ...

5. The respondent in his capacity as a director, trustee or shareholder or an appointor of a trust is restrained from disposing of or selling, transferring, alienating or encumbering any real property held by any company or trust in which he has an interest.

6. In the event that, within 28 days of these Orders, the parties are unable to reach agreement as to the value of the following assets:

   6.1.     S Street, Suburb G

   6.2.     T Street, Suburb V

   6.3.     P Street, Suburb Y

   6.4.     BB Street, Suburb W

   6.5.     Q Street, Suburb Z

   they will jointly engage an expert pursuant to Part 15.5 of the Rules to undertake a valuation by the method set out in Order 7.

7. For the purposes of implementation of Order 6:

   7.1.     within 14 days of Order 6, the applicant's solicitor nominate three valuers

   7.2.within a further 7 days, the respondent's solicitor select one of such three valuers

   7.3.within a further 14 days, the applicant' solicitor prepare and submit to the respondent's solicitor a draft joint letter of instruction

   7.4.within 7 days of receipt of such draft letter of instruction, the respondent confirm his agreement to the proposed document or inform the applicant's solicitor of any proposed amendments

   7.5.the respondent meet the cost of such valuations in the first instance, on the proviso that he may seek a contribution from the applicant at a later stage.

8. The respondent pay to the applicant all expenses, net of any government subsidy, of the cost of the child X's attendance at day care.

9. The respondent maintain health insurance for the applicant, the child X and the wife's son DD at the current rate of cover.

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 Bakker & Kane 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 8109 of 2018

Ms Bakker

Applicant

And

Mr Kane

Respondent

REASONS FOR JUDGMENT

The proceedings

1. Ms Bakker and Mr Kane are parties to litigation in relation to parenting and financial issues. Their only child, X, was born in 2018 and is currently two and-a-half years of age. The parties lived in a de facto relationship for a disputed period, which ultimately will be determined by a declaration pursuant to section 90RD of the Family Law Act 1975 (Cth) (“the Act”). For convenience, I will refer to Ms Bakker as "the wife" and Mr Kane as "the husband" in these reasons.

2. On 2 July 2020 a raft of applications for interim orders was listed for hearing.  These issues appeared to be as follows:

   1.whether the husband should pay to the wife interim spouse maintenance of $2,129 per week plus private health insurance;

   2.whether the husband should pay to the wife a partial property settlement of $300,000;

   3.whether there should be a Child Support departure order such that the husband pays $1,255 per week to the wife;

   4.whether there should be injunctive orders to restrain the husband from dealing with a property at P Street, Suburb Y and his interest in a property at Q Street, Suburb Z and certain trust entities;

   5.whether there should be orders for valuation of the Suburb Y, Suburb Z and Suburb W properties and the husband's practice;

   6.whether the husband should now pay the wife's costs of her application for a declaration of the existence of a de facto relationship;

   7.whether there should be orders for the valuation of the properties S Street, Suburb G and T Street, Suburb V; and

   8.whether there should be orders that the wife make available to the husband certain chattels contained in the Suburb G property.

3. At the interim hearing, agreement was reached in relation to the following matters:

   1.the husband be restrained from dealing with the Suburb Y property and his interest in certain trusts;

   2.orders be made for valuations of the Suburb Y, Suburb W and Suburb Z properties; and

   3.the husband be restrained from issuing any subpoenae to an organisation in Queensland.

4. The husband sought orders for valuations of the Suburb G and Suburb V properties, in the event that the parties are unable to reach agreement.  The position of the wife on this issue was unclear to me but I can see no reason why these assets should not be the subject of valuations. I indicated to the parties that I was not prepared to entertain the application of the husband for the return of specified chattels.

Background

1. The husband was born in 1964 and currently 55 years of age.  He is a health professional who conducts a private practice at Suburb W.  The wife, who is aged 48, is a finance professional at KK Organisation.  On 23 April 2020 the following orders and declarations, inter alia, were made by consent:

   Property

   1.By consent Orders and directions are made in accordance with paragraphs 1 to 6 of a document headed "Proposed Minute of Order" dated 20 February 2020, filed herein and set out hereunder:

   "1. That pursuant to s 90RD of the Family Law Act 1975 the following declaration be made:

   1.1.A de facto relationship existed between the Applicant and the Respondent;

   1.2.There is one Child to the de facto relationship between the Applicant and the Respondent, namely X born in 2018;

   1.3.The Applicant and the Respondent were ordinarily resident throughout their de facto relationship in the State of New South Wales;

   1.4.There is a dispute between the parties as to the dates of cohabitation and it is noted that this is an issue for final hearing.

   2.     That the costs incurred by the Respondent in establishing the existence of a de facto relationship shall be reserved to be determined by the Court or by agreement.

2. The wife contended that the parties lived in a de facto relationship between April 2017 and 3 June 2018.  The husband asserted that the parties were "in a relationship" between April 2017 and August/September 2017.  In his affidavit of 2 June 2020 the husband deposed:

   12.Since the inception of Ms Bakker's Application for Property Settlement I have opposed Ms Bakker's Application to the Court for a declaration under Section 90RD as I contend that there was no de-facto relationship. I do not believe that I was in a de-facto relationship with Ms Bakker but have accepted that it is likely the Court will make that finding and accordingly, I agreed to consent to the Court's jurisdiction. I advised Ms Bakker's lawyers of that on 27 March 2020 and formal Orders by Consent were entered into on 23 April 2020.

3. Each of the parties was married prior to their relationship and they both have children in addition to X.  The wife has a son, DD, who was born in 2010 and is currently 10 years of age.  The wife, DD, X and the maternal grandfather Mr N live at the Suburb G property.  The husband has two adult children, FF and GG, from his previous relationship.  They are both students and live with the husband at the Suburb Y property.

4. The wife endured a difficult pregnancy with X, who was born prematurely in 2018.  In approximately October 2017 the wife commenced paid sick leave due to complications with the pregnancy.  In February 2018 she began maternity leave for a period of 12 months at a reduced rate of income.  Between February 2019 and 26 November 2019 she took annual and long service leave on half pay.  On 26 November 2019 the wife commenced a period of unpaid leave.

5. Between April or June 2018 and December 2018 the husband paid child support of $1,000 per week on a voluntary basis.  From December 2018 he paid $390 per week by way of child support.  The husband's uncontradicted evidence was that he paid $14,000 to the wife in July 2019, that amount being the difference between payments of $390 and $1,000 per week.  In July 2019 the husband began to make payments of $1,274 for the support of X.

6. In January 2020 the wife made an application to the Child Support Agency, which issued an assessment of $448 per week.  On 23 April 2020 the Child Support Agency issued a fresh assessment in the sum of $28 per week.

7. The husband established the CC Business in 1995.  Ordinarily the practice employed three health professionals, five full-time and four casual assistants, and two other staff.  The practice normally operates a technical facility on site.  I have no reason to doubt the husband's evidence that the COVID-19 pandemic has damaged the financial fortunes of the practice.  He deposed that, in April and early May 2020, the gross income of the practice was approximately $12,000 and the expenses amounted to around $35,000 per week.  He deposed further that:

   I have been supplementing the practice income by making payments from monies accumulated in the Kane Trust.  Those monies are now depleted.

8. The husband gave uncontradicted evidence that, since COVID-19 restrictions eased in mid-May 2020, he sees six to eight patients per day.  He deposed also that he receives JobKeeper payments and that the practice is able to cover its expenses, without generating a profit.

9. Prior to the relationship the wife purchased the Suburb G property, which she occupies as her home.  She also owned an investment property at Suburb V.

10. In 2017 the husband paid to the wife a sum of $1,500,000 and acquired a 50 per cent interest in the Suburb W property.  According to the wife, she applied these funds to offset a mortgage debt in her sole name and the parties then obtained jointly a new credit facility of $300,000.  The wife met all repayments in relation to this loan until February 2020.  In April 2020 the mortgagee granted the wife's application for financial hardship relief and the repayments were suspended until November 2020.

11. The wife deposed that the mortgage debt in relation to the Suburb V property currently stands at approximately $1,266,000.  She receives all rental income from this property and is solely responsible for the mortgage debt.

12. In August 2017 the husband borrowed $1,000,000 by way of a line of credit secured against a property in Suburb M, which had been purchased by a unit trust in 2014.  The husband contended that his father was the beneficial owner of this property at all relevant times.  The husband deposed that he used these funds to facilitate a property settlement with his ex-wife.  He deposed further that this property was sold in November 2019 and that he received no part of the net proceeds.

13. Prior to the relationship of the parties the husband acquired a property at P Street, Suburb Y.  This property was tenanted until November 2018 but has since been occupied by the husband and the two children of his prior relationship.

14. In August 2019 the husband purchased as an investment the property R Street, Suburb Y for $2,337,000.  These funds came from mortgage borrowings of $1,870,000 and a line of credit.

15. In November 2019 the husband sold the Suburb Y investment property to his ex-wife for $2,337,000, although the contract price was expressed to be $2,100,000.  According to the husband, his ex-wife paid stamp duty on the additional sum of $237,000 and they entered into a loan agreement in respect of that amount.

16. The husband deposed that he consolidated all of his borrowings into one loan secured on the Suburb Y property in November 2019.  He deposed further that he used funds which he received from his ex-wife to discharge the mortgage in respect of the Suburb Y investment property and that he deposited the balance of $238,029 into an offset account.

17. The husband deposed that he transferred $1.4 million from the offset facility to the Suburb Y mortgage account in November 2019.  The mortgage debt thus was reduced from approximately $6,000,000 to $4,500,000.  He then closed the line of credit and now maintains that he has no redraw facility in relation to the Suburb Y loan account.  The husband deposed further that the mortgagee has accepted a reduction in repayments from $27,387 to $18,279 per month.

18. In January 2020, X began to attend child care for three hours on each of two days per week.  The husband deposed that he offered to meet those expenses and arranged for direct payment to the child care centre.  There was no reference to any such payment in the husband's Statement of Financial Circumstances.  The wife deposed that she rejected the husband's offer to pay child care fees.  In any event, the husband proposed at the interim hearing that he pay the daycare fees.

19. On 17 April 2020 the wife entered into a litigation funding contract with a company known as HH Company.  She deposed that her potential borrowings are capped at $300,000 but did not tender the contract in evidence.  A Loan Statement dated 19 June 2020 was tendered by consent, after the close of the case for the wife, and indicated an outstanding balance of $264,057.47.  This figure included interest of $592.07 and "monthly fees" of $80.

Consideration

Interim spouse maintenance

1. On behalf of the husband, it was submitted that the wife failed to establish that she is unable to support herself adequately for the purposes of section 72 of the Family Law Act 1975 (Cth) (“the Act”). Relevantly, this section provides as follows:

   (1)A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

   (a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;

   (b)by reason of age or physical or mental incapacity for appropriate gainful employment; or

   (c)      for any other adequate reason;

   having regard to any relevant matter referred to in subsection 75(2).

2. The wife currently is taking unpaid leave from her position as a professional at KK Organisation.  A summary of the contents of her tax returns for the 2016 to 2019 years was submitted to show the following information:

($)
2016	gross income	209,620
deductible loss on Suburb V Investment property	40,200
2017	gross income	177,576
loss on Suburb V investment property	38,547
2018	gross income	150,994
loss on Suburb V investment property	53,831
2019	gross income	140,311
loss on Suburb V investment property	45,330

There was no suggestion on behalf of the wife that this information was incorrect or should be rejected for any other reason.

1. On behalf of the husband, it was contended that the wife's tax returns also disclosed income from company directorships.  I was unable to locate the wife's tax returns within the hundreds of pages of documents contained in the tender bundles relied upon by the parties at the interim hearing.  The wife gave no evidence as to any company directorships which she has held in the recent past or which she may obtain in future.

2. The wife offered very limited evidence as to attempts which she has made to obtain paid employment.  In her affidavit of 1 July 2020 she deposed that she has made an application for a permanent position at an organisation in Queensland.  She deposed that the Department Head told her that she "is a very attractive candidate".

3. The wife deposed that X would attend a child care centre situated within her workplace, in the event that she obtains this position in Queensland.  It thus follows that the wife considers that her responsibility to care for the child is no obstacle to her undertaking a full-time position.

4. It seems to me that there is substance to the submission on behalf of the husband, to the effect that the wife confined her attempts to secure gainful employment to a search for appointments comparable with her current position.  The wife gave no evidence whatsoever that she has made any attempts to secure employment outside her professional world.

5. As was submitted by senior counsel for the husband, the wife's overall financial position includes losses incurred in relation to her investment property.  These tax losses worked to her advantage while she derived a relatively substantial income but these expenses now operate to her financial disadvantage.

6. It was contended on behalf of the wife that a sale of the Suburb V property may not generate net proceeds.  The wife deposed that, after deduction of capital gains tax, a sale may result in a shortfall of funds.  This unqualified opinion was based on market appraisals by two real estate agents, not valuations as asserted by the wife, and an unsourced estimate of capital gains tax.  On the basis of this evidence alone, I am not prepared to infer that a sale of the Suburb V property would generate no financial benefit to the wife in terms of available cash.

7. As senior counsel for the husband pointed out a sale of this property would relieve the wife from ongoing liability for associated expenses.  Based on the wife's Financial Statement, these ongoing expenses would include weekly mortgage repayments of $1,027, pest control $5, agency fees $70 and repairs and maintenance $58, which would amount to at least $1,160.  Senior counsel for the wife submitted that her shortfall of income over expenditure amounts to $2,451, thus these expenses related to the Suburb V property constitute approximately 47% thereof.

8. The circumstances of the wife's leave from her position were the subject of dispute between the parties.  The wife deposed that she was granted "twelve months unpaid leave on compassionate grounds" on 25 November 2019.  She deposed further that she relied upon a promise by the husband on 19 October 2019 that he would provide financial support for twelve months so that she could "stay home with X next year."

1. In evidence was a series of email communications between the wife and staff at KK Organisation.  The chain of emails contained no mention of the wife's leave being granted on compassionate grounds.

2. I have difficulty in accepting that the wife would elect to take unpaid leave for twelve months, in reliance on a promise by the husband that he would provide her with financial support for that period.  By October 2019 the parties had embarked on litigation in the Family Court of Australia and engaged in disputes in the Local Court of New South Wales.

3. In 2018 assault charges against the husband were dismissed by Suburb AA Local Court, in circumstances where the wife failed to attend to give evidence.  In October/November 2018 the wife initiated an application for an Apprehended Violence Order against the husband but police officers elected to discontinue these proceedings.  Against this background I am loath to accept that the wife would elect to withdraw from her paid employment on the strength of an alleged assurance by the husband.

4. As set out above, the wife deposed that she would take on a full-time position in Queensland despite her responsibilities as primary carer for X. That being so, I do not accept that the wife's circumstances satisfy the requirements of section 72(1)(a) of the Act.

5. As observed above, the wife gave very little evidence of attempts to secure gainful employment.  Whatever searches she has made appear to be limited to positions comparable to her present engagement with KK Organisation.

6. Additionally, I consider that it is open to the wife to alleviate her financial position by a sale of the Suburb V property.  She may not obtain cash by way of net proceeds but, at least, she could reduce her recurring expenditure to a significant extent.

7. For these reasons, I find that the wife failed to establish that she is unable to support herself adequately for the purposes of section 72 of the Act. It may be that she will be unable to return to her position at KK Organisation but that consideration is not decisive of this issue.

8. Additionally, I do not accept that the husband has a capacity to pay interim spouse maintenance to the wife.  I am prepared to accept that net income from the husband's practice has been impacted adversely by the

   
   

   COVID-19 pandemic.  In my view, there was no successful challenge to the husband's evidence that, since mid-May 2020, he has been able to cover the expenses of the practice but has received no income by way of net profit.

9. The wife relied upon a profit and loss statement for the Kane Trust, referable to the period 11 May 2020 to 1 June 2020 (page 237 of the husband's Tender Bundle).  The husband deposed that the Kane Trust receives professional fees from the practice and owns part of its property, plant and equipment.

10. On behalf of the wife, it was submitted that this document "stands starkly inconsistent with the evidence that the husband gave in his affidavit."  It was suggested that the gross practice income for that 20 day period amounted to approximately $35,000 per week, rather than $12,000 as alleged by the husband.  It was submitted further that the practice expenses were $15,000 rather than $35,000 per week.

11. Senior counsel for the husband pointed out that the profit and loss statement and paragraph 25 of the husband's affidavit referred to different time periods.  It was submitted further that the three week period covered by the profit and loss statement was merely a "snapshot" of the financial functioning of the practice.  I see substance in these submissions, to the extent that I will not rely on the profit and loss statement to support a finding that the husband has funds available to him on a regular basis to enable payment of spouse maintenance to the wife.

12. It appeared that, to some extent, the wife's case for interim spouse maintenance relied upon identification of substantial sums of money held by the husband and/or his corporate entities at various times.  I do not accept that it necessarily follows that the husband has the capacity to pay spouse maintenance.

13. For example, the wife identified that the husband held $2,300,000 in a bank account in March 2019.  It was submitted that he gave no explanation for the fate of these funds.  Senior counsel for the husband, however, pointed to paragraph 19 of his affidavit, where he explained his use of these funds.  The husband deposed that he closed the Line of Credit secured on the Suburb M property, by payment of the outstanding balance of $997,231 on 22 November 2019.  He deposed further that he transferred $1,400,000 from the Offset Account to reduce the mortgage on the Suburb Y property from approximately $6,000,000 to $4,500,000.  In my view, this example illustrates the danger inherent in a suggestion that the mere holding of large sums of money by the husband at various times leads to a finding that he has a capacity to pay spouse maintenance.

Child Support Departure

1. In my view, the wife failed to establish that "special circumstances" exist for the purposes of section 117 of the Child Support (Assessment) Act 1989 (Cth). This section provides as follows:

   SECTION 117 MATTERS AS TO WHICH COURT MUST BE SATISFIED BEFORE MAKING ORDER

   Court may make departure order.

   117(1)     Where:

   (a)application is made to a court having jurisdiction under this Act for an order under this Division in relation to a child in the special circumstances of the case; and

   (b)      the court is satisfied:

   (i)that one or more of the grounds for departure mentioned in subsection (2) exists or exist; and

   (ii)      that it would be:

   (A)just and equitable as regards the child, the carer entitled to child support and the liable parent; and

   (B)     otherwise proper;

   to make a particular order under this Division;

   the court may make the order.

   Grounds for departure order

   117(2)     For the purposes of subparagraph (1)(b)(i), the grounds for departure are as follows:

   (a)that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of:

   (i)the duty of the parent to maintain any other child or another person; or

   (ii)special needs of any other child or another person that the parent has a duty to maintain; or

   (iii)commitments of the parent necessary to enable the parent to support:

   (A)     himself or herself; or

   (B)any other child or another person that the parent has a duty to maintain; or

   (iv)high costs involved in enabling a parent to spend time with, or communicate with, any other child or another person that the parent has a duty to maintain;

   (aa)that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of the responsibility of the parent to maintain a resident child of the parent (see subsection (10));

   (b)that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:

   (i)because of high costs involved in enabling a parent to spend time with, or communicate with, the child; or

   (ia)     because of special needs of the child; or

   (ib)     because of high child care costs in relation to the child; or

   (ii)because the child is being cared for, educated or trained in the manner that was expected by his or her parents;

   (c)that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:

   (i)because of the income, earning capacity, property and financial resources of the child; or

   (ia)because of the income, property and financial resources of either parent; or

   (ib)     because of the earning capacity of either parent; or

   (ii)because of any payments, and any transfer or settlement of property, made or to be made (whether under this Act, the Family Law Act 1975 or otherwise) by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child.

1. The wife set out the suggested grounds for a departure order as follows in her affidavit of 19 May 2020:

   (a)Mr Kane currently pays no child support and is able to report a NIL personal income to [child support agency] whilst continuing to earn funds through other avenues;

   (b)I believe the current child support assessment does not accurately reflect Mr Kane's true earning capacity, for reasons deposed to in further detail above;

   (c)The level of support I seek properly reflects the income earning disparity between Mr Kane and me and is an amount which Mr Kane previously has agreed to pay and shown he has capacity to pay.  Mr Kane has always earned an income which significantly exceeds mine;

   (d)I cannot afford to meet X's expenses based on my income and the assessed rate of child support.  I wish to remain living in the Suburb G house and have depleted my resources in order to meet our weekly expenses and X's costs of living;

   (e)Given Mr Kane's delays in facilitating payments to date, I wish to avoid future conflict and extraneous correspondence between our lawyers every time an expense falls due and payable;

   (f)I also wish to avoid continual applications to the [child support agency], the Agency's delays in dealing with those and the uncertainties surrounding the Agency's ability to enforce payments; and

   (g)The child support dispute between Mr Kane and I will most likely have to be dealt with by the Administrative Appeals Tribunal which will cause further delays in me receiving any financial support for X.

2. I accept the submission of senior counsel for the husband, to the effect that the wife's grounds for a departure order really amount to a wish to avoid the inconvenience of dealing with the Child Support Agency.  The reality is that the wife merely seeks to avoid having to embark upon the administrative pathway for variation of a Child Support Assessment, as mandated by the relevant legislation.  Parliament has seen fit to establish a mechanism for assessment and variation of child support liabilities.  Parents simply do not have the option to depart at will from the procedure created by statute.  I will not accede to the application for a child support departure order.

Lump sum payment of $300,000

1. Senior counsel for the wife submitted that she seeks a payment of $300,000 "to enable her properly to take part in the litigation", such that the parties are placed on "a level playing field".  It was submitted that the husband "has access to huge financial resources" and, further, that he could call in the loan of $237,000 payable by his ex-wife in relation to the Suburb Y property.

2. As noted above, the wife entered into a contract with a litigation funder in April 2020.  The wife deposed "I wish to avoid paying continual interest and monthly fees to HH Company".  She deposed to a concern that she "may have to sell ... the investment property at Suburb V to fund my expenses".  Accordingly, the wife's own evidence pointed to two means by which she might fund her litigation.

3. The wife did not identify a source for payment of a lump sum of $300,000.  She relied only upon the submission that the husband "has access to huge financial resources" and that substantial sums of money have been deposited into his accounts at various times in the past.

4. The loan contract between the husband and his ex-wife recited that she hopes to redevelop the Suburb Y property so as to create a duplex.  Inter alia, the agreement provided that:

   6.The borrower's intention is to repay the lender $237,000 if and when she is able to and, in any event, no later than the sale of the second duplex…

   I do not accept the submission on behalf of the wife that the husband is able to call in this loan, so as to fund a partial property settlement payment to the wife.

5. As was submitted by senior counsel for the husband, there was a real issue as to whether a lump sum payment of $300,000 would be capable of being "clawed back" in an overall financial resolution between the parties. There are substantial disputes as to the duration of the de facto relationship and the respective contributions of the parties. Another difficulty is that the value of the net pool of assets is unknown at this stage of the proceedings. On the available evidence, I find it difficult to make an assessment as to the wife's probable entitlements pursuant to section 79 of the Act.

6. For these reasons I do not accede to the wife's application that the husband pay to her a sum of $300,000 by way of interim property settlement.

The costs of the section 90RD declaration

1. The declaration of 20 April 2020 did not extend to the duration of the de facto relationship, thus this issue remains at large.  Accordingly the wife did not achieve the whole of the relief which she sought, which included a declaration as to the length of the de facto relationship.

2. I am not inclined to make an order for costs in favour of the wife in relation to that discrete issue at this stage of the proceedings.  The conduct of each of the parties to date has demonstrated a strong propensity to resort to litigation, rather than enter into realistic attempts to resolve their disputes.  I have no reason to expect that either or both of the parties will adopt a different approach in the future, thus it seems realistic to me to anticipate that there will be further costs applications on each side before the conclusion of this litigation.

Valuation of the CC Business

1. It seems reasonable to assume that valuation of the practice would be an expensive exercise and that updates would be required before these proceedings obtain trial dates.  At this stage, I am not persuaded that the parties require a valuation of the husband's practice in order to undertake meaningful negotiations for settlement of their financial dispute.  Their past conduct, however, gives no basis for any confidence that either or both parties has any appetite to attempt to settle their dispute rather than litigate to the bitter end.  I will not make orders for a valuation of the husband's practice at this point.

Valuation of real estate

1. Ultimately, the parties agreed to orders for the valuation of all of their real estate assets.  The only issue which remained was whether the cost thereof should be borne equally or met by the husband in the first instance.

2. There is no doubt that there is currently a discrepancy in favour of the husband, in terms of the respective financial positions of the parties.  He has an income stream and the wife holds no gainful employment at this time.  Accordingly, I will order that the husband bear the valuations costs in the first instance but that he may revisit this issue at an appropriate time.

I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 9 September 2020.

Associate: 

Date:  9 September 2020