CA v RWS (No 2) - [2020] NSWSC 1538

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: CA v RWS (No 2) [2020] NSWSC 1538
Hearing dates: 21 July 2020 and on the papers
Date of orders: 24 November 2020
Decision date: 02 November 2020
Jurisdiction: Equity
Before: Robb J
Decision:
See pars [95], [128], [166] and [186]. See pars [191] and [192] regarding the short minutes that are to be provided.

Catchwords:
FAMILY LAW — Property — Procedure — where, after an initial interlocutory judgment, several issues remained outstanding — where the Court sought further information in order to make interim maintenance orders — where the parties raised additional issues not contemplated in the first judgment –– where the effects of the COVID-19 pandemic on the right to terminate a lease considered — other issues raising no points of principle

Legislation Cited:
Civil Procedure Act 2005 (NSW)
Family Law Act 1975 (Cth)
Residential Tenancies Act 2010 (NSW)
Residential Tenancies Amendment (COVID-19) Regulation 2020
Residential Tenancies Amendment (COVID-19) (No 2) Regulation 2020
Residential Tenancies Regulation 2019
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:
CA v RWS [2020] NSWSC 163
R v Ross-Jones; Ex parte Green (1984) 156 CLR 185; [1984] HCA 82

Category: Consequential orders
Parties: CA (plaintiff / applicant)
RWS(first defendant / first respondent)
NS(second defendant / second respondent)
PWS(third defendant)
Representation:
Counsel: BL Jones (plaintiff / applicant)
S O’Ryan QC (first defendant / first respondent)
A Lim (sol) (second defendant / second respondent)
P Dunn (sol) (third defendant)
Solicitors: Meyer Pigdon (plaintiff / applicant)
Broun Abrahams Burreket (first defendant / first respondent)
ALP Lawyers (second defendant / second respondent)
Dentons (third defendant)

File Number(s): 2019 / 339364

Judgment

On 3 March 2020, I delivered the initial reasons for judgment in these proceedings: CA v RWS [2020] NSWSC 163 (the principal judgment).
In these reasons, I will assume knowledge of the principal judgment, and will use the same terms as were used in that judgment including the relevant level of anonymisation. Parenthetical references to paragraph numbers are to the paragraphs of the principal judgment.

The principal judgment

The principal judgment dealt with an application by the wife for interim relief under the Family Law Act 1975 (Cth) against the husband, the husband's brother and the husband's father. The application for interim relief was heard in this Court, because the Family Court of Australia (the Family Court) had made an order transferring the proceedings to this Court, so that they could be heard with other proceedings pending in this Court that involved certain related issues: see [6], [7] and [28] to [37].
As recorded at [210], I declined to make the order sought by the wife giving her exclusive interim possession of the Vaucluse Property. The registered proprietors of that property are the husband and the brother. Particularly at [131] and [132], I noted that there was a dispute between the parties as to the value of the Vaucluse Property; the wife claiming that it was worth $6 million and the husband claiming it was worth $4.2 million. The evidence did not substantiate either valuation.
I noted that the wife had given evidence of the asking rents for a number of suitable properties, which could be the subject of an interim order that the husband pay her amounts sufficient to enable her to rent alternative accommodation. However, as I noted at [225], the wife had not expressly made an alternative claim that the husband pay the cost of rental accommodation for her.
I concluded at [231]:

As the issue of providing accommodation for the wife cannot sensibly be ignored, I will invite the parties to provide submissions on this issue to the Court before final orders are made on the application.

In response to the wife's application for an order for interim maintenance, I rejected, at [251], her claim for interim maintenance in the amount of $2,117 per week, but concluded that, in principle, it was appropriate for the Court to make an order for the payment by the husband to the wife of interim maintenance in the amount of $1,300 per week.
I then said at [252]:

As I have said, this calculation is unsatisfactory as it makes no allowance for the cost of accommodating the wife, and that cost really should be considered in relation to her total needs as well as the husband's financial resources.

The Court did not make any formal orders in conjunction with the primary judgment. At [259], I observed that it would be necessary for the parties to consider my judgment and provide further submissions to the Court concerning the way forward to permit the Court to make complete and effective interim orders.

Orders for further case management

On 15 April 2020, the Court by consent made case management orders in the following terms:

That in so far as it may be required, leave is granted to the parties to adduce further evidence.
Within 14 days of the date of these Orders, the Plaintiff file and serve:

(a) any further affidavits on which the Plaintiff seeks to rely; and

(b) a Minute of Order setting out the relief sought by the Plaintiff arising from the Judgment dated 3 March 2020.

Within a further 14 days the First and Second Defendants file and serve:

(a) any further affidavit(s) on which they seek to rely; and

(b) a Minute of Order setting out the relief sought by the First and Second Defendants arising from the Judgment dated 3 March 2020.

Within a further 7 days the Plaintiff file and serve written submissions.
Within a further 7 days the First and Second Defendants file and serve written submissions in reply.
That in the event this Honourable Court requires a further re-listing, that the matter be re-listed on a date convenient to the Court for the making of Orders.
1. When I invited the parties to provide further submissions concerning the way forward, I had in mind that it would be necessary for the wife to formalise her claim to be provided with alternative rented accommodation on an interim basis, and that it would be necessary for the husband and the wife to address the identification of suitable premises at an appropriate rent, having regard to my proposal that the husband should be ordered to pay interim maintenance, and the limitations on his personal financial resources. Parties’ affidavits and submissions
2. The wife filed further affidavits sworn by her on 29 April 2020 and 5 June 2020. She also filed an affidavit by the wife's father sworn on 20 April 2020. Supplementary submissions were delivered on 20 May 2020.
3. The husband filed affidavits sworn by himself on 13 May 2020 and by his father on 14 May 2020. The husband's supplementary submissions were delivered on 27 May 2020.
4. The husband's brother filed an affidavit of Ellena Vlahopoulos sworn 7 May 2020, and delivered supplementary submissions on 24 June 2020.
5. A further brief hearing occurred on 21 July 2020, at which the wife agreed to provide to the Court a supplementary court book containing all of the additional material relied upon by the parties.
6. The index to the supplementary court book contained a note that the husband objected to the wife’s reliance upon her 5 June 2020 affidavit, as it was not filed in accordance with the time requirements of the leave granted by the Court. The index also noted that the wife objected to the affidavit of Ellena Vlahopoulos sworn 7 May 2020 on the basis of relevance.

Parties’ proposed orders

The draft minutes of order sought by the wife, which was an annexure to her written submissions, sought orders in the following terms:

Maintenance

That pending further Order, the First Defendant pay to the Plaintiff, or as she may direct in writing:

(a) periodic spouse maintenance in the sum of $2,300 per week, the first payment to be made within 7 days of the date of this Order, and then weekly thereafter; and

(b) the sum of $14,000 within 7 days.

That on a date nominated by the Plaintiff, the First and Second Defendants grant access to the property situated and known as [the Vaucluse Property] for the purposes of permitting the Plaintiff (and her nominee(s)) to remove the following items:

(a) Paintings hanging in the Master bedroom;

(b) Charles Billich portraits;

(d) Decorative items/knick knacks in the Master bedroom;

(e) Tea sets;

(f) Master bed bedding and linen;

(g) Clothing for Manolo;

(h) Portraits of Mimi.

The Vaucluse Property

That Order 4 made 22 May 2019 by the Family Court of Australia, as amended by this Court on 26 November 2019, be discharged.
The Court NOTES that the balance of the restraints set out in the Orders made on 9 May and 22 May 2019 by the Family Court of Australia remain in place.
That within 14 days of the date of the making of these Orders, the Plaintiff, First Defendant and Second Defendant jointly appoint (and meet any cost associated with) a real estate agent to prepare a market rental appraisal for the Vaucluse property ("market rent").
In the absence of agreement as to the identity of the agent referred to in Order 5:

(a) the Plaintiff shall nominate 3 proposed real estate agents;

(b) the First Defendant shall select 1 within 7 days of the nominations being made by the Plaintiff.

That within 7 days of determination of the market rent for the Vaucluse property, the First Defendant and the Second Defendant offer the existing tenant of the Vaucluse Property to enter into a residential tenancy agreement at the market rent (such offer to remain open for 14 days) and thereafter:

(a) In the event the offer is accepted by the existing tenant within the 14 day period, the First Defendant and the Second Defendant forthwith do all acts necessary to enter into a residential tenancy agreement with the existing tenant at the market rent;

(b) In the event the offer is not accepted by the existing tenant within the 14 day period, then:

the First Defendant and the Second Defendant forthwith terminate the residential tenancy agreement presently in place and require the tenant to vacate the Vaucluse property upon completion of the notice period set out in the residential tenancy agreement; and
the First Defendant and the Second defendant forthwith do all acts and things and sign all documents necessary to secure an arms' length tenant for the Vaucluse property at (unless otherwise agreed in writing between the Plaintiff, the First Defendant and the Second Defendant or further Order of the Court) not less than 5% below the market rent attributed to the Vaucluse property for a period of at least 6 months.

That pending further Order, the rental income received in relation to the Vaucluse property be paid to reduce the indebtedness secured by the mortgage over the Vaucluse property.

The Ryde Property

That pending further Order and unless otherwise agreed between the parties in writing, the First Defendant provide no less than 28 days' written notice of any intention to sell [the Ryde Property] or to permit an increase in borrowings secured by that property.

Mediation

That pursuant to Section 26 of the Civil Procedure Act 2005 (NSW), the parties to these proceedings engage in private mediation with a mediator as agreed between the parties and failing agreement:

(a) The first Defendant shall nominate 3 proposed mediators;

(b) The Plaintiff shall select 1 within 7 days of the nominations being made by the First Defendant.

The cost of the mediator shall be shared equally between the participants to the mediation in the first instance.
The parties inform the Court of the outcome of any mediation.

Other

Liberty to restore the matter to the list on the giving of 7 days' written notice should any issue arise with respect to the implementation of these Orders.
That the First Defendant pay the costs of the Plaintiff as agreed or assessed.
1. The draft minutes of order sought by the husband that were annexed to his written submissions provided:
That Order 3.1 and 3.2 made on 9 May 2019 and Order 4 (a) made on 22 May 2019 in the Family Court of Australia be discharged.
That pending further order or as otherwise agreed between the Plaintiff and the First Defendant in writing the First Defendant provide not less than 28 days written notice of intention to sell the property situate and known as [the Ryde Property] or increase the borrowings secured against the title of the property for any purpose other than arises out of the existing mortgage.
That pending further order or as otherwise agreed between the Plaintiff and the First Defendant in writing the First Defendant provide no less than 28 days written notice of intention to sell the property situate and known as [the Vaucluse Property] or increase the borrowings secured against the title of the property for any purpose other than arises out of the existing mortgage
The parties to these proceedings engage in a private mediation with a mediator as agreed between the parties and failing agreement:

a. The first defendant will nominate 3 mediators;

b. The plaintiff will nominate one within 3 days of receiving the nomination of the first defendant.

c. That the mediation take place after the parties have filed their evidence in support of their substantive claim

That the plaintiff pay the cost of the first defendant as agreed or taxed.
1. The husband's brother included draft minutes of order in his written submissions that were in the following terms:
That the Orders sought by the wife on an interim basis as to her future occupation of [the Vaucluse Property] be dismissed;
That the wife's application for relief to regulate the terms of any tenancy of the Vaucluse property be dismissed;
That the interim relief that the wife sought to attend the Vaucluse property and to remove items from the property be refused, such that no order be made on this subject matter.
That pending further order, or otherwise as agreed between the plaintiff and the 1st Defendant and the 2nd Defendant in writing, the 2nd Defendant provide no less than 14 days written notice of any intention to sell his interest in [the Vaucluse Property] or increase any borrowing secured on the title of that property for any other purpose than arises out of the existing mortgage.
That the Plaintiff wife pay the costs of the second Defendant/2nd Respondent as agreed or taxed.
1. It is necessary to identify the material differences between the orders sought by the parties, in the light of the reasons given in the principal judgment.
2. As appears from the wife's submissions, her request that, by order 1(a), the husband be ordered to pay her periodic spouse maintenance in the sum of $2,300 per week reflects an acceptance of the observation, noted above, in [251]: "In principle, it is appropriate for the Court to make an order for the payment by the husband to the wife of interim maintenance of [$1,300 per week]”. The wife explains the additional $1,000 per week as being a reasonable and appropriate amount to cover rent, having regard to the fact that the average weekly rent on the properties referred to at [91] was $1192 per week, and also further evidence in the wife's 29 April 2020 affidavit, at par 18 and Annexure B, of other suitable properties with rent ranging from $975-$1,000 per week.
3. The wife seeks the additional lump sum maintenance to cover a rental bond of $4,000 and $10,000 for furniture.
4. Strikingly, the orders sought by the husband make no provision for any maintenance payments at all, notwithstanding the conclusions expressed in the principal judgment.
5. The purpose of order 2 proposed by the wife is that she be permitted to have access to the Vaucluse Property to enable her to recover her property that she has itemised in the proposed order. That is not an order sought by the wife in the interim orders set out at [21] of the principal judgment. The orders proposed by both the husband and the husband's brother do not make provision for the wife having access to the Vaucluse Property to recover her possessions.
6. Orders 3 and 4 respond to observations made at [23] to [27] and [255] about the need to vary or discharge certain orders made by the Family Court that restricted the husband’s ability to deal with his interests in the Vaucluse and Ryde properties, and in particular the brothers’ entitlement to permit the holding over of the Vaucluse Property to continue.
7. The parties disagree as to the changes that should be made to the Family Court orders. The orders proposed by both the husband and the husband's brother do not contain any mechanism for ensuring that the Vaucluse Property is leased at market rent. The husband's order 1 would discharge specified orders made by the Family Court on 9 May 2019 and 22 May 2019. The circumstances in which those orders were made are considered in the principal judgment at [23] to [27]. The order proposed by the husband is in different language to the wife's proposed order 3.
8. Orders 5 to 7, as proposed by the wife, would establish a mechanism to ensure that the Vaucluse Property would be leased for an amount approximating the market rent. Again, that is not an interim order originally sought by the wife. Such an order would have been inconsistent with the wife being given interim exclusive possession of the Vaucluse Property. The order sought by the wife is evidently a response to the observation made by the Court at [234].
9. The husband's brother's proposed order 2 would dismiss the wife's application for relief to regulate the terms of any tenancy of the Vaucluse Property.
10. Strangely, the orders proposed by the wife do not include the order suggested at [233] requiring the husband and his brother to give 14 days' notice of any intention to enter into a contract to sell the Vaucluse Property and restricting their right to further encumber the property.
11. Order 3 proposed by the husband and order 4 proposed by the brother would have that effect.
12. Orders 9 and 2 proposed by the wife and the husband respectively would implement the suggestion, contained at [242], requiring the giving of notice of an intention to sell the Ryde Property, and restricting the husband’s right to further encumber that property. Differences in the proposed wording will need to be considered.
13. The order for mediation proposed by the wife in order 10 would take immediate effect, while the corresponding order 4 proposed by the husband contains a stipulation that the mediation take place after the parties have filed their evidence.
14. By proposed order 14, the wife seeks her costs from the husband. Orders 5 as proposed by the husband and the husband's brother seek their costs from the wife.

Appropriate approach to resolve outstanding issues

As I have explained above, it is noted in the index to the supplementary court book that the Court has been provided with two affidavits to which other parties object. My Associate was advised of the fact of those objections in correspondence from the parties' solicitors. By letter dated 28 May 2020, the solicitors for the wife stated that they "look forward to receiving notification from the Court as to any re-listing of the matter" in the context of giving notice of objection to the defendants relying on a particular affidavit. As mentioned, the matter was relisted on 21 July 2020. The parties' legal representatives did not bring to my attention the fact that there were unresolved objections to parties relying upon affidavits.
Order 6 made on 15 April 2020, as set out above at [17], provided for the matter to be relisted "in the event that this Honourable Court requires a further re-listing". That left the issue within the discretion of the Court. I may have relisted the matter, if I had appreciated, before the point in time where it became possible for me to re-address this matter, that these disputes were outstanding.
However, given the length of time that has now passed since the delivery of the principal judgment, I propose to rule on the parties’ objections on the basis of their written submissions, and without arranging for any further oral hearing to take place. I am satisfied that the Court has sufficient material before it to properly carry out that exercise.

It may be that the wording of consent order 1 made on 15 April 2020, where it gave leave to the parties to adduce further evidence “in so far as it may be required” has been shown, in hindsight, to have been imprecise. The invitation made in the principal judgment was intended to be limited to the issues left open by the reasons. It did not invite further evidence in respect of issues that had been determined on the basis of the evidence that was provided by the parties.
However, it must be acknowledged that there was a real level of uncertainty about the ambit of the issues left open. Furthermore, the wife, by her proposed orders, seeks some relief that is outside the interim relief that she claimed at the beginning of the hearing, and which is set out at [21] of the principal judgment.
It will be necessary, in the circumstances, for the Court to make a judgment about the additional evidence that should now be received, or acted upon, on the basis that the reception of that evidence will not be procedurally unfair to any party.
A further issue is that some of the additional evidence concerns events that have occurred since the date of publication of the principal judgment, for example, some possible consequences of the COVID-19 pandemic. I will deal with this additional evidence, having regard to the circumstance that the Court has not yet made any interim orders, and interim orders may be revisited on proper application, if new developments warrant that approach.

Reception of additional evidence

The position is that formal objection has been made to the Court receiving two affidavits into evidence, and, without objecting to the evidence being tendered, the wife objects to the Court acting upon certain aspects of the evidence of the husband and his father which "seeks to in substance: (1) re-agitate the issue of his capacity to pay maintenance; (2) contest the conclusions of this Court concerning the appropriateness of the amount of maintenance claimed by the Wife before the hearing; and (3) contest the Court's conclusion that maintenance should be paid": wife's submissions at par 8. The wife also submits that the balance of the husband's affidavit: "concerns matters that are entirely irrelevant and scandalous as they do not relate to any issue before the Court or any order that the Husband seeks. They should not have been deposed to".
It will be appropriate to deal first with the parties' formal objections to the receipt by the Court of certain of the affidavits.
The husband has objected to the wife's 5 June 2020 affidavit, on the basis that it was served outside the time allowed by the case management orders made on 15 April 2020, in that the wife was given until 29 April 2020 to serve her affidavits. Furthermore, the wife's affidavit was effectively served in reply, although the orders did not make provision for evidence in reply.
The issue of whether a party, in the position of the wife, should be permitted to rely upon affidavit evidence served in these circumstances would normally depend upon questions of procedural fairness, and the consequences of the other parties not having a proper opportunity to respond.
The wife's 5 June 2020 affidavit in substance only added to her evidence a one page kerbside rental appraisal for the Vaucluse Property dated 3 June 2020. No reasoning was given by the agent for the appraisal made. I propose to receive the evidence, as, for reasons I will explain below, I have not considered that the new evidence is sufficiently credible to rely upon it, or reach a different conclusion on the relevant issue than I would have reached in any case. Consequently, there is no good practical reason for formally rejecting the evidence.
The second affidavit to which formal objection has been made is the affidavit of Ellena Vlahopoulos affirmed on 7 May 2020, which the husband's brother wishes to read. That affidavit gives evidence on behalf of the removalist which the husband's brother retained to remove and store the wife's possessions, after she had been evicted from the Vaucluse Property. The deponent explains how the removalist made a written catalogue of the property that was removed and took photographs of it. The deponent also explains that the wife caused her father to recover all of the boxes containing her possessions from the removalist.
The wife submits that the evidence is irrelevant. The brother responds that the evidence is relevant to order 2 sought by the wife. I understand the brother's argument to be that the Court should refuse to make order 2, because it would be futile to require the husband and the brother to give the wife access to the Vaucluse Property for the purpose of permitting her to remove various listed items, because all of her property has already been removed and ultimately redelivered to her.
As that is the use to which the brother seeks to put the evidence, I consider that the evidence is relevant, and on that basis the Court should receive it.
However, as will be explained further below, I have found the evidence to have been of no use in the resolution of the relevant issue for two reasons. First, the brother has not provided any cogent submission as to why the evidence excludes the possibility that some of the wife's possessions remain at the Vaucluse Property. Secondly, I have found the catalogue of the possessions substantially illegible, and of no assistance in determining whether the Court should make order 2 as sought by the wife. Furthermore, in the absence of any explanation, while I have spent time reviewing the many photographs, they have provided no assistance to the Court.
I will now address the more difficult question of how the Court should deal with the additional evidence led by the husband and his father; which the wife submits is outside the invitation made by the Court, or is otherwise irrelevant.
Where the wife has herself sought to introduce a new issue, the Court could not address that issue without giving the defendants an opportunity to tender evidence and make submissions in response to it. That applies to the wife's proposed order 2 concerning her being given access to the Vaucluse Property to recover her possessions. It also applies to orders 5 to 8, concerning the mechanism for ensuring that the Vaucluse Property is leased at market rent. Those orders represent an alternative to interim orders 1 and 2 sought at the hearing, but not identified as an alternative: see [21].
The question whether the Court should receive additional evidence on the issue of the amount of any interim spousal maintenance is more complex. The wife sought, by interim order 1, interim spousal maintenance in the form of occupation of the Vaucluse Property, as well as, by order 3, interim spousal maintenance, being a weekly payment of $2,117, the payment of rates and services for the Vaucluse Property and health-insurance for the wife. The wife did not seek, as an alternative order to order 1, an additional amount of interim monetary maintenance to meet her costs of leasing an appropriate apartment. Nonetheless, she tendered evidence as to appropriate rental costs. That has had the consequence that the Court must receive evidence from the husband on the issue of appropriate apartment accommodation for the wife, as well as the cost of rent for such an apartment.
Furthermore, as I noted at [230], due to the husband's personal financial resources being limited, it is at least necessary for the Court to have regard to those resources in determining what amount could reasonably be made available for both the accommodation and the maintenance of the wife. As I said: "It is unsound to consider one of these amounts while ignoring the other".
Consequently, the effect of the wife not having formally made an alternative claim for interim spousal maintenance to cover rent for an appropriate apartment for the wife is that the door for the husband to tender additional evidence going to his financial resources, at least as at the date of the hearing, was left open.
To the extent that the orders proposed by the husband do not provide for any interim spousal maintenance, I consider that those orders do impermissibly seek to re-agitate an issue determined in the principal judgment. To that extent, the husband's further submissions should not be received.
Further, in par 12 of the husband's father's 14 May 2020 affidavit he says: "I do not intend to provide [the husband] with more financial support than what I presently provide him with". At [254], I concluded: "I would accept that the evidence establishes that the husband's father will probably continue to meet some reasonable shortfall in the husband's capacity to fund his expenses". At the time I prepared the principal judgment, I considered that there was an irresolvable element of doubt about where the father would actually draw the line when it came to providing the assistance that he had provided to the husband for well over a decade. I consider that the Court should not act on additional evidence, not received at the hearing, that is calculated to persuade the Court of the precise amount of the financial assistance that the father will provide to the husband.
There are two aspects of the additional affidavit evidence sought to be relied upon by the husband that I have concluded the Court should not act upon.
The first is evidence given at pars 8 to 15 of the husband's 13 May 2020 affidavit, and at pars 7 and 8 of the husband's father's 14 May 2020 affidavit, concerning a petition titled "Justice for Mimi" that was established on Change.org. The person responsible for that petition has conducted an extremely distressing social media campaign against the husband, as well as the brother and his father. Mimi is the name of a now deceased dog that was formerly owned by the wife. The defendants believe that the wife is responsible for this social media campaign, although the wife denies this.
The statements published on social media are clearly defamatory and scandalous and should not be repeated in these reasons for judgment.
The Court could not, on the material before it, and without a proper hearing, express any findings concerning who was responsible for the social media campaign, even on a tentative basis. The wife's submission that the evidence goes to an issue that is not the subject of any relief sought to date in these proceedings is correct. The Court cannot, in the circumstances, allow the evidence to influence the present judgment.
Secondly, the evidence given by the husband in pars 48 to 52 of his latest affidavit seeks to re-agitate the issue of whether the wife gave proper disclosure of her financial affairs, and whether she has provided inadequate substantiation for her claim for living expenses. I do not propose to reconsider that issue in these reasons.

Interim spousal maintenance

The wife seeks, by proposed order 1, interim spousal maintenance of $2,300 per week, plus a lump sum of $14,000.
As mentioned, the husband continues to submit that the Court should not make any order for interim spousal maintenance in favour of the wife, notwithstanding the in-principle finding of the Court at [251] of the principal judgment.
As I have explained above, I consider the real issue to be whether the wife has established a case to be provided with additional interim monetary spousal maintenance to enable her to rent an appropriate apartment, and if so, the amount of the rent that is appropriate.
The degree of difficulty involved in making this determination is substantially increased by the fact that the husband's personal financial resources are limited, in the context of the husband in fact consistently having enjoyed, for a period of over a decade, a substantially greater income in fact, by reason of funds provided by his father, or by reason of the father paying the husband's debts.
As I explained at [158] to [163], a major plank in the wife's case is that, for the purposes of s 75(2)(b) of the Family Law Act, it will be proper to treat the husband's financial resources as being more than what is available to him from his own resources, because the Court is required to have regard to "a source of financial support which a party can reasonably expect which will be available to him or her to supply a financial need or deficiency", although the party need not "control the source of the financial support".
The application of this argument to the circumstances of the present case is a matter that will be determined at the final hearing, after the cross-examination of relevant witnesses, when the Court will be able to make final findings of fact.
At this interim stage of the proceedings, the Court is required to make judgments on the balance of convenience, having regard to the arguments that will be open to the parties at the final hearing.
That is an exercise that is relatively foreign to a judge of this Court, insofar as it involves making an interim order that, in practical effect, may assume that the husband will have access to a greater financial resource than that which appears to be available to him on the basis of his personal legal rights and entitlements.
The evidence at this stage of the proceedings establishes that, during the whole of the period of cohabitation between the wife and the husband, the couple enjoyed a lifestyle that has ultimately been shown to be substantially more lavish than the husband would, during any of the period, have been able to fund from his own personal resources. While the Vaucluse Property is in the joint names of the husband and his brother, the wife has given evidence that she was led to believe, including by the husband's father, that, in accordance with relevant custom, the father had purchased the Vaucluse Property as a gift for the wife and the husband. The legal reality is that, not only is the title to the Vaucluse Property encumbered by a registered mortgage, for which the father has been making payments; it is also subject to an equitable charge in favour of the husband's father that is accumulating compound interest. The husband's father has also substantially augmented the husband's income, by consistently making substantial additional payments to the husband.
The result has been that, when the strict legal position is considered, save for the husband's interest in the Ryde Property, the apparent wealth of the husband is an illusion, and his entitlement is dependent on the discretion of his father.
The question of what marital property orders and orders for spousal maintenance can be made by a Court exercising jurisdiction under the Family Law Act, in these circumstances, may be a fundamentally important one. It may be that cases such as the present will be rare, but it must be an important question of principle as to whether, within families, structures can be established whereby third parties to the marriage have such a degree of control over the income and property superficially enjoyed by the parties to the marriage, such that the discretionary decisions of the third party can put property and income beyond the reach of the Family Court.
The Court must contend with the fact that, though the husband's father has limited the support that he has provided to the husband to a substantial continuing amount, which falls short of enabling the husband to pay an appropriate amount of interim spousal maintenance to the wife, if the orders made on the final hearing are satisfactory to the husband, the father will be free to decide to reinstitute the former levels of support. This must be regarded as a real matter of concern, as the debt of the husband and his brother to the father under the deed of loan agreement is expressed to be repayable with interest on demand by the father on not less than six months' prior written notice, or upon the sale of the Vaucluse Property. On 11 March 2019, the husband's father served a notice of demand that required payment within six months: see [125]. That period expired on 11 September 2019. The defendants' evidence ignores that fact, and the Court must infer that the father has done nothing to enforce payment of the debt. Furthermore, as will be seen below, it appears that the husband’s father has permitted unpaid interest to continue to compound in a manner that has led to a significant portion of the interest now being irrecoverable from the value of the Vaucluse Property. That is not an indicium of a genuine loan.
In view of the absence of any employment qualifications or work experience in the wife, and the serious concerns about her psychological well-being, as considered at [76] to [82], the evidence at this interim stage of the proceedings justifies the conclusion that the wife is unlikely to have any significant, independent earning capacity for the foreseeable future.
I considered the evidence concerning the husband's earning capacity at [93] to [99] of the principal judgment. His evidence was that, during the period of cohabitation, he had a personal after-tax income of between $8,000 and $10,000 per month from his employment. The husband said that his personal expenses were estimated at $4,190 per week. As these expenses equate to more than $16,000 per month, it is immediately obvious that the husband's lifestyle must have been supplemented by payments made by his father.
Since July 2018, the husband has been studying part-time for a Masters of Property Development, and for that purpose he has reduced his working week from five days to three days on average per week: see [49]. This change took place at about the time when the relationship between the couple finally broke down on 5 July 2018: see [54]. The husband, by his conduct, did not recognise his potential responsibility to provide maintenance to the wife. Rather, he has offered her no maintenance, and has adjusted his circumstances in a way that makes it more difficult for him to perform his responsibilities.
In his 13 May 2020 affidavit, the husband gave evidence that, as a result of the COVID-19 pandemic, on 16 April 2020, his employer reduced his working hours and gross salary by 15%, on the basis that the changes would continue until 1 July 2020.
The letter from the husband's employer explaining the reduction appears to state that the husband's normal work week would be five days, which would be reduced in in a number of ways to reflect the 15% reduction in hours of work. It is not clear whether the husband had reverted to working a five-day week.
The Court has no evidence of what has happened since 1 July 2020. Nothing was said on this subject at the hearing on 21 July 2020.
A letter addressed to "to whom it may concern" dated 11 May 2020, unsigned, but apparently written by the payroll officer of the husband's employer, stated that his gross salary was $137,024.97, which had been reduced by 15% to $116,471.23, inclusive of superannuation. A fortnightly pay document apparently attached to the letter dated 13 May 2020 showed the husband's gross fortnightly salary as being $4,090.96, and the amount of PAYG tax withheld as $1,116. The husband's net fortnightly salary was therefore $2,974.96.
The husband estimated his weekly expenses as being $2,431, or $4,862 per fortnight. It appears that the husband's weekly expenses have reduced from $4,190 per week to $2,431 per week. That remains substantially more than the husband's weekly net salary of $1,487.48.
It should be added that the husband gave evidence that his savings are inadequate to fund a lump sum payment of $14,000 to the wife.
The Court has not been given a sufficient and satisfactory explanation for why the husband's net weekly salary is now $1487.48, while the evidence he gave at the hearing was that it was, during the period of cohabitation, between about $2,000 and $2,500 per week. An attempt to prove that the husband's net income is less that the amount of interim spousal maintenance claimed by the wife's may appear to be a good forensic strategy, but the strategy is not persuasive when the husband's evidence is that his expenses are $1,000 per week more than his income, and the husband is apparently able to meet those expenses.

The evidence given by the wife is also not entirely satisfactory.
The wife's evidence, in her 29 April 2020 affidavit, explained that she remained living in the granny flat in Point Piper from 12 until 19 December 2019, and then until 9 January 2020 she was in Indonesia. Her airfares and expenses were met from funds advanced by her father pursuant to the loan agreements. The wife said that, since 9 January 2020, she has not had a fixed address. She has relied on the generosity of family members and friends for accommodation. She has had short term stays with family in Maroubra and the occasional stay with friends. The wife said that, on approximately seven nights, she has stayed at a hotel because she was unable to secure accommodation for the evening. She is sometimes separated from Manolo, when she has had to stay somewhere that does not permit pets.
The wife's father said, in his 28 April 2020 affidavit, that, as at 2 April 2020, he had advanced not less than $676,018 to the wife pursuant to the two loan agreements. He gave a schedule of the total payments, supported by spreadsheets (without vouchers), which detail the dates and amounts of individual payments by subject matter. Some of the smaller amounts related to particular living requirements. $356,151.25 was for the payment of the wife's legal fees. But an amount of $239,013.78 was described as "bank transfers to [the wife]" and $47,100 was described as "Cash/miscellaneous".
While, on the one hand, I find it easy to accept that the wife's itinerant housing arrangements would be very disruptive and distressing, no explanation has been given as to why the wife could not have applied, and continued to apply in the future, some of the money borrowed from her father for the purpose of obtaining secure rental accommodation until the determination of these proceedings. The wife now only seeks an additional $1,000 per week as interim spousal maintenance to cover the rent of an apartment in or near Vaucluse, as well as the $14,000 lump sum.
I have not ignored the apparent fact that the $239,013.78 in bank transfers occurred over the period 31 July 2018 to 13 May 2019 (with a small payment of $1,400 on 28 October 2019). It appears that a substantial proportion of the amount borrowed by the wife from her father was expended for unexplained purposes in the first year after the wife and the husband separated. The $47,100 for cash and miscellaneous payments was paid between October 2018 and December 2019.
While it is not obvious how money could have been diverted from these various payments to provide a fund to pay rent for an apartment for the wife, I am satisfied that that should have been possible with a little prudence, foresight and planning.
It remains to be said that, in his 13 May 2020 affidavit, the husband gave evidence of a number of Realestate.com advertisements in Maroubra, Randwick and Kingsford of apartments for rent in the range $465 to $650 per week. The husband observed that those suburbs are closer to the wife's parent's home and her psychologist than Vaucluse, and they are substantially less expensive than apartments in Vaucluse. The husband also questioned the wife's need for two bedroom accommodation, given that Manolo is said to sleep on the wife's bed. The advertisements are, to my observation, for one bedroom apartments.
The Court must now face the question: what is to be done with all of this new evidence? It is all a whirl and virtually none of the figures add up in a sensible way.
The husband's aspiration that the Court would award the wife no interim spousal maintenance was, in my view, always a mirage. The difficulty that the Court has faced is the need to determine a fair and realistic amount, given that, in reality, the husband continues to have access to financial resources that are substantially greater than his apparent income. While the Court should not fix the amount of the interim spousal maintenance in an amount that is not realistic, equally the Court should not surrender to arrangements which might make the husband's obligation to provide a reasonable level of interim spousal maintenance to the wife discretionary, in accordance with the desires of the husband and his father.
Yet, the temptation of the Court to risk an order for interim spousal maintenance that may prove to be too high in fact must be tempered by the circumstance that the wife also had, and I would assume still has, access to borrowings from her father, just as has the husband.
Additionally, the effect of the COVID-19 pandemic on the husband's income that that has been explained above must be taken into consideration, even acknowledging that the Court does not know what has happened since 1 July 2020.
The judgment that I have made is that the Court should make an order for interim spousal maintenance in favour of the wife in the sum of $1,500 per week starting from a date seven days from the date of the order. In addition, the husband should pay a lump sum of $10,000.
It has not been realistic for the Court to order the additional $1,000 per week sought by the wife. The wife will have to reduce her aspiration to a one-bedroom apartment closer to where her parents have their Sydney residence. She will have to absorb part of the rent within the in-principle allowance of $13,000. Just as the husband has to rely upon borrowings from his father, so will the wife as to any balance.
So far as the husband is concerned, the unfortunate delay in the Court's ability to finally determine this interim claim has spared the husband from many weeks of interim spousal maintenance payments. Given what was said by the Court at [251] of the principal judgment, I assume that the husband has been making provision for the order that the Court will make.
In case it be thought that the Court’s order for interim maintenance in favour of the wife can only be met by the use of magic by the husband, the husband appears to have $500,000 equity in the Ryde Property: see [149]. If the husband decides to apply that equity in the satisfaction of the Court’s order, the wife may have to temper her aspiration for final orders providing her with both spousal maintenance and title to the Ryde Property: see final orders 11 and 14 set out at [8] of the principal judgment.

Access to Vaucluse Property for removal of wife's possessions

The next question is whether the Court should make order 2 proposed by the wife.
The wife explains the basis of this claim in pars 8 to 11 of her 29 April 2020 affidavit. The wife begins by referring to the single expert valuation report for the Vaucluse Property, and then says:

10. In the photographs annexed to the report, I am able to identify items that were contributed by me (such as furniture and furnishings). Items of significant importance that were held at the Vaucluse property have not been made available to me, such as a wedding gift from my mother (being an heirloom tea set) and artworks gifted to me by children I have sponsored. I find it very distressing to see somebody else living in the Vaucluse property and using the furniture, furnishings and belongings that belong to me. I wish to retain items of furniture and furnishings held within the Vaucluse property on a final basis.

Then, in par 11, the wife listed the items of property that are set out in proposed order 2.
The husband responded, in par 46 of his 13 May 2020 affidavit, by saying that he has no personal knowledge of the facts deposed to by the wife, and has not been inside the property for a long time. He said that he has asked his brother, who manages the Vaucluse Property, to try to arrange to retrieve the items that the wife has asked for, and if they are there to deliver them to her.
The husband's brother responded by serving the affidavit of Ellena Vlahopoulos that has been referred to above.
The brother said, at par 15 of his submissions, that he has directed the managing agents to inspect the property in an attempt to locate and retrieve any of the specified items. If the agents are successful, the brother will notify the wife's solicitors of the fact, and will enable the wife to collect her items, away from the precincts of the Vaucluse Property. The brother objects to the wife, or anyone on her behalf, having leave to enter the Vaucluse Property, as that may disrupt the current tenant’s occupation and enjoyment of the property.
The Court does not know what, if anything, has happened as a result of the offers made by the husband and the brother.
As I understand the wife's affidavit, she identified from photographs annexed to the single expert valuation report certain furniture and furnishings to which the wife claims to be entitled. It is not clear from the affidavit whether all of the items listed in proposed order 2 were seen in photographs attached to the valuation report. It is possible that some of the items were simply articles that she has not recovered by means of the boxes of her possessions retrieved from the removalist.
Although the brother relied upon the affidavit of Ms Vlahopoulos, he did not provide any submission as to why the information in the affidavit showed that the possessions that the wife seeks could not still be at the Vaucluse Property. After some time perusing the catalogue and the photographs, it became clear to me that the exercise in which I was engaged was a farce. Ms Vlahopoulos' evidence, in the absence of any explanation, provides no guidance on the issue.
I am satisfied, however, that the Court should lend its aid to the wife in trying to recover any of her possessions of which she may have been deprived by the brutal circumstances in which she was evicted from the Vaucluse Property without proper notice. The circumstances of the eviction, on the evidence before the Court, had a seriously deleterious effect on the wife's well-being and psychological health.
I do not feel able to make any particular order in conjunction with these reasons. If the wife wishes to have the Court's further assistance, I invite her legal representatives to arrange with my Associate for a telephone hearing to take place at the convenience of the Court and the parties. I will then get to the bottom of the matter, and make any order that is appropriate.

Discharge of orders made by the Family Court

I explained the relief sought by the husband in his notice of motion filed on 20 November 2019, concerning the discharge of certain orders made by the Family Court, as varied by Kunc J of this Court, at [23] to [27]. At [255], I observed that it followed from the reasons given that the Court should make an appropriate order that permits the husband and the brother to lease the Vaucluse Property until the final determination of these proceedings.
As recorded at [23], the husband sought an order: "That Order 3.2 made on May 2019 and Order 4(a) made on 22 May 2019 in the Family Court of Australia be discharged."
Order 3 now proposed by the wife would only have the effect of discharging order 4 made on 22 May 2019 by the Family Court, as amended by this Court on 26 November 2019. This order does not refer to order 3.2.
On the other hand, order 1 sought by the husband would discharge order 3.1 made by the Family Court, in addition to the orders referred to in the husband's notice of motion.
The parties' submissions do not assist the Court with explanations for these departures from the order sought in the husband's notice of motion.
The relevant orders made by the Family Court on 9 May 2019, made by consent of the parties, were as follows:

That pending Hearing of the adjourned Interim Applications, and without prejudice to and without admission by either of Husband and the Wife:

3.1. The husband be and hereby is restrained from causing or permitting any dealing with his interest in and to each of [the Ryde Property and the Vaucluse Property] including but not limited to further encumbering or increasing the amount owed on any facilities secured thereon;

3.2. The husband be and hereby is restrained from causing or permitting occupation, leasing any other tenancy of [the Vaucluse Property].

Order 4 made by the Family Court on 22 May 2019 was in the following terms:

Order 3.2 of Orders made 9 May 2019 is amended to read:

a. The husband be and hereby is restrained from causing or permitting occupation of the [Vaucluse Property], save for the purpose of leasing the premises for a period of no more than six months from the end of May 2019.

As recorded at [25] of the principal judgment, on 26 November 2019, Kunc J made an order, by consent, varying order 4 to permit the tenant to remain in occupation on a month-to-month basis pending the hearing and determination of the wife's application for interim relief.
As order 4, as varied by Kunc J, only covered the period up to the determination of the wife's application for interim relief, at the least, a new order should be made extending the effect of the order made by Kunc J during the period of holding over by the current tenant, or to the final determination of these proceedings, whichever is the earlier.
If, as proposed by the wife's order 3, all the Court did was to discharge order 4 made on 22 May 2019 as varied, the effect would be to reinstate orders 3.1 and 3.2 made on 9 May 2019, without qualification. The effect would be to restrain the husband from continuing with any lease of the Vaucluse Property. That would prevent the continuation of the lease to the current tenant, whether at the current rent, or at any other supposed market rent. It would prevent the lease of the property to any other tenant, contrary to the outcome sought by the wife in her proposed orders 5 to 7.
The orders sought by the husband in his notice of motion would have the effect of completely discharging order 3.2 made on 9 May 2019. There would then be no restraint at all on the husband leasing the Vaucluse Property. The exception from that restraint created by order 4 made on 22 May 2019 would also effectively be discharged.
So far as existing restraints on the leasing of the Vaucluse Property are concerned, the only order that should be made is an order, in appropriate terms, extending the right of the husband, and accordingly the brother, to lease the Vaucluse Property to the current tenant, on a holding over basis, during the period of the holding over, or until the determination of these proceedings. If the current tenant terminates the lease, the husband and his brother should be entitled to re-lease the Vaucluse Property at a proper market rent, for a period that should not last much beyond the expected time of determination of these proceedings.
As the relevant 9 May 2019 orders were made by consent, they should not be varied or discharged by the Court, except by the consent of the affected parties, or by reason of the need to make some additional order to deal with circumstances not dealt with by the existing orders. One such circumstance is that the order, as varied by Kunc J, will only apply until the determination of the interim application.
The last issue to deal with is the husband's application for an order that order 3.1 made on 9 May 2019 be discharged. If that order were made, it would discharge the restraint on the husband further encumbering or increasing the amount owed on any facilities secured on the Vaucluse Road property.
As the husband did not seek this order in his notice of motion, the Court could not make it without there being a formal application by the husband, and the wife having an opportunity to respond to the application properly. As order 3.1 was made by consent, there may not be grounds for the Court to discharge or vary the order.
It may be observed that order 3.1 has the effect of preventing the husband from allowing the amount of the loan made by the NAB, secured on the Vaucluse Property, to increase above the amount that was owed by the husband and the brother as at 9 May 2019.
Furthermore, order 3.1 may be inconsistent with the effect of the deed of loan agreement in favour of the husband's father, which has the effect that the amount of the debt charged on the Vaucluse Property will increase indefinitely, as a result of the compounding of interest, until repaid by the brothers to the father.
It may be that the parties did not have the charge granted to the father in mind when order 3.1 was made by the Family Court by consent.
Be all this as it may, the Court, in the present application, should not make an order discharging order 3.1 made by the Family Court.

Leasing of the Vaucluse Property at market rent

The question is whether the Court should make orders 3 to 7 of the orders proposed by the wife. Those orders provide a mechanism designed to ensure that, for an initial period of six months, the Vaucluse Property is leased at a rent no less than 95% of market rent, as determined by an appraisal.
As that order was not included in the interim orders that were formally sought by the wife at the hearing, the defendants are entitled to some licence in responding to the observation made by the Court at [234] of the principal judgment.
It is significant that the orders sought are not, in substance, an order for interim maintenance under the Family Law Act, or any other proprietary order that may be made under that Act. It was not necessary for the Court to require the wife to provide the usual undertaking as to damages in respect of any interim maintenance order that it might make. However, it will be relevant to the determination of the balance of convenience in relation to what is in effect a property preservation order that the wife has not offered to give the usual undertaking as to damages, and her financial position would appear not to permit her to give such an undertaking that was valuable.
Although the wife did not clearly specify the legal basis of her claim for what is in effect an interim mandatory injunction, the Court would need to consider whether the usual undertaking as to damages had been offered, whether the basis of the claim was an asset preservation order under Uniform Civil Procedure Rules 2005 (NSW) r 25.3(1), or an injunction under s 114(1)(e) of the Family Law Act. As to the last-mentioned proposition, see R v Ross-Jones; Ex parte Green (1984) 156 CLR 185; [1984] HCA 82, per Wilson and Dawson JJ at 213, 214. Consequently, fairness to the husband and the husband's brother requires that the Court take particular care in assessing the possibility that they may suffer damage as a result of any order made by the Court.
The wife gave evidence, at par 8 of her 29 April 2020 affidavit, that the single expert valuation report for the Vaucluse Property was provided on 17 April 2020, and that the expert valuer was of the opinion that the property has a market value of $4,600,000. I assume that the parties agreed to retain a single expert valuer to give a report for the purposes of the final hearing of these proceedings.
If that evidence is material, the Court should now have regard to it in determining the interim orders that should be made. The Court referred, at [129], to the fact that the parties had not provided evidence as to the market value of the Vaucluse Property. The Court described that circumstance as "surprising", as half of the difference between the market value of the property and the total of the amounts owed to the NAB and the husband's father will be property of the husband that the Court would be able to take into account for the purpose of making final orders in favour of the wife.
The single expert valuation of the Vaucluse Property at $4,600,000 is closer to the estimate made by the husband of $4,200,000 than the estimate of $6,000,000 given by the wife.
The significance of this circumstance is that the mortgage balance on the Vaucluse Property is said to be $1,727,738, the amount claimed to be owing to the husband's father is $1,800,000, and the husband claimed in his evidence that, as at 31 March 2019, the interest accrued under the deed of loan to the husband's father was $2,177,615. The total is $5,655,353.

Although the wife challenges the genuineness of the debt claimed to be owed to the husband's father, which is an issue that will be required to be determined at the final hearing, the Court must decide this interim application on the basis that there is a real probability that the Court will find that the deed of loan is not a sham. If that is the outcome, then the amount that the husband and his brother owe, which is secured on the Vaucluse Property, is about $1,000,000 more than the market value of the property.
If that is so, then the husband will have no equity in the Vaucluse Property that will be available for the purpose of a marital property order in favour of the wife.
This possibility is not determinative of the present issue. However, an effect of the valuation provided by the single expert valuer is to decrease the probability that the wife has any real contingent interest in the Vaucluse Property. As the probability that the wife has a real contingent interest in the Vaucluse Property reduces, so does her interest in obtaining orders calculated to preserve the value of that property. The consequence is that the justification for the Court imposing on the husband and his brother, over their objection, any increase in the letting risk in respect of the Vaucluse Property will diminish.
I recorded, at [142] of the principal judgment, that the rent payable under the current lease of the Vaucluse Property is about $900 per week. My observation that there was a good case to require the brothers to lease the Vaucluse Property at a reasonable market rent was prompted by the circumstance, recorded at [143], that the wife had tendered rental appraisals of $2,000 per week in one case and $3,000-$4,000 for the property, fully furnished, in another case.
The husband referred, in par 42.3 of his 13 May 2020 affidavit, to a rental appraisal of the Vaucluse Property prepared by LJ Hooker Double Bay on 15 May 2019 in the range of $1,200 to $1,500 per week. The agent who provided the appraisal stated that the range given was "a conservative rental range".
At par 42.6, the husband referred to the "current economic climate", and attached a further rental appraisal prepared by LJ Hooker Double Bay on 7 May 2020 of $900 per week. This appraisal was given by a different agent within the firm. The agent did not provide any explanation for the fall in the assessment, and there is no indication that she was aware of the earlier assessment given by the firm.
The wife annexed to her 5 June 2020 affidavit a kerbside rental appraisal for the Vaucluse Property, as at 3 June 2020, by an agent at Ray White TRG of $1,700 to $1,850 per week. As recorded above, the defendants have objected to the Court receiving this evidence.
The husband said in his affidavit that he is opposed to orders being made that may interfere with or disrupt the current tenant's occupation of the property, as securing a new tenant may be difficult, noting the fact that the husband has given evidence that, as at 13 May 2020, there were 441 properties available for rent in Vaucluse.
In his submissions, the husband's brother supported the husband's resistance to the orders sought by the wife, principally on the basis of the consequences of the current COVID-19 pandemic. The husband's brother referred to the effect of s 85(2) of the Residential Tenancies Act 2010 (NSW) (the Act), as being that the notice period to terminate the current lease is not less than 90 days.
In short, the brother submits that there is a real risk that, if the current lease is terminated because the tenant will not pay a substantially increased rent, there will be a hiatus in rent receipts, and the brothers will not be able to apply the current rent receipt of $46,928 per annum in repayment of the debt owed to the NAB.
The brother's submissions also drew attention to the effect of clauses 34 and 35 of the Residential Tenancies Amendment (COVID-19) Regulation 2020 (NSW). The reference in the husband’s brother’s submissions does not appear to be correct. Relevantly, Schedule 1 of the Residential Tenancies Amendment (COVID-19) Regulation 2020 inserted Part 6A into the Residential Tenancies Regulation 2019 (the Regulation).
Section 228A of the Act, in its present terms, defines “moratorium period” as meaning the period ending at the end of 26 March 2021. Section 228B of the Act specifies when a household is impacted by the COVID-19 pandemic. Put simply, a household is so impacted if one or more rent-paying members of the household have lost income, in defined ways, with the result that the weekly household income has been reduced by at least 25%.
Clause 41C of the Regulation, within Part 6A, contained a prohibition on landlords terminating tenancy agreements with impacted tenants in specified circumstances during the moratorium period.
Perhaps the most obscure provision in the Regulation was clause 41F, which was part of Part 6A, and provided: “For the purposes of section 230(b) of the Act, Part 13 of the Act is repealed on 15 October 2020”. Section 230 of the Act provides: “This Part is repealed – (a) on 26 September 2020, or (b) on a later day, no later than 26 March 2021, prescribed [in] the regulations”.
Clause 41F of the Regulation would have had the effect that the COVID-19 moratorium arrangements, in relation to impacted tenants, would have come to an end on 15 October 2020.
However, on 25 September 2020, the New South Wales government published the Residential Tenancies Amendment (COVID-19) (No 2) Regulation 2020. This second amending regulation replaced Part 6A of the Regulation with a new Part 6A that had slightly different wording to the original version.
One of the changes was to introduce a definition of “relevant period” in clause 41A, as meaning “the period ending on 26 March 2021”. “Impacted tenant” is given the meaning in s 228A of the Act.
By clause 41E, in the new version of Part 6A of the Regulation, for the purposes of s 230 of the Act, Part 13 of the Act will be repealed on 26 March 2021. Consequently, the present COVID-19 residential tenancy moratorium, in respect of impacted tenants, will continue until 26 March 2021.
Returning to the application of clause 41C of the Regulation, as newly amended, again put simply, it relevantly prevents a landlord applying to the Tribunal for a termination order under s 83 of the Act, in relation to a residential tenancy agreement, on the grounds specified in s 88 of the Act, if the tenant is an impacted tenant. Section 88 concerns termination notices for non-payment of rent. It is not necessary to enter into a consideration of the somewhat complex effect of clause 41C(2) of the Regulation, which permits a landlord to give a termination notice, or apply to the Tribunal for a termination order, if the landlord has participated, in good faith, in a formal rent negotiation process with the impacted tenant, and it is fair and reasonable in the circumstances of the case for the landlord to give the termination notice or apply for the termination order.
The Court has no evidence as to whether or not the current tenants of the Vaucluse Property are impacted tenants.
It is possible, in any event, that clause 41C of the Regulation would permit a good faith renegotiation of the rent for the Vaucluse Property. It must be accepted that there would always be some uncertainty as to whether the giving of a termination notice would be found to be fair and reasonable in the circumstances.
Perhaps unsurprisingly, a Flowchart issued by NSW Fair Trading, to assist interested parties to determine whether a residential tenancy can be terminated during the moratorium period, suggests that good faith negotiations should involve an attempt by the landlord and tenant to agree less onerous rental terms than in the lease, in order to provide some relief to the tenant [1] .
1.
The application of these statutory provisions is complex, and was not given any detailed consideration in the parties’ submissions.
It at least appears to be true, that if the Court made the orders now sought by the wife, and it turned out that the current tenants of the Vaucluse Property were impacted tenants, then the husband and his brother would be thrown headlong into the effect of the residential tenancy moratorium provisions. There is no way, on the evidence, that the Court can gauge that risk.
A sober consideration of the statutory provisions, and the information published by NSW Fair Trading, justifies at least a broad acceptance that the residential tenancy market has been substantially disrupted by the COVID-19 pandemic. Even though it is not possible for the Court to draw any definite conclusions about the possible consequences, if the Court makes the orders sought by the wife, the consideration leads to the conclusion that caution is required.
In any event, the prospect that the making of the orders sought by the wife would lead to the husband and his brother receiving more rent in a meaningful way, and without significant risk, is contingent upon a number of events. The first is that the chosen rental agent to give the appraisal of market rent required by the orders derives a market rent that is sufficiently greater than the present rent to justify the risks and costs involved in the exercise. The range of the appraisals that has been given to date is between $900 and $1,850 per week. As all of the evidence consists only of one page appraisals, the Court has no basis for judging the likely result of the exercise.
If the orders sought by the plaintiff were made, the parties would have to appoint the joint agent to provide the rental appraisal within 14 days. The agent would then have a reasonable time to provide the appraisal. The current tenants would have to be offered a continuation of the lease at the higher rent within seven days, and would then have 14 days to decide whether or not to accept the higher rent. If the current tenants declined to do so, then the husband and the brother would have a further 14 day period to terminate the current lease. While the orders would require the husband and his brother to require the current tenants to vacate the Vaucluse Property “upon completion of the notice period set out in the residential tenancy agreement”, I have noted above the effect of s 85(2) of the Act, which requires that the notice period be no less than 90 days. Clause 41C(2) of the Regulation appears to reinforce the minimum 90 days’ notice period. Section 119 of the Act would prohibit the husband and his brother seeking an order for possession of the Vaucluse Property against the current tenants in a court, if they did not vacate the property at the end of the notice period. The husband and his brother would have to seek appropriate relief from the Tribunal.
I will not attempt the arithmetic involved in an estimation of the time it would take for the husband and his brother to obtain possession of the Vaucluse Property, if the current tenants were not prepared to pay any higher rent, and they resisted the termination of the lease. The period is at least 139 days, counting only the times for individual steps for which specific periods can be specified.
These considerations do not allow for the possibility that it turns out that the current tenants are impacted tenants. They do not allow for the possibility that, after the husband and his brother regain possession of the Vaucluse Property, there is a substantial hiatus in the receipt of rent. They do not allow for the possibility that the amount of any increased rent that is achieved will not have justified the risks and costs involved in the exercise.
When added to the consideration that the husband and his brother will not be protected by any undertaking as to damages to the Court, these matters cause me to conclude that it would not be warranted for the Court to make orders 3 to 7 as proposed by the wife.
I add, however, that the practical effect of the course advocated by the husband and his brother is that the Vaucluse Property will continue to be leased at the bottom of the range of market rentals that has been suggested by the various market rental appraisals. The husband and his brother desire to take a conservative course. They have made no attempt to maximise the rental return from the Vaucluse Property. Consequently, they have not attempted to use this asset to increase the funds available to the husband to be able to pay interim spousal maintenance to the wife. That is to the husband’s account. The Court should resist depriving the wife of interim spousal maintenance, in circumstances where the husband chooses not to try to maximise his income from the Vaucluse Property.

Order requiring payment of rent received against mortgage

Order 8 proposed by the father would require all of the rental income received in relation to the Vaucluse Property to be paid in reduction of the indebtedness secured by the mortgage over that property.
The husband and the brother do not consent to that order being made.
Upon consideration, I do not think it is appropriate for the Court to order both the husband and the brother to pay all of the rent received for that purpose. It is doubtful that the Court should, in these matrimonial proceedings, make an order to that effect against the brother.
In any event, the order would require 100% of the net rent received to be applied against the mortgage to the NAB.
The husband said, in par 42.4 and 42.5 of his 13 May 2020 affidavit, that the rental income is already being deposited directly into the mortgage account to defray the monthly mortgage instalments, and that he has provided the wife with the mortgage statements and rental income statements to verify this. The husband offered to continue to keep the wife informed, as well as if there are any changes to the present arrangements in relation to the tenancy.
Upon reflection, I consider that the order sought by the wife is too restrictive. It does not allow for any expenses in relation to the Vaucluse Property that may have to be paid before the net rent is ascertained. It also does not allow for the possible requirement for tax to be paid on the rental income.
If the wife prefers it, it would be reasonable for the Court to make an order that required the husband to continue to furnish to the wife the information referred to in the husband's affidavit, together with leave being given to the wife to make an application for an appropriate order if circumstances change.
Order 9 proposed by the wife would have the effect that, pending further order, and unless otherwise agreed between the parties in writing, the husband would be required to provide no less than 28 days written notice of any intention to sell the Ryde Property, or to permit an increase in borrowings secured by that property.
The wife has not sought an equivalent order in relation to the Vaucluse Property. I consider that this omission was most properly unintended.
My belief that the omission was unintended on the part of the wife is supported by the fact that both the husband and the brother, in their proposed orders 3 and 4 respectively, include orders that would restrain the husband and his brother from selling, or further encumbering, the Vaucluse Property, without giving 28 days written notice to the wife.
The wording of the order sought by the wife in relation to the Ryde Property is different to the corresponding wording of the orders sought by the husband and the brother, in relation to giving notice of increases in borrowings.
The order proposed by the wife relevantly says: “… notice of any intention to…permit any increase in borrowings secured by that property". The equivalent part of the orders sought by the husband and the brother are: “… notice of intention to… increase the borrowing secured against the title of the property for any purpose other than arises out of the existing mortgage".
At [235] of the principal judgment I said:

There is also a good case for an order restraining the brothers from borrowing any additional amount from the NAB on security over the Vaucluse Property, at least without giving the wife 14 days prior notice.

That was in the context that I had said that there was a good case for restraining the brothers from selling the Vaucluse Property without giving the wife notice, but I had expressed a difficulty in making an order obliging the husband to make any payments to the NAB, other than those that could be funded by the rent.
I therefore contemplated that notice of intention to further encumber the Vaucluse Property would be required, but only in respect of positive additional borrowings from the NAB.
In relation to the Ryde Property I said at [242]:

There is a good case for the Court to order the husband to give 14 days' notice of any intention to sell the Ryde Property, or to permit any increase in the encumbrance over the Ryde Property for any purpose other than arises out of the existing mortgage, by which I mean shortfalls in the husband's ability to make mortgage payments from the current rent, plus any need to fund any orders made by the Court on the wife's present application.

In respect of the Ryde Property, I suggested that notice should be given of any intention on the husband's part to permit an increase in the encumbrance, but that was limited to purposes other than those which arose out of the existing mortgage. I explained that qualification in a way that permitted the amount of the mortgage to increase, if the husband's ability to pay down that mortgage was impeded by the limit of the amount of rent received "plus any need to fund any orders made by the Court on the wife's present application".
While it is desirable that the amounts by which the Vaucluse and the Ryde Properties are encumbered should not increase without notice to the wife, pending the final determination of these proceedings, the limitations on the financial resources available to the husband and the brother impose limits upon what the Court can reasonably expect. Given the circumstances in which the Court proposes to order that the husband provide interim spousal maintenance to the wife, the Court must acknowledge the possibility that the making of those payments may necessitate some increase in the amount by which the Ryde Property is encumbered.
The Court should make appropriately worded orders requiring notice of intention to sell and intention to increase the amount of any encumbrances in relation to both properties, but those restrictions should be formulated as contemplated in the principal judgment.

Order for mediation

The passage of time has obviated the need to resolve a dispute that existed between the parties as to the timing of a mediation, as, on 24 September 2020, the Court made an order pursuant to s 26 of the Civil Procedure Act 2005 (NSW), that the parties were referred to private mediation to be held together with the related proceedings, described at [28] to [36] of the principal judgment, with such mediation to occur by 7 December 2020.

Costs of the interim application

As noted above, each side seeks an order that the other side pay her or their costs of the interim application.
I will reserve costs of the interim application, until after the final hearing. Each side has enjoyed some measure of success. I would not deal with the issue of costs without proper guidance concerning the principles that the Family Court would have applied in the circumstances.
If I am not the judge appointed to preside at the final hearing, I would make no objection to the trial judge referring the costs of the interim application back to me, after the final judgment has been delivered. That would be a matter for the trial judge's discretion.

Short minutes of order

Counsel for the parties should confer to settle short minutes of order, prepared in draft by counsel for the wife, to give effect to these reasons for judgment. This should be treated as a drafting exercise, and not as an opportunity for the parties to engage in further disputation.
My Associate should be advised if there is any reason why this exercise cannot be completed within 10 days. If there is any real need to do so, the parties may arrange with my Associate for the matter to be relisted for a telephone hearing.

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Endnote

Amendments

24 February 2021 - Republished as anonymised version

Decision last updated: 24 February 2021

Medium Neutral Citation:	CA v RWS (No 2) [2020] NSWSC 1538
Hearing dates:	21 July 2020 and on the papers
Date of orders:	24 November 2020
Decision date:	02 November 2020
Jurisdiction:	Equity
Before:	Robb J
Decision:	See pars [95], [128], [166] and [186]. See pars [191] and [192] regarding the short minutes that are to be provided.
Catchwords:	FAMILY LAW — Property — Procedure — where, after an initial interlocutory judgment, several issues remained outstanding — where the Court sought further information in order to make interim maintenance orders — where the parties raised additional issues not contemplated in the first judgment –– where the effects of the COVID-19 pandemic on the right to terminate a lease considered — other issues raising no points of principle
Legislation Cited:	Civil Procedure Act 2005 (NSW) Family Law Act 1975 (Cth) Residential Tenancies Act 2010 (NSW) Residential Tenancies Amendment (COVID-19) Regulation 2020 Residential Tenancies Amendment (COVID-19) (No 2) Regulation 2020 Residential Tenancies Regulation 2019 Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	CA v RWS [2020] NSWSC 163 R v Ross-Jones; Ex parte Green (1984) 156 CLR 185; [1984] HCA 82
Category:	Consequential orders
Parties:	CA (plaintiff / applicant) RWS(first defendant / first respondent) NS(second defendant / second respondent) PWS(third defendant)
Representation:	Counsel: BL Jones (plaintiff / applicant) S O’Ryan QC (first defendant / first respondent) A Lim (sol) (second defendant / second respondent) P Dunn (sol) (third defendant) Solicitors: Meyer Pigdon (plaintiff / applicant) Broun Abrahams Burreket (first defendant / first respondent) ALP Lawyers (second defendant / second respondent) Dentons (third defendant)
File Number(s):	2019 / 339364