CARMEL-FEVIA & FEVIA

[2011] FamCA 865

FAMILY COURT OF AUSTRALIA

CARMEL-FEVIA & FEVIA [2011] FamCA 865

FAMILY LAW – EVIDENCE – Evidence of future litigation

Family Law Act 1975 (Cth)

APPLICANT: Ms Carmel-Fevia

RESPONDENT: Mr Fevia

FILE NUMBER: MLC 4389 of 2008

DATE DELIVERED: 8 November 2011

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 4 November 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Bartfeld QC with Ms Vohra

SOLICITOR FOR THE APPLICANT: Taussig Cherrie Fildes

COUNSEL FOR THE RESPONDENT: Mr Kirkham QC with Mr Thompson

SOLICITOR FOR THE RESPONDENT: Saxbys Lawyers

IT IS NOTED that publication of this judgment by this Court under the pseudonym Carmel-Fevia & Fevia has been approved by the Chief Justice pursuant to s 121(9)(g) of the Act.

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 4389 of 2008

Ms Carmel-Fevia

Applicant

And

Mr Fevia

Respondent

REASONS FOR JUDGMENT

1. This is a ruling about evidence.

2. The dispute between the parties concerns the division of property, spousal maintenance and child support.  The jurisdiction to deal with the first two matters arose because after a contested hearing in 2009, Murphy J set aside a financial agreement and declared it was not binding.  A brief reading of the judgment indicates a close examination was undertaken of technical matters.

3. Two matters require a ruling before this case begins.  They are:

   (a)the wife wants to obtain discovery of and then give evidence about, the potential outcome of litigation brought by the husband against his former lawyers that might arise out of these proceedings because of the orders of Murphy J referred to; and

   (b)the wife wants to lead evidence about her aspirations for the two children of the marriage.  She asserts she will have significant expenditure in the future to match the largesse of the husband and that as such, her aspirations are said to form part of her case for settlement.

4. The husband and wife agreed that the pool for division between them was about $430 million.

5. The future litigation issue concerned a potential action the husband may bring against his former lawyers because of the orders he now has to meet.  That obligation is said to arise as a result of the setting aside of the agreement which he otherwise considered binding and determinative of the financial entitlements of the wife.

6. The wife’s position was that if the husband was totally indemnified as a result of any such litigation then his financial position would not alter.  The payment to the wife together with his legal fees could and most likely would, be covered by the insurers.  Thus, the wife submitted, his true financial position was much greater than the $430 million agreed pool.

7. The husband objected to the evidence about future litigation.

8. His position was that although the insurers of his former lawyers had denied any liability to him, he had not yet begun any such proceedings.  Even if he was ultimately successful, he did not presently know the extent of the insurance cover of his former lawyers nor their financial capacity to meet any order not covered by the insurer.

9. Another significant factor turned on the fact that in the proceedings before Murphy J, the wife had pleaded an additional basis to set aside the agreement alleging it was executed just before the marriage under duress.  The insurers were aware of that.  If the husband sued the former solicitors, the duress argument might become relevant.  It was submitted that the solicitors might argue the setting aside of the agreement had nothing to do with their actions.

10. In the absence of a commenced action, the timing let alone any outcome was unknown.

11. Mr Kirkham QC on behalf of the husband submitted that the parties had agreed the divisible pool was about $430 million but not $430 million plus any damages that the husband might recover.

12. Mr Bartfeld QC on behalf of the wife submitted that whilst the outcome of the husband’s action against the former solicitors was unknown, there was always the possibility that he might settle the action with his former solicitors.

13. It was submitted that all of the matters put by the wife justified the admission of the evidence and it was then a matter of weight to be given to it.

14. Mr Kirkham submitted this was all speculative. I agree.

15. Whilst the potential action cannot proceed without the proceedings before me being finalised so as to quantify any possible damages, in my view, the issue is too speculative.

16. The admission of the proposed evidence should be considered and determined on the principles set out in the Evidence Act 1995 (Cth). S.55 provides that evidence is relevant if, once accepted, it could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding. If the evidence is not relevant, it is not admissible.

17. For the reasons set out in paragraphs 8 and 9 above, I consider it is not so much a matter of weight but rather whether the evidence is speculative because no-one will know the potential for an outcome until after these proceedings are concluded.  The evidence is therefore inadmissible.

18. The second matter concerned what was loosely described as evidence about the wife’s aspirations.  It was common ground that not only is the husband very wealthy and the marriage was relatively short, whatever order is made, the husband can meet it.  Therein lies the dilemma.

19. The husband and wife have two children from their union.  The husband also has children from previous relationships.  The wife desires to lead evidence of lavish spending on children as well as the husband’s own affluent lifestyle.  Her concern is to be able to provide for the two children such benefits as motor cars, university expenses, houses and expensive weddings a long way in the future.

20. Underlying those was a concern of the husband that the wife was submitting that he would not make provision for these two children if a property order was made.  He denied any such intention.

21. The wife’s submission was that she was entitled to have her aspirations and to have them taken into account.

22. A significant focus in this case will be on the extent and reach of S 75(2) of the Family Law Act1975 (Cth) (“the Act”) because it is common ground between the parties that the wife did not make any direct or indirect financial contributions during the relationship. Her case rests on her contribution as a homemaker and parent.

23. Mr Kirkham submitted that the evidence should not be admitted because it was speculative.  He submitted there was no authority in which allowance had been made for aspirations although it had been mentioned in the United Kingdom.

24. S 79 of the Act provides that any order for the division of property shall only be made if it is just and equitable. That assessment requires a consideration of the matters set out in s 79(4). That particular provision does no more than require the Court to take into account a number of stipulated matters. Each is loaded with subjectivity. One particular matter that the Court is required to contemplate is the matters in s 75(2) so far as they are relevant. In that provision, the Court is directed to take into account a number of matters one of which is the standard of living that in all the circumstances is reasonable.

25. Having regard to the matters set out above, it is conceivable that some argument might be put by the wife about her future standard of living and her aspirations may have some relevance to that issue.  I reject therefore that such evidence is merely speculative.

26. The evidence is admissible and its weight must be determined as part of the assessment.

I certify that the preceding Twenty Six
(26) paragraphs are a true copy of the reasons
for judgment of the Honourable Justice Cronin
delivered on 8 November 2011

Associate: ……………………………………………………………

Date:  …………………………………………………………………