Cokes & Cokes
[2023] FedCFamC1F 809
•8 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Cokes & Cokes [2023] FedCFamC1F 809
File number(s): NCC 4476 of 2020 Judgment of: SMITH J Date of judgment: 8 September 2023 Catchwords: FAMILY LAW – Property – Interim Hearing – Oral Decision - Where the husband files multiple applications five weeks before the Final Hearing – Issues foreshadowed by husband over 12 months earlier but not pursued at that time - Inevitability of adjournment if certain applications allowed – Overarching purpose - Where the husband seeks leave to instruct an unidentified expert witness to provide an opinion on altering property boundaries to provide a different factual basis on which to value the parties real properties – Application dismissed – Where the husband seeks to have the single expert real property valuer provide an updated opinion assuming altered boundaries – No factual basis - Application dismissed – Where the husband seeks an expert valuation of the wife’s chattels – Application dismissed – Where the husband seeks litigation funding – Where wife controls 95% of net assets and husband’s legal practitioners will not appear at Trial without funds in trust - Where granting the application for “litigation funding” pursuant to either of ss 79 and 117 of the Family Law Act 1975 (Cth) is just and equitable and will not prejudice the wife – Application granted pursuant to s 79 – Costs reserved. Legislation: Evidence Act 1995 (Cth) s 75
Family Law Act 1975 (Cth) ss 72, 79, 117
Federal Circuit and Family Court of Australia Act 2021 (Cth) Part 6 Division 4, ss 67, 68, 69
Cases cited: Aon Risk Services v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466; [2009] FamCAFC 166
Division: Division 1 First Instance Number of paragraphs: 64 Date of hearing: 7 September 2023 Place: Newcastle by Microsoft Teams Counsel for the Applicant: Mr Levick Solicitor for the Applicant: Boyd Olsen Lawyers Counsel for the Respondent: Mr Kelly Solicitor for the Respondent: Braye Cragg Solicitors ORDERS
NCC 4476 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS COKES
Applicant
AND: MR COKES
Respondent
ORDER MADE BY:
SMITH J
DATE OF ORDER:
8 SEPTEMBER 2023
THE COURT ORDERS THAT:
1.Pursuant to Rule 1.31 of the Federal Circuit and Family Court of Australia Rules (2021), the requirement for strict compliance be dispensed with.
2.That the time for compliance with Rule 2.31 of the rules be dispensed with.
3.That this application be listed with short service.
4.The wife shall pay to the husband's solicitor's trust account the sum of $50,000 (fifty thousand dollars) by 4pm on Tuesday 12 September 2023 by way of interim property distribution.
5.Subject to further order of the Court, the husband's solicitors are restrained by injunction from applying those funds to any existing debts owed by the husband and are only to apply them to the payment of counsel's fees, their own fees, and disbursements incurred from today in relation to the preparation for and attendance at any further mediation or the final hearing commencing 25 September 2023.
6.Dismiss the balance of the Respondent Father’s two Applications in a Proceeding filed on 21 August 2023 and 28 August 2023 respectively.
7.The parties’ costs of and incidental to each of the Applications in a Proceeding filed 21 August 2023 and 28 August 2023 be reserved.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cokes & Cokes has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX-TEMPORE REASONS FOR JUDGMENT
Smith J:
These are oral reasons for decision in an interim application in property adjustment proceedings pursuant to the Family Law Act 1975 (Cth) (‘the Act’) heard yesterday, on an urgent basis, and in which the decision must be delivered promptly due to an upcoming final hearing in 11 business days. For these reasons, I provide short oral reasons, as it is unlikely a written judgment could be delivered in an acceptable time.
The parties to these proceedings were in a long relationship. They married in 1981 and separated on 27 or 28 June 2019 after approximately 38 years. They then continued to live under the same roof until the husband moved out of the former matrimonial home at 1 C Street, Suburb B. The parties were divorced in late 2020. The parties own a second property at 2 C Street. The properties are contiguous, as can be seen in the diagram A to the husband’s affidavit at page 31 of MFI1 in his first court book. These two real properties constitute the majority of the matrimonial pool. They are both owned solely by the wife.
These property adjustment proceedings commenced on 3 December 2020, close on three years ago. The two properties at 2 C and 1 C Street, which I will refer to jointly as “the properties”, were first valued by a single expert valuer Mr D in mid-2021.
On 2 May 2022, orders were made concerning an updating valuation of the properties by Mr D. I will return to this. In early 2023, having received the updated valuations, the parties were given a timetable for filing evidence in preparation for trial. On 26 May 2023, almost three months ago, the matter was listed for final hearing for a week commencing on Monday, 25 September 2023, in person before me at City L. That is the final hearing which is in 10 or 11 business days’ time.
It is in this context, having obtained a final hearing date in May of this year, that, on 21 August 2023, just five weeks out from the final hearing, the husband has filed an Application in a Proceeding, which I am now determining.
He seeks a number of orders. Firstly, he seeks “litigation funding”, whether under the rubric of section 117 of the Act, a section 79 interim property division, or as section 72 lump sum spousal maintenance, for $75,000.
Secondly, the husband also seeks an extension of time to ask further questions of the single expert, Mr D, who has valued the two properties on two occasions. He has asked additional questions of the existing valuations but now seeks to ask further questions, and I will come back to that. He also seeks leave to now retain a further, unidentified, expert to provide expert opinion evidence on the ability to change the boundaries of the two properties, which I will refer to as a zoning or planning type issue. The question of whether or not the boundaries can be changed would need to be known in order to determine whether or not there is a factual basis upon which to ask Mr D the additional questions the husband wants to ask. In effect, the husband says that if the boundaries can be changed, which he says he believes they can be, then the two properties can be valued on an entirely different basis as their highest and best use, which the husband also says he believes will make them substantially more valuable and so substantially increase the matrimonial pool.
Thirdly, the husband seeks leave to have a valuer value the chattels in the wife’s possession, and, as I understand it, in particular some paintings which the husband says are or could be very valuable.
As a matter of context, while this Court has been attempting to reduce waiting times for final hearings and, in the last two years in particular has managed to achieve a significant result in that regard so that the four and five-year delays which I dealt with when I was first a judge of the Federal Circuit Court, now the Federal Circuit and Family Court of Australia (Division 2), are now no longer as common, there are still delays. There remains a large volume of work to be done in Division 1 in the City L Registry where, whilst there are two judges, the other judge sits primarily as an appeal judge, so there is, in effect, most of the time only me sitting as the sole trial judge, and that means that even the most serious Magellan cases involving allegations of sexual abuse and serious physical abuse, of which, unfortunately I have more than 10 now, have parties and children still facing delays due to the sheer volume of work the Court faces.
I also note that, given the nature of the application and that it is listed at short notice and given that the husband’s counsel was not available due to other commitments yesterday, the Court agreed to, and did, sit commencing at 4.15 pm yesterday to ensure that these applications were heard in circumstances where the husband was legally represented by solicitors and counsel, as was the wife.
I note the material that was placed before me yesterday, including the Husband’s Further Amended Response filed 5 September 2023; the Application in a Proceeding filed 21 August 2023; the husband’s Affidavit filed 21 August 2023, noting that he purported to incorporate his entire trial affidavit and I did not allow that and that was not pressed; the Affidavit of the husband’s solicitor, Mr Quinn, filed 21 August 2023 on whether or not he would continue without funds; and the husband’s Financial statement filed 21 August 2023.
I note that there was initially a listing problem. The matter was given a listing date in October, due to an error, rather than a listing in September, and there had been an Application in a Proceeding filed on 28 August 2023 with a supporting Affidavit to deal with the fact of that error, but it was an error and that was corrected. The matter has now been heard, so that fell away. I also note that I have the husband’s Case Outline and Written Submissions, which were MFI2.
The wife relied upon her Response to an Application in a Proceeding filed 5 September 2023; her Affidavit of 5 September 2023; her Financial Statement of 5 September 2023; the Affidavit of Mr D filed on 29 August 2023, although, of course, the two reports as I have indicated were from much earlier dates; and, of course, the wife’s Case Outline, MFI5. That is the material that was before me. Most of the background facts relevant to this Application are not contentious.
It is convenient to deal first with the application for leave to retain a further expert, which I will refer to as a planning or zoning expert, although it was not put in those terms and the field was not specified, but an expert to determine whether or not there is a basis for the husband’s claim that the relevant boundaries could be moved, so that the properties could or might be more valuable, which is the basis on which the husband then seeks to ask further questions of Mr D about the value of the properties.
As set out in his Affidavit of 29 August 2023, Mr D was appointed as a single expert by the parties, who have been legally represented throughout, to value the two properties. He prepared two reports dated 31 May 2021, being a report with regards to each property. That was in response to joint instructions. Pursuant to further joint instructions given by the parties on about 1 December 2022, Mr D provided two further valuations dated 8 February 2023. In those, he again valued the properties separately and, based upon the current situation, indicated that separate valuations were the best use and highest value for the properties.
On 21 February 2023, the husband’s solicitors sent a letter, which is annexure G to Mr D's Affidavit, which raised a variety of matters, but the matters raised were not around the moving of boundaries and the possible revaluation. On 8 March 2023, annexure H to his affidavit, Mr D provided responses. Mr D says he has received no other communication apart from being required for cross-examination.
The issue of the boundaries is set out in the husband’s Affidavit starting at about paragraph 27. He says the valuations:
...did not include a valuation of the properties being owned by the same person and being subdivided into three or four lots instead of the two current lots.
He says that this goal of subdivision and redevelopment, or subdivision, at least, was one that he and the wife jointly had in mind when the properties were purchased, or indeed, I should say when number 11 was purchased, which was purchased second.
He also says at 37 of his Affidavit that “I say that the way [Mr D] has valued the properties grossly undervalues them”.
And at 38 the husband goes on to state “I want [Mr D] to value the properties according to two separate options”. The husband then sets those options out.
On the husband’s own evidence, he has known for about 16 years that his view is that the value of the properties is to be ascertained in the way he now submits. The husband says he believes that there is a basis for valuation on the basis of subdivision into three or four lots. The husband has included a diagram annexed to his Affidavit in his Court Book, as Annexure ‘A’ diagram A and diagram B, which includes him setting out on pictures the different ways in which he says the properties could be subdivided.
He says, based on hearsay conversations he has had with unidentified council officers and others whose identities and qualifications are unknown, that he believes this is possible, and this is why he says he now wants to retain an expert to provide the factual basis for his contention that the change of boundary lines could occur. That evidence would be necessary to provide the factual basis for Mr D to revalue the properties on the basis that there is a better or higher use available.
Now, the proposed expert planner, who, in the normal course, would be a single expert, is not identified. No questions have been prepared for the expert in draft by the husband. The wife and the Court do not have the opportunity to consider whether the expert the husband thinks is an appropriate expert is indeed an appropriate single expert. That is where we start.
Now, it is important to go back to my orders of 6 May 2022 and the notes that were made following what occurred at the mention. The notations made by me on this occasion recorded the following:
A. This is a property only matter.
B. The actually (sic) amount in dispute is approximately $400,000.
C. The parties are to approach the single expert for an updated valuation on a property by property approach.
D. The parties are considering asking the valuer to undertake a valuation on a joint development basis and will need to liaise with the valuer as to whether they are willing to this (sic). If the valuer is not willing to do this and any issue arises as to whether such a valuation is required, the parties may either approach the Court for the making of consent orders for the appointment of a further valuer or if they cannot agree as to the appropriate course of action are to jointly advise the Court forthwith and to seek a further mention date.
Now, as it can be seen and as was accepted during oral argument yesterday, the husband raised this very question in May of 2022. He had in mind, as he has said, that there might be a joint development basis for the valuation, and he was told, and I noted, that if the parties could not agree on an appropriate course, they were to jointly advise the Court and seek a further mention date.
It was after this that the husband agreed to settle a further letter of instruction to Mr D, which did not proceed on that basis. It was after this that the updating valuations, which the husband now says are wrong, were obtained. And I again note he has been legally represented throughout and he has been aware of the issue throughout. It was after these events that the matter was listed for a final hearing.
Now, when all of these issues were raised with counsel for the husband, the only explanation the husband was able to offer for why, if, as he says, the approach that has been taken grossly undervalues the assets which constitute the overwhelming majority of the matrimonial pool, was that he filed his further amended response last Monday, 5 September 2023 and that in that response he makes a proposal which sees him consenting to a 75/25 split in favour of the wife conditional on him receiving the two properties. He says otherwise he seeks a 60/40 split. His proposal for a 75/25 split is premised on his belief that the properties are in fact worth a lot more than the value ascribed by Mr D.
In effect, he now says this needs to be addressed because the wife may not accept that proposal, or the Court may not accept that proposal. I had difficulty following that submission.
In my view saying that since the wife might not accept his proposal the major assets how need to be properly valued on the basis identified and raised by him with the Court and the wife more than a year ago, before the current updating valuations were done and the matter listed for final hearing, is not a proper basis for seeking to raise the matter this late.
The husband also said he was waiting to see what would happen at mediation in July 2023. While it is appropriate sometimes to wait for mediation rather than expending costs, when you already have a final hearing date prior to the mediation, you cannot proceed upon the basis that the matter might settle and not prepare the case. In any event, even if by July of 2023 the application had been filed, it would or might have been possible to deal with these matters within a period of less than two months of the final hearing. Waiting for a mediation is not a proper basis for not addressing what the husband says is a fundamental undervaluation of the entire matrimonial property pool until weeks before the allocated final hearing.
Now, two possibilities seem to arise to me.
First, there may be no basis for the husband’s inquiry and no need for the new expert, ie if the properties’ boundaries cannot be redrawn as he proposes. If there is no proper basis because re-boundarying is not possible or permissible, or unlikely to be allowed, then there is no prejudice to the husband in rejecting in his application to retain a planning expert and in not allowing him to ask Mr D to undertake further valuations.
Second, there is a possibility that there might be a basis for the husband’s enquiry or view that the boundaries could be redrawn. The difficulty, of course, is we do not know because the husband has called no evidence about the matter other than some hearsay evidence which, although not objected to and so accepted by me, I would otherwise give little weight as it does not even meet the test under section 75 of Evidence Act 1995 (Cth), which allows hearsay in interim applications in certain circumstances, because it is not clear who at the council had said something, whether it is some person behind the counter or the head of planning. In any event, assuming for present purposes that there is or might be a basis for the husband’s view as to the redrawing of boundaries, the wife says she would be prejudiced by the inevitable adjournment that the process proposed by the husband would necessarily involve.
I accept and find that allowing the husband’s application would necessarily lead to an adjournment. I think it is fanciful to suggest that the appointment of an as yet unidentified person as a single expert, and then the preparation of jointly settled questions in respect of which the husband does not yet even have a draft, the retaining of the expert, and the obtaining of a report from that expert, and the process which would allow each of the parties to ask questions of the expert, and then further once that was done, and assuming neither party sought to call an adversarial expert to challenge the single expert on the boundary question, going through the process of providing that report on boundaries to Mr D, and then, Mr D undertaking a completely new valuation on a completely different basis, and then the parties being able to ask Mr D questions, and to have reasonable notice of what that opinion was, could possibly occur before the trial, which is 10 or so business days away.
So, in effect, to allow the husband to go down this course is either futile and should not be allowed or, if it is not futile, the question is whether the husband should be allowed to effectively adjourn the final hearing in the proceedings.
I deal with the matter on the latter basis that there may be a basis for redrawing the boundaries.
I refer to the “overarching purpose” in the Federal Circuit and Family Court of Australia Act 2021 (Cth). I note that the orders of 6 May 2022 at paragraphs 4 and 5 specifically note that this matter is being heard pursuant to the overarching purpose in Part 6 of that Act). I refer to Aon Risk Services v Australian National University (2009) 239 CLR 175, which should be well known to the parties.
It is the application of these overarching principles across the Court which have led to the fact that we no longer, or only very rarely now, have cases that are five years old or older, and that the delays and times are still coming down. In considering whether, in effect, an adjournment should be allowed, because that must be the inevitable consequence of what the husband proposes, I consider not only the wife’s right to a hearing after almost three years of waiting, but also place considerable weight upon the 50 or so other matters in my docket awaiting final hearing dates, and also the large numbers of matters that are currently in the registrars’ dockets awaiting for space to become available in my docket so they move towards a final hearing.
If this application is granted the matter will inevitably be adjourned and will need to be given a further one-week hearing date when that is next available, which I think could not happen before the second half of next year, given that I am listed out for the first half already. There is no case in my docket that could be called on in the next two weeks so the time would be lost for a hearing. Additionally, if this matter is given a date in August or September or October 2024, that will necessarily mean that another case will then be delayed, and there will be a cascading effect as other cases are delayed.
If, as the husband says, there has been a fundamental undervaluation which he has been aware of since, at the very latest, 6 May 2022, then he should have done what was required to address that issue when told to and invited to and directed to during the mention on 6 May 2022. The husband cannot be permitted to proceed with a further valuation process, given that this will necessarily lead to the adjournment of a final hearing less than five weeks out from the final hearing when the wife does not consent, and it will impact on other cases awaiting a final hearing.
Accordingly, I reject the applications in respect of the retainer of a further unknown expert on planning or boundaries, and in respect of asking written questions of Mr D going to a revaluation on a different basis in the absence of any evidence that the redrawing of boundaries is permissible or possible as such questioning would have no foundation.
Similar delay issues arise in relation to valuation of the wife’s chattels. The husband says there are valuable paintings, but he does not suggest these paintings have been acquired recently. As I understand it, he accepts that he has known about these paintings for years, indeed, for at least the entirety of these proceedings.
No explanation at all is provided for why this was not addressed prior to now, except perhaps that, again, he was waiting to see whether he could settle the matter, but trials cannot be adjourned because no one wants to do anything until a few weeks out if it cannot settle. The husband says he has a valuer who could do the job in the week, but he has not provided the name or CV of the valuer to the wife or the Court. The usual process is that a single expert should be appointed. The wife would be entitled to consider the CV. The wife would be entitled to propose her own single expert or experts. Questions would need to be drafted and settled and a report obtained, and questions might need to be asked.
Again, we are now 10 days out from hearing, and the husband is not entitled to wait until five weeks prior to a final hearing to file an application addressing what he now says is a fundamental valuation question in respect of what he says is valuable personal property which he says is not amenable to the usual broad approach that is taken in respect of tables and chairs and beds etcetera.
Now, if the husband had brought this application three months ago, and there had been time for the process, and there was some basis for thinking this artwork had value, then he would have had a reasonable basis for his application, but it is too late to do before the trial and the trial will not be adjourned for this late application.
I have, I note, however, advised the parties yesterday, represented by counsel, of my practice, which I understand is a common one in the situation of unvalued contested chattels, of allocating them by reference to the asserted value. So, as I indicated, if the husband says one of the paintings is worth $10,000 and the wife said it is worth $1000 - and I understand the wife’s counsel said it would not be even worth that - it is accepted by the wife that I will allocate that painting to the husband on the basis that it is, for the purposes of property adjustment, worth perhaps $2000, because in that case, the wife is getting $2000 allocated to something the husband will retain which she says is worth significantly less than $1000, and the husband is getting for only $2000 something he says is worth $10,000. Obviously, we will see what happens at trial, but I have indicated that that is what I consider the appropriate approach, and I take into account that the wife’s counsel said that he accepted that approach on her behalf.
I now come to the “litigation funding”. The husband and the wife were in a 38-year marriage. They are in their mid-60s. The husband’s proposed balance sheet is set out at page 45 of his Court Book and it was largely agreed to by the wife for present purposes. It is as follows:
Respondent’s Proposed Balance Sheet Ownership Description Applicant’s estimated value Respondent’s estimated value 1 W 1 C Street, Suburb B, NSW (Folio: …) $1,500,000 2 W 2 C Street, Suburb B, NSW (Folio: …) $800,000 3 W CBA Account …88 $0 4 W CBA Account …31 $115,590 5 W F Bank account …10 $0 6 W H Limited @12.07.23 ($5.77 x … shares) $5,666 7 W Motor Vehicle 1 $15,000 8 W Household Contents $4,000 9 W Jewellery $6,000 10 W Household Contents $5,000 11 H Motor Vehicle 2 16,000 12 H Motor Vehicle 3 (unregistered) 1,500 13 H Wine $0 14 H Household contents $5,000 15 H J Bank account …98 $0 16 H G Limited Shares @12.07.23 ($4.22 x … shares) $844 Total $2,469,600
ADDBACKS Ownership Description Applicant’s estimated value Respondent’s estimated value 17 H Money Paid by Husband on behalf of Ms E $111,860 Total $111,860
LIABILITIES Ownership Description Applicant’s estimated value Respondent’s estimated value 18 W F Bank - …85 - 2 C Street $206,780 19 W F Bank - …78 -1 C Street $67,229 20 W CBA Mastercard …14 at separation $0 21 W CBA Mastercard …10 at separation $0 22 W CBA Mastercard …51 at separation $0 23 H J Bank Credit Card …68 at separation $15,116 24 H ANZ Credit Card …06 at separation $10,645 25 H Loan to Ms K $31,000 Total $330,770 SUPERANNUATION Member Name of Fund Type of Interest Wife’s estimated value Husband’s estimated value 26 H Superannuation Fund 1 at separation Accumulation $193,131 27 W Superannuation Fund 2 at separation Accumulation $19,651 28 W Superannuation Fund 3 at separation Accumulation $116,487 29 Superannuation Fund 4 at separation Accumulation $71,637 Total $400,906
NET TOTAL ASSETS (including Superannuation) $2,651,596
The properties are as valued by the expert at 1 and 2. The funds at item 4, which was the wife’s cash at bank, have reduced down recently from $115,000 to $74,000. The husband seemed to suggest there is some impropriety with that. I do not see why I would infer that. She may be preparing for the hearing.
The wife’s solicitors hold $6000 in trust. The wife’s superannuation is also apparently about $60,000 more than on the balance sheet, as she continues to work, as does the husband, and I note their financial statements. I note the husband, because of his circumstances, although he now works again, has been able to draw down his superannuation.
It can be seen that almost all of the assets of the parties are owned by the wife, with the husband having two older cars, some household contents and some superannuation. The husband’s assets are worth about $100,000, or less than five per cent of the net assets. Put another way, the wife controls about 95 per cent of the net assets.
The wife’s call-over sheet said she was seeking a 75/25 split in her favour. Her current pleading says it should be 92 per cent to 8 per cent in her favour. That is an interesting submission after a 38-year marriage. There may be a good foundation for it. I am not in a position, given the material before me on this application, to ascertain how reasonable or otherwise that submission is. But nevertheless, even on the wife’s pleaded case, the husband is entitled to about $200,000 of the net assets, and that is about $100,000 on top of his current assets, including his superannuation.
I raised with the parties the leading decision of Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 (‘Strahan’). There was no contest about this being one statement of the appropriate principles.
It is not an appropriate case for section 72 spouse maintenance given the husband works and the paucity of evidence relevant to that application.
However, in my view, applying the principles as articulated in Strahan there is a good basis for an order pursuant to section 117. Whilst the wife submitted the matrimonial funds are not “substantial”, referring to Strahan, the wife nevertheless controls all but a tiny percentage of the total property pool which does exist. On that basis the playing field could hardly be less equal. She has $2.3 million in real property subject to only $275,000 in mortgages, so more than $2 million net equity plus her substantial superannuation.
I note that this matter is also an appropriate case for an interim property distribution, noting that even the wife’s concession of 8% to the husband is close to $200,000 and so sufficiently covers the sum claimed and issues of potential recoverability.
The only substantial objection raised by counsel for the wife is the delay in bringing the application, for which, again, no explanation is advanced. But for that delay, perhaps we would not be, as counsel for the wife rightly conceded, having this argument.
The husband submitted at paragraph 34 of his written submissions that “It is submitted the wife is able to obtain funds for her legal fees by way of a bank loan, et cetera”.
And that may well be true if the matter had been brought before me three months ago when the matter was listed for trial, I strongly suspect that either I would have found it was true or I would have followed the other very common course of requiring the wife within a period of days to make an application to the bank to see what they would lend her in circumstances of court proceedings. The difficulty is the wife says she has only got $75,000 cash available, as per her financial statement and now item 4 of the balance sheet, and she needs that to pay her lawyers.
The significant difference is that whilst the husband’s lawyers say on oath, perhaps unsurprisingly given his financial position, that they are not able to continue carrying his debt and will not appear absent money in trust, perhaps equally unsurprisingly given the wife has the majority of the assets and, even on the husband’s case, will retain the more substantial proportion of the pool, the wife’s lawyers have not suggested they will not continue to appear unless there are further funds in trust.
Whilst the delay in bringing this application has been fatal to the husband’s three applications in respect of a planning or zoning expert, asking further questions of Mr D and the chattel valuations, the consequences of the husband not being represented in this matter are grave, and where there is no clear prejudice to the wife in granting the husband’s application, where there is no suggestion her legal practitioners will not continue to appear nor that she will not be able and willing to pay them in a reasonable time frame post final hearing, where the husband’s solicitors have said that unless there are moneys in trust to cover their risk of appearing at a final hearing, they will not appear, the overall factors favour the husband. There is still the issue that the wife’s legal representatives appear to have anticipated some further funds being provided prior to trial and the wife’s need for reasonable access to cash in the short term to be taken into account in determining the amount.
Balancing all of the issues, I am satisfied that there should be an order for a payment of money. I think the sum should be $50,000, as I think that is a reasonable figure which balances the rights and issues between the parties, taking into account the husband’s delay.
There was a suggestion that I should wait till hearing to categorise the funds. I do not think that is appropriate, and indeed, numerous authorities say it is not. As I have indicated, there is no basis in spousal maintenance made out on the evidence before me, but there is a basis both under section 117 and under section 79 of the Act. I will order the payment pursuant to section 79. The manner in which that payment should be dealt with at trail, by way of add-back or otherwise, is a matter for trial.
Given the purpose of the payment, as sworn to by the husband’s solicitors, it should not be used for existing debts owed by the husband to them or to counsel, and they are restrained to allow it to be used only for the payment of solicitors and counsel's fees and disbursements incurred from today in relation to the final hearing commencing 25 September 2023 until further order.
Those are my reasons. I’ll enter orders today.
I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Smith. Associate:
Dated: 8 September 2023
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