ISHERWOOD & ISHERWOOD (No.2)
[2021] FCCA 684
•30 April 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ISHERWOOD & ISHERWOOD (No.2) | [2021] FCCA 684 |
| Catchwords: FAMILY LAW – Evidence – credit – where Court makes credit finding. |
| Legislation: Evidence Act 1995 (Cth), s.50 |
| Cases cited: Hepworth v Hepworth (1963) 110 CLR 309 |
| Applicant: | MS ISHERWOOD |
| Respondent: | MR ISHERWOOD |
| Intervener: | T LAW FIRM |
| File Number: | SYC 2092 of 2016 |
| Judgment of: | Judge Morley |
| Hearing dates: | 2, 3, 4, 5, and 6 March 2020 |
| Date of Last Submission: | 30 October 2020 |
| Delivered at: | Sydney |
| Delivered on: | 30 April 2021 |
REPRESENTATION
| The Applicant appeared on her own behalf. |
| Counsel for the Respondent: | Mr O'Ryan QC |
| Solicitors for the Respondent: | York Law Family Law |
| Counsel for the Intervener: | Mr Ahmad |
| Solicitors for the Intervener: | T Law Firm |
ORDERS
That pursuant to Section 79 of the Family Law Act 1975 (Cth), the Court orders that:
(a)Within seven days from the making of these Orders the parties do all acts and things and sign all necessary documents so that from their joint account with Westpac Banking Corporation account BSB ... account number ...87 (‘the joint Westpac account)’:
(i)The Husband receives $1,369,383; and
(ii)The Wife receives $346,740, but before any moneys from that $346,740 is paid out to the Wife the following payments shall be made from that sum:
A.$1,320 shall be paid to the Husband, being the payment made by the Husband on behalf of the Wife to Ms Z;
B.$3,095.16 shall be paid to the Husband, being the outstanding cost order made by Judge Harland on 4 May 2018; and
C.$42,947.72 shall be paid to the Intervener, T Law Firm, being the assessed costs with interest to 22 July 2020 of $40,968.08 plus interest at $7.02 per day up to and including 30 April 2021
and the balance then remaining of $299,377.12 shall be paid out to the Wife, less any fees such as bank cheque fees accruing in consequence only of the payment to the Intervener;
(iii)Any interest accrued therein above a balance of $1,716,123 be divided between the parties as to 52 per cent thereof to the Husband and 48 per cent thereof to the Wife; and thereafter
(iv)The Joint Westpac account be closed.
(b)Within seven days from the date of making of these Orders and contemporaneously with compliance with Order 1 hereof, the parties do all acts and things and sign all necessary documents to authorise U Lawyers to withdraw the balance in the controlled monies account with Westpac Banking Corporation styled ‘U Lawyers ATF Ms Isherwood Controlled Monies’ BSB ..., account number ...48 and pay:
(i)To the Wife, the sum of $826,479; and
(ii)Any interest accrued thereon above a balance of $826,479 be divided between the parties as to 52 per cent thereof to the Husband and 48 per cent thereof to the Wife.
(c)As between the Husband and the Wife, the Husband is solely responsible for:
(i)Payment of the director’s loan owned to C Pty Ltd;
(ii)Payment of the debt owed by the Husband to D Pty Ltd; and
(iii)Payment of the joint loan to E Pty Ltd.
(d)Within 30 days from the date of making of these Orders, the parties do all acts and things and sign all necessary documents so that the Husband and the Wife transfer the EEEE shares registered in the parties’ joint names as follows:
(i)107 shares to the Wife; and
(ii)106 shares to the Husband.
(e)Within 30 days from the date of making of these Orders, the parties do all acts and things and sign all necessary documents so that the Husband and the Wife transfer the F shares registered in the parties’ joint names as follows:
(i)2035 shares to the Wife; and
(ii)2034 shares to the Husband.
(f)Within 30 days from the date of making of these Orders, the Husband do all acts and things and sign all necessary documents so that:
(i)In relation to the J shares owned by the Husband, he transfers to the Wife one half of the shares owned by him, however, if the number of shares are not divisible by two, then the Husband to receive the balancing share (ie if the shares are 301, the division will be 151 to the Husband and 150 to the Wife).
(ii)In relation to the G shares owned by the Husband in his sole name, he transfers to the Wife one half of the shares owned by him, however, if the number of shares are not divisible by two, then the Husband to receive the balancing share (ie if the shares are 301, the division will be 151 to the Husband and 150 to the Wife).
(iii)In relation to the H shares owned by the Husband, he transfers to the Wife one half of the shares owned by him, however, if the number of shares are not divisible by two, then the Husband to receive the balancing share (ie if the shares are 301, the division will be 151 to the Husband and 150 to the Wife).
(g)Within 30 days the Husband do all things and sign all documents necessary to transfer the 185 J shares standing in the joint names of himself, Ms K, and the late Ms L, into the sole name of Ms K.
(h)Within seven days the Wife is to do all acts and things and sign all documents necessary to transfer to the Husband the whole of her shareholding in C Pty Ltd.
(i)A base amount of $517,918 is allocated, as required by section 90XT(4) of the Family Law Act 1975 (Cth), to the Wife out of the Husband’s interest in the M Super superannuation fund.
(j)In accordance with paragraph 90XT(1)(a) of the Family Law Act 1975 (Cth):
(i)The Wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth); and
(ii)The Husband’s entitlement, and the entitlement of such other person to whom a splittable payment may be made to payments out of the Husband’s interest in the M Super superannuation fund, is correspondingly reduced.
(k)The trustee of the M Super superannuation fund (‘the trustee’) shall do all such acts and things and sign all such documents as may be necessary to:
(i)Calculate, in accordance with the requirements of the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001 (Cth), the entitlement created for the Wife by order (1)(i) and (j) herein; and
(ii)Pay the entitlement whenever the trustee makes a splittable payment out of the Husband’s interest in the M Super superannuation fund.
(l)This order has effect from the operative time and the operative time is four days after the date of service of a sealed copy of these orders on the trustee.
(m)After service of the payment split notice pursuant to regulation 7A.03 of the Superannuation Industry (Supervision) Regulations 1994 (Cth), the Wife shall do all such things and sign all such documents as may be necessary, including but not limited to, exercising her request pursuant to regulation 7A.05 of the Superannuation Industry (Supervision) Regulations 1994 (Cth) for the creation of a new interest in the Wife’s name in the M Super superannuation fund.
(n)Having been accorded procedural fairness in relation to the making of this Order, this Order binds the trustee of the M Superannuation Fund.
(o)The Husband is the sole owner in law and in equity as between himself and the Wife of all real property, personal property, financial assets and financial resources currently in the Husband’s power, possession or control other than as dealt with specifically elsewhere in this order, and including, but not limited to, his interest in the practice known as “N Group”; the Husband’s bank accounts including the CBA account #...36 containing the rent guarantee deposit moneys; the Husband’s interest in O Shares, P Shares and Q Shares; the Husband’s superannuation entitlements with the Isherwood Super Fund; the partial property settlement amounts that the Husband received being:
(i)informal partial property settlement in August 2016 of $100,000;
(ii)partial property settlement, 17 October 2017 of $100,000;
(iii)partial property settlement in August 2018 of $100,000;
(iv)partial property settlement, 2 March 2020 of $10,000;
(v)interim costs, 17 October 2017 of $110,515;
(vi)interim costs, 9 July 2019 of $50,000; and
(vii)partial property settlement, 14 April 2020, $100,000.
(p)The Wife is the sole owner in law and in equity as between herself and the Husband of all real property, personal property, financial assets and financial resources currently in the Wife’s power, possession or control other than as dealt with specifically elsewhere in this order, and including, but not limited to, her interest, if any, in R Pty Ltd; her savings with the Westpac Bank being Westpac Choice Account ending with #...74 and Westpac ESaver Account; the Wife’s entitlements with M Super; the Wife’s interest in real property in Country B; and the partial property settlement amounts that the Wife received being:
(i)informal partial property settlement in August 2016 of $100,000;
(ii)partial property settlement, 17 October 2017 of $100,000;
(iii)partial property settlement in August 2018 of $100,000;
(iv)partial property settlement, 2 March 2020 of $10,000;
(v)interim costs, 17 October 2017 of $110,515;
(vi)interim costs, 9 July 2019 of $50,000; and
(vii)partial property settlement, 14 April 2020, $100,000.
That in the event that either party refuses or neglects to comply with any part of this order in relation to the execution of any deed, instrument or document the court appoints and authorises the Registrars of the Federal Circuit Court of Australia to execute such deed, instrument or document in the name of the party who so refuses or neglects and further appoints those Registrars to do all acts and things necessary to give validity and operation to the deed, instrument or document.
All outstanding Applications and Responses including all Applications in a Case and all Responses to Applications in a Cases are withdrawn and dismissed and all issues are removed from the list of matters awaiting finalisation.
IT IS NOTED that publication of this judgment under the pseudonym Isherwood & Isherwood (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 2092 of 2016
| MS ISHERWOOD |
Applicant
And
| MR ISHERWOOD |
Respondent
REASONS FOR JUDGMENT
Introduction
These are Reasons for Judgment in relation to property settlement proceedings pursuant to section 79 of the Family Law Act 1975 (Cth) (‘the Act’) between the Applicant Wife Ms Isherwood (‘the Wife’) and the Respondent Husband Mr Isherwood (‘the Husband’).
These parties were married in 1990 without having cohabited prior to their wedding.
There were two children of the parties’ marriage. Ms L was born in 1995, and from birth was afflicted by a medical condition, and, tragically, died in 2009. Ms K was born in 1996 and was 23 years of age at the time of the hearing.
As was the case with most evidence in the proceedings, the parties were in disagreement in relation to the date of separation. Throughout the proceedings, the Wife provided a range of dates for the date of the parties’ separation in applications and sworn and affirmed evidence, commenting in her written submissions at the end of the hearing that the parties separated in April 2016, and that all earlier asserted separation dates in her material were errors at the fault of her various then-legal representatives.
The Husband asserts in his evidence that the parties separated on 1 January 2014, whilst the Wife was on a visit to Country B and he was residing at the matrimonial home at Suburb S. He further asserts that the parties lived separated under the same roof in the matrimonial home until it was sold in August 2016.
In any event, the parties were divorced on 8 August 2016.
The hearing took place from 2 to 6 March 2020, shortly before the worldwide SARS-CoV-2/COVID-19 pandemic was proclaimed by the World Health Organisation, and was conducted in person in the courtroom. The Wife was self-represented on hearing and the Husband was represented by Mr O’Ryan of Queen’s Counsel.
T Pty Ltd (‘the Intervener’), one of the former solicitors for the Wife, intervened in the proceedings in relation to their claim for outstanding costs owed by the Wife to that solicitor corporation, and Mr Ahmad of counsel appeared on behalf of the solicitor corporation on 2, 3, and 5 March 2020.
At the conclusion of the evidence on 6 March 2020, directions were made for the filing of written submissions by the Wife by 30 March 2020, written submissions by the Husband within 21 days of the date of the service upon him of the Wife’s written submissions, and written submission in reply by the Wife within 14 days after service upon her of the Husband’s written submissions. After some extensions of time, all written submissions were received and judgment was reserved by order made 13 July 2020.
A notation was also made by the Court on 13 July 2020 that the Court would be advised by the Intervener as soon as the Intervener received a formal assessment of costs from the Supreme Court of New South Wales’ cost assessor, to which part of their claim for costs had been submitted for assessment, and that the formal assessment of costs would be provided to the Court. Such formal assessment of costs was necessary for resolution in these Reasons of the costs issue as between the Wife and the Intervener.
That formal assessment of costs was ultimately received as a Certificate of Determination of Costs and a Certificate of Determination of Manager’s Assessment Costs. Both documents were attached to an affidavit of Mr V, a principal of the Intervener solicitor corporation, sworn and filed 30 October 2020.
These Reasons deal with the principal issue between the spousal parties of property settlement, including the resolution of numerous issues relating to the identification of the property and liabilities to be included in identifying the matrimonial asset pool, and the existing legal and equitable interest of the spouse parties in the property and the spouse parties’ contractual nexus to the liabilities. Having made the necessary findings in that regard, a finding must be made as to whether it is just and equitable to proceed with the property settlement as between the spousal parties and, if so, the legislative pathway for determining a just and equitable property settlement between the parties must be followed.
In relation to the costs issue between the Wife and the Intervener, the costs sought by the Intervener are:
a)$40,968.08, being the Intervener’s costs for acting for the Wife in these proceedings, as determined in the costs assessment procedure through the Supreme Court of New South Wales;
b)Interest accruing on the assessed costs at 6.25% from 5 August 2020,[1] being $512.10 as at 16 October 2020 and accruing at $7.02 per day;
c)$3,135.00, being the assessor’s costs pursuant to the Certificate of Determination of Manager’s Assessment Costs, payable, they assert, by the Wife and unpaid;
d)$6,000.00, being the Intervener’s assertion of their costs of the assessment process in the Supreme Court of New South Wales. The basis of the calculation is not in evidence, but it is sought as a “fixed sum”;[2] and
e)$17,894.16, being the Intervener’s asserted costs of their intervention. The basis of the calculation is not in evidence,[3]
a total of $68,509.18 plus the interest from 16 October 2020 at $7.02 per day until payment.
[1] Uniform Civil Procedure Rules 2005 (NSW) reg 36.7.
[2] Affidavit of Mr V sworn 30 October 2020 [11].
[3] Affidavit of Mr V sworn 30 October 2020, [12].
At the commencement of the hearing, an Application in a Case filed by the Wife on 13 September 2019 seeking a partial property settlement order in her favour and an Application in a Case filed by the Wife and sealed by the Court on 29 January 2020 seeking to “cancel” the Application in a Case filed 13 September 2019 and seeking a different partial property settlement order in the Wife’s favour were outstanding.
Also outstanding at the commencement of the hearing was an Application in a Case filed by the Wife on 29 January 2020 seeking an order that the Intervener refund to the Wife moneys paid by her to the Intervener on the grounds of asserted conduct in their representation of her.
Each of these additional issues will be dealt with separately below.
Material relied upon on hearing
The Wife relied upon the following materials:
a)Her Further Amended Initiating Application filed 30 July 2019;
b)The affidavit of the Wife, affirmed 21 August 2019 and filed that day;
c)The Wife’s Financial Statement, affirmed 16 August 2019 and filed that day;
d)The affidavit of Mr W, solicitor, sworn 18 February 2020 and filed that day;
e)The Applicant’s revised Case Outline and Summary of Argument;
f)A minute of “final orders sort for final hearing 2 – 5 March 2020”;
g)The Wife’s written submissions, headed “Applicant Case Outline and Summary of Argument” and filed 30 March 2020; and
h)The Wife’s reply to the Husband’s written submissions, filed 15 May 2020.
The Wife’s written submissions contained 54 pages of submissions, some of which included assertions of fact that were not found in the evidence admitted during the hearing. All such assertions of fact not in the evidence at hearing have been disregarded by the Court, there having been no leave sought or granted at any time to reopen the evidence.
Similarly, the Wife’s written submissions from page 55 onward contained copies of documents detailed in the “List of documents” starting on page 55 (four pages). Any such document attached to the Wife’s written submissions that was not a document admitted into evidence in the hearing has been disregarded by the Court, there having been no leave sought or granted to adduce further evidence.
In the Wife’s reply to the Husband’s written submissions, she provided 52 pages of written submission. Those submissions contained material purporting to assert facts not already in evidence admitted during the hearing. Such material has been disregarded by the Court, as have any of the documents attached at pages 53 to 104 which are not documents admitted into evidence in the hearing.
Some of the documents contained in the Wife’s written submission bundles are documents that the Wife sought to put into evidence by tender during the hearing, but that were rejected by the Court on various bases under the law of evidence.
In the written submissions of the Husband prepared on his behalf by Queen’s Counsel, submissions are made at paragraphs 26 to 35 about the Wife’s attempt to so adduce further evidence with her submissions. The Court is referred to the decision of Murphy J in Summitt & Summitt[4] at paragraphs 14 to 24, Bulleen and Bulleen (No. 3)[5] per Cronin J at paragraphs 67 to 71 per Cronin J, and Elgin and Elgin[6] per Forrest J at 18 to 21.
[4] Summitt & Summitt and Ors (Re-opening) [2009] FamCA 365, [14]-[24] (Murphy J).
[5] Bulleen & Bulleen (No. 3) [2010] FamCA 859, [67]-[71] (Cronin J).
[6] Elgin & Elgin (Re-opening) [2012] FamCA 898, [18]-[21] (Forrest J)
I find that I do not need to consider the question of a reopening of the evidence, to which those authorities relate, as there has been no application by the Wife to reopen the evidence, any such application of necessity having to be brought before the Court in a formal manner by way of an Application in a Case, supported by evidence, so that it can be responded to by the Husband and submissions made on each side to enable the Court to make a finding on the issue.
The Husband relied upon the following material:
a)His Response to Initiating Application filed 6 July 2017;
b)The affidavit of the Husband sworn and filed 15 August 2019;
c)The affidavit of the Husband sworn and filed 27 February 2020;
d)The Husband’s Financial Statement sworn or affirmed 27 February 2020;
e)The affidavit of Mr X (the Husband’s brother) sworn and filed 15 August 2019;
f)The affidavit of Ms Y sworn 15 August and filed 16 August 2019;
g)The affidavit of Ms Z (chartered accountant – single expert witness) sworn and filed 20 April 2018;
h)The affidavit of Ms Z (chartered accountant – single expert witness) sworn 3 March 2020 and filed in Court during the hearing;
i)The Husband’s Outline of Case dated 2 March 2020 prepared by Queen’s Counsel; and
j)The Husband’s written submissions filed 27 April 2020 and including a “minute of order sought by the Husband”.
The Husband also relied upon his tender bundle of exhibits to the affidavit of the Husband sworn 15 August 2019 being 295 pages.
At the commencement of the hearing, Queen’s Counsel for the Husband provided to the Court a list of objections to the Wife’s affidavit of 21 August 2019. The Wife provided to the Court a list of her objections to the Husband’s affidavit of 15 August 2019 and a list of objections to the affidavit of Ms Y sworn 15 August 2019. The Wife’s list of objections had been prepared by counsel acting for her when the matter was listed for hearing, but not reached, on 3 September 2019. It was agreed by Queen’s Counsel for the Husband and by the Wife that I would consider the objections when considering judgment in the matter and deal with the evidence as appropriate.
The following documents were admitted into evidence and marked as exhibits in the course of the hearing:
a)Exhibit A1 – an email of 11 November 2019 from the Wife to the Husband’s solicitors with subject “Letter Regarding Valuation of Assets”;
b)Exhibit A2 – copies of email correspondence and attachments to email between the Wife and AA Group;
c)Exhibit A3 – a Western Union document in the Country BB language;
d)Exhibit A4 – a bundle of copies of email correspondence and attachments to the email correspondence between the Wife and various bodies in relation to the Wife seeking employment;
e)Exhibit A5 – a copy of an email of 10 January 2020 from the Wife to the Husband’s solicitors on subject “Proposal to Leave Contended Assets Out of the Settlement” and the attachment to the email;
f)Exhibit A6 – copies of two emails both dated 11 February 2018 from the Wife to Mr CC and from Mr CC to the Wife;
g)Exhibit A7 – a three page document purporting to be information in relation to the Wife’s visa status in Country BB;
h)Exhibit A8 – copies of handwritten letters between the parties’ adult child Ms K and the Wife (four pages);
i)Exhibit A9 – bundles of bank statements for accounts in the Wife’s name, being:
i)A bundle of statements for the Commonwealth Bank of Australia (‘CBA’) Smart Access account in the Wife’s name BSB ... account ...78 for the period 2 January 2013 to 18 August 2017;
ii)A bundle of statements for the CBA Gold Awards credit card account in the Wife’s name for account number ending #...27 for the period 19 December 2014 to 16 September 2016; and
iii)A bundle of statements for the CBA Gold Awards card account in the Wife’s name account ending #...78 for the period from 2 January 2013 to 19 January 2015;
j)Exhibit R1 – a bundle of correspondence between the Wife and the Husband’s solicitors in relation to disclosure, and including therein the Financial Statements for C Pty Ltd for year ended 30 June 2019 and a Financial Statement for the Husband as a sole trader in a health care practice for the year ended 30 June 2019;
k)Exhibit R2 – a copy of a Power of Attorney granted by the Wife to her mother dated 26 September 2008 in the Country B language and a certified translation thereof in the English language;
l)Exhibit R3 – the affidavit of the Wife affirmed 16 August 2019 and filed that day in these proceedings;
m)Exhibit R4 – a copy of a Contract for Sale of Land – 2005 Edition between the Husband and the Wife as vendors and a Mr and Mrs DD as purchasers relating to property at EE Street, Suburb S, New South Wales, executed by all parties and dated 4 June 2016;
n)Exhibit R5 – a bundle of correspondence between the Wife’s former solicitors, U Lawyers, and the Husband’s solicitors, being five letters commencing with a letter from U Lawyers dated 7 November 2017 and ending with a letter from U Lawyers dated 6 March 2018;
o)Exhibit R6 – a translation into English of a document containing a description of the Wife’s property in Country B, being EE Street, Town FF, Country B, having been marked with a pink highlighter by the Wife during her cross-examination as to parts of the description with which she disagrees and with one line redacted by green highlighter;
p)Exhibit R7 – an invoice from GG Travel Agency addressed to the parties’ child, Ms K, in relation to airline flights between Sydney, Australia, and City HH, Country JJ, in 2016 and copy of a page of the Husband’s KK Bank account statement for account ending #...33 covering the period 24 November 2016 to 19 December 2016;
q)Exhibit R8 – four pages of payment history from SSSS Centre relating to CBA accounts in:
i)the Husband’s name ending #...91;
ii)the Wife’s name ending #...98;
iii)the Wife’s name ending #...72; and
iv)the joint names of the Husband, the parties’ child Ms K and the parties’ deceased child Ms L ending #...64,
relating to dividend payments and capital repayments in relation to those accounts;
r)Exhibit R9 – an email dated 6 November 2019 from the Wife to the Husband’s solicitors.
s)Exhibit R10 – a bundle of documents relating to the LL Super and relating to the property at EE Street, Town FF, Country B, an asset of that superannuation fund and being account statements in relation to the property for the years 2013 and 2014, 2015, from 1 January 2015 to 30 September 2015, and from the period 1 January 2015 to 28 August 2019;
t)Exhibit R11 – a bundle of emails to and from my Associate involving all of the parties and legal representatives, including the Intervener, from 27 February 2020 to 5 March 2020, and a copy of a letter dated 14 February 2020 from the Husband’s solicitors to the Wife;
u)Exhibit R12 – copies of correspondence between the Husband’s solicitors and the Wife’s former solicitors, U Lawyers, and between the Husband’s solicitors and the Wife from 7 November 2017 to 6 February 2020;
v)Exhibit R13 – a copy of an email dated 14 January 2007 from the Wife to Ms MM;
w)Exhibit R14 – a schedule of the Wife’s travel for the period December 2013 to February 2020, being a schedule pursuant to section 50 of the Evidence Act 1995 (Cth) and the source documents from which the schedule was derived;[7]
[7] Evidence Act 1995 (Cth) s 50.
x)Exhibit R15 – a tax invoice dated 5 March 2020, from Z Forensic Accounting Unit Trust to the Husband, in relation to an updated report, dated 3 March 2020 and attendance for cross-examination by Ms Z at the hearing;
y)Exhibit R16 – the following documents in a bundle:
i)An income tax return for the Husband for the 2018 income tax year;
ii)A Financial Statement for the Husband as a sole trader of a health care practice for the end of 30 June 2018;
iii)An income tax return for the Husband for the 2019 year;
iv)Financial Statements for the Husband as a sole trader in the health care for the year ended 30 June 2019;
v)Financial Statements for C Pty Ltd for the year ended 30 June 2018; and
vi)Financial Statements for C Pty Ltd for the year ended 30 June 2019.
z)Exhibit R17 – superannuation statements for the Husband’s interest in M Super Fund as at 29 February 2020, as at 31 December 2016, and as at 30 June 2016; and
aa)Exhibit R18 – medical records relating to the parties’ daughter Ms K.
During the hearing I was provided by the parties with a document entitled “Balance Sheet – Final Trial – updated 8.45 am 3.3.20” made available to me as an ‘aide memoire’. In relation to that document, I have disregarded all of the material contained under the heading “notes”.
I have carefully considered all of the evidence relied upon in the hearing by both the Husband and the Wife, including evidence in examination-in-chief, in cross-examination, and in re-examination, including large parts of the sound recordings of the cross-examinations of the party witnesses and witnesses.
I have carefully read and considered all of the written submissions of the Wife, all of the written submissions of the Husband and all the written submissions in reply of the Wife, subject only to the comments I have made earlier in these Reasons in relation to material included by the Wife in her written submissions and in her written submissions in reply by way of evidence not included in the evidence at trial, as indicated.
The proceedings
It is necessary to trace some of the history of these proceedings as it will assist in identification and explanation of various of the asserted assets, and in particular asserted add backs sought by one side or the other to be included in the matrimonial asset pool.
The matter commenced with the Wife filing her Initiating Application on 5 April 2017 seeking, in effect on the face of the orders sought, an equal division of the net matrimonial assets between the parties. The Husband filed his Response on 6 July 2017 seeking, in effect, a division of the net matrimonial asset pool as to 60 per cent to him and as to 40 per cent to the Wife.
The matter came before the Court for its first mention before Judge Henderson (as her Honour then was) on 10 July 2017, at which time her Honour set the matter down for an interim hearing in relation to the interim applications in the parties’ moving documents on 18 October 2017, with the parties to engage in a mediation prior to that time. On 18 October 2017 the matter came back before her Honour without the parties having arranged and attended a mediation, and the matter was further adjourned to 19 February 2018 to allow the parties to engage in a mediation.
On that occasion also, the following orders (in summary) were made by consent:
a)That a sum of $110,515 be released to the Wife’s solicitors from the moneys in a joint account in the parties’ name with Westpac Bank, for interim costs;
b)That a sum of $110,515 be released to the Husband’s solicitors from the moneys in a joint account in the parties’ name with Westpac Bank, for interim costs;
c)That a sum of $1 million be released to the Wife as partial property settlement from the money standing to the parties’ credit in their joint account with the Westpac Bank, $100,000 thereof to be released to the Wife herself for living expenses and the other $900,000 to be paid into the trust account of U Lawyers, the Wife’s then solicitors, as controlled moneys to be held for the purpose of the Wife purchasing a residential property in Sydney, including for stamp duty and legal costs, for the Wife to receive any interest accruing on the controlled moneys and to pay any consequent tax, with the Wife restrained from selling or encumbering any such purchased property without a Court order; and
d)That a sum of $100,000 be released to the Husband as partial property settlement from the money standing to the parties’ credit in their joint account with the Westpac Bank.
On 16 February 2018 an order was made in Chambers vacating the mention for 19 February 2018 and adjourning the matter to 1 May 2018 to further allow the parties to attend a mediation.
On 21 March 2018, the Wife filed an Application in a Case seeking further interim orders varying the interim orders made by consent on 18 October 2017 so as to provide for the Wife to receive the full sum of $1 million without any conditions attached to it, and in particular that she not be required to apply $900,000 thereof to a purchase of a residential property in Sydney, but that she receive the whole amount as partial property settlement. That application was heard on 1 May 2018 by Judge Harland and her Honour delivered judgment and made orders on 4 May 2018 dismissing the Wife’s said application and ordering that the Wife pay the Husband’s costs in a sum of $3,095.16 within 30 days. The matter was adjourned to 7 August 2018 before Judge Henderson for directions.
On 7 August 2018 Judge Henderson placed the matter in a call-over list on 11 March 2019 for allocation of hearing dates. Later in August 2018, consent orders were received in Chambers and on 27 August 2018 her Honour made a Chambers order to the effect that, by consent, each of the Husband and the Wife receive $100,000 from the money standing to the parties’ credit in their joint account with the Westpac Bank, and a notation to the effect that the moneys to be so paid to both the Husband and the Wife were to be included in the balance sheet to be prepared for the final hearing.
On 18 February 2019, the date of the call-over was administratively adjourned to 3 May 2019.
On 15 February 2019, the Wife filed a further Application in a Case seeking interim orders that a sum of $195,000 from the money standing in the party’s credit in the joint account of the Westpac Bank and the $900,000 held as controlled moneys by the Wife’s then solicitors, U Lawyers, be released to the Wife to enable her to purchase real property at NN Street, Suburb OO, Sydney.
The Husband filed a Response to that Application in a Case on 16 April 2019, seeking an order that a sum of $1,095,000 be released to him and $195,000 be released to the Wife from the money standing in the parties’ joint credit in the joint account with Westpac Bank, and that the Husband sell the unit in his sole name at PP Street, Suburb QQ, NSW.
The matter came before me on 17 April 2019 and the competing applications were set down for interim hearing on 19 July 2019.
On 3 May 2019, the matter was called over and listed for a final hearing on 4, 5, and 6 September 2019. Trial directions were made and the proposed interim hearing on 19 July 2019 was vacated.
Further consent to interim orders was received to Chambers and on 9 July 2019 and orders were made in Chambers, by consent, that within seven days a sum of $50,000 be released from the money standing with the parties’ joint credit in the joint Westpac Bank account to be paid into the trust account of the Wife’s then solicitors, T Law Firm, and that $50,000 from that source be paid into the trust account of the Husband’s solicitors, York Law, both to be characterised as interim costs.
On 30 August 2019, by Chambers orders, leave was granted to the Husband to issue a short service subpoena to NSW Police in anticipation of the commencement of the final hearing on 4 September 2019.
On 4 September 2019, the matter was not reached and was set down for final hearing with priority from 2 to 5 March 2020. On this date, the Wife was represented before the Court by Mr Tockar of counsel, instructed by her then solicitors, T Law Firm, and the Husband was represented before the Court by Mr O’Ryan of Queen’s Counsel, instructed by York Law.
On 13 September 2019, the Wife filed another Application in a Case through her then solicitors, T Law Firm, seeking a further release of $150,000 to the Wife from either the parties’ joint account with the Westpac Bank or from the controlled moneys account held by U Lawyers, with $75,000 thereof to be characterised as an interim costs order and the other $75,000 thereof to be characterised as “interim settlement”.
The Wife also sought a ‘dollar for dollar’ interim costs order for the Husband to pay the Wife’s costs by that method. The Application in a Case was made returnable on the first day for final hearing, 2 March 2020.
On 13 January 2020, a Notice of Intervener and an Application in a Case were lodged by T Law Firm Lawyers, who had ceased acting for the Wife, seeking, inter alia:
a)To secure their costs owed by the Wife against the controlled moneys held for the Wife by U Lawyers;
b)For them to be informed of any terms of settlement between the Husband and the Wife; and
c)For there to be a final order for payment of the amount of claimed costs by the Wife to T Law Firm lawyers, a sum of $60,893.10 plus interest, plus costs on the indemnity basis for the intervening proceedings.
That application a case was made returnable before the Court at 9:30AM on 7 February 2020.
On 29 January 2020 the Wife filed a further Application in a Case seeking an order for:
a)“Cancellation of the previously lodged interim application by my previously hired lawyer, Mr V, for which hearing date was allocated 2 March 2019”;
b)Release of $100,000 to her for interim costs out of the moneys held for the Wife as controlled moneys by U Lawyers, “In order to be used for evaluation of contested assets as ordered by the Court”; and
c)That the Court “… determine this application in the absence of the parties and without notice to the respondent”.
That Application in a Case was also made returnable on 7 February 2020.
Further, on 29 January 2020, the Wife filed another Application in a Case seeking an order that her former solicitor, Mr V, refund her money on the basis of certain conduct alleged by the Wife against Mr V, that Application in a Case also being returnable at 9:30AM on 7 February 2020.
At this early point in these Reasons, I wish to point out that I do not in these Reasons make any findings in relation to the professional conduct or standing of Mr V. There is nothing on the evidence that would support making any such finding.
When the matter came before the Court on 7 February 2020, there was no appearance by or on behalf of the Wife. There was an appearance for the Husband by his solicitor advocate and for the Intervener by solicitor advocate. Orders were made as follows, in summary:
a)Pursuant to section 92 of the Act, T Law Firm Pty Ltd was granted leave to intervene;
b)The parties to notify the Intervener within 24 hours of any agreement being reached between the Husband and the Wife to disperse the controlled moneys account held for the Wife by U Lawyers and/or to settle the proceedings on an interim or final basis (with other assorted procedural orders);
c)Leave was granted for the Husband’s witness, Ms Y (his sister) to appear for cross-examination at the final hearing by telephone link from Country B; and
d)The Wife’s two Applications in a Case filed 29 January 2020 were adjourned for mention to 10:00AM on 2 March 2020, the first day of the final hearing.
On 2 March 2020, the first date set down for the final hearing, the Wife appeared self-represented, Mr O’Ryan of Queen’s Counsel appeared for the Husband, and Mr Ahmad of counsel appeared for the Intervener. After some preliminaries, a consent arrangement was reached and a consent order handed to the Court providing for $10,000 to be released to each of the Husband and the Wife by way of partial property settlement on the basis that the Wife had need for that sum for her immediate accommodation and living costs in Sydney, having arrived in Sydney from City RR, Country BB by air that day.
The Wife advised the Court that she had not slept, eaten, or drunk anything since arriving in Sydney and that she was in no condition to commence and run the hearing that day. It was decided by the Court that the matter would stand over to 3 March 2020 for the final hearing. But before the matter was so adjourned, certain other procedural matters were attended to.
The Court first dealt with an application by the Wife to rely upon an affidavit by her brother, a professional in Country B, as expert evidence in relation to a transfer by the Husband to his sister of certain land in Country B. The Wife advised that the said affidavit was in Country B language, that she did not have a translation to English available to her at the Court, but that she pressed the evidence.
The Wife was advised by the Court that the first step was to obtain a translation because the purported affidavit in Country B language was of no assistance to the Court, but that even if a translation was available, there would still be the question as to whether or not expert evidence as to the law in Country B would be accepted from the Wife’s brother.
The Court was informed by Queen’s Counsel that the Husband would be relying on an affidavit sworn 20 April 2018 by Ms Z in relation to the value of certain items in the matrimonial asset pool. Queen’s Counsel advised that Ms Z was a single expert witness pursuant to rule 15.44 of the Family Law Rules 2004 (Cth), having been appointed pursuant to that rule by a joint letter of instructions dated 8 August 2017 to Ms Z from and signed by the solicitors for the Wife and the solicitors for the Husband, the joint letter of instructions being on the letterhead of the then-solicitors for the Wife, U Lawyers.
The joint letter of instructions appointed Ms Z as single expert witness:
a)To value the practice conducted by the Husband as a sole trader;
b)To advise in relation to the capital gains tax that may be occasioned in the event that the Husband sold unit PP Street, Suburb QQ if sold in the 2016-2017 financial year; and
c)To advise in relation to capital gains tax that may be occasioned by any sale by the Husband of his J shares.
The Court was referred to that letter of joint instruction in the evidence and also referred to a follow up letter sent by U Lawyers to Ms Z dated 21 March 2018 answering certain queries raised by Ms Z. The appointment of Ms Z was, on the basis of the content of the joint letter of instructions, an appointment as a single expert witness pursuant to rule 15.44 of the Family Law Rules 2004 (Cth), not under the Federal Circuit Court Rules 2001 (Cth).[8]
[8] See especially Wender & Wender [2017] FamCAFC 48, [36]-[39].
The Wife then indicated that she wanted “another valuation by another valuer” presumably seeking permission pursuant to rule 15.49 of the Family Law Rules 2004 (Cth) to obtain a report by her own “adversarial” expert witness. It was made clear to the Wife by the Court that there was no time for such a process as the final hearing was taking place.
Next, the matter of the Wife’s various Applications in a Case was dealt with.
The Wife referred to her Application in a Case filed 29 January 2020 seeking release to her of $100,000, but only pressed for an order for $10,000 to pay for her accommodation and living expenses in Sydney. The Husband consented to an interim order for release of $10,000 to each party, as detailed above.
Finally, in relation to the position of the Intervener, the Court was advised that the parties were negotiating in relation to a possible consent arrangement that would protect the position of the Intervener in relation to costs claimed against the Wife.
The matter was then adjourned for further hearing on 3 March 2020 to allow the Wife time to recover from her trip to Australia.
On the morning of 3 March 2020, by consent, the Application in a Case filed 13 January 2020 by T Law Firm Pty Ltd and “the Application in a Case in the nature of a response filed by the Applicant Wife on 29 January 2020” were both stood over to 9:00AM on 5 March 2020 for hearing. The hearing of the property settlement proceedings between the Husband and Wife proceeded throughout 3 March and 4 March 2020, principally consisting of cross-examination by Queen’s Counsel of the Wife.
On 5 March 2020, interim orders were made by consent in relation to the costs issue between the Wife and the Intervener protecting the position of the Intervener in relation to their costs claim against the Wife. An order was made by the Court directing that a schedule of costs claimed by the Intervener in their application for the Wife to pay their costs be provided to the Court in Chambers and served upon the Wife within five working days, and that any written submissions by or on behalf of the Wife in relation to cost schedule be provided to Chambers and served on the Intervener by no later than 14 days from 5 March 2020.
It is outside the Court’s knowledge as to whether or not there was compliance with the order for the schedule of costs to be served by the Intervener on the Wife and, certainly, no written submissions by the Wife have been provided to Chambers.
The final hearing as between the Husband the Wife then continued throughout 5 and 6 March 2020. When the evidence closed on 6 March 2020, there was insufficient time in the day left for submissions. I made directions for the Wife to file and serve written submissions by 4:00PM on 30 March 2020, the Husband to file serve written submissions within 21 days of the date of service upon him of the Wife’s written submissions, the Wife to file and serve any written submissions in reply within a further 14 days after service upon the Husband’s submissions, and listing the matter for further mention and directions on 13 July 2020. It was noted that upon the written submissions being received in compliance with the directions the listing on 13 July 2020 would be vacated and a Chambers order made reserving judgment.
The Wife’s written submissions were filed on 30 March 2020, the Husband’s written submissions were filed on 27 April 2020, and the Wife’s written submissions in reply were filed on 15 May 2020. Judgment was formally reserved on 13 July 2020.
On about 14 April 2020, further terms of settlement were received in Chambers, and on that day, orders were made in accordance with those terms to the effect that, within seven days, $100,000.00 was released to the Husband from the parties’ joint account with the Westpac Banking Corporation, and $100,000.00 was released to the Wife from the moneys held on trust for the Wife as controlled moneys by U Lawyers, both by being by way of partial property settlements.
On 30 October 2020, an Application in a Case was lodged by the Intervener seeking release from the parties’ joint Westpac Banking Corporation account of the sum of $68,509.18, together with interest, to be paid to the Intervener and noted as a partial property settlement to the Wife, and an order authorising U Lawyers to withdraw from the controlled moneys account held upon trust for the Wife the sum of $68,519.18, plus interest, to be paid to the Intervener and noted as a partial property settlement to the Wife.
The proposed order was not framed in the alternative, but in the conjunctive by the use of the word “and”, thereby meaning literally that T Law Firm Pty Ltd would receive a sum of $137,018.36, plus interest accruing each day. Clearly, the meaning of the order sought was that payment of a sum of $68,509.18, together with interesting accruing at a daily rate, be paid to the Intervener from one or other of the funds, each as an alternative, not from both.
The sum of $68,509.18 was the total amount claimed by T Law Firm as detailed earlier in these Reasons.
In the alternative to the order detailed above for the full amount of costs at $68,509.18 plus daily interest, the Intervener sought an order that the Intervener be paid a sum of $44,103.08 (the total of the assessed costs and the manager’s assessment costs) from the parties’ joint account with the Westpac Bank and from the controlled monies held by U Lawyers on behalf of the Wife, once again expressed in the conjunctive, but obviously meant to be in the alternative.
The Intervener’s Application in a Case was made returnable before the Court on 24 February 2021. On that date, the said application was stood over for mention upon delivery of judgment relating to the whole of the proceedings.
Finally, it is to be noted that the Wife’s Application in a Case filed 29 January 2020 seeking orders relating to a refund of monies paid by her to the Intervener will be dealt with later in these Reasons, that the Wife’s Application in a Case filed 13 September 2009 was in effect withdrawn by her with the filing of her Application in a Case filed 29 January 2020 seeking an order for “Cancellation of the previously lodged interim application by my previously hired lawyer, Mr V, which hearing date was allocated 2 March 2019”, and that that Application in a Case filed 29 January 2020 seeking release of $100,000 was dealt with by the consent order made on 2 March 2020 releasing $10,000 to each of the parties from the joint account of the parties at the Westpac Bank “by way of partial property settlement”.
Credit finding
There was a considerable quantity of contested evidence between the parties on final hearing and a couple of instances of lacunae in the evidence relating to the nature and value of certain assets of the Wife that could form part of the matrimonial asset pool.
This is a case where it is necessary to make a finding as to credit. I find that on the credit basis, I prefer the evidence of the Husband to that of the Wife where they differ. Some of the reasons for that finding, are as follows, though I note that I have not in these Reasons detailed every incident during the cross-examination of the Wife in which the Wife’s conduct invited the Court to make a credit finding.
General presentation of evidence under cross-examination
During her cross-examination the Wife was consistently non-responsive, argumentative, and combative. In a number of instances (some of which I will shortly detail) she simply refused to engage with the question, and on numerous occasions, she sought to avoid answering the question altogether.
On numerous occasions, she gave what were, clearly, self-serving answers in an attempt to obfuscate and avoid engaging with the question.[9] Most of her answers were gratuitously unresponsive and designed to only serve her case, the exceptions occurring when the Court specifically and strenuously directed her attention to the question she was asked and the necessity of answering that question.
[9] See especially Kuhl & Zurich Financial Services Australia Ltd (2011) 243 CLR 361, [62] (Heydon, Crennan, and Bell JJ).
On several occasions the Wife sought to blame her lawyers for her difficulties, asserting that they had, in effect, fabricated her affidavit evidence and insisted it remained as they had fabricated it over and above her corrections. For abundant clarity in these Reasons, I note that all of the Wife’s affidavits had been sworn or affirmed by her, not by her then solicitors.
I agree with the submission made by Queen’s Counsel that the manner in which the Wife gave her evidence was not influenced or inhibited by any language or cultural difficulties or differences.
While I have detailed some specific examples of her conduct under cross-examination, it is important to bear in mind that her poor conduct permeated the whole of the evidence she gave.
The Wife’s inherited real properties in Country B
It was conceded in the course of the hearing by the Wife that she was still an owner of certain undefined real property in Country B the Wife had received by way of inheritance from her late father during the currency of the parties’ cohabitation. In the Wife’s affidavit of 16 August 2019,[10] there is no mention of this inheritance, and when asked by Queen’s Counsel for the Husband whether there was any mention of the inherited lands in Country B in that affidavit, the Wife responded that she did not mention it in the affidavit “on my lawyer’s advice”.
[10] Exhibit R3.
Queen’s Counsel then asked the Wife if she had mentioned any interest in a land owned by her at the time of completion of the document in her Financial Statement of 16 August 2019 filed in these proceedings and the Wife responded that she did not.
The Wife was taken in cross-examination to correspondence between the Husband’s solicitors and her then solicitors, U Lawyers, in which the Husband’s solicitors specifically sought full and frank disclosure from her in relation to all and any real property inherited by her in Country B and whether they were still held or had been disposed of and if disposed of, details of such disposition. In that cross-examination, the Wife acknowledged that there had been no response by her or on her behalf to that request for full and frank disclosure until her affidavit of 21 August 2019 (her trial affidavit for the hearing that was to take place on 4 to 6 September 2019). In paragraphs 75 to 77 of that affidavit, the Wife refers to that inheritance and says in paragraph 75:
My father died in about 1983. I was not aware until about 2014 that he had left any inheritance for me.
The Wife was then taken to documents being an original in the Country B language and a translation into the English language of a Power of Attorney granted by the Wife to her mother, dated 2008, for the purpose of her mother selling the land the Wife had inherited in Country B. That document states (per the English translation) in part:
In my capacity as one of the heirs of my late father, Mr SS, declare of my own free will and volition that I have appointed my mother, Ms TT, a Country B national, to represent me as if I were there myself, to sell, discharge and register all my inheritance shares whatever they amount to and no matter where they come from, in the two real estate properties no. 1 and 2 UU Street, City VV, Country B with all rights, benefits and contents, to whomever she chooses and by the price and conditions that she sees suitable.
Accordingly, the Wife’s evidence in paragraph 75 of her trial affidavit of 21 August 2019 was not correct. The Wife had not, prior to that affidavit of 21 August 2019, made any mention of owning property in Country B inherited from her father. In the “Applicant’s revised case outline and summary of argument” prepared by Mr Tockar of counsel on behalf of the Wife and dated 3 September 2019, a table of the Wife’s “current financial circumstances” is set out, stating at item 22 thereof “property in Country B inherited by the Wife – value not known.”
In in paragraph 4 of the affidavit of the Wife affirmed 13 September 2019 and filed that day in support of her Application in a Case of the same day, the Wife says:
Prior to the matter being heard in March 2020, I have been advised by my solicitors that formal valuations need to obtained in relation to the following in order to finalise the asset pool:
(a) property in Country B that I may have inherited from my father;…[11]
[11] Emphasis added.
It is to be noted that the Wife used the word “may” in the affidavit.
A question was put to the Wife by Queen’s Counsel in cross-examination:
Do you have an interest in land in Country B?
The Wife’s response was to prevaricate, avoid answering the question, and blame her previous lawyers for any omissions.
When the Court put the question to her directly, “Do you have an interest in any land in Country B?”, the Wife’s answer was, “I do have an interest.”
During cross-examination of the Wife on the following day, 4 March 2020, the following extraordinary exchange took place between Queen’s Counsel, the Wife, and the Court. I have transcribed the following from the audio Court record, and I include it here in full in this analysis of credit findings:
Mr O’Ryan QC – In summary, in 2008, you gave your mother who resides in Country B power of attorney to be able, to enable her to deal with by sale or otherwise what you inherited from the estate of your late father, I that correct?
Ms Isherwood – I signed that, I told you before and I reiterate Mr O’Ryan I cannot recall the incident itself but I checked my signature and this is my signature
Mr O’Ryan QC – And so, I put to you that what you affirmed in your affidavit about you first ascertained that you had an interest in an estate, that it is first ascertained in 2014 that you have an interest in an estate, was false
Wife – [pause of 6 seconds] um [pause of 8 seconds] may I ask for a clarification your Honour, just so I would answer according, like I wouldn’t be making the wrong, giving the wrong answer to the Court
Court – If you don’t understand a question and need to have a question clarified, then say so.
Ms Isherwood – Um, not just clarified, if this is 2018, isn’t it within that marriage period where there respondent was fully aware of it?
Court – In 2018 hasn’t been mentioned
Ms Isherwood – Not 18, forgive me 2008
Court – no no you’re not seeking clarification, you’re seeking to make an argument or a submission
Ms Isherwood – Ok
Court – The question you’ve been asked, is to the effect that isn’t you saying that you first learned that you had an interest in your late father’s estate in 2014 false
Ms Isherwood – Regarding all the land it’s not false your Honour, it is correct, I still ascertained that until 2014, I only knew about these two pieces of land at the time it seems, this is why the Power of Attorney is limited to the two pieces of land, otherwise it would have maybe, it would have maybe encompassed more pieces of land or all my inheritances at the time, maybe this is what was mentioned and I reiterated that I can’t recall-
Mr O’Ryan QC – Not what you would have-
Ms Isherwood – What actually happened
Mr O’Ryan QC – Am I to understand what that response is-
Ms Isherwood – Only regarding-
Mr O’Ryan QC – Are you suggesting Madam that these two blocks of land, identified in the Power of Attorney, that there is more property that you received in the estate beyond these two blocks of land?
Ms Isherwood – I did not know at the time Mr O’Ryan
Mr O’Ryan – But is the answer to that question yes, there are more properties?
Ms Isherwood – Your Honour, I did not know at the time that there were more than two pieces of land, this is why-
Mr O’Ryan QC – So the answer to my question is yes?
Court – [to Ms Isherwood] That’s not an answer to the question
Ms Isherwood – What is the question
Court – You’re being asked a subsequent question now-
Ms Isherwood – Yes
Court – That is, in the property that you inherited-
Ms Isherwood – Yes
Court – From your father in Country B-
Ms Isherwood – Yes
Court – Were there more than two pieces of land?
Ms Isherwood – Is this according to 2014 or 2008? Which year are we talking about your Honour?
Court – As a matter of fact-
Ms Isherwood – As a matter of fact, in 2008 I was not aware-
Court – No no, you’re not being asked about awareness, you must listen, I’ll say this to you-
Ms Isherwood – Yes
Court – You must listen to the question-
Ms Isherwood – I’m trying your honour
Court – And answer the question
Ms Isherwood – Yes
Court – Not turn the question into an invitation to give some information-
Ms Isherwood – No your Honour
Court – You’re desperate to give
Ms Isherwood – I know-
Court – Listen to me, not turn the question into an invitation to give other information you’re desperate to give, or to give explanations why the answer to the question is an answer you don’t want to give-
Ms Isherwood – No your honour
Court – You have to answer the question-
Ms Isherwood – Absolutely-
Court – And I’ll tell you this, if in the course of the cross examination, there is any persistence by you in not answering the question asked,-
Ms Isherwood – Your Honour, I didn’t understand-
Court – No listen to me, this is very important for you because you appear for yourself, listen to me, I’m assisting you here, if there’s any persistence in not answering the question you’re asked, then that lays you open to me making a finding that you’re not a witness of good credit
Ms Isherwood – No your Honour
Court – Do you understand?
Ms Isherwood – No you don’t understand-
Court – Don’t argue with me, the question you’re being asked very directly and simply now, is nothing to do with awareness, nothing to do with 2008 or 2014 as individual time periods, the question you’re being asked is did you inherit more land from your father’s estate than the two parcels of land that are referred to in the power of attorney?
Ms Isherwood – Yes
Court - You did. [To Queen’s Counsel] That was a question asked?
Mr O’Ryan QC – Yes your Honour
Court – Right, so the answer to the question did you inherit more-
Ms Isherwood – Yes
Court – Parcels of property from your father than the two parcels referred to-
Ms Isherwood – Yes
Court – The answer is yes you did?
Ms Isherwood – Yes, but now I understood the question your Honour
Mr O’Ryan – The two parcels of land identified in the Power of Attorney, were they sold?
Ms Isherwood – Yes
Mr O’Ryan QC – And did you receive a share of the proceeds of sale?
Ms Isherwood – Um according to the document-
Mr O’Ryan QC – Did you receive a share of the proceeds of sale?
Ms Isherwood – One of them Mr O’Ryan, the other one wasn’t sold
Mr O’Ryan QC – Thank you, so only one was sold?
Ms Isherwood – Only one was sold
Mr O’Ryan QC – In respect of the one that was sold-
Ms Isherwood – Yes
Mr O’Ryan QC – What did you do with the money received?
Ms Isherwood – Um, Ok, I do not recall Mr O’Ryan, there is nothing in this translation that indicates my share of that piece of land that’s been sold, in this-
Court – No no you see once again, you’re talking about-
Ms Isherwood – I’m just explaining-
Court – No, the question-
Ms Isherwood – The answer was I do not recall-
Court – The question has left that document behind, the question has left that document behind, the question is-
Ms Isherwood – Approximately two to three thousand
Court – What did you do-
Ms Isherwood – two to three thousand, approximately your Honour, this is what I’ve been told but I can’t confirm it
Mr O’Ryan QC – Where did you put it?
Ms Isherwood – Marriage expenses
Mr O’Ryan QC – Did you put it in a bank account?
Ms Isherwood – At the time, um, it was handed in cash I believe and um it was spent on needs
Mr O’Ryan QC – I didn’t ask what it was spent on-
Ms Isherwood – Ok
Mr O’Ryan QC – Are you saying you received your share of the proceeds of sale in excess of $2000 in a cash form?
Ms Isherwood – Um
Mr O’Ryan QC – As currency form, I don’t’ mean-
Ms Isherwood – Cash, yes, I believe so
Mr O’Ryan QC – In US dollars?
Ms Isherwood – Overseas, when I travelled overseas that this is what the price, this is how it was paid
Mr O’Ryan QC – Thank you. Which block was sold, 1 or 2?
Ms Isherwood – 1
Mr O’Ryan QC – So 2 is still there?
Ms Isherwood – Yes, and this is the evidence if you’d like to tender it to court-
Mr O’Ryan QC – And in addition to that property 2, there are how many other properties?
Ms Isherwood – Um, may I look at the list that I’ve-
Mr O’Ryan QC – I’m asking you do you know how many other properties there are?
Ms Isherwood – there are about 12-
Court – If you don’t know without consulting a document, say ‘I don’t know’
Ms Isherwood – I don’t know
Court – Do you have a document-
Ms Isherwood –Yes I do have a document-
Court – That will assist you. Alright have a look at that and respond to my question ‘how many’
Ms Isherwood – 12, um, 12 lots
Mr O’Ryan QC – And Madam, you know that yesterday I took you through various letters that had been written on behalf of your husband in which information about your inheritance was sought
Ms Isherwood – Yes I remember
Mr O’Ryan QC – And you would therefore recall that on 10 March 2019, a letter was sent in which you were asked to provide documents relating to any sales of property in Country B, do you remember that?
Ms Isherwood – Could you, uh, that was an email sent to me directly or to one of my lawyers, Mr O’Ryan, just to, otherwise would you be kind-
Mr O’Ryan QC – Are you aware that during the conduct of these proceedings your solicitor, I withdraw that, your former husband’s solicitor has sought from you through your solicitors documents relating to the sale of any properties in Country B?
Ms Isherwood – Yes
Mr O’Ryan QC – And you have produced nothing in response to that request?
Ms Isherwood – There is no sale
Mr O’Ryan QC – And you didn’t even answer the request?
Ms Isherwood – No I did, this document, the document I tendered today proves that I attended to it promptly as soon as I received the email in Country BB
Mr O’Ryan QC – Thank you. Those properties in January 2019 were valued on behalf of Mr Isherwood at USD 1.591 million weren’t they?
Ms Isherwood – According to that valuation
Mr O’Ryan QC – Approximately 1.6 million?
Ms Isherwood – It is inaccurate and, um, I have provided as well my only valuation, proving that what he, the way he went about valuing the land is totally inaccurate
Mr O’Ryan QC – I see. Those remaining blocks of land are valuable are they not?
Ms Isherwood – No they’re not
Mr O’Ryan QC – I see
Ms Isherwood – And I only own a minimum amount, the each parcel has at least 36 persons, forgive me 36 people taking shares within 1 block so each lot has 36 beneficiaries
Mr O’Ryan QC – Yes. Madam, I put to you that you have deceitfully failed to disclose in these proceedings to your husband your interest, the extent of your interest in that Country B state property
Ms Isherwood – No I reject the statement
It is an example of the Wife prevaricating in her answers, seeking to give explanations that are not proper to be given as a response to the question, and ultimately giving evidence that tends to suggest, as put by Queen’s Counsel to the Wife, that she “deceitfully” failed to disclose a financial interest that she held.
The date of separation
Throughout the proceedings the Wife gave a range of dates for the separation of the parties, varying between 15 January 2014 in her Initiating Application, her Amended Initiating Application and her Further Amended Initiating Application, 15 January 2015 in her affidavit affirmed 16 August 2019 and her trial affidavit filed 21 August 2019, and her assertion positively that the separation occurred in 2016 during her cross-examination on 3 March 2020.
On 3 March 2020, during her cross-examination at about 12:25PM, the Wife was taken to her affidavit sworn 5 April 2017 and filed in the proceedings, where in paragraph 6 thereof she swore that the separation occurred on 8 June 2015. She was also taken to her affidavit sworn by her on 11 October 2017 and filed in these proceedings, where in paragraph 6 she stated that the parties separated on 8 June 2015.
When Queen’s Counsel for the Husband put the direct question to the Wife, “When do you say you and the Husband separated?’ she answered, “When the house was sold … 3 August 2016”.
In the Wife’s affidavit affirmed 16 August 2019,[12] she stated in paragraph 6 thereof that the parties separated on 15 January 2015, and then stated in paragraph 44 thereof:
[12] Exhibit R3.
Mr Isherwood and I separated under the one roof when we moved into EE Street in 2013.
When taken to that paragraph 44 in cross-examination by Queen’s Counsel for the Husband on 4 March 2020 at 11:04AM, the Wife said, “It’s a mistake” and blamed her former solicitor.
The Wife was then taken to her trial affidavit affirmed 21 August 2019, where she repeated the evidence in paragraph 6:
Mr Isherwood and I separated on 15 January 2015.
and paragraph 43, where she said:
Mr Isherwood and I separated under the one roof when we moved into EE Street in 2013.
and she again said, “It’s a mistake. Same lawyer.”
When asked by Queen’s Counsel
So did you swear in that affidavit that yourself and the Husband separated under the one roof in 2013 when you moved into that EE Street, Suburb S property?
the Wife prevaricated and avoided answering the question by again saying, “It’s a mistake” and only when pressed on the matter did she concede that she had sworn that evidence.
The same prevarications occurred when paragraph 43 of her affidavit of 21 August 2019 was put to her. When put to the Wife by Queen’s Counsel:
Do you say that what you swore in those two affidavits is false?
the Wife replied
False, because it was put there by Mr V.
I intervened and put to the Wife
It doesn’t matter what your lawyers put in the document, you swore it to be true.
The Wife responded:
I said it was not true and Mr V said, ‘We have to put it in that way and you’re here to sign it,’ and he said, ‘We have no option. You must sign it’.
I then put to the witness
You swore your affidavits of 16 August 2019 and 21 August 2019 to be true.
and the Wife responded,
Based on misleading information of my lawyer.
The Wife’s self-managed superannuation fund and the Country B property
In relation to the Wife’s self-managed superannuation fund, of which WW Pty Ltd is the trustee and of which a property in Country B is the only asset, the Wife conceded during cross-examination by Queen’s Counsel for the Husband that she had made no disclosure whatsoever of that self-managed superannuation fund from and including her first Financial Statement sworn 5 April 2017 through to and including her Financial Statement for the trial affirmed 16 August 2019, in which she disclosed the self-managed superannuation fund as “WW Pty Ltd”, but asserted that it had “NIL” value.
The falsity of this evidence is made apparent later in these Reasons.
The Wife was cross-examined in relation to this entry and when Queen’s Counsel for the Husband put to the Wife, “You were representing to the Court that your self-managed superannuation fund has no value”, the Wife responded, “It does have a value, this is incorrect.”
I note here that this cross-examination took place against the backdrop of a failure by the Wife to disclose any tax return and Financial Statements for the self-managed superannuation fund for the years ended 30 June 2015 to 30 June 2019 inclusive.
The subsequent questions were an inquiry as to what sum the Wife would sell the Country B property for, noting that the Wife is the sole controller of WW Pty Ltd and the sole member of the self-managed superannuation fund, and that a sale of the Country B property would be by the trustee company.
The Wife answered the question, “Would you sell the Country B property for US$150,000?” with the answer “no”, and when asked, “What would you sell the Country B property for?” she failed to respond with a figure or an answer indicating why she was not able to give a figure. For abundant clarity, as I understood Queen’s Counsel’s questioning, this was an attempt to ascertain the value of the Country B property.
At this point I put to the Wife, “Would you accept from me your answers appear prevaricating?” and the Wife answered, “No. Hesitant.”
Further on, the Wife was cross-examined about the Country B property. On 4 March 2020 at about 2:50PM, it was put to the Wife by Queen’s Counsel:
You told the Husband’s solicitor in an email of 10 January 2020 that the Country B property had been on the market since 2018
to which the Wife responded:
I said that in my email, but it’s a mistake. It has been on the market since 2017.
Then on 4 March 2020 at about 2:55PM it was put to the Wife, “Your sister has a Country B property in that development” (referring to the self-managed superannuation fund’s asset in Country B). The Wife prevaricated and did not answer.
Queen’s Counsel then put to the Wife the question, “Do you have a sister?”, and the Wife again prevaricated, and finally answered, “Um, I have a sister.” There was no doubt that the Wife knew that she had a sister.
When it was again put to her, “Your sister has a Country B property in that development”, she immediately answered, “Yes”.
Witnesses under cross-examination may, understandably, be placed in positions of uncertainty where they need to consider the proposition put to them more deeply or give thought to how to articulate a proper response. However, in the present case, the Court is left with no doubt that the Wife knew the answer to the question – a simple, uncontroversial question – and in any event still sought to avoid giving a direct and responsive answer.
Sale of the EE Street, Suburb S property
When the Wife was being cross-examined about the sale of the EE Street, Suburb S property at about 11:22AM on 4 March 2020, she was referred to a conversation between herself and the Husband. It was put to her:
Your Husband said he wanted to sell EE Street as he couldn’t afford to continue to pay the mortgage repayments and he was going backwards financially?
to which the Wife replied, “Can I ask you the date when he said that?”
She was then asked, “Do you recall the conversation?” to which she replied, “I recall the conversation”. She was then asked, “Did he say to you the words that I have just put to you?” to which she responded, “Yes”.
Again, it was unnecessary for the Wife to meet the initial proposition with a question about the date of the alleged conversation. This question was put to the Wife in a cogent manner, at a clear and logical point in relation to cross-examination about the EE Street, Suburb S property, and ultimately she acknowledged that she recalled the conversation without the date being provided.
Selection of the real estate agent for the EE Street, Suburb S property
During the cross-examination of the Wife in relation to the simple matter of the selection of the real estate agent for marketing and sale of the EE Street, Suburb S property, it was put to the Wife that she had selected the agent. She then gave her verbal evidence that both parties had selected the agent.
When it was again put to her that she chose the real estate agent, she prevaricated to a quite extraordinary degree and demanded to see written proof of that assertion. When pressed to answer the question, including by the Court, she continued to prevaricate. Eventually, she still insisted it was a mutual decision.
She was then taken to paragraph 37 of her affidavit of 21 August 2019 and her evidence therein:
I chose the real estate agent, XX Real Estate, because of their very professional attitude, the fact that they knew the area well and they had a very good appreciation of the value of the home.
During the exchange it was put to the Wife by Queen’s Counsel for the Husband that in response to his questions in cross-examination:
When I ask you a question you assume that in some way your response will be prejudicial to you and so you give an equivocal response
to which the Wife responded, “No, I honestly do not remember.”
The Wife was then shown paragraph 14 of her affidavit of 5 April 2017 in which she said:
I chose the real estate agent ...
Twice the Wife had sworn to the truth of the fact being put to her in cross-examination (that is, that she chose the real estate agent). The controversy and prevarication with which the Wife treated this proposition was unwarranted.
In considering the Wife’s evidence in this matter, it is observable that her insistence that the decision was mutual at the start of her evidence was strident and insistent. When the portions of her affidavit material contradicting her verbal evidence were shown to her, it is observable that the Wife deferred to not remembering the proper answer.
A poor memory of the matter at hand to explain discrepancies in evidence could reasonably fly in the face of earlier insistent and strident evidence. This is especially so where the Wife’s demeanour in giving this evidence had a tone of evasion and prevarication.
Payment of interest accruing on the loan account for the EE Street, Suburb S property
It was of note to the Court that during cross-examination of the Wife by Queen’s Counsel for the Husband on 4 March 2020 in relation to an asserted agreement between the Husband and the Wife that the Wife would contribute to the payments of interest accruing on the loan account secured on the EE Street, Suburb S property, the Wife was evasive and prevaricating in her response and avoidant of answering the questions she was asked.
The evidence
At the time of hearing, the Wife was 48 years of age and the Husband was 58 years of age. The Wife had obtained several university qualifications, but was not in paid employment at the time of the hearing and was living in City RR, Country BB, having travelled to Australia for the hearing. The Husband is qualified and in practice as a health care professional, having qualified as such and commenced practice prior to the parties commencing their cohabitation.
The parties married in 1990 at Suburb YY in New South Wales without having cohabited prior to their marriage.
As indicated earlier in these Reasons, the date of the parties’ separation is in dispute, the Wife asserting in her evidence a range of separation dates covering 15 January 2014, 15 January 2015, and 8 June 2015.
At paragraph 43 in her trial affidavit, the Wife asserted that the parties separated in 2013 when they moved into their matrimonial home at EE Street, Suburb S, but during her cross-examination, the Wife insisted that the parties had separated “when the house sold, 3 August 2016.” In the Wife’s written submissions, she asserted that the parties separated in April 2016.
For his part, the Husband asserted consistently that the parties separated on 1 January 2014 whilst the Wife was absent overseas in Country B and that their separation was under the same roof in the EE Street, Suburb S home until it was sold in August 2016.
Part of the Court record is the Application for Divorce filed 7 April 2016, being a joint application by the Husband and the Wife. That document, in Part G, has an affidavit completed by each of the parties to the effect that each had read the application and that the facts of which they have personal knowledge are true.
The application asserts in paragraph 14 that the parties separated on 15 January 2014 – a date admittedly quite close to that asserted by the Husband in paragraph 5 of his trial affidavit where he says:
Ms Isherwood and I separated on 1 January 2014 under the same roof.
The application for divorce goes on to assert in paragraph 16(b) that the parties, during their separation, lived together in the same home but not as Husband and Wife for the period from 15 January 2014 until 23 March 2016.
The Husband asserts in his trial affidavit, again in paragraph 5, that “the physical separation did not [occur] until August 2016,” August 2016 being when the EE Street, Suburb S matrimonial home was sold.
The parties’ divorce was granted on 7 July 2016, becoming effective on 8 August 2016.
For the purposes of these proceedings, I prefer the evidence of the Husband over that of the Wife, and in the maze of asserted separation dates, I give the greatest credit to the evidence of the Husband in his trial affidavit as to separation and the evidence of the Husband as a joint Applicant for the divorce.
I find that the parties separated in January 2014.
The Husband graduated with a degree in health care from City ZZ University in 1985. The Wife obtained a her degree from the City AAA University between 1991 and 1993 and then completed further studies in 1995 and at about that time, obtained accreditation as a professional with the Employer BBB. The Wife then studied for a master’s degree at the City AAA University in 2014 and 2015, completing that degree at some time in 2018. At the time of the parties’ marriage, the Husband was the sole proprietor of a health care practice at Suburb CCC.
The parties had two children, Ms L born in 1995 and Ms K born in 1996. Ms L was born with a medical condition and tragically died in 2019 at 14 years of age.
At the time of the hearing, Ms K was 23 years of age and living with her father and being financially supported by him when in Australia, and had been living independently for about a year in City RR, Country BB with financial support from each of her parents.
The Wife asserts in her evidence that at the time of the parties’ marriage she had a quantity of gold as an asset, though she does not give any evidence as to the precise quantity held or its value.
The Husband acknowledges the Wife’s assertion in this regard, but says that he cannot give any factual evidence as to whether the Wife held the gold or not at the time of their marriage or, if she did so hold gold, what subsequently happened to that asset. The Husband asserts that the Wife had “nil” assets at the commencement of cohabitation in his trial affidavit.
The Wife says that at the time of marriage the Husband had no assets, whereas the Husband gives evidence that he had shares to a value of about $40,000 in DDD Shares and EEE Shares and a practice at Suburb CCC that he had purchased prior to the parties’ marriage for about $25,000.
In relation to the assets held at the commencement of cohabitation, I prefer the evidence of the Husband.
In 1988, the Husband registered a private corporation, C Pty Ltd to act as his service entity in relation to his sole trader practice. That company has continued in that role since that time. At the time of the hearing, the Husband and Wife were both shareholders in C Pty Ltd and the Husband was the sole director.
In 1990, around the time of the parties’ marriage, the Husband established a second health care practice at Suburb FFF in partnership with his friend Mr GGG, keeping the Suburb CCC practice running until it was closed by the Husband in about 2003. In 2003, the Husband relocated a part of the health care practice to the Suburb HHH Shopping Centre, maintaining his interest in the Suburb FFF practice until he ceased to have an interest in Suburb FFF in 2015.
The Husband’s health care practice at the Suburb HH Shopping Centre continues through to the present day. In 2016, the Husband established a second health care practice in JJJ Street, Suburb HHH, but found the practice unsuccessful and closed that practice in June 2018, owing a sum of $120,000 in unpaid rent to the landlord of the premises from which the practice was conducted.
From the time of Ms L’s birth, the Wife’s time was largely devoted to her care, Ms L needing constant care by reason of her disabilities. The Wife was assisted by the Husband in caring for Ms L, but I find on the whole of the evidence, taking into account the Husband’s role as principal breadwinner throughout the relevant period of time through his conduct of multiple health care practices, that the Wife was principal carer for Ms L and, later, for Ms K.
From 2003 when the Husband relocated the health care practice to Suburb HHH Shopping Centre, he commenced working full days Monday to Friday and all day Saturday. The Wife must of necessity have been the principal carer for Ms L and Ms K from this time.
As stated earlier, the Wife was able to complete her degree in 1995 in conjunction with her care for Ms L and to obtain her accreditation as a professional with Employer BBB. Thereafter, the Wife undertook some work as a professional.
From about 2003, the Wife assisted at the Husband’s health care practice. On the Wife’s evidence, she was virtually the controller and manager of that practice, and on the Husband’s evidence, she undertook some receptionist work and attended to some paperwork. On the basis of the finding I have made in relation to the Wife’s credit, I prefer the evidence of the Husband in this regard.
Following Ms L’s passing in 2009, the Wife undertook more work as a professional. In 2009 or 2010, the Wife undertook studies and completed a Certificate in Health care and Certificate in Practice Management Software and Cashflow Management Accounting Software.
The Wife asserts that, in 2010, she commenced to work full-time in the practice, then continued in that full-time work until 2014. This is denied by the Husband. I find, once again, that I prefer the evidence of the Husband, though it is clear on the evidence that the Wife did work in the practice on some basis between 2010 and 2012, as the Husband asserts, and it is doubtful that the Wife’s work in the health care practice continued past 2012 as, in 2013, on her own evidence in paragraph 19 of her trial affidavit, she says that she commenced paid employment as a customer relations officer with the Employer KKK. This employment only lasted from October to December 2013, but it is unlikely that, at that relevant time, the Wife was in full-time employment in the health care practice.
The Wife was absent in Country B between December 2013 and 26 January 2014 (the Husband’s asserted date) or February 2014 (the Wife’s asserted date). The Wife was again absent from Australia and travelling to various countries between 21 January 2015 and 26 February 2015. In 2014, Ms K undertook her high school certificate examinations and, in 2015, commenced at University, undertaking a Bachelor’s degree course.
In 2015, the Wife travelled to Country LLL and the United Kingdom. The Wife asserts in paragraph 25 of her trial affidavit that, in September 2015, she commenced employment with Employer MMM, but left that employment in December 2015 to start her own sales business. For this purpose, the Wife listed a private corporation, R Pty Ltd.
In 2015, the Wife, again, travelled overseas to the Country NNN and Country OOO. On return to Australia, she operated her business through R Pty Ltd, becoming the exclusive distributor in Australia and New Zealand of the Country PPP brand “QQQ” products. The business does not appear to have been a success, accumulating losses of $55,000 according to the Balance Sheet, before it was terminated and R Pty Ltd was deregistered as a company by the Wife in 2018.
There is no evidence of any financial agreement that is binding on the parties.
Accordingly, I find that there is no basis upon which an adjustment should be made between the parties for any of the matters referred to in section 75(2) of the Act as referred to in section 79(4)(e).
Accordingly, I find that an appropriate division of the net matrimonial asset pool between the parties is as to 55 per cent thereof to the Husband and 45 per cent thereof to the Wife.
What property settlement orders are appropriate?
I find that an appropriate property settlement between the parties lies largely in accordance with the distribution of assets as contended for by the parties with the result that a payment would be made by the Husband to the Wife to achieve the property division I have determined is proper.
In that regard, I propose to make orders that provide for the money standing to the credit of the parties in the joint Westpac Bank account to be divided as to $1,369,383 for the Husband and $346,740 to the Wife with any interest accrued thereon above a balance of $1,716,123 being divided between the parties as to 52 per cent thereof to the Husband and 48 per cent thereof to the Wife. I will also make an order that from the Wife’s amount of $346,740 she pay to the Husband $1,320, being the Wife’s repayment to the Husband of her share of the fees paid to Ms Z, and $3,095.16, being the outstanding costs order made by Judge Harland on 4 May 2018.
I propose that the whole of the funds standing to the credit of the Wife in the controlled moneys trust account with U Lawyers to be paid to the Wife with any interest accrued thereon past a principal balance of $826,479 to be divided as to 52 per cent therefore to the Husband and 48 per cent thereof to the Wife.
The Husband will retain his practice at Suburb HHH and the shareholding in the company C Pty Ltd and all of his savings, as the Wife will retain her savings.
The jointly owned EEEE and F shares are to be transferred by the parties so that one half thereof are owned solely by the Husband and one half thereof are owned solely by the Wife, and in consequence of the number of shares held being odd amounts in each case, I will order that the Husband have 106 EEEE shares and the Wife have 107 EEEE shares, and that the Husband have 2034 F shares and the Wife have 2035 F shares.
I will order that the Husband transfer to the Wife one half of the shareholding held by him in the J shares in his sole name and in his G and H shares.
In compliance with the proposal of each of the parties, I will make an order that the Husband do all things necessary to have the 185 J shares standing in the joint names of himself, Ms K, and Ms L Isherwood transferred into the sole name of Ms K Isherwood.
The Husband naturally retains all of the partial property settlement moneys already received by him and the benefit of the moneys distributed for application to costs, and the Wife receives all of the partial property settlement moneys distributed to her and the moneys distributed for application to costs.
The Husband will retain the rent guarantee deposit moneys in J account #...36.
The Wife will retain her superannuation entitlements with M Super, and the Husband will retain his superannuation entitlements with the Isherwood Super Fund.
In relation to the Husband’s superannuation entitlements with M Super I will make a superannuation splitting order in favour of the Wife with the base amount of $517,918, thereby dividing the parties’ superannuation entitlements (not including the Wife’s entitlements in the LL Superannuation Fund for reasons set out earlier in these Reasons) equally between the parties.
So as to achieve the appropriate division between the parties I will make an order that the Husband be solely responsible as between the parties for payment of his director’s loan owned to C Pty Ltd, for repayment of the debt owed by the Husband to D Pty Ltd and for repayment of the parties’ joint loan to E Pty Ltd.
The application of the Intervener
On 13 January 2020, the Intervener filed a Notice of Intervention by Persons Entitled to Intervene and an affidavit by Mr V, solicitor and a director of the Intervener, sworn 9 November 2020, both in compliance with rule 11.03 of the Federal Circuit Court Rules 2001 (‘the Rules’) and, pursuant to rule 1.05(2) of those Rules, rule 6.06 of the Family Law Rules 2004, and an Application in a Case seeking interim and final orders, all directed towards securing payment by the Wife to the Intervener of the Intervener’s costs of acting for the Wife in these proceedings, including disbursements and counsel’s fees, in a sum of $60,893.10. That calculation was based upon a final tax invoice rendered to the Wife by the Intervener in a sum of $24,593.10 and outstanding fees owed to counsel of $36,300.
The orders sought on the interim basis went to securing the Wife’s ultimate share of the matrimonial assets pool to the extent necessary to satisfy those costs.
The Notice and the Application in a Case were returnable on 7 February 2020. The documents were served on the Husband and the Wife.
The matter came before the Court on 7 February 2020. The Husband and the Intervener were both represented. There was no appearance by or on behalf of the Wife. The Application in a Case filed by the Wife on a self-represented basis on 29 January 2020 was also listed for first mention on 7 February 2020. There was no explanation as to why the Wife was not before the Court on that day.
Orders were made granting leave to the Intervener to intervene and for notice to be given by the parties to the Intervener if the matter between the Husband and Wife settled and orders were to be made.
The Wife’s Application in a Case was stood to the first day of the hearing, 2 March 2020, as was her Application in a Case filed 13 September 2019.
The Intervener was represented by Mr Ahmad of counsel on the first day of the hearing, and the Intervener’s application was stood over to 3 March and on that day to 5 March 2020.
On 5 March 2020 the parties, including the Intervener, reached an agreement that the interim orders made 7 February 2020 would continue; that upon final orders being made in these proceedings as between the Husband and the Wife, those parties would cause the sum determined by the Supreme Court of New South Wales costs assessor in respect of the Intervener’s application for costs assessment to be paid to the Intervener from the moneys in the controlled moneys account through the trust account of U Lawyers from the Wife’s share of such moneys prior to any money being distributed to the Wife; and restraining the Wife “from causing the sum of $100,000 being distributed” from the controlled moneys account “pending determination of the Intervener’s Costs Assessment Application before the Supreme Court of New South Wales.” Orders were made by consent in accordance with the minute of consent orders signed by the Wife and for the Intervener.
The Application in a Case filed by the Intervener on 13 January 2020 sought that interest pursuant to section 117B of the Act be paid by the Wife on the sum claimed and that the Wife pay the Intervener’s costs of these proceedings on the indemnity basis.
Then, on 30 October 2020, the Intervener filed a further Application in a Case seeking from the Wife the sum as assessed by the costs assessor – $40,968.08 – and the manager of costs assessment’s costs that the Intervener asserted in evidence (wrongly) the assessor had ordered be paid by the Wife, that the Intervener had itself paid ($3,135) and interest on the sum assessed pursuant to the Uniform Civil Procedure Rules 2005 (NSW), $512.10 up to 16 October 2020 and increasing at $7.02 per day.
The Intervener’s new application also sought from the Wife $6,000 as the Intervener’s costs in the costs assessment process and $17,894.16 as its costs of these proceedings, presumably, though not made specific in any evidence, costs calculated pursuant to a Costs Agreement that the Wife had entered into with the Intervener in relation to them representing her in these proceedings, and therefore, in effect, on the indemnity basis as they had sought in their Application in a Case in January 2020.
An affidavit by Mr V sworn 30 October 2020 was filed in support of the new application.
The assessed costs of $40,968.08 are already the subject of the orders made by consent on 5 March 2020 and are payable from the Wife’s share of the controlled moneys account with U Lawyers to the Intervener. There was no need to seek a further order to that effect.
That would have been the simple end of that issue, but for an anomaly on the Certificate of Determination of Costs dated 22 July 2020 – Exhibit 1 to Mr V’s affidavit of 30 October 2020. The Certificate sets the costs as assessed at $40,420.00 plus interest to 22 July 2020 of $548.08, but it refers to “The costs that have been assessed are the costs claimed in the following bills: Invoices 22.03.18, 30.04.18, 23.05.18”.
The Wife instructed the Intervener to act for her in these proceedings on signing the Intervener’s fee agreement on 19 June 2019, following a first conference on 7 June 2019.[75] There was no relevant engagement between the Wife and the Intervener in 2018. The Statement of Reasons of Costs Assessor RRRR of 22 July 2020 (‘the assessor’s reasons’) being Exhibit 3 to Mr V’s affidavit of 30 October 2020 find that the Wife instructed the Intervener to act for her in these proceedings from 12 June 2019 to 13 November 2019.
[75] Affidavit of Mr V sworn 9 January 2020, [3].
Throughout the assessor’s reasons, the Intervener is referred to as “the Costs Applicant” and the Wife is referred to as “the Costs Respondent”.
The assessor’s reasons find that on 23 August 2019 the Intervener sent to the Wife a tax invoice for $39,992.25 and that on 6 September 2019 the Intervener sent the Wife an invoice from counsel briefed by the Intervener (indisputably on the Wife’s instructions) for $30,250.00.
The assessor finds that on 13 November 2019 the Wife terminated the Intervener’s retainer and that on 13 December 2019 the Intervener sent to the Wife a further invoice in a sum of $24,593.10 “for work performed between 23 August 2019 [date of the Intervener’s previous invoice] and 26 September 2019”.
Pointedly, for matters addressed below in relation to the costs of the costs assessor and Manager, Costs Assessment and the costs claimed in these proceedings by the Intervener for its costs of the assessment process, the assessor’s reasons in paragraphs 15 and 16 say:
The Applicant filed an Application for Assessment of Costs of a Law Practice and Client (the application) on 6 February 2020 claiming costs and disbursements of $24,953.10. In fact, the costs and disbursements claimed total $20,228.60 and the costs have been assessed on the basis of this amount.
The Costs Applicant subsequently sought to include counsel’s fees of $30,250 as a disbursement which has been allowed.
In paragraph 20 the costs assessor finds that the costs agreement between the Wife and the Intervener “is void” under section 178 of the Legal Profession Uniform Law 2014 (NSW) (‘the Costs Act’). The assessor then assessed the costs under section 172 of the Costs Act. The assessor finds that proper disclosure was made in relation to counsel’s fees.
In paragraph 27 of the assessor’s reasons she finds that the Wife “has been charged $96,520.85”, but it is inherent in the assessor’s reasons that the costs that she is assessing are not the whole $96,520.85, but the amounts submitted to assessment – $20,228.60 costs and disbursements and $30,250 disbursement for counsel’s fees.
In paragraph 28 the assessors says “I do not find that the costs charged, and counsel’s fees are fair and reasonable in the circumstances of this matter.” In paragraph 28 the assessor “reduced the costs allowed by $4,000” and “allowed the disbursements as claimed, apart from counsel’s fees”, which the assessor reduced by the fees of counsel for 5 and 6 September 2019, and set at $24,200.00.
After including interest to 22 July 2020, the amount as assessed was $40,968.08. The Intervener is entitled to that amount out of the Wife’s share of the controlled moneys with U Lawyers pursuant to the order made by consent on 5 March 2020. As that order was an interim order made by consent, I will renew it as a final order with the relevant interest component.
In relation to the costs assessor and Manager’s costs set at $3,135 the assessor says at paragraph 33 of the assessor’s reasons:
As the Costs Applicant did not make disclosure in accordance with the requirements of the Act, I find the Costs Applicant is to be liable for the costs of the assessment.
In relation to the Costs manager’s Assessment Costs of $3,135, such sum is claimed by the Intervener from the Wife. In the affidavit of Mr V of 30 October 2020 at paragraph 7 he deposes:
On 5 August 2020 the Supreme Court issued a certificate of determination of manager’s Assessment Costs, directing the costs Applicant (the Wife) to pay the assessment fee of $3,135. She has not paid that sum. Exhibited to me at the time of affirming this Affidavit and marked “2” is this Certificate of Determination of Manager’s Assessment Costs.[76]
[76] Emphasis added.
The said certificate is attached (though marked 2) and clearly says, in accordance with paragraph 33 of the assessor’s reasons, that the sum of $3,135 is “[p]ayable by the costs Applicant”. The Intervener, not the Wife, is the costs Applicant, despite the assertion in Mr V’s affidavit.
The Intervener paid the $3,135 on 28 July 2020. The Intervener seeks that the Wife repay that sum to it. The Wife is not in any way liable to the Intervener for that cost. No such order will be made.
The Intervener seeks an order that the Wife pay its costs of the assessment proceedings in a sum of $6,000. No evidence is provided as to how that sum is calculated.
The costs claimed by the Intervener were reduced by more than 15% on assessment and I am conscious of section 204(2)(c) of the Legal Profession Uniform Law 2014 (NSW).
I find that there is no basis upon which I should find pursuant to section 117 of the Act that the Wife should pay the Intervener’s costs of the assessment process.
The Intervener seeks that the Wife pay the Intervener’s costs of their intervention in these proceedings in a sum of $17,894.16. There is no evidence presented as to how that sum is calculated. If it is based on the purported costs agreement between the Wife and the Intervener, then:
a)That costs agreement was in relation to the Intervener acting for the Wife in these proceedings, not against the Wife in these proceedings; and
b)That costs agreement has been found to be void pursuant to section 178 of the Costs Act.
Costs as between the Intervener and the Wife in these proceedings are as between a party and a party.[77] Costs between parties in proceedings under the Act are governed by section 117 which provides in subsection 117(1) that the normal position in relation to costs in family law matters is that:
[77] Family Law Act 1975 (Cth) s 92(3).
Subject to subsection (2)…each party to proceedings under this Act shall bear his or her own costs.
Subsection 117(2) provides for a departure from the usual rule in subsection 117(1) as follows:
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Subsection 117(2A) provides as follows:
In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle proceedings in the terms of any such offer; and
(g) such other matters as the court considers relevant.
If, having considered the matters referred to in subsection 117 (2A) the Court is of the opinion that the circumstances justify a departure from the usual rule that each party bear his and her own costs, then the Court must determine the quantum of the costs to be awarded.
Pursuant to section 117(2), a finding by the Court of circumstances that justify the making of a costs order is the necessary preliminary to the making of an order and beyond that there is no additional or special onus on an Applicant for a costs order.
In Penfold v Penfold[78] Stephen, Mason, Aickin and Wilson JJ of the High Court discussed section 117 of the Act and said:
It is an accurate description of section 117(1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to section 117(2). As subsection (1) is expressed to be subject to subsection (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Subsection (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the 2 provisions which imposes any additional or special onus on an Applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgement under appeal that an order can only be made under section 117 (2) in “a clear case”.
[78] Penfold v Penfold (1980) 144 CLR 311.
The Court’s discretion in relation to costs is broad and the considerations listed in subsection 117(2A) are not restrictive.[80] There is nothing to prevent any one factor in this subsection being the sole determinant for an order for costs.[81]
[80] Penfold v Penfold (1980) 144 CLR 311.
[81] PBF as Child Representative for AF (Legal Aid Commission of Tasmania)& TRF & LKL (2005) 33 Fam LR 123, 130.
Rule 21.02 in Division 21.2 ‘Orders for Costs’ under Part 21 ‘Costs’ of the Rules provides:
Order for Costs
(1) An application for an order for costs may be made:
(a) at any stage in a proceeding; or
(b) within 28 days after a final decree or order is made; or
(c) within any further time allowed by the Court.
(2) In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
(c) refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceedings is concluded.
Rule 21.10 of the Rules provides:
Costs and disbursements
Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to:
(a) costs in accordance with Parts 1 and 2 of Schedule 1; and
(b) disbursements properly incurred.
I note here that though rule 21.10 provides that costs be in accordance with Parts 1 and 2 of Schedule 1 to the Rules, rule 21.11(2) provides:
(2) When taxing a statement of costs, a taxing officer must apply:
(a) for a family law or child support proceeding--the scale of costs set out in Schedule 3 to the Family Law Rules; …
Schedule 1 of the Rules 2001 is composed of ‘composite amounts’ for stages in the proceedings and Schedule 3 in the Family Law Rules2004 (Cth) is composed of per item of work or per hour amounts.
It was established by the decision of Raphael FM (as his Honour then was) in Colan Products Pty Ltd v Luxon Pty Ltd (No 2)[82] that, when applying the scale provided by the Rules, Counsel’s fees are not claimable as a disbursement and what is to be claimed is the advocacy loading on the daily hearing fee.
[82] Colan Products Pty Ltd v Luxon Pty Ltd (No 2) [2002] FMC 90.
I find on the evidence that there is no consideration in section 117(2A) that justifies a departure from the general rule in section 117(1) as between the Wife and the Intervener. There was nothing in the conduct of the Wife in the proceedings within the meaning of subsection (2A)(c), and no failure by the Wife to comply with any order in the proceedings as would affect matters between the Wife and the Intervener.
In relation to the Intervener’s application filed in January 2020, the Wife has not been wholly unsuccessful (nor has the Intervener been wholly successful).
The Intervener’s original application filed in January 2020 sought costs of $60,893.10 plus interest, and on assessment, they receive $40,420.60 plus interest. The Wife opposed the application on 2 and 3 March 2020 and then settled with the Intervener on 5 March 2020.
The Intervener’s Application in a Case of 30 October 2020 was a repeat of the initial claim, settled by consent orders on 5 March 2020, and therefore totally unnecessary, and sought three further tranches of costs in relation to each of which it failed (in fact that application sought double payment of the same amounts).
It is fair to say that in relation to the Intervener’s application filed in October 2020, the Intervener has been wholly unsuccessful and the Wife successful.
The Wife’s Applications in a Case of 29 January 2020
The Wife, by her then solicitors, the Intervener, filed an Application in a Case on 13 September 2019 with her supporting affidavit of that date seeking release to her of $150,000 to be half interim settlement and half interim costs, and a “dollar for dollar” order as against the Husband. The application was made returnable before the Court at 10:00AM on 2 March 2020, the first day of the final hearing.
On 26 January 2020, having terminated the Intervener’s retainer in November 2019, the Wife filed two Application in a Case – one relevant as between herself and the Husband and the other relevant as between herself and the Intervener, who had filed their Notice of Intervention, Application and affidavit, but had not been joined as a party by an order under section 92 of the Act.
The application relevant to the Husband sought an order cancelling the Application in a Case filed for her on 13 September 2019, seeking release to her of $100,000from the controlled moneys with U Lawyers “in order to be used for valuation of contended assets as ordered by the court” and that the application be determined urgently on an ex parte basis “without notice to the” Husband.
That application was returnable on 7 February 2020 and was called on that day. The Wife did not appear on that occasion, and the matter was stood over to 2 March 2020. On that day, orders were made by consent between the Husband and the Wife for release of funds to each in the sum of $10,000 and the interim application in that Application in a Case was exhausted.
The other application sought an order that the Intervener refund to the Wife “my money paid” on certain asserted bases going to the professional conduct of a solicitor principal of the Intervener. It was supported by an affidavit by the Wife affirmed 24 January 2020. The application was not agitated by the Wife at the hearing and the settlement by consent orders as between the Wife and the Intervener on 5 March 2020 had the specific effect of exhausting the interim application in that Application in a Case.
I find that it is appropriate to say here that there is nothing in the evidence presented by the Wife in support of that application that indicates to me any basis at all for the assertions made by the Wife against the professional standing of the solicitor principal referred to. The assessor’s reasons add confirmation to that finding.
I certify that the preceding five hundred and five (505) paragraphs are a true copy of the reasons for judgment of Judge Morley
Associate:
Date: 30 April 2021
[79] Penfold v Penfold (1980) 144 CLR 311, 315 (Stephen, Mason, Aickin and Wilson JJ).
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