Lange and Lange - [2013] FamCA 666

FAMILY COURT OF AUSTRALIA

LANGE & LANGE

[2013] FamCA 666

FAMILY LAW – EVIDENCE - Expert Evidence – Application by wife for leave to adduce evidence from adversarial expert – Leave granted subject to conditions

Family Law Act 1975 (Cth)

Toft & Royce [2013] FamCA 372
Bevan v Bevan [2013] FamCAFC 116

APPLICANT:

Mr Lange

RESPONDENT:

Ms Lange

FILE NUMBER:

MLC

7168

2011

DATE DELIVERED:

13 August 2013

PLACE DELIVERED:

Hobart

PLACE HEARD:

Hobart

JUDGMENT OF:

Benjamin J

HEARING DATE:

13 August 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Cherpis

SOLICITOR FOR THE APPLICANT:

Pearsons Lawyers Pty Ltd

COUNSEL FOR THE RESPONDENT:

Mr Lethlean

SOLICITOR FOR THE RESPONDENT:

Mills Oakley Lawyers

Orders

The respondent wife have leave to adduce evidence from an adversarial expert
Ms B of C Accountants as to the value of the interest held by the husband in the companies D Pty Ltd and E Pty Ltd, if any, and the businesess conducted by each of those companies subject to:-
(a)such valuations being filed and served on or before 12.00 noon Friday 6 September 2013; and
(b)the wife meet the whole of the costs of such valuation, subject to any application for the husband to contribute either in part or in whole for those costs, at the conclusion of the hearing of the property proceedings.
Costs of both parties be reserved in respect of this application and IT IS NOTED the hearing on 13 September 2013 is to proceed.
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lange v Lange (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT HOBART

FILE NUMBER: MLC 7168 of 2011

Mr Lange

Applicant

And

Ms Lange

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

This is an application in a case filed by the wife for leave to adduce evidence from an adversarial expert as to the value of the interest held by the husband in the companies D Pty Ltd and E Pty Ltd. The second part of that application is that the husband be ordered to borrow $30,000 to enable the wife to employ the adversarial expert that she nominates, namely Ms B.
These proceedings were listed before me for hearing of children and property matters some week or so ago in Melbourne. To the credit of the parties, the parenting aspects were resolved and the property proceedings were then to continue. The wife made an application for adjournment at the commencement of the property proceedings and that application was unsuccessful.
The husband commenced giving evidence and provided some evidence in chief. When the matter came back on later that day, after a significant delay, counsel for the wife indicated that the wife’s state was such that she could not adequately instruct counsel and counsel felt, in those circumstances, that he could not adequately represent the wife and if the proceedings continued that day he sought leave to withdraw.
The proceedings were adjourned to a mention date and since that time a day has been allocated for the finalisation of the hearing. On 2 August some further directions were made. Firstly that a transcript of the evidence of the husband in chief be taken out and placed on the court file and that the husband provides financial records to the wife by 4 pm on Monday, 5 August 2013.
It is significant to note that directions had previously been made for trial and that the wife had not complied with those directions which were noted by a registrar when the matter came before her on 26 July 2013. The wife now seeks the orders that I have referred to above. In her affidavit, she sets out the following that she now thinks it is necessary for her to obtain expert evidence as to the value of the husband’s interest in his companies, in circumstances where the husband says that the business has no value and that the relationship with an Country F entity is a license or licensor and he has no equity in that entity. Although she properly observes that that evidence is yet untested.
The wife says in her affidavit that she does not believe the husband as he attended an expo in City G 2003 and promoted the product in the Country F and the Australian entities. It appears from the evidence of the husband so far that the product operates an administration system for clubs and the like. It appears that the business had a turnover in the last financial year of about $151,000.
The wife has said that the cost of obtaining such a report will be about $30,000 and she bases this on conversations she has had with Ms B. The husband’s father had paid $100,000 to the husband’s previous partner to buy him out of the business and the wife says that is the basis upon which to value the company or business. The wife has not applied to join the husband’s father, nor given notice in that respect, despite seeking orders that the company be transferred to her and the house be transferred to her.
The wife observes that the house is owned by the husband and that the house is unencumbered. It is apparently not in issue that the house was acquired by the husband prior to the parties’ cohabitation and was unencumbered at that time. No satisfactory explanation has ever been provided to me as to why this was not done months, if not years, in advance having regard to these proceedings being on foot for such a long time. The explanation offered was that the wife was focused on the children’s matters. However, the wife was represented and directions were made in relation to the property matters and these should have been attended to.
It is clear that this is to be treated as an interim property order and I have been taken to the decision, the unreported decision of Cronin J in Toft & Royce [2013] FamCA 372. I note the law as set out by his Honour in paragraph 7 through to 13 and his Honour’s understanding of the Stanford[1] decision. That decision has recently been the subject of discussion in the Full Court in the matter of Bevan v Bevan [2013] FamCAFC 116.
[1] Stanford v Stanford [2013] HCA 32
What is also unusual in this case is that the wife seeks an order that the husband, who discloses a very modest income, if relevant at all, be directed to borrow money to fund this $30,000 exercise in the light of a company which, on the husband’s case, has no value. In terms of the application for permission to obtain an adversarial expert’s valuation, the husband’s case is that it would inevitably lead to an adjournment and to additional cost and delay in circumstances where these proceedings have been on foot for some two years and in circumstances where the wife’s claim on its face seems to have some characteristics of being an ambit claim.
I am inclined to permit the wife to obtain a report from Ms B provided that that report can be made available at least seven days before the recommencement of the hearing and I will make that order.
I intend to give the wife leave to obtain an adversarial report, subject to some conditions. The first condition is that that report will need to be available at least seven days before the recommencement of the hearing. The second condition is that the wife will meet the costs of the report. It seems unfair and unjust to a husband who was ready for hearing, had complied with the orders of this court in terms of preparedness for trial and where an application was made at the commencement of the trial for this report when it ought to have been made beforehand.
The husband has a significant interest in his matrimonial home, but his income, on his evidence, is limited and I do not accept that it is appropriate in the circumstances for him to meet the costs of that report subject to any application for contribution by him in part or in whole when and if the report is provided.
At this point the Court received a message saying that the solicitor and counsel for the other party have apparently needed to leave to go to another call. I will endeavour to call him by mobile. I do not intend to wait for them. I will finish my reasons and make orders and those orders and reasons will be published and sent to the parties in due course.
The application also, as I said earlier, dealt with by way of partial property settlement or interim or a costs order under s 117. In terms of s 117, the husband has a modest income and, on his evidence, equity in the home, but the company has no value. The wife’s evidence is that she has no income, other than that received by way of social services or government assistance and no property apart from any entitlement that may arise by reason of these proceedings.
The application, as it were, was for costs to enable the valuation of a business at a late stage in circumstances where the wife has not complied with court orders and seeks the order late. There will be or there is alleged to be significant prejudice to the husband and in circumstances where the husband is asked to borrow monies, where such monies may or may not be available to him without the assistance of member of his family.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 13 August 2013.

Associate:

Date: 13 August 2013