PERICLES & HOPMAN
[2020] FamCA 465
•9 June 2020
FAMILY COURT OF AUSTRALIA
| PERICLES & HOPMAN | [2020] FamCA 465 |
| FAMILY LAW – PROPERTY – where a party to proceedings asserts that COVID-19 has resulted in a diminution in value of assets. FAMILY LAW – PRACTICE AND PROCEDURE - where judgement is reserved in a de facto property case and a party applies to re-open the case to adduce new evidence of valuation – principles to re-open a case to adduce further evidence – where applicant for re-opening fails to adduce evidence of fall in value of assets – application dismissed. FAMILY LAW – COSTS – where parties agree that costs should follow the event – where parties’ agreement that costs follow the event does not relieve the court from being satisfied that it is “just” within the meaning of s 117 to make an order for costs – where the court is satisfied that there are circumstances which warrant an order for costs – where having had regard to the relevant matters an order for costs is made in the wife’s favour of and incidental to the application which is dismissed. FAMILY LAW – COSTS – where counsel sensibly did not pursue costs on an indemnity basis – where costs claimed are modest - where costs are ordered in the sum claimed. |
| Evidence Act 1995 (Cth) Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| Atwill & Atwill [1981] FamCA 72 Burke & Burke (1992) 16 FamLR 324 EB v CT(No. 2) (2008) QSC 306 Elgin & Elgin (2015) FamCAFC 155 Reid v Brett [2005] VSC 18 Smith v New South Wales Bar Association (1992) 176 CLR 256 Walpole & Secretary, Department of Communities and Justice [2020] FamCAFC 65 |
| APPLICANT: | Ms Pericles |
| RESPONDENT: | Mr Hopman |
| FILE NUMBER: | MLC | 9624 | of | 2016 |
| DATE DELIVERED: | 9 June 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Bennett J |
| HEARING DATE: | 21 May 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Sweeney |
| SOLICITOR FOR THE APPLICANT: | Lander & Rogers |
| COUNSEL FOR THE RESPONDENT: | Not applicable |
| SOLICITOR FOR THE RESPONDENT: | Blackwood Family Lawyers |
Orders
The wife’s outline of case be marked exhibit “W1” and remain on the court file.
The husband’s application in a case filed 23 April 2020 be and is hereby dismissed.
The wife’s memorandum of costs claimed be marked exhibit “W2” and remain on the court file.
The husband’s memorandum of costs claimed be marked exhibit “H1” and remain on the court file.
The husband pay the wife’s costs of and incidental to the application fixed in the sum of $5,153.38.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Pericles & Hopman has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 9624 of 2016
| Ms Pericles |
Applicant
And
| Mr Hopman |
Respondent
REASONS FOR JUDGMENT
Introduction
By an application is a case filed on 23 April 2020, Mr Hopman seeks to re-open his case to adduce further evidence of the value of assets which he contends has reduced as a consequence of the COVID-19 pandemic. He is the respondent in the principal proceedings which were initiated by Ms Pericles on 5 October 2016 seeking final property orders pursuant to Part VIIIAB of the Family Law Act 1975 (“the Act”). The substantive proceeding was heard over 8 days in March and August 2019.
It is conceded that the parties were in a de facto relationship but the period of the relationship is in issue. Also in issue are contributions pursuant to s 90SM(4)(a) to (c) of the Act, the s 90SF factors and identification and valuation of some assets. During that trial, the value of property held by the Mr Hopman was the subject of considerable evidence. Ms Pericles holds no relevant assets.[1]The valuation evidence included that of Ms B, Accountant, as to the value of entities held or controlled by the applicant husband. For ease of reference, I will refer to the parties as husband and wife.
[1] A comprehensive statement of assets appears as Exhibit “C3” from the hearing.
The trial was an interrupted hearing. On the first day of hearing in March 2019 the husband sought to adjourn the hearing to allow him to obtain up to date valuation evidence of his interests in various entities and trusts. The wife opposed the adjournment. The Court accommodated the husband’s request but this necessitated the disjointed hearing and evidence being called for five days in March and another three days in August 2019. Within the first tranche of hearing days, the trial was again interrupted because senior and junior counsel for the husband withdrew. Mr C QC and Mr D were replaced by Mr Weil of counsel.
The trial concluded on 9 August 2019 and judgment is now reserved.
The husband now seeks to adduce further evidence. That is opposed by the wife.
These reasons explain why I will dismiss the husband’s application.
This hearing
The husband relied on the following documents:
a)Application in Case filed 23 April 2020;
b)Affidavit of the husband affirmed 23 April 2020;
c)Summary of Argument filed 20 May 2020.
The wife relied on the following documents:
a)Response to an Application in a Case filed 14 May 2020;
b)Affidavit of the wife sworn 14 May 2020;
c)Written submissions dated 20 May 2020 (not filed).
The matter proceeded on submissions. Neither party sought to cross examine the other party.
The Application
The husband’s grounds for re-opening his case to adduce fresh evidence are purportedly set out in his affidavit filed 23 April 2020. It is a matter of purport because the husband’s statements, such as they are, are not admissible as evidence.
In the written submission prepared by the solicitor for the husband, the grounds were summarised as follows (sub paragraphs a) and b) are admissible but are included for context):
a)For the purposes of the trial, the value of each asset in which Mr Hopman and Ms Pericles had an interest was generally (but always) as of late January 2019;
b)More than fifteen months have elapsed since late January 2019;
c)The Australian economy is experiencing a significant downturn as a result of the effects of the coronavirus pandemic in the first half of 2020. Unemployment has increased. Businesses have stopped trading. The share market has fallen. The real property market has fallen;
d)Australia is in an economic crisis as a result of the coronavirus pandemic. A number of experts have been published in the media saying that Australia is entering an economic depression;
e)The coronavirus pandemic is an extraordinary global event, the likes of which have not been seen for 100 years; and
f)This Honourable Court should take judicial notice of the extraordinary nature of the coronavirus pandemic and its economic effects.
There is also a complaint by the husband that Ms B did not take into account the husband’s case that he holds one unit in the E Development on behalf of Mr F. However, this was known to the husband at the hearing and could have been met by him at the time. It is not an issue which will be determined by me in the final judgment and is not at all relevant to the current application.
The Law
In determining the current application, the Court is being asked to exercise a discretion. In Elgin & Elgin (2015) FamCAFC 155, [231] our Appeal Division made the following observation in relation to an application to re-open a property case arising following the breakdown of a marriage. It applies equally to the financial relief sought in this case:
It is important also to recognise that in exercising the discretion conferred by s79, the Court is obliged to achieve justice rather than precision. The complaints therefore stand to be considered in light of the fact that the Court is applying a broad brush, rather than undertaking an exercise in mathematics or accounting (Bolger & Headon (2014) FLC 93-575).
The relevant principles for re-opening a case are articulated in the High Court decision in Smith v New South Wales Bar Association (1992) 176 CLR 256, in the Supreme Court of Victoria in Reid v Brett [2005] VSC 18 and of the Supreme Court of Queensland in EB v CT(No. 2) (2008) QSC 306. In EB v CT(No. 2) (a de-facto property dispute), in determining whether or not to re-open evidence on the diminishing value of shares during a financial crisis, Applegarth J identified the following relevant matters which have been approved of and applied by this Court (citations and footnotes omitted):
[2] The guiding principle in deciding whether to grant leave to re-open is whether or not the interests of justice are better served by allowing or rejecting the application. Reference is made in Finborough Investments Pty Ltd v Airlie Beach Pty Ltd and in the cases referred to in it to the need for finality in litigation.
[3] In Smith v New South Wales Bar Association the High Court stated that different considerations may apply depending on whether the case is simply one in which the hearing is complete, or one in which reasons for judgment have been delivered. As to the former situation, the court said it was difficult to see why the primary consideration should not be that of embarrassment or prejudice to the other side.
[4] In Reid v Brett the criteria governing the exercise of the discretionary power to re-open a case to admit further evidence where the hearing has concluded but judgment has not been delivered, were said to be as follows:
(a) the further evidence is so material that the interests of justice require its admission;
(b) the further evidence, if accepted, would most probably affect the result of the case;
(c) the further evidence could not by reasonable diligence have been discovered earlier; and
(d) no prejudice would ensue to the other party by reason of the late admission of the further evidence.
[5] Reference by the High Court to prejudice to the other party, and the guiding principle of the interests of justice, require account to be taken of the strain that litigation imposes on personal litigants. The prejudice caused by delay in the delivery of an expected judgment at the end of stressful litigation cannot always be measured in terms of money or cured by an order for costs. The interests of justice are served by finality in litigation, particularly where prolonged litigation imposes a strain on personal litigants.
Murphy J in Summitt & Summitt and Ors (Re-opening) [2009] FamCA 365 (“Summitt’s case”) observed that in a family law context EB v CT may have some important points of distinction (depending on what assets are to be re-valued). Here those distinctions have no relevance. In EB v CT Applegate J further stated:
[6] The application to re-open is not to overcome a technical defect in the evidence or to tender evidence that is omitted by inadvertence. The application seeks to raise a new issue, namely the current value of certain assets of one of the parties, whereas the issue litigated at the hearing of the assets, financial resources and liabilities of the parties as at the date of hearing.
Summitt’s case, came before the Court in the context of the global financial crisis (“the GFC”) when the husband sought a re-opening of the financial case that had concluded between himself and the wife in November 2008. The re-opening was sought after judgment had been reserved and was all but ready to be delivered. The matter was urgently listed with the solicitor for the husband deposing, based on instructions from the husband, that:[2]
… the values of the relevant real properties had significantly reduced due to the impact of the global financial crisis, and also, the ongoing drought and problems associated with the lack of water available for the [Summitt] farming operation.
[2]Summitt & Summitt and Ors (Re-opening) [2009] FamCA 365, [5].
At trial, valuation evidence of a single expert witness had been accepted as agreed between the parties. The husband’s solicitors brought the application to re-open supported by new valuation evidence that the husband had obtained independently of the wife, when the wife would not consent to new valuations being undertaken by the single expert witness. It was the new valuation evidence that was relied upon to substantiate the husband’s claim of a diminution in value of the subject property. Such evidence assessed that the value of the assets had decreased by $400,000, as compared to the previous valuation at trial, with the husband arguing that it would not be just and equitable, nor in the interests of justice to rely on the previous valuation of the single expert witness as at the time of the trial, and that the new valuation evidence would clearly affect the result.
Murphy J held that the new valuation evidence was not sufficient to reopen the case, as it did not specifically mention any facts said to have impacted on the value of the property since the trial,[3] or that there had been a change in value of any of the subject property,[4] but relied on “comparable sales” of comparable properties of which only three of the relied sales possibly occurred after the trial.[5] There was no suggestion by the husband that the previous valuations were unreliable and the previous single expert was given no opportunity to examine the effect of the GFC on the subject properties. [6] It was also noted that the GFC had begun by the end of the trial but was not the subject of evidence at the trial, [7] but that for the purposes of arriving at an agreed value of the property at trial, the economic and other exigencies present at the time of the trial are generally ignored. [8] This includes exigencies that may occur in the delay between a trial concluding and judgment being delivered as finality in litigation prevails. [9] Murphy J held that the expert’s evidence did not: [10]
…adduce cogent evidence to show that facts or factors impacting on value now are different from facts or factors impacting on value at the trial and that it, or they, are material to the decision and need to be taken into account to prevent injustice.
[3] Ibid [35].
[4] Ibid [36].
[5] Ibid [37-40].
[6] Ibid [46-7].
[7] Ibid [48-9].
[8] Ibid [57].
[9] Ibid [59].
[10] Ibid [67].
Murphy J dismissed the husband’s application due to a lack of admissible evidence by the husband and the prejudice to the wife who would likely be unable to pay for legal representation or valuations if the hearing was re-opened.
In relation to EB v CT (No. 2) [2008] QSC 306, Murphy J quoted the above paragraphs as set out at paragraph 14 and noted that Applegarth J’s comments are “particularly true of litigation” in the family courts.[11]
[11] Ibid [19].
Murphy J drew some distinction between the proceedings in EB and those facing the family courts under s 79 of the Act where the value of property may not only be important at the date of the hearing but at other dates also where for example, primary contributions have changed.[12] However, Murphy J emphasised that the date of hearing is almost always the date for ascertaining the value of property within the meaning of s 79.
[12] Ibid [23].
In the present case, the husband seeks:
a)That the Applicant, Mr Hopman be granted leave to reopen his case.
b)That the Applicant, Mr Hopman be granted leave to adduce further evidence in these proceedings regarding the current value of his interests in:
i)Real estate;
ii)The E Development Trust;
iii)E Pty Ltd; and
iv)Listed shares.
In Mr Ross’ closing submission, he clarified that the husband was not seeking to cherry-pick what is to be re-valued. He stated that the husband was seeking that all assets be valued again.
Issues of proof
Onus of proof
The applicant bears the onus of proving that the interests of justice are best served by reopening the case rather than dismissing his application.
Standard of proof
As required by s 140 of the Evidence Act 1995 (Cth), I will apply the balance of probabilities as the standard of proof.
Findings of fact
A statement of fact is a finding of fact.
Evidence relied upon by the husband
Unlike in the decision in Summitt’s case there has been no attempt by the husband in this case to introduce any expert evidence to substantiate any of the assertions or contentions that assets have reduced in value. Mr Sweeney submitted, correctly in my view, that there is little if any evidentiary basis for the conclusions upon which the husband seeks to rely to establish his case.
The husband’s written submissions contained the following points:
a)It is likely that there has been a significant fall in the value of Mr Hopman’s assets since late January 2019. Most of that fall has occurred since the coronavirus pandemic started in early 2020.
b)The Court cannot make orders that are just and equitable if the Court relies on valuations of key assets that are markedly higher than the current values of those assets, following the extraordinary effects of the coronavirus pandemic.
a)The further evidence is so material that the interests of justice require its admission. That the Court must make orders adjusting the interests of the parties in their assets that are just and equitable. Nearly all of the assets being considered by the Court are assets owned or controlled by the husband. The coronavirus pandemic has had an extraordinary effect on the value of those assets. Orders using January 2019 values for assets are at risk of not being just and equitable.
b)The further evidence, if accepted, would most probably effect the result of the case. The coronavirus pandemic is an extraordinary, once in 100 years global phenomenon. It will have an extraordinary effect on the value of the assets being considered.
c)The further evidence could not by reasonable diligence have been discovered earlier. The coronavirus pandemic occurred 6 months after the last day of trial (9 August 2019). It could not have been anticipated. Evidence of the economic effects of the coronavirus pandemic could not have been put before the Court prior to end of the trial.
d)No prejudice would ensue to the other party by reason of the late admission of the further evidence. Whilst acknowledged that the wife will incur some extra legal expense if the husband’s application is granted, that legal expense is likely to be minor compared with the significant changes in the values of the husband’s assets as a result of the coronavirus pandemic and the prejudice he will suffer if the Court relies on January 2019 asset values.
As stated, the only evidence upon which the husband relied was his own affidavit. To cut short Mr Sweeney’s objections to the husband’s affidavit, I asked Mr Ross to refer specifically to those parts of the husband’s affidavit affirmed on 23 April 2020 which are admissible. Our interchange was to the following effect (being taken from notes not transcript):
HER HONOUR: So Mr Ross can you tell me which paragraph in your client’s affidavit substantiates an assertion in admissible form, he being a patent attorney and a property developer, that there has been a reduction in the value of public listed shares, his public listed shares, real estate or development, such that it qualifies as a basis to reopen the case and adduce that evidence?
MR ROSS: Your Honour in paragraph 10 and 11, Mr Hopman deposes to a fall in the list price of his G Limited shares.
I note that paragraph 10 and 11 read as follows:
[10]There has been a significant fall in the value of listed shares and real estate since late January 2019. Much of that fall has occurred since the coronavirus pandemic started in early 2020.
[11]My G Limited shares were trading at $1.33 per share on 31 January 2019. They are trading at $1 per share as at 21 April 2020. My G Limited shares have fallen by 25% in value since 31 January 2020.
Our discussion continued:
HER HONOUR: So they were $1.33 at 31 January 2019, did they go up after that?
MR ROSS: They have fluctuated but in general terms they have dropped since then, particularly since the coronavirus pandemic.
HER HONOUR: Okay because my recollection is that when we came back at some stage in February, when they stood at a $1.69 and I don’t think you were rushing at that point to reopen and say, look, we have had a 20% increase in our share value and what do they now stand at? Because the wife says that there is a diminution of something like 15%?
MR ROSS: As of the 21 April…
HER HONOUR: How about today?
MR ROSS: I have not checked the price today your Honour.
HER HONOUR: I’m sure your client knows.
MR SWEENEY: $1.135.
HER HONOUR: So that is a 10% reduction.
MR ROSS: At paragraph 12 deposes to Mr Hopman attempting to sell the H Town Property and he has been attempting to do so since February and has not received a single offer to purchase the property from which the Court can, in my submission, infer that the value of that property has reduced.
HER HONOUR: How can you do that? It is a sale price of a property, a sale price is set by valuations, not offers. That is as old valuation law as you can possibly get.
MR ROSS: A lack of an offer gets you a lack of a sale price. If you can’t sell to anyone…
HER HONOUR: Well I don’t know, there is nothing in here that says how he has marketed it or what he has done?
MR ROSS: He has put the property on the market for sale using a real estate agent and the wife’s affidavit exhibits the internet listing of the property.
HER HONOUR: Yes but there was nothing that required him to put it on at $725,000, if he has put it on for $725,000 he clearly thinks he is going to get an offer for that amount. Otherwise he could have put it on at $650,000. But he is not prepared to take 650. Inferentially, he is not prepared to take something less than 725.
MR ROSS: Mr Hopman would argue that many people put real estate on the market with an asking price that is above what they’re prepared to take and above what they actually do take. That is common practice that people put their top end hopeful price but very very frequently real estate sells for less than the asking price.
The H Town property had an agreed value of $725,000 at the conclusion of evidence and submissions. The price at which it is being offered exceeds that amount by $44,000, with the property being listed by the husband at $769,000, as seen by the listing advertisement on the agent’s website on 12 May 2020.[13]
[13] Wife’s affidavit sworn 14 May 2020, [2(h)] and annexure “W-1”.
Mr Sweeney submitted that, even if the G Limited shares have reduced in value from the January 2020 valuation, the wife contends (and it was not denied) that in March 2020 the husband received an “ex-share” dividend of 3.3 cents per share. What other dividends have been received since January 2019 was not the subject of comment. It is difficult for me to factor in dividends received because, in the context of his case, the husband does not disclose how many shares he still holds and, just as significantly, dividends were not a matter upon which I was addressed or in respect of which orders were sought.
More relevantly, Mr Sweeney submitted that a reduction in the share value from the $1.33, upon which the husband relied, has no relevance when the share price accepted for the trial was $1.30. It was contended that the share price wasn’t $1 when the husband filed his affidavit and the closing price was $1.14 on the date on which the wife filed her affidavit. Mr Sweeney asserted that the share price was $1.40 just 3 days after the trial concluded in August 2019.
Mr Sweeney also stated, correctly, that the Court also has no evidence from the husband of the financial effect on him of a reduction in price. There is, for instance, no evidence of how many shares the husband holds. For the purpose of the trial, the parties and the Court had regard to the husband holding 1,254,266 G Limited shares at $1.30 per share equalling approximately $1,630,545, being inclusive of the shares he had disposed of prior to the final hearing, and 13,207 shares that the husband had sold for the benefit of the wife in May 2019 for $16,470. There is no restraint on the husband selling shares and counsel for the wife referred to evidence adduced at trial that the husband had sold various parcels of shares in the lead up to the first day of trial and sought that adjustments be made to balance sheet items to reflect his lesser shareholding. The evidence at trial was that during the period September 2018 and March 2019 he sold 5 separate parcels of shares in order to finance his lifestyle and other expenses such as legal costs. He further borrowed funds against the security of property without any recourse to wife.
Mr Sweeney speculated that the husband may have sold shares at a price higher than the current share price or the agreed $1.30 per share. That is mere speculation. However, it does highlight that the husband’s shareholding is not known.
In relation to the value of H Town property, Mr Sweeney, submitted that the husband failed to present any evidence as to, inter alia:
a)Specifically how the H Town property has been impacted by the recent events;
b)Whether or not he has sought to sell the H Town property at the valuation accepted for the purposes of the trial. Prima facie, he is attempting to make a profit on the sale over and above the expert valuation by advertising it at a price of $44,000 beyond the amount agreed at trial being $725,000. Any level of interest at the agreed value ($725,000) is not alluded to and thus, Mr Sweeney submitted, the Court cannot be satisfied that there is any prospect of a loss in respect to this property.
In relation to the E Development, Mr Sweeney submitted, and he was not contradicted, that it is not accurate for the husband to seek that the Court infer that the experts in assessing the value of E Development were unaware that the completion of the development would be deferred until April 2020. The husband conducted his case maintaining (and the wife accepted) that the development would not be completed until April 2020. The expected date of completion was known to, or able to be put to, the valuer and accountants at the time of the hearing. Even if the development is not yet ready for sale and the Court was to accept the husband’s unsupported statement that the development is 3 months from completion, the husband does not appear to have factored in the allowance in the valuation of the development for 15% contingency for “profit and risk”.
Mr Sweeney raised the following questions about the husband’s statement in relation to the E Development that: “it will be difficult to sell 9 unsold townhouses in the foreseeable future” which does not disclose the evidentiary basis on which this is asserted. In particular;
a)Where is any evidence from any selling agent to this effect (or is a selling agent even appointed)?
b)How did the costs the husband ultimately incurred or paid to construct the townhouses compare with the expected and accepted construction costs disclosed at trial?
c)Are the husband’s bank borrowings in respect to this property significantly reduced from what they are at the trial so that there is more equity therein?
d)Are the townhouses currently and actively being marketed and for what price?
e)Is the asking price significantly in excess of the valuation agreed at the trial and if so, what does the selling agent (if any) advise as to the prospect of obtaining the amount of the agreed valuation if the townhouses were marketed and sold at a more realistic price?
In relation to superannuation interests, Mr Sweeney submitted that, whilst the husband is asserting that “the value of J Street Suburb K property has fallen significantly since the start of the coronavirus pandemic” there was no admissible expert evidence that the value of the property has reduced from the date of the agreed valuation at trial.
It is significant that the husband did not respond to the criticisms levelled at his case by counsel for the wife because those criticisms were stated or presaged in written submission provided on behalf of the wife on 20 May 2020 prior to the husband filing or serving any written submission at all. Accordingly, the husband had an opportunity to respond in the issues raised by the wife in written submissions, first, in his written submission and, second, in viva voce argument at the time of the hearing. He did not take either opportunity.
At one point, Mr Ross submitted that a statement by the Governor of the Reserve bank and two articles in The Economist were public records within the meaning of the Evidence Act1995 (Cth), and I should be satisfied by those statements that all property has fallen in value. However, he did not persist with the argument.
Mr Ross concluded the husband’s case with a submission to the effect that, in cases such as Atwill & Atwill [1981] FamCA 72, Burke & Burke (1992) 16 FamLR 324 and Walpole & Secretary, Department of Communities and Justice (2020) FamCAFC 65, the Court took judicial notice of various matters including that there is currently a travel ban on departures from Australia, that the eligible pension age for women in 1992 was 60 years and that employment prospects for teachers would suffer as the Kennett government’s closure of government schools in Victoria in the early 1980’s. Each of those cases is distinguishable from this case in that the matter in respect of which judicial notice was taken was either a matter on which the trial judge referred to evidence having been given or that judicial notice was taken of a fact equivalent to the pandemic rather than of the consequences of the pandemic. Mr Ross’ response to that observation is recorded as:
The Court has taken judicial notice of matters that are in the public knowledge and are uncontroversial. In our submission the coronavirus is very much a matter of public knowledge and the significant impacts it has had on our economy, are also a matter of public knowledge and the fact that we are conducting this hearing over Teams is but one of numerous examples of the fact that life is not normal and that that is going to have a damaging economic effect. If you Honour requires specific evidence that specific pieces of real estate or other assets have dropped in value, then Mr Hopman’s case fails. But in Mr Hopman’s submission your Honour should not require that your Honour should take judicial notice of the economic effects of the corona pandemic following the principles set out in the cases that I have taken you to.
Notably, the solicitor for the husband was aware that it is not necessary for evidence of the alleged reduction in value to be obtained from the expert witnesses upon which the parties relied, for agreed values at trial or whose evidence is to be subject to a finding by me. An authority referred to by both parties was the decision of Murphy J stated in Summitt’s case (on a reopening based on decreases in the value of property after a trial concluded an discussed above) that it was understandable and permissible for the applicant for re-opening in that case to not have a “current” value from the expert witness used at trial but to rely upon a valuation from another expert witness having regard to rules 15.49(2)(c) and 15.51 of the Family Law Rules2004.
Having regard to the forgoing, I am not satisfied that there is evidence before the Court on which I can be satisfied that there has been a fall in valuation of assets to a degree that can properly inform the exercise of my discretion to permit the husband to re-open his case.
Other matters properly informing the exercise of the Court’s discretion to grant leave to a party to re-open a case
For the sake of completeness, I will briefly discuss the other elements relevant to this Application.
Embarrassment or prejudice to Ms Pericles
Where, as here, evidence is concluded and my decision is reserved, the “guiding principle” according to Smith v New South Wales Bar Association (see paragraph 14 above) is the embarrassment or prejudice to the wife.
I accept the contention of counsel for the wife that his client’s “embarrassment” is evident from the financial “picture” painted during the trial. In a financial sense, she is in control of virtually nothing. She has limited income. She does not have the financial wherewithal that the husband has to meet the costs of further valuations, expert accountants and lawyers to represent her.
Would the result be affected if the evidence is accepted?
As stated, the evidence relied by the husband is virtually wholly inadmissible. Even if it was accepted as admissible, though it could not, it is submitted that it would “probably affect” the case. The evidence he gives of the valuations of shares does assist his current application as he does not attempt to show values at trial and compare them with values today. He simply relies on fluctuations between selective dates that have no relevance to the current application to re-open.
In any event, by the time this matter is re-heard, it is entirely possible that the share price may rise and the husband may have sold real properties. The evidence though, cannot be tested unless or until the husband offers the properties for sale at the agreed valuation. He has not sworn that he has done so or, indeed, that he will. His attempts to obtain a price greater than the agreed valuation and a failure to achieve an offer at that inflated price does not prove that he has suffered a loss or aide his application for reopening the evidence.
Further evidence discoverable by reasonable diligence.
No point was made by the wife is made in respect to this ground. The solicitor the husband states, obviously correctly, that no one could have foreseen the pandemic. Accordingly, it is a positive rather than neutral factor in the husband’s application to re-open.
No prejudice ensuing to the other party.
The exercise of the discretion to re-open a case to permit fresh evidence should be informed by matters such as the “strain that litigation imposes on personal litigants”.[14] Prejudice caused by delay in the delivery of an expected judgment at the end of stressful litigation cannot always be measured in terms of money or cured by an order for costs.
[14]EB v CT (No. 2) (2008) QSC 306, [5].
Mr Sweeney submitted that the wife is entitled to have the litigation concluded on the evidence as it stands and that ongoing uncertainty and ongoing litigation are not in her interests. There is some force in that argument but, had the current application been supported by evidence, it would not have precluded me from re-opening the case.
I accept the submission of counsel for the wife that, from the evidence and from observing the wife in the witness box during the course of her evidence, she is both fragile and impecunious. On the other hand, the husband is not disadvantaged to the same degree.
On the issue of prejudice, I also have regard to the fact that all relevant property is owned by the husband. This is not a case where the parties own and will be left with assets comparable in nature and may therefore be assumed to share equally in losses and increments associated with rises and falls in the economy. The husband has cash reserves and owns real property, an interest in partially completed real estate development and shares. It was proposed by the husband at trial that the wife receive a cash payment by way of a settlement of property rather than a distribution in specie. Neither appeared enthused when I suggested a division in specie of shares but neither indicated that such a division was precluded by any evidence in the trial.
Conclusion on the application to re-open
The husband has failed to discharge the evidentiary onus for the application he makes. The husband’s application to re-open his case for the purpose of adducing evidence, which is as yet not obtained or identified, will be dismissed.
Costs
It was agreed that costs should follow the event. That concession does not relieve me of my obligations under s 117 of the Act, but it does obviate the need for detailed submissions.
At the outset, and apropos the conduct of the proceedings, I compliment Mr Ross and Mr Sweeney on their submissions which were succinct both in writing and orally.
The general rule is that parties each pay their own costs unless I am satisfied that there are circumstances which justify one party paying the costs of another party. Here, the fact that the parties were in Court for the determination of only one application and that the husband has been unsuccessful in that application satisfies me that there should be a departure from the general rule.
When considering what, if any, orders for costs is to be made I have regard to the matters set out in s 117(2A) insofar as they are relevant. Otherwise, the husband’s financial circumstances are significantly better than those of the wife. Moreover, the evidence before the Court is that the wife is not only in an inferior financial situation to that of the husband but that her circumstances are poor. The husband has been wholly unsuccessful in his application.
It is appropriate and just that the husband pay the wife’s costs of and incidental to the application.
I am favourably impressed that both counsel for the wife and the husband’s solicitor eschewed indemnity costs. Applications for indemnity costs in obviously inappropriate circumstances are made far too often in this Court. I am tiring of them. Moreover, it betrays a lack of skill and judgment on the part of practitioner who draws the application in those inappropriate terms.
Both Mr Sweeney and Mr Ross prepared a memorandum of costs drawn in accordance with Schedule 3 to the Family Law Rules 2004,[15] with Mr Sweeney having delivered the wife’s memorandum to Mr Ross before the start of the hearing. Mr Ross took no issue with the quantum of costs provided by Mr Sweeney. Having perused it, I can see why. It is most reasonable. The allowance for the written submissions by Mr Sweeney, which were of a very high standard, is very modest. I will order costs, as claimed, in the sum of $5,153.38. Those costs are payable now.
[15] Exhibits “W2” and “H1”.
I certify that the preceding sixty-two (62) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett delivered on 9 June 2020.
Associate:
Date: 9 June 2020
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