Pirani & Pirani (No 3)
[2023] FedCFamC1F 561
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Pirani & Pirani (No 3) [2023] FedCFamC1F 561
File number(s): SYC 3987 of 2023 Judgment of: CAMPTON J Date of judgment: 7 July 2023 Catchwords: FAMILY LAW – INTERIM PROPERTY AND SPOUSAL MAINTENANCE – Determination of a number of interim applications of both the husband and wife as to interim or partial property distribution, litigation funding and spousal maintenance – Where the wife seeks that the husband pay $1 million by way of litigation funding, $150,000 by way of either interim or partial property settlement or lump sum spousal maintenance and $4,924 per week by way of interim spouse maintenance – Orders made broadly as sought by the wife, save that the quantum of the litigation funding be $450,000 and of weekly maintenance be $3,500 per week. Legislation: Child Support (Assessment) Act 1989 (Cth) s 139
Family Law Act 1975 (Cth) (“the Act”) ss 72, 75, 79, 80, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Pt 8, ch 6, ch 11, r 1.33
Cases cited: Bevan and Bevan (1995) FLC 92-600; [1995] FamCA 95
Bing and Bing (2007) FLC 93-318; [2007] FamCA 418
Hall v Hall (2016) 257 CLR 490; [2016] HCA 23
Marchant & Marchant (2012) FLC 93-520; [2012] FamCAFC 181
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Mitchell and Mitchell (1995) FLC 92-601; [1995] FamCA 32
Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578
Salvage & Fosse (2020) FLC 93-966; [2020] FamCAFC 144
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466; [2009] FamCAFC 166
Swift & Swift [2020] FamCA 991
Weir and Weir (1993) FLC 92-338; [1992] FamCA 69
Zschokke and Zschokke (1996) FLC 92-693; [1996] FamCA 79
Division: Division 1 First Instance Number of paragraphs: 115 Date of hearing: 30 June 2023 Place: Sydney Counsel for the Applicant: Mr Hedges SC Solicitor for the Applicant: New South Lawyers Counsel for the First Respondent: Mr Kearney SC Solicitor for the First Respondent: Barkus Doolan Winning Family Lawyers The Second, Third, Fourth, Fifth and Sixth Respondents: Did not participate ORDERS
SYC 3987 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS PIRANI
Applicant
AND: MR PIRANI
First Respondent
B PTY LTD
Second Respondent
C PTY LTD (and others named in the Schedule)
Third Respondent
order made by:
CAMPTON J
DATE OF ORDER:
7 July 2023
THE COURT NOTES THAT:
A.For the purpose of these orders, “the children” means:
(a)X born 2013;
(b)Y born 2015; and
(c)Z born 2018.
B.The husband agrees to pay periodic child support to the wife for the children in the sum of $500 per week to be deposited into a bank account as nominated by the wife’s solicitors in writing.
C.The husband agrees to pay by way of non-periodic children support for the children the following expenses as and when they fall due:
(a)100 per cent of all school fees for the attendance by the children at KK School and LL School.
(b)100 per cent of KK School and LL School canteen expenses.
(c)100 per cent of out of school care fees and day care fees for the attendance by the children as agreed between the parties in writing.
(d)100 per cent of all extra-curricular activities as agreed between the parties in writing or as currently undertaken by the children.
(e)100 per cent of all instalments of the children’s private health insurance at not less than the current level of cover and the final payment to be made on the occurrence of a terminating event with respect to each child.
(f)100 per cent of the children's gap medical, dental, hospital, optical, physiotherapy, psychologist, psychiatry counselling, paediatric and orthodontic expenses not recoverable from Medicare or private health insurance and as agreed between the parties in writing.
And that that by way of implementation of this notation, the Husband has agreed to pay all non-periodic expenses for the children directly to the referable third-party service provider in question upon the production and receipt of a tax invoice.
D.The wife proposes that the husband have FaceTime communication with the children on two occasions each week between 4.30 pm and 5.30 pm, provided that for the purpose of such FaceTime, the husband provides a mobile telephone for the children’s use.
THE COURT ORDERS THAT:
1.Without prejudice or admission, the wife be granted leave to withdraw her applications for the following relief and they are dismissed:
(a)The relief articulated in paragraphs 18, 19 and 20 of her interim relief sought in her Initiating Application filed 6 June 2023, as to the return and use of Motor Vehicle 1; and
(b)The relief articulated in paragraphs 31 and 32 of her interim relief sought in her Initiating Application filed 6 June 2023, as to periodic and non-periodic child support departure
2.The husband’s application to discharge Orders 1.8 and 1.9 made on 7 June 2023 (noting that these orders require him to pay the mortgages and outgoings in respect of the property at F Street, Suburb G (“the Suburb G property”) is dismissed.
3.The following be adjourned for hearing on 18 August 2023 at 2.15 pm by Microsoft Teams:
(a)The husband’s application to discharge Order 1.7 made on 7 June 2023 and for him to have exclusive use and occupation of the Suburb G property as against the wife pending further order;
(b)The husband’s application to sell the Suburb G property;
(c)The husband’s application for FaceTime commination with the children; and
(d)Any response of the wife to the husband’s applications listed for hearing.
4.For the purpose of the hearing on 18 August 2023:
(a)On or before 4 August 2023, the wife is to file and serve any Reply to the husband’s interlocutory relief identified, and any further affidavit in support thereof;
(b)On or before 11 August 2023, each of the husband and wife (and the additional respondents, should they so elect) are to file and serve a Case Outline identifying the documents to be relied upon, a short chronology of facts relevant to the issues in dispute and summary of submissions;
(c)Save and except in accordance with these orders or any prior orders or directions, neither of the husband nor wife shall file or be permitted to rely on any further affidavit evidence without leave.
5.Within 14 days of the date of these orders, the husband pay to the wife by way of partial property settlement the sum of $150,000.
6.Within 14 days of the date of these orders, the husband pay to the trust account of the wife’s current solicitors, by way of litigation funding, the sum of $450,000, with such sum to be applied in payment of costs and disbursements incurred or to be incurred by the wife in the conduct of this proceeding.
7.Pending further order, the husband pay to an account nominated by the wife in writing the sum of $3,500 per week, by way of spouse maintenance.
8.For the purpose of Order 7, the first payment is to be made by the husband on the first Monday following the date of these orders, and each Monday thereafter (pending further order).
9.By consent and pending further order, the husband shall do all such things as are necessary to ensure and facilitate:
(a)The wife having the exclusive use as against all others of Motor Vehicle 4; and
(b)Payments of, as and when fall due, all registration, comprehensive insurances and service costs of the said vehicle.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Pirani & Pirani has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
INTRODUCTION
These are parenting and financial proceedings commenced by Ms Pirani (“the wife”) on 6 June 2023. The other parties to the proceedings are Mr Pirani (“the husband”), and:
(a)The second respondent, B Pty Ltd;
(b)The third respondent, C Pty Ltd;
(c)The fourth respondent, D1 Pty Ltd;
(d)The fifth respondent, D2 Pty Ltd; and
(e)The sixth respondent , E Pty Ltd.
Each of the second to sixth respondents are corporations that the wife contends are either directly or indirectly controlled by the husband (“the additional respondents”). The ownership structure of the additional respondents is recorded notation C and D to the orders made on 22 June 2023, being:
C. The husband agrees that:
(c)In relation to the second respondent, [B Pty Ltd]:
(i) He is the sole director and secretary;
(ii) The third respondent, [C Pty Ltd], is the sole shareholder.
(d)In relation to the third respondent, [C Pty Ltd]:
(i) He is the sole director, secretary and shareholder.
(e)In relation to the fifth respondent, [D2 Pty Ltd]:
(i)He is the sole director and secretary;
(ii)The third respondent, [C Pty Ltd], is the sole shareholder.
(f) In relation to the sixth respondent:
(i)He is the sole director and secretary;
(ii)[MM Pty Ltd] is the sole shareholder, being a company for which the husband is the sole director and secretary and the third respondent, [C Pty Ltd], is the sole shareholder.
D.It is not controversial that save and accept as to the fourth respondent, which is currently subject to external administration with a receiver and manager appointed, the husband has ultimate control either directly or indirectly of the second, third, fifth and sixth respondents.
D1 Pty Ltd (the fourth respondent) was placed in external administration and in early 2023 receivers were appointed on its behalf. Neither it nor its receiver and manager have not participated in litigation to date.
The husband and wife commenced cohabitation in 2012 and married in 2013. They have three children together, namely:
(a)X born 2013, who is turning 10 years old and is in Year 4 at KK School;
(b)Y born 2015, who is seven years old and is in Year 2 at LL School; and
(c)Z born 2018, who is four years old and is in pre‑kindergarten at LL School.
The husband and wife travelled to Country P with the children in late 2022. The wife left Country P with the children in January 2023. This is the husband’s contended date of separation. The wife says they separated in mid-February 2023.
In Australia, the wife and the children live in the home at F Street, Suburb G (“the Suburb G property”). The husband is the sole legal owner of the Suburb G property.
On the application of the wife, on 7 June 2023 a raft of injunctive, financial and parenting orders were made ex parte against the husband and the additional respondents, including the following:
1.Orders are made in accordance with paragraphs… of that part of the Initiating Application filed on 5 June 2023 under the heading "Urgent Ex parte Orders" as set out hereunder:
[1.5.] The children… shall live with the Wife.
[1.6.] The Wife has sole parental responsibility of the Children.
…
[1.7.]The Wife be granted sole and exclusive occupation of… the [Suburb G] Property.
[1.8.]The Husband must pay all mortgage instalments as and when they fall due in respect of the mortgage secured upon the [Suburb G] Property to the Westpac Banking Corporation [Westpac Mortgage].
[1.9.]The Husband pending final determination of these proceedings or further order is to pay outgoings in relation to the [Suburb G] Property as and when they fall due including the following:
9.1. council rates;
9.2. insurances;
9.3 water rates;
9.4 electricity and gas charges.
[1.12.] The Husband must within 48 hours of service of these Orders:
12.1.do all acts and things required and sign all documents necessary to transfer, or cause the transfer, of ownership to the Wife of the mobile telephone number […] and pay any outstanding bills, charges or invoices relating to the mobile telephone number and provide evidence of such payment to the Wife. To give effect to this Order, the Husband be restrained from doing any act or thing or causing or permitting any third party to do any act or thing, including but not confined to, disposal, disconnection, cancellation or transfer to a third party of the mobile telephone number;
…
[1.14.]The Husband and [B Pty Ltd] are restrained from doing any act or thing or causing any act or thing to demand payment or exercise any mortgagees rights in respect of the [B Pty Ltd] Mortgage.
[1.15.]The Husband is otherwise restrained from the date of these Orders until 4.00 pm on the day that the Wife's Interim Application is heard from:
15.1.transferring any greater sum than $50,000.00 in aggregate, and/or any property to the value of $50,000.00 from any bank account or funds held with any institution or company either owned or controlled by the Husband in Australia to overseas including but not limited to each of the companies listed in Schedule 1 to these Orders;
15.2.doing any act or thing including directing any other person or entity to do any act or thing that would cause the reduction of the asset pool as at the date of these Orders save for any act or thing that would be required to be carried out in the usual course of business;
15.3.selling any real property either owned in his name, [B Pty Ltd] or company either owned or controlled by the Husband in Australia including but not limited to each of the companies listed in Schedule 1 to these Orders unless no less than 3 business days written notice is provided to the Wife; and
15.4.in the event of a sale of a property or properties each of the Husband and/or the company are restrained from dealing with the proceeds of sale other than to cause them to be deposited to an interest bearing controlled monies account conducted in the name of the solicitors for the Wife as trustee for the Wife, the Husband and the respective company which owns the property and or properties and where such monies shall remain until further Order.
…
[1.19.]The Husband and [D1 Pty Ltd] are restrained from doing any act or thing to demand payment or exercise any mortgagees rights in respect of the [Suburb J] Property…
By consent on 9 June 2023, Order 1.15.1 and 1.15.2 made on 7 June 2023 were varied to increase the value of the restraint to $1 million. Orders 1.15.3 and 1.15.4 made 7 June 2023 were discharged.
On 14 June 2023 an order was made for the husband to pay the wife the sum of $20,000 within one week by way of urgent spouse maintenance and orders were made requiring disclosure from the husband.
Further consent injunctive orders were made on 22 June 2023. Order 7 made on that date recorded:
7.The following subject matters are listed for hearing before me by way of Microsoft Teams on 30 June 2023 at 2.15 pm as sought by the wife on an interim basis in her Initiating Application filed 6 June 2023.
(a)Partial property settlement/spousal maintenance [Proposed Order 17 and 30];
(b)Urgent child support [Orders 31 to 32];
(c)Litigation funding [Orders 33 to 35] in an amended sum of up to [$1 million].
(d)Order of return of [Motor Vehicle 1] [Order 18, 19 and 20].
During the hearing on 30 June 2023, the wife:
(a)Said that although she had applied for an administrative assessment of child support to the Child Support Registrar, no assessment had issued. She expected that it would issue immanently. In those circumstances, and having regard to the husband’s concessions that he would agree to pay both periodic and non-periodic child support to the wife, she withdrew her application for urgent maintenance pursuant to s 139 of the Child Support (Assessment) Act 1989 (Cth). She reserved her capacity to make such further application for interim periodic and non-periodic child support departure in the future; and
(b)Agreed that the husband’s sworn evidence that Motor Vehicle 1 driven by the wife during their marriage had been transferred to a creditor in satisfaction of a debt was not inherently improbable (at paragraph 69 of his affidavit). Her relief seeking the return and exclusive use of Motor Vehicle 1 was withdrawn and dismissed, reserving her capacity to make such further application in relation to the vehicle as she was advised. The wife identified that she would make specific disclosure requests of the husband as to this subject matter.
The Response to an Initiating Application filed by the husband on 29 June 2023 recorded his interim agreement to pay periodic and non-periodic child support for the children as follows:
12. The Court notes that the Husband has agreed to pay or cause to be paid to the Wife the sum of $500 per week per child by way of child support.
13. The Court notes that the Husband has agreed to pay the following non-periodic child support expenses as and when they fall due:
a. 100% of all school fees for the attendance by the children at [KK School] and [LL School].
b. 100% of [KK School] and [LL School] canteen expenses.
c. 100% of out of school care fees and day care fees for the attendance by the children as agreed between the parties in writing.
d. 100% of all extra-curricular activities as agreed between the parties in writing or as currently undertaken by the children.
e. 100% of all instalments of the children's private health insurance at not less than the current level of cover and the final payment to be made on the occurrence of a terminating event with respect to each child.
f. 100% of the children's gap medical, dental, hospital, optical, physiotherapy, psychologist, psychiatry, counselling, paediatric and orthodontic expenses not recoverable from Medicare or private health insurance and as agreed between the parties in writing.
14. The Court notes that by way of implementation of notation 13 herein, the Husband has agreed to pay all non-periodic expenses for the children directly to the referable third-party service provider in question upon the production and receipt of a tax invoice.
In the husband’s Response, he:
(a)Agreed to pay to the wife the sum of $2,500 per week by way of interim spouse maintenance, and to continue meet the payments on the mortgage, outgoings and utilities relating to the Suburb G property until it is sold;
(b)Sought by way of additional relief, absent reasonable notice, to discharge Order 1.7 made on 7 June 2023 for the wife to have exclusive occupation of the Suburb G property, orders for him to thereafter have exclusive occupation of the property and for orders that it to be sold, and orders to facilitate him communicating with the children by FaceTime from Country P. The husband accepted that a hearing of this additional relief occasioned a prejudice to wife in circumstances where it was filed one day prior to the hearing, and she was given insufficient notice of it. That tranche of relief was agreed to be adjourned to a further already allocated hearing of this proceeding on 18 August 2023.
In circumstances where the husband’s application to sell the Suburb G property is listed for hearing on 18 August 2023 and he presently agrees to continue meeting the mortgage instalments, outgoings and utilities in respect of the property until it is sold, his application to discharge Orders 1.8 and 1.9 made on 7 June 2023 will be dismissed. The husband does not contend that the payments pursuant to those orders cannot continue to be made at least in the short-term future, and on his case until the sale is concluded. In the event he is successful in his relief for the sale of the Suburb G property on 18 August 2023, the period of payments pursuant to the orders will be limited. If he is unsuccessful, the orders will continue to operate.
The husband agreed to an interim order being made requiring him to do all things necessary to ensure the wife had exclusive use of Motor Vehicle 4, and to cause the registration, comprehensive insurance and service costs in respect of that vehicle to be paid. An order will be made to that effect.
The wife said that she would facilitate the husband communicating with the children by FaceTime on two occasions each week between 4.30 pm and 5.30 pm, provided that for the purpose of such FaceTime the husband provides a mobile telephone for the children’s use. A notation will be made to that effect.
Hence, the issues remaining for determination at the hearing before me on 30 June 2023 were:
(a)Whether the husband pay to the wife funds by way of litigation funding, and if so, in what sum?
(b)Whether the husband should pay to the wife funds by way of interim or partial property settlement or lump-sum spousal maintenance, and if so, in what sum?
(c)What should the value of the interim periodic spousal maintenance agreed to be paid by the husband to the wife be?
For the reasons that follow, orders are made that the husband pay to the wife within 14 days, the sum of $450,000 by way of litigation funding and the sum of $150,000 by way of partial property settlement. Orders are made for the husband to pay periodic spouse maintenance to the wife in the sum of $3,500 per week.
DOCUMENTS RELIED UPON BY EACH PARTY
The wife relied on:
·Her Initiating application filed 6 June 2022;
·Her affidavits filed 5 June and 14 June 2023;
·Her Financial Statement filed 5 June 2023;
·A tender bundle (Exhibit 6);
·Her Case Outline document filed 30 June 2023 (Exhibit 2); and
·Her costs notice filed 30 June 2023 (Exhibit 3).
In her Case Outline, the wife amended (without objection) her relief sought for litigation funding from an order that the husband pay her $500,000 to an order that he pay $1 million.
The husband relied on:
·His Response to an Initiating Application filed 29 June 2023;
·His affidavit filed 29 June 2023;
·His Financial Statement filed 29 June 2023;
·A tender bundle (Exhibit 7);
·His Case Outline document filed 30 June 2023 (Exhibit 2); and
·His costs notice filed 30 June 2023 (Exhibit 5).
Neither of the husband’s affidavit or Financial Statement filed 29 June 2023 were sworn or affirmed in accordance with Pt 8 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”). The husband gave oral evidence by Microsoft Teams from Country P adopting on his oath as to the truth of the contents of each document.
The husband also sought to rely upon an affidavit of Mr NN, the Chief Financial Officer of the B Group, said to be sworn on 22 June 2023. The wife in submissions also made reference to the contents of the affidavit. It was a document forwarded in part by email to the chambers of Schonell J by the solicitor for the additional respondents on 22 June 2023 notwithstanding the hearing as to the continuation of injunctions on that day was listed before me. A representation was made in that email and by the legal representative of the additional respondents said that the document would be filed with the Court. An order was made on 22 June 2023 to that effect. It has not been filed. The pages of the document forwarded by email by the additional respondents was incomplete, and did not contain any of the annexures or exhibits to the document. The document available to the Court at the hearing on 30 June 2023 remained as it was on 22 June 2023.
The wife’s affidavit filed 5 June 2023 annexed 1,758 pages of exhibits. The husband’s affidavit filed 29 June 2023 annexed 156 pages of exhibits. Each party thereafter tendered large bundles of documents. A direction was made at the outset of the hearing that consideration would not be given to any of the annexures or exhibits to the affidavits or documents in the tender bundles unless the document itself, or the proposition of fact to be proved or inferred from the document, had been identified in oral or written submissions.
BACKGROUND
The husband is 55 years of age and wife is 35 years old. They are each of Country P heritage and spent some months in Country P during each year of their cohabitation.
Throughout the relationship, the husband engaged in property development through the B Group. The wife deposed that B Pty Ltd, being the ultimate holding company of the B Group, was incorporated in 2009. The B Group comprises more than 80 different corporations (including the additional respondents) and trusts, which are listed in a schedule to the wife’s affidavit. The import of each of the husband and wife’s evidence, consistent with the Mr NN document, is that the B Group is a very complex, interrelated web of corporate and trust structures which undertakes work relating to residential, commercial and retail properties with its own finance arm.
The husband was previously married and finalised a property settlement with his first wife in 2011. He has three children from this prior marriage. One of those children has been charged by the police with allegations relating to a B Group project. The flavour of the wife’s evidence is that there is some prospect of the husband also being charged with criminal offences should he return to Australia and hence he will not return to Australia in the short to medium term future. This may or may not resonate with the events concerning the New South Wales Crime Commission at [40] below.
The wife worked in an office of the B Group while studying at university in 2009. She made no direct financial contribution when she commenced living with the husband in 2012. The wife said it was her understanding, based on conversations she had with the husband, that he owned a property at Suburb PP and a property in Suburb L at that time. The husband did not dispute this evidence in his affidavit.
The husband and wife’s eldest child was born in 2013, shortly after the commencement of cohabitation.
The import of the wife’s affidavit was that her primary role throughout the relationship was as a homemaker and parent to the children. She said she undertook voluntary roles with charitable organisations and worked at the B Group, indirectly assisting the husband by improving his image and reputation, as well as that of the B Group.
The Suburb G property was acquired in 2016. The existing residence on the property was demolished and a new home constructed. The wife estimates the current value of the Suburb G property to be in the range of $16 million. It is subject to a Westpac mortgage, a B Pty Ltd mortgage and a number of caveats.
In 2019, the wife said that the husband gifted her Motor Vehicle 1. She says that the husband represented to friends and family that he bought the car for the wife, including on social media (at paragraph 83 of her affidavit) purchased for over $400,000. Implicitly, it was the wife’s understanding that Motor Vehicle 1 was her car and that the husband did not suggest to her that this understanding was wrong. The husband’s affidavit records that the car was owned by B Pty Ltd and was unencumbered.
The wife gives evidence that in 2021, she and the husband purchased a property at QQ Street, Suburb J (“the Suburb J property”). She said her parents have lived in the property since its purchase, that her mother suffers from mental health conditions and that she is estranged from her father. The property is registered in the wife’s name and is subject to a mortgage in favour of D1 Pty Ltd to the value of $875,000. The wife contends the property is worth about $870,000. D1 Pty Ltd (the fourth respondent) is currently in external administration. The wife foreshadows that she may put the integrity of the mortgage into issue, saying that she has no recollection of executing such mortgage security in favour of D1 Pty Ltd.
The wife gives evidence, not put into issue by the husband in his affidavit, that during the marriage she received a wage of $10,000 per month from the B Group, accessed from the husband cash on request of between $5,000 to $10,000 per week and had all but unlimited use of the husband’s credit card.
Events and financial circumstances since separation
As recorded above, the parties separated in either January or February 2023. The husband said that he perceives the wife returning to Australia with the children in January 2023 as “her kidnapping of the children” (at paragraph 14 of his affidavit). The wife says she left Country P with the children in anticipation of them recommencing school in Australia. She contends that separation occurred in mid-February 2023.
The husband has resided in Country P since late 2022. His affidavit evidence foreshadows that he will remain in Country P in the immediate future, and implies that the children will continue to live with the wife in Australia. He said that he seeks to spend time with the children, including in Country P (at paragraph 14 of his affidavit).
The husband’s evidence at paragraph 50 of his affidavit is that he drew down on a directors’ loan made to him from B Pty Ltd (the second respondent) to pay the wife:
(a)A total of $559,230 from 15 November 2022 until 9 May 2023, being an average of approximately $22,369 per week; and
(b)$20,000 by way of urgent spouse maintenance pursuant to an order made on 14 June 2023.
The husband’s Case Outline records that he said he has also paid significant ongoing expenses in relation to the Suburb G property, including mortgage repayments and utilities in the sum of $7,385 each week.
The parties are in dispute as to the fact, value and possession of funds held in cash in a safe in Country P and in a safe in the home at Suburb G. The wife’s affidavit records that in early 2023 a warrant was executed by the New South Wales Crime Commission for a search of the Suburb G property, and that $250,000 was seized on that day. This cash remains held by the Crime Commission.
The wife gives evidence in her affidavit that since separation the husband has caused her to be followed by up to 10 men, to be photographed by a private investigator and as to he then sending her electronic communications threatening to “kill” her and that he will “steal” the children. She says on Easter Sunday the husband threatened to get people to take the children away from her and bring them to him in Country P. She says that he threatened to lock her and the children out of the Suburb G property unless she apologised and “stop[ped] this nonsense”.
In early 2023, the wife drove the children in Motor Vehicle 1 to a local shopping centre. She said that while there, she received an email from the human resources manager of the B Group advising that Motor Vehicle 1 was “owned by the company” and was required to be returned within an hour of the wife receiving the email. The wife said she returned to look for Motor Vehicle 1 in the shopping centre and could not find it. She reported the motor vehicle as missing to the police. Her affidavit then records:
90. [In mid-2023], I received a voice message from [the husband]. During the course of that message he said [I have deposed to what I regard as the most relevant parts of the message in this context] the following :
[Mr Pirani]: "of course I want to take the car… I did that. .. because of what you did to me. .. you don't understand jack shit ... call me back send me the fucking contract between you and him [Mr RR] and tell me how much he owes you because he is going to fuck you with a big bill you fucking slut".
The husband did not deny this evidence in his affidavit.
In April 2023, the wife received a series of text messages and telephone calls, first from employees of the B Group advising that she had until 4.00 pm that day to vacate the Suburb G property, and then from the husband advising that the home would “be locked down as part of the sale process” (see paragraphs 93–95 of her affidavit). She later received communications that the home had been repossessed.
It was the wife’s evidence, not challenged by the husband in his affidavit, that in May 2023 the husband carried out his earlier threat by causing a man with a security industry licence to attend put a lock on the gate of the Suburb G property. The police attended and required the security person to remove the lock. They wife and the children thereafter recovered access to the home.
The wife says and the husband does not deny disconnecting the mobile telephone number she has used for the past ten years. This conduct has been rectified by way of Order 1.12 made on 7 June 2023.
The husband broadly says in his affidavit that he regrets many of his communications with the wife and that they arise from his Country P culture and the language often used by way of passionate expression. He did not explain or put into context the evidence of the wife as to his insurgent effort to exclude the wife and children from the home, severing her access to her telephone number or causing the clandestine seizure of her motor vehicle. The wife gives at a significant number of other examples in her affidavit of text messages and communications received from the husband in which has made threats to follow her, call the police on her, or to monitor her movements. Those communications record the husband’s use of insulting and denigrating language towards the wife (see at paragraphs 157–190 of her affidavit).
It is the wife’s case that the husband is undertaking a strategy to remove his wealth from Australia. It is not controversial that in the shadow of separation, the B Group has sold or is in the process of selling a number of properties valued at hundreds of millions of dollars. As identified earlier in these reasons, orders have been made regulating the sale of a group of properties in Suburb L, achieving on disposal in excess of $90 million and as to property at Suburb N marketed at a sale price of approximately $55 million .
The husband gives evidence at paragraph 31 of his affidavit that:
(a)D1 Pty Ltd (the fourth respondent), the entity which he describes as the “finance arm” of the B Group, is presently under external administration; and
(b)The NSW Department of Fair Trading sought to suspend and revoke the B Group’s licence in 2022, although his evidence suggests that the licence has been reinstated.
He says each of the above circumstances generated a “crippling effect on the overall operations of the business and led to other issues”, such as triggering significant cash flow issues and external finance providers issuing default notices to realise their facilities valued at hundreds of millions of dollars. It is his case that the B Group is rationalising its stock to meet outstanding demands of registered financiers, but that doing so will not produce excess funds given that all proceeds of sale shall be used to retire secured debts.
It is the husband’s evidence that he has “very limited cash flow”, that he has been living “from the directors’ loans made to [him]” and that he and the wife have been living off borrowed funds this year, including to pay the Suburb G mortgage and outgoings (as recorded at paragraph 37 above). He says that the Suburb G mortgage repayment is “currently drawing on itself” but does not give evidence of the value of any as yet undrawn portion this facility.
In addition to the Suburb G mortgage, the husband said that:
74. There are a number of loans, lending arrangements, supplier arrangements and contractor arrangements in respect of the group for which I had to provide director’s personal guarantee as security of payment. The security is the [Suburb G] property.
75. Whilst I have met the repayments on these loans to date, I do not have cash flow from my business sufficient to be able to maintain it on an ongoing basis.
(Husband’s affidavit filed 29 June 2023)
The wife’s final relief sought is contained in her Initiating Application filed 6 June 2023. In respect of the parenting proceedings, she seeks that the children live with her and that the husband be subject to various restraints, including from removing the children from Australia. She does not currently seek orders as to parental responsibility or the children spending time with the husband. In relation to the financial proceedings, she seeks that the husband transfer to her his interest in the Suburb G property and discharge any loans secured on that property, and that he otherwise pay her an adjusting sum which would effect a 40 per cent division of the net property pool in her favour. She submitted that if her contributions were assessed at the lower end of the reasonable range, the net property pool would be divided 70 per cent in the husband’s favour and 30 per cent in hers.
The husband’s final relief sought is contained in his Response to an Initiating Application filed 29 June 2023. He does not particularise his final parenting relief sought. In relation to the financial proceedings he seeks that the Suburb G property be sold, that upon its sale he receive all of the proceeds of sale, and that each of he and the wife otherwise be declared the sole legal and beneficial owner of the property in their possession. He seeks that the wife pay his costs of the proceedings. Implicitly, he contends that there is no warrant for any adjustment pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
THE LAW
The sources of power grounding the wife’s relief and the necessary preconditions and relevant considerations for making the order sought
As to her relief that the husband pay her $1 million for litigation funding, the wife relied on the costs power pursuant to s 117 of the Act, or if that was not successful, then relied on s 79 and s 80(1)(h) of the Act.
As to her relief that the husband pay her $150,000 by way of either interim property settlement or spousal maintenance, the wife relied on the power pursuant to s 79 and s 80(1)(h) of the Act.
Before an order as to costs can be made, the Court must be satisfied that the order is, in the circumstances, just (s 117(2) of the Act). Until that point, there is no power to make an order departing from the general rule that each party pays their own costs. Once enlivened, the discretion to make an order as to costs is governed by the considerations contained at s 117(2A) of the Act. There is no authority that contends that more than one of the factors in s 117(2A) need be present. Indeed, any one factor may be determinative.
In Salvage & Fosse (2020) FLC 93-966 (“Salvage & Fosse”) the Full Court identified that litigation funding orders have a long history and are made to alleviate the obvious unfairness of a party with control of the assets being able to marshal them to pay lawyers, leaving the other party to attempt to pursue the proceedings without being able to resort to property that might subsequently be transferred to them. That said, each application must be looked at according to its own particular facts and circumstances.
As to litigation funding, the principles relevant to the making of such orders were identified by the Full Court in Zschokke and Zschokke (1996) FLC 92-693. The Full Court in that decision said three matters were relevant regardless of “whether the matter was determined as an interim property settlement order under s 80(1)(h), or as an interim costs (or security for costs) order under s 117(2), or indeed even a maintenance order” (at 83,217), being:
(a)A position of relative strength on the part of the respondent;
(b)A capacity on the part of the respondent to meet his or her own legal costs; and
(c)An inability on the part of the applicant to meet his or her legal costs.
The Full Court also identified that it may well be necessary for the Court to have regard to whether, in the circumstances of the particular case, it will be possible to take into account in the final proceedings any sum that might be payable under the order (at 83,217).
In Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578 (at [30]–[32]), Brereton J said that in addition to the above three matters, the following are relevant for the purposes of a litigation funding order:
(a)An applicant should have “at least an arguable case for substantive relief which deserves to be heard”;
(b)There should be evidence of the applicant’s likely costs of the litigation;
(c)It is not essential that the applicant’s legal representatives will not continue to act unless the costs are paid or secured on an ongoing basis;
(d)An order may make provision for litigation expenses at a rate that appears reasonable in all the circumstances;
(e)An order can be for costs already incurred as well as for future costs and such matters as well as the question of whether the applicant’s lawyers will continue to act in the absence of a litigation costs order may be relevant to the discretion to make an order and the quantum thereof;
(f)Any such order should be framed to protect the parties from risk of injustice which could be done by requiring the funds to be administered by the applicant’s solicitors and applied only to meet the expenses referred to in the order.
While the exercise of the cost power carries with it a very broad discretion, that discretion must be exercised carefully for the purposes of litigation funding. The Full Court has affirmed that an order must be framed to protect the parties from any risk of injustice arising from the manner in which the funds are expended.
As to the exercise of an interim or partial property power pursuant to s 79 and s 80(1)(h), the Full Court in Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 (“Strahan”) revisited the principles effectible to interim or partial property orders, and set out effectively two steps being:
(a)First, establishing that s 80(1)(h) is enlivened. The test is not confined to “compelling circumstances”. Subject to the interests of justice, the usual approach in respect of s 79 is a once and for all order (see Swift & Swift [2020] FamCA 991 at [16]). That said, more is required than the mere fact that upon a final hearing the party seeking the order would receive the property sought (Marchant & Marchant (2012) FLC 93-520). The “overarching considering” as to the appropriateness of the exercise of an interim property power by the Court must be answered in the affirmative in the interests of justice; and
(b)The second step requires “consideration of the factors which are relevant the second step involves the exercise of that to the exercise of power under s 79” (at 85,641). Given it is an imprecise exercise in the making of these orders, any discretion ought be:
(i)Conservative so as to ensure the final property outcome is not compromised; and
(ii)That the remaining property is sufficient to meet the legitimate expectation of both parties at the final hearing; and
(iii)The interim or partial order is capable of being reversed or adjusted if it is subsequently considered necessary to do so.
The Full Court in Medlow & Medlow (2016) FLC 93-692 reinforced a cautious approach should be adopted by trial judges in exercising an interim property power that have a real prospect of depleting the property of the parties. That said, as was explained by the Full Court in Strahan, s 80(1)(h) is a wide enabling provision for interim property decisions.
CONSIDERATION
The specie and value of the pool of property available for adjustment between the parties
The wife’s contended balance sheet became Exhibit 5. It is a 48-page document which includes in excess of 800 items of property. It records the wife’s assertions that:
·The pool of property available for adjustment between she and the husband is between $500 million and $2 billion dollars; and
·The Suburb G property has an estimated value of $16 million and is subject to a mortgage of $12 million.
The husband was critical of the wife in failing to record in Exhibit 5 the value of the very significant liabilities of the B Group. That said, he did not put into evidence any document even vaguely resembling a draft balance sheet. This is remarkable given that he, as against the wife, has a significantly greater capacity to construct that document. He did identify and tender a number of demands made by secured creditors of differing corporations in a piece meal fashion absent context as to the value of the items of real property securing each demanded liability or the current financial circumstances of the said differing corporations subject to the demands.
The wife makes substantial complaint as to significant disclosure failures of the husband. It is uncontroversial that the husband has not disclosed:
(a)Any set of financial statements for any corporation or trust after 30 June 2021; and
(b)Any of his personal bank statements, or those of the corporations.
A party to property proceedings is required to make full and frank disclosure of their financial position (see Weir and Weir (1993) FLC 92-338). That case law is reinforced in ch 6 of the Rules. The duty of disclosure is absolute. It is a continuing onus throughout the litigation process, which is critical to the function of the jurisdiction and fundamental to achieving justice and equity. The fact that the obligation of disclosure exists as a duty to the Court, as well as the other party, is significant. It is also significant that the obligation is in respect to the disclosure of “information relevant to the dispute”, and is not simply one that attaches to the production of documents. Importantly in this case, it extends to all relevant and material facts.
It is not controversial that the husband’s last disclosed taxation return was for the financial year ending 30 June 2021, being two years ago. It is described by the wife as recording:
20. The most recent tax return for the husband discloses a taxable income for 2021 of $2,373,944.00. The tax on taxable income was $1,038,941.80. After Medicare, the tax payable was $1,086,420.68.
21. The husband had franking credits of $579,619.00, leaving a tax payable of $506,801.68.
22. It follows that the disposable income for the husband for the year ended 30 June 2021 was $1,867,142.00.
23. In the absence of any further disclosure by the husband, the court is entitled to take the view that the husband’s disposable income is the nett amount for 2021, which amounts to $35,907.00 per week.
(Wife’s Case Outline filed 30 June 2023)
Again it is uncontroversial that the last set of corporate financial statements disclosed by the husband to the wife is for the financial year ending 30 June 2021. The wife identifies that:
24. The most recent profit and loss statement, being for the year ending 30 June 2021, for [B Pty Ltd], discloses a gross profit for the year of $97,241,255.00 and a net profit of $61,517,161.36.
25. The balance sheet of [B Pty Ltd] for 30 June 2021 shows a total equity of $229,734,443.00.
(Wife’s Case Outline filed 30 June 2023)
The husband’s 2021 taxation return and the 2021 B Pty Ltd financial statements did not form part of the plethora of documents annexed to the identified affidavits or tender bundles. I cannot accept what was submitted on behalf of the wife in her Case Outline in the absence of evidence. That said, the husband did not say that what she recorded was incorrect, and implicitly agreed that the 2021 financial statements would reflect that the B Group or B Pty Ltd recorded significant profits for that financial year. He submitted that reliance on the 2021 financial statements for the B Group is fraught and that the position of the Group is now dire. I give little weight to that submission, given that he had failed to produce any other reliable documents upon which the Court ought to rely to ground a picture as to the B Group’s current financial position. He ought not achieve an advantage from his own omission.
I am not prepared to accept for the purposes of this proceeding, where the B Group employs a large number of people in the corporations the husband controls, including the Chief Financial Officer, Mr NN who has purported to prepare an affidavit in this proceeding, the husband’s assertion that he is unable to produce and disclose draft management accounts for any of the corporations post-dating 1 July 2021 (that is, for the past two years).
I do not accept the husband’s evidence that he is unable to fully comply with his disclosure obligations from Country P, including that he has not disclosed a personal or corporate bank statement. While he says that in Country P he no longer has access to any relevant personal or corporate bank statements, Mr NN or other B Group staff or his accountants could facilitate this process with his authority in Australia. Additionally, as recorded below, it appears the husband has conducted large electronic financial banking transactions by way of a mobile device from Country P during the 2023 calendar year, including transferring monies between different financial institutions and accounts and withdrawing funds.
The husband’s affidavit records the following:
67. I am unable to produce my tax return for the financial year ended 30 June 2022 in circumstances where it has not yet been prepared. I am unable to produce bank statements for the past 12 months in circumstances where the banks (including Westpac and CBA) have closed all my accounts and I no longer have access to any statements. I do not receive any pay slips, nor do I have an ABN.
There is a disingenuous aspect to that evidence. Accepting for a moment that it is accurate, the husband conceded (as recorded by Notation D made on 22 June 2023) that he has ultimate control either directly or indirectly of the second, third, fifth and sixth respondents. Disclosure of only his personal documents (personal pay slips, bank statements, or his own ABN as recorded in his affidavit) cast against this concession would not paint an accurate picture of his financial position, nor satisfy his disclosure obligations under the Rules.
The general ledger for B Pty Ltd for the period 10 December 2021 to 9 June 2023 commenced at page 87 of Exhibit 6 (the wife’s tender bundle). It recorded the husband’s directors’ loan account being in credit of $1,185,124 as at 13 December 2021, and to be in debit of $2,552,833 on 9 June 2023. The ledger contains many transactions, including:
·Sizeable electronic withdrawals using a mobile device (often more than one on the same day), including withdrawals of $450,000 on 23 November 2022, $50,000 on 29 November 2022, $600,000 on 10 March 2023, $40,000 on 21 March 2023, $100,000 on 11 April 2023, $40,000 on 24 April 2023, $40,000 on 3 May 2023 and $39,000 on 23 May 2023; and
·Transactions spent on a debit card in City SS and other purchases of luxury travel during the period the husband was in Country P and the wife was in Australia; and
·Significant payments to the Australian Taxation Office; and
·The payment of school fees; and
The value of the withdrawals from the loan account in the period from 1 February 2023 (being the day following the husband’s contended separation date) to the period 9 May 2023 was $1,282,061. In the same period the husband said he provided $242,230.50 of those funds to the wife (see husband’s affidavit at paragraph 50, excluded advances prior to 1 February 2023). The inference remaining is that the husband has accessed in excess of over $1 million from the loan account in the same period. I accept, having regard to the ledger, that some of those funds have been paid to meet the children’s school fees. However, the husband has failed to disclose in his evidence any material accounting as to the use and application of the balance of those funds.
Most of these transactions occurred while the wife was in Australia and the husband in Country P. I am satisfied that the above evidence implies acceptance that the husband has a capacity to access his electronic banking from Country P, and infers that he therefore has access to at least some documents for his personal bank account. It further infers that an individual at B Pty Ltd has been able to record the transactions in a ledger summarising information from a source, most likely a bank statement. The ledger placed into evidence by the wife permits an inference that I accept that the husband or his agents (including by way of his control of B Group employees) have similar documents and information as to other entities in the B Group and that the husband as the director and ultimate owner of the additional respondents (save as to the fourth respondent’s recent documents) had the capacity to disclose, notwithstanding he is in Country P, those documents as sought by the wife or as required by the Rules.
I therefore accept the wife’s submission that for the purpose of this determination, the husband had significant disclosure obligations pursuant to the Rules and that he has not yet met those obligations. I further accept that his failure to do so at this time has adversely impacted on the Court’s exercise of its jurisdiction, such that an aspect of robustness by way of inference in the wife’s favour is available in the circumstances.
Each of the husband and wife relied upon the document of Mr NN not yet filed. They did not contest the statement of Mr NN that the B Group is a substantial enterprise and that he estimated the value of the real property owned by the group is in the order of over $1.5 billion with borrowings of over $1 billion. In the circumstances of the husband’s disclosure failures, I will accept this as not materially disputed by him at this time for the purposes of this determination. This conclusion is supported by the fact of the reality of the husband having the ultimate direct or indirect control and benefit of the additional respondents as recorded in these reasons.
The application for litigation funding
The wife submits forcefully that:
(a)Almost all of the husband and wife’s property is currently controlled by the husband, save for the Suburb J property occupied by her parents (which on the husband’s case has little or no equity) and her jewellery that she values at $800,000 in Exhibit 5 (the balance sheet) and $700,000 in her Financial Statement;
(b)After separation, she received voluntary support from the husband by payments, valued at $242,230.50 between 1 February 2023 and 9 May 2023 (on the husband’s own case);
(c)The husband’s operation of his directors’ loan account reflects a reality that the husband has access to vast sums of cash whenever he requires;
(d)As reflected in her Costs Notice, she has incurred legal costs up to and disbursements up to the date of the hearing on 30 June 2023 of $515,538, and has been provided an estimate of her total costs to be incurred to the conclusion of a final hearing in the range of $3.5 million. Of those fees already incurred, $10,000 has been paid by the wife to her solicitor, and further $5,000 was paid to retain senior counsel. She has briefed both senior and junior counsel, and in her affidavit identified their relevant retainer agreements;
(e)As reflected in his Costs Notice, the husband has incurred costs and disbursements as at 30 May 2023 of $10,045. He has paid $9,120 to his solicitors, and his solicitors hold a further $98,568 in trust. He has also briefed senior counsel. The husband has been provided an estimate of his total costs to be incurred to the conclusion of a final hearing in the range of $1.5 million.
In resisting the wife’s application, the husband highlights his assertion that the wife has in excess of $15 million in jewellery and personal effects. It is his case that she should sell her jewellery to pay her own legal fees or to support herself. The affidavit evidence of the husband records a contention of the wife that the jewellery is subject to a lien. I am unable to make any finding at this stage as to the integrity of the contended lien, as to the value of the wife’s jewellery or as to the value it may realise if sold.
The husband highlights his evidence as to the need to sell the Suburb G property and retire the debt associated with it. His evidence is vague as to what sum, if any, will be achieved on the sale, if it occurs. Should the sale occur, it is the husband’s proposal that:
(a)The wife be paid $150,000 from the proceeds of the sale to fund her legal costs (see paragraph 8(e) of his interim relief sought in his Response to an Initiating Application filed 29 June 2023); and
(b)Thereafter she and the children live in the Suburb J property currently occupied by the wife’s parents, because it is “more affordable and has less outgoings”. He did not identify why D1 Pty Ltd, currently in administration, would not proceed to recover the loan secured by mortgage registered on the property. He did not identify how the children, if they lived in the Suburb J property, could continue at their current schools.
The husband did not give evidence as to any limitation as to the further value he could draw by way of loan from his corporations, currently or in the short to immediate future.
While I am unable to make any determination as to the reliability of the husband’s broad and unparticularised assertion as to the increasingly dire financial circumstances of both he and the B Group the context of an interim hearing, his evidence cannot be rejected at this stage as being glaringly improbable. That said, I am mindful of:
(a)His disclosure failures and the inferences available from same; and
(b)The statements of Mr NN that the real property interests of the B Group have a net value of about half a billion dollars; and
(c)The husband’s evidence that he has provided to the wife $559,230 from 15 November 2022 until 9 May 2023 (see at [37] above); and
(d)The acceptance of the matters recorded in [76] above; and
(e)What appears to be a limitless capacity of the husband to fund his own legal fees going forward.
Against that background, I find that the evidence establishes that the husband’s current financial circumstances are vastly superior to those of the wife, that the husband has capacity to meet his own current and future legal costs, and a current inability exists on the part of the wife to meet her current and future legal costs.
The husband has the provenance of nearly all of the documents and information required to establish the current specie and value of the property available for adjustment. I accept the wife’s submission that having regard to the husband’s conduct to date there is little cause for optimism that the matter will be resolved in a straightforward manner. History being indicative of the future, I find that it is more likely than not that the wife will need to resort to forensic processes to obtain relevant documents and information, which in turn will cause her to incur significant future costs.
Having regard to:
(a)The likely existence of a significant pool of property of the parties being available for adjustment; and
(b)The wife’s largely uncontroversial contributions made during the marriage coupled with the likelihood of her continued primary care of the children; and
(c)In attaching weight to the husband’s own concession as to the wife receiving funds for litigation funding in the event of the home being sold; and
(d)Considering the scale of the likely litigation
I find prejudice will be occasioned to the wife if no litigation funding order is made pursuant to s 117 of the Act is made at this time. I find that it is more likely than not she will not be able to adequately prosecute her relief for property adjustment without such an order, and that her ability to do so will be compromised. I find there is sufficient evidence to suggest that the funding order will enhance her prospects of obtaining justice. I find that a consideration of all of the identified circumstances justify the making of a litigation funding order in favour of the wife.
The final relief sought by the husband in his Response to an Initiating Application filed 29 June 2023, having regard to the wife’s uncontroversial contributions made by the wife of a home making and parenting nature, may be ambit or could be constructed to achieve a perceived forensic advantage in this determination, in that more likely than not it is outside even the most generous range of a property adjustment discretion. Notwithstanding same, if the husband’s contended value of the wife’s jewellery at $15 million is accurate, the wife’s retention of that property (not being sought by him by way of final s 79 adjustment) will ensure that it is possible to take into account in the final proceedings any sum that might be payable by way of any litigation funding order.
The quantification of the wife’s likely costs to complete the litigation and the value of the litigation funding order current sought are immoderate and may be considered excessive. Her estimate of costs to progress the matter to a formal mediation process or a financial conciliation conference are broadly reasonable when compared to that of the husband (exhibits 3 and 4) without a consideration of any determination as to whether the parties equally share the cost of expert valuation opinion evidence or otherwise. A joint draft balance sheet identifying and valuing the property of the parties is yet to be distilled. It would be premature to determine any aspect of the litigation funding claim past the point of mediation in the litigation pathway. At this early stage in the proceeding it would be bold to assume that such processes will fail or be unsuccessful.
There is a fundamentally obvious unfairness as between the husband and wife of the kind identified in Salvage & Fosse which requires alleviation. I accept the submission of the wife that some “levelling the playing field” is required and is just. If the matter does not resolve at mediation the wife may consider making such further order for litigation funding by way of costs or property settlement as she is advised.
By broad reference to exhibits 3 and 4 I find that a litigation funding order in the range of $450,000 accommodates the disadvantages to the wife attempting to achieve some levelling to the litigious playing field up to the stage of a mediation in the proceeding. An order will be made to ensuring the funding is protected, so that it will be paid to her current or future lawyers and used to pay legal fees in the conduct of this litigation. I find that the making of such an order for costs will not present any risk of injustice to the husband in circumstances where discretion is available to add-back paid legal fees at trial or he may amend his relief to access some value from the wife’s jewellery. Grounded from all of the above matters, I am satisfied that a costs order made in those terms can be adequately accounted for as part of the final s 79 determination.
The wife identifies some possible sources of litigation funding including from the deposit received by a company of B Group from the sale of a real property at Suburb TT in the sum of $2.4 million, from a deposit received on the sale of the Suburb L property in the range of $4.5 million, or from the sale of the Suburb N project regulated by the orders made on 7 June 2023 expected to be sold in the range of $55 million. Although there is some uncertainty as to the value or entitlement to those sources (on behalf of other creditors, as suggested by the husband), I accept the wife’s submission that the husband’s disclosure failures have clouded her ability to identify with precision an appropriate fund from which a payment from the husband could be sourced.
I do not consider it necessary at this time to further specify the source of funds that the husband will access to satisfy the litigation funding order (see Bing and Bing (2007) FLC 93-318). The husband’s implicit assertion that there are no available funds to make the payment to the wife cannot be accepted in the circumstances of this case at face value for the reasons identified herein.
The husband’s control of his vast array of corporate entities provides him with flexibility in accessing funds to comply with orders. In the event he does not, it may be necessary for someone other than the husband to assume control of some of the entities within the B Group, especially in circumstances where he is outside Australia. The question of enforcement of the order remains a separate question from the propriety of granting the relief in the first place. Enforcement, including the vast array of procedures available to the wife pursuant to ch 11 of the Rules, including cross-examining the husband in an enforcement hearing or by way of other avenues of federal legislation, may become relevant if the husband defaults in compliance with the orders. The matters identified in r 1.33 of the Rules may also be relevant.
The application for the interim or partial property settlement
The best evidence as to the construction and value of the property of the parties is recorded earlier in these reasons, be it Exhibit 5, the statements of Mr NN, or by way of the respective financial statements of each of the husband and wife cast against the husband’s disclosure failure to date. The value of the amount sought by the wife is not substantial when compared to the likely range of the value of the property pool available, on the current available evidence including the value of the husband’s loan account drawings, for adjustment between the husband and wife.
The wife contends that it is just and equitable to adjust property between herself and the husband, as identified by the High Court in Stanford & Stanford (2012) 247 CLR 108. The husband implicitly puts this into issue. As recorded, it is more likely than not that the husband has taken an unreasonable position by way of his response so as to achieve a forensic advantage for the purposes of this determination. Having regard to the contributions made over the period of the relationship by the wife to date and the fact of their relationship having broken down and the parties living apart, the wife broadly makes out a case as to s 79 factors in her favour.
The wife bears the onus to establish that it is in the interests of justice to exercise an interim or partial property power at this time. The husband submits with some vigour that there must be a principled reason to exercise that power. He contended that a failure by the wife to identify such a principled reason was fatal to her application for $150,000 pursuant to a property power.
The husband highlights the value of funds paid to the wife since separation and submits forcefully that she has provided “no accounting for the disposition by her of these funds” including where she is had the cost free benefit of accommodation in the home and the provision of a vehicle for her use. I am satisfied that the wife in her affidavit (see paragraphs 79–82]) gives a very broad summary accounting of the use and application of funds she has received from the husband since separation. The husband again identified that the wife ought to have access to her jewellery. I give this contention little weight having regard to the matters identified above. In any event, a long line of well-established authorities make it clear that a party need not exhaust all of their property so as to receive the benefit of an exercise of an interim or partial property power
The wife’s application for an exercise of a property discretion must be considered in the context of the husband’s conduct post-separation as recorded earlier in these reasons. On the evidence to date, it apparent that the husband has engaged in a campaign hinged on the wife’s inferior financial circumstances and dependence to achieve an advantage as against her post-separation. I am satisfied that it is in the interests of justice of an order to be made providing the wife with part of the property of she and the husband, so as to provide her with some autonomy, independence and security from the husband, and shield from him exerting further control directing his resources to attempt to threaten, control and coerce her.
Having regard to the matters recorded earlier in these reasons and accepting the capacity to be robust by way of inference having regard to the husband’s disclosure failures, I accept that it is the interests of justice to exercise an interim or partial property power in favour of the wife at this time. Upon broad considerations of the matters identified earlier in these reasons of integer s 79 factors I accept that the wife has established the matters set out in the second limb identified by the Full Court in Strahan. The making of the order in the terms sought by the wife, in the context and circumstances of this case, cannot be said to be incapable of being reversed or adjusted if it is subsequently considered necessary to do so. On the husband’s own evidence, the interim payment will be capable of being recovered from a sale of the wife’s jewellery at some point in the future.
An order will be made as to the husband paying the wife the sum of $150,000 as part of her property settlement. As to the source to be accessed by the husband to make the litigation funding payment, the same considerations as discussed at [92]–[94] apply here. It will be a matter for the husband as to where he draws the funds to pay the wife the partial property payment.
Spouse maintenance
In Hall v Hall (2016) 257 CLR 490 at 496, the High Court described the “gateway” requirement for the consideration of a spousal maintenance application pursuant to s 74 of the Act. The gateway requirement is set out in s 72(1) of the Act, as follows:
(1) A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason
having regard to any relevant matter referred to in subsection 75(2).
Each party agrees that the wife has satisfied the gateway requirements of s 72 of the Act. The issue is the quantum of the amount to be paid. The wife seeks $4,934 each week. The husband proposes to pay $2500 each week.
The evidence as to the wife’s needs was contained in Part N of her Financial Statement being approximately $16,175 per week and in her affidavit being $4,934 per week (at paragraph 113). In oral submissions, she contended her expenses were not less than $10,000 per week.
The husband submits the disjunction between what the wife claims by way of her expenses in each document is inexplicable and demonstrative that her expenses have been materially inflated or that she has greater resources available to her than she has disclosed. Putting aside the identification of the claimed quantum, the husband highlighted that many of the wife’s expenses are discretionary, and include significant expenditure on clothing items and personal beauty treatments. The husband was also critical as to the wife failing to disclose documents verifying her contended expenses. Exhibit 6, being the wife’s tender bundle, contained a large number of invoices and receipts tendered by the wife in response to the husband’s complaint. Verification of expenditure is not necessarily required. It depends very much on the nature of the claim itself – claims for everyday expenses in an unexceptional amount may more readily be accepted on limited evidence, whereas others may require more evidence to persuade that they are reasonable.
Both parties agreed that during the period of cohabitation they enjoyed a very high standard of living. The husband says that the wife's expenses are in “over-exaggeration” and were not consistently commensurate with either their lifestyle during the period of the marriage (he conceded that the parties purchased on occasion expensive designer clothing and undertook extensive overseas travel) and certainly are not commensurate with what can be afforded in the current situation where “my business is struggling to stay afloat”.
As examples, there is some merit in the submissions of the husband that the wife’s expenditures listed at paragraph 113 of her affidavit, including $1,230 per week on designer clothing and $620 per week on accessories and beauty treatments. I accept that some of these items identified are discretionary and not reasonable. Other items cannot be said to share those qualities.
Part N of her Financial Statement records some weekly expenses that are paid by the husband, including gas, electricity, internet, her mobile phone and costs relating to her motor vehicle. She concedes in the notes to Part N that some of the items were not paid by her at the time of swearing the Financial Statement, but said that she had “reasons to believe they will shortly become my expenses based on [the husband’s] threats and the actions he has carried out since separation. Those concerns, although reasonable, have been remedied by the raft of interlocutory orders made in the proceedings to date. These expenses will not be double‑counted.
In a claim for maintenance under the Act the focus is on what is reasonably necessary for adequate support. The evidence of the wife does not establish that the full value of all of the items claimed in the wife’s affidavit are necessary or reasonable in the amount she claims or that some items are reasonable at all. By way of example, her claims for luxury clothing and personal beauty expenses shall be reduced but not omitted, and her claims for property and car related expenses will be omitted.
Taking into account these matters I find that $3,500 per week is a reasonable amount to adequately meet her weekly expenses on the basis that the husband provides her with the use of Motor Vehicle 4 and pays the mortgage, outgoings and utilities on the home. This finding is supported by the undisputed fact from the husband’s own evidence that, in addition to paying those non periodic expenses, he paid the wife $22,369 per week between November 2022 and 9 May 2023 (see at [36] above).
Insofar as the husband at submitted that the wife has some unexercised capacity to contribute to her own self support such submission is rejected. The wife has the full time care and control of the three children of the marriage. She left the workforce to adopt a role of homemaker and parent. She has not exercised any employment skills for the past 15 years.
The wife will have the benefit of the partial property payment to potentially supplement her costs of self-support. It is clearly established that a person seeking spousal maintenance is not necessarily obliged to resort to any capital that they might have before they can receive the benefit of an order for spousal maintenance (Bevan and Bevan (1995) FLC 92-600; Mitchell and Mitchell (1995) FLC 92-601). The wife in the circumstances of this case ought not be required to expend her limited capital so as to achieve a reasonable quantum of periodic spouse maintenance. The submission that the wife should sell her jewellery for her own self support is rejected for the same reasons. The capital by way of partial property settlement is taken into account not for immediate day to day use but for the reasons identified earlier.
I find for the reasons identified above that the husband has capacity to pay to the wife the value of her reasonable weekly needs as found including being grounded from the husband's income, property and resources supplemented by way of his disclosure failures.
I find that an order that the husband pay to the wife $3,500 per week by way of periodic spousal maintenance is proper.
CONCLUSION
For all of the above reasons, I shall make the orders as set out at the forefront of this judgment.
I certify that the preceding one hundred and fifteen (115) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 7 July 2023
SCHEDULE OF PARTIES
SYC 3987 of 2023 Respondents
Fourth Respondent:
D1 PTY LTD
Fifth Respondent:
D2 PTY LTD
Sixth Respondent:
E PTY LTD
2
4
0