Richmond & Tirado (No. 2)

[2021] FamCA 214

FAMILY COURT OF AUSTRALIA

Richmond & Tirado (No. 2) [2021] FamCA 214

File number(s):

CAC695 of 2018

Judgment of:

GILL J

Date of judgment:

20 April 2021

Catchwords:

FAMILY LAW – INTERIM PROCEEDINGS – binding financial agreement – application for litigation funding order – injunctive relief – undertakings.

FAMILY LAW – CHILDREN – modification of child related orders.

Legislation:

Family Law Act 1975 (Cth) – s 117

Cases cited:

In Marriage of Zschokke (1996) 133 FLR 375

Norton & Locke (2013) 50 Fam LR 517

Salvage & Fosse [2020] FamCAFC 144

Number of paragraphs:

68

Date of hearing:

18 February 2021

Place:

Canberra

Counsel for the Applicant:

Dr Leslie

Solicitor for the Applicant:

KJB Law

Counsel for the Respondent:

Ms Dart

Solicitor for the Respondent:

Parker Coles Curtis

Solicitor for the Independent Children's Lawyer:

Legal Aid, ACT

ORDERS

CAC695/2018

BETWEEN:

MS TIRADO

Applicant

AND:

MR RICHMOND

Respondent

INDEPENDENT CHILDREN’S LAWYER
Other

ORDER MADE BY:	GILL J
DATE OF ORDER:	20 APRIL 2021

THE COURT ORDERS THAT:

Parenting orders

1.Order 3 of the orders of Judge Tonkin of 26 October 2018 is, from 23 April 2021, discharged, and from that date the following order is operative:

2.X shall live with each of his parents in the following manner:

(a)With the mother from Friday at the commencement of school (or 9 am if not a school day) until the commencement of school (or 9 am if not a school day) the following Wednesday.  

(b)With the father from Wednesday at the commencement of school (or 9 am if not a school day) until the commencement of school (or 9 am if not a school day) the following Monday.

(c)With the mother from Monday at the commencement of school (or 9 am if not a school day) until the commencement of school (or 9 am if not a school day) the following Wednesday. 

(d)With the father from Wednesday at the commencement of school (or 9 am if not a school day) until the commencement of school (or 9 am if not a school day) the following Friday.

Restraints

3.Order 3 sought in the mother’s application in a case filed 16 November 2020 seeking restraints be imposed upon the father is, noting the undertaking given by the father on 17 February 2021, dismissed.

Litigation funding orders

4.Order 4 sought in the mother’s application in a case filed 16 November 2020 seeking litigation funding is dismissed.

Payment of loans

5.Orders 5 and 6 sought in the mother’s application in a case filed 16 November 2020 seeking restraints be imposed upon the father is, noting the undertaking given by the father on 17 February 2021, dismissed.

Disclosure

6.Orders 14, 15 and 16 of the orders sought by the mother in relation to disclosure are dismissed.

Valuation

7.Order 17 of the orders sought by the mother in relation to valuation is dismissed.

Relisting

8.The parties are at liberty to seek the relisting of this matter on seven days’ notice in writing.

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Richmond & Tirado has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

GILL J

INTRODUCTION

1. This matter firstly concerns the variation of time that the child of the relationship, X, spends with each of his parents.  The current orders provide for X to spend time with the mother from Tuesday to Friday in one week, and Monday to Friday the following week.  The time with each parent is equally shared, but in a manner that currently provides for the father to have every weekend with X.  Each party seeks both that they be the primary carer, but sets out a fall-back position to at least alter the structure of the currently equally shared time.

2. The proceedings secondly concern an application by the mother for a litigation funding order in respect of her proceedings in relation to an asserted binding financial agreement (“BFA”) between the parties.

3. A number of other, more ancillary orders were pursued by the parties.

4. The mother seeks injunctions directed against the father in respect of a number of properties.

5. The father seeks orders regarding hair follicle testing, a matter that was ultimately resolved by consent.

6. The mother seeks orders in relation to financial disclosure, and for the valuation of property.

   MATERIAL RELIED UPON

7. The applicant mother relied on the following:

   (a)Amended Application in a Case of Ms Tirado filed 16 November 2020;

   (b)Outline of Particulars filed 11 March 2020;

   (c)Affidavit of Ms Tirado sworn 23 October 2020, filed 29 October 2020;

   (d)Financial Statement of Ms Tirado filed 26 October 2020;

   (e)Affidavit of Mr F filed 13 November 2020;

   (f)Affidavit of Dr G filed 13 November 2020; and

   (g)Case Outline filed 27 January 2021.

8. The respondent father relied on the following:

   (a)Response to an Application in a Case filed 22 December 2020;

   (b)Affidavit of Mr D filed 22 December 2020;

   (c)Financial Statement filed 22 December 2020;

   (d)Tender Bundle;

   (e)Outline of Particulars filed on behalf of Husband filed 17 June 2020; and

   (f)Case outline filed 4 February 2021.

   THE ANCILLARY ORDERS

   The hair follicle testing

9. Orders, unopposed, were made that hair follicle testing be conducted covering the twelve months up until today’s date, then after at intervals of no greater than three months, with the father to pay all costs associated with the testing. 

   Undertakings

10. The mother sought various injunctions in relation to restraints upon disposal of property, and for the payment of various loans.  The restraints were sought to maintain the status quo pending resolution of the issue as to the applicability of the BFA.

11. A significant difficulty, identified in Norton & Locke (2013) 50 Fam LR 517, emerges in respect of such restraints, as they would be imposed in circumstances where the Court’s jurisdiction in relation to the property is the subject matter of the dispute.  An applicable BFA will oust the jurisdiction.  An ineffective BFA will leave the jurisdiction in relation to the property untrammelled.

12. Under such circumstances, resort to inherent powers pending the determination of jurisdiction should be confined insofar as is possible to short periods of time pending determination of jurisdiction.  The issue of jurisdiction is the subject matter of the dispute and unable to be resolved in the short term.  However, the protection of the status quo, insofar as it relates to the protection of the subject matter of the dispute, was sufficiently resolved by the father’s proffered undertakings to either maintain payments for the identified properties, or to give the mother notice prior to disposal of the items of property.

13. The father gave an undertaking that, without prejudice to his application for the BFA to be upheld, that he would give the mother no less than 21 days’ written notice of any intention to transfer, sell or otherwise dispose of real property or motor vehicles held in his name.  He further undertook that he would pay instalments as and when they fall due on the Commonwealth Bank loan account …08 (held in the parties’ joint names) attached to the Suburb H property.

    Valuation and disclosure

14. The mother sought orders in relation to disclosure.  Given the inapplicability of the disclosure rules, the mother was asked to identify why such orders should be made.  The explanation offered in relation to disclosure was so that it could be determined what property was in existence at the time of the entry into the BFA, under circumstances where the mother asserts that the BFA failed to cover all property held by the parties.  The further explanation was that the disclosure would enable the mother to pursue a case of insufficient disclosure in relation to the BFA.

15. The orders pursued by the mother, at 15 and 16 of her orders sought, on their face go well beyond the purpose identified, including disclosure of material well after the end of the relationship, and after the entry into the BFA.  Although some touch on the time of the entry of the BFA, none are limited to a period even proximate to that time.

16. The mother may well have a strong basis to seek orders for the provision of material.  However, adequate connection between the orders sought and the justification put forward by the mother has not been identified.  The Court should not be placed into a position to guess which aspects of the pursued disclosure are properly connected to the end pursued and which are not.  The orders in their current form should not be made.

17. The mother further sought orders for valuation.  It appeared to be accepted that these were primarily related to the ultimate property proceedings, although it was submitted that they may be required to deal with the application to set aside the BFA.  The speculative justification is insufficient to warrant making the orders sought, and it is premature to value for the ultimate property proceedings. 

    THE APPLICATIONS IN RELATION TO SAS

18. The parents each sought a change to the current arrangements for X which, in general terms, provide for X to spend time on an equally divided fortnightly basis with the mother from Tuesday to Friday, the father then from Friday to Monday, the mother then from Monday to Friday, and the father then from Friday until Tuesday in week two.  The current arrangement provides no time for X with the mother on weekends, an arrangement that both parties say should change now that X has commenced school.

19. The mother seeks that X live primarily with her, but spend Friday to Monday on alternate weekends with the father, along with each Wednesday overnight with the father, a 9-5 split across the fortnight in favour of the mother.

20. The mother’s fallback position is a 3-4, 4-3 arrangement across the fortnight, allowing each parent to have weekend time with X.

21. The father seeks that X live primarily with him and spend each alternate weekend with the mother from Friday until Monday, and then each Wednesday evening with the mother until 6.30pm, an 11-3 split across the fortnight in favour of the father.

22. The father’s fallback position is a week about arrangement.

23. The mother submitted that the orders that she seeks are in X’s best interests, in providing a stable home base, assisting to address aggressive behaviour by X, and providing appropriate time with the father without X being separated from her for significant periods.  She further observes that the handover arrangements accompanying her proposal protect both herself and X from exposure to family violence.

24. To support this position, the mother points to bruises to X that she said occurred most recently in July 2020.  The mother annexes photographs of the bruising, and correspondence between the parties and their lawyers regarding such.  The correspondence at times occurred with the mother raising the issue weeks after she asserted the bruising appeared.  The bruising is the subject of innocent explanation from the father on occasion, or a lack of knowledge on others.  The issues raised by the allegations of bruising were not the subject of application for a number of months, a matter that undermines the notion that there was genuine concern for X’s well-being in this respect.  The mother was reasonably prepared to concede that the injuries were not necessarily indicative of X being exposed to family violence. 

25. The bruising does not provide sufficient indication of risk at this stage to carry significant weight in determining the arrangements for X.

26. The mother also relied on material indicative that a person other than the mother had reported to CYPS that the father choked X to the point of X turning purple.  The report, in respect of an alleged occasion of 3 June 2019, was made on 7 April 2020.  Exhibit H2 contained an extract from the records of CYPS, containing an anonymous report to the above effect.  The anonymous nature of the report does not enable, at this stage, significant weight to be placed upon the allegation.

27. Further, the mother relied upon her observations of X’s being upset on some occasions that he is to be handed over to his father, and as to X displaying some aggression at school.  Nothing indicated that the aggression reported at school was the product of time spent with either parent.  It was also unclear that the circumstances of X’s upset at being dropped off at school is referable to an issue in his relationship with the father.  X’s reportedly expressed desire to be with the mother rather than staying with the father is not a matter of significant weight in the interim determination.

28. The mother also alleges that X reported violence between the father and his previous partner.  Again, these are matters unable to be resolved at present, and, if correct, appear to occur in the context that the relationship is no longer on foot.

29. The father relied upon three matters to support his application in relation to X.  Firstly, he relied on inconsistency in the mother bringing X to school. Given that neither party’s material relates to the current school year, the currency of this issue is not apparent, and not a matter of significant weight.

30. Secondly, the father relied on non-compliance by the mother with orders regarding the area in which she may live, and orders relating to drug testing.  The father’s claim regarding possible breach of orders providing for where the mother might live rose no further than mere speculation.  The issue in respect of drug testing is to be remedied in these orders, (as identified earlier) in part by arrangements for funding of such where the mother is in difficult financial circumstances.

31. Thirdly, the father relied on allegedly false complaints on the part of the mother.  Two observations should be made regarding this issue.  The first is that the mother’s complaints remain to be determined.  Secondly, the father accepted that there was no indication that the mother has shared these complaints about the father, whether false or otherwise, with X.

32. The Independent Children’s Lawyer’s (“the ICL”) position is that there is an absence of evidence of significant change since the making of orders by Judge Tonkin on 26 October 2018, and that those orders for equally shared time balanced and ameliorated the risks asserted to arise in each of the households, but that there required some adjustment to enable X to have weekend time with both parents.

    Conclusion in relation to the child related orders

33. The Orders made by Judge Tonkin, as described by the ICL, balanced the risks in each household.  They did so in a manner designed to give X the benefits of meaningful relationships with each parent, while at the same time, ameliorating the risks alleged to be posed by each, whether of exposure to, or being subjected to violence on the part of the father, or exposed to emotional abuse or inadequate parenting by the mother.  The matters raised by the parties continue to fall within these areas of concern.  The circumstances identified by the parties do not indicate that X’s best interests, particularly as indicated by these primary considerations, call for change from the balance as struck by Judge Tonkin, pending a resolution of the issues at final hearing.

34. However, as indicated by the parties’ agreement as to the need for such, some change in the structure of the balance is required.  It is appropriate that X have weekend time with each of his parents now that he has started school.  The issue is whether that should be reflected in the 4-3-3-4 arrangement posed by the mother, or week about as posed by the father.  I am unable to formulate 4-3-3-4 orders to effect weekend rotation and assume 5-2-2-5 was intended. 

35. It is the former that should prevail.  X should not be exposed to the marked change that would be brought about by the extended separation from each parent which would be caused by a week about arrangement.  Accordingly, it is the mother’s fall-back position that should be adopted.

    LITIGATION FUNDING

36. The parties are in dispute regarding the efficacy of a purportedly BFA.  The mother seeks that it not be regarded as binding.  The father seeks that it be relied upon to exclude the mother from making a property application.

37. In order to pursue that application, the mother seeks litigation funding under the costs power contained at s 117 of the Family Law Act 1975 (Cth) (“the Act”). It was accepted by the parties that, as set out at [8] of Salvage & Fosse [2020] FamCAFC 144, jurisdiction resides in the Court to make such an order despite the presence of the disputed BFA. In order to make such an order, the Court is to consider the terms and considerations of s 117.

38. An order for the payment of costs pursuant to s 117 is predicated upon whether the circumstances render it just to make the order, in the context of a starting point that each party should bear their own costs. In In Marriage of Zschokke (1996) 133 FLR 375 at 391, this was also described as the consideration of the “requirement of justice”.

39. Accordingly, from Salvage & Fosse the parties identified that:

    [14]  The critical question therefore is whether the applicant has “any real prospects of obtaining justice unless the order sought is made” (Parker v Parker(1992) 16 Fam LR 458 at 461), or in terms of s 117(2) of the Act, whether in all the circumstances the costs order is just. That question raises, at least, consideration of the strength of the applicant’s case and the effect of the order upon the respondent.

40. In relation to the issue of the strength of the case, the father properly conceded that the mother has an arguable case for the setting aside of the BFA.  This was not a concession that the mother should succeed in her application, but rather that, on her case, she identifies matters that go to the issue of setting aside.

41. On the issue of the parties’ capacity to obtain justice (insofar as such is reliant on bringing adequate resources to the litigation of the matter), the mother relied upon three particular considerations under s 117 (presumably s 117(2A)((a), (b) and (g)) being:

    (a)A position of relative financial strength of the father;

    (b)The capacity of the father to meet his legal costs;

    (c)The inability of the mother to meet her legal costs.

42. It was put that the father is in an “overwhelming position of financial strength,” an assertion that he submitted was not supportable.

43. The father, in his submissions, identified no incapacity to meet his legal fees.  Rather, he asserted that he would not be able to meet the mother’s legal fees.

44. The father’s affidavit material identified his holding of various assets, incorporating a business, multiple parcels of real estate and motor vehicles.  His evidence indicated the recent sale of properties, proceeds of which went to the funding of development on one of the other properties.  These matters do not directly answer the question of his capacity to pay either his or the mother’s legal fees, although they are suggestive that he has assets at his disposal (even if not readily so).

45. More persuasive of capacity, the father also has a business that he indicated has suffered a disappointing setback on one contract, but where he still anticipates the prospect of taking $50,000 from the business to make the balloon payment on a vehicle.  While there is some uncertainty as to the extent of the father’s capacity, the anticipation of such occurring is indicative of the superiority of his position over that of the mother, being a position that he asserts is so parlous as to render her eligible for legal aid. 

1. The evidence is supportive of the father’s capacity to more than fund his litigation. 

2. The mother was thereby able to make good the first two propositions that she advanced, being the superiority of the father's position and his capacity to meet his own legal costs.  Although the mother did not go as far as demonstrating that the father could readily secure the funds that she seeks, she demonstrated that he has some capacity beyond his own expenses and legal costs that would enable him to meet at least part of her legal costs.

3. Of more significant emphasis in the father’s case was the third of the points raised by the mother above, being her incapacity to pay her own legal fees.  While the father did not suggest, other than perhaps via legal aid, that the mother would be able to pay her lawyers, he submitted that it could not be concluded that the mother would lack representation without the provision of funding.

4. The key evidence in relation to this aspect flows from what is, or is not contained in the affidavit of the solicitor for the mother, Mr F.  Importantly, Mr F does not suggest that the mother’s legal representation will cease absent a funding order.  Perhaps consistent with this absence, Mr F also attests to his view that the mother’s applications as they relate to the BFA and parenting are meritorious.  This speaks to the central question of whether it is just to make the litigation funding order on the basis that the mother will be unable to pursue justice without it.  No particular inability to litigate the matter is identified by the mother, in the absence of a funding order.  Her case in the context of her present representation does not suggest such an incapacity.

5. While it may be accepted that it is not necessarily fatal to an application for litigation funding that a litigant establish that his or her lawyers will not continue to act unless funding is secured, such a matter is a relevant consideration in determining whether or not to exercise the discretion pursuant to s 117, and undermines the critical consideration that the person will not be able to access justice without the order.

6. There are further matters to consider as the discretionary considerations extend to matters concerning whether the nature and extent of the claims being pursued justify an order, and whether the consequences of the applicant not succeeding in the substantive proceedings point away from the making of the order. 

7. In Salvage & Fosse, the Full Court said at [16]:

   In this matter, the respondent faced the task of persuading not only the primary judge that she had a claim to set aside the Cohabitation Agreement of sufficient merit to justify an interim costs order but also that her subsequent property application was of sufficient merit and value to justify that course. There would be no point in providing funding to pursue a case to set aside the Cohabitation Agreement, unless the Court was satisfied that the respondent would be likely to receive a property settlement of such value as to justify that course.

8. That is, the merits of the application that require consideration relate to the substantive claim as well as to the merits of the application to set aside the BFA.

9. In assessing these issues, the Full Court in Salvage & Fosse identified three particular considerations relevant to the discretionary grant of a costs order in such a case:

   [24]  It was not suggested to his Honour that an evaluation should be undertaken of: the quality and nature of the claim to set aside the Cohabitation Agreement; the likely result that would ensue if a subsequent property division was undertaken; and the likely costs of such a course. No authority directly suggests such a course. We consider, however, that such a consideration is essential in a case such as the present.

10. As noted above, it was appropriately conceded for the father that the mother’s application to set aside the BFA does not lack reasonable prospects of success.  The issue focussed upon by the father is the mother’s substantive case were she to succeed in setting aside the BFA.  His contention is that the mother has failed to identify that successful litigation on her part will yield a result that justifies the litigation.

11. The mother asserts that the likely costs to set aside the BFA, as identified in the affidavit of Mr F, are those that she pursues in this application, of $146,811.46.

12. Accepting that there were limitations in her capacity to identify the outcome of the substantive litigation, the mother asserted (at [17]) that, should she succeed in setting aside the BFA, the likely result on property division would exceed the combination of what she has already received pursuant to the BFA combined with the costs award that she seeks.  This was an argument made by her, understandably, using the broadest of brush strokes.

13. The key elements of those broad brushstrokes were the assertions of a lack of demonstrable difference in initial contributions, a long relationship, significant post separation contributions by each, and significant future needs by the mother.  These assertions were made against an asserted background of the mother having received $170,000, and the father, according to his financial statement, holding approximately $700,000 in equity.  Adding back what has been received by the mother would, it was submitted, result in the mother, on payment of the litigation funding order, receiving approximately 36 percent of the pool.

14. This analysis was criticised by the father as it necessarily assumes the resolution of disputed facts in the mother’s favour at trial, and fails to deal with the performance of the agreement or the conduct of the parties post separation.

15. It is the failure of the mother to deal with post separation conduct that undermines her analysis of the scope of her claim most seriously, the parties having separated almost four years ago.  Her description that each has made post separation contributions does not identify whether there is a similarity or strong divergence in the parties’ post separation contributions.  This does not enable the Court to have any confidence that the substantive result will exceed what has been received by the mother and what is proposed to be spent by her in pursuit of the substantive outcome.

16. A further consideration identified in Salvage & Fosse is:

    [w]hether, and if so how, such an order (for litigation funding) could be taken into account, adjusted or possibly reversed at the final hearing.

17. In Zschokke, the Full Court identified this aspect as the capacity to consider or to take in to account the interlocutory costs order in the final property proceedings.

18. The mother appeared to accept that if she is unsuccessful in setting aside the BFA, the costs order would be incapable of being ‘reversed out’.  There would be no property against which such an order could be ultimately reckoned.  The father appropriately accepted that this does not constitute a bar to the making of a funding order, but that it remains a discretionary consideration. 

    Conclusion in relation to litigation funding

19. Section 117 specifies the starting point that, subject to justifying circumstances each party should bear their own costs. Those justifying circumstances, drawn from s 117(2A) require the court to conclude that it is just to make the order for costs.

20. Where, pursuant to s 117, a party seeks a litigation funding order, it is critical that the party establish, as was approved by the majority in Salvage & Fosse at [14] whether the party has “any real prospects of obtaining justice unless the order sought is made.” This is the critical question because it is the issue that stands behind an order being considered to be just.

21. The mother has failed to establish that she lacks prospects to obtain justice without such an order.

22. Further, even if this aspect was established, two further matters point against the exercise of the discretion in the mother’s favour.  The first is that there can be no confidence that, even if the mother is successful, that the ultimate disposition will be such as to warrant the making of the order.  Further, if the mother is not successful, it cannot be thought that there is any prospect of being able to take into account the costs order in any ultimate adjustment.

23. The orders sought by the mother should not be made.

I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill.

Associate:

Dated:       20 April 2021