Valder & Saklani (No 3)

[2023] FedCFamC1F 98

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Valder & Saklani (No 3) [2023] FedCFamC1F 98

File number(s):

CAC 2098 of 2016

Judgment of:

CHRISTIE J

Date of judgment:

24 February 2023

Catchwords:

FAMILY LAW – PROPERTY – Where the Full Court remitted the matter for hearing – Where an order was made  in the NSW Supreme Court for equitable compensation to be paid by the husband to a third party (the applicant) - Where the husband became bankrupt on his own petition – Where the husband and wife entered into consent orders  in this Court after Supreme Court orders for the husband to pay equitable compensation were made – Where the applicant was granted leave by the Federal Court of Australia to commence proceedings in this Court on behalf of the husband’s creditors– Where the wife sold an asset transferred to her in the consent orders to third parties – Where the third parties assert they are bona fide purchasers – Where the applicant asserts the transactions by the husband to the wife through consent orders without informing the court of the orders relating to equitable compensation constitute a miscarriage of justice – Where the applicant asserts the subsequent transfer to the third and fourth respondent by the wife should be set aside as a transaction likely to defeat an anticipated order– Where the husband asserts the applicant is not a creditor upon his discharge from bankruptcy – Where the applicant is successful in her s 79A claim – Where the applicant is successful under s 106B – Where the interests of the third and fourth respondents should be protected – Where it is just and equitable to order sale of land in question – Where the applicant should be paid her equitable compensation from the sale of the land – Where the remaining assets of the husband and wife are to be divided as agreed between them.

Legislation:

Bankruptcy Act 1966 (Cth) ss 58, 153

Family Law Act 1975 (Cth) ss 75, 79, 79A, 106B

Family Law Rules 2004 (Cth)

Cases cited:

Biltoft and Biltoft (1995) FLC 92-614; [1995] FamCA 45

Cantrell & North (2020) FLC 93-976; [2020] FamCAFC 175

Chorn and Hopkins (2004) FLC 93-204; [2004] FamCA 633

Harris v Caladine (1991) 172 CLR 84; [1991] HCA 9

John Alexander’s Clubs & Anor v White City Limited (2010) 241 CLR 1; [2010] HCA 19

Official Trustee in Bankruptcy v Donovan and Donovan and Stevens (1996) FLC 92-703; [1996] FamCA 58

Public Trustee v Gilbert (1991) FLC 92-211; [1991] FamCA 10

Re Pen-y-van Colliery Company (1877) 6 CHD 477

Semmens v Commonwealth  (1989) 13 Fam LR 715

Trustee of the Bankrupt Estate of Hicks & Hicks [2019] FamCA 695

Trustee of the property of G Lemnos, a bankrupt & Lemnos & Anor (2009) FLC 93-394; [2009] FamCAFC 20

Valder & Saklani (2021) FLC 94-042; [2021] FamCAFC 142;

Valder v Saklani (2013) (omitted)

Division:

Division 1 First Instance

Number of paragraphs:

163

Date of hearing:

12 – 14 December 2022

Place:

Sydney

The Applicant:

Litigant in person

Counsel for the First Respondent:

Mrs Mooney SC

Solicitor for the First Respondent:

Holmes Donnelly & Co Solicitors

Counsel for the Second Respondent:

Mr Mc Govern SC (direct brief)

The Third Respondent:

Litigant in person

The Fourth Respondent:

Litigant in person

ORDERS

CAC 2098 of 2016

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS VALDER

Applicant

AND:

:

:

MS SAKLANI

First Respondent

MR B SAKLANI

Second Respondent

MR C SAKLANI (and another named in the Schedule)

Third Respondent

order made by:	CHRISTIE J
DATE OF ORDER:	24 FEBRUARY 2023

THE COURT ORDERS THAT:

1.The orders of the Family Court of Australia dated 13 November 2013 are set aside.

2.The transfer of G Street, F Town, New South Wales (…) (“the F Town property”) by the first respondent to the third and fourth respondents is set aside.

3.Within 28 days the third and fourth respondents do all acts and things and sign all documents necessary to place the F Town property on the market for sale and thereafter do all acts and things necessary to complete the sale of the property.

4.The third and fourth respondents apply the proceeds of sale of the F Town property in the following order and priority:

(a)In discharge of the mortgage secured against title;

(b)In payment of the costs of sale including legal or conveyancing fees, real estate agent fees and auction expenses (if any);

(c)In payment of the sum of $594,258.25 to the applicant subject to the terms of the orders of Katzmann J dated 8 November 2016;

(d)In payment of the sum of $250,000 into a controlled monies account held by the first respondent’s solicitors on behalf of the applicant and first respondent;

(e)In payment of the sum of $1,602,705.89 to the third and fourth respondents;

(f)In payment of the balance then remaining to the first respondent.

5.Following agreement in writing between the applicant and first respondent or assessment, the costs of the equity proceedings will be paid to the applicant subject to the terms of the orders of Katzmann J dated 8 November 2016 from the sum in Order 4(d) above and any balance will be paid to the first respondent.

6.In the event that the applicant has not commenced the application for assessment of costs within 28 days of the monies being placed in the controlled monies account as required by Order 4(d) then the monies are to be paid to the first respondent.

7.Other than as provided in these orders the husband is entitled to his Super Fund 1, leasehold interest in Country Q, personal property and any other property in his name.

8.Other than as provided in these orders the wife is entitled to her personal property, car and any other property in her name.

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 Valder & Saklani has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

CHRISTIE J:

1. This long running case is primarily concerned with a debt which the Supreme Court of New South Wales found payable to Ms Valder by Mr B Saklani and whether that debt might be recovered by order of this Court.

   BACKGROUND

2. The chronology is key. In 2013 the Supreme Court of New South Wales determined that Ms Valder, was entitled to be paid equitable compensation by Mr B Saklani. On 13 November 2013 Mr B Saklani and his wife, Ms Saklani, entered into financial consent orders in this Court. The Application for Consent Orders did not mention the liability created by the Supreme Court orders.

3. The effect of those consent orders was a transfer of real property from Mr & Ms Saklani as joint tenants to Ms Saklani. The land involved was a parcel of rural land against which Ms Valder had made an equitable claim in the NSW Supreme Court proceedings. There were several dwellings on the land at G Street, F Town, New South Wales (…) (“the F Town property” or “F Town”). They included the E Property, where Ms Valder had at one time resided, the H Property, where Ms Saklani lived at the time of the consent orders and the J Property where Mr B Saklani lived at the time of the consent orders.

4. In March 2015 Mr B Saklani became bankrupt on his own petition and in March 2018 he was released from bankruptcy. He argues that the judgment debt of Ms Valder was released when his bankruptcy ended. Before Mr B Saklani was released from his bankruptcy, Ms Valder applied for leave to commence proceedings to recover her equitable compensation and legal costs from Mr B Saklani, such sums to be held on behalf of Mr B Saklani’s creditors. In  November 2016 an order of the Federal Court of Australia granted the applicant leave to bring proceedings in the Family Court of Australia (as it was then known).

5. Ms Valder says the failure to disclose her interest as a creditor or person who may be affected by an order when applying for consent orders would satisfy this Court that the consent orders of 13 November 2013 should be set aside. To that end she filed an application in this Court on 19 December 2016. She named Ms Saklani as the first respondent. On 17 May 2019 Mr B Saklani was joined as second respondent.

6. While Ms Valder’s application was pending, the wife transferred her interest in real property she received pursuant to the consent orders to third parties, including, in respect of the F Town property, her son and daughter-in-law. Ms Valder seeks an order to set aside that disposition of real property. On 24 May 2022, Altobelli J made orders joining Ms Saklani’s son, Mr C Saklani, the third respondent, and his wife Ms D Saklani, the fourth respondent, to the proceedings. On 4 July 2022, the third respondent filed an application in a proceeding seeking that that order be discharged. The Court dismissed this application and the third and fourth respondents remained as parties to these proceedings.  Until the first day of the trial, the third and fourth respondents had declined to participate as parties and filed affidavits in Ms Saklani’s case. They appeared at the final hearing.

7. The wife retained a life estate in the F Town property on its transfer to her son and daughter in law and as at the date of this hearing both she and Mr B Saklani continue to live on the property. Mr C Saklani and Ms D Saklani live elsewhere.

   THE EVIDENCE

8. The applicant relied upon:

   (a)a Case Outline Document (exhibit 1);

   (b)an Amended Initiating Application filed 26 April 2022;

   (c)an affidavit of Mr K filed 12 October 2022;

   (d)an affidavit of Mr L filed 2 December 2022;

   (e)an affidavit of Ms Valder filed 6 December 2022; and

   (f)a joint statement of Mr L and Mr M filed 8 December 2022 (exhibit 3).

9. The applicant also tendered and relied upon various other documents.

10. The first respondent relied upon:

    (a)a Case Outline Document (exhibit 2);

    (b)a minute of orders sought (exhibit 18);

    (c)an Amended Response to Initiating Application filed 24 May 2022;

    (d)an affidavit of Ms Saklani filed 8 December 2022;

    (e)an affidavit of Mr C Saklani filed 8 December 2022;

    (f)an affidavit of Ms D Saklani filed 8 December 2022; and

    (g)an affidavit of Mr M of 5 December 2022.

11. The first respondent also tendered and relied upon various other documents.

12. The second respondent relied upon:

    (a)a Case Outline Document (exhibit 4);

    (b)a minute of orders sought (exhibit 19);

    (c)written submissions (exhibit 4); and

    (d)an affidavit of Mr B Saklani filed 9 December 2022.

13. The second respondent also tendered and relied upon various other documents.

14. The third and fourth respondents did not file any material in their own case but tendered and relied on various other documents which became exhibits in the proceedings.

15. I was assisted by written submissions filed on behalf of the applicant, first and second respondents and the oral submissions on behalf of each of the parties.

    THE LAW

16. The applicant was permitted to bring proceedings in this Court as a consequence of her application for leave to the Federal Court of Australia under s 58(3) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”). Section 58(3) provides:

    Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor:

    (a) to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or

    (b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.

17. The applicant relies upon the provisions of s 79A of the Family Law Act 1975 (Cth) (“the Act”) and s 106B of the Act to make available property which once belonged to one or both of the parties to the marriage to satisfy her debt.

18. Section 79A of the Act operates to create a discretion to set aside final orders, including orders made by consent, if the provisions of the section are engaged.

19. Section 79A provides:

    (1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:

    (a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or

    (b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or

    (c)  A person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or

    (d) In the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substation for the order; or

    (e) A proceeds of crime order has been made covering property of the parties to the marriage or either of them, or a proceeds of crime order has been made against a party to the marriage;

    The court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.

    ….

    (2)In the exercise of its powers under subsection (1), (1A) or (1C), a court shall have regard to the interests of, or against, as the case may be, the estate of the deceased party.

    …

    (4)For the purpose of this section, a creditor of a party to the proceedings in which the order under s 79 was made is taken to be a person whose interests are affected by the order if the creditor may not be able to recover his or her debt because the order has been made.

20. The argument of the applicant about the applicability of s 79A of the Act to the facts and circumstances of this case rests in part on the provisions of s 79(10) of the Act which provides:

    The following are entitled to become a party to proceedings in which an application is made for an order under this section by a party to a marriage (the subject marriage):

    (a) a creditor of a party to the proceedings if the creditor may not be able to recover his or her debt if the order were made;

    (aa) a person:

    (i)    who is a party to a de facto relationship with a party to the subject marriage; and

    (ii)   who could apply, or has an application pending, for an order under section 90SM, or a declaration under section 90SL, in relation to the de facto relationship;

    (ab) a person who is a party to a Part VIIIAB financial agreement (that is binding on the person) with a party to the subject marriage;

    (b)   any other person whose interested about e affected by the making of the order.

21. Further, the applicant says in proceedings under the Act the Court can use the provision of s 106B to set aside a transaction. Section 106B provides:

    (1)In proceedings under this Act, the court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.

    (1A) If:

    (a) a party to a marriage, or a party to a de facto relationship, is a bankrupt; and

    (b) the bankruptcy trustee is a party to proceedings under this Act;

    the court may set aside or restrain the making of an instrument or disposition;

    (c) which is made or proposed to be made by or on behalf of, or by direction or in the interest of, the bankrupt; and

    (d) which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.

    (2)The court may order that any money or real or personal property dealt with by any instrument or disposition referred to in subsection (1), (1A) or (1B) may be taken in execution or charged with the payment of such sums for costs or maintenance as the court directs, or that the proceeds of a sale must be paid into court to abide its order.

    (3)The court must have regard to the interests of, and shall make any order proper for the protection of, a bona fide purchaser or other person interested.

    (4)A party or a person acting in collusion with a party may be ordered to pay the costs of any other party or of a bona fide purchaser or other person interested of and incidental to any such instrument or disposition and the setting aside or restraining of the instrument or disposition.

    (4AA) An application may be made to the court for an order under this section by:

    (a) A party to the proceedings; or

    (b) A creditor of a party to the proceedings if the creditor may not be able to recover his or her debt if the instrument or disposition were made; or

    Any other person whose interests would be affected by the making of the instrument or disposition.

    …

22. This case involves the interplay between bankruptcy law and family law. The second respondent contends that the provisions of s 153 of the Bankruptcy Act are relevant.

23. Section 153(1) of the Bankruptcy Act deals with the effect of discharge from bankruptcy and provides as follows:

    Subject to this section, where a bankrupt is discharged from a bankruptcy, the discharge operates to release him or her from all debts (including secured debts) provable in the bankruptcy, whether or not, in the case of a secured debt, the secured creditor has surrendered his or her security for the benefit of creditors generally.

24. While both Mr and Ms Saklani asked the Court to dismiss the applicant’s application under s 79A of the Act, each of them requested that, if the orders were set aside, the Court then proceed to make new orders for property adjustment as between them pursuant to s 79 of the Act.

25. In making orders for the adjustment of property pursuant to s 79 it is necessary to consider the matters in s 79(4) and any relevant matters in s 75(2) of the Act.

    CONSIDERATION

26. The issues in this case, framed by the relief each party seeks and the evidence which has been filed in support, appear to be as follows:

    (a)Was Ms Valder a creditor or person affected by the final consent orders between Mr and Ms Saklani made on 13 November 2013 in the Family Court of Australia?

    (b)Was there a miscarriage of justice in the making of the final consent orders between Mr and Ms Saklani? A related question is whether the Family Court should have been informed of the existence of the Supreme Court proceedings and the order for equitable compensation and costs?

    (c)If there was a miscarriage of justice, should the discretion which is created by s 79A of the Act be exercised to set aside the final orders?

    (d)Is delay between the time when Ms Valder became aware of the existence of the consent orders and the time she commenced proceedings relevant to the exercise of discretion?

    (e)Do provisions of the Bankruptcy Act function to end the entitlements of a creditor (here Ms Valder) after the bankrupt has been released from bankruptcy?

    (f)Is it significant to Ms Valder’s claim that the F Town property was not part of the “property of the bankrupt” at the time he became bankrupt?

    (g)What is the significance of Ms Saklani’s knowledge of the existence of a liability to Ms Valder in the determination both as to whether there has been a miscarriage of justice and then whether the orders should be set aside?

    (h)In determining whether to exercise the discretion to set aside the orders, what is the significance of the potential diminishment of the pool of assets available to the wife having regard to the history of her contributions – put another way, how should the interests of a creditor of one spouse be balanced against the interests of the other spouse?

    (i)Are the provisions of s 106B of the Act engaged?

    (j)If the provisions of s 106B are engaged, how should the discretion be exercised?

    (k)Are Mr C and Ms D Saklani bona fide purchasers or other interested persons? If so, how should the Court have regard to their interests?

1. There is overlap between the subject matter in the above list of issues since it is not possible to consider whether the discretion to set aside orders should be exercised without taking into account the merits of the s 106B argument or s 79 claim, or the status of the debt said to be owed to Ms Valder.

2. In Valder and Saklani (2021) FLC 94-042 the Full Court of the Family Court of Australia accepted that Ms Valder was a creditor and/or a person whose interests would be affected by the making of an order. As a consequence, she is a person who would have been entitled to become a party to proceedings in which an application was made for an order under s 79 of the Act.

3. In 2022 the High Court of Australia dismissed an application for special leave by Mr B Saklani stating there was no reason to doubt the correctness of the decision of the Full Court.

4. Before me, Mr B Saklani inferentially contended that the import of the Full Court’s decision was to confirm Ms Valder’s standing to bring the claim. He continued to argue that she ought not be considered a creditor or person affected in the determination of the s 79A application (on a variety of bases discussed below). It is therefore necessary to understand the circumstances in which the consent orders, the subject of the s 79A application, came to be.

5. In 2013 Mr and Ms Saklani began the process of applying for a divorce and separately for orders adjusting their interests in property. On 11 October 2013 Ms Saklani consulted a solicitor about draft consent financial orders which had been prepared by solicitors acting for Mr B Saklani. She says she did not provide her solicitor with any information about Ms Valder or any legal proceedings involving her husband.

6. The husband was represented at the time of the making of the consent orders. In his trial affidavit filed in these proceedings he gave no evidence about the circumstances in which he entered into the consent orders. After both Ms Valder and Ms Saklani had given evidence and been cross-examined before me, Mr B Saklani provided a proof of evidence which he adopted on oath in which he said:

   1.The circumstances, in October 2013, in which I completed the form for consent orders under s 79 of the Family Law Act are as follows;

   2.I first completed the form as applicant and took it to [Ms Saklani], who was then still my wife, and guided and assisted her to complete her part as respondent.

   3.I was aware of my obligation to complete the form accurately and honestly and in particular of [my professional obligations], given my background which I summarise as follows:

   •I [studied] at [N University] and graduated with [distinction in 1980], I completed [postgraduate studies] at [N University] in 1983. Both these were achieved whilst a full-time [public servant].

   •I decided to continue to work for the [public service].

   •In 1987 I joined [a government department] in a senior position.

   •In 1989 I joined [P Partners] as a [professional]

   •In 1993 I was seconded to [a government agency] and [was promoted to a senior position there] in 1995.

   •In 1996 I resigned from the [government agency] to pursue private professional sector work, coinciding with the move from Sydney to [F Town].

   •I rejoined the [public service] in 1998 and remained there until my retirement in 2014.

   4.When I completed the form, I did so in the following circumstances and the belief that the answers were true:

   •I had won before [omitted] and then a loss in the Court of Appeal

   •I had strong advice that the Court of Appeal had erred and the High Court would allow my appeal. That advice was vindicated when the High Court decided unanimously that Court of Appeal was wrong on the special leave point.

   •I was advised that in the highly unlikely loss in the High Court, damages would be to restore the Applicant to her position before the promise. [The Judge] had found as fact, that remains unchallenged, that the detriment that the Applicant suffered in reliance on the promise was matched by the benefit she received in [F Town], that is to say she suffered no material loss.

   •I was confident that any damage awarded would be modest or insignificant.

   5.I specifically looked at s 79 and s 79A of the Family Law Act which referred to a “person affected by an order”. I interpreted this to mean that if as a consequence of the property settlement the assets that I became absolutely entitled to in the property settlement would have to be insufficient or possibly insufficient for any creditor to be a “person affected”. I had my assets comprising [overseas] property and other assets including employee entitlements totalling in value more than $1.5 million

   6.I also looked at the reference to “creditor” in the application form which I understood to mean at the time any person or company or other entity to whom an amount of money was due and payable. I did not categorise the applicant as a “creditor” nor that  I had any “liability” to her because there was no amount owing to her

   7.As [a professional] and [as a public servant] in a [government] department I was only prepared to complete the form if I honestly believed it was accurate.

   8.Further I told my then wife that the content was accurate as there was no amount owing as due and payable and no liability to the applicant until the High Court had determined the appeal which occurred 6 months later. The Supreme Court quantified an amount that occurred almost 10 months later in September 2014.

   9.I was aware that the favourable Court of Appeal decision did not establish a liability according to accepted definition of that term or in case law.

   10.As to the reference to “any other circumstances” in the form, I read that as circumstances “other ‘than covered earlier in the form

   (As per the original)

   (Exhibit 10)

7. In order to enliven the discretion created by s 79A of the Act the applicant must demonstrate that:

   (a)She is a creditor or person affected by a s 79 order; and

   (b)There has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance.

8. The applicant submits, and I accept, that there is a requirement for the parties to an Application for Consent Orders to place before the Court all relevant information having regard to the operation of the Act and the provisions of the Family Law Rules 2004 (Cth) (as were in force).

9. There are two bases upon which Ms Valder contends that the making of the consent orders constituted a miscarriage of justice. The first is because Mr and Ms Saklani failed to provide the Court with information about the NSW Supreme Court proceedings which had resulted in an order for equitable compensation. The second is because the consequence of those orders was to leave Mr B Saklani without sufficient liquid assets to meet his debts (including to her).

10. There may have been a third basis on which Ms Valder contended the making of the final orders constituted a miscarriage of justice – namely that the husband and wife entered into consent orders for property adjustment but were not in effect separated. The evidence supportive of that conclusion is as follows:

    (a)Mr and Ms Saklani remained living at F Town after separation;

    (b)They travelled to Country Q together in 2014;

    (c)Ms Saklani was reliant on Mr B Saklani for information about legal matters in circumstances where it could not be assumed that their interests were aligned;

    (d)Mr and Ms Saklani continue to live on the same property at F Town;

    (e)Ms Valder filed evidence including an affidavit by Mr K, the effect of which was to imply that Mr and Ms Saklani were not separated. Mr K lives on the neighbouring property at F Town – which he purchased from Ms Saklani. He says he dealt mainly with Mr B Saklani on the purchase. Mr K was not required for cross-examination;

    (f)Ms D Saklani said that the transfer of F Town to her and her husband was discussed with Mr and Ms Saklani (as opposed to Ms Saklani as the owner); and

    (g)Ms Valder annexed a recent photograph of Mr and Ms Saklani eating a meal together in a café/restaurant.

11. It is possible for parties to an intact marriage to enter into consent orders since the power which is being exercised is the marriage power. In an appropriate case, the Court may decline to make orders for property adjustment as between parties to a marriage which has not broken down. This is particularly the case if the orders are designed to defeat the claims of creditors.

12. Having reviewed the evidence I accept that there is an ongoing relationship between Mr and Ms Saklani but I am not confident that the evidence establishes to my satisfaction that the marriage relationship remained or remains on foot.

13. I turn then to consider whether or not the failure, on application to this Court for consent orders, to refer to the Supreme Court Order establishing Ms Valder’s entitlement to equitable compensation is sufficient to constitute a miscarriage of justice.

14. The Application for Consent Orders form itself seeks information which the parties must adopt on oath. The form poses questions the answers to which inform the judicial officer considering the application.

15. Question 19 of the Application for Consent Orders asks the question: Is there any person who may be entitled to become a party to the case under subsection 79(10) or subsection 90SM(10) of the Act? The box for “no” was crossed.

16. The notes to Part H of the Application for Consent Orders state: Column 1 should be completed by the applicant and must contain details of all property, superannuation, liabilities and financial resources of the applicant. The husband, as applicant for consent orders, did not give any indication that he may have been indebted as a consequence of the decision of the Supreme Court of NSW Court of Appeal (“the Court of Appeal”). Question 56 asked for details of any liability not covered by the specific questions which related to mortgages, loans and the like). Further, question 71 draws attention to the necessity to inform the Court of any other relevant matter. The husband did offer information in answer to this question. He indicated expenditure of $400,000 post-separation which he said should be taken into consideration “in relation to the division of the property”. He did not mention his ongoing legal proceedings.

17. It is important to understand what the husband knew at the time he signed the affidavit attached to the Application for Consent Orders. He was aware of the detail of the proceedings in which he had been involved.  

18. In July 2013 the Court of Appeal made the following orders:

    (1)Appeal allowed.

    (2)Set aside the orders made in the Equity Division [in] February 2012.

    (3)Order in lieu thereof as follows:

    (a) That the defendant pay to the plaintiff by way of equitable compensation a sum to be determined in accordance with the decision of the Court of Appeal.

    (b) That the defendant pay the plaintiff’s costs of the proceedings.

    (4)Remit the matter to the Equity Division for determination of  the quantum of equitable compensation in accordance with the decision of this court on the basis of further submissions and, if the court so determines, additional evidence.

    (5)Order that the respondent pay the appellant’s costs of the appeal.

    (6)Order that the respondent have a certificate under the Suitors’ Fund Act 1951 if qualified.

19. At the time of the decision Mr B Saklani was a professional. Mr B Saklani was legally represented in the Supreme Court proceedings. It was not part of the husband’s case that he had not read the decision of the Court of Appeal. The decision made plain that the husband was liable to Ms Valder for equitable compensation and costs. The only remaining issue was the quantum of the compensation and costs.

20. At [142] of Valder v Saklani (2013) (omitted) the Court of Appeal said:

    …that valuation evidence does not indicate the appropriate outcome. The appropriate measure is whichever is the smallest of

    (a) today’s open market value of Lot 4 in the plan of subdivision approved in October 2005 determined as if that lot was a subdivided lot capable of being transferred and as if the [E Property] building destroyed [...] in [2006] was still standing;

    (b) the aggregate of, first, today’s open market value of that Lot 4 determined as if that lot was a subdivided lot capable of being transferred and as if it were unimproved vacant land and, second, the amount of the insurance proceeds received as a result of the destruction of the [E Property] building in [2006] (plus interest at a commercial rate on the amount of the insurance proceeds from 1 August 2006 to the date of judgment);

    (c) the open market value of Lot 4 as at 31 July 2006 determined as if that lot was a subdivided lot capable of being transferred and also as if the [E Property] building destroyed [...] in [2006] had been standing at 31 July 2006, plus interest at a commercial rate on that value form 1 August 2006 to the date of judgment; and

    (d) the aggregate of, first, the open market value of Lot 4 as at 31 July 2006 determined as if that lot was a subdivided lot capable of being transferred and also as if it were unimproved vacant land and, second, the amount of the insurance proceeds received as a result of the destruction of [E Property] building in [2006] (plus interest at a commercial rate on that aggregate from 1 August 2006 to the date of judgment).

21. The husband did not provide any information to the Family Court of Australia in his Application for Consent Orders which would have brought to the attention of the Court the ongoing proceedings which had created a liability to Ms Valder albeit that the sum to be paid was yet to crystallise.

22. This is significant because he was giving instructions to his lawyers to file an application for special leave in the High Court of Australia in order to challenge the Court of Appeal decision at the same time as he was instructing his solicitor to prepare his Application for Consent Orders in the Family Court.

23. The husband explains his failure to provide any information by reference to his belief that his appeal to the High Court would succeed. I accept he may have held such a belief but it was not for him to omit part of the relevant contemporaneous financial position on the basis of his belief that his financial obligations to third parties would change in the future. It was incumbent upon him to inform the Court of his current circumstances and those included a liability to meet the order for equitable compensation and costs.

24. The wife explains her failure to provide any information to the Family Court on three different bases. She says she was told by her husband that the question about whether there were any creditors of the parties who may be entitled to be joined was “irrelevant”. Further, she says she did not want to know about matters between the husband and Ms Valder. Finally, she says she was assured by the husband that there was no issue.

25. I accept the wife may not have wanted to know about matters involving Ms Valder but it is important to understand the extent of her knowledge to inform the exercise of discretion. Ms Saklani filed an affidavit sworn 4 August 2010 in the proceedings between Ms Valder and Mr B Saklani in the Supreme Court. Given Ms Saklani’s awareness of the existence of proceedings and her participation in them as a witness in her husband’s case, her desire not to know about matters, while perhaps understandable, raises an issue as to whether her wilful blindness is sufficient to exercise the discretion in the manner which she seeks (namely to dismiss the s 79A application).

26. The wife’s knowledge also included information (provided by the husband) that the decision in the Supreme Court had been unfavourable to him and his lawyers had recommended appeal. She therefore knew that the situation was not finalised.

27. The wife says the husband provided her with both an Application for Divorce and Application for Consent Orders in draft form in this period.

28. Prior to the filing of the Application for Consent Orders the husband and wife filed a joint Application for Divorce on 30 May 2013 (exhibit 17). The parties told the Court that they lived separately at G Street, F Town NSW – the husband in J Property, the wife in H Property. Significantly, the husband said he regarded Australia as his home and intended to live indefinitely in Australia. The parties told the Court that they had separated on 15 January 2012. The affidavit material relied upon by Mr B Saklani before me placed their separation in late 2008 or early 2009.

29. The husband’s evidence to the Court affirmed 11 November 2013, when the consent orders were requisitioned by the Registrar, was that he intended to settle in Country Q after he retired. This was in direct contradiction to the evidence in his very recent Application for Divorce – namely that he intended to remain in Australia indefinitely. This is not explained in any evidence before me.

30. On 13 November 2013 the Court made final consent orders. Those orders dealt with all of the property of Mr and Ms Saklani.

31. I am comfortably satisfied that the husband knew and ought to have provided information about the judgment against him in the Supreme Court when he applied for property division by consent in the Family Court. I am comfortably satisfied that the wife knew about the proceedings, knew they had been decided unfavourably to the husband and declined to make any inquiries of a person other than the husband himself. I accept that she closed her mind to the issue. Regardless of the intentions of either the husband or the wife, the effect was that the Registrar of the Court, whose role it was to satisfy themselves that the orders were just and equitable as between the parties and did not have the effect or potential effect of defeating a claim by a legitimate creditor of the parties or either of them, was not given the information necessary to make that assessment: Harris and Caladine (1991) 172 CLR 84. I find there has been a miscarriage of justice.

32. Section 79A of the Act is designed to protect the integrity of the Court’s processes. A failure to provide relevant information impugns the process: Public Trustee v Gilbert (1991) FLC 92-211. I find that s 79A is engaged.

33. The process was affected both by the failure of Mr and Ms Saklani to inform the Court of relevant information but also by the failure to give Ms Valder notice of the application as a person affected by it: Semmens v Commonwealth  (1989) 13 Fam LR 715(“Semmens”) at 723.

34. The case law as it emerged from Semmens and the cases which followed was recently the subject of review by the Full Court in Cantrell & North (2020) FLC 93-976 at [69] – [73]:

    69. The observations by the Full Court in Semmens were consistent with Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337. There, Gibbs J said at 354:

    … [I]t does not follow that the Parliament intended that the legitimate interests of third parties should be subordinated to the interests of a party to a marriage, or that the Family Court should be able to make orders that would operate to the detriment of third parties. There is nothing in the words of the sections that suggest that the Family Court is intended to have power to defeat or prejudice the rights, or nullify the powers, of the third parties…

    70. Thus, in Rowell and Rowell (1989) FLC 92-026 (per McCall J at 77,393, Barblett DCJ at 77,394 and Baker J agreeing with both), which was also referred to in Semmens, it was held that in the circumstances, it was necessary to give notice of the proceedings to a creditor before final orders were made and that the failure to give notice to the creditor was a denial of natural justice.

    71. In Re Bailey and Bailey (executrix of the estate of Bailey) (1990) FLC 92-117 (“Bailey”), the Full Court said at 77,774:

    The combination of the statement by the High Court in Ascot Investments and Harper and sec. 79A clearly indicates to us that it is not proper for the Court to proceed in a property application without due regard to liabilities of a party which are either established or in the process of being determined where the liabilities are of such magnitude as to be defeated by the order being sought in the Family Court.

    72. The Full Court in Biltoft and Biltoft (1995) FLC 92-614 (“Biltoft”) said:

    There is an obligation on both parties to disclose any significant creditors or any significant claim against them by a third party. If, as a result of the order of the Court in the property proceedings, the ability of a creditor or claimant to recover his or her debt or claim is likely to be affected, notice of the Family Court proceedings must be given to that creditor or claimant. He/she may then intervene in the Family Court proceedings and either seek a stay of those proceedings or some appropriate order which recognises his/her rights.

    (Emphasis added)

    73. The word “affected” used in Biltoft has a wide meaning and goes further than the ultimate recovery of debt as may be suggested by the word “defeated” which was used in Bailey and includes, for example, the ease with which the debt might be recovered and the consequential issues of cost, delay and uncertainty.

1. It follows that I am satisfied there has been a miscarriage of justice in the making of the consent orders. I retain the discretion to dismiss Ms Valder’s application even if I find that the discretion is enlivened. I do not accept that the wife’s failure to make inquiries is a sufficient basis to decline to exercise the discretion.

2. As discussed above at [28] – [30] the issue of whether Ms Valder could recover her equitable compensation remained a live issue before me notwithstanding the decision of the Full Court. The husband’s position was that, if Ms Valder cannot be characterised as a creditor or person affected, then the fact that the evidence establishes a “miscarriage of justice” may not be of any moment. The orders will only be set aside on application of a creditor or person affected, and even then it remains discretionary relief. If I were to be satisfied that there was either no liability to Ms Valder owed by either party and/or there were no assets available to meet the liability, that would tend to the conclusion that the orders should not be set aside.

3. The husband submitted that Ms Valder was not a person affected at the time of the making of the consent orders because she had not demonstrated that her debt was unrecoverable. The basis for this submission was said to be because the husband had $900,000 of property in Country Q, $500,000 of Super Fund 1, $150,000 in a SMSF and land worth $500,000.

4. There are a number of difficulties with that argument. The first is that the assets which the husband asserted he had did not absolve him of the requirement to provide the Court with information about his liabilities and/or creditors: Trustee of the Bankrupt Estate of Hicks & Hicks [2019] FamCA 695 (“Hicks”). The second is that the calculation ignores the fact that the net assets of the husband, as reflected in his Application for Consent Orders – following payment to the wife - were $695,000. Perhaps the net assets could have been $895,000 if the valuation of the Country Q property some three months later was accurate. At the time of the consent orders it was not apparent what the figure for the equitable compensation would ultimately be nor was it evident what the figure for the costs order would be. The husband cannot confidently assert that the $695,000 (or even $895,000) would have been sufficient to meet Ms Valder’s claims. This becomes even more stark when one considers the composition of the assets said to comprise the $695,000 net, their location and the paucity of objective evidence about their value.

5. I accept that at the time of the consent orders the husband did not know the precise sum by way of either equitable compensation or costs. It is reasonable to look at what occurred in the period immediately after the making of those orders to understand whether the funds retained by the husband were sufficient to meet his debts.

6. The quantification of Ms Valder’s equitable compensation occurred when the Supreme Court gave judgment and made orders in September 2014. Those orders were as follows:

   1. Give judgment for the plaintiff against the defendant in the sum of $594,028.25.

   2. Order that the defendant pay the plaintiff’s costs of the proceedings to determine equitable compensation.

7. The High Court also ordered that Mr B Saklani pay Ms Valder’s costs when they dismissed the appeal in 2014.

8. The Court of Appeal also ordered that Mr B Saklani pay Ms Valder’s costs of the appeal on 1 July 2013.

9. Accordingly, the monies which Mr B Saklani might reasonably have been considered obliged to pay to Ms Valder (or potentially obliged to pay Ms Valder) while not settled as at the date of his consent orders included the as yet unquantified equitable compensation, costs of the Court of Appeal, costs of the High Court and costs of the further proceedings to establish quantum.

10. Finally, it is worth noting that whatever the husband now submits was his capacity to pay Ms Valder the monies the Supreme Court ordered, he failed to do so.

11. In the report to creditors, Mr B Saklani’s Trustee in Bankruptcy wrote:

    The bankrupt has advised that the property was approximately evenly split in terms of value.

    That is inconsistent with the representations which both the husband and wife made to the Court at the time of the making of the orders namely that the husband was to receive 38.37 per cent of the assets.

    Further, the report to creditors read: the transfer of the bankrupt’s interest in the [Country Q] property for a non-registerable and unrecoverable tenancy arrangement has effectively converted the bankrupt’s interest in the properties, together with a number of sums of cash, to property which is unrecoverable by the trustee.

12. The reference to Mr B Saklani’s interests in Country Q is a reference to his decision to enter into a lease agreement. He transferred his interest in property said to be worth $900,000 to his nephew. In exchange he says his nephew gave him a 75 year lease over the top floor of his nephew’s home.

13. The identity, character and location of the assets referred to in the Application for Consent Orders mean that Ms Valder would have faced similar difficulties to the trustee in seeking to recover the funds owed to her from the assets said to be available to Mr B Saklani.

14. A further argument advanced by senior counsel for the husband was to the effect that Ms Valder did not satisfy the definition of creditor as at 13 November 2013 because the orders which fixed the quantum of her equitable compensation were not made until September 2014, and so, he argued, her entitlement to an unliquidated sum did not give her that status of a creditor. This position was said to be supported by the decision in Re Pen-y-van Colliery Company (1877) 6 CHD 477. Re Pen-y-van Colliery Company was concerned with the interpretation of ss 147-152 of the Companies Act 1862 and who may appropriately petition the Court for winding up. The decision of that Court, that a person who had an unliquidated claim was not to be regarded as a creditor for the purpose of that Act, does not convince me that Ms Valder, whose claim for equitable compensation had been determined save for quantum, is not to be regarded as a creditor or person affected by an order under s 79 for the purpose of the Family Law Act.

15. It was argued on behalf of Mr B Saklani that the application under s 79A of the Act should be dismissed because Mr B Saklani’s liability to Ms Valder could only be satisfied by payment to her from the “assets of the bankrupt”.

16. Mr B Saklani was not the registered proprietor of the F Town property at the date of his bankruptcy. And hence the F Town property did not vest in the Trustee. However, that issue was at the very heart of the application to the Federal Court for leave. That is, Ms Valder was seeking leave to bring proceedings to set aside the orders which had had the effect of transferring the F Town property from the name of Mr B Saklani and his wife to that of his wife alone. If that disposition were to be set aside (and the Court were to grant the s 106B relief) the F Town property is to be treated by this Court as available to meet the liabilities of any creditors of the husband or wife, notwithstanding the fact that it was not in the name of Mr B Saklani at the date of his bankruptcy or during its currency.

17. The husband argued before me, as he had argued before Rees J that s 153 of the Bankruptcy Act was fatal to Ms Valder’s claim. Mr B Saklani reads the Full Court’s decision as giving Ms Valder standing but no more. It is submitted, by him, that her claim was extinguished by operation of s 153 of the Bankruptcy Act and accordingly, her application should be dismissed. Section 153 provides:

    (1) Subject to this section, where a bankrupt is discharged from a bankruptcy, the discharge operates to release him or her from all debts (including secured debts) provable in the bankruptcy, whether or not, in the case of a secured debt, the secured creditor has surrendered his or her security for the benefit of creditors generally.

    (2) The discharge of a bankrupt from a bankruptcy does not:

    (a) release the bankrupt from:

    (i) a debt on a recognizance; or

    (ii) a debt with which the bankrupt is chargeable at the suit of the sheriff or other public officer on a bail bond entered into for the appearance of a person prosecuted for an offence against a law of the Commonwealth or of a State or Territory; or

    (aa) release the bankrupt from liability to pay an amount to the trustee under subsection 139ZG(1); or

    (b) release the bankrupt from a debt incurred by means of fraud or a fraudulent breach of trust to which he or she was a party or a debt of which he or she has obtained forbearance by fraud;

    …

18. Mr B Saklani’s senior counsel argued that the effect of s 153 functioned to end the entitlements of Ms Valder to pursue her claim. At paragraph 8 of the husband’s closing submissions, senior counsel explained: “This is because if a claim for debt is extinguished or released and therefore cannot be pursued, there is no possibility of the bankrupt estate being increased or enlarged for the benefit of all the creditors”.

19. It follows from the submissions on behalf of the husband that Ms Valder should not be permitted to pursue the s 79A application to set aside orders which were made before the bankrupt became bankrupt.

20. As the argument is developed, the debt of Ms Valder became, on Mr B Saklani’s bankruptcy, a right to prove in his bankrupt estate (and lost its character as a debt or liability separate from this right to prove in the bankrupt estate). Hence the husband argues that Ms Valder lost her status as a creditor. The husband contends that, while she may have been a creditor at the time she commenced her application pursuant to s 79A of the Act, she lost the status during the currency of these proceedings when the husband was discharged.

21. The husband submits that Ms Valder’s claim for debt (and status as a creditor) was extinguished when the bankruptcy ended. This argument avoids the operation of s 58(3) of the Bankruptcy Act which allows a court to grant leave to a creditor to commence an action. That ignores the fact of Ms Valder having, during the currency of the bankruptcy, sought and obtained leave to pursue her claim by reason of the orders of Justice Katzmann made 8 November 2016. This gave her rights different and separate from the lodgement of a proof of debt in the bankrupt estate and is unaffected by the husband’s release from bankruptcy. As was confirmed in Valder & Saklani (2021) FLC 94-042 at [42]:

    … The bankrupt estate continues until it is annulled because the debts have been paid in full (s 153A of the Bankruptcy Act), by court order (s 153B of the Bankruptcy Act) or because the creditors have accepted a payment under s 73 of the Bankruptcy Act (s 74 of the Bankruptcy Act).

22. The husband argued before me that the s 79A discretion ought not be enlivened because Ms Valder as a creditor was not entitled to claim against property other than the “property of the bankrupt” as at the date of bankruptcy being “property divisible among creditors” as that expression is defined in the Bankruptcy Act. The argument was that since the husband had already transferred his interest in the F Town property to the wife at the time of his bankruptcy, the F Town property was not an asset against which Ms Valder was entitled to claim as a creditor. This argument ignores the fact that, having been given leave to bring a claim to set aside the orders (which provided for transfer of that property), it is open to this Court to make an order which has the effect of ordering that funds be paid to Ms Valder from the sale of matrimonial property (such payment to be subject to the terms of the grant of leave) as opposed to revesting property in the husband (or for that matter the wife). As noted by the Full Court in Valder & Saklani (2021) FLC 94-042 at [51]-[52], Official Trustee in Bankruptcy v Donovan and Donovan and Stevens (1996) FLC 92-703 is to be distinguished from the position in this case firstly because the judge in that case proceeded on the assumption that the effect of the application would necessarily be that the property revested in the former bankrupt and, secondly, because at the time at which that case was decided, s 79A(4) of the Act was not yet enacted.

23. The husband submitted, before me, that the proceedings pursuant to s 79A of the Act were defective until he was joined on 19 May 2019. I accept that it would not have been possible to make an order setting aside the consent orders unless the husband was either a party to the proceedings or had been given notice (and declined to participate). Senior counsel for Mr B Saklani argued that because Ms Valder’s application for relief under s 79A of the Act, as originally filed did not name the husband as respondent, then the case under s 106B must fail and in that regard he relied upon the dicta of the High Court in John Alexander’s Clubs & Anor v White City Limited (2010) 241 CLR 1 (“John Alexander’s Clubs”).

24. John Alexander’s Clubs says no more than “where a court is invited to make, or proposes to make, orders directly affecting the rights or liabilities of a non-party, the non-party is a necessary party and ought to be joined”. Mr B Saklani, Mr C Saklani and Ms D Saklani were joined, filed evidence and were given the opportunity to be heard. The husband was joined on 17 May 2019 and the s 79A orders are capable of being made following a hearing in which he filed evidence, attended and was represented.

25. The second respondent argued that since Ms Saklani transferred the property at a time prior to joinder of Mr B Saklani, then she could not have done so with any impact on an “anticipated order” since one could not anticipate the making of an order which could not be made without him as a party. This submission takes too narrow an approach to the construction of s 106B of the Act. There were proceedings before this Court which squarely raised the correctness and validity of both the consent orders and the transfer of the F Town property.

26. Although Ms Valder has had some legal advice she has prepared her own documents and, in the main, appeared on her own behalf. At all times she has made plain that the purpose of her application was to recover the equitable compensation which the Supreme Court orders required Mr B Saklani to pay to her and to that end she placed Ms Saklani on notice of her intention to recover those funds, including against assets which had been transferred into Ms Saklani’s name – this much is clear from the letter she wrote to Ms Saklani’s solicitors on 23 April 2015. This is sufficient to conclude that an order may have been anticipated.

27. Senior counsel for Ms Saklani submitted that, even if I were satisfied that the failure to inform the Family Court of the existence of the equitable compensation orders of the Supreme Court constituted a miscarriage of justice, it was open to me and I would decline to exercise the discretion to set aside the orders because allocating funds to a creditor of the husband (Ms Valder) would diminish the funds available to the wife as a consequence of her contributions over a long period. I accept that a payment to Ms Valder would indeed deplete the assets available to Ms Saklani following a long marriage in which she made significant contributions. This alone however is insufficient to persuade me to exercise the discretion to dismiss the application. The assessment of what orders are just and equitable as between a husband and wife at the conclusion of a long relationship in which each has made significant contributions is usually undertaken after considering what assets and liabilities are available for adjustment. However, there is no statutory mandate to treat the rights of a spouse to a property adjustment order as having priority over the interests of a creditor to recover a debt: Trustee of the property of G Lemnos, a bankrupt & Lemnos & Anor (2009) FLC 93-394. Ultimately, each case will be determined by application of the statutory considerations to the specific facts. Here it is acknowledged that the payment of Ms Valder’s claim will diminish the assets available to Ms Saklani but that fact alone is inadequate to result in the dismissal of the applicant’s claim.

28. It was also contended, on behalf of Ms Saklani that if I found that she had not knowingly participated in the Application for Consent Orders with an intention to defeat Ms Valder’s, claim this would impact on the exercise of my discretion. I accept that, in a case where a party has no knowledge of the omission, this may be relevant (albeit not determinative) in relation to the exercise of the discretion. Here the position is that the wife knew that there were proceedings and knew that they were ongoing but did not make independent inquiries in relation to them, notwithstanding the fact that she was legally represented.

29. It is insufficient in my view to, by reference either to the wife’s contributions or to her knowledge of the liability, conclude that the application of Ms Valder be dismissed. It is necessary to weigh the rights of each of the parties to the litigation. In that regard dismissal of Ms Valder’s application would plainly leave her in a position where she was unable to recover the sum due to her by way of equitable compensation.

30. The husband submits as relevant to the exercise of discretion the fact that Ms Valder has been aware of the existence of the consent orders between himself and Ms Saklani since about 16 May 2014 (when the High Court published it reasons for judgment) yet did not commence proceedings until December 2016.

31. Ms Valder obtained leave pursuant to s 58(3) of the Bankruptcy Act to commence proceedings on 8 November 2016 and commenced proceedings pursuant to that leave the following month.

32. Delay in seeking leave to commence proceedings is a matter which may have been material when Katzmann J was considering whether to grant leave. I was not taken to any identified prejudice occasioned by delay in the commencement of these proceedings. Consequently I am not persuaded that any delay should result in the application being refused.

33. The above observations do not dispose of the issue. This Court would be cautious to disturb final orders on the application of a creditor if the evidence established that setting aside the final orders would not make assets available to satisfy the debt. Hence, in this case the exercise of discretion is informed by the Court’s decision in the related application under s 106B of the Act. Only if that transfer is set aside will the assets of the husband and wife be sufficient to meet Ms Valder’s debt.

34. It is necessary when considering the exercise of my discretion (to set aside the final orders or not) to take into account the position of Mr C and Ms D Saklani, who are now the registered owners of the F Town property.

35. Ordinarily where a third party has acquired property for value, at arm’s length, the Court would be cautious to make orders which had an impact on the interests of those third parties. There are a number of reasons why the facts and circumstances of this case mean that the Court would not be unduly cautious.

36. The applicant asks the Court to invoke the provision of s 106B of the Act to set aside the transfer of the F Town property by the wife to her son and daughter in law. Section 106B of the Act provides for the setting aside of a transaction made to defeat an anticipated order or, irrespective of intention, which is likely to defeat an order.

37. Section 106B functions to set aside transactions including dispositions of real property if the terms of the section are satisfied.

38. Section 106B is available where:

    (a)there are proceedings under the Act – that subsection is satisfied by the existence of the proceedings under s 79A;

    (b)there is an instrument or disposition – here the transfer of the F Town property by the wife to Mr C and Ms D Saklani;

    (c)the disposition was made by a party – here the wife; and

    (d)the disposition was likely to defeat an order – here it is unnecessary to make a finding as to the wife’s intention because it is plain that the disposition has had the effect of removing the F Town property from the beneficial ownership of the wife and therefore making it unavailable to meet the husband’s liability to Ms Valder.

1. If the section is engaged then the Court is able – after affording affected parties procedural fairness – to set aside the relevant transaction and make ancillary orders.

2. The third parties are parties to these proceedings and on notice of the application under s 106B of the Act. They were also on notice that the applicant sought, as part of her alternative relief, sale of the F Town property (or a portion of it). As I understand the evidence, the property is not subdivided (although work has been undertaken towards subdivision), accordingly if sold it must be sold as a whole.

3. Ms Saklani transferred her interest in the F Town property to her son and daughter in law with settlement taking place in December 2018 and registration in January 2019. There was a valuation and consideration was paid to in the total sum of $1,484,881.20. The transfer was subject to a life interest in favour of Ms Saklani. At that stage, these proceedings had been on foot for two years. Ms Valder had sought an undertaking that Ms Saklani not dispose of property without notice. Ms Saklani had not provided the undertaking.

4. The Act does require me to have regard to the interests of, and make an order for the proper protection of, a bona fide purchaser or other interested person: ss 79A(2) and 106B(3) of the Act.

5. Ms Valder commenced proceedings on 19 December 2016. At that time she sought an order to set aside the consent orders and foreshadowed consequential orders. Given the litigation between Mr B Saklani and Ms Valder to that point, and what Mr B Saklani describes as his cordial and civil ongoing relationship with Ms Saklani, I accept that Ms Saklani brought the application to Mr B Saklani’s attention. The evidence does not assist me as to when this happened but from that point Mr B Saklani would have been aware that Ms Valder was seeking those orders to provide the opportunity to recover her judgment debt from the equity in or sale of the F Town property. Ms Saklani was, initially, the only respondent to that Initiating Application. To the extent that she had been seeking to avoid the detail of the dispute to that stage she could no longer credibly take that path and must have known or must be presumed to have known that Ms Valder was seeking payment of funds from her. As is plain from the section itself, even if she did not intend through her actions to defeat Ms Valder’s claim – if I find that her disposition of the F Town property was likely to have that effect, her knowledge or intention are not determinative of the outcome.

6. The third and fourth respondents’ primary position was that the Court should dismiss Ms Valder’s application but in the alternative they contended that the Court would find that they were bona fide purchasers of the F Town property and their interests would be protected by declining the relief sought. While the third and fourth respondents who appeared without a lawyer did not have a formal minute of the orders which they sought, the final oral submissions of Mr C Saklani – which Ms D Saklani adopted – were to the effect that the application to set aside the transaction should be dismissed and, in the alternative, orders should be made which have the effect of compensating them for the funds which have been paid in respect of the acquisition and improvement of the F Town property.

7. My reading of s 106B(3) of the Act is such that even if I were to have doubts about the bona fides of one or other of Mr C and Ms D Saklani as purchasers I would nonetheless be required to have regard to the protection of their interests as “persons interested” by reason of the significant expenditure on acquisition and improvement of the property including preparation for subdivision.

8. Turning to Mr C and Ms D Saklani as persons who will be affected by an order under s 106B of the Act, it is material to consider what, if any, knowledge they had about the existence of proceedings involving Mr and Ms Saklani.

9. Mr C Saklani gave evidence that he became aware that his mother was involved in proceedings before this Court in 2017. He understood that it involved a claim by Ms Valder. He said that he was not aware of the details of the claim but presumed that Ms Valder was seeking to recover funds from Ms Saklani that she had been unable to recover from Mr B Saklani. He told the Court that he was not aware that Ms Valder was seeking to set aside the transfer of the F Town property. That makes sense since the transfer did not occur until January 2019. That said, Mr C Saklani would have been aware that there was litigation to recover monies from his mother and that she was the owner of the F Town property.

10. Mr C Saklani says he was not aware of his father’s bankruptcy until the end of 2018 and his mother reassured him that all debts had been discharged.

11. Mr C Saklani does not give evidence of having obtained legal advice or made inquiries prior to his mother’s disposition of the F Town property.

12. Mr C Saklani took a similar approach to his mother in actively avoiding reading about the legal proceedings involving his father and Ms Valder notwithstanding his knowledge that there were publicly available documents which would shed light on the circumstances. He knew his wife had read at least the decision of the High Court but declined to discuss the contents of that with her.

13. Even if I were satisfied that Mr C Saklani knew nothing about the existence of litigation and an outstanding liability I would still be entitled to set aside the transfer of the F Town property. In this case I am satisfied that Mr C Saklani failed to make inquiries in circumstances where it would have been prudent to do so.

14. Ms D Saklani had read the High Court judgment but her evidence says her husband has refused to discuss it with her. 

15. Ms D Saklani gives evidence in her affidavit filed 8 December 2022 at [5] that:

    On or around 16 December 2017, I recall [Mr C Saklani] said to me that his parents needed to speak to him the next day to discuss purchasing the [F Town] property.

16. Ms D Saklani says there were meetings with Mr B and Ms Saklani. She says at [7]

    I asked [Mr C Saklani’s] parents if there were any ongoing legal proceeding. [Mr C Saklani] had told me previously that his parents had told him any proceedings with [Ms Valder] had concluded but I wanted to hear it from them directly. I recall that [Mr B and Ms Saklani] looked chocked that I had asked the question, there some an uncomfortable silence, and [Mr B and Ms Saklani] looked around the room before responding. [Mr B and Ms Saklani] said that those proceeding with the applicant were finalised and that there was nothing to be concerned about. Leaving the conversation I believed the matter with the applicant had been finalised. And that it had nothing to do with [Mr C Saklani] and I purchasing the property.

    (As per the original)

17. Neither senior counsel for Mr B Saklani nor senior counsel for Ms Saklani cross-examined Ms D Saklani on this evidence. I therefore accept her evidence. It follows that I accept that Ms D Saklani was given information which was not accurate.  Ms D Saklani says she did not become aware that she had been joined to the proceedings until late May 2022. This is unfortunate but there is no suggestion that Ms Valder has been responsible for the lack of information Ms D Saklani has experienced.

18. I am concerned about Mr C Saklani closing his mind to the complexities of his own involvement in his parents’ financial affairs but this falls short of a finding that he was assisting them to defeat the applicant’s claim.

19. I accept Mr C and Ms D Saklani may have been motivated by a combination of desire to assist Ms Saklani and desire to acquire the F Town property. However, the cumulative effect of the actions of Mr C Saklani’s parents was to place the F Town property outside the reach of Mr B Saklani’s creditors (unless s 106B of the Act functioned to set aside the disposition). I am satisfied that it is appropriate to set aside the disposition.

20. In Mr C Saklani’s affidavit he sets out the monies which have been expended on the property from immediately prior to transfer until the date of the affidavit. I accept that those monies have been paid and that Mr C and Ms D Saklani should have those funds returned to them.

21. The view I have taken is that the actions of the husband in failing to provide information to the Court resulted in a situation where orders placed what objectively was his only asset of sufficient value to meet Ms Valder’s claim, in the hands of his wife. She then, with knowledge that there were proceedings on foot, disposed of that property. The actions of the husband and wife resulted in the defeat of Ms Valder’s legitimate claim. I accept that it is possible to make orders which protect Mr C Saklani and Ms D Saklani – albeit not to the extent of allowing them to retain the F Town property. Weighing the competing relevant considerations as set out above requires that the discretion be exercised to set aside the consent orders and the disposition of the F Town property.

22. While I accept that the knowledge of Mr C Saklani and Ms D Saklani was not the same as that of Ms Saklani and Mr B Saklani, as outlined above, each of them had sufficient knowledge about the existence of legal proceedings such as should have seen them act more cautiously before entering into the transaction sought to be disrupted by Ms Valder’s application under s 106B of the Act. I am satisfied that this is a case in which it is necessary to balance the interests of the affected person, Ms Valder against those of Mr C and Ms D Saklani and in so doing, set aside the transaction. I take into account the fact that a sum has been identified as owing to them and the proceeds of sale, according to the valuation, will be sufficient to meet that liability as well as the liability to Ms Valder. I take into account the fact that the F Town property is currently the home of Mr B and Ms Saklani and not Mr C and Ms D Saklani who live elsewhere. I am satisfied that it is appropriate to set aside the transaction.

23. The ancillary orders I will make flowing from the order to set aside the transaction will require the sale of the property by Mr C and Ms D Saklani.

    Section 79 proceedings

24. The husband and wife did not focus significantly on the s 79 matter as their primary position was that the Court would not arrive at the conclusion that the original consent orders should be set aside.

25. However each of them sought identical relief in the event the Court was minded to set aside the consent orders, as follows:

    1.   That the Initiating Application be dismissed.

    2. That in the event that the court exercises its discretion pursuant to s79:

    2.1. That the First Respondent retain the property known as “[H Property]”.

    2.2. That the first respondent and Second Respondent otherwise retain all assets, liabilities and financial resources in their respective names.

    3. That in the event the court, in its discretion pursuant to s79 orders that a sum be paid to the Applicant, then such sum be ordered to be paid within 12 months.

    (As per the original)

26. The wife set out her contentions as to the assets of the parties in a table in her outline of case document. The husband, through senior counsel, accepted that summary. The table is as follows:

Description	Ownership	Wife’s Value
ASSETS
H Property	Wife	$3,500,000
Monies in trust (borrowed) for legal expenses	Wife	$125,069.45
R Bank account	Wife	$1,450
CBA Bank account	Wife	$44,000
Motor Vehicle 1	Wife	Not valued
S Company Shares (264)	Wife	$1,261.92
Contents of H Property	Wife	Not valued
Jewellery	Wife	Not valued
Personal items, furniture and whitegoods shipped to Country Q	Husband	Not valued
Assets subtotal		$3,671,781.37
LIABILITIES
Loan from Ms T – legal fees	Wife	$44,000
Loan from Mr U – legal fees	Wife	$20,000
Loan from Mr V – legal fees	Wife	$165,000
Loan from W Finance – legal fees	Wife	$20,000
Liabilities of Husband	Husband	Not disclosed
Debt to the children	Wife	$1,582,109.20
Liabilities subtotal		$1,831,109.20
SUPERANNUATION
Super Fund 1 – payment phase	Husband	NK
FINANCIAL RESOURCES
Lease for property in Country Q	Husband	$900,000
Financial resources subtotal		$900,000

1. Neither Mr B Saklani nor Ms Saklani included in the schedule, reference to the monies due to Ms Valder pursuant to the orders of the Supreme Court. That is consistent with the position they adopted in the litigation, namely that the debt was no longer recoverable. Given I have rejected that submission, I need to take into account what amount is owed to Ms Valder.

2. Ms Valder sought that the Court order payment of $594,028.25 and $350,000 in costs. The sum of $594,028.25 is, leaving aside the arguments already discussed, uncontroversial but the indebtedness of Mr B Saklani to Ms Valder in respect of legal fees is a matter of some controversy.

3. It is clear that the Supreme Court made the following costs order: “that the defendant pay the plaintiff’s costs of the proceedings to determine the quantum of equitable compensation”. Costs orders in the applicant’s favour were also made by the High Court and the Court of Appeal.

4. Senior counsel who appeared on behalf of Mr B Saklani contended that there was no evidence before this Court which was capable of establishing either that Ms Valder had incurred legal costs in respect of the proceedings to determine the quantum of equitable compensation and/or in the event that she had incurred legal costs, there was no evidence before the Court of their quantum.

5. That is correct save and except that there was some evidence of legal fees contained in the trustee’s report to creditors dated 2 September 2015. The report includes, in the list of unsecured creditors of the bankrupt, an amount of $844,028.25 which is described as court judgment and legal fees in favour of Ms Valder. When one has regard to the amount which was assessed as equitable compensation, the component which relates to legal costs is the sum of $250,000. The trustee understood the liability of the husband for legal fees in respect of the proceedings between himself and Ms Valder in the Supreme Court to be in the order of $250,000 as a consequence of the bankrupt’s Statement of Affairs. Annexed to Ms Valder’s affidavit filed in this Court is an affidavit which she relied upon in the Federal Court when she sought leave to commence proceedings. In that affidavit at paragraph 17 Ms Valder refers to Mr B Saklani’s estimate of the costs he owes her and notes that “…it is close to the amounts incurred by me.”

6. The position taken by Mr B Saklani was to the effect that he was not confident that Ms Valder had incurred legal fees in respect of the proceedings, some of her legal assistance having been provided, she accepted, on a pro bono basis. The fact that she did have some pro bono assistance does not negate the possibility of her having paid lawyers to act on her behalf. It is somewhat disingenuous to provide an estimate as to the legal costs you owe in your Statement of Affairs and disavow any legal costs owed in these proceedings.

7. Further support is to be found for the conclusion that the legal fees owed to Ms Valder in 2015 were in the order of $250,000 in the exhibits to Ms Valder’s affidavit which contained a document dated 17 March 2015 which sets out creditors disclosed on statement of affairs in respect of Mr B Saklani administration number NSW … and those include Ms Valder $594,028.00 and Ms Valder $250,000.

8. The figure of $250,000 was also the quantum of costs which Ms Valder made Ms Saklani aware of by letter to Ms Saklani’s lawyers as early as 23 April 2015.

9. I find that, on the balance of probabilities, Ms Valder’s legal fees were as set out in the report to creditors but I accept that this was an estimate on the part of both Mr B Saklani and Ms Valder and not a sum which had been agreed or assessed. Consequently, the course I propose to take is to set aside funds in order to ensure that whatever legal fees are payable by Mr B Saklani to Ms Valder (if any) are paid on the basis that they are legal fees which have been incurred and which have been agreed or assessed. If in due course Mr B Saklani is correct, the only prejudice is that the funds will be retained for a period until that issue can be determined.

10. In determining the assets liabilities and financial resources of the husband and wife for the purpose of adjustment between them I have excluded the borrowings related to legal expenses and included the monies owed to Ms Valder. In closing submissions senior counsel for the wife sought to amend the figure owing to Mr C and Ms D Saklani to $1,602,705.89 to include in the figure owing to them an amount of $20,596.69 said to be legal fees related to these proceedings. No party made any submission contrary to their inclusion and I have taken the larger amount into account when making the orders.

11. Accordingly the assets, liabilities and financial resources are as follows:

Description	Ownership	Value
ASSETS
H Property	Wife	$3,500,000
R Bank account	Wife	$1,450
CBA Bank account	Wife	$44,000
Motor Vehicle 1	Wife	Not valued
S Company Shares (264)	Wife	$1,261.92
Contents of H Property	Wife	Not valued
Jewellery	Wife	Not valued
Personal items, furniture and whitegoods shipped to Country Q	Husband	Not valued
Assets subtotal		$ 3,546,711.92
LIABILITIES
Debt to the children	Wife	$1,602,705.89
Judgment debt to Ms Valder	Husband	$594,028
Legal Costs payable to Ms Valder	Husband	E$250,00
Liabilities subtotal		$ 2,446,733.89
SUPERANNUATION
Super Fund 1 – payment phase	Husband	NK
Net Assets		$1,099,978.03
FINANCIAL RESOURCES
Lease for property in Country Q	Husband	$900,000
Financial resources subtotal		$900,000

1. Consistent with the principles in Chorn and Hopkins (2004) FLC 93-204 I have not included as a liability monies borrowed to fund the legal fees associated with these proceedings. Similarly, I have excluded legal fees held in trust as an asset given they have been sourced from the excluded borrowings.

2. Neither the husband nor the wife sought to value the husband’s interest in his superannuation pension in the payment phase. No order to split that interest is sought and I will have regard to the pension as the husband’s income. The current sum payable to the husband is $1,036.27 per week or $53,886.04 per annum.

3. The wife argued that the liabilities of the husband are not liabilities which should be included in the balance sheet for the purpose of considering the adjustment of assets as between herself and Mr B Saklani on the basis that the monies owed to Ms Valder either by way of equitable compensation or by way of costs arose in the context of Mr B Saklani’s relationship with Ms Valder, a relationship which Ms Saklani says her husband denied when it was raised with her by her relative who was married to Ms Valder.

4. The Court has the discretion, in order to do justice and equity as between the parties, to alter the interests of the parties in their property (or not). In exercising that discretion it is orthodox to have regard to all of the assets, liabilities, superannuation and financial resources of the parties. In an appropriate case, however, it may be necessary in order to do justice and equity between the parties to, in effect, treat certain liabilities as the liability of one or other of the parties rather than taking those liabilities into account when determining the net pool available for adjustment: Biltoft and Biltoft (1995) FLC 92-614.

5. If I were to accede to the wife’s position and make the liability to Ms Valder the responsibility of Mr B Saklani, not to be satisfied from the sale proceeds of the F Town property, then I would not be satisfied that the debt would be repaid. This is a matter I am required to take into account under s 75(2)(ha) of the Act. In order to ensure the orders I make are just and equitable as regards the interests of all parties, I will require Ms Valder to be paid from the funds of the husband and wife.

1. Here, the wife in effect contends that, should the Court set aside the consent orders and the disposition of the F Town property to her son and daughter in law, the Court will not otherwise adjust the interests of the husband and the wife in the assets. The husband appears to agree to that approach. The husband and the wife are each legally represented. It was open to the wife to seek superannuation splitting orders if, in her view, the non-superannuation assets were not sufficient to recognise her entitlements. She has chosen not to pursue that course.

2. I must nonetheless turn my attention to whether leaving the assets, liabilities, superannuation and financial resources without adjustment will result in orders which are just and equitable. In order to make that assessment I must have regard to the parties’ financial and non-financial contributions over a long marriage. I accept that there was no challenge to the evidence set out in the affidavits of the husband and wife and each has made different but equivalent contributions.

3. I must also consider whether there are other matters which would cause me to make any adjustments to what would effectively be an equal contribution based entitlement. Neither party is in paid employment. Each has reached retirement age.

4. The effect of leaving the property of each of the parties as is would be to provide that the husband has his superannuation pension and the lease over the property in Country Q and the wife has the proceeds of the sale of the F Town property after the payment of the debts. Based on the evidence filed by the husband and the wife, that division appears on one view to be approximately equal. Their circumstances have changed since the earlier orders such that neither is working. Having regard to such information as is available to me regarding their contributions over a long relationship, different but equivalent, and having regard to their positions as retired persons, this result is just and equitable.

   WHAT ORDERS SHOULD BE MADE?

5. When the Federal Court of Australia granted leave under s 58(3) of the Bankruptcy Act it did so to allow Ms Valder to bring proceedings in circumstances where the Trustee was not funded to take further action and did not intend to do so. She was then entitled (on behalf of all creditors) to seek payment of the monies to which a court had said she was entitled and then, hold those funds on behalf of all creditors. Her action in this Court was to apply to set aside a transaction which, by reason of failure to disclose all relevant material, amounted to a miscarriage of justice. That transaction resulted in Mr B Saklani transferring his interest in his primary asset of value in Australia to Ms Saklani who then, during the currency of these proceedings, transferred it to her son and daughter in law. If the orders of this Court and the disposition to the son and daughter in law are set aside, then the payment to Ms Valder (on behalf of all creditors) may be made from the assets which are available for adjustment as between Mr B and Ms Saklani pursuant to s 79 of the Act.

6. The primary position of all respondents is that the application should be dismissed.

7. The husband and wife contended that if the Court was minded to grant the relief sought by the applicant then they should each retain their own assets and a payment should be made to the applicant within 12 months. Order 3 in the minute of orders sought by both the husband and wife was identical. It read: “[t]hat in the event the court, in its discretion pursuant to s79 orders that a sum be paid to the Applicant, then such sum be ordered to be paid within 12 months”.

8. No evidence was led as to why a period of 12 months was either necessary or appropriate and what the source of funds to make the payment to Ms Valder would be, given the parties’ financial circumstances. The order was not expressed in personam and it was therefore not plain who was obliged to make payment under the order. In all of those circumstances I find that in the context of this long running litigation such a lengthy period is not appropriate.

9. The manner in which each of the members of the Saklani family ran their respective cases appeared to be with a view to, depending on the outcome of the litigation, retention of the F Town property by a member of the Saklani family. However, there was no evidence led as to how such an outcome could be achieved and, in the absence of such evidence, I will make orders for sale of the property as was contemplated by the orders in the applicant’s case.

10. Mr C and Ms D Saklani did not produce a minute of order but sought reimbursement of the sums applied to acquisition and improvement of the F Town property. Both Mr B and Ms Saklani agreed that the sum outstanding to Mr C and Ms D Saklani is $1,582,109.20 plus $20,596.69 being a total of $1,602,705.89.

11. In order to determine what orders are appropriate in the circumstances of this case it is necessary to have regard to the effect of orders under ss 79A, 106B, the power to make orders impacting on third parties and the nature of the exercise of the s 79 power.

12. The original s 79 order, contained in the consent orders, provided (amongst other orders) for a real property transfer, and this Court will order that those consent orders be set aside.

13. If the order for transfer of the F Town property from the husband to the wife is set aside, that order does not reconvey the property.

14. I am conscious that in Hicks the Full Court said in the context of a s 79A proceeding at [50]:

    … once the consent orders made on 1 September 2011 were set aside the parties were restored to their ownership position as regards their property including, for example, their joint ownership of the Suburb F property.

15. I do not interpret the above statement as conclusive of the proposition that a s 79A order has the effect of functioning as an order for transfer or a re-conveyance but rather that once a s 79A order is made, the property that was by the original order transferred into the name of one party, if still owned, will be available for consideration as though it were an asset of the parties (or either of them) when the Court comes to consider the s 79 application. That approach recognises that the s 79A orders sets aside the consent orders but does not order or direct parties to transfer assets.

16. That is particularly the case in proceedings where the Court is being asked to simultaneously make orders in proceedings involving the new owners of that property and a creditor of the husband whose judgment debt must be met from that asset.

17. The suite of orders arising out of these proceedings do not re-vest the F Town property in the husband. As the Full Court observed in Valder & Saklani (2021) FLC 94-042 at [47]:

    … The court is empowered by s 79A(1) to “vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside:. Section 80(1)(k) of the Act allows the court to make any other order…which it thinks is necessary to make to do justice.” If it was found that the consent orders had been entered into with the intention of defeating creditors, we do not see why an appropriate variation or substituted order could not see the provision for the payment of those creditors, either directly (in which case here, the appellant would be obliged by the terms of the leave granted to her by the Federal Court to pay those funds to the trustee in bankruptcy)…

18. I note that, as discussed above, the final consent orders between the husband and wife had the effect of defeating the claim of the creditor whose interests were not flagged by the parties. The order under s 79A operates to set aside the order made under s 79 of the Act. Once the s 79A order is made, then the Court is free to deal with the property of the parties or either of them. The existence of a s 79 order, in this case the consent orders, ousts the jurisdiction of the Court to hear and determine financial adjustment proceedings. The s 79A order reinstates the jurisdiction.

19. In order to ascertain the pool for adjustment I must first deal with the transfer which occurred after the making of the consent orders. In that regard I will set aside the transaction between Ms Saklani and Mr C and Ms D Saklani pursuant to s 106B of the Act. The effect of that order is that the property is to be regarded as the property of the husband and the wife (as though the transaction had not occurred) but, subject to a payment to Mr C and Ms D Saklani to recognise their financial contributions to that property. Ms Saklani included in her case outline the amount owing (and Mr B Saklani adopted through his senior counsel). That figure comes from Mr C Saklani’s affidavit.

20. As the F Town property is currently in the names of the third parties, they should be required to place it on the market for sale. From the proceeds of sale it will be appropriate that the funds be applied to discharge the mortgage, costs of sale, payment of the sum of $1,602,705.89 to the Mr C and Ms D Saklani, the sum of $594,028.25 to the applicant subject to the terms of the orders of Katzmann J, the sum of $250,000 to be placed in a controlled monies account opened by the lawyers for the of the first respondent and held in trust for the applicant and first respondent pending the outcome of costs assessment, the balance then remaining to be paid to Ms Saklani.

21. Pending determination of the quantum of the costs in the Supreme Court proceedings and the High Court proceedings, between Mr B Saklani and Ms Valder, the controlled monies will be held for payment out as agreed or assessed.

22. If there is no agreement between Mr B Saklani and Ms Valder and Ms Valder has not commenced the application for assessment of court ordered costs within 28 days of the funds being placed into the controlled monies account, it is appropriate that the funds in the controlled monies account be released to Ms Saklani.

23. Any costs paid to Ms Valder will be paid to her on the same basis as the equitable compensation monies, namely subject to the terms of the orders of Katzmann J.

I certify that the preceding one hundred and sixty-three (163) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie.

Associate:

Dated:       24 February 2023

SCHEDULE OF PARTIES

CAC 2098 of 2016
Respondents
Fourth Respondent:	MS D SAKLANI