Yonjan & Satyal
[2023] FedCFamC2F 419
•30 March 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Yonjan & Satyal [2023] FedCFamC2F 419
File number(s): MLC 11011 of 2020 Judgment of: JUDGE O'SHANNESSY Date of judgment: 30 March 2023 Catchwords: FAMILY LAW – final property orders by consent – ex tempore reasons – where one party has a litigation guardian – where substantial evidence remained in dispute – where matter would have exceeded four or five final hearing days. Legislation: Family Law Act 1975 (Cth), ss 90SF, 90SM
Federal Circuit and Family Court of Australia (Family Law) Rules 2021, r 3.12
Cases cited: Black & Kellner (1992) 15 Fam LR 343.
Browne v Green [1999] FamCA 1483.
Chang and Su [2002] FamCA 156.
Hickey and Hickey and the Attorney-General [2003] FamCA 395; (2003) FLC 93-14.
Keskin & Keskin and Anor [2019] FamCAFC 236; (2019) FLC 93-932.
Kowaliw and Kowaliw [1981] FamCA 70; (1981) FLC 91-092.
Parshen & Parshen (1996) FLC 92-720 at 83,665.
Weir v Weir (1992) 16 Fam LR 154.
Division: Division 2 Family Law Number of paragraphs: 37 Date of hearing: 30 March 2023 Place: Melbourne Counsel for the Applicant: Mr P. Croft Solicitor for the Applicant: Hope Earle Lawyers Counsel for the Respondent: Mr C. Arnold Solicitor for the Respondent: Hiways Lawyers ORDERS
MLC 11011 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS YONJAN
Applicant
AND: MR SATYAL
Respondent
ORDER MADE BY:
JUDGE O'SHANNESSY
DATE OF ORDER:
30 MARCH 2023
THE COURT ORDERS BY CONSENT THAT:
1.That the Respondent's solicitors forthwith serve copy of these orders upon G Law Firm, and this Orders serves as irrevocable authority to G Law Firm to disburse the trust funds as follows: -
(a)First, the sum of $189,533.00 to the Respondent via his solicitors Hiway Lawyers; and
(b)Second, pay the balance remaining to the Applicant via her solicitors Hope Earle.
NAB Offset Account ending #...92
2.That the parties do all acts and things to unfreeze the Respondent's National Australian Bank Offset Account (BSB: …91 Account no: …92).
3.The Respondent's solicitors be permitted to serve a copy of these Orders upon the National Australian Bank, and paragraph 2 herein shall be deemed as the parties' irrevocable authority to the National Australian Bank to forthwith, unfreeze the Respondent's National Australian Bank Offset Account (BSB: …91 Account no: …92); and disburse all balance in this account to an account nominated by the Respondent, and thereafter, close the NAB Offset Account ending #...92.
CommSec Shares Portfolio Accounts #...37 and #...26
4.That within 14 days from the date of the Orders, the Applicant and Respondent shall do all acts and things and sign all documents as may be necessary to liquidate all shares in their respective CommSec Accounts #...37 and #...26 (“the Sale”) and provide to each other via their solicitors final statements of such accounts .
5.Upon completion of the Sale, the proceeds of sale be disbursed in the following priority: -
(a)First, in payment of costs, commission expenses and of the sale of the CommSec shares;
(b)Second, to pay into the Respondent’s solicitor’s trust account the amount sufficient to pay the estimated Capital Gains Tax (CGT) for account #...37 and for such amount to be held and then paid by in accordance with paragraph 6 herein;
(c)Thirdly, to pay into the Applicant’s solicitor’s trust account the amount sufficient to pay the estimated Capital Gains Tax (CGT) for account #...26 and for such amount to be held and then paid by in accordance with paragraph 7 herein;
(d)Fourthly 55% of the balance to the Applicant; and
(e)Fifthly, the remaining balance to the Respondent.
6.For the purposes of the funds held on trust for CGT pursuant to paragraph 5 herein, the following applies: -
(a)The Respondent will appoint an accountant to provide an estimate of the CGT payable by the Respondent as a result of sale of his shares in the CommSec Portfolio account #...37 as if that capital gain were income earned after income from all other sources and provide such estimate to the Applicant via her solicitors;
(b)The amount estimated for CGT by the account will be held in the Respondent’s solicitor’s trust account pending compliance with paragraph 5(c) and paragraph 6(d) below;
(c)The Respondent will do all things necessary to have his Tax Returns for the financial year in which the shares are sold, completed as soon as practicable by the accountant nominated by the Respondent;
(d)Upon the Respondent’s Tax Return being completed for the financial year in which the shares are sold, the Respondent will provide a copy of his Tax return including the CGT calculated as owing by him to the other party and any tax assessment to the Applicant’s solicitor and this paragraph will authorise the Respondent’s solicitor to pay the funds held in trust as follows: -
(i)The amount owing by the Respondent for Capital Gains Tax to the Australian Taxation Office; and
(ii)To divide any balance as to 55% to the Applicant and the balance to the Respondent.
7.For the purposes of the funds held on trust for CGT pursuant to paragraph 4 herein, the following applies: -
(a)The Applicant will appoint an accountant to provide an estimate of the CGT payable by the Applicant as a result of sale of her shares in the CommSec Portfolio account #...26 as if that capital gain were income earned after income from all other sources and provide such estimate to the Applicant via her solicitors;
(b)The amount estimated for CGT by the accountant will be held in the Applicant’s solicitor’s trust account pending compliance with paragraph 6(c) and paragraph 7(d) below;
(c)The Applicant will do all things necessary to have her Tax Returns for the financial year in which the shares are sold, completed as soon as practicable by the accountant nominated by the Applicant;
(d)Upon the Applicant’s Tax Return being completed for the financial year in which the shares are sold, the Applicant will provide a copy of her Tax return including the CGT calculated as owing by her to the other party and any tax assessment to the Respondent’s solicitor and this paragraph will authorise the Applicants solicitor to pay the funds held in trust as follows: -
(i)The amount owing by the Respondent for Capital Gains Tax to the Australian Taxation Office; and
(ii)To divide any balance as to 55% to the Applicant and the balance to the Respondent.
7A.The parties do all acts and things to sign all documents necessary to ensure the Applicant has sole control and responsibility for:
(a)Company B phone number …; and
(b)C’s Instagram Account.
Others
8.That save and except as set out in these orders, as and from the date of these Orders, the Respondent shall retain for his sole enjoyment and benefit, to the exclusion of the Applicant:
(a)His cryptocurrency;
(b)Funds in his bank accounts and investments held in his name;
(c)Personal items and chattels currently in his possession;
(d)His superannuation entitlements; and
(e)All other property in his possession as at the date of these Orders.
9.That save and except as set out in these orders, as and from the date of these Orders, the Applicant shall otherwise retain for her sole enjoyment and benefit, to the exclusion of the Respondent: -
(a)Funds in her bank accounts and investments held in her name;
(b)Personal items and chattels currently in her possession; and
(c)All other property in her possession as at the date of these Orders.
10.Unless otherwise specified, the Respondent be solely liable for and forever indemnify the Applicant with respect to any debts to which he is liable including but not limited to:
(a)Any taxation liability; and
(b)Any personal loan or credit cards in his name.
11.Unless otherwise specified, the Applicant be solely liable for and forever indemnify the Respondent with respect to any debts in which she is liable, including but not limited to:
(a)Any taxation liability; and
(b)Any personal loan or credit cards in her name.
12.The save and except as set out in these orders as and from the date of these Orders, each party shall be solely responsible for any liability in his/her own name and each party shall indemnify the other party and keep the other party indemnified in respect of any liability in his or her respective names arising from or in relation to any and all assets to which they are respectively entitled to pursuant to these Orders.
13.Unless otherwise specified in these Orders, and save for the purpose of enforcing any payment due under any subsequent Orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the current date;
(b)monies standing to the credit of either party in any bank account are to become the property of the party in whose name the account is registered, with any accounts held jointly to be divided equally between the parties and thereafter closed;
(c)each party forego any claims they may have to superannuation benefits belonging to or earned by the other;
(d)insurance policies are the sole property of the beneficiary named thereon; and
(e)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
14.By this order the Litigation guardian is permitted and expressly authorised to sign all such documents and do all such acts and things as may be necessary on behalf of the Applicant to give effect to the preceding Orders.
15.The parties do all acts and things necessary including signing all documents to give full force and effect to the provision of these Orders and in the event that either party refuses or neglects to execute a deed and/or instrument in compliance with these Orders, the Registrar or Deputy Registrar of the Federal Circuit and Family Court of Australia at Melbourne is hereby appointed pursuant to Section 106A of the Family Law Act 1975 (Cth) to execute all deeds and/or instruments in the name of the Husband or the Wife and do all acts and things to give validity and operation to the Deed and/or Instrument.
16.The requesting party be at liberty to apply for costs when submitting such an affidavit to the Registrar.
17.That on compliance with these orders the Applicant's litigation guardian be discharged.
18.That all extant property applications be otherwise dismissed.
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 a pseudonym Yonjan & Satyal has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR EX TEMPORE JUDGMENT
JUDGE O’SHANNESSY
INTRODUCTION
These are the settled reasons of a judgment delivered ex tempore. These reasons were delivered orally. These settled reasons have been corrected from the transcript to correct grammatical errors, to add citations and to attempt to make the orally delivered reasons easier to read. The substance is unchanged.
This matters comes before me on the first day of a property final hearing where the parties had competing applications pursuant to section 90SF and 90SM of the Family Law Act 1975 (Cth) (‘the Act’). I was provided with a signed minute of consent orders compromising the proceedings. Thereafter, Mr Crofts, counsel for the Applicant de facto Wife, Ms Yonjan (‘the de facto Wife’) by her litigation guardian, Ms F, addressed me as to why the proposed minutes of consent orders (marked ‘A’) and additional minute (marked ‘B’) were just and equitable and sought that I should make those orders. I was also addressed by Mr Arnold, counsel for Mr Satyal (‘the de facto Husband’), as to why he joined with Mr Crofts in urging me to find that the orders sought were just and equitable, and he too, asked that I make the orders sought.
Because the de facto Wife was not present in court when submissions were made and my reasons were delivered, and contemplating both parties may wish to contemplate why these orders were made, these reasons are more detailed the would usually be the case in consent orders with represented parties.
BACKGROUND
The matter has a complex and difficult history. The de facto Wife is 35 years of age and is unemployed. It is common ground that she came to Australia to study, successfully studied, but thereafter has never been employed in paid employment in Australia. The de facto Husband is 34 years of age and employed with a major corporation in a senior position. The parties commenced cohabitation in mid-2013 when they took advantage of the Victorian legislation to register a de facto relationship and, hence, there is no issue or doubt about the commencement of the de facto relationship. The parties did not have children together and separated in September 2019 and their de facto relationship ended at that time.
During that relatively short relationship, the parties were able to acquire what could be broadly described as four different types of property;
·A real property known as the Property D, later sold;
·Investments in shares, which turned out to be reliable;
·Other investments with more risk but promising higher return investments; and
·Remaining cash resources.
THE PROCEEDINGS
The de facto Wife issued proceedings in this court on 9 October 2020. The first return of that application in court was on 8 December 2020. By a directions hearing on 25 May 2021, the matter was set down for final hearing before me on 9 May 2022.
I will not recite every court event in the long and complex history but the matter came before a Senior Judicial Registrar on 17 January 2022 and at that hearing the final hearing, listed for 9 February 2022, was either vacated or it was indicated that it should be vacated. Two days later, in chambers and by consent, the matter was re-fixed by orders that I made for the next available time in my list, which was today, 30 March 2023. It was common ground back in January 2022 that the various complications or complexities to the matter meant that the matter would not be able to proceed in May 2022. Along the way, the parties had attended a mediation with an experienced mediator and had been unable to resolve the matter.
The next very significant event in the litigation occurred on 21 October 2022. Ms F was appointed as the litigation guardian for the de facto Wife. I refer to Rule 3.12 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (‘the Rules’) which provides as follows:
Person who needs a litigation guardian
(1)For these Rules, a person needs a litigation guardian in relation to a proceeding if the person:
(a)does not understand the nature and possible consequences of the proceeding; or
(b)is not capable of adequately conducting, or giving adequate instruction for the conduct of, the proceeding.
…
In November of 2022, with the benefit of the litigation guardian, the Court provided to the parties the resource of a judicial settlement conference before a Senior Judicial Registrar. That particular Senior Judicial Registrar had been appointed to office after some decades of practice as a family lawyer at the Victoria Bar, including in complex property matters. Despite the knowledge, experience and power of personality of the Senior Judicial Registrar, the matter was unable to be resolved in that November judicial settlement conference. It must be borne in mind that the parties had already been to mediation at that point. Somewhat generously to the parties, the Senior Judicial Registrar made himself available for a second judicial settlement conference in January of 2023. Again, despite the knowledge, experience and power of the personality of that Senior Judicial Registrar, the parties were unable to reach agreement.
A significant event, from my perspective, occurred on 23 March 2023. That is, a week before the first day of the matter listed for final hearing. The solicitors acting for the litigation guardian, and being sensitive to take account of the opinions and assertions and view of the world of the de facto Wife, had, I’m told and I accept, taken some time and care to prepare an affidavit of what they understood would be her evidence-in-chief, that is her story where relevant, from her point of view. The difficulty was experienced that because of the medical and/or personality circumstances of the de facto Wife, that being the same circumstance that led to the appointment of the litigation guardian, the solicitors were unable to obtain sufficient instructions or clarity with their client for her to swear the affidavit of evidence-in-chief, that is her side of the story.
Not resting on that circumstance, with considerable care a further appointment was arranged with the de facto Wife’s treating psychiatrist, Dr E. Dr E had made a number of reports for the benefit of the court and the parties in the proceedings. There were aspects, particularly early on, of Dr E’s opinions that were controversial, at least from the de facto Husband’s point of view. On 23 March 2023, the litigation guardian, the de facto Wife, the instructing solicitors and Dr E met for the purpose of either the de facto Wife swearing her affidavit of evidence-in-chief or Dr E being able to observe and/or assist in that process. The end result was that the de facto Wife’s circumstances were such that she was unable to execute the affidavit of evidence-in-chief.
Dr E opined, in a report released to the parties, that the de facto Wife, when presented and asked to assist herself in the advancement of the necessary step of the swearing of her own affidavit of evidence-in-chief, was overwhelmed with anxiety to the point where she was unable, in Dr E’s opinion, to either deal with the concepts within the affidavit or to commit to executing it or varying it. Dr E had earlier opined that the de facto Wife’s circumstances were such that she was easily overwhelmed with anxiety and became avoidant of dealing with the situation or making a decision. Also when stressed the de facto Wife could make an impulsive decision or be avoidant.
That conference, were proof needed (and it is not), demonstrated the necessity of Ms F continuing as litigation guardian. That conference also demonstrates the care that was taken to enable the de facto Wife to participate in and make decisions about her own property proceedings to the extent possible. I commend the solicitors on the record and Ms F for the care they’ve taken to ensure, notwithstanding that the proceedings were proceeding via a litigation guardian, that the de facto Wife was still consulted and able to have her say in the proceedings.
The proceedings were of some complexity. Apart from the described four bundles of assets, there were controversies as to the extent of the de facto Wife’s medical circumstances, whether she would be able to engage in employment in the future, notwithstanding the past, and whether she, in fact, had a legal or equitable interest in properties and businesses connected with her family in Indonesia. It was common ground that throughout the relationship, the de facto Wife had received regular monthly payments or, what could be described as, an allowance from her family of initially $5,000 per calendar month rising to $10,000 per calendar month, and in addition, have the use of a credit card, the debt upon which was regularly paid by her family.
The dispute was whether the de facto Wife had received those payments by way of the generosity of her parents and her family or whether this was a reflection of her actual property entitlements, or a mixture of the two. The proceedings were further complicated by the common ground circumstance that the de facto Husband had, on his own behalf and also on the de facto Wife’s behalf, made many investments throughout the relationship. As recited earlier, some of those investments were successful and some not so successful and would, in fact, ensue losses.
The de facto Wife’s personal feeling about that, and a very common human feeling frequently experienced, is that to the extent that the investments made by the de facto Husband had resulted in losses, and she asserted without her knowledge or involvement, should be borne by him.
The law has a bit to say about that circumstance, particularly in regard to a relationship of some length. This is a relatively short relationship but, nonetheless, extended over six years which is a not insignificant period. The law can be described broadly and, perhaps not entirely accurately, as being swings and roundabouts. That is, that in a relationship of de facto marriage or marriage in the Family Law Act Courts of Australia, parties are expected to take the benefit of the increase in investments but also to share the burden of unsuccessful investments or business ventures.
There is, as common sense would command, an exception to that broad principle, and that is the principle stated by Baker J in Kowaliw and Kowaliw [1981] FamCA 70; (1981) FLC 91-092 (‘Kowaliw’). I refer and adopt the following passages referring to negligent or reckless investments designed to deplete the asset pool:
10.As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
11.Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec. 75(2)(o) to applications for settlement of property instituted under the provisions of sec. 79.
12.I have no doubt that the husband's involvement in the company was an attempt by him not only to produce income for the family, but also to acquire assets of a business nature with the whole object of improving the parties' overall financial position. It is clear that for a period of some six years the husband derived income from this source and although the company failed, it did not fail, in my opinion, as a result of the type of conduct set out in the exceptions to the statement of general principle referred to above.
…
15.What the Full Court is saying in effect is that it was not appropriate, having regard to the facts before it, for a consideration of a negative contribution pursuant to para. (a) or (b) of sec. 79(4) to be taken into account. That is not to say, however, that conduct which amounts either to a deliberate diminution of the value of assets or to economic recklessness can never be taken into account in altering property interests…
16.It does seem to me, however, that if a party has either by deliberate act or by economic recklessness reduced the value of assets available for distribution then the economic consequences which flow therefrom including the resultant burden to the other party are directly relevant to a consideration of the respective contributions of the parties contemplated by sec. 79(4).
…
18.If a party has acted in the manner to which I have referred earlier either by:
(a)embarking upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)acting recklessly, negligently or wantonly with matrimonial assets the overall effect of which has reduced or minimised their value,
then such conduct in my view and the economic consequences which flow therefrom are clearly matters to which the Court may have regard pursuant to the provisions of sec. 75(2)(o).
19.If, on the other hand, losses of a financial kind have been suffered by the parties to a marriage in the course of the pursuit of matrimonial objectives, such as the gaining of income or the acquisition of assets whether the liability for such losses be joint or several then, in my view, such losses should be shared by the parties (although not necessarily equally) and taken into account when altering property interests.
…
Further to that, the Court is frequently asked to apply the principles in the authority and I do take into account the observations of the Full Court in Parshen & Parshen (1996) FLC 92-720 at 83,665 as follows:
… In our view, in the absence of evidence to the contrary, it should be inferred in proceedings pursuant to the provisions of s 79 that moneys howsoever received by a party during the course of the parties' cohabitation, are used by that party for the benefit of the family unit. Such moneys, in those circumstances, thus constitute a financial contribution by the party who received the moneys.
Whether or not that statement in Parshen can be regarded as a presumption at law or merely as common sense or an evidentiary device is a concept that would have needed to be wrestled with in these proceedings. Further, what would have been in issue was not only the fact of losses and gains and how they were occurred, but the motivation of the de facto Husband in making them.
I also refer to and adopt the authority of the Full Court in Browne v Green [1999] FamCA 1483, (1999) FLC 92-873. There the Full Court adopted and approved the observations of Baker J in Kowaliw cited above, and in a case where the husband’s management of the “project” lost a lot of money, observed as follows;
52. …the husband was the initiator of, and had control of, the project. However, we do not consider that these facts of initiation and control of a particular venture could, at least on their own, warrant a departure from the guideline that economic losses, as well as economic gains, incurred in a marriage, should as a general rule be shared…
53. …There can be little doubt that had the …project succeeded, the wife would have sought to share in the fruits of that success, and there would seem to be no reason why she would not have been entitled to do so. It is this last-mentioned consideration, being that parties generally expect to share the economic profits of a marriage, which, in our view, requires that there should be good and substantial reasons for departing from the principle that where there are economic losses incurred in a marriage, those losses should be shared, absent any negligence, recklessness or deliberate dissipation of assets by one party...
In Keskin & Keskin and Anor [2019] FamCAFC 236; (2019) FLC 93-932 (‘Keskin’) the Full Court, Strickland, Kent & Austin JJ, at [44] approved what was the age old and pre-Stanford “preferred approach” as to the how the nuts and bolts of section 79(4), and hence section 90SM, fitted together:
[20]In Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) [2003] FamCA 395; (2003) FLC 93-143 at [39] the Full Court, in setting out what the case law revealed as the “preferred approach” to the determination of an application under s 79 of the Act, referred to four inter-related steps, including that “the Court should identify and assess the contributions of the parties within the meaning of ss. 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties”. The Full Court did not purport to elevate the preferred approach as being mandatory, as was observed by a later Full Court in Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545 at [61]- [63], [72]. However, adoption of that preferred approach is a means by which many of the mandatory factors in s 75(2) of the Act, in particular paragraph (b) – the income, property and financial resources of each of the parties; paragraph (ha) – ability of a creditor to recover debt; paragraph (n) – the terms of any proposed order under s 79 of the Act; can be considered, as these must be considered, in determining any adjustment pursuant to s 75(2) of the Act. Conversely, if the preferred approach is not adopted there must be a means discernible from the reasons to identify that these relevant mandatory s 75(2) factors have been considered, and how they have been brought into account, in the making of any s 75(2) adjustment…
That preferred approach set out at [39] of Hickey and Hickey and the Attorney-General [2003] FamCA 395; (2003) FLC 93-143 (‘Hickey’) is as follows:
[39]The case law reveals that there is a preferred approach to the determination of an application pursuant to the provisions of section 79. That approach involves four interrelated steps. Firstly, the court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of hearing. Secondly the court should identify and assess the contributions of the parties within the meaning of section 79(4)(a), (b) & (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly the court should identify and assess the relevant matters referred to in section 79(4) (d), (e), (f) & (g) (“the other factors”) including, because of section 79(4), the matters referred to in section 75(2) so far as they are relevant and determine the adjustment study (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.
(Citations omitted)
I pause here to observe that lest it be said there is a conflict between the High Court’s disavowal of “entitlement” to a section 79 order by mere separation and/or section 79(4) contribution on the one hand, and the use of the word “entitlements” in the Hickey passage cited above, I regard the use of that word in the above context as synonymous with “assessment.” I will have regard to what I find to be the contribution based assessment rather than entitlement.
In this case there were reports filed, and multiple reports in some aspects, of five experts in this case dealing with financial and medical matters. The ultimate determination of what the property pool would be was, ultimately, in the region of $1.1 to 1.2 million. That is, before turning to the issue of the value, if any, of whether or not the de facto Wife had a legal interest in property in another country. If it was able to be proven that she did so, that would also raise the issue of non-disclosure. I refer to the principles of authorities such as Weir v Weir (1992) 16 Fam LR 154 and the matter of Black & Kellner (1992) 15 Fam LR 343 and also Chang and Su [2002] FamCA 156:
A case involving allegations of non-disclosure in a financial matter are of necessity, complex, expensive and time consuming. Cases involving allegations of financial waste or seeking to draw into account Kowaliw principles are of necessity, expensive and time consuming. Cases involving questions about medical diagnoses are of necessity, complex and time consuming. A case involving all of those matters is particularly time consuming. In circumstances where the known property pool or agreed property pool was in the range of AUD$1-1.2 million, this called into question the utility to each of the parties of determining the various disputes between them. I refer to the following excerpt from the Central Practice Direction – Family Law Case Management Guidelines:
3.4 The overarching purpose includes the following objectives:
…
e.the resolution of disputes at a cost and by a process that is proportionate to the importance and complexity of the issues in dispute.
It was my assessment, when reading the affidavits of the evidence-in-chief preparatory to the matter coming on before me this day, that the matter would have been impossible to have been concluded in the two days for which it kept being booked in for. The two day estimate of time, whoever made it (and it may have been the court), was wildly optimistic. Assuming that along the way the parties’ lawyers were able to reach some compromises as to issues to be disputed, and assuming that the Court was able to, by direction, limit and contain some of those issues, it was not disputed, after discussion with counsel, that after today, that is not including today, additional days of time in court was in the range of four or five to eight days.
The estimates of the additional costs beyond today, were the matter not compromised, was on the de facto Husband’s side something in the region of $80-100,000 and on the de facto Wife’s side, something in the region of $80-150,000. The de facto Wife’s costs to be ultimately borne by her, have the additional cost or burden of the litigation guardian’s professional fees for attendance as well as the attendance of the solicitors with the carriage of the proceedings. When the range of dispute was whether the assets should be divided 50/50 or some other way, it can be immediately seen that the pursuit of the best outcome, or even truth, or even attempting to prove strongly felt matters on the balance of probabilities and the necessary and inevitable time and expense that that would take, meant that the further conduct of the litigation would have borne no utility to either party, save for the possible event of there being an order for costs, depending on the conduct of the litigation.
Hence, this was high risk and expensive litigation with limited upside or benefit to the parties. Further, that analysis that I have just done does not take into account at all the anxiety and personal and emotional cost on each of the parties of the many days of litigation and the significant time that, at least the de facto Husband, if not both of the de facto partners, would have spent in the witness box.
Hence, I am grateful to the solicitors and counsel involved in the matter who have been able, with considerable hard work and professional diligence, compromise the matter. The counsel had the burden of addressing me about why these orders were just and equitable, notwithstanding that the great bulk of the issues between the parties remained in dispute.
With the benefit of solicitors and counsel, the parties were able to concentrate on what the evidence actually was and assess likely outcome of evidence as opposed to possible or merely potential or merely arguable outcomes. From the very detailed address by counsel for the litigation guardian and, ultimately, for the de facto Wife, I am satisfied that very significant care has been taken in the analysis of the potential range of outcomes in the case and the likelihood, as well as the constant comparing, the likely upside with the inevitable risk of litigation and inevitable cost of that being pursued.
I was told, and I accept, that a likely or at least seriously arguable outcome to the case was that a finding of a equality of contribution was within the range of what could be found, which would mean that, at that point, the likely range, subject to some risk of the first step of the Keskin analysis, would have been a pool of assets of $1-1.2 million on the best case scenario for the de facto Wife on the basis that the de facto Husband was unsuccessful in his assertions of an actual legal interest and non-disclosure. That would mean that on the second step of the Keskin analysis, that the parties would be regarded as contributing directly and indirectly, including contributions from the families of each of them being regarded as their own individual contribution rather than a joint contribution, of something in the range of a bit more or a bit less of 50/50.
That then leads to the third step of the Keskin analysis that must be grasped, which is sometimes described as future needs but is actually a weighing of a significant shopping list of largely prospective factors. The end result in this case is the taking account of the significant income that the de facto Husband earns in his employment in the region of $250,000 per annum and the support of his wife and child on the one hand, and on the other hand, the de facto Wife’s medical circumstances and circumstance that she has never worked in paid employment in Australia and that her personal circumstances are such that she was unable to conduct this litigation, which meant there was, at the very least, some considerable question mark over whether she would be able to be employed, and in addition, the history of the payments or generous gifts to her during the relationship and the extend that they could be reasonably expected to continue.
I am told the end or ultimate division, though not precisely agreed, is in the region of a 45/55 split of the known assets, but excluding the issue or fact as alleged of overseas assets but taking into account the risk of that litigation and findings in that was that, overall, is a 45/55 split in the de facto Wife’s favour.
In the circumstances where I have experienced solicitors, experienced counsel and a litigation guardian who is, herself, an experienced family law property litigator, I am very comfortable that these orders are just and equitable and that is notwithstanding that the de facto Wife has not herself been able to make the decision as to whether or not these orders are just and equitable. I am satisfied that the orders now sought by consent are just and equitable and that in this adversarial process all proper matters have been considered and weighed. And the fact that at the end of that process, in a quite sharp adversarial system, the experienced property litigation lawyers have been able to reach a compromise agreement, helps persuade me that these are just and equitable orders. So I will make the orders sought.
I will direct that a transcript of submissions be made available to the parties.
These are my reasons.
I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 14 April 2023
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