We are constantly asked: what have been the effects of the COVID-19 pandemic in the family law realm? While the temptation to generalise must always be resisted, it would be fair to say that a degree of opportunism has emerged with litigants attempting to better their positions in both the parenting and financial realms, with the instability occasioned by the pandemic being proffered as reason to bend judicial discretion, in ways favourable to those alleging distress.
Our observations will follow in a number of vignettes which we hope will enliven discussion and enlighten the reader.
1. That Old Feeling – Water-coloured memories of the GFC
Memories of the Global Financial Crisis came flooding back as Murphy J's judgment in Summit and Summitt and Ors (Re-opening) [2009]FamCA 365 was referenced in the recent case of Pericles and Hopman [2020]FamCA 465. In the latter case a property trial had concluded on 9 August 2019 and judgment was reserved. Judgment still had not been delivered when on 23 April 2020 the husband brought an application to adduce fresh evidence on the basis that the valuations obtained were 15 months old, and the Court should take judicial notice of the extraordinary nature of the coronavirus pandemic and its economic effects.
Bennett J referenced a similar facts scenario considered by Murphy J in Summit's case where the husband had sought a re-opening of a financial case where the trial had concluded, and judgment had been reserved. The husband sought to adduce new single-expert evidence to substantiate a diminution in the value of the subject property which had been the subject, at trial, of an agreed single expert valuation. Bennett J noted that Murphy J in Summit held the new evidence was insufficient to reopen the case.
18 …as it did not specifically mention any facts said to have impacted on the value of the property since the trial, or that there had been any change in value … but relied on "comparable sales" of comparable properties of which only three … occurred after the trial. There was no suggestion by the husband that the previous valuations were unreliable and the previous single expert was given no opportunity to examine the effect of the GFC on the subject properties. It was also noted that the GFC had begun by the end of the trial but was not the subject of evidence at the trial, but that for the purposes of arriving at an agreed value of the property at trial, the economic and other exigencies present at the time of trial are generally ignored. This includes exigencies that may occur in the delay between a trial concluding and judgment being delivered as finality in litigation prevails.
Murphy J dismissed the husband's application in Summit due to a lack of admissible evidence by the husband and the prejudice to the wife in having to meet the costs of the case re-opening
2. Because Coronavirus?
So in the present case, how did the husband fare in his submission that statements by the Governor of The Reserve Bank of Australia and two articles from The Economist should have satisfied the Court that all property had fallen in value? In fairness, that point was not pressed, but the husband did refer to three cases in which the Court did take judicial notice of certain matters and submitted that it was within Her Honour's discretion to note the effects of COVID-19. Bennett J distinguished these in pointing out that in those cases, the Court was asked to take judicial notice of a fact, not a consequence. It seems trite to say that if you are asserting you have taken a hit, you'd best have your evidentiary ducks in a row.
The present case was distinguished from Summit by Bennett J, insofar as the husband did not attempt to introduce any expert evidence at all showing the reduction in value as a consequence of COVID-19, Bennett J noted the following:
The real property had an agreed value at trial of $725,000, and was being listed by the husband at $769,000. Her Honour did not accept the husband's submission that no offers on the property demonstrated that the property value had fallen. There was no specific evidence how the property had been impacted by COVID-19, nor evidence of any level of interest in the property at the agreed value of $725,000;
The un-contradicted submissions, by the wife's Counsel, that the husband's assertion "that it would be difficult to sell nine unsold townhouses" could not be substantiated, in the absence of evidence from selling agents around asking prices and prospects. Nor was there any evidence of any change in the debt ratio, or construction costs, that might affect value;
No evidence was offered by the husband on the financial effect on him of a reduction in share prices, much less how many he held;
No evidence was offered by the husband as to the reduction of value in a property owned by a superannuation fund held by the parties.
Her Honour concluded that there was insufficient evidence before the Court that would satisfy her that there had been a fall in a value that would justify an exercise of discretion to re-open the case. Had there been such evidence, Her Honour took the view that the strain of litigation on the "frail and impecunious wife", as opposed to the husband who was not similarly disadvantaged, would militate against a reopening.
So, the sky may well be falling, but Henny Penny is not excused from specifically proving that it is an altogether bad thing for her (or him, as the case may be).
Kieran McCarthy
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