Ackerley and Ackerley
[2019] FamCA 500
•30 July 2019
FAMILY COURT OF AUSTRALIA
| ACKERLEY & ACKERLEY | [2019] FamCA 500 |
| FAMILY LAW – PROPERTY – Interim distribution – Where the wife seeks interim settlement of property – Where the husband opposes – Where the husband asserts that his income is outstripped by his expenditure – Whether to make orders for interim settlement of property – Principles in relation to interim settlement – Orders |
| Family Law Act 1975 (Cth) ss 79, 80(1)(h) |
| Bevan & Bevan (1995) FLC 92-600 Brown & Brown (2007) FLC 93-316 Hall & Hall (2016) 257 CLR 490 Klearchos & Klearchos and Ors [2015] FamCAFC 217 Maroney & Maroney [2009] FamCAFC 45 Medlow & Medlow (2016) FLC 93-692 Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 |
| APPLICANT: | Ms Ackerley |
| RESPONDENT: | Mr Ackerley |
| INDEPENDENT CHILDREN’S LAWYER: | Bowral Legal |
| FILE NUMBER: | SYC | 7181 | of | 2018 |
| DATE DELIVERED: | 30 July 2019 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Berman J |
| HEARING DATE: | 19 June 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Litigant In Person |
| SOLICITOR FOR THE APPLICANT: |
| COUNSEL FOR THE RESPONDENT: | Litigant In Person |
| SOLICITOR FOR THE RESPONDENT: |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | No appearance |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Bowral Legal |
UPON NOTING that the husband’s ongoing obligation to pay periodic spousal maintenance to the wife of $1,200 per week
Orders
On or before 4.00 pm on 31 August 2019 the husband do all things necessary to cause the following:-
(a)In his capacity as director of D Holdings Pty Ltd the financial reports and company tax returns to be lodged with the Australian Taxation Office (“ATO”) for the company from establishment to the present date (but not as to the 2019 returns wherein time is extended for their lodgement to 1 December 2019);
(b)In his capacity as director of D Pastoral Company Pty Ltd the financial reports and company tax returns to be lodged with the ATO for the company from establishment to the present date (but not as to the 2019 returns wherein time is extended for their lodgement to 1 December 2019);
(c)If required, in his capacity as director of D Holdings Pty Ltd ATF the Ackerley Family Trust, the financial reports and Trust tax returns to be lodged with the ATO for the Trust from establishment to the present date (but not as to the 2019 returns wherein time is extended for their lodgement to 1 December 2019).
That in the event that the tax returns are not lodged by 31 August 2019 in circumstances where the reason for delay is as a result of the unavailability of the husband’s accountant B and Associates, THEN the wife will forward to the husband the names of three suitably qualified accountants who have indicated a preparedness to receive instructions to complete the preparation of tax returns and financial reports for the various entities and upon receiving the names of the proposed accountants, the husband at his election will nominate one accountant to undertake the work, and the wife and husband will jointly instruct the nominated accountant to complete the outstanding tax returns and financial reports (at the cost of the husband and/or the relevant entity).
That the husband will forthwith authorise B and Associates to communicate with the wife and to provide information and answer all reasonable questions as to the financial affairs of each of the parties and any related entity.
That within thirty (30) days of the date of this order the husband will pay to the wife by way of interim property settlement the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000) NOTING that FIFTY THOUSAND DOLLARS ($50,000) is to be paid by the wife to Holmes Donnelly & Co Solicitors.
That pending further order or the written agreement between the parties, the husband is restrained and an injunction granted restraining him from:-
(a)selling, transferring, assigning, further encumbering, mortgaging or in any way alienating his interest in:-
(i)F Street, Town G, New South Wales;
(ii)E Pty Ltd;
(iii)D Holdings Pty Ltd;
(iv)D Pastoral Company Pty Ltd;
(v)Ackerley Self-Managed Superannuation Fund;
other than in the ordinary course of business.
That within twenty one (21) days of the date of these orders the husband provide disclosure of the following documents:-
(a)Bank statements in respect of C Bank home loan account #...01 for the period 22 February 2019 to date;
(b)Bank statements in respect of C Bank home loan account #...02 for the period 22 December 2018 to date;
(c)Superannuation member benefits statement for each of the parties for the Ackerley Self-Managed Superannuation Fund;
(d)If not already provided:-
(i)the contract for sale purported to be executed on 17 May 2019 as referred to in the “Mortgage-Linked Loan Agreement” being Exhibit “A1” of the tender bundle produced by the husband on 13 June 2019 (Exhibit “2”);
(ii)the disposition of the motor vehicle 1, in the name of or held previously by D Pastoral Company Pty Ltd;
(iii)the acquisition of the motor vehicle 2.
That in default of the payment to the wife of the lump sum of ONE HUNDRED THOUSAND DOLLARS ($100,000) by the time as ordered in paragraph 4 herein, and if the default shall continue for a period of seven (7) days THEN and in those circumstances the parties will cause the property at F Street, Town G to be placed on the market for sale by public auction or private treaty upon such terms and conditions as the parties may agree and following the payment of the usual costs and disbursements associated with the marketing and sale of the said property, the net proceeds of sale will be disbursed as to the first ONE HUNDRED THOUSAND DOLLARS ($100,000) to the wife together with default interest as determined by reference to the Family Law Rules 2004 (Cth) and the balance to be held by the conveyancer or if agreed to be invested in an account in the joint names of the parties pending further order of the Court or the written agreement of the parties.
The husband’s Response filed 12 June 2019 is dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Ackerley & Ackerley has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT |
FILE NUMBER: SYC 7181 of 2018
| Ms Ackerley |
Applicant
And
| Mr Ackerley |
Respondent
REASONS FOR JUDGMENT
Introduction
By Initiating Application filed 9 November 2018, Mr Ackerley (“the husband”) commenced proceedings seeking parenting orders for X born in 2011 (“the child”).
On 10 December 2018, Ms Ackerley (“the wife”) filed a Response in answer to the husband’s application and sought orders for spousal maintenance for a period of two years and orders for property settlement seeking leave to amend the orders upon the husband making disclosure of a raft of documents as set out in [11] of the interim orders sought.
The wife sought urgent spousal maintenance pursuant to s 77 of the Family Law Act 1975 (Cth) (“the Act”) in the sum of $500 per week and thereafter, pursuant to s 74 she sought spousal maintenance in the sum of $1,421 per week together with the following to be paid by the husband:-
·Private health insurance.
·Trauma and life insurance.
·Car leasing, registration and insurance.
·Mobile phone.
·Data charges.
·Home and contents insurance.
·Store Card repayments.
Under the heading of “Interim Costs” the wife sought that the husband pay the sum of $70,000 to be categorised at trial.
By her Amended Response filed 4 April 2019 the wife seeks interim costs of $100,000 payable to her solicitors and spousal maintenance of $1,500 per week in addition to the payment of the various insurance policies, vehicle costs and telephone costs.
On 3 July 2019 the parties reached agreement resolving outstanding interim parenting issues.
The parties remain in conflict as to the interim financial arrangements and are not agreed as to the quantum of spousal maintenance to be paid to the wife pending final hearing, the wife’s application for interim settlement of property or litigation funding in the sum of $100,000 nor the extensive further discovery sought.
On 11 February 2019 the wife filed an Application in a Case seeking compliance by the husband of order 14 made on 10 December 2018, that he provide full and frank disclosure, and injunctive relief pursuant to s 114(1)(e) of the Act restraining the husband from dealing with the following:-
·F Street, Town G (“Town G property”);
·E Pty Ltd (“E Pty Ltd”);
·D Holdings Pty Ltd (“D Holdings”);
·D Pastoral Company Pty Ltd (“D Pastoral”); and
·Ackerley Self-Managed Superannuation Fund (“Ackerley Super”).
The wife also sought orders requiring the husband to cause tax returns to be lodged and financial reports to be prepared for the following entities:-
·D Holdings;
·D Pastoral; and
·Ackerley Super.
History in relation to spouse maintenance
On 10 December 2018 the parties entered into an interim consent order in the following terms:-
11.That by way of urgent spouse maintenance the husband pay the wife’s rental payments of $550 per week for a period of 3 months from the date of the orders.
The proceedings were adjourned to 21 February 2019 before Senior Registrar Campbell. The parties were again able to reach interim consent orders in the following terms:-
2.By consent, and without admission as to capacity to pay, the Husband pay to the Wife the sum of $1,500 per week by way of urgent spouse maintenance commencing forthwith and continuing until 4pm 5 April 2019.
3.Order 12.3 of the orders made on 10 December 2018 is amended to provide that the Applicant (Husband) will pay: “Car leasing, registration, car maintenance and insurance”.
The proceedings were further adjourned to 5 April 2019 before the Senior Registrar to hear the wife’s application seeking interim spousal maintenance in the sum of $1,421 per week together with the payment of other identified expenses, lump sum payment of interim costs or partial settlement of property and further disclosure.
The wife amended her response to seek the periodic payment to be increased to $1,500, an order requiring the husband to direct third parties to remit funds into a nominated account and that livestock owned by D Pastoral be sold.
Following a contested interim hearing the Senior Registrar made the following orders by way of spousal maintenance:-
3.By consent, and without admission as to capacity to pay, the Husband pay to the Wife the sum of $1,200.00 per week by way of urgent spouse maintenance commencing forthwith.
4.Order 12.3 of the orders made 10 December 2018 is amended to provide that the applicant (Husband) will pay: “Car leasing, registration, car maintenance and insurance”.
On 17 June 2019 the wife filed an Application in a Case seeking that order 3 of orders made on 5 April 2019 be corrected pursuant to r 17.02 of the Family Law Rules 2004 (the slip rule) as follows:
“
By consent, and without admission as to capacity to pay, the husband pay to the wife the sum of $1,200.00 per week by way ofurgentinterim spousal maintenance under section 74 of the Family Law Act 1975 commencing forthwith.”The wife contends that the order made for spousal maintenance did not reflect the nature of the hearing, the submissions made on behalf of the wife or the reasons for judgment given by the Senior Registrar.
The wife considers that the extended interim hearing was pursuant to s 74 and not s 77 of the Act.
The Court file reflects that the parties were represented by counsel. The proceedings commenced at 10.05 am and concluded with the Senior Registrar making orders at 3.46 pm.
Order 7 referred the matter generally to the Team Leader Judicial Services for listing of the outstanding interim financial issues anticipating a hearing of two hours. The following notation is of assistance:-
It is noted that the issues for hearing are interim spouse maintenance and partial property adjustment … and the time estimate for that hearing is half a day.
The wife’s concerns arise by reason of the husband’s Response filed 12 June 2019 seeking to vary the amount as provided for in order 3 of orders made 5 April 2019 from $1,200 per week to $700 per week.
Background
The wife is 49 years of age and the husband is 51 years of age. The parties commenced a relationship in 2000, were married in 2006 and separated on 26 August 2018.
The child was born in 2011 and is seven years of age.
The husband lists his usual occupation as a finance manager. The wife has experience as an administrator but has not been in employment in that field since the birth of the child.
The husband conducts a finance business through E Pty Ltd. The husband assists residential and commercial clients in their finance arrangements and brokerage is paid to E Pty Ltd by banks and other commissions.
The accountant for the husband and his entities is Mr B of B and Associates.
The husband concedes that historically E Pty Ltd has allocated income to the wife.
The husband established the Ackerley Super in 2001 with his rollover of $20,000 and the wife’s rollover amount of $90,000.
D Holdings was established on 30 March 2016 as the trustee company for the Ackerley Family Trust.
The Ackerley Family Trust purchased property at 1 and 3 H Street, Town G. The two properties comprise 194 acres and the properties were purchased for a total sum of $1,500,000.
D Pastoral was incorporated on 30 June 2016 and has as its purpose the purchase and sale of livestock.
The livestock are agisted on the Town G property.
Exhibit “3” in the proceedings sets out a corporate flow chart.
The husband is the director of D Holdings and the husband and wife each hold 50 of the 100 issued shares. The company is the trustee of Ackerley Family Trust and owns the farming land which is leased to D Pastoral. The husband is the sole director of D Pastoral and each of the parties hold one of the two issued shares.
The beneficiaries of Ackerley Family Trust are the husband, the wife and the child. The husband is the appointor. The Ackerley Family Trust does not trade and therefore is not required to lodge annual taxation returns.
The trustees of the Ackerley Super are the husband and the wife.
The husband is the sole director and shareholder of E Pty Ltd.
The parties have jointly instructed a single expert to value the parties interests in the following entities:-
(1)E Pty Ltd;
(2)D Holdings (including the value of 1 and 3 H Street, Town G);
(3)D Pastoral;
(4)The Ackerley Family Trust;
(5)The Ackerley Self-Managed Superannuation Fund.
The letter of instruction was forwarded on 6 June 2019. There is no indication when the valuation will be completed, however, a preliminary step may well be the completion by the husband of outstanding tax returns and financial statements for various entities.
Preparation of taxation returns and financial statements
The joint letter of instruction to the single expert encloses the financial statements and company taxation returns for the financial years ending 2015, 2016, 2017 and 2018 for E Pty Ltd. There are no returns or financial statements for D Pastoral, D Holdings, Ackerley Family Trust and Ackerley Super.
The wife has a longstanding concern that the D Pastoral, D Holdings and the Ackerley Family Trust have not filed financial statements nor tax returns for at least the last three financial years (excluding the 2019 financial year).
The husband relies upon correspondence from his accountant Mr B of 6 June 2019 that “the anticipated timeline for completing of the returns is unchanged from our letter dated 15 May 2019, that being August 2019”.
Whilst the husband had a good understanding of the physical relationship between the various entities, given his extensive financial background, his lack of understanding or knowledge regarding the financial interrelationship of the entities was surprising.
The husband could not explain why he had not requested or instructed the accountants to prepare the taxation returns for the 2016 and 2017 financial years.
I do not accept that the blame should devolve to his accountants. If they are unable to carry out the husband’s instructions then consideration will need to be given to requiring the husband to instruct different accountants.
The non-filing of taxation returns is a matter of concern generally, however, the non-filing of returns and financial reports for Ackerley Super may well render the fund non-compliant and expose the trustees to liability.
There is merit in the order sought by the wife that the husband engage an alternative accountant to prepare the outstanding returns if Mr B is not able to do so within the timeframe that he stipulates namely, by the end of August 2019.
The relevance of the financial position of each of the entities and the interrelationship between them is relevant to a consideration of the husband’s application to vary the spousal maintenance order from $1,200 to $700 per week. I propose to require the husband to authorise Mr B to respond to reasonable enquiries by the wife as to the financial affairs of the various entities and if the returns and financial statements that are outstanding are not able to be completed by 4.00 pm on 31 August 2019 then the wife will be at liberty to put forward the names of three alternate accountants who are prepared to undertake the accounting work required to lodge the returns and financial statements, with the husband to nominate and thereafter instruct the accountant accordingly.
Spousal maintenance
In Hall & Hall (2016) 257 CLR 490 the High Court set out the appropriate approach in considering an application for interim spousal maintenance as follows:-
[3]…The gateway to the operation of Pt VIII in relation to spousal maintenance is in s 72(1). That sub-section provides that “[a] party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, the other party is unable to support herself or himself adequately … having regard to any relevant matter referred to in [s] 75(2)”.
[4]The liability of a party to a marriage to maintain the other party that is imposed by s 72(1) is crystallised by the making of an order under s 74(1). That sub-section provides that “[i]n proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part”.
[5]A court exercising the power conferred by s 74(1) is obliged by s 75(1) to take into account the matters referred to in s 75(2) and only those matters. Those matters are presented as a comprehensive checklist. They include what s 75(2)(b) refers to as “the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment”. They also include, by virtue of s 75(2)(o), “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
…
[8]Unlike a court exercising the power to make an urgent order conferred by s 77, a court exercising the power to make an interim order under s 74(1) must be satisfied of the threshold requirement in s 72(1) and must have regard to any matter referred to in s 75(2) that is relevant. No doubt, on an application for an interim order “[t]he evidence need not be so extensive and the findings not so precise” as on an application for a final order. But there is nothing to displace the applicability to an exercise of the power conferred by s 74(1) of the ordinary standard of proof in a civil proceeding now set out in s 140 of the Evidence Act 1995 (Cth). A court determining an application for an interim order under s 74(1) cannot make such an order without finding, on the balance of probabilities on the evidence before it that the threshold requirement in s 72(1) is met having regard to the relevant matters referred to in s 75(2).
(footnotes omitted)
In this case the husband concedes that the gateway requirement as referred to by the High Court in Hall & Hall (supra) is satisfied. Whilst upon a final hearing the husband foreshadows that the wife has significant skills and should be able to easily re-enter the workforce, he concedes that in her present circumstances and at least by reason of her having the care of a child under the age of 18 she satisfies the threshold test.
It is also noted that the husband has conceded the wife’s entitlement to spousal maintenance on each occasion that the matter was considered by the Court.
In particular, one of the issues before the Senior Registrar on 5 April 2019 was not whether the wife satisfied the threshold requirement but rather, that the husband was not able to meet the earlier consent position of $1,500 per week, but would be able to meet a lesser sum. Hence, an order was made in the sum of $1,200.
Whether the Senior Registrar was considering urgent spousal maintenance pursuant to s 77 or interim maintenance pursuant to s 74 of the Act makes little difference. By reference to the extensive nature of the hearing before the Senior Registrar I consider it to be a distinction without a difference.
The remaining issues to be determined are therefore:-
(1)What are the wife’s reasonable needs?
(2)What capacity does the husband have to meet a spousal maintenance order if such an order was to be made?; and
(3)What order is reasonable having regard to s 75(2) of the Act?
Brown & Brown (2007) FLC 93-316 considered how the word “adequately” should be applied. Adequate does not mean a subsistence level, nor is it to be determined according to any fixed or absolute standard. It should be a level that is reasonable, in all the circumstances, giving proper regard to the relevant s 75(2) factors.[1]
[1]Bevan & Bevan (1995) FLC 92-600 at 81,980-81,981.
In Maroney & Maroney [2009] FamCAFC 45 the Full Court said at [56]:-
Once a party…establishes an entitlement to interim spousal maintenance, and such entitlement is quantified in accordance with that spouse’s reasonable needs, an order may be made notwithstanding that the liable spouse could only satisfy the order out of capital or borrowings against capital assets.
If the wife is correct in her assessment of the proceedings before the Senior Registrar on 5 April 2019 and the order was not made by consent but rather consequent upon a judicial determination, then the reasonable needs of the wife have been considered and an appropriate order made. If it was by consent, then by necessary implication the husband conceded the wife’s reasonable needs.
The husband sets out his current circumstances in his affidavit filed 12 June 2019. There is no challenge to the wife’s expenditure principally comprising rent of $550 per week and Part N average weekly expenses of $1,033, with a further sum of $1,510 attributable to the children’s expenses.
The gravamen of the husband’s opposition to the continuation of the current order of $1,200 per week is the husband’s assertion that his expenditure exceeds his income by $2,971.
The husband lists income received from E Pty Ltd and D Pastoral of $480 net per week with a “director drawing benefit” of $1,252. Thereafter, the husband sets out his significant outgoings.
By reference to the husband’s most recent Financial Statement filed 12 June 2019, he lists his total income at $1,653 with total expenditure of $4,632.
The information differs from the content of the Financial Statement filed by the husband on 20 February 2019.
The personal expenditure of the husband lists the income tax payable as nil. The significant items of personal expenditure are the mortgage payments in respect of the Town G property, credit card minimum payments, school tuition fees and extra-curricular activities for the child at $434 and $1,338 being the interim spousal maintenance payments to the wife.
For reasons that are best known to the husband he has not filed taxation returns and prepared financial statements for the relevant entities that pay him income, dividend or drawings.
The husband’s documents have always reflected personal expenditure substantially in excess of weekly income. It is exemplified by reference to the husband’s Financial Statement of 20 February 2019 which listed his average weekly income at $1,310 and total personal expenditure of $6,339.
The shortfall of expenditure over income does not appear to be reflected in an increase in liability or the sale of property.
The wife contends that the husband has access to cash flow from either E Pty Ltd, D Pastoral or the Ackerley Family Trust that is not reflected in income and accordingly does not appear on the husband’s 2018 tax return.
The husband was challenged on this inconsistency and was not able to assist the Court. He could not explain from which entity income was derived and appeared to be either unconcerned or surprised at any proposition that suggested that given his stated position, the retention of the farm may not be financially sustainable.
It could not be said that the core business of the husband is that of a farmer.
Moreover, further uncertainty arises from correspondence to the husband from Mr B of 12 February 2019 advising him that money being drawn from the companies in excess of the distributable surplus may raise issues pursuant to div 7A of the Income Tax Assessment Act 1936.
The wife contends that in the absence of the husband providing full and frank disclosure and in particular the failure of the husband to cause tax returns and financial reports to be filed to date, it is relevant that the commission income from E Pty Ltd for the period 1 August 2018 to 25 January 2019 was $164,808 which represents weekly income of $6,338 averaged out over a 26 week period (see Exhibit “4”).
I do not consider that the husband presented evidence different to that which was available to the Senior Registrar on 5 April 2019 and in any event in circumstances where the wife has made repeated requests for discovery of documents that would cast light on the husband’s financial arrangements and those documents not being made available, the husband has not established any basis to vary the current order of spousal maintenance from $1,200 to $700 per week.
Interim property settlement/interim costs
The wife seeks a lump sum of $100,000 with $50,000 to her former solicitors for outstanding fees and the balance to the wife.
The wife’s application is opposed.
There are essentially two stages to the consideration of an application for interim property orders:-
(1)The first stage is a “procedural step” which requires an analysis of whether the circumstances of the case trigger the Court’s power to invoke s 80(1)(h) to make an order for interim property settlement before a final hearing. At this stage the “overarching consideration” is the interests of justice (see Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466).
(2)The second stage is the “substantive step” where the provisions of s 79 must be considered and applied but with limitations, given that it is not a final hearing. (see Strahan (supra)).
In Medlow & Medlow (2016) FLC 93-692 at [69] the Full Court confirmed that the starting point in respect to any property application, including an application for interim property orders, is “the identification of the parties’ property and of their interests in it”.
In circumstances where a party seeks interim property orders, the Full Court in Medlow (supra) said at 81,090:-
[86]The onus was clearly upon [the applicant] to establish that there were sufficient assets available for the interim distribution and that the effect of any interim order was capable of being reversed as part of the final hearing, or at least would not defeat [the respondent’s] property claims. The onus was not on [the respondent] to adduce such evidence.
The Full Court in Medlow (supra) referred to Strahan (supra) and confirmed that an interim order for distribution of property must be “amenable to adjustment on a final hearing”.
The following principles are relevant to the Court’s consideration of the wife’s application for a lump sum payment:-
a)Together, s 79 and s 80(1)(h) confer a power on the court to make orders for property settlement;
b)Section 79 confers a discreet power to make orders for property settlement and the court may exercise the power conferred by s 79 through “a succession of orders until the power…is exhausted” or until a final order dealing with all known property of the parties is made;[2]
c)Section 80 is not in itself a source of jurisdiction for such an order to be made. Rather, the section is an “enabling provision” that provides various ways in which the general power in s 79 may be exercised in individual cases.
[2] See Gabel & Yardley (2008) FLC 93-386.
Given that an applicant is effectively seeking access to their own funds, it is unnecessary for a “detailed enquiry as to the purpose for which the funds are to be used”.[3]
[3] See Felice & Felice [2011] FamCA 162 at [12].
Sufficient particulars must nonetheless be provided to enable the court to determine:-
a)that the application is “genuine”;
b)to “identify the circumstances that make it appropriate to give consideration to exercising its power”; and
c)to sufficiently weight the identified need “against the benefit of having only one exercise of s 79 power”.
The applicant must show more “than the mere fact that upon a final hearing the applicant would receive the property being sought (or an amount in excess of the funds being sought) from the other party”. (see Strahan (supra) at 85,646).
In Strahan (supra) the Full Court noted at 85,631:
In Poletti and Poletti (unreported, Family Court of Australia, 2 March 1990) Nygh J, when describing an application for “interim costs”, referred to the reasons of the Full Court in Wilson and Wilson (1989) FLC 92-033 (“Wilson”) and said it is a “situation where one party to the marriage controls almost exclusively what might be described as the patrimony of the parties and has control of the bulk of the assets and funds of the parties, where an order may be made to ensure that the other party, who does not have the fortune of controlling those funds, at least has an equal or near equal opportunity to present his or her case”: see also In the Marriage of Polletti (1990) 15 Fam LR 794 (“Polletti”) at 796 per the Full Court (Ellis, Strauss and Butler JJ). The Full Court in Zschokke at 83,220 made a number of relevant remarks about the “desirability of legal representation for both parties in family law proceedings”.
In Klearchos & Klearchos & Ors [2015] FamCAFC 217 the Full Court confirmed that a trial Judge, in considering an interim application for costs, is required to consider the matters set out in s 117 and, specifically, s 117(2A) of the Act.
Matters that are likely to be relevant by reference to s 117 are as follows:-
(a)That subject to sub-s (2), s 117 provides that each party shall bear his or her own costs;
(b)That if the court is of the opinion that there are circumstances that justify it in doing so, the court may make an order for costs and if so in considering what order (if any) should be made the court must consider the matters as set out in s 117(2A).
The parties are not agreed as to the extent of the asset pool but I am satisfied that it is extensive.
It is not controversial that the husband has actual and or effective control over the principal assets and interests of the parties in property. The husband resides in the Town G property which the wife considers has a value of $2,100,000. In addition, the husband continues to manage and operate the farming enterprise at Town G which he agrees was purchased for $1.5 million and is likely to have increased significantly in value.
In all the circumstances I consider that it is just and equitable for the Court to consider making an order by way of interim settlement of property. I do not consider that the wife has satisfied the necessary grounds for an order to be made for litigation funding, but in circumstances where the parties led a substantial lifestyle, where the mother is now a self-represented litigant given that she is not able to afford her legal representation and the parties are possessed of substantial assets albeit under the effective control of the husband, an order should be made in terms of the wife’s application.
The extent to which some or all of the money may well be utilised for legal fees will be a factor to be considered as to whether those monies should be the subject of an “add back”. That consideration may well be dependent upon the countervailing circumstances of the husband and whether he continues to remain as a self-represented litigant.
I do not think it is reasonable that the husband be given seven days to pay the sum. The husband may well decide that there needs to be a refinance of the various commitments secured against the Town G property or the Town G farming enterprise, or indeed whether the husband comes to the position where he considers it not viable to retain either the farm property, the house property or both. It is reasonable that the husband have 30 days to arrange the payment of the interim settlement sum of $100,000 to the wife.
Sale of livestock
I do not consider that an order should be made in relation to the funds from the sale of livestock held by D Pastoral Company in circumstances where an order has been made that the wife is entitled to partial settlement of property in the lump sum of $100,000.
Injunctions
There is merit in an order of injunction restraining the husband from dealing with the Town G property and the entities controlled by the husband namely:-
(a)E Pty Ltd;
(b)D Holdings;
(c)D Pastoral Company;
(d)Ackerley Super Fund.
other than in the ordinary course of business.
Further discovery
Given the various hearings relating to the husband making full and frank disclosure of documents, there is merit in him providing the documents as categorised by the wife save and except that there is no assistance to the proceedings in respect of the husband’s trip in April 2019 to the United States of America.
I make orders as appear at the commencement of these reasons.
I certify that the preceding ninety-three (93) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 30 July 2019.
Associate:
Date: 30 July 2019
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