Ahsan and Ahsan & Anor

[2017] FamCA 967

FAMILY COURT OF AUSTRALIA

AHSAN & AHSAN AND ANOR [2017] FamCA 967

FAMILY LAW – PROPERTY – Interim – Just and Equitable – Where the asset pool is not set out with any precision – Where there is no evidence as to valuations – Where consideration of applicable principles – Where it is not appropriate to make orders as to interim property. 

FAMILY LAW – COSTS – Review of a Registrar’s decision – Where the review as to costs is a hearing de novo – Where the asset pool is not insignificant – Where it can be inferred both parties are employed or in receipt of an income – Where the wife withdrew the contravention application – Where the wife has been wholly unsuccessful – Where it is appropriate that the wife pay the husband’s costs as agreed or assessed. 

Family Law Act 1975 (Cth) ss 75, 79, 117

Ahsan & Ahsan and Anor [2016] FamCA 1009
Harris & Harris (1993) FLC 92-378
Hawkins & Roe [2012] FamCAFC 77
Penfold v Penfold (1980) 144 CLR 311
Strahan & Strahan [2009] FamCAFC 166

APPLICANT: Ms Ahsan

FIRST RESPONDENT: Mr Ahsan

SECOND RESPONDENT: Mr G Ahsan

INDEPENDENT CHILDREN’S LAWYER: Debra Nikitin

FILE NUMBER: PAC 2493 of 2016

DATE DELIVERED: 29 November 2017

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 18 September 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Ahmad

SOLICITOR FOR THE APPLICANT: Integrated Law Group

COUNSEL FOR THE FIRST RESPONDENT: Ms Druitt

SOLICITOR FOR THE FIRST RESPONDENT: Barber Lawyers

SOLICITOR FOR THE SECOND RESPONDENT: Greenaway & Tohme

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Ms Nikitin of Legal Aid NSW Penrith

Orders

1. That the Wife pay the Husband’s costs of and incidental to her Application- Contravention filed 31 May 2017 as agreed within one month from this date and in default of agreement as assessed, such costs payable from the Wife’s share of the proceeds of sale of the property at K Street, Suburb L.

2. That the Second Respondent’s application for costs of and incidental to her Application-Contravention filed 31 May 2017is dismissed.  

3. That otherwise the Wife’s Application in a Case filed 31 May 2017 as amended 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 Ahsan & Ahsan 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 PARRAMATTA

FILE NUMBER: PAC 2493  of 2016

Ms Ahsan

Applicant

And

Mr Ahsan

First Respondent

And

Mr G Ahsan

Second Respondent

REASONS FOR JUDGMENT

1. The present matter for determination relates to the applicant wife’s application seeking interim property and associated orders.

2. The wife relies upon her Application in a Case filed 31 May 2017 as amended by her Amended Application in a Case filed 18 July 2017.

3. In summary, the wife seeks orders:

   a)that within 14 days the husband pay to her the sum of $125,000.00 on account of her outstanding legal fees with the characterisation of that payment reserved to final hearing;

   b)that within 14 days the husband pay to her the further sum of $150,000.00 by way of interim property settlement with the characterisation of that payment reserved to final trial;

   c)that in the alternative to b) the husband pay to the wife the sum of $150,000.00 by way of lump sum spousal maintenance;

   d)that within 14 days the husband make payment of arrears in respect to the Bank mortgage secured over the property at M Street, Suburb A;

   e)that the husband indemnify the wife from all or any liability arising from Local Court proceedings commenced against the parties by Suburb O City Council for unpaid rates in respect to the Suburb A property;

   f)that the determination of a Registrar on 11 July 2017 as to costs be reviewed.

4. The husband filed a Response to the wife’s Amended Application in a Case and in that Response, in summary, he seeks orders:

   a)that the Suburb A property be sold;

   b)that upon sale of the Suburb A property the Bank mortgage secured over the property be discharged and that a further payment be made to the Bank to maintain loan account numbers …8 and …38 in operation without forcing the husband to seek a refinance on the property at P Street, Suburb I;

   c)that the wife’s application for review of the Registrar’ costs order be dismissed.

Context

1. This application is yet another interim application in extensive litigation between the parties both as to parenting and property.

2. On 8 September 2016 various orders were made and inter-alia the husband was ordered to continue to pay all loan repayments in respect of all loans in the name or names of either or both parties including loans secured by mortgage on the matrimonial properties being loans …8 and …38 and, otherwise, pay as and when they fall due all outgoings by way of utilities accounts, insurances, levies Council and water rates and taxes levied over the matrimonial properties and indemnify the wife from such liabilities.

3. On 14 October 2016 orders were made as follows:

   1.By consent and pending further order:

   (1)That within 14 days the parties do all things and sign all documents necessary to obtain an extension and or approval of the sub-division approval for K Street, Suburb L being Lot … in ....

   (2)That all costs of and incidental to obtaining the subdivision approval and the conditions of the subdivision be met by the Second and Third Respondents.

   (3)That within 14 days of the notice of registration of the subdivision by the Land and Property Information Office, the parties do all things and sign all documents to cause:

   (i)The sale of the front block at a sale price agreed by the parties in which a residence is constructed and after discharge of any mortgage and sale costs any balance remaining be paid to the Applicant and First Respondent in equal shares.

   (ii)That contemporaneously with the sale provided in (3)(i) above, the rear block be transferred to the Second and Third Respondents at the cost of the Second and Third Respondents and any transfer fees, lodgement fees and stamp duty payable.

4. Interim parenting orders were made on 25 November 2016 that, in summary, provided for the parties to have equal shared parental responsibility for the children, that the four younger children live primarily with the father and that the children spend substantial and significant time with the mother: Ahsan & Ahsan and Anor [2016] FamCA 1009.

5. On 31 May 2017 the wife filed an Application – Contravention seeking to have the husband and other respondents dealt with for asserted breaches of orders made on 14 October 2016, and his asserted failure to pay various property outgoings and his asserted failure to make proper and adequate disclosure.

6. On 11 July 2017 the wife withdrew her Application – Contravention and it was, accordingly, dismissed. Consequently, the wife was ordered to pay the costs of the husband in respect to the contravention application assessed in the sum of $3,087.00 payable within one month of receiving settlement monies from the sale of a property at Suburb L and, otherwise, ordered to pay the costs of the second and third respondents in respect to the contravention application in the sum of $1,208.70 within one month of receiving settlement monies from the sale of the property at Suburb L.

7. Notwithstanding the orders sought by the wife, the parties reached some agreement in relation to the disposition of certain property and orders by consent were made on 18 September 2017 (as amended under the slip rule) that, in summary, provide as follows:

   a)that the wife do all things necessary to cause the property at Suburb A to be sold by way of auction or private treaty for the best possible price;

   b)that in default of the husband doing all necessary things and signing all necessary documents to effect and complete the sale of the said property then a registrar of this court be appointed to sign such documents on his behalf;

   c)that upon completion of the sale the proceeds of sale be applied in payment of real estate agent commissions and expenses of the sale, legal costs relating to the sale, adjustment of any rates and taxes on the property, in discharge of the Bank mortgage secured over the property and with the balance then remaining to be placed in an interest-bearing controlled monies account in the names of the husband and wife in the trust account of the wife’s solicitors;

   d)liberty to apply as to implementation of the orders.

The wife’s evidence

1. The wife relied upon her affidavits filed 31 May 2017 and 15 September 2017.

2. The wife is aged 38 and the husband aged 44.

3. The parties married in 2001 and separated in November 2015.

4. The wife asserts that during the course of the relationship she was the primary carer for the five children of the marriage.

5. At the commencement of the parties’ relationship the wife was working full-time and she continued to do so until about June 2004. The husband at the time of cohabitation was working as a tradesman until late 2001 when he commenced a business known as R Pty Ltd.

6. The wife makes no reference to any assets of substance at the time of cohabitation.

7. The wife asserts that during cohabitation she worked in relation to the business primarily as bookkeeper and in its administration. As at early March 2016 the wife contends that the husband’s business had about $100,000.00 cash at bank, average monthly deposits of income of about $40,000.00, monthly issued invoices of between $60,000.00 and $80,000.00 and about $300,000.00 in unpaid invoices.

8. Subsequent to separation, the husband has remained residing in the former matrimonial home at P Street, Suburb I. The wife has resided in the parties investment property at M Street, Suburb A being a property registered in the wife’s name alone.

9. Otherwise, the parties have an interest in a property at K Street, Suburb L that is the subject of previous orders as referred to above.

10. As at 17 February 2017 there were arrears of payments in respect to loans …8 and …38. As at 30 May 2017 the wife asserts that the current balances outstanding under the two loans were about $796,000.00 and $195,000.00 respectively.

11. The wife asserts that the matrimonial assets of the parties comprises in part their interest in the three real estate properties referred to above having, she asserts, a total value of about $2.54 million and subject to the outstanding loans to the Bank totalling about $991,000.00.

12. The wife does not adduce any evidence as to the value of the said properties.

13. Otherwise, the wife contends that the parties have combined superannuation entitlements of about $53,500.00, the husband’s interest in R Pty Ltd, value not known, (in respect to which the wife contends the husband has failed to make full and proper disclosure), the husband’s motor vehicles with asserted values totalling $130,000.00 and personalty in the Suburb I property with an asserted value of $30,000.00.

14. Accordingly, the wife’s version of the net asset pool is about $1.76 million.

15. The wife seeks a final order that she receive 75 per cent of the matrimonial assets.

16. Subsequent to separation the wife withdrew $25,000.00 from Bank loan …38 on 19 May 2016. She asserts that these funds were expended in setting up post separation accommodation for her and the children.

17. Subsequent to the wife’s withdrawal from the Bank account, the husband withdrew funds totalling about $100,799.00.

18. The wife contends that the business R Pty Ltd has now been placed into voluntary liquidation by the husband after he had disposed of various assets of the business in transactions that are the subject of enquiry by the liquidators. She further contends that he continues to operate virtually the same business through R A Pty Ltd whilst contending that he is unemployed.

19. The wife makes complaint as to the husband’s failure to make full and proper disclosure of his financial circumstances and those of his business.

20. The wife asserts that she would have “considerable difficulty” in finding employment having not been in the workforce for about 11 years. Yet she has now obtained employment five days per week earning $790.00 per week, a sum that varies depending on her shifts from week to week. She estimates her monthly expenses at $2,776.00 or about $636.00 per week.

21. The husband is obliged under interim orders to maintain mortgage payments and property outgoings and as such it is to be inferred that from her income the wife attends to her own needs and those of the children when they are in her care.

22. The wife asserts that she has no funds to meet legal expenses and has paid $55,000.00 in legal fees to date funded by her withdrawal from the mortgage and loans from family members. She says that she is currently indebted to her legal representatives for $95,000.00 with additional fees incurred in respect to the present application and in the matter proceeding to final hearing. She expresses concern that without funds she will be unrepresented.

23. The wife complains that the husband and the second and third respondents have been dilatory in relation to their compliance with orders made on 14 October 2016 as to the subdivision and then subsequent transfer of portions of the property at K Street, Suburb L to the second and third respondents. The requisite development application was not lodged until 11 August 2017.

24. As to the question of costs the wife contends that she withdrew her contravention application as a consequence of legal advice to her at that time.

The husband’s evidence

1. The husband relied upon his affidavit filed 11 September 2017.

2. He says that the property at Suburb A was purchased in the wife’s name in 2001.  The husband says that he had previously bought and sold property with his brother and he contends that he provided funds from the sale of that property towards the Suburb A purchase in addition to which the wife provided funds from the sale of her then motor vehicle.

3. In February 2002 the parties purchased a property at Suburb S for $255,000.00. The property was purchased from savings with the balance of purchase price provided by way of a mortgage borrowing.

4. Subsequently, in July 2004, the parties purchased the property at Suburb I for $524,000.00 with the purchase price comprising savings and the balance by way of mortgage.

K Street, Suburb L

1. The husband’s parents owned the real estate property at K Street, Suburb L. That property has been the subject of interim orders as referred to above. The father asserts a family arrangement where in consideration for the payment of $100,000.00 to each of his brothers, his parents would transfer to him and the wife the property at K Street, Suburb L that would be later subdivided with the parents retaining the rear portion of the property on which the home was erected.

2. The husband says that at the time of the purchase of the Suburb I property he borrowed additional funds and paid out to each of his brothers the sum of $100,000.00.

3. The husband commenced business as R Pty Ltd in 2001 and that business was subsequently incorporated in 2008. In about 2010 the husband’s father advanced to him $130,000.00 to purchase a truck. The husband, thereafter, commenced repayments to his father of $1,600.00 per month in the middle of 2013. The husband estimates there was a balance outstanding to his father of $70,000.00. He says that of the funds that he redrew from the Bank mortgage in May 2016, $70,000.00 was to repay his father and the balance for his legal fees.

4. He denies that he owns motor vehicles as asserted by the wife.

5. He concedes that R Pty Ltd was put into liquidation by him as a consequence of an outstanding debt to the Australian Taxation Office of $189,000.00, although at the time the company had unpaid invoices totalling about $396,000.00. What has happened to those funds owed to the company is not the subject of evidence.

6. As at September 2017 he asserts that he has paid arrears outstanding to the Bank and asserts that, otherwise, his obligations for payment of property outgoings have been met save for Council rates on the property at Suburb A. No doubt any default in relation to such rates will be remedied on final property settlement.

7. The husband, otherwise, provides no evidence as to his present financial circumstances notwithstanding his assertions that he continues to meet when they are due and payable significant periodic obligations including mortgage payments.

8. As to final property the husband seeks orders that, in summary, see him pay to the wife the sum of $250,000.00 and that he, otherwise, would retain the real estate properties at Suburb L, Suburb A and Suburb I subject to any existing mortgages. In part, interim orders have superseded that position as to the retention of the properties.

9. The wife is already at some indeterminate future date to receive half of the proceeds of sale of the front block at K Street, Suburb L the value of which is not known.

Discussion

1. The wife’s present circumstances where she is in employment and appears able to meet her estimate of her reasonable monthly expenses is not indicative of any periodic need for spousal maintenance. Nor is there an indication of any need to quantify by way of lump sum any periodic obligation for spouse maintenance as sought by her.

2. In submissions, she seeks lump sum provision either by way of interim litigation funding or interim property.

3. In the circumstances of this matter it is more appropriate to consider whether interim distribution of property under s 79 of the Family Law Act 1975 (Cth) is appropriate in the circumstances set out above.

4. The principles as to applications for interim property provision are well settled, (Strahan & Strahan [2009] FamCAFC 166) and require a two-step process.

5. Firstly, there must be circumstances enlivening the power to make an interim order. The test is not limited to “compelling circumstances” but whether it would be “appropriate” to make an interim order, with the “overarching consideration” being the interests of justice.

6. In Strahan (supra), the Full Court said:

   132.In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1) (h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

7. Secondly, the Court is to have regard to relevant matters in s 79 of the Act.

8. It needs to be kept in mind that the final outcome of property settlement should not be compromised by an interim property order. Either the remaining property needs to be adequate to meet the legitimate expectations of both parties at the final hearing or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.

9. It is important to have regard to an overall caution. In Harris & Harris (1993) FLC 92-378, the Full Court said:

   As a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings.

10. In Strahan (supra), the Full Court said at [132]:

    … regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

1. It is now well settled that in property cases the Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.  Such a consideration should not be guided by an assumption that the parties’ rights to, or interests in, property are, or should be, different from those that then exist. The question is whether those rights and interests should be altered.

2. There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact.

3. In many cases, such as this one, this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.

4. Both parties in this matter in any event seek that the Court makes final adjustive orders.

5. The assets and liabilities of the parties are not set out by the wife with any precision. There is no valuation evidence of the value of the three real estate properties. It is inappropriate to simply guess what may be obtained on sale of the Suburb L property at some indeterminate time in the future or the sale price of the Suburb A property. On the wife’s estimate of its value the sale of Suburb A will not even discharge the liability to the mortgagee.

6. If that be the case, then the home at Suburb I, occupied by the husband and children, will remain encumbered.

7. There appear to be issues as to the parties’ contributions yet to be resolved, there appears on the wife’s case issues as to prospective add backs as against the husband and, of course, a significant live final parenting issue that will impact significantly on the s 75(2) factors for consideration.   

8. It is thus difficult to see the possible range of outcomes with any clarity.

9. The wife has an expectation of funds from the subdivision and sale of the Suburb L property in respect to which she claims the husband is dilatory. Yet she has made no application for appropriate enforcement. The remedy is in her hands.

10. In all of the circumstances, it is not appropriate to make any interim order for property adjustment. The wife’s application in this respect will be dismissed.

Costs

1. The review of the Registrar’s determination as to costs is a hearing de novo.

2. The Contravention application was returnable on 11 July 2017 before a Registrar for directions. It was not at that time listed for hearing. The Contravention application was withdrawn and dismissed on that day.

3. Section 117 of the Act provides that each party to the proceedings shall bear his or her own costs.

4. That principle is, however, subject to the discretion afforded to the trial judge in subparagraph (2), which provides that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to further subsections thereof and the applicable Rules of the Court, make such order as to costs as the Court considers just.

5. Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, there is no additional or special onus on an applicant who seeks an order for costs: see Penfold v Penfold (1980) 144 CLR 311.

6. The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section. They relevantly, in these proceedings, relate to the following:

   (a) the financial circumstances of each of the parties to the proceedings;

   (b) whether any party has legal aid and the terms of any grant of aid;

   (c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answers, questions, admissions of facts, production of documents and similar matters;

   (d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court;

   (e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   (f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

   (g) such other matters as the Court considers relevant.

7. The Full Court in Hawkins & Roe [2012] FamCAFC 77 said:

   17.With respect to the application of the section, in Penfold and Penfold (1980) 144 CLR 311, the High Court said at 315 and 316:

   Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in "a clear case".

   Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v Kent). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.

   (footnotes omitted)

   18. The weight to be given to a particular consideration under s 117(2A) is a matter for the discretion of the judge. However, in I and I (No 2) (1995) FLC 92-625 the Full Court of this Court held that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”. That is not to say that one single matter may not ultimately be determinative. The Full Court confirmed this in Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at paragraph 41:

   … A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.

8. No submissions were received from the second respondent. That application for costs will be dismissed.

9. The parties have a not insignificant asset pool. It is yet to be determined with precision. The wife is working. There is an inference that the husband is in receipt of income.

10. Neither party is legally aided.

11. The proceedings were necessitated, it was contended, by the husband’s (and his parents’) failure to comply with orders.

12. The wife was wholly unsuccessful in that the application was withdrawn and dismissed on the first return date.  

13. It is just that the wife pay the husband’s costs reasonably incurred of and incidental to the Application–Contravention filed by her on 31 May 2017.

14. Such costs should be as agreed or in default of agreement as assessed and be a charge against funds to be received by her from the proceeds of the sale of the Suburb L property in due course.

15. Orders will be made accordingly.

I certify that the preceding eighty-three (83) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 29 November 2017.

Associate:

Date:  29 November 2017