Beale and Beale

[2009] FamCA 358

FAMILY COURT OF AUSTRALIA

BEALE & BEALE [2009] FamCA 358

FAMILY LAW – PROPERTY – Interim property settlement

Family Law Act 1975 (Cth)

APPLICANT: Ms Beale

RESPONDENT: Mr Beale

FILE NUMBER: SYF 2765 of 2004

DATE DELIVERED: 18 February 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan JR

HEARING DATE: 18 February 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT:

SOLICITOR FOR THE APPLICANT: Diana Perla & Associates

COUNSEL FOR THE RESPONDENT: Ms Bateman

CASE GUARDIAN FOR THE 

RESPONDENT:

Ms R

CASE GUARDIAN FOR THE 

CHILDREN:

Robyn Sexton & Associates

Orders

1. By consent orders and notations are made in accordance with the document titled “Minute of Order” marked Exhibit 1.

2. That the parties do all things and sign all documents necessary to cause payments from the controlled monies account held by Truman Hoyle Solicitors in the sum of:

   a.$43,000, to the trust account of the wife’s solicitors.  That fund to be only disbursed for the purpose of counsel’s fees in relation to the upcoming property settlement hearing and in relation to solicitor’s costs for the purposes of preparing for that hearing.

   b.$18,720.00 to the wife’s solicitor for the purposes of the expenses of the wife’s household during a period of absence from work related to an operation.  That sum to be paid out within 7 days after receipt by the husband’s case guardian of a written advice from the wife’s treating specialist as to the need for a rotator cuff operation, the likely operation date and a prognosis as to the time the wife will be unable to return to paid employment following that operation. 

   c.$7,000.00 to C School in relation to school fees, that payment to be made within 7 days after receipt by the husband’s case guardian of an invoice in relation to those fees.

THE COURT NOTED

1. It is the expectation of the Court that any monies distributed pursuant to these orders which are not required for the purposes for which they were distributed, as soon as practicable, be returned to the controlled monies account.

IT IS FURTHER ORDERED

1. That an order be made pursuant to Section 106A of the Act that the Case Guardians sign any documents necessary to give effect to these orders in the stead of the parties they represent.

IT IS NOTED that publication of this judgment under the pseudonym Beale & Beale is approved pursuant to s 121(9)(g) of the Family Law Act 1975  (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 2765 of 2004

MS BEALE

Applicant

And

MR BEALE

Respondent [by his Case Guardian Ms R]

REASONS FOR JUDGMENT

1. These are proceedings for interim financial orders in the context of proceedings for settlement of property.  The wife seeks $80,000 by way of interim property settlement. She includes a prayer in her application in respect of moneys being paid to other people. I gather that she would support those payments but she does not have a specific interest in those payments being made. Those aspects of her application are not pressed. 

2. The background involves a husband who is 55 years of age and a wife 50 years of age. They started to live together in 1985, were married in 1988 and separated in 2003.  They have two children, A and J, who are 17 and 13 years of age and both attend C School. There is a case guardian for the husband who has been injured in an accident and a case guardian for the children who are affected by the proceedings.

3. In an estimate of the assets of the parties attached to a case outline document prepared on behalf of the wife, it is said that the assets comprise $1.339 million. The largest component of that pool is $758,500 in a Truman Hoyle controlled moneys account. There is $22,000 in a smaller fund with the same trustee and $500,000 in the husband's superannuation.  There are bits and pieces elsewhere, including a motor vehicle and so on. There are the contents of a safety deposit box which have not been revealed and that seems to be an issue between the parties.

4. The husband has identified $376,000 in debts.  The wife puts her liabilities at $238,000.  Therefore there are assets of something in excess of $1.3 million, some in the form of superannuation, and albeit they will be disputed to some extent, over $600,000 in claimed debts. 

5. The fact that some of the assets are in the form of superannuation may not be important in the circumstances of this case.  I do not know that the husband is still in the paid workforce.  So it may be that he meets the requirements of the superannuation fund to access those moneys.  I am not sure.

6. In the context of that pool the wife seeks certain payments out of the controlled moneys account. 

7. The legal position is complicated.  No doubt this court has power to make an order for payment of money.  The heads of jurisdiction for such a payment would include spousal maintenance, costs, mandatory injunctions, interim property settlement. There is a nice debate in the authorities about whether you can have partial or interim property settlement.  It has been recognised (In the Marriage of Hickey (2003) 30 Fam LR 355) that an order under s.79 can be made up of components. Presumably those components could be made on different days.

8. I am told the wife's case is based on interim property settlement. The problem is that I am not in a position to make the findings about contributions and the other matters in s.79(4), including s.75(2), that would justify a distribution of property.  There is a case of Harris to which I am referred which is a long-standing authority which says you need to be careful in making an interim order. That would not prevent a distribution which would not interfere with the parties’ entitlements on a final basis. 

9. Here however it appears that the pool of assets has already been reduced to a point whereby the legitimate expectations of at least one of the parties cannot be met out of the fund. 

10. A substantial part of the pool arises from damages paid in the United States of America, in respect of a motor vehicle accident in Mexico, in which the husband was seriously injured.

11. That accident meant that the wife has had stewardship of the parties' finances. Just as the wife is very critical of the husband's stewardship of the family finances before the accident, he is very critical of her stewardship of the family finances since.  He points to the passage of funds through the wife’s hands and says there is a significant part of $470,000 not adequately accounted for by the wife.  She details in her evidence some aspects of the expenses that have been met in the years since the accident occurred.  Many of them were expenses directly for the benefit of the husband or as a consequence of his accident or for the support of the children. For example, she sets out reasons for private schooling for the children. In any event, that arrangement has been left in place. Presumably, the husband agreed or acquiesced to that arrangement or was unsuccessful in having a Court order something else. 

12. I am not going to be able to get to the bottom of that. The claims of the parties are greater than the existing pool of assets. That fact does not exclude a further interim distribution of that fund. Life goes on. Just because the parties' marriage has broken down and they are waiting for a court case does not mean that there are no expenses to be paid. There are expenses associated with legal proceedings.

13. Although her case is not argued in that way, there is a perfectly legitimate case for interim costs.  Traditionally, as a solicitor's contract was entire and solicitors were only entitled to be paid at the conclusion of a course of litigation or if there were components of litigation, then perhaps at the conclusion of some aspect of the case. The schemes for legal representation in most States now mandate interim billing.  The general view is that has been a benefit.  Clients who have to pay lawyers at certain rests during litigation and during other legal work, come to understand what the costs are and that helps them keep track of the costs. It promotes proportionality between the costs of proceedings and the subject matter of the proceedings. 

14. Most solicitors render interim accounts. One could put on rose tinted glasses and look to the generous approach of Ms Bateman who appears for the husband in these proceedings, in relation to her own fees and say it would be a good thing if all lawyers waited. The fact is, that is not the accepted practice. 

15. Ms Perla is an officer of the court and she says she has been retained on a certain basis. The wife owes her for fees incurred.  She is not pressing for those fees to be paid, but she wants payment of the fees that will be incurred to a trial and she needs to be put in funds for counsels fees for a three day trial.  That is a disbursement that Ms Perla would be personally responsible for. The claim for those fees is entirely proper.  There may be some inexactitude in the estimates.  Given the history of the matter, it is possible that the trial will take more than three days. Given the glacial pace of progress to date it may be that the cost estimate between now and the date of trial, is optimistic. 

16. Further, the legal fees represent a real debt, just as if the parties’ Honda CRV broke down and had to be repaired or some aspect of the husband's environment needed work. In each case the party affected would make arrangements for the payment to be made. It seems to me that those legal expenses should be paid. That can be done on an invoice for the costs. That will be simple in relation to the counsel's fees and it is just a matter of a proper calculation being made for the rest.

17. The other aspects of the wife’s claim are more complicated. In a perfect world the wife's case for the cost of an operation on her rotator cuff would be supported with detailed evidence. We do not have anything from a doctor to say that the wife needs to have an operation on her rotator cuff.  That would be a relatively simple thing to obtain. We do not need a single expert for it.  We just need a treating specialist to say that is what needs to happen and what the time frame is.  The cost of such an operation itself is modest. The wife says she has been told that provided she maintains membership of her medical fund she will only need to cover the fees of the anaesthetist. However as a consequence of the operation, she has been told she will have something like six weeks off work. The wife works as a Registered Nurse. In a perfect world we would have something from her treating doctor to say that she will be off work for six weeks following shoulder surgery.  We do not have that. 

18. The wife proposes to move to cheaper accommodation. There in no evidence about the sort of accommodation she proposes to obtain.  As Ms Bateman says, the wife’s claim for funds for a rental bond need not call for any outlay as she will recover the bond from her existing accommodation. The existing bond is likely to be more than the new bond so there may be a small bonus out of it.

19. There is no opportunity for the husband and for the children to have a say about that. They may wish to argue that the accommodation proposed by the wife is not necessary, that there are other options. They may wish to cavil with the estimates in relation to the wife's medical advice. 

20. The fact is that if these proceedings are further delayed for those things to happen, more money comes out of the same fund. In the Marriage of Harris is still good law to the effect that the Court must be conservative about these types of claim.  On the one hand, the wife says, "I have a proper claim and I would like to have access to funds within that claim to apply to necessary debts in the meantime." As I say, the husband will dispute the extent of the wife’s overall entitlement. I cannot determine those arguments.  They have defeated the parties up until now.  I acknowledge that having case guardians for both the husband and the children must make settlement discussions more complicated than they would be with two parties who have conduct of their own affairs.

21. At the end of the day there is an exercise of power under s.79, quite a complicated exercise of power under s.79, to be undertaken.  We do not have the factual complexity that they had in Poletti's case or Zshokke's case where interim costs orders were made.  But the issues here have defeated the parties and they are issues of some complexity and we have tripartite litigation.  The ultimate exercise of discretion will be facilitated if the parties are properly represented. That is part of the rationale for interim costs.

22. The wife seeks a capital fund to meet some of her recurrent expense. That is not essential. It would be unusual, for example, to pay your rent in advance, throughout the life of a lease.  Rent is paid weekly or fortnightly or however.  The wife cannot demonstrate a need for all of the elements of her claim. The other thing to be said is that it is the wife's own case that she cannot and does not propose to pay all of her debts. The husband is in the same situation. He cannot or will not pay all of his debts.  The husband is carrying debts of $109,000, $49,000, $39,000, $69,000. He has the wherewithal to pay them, in the form of funds from the controlled moneys account.  Yet he has not asked for access to those funds. 

23. What I am saying in a longwinded way is that the wife (as with the husband) proposes to leave some of her debts unpaid. That means they have decided to leave at least the bulk of the controlled moneys account in tact rather than paying all of their debts. In being cautious about an order for interim property settlement I should not be unduly worried about leaving some of the wife’s debts unpaid.

24. Another aspect of the wife’s claim is for school fees. The parents will want to avoid the children being embarrassed by this issue. One approach would be for them to authorise payments out of the fund on the receipt of an invoice from the school, subject of course to either of them compromising the fees with the school. If it pleased the husband to ask the school to wait, he could arrange that. If he thinks they should not be at the school, he would be able to bring the matter back and litigate about that issue.  

I certify that the preceding twenty four (24) paragraphs are a true copy of the reasons for judgment of the Judicial Registrar Loughnan  

Associate:

Date:  8 May 2009