Benson & Benson
[2012] FMCAfam 335
•20 April 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BENSON & BENSON | [2012] FMCAfam 335 |
| FAMILY LAW – Property – interim application for property distribution pending final hearing – matters to be considered – whether appropriate to make such an order. |
| Family Law Act 1975, ss.79(2), 79(4) |
| Lee Steere v Lee Steere (1998) FLC 91-626 Ferraro v Ferraro (1993) FLC 92-335 Clauson v Clauson (1995) FLC 92-595 Hickey v Hickey & Attorney General of the Commonwealth of Australia (Intervenor) 2003 FLC 93-143 Wardman & Hudson (1978) FLC 90-466 Biltoft & Biltoft (1995) FLC 92-614 Russell v Russell (1999) FamCA 187 Strahan v Strahan (2010) 42 Fam LR 203 Harris & Harris (1993) FLC 92-378 Wenz v Archer (2009) 40 Fam LR 212 |
| Applicant: | MR BENSON |
| Respondent: | MS BENSON |
| File Number: | MLC 5232 of 2011 |
| Judgment of: | Brown FM |
| Hearing date: | 2 April 2012 |
| Date of Last Submission: | 2 April 2012 |
| Delivered at: | Adelaide |
| Delivered on: | 20 April 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Constantinou |
| Solicitors for the Applicant: | Schetzer Constantinou |
| Counsel for the Respondent: | In Person |
ORDERS
The application filed 29 March 2012 is dismissed.
The final hearing before Federal Magistrate Brown on 10 & 11 July 2012 at 10:00am NOTING 2 days is confirmed.
The applicant file and serve all affidavit evidence he proposes to rely on at trial together with an updated financial statement on or before close of Registry filing on 11 June 2012.
The respondent file and serve all affidavit evidence she proposes to rely on at trial together with an updated financial statement on or before close of Registry filing on 25 June 2012.
On or before 25 June 2012 the applicant do pay the setting down fee or file an exemption certificate in respect thereof.
The applicant pay such daily hearing fee as required pursuant to the Federal Magistrates Regulations 2000.
IT IS NOTED that publication of this judgment under the pseudonym Benson & Benson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
MLC 5232 of 2011
| MR BENSON |
Applicant
And
| MS BENSON |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr Benson “the husband” and Ms Benson “the wife” were married on (omitted) 2008. They are both aged in their forties – he husband being forty-seven; the wife being forty-two.
The parties have one child. He is X born (omitted) 2007. X lives with the wife in suburban Adelaide. The husband lives in suburban Melbourne.
There is no dispute that the parties began to live together in (omitted) 2006 and separated in (omitted) 2010, when the wife and X left Melbourne. Accordingly, the relationship between the parties was one of around four years.
The parties’ major property acquisition, during their relationship, was the purchase of their former family home at S. This property has now been sold. There is no dispute between the parties that the net proceeds of sale are now well in excess of $700,000.00, given that the proceeds were invested in an interest bearing account from 2010 onwards.
The husband commenced these proceedings, in the Melbourne Registry of the court, on (omitted) 2011. On a final basis, he seeks generic orders for the settlement of matrimonial property, namely that the court make the property order which it considers just and equitable.
At the interim stage, he also sought that the court make an order that both “the husband and wife receive an interim distribution of the net proceeds of S in an amount agreed to and failing agreement as ordered by [the Court].”
The wife responded to this application on 20 July 2011. She too sought generic orders for property settlement in similar terms to the husband. On a final basis, she also seeks an award of spousal maintenance, in the sum of $1,000.00 per week, until X commences primary school.
Her application was silent in respect of the husband’s application for an interim distribution of property. She did however seek that the proceeds of the sale of the S property remain in her possession and control, so that she could utilise any interest earned on this sum for her sole benefit.
Given her relocation to Adelaide, the wife also sought that the proceedings be transferred to the Adelaide registry of the court. At the time it was her position that her straitened financial circumstances prevented her from travelling to Melbourne easily.
The parties’ competing applications first came before the court, in Melbourne, on (omitted) 2011. On this occasion, the parties were able to agree on a number of interim and procedural orders. It was agreed as follows:
·The proceedings be transferred to Adelaide;
·Each party provide discovery of relevant financial documents;
·The proceeds of sale of the S property be held in a joint interest bearing account;
·There be an interim property distribution to the husband in the sum of $100,000; and
·There be a distribution to the wife in the sum of $100,000, with the sum to be characterised at the trial.
Since these orders, there have been a number of procedural orders, which have attempted to refine the extent of discovery between the parties. In addition, in (omitted) 2012, the parties attended a financial mediation conference, in Adelaide, which failed to resolve the property issues between them.
In all these circumstances, the parties competing applications have been fixed for final hearing, before me, on 10 & 11 July 2012.
On 29 March 2012, the husband filed a further interim application. In this application, he seeks the following order:
“That from the proceeds of sale of S held in trust by the husband’s lawyers, there be a further distribution of $100,000 each to the wife and husband with such payment to be characterised as a partial payment of property.”
Although the wife has not formally responded to this application, it is clear that she opposes it. The application came on for hearing on 2 April 2012. The wife acted on her own behalf in the application, whilst the husband was represented by his solicitor in Melbourne, via the telephone.
These reasons for judgment are concerned with the determination of the interim property application, which comes approximately three months prior to the date scheduled for final hearing.
Background
This is an interim hearing. Necessarily it must take place in a truncated or shortened form. There has been insignificant time to allow for additional oral evidence, particularly in the form of cross-examination, particularly where there is a conflict in the written evidence of the parties. It is difficult, if not impossible, to resolve such a factual dispute, at the interim stage.
Until it seems fairly recently, the husband was employed as a ramp services manager by (omitted). He earned approximately $209,000 per annum. Besides X, he has two other children from an earlier relationship. They are Y aged thirteen and Z aged eleven. They live in Queensland with their mother.
More recently, the husband has begun a business involving the (omitted). He now describes himself as a project manager. What are the implications of this change are not entirely clear to me. However it is the husband’s position that he is under some financial pressure as a result of a contractual obligation, which he has entered relating to the purchase of brewing plant in New Zealand.
The wife is not currently in the paid workforce. She lives with her mother and X in Adelaide. She does not currently pay rent. The wife left the workforce prior to X’s birth. She was diagnosed with (omitted) cancer five years ago. Her illness is thankfully in remission, but she has a genetic disorder which makes her highly susceptible to contracting further cancers in future.
The wife derives income from a share portfolio standing in her name. The dividends received provide her with a small income. She receives child support from the husband for X and a modest social security allowance. These are her only sources of income. It is her position that, although she lives frugally, her recurrent expenses exceed her income by a significant degree.
The S property sold for $705,000.00. The net proceeds were $684,105.11. The settlement of the property took place in (omitted) 2010. The proceeds were invested in an account, in the wife’s sole name, as she deposes, to reduce the husband’s potential tax liability, given his higher income.
It is the wife’s case that she has not utilised income generated by the sum, other than to pay tax levied on the income so generated. This explains the increase in the deposit, prior to the agreed interim distribution, when the account held $745,000.00.
The husband supported his first application for an interim distribution of part of the proceeds of sale of the S property by deposing that he needed funds to invest in a business idea for manufacturing and selling (omitted). He had established a company, (omitted) to pursue this idea.
The wife initially resisted this application. From her own perspective, she could see no utility in such a distribution. It is her position that the husband is a poor business person and has no experience in the brewing business. She fears financial disaster, if the husband embarks upon such an enterprise.
The wife has amended her response. She now seeks that the proceeds of sale of the S property be divided 55/45 percent in her favour. She continues to maintain her application for spousal maintenance and, once X has started school, that the husband pay one half of his private school costs.
It is difficult, at this stage, for me to accurately and completely quantify the pool of assets available to be distributed between the parties. The following table is compiled following my perusal of the parties’ respective statements of financial circumstances and their affidavit material:
Proceeds of S property
$200,000 distributed745,000 E Wife’s share portfolio 230,000 Cash (W) 6,900 Telstra shares (W) 15,800 NAB shares (W) [1] 9,360 Wife’s superannuation 42,500 BP shares (H) 6,780 (omitted) shares (H) 5,200 Cash (H) 8,500 Husband’s superannuation 320,000 Total 1,477,040 [1] It is the wife’s position that the parcel of shares in Telstra and NAB should be excluded from the pool of assets, as the funds for their purchase were provided by her father. The intention being that they were to be utilised to pay for X’seducation.
Neither party has deposed as to the existence of any significant matrimonial liabilities. It remains the wife’s position that the husband has not made complete disclosure of his current financial position. She asserts that he has received a redundancy payment recently from (omitted) and has sold a parcel of (omitted)shares.
The current applications
Each party has filed an affidavit in respect of the husband’s current application for an interim distribution of property. Both affidavits were filed on 29 March 2012.
In his affidavit, the husband deposes that he has expended the $100,000 advanced to him in (omitted) 2011. The majority of the moneys has been utilised in expenses related to his (omitted)business, which he describes as being his “vision”.
The husband deposes that, in (omitted)2011, he entered into a contract with a New Zealand company to buy the plant of a (omitted)for a total sum of NZ$120,000. This sum was to be paid by a deposit of NZ$30,000 with the balance of NZ$90,000 to be paid on or before 14 February 2012.
The balance has not as yet been paid and interest is accruing on the sum at the rate of 9%. It is the husband’s position that he anticipated that these proceedings would have been resolved by now and with this belief he entered into the contract in good faith.
The husband is under some pressure to complete the contract and for this reason wishes the interim distribution of property to be made. In support of his application, he deposes as follows:
“If there were a further distribution of $100,000 each it would mean that the wife and I had each received $200,000 and $363,426.21 would remain in Trust (at the end of February) with interest accumulating on that amount.
It would mean that the wife and I each have received 26% of the monies that were held in Trust at the end of February. It would mean that 48% of the net proceeds of sale of Sremain in Trust.
Whilst the net proceeds of Srepresents almost all of the liquid assets which I have an interest in, the wife has, according to her Form 13 – Financial Statement, assets of $287,365 including shares and funds in bank accounts but not including the $100,000 that she received pursuant to the July 2011 Orders. Whilst I acknowledge that these assets are pre cohabitation, they would nevertheless form part of the property pool for consideration for a property adjustment by this Court.
There is therefore no prejudice to the wife by agreeing to a further interim distribution of $100,000 each. The consequences for me of not doing so are onerous.”[2]
[2] See husband’s affidavit filed 29 March 2012 at paragraphs 12 to 15.
The wife’s position is set out in her affidavit as follows:
“I believe that it would prejudice my son and I should an interim distribution be made. As part of our property settlement I am seeking that I receive a greater amount of our cash, rather than a superannuation split or shares, to enable me to purchase accommodation and furniture (as the husband has retained all of our furniture). As I was not sure if the separation was permanent and I am living with my parent’s, the husband retained nearly all our furniture. I took only the essential items. I believe that an interim distribution would significantly prejudice the just and equitable resolution of this matter.
A cash settlement from the proceeds of sale of the former matrimonial home, in addition to the assets which I currently have within my possession is possible with no prejudice to the husband in him retaining his superannuation. The husband is more than capable of purchasing another home as he has the income to support a mortgage. I however do not and will need to be able to purchase a home free hold. I do not have an income nor can obtain income protection insurance even once I do find work.”[3]
[3] See wife’s affidavit filed 29 March 2012 at paragraphs 9 and 10
The wife is critical of the husband for not disclosing his apparent interest in the (omitted)business sooner. She remains deeply suspicious of the husband.
The legal principles applicable
The process to be followed for the division of the parties’ property is well established by law.[4] The relevant legal principles are primarily contained in sections 79 and 75(2) of the Family Law Act 1975. I am required to follow a number of specific steps.
[4] See Lee Steere v Lee Steere (1998) FLC 91-626; Ferraro v Ferraro (1993) FLC 92-335;
Firstly, I must ascertain what are the parties’ assets and liabilities as at the date of trial.[5] This is because there is only one exercise by the court of the power conferred on it by section 79 to make a matrimonial property order.
[5] See Wardman & Hudson (1978) FLC 90-466; and Biltoft & Biltoft (1995) FLC 92-614
The second step involves the court ascertaining the contributions which party each has made towards the assets identified following the first step. Contributions fall into two broad categories.
The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage, including any contribution made in the capacity of home maker or parent.”[6]
[6] See Family Law Act s79(4)(c)
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 75(2) of the Family Law Act 1975. Pursuant to section 75(2)(o), the court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
Finally in determining what order the court should make under section 79, the court must be satisfied that in all the circumstances, it is just and equitable to make the relevant orders. Overall, it is the justice and equity of the actual orders that the court must consider.[7]
[7] See Russell v Russell (1999) FamCA 187
As I understand the current positions of each of the parties, there are likely to be controversies between them in respect of each of these stages. Firstly, it is by no means clear what is the exact extent of the pool of assets available to be divided between them. The wife wishes to be provided with details of all redundancy packages received by the husband.
Secondly, the parties disagree in respect of the quantity and quantification of their contributions, particularly at the initial stage. The husband’s position is that he provided 85% of the funds necessary to acquire the Sproperty in the first place. The provenance of these funds was a redundancy package of around $440,000, which he received from (omitted) in (omitted)2007.
The wife acknowledges that the husband made significant financial contributions to the initial purchase price of the Sproperty, which was $625,000. However, she asserts that she contributed $100,000 and brought other significant assets, into the marriage, at its commencement. She calculates these contributions at around $300,000.
Significant controversy is also likely to arise at the third stage. It is the wife’s position that an overall assessment of section 75(2) favours her to a marked degree. However, in this regard I have received limited evidence from the parties regarding the relevant considerations applicable.
In particular, it is the wife’s position that the husband has an obvious and significant advantage over her in respect of his income earning potential. At separation, he was earning in excess of $200,000 per annum, whilst she was not in the paid workforce and had been out of it for a significant period of time.
In addition, the wife points to her primary responsibility to parent X and her health issues as being significant factors which favour her. She is impliedly critical of the husband for apparently abandoning secure paid employment for an uncertain future as a self-employed (omitted).
Finally, significant controversy is likely to exist between the parties as to the make-up of the package of assets which each will receive at the end of the process of division of property. Both are likely to wish to receive their entitlements predominantly in the form of cash.
From the wife’s point of view, she wishes to receive cash in order to purchase accommodation for herself and X. It would also seem highly probable that the husband will want to receive a significant component of his entitlements in cash, to fund his (omitted)business.
Part VIII of the Family Law Act is the part of the Act dealing with property, spousal maintenance and maintenance agreements. Section 79(1) empowers the court to make such order as it considers appropriate in property settlement proceedings.
Section 80 provides the court with what are described as general powers. In particular section 80(1)(h) empowers the court to make an order pending the disposal of proceedings. However, it is clear that the same principles, set out above, apply both at the interim and the final hearing stage.
In general terms, bearing in mind the limited nature of an interim hearing, the court is required to follow the four step process in respect of both final and interim matrimonial property proceedings. Any interim property order is required to be both just and equitable. Necessarily, any interim order must ultimately be referrable to the final order made in the case concerned, as both depend on the same exercise of the same power.
Given these circumstances, the Full Court of the Family Court has pointed out that, as there can be only one exercise of the power under section 79 of the Act, it is usually preferable that there be only one final hearing of section 79 proceedings, rather than a succession of subsidiary provisional hearings.[8]
[8] See Strahan v Strahan (2010) 42 Fam LR 203 at 230 [114]
In Strahan, the Full Court considered an earlier decision of the Full Court Harris & Harris.[9] In this case, the Full Court delineated the relevant considerations applicable to the making of what is conveniently described as an interim property order. The Full Court, in the case, considering it unnecessary to draw a distinction, in terminology, between an interim order and a partial order.
[9] See Harris & Harris (1993) FLC 92-378 at 79,930
In Harris, the Full Court, whilst affirming the preference that there be only one final hearing of property proceedings, identified three criteria applicable to the exercise of the power to make an interim property order namely:
·the exercise of the power should be confined to cases where the circumstances at the time were “compelling”;
·the exercise of the power, depending as it did on section 79 of the Act, must be exercised within the parameters provided by that section, notwithstanding the difficulty arising for any decision maker concerned in making final findings;
·the exercise of the power must be exercised “conservatively” in the sense that any remaining property needed to be sufficient to meet the “legitimate expectations” of both parties at final hearing, or the order being contemplated is itself capable of being reversed or adjusted at a later stage, if necessary.
In Strahan, the Full Court affirmed Harris in the sense that it accepted that an interim property application comprised a two-step process. Firstly what was described as an “adjectival stage” and secondly what was described as the “substantive stage”. The first step being concerned with the description or particularization of the circumstances required to be established before an interim property order was made. The second step dealing with the mechanisms applicable to the making of such an order.
The controversy ventilated in Strahan centred on the phrase “compelling circumstances” used in Harris and whether such a formulation unduly fettered the court’s power to make an interim property order, which was “appropriate” at that stage of proceedings. This being the expression used in the enabling provision contained in section 79(1) of the Act.
In this regard, the Full Court said as follows:
“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.”[10]
[10] Strahan v Strahan (2010) 42 Fam LR 203 at 236 [132]
In reaching this conclusion, the Full Court noted the idiosyncratic nature of litigation, under the Family Law Act, when compared with other civil litigation. In the former, there was often a marked imbalance in the power of the parties concerned and artificialities in how property available to be divided was legally controlled in the period leading up to final hearing.
In this context, the Full Court approved comments of Riethmuller FM in Wenz v Archer[11] as follows:
“It cannot be the case that a party who has an irresistible claim to a substantial share of the property of the parties should be held out of that property while the matter is litigated, left to rely upon applications for exclusive occupation of the matrimonial home or spousal maintenance alone, particularly where the parties are asset rich but have relatively modest incomes (such as the present case). Nor could it be appropriate that a party should be denied the ability to liquidate assets when there are real needs for those resources, such as to meet debts which may result in the party being pursued by creditors, or the need for the party to make payments for the benefit of the children, or to take advantage of other financial opportunities (for example the superannuation contribution cases).”
[11] See Wenz v Archer (2009) 40 FamLR 212 at 223 [53]
In terms of the second or substantive phase, the Full Court in Strahan confirmed the second and third considerations delineated in Harris, namely that the relevant provisions of section 79, including section 75(2) needed to be considered and so far as any adjustment made, at this stage, it needed to be capable of reversal or to be clawed back at a later stage.
Examples of where it may be appropriate to use the power to make an interim property order include where both the parties agree to the disposal of some assets pending trial; urgent situations to avoid injustice being wreaked upon one party if the power was not exercised; and where one party requires funds to assist in the defrayal of legal costs arising from the litigation involved.[12]
[12] See Strahan (ibid) at [133]
The discretion to make an interim property order must be closely considered, bearing in mind the different nature of an interim, as opposed to a final hearing, which nonetheless involves the exercise of the same power. Riethmuller FM expressed the dilemma arising in this way:
“…Because the orders under s.79 are the exercise of such a broad and complex discretion, generally the interests of the parties are better served by there being one final hearing under s.79. If the s.79 proceedings are not completed in one decision various options may not be left open and therefore the Court may not be able to ensure that a ‘just and equitable’ outcome overall is achieved. However, there will be cases where it would not be ‘appropriate’ to deny interim relief, as this would not permit a ‘just and equitable’ result in the interim.”[13]
[13] See Wenz v Archer (ibid) at [54
Considerations of this type led the Full Court in Strahan to say as follows:
“We also emphasise that in order to establish an appropriate case for an interim property settlement order more is required 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. [14]
[14] See Strahan (ibid) at [139]
These comments appear apposite to the present matter, where a considerable component of the parties’ wealth is held in the form of not immediately realisable assets, such as superannuation funds, and where there is likely to be controversy as to how those assets are split vis-à-vis other more readily accessible assets, particularly the cash proceeds from the sale of the Sproperty.
Conclusions
The first matter to be considered is whether it is appropriate for the court to exercise its power to make the interim order sought by the husband. The overarching consideration relevant to the exercise of this discretion being the interests of justice. Or, to put it another way, would a failure to exercise the discretion wreak injustice on the husband because of his present circumstances?
However, given any such order may also effect the wife, I must also think of the potential consequences of such an order from her perspective, particularly in the sense of the capacity of any interim order to limit the range of options available to the court at the final hearing stage.
The injustice arising to the husband is that he asserts he entered into a contractual obligation, in good faith and requires access to a relatively modest component of the parties’ property, in respect of which he made a demonstratively significant contribution, to meet his obligation, otherwise he will be financially penalised and this would be essentially unfair to him.
The husband entered the contract in question in August of 2011, just after the transfer of the proceedings to Adelaide and prior to the matter being fixed for final hearing. He had also recently obtained the wife’s acquiescence to an interim distribution of $100,000 to him and a similar sum to the wife.
Although I am not appraised of all the circumstances surrounding the contract between Mr Benson and the New Zealand company, at first blush it seems imprudent of him to have committed himself so significantly financially, when he did not know the outcome of these proceedings or even when they would be finalised.
The implications of the husband’s wish to reinvent himself as a brewer are likely to be highly controversial at trial. Particularly in the context of the assessment of section 75(2) factors and the husband’s capacity to pay the recurrent level of spousal maintenance currently sought by him from the wife.
The wife’s position is that she has a very limited income earning capacity at present and given her health and responsibilities for X, this situation is not going to change in the short to medium term.
If it is the case that Mr B. has abandoned his well paying managerial position in favour of self-employment, Ms B. is likely to be highly critical and suspicious of such a decision, arising as it does in the context of somewhat acrimonious matrimonial property proceedings.
At this juncture, I know almost nothing about the husband’s brewery business, other than that I am told that its commencement represents the fulfilment of a long held vision on his part. In particular, I do not know what are the implications of this business for his short to medium capacity to derive an income. This issue has potential relevance so far as child support for X is concerned; the wife’s application for recurrent spousal maintenance; and the overall assessment of section 75(2) factors.
Although Ms B. has had access to legal advice in the past, at present she is acting on her own behalf. She is critical of the current rate of child support payable to her, for X, by the husband. She has unsuccessfully sought to review the relevant assessment within the internal appeal channels of the Child Support Agency.
Although not couched strictly in child support terms, the wife seeks orders analogous to child support, when she seeks that Mr Benson contribute one half of X’s private school fees in future.
For all I know, at this stage, it may be Mr B. position at trial that the brewery has a great economic future but will not produce much income in its initial stages. If this be the case, Ms Benson is likely to be concerned at the implications of this so far as child support for X is concerned and her own financial support. Again, how these issues will play out, at the final hearing stage, is unclear to me.
At present, there is no evidence available to me to indicate what is likely to happen in respect of Mr Benson’s contract to buy the (omitted)equipment from New Zealand, other than that he is liable for penalty interest at a rate of nine percent. On my cursory calculations, the penalty interest amounts to around $23.00 per day. It is not asserted on Mr Benson’s behalf that he is currently in danger of having the contract rescinded.
The wife currently seeks orders that would result in her receiving fifty-five percent of the proceeds of the sale of the Sproperty. She also wishes to retain her superannuation entitlements; her share portfolio and her savings.
Fifty-five percent of the proceeds of sale of the Sproperty, together with interest accrued on it, amounts to a sum around $409,000.00. In rough terms, if the wife receives this sum and retains the property currently in her possession, (which I have provisionally and roughly calculated to be worth $304,560.00) this would result in her having received forty-eight percent of the pool of matrimonial assets. I concede however that this pool has necessarily been imprecisely calculated.
In arithmetical terms, this outcome is achievable, from the current pool, whether the interim distribution sought by the husband is made or not. It does not however take into account any possible capitalisation of the spousal maintenance order and application for school fees currently sought by the wife.
It is also an outcome which seems inherently unlikely to be acceptable to the husband, given his assertion that he contributed eighty-five percent of the funds to purchase Sin the first place, and when the duration of the marriage between the parties is considered. The marriage would be considered short when compared to the mean length of marriages in this country.
If it be the case that the husband’s change of circumstances is such that he no longer has a significant level of income, on which to assess child support and this situation is likely to persist for an extended period of time, these are likely factors which will intensify the wife’s claim for a greater weighting to be made, in her favour, so far as the division of matrimonial property is concerned.
As matters currently stand, the parties’ superannuation assets represent about twenty-five percent of the pool of assets. The wife does not seek any split to be made in her favour regarding the husband’s superannuation, which is vastly superior to her own holdings of superannuation.
The wife’s most pressing financial need is not one which relates to financial security in retirement, rather she wishes to have sufficient liquid assets to enable her to purchase some form of accommodation for herself and X.
What is the likely cost of this accommodation and how its purchase is proposed to be financed are matters which are unclear to me at the present time. However, as previously indicated, it is likely to be the wife’s preference to receive the bulk of her entitlements, arising from these proceedings, in the form of cash rather than superannuation.
At this stage, the husband’s application for property settlement orders is not well particularised. He has not delineated in specific terms the percentage basis on which the parties’ global assets should be divided. It does however appear to be the case that it is his position that the direct financial contributions made by him towards the acquisition of the Sproperty significantly outweigh those of the wife. Ultimately, for all I know, it may be his position that the court should adopt an asset by asset approach to the assessment of the parties’ various contributions.
Although the asset pool available to be divided between the parties is a substantial sum, approaching $1.5 million, and whilst noting that this pool is not encumbered by debt, the issues which may confront the court at final hearing are not without their inherent level of difficulty.
This is because, on the one hand, in the context of a relatively short marriage, it is likely to be argued that there were disproportionate initial injections of capital made into the marriage, whilst on the other hand, the wife will argue that her idiosyncratic personal circumstances are such that she is entitled to a significant weighting, in her favour, by virtue of section 75(2) factors. At this stage, how these factors will ultimately play out, is unclear to me.
The discretion to make an interim property order is one which is to be conservatively exercised. Issues which are inchoate, at this stage, may become more apparent to me at the final hearing stage and may considerably change the topography of the dispute between the parties, at this later stage. To use the terminology of the former US Secretary of Defence, Mr Rumsfeld, these are the “known unknowns”.
In addition and more significantly, as the final hearing unfolds, “unknown unknowns” may arise which will even more significantly change the issues in dispute the parties and how their property is to be distributed between them.
By way of example, it is not clear to me what are the implications of Mr Benson’s desire to become a self-employed (omitted). Will this mean that both he and the wife will have limited incomes for the foreseeable future?
At this stage, there is no evidence available to me to indicate that Mr Benson is being actively pursued by his creditors. The final hearing is around three months away. In these circumstances, I am not persuaded that such circumstances exist which render it appropriate to exercise the discretion to make an interim property order. Particularly given that the section 79 exercise is a “once and for all order” most usually made after a final hearing.
In addition, given the imprecision in my quantification of the pool of assets available to be distributed between the parties and given the wife’s preference to receive a significant component of her entitlements in cash, I am concerned at the potential for an interim property order to preclude any claw-back of funds in the event that circumstances overtake the wife’s application, as it is presently framed.
In my view, the essence of the power to make an interim property order is that it is to be exercised conservatively, bearing in mind the preference that there be only one hearing regarding the exercise of the section 79 power, which necessarily involves the exercise of a complex discretion. For the reasons outlined above, I have formed the provisional view that this matter has the potential to throw up diffuse and divergent claims under the section.
Although the circumstances arising before the exercise of the power need not be compelling, there must be still some appropriate justification before such an order is made. I am not persuaded that the overall interests of justice, at this stage, demand that there be the interim property order made, which is sought by the husband, particularly bearing in mind that the final hearing of the matter is only a few weeks away.
For those reasons, I propose to dismiss the husband’s interim application for property settlement. I will confirm the final hearing scheduled for July and will make the necessary procedural orders in respect of the filing of affidavit material.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding ninety-nine (99) paragraphs are a true copy of the reasons for judgment of Brown FM
Date: 20 April 2012
and Clauson v Clauson (1995) FLC 92-595; Hickey v Hickey & Attorney General of the Commonwealth of Australia (Intervenor) 2003 FLC 93-143
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