Border and Border

[2008] FamCA 78

FAMILY COURT OF AUSTRALIA

BORDER & BORDER [2008] FamCA 78

FAMILY LAW – CHILD SUPPORT - Application for departure
FAMILY LAW – SPOUSAL MAINTENANCE -  Wife's capacity to support herself - Wife's medical condition - Wife's needs
FAMILY LAW – COSTS -  - Interim costs

Family Law Act 1975 (Cth) s 72, s 75(2)

Child Support (Assessment) Act 1989 (Cth) Division 4 Part 7, s 117(2), s 117(2)(c), s 117(4), s 117(5), s 117(7)

In the Marriage of Gyselman [1991] 15 Fam LR 219; [1992] FLC 92-279

APPLICANT: Mrs Border

RESPONDENT: Mr Border

FILE NUMBER: SYF 3823 of 2005

DATE DELIVERED: 14 February 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston JR

HEARING DATE: 16 & 17 October 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Schonell

SOLICITOR FOR THE APPLICANT: Ross Selvaggio & Associates, Solicitors

COUNSEL FOR THE RESPONDENT: Mr Maiden, SC with Ms Judge

SOLICITOR FOR THE RESPONDENT: Goldrick Farrell Mullan, Solicitors

Orders

1. That pending further order or determination of the substantive proceedings between the parties, whichever first occurs, the husband pay or cause to be paid to the wife spousal maintenance in the sum of $1600 per week commencing on 11 October 2007 and payable monthly in advance.

2. That there be a departure from the administrative assessment of child support dated 11 September 2007 in relation to the child … born … November 1993 so that for the child support period from 11 September 2007 until 30 June 2009 the father shall cause to be paid child support at the monthly rate of $2 383 as well as the following expenditure that he has been paying for the child:-

   -hospital and health insurance at the highest cover

   -all school tuition fees and expenses

   -part mobile telephone and home telephone

   -part petrol

   -part extra tuition fees

   -part gas, electricity and water and

   -1 stationery pack.

3. That a sealed copy of these orders be served on the child support registrar as soon as possible.

4. That within 42 days the husband pay to I Finance all monies owing thereto by the wife and the wife do all things necessary to bring to an end her contract with this financier.

5. That not later than 30 days after service on the husband’s solicitors of each Taxation Invoice / Memorandum of Fees by the wife’s solicitors in respect of the wife’s legal costs ongoing as from 14 February 2008, the husband pay or cause to be paid to the wife’s solicitors the sum claimed in each such Invoice / Memorandum.

6. That for the purposes of the above order the wife shall authorise and direct her solicitors to forward direct to the husband’s solicitors for payment by the husband, Taxation Invoices / Memoranda of Fees on a monthly basis for legal work performed on the wife’s behalf in these proceedings each month, such invoices to issue no later than the twenty-eighth day of each month until determination of the substantive proceedings between the parties.

7. That the trial judge determine the character of all payments made by the husband pursuant to orders 4 and 5 above.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of Judicial Registrar W P Johnston delivered this day will for all publication and reporting purposes be referred to as BORDER & BORDER.

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 3823 of 2005

Mrs Border

Applicant

And

Mr Border

Respondent

REASONS FOR JUDGMENT

Applications

1. The parties in these proceedings are Mrs Border and Mr Border. For convenience I shall refer to them as “the wife” and “the husband” respectively.  The wife seeks orders to the following effect:

   ·That pending further order or determination of the substantive property proceedings the husband pay to the wife spousal maintenance in the sum of $6120.50 per week to be paid monthly in advance;

   ·That by way of departure from the administrative assessment of child support dated 11 September 2007 the husband pay to the wife child support for the child […] born […] November 1993 in the sum of $10 335 per month for the child support period from 11 September 2007 to 31 December 2009;

   ·That within 28 days the husband pay to the wife a total of $721 827.39, the major part of which would be to fund her legal costs including anticipated legal costs;

   ·Or in the alternative, that the wife submit to the husband for payment by him invoices for her ongoing legal costs and disbursements in these proceedings; and

   ·That the characterisation of all payments made by the husband by way of preliminary costs be determined by the trial judge at the hearing of the substantive property proceedings.

2. On the other hand, the husband seeks orders to the effect that the wife’s application be dismissed and that she pay his costs on an indemnity basis. 

3. The practical consequence of orders sought by the husband would be that there would be no change to the current orders which have made some provision for the maintenance of the wife in that the husband would pay some costs in relation to the wife’s motor vehicle, certain costs in relation to the home and gardening and the wife would have exclusive occupancy of the former matrimonial home and, so far as the child is concerned, the husband would continue to pay a total of $513 per week in respect of the child’s support comprising $46 per week child support and the balance being medical insurance, school fees, telephone costs, stationery, part of utilities and some petrol.

Background

1. The husband was born in January 1950 and he is therefore 58 years of age.  The wife was born in January 1967 and she is therefore 41 years of age.  The parties married in May 1993 and they separated on 25 July 2005.  There is one child of the marriage, a daughter born in November 1993. The child is therefore 14 years of age. 

2. Shortly after separation the wife withdrew a total of $500 000 from the parties’ joint Westpac Rocket Account.  The wife proposed to use these funds for future legal costs and living expenses for herself and the child.  Proceedings between the parties concerning these funds were resolved as part of a package of consent orders which were made on 15 September 2005.  Under these orders the wife was to pay back to the parties’ joint account the sum of $400 000.  She was able to retain $100 000.  The orders also provided for the parties to facilitate an advance of $1.2 million to the husband by Westpac Banking Corporation secured against the former matrimonial home for the purpose of the parties procuring in equal shares fully paid ordinary shares in the corporation G Limited.  There were restraints imposed on each of the parties in respect of dealing with the shares.  Under the orders, pending further order the wife was to have the sole use and occupancy of the former matrimonial home.  The orders also noted that the parties agreed, on a without admissions basis, that the husband would:

   ·Maintain private medical insurance for the wife and the child;

   ·Pay to the wife’s nominated bank account $8500 per calendar month;

   ·Pay in respect of the former matrimonial home all costs, expenses, rates and taxes for the home, lawn mowing costs, gardening and pool maintenance expenses, electricity, telephone / fax / mobile phone expenses, reasonable repairs and window cleaning expenses; and

   ·Pay the child’s school fees.

3. The orders included provision that the husband pay the costs and repairs required to the wife’s motor vehicle plus registration, running expenses, petrol and lease payments.  The orders also included provision for the husband to pay holiday costs of the wife and child including in respect of an overseas holiday.

4. I understand that the shares in G Ltd were not purchased.  Instead, the husband wanted to use a substantial part of the borrowed funds of $1.2M to re-locate his business.  By consent orders dated 15 November 2005 the earlier requirement that the $1.2M be used to purchase shares in G Ltd was discharged.  Instead, the husband used much of the funds for the re-location.  So he loaned $1 195 200 of the funds to his company, C Pty Ltd, the $4800 balance being paid in stamp duty.  C Pty Ltd used the funds for the re-location and it has repaid part of the loan leaving a balance owing of $700 000.

5. I also understand that the husband made the monthly $8500 maintenance payments under the notations in the orders of 15 September 2005 to the wife and then there were difficulties.  In any event, the issues concerning support of the wife and child continued to be litigated in the Court and on 13 April 2006 further consent orders were made.  These orders permitted the wife to sell shares in G Ltd sufficient to realise payment to her of not more than $15 000 per calendar month.  The orders also provided for the husband to pay private health insurance for the wife and child and a number of expenses in respect of the former matrimonial home.  These included all costs, expenses, rates and taxes for the home, the cost of a full time gardener whose duties include lawn mowing and pool maintenance, electricity and gas, telephone, fax and mobile phone expenses for the wife and telephone expenses for the child up to $50 per month, reasonable repairs and window and carpet cleaning expenses. 

6. In the meantime, the wife made an application for assessment of child support.  On 6 April 2006 the husband was assessed to pay child support in the monthly amount of $258.25 for the child support period from 4 April 2006 to 3 July 2007.  This was on the basis of the child support income amount of $31 200.  On 14 August 2006 the Child Support Registrar varied this assessment to $1362.08 per month using a child support income amount of $104 790 for the child support period from 1 July 2006 to 3 July 2007. 

7. On 8 November 2006 the Child Support Registrar changed the assessment to $258.25 per month for the period from 4 April 2006 to 3 July 2007. The wife lodged a Review. The Child Support Registrar reviewed the assessment, the husband lodged an objection and ultimately the Child Support Registrar informed the parties that because of legal and factual complexity the Registrar recommended application be made to a court under Division 4 of Part 7 of the Child Support (Assessment) Act 1989.  The effect of all this is that the husband is currently assessed to pay $272 per month child support. 

Interim Spousal maintenance

Wife’s capacity to support herself adequately

1. The first issue which needs to be addressed is the assertion by the husband that he ought not be the subject of an order to pay the wife spousal maintenance.  It is submitted that firstly, the wife has had the use of a considerable amount of money and should have been able to support herself on that and, secondly, to the extent that she is unable to do that, the wife ought to be able to obtain employment and income at a level sufficient for her own support. 

2. Sub-section 72(1) of the Family Law Act 1975 (“the Act”) provides in effect that a party to a marriage is liable to maintain the other party, to the extent the first-mentioned party is reasonably able to do so if, and only if, that other party is unable to support herself or himself adequately for at least one of the specified reasons having regard to any relevant matter referred to in s 75(2) of the Act. The specified reasons include by reason of having the care and control of a child of the marriage who has not attained the age of 18 years and by reason of age or physical or mental incapacity for appropriate gainful employment.

3. It is submitted on behalf of the wife that the last time the wife was employed in the paid workforce, other than by way of undertaking some responsibilities for an entity associated one way or the other with the husband, was in a position in administration in 1993 prior to the birth of the parties’ child.  In any event, it is submitted on behalf of the wife that the wife suffers from numerous and serious medical conditions and is not of sufficiently robust health to be able to undertake the requirements of regular paid work. 

4. The wife has filed a number of affidavits by medical practitioners setting out her medical condition. Dr D, Consultant Gastroenterologist and Hepatologist, has been assisting the wife since February 2006.  In July 2007 Dr D described recent history of the wife’s medical condition as follows:

   … she underwent a subtotal colectomy with ileo-rectal anastomosis for constipation at the age of 21 years (ie removal of nearly all of her colon with the distal small bowel being joined to a rectal remnant).  Following this she underwent bilateral oophorectomy and a hysterectomy for ovulation-related pain.  Since her bowel surgery, she has been stooling on average 8 to 15 times a day passing small-volumed loose stools.  On occasions she may stool up to 30 times.  She has been reliant on Imodium and Lomotil to control her diarrhoea.  On rare occasions she has noted blood to be mixed in her stood with no mucus.  She often has upper abdominal discomfort which she has noted half an hour after meals and over the past two years she has also noted significant heartburn.  Of late she has also vomited a small amount of altered blood.  … 

   On examination on the day she looked well and weighed 53 kilograms.  Abdominal examination was unremarkable apart from revealing operative scars.  She had mild mitral valve regurgitation with a mid systolic click in keeping with mitral valve prolapse.  …

   … Unfortunately her resective gut surgery and the presence of an ileo-rectal anastomosis has resulted in troublesome diarrhoea.  …  Overall her prognosis is good but her troublesome diarrhoea with frequent visits to the toilet is likely to have a significant impact on her capacity for appropriate gainful employment.  Furthermore, during profuse bouts of diarrhoea she is prone to dehydration and hypotension.  She also has frequent bouts of migraine and ongoing nausea and episodes of vomiting.  …  she has made a number of hospital visits to date for intravenous rehydration.  She is now on Efexor for depression.

5. Dr J, Consultant Gynaecologist has been seeing the wife since November 2005.  Dr J’s report includes the following:

   [The wife] has several intersecting chronic major medical problems which have so far made treatment of (vulvo-anal psoriasis and chronic vaginal candidiasis) very difficult.  She had a total colectomy in 1989 for pseudo-membranous colitis.  This has left her with chronic diarrhoea, which she has only partly controlled with medication.  There is a history of a complex urinary disorder, which produces urinary incontinence, again only partly controlled on medication.  At the age of 28 years, [the wife] had a total abdominal hysterectomy with the removal of both ovaries and tubes for a benign problem.  She requires hormone replacement therapy to maintain adequate hormone levels.  Lastly, [the wife] has a chronic depressive illness.  …

   I do not anticipate that [the wife] will be able to cease her oral candidiasis medication in the foreseeable future. This is because of the impact of her diarrhoea and urinary incontinence. The candidiasis and genital psoriasis are not life threatening, but they make any form of physical activity more difficult because of vulva soreness. This then impacts on [the wife’s] ability to efficiently perform activities of daily living.  Naturally, any chronic medical condition tends to make it more difficult for the patient to cope with another chronic physical ailment. 

6. Dr C, Consultant Physician has been consulted by the wife on a number of occasions since March 2006.  An objection was taken to Dr C’s affidavit on the basis that he was overseas and would not be available for cross-examination.  In these circumstances I do not propose to refer further to Dr C’s report. 

7. The wife was hospitalised on 31 July 2007 apparently suffering from serious dehydration and high blood pressure.  She was admitted into the intensive care unit.  She was discharged on 9 August 2007 and was cared for by her mother for several days.  On 12 August 2007 the wife was taken by ambulance to hospital apparently still suffering from high blood pressure.

8. The husband said that much of the wife’s more recent medical difficulties have been self-induced.  He said that the wife has learned to use medications in such a way as to cause her blood pressure to become lowered.  He said that she does this and then becomes admitted to hospital.

9. It is the case that there has been no opportunity to test the various doctors by cross-examination. These are interim proceedings however, and on any objective reading of the above material the wife has been suffering from a number of serious health problems. If she has defied medical direction in relation to taking medication with an intention of bringing about symptoms perceived by her to somehow favour some outcome she wished to achieve, including hospitalisation, one would have thought this to be indicative of an illness. In any event, on the basis of the medical material and the fact that the wife has not worked in regular paid employment for a long time, in my view she has been able to establish the threshold matter in s 72 of the Act at least at this point in time. In my view it would be unreasonable to regard the wife as having any capacity for paid employment at this stage.

The wife’s needs

1. The wife set out what she regards as her reasonable weekly personal needs in an itemised list at Part N to her financial statement sworn or affirmed on 14 September 2007.  The items came to a total of $6120.50 per week.  This is an annual amount of $318,266.

2. In 30 years involvement with the practice of family law I cannot recall a more excessive claim.

3. I accept that during the course of the parties’ marriage they enjoyed a very high standard of living, certainly considerably higher than one sees in the circumstances of most people in the community.  Their standard of living included having a live-in housekeeper, a full-time gardener, some use of a hire care service, designer clothes, regular attendance by the wife at a beautician and health spa, holidays interstate and overseas, regular dining in restaurants, regular attendance on the wife by a personal trainer and tennis lessons.

4. I do not consider it necessary to refer individually to the wife’s specified needs and estimated costs.  Suffice it to say that, except for a few modest estimates, I regard most of the wife’s estimates as being excessive.

5. Amongst the most contentious areas are the wife’s assertion that she has need of a full-time gardener and that she needs to have a live-in housekeeper restored.  It is submitted that because the parties enjoyed such services during their marriage then it is only reasonable that the wife be provided with them now. 

6. I must say that I am unpersuaded to such a requirement. The effect of the relevant provisions of the Act is to endeavour to achieve for parties in this situation a reasonable standard of living in all the relevant circumstances. One of the relevant circumstances is the fact that the parties were living together and they are now separated. I am not persuaded that there is the same requirement for the level of service previously provided by the housekeeper now that the household numbers are reduced and the husband is not living with the wife and the child.

7. The husband has been providing gardening services for the former matrimonial home and he should be required to continue to maintain the garden, the swimming pool and outdoors areas of that property in reasonable condition.  The wife has been unhappy about the level of service provided.  If the husband was to fail in future to provide such services this would become an enforcement issue.

8. The husband will be required by order to pay for the following in relation to the former matrimonial home:

   -home and contents insurance;

   -lawnmowing, gardening and reasonable maintenance of the property including swimming pool and air conditioning;

   -maintenance of the home security system;

   -council rates;

   -leasing, insurance and running costs for the wife’s motor vehicle (registration and compulsory third party insurance are the responsibility of the wife);

   -hospital and health insurance maintained at maximum cover for the wife and the child.

1. Bearing in mind payment by the husband of the above expenses, in my view the weekly amount which should be paid by the husband to enable the wife to enjoy a standard of living that in all the circumstances is reasonable is the sum of $1600.  Obviously this is a considerable way short of what the wife sought in her application.  But as indicated above, in my view, the wife’s estimates of her weekly requirements are excessive.

Is the husband reasonably able to maintain the wife?

1. The husband is a successful inventor. His financial affairs are somewhat complex.

2. The husband operates through his company C Pty Ltd. I shall refer to C Pty Ltd further below.

3. Over the years the husband has developed numerous patents through his business. Various products invented and developed by the husband were assigned by him to his company G Ltd including the intellectual property therein.  G Ltd was floated as a public company in September 2005.  All the products are in the process of development.

4. The husband is a director and the Chief Executive Officer of G Ltd.  The husband owns 69.36% of the shares in G Ltd.  It is said by those representing the wife that at the time of the hearing the value of the husband’s shareholding was approximately $19M.  I presume that with the downward trend of the Australian Share Market the value of the husband’s shares in G Ltd has fallen.  For the purposes of these proceedings, I accept that the husband’s shareholding in G Ltd has a very substantial value.

5. The husband says that whatever the shares might be valued at, this is somewhat theoretical in the sense that if he was to dispose of any significant shareholding in G Ltd this would profoundly depress the market for the shares.  This is said to be because such a disposal would be viewed by the market as a loss of confidence by the husband in G Ltd.

6. The husband also said that he has been advised that he is unable to sell the shares because of what he described as a “blackout period” imposed by the Australian Stock Exchange.

7. In his financial statement the husband said that his total average weekly income is $638.  He said that this consists of before-tax salary of $400, interest of $64 and a royalty paid by the company T Pty Limited of $188.  This is actually a total of $652.

8. The husband estimated his total personal expenditure as being $2341 per week.

9. The husband said that his property consists of his interest in the former matrimonial home, his estimate of value for his one-half interest being $1 200 000, his one-half interest in a home unit at R which he estimates as having a value of $180 000, bank accounts with a total of $47 686.46 and household contents worth $26 000.

10. The husband referred to his shares in G Ltd as being a financial resource and he referred to the current value of such shares and his interest in C Pty Ltd as “Not Known”.

11. The husband estimated his interest in his Superannuation Fund to have a gross value of $1 550 000.

12. The husband said that his liabilities consisted of $700 000.

13. In relation to the value of the husband’s interest in C Pty Ltd, I understand that this remains very much in issue between the husband and the wife.  I note that a single expert was appointed in the substantive proceedings, a Mr W of W and Associates Limited, to prepare a valuation report of such interest.  Mr W has prepared such a report placing a value of $524 000 on the husband’s interest in C Pty Ltd as at 30 June 2006.  If distributed to the husband this would be subject to personal tax in his hands.  Mr W said he arrived at this valuation after allowance for a $1 600 000 loan payable by C Pty Ltd to the husband.  As I have said, apparently this valuation remains in contention.

14. The wife submits that C Pty Ltd is really the husband’s alter ego and he does with it whatever he wishes including using its income as though it was his own.  The husband denies this.  He infers that the difference between his modest income and his average weekly expenditure is paid for by payments of $2600 per week which he receives from C Pty Ltd as repayments of a loan he made to the company some years ago as part of an assignment to C Pty Ltd of some intellectual property.

15. The husband also said that his accommodation is paid for by an associate.

16. Annexed to the husband’s affidavit is a copy of his income tax returns for the financial years ending 30 June 2006 and 30 June 2007 as well as for C Pty Ltd for 2006.  The husband’s said tax returns record his taxable income for 2006 as having been $15 249 and for 2007 as having been $27 876.

17. The 2006 income tax return for C Pty Ltd shows a loss for that financial year of $234 858.  Total income that year was $5 363 954.  A significant part of the overall operation of C Pty Ltd is research and development.  It is obvious from my brief involvement in these proceedings that numerous technologies have been developed by the husband, or under his direction, over many years.  Mr W has indicated that these research activities of C Pty Ltd attract a tax deduction of $125 for every $100 spent on research.  This is set off against assessable income and has resulted in the company having carried forward tax losses of some $613 000 as at 30 June 2006.  But the cost of these activities on an annual operational basis is significant.  In the 2006 financial year expenses of C Pty Ltd for research and development were $661 000.  They were $1 549 000 and $852 000 for the 2004 and 2005 financial years respectively.

18. I think there is much to support the assertions of the wife about the real nature and true value of C Pty Ltd to the husband.  He has complete direction of its enterprise and accounting subject of course to the requirements of the law.

19. I find myself unable to accept the husband’s assertions that he is not able to afford to pay any more money to the wife or their child.  The husband might well have to re-arrange part of the operations of C Pty Ltd, or re-arrange funding.  But in my view, he has the capacity to pay in accordance with any proper financial order of the Court with respect to the matters currently before me.

Child Support Departure

1. As indicated above the wife is seeking an order to the effect that by way of departure from the administrative assessment of child support dated 11 September 2007 the husband pay to the wife child support for the child at the rate of $10 335 per month for the child support period from 11 September 2007 to 31 December 2009.  As also indicated above, the husband is currently assessed to pay child support at the rate of $272 per month.

2. As also indicated above the husband has been causing the payment of a total of $513 per week towards the support of the child.  This comprises $50 home telephone and $25 towards petrol costs paid by C Pty Ltd.  It also includes the following expenditure paid by the husband:

$
-          medical insurance	19
-          school tuition fees	254
-          part mobile telephone	12
-          part extra tuition fees	30
-          one stationery pack	3
-          part of gas	14
-          part of electricity	50
-          part of water	10
392

1. The relevant law is set out at Part 7 Division 4 of the Child Support (Assessment) Act 1989 (“the Assessment Act”). The Court is required to take the three-step process set out in the decision of the Full Court of this Court in the case of In the Marriage of Gyselman [1991] 15 Fam LR 219, [1992] FLC 92-279. This process requires the Court to consider:

   (1)Whether one or more of the grounds for departure in s 117(2) of the Assessment Act is established.

   If so:

   (2)Whether it is “just and equitable” within the meaning of s 117(4) to make a particular order

   (3)Whether it is “otherwise proper” within the meaning of s 117(5) to make a particular order.

2. In relation to the first step in this process, in my view the ground for departure provided by s 117(2)(c) of the Assessment Act is available. This provides in effect that a ground for departure from child support administrative assessment is that, in the special circumstances of the case, application in relation to the child of the provisions of the Assessment Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the income, property and financial resources of that parent. In assessing the current level of child support, the child support registrar has used the husband’s taxable income. But as indicated above this is not reflective of the means available to the husband to meet his needs and those of the child. Accordingly, in my view, application of the administrative assessment provisions of the Assessment Act have resulted in the father’s child support liability being $272 per month which is unjust, bearing in mind that the husband’s taxable income provides no real indication of his financial substance.

3. In my view, therefore, the first step is established.

4. The Court must then consider the matters set out in s 117(4) of the Assessment Act.

5. The first matter is the nature of the duty of a parent to maintain a child as set out in s 3 of the Assessment Act. This provides in effect that the parents of a child have the primary duty to maintain the child and that this has priority over all commitments of the parent other than commitments of the parent necessary to enable the parent to support himself or herself.

6. The next matter to consider is the proper needs of the child. 

7. In this regard the wife set out what she regards as the child’s proper needs in an itemised list at Part N to her financial statement referred to above.  The items came to a total of $2385 per week.

8. As was the case in relation to the wife’s estimates of her own needs, with a few exceptions, I regard the wife’s estimates of most items of expenditure to be beyond what is reasonable, even in the circumstances of this family which, as I have said, has enjoyed a high standard of living.

9. I do not propose to set out an item by item list of what I regard as being appropriate.  I have taken into account the expenditure in relation to the child by C Pty Ltd and the husband.  The husband will be required to ensure that this support is continued.  In my view, the proper costs of the child are an additional $550 per week.  This is a monthly amount of say $2383.

10. The child does not have income, property or financial resources from which her needs could be met.  So it is her parents who will have to provide for her needs.  Yet the wife does not have the means to support the child, at least not until the parties’ property dispute is resolved from which time things might be different in this regard.  Accordingly, the child’s needs will have to be met at this stage from the resources of the husband.

11. I have referred above to the husband’s capacity and to the fact that in my view, he has the capacity to pay any proper order of the Court.

12. The remaining matter for consideration is whether it is “otherwise proper” within the meaning of s 117(5) to make the order.  This requires consideration of the effect the making of an order would have on any entitlement to an income tested pension, allowance or benefit.

13. The only relevant benefit is the Family Tax Benefit of $128 per week. This is to be disregarded under s 117(7) of the Act. The order might reduce the entitlement.

14. In any event, I am satisfied that the orders I propose are “otherwise proper”.

15. As also indicated above, the wife sought the departure order for the period from 11 September 2007 until 31 December 2009.  One could anticipate a hearing of the substantive proceedings this year.  Upon the making of orders in the substantive proceedings, the parties’ respective financial circumstances should change significantly.  This could be expected to affect the child support situation.  Accordingly, I propose to order that the child support be paid in respect of a child support period which will conclude prior to 31 December 2009, namely 30 June 2009.

Costs

1. The wife seeks the following orders in relation to costs:

   1.That within twenty-eight (28) days of the date hereof the husband pay to the wife the sum of $721 827.39 made up as follows:-

   (a)$167 277.39 to discharge the loan from I Finance; and

   (b)$107 000.00 to discharge the loan from the wife’s; and

   (c)$45 200.00 for further fees in relation to the wife’s Application in a Case; and

   (d)$405 350.00 (inclusive of GST) on account of the wife’s ongoing legal costs and disbursements for the preparation of and representation at the final hearing.

   2.In the alternative to orders (c) and (d) above and within twenty-eight (28) days of issue of each Taxation Invoice / Memorandum of Fees by the wife’s solicitors in respect of the wife’s ongoing legal costs and disbursements of these proceedings, the husband pay to the wife the sum claimed in each such invoice.

   3.That for the purposes of the above orders the wife shall authorise and direct her solicitors to forward direct to the husband for payment Taxation Invoices / Memorandum of Fees on a monthly basis for work performed on the wife’s behalf each month and with such invoices to issue by no later than the twenty-eighth day of each month until final determination of the property proceedings between the parties.

   4.That the determination of the characterisation of all payments made by the husband for or on behalf of the wife … be determined at the final hearing of the property proceedings between the parties.

2. The wife’s legal costs have been very substantial, even to this point.  I am not certain of the exact amount of legal costs incurred by her.  The wife had solicitors previous to her current solicitors and she has paid them.  The wife’s present solicitor Ms Daniela Poletti has received payments totalling approximately $250 000 from the wife. Since February 2007, the wife borrowed in excess of $78 000 from her father to pay some living expenses and legal costs.  In addition to other amounts for legal costs the wife paid to her solicitors $65 804.85 for the period from 30 August 2005 to 1 March 2006, $70 302.80 for the period from 27 April 2006 to 23 November 2006, and $97 009.38 for the period from 29 November 2006 to July 2007.  These amounts total $233 117.03.  The wife still owes her solicitors in excess of $24 000.

3. In addition, there are outstanding costs in relation to these interim proceedings.

4. To assist with funding her legal costs, the wife arranged a facility for up to $350 000 from I Finance.  At hearing the outstanding amount owed by her to this financial institution was $164 277.39.

5. It is submitted on behalf of the husband that the Court should not require him to make any more funds available to the wife for her legal costs.  The husband said that the wife has already been provided with several hundred thousand dollars to fund her case.  He is particularly critical of the wife’s former solicitors. 

6. The wife’s solicitor Ms Poletti estimates the likely future costs and disbursements to prepare the wife’s substantive application for hearing including presentation as $405 350.  Ms Poletti estimates solicitors’ costs alone as $184 000.  Ms Poletti says that she will require payment by the wife as the work is done because her legal firm does not have the capacity to be able to continue to undertake work for the wife without payment.  She said that if she is not paid as invoices are presented for payment then she will not continue to act for the wife.

7. I must say I have considerable difficulty with the proposition that in addition to the considerable funds made available to the wife to assist her in the preparation of her case, this Court should require the husband to pay a further amount in excess of $720 000.  On the other hand, the assets of these parties are substantial and it is in their interests for the litigation to be resolved as soon as possible.  All the wife is really seeking is a means by which she can fund preparation of her case.  She is, in effect, seeking an advance of her property for this purpose.

8. Having said this, it is far from clear that anything like $405 350 additional funds will be required.  There might never be a substantive hearing.  The proceedings might resolve by agreement.  In my view, therefore, it would be inappropriate to order such an amount.  In any event, the husband says that he does not have a source from which a capital sum, in any significant amount, could be paid.

9. Despite the husband’s assertions in this regard, I have decided that it is appropriate to make an order that the husband pay the outstanding amount to I Finance.  In my view, it would be most unfair for the wife to have to continue to endeavour to service this loan.

10. But I have a different view about the $107 000 which the wife says is owing to her parents.  Part of the outstanding amount is said to be for living costs.  In any event, bearing in mind the fact that I propose to order that the spousal maintenance and child support orders commence retrospectively, there will be some funds available to the wife which she could use towards reducing this alleged outstanding amount.

11. I do not propose to order payment of any further lump sum, at least not in the absence of it being clear that G Ltd shares can be sold without serious negative effect.  The husband will have to rearrange his financial affairs to arrange for the capital sum required to pay I Finance.  Perhaps some shares will have to be sold or funds raised against the shares.  But I do not propose to extend such an exercise to producing funds for a further lump sum as an advance for the wife’s future legal costs.

12. Having said this, in my view the wife should be assisted with her future legal costs.  She does not have the resources to pay such cost.  So the husband will be required to pay these as they are incurred.  After all, he has been able to fund payment of his legal costs, the major part of which have been paid by C Pty Ltd.

I certify that the preceding seventy-six (76) paragraphs are a true copy of the Reasons for Judgment of Judicial Registrar W P Johnston.

Associate:     ________________________

Date:  14 February 2008