CANTWELL & CANTWELL

[2015] FamCA 731

FAMILY COURT OF AUSTRALIA

CANTWELL & CANTWELL [2015] FamCA 731

FAMILY LAW – PROPERTY – interim distribution – where there is an extensive schedule of interests – where the wife seeks access to certain specified financial statements and documents in respect of the businesses – where the wife initially sought spousal maintenance – where the wife no longer seeks spousal maintenance but instead a lump sum payment of $100,000 for litigation funding or alternatively interim settlement of property – where the wife alleges property development costs that impede her ability to fund litigation – where the husband has an interests in an overseas enterprise – where the wife claims the overseas enterprise is in breach of the order of injunction – where consideration is given to the bases of power to make an interim or partial property settlement order to fund costs of litigation – where consideration is given to the criteria relevant to making an “interim” or “partial” order – where consideration is given to the inability of the husband to raise the capital sum being sought by the wife – where the commencement of trial is in a few months – where the court is not satisfied that the wife does not have available to her sufficient funds to enable her to be appropriately represented – where it is ordered that the husband provide copies of financial statements and documents in respect of the businesses – where the wife’s application for a lump sum payment is dismissed.

Family Law Act 1975 (Cth) s 74, 79, 80(1)(h), 114, 117(2).

Bing & Bing (2007) FLC 93-318
Gabel & Yardley (2008) FLC 93-386
Harris & Harris (1993) FLC 92-379
Strahan & Strahan (2011) FLC 93-460
Zschokke & Zschokke (1996) FLC 92-693

APPLICANT: Ms Cantwell

RESPONDENT: Mr Cantwell

FILE NUMBER: ADC 1215 of 2014

DATE DELIVERED: 8 September 2015

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 6 August 2015 and 20 August 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Jordan

SOLICITOR FOR THE APPLICANT: Beachside Legal

COUNSEL FOR THE RESPONDENT: Mr Richards

SOLICITOR FOR THE RESPONDENT: David Burrell & Co

Orders

1. That the husband do provide to the wife by email each Saturday copies of the internal weekly reports provided to all of Suburb B S Pty Ltd and Suburb C S Pty Ltd together with back copies of the same from 1 July 2014.

2. That the husband do within seven (7) days produce to the wife via her solicitors his full “Customer History Report” evidencing all his transactions with Suburb B S Pty Ltd and Suburb C S Pty Ltd as a buyer or seller since 1 October 2013.

3. That the wife’s Application in a Case filed 30 July 2015 be dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym  Cantwell & Cantwell has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT

FILE NUMBER: ADC 1215  of 2014

Ms Cantwell

Applicant

And

Mr Cantwell

Respondent

REASONS FOR JUDGMENT

INTRODUCTION 

1. By Amended Initiating Application filed 20 June 2014, Ms Cantwell (“the wife”) seeks substantive orders by way of settlement of property.  Mr Cantwell (“the husband”) filed a Response to the final orders sought on 22 May 2014.

2. The orders sought by each of the parties is potentially relevant to the current interim dispute.

3. The wife seeks orders that would effect a division of property between the parties as to 55 per cent to her and 45 per cent to the husband.  The husband considers that the net assets of the marriage should be divided equally between the parties.

4. The principal issue is not necessarily the adjustment as between the parties noting that at this stage of the proceedings they are five per cent apart but rather, the interest in property that each of the parties would wish to retain as part of their settlement.

5. For her part, the wife seeks to have as her sole property the following:

   ·The interests of the parties and/or their entities in the business styled as Suburb C S Pty Ltd (“the Suburb C store”).

   ·The estate and interest in the property situate at O Street, Suburb C.

   ·The title and interest of the parties in the property situate at D Street, E Town.

6. The wife proposes that she have no claim or interest in the business styled Suburb B S Pty Ltd (“the Suburb B store”).

7. The husband seeks to retain the following:

   (a)The parties interest in the Suburb B store;

   (b)The parties interest in the Suburb C store;

   (c)The parties interest in Suburb B property syndicate;

   (d)The parties interest in Suburb C property syndicate;

   (e)The parties Comsec Shares owned by Cantwell Investments Pty Ltd;

   (f)The property situate at F Street, Suburb G owned by Cantwell Investments Pty Ltd;

   (g)The property situate at D Street, E Town owned by H Pty Ltd.

8. Subject to the parties superannuation entitlements held in the Cantwell Superannuation Fund being divided equally between them, there would be such other settlement sum paid to the wife to cause an adjustment across the entirety of the property interests of the parties to equality.

9. It can be readily discerned that the focus of the dispute at least as is able to be determined at this stage, is as to the retention of the interests of the parties in the Suburb C S Pty Ltd store and the property interest of H Pty Ltd in the property situate at D Street, E Town.

10. On 4 June 2015, the application and response for final orders was listed for trial on 30 November 2015.

11. The parties have been in significant conflict with each other and it is reasonable to observe that there exists a high level of mistrust.  For her part, the wife considers that the husband conducts the financial affairs of the parties to the detriment of the wife and is opposed to providing any reasonable information that would enable the wife to be satisfied that there has been full and frank disclosure by the husband of the various interests of the parties and that their property is appropriately preserved pending determination of the matter.

12. For his part, the husband is of the view that the wife’s involvement in the various business enterprises of the parties is mischievous and that he has been careful to provide all necessary information that would enable the court to properly assess the property interests of the parties and the value to be ascribed to those interests.

13. Initial interim applications were heard and determined by Judge Cole on 15 August 2014.  Paragraph 5 of those orders namely:

    That pending further order the husband be restrained, save and except in the ordinary course of business, from disposing of, encumbering or otherwise dealing with the assets in his possession or control, without obtaining the prior written consent of the wife, or order of this court.

    has some relevance to the current dispute.

14. By Application in a Case filed 17 February 2015, the wife has sought a raft of orders which can be summarised as follows:

    (1)That the husband give discovery on oath.

    (2)That the husband produce certain specified and identified documents to the wife.

    (3)That the husband provide copies of the internal weekly reports in respect of Suburb B S Pty Ltd and Suburb C S Pty Ltd together with those reports back dated to 1 July 2014.

    (4)That the husband produce to the wife customer history reports evidencing all transactions with Suburb B S Pty Ltd and Suburb C S Pty Ltd as a buyer or seller since 1 October 2013.

    (5)Ability to the wife to view electronically all bank accounts in the name of the husband or any entity in which he has an interest.

    (6)An order of injunction restraining the husband from attempting the following:-

    (a)attending at the wife’s place of residence at I Street, Suburb G;

    (b)harassing or interfering with the wife;

    (c)obstructing the development by the wife of the property situate at J Street, Suburb G (“the J Street development”);

    (d)attempting to withdraw personal guarantees given by him to the NAB in support of trading and other entities of the parties;

    (e)sending funds out of the Commonwealth of Australia without the written consent of the wife or the court.

    (7)The payment of interim spousal maintenance or by dividend or trust distribution causing a payment to be made to the wife of $13,500 per calendar month as and from 1 March 2015.

    (8)The appointment of a single expert forensic accountant to identify and value the property investments and business interests of the parties including Suburb B S Pty Ltd and Suburb C S Pty Ltd.

15. That application was co-listed with a subsequent Application in a Case filed by the wife on 30 July 2015.

16. By that application the wife seeks that the husband pay to her the sum of $100,000 on account of the wife’s costs of prosecuting her claim in the proceedings or in the alternative, the sum shall be categorised as “interim property settlement”.

17. The husband filed a response to the first application in a case seeking that it be dismissed, that the wife file an affidavit of documents and that the parties be restrained from harassing, intimidating, threatening or interfering with the other or from attending at the home or work place of the other.

18. The interim proceedings were heard on 6 August 2015 and then adjourned to 20 August 2015 to enable the wife to file a further affidavit directed to the status and development of the J Street property.

19. Whilst no response was filed, it is accepted that the husband opposes the orders sought by the wife for either litigation funding or interim or partial settlement of property.

BACKGROUND

1. The parties commenced cohabitation in 1994, married in 1998 and separated in October 2013.  There is one adult child of the relationship.

2. Following the delivery of reasons by Judge Cole on 15 August 2014, the husband filed an affidavit on 25 September 2014 which seeks to clarify the structure of the various entities in which the parties have an interest, the extent of those entities and whilst not conceded by the wife, the husband’s initial estimate of the property interests of the parties.

3. The following schedule of interests is relevant to the current application:

Suburb C S Pty Ltd

1. This enterprise is owned by K Pty Ltd as the trustee for the Suburb C S Pty Ltd Unit Trust.  The directors of K Pty Ltd include the husband as one of the four directors.  The shareholders of K Pty Ltd comprise the husband as to 25 shares, L Pty Ltd (“the wife’s company”) as to 10 shares which represents cumulatively 35 per cent of the total shareholding.  The unit holders relevant to the proceedings are Mr Cantwell Suburb C Trust and L Pty Ltd as to 35 per cent of the total units held.  Accordingly, the parties via their separate entities hold a 35 per cent interest in Suburb C S Pty Ltd.

S Pty Ltd Suburb B

1. An entity known as M Pty Ltd trades as S Pty Ltd Suburb B.  This is a partnership between the Cantwell Suburb B Trust and the Mr N Suburb B Trust.  Neither the husband nor the wife have any interest in the Mr N Suburb B Trust.

2. The trustee for Cantwell Suburb B Trust is M Pty Ltd with the directors being the husband and Mr N.  Each of the husband and Mr N hold 10 shares.  The wife has no direct interest in Cantwell Suburb B Trust and it is therefore clear that the husband via his separate entity has a 50 per cent interest in Suburb B S Pty Ltd.

O Street, Suburb C

1. The property situate at O Street, Suburb C is the premises from which the Suburb C S Pty Ltd store trades.  This property is held by an entity known as Suburb C Property Syndicate #2 which is a partnership of trusts which includes Cantwell Investments Pty Ltd as trustee for the Mr Cantwell Family Trust as to one third interest.  The other two trusts in the partnership are owned by unrelated third parties.

2. The relevance to the wife of the O Street, Suburb C property is that if she is successful in her application that the husband cause his interest via the units held by Mr Cantwell Suburb C Trust to be transferred to the wife or her nominee, then she would also seek the transfer of the interest in the property syndicate.

84 Commercial Road, Suburb B

1. The property situate at 84 Commercial Road, Suburb B is the premises from which the Suburb B S Pty Ltd store operates.  The property is owned by Suburb B Property Syndicate which is a partnership of trusts. The husband’s entity namely, Cantwell Investments Pty Ltd as trustee for the Mr Cantwell Family Trust holds a one half interest in the property syndicate.  The husband seeks to retain his interest in the store and the land. That is not opposed by the wife.

H Pty Ltd

1. The husband is the sole director and shareholder of this entity.  It holds a number of interests in various property syndicates but in particular has a 50 per cent share of a property partnership that appears to own the property at D Street, E Town.  The wife seeks by way of final orders that H Pty Ltd transfer to her its’ interest in the E Town property.

2. Whilst not accepted by the wife, the husband alleges that the total assets and superannuation of the parties is in the vicinity of $5,000,000.

3. Accordingly and on the husband’s case, the wife would be entitled to approximately $2.5 million which may be satisfied by a cash settlement, or a combination of cash and property but specifically not to include the interests as set out in paragraph 1(a) of the husband’s formal response.

4. During the conduct of the application, counsel for the wife conceded that she now only sought orders in terms of paragraphs 4 and 5 of the Application filed 17 February 2015 and that the principal focus for the wife was to secure the lump sum payment as set out in her Application filed 30 July 2015.

5. The husband’s counsel was highly critical of the wife for the late notice, given that much of the affidavit material, financial statements and summary of argument was directed to the wife’s spousal maintenance claim.  The issue of the abandoned spousal maintenance claim, or claim for periodic payment, is set out in paragraph 52 of the wife’s affidavit filed 17 February 2015:-

   [52]I say that from the income referred to in paragraph 48 above ($5,172) I am obliged to pay the following business/investment outgoings each month:

   (a)rental management fees $132;

   (b)      rates/taxes/maintenance $200;

   (c)      mortgage ([J Street]) $1385;

   (d)development expenses ([J Street]) (reducing to $2,060 p.m. (when I am able to draw on funding) $14,905;

   (e)mortgage ([P Street]) $1640

   Total $18,262.

6. With respect to the other expenses of the wife, she relies upon her financial statements, the first filed 17 February 2015 and a more recent financial statement filed 15 July 2015.

7. The import of counsel for the husband’s argument is that the purported development expenses in respect of J Street at $14,905 is really the gravamen of the wife’s claim either for spousal maintenance or periodic payment.

8. It is further emphasised that there is only now a few months before the matter is listed for trial.

PROVISION OF INTERNAL WEEKLY REPORTS AND HUSBAND’S CUSTOMER HISTORY REPORTS

1. The orders of 15 August 2014 provided that:

   [3]The parties take all steps and do all such actions as are reasonably required to ensure that the monthly financial statements for the businesses are supplied to the other party as soon as is practicable after the conclusion of each month.

2. Demonstrably, the wife is not content with those orders and considers that the husband has not made full and frank disclosure either of the status of the parties interest in property or in the manner in which the S Pty Ltd stores are being operated and the extent to which the income has been received by the husband or the relevant controlled entity.

3. In her affidavit of 17 February 2015, the wife alleges that the husband has formed a relationship with a person living in Country T and that he has spent significant time out of Australia.  He is therefore physically removed from the two S Pty Ltd stores.

4. It is noted that during the course of the interim proceedings, the husband was absent and there was no indication that the husband was intending to return to Australia other than shortly prior to the commencement of the trial.

5. Specifically the wife complains that the husband was contemplating purchasing an “R Pty Ltd” franchise and associated real estate in Asia.

6. Upon the wife gaining some information as to the potential activities of the husband overseas, correspondence was forwarded to the husband’s solicitors regarding the wife’s concern.  That correspondence was not the subject of a timely response.

7. There is some information that suggested to the wife the husband’s overseas interests were substantial.

8. In addition, the wife alleges that whilst she receives monthly trading reports, they do not contain all of the relevant information and she is aware that each of the S Pty Ltd stores produce internal detailed weekly reports which contain substantial information in a timely fashion.

9. The wife also has concerns as to the manner in which the husband has conducted the share portfolio held by Mr Cantwell Family Trust and in addition says at paragraph 54:

   …I believe the husband has also received the proceeds of sale of further properties for which he has not accounted to me.  In particular I say that the properties at [1 Q Street, Suburb G] and [2 Q Street, Suburb G] have recently sold and settled. In October 2014 [2 Q Street, Suburb G] was sold for $900,000 or thereabouts.  The husband has refused to tell me what became of the proceeds of the sale.  In December 2014 [1 Q Street, Suburb G] was sold for $500,000 or thereabouts and the husband has not disclosed what became of the proceeds of sale.

10. Accordingly, the wife complains that the husband is resistive to the provision of appropriate information.

11. She does not dispute however that for the entirety of the relationship the husband had control of the financial dealings for the parties.

12. At paragraph 25 to 31 of the wife’s affidavit of 17 February 2015, she sets out her concerns in respect of the potential for disposal by the husband of what she describes as “an extensive collection of memorabilia and jewellery (including paintings, sports memorabilia, racing bike, helmets, signed cricket bats, framed football jumpers and boxing memorabilia), unique watches, coin collections and wine (the collectables).  She estimates that the total value of the collectables is in the sum of $200,000.

13. The husband denies both the quantity of alleged collectables and memorabilia and certainly the value.

14. The parties are in significant dispute.

15. The belief of the wife is that the husband is selling the personal items through the stores without keeping personal records.  She annexes various photographs to her affidavit which she says supports the contention that memorabilia and personalty of the husband is being sold in the store.

16. The husband takes issue with the assertions of the wife and says that many of the items that she displays in the attached photographs are not his and were never owned by him.

17. He does however admit that personal items have been sold by him to the store and he submits that full accounting will be provided.

18. There remains a dispute between the parties, but in any event it appears that the husband accepts personal items and collectables have been sold, but that they are of minimal value and he “did not see any issue with selling my excess personal items rather than retaining same.  Again a full accounting can be provided”.  The husband refers to extensive discovery and in particular item 319 which he says represents a complete answer to the wife’s concerns.

19. The wife reminds the husband of the order of injunction in paragraph 5 of orders made 15 August 2014 which restrains the husband other than in the ordinary course of business from disposing of, encumbering or otherwise dealing with the assets in his possession without consent of the wife or order of the court.

R PTY LTD

1. Following the allegation of the wife that the husband may have an interest in an overseas enterprise, at paragraph 2.26 of his affidavit filed 25 March 2015 the husband admits that he has purchased a franchise interest in R Pty Ltd in Country T and alleges that the franchise was financed by way of a loan from the Mr Cantwell Family Trust to a new Country T entity namely, “U Pty Ltd” in the amount of $550,000.  He says that he did not consult with his solicitors in relation to the purchase and it was his interpretation of the order of injunction that he could operate in “the ordinary course of business”.  He acknowledges that his actions:

   …are in breach of the restraint ordered by the Federal Circuit Court of Australia.  I will provide full and frank disclosure of the arrangements between [Mr Cantwell Family Trust] and [U Pty Ltd] but confirm that the net asset position of the [Mr Cantwell Family Trust] is unchanged following the purchase.

2. By affidavit filed 5 August 2015, the husband provides further information in respect of the R Pty Ltd franchise.  The business has yet to commence trading, a lease has been signed and fit out work has commenced.  The husband anticipated in the affidavit that the start-up date for the business would be 1 September 2015. Without the provision of any business plan or financial forecast, the husband considers that there will be $85,000 shortfall in the first year which will be covered by the $550,000 that has been loaned to the husband’s Country T venture.

3. The husband’s counsel acknowledged that the order of restraint was still in place and it is a matter for the husband as to the extent to which he considers that his ongoing expenditure in Country T may constitute a breach of the order.

4. That issue is not a relevant consideration at this point, but the circumstances surrounding the funding of the Country T franchise has been a matter of concern to the wife and could not be said to have lessened her anxiety and mistrust of the husband.

5. The wife has stopped short of seeking further remedy against the husband, but rather, she considers the provision of more timely financial information to be the appropriate counterfoil.

6. It seems that at present the husband is proposing to remain living in Country T until he is required to return presumably to prepare for trial and then to engage in the proceedings.

7. There is nothing in the affidavit material of the husband which assists in the level and extent of information that he receives in relation to the operation of the Suburb C and Suburb B S Pty Ltd stores.  At present the wife receives a monthly statement which she considers it to be inadequate.  I am not able to determine whether that is or is not the case.  I think it is reasonable to assume that the husband has available to him financial information more current than a statement each month.

8. I can see no good reason in the circumstances of this case and where the husband would seek the complete exclusion of the wife from any active involvement in either of the stores, that she should not receive up to date and regular financial information providing that it is a document, report or statement currently in existence.  I propose to make an order in terms of paragraph 3 of the wife’s application, but if the described report does not exist then the husband will be obliged to provide to the wife such other information that he receives within 24 hours of its receipt.

9. The orders sought by the wife in respect of the purported sale of the husband’s personalty via the S Pty Ltd store is more easily disposed of.  There is a dispute between the parties as to the extent of the personalty held by the husband and its value.  There is no dispute that some of those items have been sold via the stores.  The husband concedes that at the appropriate time there will be a full accounting in respect of those matters.

10. I can see no reason why the relevant documents if not already provided in discovery which would seek to establish the extent to which, if at all, the husband has disposed of property via the S Pty Ltd stores should not be provided to the wife by way of disclosure.

11. It is also an important consideration that irrespective of value, the order of restraint and injunction would prohibit the disposal by either of the parties of any interest in property other than in the ordinary course of business, without the consent of the wife, or by order of the court.

12. I propose to make orders in terms of paragraph 4 of the orders sought by the wife in her application.

LITIGATION FUNDING/PARTIAL SETTLEMENT OF PROPERTY

1. The gravamen of the proceedings is the wife’s application seeking that the husband pay to her the sum of $100,000 to be used for her anticipated legal fees, or in the alternative that the husband pay her $100,000 by way of interim settlement of property.

2. The leading authority on the circumstances in which a court will order an interim or partial property settlement to fund the costs of litigation of a party is the decision of the Full Court in Zschokke & Zschokke (1996) FLC 92-693.

3. The Full Court considered that there were four possible bases of power to make such an order:

   (1)an order pursuant to section 74 (the maintenance power);

   (2)an order pursuant to section 114 (the injunction power);

   (3)an order pursuant to section 117(2) (the costs power); and

   (4)an order pursuant to section 80(1)(h) (the court’s general power to make an interim order with reference to section 79 of the Act).

4. It is likely that the exercise of the power to make an order for the husband to provide funds to the wife for the cost of the proceedings should be considered pursuant to s 117(2) or s 80(1)(h).  If the order is to be made pursuant to s 117(2) of the Act then the court must have regard to the matters set out in the section acknowledging that not all of the matters in the subsection would be relevant to the making of an order.

5. It is a reasonable summary of the decision of the Full Court in Zschokke that:

   The requirement of justice…must remain a “basic” condition in the making of [such an order].

6. In terms of any interim payment, a proper question arises as to whether it is likely that the wife will receive sufficient in the final settlement of property to enable the interim payment to be taken into account.

7. That is not a relevant consideration in this case.

8. The husband considers that the property of the parties is likely to be in the vicinity of $5,000,000.  In the wife’s affidavit filed 30 July 2015, she considers that the total net assets would be in the sum of $6.3 million.  On either version, or indeed in respect of an outcome that is within the general range as suggested by each of the parties, the wife will comfortably be entitled to a settlement in excess of $100,000. On the husband’s case, the wife would receive a settlement that would be predominantly comprised of cash rather than in specie assets.

9. For the purposes of the determination of the wife’s application, I do not consider that I need to bring to account any uncertainty that the wife’s eventual settlement will be inadequate to adjust against the sum that she seeks.

10. At [83,216], in considering whether to make an order pursuant to s 80(1)(h), the Full Court in Zschokke held:

    …it would seem that regard should be had to the requirement in s 79 that the orders be just and equitable and this would require the court to undertake at least some brief consideration of the matters in s 79(4) including those referred to in s 75(2).  If on a brief consideration of those matters, it seems likely to the court that the party who is the applicant for the interim order for an advance of funds from the other party will be likely to receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made.

11. The Full Court in Zschokke identified three criteria relevant to the making of an order:

    ·whether one party was in a position of relative financial strength;

    ·the capacity of the other party to fund their own legal expenses;

    ·the inability of the applicant to fund their legal expenses.

12. In Harris & Harris (1993) FLC 92-378 the court considered the court’s power to make “interim” or “partial” orders. At [79,929 – 79,930] the court considered the following to be important considerations:

    (1)The exercise of the power should be confined to cases where the circumstances presented at that time are compelling.  As a generality, the interests of the parties and the court are better served by there being one final hearing of section 79 proceedings.  However, circumstances may arise before there can be a final hearing which dictates some part of the property of the parties should be the subject of orders.

    (2)It is an exercise of the section 79 power.  Consequently it must be performed within those parameters.  Since it is not the final hearing the Judge is unlikely to have the final findings, but the exercise must fall within that general framework and the material available at that time.

    (3)Of necessity it is likely to be a somewhat imprecise exercise.  Consequently it must be exercised conservatively and the Judge must be satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the order which is contemplated is capable of being reversed or adjusted if it is subsequently considered necessary to do so.  It is for this reason that we doubt whether the distinction which Nygh J drew between interim and partial orders is necessary or desirable.

13. In Strahan & Strahan (2011) FLC 93-466 the Full Court partially overruled Harris and said at [132]:

    …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 unfetted discretion, conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to section 79 is a once and for all order made after a final hearing.

14. Further, at [139] the Full Court observed:

    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.

15. Thus, the following matters may be a relevant consideration:

    ·whether or not the applicant can meet the costs of their own legal expenses;

    ·the extent of the evidence presented as to the likely costs of the litigation;

    ·the relative financial positions of the parties in order to ensure that there is “a level playing field”.

16. At [228] Thackray J said:

    …it is appropriate for the court to give consideration to whether the claim for costs is “genuine” – that is that a party is not bringing an interim application on a pretext.  However, once the court is satisfied that the claim is genuine it should not “take a narrow view of the costs budget”.

17. The husband argues that if the court was inclined to make an order as sought by the wife, it should only do so if the source of the funds can be identified.

18. The decision of Bing & Bing (2007) FLC 93-318 is quoted as authority for the proposition that the inability of a party to raise the capital sum as sought by the other party is:

    …a matter which may become relevant if and when the husband defaults in the order and an enforcement application is brought.  However, the question of enforcement of the order remains a separate question from the propriety of granting the order in the first place.

19. At [23] the following appears:

    The duty Judge is often in an impossible position in cases of this nature.  The very issues that need to be fully investigated namely the extent of the asset pool and the financial resources of the parties cannot be adequately investigated without the provision of appropriate funds.  The mere assertion that there are no immediately available funds to provide to the applicant to enable him or her to continue on with the proceedings cannot simply be accepted at face value.  If it is apparent that one of the parties controls a vast pool of assets (irrespective of whether those assets are readily capable of liquidation) then the court has a broad enough discretion to enable an order to be made for the provision of funds by the holder of those assets to enable the other party to continue with litigation.

20. I consider that there is a difference in the approach of the Full Court when dealing with a sum sought to enable a party to “continue on with litigation” as opposed to an order by way of settlement of property.

21. The general proposition in respect of an order under s 80(1)(h) is that the court should refrain from making an order of interim or partial property in circumstances where it would be preferable to hear and determine the dispute in the one hearing.

22. It is a relevant consideration that a trial date has been set and that the period between now and 30 November 2015 is narrow.

23. It would not seem to be in the interests of the parties, nor would such an order be of any use to the wife, if the funds were not readily available. The wife would not have the luxury of enforcement proceedings, nor the husband the opportunity to dispose of property and/or obtain funds in an orderly fashion that does not put at risk the integrity of the property of the parties.

24. Accordingly, I consider that each case must be considered on its merits and that in the circumstances of this case where the parties are soon to reach trial, if an order is to be made it must be capable of meaningful outcome as opposed to a fruitless exercise.

LITIGATION FUNDING

1. In her affidavit in support of her Application in a Case of 30 July 2015, the wife discloses that at that date she had $155,015 remaining to her credit.  That money is earmarked to complete the J Street development.

2. Her Financial Statement filed 15 July 2015 refers to monies standing to the credit of the wife of $197,149, but I accept that this money has been reduced to cover a range of expenses as disclosed.

3. The wife has paid $71,284 and the basis upon which the claim for litigation funding is sought is to be found in paragraph 9 of the affidavit where the wife says that she has been advised by her solicitor that her legal fees, counsel fees, valuation fees and other disbursements necessary to prepare the matter for trial will be in the vicinity of $100,000.

4. There is no evidence presented as to the extent of the anticipated legal fees and the breakdown of those fees which would support the wife’s contention allegedly based upon the advice of her solicitor that the anticipated future fees and disbursements will be in or about the sum of $100,000.

5. It is not to suggest that the wife needs to present a likely itemised schedule of future costs, but there does need to be more than the assertion by the wife that she has received certain advice.

6. I accept that it is not a requirement that the wife’s solicitors indicate whether they will or will not be prepared to represent the wife and await payment at the conclusion of the proceedings.  I do consider however that there needs to be something more than the bald assertion of the wife based upon a mere estimate of likely costs and disbursements, rather than some rigor to the exercise.

7. That consideration has more force when it is acknowledged that the wife has substantial funds but that she considers she is not able to utilise those funds because they are earmarked as likely expenditure on the J Street development.

8. I think it is a reasonable summary of the wife’s position that if the J Street development did not exist it is unlikely that the wife would have sought litigation funding notwithstanding her general complaint that the husband controls the vast bulk of the property of the parties.

9. It is also a relevant consideration that the husband has not disclosed the source of his funds for the purposes of his anticipated legal fees.

J STREET DEVELOPMENT

1. The wife’s application and argument is intertwined with the J Street development.  Her earlier affidavit sets out the ongoing development costs estimated by her to be in or about the sum of $14,905 per month together with the further sum of $1385 being the mortgage.

2. An opportunity was given to the wife to file a further affidavit setting out the historical and current circumstances surrounding the J Street development.

3. It is uncontroversial that L Pty Ltd purchased property at J Street, Suburb G in February 2012. The wife acknowledges that this is her company but she alleges that the husband engaged in all of the negotiations for the purchase of the property and controlled the future conduct of the development in a manner not dissimilar to his control of the other property interests of the parties.

4. The development was to comprise the building of four town houses on the property.  They would be sold hopefully for profit and it would be expected by the wife that a significant capital gains may inure to her.

5. She alleges that it was the husband who signed the contract on 30 January 2013 and even after separation, the husband assisted in the development, negotiated contracts and played an ongoing and integral part.

6. The wife alleges the husband had an ongoing involvement in the management of the development until August 2014 when he indicated that he no longer wished to participate in the development.

7. Since that date the wife has attempted to pursue the development on her own.

8. The husband does not accept all of the assertions of the wife in respect of the extent and detail of his involvement and says that at all times was intended to be a development by the wife and that he rendered certain assistance.  The issue for the husband seems to be that it was not a joint venture of the parties but rather at all times a development to be undertaken by the wife.

9. To some extent I am uncertain whether the extent to which the husband was involved is necessarily a relevant consideration.

10. I am satisfied that the husband was clearly aware of the development of the property and that at the very least until he disavowed any involvement in the development, he certainly did not dissuade the wife from progressing the project.

11. The issue therefore is whether the wife has presented sufficient evidence that would satisfy me she is required to quarantine and/or disburse the bulk of the funds that she currently has in her possession towards the development project.

12. There has been some ambivalence in the wife’s application seeking funds to continue the J Street development costs.  As discussed, paragraph 52 of the wife’s affidavit in support of the First Application in a Case includes development expenses of $14,905.  The original application was couched in terms of an order of spousal maintenance, or in the alternative, a payment from the general resources of the parties.  The spousal maintenance claim has been abandoned and the focus is now not on a monthly sum being available for the ongoing development costs but rather, a significant upfront lump sum payment.

13. Obviously, if the issue was satisfied by the wife’s ability to provide for ongoing development costs on a monthly basis then clearly she has sufficient resources to enable that level of outgoing.

14. It was conceded by the wife that there was inadequate information about the J Street development and leave was given for the wife to file her affidavit of 11 August 2015 specifically directed to the J Street development.

15. The wife acknowledges that the husband conveyed his intention to no longer participate in the development. Since September 2014, the wife asserts that she has:

    …made every effort to continue with the building project within the timeframe permitted by the council and the builder and to fund the project myself.

16. The old house situated on the site was demolished in September 2014 and various other works have been undertaken including engaging a real estate agent to list the units for sale off the plan, the conveyancing arrangements necessary to apply for the issue of community titles and the lodgement of a plan in preparation for subdivision development and sale.

1. It does not appear controversial that the date as and from 22 August 2014, the wife has paid $76,886 to progress the development.

2. The gravamen of the wife’s position would appear to be encapsulated in the following paragraphs of her affidavit of 12 August 2015:

   [27]Given that I am currently paying the mortgage and building costs of that property, without an income from it, each month that it is delayed, I lose the opportunity of an income from either renting or selling the first town house.

   [28]The builder, has been patient with respect to the delays resulting from the breakdown of my relationship with my husband, however the builder has advised me that there will be penalties for any further delays on my part.  Annexed hereto and marked “BMC13” is a true copy of the letter from [V Pty Ltd] dated 10/8/15 setting out their position.

3. Annexure “BMC13” comprises a letter from V Pty Ltd (“the builder”) confirming that as from 10 August 2015 all approvals for construction have been received, the site work has commenced and the slab pouring has been booked for 17 August 2015.  The completion date is scheduled for 30 weeks thereafter.

4. There is a warning that further delays in the development “will result in you as the client being responsible for additional costs”.

5. The contracts for the building of four units on the J Street land are contained in “BMC2”.  There is a different price for the construction of each of the four units, but the contract information is consistent namely, that the finish date is 30 weeks after the footings are poured.  There are no terms and conditions provided with the contract information.  I assume, but perhaps improperly so, that the building contracts may have a provision for progress payments.  Irrespective of that consideration, the contract information is silent on the payment arrangements and there is nothing in the wife’s affidavit that would assist in linking the manner in which monies currently held by the wife are to be utilised for the J Street development, which if expended would then exhaust the wife’s resources with the potential for her not to be able to pay for her future legal fees and disbursements anticipated to be in the sum of $100,000.

6. The focus on the contractual arrangements with the builder should not be considered as introducing an enquiry as to whether the wife’s circumstances are compelling.

7. Indeed, by regard to the conduct of the husband in pursuing the purchase and development of the R Pty Ltd franchise in Country T in circumstances where he acknowledges the potential for a breach of an order of injunction, it is perhaps understandable that the wife considers she should not be fettered in her own commercial pursuits, particularly where there is no suggestion that the amount she seeks will not be adequately covered by her eventual entitlement.

8. Counsel for the husband argues that the wife’s application suffers from the following omissions:-

   (1)That there is no detail as to the manner in which the sum of $100,000 is notionally allocated towards the wife’s future legal costs.

   (2)That there is no evidence that would demonstrate how the wife intends to disburse monies currently held by her on the J Street development.

   (3)In any event, the wife has not demonstrated where the funds could easily be obtained to satisfy her claim.

9. Whilst I accept the consideration by the Full Court in Bing that it is not fatal to an application for partial property settlement that a source cannot be identified, it is however a potentially relevant consideration if the timing is such that the order could not be satisfied before the commencement of trial namely, 30 November 2015.

SALE OF PROPERTIES

1. Paragraph 54 of the wife’s affidavit of 17 February 2015 refers to the assertion that the husband has caused properties to be sold and has either neglected or refused to account for the proceeds of the sale.  There is a potential relevance to the application in that it could represent a source from which the wife’s claim could be readily satisfied.

2. The enquiry as to the sale of properties was again raised by the wife in paragraph 63 of her affidavit filed 25 June 2015.  She enquires as to the status of three properties situate at 1 and 2 Q Street, Suburb G and various properties in the Suburb W development.

3. The issue is properly raised by the wife in a letter forwarded to the husband’s solicitors dated 14 August 2014 being Annexure “BMC12” to her affidavit.

4. The husband responded by letter dated 22 August 2014 confirming that the NAB would retain the entire net proceeds of sale of the property situate at 2 Q Street, Suburb G, but that as the further properties sell “there will obviously be significant net proceeds of sale which can be divided as there will be no further liabilities that need to be paid from those proceeds”.

5. The wife would appear to have placed some weight on the assertion contained in the response from the husband’s solicitors.

6. Notwithstanding the earlier correspondence, the husband revisits the matter in his affidavit filed 5 August 2015. His summary is that the sale of 2 Q Street, X Street, Suburb W, Y Street, Suburb W and Z Street, Suburb W is unlikely to result in surplus proceeds of sale.  If anything, there may well be a shortfall.

7. There may well be some surplus funds in respect of a property at AA Street, BB Town, Queensland, but there is unlikely to be any other money available.

8. I am uncertain as to the extent to which documents evidencing the status of the properties, contracts for sale and bank security documents have been provided to the wife, but without evidence, I could not be confident that the interests of the parties or in entities controlled by them in various properties could conceivably be a timely and reliable source of funds to satisfy the wife’s application.

CONCLUSION

1. The overarching consideration of the Full Court in Strahan is to entitle parties to progress their affairs with equanimity.  The wife would highlight the husband’s conduct not simply in terms of his overall perceived control of the interests of the parties in Australia, but his use of money available to him as a result of that control in the pursuit of viable business interests overseas.

2. She seeks to do no more than the husband by the pursuit of the J Street development.

3. She considers that she is thwarted by the husband’s approach whereas he appears to have no restriction.

4. The focus of the Full Court was however tempered by the general consideration that there should be one hearing in respect of the determination of property interests of the parties.

5. In this case the proceedings are close to trial and I am not satisfied that if orders were made as sought by the wife, she would necessarily receive the funds that she seeks without the need for further financial enquiry and possibly enforcement.

6. That does not ignore the fact that the wife did not set out with any clarity how the anticipated legal fees and disbursements of $100,000 be disbursed, nor is there sufficient evidence to support the wife’s contention that the entirety of monies currently retained by her could not be used for legal fees but rather, must be expended upon the J Street development.

7. In a general sense, the amount that the wife seeks even including the property that she retains and on her case would seek to retain, is significantly less than the husband’s assessment of her entitlement.  It might be said that in the circumstances of this case there is no reason why the wife should not receive the money that she seeks given the expenditure by the husband on his Country T enterprise.

8. There is however the potential for significant disruption to the assets of the parties and without a court being satisfied that the entirety of the funds held by the wife will be needed to progress the J Street development in the short term, the focus at this stage must be on ensuring that each of the parties are able to access appropriate legal advice and representation.

9. I am not satisfied that the wife does not have available to her sufficient funds to enable her to be appropriately represented.

10. It may well be the case that at the hearing evidence will be presented which will satisfy the court that interim orders for partial settlement of property pending judgment may have merit.

11. I make orders as appear at the commencement of these reasons.

I certify that the preceding one hundred and forty four (144) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 8 September 2015.

Associate:  P M Malone

Date:  8 September 2015