Carswell & Tenson
[2022] FedCFamC1F 467
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Carswell & Tenson [2022] FedCFamC1F 467
File number(s): SYC 5497 of 2018 Judgment of: SMITH J Date of judgment: 6 July 2022 Catchwords: FAMILY LAW – PROPERTY – Review – Interim hearing – Limits on evidence –– Wife not entitled to rely upon 7 affidavits comprising 150 pages of text and 500 pages of documents on a simple interim application – Obligations of parties and legal practitioners to comply with overarching purpose – Spouse maintenance – Husband to pay wife $2,500 per week. Interim property settlement – No risk partial payment will impair ability to do justice and equity at final hearing – Husband to pay wife $250,000 – Former matrimonial home in which husband resides to be sold if interim property settlement not paid. Legislation: Evidence Act 1995 (Cth) s 50
Family Law Act 1975 (Cth) Part VIII, ss 72, 75, 79, 80, 117
Federal Circuit and Family Court of Australia Act2021 (Cth) s63, Part 6 Division 4
Federal Circuit & Family Court of Australia (Family Law) Rules 2021 (Cth) r 5.08
Cases cited: Franklyn & Franklyn [2019] FamCAFC 256
Strahan & Strahan (Interim property orders) [2009] FamCAFC 166
Division: Division 1 First Instance Number of paragraphs: 184 Date of hearing: 1 June 2022 Place: Sydney Solicitor for the Applicant: Litigant in person Counsel for the Respondent: Mr Beckerling Solicitor for the Respondent: Kerr Fels ORDERS
SYC 5497 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR TENSON
Applicant
AND: MS CARSWELL
Respondent
ORDER MADE BY:
SMITH J
DATE OF ORDER:
6 JULY 2022
PENDING FURTHER ORDER THE COURT ORDERS THAT:
1.The Application for Review filed 20 April 2022 be granted.
2.The orders made on 1 April 2022 be set side.
Spousal Maintenance
3.By way of periodic spousal maintenance, the Respondent (“the husband”) pay $2,500 per week to the Applicant (“the wife”).
4.The first payment is to be made by Friday 8 July 2022.
5.The weekly payment is then to be made on, or by, each following Tuesday.
Interim Property Settlement
6.Within 60 days of the date of these orders the Husband pay $250,000 to the Wife by way of interim property settlement.
7.In the following Orders the wife is the first party and the husband is the second party.
8.Failing payment of the full sum of $250,000 in order 6 within the specified time, the parties shall then forthwith do all acts and things and sign all necessary documents to cause the sale of the former matrimonial home, being the property situated at and known as CC Street Suburb C NSW ("the Property"), by way of public auction as soon as reasonably practicable and for that purpose the following sale provisions shall apply:
(a)Real estate agent selection
(i)That within 7 days of the date of these Orders the first party shall nominate in writing to the second party the names of 3 qualified real estate agents (agents) who have consented to act.
(ii)If the first party does not nominate 3 agents within 7 days, the second party may nominate an agent at their sole discretion and notify the first party within a further 7 days, and that will be the agent for the purposes of the sale.
(iii)If the first party does nominate 3 agents then within a further 7 days the second party shall nominate one of those agents and then that agent will be the agent for the purposes of the sale.
(iv)If the second party does not select 1 agent within 7 days, the first party may choose one of the 3 nominated agents at their sole discretion and that will be the agent for the purposes of the sale.
(v)That within 14 days of the date of these Orders the parties shall sign all authorities and execute all documents necessary to instruct the agent to act on the sale of the Property.
(vi)The parties shall be responsible for giving joint instructions to the agent acting on the sale of the Property;
(vii)The costs of the agent shall be borne equally between the parties.
(b)Conveyancing solicitors
(i)That within 7 days of the date of these Orders the first party shall nominate in writing to the second party the names of 3 qualified conveyancing solicitors who have consented to act.
(ii)If the first party does not nominate 3 conveyancing solicitors within 7 days, the second party may nominate a conveyancing solicitor at their sole discretion and that will be the conveyancing solicitor for the purposes of the sale.
(iii)If the first party does nominate 3 conveyancing solicitors then within a further 7 days the second party shall nominate one of those conveyancing solicitors and then that conveyancing solicitor will be the conveyancing solicitor for the purposes of the sale.
(iv)If the second party does not select 1 conveyancing solicitors within 7 days the first party may choose one of the 3 nominated agents at their sole discretion and that will be the agent for the purposes of the sale.
(v)That within 14 days of the date of these Orders the parties shall sign all authorities and execute all documents necessary to instruct the conveyancing solicitor to act on the sale of the Property.
(vi)The costs of the conveyancing solicitor shall be borne equally between the parties.
(c)Auction
(i)That the Property be placed on the market for sale by auction as within 28 days of the date of the default of these Orders;
(ii)The husband shall vacate the property no less than 7 days prior to the date of the auction.
(iii)That such an auction take place within 42 from the date of placing the Property on the market for sale by public auction or as soon as practicable thereafter;
(iv)A reserve price shall be fixed by written agreement between the parties within 7 days of the property being listed for auction.
A.Failing agreement as to a reserve price within 7 days of property being listed for auction the parties are to agree a valuer, or failing agreement are to approach the President of the New South Wales Institute of Valuers requesting the nomination of a valuer.
B.The valuer shall set the reserve price.
C.The parties shall share the costs of the Valuer equally.
(v)In the event that the Property fails to be sold at the auction referred to above the Property shall be resubmitted for auction at a reserve price 5% lower than at the previous auction and shall continue to be resubmitted for auction every 4 weeks with a further 5% reduction in the reserve price until such time as the Property is sold.
(d)Neither party will, without the prior written consent of the other, rent or let or tenant the Property in any way;
(e)Neither party will, without the express written consent of the other, cause any other agency agreement to be effected or binding on the parties;
(f)The neither party will encumber or otherwise deal with the Property without the prior written consent of the other party;
(g)In the event a prospective purchaser makes an offer to purchase the Property prior to the proposed date for auction, the parties may agree on a price and to sell the Property to such a purchaser in writing. In the event the parties are unable to agree on a price then the Property shall proceed to auction;
(h)The parties or either of them may lawfully bid at the auction;
(i)The husband shall provide access to the Property at all reasonable times to prospective purchasers and the agent, or his or her representative;
(j)The husband shall maintain the Property in reasonable condition and repair pending completion of sale.
9.Pending sale of the Property, the husband shall meet the costs of the mortgage, municipal council rates and charges, water rates and charges, insurance premiums and utilities as and when they fall due and shall indemnify the wife in relation to the same.
10.In the event that repairs are reasonably required to the Property for the purpose of the sale the Husband may pay same with such payments to be reimbursed from the sale proceeds.
11.Upon the settlement of the sale of the Suburb C property, the proceeds of the sale be distributed as follows:-
(a)In repayment of the selling costs;
(b)In repayment of the encumbrances secured against the property;
(c)In repayment of the repair costs paid by the husband pursuant to these orders;
(d)In payment of $250,000 to the Wife; and
(e)The balance be deposited into a joint interest-bearing account in the parties name and each party be restrained by injunction from dealing with these funds unless pursuant to Court Order or the parties written consent.
12.In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to Orders 7 to 11 above, the Registrar of the Court be appointed pursuant to s 106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.
13.The parties have liberty to approach the Honourable Justice Smith to relist the matter on short notice in relation to implementation of these Orders.
AND THE COURT OF ITS OWN MOTION ORDERS THAT:
14.Within 28 days, each party comply with their obligations under Part 6.1 of the Federal Circuit & Family Court of Australia (Family Law) Rules 2021 (Cth) for full and frank disclosure.
15.Within 56 days, each party is to file an Undertaking as to Disclosure acknowledging their duty of full and frank disclosure to the court, and undertaking to comply with that duty until the conclusion of the case.
AND THE COURT NOTES THAT:
A.The wife says that a review of the husband’s bank statements disclose that in the 2021 financial year the husband’s gross income exceeded $1,500,000. The husband, representing himself and being reminded of his duties appearing as his own counsel, said that in that financial year he did not earn a gross income of $1,500,000. He says that his gross income in that year was in the range of $1,200,000 to $1,300,000. The parties were advised that this Notation would be made.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Carswell & Tenson is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
SMITH J:
The Applicant Ms Carswell (“the wife”) seeks interim orders for spousal maintenance, property settlement and litigation funding pursuant to the Family Law Act 1975 (Cth) (‘the Act’) from the Respondent Mr Tenson (“the husband”). He opposes the ambit of the orders sought.
The wife’s interim application was included in the Initiating Application, as amended. The parties’ primary affidavit evidence on the interim application was filed in late 2021. There was a hearing before a Senior Judicial Registrar on 21 February 2022. The wife sought periodic spousal maintenance of $3,859 per week, or just over $200,000 per annum, the payment of half of any monies held in trust by the husband’s solicitors and a “dollar for dollar” litigation funding order going forward, together with $250,000 by way of interim property distribution.
She also sought consequential orders for the sale of the former matrimonial home at CC Street, Suburb C (“the Suburb C property”), in which the husband resides, in default of payment of the $250,000. For asset protection purposes the husband owns 1%, and the wife 99%, of the Suburb C property.
On 1 April 2022 the Senior Judicial Registrar made orders that the husband pay the wife: spouse maintenance of $2,362 per week; and $250,000 by way of partial property settlement within 60 days; and, a “dollar for dollar” payment to the wife for any funds expended on this litigation by the husband from the date of those orders. The Senior Judicial Registrar also ordered that if the $250,000 was not paid as ordered Suburb C was to be sold to make the payment, with any remainder to be held by the wife’s solicitors.
On 20 April 2022, the husband, who is a professional, filed his Application for Review. He said in his written submissions at [10] that because of the dollar for dollar order he now acts for himself. Consistent with that position he filed a Notice of Address for Service specifying his business address and his former solicitors filed a Notice of Ceasing to Act on 26 April 2022. In this way the husband has rendered the Court’s dollar for dollar litigation funding order ineffective.
On 12 May 2022 on the husband’s application the Senior Judicial Registrar stayed his own decision in relation to spouse maintenance until 30 June 2022, and varied the order for sale.
The Application for Review was listed for Hearing before me on 1 June 2022.
The husband appeared for himself. The wife appeared by Counsel.
THE REVIEW
Proposals
The wife sought to have the Application for Review struck out and not heard on the basis that the husband had not complied with the Court’s filing directions for Court Books. That was not ultimately pressed, but was a bold submission given the wife’s conduct of the hearing before me, considered below.
In the third and final Affidavit allowed, of the seven Affidavit’s the wife insisted she was entitled to rely upon, she stated that she sought orders that [WA3 [5]]:
a) [Mr Tenson] Review Application be dismissed, and the Orders made [by the Senior Judicial Registrar] remain uninterrupted. In relation to the partial property settlement of $250,000, I seek that same be paid by [Mr Tenson] forthwith; and
b) [Mr Tenson] pay my costs of the Review Application in the fixed sum of $9,000.
Despite that, as I understand her case, once the substantive Review hearing was entered upon she sought the same orders as sought before the Senior Judicial Registrar.
I note that the utility of the dollar for dollar order sought is questionable as the husband has indicated he intends to act for himself to avoid its effects, which he says he cannot afford.
The wife also sought orders for the sale of the Motor Vehicle 3 the wife drives, which is in the husband’s name, with the wife to receive the net proceeds of the sale. No oral submissions were made about this issue.
The essence of the orders sought by the husband in his Application for Review were that “there be a partial property distribution to the wife in the sum of $150,000”.
However, the husband’s proposal was made on the condition that there would be a further loan secured over Suburb C “of no more than $150,000 (including all fees and charges)”.
On the husband’s proposal is that the wife would then receive only two thirds of the net advance, which optimistically assuming no fees and charges would be $100,000, with the balance of $50,000 to be deposited into an offset account from which the interest only payments and any fees and charges were to be paid. In effect part of the loan would guarantee payment over time of the interest and fees on the loan.
The further conditions the husband proposed were that: “the wife shall be solely responsible for all fees and charges associated with the loan and shall indemnify and keep indemnified the husband with respect to those fees and charges”; and, that “in the event the offset account is reduced to NIL, the wife shall be solely responsible for meeting all of the loan repayments and indemnify the husband with respect to those loan repayments”; and, that “the wife shall be solely responsible for all repayments with respect to the loan and any interest, cost or penalties payable as a result of any default by the wife with respect to the loan”; and, that “the wife shall indemnify the husband against any and all manner of actions, suites, causes of action, debts, dues, costs, interest and demands whether both at law or in equity payable by the wife with respect to the loan or any default on the loan.”
The evidence of the wife’s financial position, and the husband’s evidence that he does not believe he could obtain a further loan over Suburb C, mean that it seems unlikely that any such loan could be obtained. On that basis the husband’s position, as I understand it, is that the wife should not receive any interim property settlement sum and that any dollar for dollar order would be fruitless.
The husband said in submissions that he would be willing to continue to pay the wife’s weekly rent of $1,295 per week he has been paying.
MATERIAL RELIED ON
The Husband
The husband relied upon his affidavit of 25 pages of text sworn 2 December 2021 [HA1] which was before the Senior Judicial Registrar. As that affidavit complied with the Federal Circuit and Family Court of Australia (Family Law)Rules 2021 (Cth) (“the Rules”) concerning text length it was allowed to be read. The husband specified prior to the Hearing, as requested by the Court via email, the 10 documents he relied upon. These are referred to, as relevant, below. The husband also read his Financial Statement filed 2 December 2021 [HFS] and relied upon an “Outline of submissions” [MFI 3].
Given the delay since the original material was filed the husband was also allowed to rely upon his updating affidavit of 2.5 pages of text, and no annexures, sworn 17 February 2022 [HA2] updating his financial position.
The husband had filed additional material against the possibility that the wife would be allowed to rely upon material in excess of that permitted by the Rules.
The Wife
The wife filed a Court Book containing multiple affidavits. Prior to the Hearing the wife, through her solicitors, was also asked by email from Chambers to specify the 25 pages and 10 documents, in accordance with the Rules, upon which she proposed to rely.
By emailed reply dated 31 May 2022, the wife’s solicitors did not engage with the request and merely asserted that she would be relying upon her financial statement filed 26 October 2021, and her seven affidavits dated: 29 August 2018, 10 September 2019, 2 October 2020, 26 October 2021, 16 December 2021, 14 February 2022, 18 February 2022, and 27 May 2022, together with two tender bundles of documents.
In response to further correspondence from Chambers, asking her to identify what factor meant this application should be exempted from the Rules limiting materials to be relied upon. No basis for material in excess of the Rules was identified. She merely maintained her position.
The wife’s proposed evidence comprised in excess of 150 pages of text and 500 pages of documents. That is significantly more text than would usually be allowed on the final hearing of a property proceeding of this size and complexity.
The wife also sought to reply upon various applications in a proceeding seeking to allow her to rely upon this additional material, as if the mere filing of these applications excused her from compliance with the Rules, despite there being nothing unusual or complex about these proceedings that would justify a departure from the Rules.
The wife maintained her position, through Counsel acting on her behalf, that she was entitled to rely upon as much material as she desired, regardless of the provisions of the Federal Circuit and Family Court of Australia Act2021 (Cth) (“the FCFCOA Act”) and the associated Rules on case management principles to which she was directed.
Rather than have her application dismissed she ultimately selected and was permitted to read:
·Affidavit filed 26 October 2021 [WA1] from page 7 paragraph 34 until the end;
·Financial statement filed 26 October 2021 [WFS];
·Affidavit filed 14 February 2022 [WA2], of approximately two to three pages of text, but excluding the annexures; and
·Affidavit filed 27 May 2022 [WA3], of approximately five to six pages of text setting out her present position.
Litigants with a long purse and a litigious disposition, or who are willing to spend a disproportionate percentage of their net assets on litigation, or with a litigious disposition and the time and inclination to act as their own advocate, have contributed significantly to the notorious delays in the Family Law lists in Australia by taking up a disproportionate amount of the Court’s time while other citizens who abide by the Rules patiently await their turn.
It is to this mischief that s 63 and the “case management” provisions of Part 6 Division 4 the FCFCOA Act, as well as the provisions of the Rules such as Rule 5.08 “limit on number and length of affidavits” were, in part at least, directed.
The wife had a positive obligation pursuant to s 68 to act consistently with the “overarching purpose” pursuant to s 67 of the FCFCOA Act, which includes, so far as consistent with the obligation to achieve justice:
Section 67(2)…
(b) the efficient use of the judicial and administrative resources available for the purposes of the Court;
(c) the efficient disposal of the Court's overall caseload;
(d) the disposal of all proceedings in a timely manner;
(e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
There is nothing in the wife’s application that is unusual or which required any more than the evidence allowed by the Rules. Those Rules were developed by the Judges of both Divisions of the Court in consultation with the profession.
Far more complex disputes, and those involving far larger sums, are regularly dealt with within the Rules.
The process of allowing the wife to select segments of different affidavits has further complicated the hearing and determination of this matter. To avoid the risk of confusion identified Franklyn & Franklyn [2019] FamCAFC 256 at [22] it has been necessary to have the hearing tapes reviewed to confirm the material the wife was permitted to rely upon. This has used Court resources that could have been better applied to other tasks and has delayed the preparation and delivery of this Judgment.
As a consequence this matter has taken up more judicial time than it should have.
On an interim basis it is not clear to me whether it is the wife or her solicitors whose conduct lead to the position adopted. Accordingly, after much consideration, I leave the issue of to the Trial Judge, who will be best placed to consider the totality of the conduct of these proceedings and whether any action is required either in respect of costs or referral.
BACKGROUND
Relationship
The husband is 49. The wife is 44. They met in late 2004. The husband was a professional. The wife was a professional at a company in Perth. The parties commenced cohabitation at the husband’s apartment in Sydney in October 2007. They married in 2008.
There are three children of the marriage: Y 12, X, 10 and Z now 8. The parties separated in August 2017. They lived under the one roof until the wife and children relocated in late 2017. The wife commenced these, property and parenting, proceedings on 29 August 2018.
The wife has not re-partnered. She lives with the children in a rental property at Suburb C, discussed elsewhere. She says she has no family to provide her with practical support in Sydney. Her parents live in Perth and none of her siblings live in New South Wales.
The husband has re-partnered with Ms E. The husband and Ms E have a child, the children’s half-brother W, who is now just over a year old. They live at Suburb C.
The children live primarily with the wife. Y spends 5, and X and Z 4, nights a fortnight at Suburb C.
Y has had significant behavioural issues, discussed elsewhere.
Joint Balance Sheet
The parties provided a joint balance sheet dated 11 November 2021 [Exhibit A].
Description Ownership Applicant’s Value Respondent’s Value ASSETS Joint 1 G Building CC Street, Suburb C (Folio Identifier …) Joint (tenants in Common) $6,600,000 $6,600,000 2 Household Contents at CC Street, Suburb C Joint $17,000 $5,000 3 FF Business located at GG Building and Suburb C Property Joint $99,400 $78,700 (comprised at lines 18 and 20 of Husband balance sheet) 4 NAB Home Loan BSB … Account Number …33 (amount available to redraw as at 31.10.2021) Joint Nil Nil Wife 5 ANZ Access Advantage Account (#1…31) Wife $3,537 $3,537 6 ANZ Cash Investment Account #…29 Wife 0 0 7 ANZ Access Advantage Account (#…97) nicknamed by the Wife as F & D Loan) Wife $2 $2 8 HH Bank Account #…44 Wife $0 $0 9 ANZ Transaction Account #…57 (held on trust for Y) Wife Not Included $0 10 ANZ Transaction Account #…86 (held on trust for X) Wife Not Included $0 11 Bond on Wife’s rented accommodation at JJ Street Suburb C Wife $5,180 $5,180 12 13,500 H Company Shares @ $0.11c per share Wife $1,485 $1,485 13 16,510 TT Company Share (in liquidation) Wife $0 $0 14 Commsec Account (#…23) Wife $0 $0 15 Wife’s sole trading UU Business Wife $0 $0 16 Household Contents at JJ Street Wife $2,000 $5,000 17 Husband 18 5,750 TT Company Shares (in liquidation) Husband $0 $0 19 NAB Gold Private Account #…42 Husband $187 Not Included 20 NAB Business Everyday Account #…89 Husband $5,793 Not Included 21 Loan Owing from KK Pty Ltd to Husband Husband $37,815 Not Included 22 NAB Overdraft Account (#…25) Husband $13 $13 23 ANZ Cash Investment Account (#…28) Husband $23 $23 24 Interest (shares) in LL Pty Ltd (GG Building) (17,982 shares @ $13 per share Husband E $233, 766 E $233,766 25 Motor Vehicle 3 Husband E $7,000 $16,050 26 Motor Vehicle 1 Husband Not Known Not Included 27 Motor Vehicle 2 Husband E $14,800 $8,800 28 Share of Bank Guarantee required to secure the rent of GG Building (Husband says not recoverable given contingency) Husband $275,000 $ Nil 29 Accounts Receivable (Debtors) and Aged Debtors – at 21 June 2021 Husband E $1,415,949 Not Included 30 Husband's contents of GG Building (other than FF Business valued by AK Company) Husband $5,000 Not Included 31 Interest of the Husband in GG Building Husband Not Known Not Included Assets subtotal E$8,723,950 $6,957,556 LIABILITIES Joint 32 NAB Facility Home loan BSB … Acc No …22 – at 31.10.2021 Joint $1,475,934 $1,475,934 33 NAB Private Portfolio Account No …78 – at 31.10.2021
-Comprising NAB Portfolio Sub Account (#…05) at $13,949
-NAB Porfolio Sub Account #…02 at $2,464,850 (line of credit)
-NAB Portfolio Sub Account #…24 at $1,188 (Husband calls this ‘living account’)Joint $2,479,694 $2,479,987 34 Unpaid Invoices to MM Pty Ltd Joint Nil $70,924 35 Unpaid Invoices to Ms K (Builders) Joint Nil $112,000 36 Liability to Ms B Joint Nil $31,000 Wife 37 Wife’s Loan from Mr F and Ms D Wife E $264,000 Nil 38 Wife’s NAB Credit Card #…18 Wife $1,756 $1,756 39 Loan to Ms L and Mr M re Motor Vehicle 3 repairs Wife $2,355 $2,355 40 HECS Loan Wife $9,698 Not Included Husband 41 Income Tax Liability as at 01.10.2021 Husband $144,750 $144,750 42 Income Tax Liability (Husband says not yet due) Husband $222 $222 43 Unpaid NN Company Invoices Husband $9,545 $9,545 44 NAB Private Package Home Loan #…99 Husband NK 45 ANZ Credit Card, Account Number #…84 Husband $1,193 $1,193 46 NAB Overdraft Account #…89 Husband $13,237 $13,237 47 ANZ Credit Card #…92 Husband NK Not Included 48 NAB Qantas Rewards Credit Card #…20 Husband $13,853 $13,853 49 NAB Qantas Plus Credit Card #…98 Husband $1,616 $1,616 50 NAB Qantas Plus Credit Card #…74 Husband $7,579 $7,579 51 Share of Guarantee for Consultant and Fitout at GG Building Husband $286,646 $285646 Liabilities subtotal $4,709,348 $4,651,597 SUPERANNUATION Name of Fund Type of Interest Member Applicant’s value Respondent’s value 52 OO Super Fund Member Benefit Wife $76,686 $76,686 53 PP Super Fund Member Benefit Wife $8,699 $8,699 54 QQ Super Fund Member Benefit Husband $72,152 $72,152 Superannuation Subtotal E $157,537 $157,537 ADDBACKS 56. Paid Legal Fees of Husband $242,325 $242,325 57. Paid Legal Fees of Wife $325,000 Not Known 58. Half share of Property AK Company (paid by Husband for Wife) $1,100 $1,100 59. Half share of Property AK Company Update (paid by Husband for Wife) $1,512 $1,512 60. Half share of Mediation Costs with Mr AB $3,850 $3,850 61. Half share of AK Company Costs $495 $495 62. Half Report – Mr N $4,703 Total Addbacks $574,282 $253,985 Total (assets –liabilities + addbacks +superannuation E 4,746,421 $2,717,481 FINANCIAL RESOURCES Description Ownership Applicant’s Value Respondent’s Value 55 Carswell Family Trust – General Beneficiary Equitable Nil 56 Company DD points (248,366- August 2021 balance) Husband NK 57 Company DD points Financial Resources subtotal Nil Other Subtotal TOTAL (assets – liabilities + superannuation + financial resources + other) $4,746,421 $2,717,481
The main asset is the property at CC Street Suburb C valued by each party in November 2021 at $6,600,000. The husband was permitted to rely upon a valuation report for the property as at 10 May 2019 of $3,750,000. Precisely why he says this historical valuation is relevant to this application is not clear.
The wife says that the total assets are $8,723,950. The husband $6,957,556. The major differences are around the husband’s debtors, which the wife said were [WA2 [14]] $1,415,949. The husband says [HA2 [15]] that as at “15 February 2022, I have Aged Debtors of $550,509.34” The husband apparently does not include his debtors in the balance sheet. The reasons he takes that position are not clear.
Another issue in dispute is the value of the husband’s share of the bank guarantee of his business. The wife values this at $275,000. The husband says his interest is not recoverable.
The parties’ estimates of liabilities were $$4,709,348 and $4,651,597 respectively. The major liabilities were agreed to be the joint liabilities for a NAB home loan facility of $1,475,934 and a NAB private portfolio account liability of $2,479,694. That is approximately $3.955 million of joint liabilities. There are a range of disagreements including about unpaid bills and about whether or not the wife’s debt to her parents [WA1 [92]] of approximately $260,000 for legal fees is a current liability, considered further elsewhere.
Superannuation is agreed at $157,537, with more held by the wife.
The addbacks include the husband’s paid legal fees of $242,325. The wife said that [WA1 [91]] “I have paid legal costs in these Family Court proceedings of about $325,000.” The husband said HA 102 referring to this evidence said that “However, notwithstanding my numerous requests for disclosure of her current legal fees rendered and paid, she has not provided me with such information.” This is one of many mutual allegations of non-disclosure.
There also appears to be a dispute about the wife’s financial resource referable to the “Carswell Family Trust”.
The wife says that assets less liabilities plus addbacks and superannuation totals E $4,746,421 and the husband $2,717,481. Excluding legal fees of at least $560,000, that leaves a modest net property pool, by Sydney standards, of between $2.2 and $4.2 million.
I am not in a position to make a finding about the disputed asset pool but take into account the parties’ positions and in particular the figures for the major asset and liability items.
It is relevant to note that the parties’ assets are not commensurate with their expenditure on legal fees. On the lower estimate the parties have already spent 20% of their assets on litigation, without yet having had a final hearing.
Contributions
The husband said in his written submissions that:
[57] I am also concerned that is a greater amount is paid to [Ms Carswell] by way of part property settlement pursuant, any such amount may not be available to be repaid to me in the event final hearing determines that [Ms Carswell] is to receive less that the amount of $250,000 by way of final property settlement order should be amended or discharged.
The husband gave evidence about financial contributions, at [HA1 [34]-[40]]. Proceeding on the basis of his evidence, given the length of the relationship, the parties three children, the wife’s role as primary homemaker and carer and the husband’s role as primary earner, taking into account the legal costs incurred, and the husband’s written submissions that it was the transfer by the wife to her parents of $75,375 and the stated intended expenditure of the $250,000 which caused him to hold this concern, I am not satisfied that there is a basis for this concern.
An order for payment of $250,000 of the current pool, which is just under 10% on the husband’s assessment, would not mean that the remaining property would not be adequate to meet the legitimate expectations of the husband at a final trial. No submissions were advanced as to the percentage or quantum the wife would receive. No submissions were made that the wife would receive less than 10% of the pool, as asserted by the husband.
I am satisfied that the wife’s remaining inchoate interest in the matrimonial property, and particularly in Suburb C, would be more than sufficient to cover the claimed interim payment.
HUSBAND’S CAPACITY TO PAY
Husband’s earning capacity
The husband is a professional. His declared taxable income in the three financial years 2018-2020 were set out at paragraph [HA1 [23]] as follows:
Net income Net Taxable Income Financial year ending 30 June 2018 $737,121 $716,415 Financial year ending 30 June 2019 $872,345 $867,063 Financial year ending 30 June 2020 $722,861 $709,728
That is an average net taxable income of approximately $764,402 per annum.
The wife said that despite requests the husband had not disclosed [WA3 [7]]:
a) “his 2021 tax return or Notice of Assessment (either in draft, or in lodged form);
b) any BAS Statements;
c) any bank statements for his business banking account since 31 January 2022 (being the account into which [Mr Tenson's] professional fees are received);
d) reports as to his current aged debtors, or the current value of his work in progress.”
The husband said that at that time he had [HA1 [23]] “not yet lodged my tax return for the 2020/2021 financial year and do not intend to do so until early 2022.” It is now June 2022. There is still no evidence from the husband that he has filed his tax return for the last financial year nor disclosed these to the wife. No explanation was offered for why this has not occurred.
The wife says that she had requested the husbands BAS statements but been told that they cannot be produced because [WA2 [11]]:
“Our client does not have any BAS to produce. Our client completes the forms by hand which are then sent in the post to the ATO. He has not retained copies.”
If true, that is a surprising response. It is difficult to conceive of any logical reason why a professional would not keep copies of BAS statements he lodges as part of his financial records. The question of when that particular practice commenced will doubtless be considered at the final hearing.
I note, for later consideration by a Trial Judge, that in the context of the wife’s many allegations of non-disclosure, and conduct said to be intended to defeat the Court’s capacity to determine the husband’s true financial position, that the husband was specifically put on notice that as a professional, and acting as his own advocate, that if the wife’s current assertions about his conduct of the litigation are established at the final hearing then he should anticipate a referral to the appropriate professional conduct bodies to consider whether he is a fit and property person to hold a professional licence.
The wife said in her evidence in October 2021, at [WA1 [37]] that the husband earns “in excess of $1,200,000 per annum.” The wife said in 2022 [WA2 [8]-[9]] that having reviewed the husband’s bank accounts she had estimated “the deposits” into his business bank account for the 2021 financial year totalled $1,554,219.71. I would not allow the wife to tender voluminous bank statements said to underlay this analysis without a s 50 Evidence Act 1995 (Cth) Schedule in the context of an interim hearing.
In this context, I reminded the husband of his duties as a professional appearing in his own cause, and of his duty of full and frank financial disclosure, and asked the husband to advise the Court of his gross income for the 2021 financial year, on the basis that if at a final hearing his statements to me were held to be incorrect he should expect to be dealt with for misleading the Court. In this context, the husband he said that his gross income during the 2021 financial year was $1.2 to $1.3 million. Given his obligations of disclosure I take the higher figure.
The husband said that the [HA1 [26]] “the income that I am likely to derive in the financial year ending 30 June 2022 will be considerably less than both the last financial year as well as the financial years immediately preceding those.”
The reasons given related to the timing of certain payments, impact on the “pipeline of work”, taking 2 months parental leave following the birth of his child W in 2021 and “working at a reduced capacity since then so as to share the child caring obligations” for W, and endeavouring “not to take on any [work] that will, or have the potential to, fall on a day that I have custody of the children”. He also said that in the event that Ms E increased to working 4 days a week and the parties were unable to obtain 4 days of child care he would reduce his work days to 4 days a week to care for W.
He said [HA1 [27]] “I am currently working approximately 40 hours per week as a [professional]. This includes some work every second weekend when I am not caring for the children. I accept as many quotes as possible in my field of expertise that enable me to maximise my income earning potential but also prioritise my parenting duties. I do not have the capacity to work any more hours than I currently am.”
The husband also said [HA1 [28-29]] that he was unable to draw upon further borrowing from the bank for a partial property settlement without giving the bank certainty as his net asset position following the property division, including certainty that he will have the property on a final basis. That is clearly not possible. Indeed, on the material before me and given the husband’s own evidence of his financial capacity, it’s seems highly unlikely.
The husband’s evidence was that [HA1 [31]] on his income of $1.2 million per year he had expenses of around $331,000 per year before income tax.
The husband’s financial statement filed to December 2021 said that his average weekly income was $14,700 and his total expenditure was $17,812. This was net income after expenses of about $765,000 per year, with tax of approximate is $6400 per week, leaving net income of approximately $8,200 per week.
His major expense was for the mortgage on Suburb C of just over $4000 per week. The wife relies upon this high expenditure on this extremely luxurious $6.6 million property as a significant factor in considering the appropriateness of her claims by reference to parity of standards of living.
The husband says he pays $3,878 per week supporting the children.
All other expenditure is said to equal $2,658 per week.
Any consideration of the husband’s critique of the wife’s luxurious lifestyle, considered elsewhere, must keep in mind his own level of expenditure.
In relation to the “financial circumstances of any person co-habiting with a party” (s 75 2 (m) of the Act the husband says [HA1 [33]] that Ms E is employed as a manager for RR Company now working 3 days a week and earning approximately $1,155 net each week.
In his updating affidavit of 17 February 2022 [HA2] the husband said that [9] “the income that I am likely to derive in the financial year ending 30 June 2022 will be considerably less than both the last financial year as well as the financial years immediately preceding those.” He said that his weekly average income to January 2022 had dropped to [HA2 [11-12]] to “$17,274.57 per week (before tax and expenses)” which if carried through, would be approximately $898,277 for the 2022 financial year, which after GST and expenses he estimated at $615,849. Taking into account tax and Medicare levy he estimated an income of $6,840 per week. In that context, the husband’s expenditure of $4,000 per week, or well over half of his net income, to remain in the Suburb C mansion seems unsustainable.
WIFE’S CAPACITY FOR APPROPRIATE GAINFUL EMPLOYMENT
The husband put in issue the wife’s capacity for appropriate gainful employment and her effective earning capacity.
Wife’s present income
The wife said [WA1 [42]] that her income was made up of: $640 per child support, $428 for spouse maintenance, an income tested jobseeker payment of $341 per week an income tested family tax benefit of $148 per week. In addition to this it was agreed that the husband pays the rental cost for the property in which she and the children live at Suburb C which is $1295 per week. He agreed in submissions to continue paying this.
The wife said [WA1 [44-45]] that she agreed to this arrangement in circumstances where she had no other means of financial support.
the essence of the wife’s case was set out at [WA1 [39]]:
I am presently home-schooling our three children and I am not working. Irrespective of the lockdown and home-schooling, I do not feel able to work anymore than I have previously, which is on a casual commission basis at times that I am available for reasons which I refer to below.
The wife relied upon two major factors which she said meant she has little effective earning capacity. The first was her obligations to care for the children, and in particular Y, which she says effectively means that she could not sustain full time or other employment due to her need to be always available, and the second was the limited available employment in her chosen field of employment in the arts. She does not appear to have considered any other employment.
Children’s Care Needs
The wife says that Y’s particular needs, in combination with the need to care for three children, are a factor which prevents her engaging in employment.
Section 72(1)(a) specifically includes “the care and control of a child of the marriage who has not attained the age of 18 years” as a barrier to work which will impair the exercise of latent earning capacity. The Court is also required to consider the similar issue in s 75(2)(c) the “care and control of a minor child of the marriage”. At the time of her affidavit on 26 October 21 the wife said that she was home-schooling the 3 children and not working. That situation has obviously changed significantly with the return to face to face schooling in 2022.
Y’s Needs
The wife WA 38 relied upon Dr P’s single expert report to describe the challenges she faced as Y’s primary carer. She set out, at [WA 1 [60-64]], that at October 2021 she felt she needed to be available to support Y daily in a way which was entirely different to the kind of support required by his sisters. This included because; Y’s school attendance was not consistent; and, there was additional effort needed to support Y in practising strategies to manage his behaviours; and, meeting with teachers; and, supervising his schoolwork. When Y was suspended she was solely responsible for homes-schooling him, which she said was 8 months in addition to COVID-19 lockdowns.
The issue between the parties was whether Y’s high care needs continue today in a way that impairs the mother’s capacity to work.
Dr P – December 2020
Y was attending at SS School, a private school in Sydney. He was suspended and did not attend for a lengthy period of time due to his behaviours. He received diagnoses of Adjustment Disorder and probable Autism Spectrum Disorder. It was in this context that a single expert report was prepared.
Dr P provided a single expert report dated 17 December 2020. That report painted a deeply concerning picture of Y’s mental health. I will not summarise the entire report, however, it is worth-while extracting some portions to indicate the nature and extent of Y’s difficulties.
Dr P recorded some of her observations of Y at page 6, from line 58:
[Ms Carswell] and the three children arrived at my offices and I came out from my office to greet them in the reception area. [X] and [Z] were friendly, polite, accommodating and very sociable when I introduced myself to them. [Y] would not engage in any eye contact and was standing close to the door of my rooms next to his mother. He appeared to be agitated, angry and hostile in his body language and mannerisms. When I said hello to him he looked directly at me and hissed but was otherwise nonverbal. In the reception rooms, I explained the purpose of my role. The situation was tense as [Y] became increasingly oppositional. He found small stones which were in a pot plant and started throwing these around the room, including directly at his mother and my receptionist. The situation quickly became very dangerous with the stones flying around the office and directly at the adults. [Ms Carswell] was endeavouring to placate and calm [Y] in a gentle and consistent manner; however, this did not have any apparent effect. I immediately removed the girls from the situation and took them to my room and they appeared to be relieved. I returned to the reception area where [Y] was continuing to be extremely agitated and was threatening to run out of the office so that [Ms Carswell] was blocking the door. [Ms Carswell] asked if I could lock the door but my office did not have the capacity to lock the door from the inside [due to fire regulations]. At one point [Y] ran from the office and was screaming, but [Ms Carswell] managed to restrain him and bring him back in. I explained to [Ms Carswell] that the situation was too dangerous to continue, but that I would be able to interview the girls. [Ms Carswell] asked if I could reconsider and allow [Y] time to calm down. At this point she was able to get [Y] to sit in a small bench seat which is partially obscured from view and [Y] was still. I told [Y] that I would not make him do anything that he did not want to do. At one point, when [Ms Carswell] was speaking to me about the possible arrangements, [Y] shouted “I can hear you”.
I was then able to separately interview [X] and [Z] whilst [Y] sat with his mother in the waiting room.
I was later informed by my receptionist that she made arrangements not to take any calls during the time [Y] was in the waiting room as [Ms Carswell] informed her that the calls were disturbing to [Y]. My receptionist also informed me that at some point [Y] took all the melamine shelving out of the cubby seat area and threw the shelves forcefully on to the floor. My receptionist informed me that [Ms Carswell] jumped away from the flying boards and that she [together with my receptionist] packed the shelving away, although [Y] had two of the shelves barricading himself in the cubby. My receptionist informed me that there were times when [Y] appeared to be verbally angry and other times when he remained physically agitated and was hitting and kicking and that it was a very dangerous and volatile situation. [Emphasis added]
Dr P noted, at page 19 lines 471 and following, that the wife considered it would be appropriate for Y to attend the VV Services and that it was likely that he would be able to attend there in 2021.
At page 33, from line 929, Dr P reported Mr Tenson’s concerns including that from lines 943:
During the course of this conversation, [Mr Tenson] indicated that he feels extreme anxiety and trepidation about [Y] and the escalation of his behaviours. He said whenever a call comes through from [Ms Carswell] or he sees a silent number on his telephone he feels terrified. He said that there have been a few recent flareups [sic] in [Y’s] behaviour and he said that he thought these correlated in part with the appointments that [Y] has had to attend recently, both with myself and with [Dr R]. He said that prior to that [Y] had not run away since August.
In her “Evaluation and Terms of Reference” section Dr P stated, from lines 1284 to 1308:
I think that [Y] is facing an urgent and escalating mental health crisis which requires the immediate attention and focus of his parents. I cannot emphasis enough, the serious and escalating nature of [Y’s] needs and the concomitant impact on [X], [Z] and the parents generally. I must also emphasis the serious and life threatening risks inherent to [Y’s] untreated and improperly managed presentation.
Throughout this report, I will refer to [Y’s] “mental health” as a broad term encompassing a range of possible diagnoses, including a pervasive developmental disorder (such as ASD), an acute mental health disorder (such as depression, anxiety), a behavioural disorder (such as oppositional defiant disorder), or a combination thereof. The exact nature and aetiology of [Y’s] mental health cannot yet be determined but is likely to be multifactorial.
In my view [Y’s] mental health is likely to have been exacerbated by multiple factors relevant to the parenting matter before the court, as well as other broader factors and circumstances. These factors include: poor communication between the parents; exposure to parental conflict; [Y’s] suspensions from school and the consequent lack of peer interactions; the impact of COVID-19, including periods of home-schooling and the limited access to consistent psychiatric and educational services; the lack of ongoing tertiary psychiatric support and the impact of these proceedings. I think there is a very strong possibility that [Y’s] mental health has been a longstanding issue and that there is likely to be a strong developmental basis to it.
My view is that [Y’s] mental health has had and is continuing to have a significant impact on all family members, but most particularly [X], [Z] and [Ms Carswell] who live with [Y] for the large proportion of the time. [X] and [Z] presented as highly distressed, anxious and hypervigilant [sic] about their brother, themselves and their parents. I formed the view that their capacity to cope in the current circumstances is fragile and if not addressed, will present a future risk to their own mental health. [Emphasis added]
Dr P said at page 54 line 1612 and following:
Currently there is a high risk that family members will be exposed to violence in responding to [Y]. [Y’s] current condition has involved him being violent towards others including both parents, school staff members, the family babysitter, and other adults and professionals. The risk of serious physical injury is high.
Dr P supported Y’s enrolment in the VV Services program as soon as possible.
VV Services
The VV Services program is a Clinical School Program operated as a joint partnership between VV Services and Q School.
Y was enrolled in and completed the program at VV Services. On 10 August 2021 Dr S, a clinical psychologist at the VV Services, wrote an email to the “team at WW School” in anticipation of his transition there [Exhibit 3]. Dr S wrote:
As part of the Clinical School Program, [Y] attended separate Family Residential Stays at [VV Services] with each household in December 2020 and January 2021. He then commenced attending [Q School] on 9th February 2021, with 4 days being spent at [Q School] and 1 day at [SS School]. [Y] is a very bright, curious, independent and likeable boy, who has made considerable gains since starting our program, including: a greater capacity to regulate his emotions, resilience in dealing with peer relationship issues at school (where there is a high level of provocation from peers, frequent dysregulated behaviour from other students and limited friendship options within such an EDBD setting), abiding by the expectations and rules, more openness to engaging in meetings with mental health professionals from [VV Services] and a flexibility in dealing with moving between two different schools and adjusting to online learning due to COVID. [Y's] parents have also shared how at each of their homes, he has demonstrated extremely settled, prosocial behaviour and has not engaged in any unsafe behaviour this year.
While there have been some challenges in working with [Y], there have been only two occasions of physical aggression towards others at [Q School] early on during his enrolment. The first was an isolated instance towards a student in response to a considerable level of provocation from the other child. This did not result in any injury to the student, and since then there have been no further incidents of aggression towards other students as [Y] has been able to show he can seek support from the teachers at [Q School] if he needs help to resolve an issue with a peer. The later incident of physical aggression towards staff back in March 2021 was in the context of attempting to prevent [Y] from leaving the school grounds. Whilst at first [Y] did not show any unsafe behaviour and in fact was sitting calmly a short distance away from the school entrance, when staff approached him to try and give supportive, verbal encouragement to return to the school grounds, he absconded further and threatened staff with various objects from the immediate environment (e.g., a stick and rock) in an effort to prevent them from approaching him. Given our pursuit of [Y] seemed to trigger the physical aggression and increase risk to all involved, our team (in close collaboration with his parents) revised our absconding management plan and all agreed that [Y] would not be pursued if he were to leave the school grounds. Since that time, there have been no instances of [Y] absconding or even attempting to abscond from the school grounds, and instead [Y] has demonstrated a capacity to utilise mutually agreed upon safe spaces both within the school building, and in the outdoor playground when he feels the need to have some space away from his peers and teachers. [Y] has been trialled on a number of different medications in the past but has recently ceased the most recent medication (Clonidine) on the advice of our team and [VV Services’] Child and Adolescent Psychiatrist given the progress that [Y] has been able to make this year. To further the gains already made, our teams are continuing to support [Y] to enhance his: social skills, ability to regulate his emotions (particularly anxiety), and to build his sense of self-worth and experience of success at school given the difficulties of the past.
Our [VV Services] and [Q School] teams have worked very closely and collaboratively with [SS School], and given the gains [Y] has made, have commenced a transition plan to re-integrate [Y] back to [SS School]. Prior to the shift to online learning due to the COVID shutdown, [Y] had successfully been attending two days at [SS School] with no behavioural issues noted, with the plan being to have him attending [SS School] full-time by the end of Term 3. Obviously, the extension to online learning makes this highly unlikely, however we are continuing to collaborate with [SS School] and [Y's] parents about how to find opportunities to help [Y] keep building skills that he will need to successfully navigate the mainstream school environment, and for him to be able to demonstrate these skills so as to help us all feel confident about the transitions [Y] faces ahead, particularly moving into a high school environment next year.
We got the sense that despite the differences that were apparent in our last meeting, we were all in agreement that we want what is best for [Y], and we hope that this helps in understanding more about his needs and the progress that has been made up to this point, bearing in mind that we still have 6-7 months before he begins Year 7. We see this period as a window of opportunity to set [Y] up to be able to successfully manage the mainstream school environment next year.
While he may need support at the beginning of the year, we would anticipate that this would not need to be long-term support but more a 'scaffolding' approach where, as he settles in and has more and more positive experiences, the support can then be reduced. The level of support required may in fact be very minimal, with some possibilities for support such as: having a particular adult that [Y] feels comfortable with and is able to access when needed, having a nominated safe space [Y] can go to (within the school grounds) if he needs some time away from the class to regulate himself, regular positive feedback for [Y] and some liaison with his parents to integrate ideas between the school and home environments. [Emphasis added]
SS School
The husband said that [HA1 [55]] 11 November 2021, following successful graduation from the VV Services program, Y had attended SS School full-time. At the time of swearing his affidavit the husband said [HA1 [64]] that Y’s attendance at SS School had been without incident.
WW School
The parties agreed that Y would attend WW School from year 7 in 2022. WW School is a 15 minute drive from the wife’s and the husband’s respective home. In submissions the parties said Y had been attending. He has had one suspension earlier this year but is otherwise attending full time.
Wife’s assisted transport application
The husband tendered, Exhibit 2, an assisted transport application from February 2021 to assist with transporting Y to school. In support of that application she said:
The school times and distance from [Q School] to my other chlidren’s [sic] school means I am often unable to collect my other children on time. I am a single mother primary carer with no family in NSW and a low income (including due to having sole responsibility for home schooling [Y] for approx.12 mths between Nov 2019 to Feb 2021 and now Mondays) and the travel time of approx. 3 hrs per day to and from [Q School] is impacting the number of hours worked and quality of my service provision as a sole business owner and my ability to seek employment. [Emphasis added]
The husband pointed to the fact that the wife is no longer home-schooling the children due to COVID-19 and the fact that all three children are now attending school full-time.
His case is that whilst this was the situation, the children are attending school full time, and spending substantial time with him, and the wife is in the same position to re-enter the workforce as other carers of children in this age group.
Wife’s Earning Capacity in AJ Business
The wife gave evidence [WA1 [51]-[52]] that she has a business (as a sole trader). She said that in the 2021 financial year she earned about $7,250 gross and the work was dependent upon the availability of work, her availability having regard to the children’s commitments in particular Y’s needs, and the husband’s preparedness to assist her with the children’s care and routines. She said that she had not worked from 2009 to separation.
In her updating affidavit the wife said in WA3 from [22]-26] that she performed one weeks casual work since 1 April 2022 earning about $900 gross. She said [WA3 [25]-[26]]:
25. I continue to seek employment that is flexible, and school hour based at the times that I have had the opportunity to work (i.e: when the children have not been home schooled, or ill or in COVID isolation). In late April 2022, I identified a casual role which I could perform primarily at home… On 6 May 2022, I was notified as being successful [in securing a casual position]. I begin that […] work on 30 May 2022 and it concludes on 22 August 2022. The work required each week is conducting [three-hours of online work], and then attending to online work arising from administration tasks, preparation work… I can perform all of this work from home, and around the children's commitments. The income that I will receive from this work is $4,840 for term 3, and pursuant to my Contract of Employment which is exhibited hereto and marked '3'.
26. I have estimated my weekly income from [UU Business] work to be about $260 per week. This estimate is based on the income that I anticipate receiving from [Ms K] ($900), and the income that I anticipate receiving … ($4,840), divided by 24 weeks (being the period since the Orders were made on 1 April until 2 September 2022). This is a variation to my most recent Form 13 Statement, namely that I anticipate being in a position to earn about $260 per week from contract work.
The wife said that when she had sought the husband’s assistance with managing the children’s activities and treatment he had responded [WA1 [57]] “in a way which I found demeaning and intimidating”. She set out, at some length, the circumstances in which she says the husband has failed to assist her obtain employment, starting with examples in September 2019 and going through to October 2021.
She pointed to the fact that [WA1 [59]] “Each week, the children and in particular Y, have various commitments which I am responsible for transporting them to and from.”
The husband’s case is that the wife’s true capacity is not represented by her capacity to work and earn in her chosen field, which provides a relatively limited market.
The husband says that between mid-2003 until the end of 2005 the wife worked as a professional. He said that in 2008 the wife worked for ZZ Organisation and then in 2009 for V Enterprise.
The husband says the wife’s tertiary qualifications included [HA1 [50]]:
[A] Bachelor Degree from [XX University]; a Masters Degree from [YY University] which she obtained after we separated in 2017/2018; a Bachelor Degree from [YY University], obtained after receiving her Masters degree; and a Certificate III which I believe she obtained in the last year or so.
The wife did not dispute this history of education, training and work experience.
While she is not presently qualified as a professional, and further study and re-qualification would be required, that is clearly a longer term option. In the near term the husband submitted that her skills would make her qualified for assistant work, including undertaking discovery or similar work.
The essence of his case is that capacity for appropriate gainful employment is based on available skills and not restricted by a desire to work in a field, particularly if that field does not have many apparent opportunities for employment or remuneration.
Wife’s Reasonable Financial Needs
The husband also disputed the reasonableness of the wife’s expenses on the issue of whether her need exceeded her earning capacity, and if so to what extent.
Loan to Parents
The wife says [WA1 [73] table item 38] that “what I can currently afford to pay” in repayments to her parents per week was “$232” and the "amount I seek as part of spouse maintenance” is “$245”. She says, at WA 100, that she considers the outstanding loan of $239,000 to her parents “an existing current liability” which she pays from time to time.
The husband disputes the wife’s obligation to pay her $232 per week as he says the loan deed she entered into on 13 June 2019 says the date for payment of the loan is HA 76 “at the conclusion of the matrimonial proceedings.”
Further, the husband says [HA1 [81]] that his request for bank statements dated 20 September 2021 concerning repayments alone facility was met with the response on 1 October 2021 that “Our client's repayment of funds towards a liability in her name is otherwise a matter about which your client can make submissions at any interim hearing”. This points again to both parties taking an inappropriate attitude to their obligations of mutual financial disclosure.
Rental Property
The wife says [WA1 [74]-[75]] that the current property in which she lives and for which the rental is $1295 per week, or approximately $67,000 per annum, is inadequate for the family’s needs, as it is 130 m², has only three bedrooms so that the girls share a bedroom and she says her bedroom is an attic conversion with no doorway. There is no parking space and only one living space. She says [WA 1 [74]]:
I seek to relocate to a different rental property with the children in [Suburb C] (or a surrounding suburb), and which I estimate will cost in the region of $1,900 per week. I seek an Order that [Mr Tenson] be required to pay my rental costs directly to the agent, up to the value of $1,900 per week.
In particular the wife sought to move to a four bedroom property so each child could have their own room, living spaces for privacy and parking space. She relied upon the opinion of Dr P at page 48 line 1421 where Dr P noted that the father has developed a practice of allowing Y time to calm down when “emotionally charged”, that the father was assisted by the benefit of having his partner Ms E and “the fact that he appears to have a larger home so that the children have more opportunities for respite from one another”.
The husband says at [HA1 [82]] that the wife’s rental property “is a newly refurbished, freestanding … three-story, three-bedroom terrace house on one of [Suburb C’s] quiet streets close to [Suburb AA]. The house is fitted with air conditioning, underfloor heating and a courtyard.”
The wife exhibited printouts of properties currently available for rent indicating the cost, at Exhibit 1 to her affidavit [WA1]. These included a four bedroom three bathroom to Apartment flat on AC Street Suburb BB at $1,750 per week, or $91,000 per year, and a 4 bedroom 3 bathroom and 2 car house on AL Street Suburb BB at $2000 per week, or just over $100,000 per year. The properties are all, by any reasonable person’s assessment, luxurious. That is to be anticipated given that the annual price exceeds the pre-tax earnings of the average worker.
The wife said [WA3 [21]] that the property was sold in March 2022 but she remains a tenant on a month to month lease at the same rate.
A large part of the wife’s case, in her affidavit at [WA1 [76]], and in her oral submissions related to the fact that the husband has the benefit of the former matrimonial home which is a [WA1 [76]]:
... five bedroom, three-bathroom, two living room, two outdoor space home with four parking bays (one of which is in a car garage). The [Suburb C] property has an internal floor space of 320 square metres and it is more than double the size of the property in which the children and I live.
The essence of the wife’s submission is that she and the children, when they are with her, are entitled to the same level of luxurious accommodation as the husband and his new wife and child have at Suburb C.
The husband says that there are four bedroom terrace houses in Suburb C available for rent for similar sums to the wife’s current rental costs. He also included the evidence of other available properties in his documents. He said that he would be willing to pay the bond on another property at a similar weekly rental to allow the wife and children more space. He also said [HA1 [89]] he is will continue paying her rent up to $1,295 per week.
Holidays
The wife seeks $200 per week, or $10,400 per year, for holidays. She says, [WA1 [83-86], that she estimates that the husband has spent in excess of $126,000 on holidays since the separation in September 2017, or approximately $650 per week.
The husband also points to the wife’s claim for $10,400 per year for holidays, for her alone, as being excessive [HA1 [97]].
Expenses
The husband points at [HA1 [88]] to the fact that it appears from the wife’s bank account that she shops at:
[AD Store] (an exclusive food providore in [Suburb BB]), [AE Store] (a boutique organic meat providore which, for example, sells organic whole chickens for $41.50) and [AF Store]. Prior to separation, we regularly did our weekly grocery shopping at Woolworths and Coles, which I have continued to do.
While both parties have conducted the proceedings on the basis that they are entitled to allocate unlimited Court time to this interim application it is not appropriate to attempt to delve into the contested minutia of the wife’s Part N statement.
The wife’s allocation to herself of $749 per week, excluding rent, is not excessive in context and noting the husband’s personal expenses for himself, excluding rent, are $1,757 per week.
SPOUSE MAINTENANCE
Wife’s Ability to Adequately Support Herself
The wife’s right to spouse maintenance pursuant to ss 72 and 74 of the Act is subject to the wife establishing that she is unable to adequately support herself. That necessarily involves an assessment, subject to the limitations inherent in an interim hearing, of the wife’s capacity for appropriate gainful employment and of her earning capacity.
The wife is only earning a nominal income at present. She does not have other financial resources presently available to her, noting that her inchoate rights pursuant to s 79 are largely tied up in Suburb C in which the husband resides.
The wife requires, even on the husband’s case, a degree of financial assistance. In that context he agrees to continue paying the weekly rent of $1,295 on the current property, or on a more suitable 4 bedroom property at the same rent which he says can be sourced in the local area.
The real issues are the degree of the wife’s financial need in order to live adequately, which she frames by reference to parity with the husband’s lifestyle and not by reference to community standards, and the extent to which she has an earning capacity that she could exercise in the real world in appropriate employment should she choose to do so.
The wife is only 44. She suffers from no physical or psychological incapacity. She has a wide range of transferrable skills based on her education, training and experience which would make her a viable candidate for appropriate gainful employment in the current strong labour market, and in her reasonably accessible area at the centre of Sydney.
The wife’s submissions proceeded on the basis of her earning capacity in her business. While the wife might prefer to work in this field of interest, where there is apparently only limited work available in her preferred field of employment, and where she has other transferable skills which make her qualified for other appropriate gainful employment, I would not consider her present income a true measure of her earning capacity.
The wife has extensive skills which would qualify her for work in the open labour market. As the husband submitted, a highly educated, well-spoken and presented former professional would be a viable candidate for an administrative role in a company. While she might need to accept an entry level role in the range of $55,000-$60,000 per annum plus superannuation, within a reasonable time she would be expected to earn substantially more. The husband submitted that could be up to $150,000 per annum. That seems high, but a figure of up to $90,000 plus superannuation would certainly be within the range. Any such roles would be in addition to her obvious qualification for sales or customer service roles, requiring proficient English language skills, which she could easily obtain at any time in the present labour market, in the $50,000-$60,000 per annum plus superannuation range.
While the wife is unlikely to be presently entitled to hold a professional licence, that is something she may pursue in future and, once requalified, her long term earning capacity could be significantly higher. This would be a matter for Trial.
That earning capacity is, however, subject to the wife’s duties as the primary carer of Y.
Given the husband told Dr P that “whenever a call comes through from [Ms Carswell] or he sees a silent number on his telephone he feels terrified”, the strain the wife has been under cannot be over-stated.
I accept and find that the need to be available for Y, and for the other children in the context of the stress Y brought to their lives, meant that until recently Y’s behaviour and the wife’s obligations as the primary carer meant that regular employment was unrealistic.
The evidence suggests that Y is doing significantly better now, with one short suspension in recent times. However, until there has been a regular period of stability in Y’s behaviour and schooling it will be difficult for the wife to make a commitment to regular employment.
If Y were to be substantially suspension free at school through the coming months and to the end of this year, it would appear to be reasonable for the mother to look to engage in substantial part time work of 30+ hours a week or more next year, as many single parents with children in the same age range as the parties children and extensive parenting obligations do.
However, on balance, given the inherent uncertainty in the medical and behavioural prognosis for a child in Y’s position it is not appropriate in this case, as it might be in other cases, to frame an order for spouse maintenance to reduce at a given date based upon an assumption that the wife will have the capacity to obtain substantial part-time or full time employment over the next six months.
Wife’s Reasonable Standard of Living
The wife is entitled to a reasonable standard of living. It is clear that her case is framed around her subjective view of reasonableness and that this, in turn, is largely dependent on an implied right to parity with the husband’s standard of living.
Whilst a degree of parity is clearly appropriate, particularly while the husband enjoys the benefit of living in the asset that represents the majority of the parties’ joint net matrimonial property, the test of reasonableness must contain an objective element by reference to the parties’ incomes, their relatively modest net asset pool, and community standards.
It is clear that the children should each have their own room, and more space, particularly to protect the girls from Y’s behavioural issues should they not continue to subside. However, I am not satisfied that the wife requires $2,000 per week to achieve that. There appear to be more suitable premises in the surrounding area which would adequately meet the wife’s reasonable needs at a similar, or perhaps slightly higher, rent than she currently pays.
The wife has not established a current liability to her parents to my satisfaction, noting the husband’s evidence as to the apparent terms of the loans.
The rent, which the husband concedes, should be paid together with the wife’s personal expenses in her part N statement plus insurances total approximately $2,100 per week.
Allowing for some additional weekly amount for more appropriate accommodation in the same area, and not being persuaded that the wife’s loan is currently repayable, and balancing all of the evidence and issues as best I can on an interim basis, I am satisfied that a sum of $2,500 per week by way of interim spouse maintenance payments would allow the wife to be adequately supported taking into account all of the relevant factors.
While that sum is less than sought by the wife, it is a much higher sum than is allowed in many spousal maintenance cases determined across both Divisions of this Court. In my view it sufficiently reflects issues of parity between the parties while taking into account the reality of their actual financial positions.
Husband’s Capacity to Meet Spousal Maintenance Obligations
The husband has, by community standards, an extremely high income. I am not satisfied that I am able to determine his true income. That, in part, is because of the way in which he has chosen to manage his affairs as well as this litigation.
I cannot infer at this stage that he has structured his affairs to frustrate the disclosure process or make any findings as to the wife’s allegations concerning non-disclosure.
I have the historical material as to his income earning capacity and rely upon that.
The husband conceded that he would pay $1,295 per week for the cost of rent.
He is living in Suburb C at an extremely high weekly cost, while complaining that the wife wants to spend too much on rent.
His personal expenses as disclosed in his Part N statement are also more than double the wife’s and very high by community standards, while he complains of her excesses at boutique grocers.
On balance, in the context of an interim hearing, I am satisfied that the husband has the capacity to meet the spouse maintenance order I propose from his income.
Although not strictly necessary given my finding above, I note that the parties also have significant net equity tied up in Suburb C. Suburb C is a source of funds available to the parties to meet the wife’s need for maintenance if necessary. The fact that the husband choose to use the majority of his net income to live in a property which is jointly owned, and which contains most of the parties’ net equity, is not a basis on which the wife should not be provided with funds with which to adequately support herself.
The wife did not seek a sale order for Suburb C if the husband fails to pay spousal maintenance, and so I will not make such an order, although I would have considered it appropriate given the material before me and my findings.
INTERIM PROPERTY SETTLEMENT AND LITIGATION FUNDING
The wife set out at [WA1 [109]] the reason she requires $250,000 as an interim payment, and why it would be appropriate to require the sale of Suburb C in which the husband resides to achieve that payment if necessary. She said [WA1 [109]]:
I seek an Interim lump sum property settlement of $250,000 from [Mr Tenson], so that I may meet the following costs:-
a) $7,000 for cleaning at the end of lease in March 2022 and prior to moving into a new premises, and removalist costs to move out of my current premises, and into a new rental premises;
b) $8,000 for the costs of bond (being the value of four weeks of rent) for any rental property that the children and I move into;
c) $55,000 to fund a vehicle for the children and me. I seek a smaller vehicle, and my preference is a [Motor Vehicle 4] ([model 1] or [model 2]). I have researched available models and I understand that a new [Motor Vehicle 4 model 2] (with options for safety and travel) is in the range of $54,000. [Mr Tenson] drives a new [Motor Vehicle 1] and an upgraded five door [Motor Vehicle 2];
d) $130,000 by way of funds for legal costs which I currently owe and anticipate owing to Counsel, and my legal representatives;
e) $20,000 to purchase furniture for our residence. [Mr Tenson] provided me with $4,000 post separation to fund the costs of furnishing the home that the children and I moved into. I collected, borrowed and purchased second hand items and which have further deteriorated in the time since our separation. I seek to purchase new beds, a dining table and chairs, desks and desk chairs, couches, whitegoods and appliances for the home that I live in with the children. When I left the former matrimonial home, [Mr Tenson] retained the vast majority of our belongings, including the $80,000 worth of new whitegoods and appliances which were included in our renovation. I have reviewed [Mr Tenson's] bank statements that he has disclosed in these proceedings and I estimate that [Mr Tenson] has spent in excess of $67,000 on furniture and appliances since our separation; and
f) $30,000 for extraordinary costs and to ensure I have funds accessible in those circumstances.
The wife said that the husband, by comparison, can fund his legal costs from his income. The husband disputes this if he is required to pay the wife’s costs on a dollar for dollar basis.
It is significant that the wife’s evidence in support of the $250,000 figure includes anticipated costs of $130,000. There is a clear overlap in the claimed $250,000 and the dollar for dollar order. It is for the wife to justify the level of partial property settlement required, particularly where the quantum of the sum ordered impacts on the likelihood of the need to sell Suburb C.
The range of available orders has been affected by the husband’s election to act for himself specifically to defeat the dollar for dollar order, which he says he cannot meet.
It was raised in submissions that the Court might craft an order to deal with the possibility that the husband decides to now retain legal representation. As I understand the proposal, there would be a dollar for dollar order that would take effect firstly, if the husband again retains legal representation, and secondly, after both parties had both spent $130,000 on legal costs. In my view that is not an appropriate course of action to take.
Despite the lack of utility of a dollar for dollar order, and noting that the wife gave evidence elsewhere that she might in fact have legal costs up to $180,000, rather than the $130,000 referred to at [WA1 [109]], she did not seek a higher interim payment.
I find that the husband is in a position of relative financial strength to the wife, and that the wife is not in a position to meet her own legal costs. I accept the wife’s legal costs are likely to be in the range of $130,000. Despite my concerns about the history of the conduct of, and expenditure on, this litigation to date I find that $130,000 is objectively a realistic figure given the ongoing parenting and property proceedings and the likelihood of a contested final hearing.
I do not accept that the husband has established that he cannot meet his own legal costs from his income, noting his disclosed level of personal income and his expenditure on non-essential items.
Accordingly, I am satisfied that it would be appropriate to make an order for a lump sum payment in the sum of $130,000 in respect of litigation funding pursuant to s 117 of the Act.
Further, I find that the wife has a financial need as set out in her affidavit for litigation funding and for other matters, and that $250,000 is an appropriate total sum. I find that the wife has no other source of funds, that her likely entitlement on a proper assessment of contributions exceeds $250,000, and that there is little real risk that the payment of this interim sum will mean that a Trial Judge cannot do justice and equity between the parties on a final basis, see for example, Strahan & Strahan (Interim property orders) [2009] FamCAFC 166.
Accordingly, I find that it would be appropriate to make an order for a lump sum payment in the sum of $250,000 pursuant as an interim property settlement pursuant to s 79 and s 80(1)(h) of the Act.
In the context of these proceedings, I consider it most appropriate to characterise the entire $250,000 sum is as an interim partial property settlement order.
It would not put the trial judge in a position where they will be unable to do justice and equity between the parties, in terms of the issue as described in, for example,
Sale of the Suburb C Property
The husband said in his written submissions that he seeks to retain Suburb C. However, on his own evidence as to his likely future earning capacity and expenses, his inability to borrow more against Suburb C, his lack of other assets or financial resources, and the possible range of outcomes taking into account contributions and likely adjustments, there is no bona fide prospect of him retaining Suburb C.
In my view, where the husband has had the benefit of living in the jointly owned Suburb C property which the wife would also prima facie be entitled to occupy, and where the wife has a need for access to funds and no other available assets from which to meet this need, and where on his own evidence of his financial capacity the husband cannot otherwise fund a partial property distribution and has no bona fides prospect of ultimately retaining the Suburb C property, then justice and equity as between the parties requires the sale of the Suburb C property if the husband is not, as he says, able to raise the funds to meet the interim payment.
The wife is not required to go without so the husband can live in a multi-million dollar mansion which holds most of the parties’ net equity.
As noted above, the wife did not seek a sale order if the husband fails to comply with the spousal maintenance order. Whilst I would have considered that an appropriate order to have made, as there is no reason the wife should go without when her equity is tied up in a house the husband has the benefit of living in, as this order was not sought and the husband was not provided with the opportunity to address it, I will not make that order.
The husband would of course be entitled to bid for the Suburb C property, although on his evidence it is not apparent how he could actually do that.
ORDERS
I will allow the review application and set aside the Senior Judicial Registrars orders.
I make an order for ongoing spouse maintenance pursuant to s 72 of the Act in the sum of $2,500 per week to be paid as set out in my orders.
I make an order for payment to the wife of $250,000 within 60 days by way of interim partial property settlement, and for the sale of the Suburb C property and disposition of the sale residue in default of payment in accordance with the intent of the wife’s proposed orders 5 to 11.
Given the history of this litigation I am concerned about the lack of specificity in the wife’s proposed auction sale orders, and the possibility of further disputes around the sale of Suburb C. I will more detailed orders for sale by auction to give effect to the wife’s proposal.
I make no orders as to the sale of Motor Vehicle 3.
Given the allegations of non-disclosure made by each party, of my own motion I order that within 28 days each party comply with their obligations as to full and frank disclosure, and that within 56 days each party file an undertaking as to disclosure in accordance with rules 6.01 and 6.02 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
I certify that the preceding one hundred and eighty-four (184) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Smith. Associate:
Dated: 6 July 2022
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