Chaihine and Kamal & Ors
[2020] FamCA 513
•26 June 2020
FAMILY COURT OF AUSTRALIA
| CHAIHINE & KAMAL AND ORS | [2020] FamCA 513 |
| FAMILY LAW – PROPERTY – Where application for interim property orders – Where consideration of applicable principles – Where application for injunctions as to disposition of sale funds to meet ongoing property outgoings pending final hearing – Where consideration of applicable principles – Where orders made for interim provision to wife and for application of sale funds. |
| Family Law Act 1975 (Cth) ss 79, 114 |
| Harris & Harris (1993) FLC 92-378 Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 Strahan & Strahan [2009] FamCAFC 166; (2011) FLC 93-466 |
| APPLICANT: | Mr Chaihine |
| FIRST RESPONDENT: | Ms Kamal |
| SECOND RESPONDENT: | Mr B |
| THIRD RESPONDENT: | Mr C Chaihine |
| FOURTH RESPONDENT: | Mr D |
| FIFTH RESPONDENT: | E Pty Ltd ACN … |
| SIXTH RESPONDENT: | Mr A Chaihine |
| SEVENTH RESPONDENT: | Mr M Chaihine |
| EIGHTH RESPONDENT: | Mr F |
| NINTH RESPONDENT: | G Pty Ltd (ACN …) |
| FILE NUMBER: | PAC | 2393 | of | 2018 |
| DATE DELIVERED: | 26 June 2020 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 11 May 2020 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Mr Penhall of Penhall & Co Lawyers |
| COUNSEL FOR THE FIRST RESPONDENT: | Ms Dart |
| SOLICITOR FOR THE FIRST RESPONDENT: | Sanford Lawyers |
| SOLICITOR FOR THE SECOND RESPONDENT: | Mr Penhall of Penhall & Co Lawyers |
| SOLICITOR FOR THE THIRD RESPONDENT: | Mr Penhall of Penhall & Co Lawyers |
| SOLICITOR FOR THE FOURTH RESPONDENT: | No appearance Edmond Khoury Solicitors |
| SOLICITOR FOR THE FIFTH RESPONDENT: | No appearance Edmond Khoury Solicitors |
| SOLICITOR FOR THE SIXTH RESPONDENT: | Mr Penhall of Penhall & Co Lawyers |
| SOLICITOR FOR THE SEVENTH RESPONDENT: | Mr Penhall of Penhall & Co Lawyers |
| EIGHTH RESPONDENT – SELF‑REPRESENTED LITIGANT: | No appearance |
| NINTH RESPONDENT – SELF‑REPRESENTED LITIGANT: | No appearance |
Orders
That the proceeds of sale of the property at H Street, Suburb J, New South Wales on settlement of the sale be paid in accordance with Orders made on 30 October 2019 save that the balance remaining after payment of legal fees of the sale shall not be paid to Penhall and Co Lawyers but be paid as follows:
(a)In payment of the sum then remaining to the wife’s solicitor to be held on trust for the husband and wife in an interest bearing controlled money account, then;
(b)In payment of any arrears outstanding in relation to the mortgage secured over property at K Street, Suburb L (“the Suburb L property”);
(c)Payment to the wife in the sum of $50,000 to the wife or as she may, otherwise, direct with such sum to be categorised at final hearing or by agreement; and
(d)Pending further order, in payment from the balance then remaining to future payments of mortgage payments, insurances and rates levied in relation to the Suburb L property as they fall due and payable.
That, otherwise, the husband’s Application in a Case filed 19 January 2020 and the wife’s Response thereto are dismissed.
Liberty to apply on short notice as to implementation or enforcement of these orders.
That any application for costs be by way of written submissions filed and served within 28 days from this date with any submissions in response to be filed and served within a further 14 days with judgment then reserved to chambers.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Chaihine & Kamal has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAC 2393 of 2018
| Mr Chaihine |
Applicant
And
| Ms Kamal |
First Respondent
And
| Mr B |
Second Respondent
And
| Mr C Chaihine |
Third Respondent
And
| Mr D |
Fourth Respondent
And
| E Pty Ltd ACN … |
Fifth Respondent
And
| Mr A Chaihine |
Sixth Respondent
And
| Mr M Chaihine |
Seventh Respondent
And
| Mr F |
Eighth Respondent
And
| G Pty Ltd (ACN …) |
Ninth Respondent
REASONS FOR JUDGMENT
In May 2018 the applicant wife commenced proceedings in this Court seeking parenting orders in relation to the parties’ two children then aged five and two and property orders seeking to adjust the existing property entitlements of herself and the respondent husband.
The present interim application for determination relates only to property issues as between the husband and wife.
In her Amended Initiating Application filed in August 2018 the wife, in summary, sought the following final property orders:
a)that there be a just and equitable division of the assets of the parties inclusive of superannuation;
b)that the transfer of shares in E Pty Ltd by M Pty Ltd to the fourth respondent be set aside;
c)that the husband and the fourth respondent do all acts and things necessary to effect a transfer of 50 per cent of shares in E Pty Ltd to the husband;
d)that the fourth respondent do all things necessary to remove a caveat lodged by him over the property situate at N Street, Suburb O, New South Wales (“the Suburb O property”) and be restrained from lodging any further caveat over the said property; and
e)that there be a declaration that there is no valid or enforceable loan agreement as between the husband and the second, third and/or fourth respondents and that the second, third and/or fourth respondents do not have any legal or equitable interest in the property of the wife or the husband.
The husband, for his part, filed on 30 March 2020 an Amended Response to the wife’s Amended Initiating Application. The husband, in summary, sought final property orders as follows:
a)that the property at K Street, Suburb L, New South Wales (“the Suburb L property”) be sold, that pending sale the wife have exclusive occupation thereof and that upon sale the net proceeds of sale after discharge of the registered mortgage be paid in payment of agent’s commission on sale, in payment of legal costs on sale and that the net proceeds of sale be held in a controlled monies account by the husband’s solicitor in trust for the husband and the wife pending further order;
b)that the husband within three months pay to the wife a sum equivalent to 30 per cent of the value of the matrimonial property pool as determined by the Court;
c)that in addition the husband pay to the wife a further sum of $30,000 in lieu of any splitting order in relation to the husband’s superannuation interest with Super Fund 1;
d)that orders sought by the wife as to the transfer of shares in E Pty Ltd be permanently stayed pending reregistration of that company which was deregistered on 15 March 2019;
e)that the relief sought by the wife in relation to the interest of the husband and various other respondents in the property at 3 and 5 P Street, Suburb Q (“the Suburb Q properties”), be struck out and dismissed;
f)that there be a declaration that the husband has an equitable charge over the Suburb Q properties to secure his net interest arising from funds contributed to the building project thereon and his share of profit;
g)that in the alternative there be a declaration that the husband as registered proprietor of the Suburb Q properties holds the property on constructive trust for himself and the second, third, sixth and seventh respondents with their entitlements to be determined; and
h)that there be a declaration that the sum of $550,000 paid by the husband to the third respondent on or about 12 March 2018 is not an advance but repayment in part of the equitable interest of the third respondent and seventh respondents in the property at Suburb Q.
On 21 January 2020 the husband filed an Application in a Case that is the present application before the Court. In the Application in a Case the husband sought, in summary, the following orders:
a)that the Suburb L property be sold forthwith and that pending sale the wife be entitled to exclusive occupation thereof provided that should the husband borrow from family members funds to meet mortgage payments and/or property outgoings those monies shall be reimbursed from the proceeds of sale on completion and that, otherwise, the net proceeds of sale be applied in discharge of the registered first mortgage, in payment of agent’s commission and marketing costs of sale, in payment of legal costs on sale and payment of the net proceeds of sale then remaining to a controlled monies account in the name of the husband’s solicitor in trust for the husband and wife pending further order; and
b)Costs.
The husband relied upon his affidavits filed on 19 January 2020 and 30 March 2020 in support of his interim application.
The wife on 4 March 2020 filed a Response to the husband’s Application in a Case. In that Response she sought, in summary, the following orders:
a)that the proceeds of sale of the property at H Street, Suburb J New South Wales (“the Suburb J property”) be paid in accordance with Order 2(d)(i) to (iii) made on 30 October 2019 and then paid:
i)in payment of any arrears outstanding in relation to the mortgage secured over the Suburb L property;
ii)in payment of the sum of $60,000 to the wife’s solicitors to be applied to future payments of mortgage payments and property outgoings in relation to the Suburb L property with such sum to be categorised as lump sum spousal maintenance; and
iii)in payment to the wife of the sum of $50,000 to the wife’s solicitors to be categorised as lump sum spousal maintenance;
b)that in the event that the net proceeds of sale of the Suburb J property are insufficient to meet the above orders, then the second respondent do all things necessary to remove his caveat registered as against the title to the Suburb Q properties;
c)that the wife be appointed trustee for sale of the Suburb Q properties and that upon sale of the properties the proceeds of sale be paid in payment of legal costs on sale, agent’s commission and auction expenses and then:
i)in discharge of the ANZ mortgage secured over the said property;
ii)in payment of any contract adjustments;
iii)in payment to the wife of any balance outstanding arising from the sale of the Suburb J property as provided for above; and
iv)in payment of the balance to a controlled monies account with the wife’s solicitors in trust for the husband and wife;
d)that pending sale of the Suburb Q properties the husband be liable for payment of mortgage payments, insurance premiums, council rates and other outgoings in respect of the property as and when they fall due and payable;
e)that pending further order the husband be solely liable and ensure payment of full mortgage payments, insurance premiums, council rates and other outgoings in relation to the properties at Suburb J, Suburb O and Suburb Q;
f)that pending further order the third respondent be restrained from selling encumbering or, otherwise, dealing with his interest in the property at V Street, Suburb W, New South Wales (“the Suburb W property”);
g)that pursuant to section 117 of the Family Law Act 1975 (Cth) (“the Act”) that upon the husband paying money on accounts rendered by his solicitors or barristers or in response to any request for payment of monies on account, then the husband cause the same sum of money to be paid to the trust account of the wife’s solicitors on account of her legal costs and disbursements in these proceedings;
h)that the third respondent within 14 days provide documentary evidence by way of bank statements showing receipt by him of $550,000 from the husband on 12 March 2018; and
i)costs.
The wife relied upon her affidavit filed 4 March 2020.
Context
The wife is currently aged 34. The husband is aged almost 39 years.
The parties married on … 2012 and separated on 10 March 2018.
There are two children of the parties’ marriage presently aged seven and four.
As to the other respondents in the proceedings they are relevantly as follows:
a)the second respondent is the husband’s brother-in-law who asserts a financial interest either by way of loan or equitable interest arising from a loan of $300,000 in respect of the properties at Suburb Q and has lodged caveats as against those properties;
b)the third respondent is the husband’s brother and following separation the husband asserts he paid to the third respondent $550,000 from funds accrued through a refinance of the Suburb Q properties post separation. The husband asserts the funds were paid in part repayment of funds advanced by the third respondent in relation to the Suburb Q properties and were to assist with the third respondent’s development of a property at R Street, Suburb S. The husband further asserts that the funds advanced included about $210,000 of his father’s money that was initially contributed to the Suburb Q property;
c)the fourth respondent is a friend of the husband and following separation the husband asserts that he paid to the fourth respondent $650,000 in repayment of loans. The wife seeks to set the repayment aside. The fourth respondent has taken no part in the proceedings and the husband asserts that he cannot be located and that the fourth respondents company E Pty Ltd, the former fifth respondent, operated a “Ponzi” scheme. If the transaction is set aside the fourth respondent in his Response seeks an equitable declaration of his interest in the Suburb Q properties;
d)the sixth respondent is the husband’s brother who asserts financial contribution to the Suburb Q properties and a consequent equitable interest by reason of his contribution to building costs;
e)the seventh respondent is the husband’s father to whom the husband transferred funds subsequent to separation asserting they were in repayment of monies owing to the seventh respondent. The seventh respondent, for his part, asserts an equitable interest in the Suburb Q properties by reason of his contribution to building costs; and
f)the eighth respondent is a friend of the husband who asserts an interest in the Suburb J property by reason of funds advanced to the husband.
The determination of the interest, if any, of the additional respondents awaits a final hearing.
On 24 January 2019 interim property orders were made as follows:
NOTATIONS
A.Subject to the discharge of Orders made on 14 June 2018 it is noted that the husband intends to:-
(1)Enter into a lease in the form set out in Tab 2 of exhibit “Ms T1” referred to in the Affidavit of Ms T filed 15 January 2019;
(2)Enter into a contract in the form set out in Tab 1 of the said exhibit “Ms T1”.
ORDERS 1 – 4, PENDING FURTHER ORDER
1.Orders made on 14 June 2018 are hereby discharged in respect of the property N Street, Suburb O (Suburb O).
2.Upon the settlement of the sale of the husband’s 50% interest in Suburb O the husband shall apply the proceeds of sale as follows:-
(1)The payment of the husband’s Solicitors costs and disbursements on sale;
(2)The payment to the wife’s Solicitors, Sanford Legal, the sum of $60,000.00 to hold same for the payment of mortgage repayments, council and water rates on and from the date hereof in respect of the property K Street, Suburb L (Suburb L);
(3)In payment to the wife of $108,750.00 or 50% of the balance, whichever is greater;
(4)In payment of the balance to the husband.
3.The husband is restrained in respect of his interest in Suburb O not sold pursuant to the contract referred to in Notation 2 above from transferring, selling, encumbering or otherwise dealing with such interest.
4.The wife’s Application in a Case filed 14 December 2018 and the husband’s Response filed 15 January 2019 are stood over generally restorable upon giving the Court and the husband and wife 7 days’ notice.
5.That pending further Order, the wife is restrained from making any application to sell the husband’s interest referred to in Order 3 unless such application is made on a final basis.
6.From the husband’s share he shall pay all arrears owing in respect of the X Bank mortgage on Suburb L.
Subsequently, and on 14 March 2019, the wife’s solicitors were paid the sum of $60,000 and the further sum of $108,750.
Later on 30 October 2019 further interim orders were made by consent as that provided for the Suburb J property to be sold by the husband with the proceeds of sale after sale costs and discharge of mortgage to be held by the husband’s solicitors in trust for the husband and wife pending further order. The property remains unsold. The consent order for sale was also signed by the eighth respondent who the husband asserts provided substantial finance by way of loan for the property. There is no provision for the eighth respondent to be paid any money from the proceeds of sale or for any other third party interest to be addressed. The Suburb J property has an asserted value of about $650,000 and is subject to a mortgage of $250,000 to the ANZ Bank. As at the interim hearing, the Court was informed that the property had sold for $650,000 subject to a 21 day cooling off period. Net proceeds are estimated at about $375,000 after sale costs.
The husband’s evidence
The husband had been previously employed by U Company until he ceased that secure employment in … 2017 to pursue business interests with friends and family.
The husband asserts that there is no present buyer for the Suburb Q property. Yet he proffers no evidence as to any attempt to sell the property.
In early January 2020 the wife complained to the husband that she had no money. The husband responded that he was not working and was unable to obtain a loan for $10,000 and that the wife would have to get out of the house.
The husband asserts that from the proceeds of sale of the property at N Street, Suburb O and after payment of sale costs, land tax mortgage arrears and a payment of $20,000 to his solicitors on account of his legal fees in these proceedings, he received the net sum of $40,268.
He further asserts that he has used these funds to meet first mortgage payments on the properties at Suburb Q and the collateral mortgage over the Suburb J property. He has also paid school fees for the children and other activities for them. The husband, otherwise, receives $400 per week rent in relation to his interest in the Suburb O property with rental payments being paid in reduction of an outstanding car finance debt.
The husband complains that capital funds received by the wife have been utilised to purchase a $50,000 Motor Vehicle 1 and that she has, otherwise, failed to account for the expenditure of the funds.
The Suburb L matrimonial home has a value asserted by the wife to be $1.85 million with a mortgage outstanding of $1.15 million. The property has possible equity of about $700,000 before sale costs. There is no third party interest asserted in the Suburb L property.
In seeking a sale of the former matrimonial home at Suburb L, the husband asserts that the wife has available to her and the children accommodation at her mother’s home and the sale would “greatly assist in determining the property pool”.
The husband asserts an investment with him of $650,000 by the fourth respondent that was later repaid by the husband to the fourth respondent’s company E Pty Ltd. That company is now deregistered. The fourth respondent cannot be found.
The parties’ draft Balance Sheet (Exh “D”) ascribes a value of the Suburb Q properties of $1.7 million with a mortgage of about $1.044 million to the ANZ Bank together with collateral security for the Suburb J property of $250,000. Estimated net proceeds after secured mortgages would be about $400,000. A sale would crystallise funds available to meet asserted third party interests in the property when such entitlements, if any, are ascertained.
The wife’s evidence
The wife asserts that two days after separation the husband drew funds totalling one million dollars from the mortgage secured over the Suburb Q properties and further funds of $230,000 from the mortgage secured over the Suburb J property. Funds were deposited into the husband’s bank account (7274).
The husband then on 12 March 2018 transferred $700,000 from his account to the account of E Pty Ltd. By June 2018 these funds had been exhausted. The wife asserts that some of these funds were used to purchase the Suburb W property in the name of the husband’s brother: the third respondent Mr C Chaihine.
The husband asserts that such funds were disbursed by him as set out above.
The husband at the time of separation owned the following properties in his name:
a)The matrimonial home at Suburb L;
b)The property at Suburb J;
c)The properties at Suburb Q; and
d)The Suburb O property with the husband having now sold a one half interest in the property pursuant to interim orders referred to above.
The husband, otherwise, had various company interests that are not the subject of the present applications.
The husband in April 2018 had represented to a bank for the purposes of a finance application that he had monthly income of $13,000 and assets to the value of $8.326 million and liabilities of $2.197 million. Such would appear to be inconsistent with assertions by him that there are various third party interests in his properties and other debts by way of loan.
The wife asserts that she was unaware of the third party interests in some of the properties as now alleged in these proceedings.
The wife refutes the husband’s assertion that he is unable to fund mortgage payments as they fall due and payable. She alleges that mortgage payments for the Suburb Q properties are being paid by him. She asserts that the husband has a new business operated by his company Y Pty Ltd trading from the Suburb O property and that the husband also earns income from his Z Pty Ltd business.
The wife complains that the husband caused her car to be repossessed in October 2018 even though he made payments until September 2018. She used funds paid to her as referred to above to purchase a car for the transport of herself and the children.
From her earlier property distribution the wife met mortgage payments until January 2020 when she was advised by her solicitors that there were insufficient funds. As at March 2020 the mortgage had not fallen into arrears.
The wife asserts that funds received were primarily spent on legal fees ($36,202), the purchase of a safe car ($50,000), property outgoings including security cameras, a holiday, repayment of debt to her family and living expenses. She receives no financial assistance from the husband by way of child support.
Leaving aside her personal grooming expenses, the wife asserts her living expenses to be about $590 per week, not including mortgage payments and rates.
She receives Centrelink payments of $550 per week. She has outstanding legal expenses of about $73,500.
The wife has professional tertiary qualifications. She does not assert any incapacity for work or any adequate reason why she cannot earn income. The characterisation of funds sought by her as spouse maintenance is not appropriate.
She complains of the husband’s significant overseas travel since separation.
As to the Suburb J property she says it was purchased in September 2017 for $650,000. The property zoning allows for the property to be used as a boarding house. The wife was aware that the husband and the eighth respondent Mr F proposed a joint venture with the property. She is unaware as to what financial contribution Mr F has made, if any, despite requests for proper disclosure.
The Suburb J property is to be sold pursuant to orders made in October 2019. The wife seeks a further provision from the proceeds of sale.
Discussion
Section 114 of the Act provides that the Court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate. In this matter, of course, the proceedings relate to the property of the parties and to the orders proposed by both parties.
Section 114 relevantly provides:
(1)In proceedings of the kind referred to in paragraph (e) of the definition of matrimonial cause in subsection 4(1), the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including:
(a)an injunction for the personal protection of a party to the marriage;
(b)an injunction restraining a party to the marriage from entering or remaining in the matrimonial home or the premises in which the other party to the marriage resides, or restraining a party to the marriage from entering or remaining in a specified area, being an area in which the matrimonial home is, or the premises in which the other party to the marriage resides are, situated;
(c)an injunction restraining a party to the marriage from entering the place of work of the other party to the marriage;
(d)an injunction for the protection of the marital relationship;
(e)an injunction in relation to the property of a party to the marriage; or
(f)an injunction relating to the use or occupancy of the matrimonial home.
The grant of an injunction is discretionary and the basis upon which an order or injunction may be made is well settled. The wife, in this case, has readily satisfied the Court that there is a serious issue to be tried that being the question of overall property entitlement as between herself and her husband.
It is clear by reason of the discussion herein that the wife has a significant likelihood of obtaining orders for substantial property adjustment. She, in the context of this matter, seeks orders that would address the prospect of the diminution of the overall property pool by reason of accumulating liabilities by reason of default in payment of same and the dislocation of herself and the children from their home pending final hearing.
In this matter the Court is readily satisfied that the foundational basis for the grant of orders or injunctions as sought by the wife as to the payment of mortgage and property outgoings on the home at Suburb L occupied by her and the children has been made out.
The Court must have regard to the balance of convenience as between the parties in the context of the orders sought by both of them. The determination about the balance of convenience may thus be an inference drawn from the facts and circumstances established by the applicant’s evidence: Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 321-322.
In Patterson, Gleeson CJ said after discussing the discretionary nature of the remedy at 321–325:
It is not difficult to imagine situations in which justice and equity would require the granting of an injunction to prevent dissipation of assets pending the hearing of an action even though the risk of such dissipation may be assessed as being somewhat less probable than not.
In the event that the Suburb L property is sold by reason of mortgage default or incapacity to pay, the wife and children will be dislocated some months out from final hearing. Orders as to the application of funds from the sale of the Suburb J property to pay the mortgage and property outgoings are in all the circumstances proper.
Otherwise, the principles as to applications for interim property provision are well settled, (Strahan & Strahan [2009] FamCAFC 166; (2011) FLC 93-466) and require a two-step process.
In Strahan, the Full Court said:
132.In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.
Firstly, there must be circumstances enlivening the power to make an interim order. The test is not limited to “compelling circumstances” but whether it would be “appropriate” to make an interim order, with the “overarching consideration” being the interests of justice.
Secondly, the Court is to have regard to relevant matters in s 79 of the Act. It needs to be kept in mind that the final outcome of property settlement should not be compromised by an interim property order. Either the remaining property needs to be adequate to meet the legitimate expectations of both parties at the final hearing or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.
A detailed inquiry is not required, but there must be some assessment of s 79 factors.
In Strahan the Full Court went on to say:
137.Once a court proceeds to exercise the power in s 79 of the Act, being in the substantive phase, a court is required to undertake consideration of the matters in s 79(4) including by reference to s 79(4)(e) the matters in s 75(2) so far as they are relevant. However consideration of such matters may be brief and if it is established that “it seems likely to the Court that ... the applicant ... will be likely 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”: Zschokke; Polletti and Polletti per Nygh J and Wenz v Archer. As senior counsel for the Wife submitted, “provided scope can be found within the assets of the parties for an order of the size sought ... then that should be the end of the matter”. In other words, in such circumstances the applicant would only be receiving what he or she was entitled to receive when the power was exhausted.
138.The legislation does not prescribe what the Full Court in Zschokke at 83,218 described as “preconditions” and nor would we seek to exhaustively prescribe matters that may be relevant to take into account in the exercise of the discretion under s 80(1)(h) of the Act. As to the three “criteria” identified by the Full Court in Zschokke, we accept that an inability on the part of an applicant for an interim property order to defray the costs of litigation to meet his or her litigation costs would be a relevant matter to take into account at the procedural or first stage. Senior counsel for the Wife submitted that it may be relevant at the substantive or second phase in reviewing the “necessarily limited and impressionistic budget for costs” to ensure that the application is bona fide. We are of the view that it may be that any issue about the bona fides of an application is relevant at the procedural phase in the context of considering if in the interests of justice it is appropriate to make an order before the final hearing.
139.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.
140.As to the other matters being a position of relative financial strength on the part of the respondent to an application and the capacity of the respondent to meet his or her own litigation costs, there is no doubt that the financial circumstances of both parties are relevant at the substantive stage and may also be relevant at the procedural stage. Senior counsel for the Wife submitted that all of the matters discussed by the Full Court in Zschokke are self-evident and we accept that this is so in relation to at least two of the matters being the need for funds and the financial circumstances of both parties.
141.As to the various matters discussed by Brereton J in Paris King Investments which we have discussed above, we do not propose to deal with all of what his Honour said, however we make the following observations about some of the matters. Obviously the applicant should have “at least an arguable case for substantive relief which deserves to be heard”. Further, in determining at the procedural stage whether to exercise the jurisdiction there may need to be evidence of the applicant’s “likely costs of the litigation” given that the need for funds to defray litigation costs and expenses is the circumstance propounded as to why it is appropriate that an order be made. We also accept that “it is not an essential precondition” that the applicant’s legal representatives will not continue to act unless the costs are paid or secured on an ongoing basis.
It is important to have regard to an overall caution. In Harris & Harris (1993) FLC 92-378, the Full Court said:
As a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings.
In Strahan, the Full Court said at [132]:
… regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.
It is readily apparent that there are significant factual issues as between the wife and the husband and the other respondents. They will be resolved at final hearing.
Final trial directions were made on 11 May 2020 as to both parenting and property. There is prospect that the final hearing for five days will be accommodated before the end of this year. Thus, financial orders should accommodate the next six months or so to final determination.
Current orders provide for the sale of the Suburb J property. It appears that as at the date of hearing the sale has now proceeded subject to a cooling off period.
Orders should be made to ensure that the sale as ordered proceeds if the current purchaser does not. It is now more than six months since the orders for sale. The inordinate delay is not properly explained. In the event that the current “sale” does not proceed, the wife may if so advised apply to be appointed trustee for sale.
The wife has received some funds as set out above. It is likely that about $86,000 might be regarded as interim property distribution.
As discussed above, in light of the impending final hearing it is not appropriate to dislocate the wife and the children. The proceeds of the sale of the Suburb J property are to be held in a controlled money account by order. It is appropriate that such funds, pending further order, be used to meet ongoing mortgage payments and rates until final orders. Otherwise, the wife seeks a further capital payment to her of $50,000.
There is significant equity in the matrimonial home as referred to above. The husband has superannuation of about $182,000.
Neither party asserts any significant assets at cohabitation. The parties’ cohabitation was for about six years.
The present asset pool is asserted by the wife to have accumulated over cohabitation where the husband, it appears, was the primary income earner with U Company and the wife assuming the homemaker and primary caregiver role for the children.
Post separation the children are in the primary care of the mother.
It is likely that contributions will be regarded as in the range of equality save for funds the wife acknowledges came in from the paternal grandfather but that appear to have been repaid from the husband’s post separation mortgage drawings.
There may be some adjustment in favour of the wife for s 75(2) considerations.
Overall, the wife has a significant claim for property adjustment. If that claim is limited to the equity in the Suburb L property and the husband’s superannuation the pool would equate to about $900,000. Other assets are the subject of competing contentions but ultimately the pool may be significantly enhanced. Other aspects of the asserted pool are discussed above.
The claim for further provision by the wife can readily be readjusted by reference to the equity in the Suburb L property. However, it is not appropriate to categorise such provision until final hearing and evidence as to how funds are expended by the wife.
Clearly, the amount sought by her is well within a reasonable range of her prospective entitlement to property adjustment. The husband seeks an order that the wife receive 30 per cent of an ascertained property pool plus a further sum of $30,000 in lieu of a superannuation split.
It is thus proper and appropriate that there be orders substantially as sought by the wife in that she shall receive a further capital sum of $50,000 from the proceeds of sale of the Suburb J property which will be held by her solicitors in a controlled money account in trust for the parties with the remaining proceeds being applied to mortgage payments, insurances and rates levied on the Suburb L property.
There is clearly sufficient equity in the Suburb J property to meet the wife’s claim. Otherwise, the remaining funds from the sale or ultimately the equity in the home at Suburb L will be available to meet any claim by the eighth respondent as to his asserted entitlement in regard to the Suburb J property or its proceeds of sale. It is thus unnecessary to address the question of the sale of the Suburb Q property.
As to the orders sought by the wife in relation to payment of mortgage and outgoings by the husband as to the other real properties, they are in the husband’s name. Should he default the properties may well be sold. Such default will impact adversely on the third party claims of some of the additional respondents. As they assert an equitable or other interest in the properties, it is in their interest to preserve their asserted entitlement that they contributed as necessary.
There is limited time to a final hearing. The wife may apply part of the capital payment to her for legal costs. The “dollar for dollar” order will not be made.
The husband’s application will be dismissed.
Orders will be made accordingly.
I certify that the preceding eighty (80) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 26 June 2020.
Associate:
Date: 26 June 2020