Clunes & Dern
[2021] FedCFamC1F 336
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Clunes & Dern [2021] FedCFamC1F 336
File number(s): SYC 1626 of 2021 Judgment of: AUSTIN J Date of judgment: 10 December 2021 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Review of decision – Where a Senior Registrar made orders restraining the husband’s use of personal injury damages it is anticipated he will soon recover – Where the husband no longer opposes an injunction and the dispute is confined to its form – Where on the balance of convenience the husband ought not be required to seek permission from the court to spend his own money – Orders made – Husband to deposit any monetary damages he receives into a controlled money account and notify the wife of any expenditure exceeding $3,000, with the onus being on the wife to apply for an order preventing such expenditure – Husband to furnish the wife with regular written reports detailing all expenditure from the fund – No order as to costs. Legislation: Family Law Act 1975 (Cth) Pt VIII Cases cited: Mullane & Mullane (1983) 158 CLR 436
Tsiang & Wu (2019) FLC 93-911
Williams & Williams (1985) FLC 91-628
Division: Division 1 First Instance Number of paragraphs: 23 Date of hearing: 10 December 2021 Place: Newcastle Counsel for the Applicant: Mr Todd Solicitor for the Applicant: Mills Oakley Counsel for the Respondent: Mr Gould Solicitor for the Respondent: Clinch Long Woodbridge Lawyers ORDERS
SYC 1626 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CLUNES
Applicant
AND: MR DERN
Respondent
ORDER MADE BY:
AUSTIN J
DATE OF ORDER:
10 DECEMBER 2021
THE COURT ORDERS THAT
1.Orders to 1 to 4 inclusive made on 25 October 2021 are discharged.
2.Upon the husband’s receipt of any money paid in satisfaction of a verdict or settlement entered in his favour in Suit Number … presently pending before the Supreme Court of NSW, the husband shall deposit such money into a controlled money account held by his solicitors, save for payment of the following debts:
(a)Medicare rebates;
(b)Costs and disbursements incurred in the Supreme Court suit; and
(c)Out-of-pocket expenses particularised in the Supreme Court suit.
3.The husband is restrained from causing or allowing any withdrawal from the controlled money account in excess of $3,000 unless he has given the wife 21 days’ written notice of the sum and intended purpose of the proposed withdrawal.
4.Upon establishment of the controlled money account, the husband shall provide to the wife written reports within seven days of 28 February, 30 April, 30 June, 31 August, 31 October and 31 December, of every withdrawal made from the account within the period of two months preceding those dates.
5.Otherwise, the applications for interim relief contained within the following documents are dismissed:
(a)The Application in a Case filed on 30 July 2021;
(b)The Response to an Application in a Case filed on 17 September 2021;
(c)The Application for Review filed on 10 November 2021; and
(d)Exhibit H2
BY CONSENT, IT IS FURTHER ORDERED THAT
6.No orders as to costs.
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 Clunes & Dern has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
AUSTIN J:
The parties separated in or about August 2020 and proceedings between them for property settlement under Pt VIII of the Family Law Act 1975 (Cth) (“the Act”) were commenced by the wife in March 2021.
The parties’ assets and superannuation interests are of modest value, save for a personal injury claim brought by the husband in the Supreme Court of NSW seeking personal injury damages for catastrophic injury he suffered some years ago during the marriage. Those proceedings are currently listed for hearing in or about March 2022.
In July 2021, the wife filed an application for interlocutory relief, including an injunction to restrain the husband’s use of the personal injury damages it is anticipated he will soon recover. The husband joined issue by filing a response in September 2021 seeking interlocutory relief of his own.
All aspects of the interlocutory dispute have been resolved by orders made in September 2021 and October 2021, with the exception of the dispute over the injunction concerning the husband’s use of the personal injury damages. That particular issue was decided by the Senior Registrar on 25 October 2021, but the husband applied to review those orders.
The husband confirmed at the outset of this review hearing that, contrary to the terms of the Application for Review filed on 10 November 2021, he seeks to review only Orders 1 to 4 inclusive made on 25 October 2021.
The ambit of the dispute has narrowed significantly because the husband now concedes an injunction should restrain his use of the personal injury damages, whereas formerly he objected to any form of injunction at all. The dispute, therefore, is now only as to the form the injunction should take.
The wife wants to retain the orders made by the Senior Registrar, which oblige the husband to notify her of every item of expenditure from the damages (regardless of the amount) so that she may decide whether to permit or disallow it. If she disallows it, the current form of order would force the husband to come back to court seeking an order permitting the contested expenditure over the wife’s objection.
The husband instead proposes an order which operates on two levels (Exhibit H2): first, to enable his unfettered expenditure of any amount up to $5000; and secondly, a requirement for him to give 21 days’ written notice to the wife of his intended expenditure of more than $5000, thereby giving her the chance to approach the court for an order specifically restraining the proposed expenditure if she objects to it.
As can be seen, the dispute is confined to the choice of person upon whom the burden should fall to instigate further litigation in respect of those items of proposed expenditure which prove controversial, when it may be reasonably anticipated that many items of expenditure are unlikely to be controversial at all.
EVIDENCE
The wife relied upon:
(a)her affidavit filed on 30 July 2021; and
(b)a letter prepared by the husband’s treating psychiatrist on 19 September 2021 (Exhibit W1).
The husband relied upon:
(a)his affidavit filed on 17 September 2021 (but only paragraphs 13–19, 21–22 and 27–29, together with any annexures referred to in those particular paragraphs); and
(b)a more recent letter prepared by the husband’s psychiatrist on 1 December 2021 (Exhibit H1).
LEGAL PRINCIPLES
There is no dispute that the husband’s personal injury claim is a “chose in action” and therefore comprises “property” within the wide meaning of that term in the Act (Mullane & Mullane (1983) 158 CLR 436 at 445).
There is no dispute that, when the chose in action crystallises in the form of a verdict and judgment in the husband’s favour, the damages paid to him in satisfaction will also be “property”. It was acknowledged, as it had to be, that such damages are amenable to division between the parties in the exercise of discretion under Pt VIII of the Act (Williams & Williams (1985) FLC 91-628 at 80,093).
The parties agreed the principles referred to in Tsiang & Wu (2019) FLC 93-911 apply to the preservation of such property.
The parties agree the risk of the personal injury damages being indiscriminately spent before the property settlement proceedings can be concluded justify an injunction being granted. The narrow contest is over the level of such risk and hence where the balance of convenience lies in casting the onus to seek further intervention by the court.
DISPOSITION
The wife contends the husband should have the onus of seeking the court’s permission to spend the money, if she objects to his expenditure. She gives two reasons why that is so. First, the husband’s symptoms, caused or exacerbated by his accident, allegedly disturb his ability to modulate his conduct, rendering him currently “labile, erratic, impulsive and changeable within minutes”. Secondly, she points to the expenditure the husband deposed he wished to make from the damages he recovers (Husband’s affidavit at [28]) which she implies, but does not overtly express, to be unreasonable.
As to the husband’s condition, the most recent medical evidence available from his treating psychiatrist (Exhibits W1 and H1) do not easily bear out the wife’s current apprehension about his impulsivity and unreliability.
As to the husband’s planned expenditure, much of it appears perfectly reasonable. In any event, it must be remembered that the damages eventually paid to the husband are to compensate for the injury which he (not the wife) has suffered. The money paid to him in the form of damages will comprise his (not her) property. The husband is free to do with his property whatever he likes, to the extent not constrained by injunction.
The wife’s worry about the husband’s profligacy will be adequately accommodated by the terms of an injunction which will require him to:
(a)give her plenty of advance notice of any planned expenditure over a specified limit; and
(b)furnish her with regular written reports about all expenditure from the damages, which the husband said in submissions he was willing to provide (though not as frequently as I had envisaged).
Such regular written reports will enable the wife to track the diminution of the damages and trace the funds into other assets. In that way, the risk of the money being squandered and thereby hindering the full measure of the wife’s discretionary claim against the funds is satisfactorily mitigated.
On the balance of convenience, the husband ought not be put to the trouble and expense of seeking court permission to spend any amount of his own money. As to the cap on the husband’s unfettered expenditure, the husband contended for an amount of $5,000, whereas the wife contended for a lesser amount of $1,000. That decision is all but arbitrary and, erring on the side of caution, I select a figure between those amounts and will impose a cap of $3,000.
The husband must give the wife notice of any expenditure over $3,000 and she should then have the onus of applying for an order to prevent his expenditure which she finds objectionable.
For those reasons, I make orders in these terms.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Austin. Associate:
Dated: 21 December 2021
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