Conner and Conner & Anor (No 2)

[2018] FamCA 1145

FAMILY COURT OF AUSTRALIA

CONNER & CONNER AND ANOR (NO. 2) [2018] FamCA 1145

FAMILY LAW – INTERLOCUTORY ORDERS – where the husband is in detention awaiting trial on sexual offences and seeks a partial property settlement to enable him to pay criminal law firm lawyers – where the wife and an adult daughter who is said to be a complainant in the criminal law proceedings oppose the application.

FAMILY LAW – INTERVENER’S POSITION – where despite having been previously ordered to file a formal response setting out her claim, the intervener did not do so but now seeks injunctive relief in relation to what the husband proposes as a partial property distribution on the basis that she is a prospective claimant for compensation in those criminal proceedings-where such a claim can only be made on conviction – where absent a formal response seeking orders, there ought not be injunctive relief to protect a prospective claim-application for interim orders dismissed.

FAMILY LAW – CASE GUARDIAN – where the husband maintains he needs a case guardian because his detention makes it difficult to give instructions-where he argues that physical detention is a disability within the meaning of the rules – where the court finds that disability is referring to a health status. Where in the alternative, the husband maintains that as he has given his new partner a power of attorney, she is a person who is a manager of his affairs and thereby he is entitled to have a case guardian – where the court rejects that argument and finds that there is a distinction between the role of a case guardian and an attorney under power and that the rule relied upon is addressing persons who are the subject of state administrative law tribunals.

FAMILY LAW – PARTIAL PROPERTY-where the husband’s claim is resisted on the basis that he has already had a partial distribution but he still has not had what the wife appears to be saying is his entitlement-consideration of what circumstances are just and equitable now when the interim order is being considered and the court is entitled to take into account the impending stress and anxiety of the wife and the children-where it would not be just and equitable to make the type of order the husband seeks but to allow him to endeavour to charge his interest and apparently said to be what the wife says he can have or in the alternative, borrow to that extent.

FAMILY LAW – COSTS-where the wife’s material does not assist in the overall resolution of the matter and there are no justifying circumstances to depart from the principle in s 117 of the Act.

Disability Act 2006 (Vic)
Family Law Act 1975 (Cth)
Instruments Act 1958 (Vic)
Powers of Attorney Act (2014) (Vic)
Sentencing Act 1991 (Vic)

ABC v Lenah Game Meats Pty Ltd [2001] HCA 63; 208 CLR 199
Cardile v LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380
Conner and Conner & Anor [2017] FamCA 1017
Kannis v Kannis (2003) FLC 93-135
Price and Underwood (Divorce Appeal) (2009) FLC 93-408
Strahan and Strahan (Interim property orders) (2011) FLC 93-466
Zschokke and Zschokke (1996) FLC 92-693

APPLICANT: Mr Conner

RESPONDENT: Ms A Conner

INTERVENOR: Ms B Conner

FILE NUMBER: MLC 3395 of 2015

DATE DELIVERED: 18 April 2018

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 11 April 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hall

SOLICITOR FOR THE APPLICANT: Taussig Cherrie Fildes

COUNSEL FOR THE RESPONDENT: Mr Indovino

SOLICITOR FOR THE RESPONDENT: Lennon Lawyers

COUNSEL FOR THE INTERVENER: Dr Smith

SOLICITOR FOR THE INTERVENER: Lander and Rogers

Orders

1. Paragraph 7 of the husband’s application in a case filed 28 February 2018 is referred to the Honourable Justice Johns as Case Management Judge for the purposes of determining whether the property proceedings between the husband and wife should be expedited and that unless her Honour decides otherwise, that issue be determined in chambers.

2. Without restricting what matters should be taken into account, for the purposes of paragraph (1), the Case Management Judge may benefit from reading paragraphs [27] to [44] of the husband’s affidavit filed 28 February 2018 and paragraphs [16] to [24] of the wife’s affidavit filed 10 April 2018.

3. That to the extent necessary, the wife co-operate with the husband:

   (a)To enable him to charge his interest in the real property at F Street, Suburb D to the extent of $175,000 to his respective lawyers for the purpose of enabling him to obtain legal representation for the proceedings pending before the County Court of Victoria and this Court; and

   (b)In the alternative, for the husband in his own name, to borrow up to $175,000 secured against his interest in the said real property,

   and in either case, the wife not be responsible for, nor have any obligation to, the persons or organisations accepting the husband’s charge or borrowings.

4. That otherwise, the application in a case filed by the husband on 28 February 2018 and the response of the wife thereto filed 10 April 2018 are dismissed.

5. That save as to any issue of costs, the response of the intervener filed 10 April 2018 is dismissed.

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 Conner & Conner 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 MELBOURNE

FILE NUMBER: MLC 3395  of 2015

MR CONNER

Applicant

And

MS A CONNER

Respondent

And

MS B CONNER

Intervener

REASONS FOR JUDGMENT

1. In these proceedings, Mr Conner (“the husband”) seeks orders that he have a case guardian appointed for him in property proceedings with Ms A Conner (“the wife”).  He additionally seeks a partial distribution of property where it is uncontroversial that the main asset of the parties is their former home.

2. In addition to these parties, there is an intervener, Ms B Conner (“the intervener”) who is the parties’ adult daughter.

The current circumstances of the parties

1. The circumstances of the present interlocutory proceedings are unusual.

2. The husband is currently in an Australian detention centre awaiting a criminal trial to be heard in August 2018 in the County Court of Victoria on sexual offences.  He has been committed for trial after a hearing in the Magistrates’ Court.  One of the Crown’s proposed witnesses is said to be the intervener. 

3. The husband’s case guardian application is premised on the difficulties he faces in dealing with the legal issues from his position within the detention centre.  The partial property settlement is pursued because the husband says he needs money to pay his lawyers for the impending criminal trial.  He has apparently rejected (and still does) the opportunity (if it is open anyway) to have legal assistance provided by Victoria Legal Aid.  Instead, he desires to pay for his representatives of choice.  To achieve the payment he is seeking, the husband needs the wife’s cooperation and indeed possibly, the use of her capacity to service as the proposed loan.

4. The wife opposes the husband’s applications.  Whilst it is unclear what her final position in the property settlement dispute might be, she maintains that even if she has to pay the husband some money in due course, now is not the time to face that issue.  Apart from looking after the interests of children, the wife also has to deal with the impact of the criminal charges on her family.  To expand her argument, she points to the fact that the husband has already had one partial distribution of money from the sale of a modest investment property and she now argues that the whole concept of the alteration of property should be seen as a once-only determination. 

5. The wife also disputes that the husband falls within the definition of a person entitled to be represented by a case guardian but in any event, strongly submits that his proposed case guardian is partisan and inappropriate because of her past conduct.  She therefore seeks a dismissal of the husband’s application. 

6. The intervener’s position is also problematic.  Despite being ordered to file a response or claim seeking orders for specific relief, the intervener has not done so.  However, she again proceeds to seek interlocutory orders of an injunctive nature.  That gives rise to the issue of whether she has the right to do so. 

Previous interlocutory proceedings

1. Much of the background and the present context, can be seen in the orders made on 11 December 2017 and the reasons then published.  (See Conner & Conner and Anor [2017] FamCA 1017).

The present proceedings

1. Each of the three parties was represented by counsel all of whom put helpful submissions in respect of all of the problems that this case presents.  The “Socratic dialogue” was helpful.

The intervener’s application

1. The rights and role of the intervener have to be viewed through the legislative prism.

2. Section 92 of the Family Law Act 1974 (Cth) (“the Act”) provides as follows:

   (1)In proceedings (other than divorce or validity of marriage proceedings), any person may apply for leave to intervene in the proceedings, and the court may make an order entitling that person to intervene in the proceedings.

   (1A)...

   (2) An order under this section may be made upon such conditions as the court considers appropriate.

   (3)Where a person intervenes in any proceedings by leave of the court the person shall, unless the court otherwise orders, be deemed to be a party to the proceedings with all the rights, duties and liabilities of a party.

3. At an interlocutory hearing on 2 May 2017, the husband and wife agreed to the intervener becoming the party described in s 92 of the Act.

4. The Family Law Rules 2004 do not specifically deal with the process to be followed by an intervener but s 92 provides for the court to make conditions for that right of intervention. None seems to have been imposed here until I made the order on 11 December 2017. The intervener did not comply but has again responded to the husband’s application for interlocutory relief seeking orders to the effect that if the husband is to receive any money at this point, he be restrained “by injunction pursuant to rule 14.05(1)(b)” of the rules from dealing with $250,000 of any such sum “pending the filing and finalisation” of her application “to the County Court of Victoria pursuant to s 85B of the Sentencing Act 1991 (Vic)”.

5. It might be obvious that rule 14.05 does not empower the court to make any order at all of the nature pleaded.  The power to make such an order lies in the Act and specifically s 114.  The rule relates to the process and is illuminating in the sense that it describes what evidence would be necessary if a “Mareva Order” was sought.

6. The rule (appropriately and relevantly condensed) says that the applicant may seek such an order restraining another from dealing with property if the applicant “has an existing or prospective claim that is able to be decided in Australia”.  A prospective claim must be supported by evidence as to its basis and the amount.  Counsel for the intervener relies on a submission that the intervener will seek (in effect) compensation or damages in the County Court of Victoria in the sum of “at least $250,000.

7. Section 85B of the Sentencing Act refers to this type of claim as a “compensation order” but it provides that if the husband is found guilty or convicted, the court may on the intervener’s application, if it is shown that she has suffered “any injury as a direct result of the offence”, order the husband to pay compensation “of such amount as the court thinks fit”.  Compensation is then defined. 

8. Nothing in the intervener’s evidence tells me how the sum of $250,000 has been calculated and then there is her reference to the words “at least”.

9. Counsel for the intervener, in discussion, indicated that if there was no conviction, the intervener may bring a claim in tort for “assault and battery”. It seems to be suggested that even if she is successful in the s 85B application, that claim might still be made. That very submission is indicative of the speculative nature of what the court is dealing with here. Quite properly, counsel could not say (because no such claim has, as yet, been formulated) which particular jurisdiction such a tortious action would be brought. At its highest, counsel acknowledged that the intervener’s pursuit of relief in the present proceedings rested on this court being satisfied that she has a prospective claim.

10. In my view, the very nature of the evidence required by rule 14.05(2)(e) indicates there must be something for this court to consider that justifies interference with the husband’s rights; it must be more than there will, or may, be a claim depending upon the outcome of the criminal trial in the County Court of Victoria.

11. To add to the problem, there is still no substantive relief sought by the intervener despite the order of 11 December 2017 which, in my view, was put in place because of s 92(2) of the Act.  As s 114 of the Act is the power to make the sort of injunctive relief sought by the intervener, the non-compliance with court orders is a matter to be taken into account in the exercise of discretion.

12. It would also be odd for the rules of court to require the husband and the wife to comply with various rules (see 4.01(1)(a), 6.01(d) (with specific reference to Note 2), 6.06(2)(b)(ii) and 9.01(1), 9.01(3)(c), and 9.04) but for there to be no requirement for any formal pleading or application by the intervener and for her to be able to make a claim as she has now foreshadowed.  One question in relation to the exercise of discretion is also what right, as against the property interests of the husband, is the intervener seeking to protect.  Counsel for the intervener submitted that it was her prospective claim.

13. In my view, the intervener cannot assert a claim for the purposes of the injunctive relief she is seeking without more. The word “prospective” is an adjective the noun for which is “prospect”. Prospect refers to the probability of a claim. Section 85B of the Sentencing Act does not give Mareva Order-type rights.  I see no reason why this court should extend the powers to which I shall return in a moment, to protect an unpleaded cause of action by a party who does not claim particular property.  The intervener cannot be a person referred to in s 79(10)(a) because she is not a creditor.  She cannot rely on s 79(10)(b) as a person whose interests would be affected by the making of a property order because that particular section only gives her an entitlement to become a party to the proceedings and what she does thereafter in respect of her rights as a creditor, becomes an issue for her.  In any event, the intervener has already been made a party by virtue of the orders to which I have earlier referred. 

14. Another aspect which is equally troubling is that the intervener also says in her affidavit that the criminal offences alleged against the husband were also perpetrated against her sister “and several others”.  Presumably, if the intervener has the rights she asserts here, the unnamed “several others” would have similar rights.  Whilst they might not know of the present proceedings, it is hard to imagine that the intervener’s sister does not.  All of these people would have to be given notice of the entitlement once they become a creditor, to become a party.

15. The question of whether the power to grant an injunction on the limited material provided by the intervener requires consideration of various authorities.

16. In ABC v Lenah Game Meats Pty Ltd [2001] HCA 63; 208 CLR 199, Gleeson CJ observed:

    [8]When a plaintiff applies to a court for an interlocutory injunction, the first question counsel may be asked is: what is your equity? If a plaintiff, who has commenced an action seeking a permanent injunction, cannot demonstrate that, if the facts alleged are shown to be true, there will be a sufficiently plausible ground for the granting of final relief, then that may mean there is no basis for interlocutory relief…

    The Chief Justice then said:

    The nature of the jurisdiction

    [9]Sir Frederick Jordan, in his Chapters on Equity in New South Wales, said[2]:

    The purpose of an interlocutory injunction is to keep matters in statu quo until the rights of the parties can be determined at the hearing of the suit.

    [10]That is a sufficient description of the purpose for which the Supreme Court of Tasmania might properly have granted an interlocutory injunction in the present case. It is not a complete description of the circumstances in which an interlocutory injunction may be granted. But it covers this case. The respondent claimed a right, which it sought to have vindicated by a permanent injunction, to prevent the appellant from publishing or broadcasting any of the material on the video tape which had come into its possession. Subject to any argument as to whether damages were an adequate remedy, there was a probability that such right would be rendered worthless if, before the final hearing, the appellant broadcast the material as and when it pleased. In order to preserve the subject matter of the dispute, and to prevent the practical destruction of the right claimed by the respondent before the action could be heard on a final basis, the Supreme Court had power to grant an interlocutory injunction. The immediate source of that power was s 11 of the Supreme Court Civil Procedure Act 1932 (Tas). Power of that nature has a long history, and is exercised according to principle, not unguided discretion. I agree with what is said by Gummow and Hayne JJ as to the relevant principles. For present purposes, what is most significant is that the justice and convenience of granting an interlocutory injunction, in a case such as the present, is to be found in the purpose for which the power exists.

17. Relevantly, Gleeson CJ observed that what he was considering was not a Mareva claim or, for that matter, some statutory injunction as would be found in s 114 of the Act but his Honour’s observations provide significant guidance that there must be something to protect which justifies interference with proprietary rights.

18. In Cardile v LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380 the plurality said the following:

    [28]The term "injunction" is used in numerous statutes to identify a particular species of order, the making of which the law in question provides as part of a new regulatory or other regime, which may be supported by penal provisions. Notable examples in statutes presently in force nationally are found in s 80 of the Trade Practices Act (Cth) ("the Trade Practices Act"), s 114 of the Family Law Act 1975 (Cth), s 1324 of the Corporations Law (Cth) and s 170NG of the Workplace Relations Act 1996 (Cth). These provisions empower courts to give a remedy in many cases where none would have been available in a court of equity in the exercise of its jurisdiction, whether to protect the legal (including statutory) or equitable rights of the plaintiff, the administration of a trust for charitable purposes, or the observance of public law at the suit of the Attorney-General, with or without a relator, or at the suit of a person with a sufficient interest.

    [29]In these situations, the term "injunction" takes its content from the provisions of the particular statute in question. In other laws, for example Div 2 (ss 43-65) of Pt III of the Proceeds of Crime Act 1987 (Cth), where the term "restraining order" is used, remedies having some characteristics of injunctions as understood in courts of equity are given their own particular statutory designation.

    …

    [33]Whilst s 23 of the Federal Court Act empowers the Federal Court to make "orders of such kinds, including interlocutory orders ... as the Court thinks appropriate", the Federal Court is not thereby authorised to grant injunctive relief where jurisdiction is acquired under another statute which provides an exhaustive code of the available remedies and that code does not authorise the grant of an injunction. (My emphasis)

1. Their Honours then said:

   [40]In these various ways, the courts developed doctrines and remedies, outside the injunction as understood in courts of equity, to protect the integrity of its processes once set in motion. The Mareva order for the preservation of assets should be seen as a further development. There is no harm in the use of the term Mareva to identify that development, provided the source of the remedy is kept in view when considering the form of the remedy in each particular case. An anterior question will be whether there is another interlocutory remedy among those considered above which will be suitable to meet the case in hand but be less extensive in scope.  

   As to Mareva orders, their Honours said:

   [43]In Australia, for many years, Mareva orders have been made in aid of the exercise of the specific remedies provided for execution against judgment debtors. Such orders are not interlocutory as they may operate after the recovery of final judgment, yet they are impermanent in the sense that they preserve assets and assist and protect the use of methods of execution and do not substitute for them. In respect of their operation after, as well as before, the making of orders for final relief, the Mareva order should, in general, be supported by an undertaking as to damages.  

   No such undertaking has been offered here by the intervener.

2. Finally, their Honours said:

   [50]…There is a temptation to use the term "flexible" to cloak a lack of analytical rigour and to escape the need to find a doctrinal and principled basis for orders that are made. There are significant differences between an order protective of the court's process set in train against a party to an action, including the efficacy of execution available to a judgment creditor, and an order extending to the property of persons who are not parties and who cannot be shown to have frustrated, actually or prospectively, the administration of justice. It has been truly said that a Mareva order does not deprive the party subject to its restraint either of title to or possession of the assets to which the order extends. Nor does the order improve the position of claimants in an insolvency of the judgment debtor. It operates in personam and not as an attachment. Nevertheless, those statements should not obscure the reality that the granting of a Mareva order is bound to have a significant impact on the property of the person against whom it is made: in a practical sense it operates as a very tight "negative pledge" species of security over property, to which the contempt sanction is attached. It requires a high degree of caution on the part of a court invited to make an order of that kind. An order lightly or wrongly granted may have a capacity to impair or restrict commerce just as much as one appropriately granted may facilitate and ensure its due conduct. (My emphasis).  

3. Returning then to ABC v Lenah Game Meats (supra), Gummow and Hayne JJ at [64] said that an interlocutory injunction was granted to preserve the status quo “pending the determination at trial of the right of the parties to final relief”.  Presupposing as I do that a Mareva-type order is designed to protect rights, that statement throws light on my concern that this court could not say, at this moment, what rights the intervener has, if any, or even whether there is going to be a trial of her claim for relief, because she has not pleaded it.

4. Their Honours went on to say:

   [89]Where interlocutory injunctive relief is sought in some special statutory jurisdiction which uses the term "injunction" to identify a remedy for which it provides, that term takes its colour from the statutory regime in question. …

   …

   [91]The basic proposition remains that where interlocutory injunctive relief is sought in a Judicature system court, it is necessary to identify the legal (which may be statutory) or equitable rights which are to be determined at trial and in respect of which there is sought final relief which may or may not be injunctive in nature. In Muschinski v Dodds, Deane J said that an equitable remedy:

   is available only when warranted by established equitable principles or by the legitimate processes of legal reasoning, by analogy, induction and deduction, from the starting point of a proper understanding of the conceptual foundation of such principles.

5. The following statement by their Honours at [138] seems to me to encapsulate the difficulties that the intervener presently faces having regard to the orders made last December:

   [138]…The court determines the legal or equitable right upon which the plaintiff relies for its equity, considers the adequacy of legal remedies, and then comes to discretion and such matters as the imposition of terms, and the form of any relief. Decisions of equity courts are not a wilderness of single instances determined by idiosyncratic exercises of discretion. To utter the undoubted truth that in Australia equitable principles have a dynamic quality is not to deny that it is those principles that are decisive.  

6. In that context, the power sought to be exercised is found in s 114(3) of the Act.  It reads:

   Injunctions

   (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)…;

   (b)…;

   (c)…;

   (d)        …;

   (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.

   (2)…

   (2A)…

   (3)A court exercising jurisdiction under this Act in proceedings other than proceedings to which subsection (1) applies may grant an injunction, by interlocutory order or otherwise (including an injunction in aid of the enforcement of a decree), in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate.

   Whilst extremely wide, the power cannot be untrammelled or unguided.

7. I find on the intervener’s evidence that there may be a prospective claim but at the moment, it is tenuous and the relief unspecified.  To restrain the husband from exercising his lawful rights (as distinct from those of the wife) would not be a proper exercise of discretion when the relief is not pleaded and the prospective claim is unsupported by any pleading or compensatory damages opinion from an expert in that area of the law.

8. Although neither the husband nor the wife has sought to have the intervener removed as a party, any future judge hearing an application, absent compliance with orders, might consider discharging the rights of the intervener as a party.  It is relevant to observe that an intervener as a party has obligations as well as rights.

9. The claim for relief by the intervener must be dismissed.

The case guardian issue

1. It is the husband who seeks an order that Ms G be appointed as his case guardian.

2. Chapter 6 of the rules of court provide assistance.  A person with a disability may continue a case only by a case guardian.  The dictionary to the rules defines a person with a disability as one who because of a physical disability is not capable of adequately conducting the case.  There are other parts of the definition but they are not relevant here. 

3. The husband’s application approaches the issue from two perspectives.  First it is said that he has a physical disability by virtue of his detention which creates inability to give proper instructions.  Secondly, in any event, he has provided to Ms G a power of attorney and accordingly, under rule 6.08A he is entitled to have her as his case guardian of right.

4. Rule 6.08A reads:

   Interpretation

   In this Part:

   a manager of the affairs of a party includes a person who has been appointed, in respect of the party, a trustee or guardian under a Commonwealth, State or Territory law.

5. Dealing with the issue of disability first, the rule remains remarkably silent.  It is submitted for the husband that he is unable to do what a normal litigant can do by virtue of his incarceration. 

6. The husband’s evidence is that he is experiencing “great difficulty managing” his legal matters not just because of fatigue and other problems related to his medical condition but as a result of the practical difficulties arising from his detention.  He maintains that he has a “range of health conditions”.  He is unable to see his usual doctor whilst he is in detention and can only be treated by doctors provided by the centre.  He describes himself as having been diagnosed by a clinical psychologist with depression the symptoms of which are bouts of extreme fatigue, insomnia, anxiety, an inability to concentrate and difficulties with short term memory.  None of this is corroborated by any expert evidence. 

7. In respect of practical issues he says that his access to computers is limited to two one hour slot each day but he misses those frequently because of attendance at appointments and activities or because other detainees refuse to give him that access.  His solution to date has been for Ms G to bring documentation to him but his access to those documents is difficult because they are retained in secure lockers and it take up to two days or more for written requests to access them.  Thus, he has difficulty responding to questions of his lawyers.  Lawyers have to visit him.

8. Ms G said that she had effectively managed the preparation of his legal case including communicating with his lawyers by email, telephone or in person, printing out documents and taking them to him for his daily visits and reading through the documents with him.  She then recorded his amendments and additions and carried his answers to questions asked by the lawyers.  She was also able to obtain evidence for him in relation to discoverable documents and the like.  To that end, Ms G has now been authorised as his attorney under power. 

9. Dealing first with the question of disability, the only guidance I have been able to find in a legislative sense comes from the Disability Act 2006 (Vic). Section 3 of that Act defines a disability as a sensory, physical or neurological impairment. I consider the rules of this court were intended to reflect the same type of disability. I reject the submission of counsel for the husband that physical disability is referring to such things as detention. The disability must refer to the adequacy of the applicant conducting his case but accepting the definition of disability in the Victorian legislation is a correct approach, it is not referring to inconvenience or detention but rather something of a medical type problem.

10. All of the evidence indicates that the husband is suffering inconvenience but I could not find that with the assistance of his lawyers and Ms G, he is not capable of adequately conducting his case in this court.

11. The second issue however is different.  It is submitted on behalf of the husband that by virtue of the words of rule 6.08A, he is entitled to have Ms G as his case guardian providing the provisions of rule 6.10(2) are fulfilled.  That latter rule reads:

    6.10    Appointment, replacement or removal of case guardian

    …

    (6)       A person who is a manager of the affairs of a party is taken to be appointed as the case guardian of the party if the person has filed:

    (a)        a notice of address for service; and

    (b)        an affidavit which:

    (i)provides evidence that the person has been appointed manager of the affairs of the party; and

    (ii)states that the person consents to being appointed as the case guardian of the party.

12. The husband has appointed Ms G pursuant to a power of attorney which provides that she can give instructions, as could he, including in relation to anything to do with “conflict transactions”.  The distinction between an attorney under power and a case guardian is in my view, quite marked. 

13. Under the Powers of Attorney Act (2014) (Vic) a person exercising a power including carrying out any function or performing any duty under the law for a principal such as the husband in a general sense must act in a way that is “as least restrictive of the principal’s ability to decide an act as is possible in the circumstances” and to ensure that the principal is given practical and appropriate support to enable participation in decisions affecting the principal as much as possible.  (see s 21).  The role of the case guardian on the other hand is one in which the appointed person is responsible to the court and conducts the litigation even to the point of acting inconsistently with the “instructions” of the party whom they represent.  In Kannis v Kannis (2003) FLC 93-135, a case under the old rules, the Full Court described the role of the case guardian (then described as the next friend) as:

    The role of the Next Friend is to conduct litigation and provide appropriate instructions to so do.  The appointment of a Next Friend is also necessary to enable the decision to be given which will be binding on the person under a disability.

14. Thus, to the extent that the distinction is as I described it, it would be odd if a person satisfied rule 6.08A holding a power of attorney but could ignore the views of the party, comply with rule 6.10(2) and then take over the litigation. 

15. This issue was canvassed (and counsel for the husband relied upon this authority) by the Full Court in Price and Underwood (Divorce Appeal) (2009) FLC 93-408. This was a case involving a very ill and dying husband. He had given his daughter a power of attorney which she relied upon to file a divorce application. Initially the dispute was whether or not the attorney could file (and obviously sign) an application for divorce on behalf of a person under a disability. There are a number of reasons why this case should be approached cautiously. First, it related specifically to a divorce. Secondly, there was no dispute that the husband was seriously ill and would have qualified for a case guardian by virtue of his health. Thirdly, the following passage in the judgment of Boland and Ryan JJ may not necessarily be seen as a binding authority:

    [150]However, r 6.08A does not provide an exhaustive definition. The rule provides “a manager of the affairs of a party” includes a person who has been appointed in respect of the party, a trustee or guardian under Commonwealth, State or Territory law.  As presently advised, we accept that the Enduring Power of Attorney (Financial) made under the provisions of the Instruments Act 1958 (Vic), which was expressed to be enduring and unlimited in terms, held by Ms U was sufficient to satisfy the provision in the rules that she had been appointed a “manager of the affairs” of the husband, and the application for her appointment could be made under r 6.10(2). (my emphasis).

    [151]Rule 6.10(2) provides, subject to satisfying the requirements of that rule, an automatic entitlement of a person who is a “manager of the affairs” of the person under a disability to be a case guardian.  Although senior counsel for the wife challenged Ms. U’s appointment on the basis of her asserted conflict of interest, as we will shortly explain, even if r 6.10(2) was not applicable, we are satisfied that Ms. U fulfilled the conditions in r 6.09 for appointment as a case guardian.  Thus her appointment as a case guardian was a valid appointment, and did not vitiate the divorce application.

16. It will be seen that the Full Court was looking at the Instruments Act 1958 (Vic) yet the provision that now governs powers of attorney is the 2014 Act to which I have earlier referred.

17. It is clear that the Full Court italicized the word “includes” in paragraph 150 of the judgment indicating clearly that the definition is not restricted.  It is not clear to me how well that issue was argued.  Whilst obviously powerful and persuasive, if not binding, the Full Court had a case involving an entirely different set of circumstances.  There, the dying husband could not participate in the proceedings whereas in my view, the husband can here.  The distinction between a case guardian and an attorney under power was not argued.  The reference in rule 6.08A seems more directed to orders of organisations such as administrative tribunals who make specific directions for the protection of individuals and I am not comfortable to say that people who have an enduring general power of attorney fit into that category.

18. Ultimately, the question boils down to whether or not I am satisfied that the husband cannot adequately conduct the litigation but it would appear here that by using Ms G in her capacity as his attorney under power, he is managing.  It does not seem to be suggested that he wants Ms G to have the absolute right to make decisions on his behalf and on the evidence he has presented, there would be no logical reason for that to occur.  He complained for example that he was not able to get the court to give him the opportunity to attend court in person and that that was an indication of inadequacy of capacity to give instructions.  In this day and age of mobile telephones, emails and even video links, I am not satisfied that the ability to give instantaneous instructions is such a problem.

19. In the circumstances, the husband’s application must fail and there is no reason for me then to consider the question of whether or not Ms G is appropriate in any event. 

The litigation funding/partial property order

1. The husband’s application seeks an order that both he and the wife submit a loan application to the Westpac Bank to extend the existing mortgage over the F Street property by $450,000 and those funds be his “by way of partial property settlement”.  In the alternative, he seeks a sale of the F Street property and that he receive $500,000. 

2. It is uncontroversial that the F Street property is valued at approximately $1.85 million and the existing mortgage is $250,000.  The present equity therefore is at least $1.5 million.

3. Although not part of his application, the husband said that if unsuccessful, he wanted an expedited trial. To the extent that such an order was intended to enable the conclusion of all family law proceedings before his August 2018 criminal trial, I could confidently indicate it unlikely.  That however is a matter for the case management judge and I shall refer the issue to the Honourable Justice Johns by the orders I propose to make.

4. Arising out of the December 2017 orders, both husband and wife filed an amended application and response respectively.

5. The husband seeks, by way of final orders, that the wife give him $775,000 and that he thereafter transfer F Street to her upon her taking over responsibility for the mortgage.  Other orders were sought but in the context of the present application, they do not affect matters. 

6. By her response, the wife sought that she provide to the husband $200,000 less his share of the capital gains tax debt that appears to be $50,000 in total.  Thus, the wife anticipated receiving the F Street property upon a payment of $175,000 or thereabouts.

7. Whilst counsel for the wife seemed to distance himself from those proposed orders, they certainly give some indication of what this dispute is about bearing in mind, the husband wants to use the money for his criminal trial lawyers who have estimated his costs at between $170,000 and $242,000.  He has also provided evidence to indicate that he needs something in the vicinity of $30,000 to $40,000 for the proceedings in this court.

8. At paragraph [15] of his affidavit, the husband said that all of the assets and liabilities had been valued and the total equity is approximately $2 million.  The wife did not address that issue.  At [4] of her affidavit, the wife said she relied on previous affidavits.  As the affidavit was drawn by a lawyer who should know better, I do not propose to rely on that material as it was filed for a different hearing.

1. The wife focussed on what appears to be negotiations in 2015 at which some form of agreement was reached because the wife approached the Westpac Bank and was told she could borrow $200,000 but that the bank would not lend her more.  Against that, the husband relied on an affidavit of Mr H.  He is a “home loan manager” who (perhaps inappropriately because of s 121 of the Act) was given the wife’s financial statement and he estimated on her salary and expenses that she could borrow $817,000 from the Westpac Bank.  This evidence was determined from “various lender servicing calculators”.  It assumes a willingness on the wife’s part, and a desire to commit herself to, that level of debt.  The evidence therefore was of little assistance. 

2. If I took the wife’s amended response filed only 10 weeks ago and presumed that she did not dispute the husband’s paragraph [15] about the equity in the assets, she is suggesting that the husband should receive about 17 per cent allowing for the “add-back” of the partial distributions previously made to both of the parties.  In the December 2017 hearing, the wife said that she thought the husband was entitled to 30 per cent. 

3. Counsel for the wife said that his client was going to mount a “Kennon” claim relating to violence affecting her contribution.  Despite responding to the husband’s assertions about the parties’ contributions, such a claim is not obvious.  I am therefore left with an assertion by the wife that $175,000 is the just and equitable payment but that is on the basis of what she described as an “in principal (sic)” agreement in 2015.  I remain unsure how her claim is put and why 17 per cent would be just and equitable or more importantly, why the husband’s evidence is significantly wrong.  She certainly disputes some of the facts but not all.

4. It is apparent from the wife’s evidence that the sale of the matrimonial home would be psychologically damaging for the adult children and they are receiving counselling but this same issue will have to be met sooner or later.  Thus, my concern about the wife’s position is that there is little attention to an immediate resolution.

5. Counsel for the wife submitted that interim property settlements should be seen as a once-only alteration of property interests but he conceded that did not preclude the court from making an order in appropriate circumstances.

6. Counsel for the husband submitted that there were two steps identified in Strahan and Strahan (Interim property orders) (2011) FLC 93-466 and they were:

   (a)What is the jurisdiction being invoked?

   (b)Is there sufficient evidence to enable a consideration of the relevant factors under s 79 of the Act?

7. Counsel for the husband submitted that the plurality in Strahan at [132] made reference to how the matters were to be approached.  The law here is not in dispute but its application is. 

8. Counsel for the husband submitted that on the basis of the figures, the 30 per cent concession by the wife would mean that the husband was entitled to $567,000 but as he had already received $160,000, he would be entitled to a further $407,000.  The difficulty with that submission is that I am not entirely sure that the wife was making the concession and even if she was in 2017, it seems to now be withdrawn.

9. It was submitted on behalf of the husband that as a proper valuation had now been done, the wife should be compelled to borrow $450,000 or such other sum as the court might consider just and equitable or in the alternative a sale should occur as it seemed “inevitable”.

10. The husband has chosen to proceed on the basis of another partial property settlement.  That election points to the source of power and determines the considerations for making such an order. 

11. Section 79(1) provides that the court may make such order as it considers appropriate altering the interests of the parties in the property.  Fundamentally, the court shall not make an order under the section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

12. The considerations once s 79(2) is triggered (and here it is because of the wife’s response filed in 2018 indicating that she agrees that an alteration of property interests should occur) lie in s 79(4) which must be applied.

13. In Zschokke and Zschokke (1996) FLC 92-693, the Full Court observed that if on a brief consideration of those matters, it seemed likely that the party seeking an advance of funds would be likely to receive a sum sufficient to cover that advance in the property settlement, the order sought could be made. 

14. In Zschokke the Full Court observed that if such an order was made, an integral part of it was that the advance could be taken into account in the property settlement and must be capable of satisfying part of the parties’ entitlement.

15. Ultimately therefore, the only limit on the application of the legal provisions here is discretion.

16. In Strahan (supra), Thackray J poignantly observed:

    [224]In every defended case one of the parties will claim they are entitled to a payment or transfer of property from the other party.  In many cases the other party will acknowledge they are likely to be ordered to transfer property or make a payment.  That, however, could not of itself be sufficient to make it appropriate for the Court to make an interim order.  Circumstances may change radically during the course of proceedings, as has been seen with recent severe fluctuations in the market.  The personal circumstances of the parties may change dramatically.  Furthermore, although a party may anticipate ultimately being ordered to transfer property or make a payment, they may legitimately expect to obtain an order for costs against the other party which will be satisfied from funds or property that would otherwise have been transferred.   (My emphasis).

17. The words of Thackray J are a metaphorical brake on the exercise of the discretion.

18. This court was invited to hear the interim property application and must therefore exercise the power according to law.  Thus, I approach it on a two step basis.  The first is to identify the circumstances that make it appropriate to give consideration to exercising the power and once that determination is made, the power is to be exercised by the obligation to make an order that is appropriate having regard to the requirements to which I have earlier referred.

19. The position put by the wife was entirely unsatisfactory but even so, I could not confidently find that what she proposed may not occur.  As I have already said, I do not propose to guess at prospective claims.  However, there may be a costs application that might have to be satisfied out of any ultimate payment or an alteration of the wife’s pleaded position along the lines “floated” by counsel for the wife that if the husband was imprisoned, his “needs” would be substantially reduced.  Even if the pleaded sum was so ordered, it may not necessarily be ordered to be paid immediately having regard to the circumstances of the husband at the time.  There are therefore a number of considerations that go to making up the question of what is just and equitable.

20. Section 79(2) of the Act requires the court to consider all of the circumstances.  Those circumstances must be those known to the court now.  With the wife’s submission about the impact of the husband’s impending trial, the anxiety and stressors on the children being high, I accept that there are circumstances that can and should, be taken into account for the purposes of the exercise here.  In my view, notwithstanding the unsatisfactory nature of the wife’s evidence, I conclude that along with the matters about which I have just dealt, it would not be just and equitable to make an order now for the wife to make a payment to the husband nor would it be just and equitable, for the court to make an order for the sale of the F Street property.

21. However, despite all of my reservations about just what the wife is conceding, I see no reason why she should not cooperate in every way to enable the husband to:

    (a)Charge his interest in the home to the extent that she seems to agree is his interest at the present time; and/or

    (b)Borrow if he can, up to $175,000 secured against his interest.

Expedited hearing

1. I otherwise refer the case to the case management judge for the consideration by her in chambers of only paragraph 7 of the husband’s application in a case filed 28 February 2018.  For that purpose, and to avoid the parties incurring further costs, her Honour might consider relevant to that application paragraphs 27 to 44 of the husband’s affidavit filed 28 February 2018 and paragraphs 16 to 24 of the wife’s affidavit filed 10 April 2018.

Costs

1. The wife sought costs as well as the dismissal of the husband’s application.  She said at paragraph 25:

   This is the second occasion that he has brought me back to court seeking an interim property distribution.  I am being both emotional and financially drained by his actions whilst I continue to work and keep the family together during these most horrific days.  

2. It might be said that her approach to resolving the matter overall, has not contributed to the very dilemma that she is complaining about.

3. Any costs application must be determined having regard to the provisions of s 117 of the Act.  That requires that each party pay their own costs unless there are circumstances to justify a departure from that principle.  If the court does intend to depart from the principle, it must take into account the matters set out in s 117(2A) of the Act.

4. In my view there are no justifying circumstances here.  Had the wife addressed the issues of how the matter was to be resolved overall, this problem may not have arisen.  In my view, the husband’s application did have some merit based upon his own material not to mention the wife’s response seeking final orders.  To somehow rely on her daughter’s prospective claim when the 2017 reasons made clear about my concerns of the lack of pleading, cannot have been a basis to resist the husband’s claim or to endeavour to resolve the overall matters.  In my view there is no justification for an order for costs here.

I certify that the preceding Ninety (90) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 18 April 2018.

Associate: 

Date:  18 April 2018