Connor and Connor

[2008] FamCA 847

FAMILY COURT OF AUSTRALIA

CONNOR & CONNOR [2008] FamCA 847

FAMILY LAW –  SPOUSAL MAINTENANCE – Lump sum – Interim – Sale of matrimonial home – Sale of assets including art   

APPLICANT: Ms Connor

RESPONDENT: Mr Connor

FILE NUMBER: MLC 1600 of 2008

DATE DELIVERED: 14 August 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Watt J

HEARING DATE: 5, 8 August 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Atkinson

SOLICITOR FOR THE APPLICANT: Taussig Cherrie & Associates

COUNSEL FOR THE RESPONDENT: Mr North SC

SOLICITOR FOR THE RESPONDENT: Lander & Rogers

Orders

IT IS ORDERED BY CONSENT THAT:

1. The parties and the children of the marriage further attend upon Ms D, psychologist for the purposes of preparing an updated family report as to the issues raised in the husband’s further amended response filed 5 August 2008 and generally as matters affecting the interests of and arrangements for the children AND IT IS REQUESTED that a copy of the update report be made available to the parties and the Court by 30 September 2008. The costs of that report be paid from the proceeds of sale of the O paintings.

2. On or before 19 August 2008:

   (a)the husband provide to the wife, at his expense, all the documents listed on the facsimile letter from Taussig Cherrie to Lander & Rogers dated 1 August 2008;

   (b)the wife provide to the husband, at her expense, so many of the documents referred to in paragraph 17 of the husband’s further amended response filed 5 August 2008.

3. The husband provide to the solicitors for the wife:

   (a)   not less than 14 days written notice of the proposed date of settlement of the current component sold within F development, or if not known to the husband within 14 days, within 24 hours of the husband being aware of same;

   (b)  not less than seven days written notice of the proposed statement of adjustment and settlement statement for the sale, or if not available to the husband, within 24 hours of the husband receiving same.

4. The parties attend a mediation conducted by Mr J Melilli of the Victorian Bar on or before 15 September 2008 and that any fees of the mediator be met from the sale of the artwork referred to in the annexure to the orders made on 6 May 2008 or from borrowings to be secured in accordance with paragraph 2 of the orders made on 6 June 2008.

5. I reserve liberty to the parties to apply generally on short notice in writing to the other party.

IT IS FURTHER ORDERED THAT:

1. By consent I discharge paragraph 3 of my order made 5 August 2008

2. The parties do all things and sign all documents necessary to cause the former matrimonial home at T to be sold at auction such auction to be conducted by no later than the end of September 2008 (unless otherwise agreed by the parties) and from the net proceeds of sale after payment of all reasonably incurred costs of sale and the discharge of all encumbrances the proceeds then available are to be paid to the solicitors for the wife and  applied:

   (a)in payment of the sum of $145,000 to the wife; and

   (b)to pay the balance to the wife’s solicitors to be held in an interest bearing account on trust for the husband and the wife until further order of the Court or unless with the prior written consent of the parties.

3. If by 4.00pm on 15 August 2008 the parties are unable to agree on the appointment of an agent or agents to market the property and conduct the auction, the reserve price, the advertising to be conducted or any other aspect of the sale such matters upon which the parties are unable to agree are to be conducted in accordance with advice received from the Director of the Real Estate Institute of Victoria or his nominee.

4. The husband, in his capacity as the sole Director of E Pty Ltd, do all things and sign all such documents as may be required to discharge the registered mortgage to Perpetual Trustee Company Ltd in anticipation of the settlement of the sale of T property.

5. The parties jointly instruct X Galleries to pay the  proceeds of sale of the O paintings (less any commission properly payable on the sale) to the solicitors for the wife who are to pay to the wife the sum of $105,000 and hold the balance to be applied in payment of one half of the the costs of the accountant’s report (exhibit ‘H&W1’), Ms D’s second report and the costs of the mediator conducting the mediation to be held in accordance with paragraph 4 of this order and in payment of the balance then remaining to the wife.

6. I reserve liberty to the parties to apply to vacate paragraph 4 of this order in the event that non-compliance with paragraphs 2 or 3 (or both) is alleged by the party applying.

7. In the event that before the date fixed for the auction of the property in accordance with paragraph 7 of this order the wife receives amounts totalling the sum of $250,000 representing the proceeds of sale of any assets of the parties in respect of which orders for sale have already been made, the number plates sold by Mr C, a borrowing in accordance with earlier orders or those assets in respect of which she seeks an order for sale in her amended application in a case filed 2 June 2008, I reserve liberty to the husband to apply for the vacation of the order for sale and in the event that sales of such assets produce proceeds of sale in excess of the amount necessary to pay the said sum to the wife the husband is to pay such excess to his solicitors who are to hold any such amount or amounts on trust for the parties in an interest bearing account until further order or the receipt of joint instructions from the parties as to their disposition.

8. In the event that the wife has received the said sum of $250,000 and thereafter the proceeds of sale of the G painting (see paragraph 3 of annexure A to the orders of 6 May 2008) become available the wife is to pay the said proceeds to her solicitor to be held on trust by her solicitors for the parties in an interest bearing account.

9. I reserve the final characterisation of the funds [$250,000] to be received by the wife as envisaged by this order to the trial judge.

10. I adjourn the matter to 9.15am on 14 August 2008 to give my reasons orally.

AND THE COURT NOTES that the Court has been advised this day by counsel for the parties that the two O paintings have been sold for a sum of $140,000 (which sum has been received from the X Gallery) and the selling agent’s commission is likely to be approximately $20,000 leaving net proceeds of approximately $120,000 to be applied in accordance with this order.

IT IS NOTED that publication of this judgment under the pseudonym Connor and Connor is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  MLC 1600 of 2008

MS CONNOR

Applicant

And

MR CONNOR

Respondent

REASONS FOR JUDGMENT

1. This matter came before me in the judicial interim hearing list on 5 August 2008. Mr Atkinson of counsel appeared for the applicant wife and Mr North SC appeared for the respondent husband.  The hearing occupied most of the sitting day and at the conclusion, I listed the matter for mention at 9.15 on 8 August 2008 for the making of orders and indicated that I would deliver my reasons thereafter.  These are those reasons.

2. The orders that I made on 8 August 2008 were partly by consent - for example, for the preparation of a further family report - the provision of information re the sale of property and attendance at a mediation.  The reasons for the orders made not by consent require some background to put them in context. 

3. The parties married in May 1998 and finally separated just under 10 years later in February 2008.  They have two children, S, who is eight years and nine months, and H, who will be seven in September. At separation the wife and children vacated the matrimonial home in T and took up residence in rented premises also in T.  The wife is paying $1500 per week for those rented premises.  The children have lived with their mother since separation and have spent time and communicated with their father by agreement. 

4. On 22 February 2008, the wife issued proceedings in this court, seeking final orders in respect of the children and for spousal maintenance and property settlement.  Neither the spousal maintenance sought nor the property settlement sought is quantified in that application. 

5. With her application, the wife filed a financial statement sworn 21 February 2008.  In Part B, the wife deposes to having nil average weekly income, weekly expenditure of $4187, assets of $6,760,000 and liabilities of $2,882,000.  The assets that make up the figure just mentioned are the former matrimonial home in T, of which the wife states that she owns 100 per cent, estimated at $6 million, a 25 per cent interest in a company that owns a ski lodge at M (referred to as ‘[K]’) estimated at $750,000, and the liabilities for which the wife states she is solely liable are $2.8 million in respect of the home, and other liabilities of $25,000 owed to family and friends, and $57,000 owing to Westpac MasterCard.

6. With these documents, the wife also filed an application in a case and affidavit in support.  The application in a case sought certain children's orders, the appointment of single expert valuers to value specified assets and interests, injunctive relief, spousal maintenance of $2500 per week, the sale of certain paintings and the payment of the net proceeds to the wife, the characterisation of such proceeds to be agreed or determined at trial.

7. The husband's responsive documents were filed on 6 May 2008.  In paragraph 11 of his response to an application for final orders, the husband indicates that he agrees with inter alia paragraphs 6 and 7 of the final orders sought in the wife's application, that is, unquantified property settlement and unquantified spousal maintenance respectively.

8. The husband's response to the wife's application in a case proposed, under the heading ‘Spousal Maintenance’, that certain paintings be sold and the proceeds held on trust and disbursed as to $700 per week into the wife's bank account and $800 be paid as a contribution towards the wife's rental of $1500 per week.  The husband's financial statement filed at that time shows, in Part B, weekly income of $546, personal expenditure of $8 per week, assets with a negative value of $3,427,892 and debts totalling $14,059,000.

9. It should come as no surprise therefore that the approach of both parties to the wife's short‑term financial needs was to sell the paintings that were unencumbered and pay the proceeds to the wife: see par 11 below.

10. The affidavits filed by both parties in support of their applications in a case disclose that the husband has, through entities that he controls, been involved in a number of property developments.  The most recent of these are at various stages of completion and sale.  Each of the developments is heavily financed.

11. On 6 May 2008 the wife’s application in a case and the husband’s response to which I have made reference were before Registrar Lethbridge for directions and certain orders and directions were made.  In addition, a document headed ‘Heads of Agreement’ was attached to the registrar's orders being signed by the parties' solicitors.  The heads of agreement provided for the preparation of a family report by a Ms D, the preparation of a report as to the value of "the [Connor] group" by Mr R of a large accounting firm, and for the sale of three paintings (two by O, one by G) as soon as possible, the holding of the proceeds by the husband's solicitors and payment therefrom of the costs of the two reports just mentioned and the balance to the wife at the rate of $1500 per week.

12. The parties' application in a case and response were adjourned from the registrar's list to the interim hearing list before a judge on 6 June 2008.  By this time, nearly four months after separation, none of the paintings had been sold and the wife had not received payment of any amount of substance from either the husband or the entities he controls. 

13. I would mention at this point that the husband sets out in his affidavits certain payments that he had made for the benefit of the wife and/or the children but there was, even on his case, very little paid directly to the wife in terms of financial provision for herself and the children.

14. On 2 June 2008 the wife filed an amended application in a case that sought the sale of a wide range of assets: the T home, the ski Lodge (K), the Queensland holiday home, certain luxury cars, personalised numberplates, a boat and a jetski, and two O paintings.  She sought payment to her from the proceeds of such sales of the sum of $300,000.  In addition, she sought an order that the husband pay to her spousal maintenance in the sum of $2500 per week. 

15. In par 31 of her amended application, the wife sought an order that the treatment of all and any payments received by her pursuant to the orders she sought be reserved to the trial unless agreed between the parties.

16. In his amended response to an application in a case, the husband sought orders (as to spousal maintenance for the wife) broadly in the terms of the heads of agreement to which I have made reference.

17. I should mention that I have omitted many other forms of relief that were sought in those applications and responses, not being directly relevant.  There were other heads of relief that were sought, however.

18. On 6 June 2008, the adjourned date, Mr Strum of counsel appeared for the wife and Mr North SC for the husband.  Certain orders were made by consent.  Firstly, financial applications were adjourned to the judicial interim list on 5 August 2008 and that of course is the day on which they came before me.  Borrowings of $100,000 against K property or the former matrimonial home were to be raised and paid to the wife to be characterised at trial.  The sale of K property was provided for and payment to the wife of a further sum of $150,000 or sums totalling $150,000 if the paintings were sold earlier and the wife had received the proceeds.  Both payments were, in accordance with the terms of the consent orders, to be characterised at trial.

19. The clear intention of these consent orders was to provide the wife, as an interim measure, with access to lump sums totalling $250,000 and to adjourn the further hearing of her application for sums totalling $300,000, plus weekly payments of $2500, to 5 August 2008.

20. I will also note that those consent orders to which I have just made reference had two notations to them.  The first was (a) that the parties have agreed to participate in a mediation to be convened prior to the adjourned hearing on 5 August 2008.  I make mention at this stage of the fact that that mediation had not taken place prior to the adjourned hearing and on that date an application was made by the husband for the adjournment of the proceedings before me on 5 August to enable that mediation to take place. This was refused. Secondly, it was noted that the wife proposes that the children spend time with the husband in accordance with the report of Ms D dated 4 June 2008.  I mention at this stage that notwithstanding that proposal and an apparent desire on the part of the husband to proceed in accordance with the report of Ms D, no such arrangement was entered into between the parties and indeed the husband later filed a further amended application that has been adjourned for the preparation of a further report by Ms D and so children's issues did not proceed before me at the hearing on 5 August 2008.

21. Paragraph 1 of the consent order made on  6 June, in adjourning the extant interim financial applications to the long interim list on 5 August 2008, further provided:

    And each party shall notify the court by 4 pm on 30 July 2008 of the precise parts of the interim applications upon which they rely and shall provide a list of the material relied upon.

22. That did not happen in fact and it fell to the court to inquire of the parties' solicitors shortly before the adjourned hearing as to what was proceeding and what material was relied upon.

23. There were further documents filed before the hearing before me.  The wife filed a further affidavit sworn on 29 May 2008 and updated that with an affidavit sworn 31 July 2008 setting out the progress (or lack of it) in obtaining funds in accordance with earlier orders, the sale of paintings or by approaching the husband in respect of other available funds such as the opportunity to lease K property for $30,000 payable in advance for the season, which the husband refused, and the apparent availability of funds from the sale by the husband to (or through) his friend, Mr C, of his personalised numberplates.  These funds were not available and remained unavailable at the time of the hearing before me, nor was Mr North able to say when they might become available.

24. The husband was given leave to file an affidavit on the day of the hearing before me which provides some explanation for these matters and sets out a proposal he made to raise funds through his family until the sale proceeds were received from Mr C which was not acceptable to the wife.  The refusal of the rental offer for K property will require further exploration and explanation by the husband, however, before the court could be satisfied that there was good reason why in the circumstances of this case $30,000 could not have been made available to the wife from that source, given that the earlier steps that the parties had put in place had failed to produce any funds whatsoever by the date that the matter came before me in August, some six months after separation.

25. I mention in passing that other indicators of the husband's attitude to the provision of funds for the wife who has the primary care of the children is to be found in his dealings with the motor vehicle which she drove until February this year, a Range Rover that was unilaterally replaced with a second-hand Holden: see pars 16 to 18 of the wife's affidavit sworn 29 May 2008 and also par 6 of that affidavit.

26. In terms of the applications that came before me therefore, the position was broadly that in the six months since separation, the wife had not been put in funds.  Her case was that she had had to borrow money from friends to manage in that time and indeed one of the exhibits that I accepted at the hearing before me was exhibit W1, a list of loans from family and friends at 31 July 2008.  The amounts total $122,000.  The list shows not only the source of the funds but also the application of the funds.  Whilst that exhibit was not objected to by Mr North, he made it clear that he was not in any way admitting that documents existed that established the accuracy of those figures, nor that they are repayable.  However, it was accepted that this was the wife's evidence as to what she has borrowed and from whom and how it has been applied.  As I say, those amounts total $122,000.

27. I will mention at this stage that one of the amounts that the wife has received by way of loan is the sum of $16,000.  That was the subject of a range of submissions by Mr North because the person who provided those funds is a Mr B.  He is referred to in a number of documents in these proceedings to which I will make reference now.  In the wife's first affidavit which was sworn on 21 February 2008 in par 20, from the second sentence of that paragraph, she says:

    In early January 2008, I struck up a friendship with the son of my father's girlfriend, [Mr B], who was travelling in Australia from Germany. The husband was immediately jealous and angered by the friendship.  I acknowledge that in about mid-January, my friendship with [Mr B] developed into a romantic relationship.  [Mr B] has now returned to Germany.

28. That was all that the wife said in any of her affidavits about Mr B.  However, in the affidavit sworn by the husband on 4 August 2008 and filed on the day of the hearing, at par 13, he says:

    The wife has also asserted in correspondence from her lawyers that her partner, [Mr B], is not living with the wife "in a genuine domestic relationship at this time on that basis that the wife has denied that [Mr B]'s financial circumstances are relevant to the current proceedings. The wife clearly is in a domestic relationship with [Mr B].  [Mr B] has been living on a full‑time basis with the wife and children in their rental property in [T].  He has lived with the wife on a full‑time basis since February this year, apart from a couple of weeks in March this year when he briefly returned to Germany.  I ring the children almost every evening between 5.30 and 7 pm.  On most occasions that I speak to the children on the telephone, I hear the wife and [Mr B] talking in the background.  The children have informed me on numerous occasions that [Mr B] lives at the [T] property and when I spend time with the children, they refer to [Mr B] being at the wife's house.  The wife is pregnant to [Mr B] and I say that that relationship is permanent. [Ms D] made observations of the wife's relationship following her meeting with the wife for the purposes of preparing a family report.  Part of Ms [D]'s observations in her report dated 4 June 2008 included the following:  "From discussions with [the wife], it is clear that she considers that she sees a long‑term future with her partner and plans to marry and have children with him."

1. Paragraph 14 complains about the lack of the provision of financial information in relation to Mr B.  The wife's case was put before me on the basis of the assertions she made in that correspondence, ie, that they are not in a genuine domestic relationship at this stage and a denial that they were cohabiting. She admitted (through her counsel) that she had made statements to Ms D as reported in par 27 above, and that she is pregnant to him.

2. Other evidence that touches on that relationship came in the form of a subpoenaed document obtained from the Department of Immigration and Citizenship which shows that Mr B entered Australia on 28 December 2007, left again about four weeks later on 23 January, entered again on 14 March, left again on 21 April, about five weeks later, then entered again on 5 May, then remained for about three months departing on 1 August, then returned again a few days later on 4 August. Those appear to be the periods, four weeks, five weeks, three months and from 4 August 2008 when he has been in the country.

3. Clearly, that is not the sort of continuity of availability to cohabit with the wife to which the husband was alluding in his affidavit.  However, I quite accept Mr North's submission that continuity of living in the same residence is not an essential element of cohabitation.

4. One of the things that Mr North applied for was an opportunity to obtain further information about Mr B before the case proceeded or alternatively, an opportunity to cross‑examine the wife about the financial aspects of their relationship.  I refused both those applications.  While there is clearly a relationship and an intention to have a relationship into the future on the wife’s part, apart from the fact disclosed by the wife, both in correspondence and in exhibit W1, of a loan from Mr B of $16,000 which was paid into a Westpac account of the wife's, there is no evidence at all of any financial relationship, nor indeed of cohabitation beyond that evidence provided by the husband in an affidavit filed on the day of the hearing to which the wife had no opportunity to respond.  Those were not circumstances in which I considered it appropriate to allow cross‑examination, particularly as it would almost certainly have extended the case beyond the hearing time that was available, which was fully occupied in the hearing that did take place on that day.

5. The circumstances of the relationship with Mr B will clearly be relevant at a later time and when there is cohabitation between the wife and Mr B, some further examination of those circumstances may well be called for. In the context of this particular application before me, however, I simply proceed on the basis that there is insufficient evidence to find an existing cohabitation and that is what is made relevant by section 75(2) of the Family Law Act 1975,  which adverts to this subject. 

6. I should say that exhibit W1, to which I have made reference in the context of the loan from Mr B, also showed, as I have mentioned, the application of funds and of that $122,000, some $46,700 had been applied to legal costs. Rent was $52,000 including the bond. Removalists and storage, house insurance, Telstra, Optus, gas, electricity, water, MasterCard, petrol, Medibank Private and CityLink, those are the expenditures that totalled $122,000. They all fall within categories of expenditure that one might expect in the wife's circumstances, and having regard to her affidavit material where she sets out her attempts to find work with her former employer and that she has in fact obtained part-time work that fits in with her present commitments to the children of the marriage who live with her, I am quite satisfied that she is reasonably attempting at this stage to exercise her capacity for employment, having regard to her responsibilities to the children and the other circumstances to which she deposes.

7. Mr North, in the context of his submissions about the relevance of the relationship with Mr B, directed my attention to the case of F v F (1982) FLC 91-214.  It is a decision of Fogarty J and the circumstances in that case, as found by his Honour, were that following separation, a wife who was claiming maintenance for herself and the two children of the marriage had been living with a person in a de facto relationship and she was pregnant to that man. He made no contribution to the wife's household, notwithstanding an apparent capacity to do so.  The application for maintenance for the wife was refused, primarily on the basis that if the wife was cohabiting with someone who had the capacity to contribute, the fact that he did not contribute was really not a sufficient basis for making a maintenance order against her husband.  He had the capacity to contribute, and the fact that the wife was not seeking such a contribution from him was part of their arrangements but they were not at liberty to make arrangements that effectively imposed a burden of support on her husband. 

8. That case is quite distinguishable from this in my view, in that I am not satisfied at this stage that the evidence establishes the relationship of cohabitation.  I have no evidence as to Mr B’s capacity to contribute on a regular basis to the expenses of the household and of course other than an obligation that he will have one day for the child that the wife is expecting in the form of child support, he has at this stage absolutely no commitment, no legal obligation whatsoever to provide anything to the wife's household, nor am I satisfied that I can infer that there is cohabitation at this stage.

9. There would, however, in my view be a very clear case for further evidence to be provided by the wife as to Mr B's financial circumstances were she to proceed to seek further interim financial relief, particularly in the form of periodic payments.

10. I should mention that on behalf of the wife, the court was informed that of the relief sought in her amended application in a case filed on 2 June 2008, before me she was seeking the relief sought in pars 7 to 13, 16 to 20, 25 and 27.  Those paragraphs dealt largely with the sale of assets starting in par 7 with the sale of the home in T which is registered in the wife's name alone and the sale of other assets, including a property in Queensland which I will describe as the parties' holiday home, that is in Queensland; the sale of K property; the sale of a boat and jet ski that belong to the husband; the sale of a Mercedes-Benz that the husband drives and the Range Rover that the wife formerly drove which the husband now has in his possession, and the personalised numberplates of the husband's which it appears have been sold to or by Mr C.  In essence, the wife then sought that she be paid $300,000 from the net proceeds of any sale effected pursuant to these orders.

11. In the course of the hearing before me, it appeared clear that the parties' attempts to put the wife in funds in the interim had not materialised in any of their manifestations either by the borrowing of funds or the sale of the assets that had been identified.  The wife in her affidavit material indicated that the sale of K property in this ski season was a doubtful proposition.  The sale of the property in Queensland was subject to the difficulty of distance and the fact that neither party lives in that State and is present to supervise or provide input into the marketing of that property, and the sale of cars was problematic, in that the husband said in his affidavit that they were fully encumbered and the wife did not have information that enabled her to disagree with that proposition.  While the sale of the boat may have been an obvious choice, the husband's evidence was that it has virtually been available in the hands of an agent, although not actively being marketed for some years now and has not sold. 

12. On the material before me, it appeared quite clear that the one valuable and attractive asset that was available for sale which might end this stalemate of financial provision that had existed for six months was the T property and the course that I indicated I would follow and did indeed take was to order the sale of that property on a similar basis to that which the parties had previously taken in their consent orders in June, that is, a sale of that property with the intention that the wife receives sums totalling $250,000 out of the proceeds, but if indeed sales of other assets by the husband or by the parties or borrowings taken in accordance with earlier agreements had produced the sum of $250,000 for the wife before the auction of the home took place, it appeared appropriate to me to allow the husband liberty to apply to vacate the order for the sale. 

13. I gave the husband this option largely because although Mr North conceded in response to a question from me that on the evidence at this stage, there was no prospect of the husband being able to keep the house as part of the overall final property settlement, he had been successful in property developments in the past. His developments were not travelling quite so well in the present environment or so it certainly would appear, they are heavily encumbered - that is, the commercial assets, I will call them, referred to in the document that became exhibit H and W1, a report from the accounting firm dated 5 June 2008 - it certainly appears that the properties that are currently being developed and either have been sold or are available for sale will make very limited equity available, if any. 

14. I will not go into the details of that report; I simply accept that they establish as submitted by Mr North that those commercial properties may not represent a net asset in the hands of the parties and have the potential to represent a net liability.  Of course those assets do not include the assets that are owned personally by the parties, although certainly in the case of the home, the borrowings secured on that are in some ways linked with the commercial activities of the husband.

15. The sale of the home therefore appeared to be the obvious and logical choice to give effect to the need which I feel was clearly established by the evidence of the wife for funding in the interim.  The parties had in their earlier consent orders consented to sales that would have put her in funds to the tune of $250,000 and I have already identified those orders.  The characterisation of the payments that were to be made to the wife was primarily left to the trial, although there were references to maintenance as I have made clear. 

16. In his submissions to me, Mr North strongly urged that the position as disclosed by the accounting firm’s report, would go against any order for sale to provide an interim or partial property settlement of the kind identified in the case of Harris v Harris (1993) FLC 92-378 which of course identifies certain circumstances in which it will not be appropriate to make such an order.  In my view, the desirability of leaving it open to the court to characterise any sums received by the wife as it sees fit at trial is highly desirable, as was envisaged by the parties in the consent orders. 

17. However, to the extent that I consider the identification of the power that I am exercising in making the orders that have been made is desirable at this stage, I would identify that as the maintenance power, that is, the power to make an order for interim spousal maintenance, and I am satisfied that, as the parties have said in their consent orders, the appropriate means of meeting the wife's reasonable needs for funds at this stage is to make an order for the sale of assets, rather than an order for payment of periodic amounts out of periodic sums available to the husband which on his case he has virtually no capacity to pay out of the amounts that are made available to him on a monthly basis, the apportionment of which he sets out quite clearly in his affidavit material and the wife, other than pointing to the fact that his lifestyle appears to continue undiminished as it was during cohabitation, is not really in a position to challenge. I have set out section 72 of the Family Law Act 1975 later in this judgment.

18. The wife establishes quite clearly that she has expenditure necessary to maintain a lifestyle that is reasonable in all the circumstances.  Rent of $1500 per week may seem a significant amount by community standards but in fact these parties have lived in that standard of accommodation in the past and there was no suggestion in the husband's case that the rental by her of this property was unreasonable.  Her other costs that she quantifies in her material certainly relate to the maintenance of the household of the kind that is in my view reasonable in all the circumstances, having regard to the standard of living enjoyed by the parties.  It is necessary in my view to make it a lump sum because there is no reasonable identification of a source from which periodic payments could be made. 

19. The wife has asserted that to meet her reasonable expenses, she has had to borrow $122,000 and obviously a number of people, largely relatives but also Mr B, have been prepared to assist her with loans in that regard.  There was no evidence that repayment of these loans was particularly pressing, so I take the view that rather than the sum of $300,000 sought by the wife in a lump sum, the sum that would have been realised had the orders of June taken effect, namely $250,000 in a lump sum, would be the appropriate amount to have paid to her in the short term; that is, enabling her to maintain a reasonable standard of living in all the circumstances, enabling her to pay expenses of the kind that she has paid with those borrowed funds which include significant legal costs that will no doubt be ongoing.

20. I am heartened by the fact that the parties do propose to proceed with a mediation.  That may well provide a means by which they can resolve all issues and let them get on with their separate lives. 

21. However, one issue that remained in the hearing before me was whether I should in fact, if I made an order of this kind - that is, for the payment to the wife of a lump sum out of the proceeds of asset sales - whether I should also leave on foot her application for periodic maintenance of $2500 per week.  Mr North's submission was that I should dismiss that application if I made this lump sum order.  Mr Atkinson's submission was that I should leave it on foot.  I am going to leave it on foot but only in case, for some reason, the orders that I have made do not in fact produce a lump sum payment or payments of the order envisaged by those orders, that is, $250,000.

22. At the adjourned hearing when I pronounced my orders on 8 August 2008, as appears from a notation on that order, I was notified by counsel that the two O paintings have been sold for the sum of $140,000, which sum has been received from X Gallery and the selling agent's commission is likely to be approximately $20,000, leaving net proceeds of approximately $120,000 to be applied in accordance with the order that I have made.  So in fact that sum appears likely to have been received in the short term and there has been no application to reopen the wife's case on the basis that that has not or is not going to happen and that then will leave the sum of $130,000 to be raised from other sources and the sale of the house, if it does not become available from any other source.

23. I point to these matters as indicating that in my view it is only in this unlikely event that the application for periodic payments will have to be pursued before trial.  It is certainly my intention that this lump sum payment should meet the wife's reasonable needs for the reasonably foreseeable future without being able to specify exactly what period that might be between now and trial, having regard to the fact that she also has the financial resource of the capacity to borrow from family friends as demonstrated by exhibit W1.

24. The orders that I made on 8 August provided for the provision of a further report by Ms D and that is because in his amended application filed on the adjourned date, 8 August, the husband sought different orders in respect of the children from those that he had previously sought and the parties consented to the order providing for that second report.  So the children's issues remain in abeyance pending the provision of that second report. 

25. Certain documents are to be provided by consent.  Mediation is to be conducted on or before 15 September by Mr Mellili of the Victorian Bar and certain notifications are to be provided. 

26. There were various other orders made, including the requirement that from the proceeds of sale of the paintings the wife is to receive $105,000 and the rest is to be applied to the payment of half of the costs of certain reports and the mediator's costs and the orders also provided liberty to apply to the husband in the event that the wife has received sums totally $250,000 from asset sales prior to the date for auction.

27. As I said earlier, the husband has in the past been heavily involved in property development and obviously was able to provide very well for his family from those activities and presently is not able to provide to the same extent that he has in the past.  Mr North informed me that his client remains optimistic, however, that he may, in the short to medium term, be able to revive his successful development career and may be in a position or hopes to be, I think is as highly as it could be put, in a position to retain the home and still effect a settlement with his wife.  It is not really possible to see that occurring on the evidence before me at this stage and I certainly could not find that it was a possibility, however, given that it was articulated as something that the husband would like to do and that he has been successful in the past and really the wife's case is based on that past success, I would consider it appropriate to give the opportunity to the husband to avoid the sale of the house by paying the sum out of other asset sales, if at all possible, before the sale of the house.  Certainly the sale of the paintings has advanced that cause to some extent.

28. I now set out  section 72 of the Family Law Act 1975, the spousal maintenance provision:

    (1)  A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

    (a)  by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;

    (b)  by reason of age or physical or mental incapacity for appropriate gainful employment; or

    (c)  for any other adequate reason;

    having regard to any relevant matter referred to in subsection 75(2).

29. I am satisfied that the wife has a need that she does not have the capacity to meet. I am satisfied that the only source from which the husband can contribute to that need at this stage is from asset sales and although these orders are characterised as maintenance, I still retain the approach taken by the parties in their earlier agreements that it should be open to the trial judge to characterise these payments otherwise if  all the circumstances disclosed at trial show that a maintenance order might have been less justified than I presently see it, then it would be open to the trial judge to characterise payments made pursuant to my orders of 8 August and the other orders that have been made as in fact partial or interim property settlement. 

30. Having commenced upon this process of giving reasons with a reminder to the parties that when I obtain a transcript of these reasons I will revise them to ensure that they include what I intended to say, subject only to a repetition of that reminder and warning, that concludes my reasons. 

I certify that the preceding fifty eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watt

Associate: …

Date:  27 August 2008