Conti and Conti

[2011] FamCA 451

FAMILY COURT OF AUSTRALIA

CONTI & CONTI [2011] FamCA 451

FAMILY LAW – PROPERTY – Personal injuries award likely for wife – Small pool – Treatment of award – Moneys to be held in trust until further order

Family Law Act 1975 (Cth) s 79, 114(1), 114(3)
Child Support (Assessment) Act 1989 (Cth)

Australian Broadcasting Corporation & O’ Neill (2006) 227 CLR 57
Aleksovski & Aleksovski (1996) FLC 92-705
Cardisle Ltd v LED Builders Ltd (1999) 198 CLR 380
Farmer & Bramley (2000) FLC 93-060
Jackson v Sterling Industries Ltd (1987) 162 CLR 612
Keenahan & Keenahan [2004] FamCA 360
LAM & RAM (2005) FamCA 868
Mullen & De Bry (2006) FLC 93-293
Sippel & Sippel [2004] FamCA 201
Waugh & Waugh (2000) FLC 93-052
Williams & Williams (1995) 61 ALR 215
Zorbas & Zorbas (1990) FLC 92-160

APPLICANT: Mr Conti

RESPONDENT: Ms Conti

FILE NUMBER: BRC 436 of 2009

DATE DELIVERED: 10 June 2011

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: O'Reilly J

HEARING DATE: 10 June 2011

REPRESENTATION

THE APPLICANT: In person

SOLICITOR FOR THE RESPONDENT: Mr Carmont

Orders

UPON THE HUSBAND GIVING THE USUAL UNDERTAKING AS TO DAMAGES

IT IS ORDERED UNTIL FURTHER ORDER

1. Any amount which the wife may be awarded or which may be agreed in relation to personal injuries suffered by her in a motor vehicle accident on 13 June 2008, net of any fees costs and charges of her personal injury lawyers, be held in the trust account of McCowan Solicitors Surfers Paradise.

AND IT IS FURTHER ORDERED

1. The costs of the husband’s application in a case filed 16 May 2011 are reserved to the trial Judge.

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER:  BRC 436 of 2009

Mr Conti

Applicant

And

Ms Conti

Respondent

REASONS FOR JUDGMENT

1. The parties have on foot s 79 property proceedings in respect of which the husband, in addition to seeking a s 79 property order, seeks in essence a child support departure order that the wife pay to him $200 per week in total for the three children of the marriage who are now 18, 15 and 13 until such time as they have finished university or are no longer living with him, whichever comes first, to be capitalised as a lump sum.  

2. The wife has a claim for damages for injuries suffered in a motor vehicle accident on 13 June 2008. 

3. The parties’ relationship and marriage extended from about 1990 or 1991 until September 2008.

4. It is plain then that the injury which she suffered was towards the end of the relationship and marriage of some 18 or so years. 

5. The wife’s lawyers expect that her claim will be settled for about $15,000.

6. The initiating application and response, together with information from the Bar table, show that excluding any such award the pool (not yet agreed) may be likely to have a value of estimated gross $100,000 with debts potentially up to $90,000.  This cannot be ascertained until the trial. On the assets side there is about $60,000 in a trust account being net proceeds of sale of the former matrimonial home, potentially about $10,000 for a motor vehicle (at this interim stage I take roughly the midpoint of the parties’ estimates of $8000 low and $13,000 high), about $14,500 in the wife’s superannuation account and $17,000 in the husband’s superannuation account. In relation to their debts, the pleadings refer to a debt to the Australian Taxation Office of about $44,000.  Mr Carmont, the solicitor for the wife, has said from the Bar table that he understands the ATO to have wiped that debt as not recoverable. That is not yet proved however and may be unlikely given that there is money sitting in the trust account.  However, that matter will have to await for trial.  If the debt is not wiped then conceivably there is interest which has accumulated and continues to accumulate on it. There is potentially a debt by the wife to Centrelink of some $33,000.  However, from the Bar table Mr Carmont stated that somehow such is linked with the husband’s tax affairs and may or may not be a debt that will be claimed.  There are fees due to S School of about $7000 and outstanding bookkeeping and accounting fees of some $5000-$10,000. Plainly, if it is correct that the ATO debt and the Centrelink debt are not claimed or payable then the picture is a little rosier for the parties with a net pool of perhaps about $80,000 -$85,000 for the purposes of trial. 

7. In relation to the husband’s claim for a departure order for child support, it is stated as common ground from the Bar table that the present assessment is either $40 or $55 per month that the wife is to pay the husband and which, in fact, she does pay to the Child Support Agency.  It is not proved but stated from the Bar table and appears to be common ground that the wife is not in employment.  There is not as yet any evidence as to whether, despite the motor vehicle accident and potential award, she is capable of present or future employment for the purpose of the Court’s determination of the husband’s child support departure claim.  Presently however it would appear she has no prospect of paying $200 a week or anything like it.  However, as is well understood, in some child support departure matters the capacity for income is important and taken into account as much as or as well as actual income. 

8. It is plain that whilst the mother’s chose in action is not a property: Zorbas & Zorbas (1990) FLC 92-160 at 78,126; an award, if and when made, is property; and there is no general presumption that the award should be left out of account in determining what order should be made under s 79: Williams & Williams (1995) 61 ALR 215.

9. In Aleksovski & Aleksovski (1996) FLC 92-705 at 83,437 the Full Court by majority said:

   In our opinion, in most cases, a damages verdict arising from a personal injury claim, whenever received, is a contribution by the party who suffered the injury. It should not be considered in isolation, for the reason that each and every contribution, which each of the parties makes to the relationship, must be weighed and considered at the same time.

   See also Aleksovski as subsequently discussed in K & K [2004] FamCA 360 at [7] –[11] per Finn J (dissentiente as to the result); and [66]-[68] per Holden and Warnick JJ.

10. In Farmer & Bramley (2000) FLC 93-060 Kay J made it clear that contribution assessment is not limited to the assets of which the pool currently is comprised. See at [68]-[69].

11. Thus the award, if any ultimately is made, is capable of forming part of the pool.  However, how it will be regarded at trial ultimately cannot be ascertained until the trial, particularly because it is not known at this stage what component of any award will or might relate to, for example, future medical costs, future pain and suffering or future economic loss: LAM & RAM (2005) FamCA 868 at [76]-[84]. In this particular case, if an award is made by settlement, there may not be available a breakdown of the components comprising it. However, that also is a future matter to await evidence at the trial.

12. Often, trial Judges will assess separately contribution which is received post separation. The accident here occurred shortly before separation. However, if there is to be an award, plainly enough it will be received not only post separation but considerably post separation. Even so, whilst often trial Judges will assess separately post separation contribution this is neither required nor proscribed: Sippel & Sippel [2004] FamCA 201 at [17] per Warnick J.

13. I will turn now to the usual principles concerning the injunctive power.  It is plain that whilst ordinarily in interlocutory applications for injunctions it is incumbent to prove that the issue to be tried, if the evidence remains as it is, carries a sufficient likelihood of success to justify in the circumstances the preservation of a status quo pending the trial, and that the inconvenience or injury which would be likely to be suffered if an injunction were refused outweighs the injury which the respondent would suffer if an injunction is granted.  Australian Broadcasting Corporation & O’ Neill (2006) 227 CLR 57 at [65] and [70].

14. Further, usually in relation to asset preservation injunctions it is plain that an applicant must establish in addition to the conditions ordinary to the grant for injunctive relief that unless restrained there is a real risk or danger that a respondent will dispose of or dissipate assets in his possession or under his control so as to defeat any judgment which the applicant may obtain.  It is a requirement in considering such that the Court if making a restraint make it no wider than necessary to achieve that end.  The grant of the relief, plainly, is discretionary and most usually will be provided where a propensity to shift or conceal assets apparently to defeat a judgment already has been manifested, however, this is not an element or requirement for exercise of the discretion.  Cardisle Ltd v LED Builders Ltd (1999) 198 CLR 380; Jackson v Sterling Industries Ltd (1987) 162 CLR 612; Waugh & Waugh (2000) FLC 93-052 at [32] – [34]; Mullen & De Bry (2006) FLC 93-293 at [41]-[44] explaining [45]-[46] in Waugh. In Mullen the Full Court concluded at [46]-[47]:

    46.    Finally, we think it helpful to recognise that the essential power being exercised in this case is simply described in section 114(3):

    A court ... may grant an injunction ... in any case in which it is just or convenient to do so...

    47.    Ultimately, each case will involve an overall assessment of a number of factors to determine the just or convenient result. Not all cases with the same identity of factors will necessarily produce the same result because of varying weight individually and comparatively.

15. In light of s 114(3), to the extent that the usual principles, as I have described them, apply at all, on present indications it cannot be said to be unlikely in the property proceedings that the husband would receive no part at all of the personal injury award, even if solely a contribution by the wife.  The balance of convenience favours grant of the injunction on the basis that if the state of the asset pool is the smaller amount of about $10,000 as opposed to the greater amount of $80,000 to $85,000 then, subject to ultimate assessment of contribution by the trial Judge at the trial and/or assessment of the departure order claim, preservation is indicated. 

16. As to danger or risk of dissipation, it seems to me that whilst there is no positive evidence as to this, the wife’s resistance of the injunction has the effect that unless preserved in a trust account, given the circumstance of the wife’s unemployment, it may be likely to be used up in life and/or other expenses unless preserved. 

17. I turn now, however, more broadly to the terms of s 114(3).  I am satisfied that there is power to make the injunction sought although no award yet is made.  If I am persuaded to make the injunction I would frame it so that it operate if an award is made.  The question thus is whether it is just or convenient to grant the injunction sought. 

18. In relation to the departure order claim, there is no fundamental reason why the preservation principle ought not apply, especially on the interim basis, in particular because at this stage it is not as if the husband is seeking actual security for an actual lump sum already assessed but rather mere preservation pending determination of his claim so as not to render it futile.  I am concerned, however, that s 114(1) expressly refers to the Court’s power to make injunctions in proceedings of the kind referred to in par (e) of the definition of “matrimonial cause” in s 4(1) of the Act.  For the purpose of today’s matter which has come on in the Duty List, there has not been any time at all for me to research or to have researched whether child support departure proceedings relevantly are within that definition, namely “proceedings between the parties to a marriage for an order or injunction in circumstances arising out of the marital relationship (other than proceedings under a law of State or Territory prescribed for the purposes of s 114AB)”, the provision in parenthesis being not presently relevant.  Without the benefit of submissions on the point or opportunity for legal research on the point today, on the face of it the child support departure proceedings would seem to come within the literal meaning of that definition.  However, as is well understood, the intersection of the Family Law Act 1975 (Cth) and the Child Support (Assessment) Act1989 (Cth) is not always coincidental, the Acts dealing with discrete subject matters.

19. It would be safe, therefore, that I leave undecided that portion of the husband’s case which is based upon preservation for the purpose of his child support departure claim and decide it solely on the basis of his application for preservation of asset for the s 79 property proceedings.  Despite the observations I have made by reference to the cases as to contribution, each case can and must be decided upon its own facts.  In this particular case there is a very modest pool, whether at its high or low end, and three children of the marriage, 18, 15 and 13 years, who live with the father.  Leaving aside matters of actual child support assessment thus this circumstance would come into consideration, one would think, potentially at the trial under the s 75(2) factors.  Moreover, as I have said, on present indications it cannot be said to be unlikely in the property proceedings that the husband would receive no part at all of the personal injury award, even if solely a contribution by the wife. 

20. I am satisfied thus that in all of the circumstances it is both just and convenient to preserve until trial or earlier order the small sum that is presently anticipated the wife might receive by way of compensation for personal injury.  If and when an award is received and retained in her personal injury lawyer’s trust account the wife then would have opportunity to apply to vary the injunction if she should be advised that there is good ground to do so.  Otherwise, hopefully the trial will come on soon and quickly and the matter be disposed off including, hopefully, the receipt of an award by that time. 

I certify that the preceding twenty-two (20) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O'Reilly delivered on 10 June 2011.

Associate: 

Date: