Cook and Cook (No. 5)

FAMILY COURT OF AUSTRALIA

COOK & COOK (NO. 5)

[2010] FamCA 787

FAMILY LAW – PROPERTY – Partial settlement of property – Lengthy defended s 79 proceedings concluded – Pending judgment – Appointment of the liquidator and receiver/manager to principal asset of the parties after conclusion of case – Further delay – Substantial legal costs and disbursements – Transfer to wife of home as partial property settlement pending final judgment – Superannuation splitting orders – Husband has secure residential accommodation – Financial circumstances of both parties – Costs

Family Law Act 1975 (Cth) ss 79, 79(4), 75(2), 117

Family Law Rules 2004 (Cth)R. 19.04

Harris and Harris (1993) FLC 92‑378
Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166

APPLICANT:

MS COOK

RESPONDENT:

MR COOK

FILE NUMBER:

MLF

1997

2003

DATE DELIVERED:

27 JANUARY 2010

PLACE DELIVERED:

MELBOURNE

PLACE HEARD:

MELBOURNE

JUDGMENT OF:

YOUNG J

HEARING DATE:

5 October 2009,
11 November 2009 and 21 December 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT:

MR ST JOHN SC

SOLICITOR FOR THE APPLICANT:

MARSHALLS & DENT

COUNSEL FOR THE RESPONDENT:

MR SPICER

SOLICITOR FOR THE RESPONDENT:

KENNEDY WISEWOULDS

Orders

IT IS ORDERED AS A PARTIAL PROPERTY SETTLEMENT:

REAL PROPERTY

THAT the husband within twenty-one (21) days of the date hereof do all acts and things, give all necessary instructions and sign all documents required to transfer to the wife, at her expense, all of his right, title and interest in the former matrimonial home at O in the State of Victoria (“the home”) (and more particularly described in Certificate of Title Volume … Folio …).
THAT the husband discharge the National Australia Bank registered mortgage (and all monies, fees and interest owing thereunder) secured upon the title to the home at or prior to its transfer to the wife pursuant to Order 1 hereof.
THAT the husband and wife retain joint ownership of the M Club Timeshare and each of them enjoy one (1) weeks use and accommodation thereof in each calendar year, but the husband be solely responsible to prepay for each year all proper costs, charges and fees of and associated with their ownership and use of that facility.

SPECTRUM SUPERANNUATION FUND

THAT paragraphs 5 to 8 (inclusive) of these Orders are binding on the Trustee of the Spectrum Super Fund (“Spectrum”).
THAT pursuant to section 90MT(1)(b) of the Family Law Act1975 (“the Act”) 100% (less $10,000) of the husband’s interest in the Spectrum Fund be allocated to the wife.
THAT whenever the trustee of the Spectrum Fund makes a splittable payment from the interest held by the husband (date of birth … 1951) (Member number …) in the Fund in accordance with paragraph 5 hereof, the Trustee of Spectrum shall:
a)pay to the wife the amount which is calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
b)make a corresponding reduction in the entitlements that the husband would have had but for this Order.
THAT paragraph 6 of this Order have effect from the operative time.
THAT the operative time for this Order be four (4) business days after the service of a copy of this Order upon the trustees of Spectrum.

TOWER SUPERANNUATION FUND

THAT paragraphs 10 to 13 (inclusive) of these Orders are binding on the Trustee of the Partner Superannuation Fund (“the Tower Fund”).
THAT pursuant to section 90MT(1)(b) of the Family Law Act1975 (“the Act”) 100% of the husband’s interest in the Tower Fund be allocated to the wife.
THAT whenever the trustee of the Fund makes a splittable payment from the interest held by the husband (date of birth … 1951) (member number …) in the Tower Fund in accordance with paragraph 10 hereof, the Trustee of the Tower Fund shall:
c)pay to the wife the amount which is calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
d)make a corresponding reduction in the entitlements that the husband would have had but for this Order.
THAT paragraph 11 of this Order have effect from the operative time.
THAT the operative time for this Order be four (4) business days after the service of a copy of this Order upon the trustees of the Tower Fund.
THAT paragraph 1 of the Orders made by consent on 29 July 2009 and paragraph 2 of the Orders made 5 October 2009 be varied, as may be required, to facilitate the superannuation splitting orders made in respect of Spectrum and Tower but otherwise continue with full force and effect as to the husband’s current entitlements in the Strategy Superannuation Fund.
THAT until further order the husband retain the current allocated pension entitlement received from the Strategy Superannuation Fund.
THAT within one (1) month the husband pay or cause to be paid to the solicitors for the wife, her costs of and incidental to this partial property application and hearing(s) fixed in the sum of $17,500, such costs to be paid within one (1) calendar month of the date hereof and if payment in full is then not made interest is to be assessed and payable, quarterly in arrears, on the sum outstanding from time to time at the rate prescribed in the Family Law Rules 2004.
THAT the wife’s partial property application filed 20 October 2009 and the husband’s response thereto filed 6 November 2009 be otherwise dismissed, save that liberty is specifically reserved to the wife to apply to reinstate orders for injunctive relief and disclosure (in accordance with paragraphs 1 – 4 (inclusive) of her application) and paragraph 26 thereof (in appropriate circumstances).

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 1997 of 2003

MS COOK

Applicant

And

MR COOK

Respondent

REASONS FOR JUDGMENT

ISSUE

The wife, by an interim application in a case filed 20 October 2009, has sought a partial settlement of property in circumstances where the final defended hearing of her opposed property and financial application has concluded, and written submissions have been lodged with the Court. But then various financial and commercial circumstances have arisen which have and will continue to substantially delay a judgment. What the wife has sought on an interim basis is the transfer to her of the jointly owned home in which she continues to live, unencumbered, together with the parties ownership of a M Club timeshare entitlement and a splitting order as to substantially all of the husband’s superannuation entitlements, held in three separate funds.
The husband and wife (“the parties”) have finished a 14 day hearing before me. The wife in those proceedings was represented by Mr St John SC with him Ms Stewart of Counsel and the husband was represented by Mr Spicer of Counsel. That hearing concluded 29 July 2009 and thereafter written legal and factual submissions were lodged with the Court pursuant to a timetable, as ordered. The matter was listed for Counsel to orally supplement their written submissions on 5 October 2009.
At that time the Court was advised for the first time, and the wife confirmed that she was then also fully advised that:
(a)TG Firm, Chartered Accountants, were appointed as receiver / manager of XC Pty Ltd; and
(b)J Firm, Chartered Accountants, were appointed liquidators of XC Developments Pty Ltd.
The appointment of the receiver / manager was made by the registered mortgagee, BankWest. The Court appointment of the liquidator was made by the various trade and building creditors, principally a sewerage company.
The financial and ongoing commercial investigation and projected sale of a property known as XC property, and its surrounding development land is ongoing. Accordingly, my judgment in that final s.79 hearing has not been written and is unable to be delivered until the net pool of assets and liabilities, and all associated factual issues, can be determined and thereafter the s.79(4) and s.75(2) matters evaluated and discretion exercised and a judgment delivered.

APPLICATION – FINAL ORDERS SOUGHT

The wife’s application for final s.79 property orders was initially filed on 7 March 2003 and was amended on 16 March 2003. A further amended initiating application was filed on her behalf on 10 June 2009 and her final orders sought were further amended in her Outline of Case Argument filed with the Court at the commencement of the final hearing.
Amongst her final orders therein sought, and aside from the payment of a substantial cash sum, the wife sought a transfer to her sole name of the former matrimonial home at O (“the home”), free of any encumbrance, together with an assignment of the husband’s superannuation entitlements, save for a sum of $10,000, in each of the Strategy Superannuation Fund (“Strategy”) and the Spectrum Superannuation Fund (“Spectrum”) and further the transfer of his entire financial entitlement in the Tower Superannuation Fund (“Tower”).
The full particulars of the then final orders sought by the wife were more complex but, for the purposes of defining the issues in this partial property application, I have defined her position in respect of both the home and the available superannuation entitlements of the husband. The wife has no superannuation entitlements.
The husband’s response was initially filed 8 April 2003 and was amended on 3 June of that year. He filed an updated Outline of Case Argument wherein he then identified the final property and financial orders sought by him. They included:
(a)a transfer of the home to the wife and discharge of its mortgage to the National Australia Bank within a reasonable timeframe, he to continue meeting all mortgage instalments as and when they were due pending transfer;
(b)a split of his superannuation in favour of the wife so that she received 100% of the benefit of his Tower Superannuation Policy together with such part of his Spectrum Superannuation Policy as could be split without affecting his ongoing life insurance associated therewith, and a sum of $10,000 was suggested to be retained by him; and
(c)retaining the whole of his Strategy Superannuation Fund.
Likewise the whole of those orders sought were more complex but, for the purposes of the determination of the partial property application before the Court, I have identified only those parts of his then response as are relevant to those assets now under partial property consideration.

APPLICATION – INTERIM ORDERS SOUGHT

The wife’s application for partial settlement of property was filed 20 October 2009 and therein she sought orders in respect of injunctive relief, disclosure, partial settlement of property and otherwise for certain payments as identified in paragraphs 25 and 26 thereof.
The wife subsequently instructed her Counsel to discontinue her application as to paragraphs 25 and 26 thereof and otherwise in these interim proceedings she has not presently pursued her application as to further injunctive relief and disclosure. What remains is the partial property settlement application as contained within paragraphs 5 – 24 (inclusive) thereof and any consequential orders or costs as a result of the determination of this interim application. I have determined that it is proper that I deal with or otherwise dismiss the whole of the wife’s application and in that regard I will in my orders preserve to her the right to apply to the Court and reinstate her orders sought as to injunctive relief and disclosure.
The husband’s response was filed 6 November 2009. He opposed any orders sought on an interim basis and sought that the wife’s application of 20 October 2009 be dismissed and with costs. His Counsel however, in his opening submission conceded that with an appropriate timeframe to discharge the National Australia Bank mortgage debt, his client remained open to but did not consent to transfer the home to the wife, provided there be no objection from the liquidator or the receiver / manager. I ascertained at the outset of this case that no such objection was to be made by either of those interested persons and I am satisfied that these matters were made known to each of the respective firms of chartered accountants who were otherwise satisfied as to the balance of available net assets to satisfy any of their claims and each of them did not request to be heard on this interim application.
As to a splitting order of the husband’s entitlement, in each of the three superannuation funds the husband opposed, on a partial property basis, any such order and that was and remained a matter in dispute for this interim hearing.

AFFIDAVITS RELIED UPON

Wife

The wife’s substantial affidavit (Court Index No. 174) was filed on 20 October 2009 together with the substantial bundle of annexures thereto (25 documents). The wife’s earlier affidavits filed in the defended hearing have also been carefully read and evaluated and she has been cross examined upon those documents and they are matters and facts to which I have had regard.
An affidavit of the wife’s solicitor, Ms Suke, was filed 9 November 2009 (Court Index No. 184), and annexures thereto.
A further affidavit of the wife’s solicitor, Ms Suke, and annexures thereto, was filed 18 December 2009 (Court Index No. 186).
Various subpeonae were issued on 29 October 2009 and documents produced pursuant thereto.
I have carefully all each of those affidavits supplemented by the substantial submissions presented by Senior Counsel on behalf of the wife on each of the hearing dates of this interim application, which concluded before me on 22 December 2009.

Husband

The husband’s affidavit (Court Index No. 182) was filed 6 November 2009 and I have read and evaluated that document which was supplemented by submissions from his Counsel. The husband’s earlier affidavits filed in the defended hearing have also been carefully read and evaluated and he has been cross examined upon those documents and they are matters and facts to which I have had regard.

Liquidator

The solicitors for the liquidator of XC Developments filed an affidavit (Court Index No. 185) of one of the joint and several official liquidators, Mr NN, on 11 November 2009 and I have likewise read and evaluated his evidence. I have received submissions from the solicitor who appeared at a Court mention for that liquidator as to the ongoing current circumstances and issues within the complex financial and development project of XC.

JUDGMENT AND ORDERS

At the conclusion of the s.79 proceedings, but prior to the filing of written submissions, I made orders on 29 July 2009, by consent, that the husband sign all documents and do all acts and things as required to remove his now partner and then nominated beneficiary, Ms E, from both Spectrum and Strategy and in her place nominate his estate and, that pending further order of the Court, it remain as his binding nominated beneficiary. Additionally it was ordered that the solicitor for the husband use her best endeavours to obtain and provide to the solicitor for the wife and the Court a copy of documents evidencing the exit or rollover of the husband’s superannuation benefits from Zurich to both Spectrum and Strategy.
The proceedings next came before me on 5 October of last year, which was the date scheduled for the oral supplementation of written submissions. It was on that date, as has been carefully recorded in my then extempore reasons for judgment that the Court first became aware of the appointment of the liquidator and receiver / manager to XC Pty Ltd.
I refer to and incorporate those extempore reasons for judgment within my assessment and determination of the matters now in issue. I do so to explain the identification of the specific financial matter that was in evidence in the primary trial and which, at the time evidence concluded, remained uncertain. It is dealt with in paragraph 4 of that judgment and by reference to transcript highlighted the ongoing financing issues with XC that were current and ongoing at the conclusion of evidence.
Within the context of this partial property application I specifically then touched upon those issues in paragraphs 13 – 15 (inclusive) thereof.
My orders of that day were to continue the injunctions in respect of superannuation and further to restrain the husband, by himself, his servants or agents from dealing with or withdrawing any funds from Spectrum or Tower and separately as to Strategy, but save for his allocated pension arrangement then in place. I required notice of the orders sought to be given to both the receiver / manager and liquidator and the proceedings were adjourned on a part-heard basis before me to 11 November 2009.
At that further procedural hearing date the parties were each again represented by their Counsel, the liquidator was represented by its solicitor and a solicitor sought leave to appear for interested persons who had received subpoenae from the wife’s solicitors for the production of documents, they being Mr BT and MP Business Consultants Pty Ltd.
I have, separately from the partial property application, heard and determined issues arising out of those subpeonae and have made findings and delivered a judgment on 8 January of this year and made consequential orders on those matters and to which I otherwise will not again refer to in this interim application.

XC

XC property is a country home and property of approximately 50 acres upon which is built an historic, heritage protected home and outbuildings.
The freehold of that land is owned by XC Pty Ltd an entity owned and controlled by X Developments Pty Ltd (on behalf of the husband and his brother). Its purchase price was approximately $4 million plus associated costs.
In 2006 a Joint Venture was established with an arms length partner, Mr BT, to develop the home and property into an accommodation facility and to further construct 60 accommodation units on the surrounding land. The role and scope of the work of Mr BT was primarily to assist with management and financing of the project. He did not contribute to the initial land cost or otherwise to all of the development costs in the years prior to that Joint Venture commencement date. A copy of the Joint Venture agreement had been tendered as evidence in the final proceedings and marked Exhibit “W24”. The local Council issued a permit for 110 accommodation units and that planning process had been gazetted by the State Government. The entitlement of the Joint Venture development was to construct 50 suites / rooms with a further 60 residential dwellings to be constructed on the surrounding land.
Initially the title to XC property was unencumbered. The purchase monies were funded by the corporate entities associated with the Cook family, namely is the three siblings. Those monies flowed from X Developments, X Land Pty Ltd and the W, N & D Cook Partnership.
Those entities provided $2 million in cash and an additional $2 million was provided from the NAB term deposit, held in a commercial bill facility, and where the family entities had invested money which they received as net proceeds of the sale of inherited family land on Melbourne’s outskirts.
Subsequently the NAB registered and lodged a mortgage in early 2003 against the titles to XC property.
That mortgage provided $2 million to the Cook family entities to contribute to the initial costs of renovation to the exterior of the historic home and to undertake demolition, renovation and reconstruction works to its interior.
The husband’s evidence was that initially a sum of between $600,000 and $700,000 was spent on these preliminary building and construction works. The balance of the NAB Mortgage Advance, approximately $1.3 million, was spent on further construction requirements, building works, related business operations and expenses and financing requirements.

It is not appropriate in this interim application and otherwise it is difficult to detail all of the works undertaken and monies expended as they were not fully identified by the husband in his affidavit, or in his evidence in chief. All of these matters arose in cross-examination of the husband upon documents produced by him at court during the hearing, or otherwise from subpoenaed documents and work and investigations undertaken by the wife’s solicitors.
In July 2005 two further mortgages were lodged on the title to XC property ranking after the NAB. These mortgages were to X Land Pty Ltd and jointly to X Developments and X Land. The sum secured by that X Land mortgage was initially $3,050,918 and the sum secured by the further joint mortgage was initially $1,085,328, in total a further sum secured by what effectively were then 2^nd and 3^rd mortgages on title totalling $4,136,246.
The husband emphasised to the court that these further mortgages were debenture mortgages and that they were drawn up and lodged by the Cook family entities on specific commercial legal advice. They were lodged to cover advances and the quantum secured by mortgage equated to the then outstanding loan accounts of those entities as at July 2005.
Throughout the calendar the years 2003 – 2006 (inclusive) the husband explained that there were significant and costly ongoing works under construction at XC.
In the initial years no Joint Venture existed with Mr BT as he was not introduced formally into this project until the Joint Venture agreement was executed on 6 October 2006.
Initially the Cook entities had envisaged a redevelopment of the XC property to include a Retirement Village project which was ultimately discontinued for reasons that were not explained to the court.
The husband estimated that by July of 2005 the Cook entities had spent a sum in excess of $6 million on XC property, aside from its original unencumbered purchase price of $4 million. The husband’s evidence was that “we sort of got ahead of ourselves … because we never ever got the permit. But we started to fill in walls and just clean up the place …”.
Work commenced on the internal demolition of the historic building in early 2008 but all work was halted because of the withdrawal from the project by the financier (BankWest) and a lack of funding. The husband explained that the concern of that financier was as to the overall cost and viability of the project and it said it was not prepared to stand by its prior financial commitments. It was also said by the husband to be of importance that BankWest was taken over by the Commonwealth Bank of Australia and a new level of financial scrutiny was brought to the project by bank personnel who did not know the husband and his partners and were not previously committed to the project.
The husband’s evidence was that there was no development or construction work on site since May 2008. BankWest then issued a Notice of Default and there was a negotiated arrangement requiring interest free payments of $40,000 per fortnight to forestall further recovery actions.
The husband had caused those payments to be made throughout the early part of last year and up to and inclusive of the period of the trial. The payments were made from entities within the management or control of the husband or his extended family. Mr BT made no contribution.
BankWest held security over all of the land and the project. The original loan facility established with them was for a principal sum of $12,000,000 and at the time of the trial that had been drawn down to a sum of $5,600,000 and was then frozen, subject to the continued ongoing payment of fortnightly interest. The husband’s evidence throughout the hearing was that his joint venture partners in the XC project were actively looking to introduce a further finance provider or investor, or indeed a partner to inject cash into the project and to permit construction to recommence.
XC Pty Ltd had entered into a commercial arrangement with FG Finance Pty Ltd to source and provide finance for the development of the project. An application was first made to the Adelaide Bank and thereafter evidence was given by the husband that negotiations were in progress with a large private mortgage provider which also proved unsuccessful.
FG Finance was then contracted to undertake an off-shore search for finance of up to US$10,000,000 and their fee, if successful, was to be 10% thereof, or US$1,000,000. The husband’s evidence was that the principal of FG was then in Hong Kong, as at mid 2009, looking to obtain finance from international banks or other substantial financial providers. The evidence of the husband, given during the substantial hearing of the efforts to re-finance was that “we are fighting to save every cent we can out of the business. If was can get finance it will give us more opportunity to save the money we have invested … and that is the reason we are doing it”.
With that background the husband, through his Counsel, had advised that he would keep both the Court and the wife’s lawyers advised of all refinancing developments.
The wife’s affidavit supporting her present interim application, paragraphs 3 – 13 (inclusive), highlight the various requests made and correspondence and documents received in the period from the conclusion of the hearing on 29 July 2009 until the further scheduled listing before me on 5 October of last year.
The wife has now alleged in paragraph 14 of her affidavit that:
(a)the husband had resigned as a director of XC Developments in April 2009 prior to trial;
(b)Mr BT was now the sole director of XC Developments;
(c)a liquidator had been appointed by the creditors of XC Developments;
(d)J Firm were the appointed liquidators; and
(e)the husband then asserted that he had limited knowledge of the then financial circumstances and current state of XC Developments as he was no longer a director.
Subsequent searches on behalf of the wife, as highlighted in paragraphs 16, 17 and 18 of that affidavit confirmed the appointment of the liquidator to XC Pty Ltd and the lodgement of a caveat upon the title to the XC property on behalf of the receiver / manager of XC Developments.
I have given a relatively detailed overview of the evidence in the trial pertaining to the XC project, of the ongoing inquiries of the husband then in progress and of the subsequent issues ascertained by the wife to highlight that there were issues and matters of and incidental to the XC project and its finance and commercial transactions that were not properly updated or disclosed by or on behalf of the husband to the wife and more particularly to the Court.
The appointed receiver / manager of XC Pty Ltd, Mr BM, of TG Firm, gave evidence before me at the Court mention on 5 October 2009 of the then financial circumstances and basis for his appointment and these remain matters of relevance to the overall issues of disclosure, injunctive relief and ultimately to be considered within the discretion to award costs in the final proceedings which has been and remains an outstanding issue. I do not at this stage further comment upon the injunctive relief identified by the wife, or her alleged lack of confidence in the husband and his level of disclosure of commercial or financial information. I do however record that the wife does not own or control any assets of financial significance save that she is the joint owner with the husband of the home.

RELEVANT CASE LAW AND THE FAMILY LAW ACT 1975 (CTH)

The approach of the Court to interim or partial property settlements had been established by the previous Full Court decision of Harris and Harris (1993) FLC 92‑378 where a three-step approach to determining an interim property settlement was established. The first consideration was that the exercise of power should “be confined to cases where the circumstances presented at that time are compelling” (at [43]). The second step was to exercise the power within the parameters of s.79 “and the material available at that time.” A third step highlighted the conservative exercise of such a power, “where the Judge must be satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the order which is contemplated is capable of being reversed or adjusted if it is subsequently considered necessary to do so.”
The principles in Harris’s case (supra) were recently considered and departed from in the decision of the Full Court in Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166 where the Full Court reformulated a two-step approach, removing the requirement to determine the existence of “compelling circumstances”. The majority, Boland and O’Ryan JJ, said:
“[118] There are two stages to the hearing of such an application where the power is to be exercised pursuant to s 80(1)(h) of the Act. This is recognised by the fact that although the power under s 79 should ordinarily be exercised on a once only basis, “circumstances may arise before there can be a final hearing” where the power is exercised. Thus the first step is to resolve whether to exercise the power before a final hearing and if it is resolved to do so then the second step involves the exercise of that power.”
Their Honours highlighted that there is no requirement in the Family Law Act 1975 (Cth) (“the Act”) to find “compelling circumstances” and endorsed a passage in Harris at 79,928 where they said that “[s]ection 80 is intended to be a wide, enabling provision and there is no justification for imposing limitations upon its normal or ordinary meaning and operation when applied to s.79”.
Their Honours further stated:
“[123] In considering the Full Court’s use of the expression “compelling circumstances” in Harris it is important to remember, as Reithmuller FM recently observed in Wenz v Archer (2009) 40 Fam LR 212 (“Wenz v Archer”) at [49], referring to the reasons of the Full Court (Kay, Warnick and Boland JJ) in Mullen and De Bry (2006) FLC 93-293, that “some care needs to be taken to ensure that explanations of the reasons for the result in a particular case should not be taken as new principle”.
Their majority judgment further emphasised that the principal obligation upon the Court when electing to exercise power to grant a partial property settlement is that it must be appropriate to do so in the circumstances of the case and be seen to achieve a just and equitable outcome. Their Honours said:
“[132] In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.
“[139] We also emphasise that in order to establish an appropriate case for an interim property settlement order more is required than the mere fact that upon a final hearing the applicant would receive the property being sought (or an amount in excess of the funds being sought) from the other party.”
I am therefore bound to follow the reformulated approach in Strahan’s case and my reasons reflect that approach. I am satisfied that I hold the power to act under s.80(1)(h) of the Act to order a partial property settlement if it is just and appropriate. My reasons for doing so are set out below, with the interests of justice being the overarching consideration.
I have therefore proceeded upon an evaluation of all the trial and affidavit evidence, both as to the basis and level of contributions, financial or otherwise, and other matters as required by s.79(4) together with a knowledge and consideration of the relevant s.75(2) factors.
I have, for completeness, included hereunder those relevant sections of the Act to which I have had reference in determining a just, equitable and appropriate partial property order.

SECTION 79(4) OF THE ACT

The matters to be taken into account pursuant to s.79(4) of the Act are as follows:
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage;
As I have heard all of the evidence and legal submissions in the defended hearing I am fully aware of the contributions, both financial and non-financial which have been made by each of the husband and wife to the acquisition, conservation and improvement of property. For the purposes of this partial property judgment I do not propose to fully detail my substantial analysis and evaluation of the evidence as to such contributions and inheritances, time and effort worked, and wealth acquisition, property development and related enterprises. I am satisfied that each party made a contribution, albeit somewhat unequal to the financial and other contributions directed towards the accumulation of current net assets.
Each party likewise contributed to the welfare of the family and the children of the marriage as a homemaker and parent. Again I do not find it necessary to now distinguish between each of their contributions for the purposes of this partial settlement of property.
I have otherwise evaluated the relevant s.75(2) factors insofar as they are important to the contributions made towards the acquisition, conservation and improvement of the assets and again, for the purposes of sub-section (e) I do not regard it necessary to make further specific findings but otherwise to record that I have properly evaluated all of the evidence and considered an appropriate and just outcome to a partial settlement of property.
I am particularly mindful of the observations of the Full Court in Strahan’s case where at paragraph 137 it is said that:
“Once a court proceeds to exercise the power in s79 of the Act, being in the substantive phase, a court is required to undertake consideration of the matters in s79(4) including by reference to s79(4)(e) and the matters in s75(2) sofar as they are relevant. However consideration of such matters may be brief and if it is established that “it seems likely to the court that … the applicant … will be likely to receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the orders sought to be made”. (See: Zschokke; Polletti per Nygh J and Wenz v Archer). As Senior Counsel for the wife submitted, “provided scope can be found within the assets of the parties for an order of the size sought … then that should be the end of the matter”. In other words, in such circumstances the applicant would only be receiving what he or she was entitled to receive when the power was exhausted”.

SECTION 75(2) OF THE ACT

The relevant s75(2) matters to which I have had regard are:
(a)the age and state of health of each of the parties; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
…
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
…
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
…
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
I have had proper regard to the age and state of health of the parties. Their income, property and financial resources have been exhaustively identified and cross examined upon before me in the defended proceedings. There is a vast difference in the current net asset pools as submitted by the parties and which I have set out hereunder. Nevertheless there are sufficient assets upon which to make a just and equitable partial property order with the certainty that it would not compromise just and equitable s.79 final property orders which would be made inclusive of the partial property orders now pronounced.
The wife has no gainful capacity for employment in future years and the husband’s time, work and effort have been devoted to the XC project and the many and various other property developments and commercial enterprises that have been elaborated upon in evidence in the defended proceedings.
The three superannuation funds of the husband are in evidence before the Court and I have substantially considered assets and circumstances hereunder. The husband is in receipt of an allocated pension from one of his funds and the wife has no superannuation benefits.
Both parties lived a high and affluent standard of living throughout the marriage where luxury holidays, motor vehicles and a secure lifestyle were affordable and their children were well educated.

Spousal maintenance is currently paid by the husband to the wife, though I am unaware of any financial effects of the collapse of the XC project upon his income post July of last year and all other matters relevant to his continued payment of spousal maintenance. I am not asked nor do I intend to vary the present spousal maintenance orders.
As to sub-paragraph “(ha”) thereof I have no evidence post July of last year and the suspension of XC project shortly thereafter. I have no ongoing evidence from the liquidator or the receiver / manager as to any issue of their ability to recover liabilities of the corporate entities of and involved with the XC project.
I have particular regard to the duration of the marriage and the ongoing residential circumstances of the parties, and the husband’s cohabitation with Ms E. These are important matters in determining a partial property settlement.
As to sub-paragraph (“o”) thereof I have particular regard of the need to provide the wife with the certainty of her home and she has debts and liabilities of and incidental to the litigation which are substantial and that is contrasted to the financial circumstances of the husband as to litigation where much of his legal costs and disbursements have been paid by himself, from related corporate sources or by extended borrowings and other family assistance.
I will hereafter identify the particular financial circumstances of the wife, capital sums that she has received, her oppressive litigation funding costs and other financial demands that I accept are urgent and are incurring interest, thus increasing her continuing liability.
I have carefully evaluated the matters required by the Act and, on the basis of all of the evidence and circumstances that I have found to be relevant to the partial property determination I conclude that I should exercise such a power before delivering judgment in the concluded final hearing and that I have exercised such power in a manner that I have determined to be just, equitable and appropriate.

WIFE’S FINANCIAL CIRCUMSTANCES

The wife presently receives spousal maintenance of $560 per week together with $1,750 per month as a credit card provision, the costs of private medical insurance and car servicing costs. Otherwise the wife has no independent means of income, has no formal qualifications or work experience and is 54 years of age. Her financial future, I accept, was to be determined by the s.79 final property hearing and the just and equitable capital or income sum and other assets and entitlements that she would then have received.

PREVIOUS COURT ORDERS

By way of a background to the orders I have pronounced herein a concise summary of previous financial and other relevant Court orders in this matter throughout the history of the case is as follows:
(a)on 24 March 2003 Brown J ordered an interim spousal maintenance payment to be made by the husband to the wife of $500 per week together with a credit card facility of $500 per calendar month and payment of all expenses of and incidental to her use and enjoyment of the home and her car;
(b)on 11 June 2003 Kay J varied the interim spousal maintenance orders by substituting the sum of $1,750 per month for the credit card provision amount and increasing the cash payment to $560 per week. His Honour also required the husband to cover the wife’s costs of private medical insurance and car servicing and awarded the wife $75,000 by way of security for costs or partial property settlement as to be characterised by the trial Judge;
(c)on 13 December 2004 Carter J ordered a further sum of $70,000 to be paid as security for costs or partial property settlement, at the discretion of the trial Judge, to the benefit of the wife;
(d)on 24 November 2006 Mushin J ordered by consent that a sum of $100,000 be paid to the wife as a partial settlement of property and an additional $15,000 be paid on the basis that it thereafter be characterised by the trial Judge as either a partial settlement of property or spousal maintenance and all such monies to be borrowed by way of an increase in the registered first mortgage secured over the home at O;
(e)on 22 May 2008 I ordered, with the appointment of Mr F as a single expert witness, that the husband pay or cause to be paid his costs and those of any real estate valuer subsequently engaged by the parties and that the apportionment of all such payments as between the husband and wife be reserved to the trial Judge; and
(f)on 30 July 2008 I ordered that the title to the home at O be further encumbered by a $255,000 borrowing, plus any associated costs on the basis that $230,000 thereof be paid to the wife as a partial property settlement and the remaining $25,000 be paid to National Australia Bank by way of prepaid interest on that borrowing (I record that it is now a matter of agreement that the parties, or either of them, were unable to negotiate that further advance from the National Australia Bank and therefore those orders were not implemented).

MONIES PAID TO WIFE PURSUANT TO COURT ORDERS

As identified in the previous Court orders the wife has received, by payment pursuant to Court order, three significant sums which remain to be categorised as to whether they should be held as payments by way of security for costs (a Barro order) or as partial settlement of property. These sums were:
§$75,000 by order of 11 June 2003;
§$70,000 by order of 13 December 2004;
§$100,000 as a partial settlement of property but with an additional $15,000 to be paid on the basis of such determination; and
§there were no monies received by the wife pursuant to the order of 30 July 2008.
The categorisation of these payments is not an issue in the partial property application now before the Court but was and remains an issue to be determined in the s.79 proceedings. I have specifically had regard to these earlier payments made pursuant to the Court orders and balanced the receipt of these monies by the wife as against her further application for the partial settlement of property now under consideration. I have concluded that it is a just and proper outcome that the further partial settlement of property which I have awarded the wife in this application should be in addition to such of those earlier payments as are subsequently found to be a partial property settlement.

WIFE’S LITIGATION FUNDING COSTS

The wife’s solicitors obtained on her behalf ongoing litigation funding which it was said was necessary for the conduct, preparation and presentation of her case and that amount was quantified as at July 2009 at $224,000, with continuing interest payments attached thereto.
Paragraph 32 of the wife’s affidavit in support of this interim application has identified the money advanced by Guardian, her litigation lender. An administration fee to establish the facility was charged and, of particular significance, the wife is currently incurring interest at 17% per annum and the whole of the loan and interest accrued is due for repayment in March of this year. I am satisfied that the wife has no available funds to discharge that liability and it is only reasonable that the partial property orders made pursuant to this application provide her with the ability to discharge the whole of this debt.
That repayment date would not have been an issue with the trial concluding in July of last year and with judgment almost certainly to have been delivered prior to the end of that calendar year. It is however now a very real issue with the appointment of the liquidator and receiver / manager and the case delay and repayment date.
This liability of the wife is a matter of significance, more so when considered in the context that the husband has been able to substantially pay his legal fees and disbursements from personal or corporate assets or family funds or borrowings without recourse to such onerous and costly litigation funding.

FAMILY LAW RULE 19.04 – DISCLOSURE OF LEGAL COSTS

I required solicitors for both parties to lodge with the Court at the commencement of the defended hearing last July a letter in compliance with the above Rule detailing the costs and disbursements incurred by their clients to date and projected for the hearing.
In summary the wife’s costs to 2 July 2009 totalled $580,000 approximately and her ongoing costs of hearing were to be billed at $13,000 per day plus GST (Exhibit “W2”).
The husband’s costs and disbursements of hearing to 3 July 2009 totalled $448,000 but that excluded the costs of expert witnesses, a summary of those were contained in paragraphs 3.1 and 3.2 of the letter and they totalled approximately $85,000. (Exhibit “H1”)
The estimated future costs of that defended trial, allowing for seven days only of court hearing were $45,000, a cost of approximately $6,500 per Court day. That hearing actually occupied fourteen Court days, notwithstanding my efforts to constrain and limit the proceedings or encourage a realistic settlement and now with subsequent written submissions and thus the legal costs and disbursements were substantially greater than first anticipated.
The solicitors for the husband identified the source of funds paid on behalf of the husband and advised that he paid personally $163,000 (approximately) and otherwise monies were paid on his behalf by:
§W N and D Cook Partnership;
§X Developments Pty Ltd;
§Cook Investments Pty Ltd; and
§an unknown sum of approximately $27,700 paid via Russell Kennedy, solicitors.
As the defended hearing extended I required an updated disclosure of legal costs. Exhibit “H16” is the letter from the husband’s solicitors identifying his continuing legal costs as at 29 July 2009 which were said then to total $550,000, with an estimated quantum of $45,000 including transcript, written submissions and future hearing expenses.
Exhibit “W41” is the wife’s updated costs letter dated 29 July 2009 which estimated her then costs at $820,000 inclusive of unbilled solicitors fees and disbursements for counsel totalling $280,000 approximately, which directly related to preparation for trial and the hearing itself to that date only.
That exhibit disclosed that the legal costs and disbursements paid by the wife to 29 July 2009 were $426,493 and it is said by the husband in paragraph 12 of his written submissions that that sum had been paid either by him or by her arranged litigation funding and that fact is seemingly confirmed in the penultimate paragraph of that exhibit. Nevertheless, that substantial litigation funding debt remains unpaid and accruing interest to this day.
The wife’s affidavit now before the Court on this interim application has substantially updated her legal fees and disbursements owing as a result of the trial and subsequent required advice from solicitor and Counsel and investigations on her behalf and, in paragraphs 35 and 36 thereof, these are estimated, as at October 2009, to total between $800,000 - $900,000.
In paragraphs 39 – 41 (inclusive) of her affidavit the wife has now disclosed inquiries made of a mortgage broker. I accept that upon registration of the home in the wife’s sole name she could raise capital, though likely now at a higher interest rate than the anticipated 5.5% highlighted in paragraph 40 of her affidavit. In the alternative the wife would have the option to then sell the home and discharge her substantial indebtedness but that whilst that is an option I leave that entirely to the discretion or requirement of the wife.

O PROPERTY (“the home”)

The parties purchased this home in their joint names in 2000 for $760,000.
The home is a 70 square, four bedroom home on approximately 2/3rds of an acre with extensive gardens, lawns and two swimming pools, one indoor and one outdoor. The property had, for the purposes of the defended hearing, an agreed valuation of $1,150,000 and was then and now remains encumbered by a National Australia Bank registered first mortgage of approximately $150,000.
The wife deposed to the home being in need of significant repair and upkeep and whilst that is most likely correct, it is reflected in its market value for the purposes of the proceedings. The wife’s case was, at all times, conducted on the basis that she intended to live in the home and, to raise money or pay legal costs and disbursements by borrowing against the substantial equity therein.
The defended hearing was conducted on the basis that the property would be transferred to her sole name. The husband, at all times, had proposed that he would discharge its registered mortgage within a reasonable timeframe and he had proposed that to be 31 December 2009. Until that date he had or would pay or cause to be paid the mortgage instalments.
The wife remains living in that home but she has incurred very substantial legal, accounting and valuation fees and disbursements which now total between $800,000 - $900,000. She has no present financial capacity to discharge that debt.
The husband lives in a property in Melbourne’s eastern suburbs which was purchased in April 2004 in the name of his partner. Its purchase price was $590,000 and Ms E contributed $200,000, presumably from the proceeds of her matrimonial settlement. The property is registered in her sole name though a mortgage encumbering that property is registered in the joint names of the husband and Ms E.
The husband contributes substantially towards the repayment of the monthly mortgage repayment and Ms E pays the other home outgoings. Initially the husband’s contribution was $1,600 per calendar month, but upon the purchase by them of an investment and holiday property in North Queensland, and borrowings that were extended for that purchase the husband’s monthly mortgage repayment on the eastern suburbs home was further increased.
There have been improvements and renovations made to the eastern suburbs home to provide the husband and Ms E with a very comfortable, but not excessive, standard of living.
In the concluded defended hearing there were issues raised as to the manner of purchase by or on behalf of the husband of both the eastern suburbs and the North Queensland property and a tracing of assets directed to those purchases but, for the current partial property application, it is not necessary for me to further evaluate or make findings on those matters.
As the husband has secure and comfortable accommodation available, both with the eastern suburbs property and the Northern Queensland holiday home, and with a consideration of the available pool of net assets and notwithstanding all of the issues and disputes as to the quantum thereof, it is just and equitable for the wife to have like accommodation and security of ownership of the home.
I will order that the home be transferred to the wife’s sole name and given the previous timetable that should be concluded within 21 days. The husband must, within that timeframe, discharge all monies and interest owing to the National Australia Bank pursuant to its registered first mortgage and thus the transfer to the wife, at her expense, is otherwise to be free of encumbrance(s). In the context of a partial settlement of property and having regard to the range and identity of assets owned or controlled by the parties, net of liabilities, that is a proper order to be made on a partial settlement basis.
In making that order in relation to the home I do understand the likely necessity of the wife to herself mortgage or raise borrowings against the title to that property to partly discharge her legal costs and disbursements. In the alternative it may be necessary for that home to be sold but, in whichever outcome, it is proper that the wife have the immediate ownership of that home and the ability to access its equity.
I have considered the resulting circumstance that, if the home is to be sold or mortgaged, then those assets may not be capable of recovery or restitution within the context of the ongoing final property hearing. I am nevertheless comfortable that the transfer of ownership of that home to the wife is just and equitable and I record that the husband, in the final interim submissions of his Counsel does not oppose but does not consent to that order.

M CLUB TIME SHARE RESORT

The parties own the right to enjoy a two week period in a time share investment lease with M Club. This asset is registered jointly in their personal names and is secured by an appropriate Certificate of Title identified by the wife in paragraph 6 of her orders sought in this interim application.
The obligation of the parties are to pay certain fees and charges associated with their weekly holiday occupancy thereof. The husband has enjoyed a week’s holiday last year in that resort. He has failed to pay the charges associated with the other week and the wife has asserted that she is therefore unable to afford the expenses of and cannot use that time share resort for a “short period of respite”. That is inappropriate. The husband should have paid those modest outgoings and both parties should each have the equal shared enjoyment of that resort.
The wife, as a partial settlement of property seeks the transfer of that Timeshare ownership to her sole name. That order is opposed by the husband on a partial property basis though in the defended hearing he had proposed to divide equally the use and enjoyment of that Timeshare, and its ownership.
This time share ownership is an asset of limited value, agreed in the sum of $5,000, and I have concluded that a just and proper order is to retain the ongoing joint ownership pending final judgment on the basis that the parties should each have one week’s use and enjoyment thereof in each calendar year and that the husband should pay all costs, charges and fees of and associated with that two week occupancy by the parties.

SUPERANNUATION

During the defended hearing the wife sought and the husband was in agreement to transfer to her his modest superannuation entitlements ($11,000) with Tower and, save for an agreed sum of $10,000 upon which to base his life insurance policy, the balance of the entitlements in Spectrum. As earlier identified the husband now instructed his Counsel to withdraw any agreement to a superannuation splitting order for any of his entitlements and I have accordingly determined what is a just and equitable superannuation outcome on a partial property adjustment basis.
The particulars of the husband’s superannuation acquired during marriage and post separation were recorded in paragraphs 70 – 77 (inclusive) of his trial affidavit. I accept that those paragraphs contained a reasonable summary of the price movements in his superannuation, including that it lost substantial value because of the global financial crisis and losses in the share market, together with costs and fees paid over the past eighteen months. I do not have an updated valuation of any of the superannuation entitlements as evidence concluded in this matter on 29 July of last year, albeit that the very stark reality is that there will have been since then an upward movement in valuation with the global financial recovery of which I am comfortable to accept on the basis of judicial knowledge thereof. It has not been suggested by either Counsel that there should be any updated valuation and indeed there remains a very live argument in the defended hearing as to the Court retaining the valuation date (of many of the assets and liabilities) as at 30 June 2008, though, with further delay, that may ultimately be proved to be somewhat unrealistic.
A qualification raised by Senior Counsel for the wife was that, at all times, his client and the Court should follow the flow of money from a Zurich Fund(s) which were rolled over both to Spectrum and Strategy. Updated material had not been disclosed by the husband and it was for that purpose that I pronounced the disclosure order on 29 July 2009, which I have earlier identified and upon which I have no further evidence and therefore make no finding.

A matter in dispute throughout the s.79 hearing related to the decision by the husband to convert his accumulation fund within Strategy to an allocated pension. The documents in evidence and marked exhibit “H5” record that the whole of the then entitlement of $452,388 was originally transferred to Strategy, the particulars of which are recorded in paragraphs 74 and 76 of the husband’s defended trial affidavit.
Strategy had collapsed in its capital value due not only to the sharp decline in share market valuations, but also because of fees charged and gross pensions paid to the husband on a monthly basis. When the husband swore his trial affidavit he was then receiving $2,262 net per calendar month, but he received from July 2009 a payment of $2,175 and it may be that his monthly payment will now increase to reflect the value of his invested capital entitlements therein. If so, and if that pension is calculated on a percentage basis to the value of the capital entitlement, then it would be appropriately calculated and fluctuate on a regular basis.
The decision to convert Strategy to an allocated pension was made without any notice or disclosure to the wife or her solicitors. As an agreed fact the gross amount of that pension paid to the husband, as at July 2009, was $47,500. That total sum paid will now have further increased and I have no evidence of that fact, or indeed what is the current monthly pension payment.
On the evidence then before me I understood that the allocated pension payment was available to be paid to the husband until the invested capital sum of that Fund has been wholly depleted or split in favour of the wife pursuant to a final court order.
The husband had been cross-examined as to his understanding of whether the allocated pension could be discontinued by his choice and the quantum then returned and held as a capital sum. There was no evidence called from Strategy. The husband’s evidence was that “I have made no enquiries … my understanding is that it could be discontinued … as I originally intended to enter into the allocated pension for two or three years”. It is not necessary for me to now make any such finding in this partial property hearing.
In the defended hearing the husband had been cross examined on the fact that his decision to draw down an allocated pension was an effective manner of reducing the corpus of his superannuation entitlements available to the court for distribution or pursuant to which effective orders could be pronounced.
The wife first raised her concern on this issue in paragraph 127 of her trial affidavit and specifically the husband, in paragraph 184 of his affidavit in reply, denied that he converted his entitlements for the purpose of “reducing her options for a property settlement”. The husband maintained that he then had a significant cash flow crisis and the conversion of that lump sum entitlement to an allocated pension was the best way “to immediately find a source of income”.
I conclude for the purpose of this partial property application only that the actions of the husband in acquiring the allocated pension were not primarily and intentionally aimed at defeating the financial options of the wife in pursuing her final property application. I accept that the husband had been under some self-made financial and cash flow restrictions at that time and he had sought legal and accounting advice, given that he was aged 57 years, that he said was legally entitled to an allocated pension income.
In his re-examination in the defended hearing the husband tendered an overall financial summary of his investments and their value as at 28 July 2009. That information was contained in exhibits “H11” and “H13” and I have accepted that evidence.
Accompanying those documents, and admitted as an aide memoire in the defended hearing, are summaries of each of the Spectrum and Strategy superannuation entitlements of the husband.
As to Spectrum, and for the two year period from 30 June 2007, that superannuation fund had lost a sum of approximately $183,000 and its net value, as at 28 July 2009, was $396,360. Again with judicial notice and the improved world financial economy that net value has almost certainly increased but its present value is unknown.
As to Strategy, and by way of an update of exhibit “H5”, the remaining net balance from which the allocated pension was drawn was then $288,937 but has been reduced by the ongoing pension withdrawals.
I record that at all times Senior Counsel for the wife had indicated, in his written and oral submissions, that it would be and remain an argument that the allocated pension received by the husband should be notionally added back as an adjustment to the pool of assets and liabilities of the parties and that is an argument for consideration in another context to this partial property application.
I am satisfied that appropriate notice has been given to the Trustees of the orders sought for each of the superannuation funds and that position is strongly supported by the affidavits, and annexures thereto, filed by the wife and her solicitor.
What I have concluded on a partial property settlement basis to be a proper exercise of judicial discretion and to provide for a just and equitable outcome, is to pronounce an appropriate superannuation splitting order as to Spectrum and Tower, but not as to Strategy. The order as to Tower will encompass 100% of the entitlement but as to Spectrum I will preserve a sum of $10,000 so that the husband may retain his life insurance cover.
As to Strategy I have not included those entitlements within a split of superannuation on a partial property basis. The injunctive orders preserving those entitlements, subject to the payment of the allocated pension, will be continued and that Fund will be an asset for further consideration in the judgment arising from the defended proceedings, as and when that is able to be delivered. I conclude that is a just and proper outcome on a partial property basis. The husband has no other superannuation and at his age, and subject to the financial uncertainties within this case and as a result of the XC project it may be an important issue for him ultimately to have a superannuation entitlement or otherwise for the option to split that superannuation entitlement between the parties as appropriately then determined.
In summary, as to superannuation the wife should therefore have split in her favour, and subject to current valuation, a sum of up to $400,000 from Spectrum (assuming post July increases) and approximately $11,000 from Tower. Together with the unencumbered home these orders would mean that the wife has transferred or hereafter available to her assets and entitlements to a value slightly in excess of $1,500,000. I record that these are assets and entitlements that the wife must ensure, and those acting on her behalf likewise must ensure, are properly managed both for her present and her future financial needs.
The wife turns 55 years of age this year and, at that date, or otherwise on appropriate legal advice and acceptance of her circumstances, may apply to have access to all or part of that superannuation.
As to superannuation, and each of the splitting orders, I am satisfied that the remaining property of the properties is adequate to meet the ongoing legitimate expectations of both the husband and wife at the final hearing. I would not contemplate that the superannuation splitting orders would be proposed or capable of being reversed, but even on the husband’s pool of net assets identified hereunder that effect and outcome of the splitting orders is just and equitable.

POOL OF ASSETS

At the conclusion of the s.79 hearing the husband submitted a balance sheet of net assets totalling $2,540,000, exclusive of any interest in X Developments Pty Ltd and with additional superannuation entitlements of approximately $700,000.
In marked contrast the wife’s net statement of assets and liabilities totalled approximately $9,100,000 together with superannuation entitlements of approximately $700,000. Additionally the wife proposed various financial adjustments and add backs which had the combined effect, if accepted, of increasing that net available asset pool to a sum of almost $12,000,000. The wife’s outstanding claim to an overall property settlement in the s.79 final hearing was for 65% of that known asset pool which her Senior Counsel asserted entitled her to a cash payment slightly in excess of $6,000,000 and retention of the home, superannuation and other assets to a value of a further $1,784,000.
I have recorded those net asset pool summaries to provide a financial background, both to the legal and commercial disputes within the s.79 proceedings, but more particularly to highlight the particular assets, and their value, of and associated with this partial property application are reasonable and manageable within any required determination of the final asset pool.

COSTS

I have carefully reflected upon the issue of costs given that, in the application and response and from the oral submissions of Counsel on this interim application, both parties seek costs of and incidental to the preparation for and presentation of argument to the Court.
I have determined not to seek any further submissions on costs but to decide the matter on my extensive knowledge and background of all matters and facts in these proceedings and the substantial documents and legal submissions now before me. I am mindful to save the parties a further hearing, or additional submissions on costs issues. I took the opportunity to raise this matter with Counsel when the matter was before me on 21 December of last year. Notation “B” to that Order confirmed the consent of the parties for the Court to determine the issue of costs without relisting the matter for further hearing or written submissions thereon.
S.117 of the Act describes that each party should pay his or her own costs, save in circumstances where it is determined that it is just to make an order for one party to pay or contribute to the costs of the other party.
S.117(2A) records the matters that are relevant to and must be considered in determining what is just and therefore what costs order, if any, should be pronounced.
I am acutely aware of the financial circumstances of the parties, who are not legally aided.
I have had significant exposure to the conduct of the proceedings, the cross examination of the parties, the evidence and legal submissions and all related matters and issues which provide me a very secure basis to determine what is and would be a just outcome on costs.
No party has been wholly successful in these partial property proceedings but, on balance, I have made significant partial property orders in favour of the wife.
I conclude that I should make a costs order in favour of the wife and that I should dismiss the husband’s application for costs. That is a proper and just outcome.
I have concluded that it is both just and appropriate to fix the order for costs in this judgment without any further submission as to quantum thereof. I have carefully read and assessed the affidavit material before me and the hearings and mentions of this matter on the three occasions that it was listed (5 October, 11 November and 22 December of last year).
The wife elected to engage Senior Counsel on each occasion and whilst Mr St John has a very substantial and informed knowledge of this case, so would his junior Counsel from the trial, Ms Stewart. I nevertheless do not propose to allow and fix the wife’s costs on the basis of her engagement of Senior Counsel when junior Counsel could have likewise presented submissions on this partial property application. That is in no way intended as a criticism of the wife, or her solicitor in engaging Senior Counsel but it will not be reflected in the quantum of costs ordered and I conclude that to be a just and proper outcome. I will assess costs on a junior Counsel basis for all three (3) appearances on this issue. The itemised scale of costs, Schedule 3 to the Family Law Rules 2004, provide (in Item 205) a maximum fee on hearing of $2,300 per day and I have therefore assessed an appropriate quantum of costs based upon that fee allowed for three days, in a total of $6,900 and a further sum of $1,100 for conferences, preparation and any advice given on affidavits or evidence.
The wife’s affidavit, and that of her solicitor were substantial and no doubt time consuming in their preparation. They were very comprehensive and helpful documents and I have evaluated costs within that context. As to the solicitors’ costs I will allow a sum of $9,500 for all of their time, work, effort, disbursements and charges of and related to the preparation of the matter for hearing and mention and their attendance at Court on each of the three listed hearings.
I am not and would not be further persuaded that the husband either could not afford to pay costs or currently would have financial difficulties in raising the quantum of costs as ordered within a timeframe of one month. I order that the husband pay the wife’s costs of and incidental to all of the partial property hearings and applications fixed in the sum of $17,500, such costs to be paid within one calendar month of the date hereof and if payment in full is not then made interest is then to be assessed and payable, quarterly in arrears, on the quantum from time to time outstanding at the rate prescribed in the Family Law Rules 2004.

I certify that the preceding paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young

………………………………………………………..

[2010] FamCA 787

27 JANUARY 2010

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Legal Concepts

Costs

Remedies

Injunction

Discovery

Consent