Dawson & Dawson
[2022] FedCFamC1F 58
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Dawson & Dawson [2022] FedCFamC1F 58
File number(s): SYC 7812 of 2018 Judgment of: SCHONELL J Date of judgment: 14 February 2022 Catchwords: FAMILY LAW – PROPERTY – Interim application – Where the mother seeks orders for the sale of shares held in the father’s name – Where these orders are sought for the purposes of meeting the costs related to the single expert, school fees and legal fees – Consideration of whether it is in the interests of justice to make a s 79 order – Interim property orders sought by the mother made – Orders stayed for a period of 30 days. Legislation: Family Law Act 1975 (Cth) ss 60CC, 79, 80 Cases cited: Bing & Bing (2007) FLC 93-318; [2007] FamCA 418
Medlow & Medlow (2016) FLC 93-692; [2016] FamCA 34
Poletti & Poletti (1990) 15 Fam LR 794; [1990] FamCA 79
Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466
Wenz v Archer (2008) 40 Fam LR 212; [2008] FMCAfam 1119
Division: Division 1 First Instance Number of paragraphs: 49 Date of hearing: 10 February 2022 Place: Sydney Solicitor for the Applicant: Sexton Family Law Solicitor for the Independent Children's Lawyer: Legal Aid NSW The First Respondent The First Respondent did not appear in these proceedings The Second and Third Respondents The Second and Third Respondent were excused from these proceedings. ORDERS
SYC 7812 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS DAWSON
Applicant
AND: MR DAWSON
First Respondent
MR FLYNN
Second Respondent
MS FLYNN
Third Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
SCHONELL J
DATE OF ORDER:
14 FEBRUARY 2022
THE COURT ORDERS THAT:
1.That the applicant mother (“the mother”) and the respondent father (“the father”) shall, for the purpose of the preparation of Dr C’s report ordered on 22 November 2021:
(a)attend all appointments made with Dr C;
(b)ensure the attendance of the children at such times and dates as directed by Dr C; and
(c)comply with all reasonable directions and requests made by Dr C to assist in preparation of his report.
2.In preparing his updating report, Dr C be requested to consider the following matters:
(a)the terms of reference contained in the Orders made on 14 August 2019;
(b)whether, in light of events, which have occurred since preparation of his expert report dated 4 December 2019, there is any change to the opinions expressed and recommendations made in that report;
(c)whether the children or any of them are at risk of being exposed to any physical or psychological harm from being subjected to or exposed to abuse, neglect or family violence in the care of either parent;
(d)any views expressed by any the children and any factors that may affect the weight to be accorded to those views;
(e)any current recommendation as to the live with and spend time with arrangements which may be appropriate; and
(f)any other matter considered relevant.
3.The mother and the father shall each be responsible for:
(a)payment of one-half of the costs of preparation of the expert report; and
(b)payment of one-half of the Dr C's additional costs including, but not limited to, subsequent attendance at Court (if required), noting that any subsequent attendance at Court may incur costs for attendance at Court, considering further material filed by or on behalf of the parties, any additional interviews required and considering further documents which may be produced pursuant to a subpoena.
4.NOTED that the mother's solicitors will hold funds for payment of Dr C's fees on behalf of the parties in their Trust Account and will pay Dr C's fees from those funds upon receipt of an invoice from Dr C.
5.Leave be granted to the Independent Children's Lawyer (“ICL”) to issue such subpoenas as may be relevant for the updating expert report.
6.Leave be granted to the ICL to scan or photocopy all documents produced on subpoena, including any documents produced by the Department of Communities and Justice, NSW Police Force and all medical or counselling records, for the purpose of providing such documents to Dr C for the updating expert report, and that any fees for such scanning or photocopying be waived.
7.The mother and the father do all acts and things necessary to provide any authority required for Dr C to speak to the following:
(a)any medical practitioner who has treated either of the parents or any of the children;
(b)any therapist, counsellor or other mental clinician who has been consulted by either of the parents or any of the children; and
(c)any schoolteacher, or school Principal, or school counsellor from the school which any of the children attend.
8.The mother and the father shall each be restrained from providing any material to Dr C without the written consent of the other party and the ICL.
9.Noted that an appointment for Dr C to conduct interviews for his updating expert report has been arranged to take place on 10 May 2022.
10.Noted that the ICL will prepare a letter of instruction to Dr C which will include the following documents:
(a)these Orders;
(b)Orders made since 4 December 2019, other than merely procedural orders or orders which concern property matters only;
(c)the trial affidavits filed by each of the parties in relation to parenting matters;
(d)any other affidavit filed by either party since 4 December 2019 if such affidavit contains evidence relevant to the updating expert report, but which is not addressed in that party's trial affidavit;
(e)the Child Dispute Conference Memorandum dated 5 October 2021; and
(f)material produced in compliance with a subpoena which is relevant to parenting issues.
11.Within seven days of the date of order, the mother and father do all acts and things and sign all documents necessary to cause the sale of a portion of the shares held in the name of the father in the ANZ Bank Account (ending #...77 connected to account ending #...54) to the net value after transaction costs of $221,282.
12.Upon compliance with the preceding order herein, the father do all acts and things and sign all documents necessary to cause the following transfers:
(a)the sum of $111,932 to the mother and that the mother, within seven days of receipt of those funds, attend to the following:
(i)payment of $36,097 to D School; and
(ii)payment of $75,835 to B School.
(b)the sum of $9,350 to the Sexton Family Law Trust Account to be held on behalf of the parties and to only be applied to the costs of Dr C; and
(c)the sum of $100,000 to the Sexton Family Law Trust Account to be held on behalf of the mother on account of legal fees and disbursements.
13.The payments referred to in 12(a) and (b) be characterised at the final hearing.
14.The payments referred to in 12(c) be characterised as an interim distribution to the mother.
15.This Order shall act as authority from the Court, and on behalf of the father and the mother, to the ANZ Bank to release these funds only in accordance with these Orders despite the prior injunctions, which otherwise remain in place.
16.In the event the father or the mother refuses or neglects to comply with any of the Orders herein requiring a party to execute a deed or instrument, the Registrar or Deputy Registrar of this Court at its Sydney Registry is appointed pursuant to s 106A of the Family Law Act1975 (Cth) to execute, in the name of the father or the mother as the case may be, any deed or instrument necessary to give effect to the orders herein, or any of them, and to do all acts and things necessary to give validity and operation to the said deed or instrument.
17.That these orders be stayed for a period of 30 days.
18.Leave is granted to the father and the parties to restore the matter on 48 hours' notice before me.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Dawson & Dawson has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
SCHONELL J:
Final proceedings relating to property and parenting matters are listed before me for hearing for five days commencing on 18 July 2022.
Issues have arisen in relation to procedural orders for the preparation of an updated expert report, the costs of meeting the updated expert report, school fees and a sum of money by way of interim costs.
The applicant mother (“the mother”) was represented by her solicitor. The respondent father (“the father”) did not appear. The Independent Children's Lawyer ("ICL") appeared and sought orders for the preparation of an updated expert report.
By Amended Application in a Proceeding filed 4 February 2022, the mother seeks orders for the sale of shares in the father’s name and for the proceeds of sale to be paid to meet in broad terms the costs of the single expert, the payment of school fees in the 2022 calendar year and her legal fees of conducting the hearing. The mother sought the order as an interim property order under s 79 and s 80 of the Family Law Act 1975 (Cth) (“the Act”).
I indicated to each of the ICL and the mother’s solicitor that in circumstances where the father had not appeared, and noting a history of non-appearance, that I proposed to stay the implementation of any orders for a period of thirty days to enable the father to appear should he wish to do so.
I propose to make the orders as broadly sought by the mother in her Amended Application in a Case and the orders as sought by the ICL, which are consented to by the mother but stay the operation for a period of 30 days. My reasons are set out below.
The mother relied upon the following documents in the proceedings:
(1)Amended Application in a Proceeding filed 4 February 2022;
(2)Affidavit of Ms Dawson sworn and filed 4 February 2022;
(3)Affidavit of Mr F filed 7 February 2022;
(4)Financial Statement of Ms Dawson filed 3 March 2021;
(5)Affidavit of Ms G filed 9 February 2022; and
(6)Family Report by Dr C dated 4 December 2019.
Various documents were tendered being the father's Amended Response filed 13 August 2019; the father's Financial Questionnaire filed 19 November 2020; and the mother's Cost Memorandum filed 9 February 2022. Each of those documents became Exhibits in the proceedings.
The parties commenced living together in or about December 2003, were married in 2004 and separated on 17 January 2018.
The parties have three children aged 16, 14 and 13. All three children attend private schools.
Upon separation, the mother left the former matrimonial home and the father has continued to reside in that home.
In the substantive proceedings, each party seeks orders for financial adjustment but it would appear they are at issue about the composition of the balance sheet, contributions and overall entitlement. The mother, I am told seeks 55% of the pool of assets and the father seeks that the mother receive between 30% to 35% of the pool (Exhibit 1 being the father’s Financial Questionnaire).
The parties are also at issue in relation to the living arrangements for their children. They have been litigating in this Court since 2018. Dr C was appointed as a single expert and prepared a report dated 4 December 2019. It is necessary for the final hearing that Dr C's report be updated so that the Court is in the best position possible to know what the views of these children are in relation to their future living arrangements as well as the other matters the Court must have regard to under s 60CC to enable it to make an order that is in the best interests of the children.
Justice McGuire ordered an updated report on 22 November 2021. Interviews are to take place in May. The orders as proposed by the ICL provide for the preparation of the updating report. They are sensible and proper orders. The mother gives evidence that the cost of the report is $7,000 plus GST. A further sum of money will be required to meet the costs of the single expert giving evidence. The total amount sought for the single expert is $9,350. The mother says she does not have the funds to meet that cost.
I will make the orders proposed by the ICL as they are necessary to properly prepare this matter for hearing and to bring to an end for these children what will be nearly four years of litigation. The mother seeks that the payment be categorised as a shared expense of the parties and not as an interim distribution to her. I propose to leave the categorisation of the payment to the final hearing when the father will have an opportunity to make submissions.
The parties' daughters attend B School and their son attends D School. All three children commenced at their respective private schools in Year 7. Their enrolment was the subject of agreement between the parties. Part of the relief the mother seeks is a payment of the 2022 school fees in the sum of $111,932.
The mother in her affidavit identifies that she had a conversation with the father in late December 2021, wherein she said to him "Can we just agree to sell some of the shares and meet the children's tuition fees for next year so we don't have to have another interim hearing" (at paragraph 14). The mother says that the father did not reject or accept her proposal at that time.
The mother refers the Court to earlier orders made on 1 September 2020, following a contested hearing when the Court made orders for the sale of shares to meet the then outstanding school fees for the 2020 calendar year.
The issue of the payment of school fees arose again in 2021.
On 1 April 2021, orders were made, by consent this time, for the sale of further shares to meet the payment of school fees of approximately $110,000 for the 2021 school year. I further note the mother's submission that the father has not taken any steps to alter the children's enrolment at the schools and that the children are being educated in the manner their parents intended. Such a submission is consistent with the evidence, noting the father signed their enrolments, did not appeal the order for the payment of the school fees in the 2020 year and consented to the payment of school fees in the 2021 year.
By the mother's present application, she seeks an order for payment of the school fees for the 2022 year in the sum of $111,932. To enable that payment to be made, the mother seeks orders for the sale of further shares held in the father’s name. The mother seeks that the payment be categorised as a shared expense of the parties and not as an interim distribution to her. I propose to leave the categorisation of the payment to the final hearing, when the father will have an opportunity to make submissions.
The mother seeks a further order that she receive a sum of $100,000 to meet the costs of her counsel and solicitors to prepare the matter for trial and appear. The order is sought in circumstances where the mother has entered into costs agreements with her solicitor and counsel, and she indicates that she wishes to and requires solicitors and counsel to represent her at the final hearing.
The father did not appear at the hearing. In the circumstances of such a hearing, I am unable to make findings.
I note that the mother points to a history of non-compliance with Court orders. In that respect, I note that on 1 September 2020, orders were made by consent which provided for the parties to attend family therapy. The mother contends that it was the father who proposed that the parties participate in family therapy. I understand from the mother's evidence that the father did not attend family therapy. I note that on 1 September 2020, the Court made orders that the father attend upon a physical and psychiatric assessment. I note further that more orders were made on 3 March 2021 that the father obtain reports from the doctors that he attended upon for the assessments. I note the mother contends that the father failed to comply with the orders and attend upon the assessments. I note that on 1 April 2021 orders were made that the father pay a sum of money to the ICL. I note the mother contends that the father did not comply with that order.
On 20 September 2021, the father's solicitor and barrister withdrew from the proceedings, and subsequently filed a Notice of Ceasing to Act, which identified that the father's last known address was at the former matrimonial home, and provided an email address for the father.
The matter was listed for a case management hearing on 22 November 2021 and the father, I am told, did not appear.
The matter was listed for directions on 10 December 2021. The father did not appear on that occasion.
The affidavits of Mr F filed 7 February 2022 and Ms G filed 9 February 2022, point to evidence of the father having been served with documents and given notice of the proceedings. I am satisfied on the basis of the evidence before me that the father has been served. As he did not appear, I do not know what he may say about these matters.
For more abundant caution, I propose to stay the operation of the orders for 30 days to give him a further opportunity to appear before me and grant to the parties a liberty to restore on 48 hours' notice.
APPLICABLE LAW
The jurisprudence on the circumstances in which the Court can make an order for what is colloquially called interim property is well settled. The authority to make such an order is found through a combination of s 79 and s 80(1)(h) of the Act. Section 79 is the source of power, while s 80 enables the making of the order.
The Court must initially be satisfied that it is appropriate to make an order; and that it is it in the interests of justice to make an order. If so, then has a case been established for the making of a s 79 order. An exhaustive assessment of the s 79 considerations is not required.
In Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466, the Full Court observed at [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.
Their Honours dicta in Strahan (supra) included approval of observations by Riethmuller FM (as he then was) in Wenz v Archer (2008) 40 FamLR 212 at page 223:
It cannot be the case that a party who has an irresistible claim to a substantial share of the property of the parties should be held out of that property while the matter is litigated,… particularly where the parties are asset rich but have relatively modest incomes … Nor could it be appropriate that a party should be denied the ability to liquidate assets when there are real needs for those resources, such as to meet debts which may result in the party being pursued by creditors, or the need for the party to make payments for the benefit of the children, or to take advantage of other financial opportunities…
As Nygh J observed a long time ago in Poletti & Poletti (1990) 15 Fam LR 794 at 796:
… the issue on such an application is not the question of whether one party should be responsible for the costs of the other, nor is it a question of determining in advance whether any expenditure was reasonably or properly incurred. It is rather, as it certainly was In the Marriage of Wilson, a situation where one party to the marriage controls almost exclusively what might be described as the patrimony of the parties and has control of the bulk of the assets and funds of the parties, where an order may be made to ensure that the other party, who does not have the fortune of controlling those funds, at least has an equal or near equal opportunity to present his or her case.
Such an order certainly will be made on account of costs but what ultimately will be the fate of the monies paid, whether it is to be treated as an advance on the ultimate property order, or whether it is to be treated as an advance on any ultimate costs order or a mixture of the two, is a matter which must be left to the trial judge.
Nor, is it a necessary precondition to the making of an order that a party needs to identify a particular fund. The Full Court in Bing & Bing (2007) FLC 93-318 at [23] observed:
...The mere assertion that there are no immediately available funds to provide to the applicant to enable him or her to continue on with the proceedings cannot simply be accepted at face value. If it is apparent that one of the parties controls a vast pool of assets (irrespective of whether those assets are readily capable of liquidation) then the Court has a broad enough discretion to enable an order to be made for the provision of funds by the holder of those assets to enable the other party to continue on with litigation…
And further, the Full Court observed at [27]:
Finally it has been asserted that the husband was and remains unable to raise the capital sum sought by the wife. This is a matter which may become relevant if and when the husband defaults in the order and an enforcement application is brought. However, the question of enforcement of the order remains a separate question from the propriety of granting the order in the first place.
Finally, as their Honours in Medlow& Medlow (2016) FLC 93-692 at [86] observed:
The onus was clearly upon the husband to establish that there were sufficient assets available for the interim distribution and that the effect of any interim order was capable of being reversed as part of the final hearing or at least would not defeat the wife's property claims. The onus was not on the wife to adduce such evidence.
Therefore, the authorities establish that Court should consider the following in making an interim property order:
(a)The Court should act conservatively.
(b)Is it in the interests of justice to make an order?
(c)Is a case established to make a s 79 order? A detailed assessment of the s 79 considerations is not required.
(d)Are there sufficient assets available for an interim distribution? However, it is not necessary to point to an immediate fund;
(e)The categories of cases in which an order will be made are not closed and are not limited solely to costs;
(f)Is the order capable of being reversed or taken into account at the final hearing; and
(g)Albeit that the matter can be determined pursuant to a particular section of the Act, the ultimate categorisation of the amount to be paid can be left to the final trial judge.
I propose to consider the mother’s claim in light of the above.
The mother identified in her affidavit at paragraph 35, what she contended to be a Schedule of the assets and liabilities of the parties ("the Schedule").
Ownership Description Value 1. J H Street, Suburb E $ 3,350,000 2. W J Street, Suburb M $ 2,800,000 3. W Motor Vehicle 1 $ 7,700 4. W ANZ share portfolio account $ Nil 5. J ANZ Online Saver #...42 $ Nil 6. J Access Account #...59 $ Nil 7. W Access Account #...67 $ 2,413 8. W ANZ Online Saver #...16 $13,151 9. W NAB account #...14 $ 54 10. H ANZ Share Investing #...87 $E 1,312, 317 11. H ANZ E-Trade account #...54 $ 1,183 12. H ANZ Cheque account #...94 $ 45,000 13. H Motor Vehicle 2 NK 14. H ANZ Account #...56 $ 3,940 Total $ E 7,535,758
LIABLITIES 15. W ANZ Visa card #...70 $ 3,732 16. Debt owed by K Company ATF Dawson Family Trust to wife’s parents $ 500,000 17. J Debt owed by parties to wife’s parents $ 1,000,000 18. W Mortgage owing to wife’s parents secured on the Suburb E property $ 2,939,000 19. W “Wife’s Loan” pursuant to the Further Amended Response filed by the wife’s parents on 02.02.22 $ 353,734 Total $ E 4,796,466
SUPERANNUATION Name of Fund Type of Interest Value 20. W Super Fund 1 Accumulation $ 80,434 21. H Super $ 21,890 Super Total $ 102,324 Total Pool available for distribution $ 2,841,616
I was informed by the mother’s legal representative that the value ascribed to the property at H Street, Suburb M, represented an agreed value. The value for the property at L Street, Suburb E represented the purchase price paid some twelve months ago. On its face, that property has negative equity.
The mother's solicitor indicated that the father had issues with the debts identified at items 16, 17 and 19 in the Schedule. Assuming for the moment the accuracy of the values in the Schedule, the asset pool is something in the order of approximately $4,700,000 on the father's case and less on the mother's case.
On any analysis of the Schedule, the bulk of the assets of the parties are held by the father. He lives in an unencumbered home, has liquid assets totalling approximately $1,362,000 and has no debt.
I note the orders as sought by the father in the Amended Response filed 13 August 2019 and the position adopted in the Financial Questionnaire filed 19 November 2020. I note that in that Financial Questionnaire, the father contends that the mother's entitlement should be something in the range of 30% to 35%. There is no issue, therefore, that as far as the father contends, a case is clearly established for the making of a s 79 order.
As against a pool of approximately $4,700,000, should the mother receive 30% of that pool, then that would give rise to a property settlement entitlement in favour of the mother of approximately $1,400,000.
In light of the orders that she proposes, I am satisfied that the father's application for financial adjustment is not imperilled by the making of the orders that she seeks even taking into account the earlier distributions made to her and thus, any order I make can be taken into account at the final hearing.
I have had regard to the mother's Financial Statement filed in the proceedings. Her weekly income is less than her personal expenditure. She has approximately $11,800 of liquid funds after payment of her credit cards. Beyond a motor vehicle, she has no other liquid assets. She is not yet of an age where she can access her superannuation.
She has no capacity to meet the payment of school fees, the single expert fees and her own legal fees.
In all the circumstances, I am satisfied that it is an appropriate exercise of my power to make the orders as sought by the mother by way of interim property orders. I am satisfied in making the orders that:
(1)the amount of money sought by the mother from the proceeds of sale of shares does not imperil the father's final application for financial adjustment;
(2)there are sufficient assets available for an interim distribution;
(3)the effect of any interim order is capable of being taken into account at the final hearing;
(4)the parties’ assets are held almost exclusively by the father;
(5)it is appropriate that the mother have a sum of money available to her to meet the cost of the litigation and to pay the school fees of the children and the single expert fees; and
(6)it is just and equitable that an order be made on an interim basis.
I propose to leave the categorisation of the payments by way of school fees and costs of the expert to be determined at the final hearing and subject to further submissions made by each of the parties as to how the sums should be categorised.
I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 14 February 2022
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