Dennison & Dennison
[2021] FCCA 2039
•13 August 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Dennison & Dennison [2021] FCCA 2039
File number(s): SYC 352 of 2020 Judgment of: JUDGE MORLEY Date of judgment: 13 August 2021 Catchwords: FAMILY LAW – Interim spousal maintenance application – respondent husband’s material filed out of time – Court declines to consider respondent’s position – case of the applicant that she requires funds for her litigation – where complex matters of corporate law at play – where application fits well within what either party could conceivably receive on the making of final orders – where orders are made as sought by applicant – orders for sale of former matrimonial home with $50,000 to be paid to each party from the net sale proceeds Legislation: Family Law Act 1975 (Cth), ss 79, 80, 114, 117
Federal Circuit Court Rules 2001 (Cth), rr 24.03, 24.04
Practice Direction No. 2 of 2017 ‘Interim Family Law Proceedings’
Cases cited: Bevan v Bevan (2013) 279 FLR 1
Candlin & Candlin [2017] FCCA 2211
Forgeard v Shanahan (1994) 35 NSWLR 206
Harris & Harris (1993) 113 FLR 472
Marchant & Marchant (2012) FamCAFC 181
Melville & Melville (No. 3) [2020] FamCAFC 231
Ming & Dao [2020] FamCA 726
Newett & Newett [2020] FamCAFC 76
Salvage & Fosse [2020] FamCAFC 144
Stanford & Stanford (2012) 247 CLR 108
Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166
Wenz & Archer [2008] FMCAfam 1119Number of paragraphs: 99 Date of hearing: 4 August 2021 Place: Sydney Solicitor for the Applicant: Annamaria Marano of Marano Family Lawyers Counsel for the First Respondent: Mr Stapleton Solicitor for the First Respondent: MCW Lawyers Counsel for the Second Respondent: Mr Bernie Solicitor for the Second Respondent: Bayside Solicitors Solicitor for the Third Respondent: No appearance ORDERS
SYC 352 of 2020 BETWEEN: MS DENNISON
Applicant
AND: MR DENNISON
First Respondent
MR C DENNISON
Second Respondent
COMPANY B
Third Respondent
ORDER MADE BY:
JUDGE MORLEY
DATE OF ORDER:
13 AUGUST 2021
THE COURT ORDERS THAT:
1.That by no later than 4:00PM on 27 August 2021 the Applicant and the First Respondent shall do all acts and things and sign all necessary documents to effect the sale of the property at C Road Suburb D New South Wales and more particularly described in Certificate of Title Folio Identifier … (‘the former matrimonial home’) by auction as follows:
(a)The former matrimonial home shall be listed with Estate Agent F of Suburb G New South Wales (‘the auctioneer’) for sale by auction within two months of the date of these orders;
(b)The reserve price of the former matrimonial home shall be such amount as is agreed between the Applicant and the First Respondent, and failing agreement being reached between them 21 days prior to the auction, then the reserve price shall be nominated by the auctioneer;
(c)The Applicant and the First Respondent shall give such instructions as are necessary to the solicitor for the Applicant to prepare a contract for sale of land and provide it to the auctioneer prior to the auction no later than the date sought by the auctioneer and otherwise act on the sale;
(d)That within 14 days of orders the Applicant and or the First Respondent shall deliver to the Solicitor for the Applicant the Certificate of Title to the property;
(e)If the Certificate of Title to the property is held by someone other than the Applicant and or the First Respondent, then they will:
(i)Sign an irrevocable authorisation and direction (such document to be prepared by the solicitor acting on the sale of the property) to release the Certificate of Title to the said solicitor and deliver the authorisation document to the said solicitor no later than 21 days prior to the settlement date;
(ii)The said solicitor will use the authorisation and direction to obtain and hold the Certificate of Title (in escrow) pending the settlement of the sale of the property.
(f)The Applicant and the First Respondent shall do all acts and things and sign all documents necessary and co-operate in every way with the auctioneer in relation to the sale by auction including allowing inspection of the former matrimonial home at all times reasonably requested by the selling agent and ensuring that the former matrimonial home is clean, neat and in good order at the time of any inspection and on the day of auction.
(g)In the event of a dispute between the Applicant and the First Respondent as to a reserve price they shall accept the recommendation set by the auctioneer for the reserve price and they shall sign the Contract of Sale of Land to effect an exchange and sale of the former matrimonial home no less than 10 days prior to the auction.
(h)In the event the First Respondent refuses and/or neglects to sign any document including but not limited to an agency agreement and the Contract for Sale of Land for the sale of the property, the Registrar of the Federal Circuit Court of Australia and/or the Family Court of Australia at Sydney shall sign the said document in the name of the First Respondent pursuant to section 106A of the Family Law Act 1975 (Cth).
(i)The Applicant and the First Respondent shall attend at the auction and negotiate with the highest bidder in the event of the reserve price not being reached.
(j)That in the event that the former matrimonial home is not sold at the auction pursuant to order 1 or within 14 days after the date of the auction by further negotiation, then the parties shall cause a further auction of the former matrimonial home to be held within three months after the date of the first auction, with the auction to be repeated at three monthly intervals until the property is sold and for that purpose the provisions of Order 1 and Order 2 shall apply.
2.On completion of the sale of the former matrimonial home, the following payments shall be made:
(a)In payment of real estate and auctioneer fees;
(b)In payment of conveyancing adjustments on completion of the sale of the former matrimonial home;
(c)In payment of legal fees and disbursements of the solicitors acting on the sale of the former matrimonial home;
(d)In payment of a sum of $50,000.00 to each of the Applicant and the First Respondent and said payment to be categorised by the trial judge at the final hearing of the proceedings;
(e)In payment of the balance of the sale proceeds to the solicitors for the Applicant for investment of the same in a controlled monies account in the name of the Applicant and the First Respondent and shall be released and paid pursuant to orders of the Court.
3.That within 14 days of the date of these orders, the First Respondent shall provide access to the former matrimonial home to the Applicant at times to be agreed between the parties through their solicitors so as to enable the Applicant to remove such of the following property as is contained in the former matrimonial home as at 13 August 2021:
(a)Photos and frames of the children of the Applicant and the First Respondent, and family photos belonging to the Wife;
(b)Iron;
(c)Fridge in garage;
(d)Kitchenware;
(e)Half share of the linen, towels, sheets, tablecloths;
(f)Half share platters, dinner sets, new and never used (blue);
(g)Dyson vacuum cleaner;
(h)Half share of pots, pans, frypan and cooking utensils;
(i)Hand mixer;
(j)Kosta Boda vase collection and all gifts from the children of the Applicant and the First Respondent to the Applicant;
(k)Large mirror in dining room;
(l)Sewing kit;
(m)Sony camera;
(n)All items that previously belonged to the Applicant’s late parents
(o)Half share of cook books.
4.On the occasion of the Applicant attending at the former matrimonial home for collection of her items or nominees attending on her behalf, the Applicant may attend accompanied by two (2) other persons or the Applicant may be represented in that attendance by a person nominated by her in correspondence between the parties’ solicitors, and on such occasion the First Respondent may at his option remain in attendance at the property but shall not interfere in any way with the collection or removal of the items referred to in these orders by or on behalf of the Applicant.
Financial Disclosure
5.By no later than 4:00PM on 27 August 2021, each of the Applicant and the First Respondent shall cause a letter to be forwarded to the solicitors for the other party specifying further financial disclosure required in relation to these proceedings, and by no later than 4:00PM on 10 September 2021 each of the parties shall provide the financial disclosure sought so far as it is within the party’s power, possession, or control.
Costs Application
6.By no later than 4:00PM on 27 August 2021, the Applicant is to file and serve any written submissions in relation to her application for costs of these interim proceedings.
7.By no later than 4:00PM on 10 September 2021, the First Respondent is to file and serve any written submissions in reply.
8.By no later than 4:00PM on 17 September 2021, the Applicant is to file and serve any written submissions in reply.
Valuation
9.By 4:00PM on 20 August 2021, the Third Respondent Mr C Dennison is to cause a draft letter of joint instructions addressed to the Single Court Expert Ms J be provided to each of the Applicant and the First Respondent setting out the usual material contained in a joint letter of instructions for valuation of financial assets and in addition, setting out competing contentions of the parties in relation to disputed matters affecting valuation.
10.By 4:00PM on 27 August 2021, each of the Applicant and the First Respondent are to serve upon the other parties (other than the Second Respondent Company B) any amendments to the draft letter of instructions as contended for by them.
11.By 4:00PM on 3 September 2021, the Applicant, the First Respondent, and the Third Respondent are to agree upon the final form of the joint letter of instructions to be provided to the Single Court Expert Ms J.
THE COURT NOTES THAT:
A.The joint letter of instructions, so far as the material required therein by the First Respondent is concerned, will include reference to MYOB original sources that he seeks to have presented to and considered by the Single Court Expert in relation to issues affecting valuation.
THE COURT FURTHER ORDERS THAT:
12.In the event that the First Respondent tenders payment to the Applicant in the sum of $50,000.00 and same is accepted by the Applicant at any time prior to exchange of contracts for the former matrimonial property, orders 1 and 2 made today are thereupon suspended pending further order.
13.The proceedings are listed for further mention and directions at 10:00AM on 29 November 2021.
THE COURT NOTES THAT:
B.On 29 November 2021, the Court will consider the appropriate future dealing with the Amended Response to Application in a Case filed on 4 August 2021.
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 under the pseudonym Dennison & Dennison is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MORLEY:
INTRODUCTION
These are the Reasons for Judgment that were delivered verbally on 13 August 2021. They have been settled herein in written form. Grammatical errors and accidental errors in reference have been amended for ease of comprehension. Legal citations have been included in full and incorporated into these Reasons.
These Reasons follow an interim hearing conducted on 4 August 2021 of an application in a case filed by the wife on 26 November 2020 and a response to the application in a case filed by the husband on 2 August 2021 and amended on 4 August 2021.
Pursuant to findings I made in the interim hearing and reasons I gave for that, at the interim hearing I did not consider the husband’s response to the application in a case or amended response to the application in a case, consequent upon the late filing of that application, although it was taken that the husband opposed the orders sought by the wife in her application in a case.
These are property proceedings between the applicant wife, Ms Dennison, hereinafter referred to as “the wife”, and the respondent husband, Mr Dennison, hereinafter referred to as “the husband”. In the course of the proceedings, other parties have been joined: firstly, Mr C Dennison, adult son of the parties, as a second respondent, and Company B, a private corporation, as a third respondent. The husband and the second respondent are directors of the third respondent.
The wife was represented by her solicitor advocate, Ms Marano. The husband was represented by his counsel, Mr Stapleton. Mr Stapleton, as counsel, and his instructing solicitors came into the matter very, very, very shortly before the interim hearing commenced. The second respondent was represented by his solicitor advocate, Mr Bernie.
The third respondent was not separately represented, but, in the context of the matter – the third respondent being a trustee company for a unit trust owning a parcel of commercial property at Suburb E, and the husband and second respondent being directors of that company – there is no apparent, immediate need to consider any difficulty arising from the third respondent not being separately represented.
In relation to the interim hearing and the issue that was to be determined therein that I will get to shortly, it was not necessary for there to be any active participation in that interim hearing by or on behalf of the second or third respondents, albeit that the husband was seeking to rely on an affidavit by and filed for the second respondent filed last year.
Material Relied Upon
In the interim hearing, the wife relied upon a case outline document and summary of argument document prepared by her solicitor advocate, Ms Marano, and relied upon her application in a case filed 26 November 2020 and her affidavit sworn 21 November 2020 and filed that day. Pursuant to leave I granted after submissions thereon and giving a reason for findings, the wife also relied upon an affidavit sworn by her on 3 August 2021 and filed that day. She relied upon an affidavit by her solicitor advocate, Ms Marano that was sworn 19 July 2021 and filed that day. She also relied upon a financial statement sworn or affirmed by her on 20 January 2020 and filed with her initiating application in these proceedings.
In relation to the husband, he relied upon a case outline document prepared by his counsel, Mr Stapleton. He relied upon an affidavit of the second respondent, Mr C Dennison, sworn and filed 30 October 2020, and reference was made to his financial statement sworn by him on 21 March 2020. The husband had filed an affidavit on 2 August 2021 and sworn by him on that day, and that was objected to on behalf of the wife, and I made a finding that the husband could not rely on that affidavit in the interim hearing, and, though I commenced that finding by saying that I could give reasons later, I then went on to give reasons for that decision.[1]
The husband also relied upon two exhibits in the matter:
(1)Exhibit R1, which was a document attached to his counsel’s case outline document, being a letter dated 24 May 2019 on the letterhead of Bank N, addressed to the wife, and dealing with a term deposit account in the wife’s name at that bank;
(2)Exhibit R2, being a document that is found as annexure A to his affidavit of 2 August 2021. He was not given leave to rely on that affidavit as such at the hearing, but the document was tendered and admitted into evidence as a separate document standing on its own behalf. That it was part of that affidavit is neither here nor there. That document is on the letterhead of Bank N, headed Bank Account Statement, addressed to the wife in relation to an account in her name over a specific period.
As the amended response to the application in a case filed by the husband on 4 August 2021 was not before the Court for consideration and determination in the interim hearing that took place on 4 August 2021, the orders sought therein that affected the second and third respondents did not go to hearing in the interim hearing, and, accordingly, no material was sought to be relied upon by the second respondent, nor submissions made on their behalf, the second respondent not being affected by the issues.
THE PROCEEDINGS
In relation to the matter, proceedings were commenced by the wife filing her initiating application on 20 January 2021 seeking interim and final orders in relation to property matters. The first of the final orders sought by her in relation to a final adjustment of property between the parties under section 79 of the Act was for a sale of the former matrimonial home at C Road, Suburb D. In the course of property settlement, the wife filed an amended initiating application on 4 May 2020, in that amended initiating application seeking final orders, the first of which was a repeat from her original application seeking a sale of the Suburb D property.
The husband filed his response on 23 March 2020. The husband was self-represented in relation to the preparation and filing of that response, and therein the husband sought, by way of what he termed ‘further orders sought by the applicant’ in the course of that document, order 4 contemplating a sale of the matrimonial home property at Suburb D, but such a sale to be dependent on and, in effect, following a sale of a commercial property at H Street, Suburb E, New South Wales, which, on the evidence before the Court, turns out to be a commercial property of which the third respondent is registered proprietor, and it is the asset, if I can put it that way, of the unit trust.
The issues raised by the wife in her application in a case are:
(1)An order for a sale of the former matrimonial home, the Suburb D property, and machinery orders in relation to effecting that sale;
(2)An order that there be a distribution from the proceeds of sale of the Suburb D property to both the husband and the wife in the sum of $50,000, and:
said payment to be categorised by the trial judge at the trial of the proceedings.
As I will get to shortly, as the Full Court has pointed out that when a party presses for an order that involves the release of funds to a party, then the party should specify to the Court the particular power they are invoking in seeking that the Court exercise to make that order. Again, as I will come to, the Court has power under several heads under the Family Law Act 1975 (Cth) (‘the Act’) to make an interim distribution of funds to parties.
In the course of the hearing and the submissions made by Ms Marano on behalf of the wife, it was made plain that the distribution was sought on the interim basis by way of an interim property distribution, pursuant to section 80(1)(h) of the Act.
(1)Payment of outgoings going to both ownership and occupation of the Suburb D pending a sale;
(2)Exchange of possession from the husband to the wife of certain items of personal property listed in numbered paragraphs 1 to 14 in order 4 sought in her application in a case, and machinery orders as to how that was to be affected;
(3)As an alternate to the sale of the Suburb D property and interim distribution of funds therefrom, an order that the husband pay to the wife a sum of $850 per week as an occupation fee for occupying the Suburb D property; and
(4)Disclosure, with the wife seeking specific orders in relation to disclosure of documents by the husband, both pursuant to Rule 24.04 of the Federal Circuit Court Rules 2001 (Cth), a rule requiring exchange of documents by way of disclosure between parties, by no later than 14 days after the first Court event of a financial matter in the Court, and seeking a machinery order in relation to the completion, filing and serving of an undertaking as to disclosure, being a mechanism used for quite some time in the Family Court of Australia, but not a creature under the Rules of this Court at the present time. That does not prevent someone from seeking an order to that effect.
By way of procedural matter, the wife sought the leave of the Court to rely on more annexures to her affidavit than are allowed pursuant to Practice Direction No. 2 of 2017 ‘Interim Family Law Proceedings’.
The wife sought costs.
The issues that went forward to interim hearing in the matter
This matter had its first return date and several return dates thereafter before registrars, pursuant to the prevailing method of dealing with financial matters coming before the Court. After the third return date on 15 July 2020 before Registrar McGrath, the registrar noted that the matter had gone to a conciliation conference and had not resolved, and the matter was forwarded to my list on 13 August 2020, the matter being in my docket.
However, on 13 August the matter was again taken by a registrar and then came before me on 15 September 2020, at which time orders were made, after consideration, joining the second and third respondents. The matter went forward to a mention on 2 November 2020, and on 2 November 2020 orders were made in relation to identifying a suitable expert for valuation of real property, valuation of personal property, and valuation of the unit trust – more specifically, valuation of the share held by each of the parties in the unit trust.
The matter came before the Court again on 14 December 2020, at which time orders were made appointing:
(1)Ms J of K Finance Professionals as a single expert witness for a valuation in relation to the unit trust;
(2)Mr L as a single expert witness in relation to valuation of the rural property involved in the unit trust, the Suburb E property; and
(3)M Property Valuers as single experts to prepare a valuation of the Suburb D property, updating their earlier valuation thereof.
By that time, of course, the wife had filed her application in a case, and directions were made setting it down for interim hearing on 4 August 2021, and, specifically, a direction that:
The first respondent husband file and serve any response to the application in a case and any affidavit in support by no later than 4 pm on 19 February 2021.
A further order was made that:
On an interim hearing, only one affidavit will be read for each witness, including by the parties, with that being a composite affidavit of all the evidence to be presented for that witness.
The first quoted direction is relevant to the affidavit sought to be relied upon by the husband in relation to which leave was not granted. The second direction quoted is in relation to the short updating affidavit sought to be relied upon by the wife in relation to which leave was granted.
The matter came before her Honour Judge Harland as part of the winter callover in the matter on 2 August 2021, two days before it came on for the interim hearing, and her Honour made orders that by 29 November 2021 the parties attend a property mediation with a mediator to be agreed within seven days of the order, each party to pay one-half of the mediator’s fees, and other relevant orders in relation to that mediation taking place, and her Honour adjourned the matter to 8 December 2021 for a compliance hearing in the Sydney Registry before her Honour in relation to those orders. Of course, I have not tampered with any of that.
INTERIM HEARING
At the interim hearing, I received oral submissions on behalf of the applicant wife from her solicitor advocate, Ms Marano, and oral submissions from Mr Stapleton as counsel on behalf of the husband. I also received a short reply on behalf of each of those parties.
In preparation for these reasons, I have carefully read and taken into account all of the material relied upon by the parties in the interim hearing, and I have reviewed my notes of the oral submissions, and I have listened to the whole of the recording of those oral submissions to refresh my memory.
This is what has become known fairly widely in matters under the Act as a ‘Strahan’ case. In that regard, I am aware of and I take notice of what fell from the Full Court of the Family Court of Australia in Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166, and particularly in the joint judgment of Boland and O’Ryan JJ at paragraphs 114, 118, 132 to 135 inclusive, 137 to 139, and the judgment of Thackray J at paragraphs 224 to 226, which I reproduce herein:
[114] Given that there is only one exercise of power under s 79 of the Act and that it is preferable that there be one final hearing of s 79 proceedings, an issue arises as to the circumstances in which there may be an earlier exercise of the power. We propose to only deal with this issue in the context of s 80(1)(h).
…
[118] We agree with the submissions of senior counsel for the Wife in relation to the approach to be taken to the hearing of an application for an interim property settlement order. 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.
…
[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.
[133] In Harris at 79,930 the Full Court gave some examples of circumstances where it may be appropriate to exercise the power being “where both parties agree to the disposal of some assets pending the trial” and “[u]rgent situations” to avoid injustice. Another example is where, as in this case, one party requires funds to assist in defraying the costs of litigation without which funds an injustice may be caused.
[134] Then turning to the substantive step we adopt what the Full Court said in Harris at 79,930 in relation to the second and third matters which we will now discuss.
[135] In relation to the second matter, as the jurisdiction under s 79 of the Act is being exercised the provisions of that section must be considered and applied but with limitations given that it is not the final hearing. There is also no requirement of compelling circumstances in relation to the substantive step.
…
[137] Once a court proceeds to exercise the power in s 79 of the Act, being in the substantive phase, a court is required to undertake consideration of the matters in s 79(4) including by reference to s 79(4)(e) the matters in s 75(2) so far 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 receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made”: Zschokke; Polletti and 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.
[138] The legislation does not prescribe what the Full Court in Zschokke at 83,218 described as “preconditions” and nor would we seek to exhaustively prescribe matters that may be relevant to take into account in the exercise of the discretion under s 80(1)(h) of the Act. As to the three “criteria” identified by the Full Court in Zschokke, we accept that an inability on the part of an applicant for an interim property order to defray the costs of litigation to meet his or her litigation costs would be a relevant matter to take into account at the procedural or first stage. Senior counsel for the Wife submitted that it may be relevant at the substantive or second phase in reviewing the “necessarily limited and impressionistic budget for costs” to ensure that the application is bona fide. We are of the view that it may be that any issue about the bona fides of an application is relevant at the procedural phase in the context of considering if in the interests of justice it is appropriate to make an order before the 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.
…
[224] In every defended case one of the parties will claim they are entitled to a payment or transfer of property from the other party. In many cases the other party will acknowledge they are likely to be ordered to transfer property or make a payment. That, however, could not of itself be sufficient to make it appropriate for the Court to make an interim order. Circumstances may change radically during the course of proceedings, as has been seen with recent severe fluctuations in the market. The personal circumstances of the parties may change dramatically. Furthermore, although a party may anticipate ultimately being ordered to transfer property or make a payment, they may legitimately expect to obtain an order for costs against the other party which will be satisfied from funds or property that would otherwise have been transferred.
[225] These sorts of considerations provide a strong basis upon which the Court should maintain its traditional stance that there should ordinarily be only one hearing of disputes concerning alteration of property issues. I accept the submission of senior counsel for the wife that something out of the usual course would need to be established before the Court could be expected to devote its resources to resolution of disputes about interim alteration of property interests. However, once the Court has determined that it is appropriate to embark upon the hearing of an interim dispute, it has no alternative other than to exercise (or decline to exercise) the power to make an interim order by application of the relevant provisions of the legislation.
[226] In my view, the two step approach advocated by senior counsel for the Wife aptly encapsulates the way the Court should approach an application for interim property settlement. The Court must first identify circumstances that make it appropriate to give consideration to exercising its power to make an interim order. It is at this stage that the Court has regard to the policy consideration that it is generally in the interest of the parties and the Court for there to be only one exercise of the s 79 power. However, once the Court has determined that the interests of justice require it to exercise the power, the conditions on which the power is to be exercised are governed only by the obligation to make an order that is “appropriate” and to ensure that the proposed order is “just and equitable” by reference to the matters set out in s 79(4).
I also take into account the judgment of then Federal Magistrate, now Judge Riethmuller in Wenz & Archer [2008] FMCAfam 1119, a judgment that has been referred to with approval on a number of occasions by the Full Court of the Family Court of Australia.
I also take into account what fell from the Full Court of the Family Court of Australia in Salvage & Fosse [2020] FamCAFC 144, and in that matter in particular from the joint judgment of Ryan and Aldridge JJ at paragraphs 15 and 16, 24 and 25, and 29, and the judgment of Watts J at paragraphs 56 to 71 and 130 to 131, which I reproduce herein:
[15] It would not be just, for example, for the respondent to have to pay the legal expenses of the applicant, where the case to be taken was weak, fanciful or misguided or where the effect on the respondent of such an order would work an injustice. We do not consider it helpful, however, for there to be a need to identify the applicant’s case as strong, persuasive or such like to justify an order. That invites a descent into semantics and an artificial characterisation of the strength of the proposed proceedings. The consideration should be whether the case to be raised by the applicant is sufficient, in all of the circumstances, as to its nature and prospects, to justify an interim order for costs. This conclusion accords with Zschokke at 83,217, where the Full Court said:
… We agree that, as was submitted by [c]ounsel for the wife, the requirement of justice (which was expressly drawn to attention by the Full Court in Hogan and also implied by Brennan J in Breen) must remain a “basic” condition in the making of an order of the type in question under s 117(2).
(See also Strahan at [124]).
[16] In this matter, the respondent faced the task of persuading not only the primary judge that she had a claim to set aside the Cohabitation Agreement of sufficient merit to justify an interim costs order but also that her subsequent property application was of sufficient merit and value to justify that course. There would be no point in providing funding to pursue a case to set aside the Cohabitation Agreement, unless the Court was satisfied that the respondent would be likely to receive a property settlement of such value as to justify that course.
…
[24] It was not suggested to his Honour that an evaluation should be undertaken of: the quality and nature of the claim to set aside the Cohabitation Agreement; the likely result that would ensue if a subsequent property division was undertaken; and the likely costs of such a course. No authority directly suggests such a course. We consider, however, that such a consideration is essential in a case such as the present.
[25] How else can it be determined that an interim costs order is justified in all of the circumstances? In other words, what is missing is an assessment of the nature and quality of any property claim – what is the likely division that would follow, and are such proceedings justified by the nature and quality of the claim to set aside the Cohabitation Agreement and the likely costs involved?
…
[29] It follows that the Court did not undertake a necessary consideration. Whilst the grounds of appeal are not well drawn, Grounds 3 and 4 do raise this.
…
[56] When making an order for litigation expenses, it is important to identify the source of power because that will determine the relevant considerations for making the order (see Zschokke and Zschokke (1996) FLC 92-693 (“Zschokke”); Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578 (“Paris King Investments”) and Strahan & Strahan(Interim Property Orders) (2011) FLC 93-466 (“Strahan”) at [221]).
[57] The four possible powers referred to by relevant authorities for the making of an order for interim provision of litigation expenses are the powers to make orders as to: property (s 90SM and s 90SS(1)(h) and (k)), costs (s 117(2)), maintenance (s 90SE) and injunctions (s 114(2A)(c)).
[58] In a financial case involving de facto spouses, an order for litigation expenses will most usually be made relying upon the property power. If unavailable, for example because of the need to determine jurisdictional facts, the next most obvious source of power is s 117(2) of the Act (see Breen v Breen (1990) 65 ALJR 195) (“Breen”); Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184 at [2], [10], [60]–[62]; Zschokke and Strahan).
[59] Section 117(2) is available “in proceedings under this Act”. In this case, the respondent has commenced proceedings under s 90UM of the Act to set aside the Cohabitation Agreement. This section provides jurisdiction to, in effect, decide whether s 90SA(1) excludes the respondent from making an application under s 90SM. The availability of this Court to determine jurisdiction attracts the provisions of s 117(2).
[60] Section 117(1) expresses the general rule that a party to proceedings under the Act shall bear his or her own costs. However, the High Court in Penfold v Penfold (1980) 144 CLR 311 (“Penfold”), said at 315:
It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s. 117 (2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs…
[61] The requirement of justice must remain a basic condition in the making of an order of the type in question under s 117(2) (see Strahan at [124] quoting Zschokke). That should be understood to mean justice when balancing competing considerations in favour of or against each of the parties.
[62] When considering whether it is just to make an interim order for the provision of litigation expenses pursuant to s 117(2), the court shall have regard to the matters set out in s 117(2A) of the Act. In Zschokke (at 83,217) the Full Court said:
If the order is to be made under s 117(2) then, in our view, the matters contained in s 117(2A) must be addressed, and this would seem to have been recognised, if not expressly at least by implication, by the Full Court in Poletti. In saying this we acknowledge that a number of the paragraphs in the sub-section (notably paragraphs (d) failure by one party to comply with court orders; (e) total lack of success by one party in the proceedings; and (f) existence and terms of an offer for settlement) may not have relevance in an application for an order of the type in question. We also acknowledge that it may well be necessary in such an application for the Court to have regard to a range of relevant matters other than those specified in the sub-section, as is permitted by paragraph (g)…
[63] In relation to s 117(2A)(a), apart from the general financial circumstances of each of the parties to the proceedings, the Full Court in Zschokke identified the following particular considerations:
•a position of relative financial strength on the part of the respondent;
•a capacity on the part of the respondent to meet his or her own litigation costs; and
•an ability on the part of the applicant to meet his or her litigation costs.
[64] As to such other relevant matters, under s 117(2A)(g), the plurality in Strahan at [96] and [141] specifically adopted the following considerations referred to in Paris King Investments at [30]:
•the applicant should have “at least an arguable case for substantive relief which deserves to be heard”;
•there should be evidence of the applicant’s “likely costs of litigation” (see also Wilson and Wilson (1989) FLC 92-033 at 77,453); and
•it is not “an essential pre-condition” that the applicant’s legal representatives will not continue to act unless the costs are paid or secured on an ongoing basis.
[65] In respect of the first of the considerations referred to in the preceding paragraph, that the applicant should have at least an arguable case for substantive relief which deserves to be heard, the trial before the primary judge and the submissions before this Court proceeded on the basis that the statement made by the Full Court in Strahan at [141] was correct. The primary judge was asked to make an assessment as to whether or not the respondent had at least an arguable case for substantive relief which deserved to be heard. The test adopted in Strahan was formulated by Brereton J in Paris King Investments at [30]. It was an objective test. Brereton J had apparently drawn upon an earlier statement made by Moss J in Chester v Chester (1995) FLC 92-612 (“Chester”), which was in different terms. Moss J said, “[i]t is desirable that the [a]pplicant should provide evidence of having been advised by the [a]pplicant’s solicitor that the [a]pplicant has a good case on the merits” (at [27]). This was a subjective test and in this case, as discussed below, the respondent’s solicitor made such a submission. The test proposed by Brereton J and adopted by the plurality in Strahan went beyond the mere advice of the lawyer for the applicant for the litigation funding order. The test is “at least an arguable case”. The hearing of an application for a litigation funding order is not an occasion to run a rehearsal of the substantive application on tested evidence. As Kirby J said, in the context of a summary dismissal application, in Lindon v Commonwealth (No 2) (1996) 136 ALR 251 at 256, “[e]xperience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment”. Departure from an earlier decision of the Full Court should be done “cautiously and only when compelled to the conclusion that the earlier decision is wrong” (Nguyen v Nguyen (1990) 169 CLR 245 at 268-270). It was not argued before us that the Full Court in Strahan was wrong. Absent argument, I am not compelled or prepared to say that the Full Court had set an inappropriate test.
[66] The plurality in Strahan at [96] also made reference to further considerations articulated in Paris King Investments at [31]. The first was that an order may “make a provision for litigation expenses at a rate that appears reasonable in all the circumstances”. In Kendling v Kendling (2008) 39 Fam LR 404 at [48], the Full Court, referring to a statement by Nygh J at first instance in Poletti & Poletti (1990) 15 Fam LR 794 (“Poletti”), said that it was not necessary to require an “itemised bills of cost” or that the costs “be at scale” or that a taxation assessment under the Family Law Rules 2004 (Cth) is required. The second was that “an order can be made in respect of costs already incurred as well as of future costs”. In Chester, Moss J at [26] notes that general principles expressed in earlier cases under the Matrimonial Causes Act 1959 (Cth), included recognition that the object of an interim costs order “is to provide the [a]pplicant with a means to continue the conduct of the litigation not to reimburse the [a]pplicant for moneys already expended on or towards her costs”. In Paris King Investments, Brereton J at [31] expressed the view that an order can be made in relation to costs already incurred but the exercise of distinction between costs already incurred and those to be incurred may be relevant to the discretion to make an order, and its quantum.
[67] Cases involving a dispute on the facts as to jurisdiction, may raise the question as to whether or not an order for litigation expenses is recoverable if the party against whom the order is made is ultimately successful in opposing the application for substantive relief. In the context of an interim property case, the Court in Strahan at [99] endorsed the statement in Harris and Harris (1993) FLC 92-378 (“Harris”) at 79,930:
… [T]he 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.
[68] However, in relation to an order for litigation expenses, the Full Court in Zschokke at 83,221 said:
However, while the conclusion in relation to the uncertainty of the amount of the [applicant’s] eventual property settlement award may be fatal to an application under s 80(1)(h), it is not necessarily so to an application under s 117(2). It is just one of the matters to be balanced in the exercise of the discretion under the latter sub-section.
[69] As Kent J said in Rakete v Rakete (2012) 48 Fam LR 325 (“Rakete”) at [55]:
… [T]he capacity to repay, whilst a relevant consideration, cannot be elevated to the status of an essential pre‑condition to the making of an Order in cases involving s 90K [or s 90UM]…
[70] The High Court in Breen said at 195–195 that an order for the interim provision of litigation expenses “should be so framed as to protect the parties from any risk of injustice arising from the manner in which the funds are expended”. There is no question that his Honour fulfilled that requirement in this case by attaching to the litigation funding order, the provision “which monies are only to be used to meet the [respondent’s] legal costs in these proceedings”. If a party pays to the other party monies for litigation funding, that party at least should obtain the advantage of moving the litigation towards finality.
[71] The Full Courts in both Harris and Strahan make comments to the effect that there should be as few interim applications for orders for litigation expenses as possible.
…
Conclusion about the primary judge’s exercise of discretion
[130] An appellate court will avoid an overly critical, or pernickety, analysis of the primary judge’s reasons, given the large element of judgment and intuition involved. This court does not have the authority to disturb a decision simply because, faced with the same material, it might have reached a different conclusion to that under appeal. The claim that the exercise of the primary judge’s discretion miscarried when making the litigation funding order, fails.
Conclusion about the appeal and leave to appeal against the litigation funding order
[131] Given that none of the grounds of appeal which challenge the order for litigation expenses succeed, the appeal against the order would fail if leave were granted. The decision of the primary judge is not attended by sufficient doubt to warrant it being reconsidered by this court and the first limb of Medlow & Medlow (2016) FLC 93-692 at [57] is not satisfied. Accordingly, the appellant’s application for leave to appeal the litigation funding order should be dismissed.
I was referred to and I take into account the Full Court judgment in the matter of Marchant & Marchant (2012) FamCAFC 181.
In relation to the principles that the Court should apply in considering these matters, I remain very much aware of the very helpful examination of the relevant law in relation to the Court’s powers in interim distribution applications from the judgment of his Honour Judge Anthony Kelly in the Federal Circuit Court of Australia in Candlin & Candlin [2017] FCCA 2211, in the course of which his Honour, as I say, went through the various heads of power – the spousal maintenance power, interim property power, and interim costs power.
But the guiding principles, of course, are found in the Full Court’s judgment in that particular edition of the multi-volume matter of Strahan & Strahan aforementioned, and therein the Full Court set out the principles to be applied in matters where the relevant power being exercised is interim property power under section 79 and section 80(1)(h) of the Act, and it is that power upon which this matter was argued, and it is that power that I would apply if making an order in relation to a property distribution in that matter.
In Strahan & Strahan aforementioned, in paragraph 132 the Court 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.
The Court then went on to make it plain that, having approached the first consideration and the interests of justice as the overarching consideration, the Court would move on, if appropriate, to the second consideration, which is to have regard to relevant matters in section 79 of the Act.
The Court cautioned in that and other matters that the Court must keep well in mind that the final outcome of a property settlement proceeding should not be compromised by an interim property order. Either the remaining property needs to be adequate to meet the legitimate expectations of the parties at the final hearing, or the order needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so to achieve a proper adjustment of the property between the parties, if it is ultimately considered appropriate, just and equitable to proceed with a section 79 matter.
In Harris & Harris (1993) 113 FLR 472, the Full Court cautioned, prior to the days of Strahan & Strahan:
As a generality, the interests of the parties and the Court are better served by there being one final hearing of section 79 proceedings.[2]
[2] Harris & Harris (1993) 113 FLR 472, 479.
EVIDENCE
I will go briefly to the evidence of the parties in the matter, and it is not a great deal to go on, to use a bit of a colloquial expression in starting.
In relation to the evidence presented by the wife contained in her affidavit of 21 November 2020, she deposes that the matrimonial home, or the Suburb D property, as I will refer to it, has been occupied by the husband since the parties separated on 17 or 18 December 2019, depending on which party’s evidence ultimately prevails (the husband says 18 December 2019, and the wife says 17 December 2019). Nothing turns on that, of course.
The wife notes that the husband does not pay an occupation fee for living in the marital home. Then again, if the Court was considering making orders in relation to the husband paying an occupation fee, the Court would move to consider the principles in relation to co-ownership that were expounded by Meagher JA in the Court of Appeal in Forgeard v Shanahan (1994) 35 NSWLR 206. It is also reported in the old de facto relationship cases with CCH.
The wife deposes that she has been living in rental accommodation since 2 October 2020. She notes that the husband cancelled the home insurance on the Suburb D without her knowledge and consent, and that she then took steps to ensure that the property was insured so as to safeguard the parties’ joint interest in the value of that property. The wife gives some evidence to the effect that she has observed the Suburb D to be in an unkempt and unmaintained state.
Going on to the Strahan issue, the wife indicates she has, to the date of this affidavit in November 2020, paid $44,000 in legal fees in relation to this matter, and that at that time she was “running out of funds to pay for legal fees”. She deposes that she seeks the interim distribution of $50,000 from any proceeds of sale of the Suburb D to pay legal fees and living expenses. She then goes on to give some evidence in relation to her sources of income and expenses that evidence being updated in her later affidavit.
She says that in November 2006 she suffered a work injury that led to workers’ compensation payments for about 10 years, and which, she deposes, limits the kind of work in which she can engage. She has been engaged in casual retail shop work. She says that she lost the employment that she had in September 2020 because of the SARS-CoV-2/COVID-19 pandemic. As at 19 November, she had $25,000 in an Bank E account and $600 in an Bank E(2) account.
In paragraphs 15 and 16 she gives some evidence in support of her application that she be able to recover possession of certain items of personalty contained in the Suburb D, and she lists those items. She gives some evidence in relation to attempts having been made to negotiate that with the husband being unfruitful.
She says the husband is a finance professional, and he is currently employed by the Employer J and also is contracted with a private corporation, of which the second respondent is a shareholder and director, for remuneration.
In relation to disclosure, she refers to correspondence forwarded by email and letter in the period from 14 September 2020 to 20 November 2020 by her solicitors to the husband, seeking disclosure from him.
In her updating affidavit, the wife indicates that in December 2020 she commenced employment with a well-known Company on a part-time basis as a sales assistant, and was stood down from that employment on 26 June 2020 because of the COVID-19 situation.
She has applied for and been allocated JobSeeker payments through Centrelink of $824.24 per fortnight commencing in mid-July 2021. She says she has still in rental premises, paying $500 a week rent. She has three savings accounts, one with $3780, another with $3503 and another with $20.47. She updates the information in relation to her weekly expenses and then performs the mathematics that indicates a shortfall between weekly expenses and income of $412.12 per week.
In relation to her solicitor providing an affidavit in relation to the Strahan issue, I note that there is a costs agreement between the wife’s solicitors and herself. One of the terms of the agreement is that the firm accounts are to be paid within seven days for the issue of a tax invoice after completion of work, or monthly, or at other times as agreed between solicitors and client.
It confirms that the firm has received from the wife $60,125 to the date of this affidavit of 19 July 2021. She estimates that the legal fees for the wife to proceed to a trial will be about $150,000 plus GST. She estimates that the fees for a mediation will be about $15,000 plus GST, plus contribution to the mediator’s fees of about $5500 plus GST per day.
The solicitor says that the matter is complex, due to the respondent husband being unrepresented and not providing full disclosure, although the husband is now represented, and also in relation to the involvement of the other respondents and the issues relating to valuation and so forth.
It became very plain in the course of the interim hearing – and the transcript would bear that out, without going into detail – that this matter is complex, involving matters asserted by the husband in relation to the second respondent and the third respondent under corporations law, including assertions of improper conduct pursuant to the Corporations Act 2001 (Cth).
Self-evidently, from the orders already made, it involves question of valuation in relation to real property, personal property and in relation to the unit trust, though, as I said during the interim hearing, if the assets of the unit trust are comprised of the commercial real estate property at Suburb E plus any income generated, then valuation thereof should not cause a great deal of difficulty.
The solicitor goes on properly to indicate that the solicitors are not prepared to wait until completion of the proceedings to receive costs and not prepared to be responsible from their own pocket or liable for payment of disbursements, including experts’ fees, mediator’s fees and counsel’s fees. If the wife is unable to meet the solicitors’ expenses, then the solicitor indicates that they would be forced to cease to represent the wife until some other satisfactory arrangement can be made.
In that regard, I am reminded of a judgment of Austin J in the Family Court of Australia in the matter of Ming & Dao [2020] FamCA 726, where in paragraph 27 his Honour refers to this concept of solicitors indicating they must cease to act for a party who cannot afford to pay their fees in circumstances where the solicitors are not prepared to wait until the end of the matter, and his Honour says in paragraph 27 thereof:
[27] If the husband’s lawyers now terminate their retainer agreement because of the husband’s consequent inability to progressively pay their costs and disbursements, then so be it. There will presumably be other competent solicitors and barristers willing to take on the husband’s representation in the proceedings, given his current lawyers’ contention he will ultimately be entitled to –
and his Honour then refers to some properties and makes plain that this was a matter where the unencumbered pool was going to be at least and probably in excess of $5.55 million.
This case is a bit different from that. Perhaps, with the very greatest of respect, his Honour’s approach was a little harsh if applied to what one could call the ordinary husband and wife proceedings of this nature.
The evidence relied upon by the husband consisted of an affidavit by the second respondent and two exhibits. The affidavit was that of the second respondent of 30 October 2020, and that was relied on, in essence, to found the submission that there was sufficient funds to come to the parties ultimately from their interest as to 25 per cent each in the Trust K, being a unit trust of which the third respondent is the corporate trustee, and, further, in relation to a sum of money that the second respondent in paragraph 31 of that affidavit indicates may be repayable to the husband by the Trust K.
But of more import in the matter is exhibit R1, the letter of 24 May 2019 on a letterhead of B, which presents evidence that as at 20 May 2019, that is, about six months prior to the parties’ separation, the wife had in a term deposit account that on that date matured with Bank E a sum of half a million dollars. The source of those funds was indicated in submissions, though not in the evidence relied upon by any of the parties in the hearing. I will leave the source of those aside at the moment.
Exhibit R2, which is not itself specifically dated, but is in the nature of a Progress Saver account statement of an account in the wife’s name with Bank E for the period 25 March 2020 to 25 September 2020, indicating an opening balance at 25 March 2020 of $98,326.88 and a closing balance as at 20 September 2020 of $58,001.48.
Included on that document is what I will refer to as a bar graph indicating in a rough graph style the balance of that account at various times. Given that the bar graph goes from an October through to a September, and that the document is stated to cover the period 25 March to 25 September 2020, the September must, self-evidently, be September 2020. Therefore, the October with which the graph starts must be October 2019.
The relevant part for the evidence is the bar graph indicates that in December 2019 there was a sum of about $300,000 in that account, whereas in January 2020 there was a sum of $100,000 remaining in the account. Accordingly, in the period from the end of December 2019 to the end of January 2020, a sum of $200,000 had gone from the account.
CONSIDERATION
Now, the first issue raised in the matter is the application of the wife that the Suburb D be sold. That, of course, is an order available to the Court on the interim basis on various heads, either by way of an order in pursuance of a property distribution, which is what is put here, or even an order under section 114 of the Act by way of a mandatory injunction requiring the parties to take certain steps in relation to their property, often used in the cause of preserving assets in circumstances where the Court is satisfied equity is being eroded and that it should be addressed in the interests of justice. It is not the basis put before the Court on the evidence in this matter.
I have the financial statement of the wife and the financial statement of the husband, as I have referred to, and they reveal that, as at the relevant dates of those financial statements, both of which go back quite some way now – the husband’s to March of 2020 and the wife’s to January of 2020 – nevertheless, at that time the husband was opining that the Suburb D had a value of $940,000, and the wife opining it had a value of $1 million, and it being mutual between them that it was unencumbered, that there is not security by way of registered mortgage for any loan account.
The thrust of the case put forward by the wife was that she needs funds for the payment of legal fees in this matter so that she can maintain legal representation in what is, on the telling of any of the parties, a complex matter, or a matter with its complexities, and, secondly, to provide some funds to her for payment of living expenses. She asserts that the only source for those funds in an immediate sense is by way of sale of the Suburb D.
The thrust of her case in relation to the personalty she seeks to recover is that she needs that to set herself up in her rental accommodation with the ordinary necessities of life, that they are available, and that that would save her having to expend money, which she does not, she says, really have on replacing those items.
In relation to disclosure, she says that she has not received full and frank financial disclosure as required by the Act and the Rules from the husband, and that the husband needs to be compelled by the Court.
The thrust of the husband’s case is that the wife had a significant sum of money about six months prior to separation, half a million dollars, at about the time of the separation something in the order of $300,000, and that the wife has given no evidence or explanation, certainly not in her evidence before the Court on the interim hearing, as to what has happened to those funds.
I note the information I have gone across that is in exhibit R2, and I also note in the wife’s financial statement from January 2020 that she does indicate that she has the Bank E account with a balance of about $100,000. That pairs with what we find in the graph in exhibit R2. But in part M at item 59, that requires under the Federal Circuit Court Rules (Cth) that she specify disposal by her following separation of any property or by gift or otherwise, that she makes no disclosure whatsoever. But, self-evidently, at some time between the end of December 2019 and the end of January 2020, something in the order of $200,000 went out of that.
Some asserted factual matters were given in submissions on behalf of the wife on the interim hearing, but, of course, that is not evidence. Evidence is not given in submissions. Wherever that went (unless, in fact, the balance of that account was reduced from the $300,000 it was in December 2019 to the $100,000 it is in January, after the filing of the financial statement) the wife was bound, if nothing else, to make her disclosure under rule 24.03(1)(e) in part M of her affidavit. Self-evidently, it had been disposed of, according to her evidence, prior to that time because of the balance she gives in item 37 of $100,000. The Court is left without any evidence as to what has happened to that substantial sum of money that otherwise was in the wife’s power and control.
In relation to the first issue, the sale of the matrimonial home, it is an order sought on a final basis by the wife. It is an order sought on a final basis by the husband, though he seeks the orders be in a sequence with the sale of the real estate asset of the unit trust and that the Suburb D sale come after the confirmation of the sale of the Suburb E property. I have no evidence from him as to why such a sequence should be made to the orders.
The Suburb E property forming part of the asset of the unit trust is necessarily involved in the controversy that exists involving the husband and the second respondent and the third respondent, and necessarily involving the wife, because she has a 25 per cent interest in the unit trust.
I do not have sufficient evidence whatsoever to work out what that controversy is, and certainly the easiest road to provide funds for interim distribution between the parties, if that is considered appropriate, is via sale of the matrimonial home, because, on the evidence before the Court, based upon the affidavit evidence, particularly the updating affidavit evidence of the wife, that is the only source by which such a fund can be obtained.
Accordingly, it is proper to consider whether there would be a partial property settlement before deciding if the Court needs to make orders for sale of the house.
Is it in the interests of justice for an interim property distribution order to be made? As the Full Court said in the normal course of things, a section 79 order adjusting property between parties is “once and for all order made after a final hearing”.
The wife asserts that it is in the interests of justice here for an order to be made releasing $50,000 to each party, because without such a provision of funds to her, she would not be in a position to continue to engage her solicitors. She would be left without legal representation.
I have referred to what fell from Austin J in Ming & Dao, and I find that without evidence presented of a firm of solicitors willing to undertake a matter on a pay-on-completion basis and to bear themselves the cost of disbursements on the way through, I cannot assume that such assistance would be available to the wife. Without legal representation, the wife is going to be left to her own devices in a matter where, on what is put to the Court, there are significant issues under the corporation law to be dealt with before the Court can find its way through to unravelling the matrimonial asset pool.
Identifying the matrimonial asset pool and the ownership of the components of the matrimonial asset pool and the liabilities under the general law and equity and any relevant legislation is the very first task the Court has to undertake in approaching any property adjustment matter under section 79 of the Act, per the High Court in Stanford & Stanford (2012) 247 CLR 108 and the Full Court in Bevan v Bevan (2013) 279 FLR 1.
That is a task that cannot be undertaken by the Court at the moment. The Court does not have sufficient evidence to do that, and it seems there is some air of uncertainty attendant upon that until the corporate law issues are worked out between the parties, matters of liability, matters of valuation and so forth.
The husband has been self-represented in this matter from the commencement of the proceedings until just before the interim hearing. As conceded, and conceded very properly – and I anticipated that concession when I saw that Mr Stapleton, a very competent counsel had come into it – the husband’s response for a start would need some retooling so as to put his application before the Court on a proper basis.
Self-evidently, the husband has not been able to competently and appropriately represent himself in these proceedings, where there are complexities of issues. No one should take that as some sort of criticism of the husband – it is absolutely not. The husband is not a lawyer, he is a finance professional.
Family law is a speciality area, and parties acting on their own behalf, unfortunately, have to find their own way. The Court is not here to give them advice, and if they cannot find their own way through the relevant principles and law and so forth, well, unfortunately, they end up falling behind. The husband has realised that he needs specialist family law assistance in this matter, and he obtained it for himself very late before the interim hearing, but, nevertheless, he obtained it.
I find that in this sort of matter it will be greatly to the disadvantage of any of the parties, with the exception perhaps of the third respondent, to be self-represented through the further course of this matter, and, certainly, the wife, as a person with no skills in the areas of finance and law, would be severely disadvantaged in finding herself unrepresented in the proceedings. I find on that basis alone, leaving alone anything else, that is in the interests of justice that the Court go on to consider further the making of an interim distribution order.
The second consideration, of course, is the relevant matters under section 79 of the Act, which, of course, start with ‘is it just and equitable to proceed with an adjustive order’, and before the Court can make that decision, the Court is required by the legislation, as the High Court pointed out in Stanford & Stanford, to ascertain the assets and liabilities, and the ownerships thereof.
That is available to the Court here in vague terms in relation to the information before the Court on the interim hearing, more particularly from the financial statements of the parties than anything else, but, even based upon that, it would seem that an interim distribution of $50,000 to each of the parties is well within what each of these parties could anticipate receiving on a final determination of the property matter, given that, on the evidence before the Court at the moment, there would seem to be an equity of between $940,000 and $1 million of the parties themselves in the Suburb D, leaving aside what other assets and liabilities there may be in the matter, and bearing in mind evidence coming in, in the husband’s case, from the affidavit of the second respondent in relation to likely values found for the parties in their 25 per cent each interest in the relevant unit trust.
I find on the basis of the evidence, without going into it any further, that an interim distribution of $50,000 to each of the parties would not in any way put in jeopardy the legitimate expectations of each of the husband and wife as parties on the final hearing of the section 79 matter. I cannot see on the basis of what I have before me that it is an order that would conceivably be required to be reversed or adjusted on the making of final orders.
As a matter of discretion, should the Court go on to do that in the circumstances where there is evidence before the Court that the wife has had available to her in the six months prior to separation and following separation up to at least some time in January 2020 a considerable sum of money, starting six months before separation at $500,000 and in the month of separation being a sum of about $300,000?
In that regard, I have the wife’s evidence in her affidavit of November 2020 and her updating affidavit of August 2021 as to the current state of her liquid financial assets. What has happened in the meantime is something, no doubt, that will come out in the fullness of time. It may add to the complexity of the matter and it may add to the complexity of the legal arguments in the matter, but the evidence before me from the wife as to her current circumstance is not in any way in contest, because there is no evidence to the contrary and nothing that could be submitted to the contrary.
The submissions made and very properly made, based upon what was skilfully put before the Court in circumstances of the affidavit not being accepted, of the wife having some substantial assets up to a certain time does not mean that the Court should assume that they are parked away somewhere and available to the wife in substitution for anything that may come from the interim property distribution.
Accordingly, I find that it is a matter where it is in the interests of justice and under the considerations available to the Court under section 79 of the Act, it is appropriate to make an interim distribution and in the sum sought by the wife of $50,000 to each of the husband and the wife. As I have found, the only reasonable place for that to come from is the matrimonial home. The sale of the matrimonial home is not an order that goes against or puts in jeopardy the final application currently on foot by either party.
In saying that, the husband, as indicated by his counsel, will be amending his response, but this matter was set down for the interim hearing, as I said, last year in December. It came on for interim hearing on 4 August. He had a lot of time to change his mind about his final orders, to get some legal advice, to put on any amended response that may include any order wherein he contemplates receiving in specie the matrimonial home, and that was not done, so I find it is mutual between the parties that on a final basis they contemplate that would be sold. Therefore, it is not defeating either party’s expectations in relation to final orders.
I find it is appropriate to make an order for the sale of the matrimonial home so that the order I have found appropriate in relation to partial distribution can be made.
In relation to the balance of the issues before the Court from the wife’s application in a case, based upon the submissions made for the parties, in particular by Mr Stapleton on behalf of the husband, I find that it is appropriate for the wife to be able to recover such of the personal property as referred to in order 4 sought in her application in a case as is contained in the Suburb D and available for her to recover, and I find there is no evidence before the Court to justify the making of orders in relation to the removal or collection of those items on behalf of the wife being otherwise than by arrangement between the parties through their solicitors, and not involving orders specifying as to who is to be there and who is not to be there.
As I have found that it is appropriate to make the order for sale of the Suburb D and interim distribution, I do not need to consider the wife’s order for an occupation fee.
In relation to disclosure, I heard submissions on behalf of both parties going to matters of disclosure. I consider it appropriate to make an order, as often made, that the parties exchange correspondence between their solicitors – and when I am referring to the parties, I am talking about the husband and wife – exchange letters between their solicitors to be created pursuant to orders specifying the disclosure sought and setting a date for the provision of disclosure, and in relation to both parties to make a backup order requiring what the law requires anyway: full and frank financial disclosure by the parties.
In relation to the wife’s application that the husband pay her costs of the application, consideration of those matters, of course, come after determination of the application, and such consideration, in the interests of justice, requires that both parties have opportunity, particularly the respondents of such an application, to make submissions on the question of costs in the light of the decision made on the application so that the provisions of section 117 can be properly considered by the Court. So I will make some directions in relation to that in the usual way.
In relation to the making of orders, I bear in mind that the only application properly before the Court today is the application in a cases of the wife of 21 November 2020, and, as I mentioned during the course of the hearing of this matter, it is applications that are properly before the Court that the Court must consider.
Oral applications sought to be advanced before the Court on the spot going to substantive matters and other versions of orders proposed by parties other than in the course of the Court considering submissions and so forth is not a proper course of conduct in a court of record, a court of law and equity. In that regard, I referred the parties in the course of the hearing to what fell from, I think, Tree J in Newett & Newett [2020] FamCAFC 76 and also what fell from Kent J in Melville & Melville (No. 3) [2020] FamCAFC 231.
According, it is appropriate to make orders in relation to the issues on the findings I have made as set out in the application in a case of the wife.
I certify that the preceding ninety-nine (99) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Morley. Associate:
Dated: 8 September 2021
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