Dobkowski & Dobkowski
[2022] FedCFamC2F 369
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Dobkowski & Dobkowski [2022] FedCFamC2F 369
File number(s): SYC 6392 of 2019 Judgment of: JUDGE MORLEY Date of judgment: 3 March 2022 Catchwords: FAMILY LAW – procedure – application for a litigation guardian – application for release of funds – application for costs. Legislation: Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)
Federal Circuit and Family Court of Australia Family Law Rules 2021 (Cth)
Cases cited: Bevan & Bevan (2013) 279 FLR 1
Candlin & Candlin [2017] FCCA 2211
Dalle-Molle by his Next Friend Public Trustee v Manos & Anor [2004] SASC 102
Dennison & Dennison [2021] FCCA 2039
Goddard Elliot & Fritsch [2012] VSC 87
Marin & Salmon [2013] FamCAFC 88
Nsair & Gyaw and Anor [2018] FamCA 418
Remington & Remington [2021] FedCFamC2F 99
Stanford & Stanford (2012) 247 CLR 108
Strahan & Strahan (2009) 241 FLR 1
Division: Division 2 Family Law Number of paragraphs: 110 Date of hearing: 2 March 2022 Place: Sydney Counsel for the Applicant: Ms Cantrall Solicitor for the Applicant: Eden King Lawyers Pty Ltd Solicitor for the Respondent: Mr Vaughan of Michael Vaughan & Co Solicitors ORDERS
SYC 6392 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR DOBKOWSKI
Applicant
AND: MS DOBKOWSKI
Respondent
ORDER MADE BY:
JUDGE MORLEY
DATE OF ORDER:
3 MARCH 2022
THE COURT ORDERS THAT:
1.A litigation guardian be appointed pursuant to Rule 3.12 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’) for the Respondent Wife MS DOBKOWSKI born in 1943 (‘the Wife’) in these proceedings.
2.Pursuant to Rule 3.16(3) of the Rules, the Attorney-General for the Commonwealth is requested to exercise the Attorney-General’s powers in relation to Rule 3.16(4) in her discretion to appoint in writing a person to be a manager of the affairs of the Wife in these proceedings.
3.Pursuant to Rule 15.13, leave is granted to any litigation guardian appointed in writing by the Attorney-General for the Commonwealth pursuant to the request in these orders to have a copy of all Court documents filed in these proceedings together with a copy of all orders made in these proceedings.
4.Within seven (7) days, the parties are to do all things and sign all documents necessary to release
(a)The sum of $25,000 from the Commonwealth Bank of Australia with account number …67 to the Husband and the Husband is ordered to forthwith upon receipt of such sum pay the whole of that sum of $25,000 to the B Aged Care for the Wife’s outstanding debt for accommodation customer number …; and
(b)The sum of $25,000 from the Commonwealth Bank of Australia with account number …68 to the Husband (or his nominee) for the payment of his legal fees, his legal fees to be incurred, and other living expenses.
5.That each party pay his or her own costs of these interim proceedings.
6.The proceedings are listed for further mention and directions at 9:30AM on 4 August 2022.
THE COURT NOTES THAT:
A.In relation to the request made to the Attorney General of the Commonwealth pursuant to Rule 3.16 (3) of the Rules in relation to appointment of a litigation guardian for the assistance of the Wife, the Court respectfully suggests that the Attorney-General appoint the NSW Trustee and Guardian.
B.The interim orders made herein for the release of two sums of $25,000.00 are made by way of partial property distribution under section 79 of the Family Law Act 1975 (Cth) pursuant to section 80(h).
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 a pseudonym Dobkowski & Dobkowski has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MORLEY:
These are orals reasons in relation to an interim hearing that took place yesterday 2 March 2022 in these proceedings between Ms Dobkowski as the applicant wife and Mr Dobkowski as the respondent husband.
The interim hearing reversed the parties in that the husband was the applicant for interim orders and the wife was responding thereto.
The proceedings relate only to property settlement between the parties under section 79 of the Family Law Act 1975 (Cth) (‘the Act’), the parties having been married in 1967.
It is the wife’s case that the parties separated in February 2019. In the substantive proceedings, it is the husband’s case that the parties have not separated in the sense that the marital relationship at no time broke down irretrievably between the parties.
The proceedings were commenced by the wife filing an initiating application with her supporting documents on 24 September 2019. That is now some two and a half years ago. The husband responded in the matter by filing his response documents on 14 November 2019.
The application before the Court, as I say, was the application of the husband in application proceedings filed 7 January 2022. In relation thereto, the orders sought by him are set out in that application and in his case outline. In short, the husband seeks an order pursuant to rule 3.12(1) of the Federal Circuit and Family Court of Australia Family Law Rules 2021 (Cth) (‘the Rules’) that a litigation guardian be appointed for the wife in these proceedings.
The husband sought an order that, on an order being made for appointment of litigation guardian, the parties’ adult daughter Ms C, be precluded from being appointed as that litigation guardian. In lieu, he sought that a suitable person not being available otherwise, an order be made pursuant to Rule 3.16(3), the request be forwarded to the Attorney-General – in the sense of the Rules as I will come to, that is the Commonwealth Attorney-General - to appoint a litigation guardian in the matter.
The husband sought costs in relation to that limb of the interim hearing.
The husband also sought orders that certain sums be ordered to be released from two named Commonwealth Bank (‘CBA’) accounts.
He sought that a sum of $25,000 be released from a CB account ending in the numbers …67 (such payment to be characterised at the final hearing) to the husband and that he be ordered to pay that sum of $25,000 to B Aged Care, run by D Company, the aged care centre at which the wife has lived following her release from a hospital stay in 2019.
As the evidence shows, that $25,000 is in relation to an outstanding debt owed by the wife for her accommodation costs at the centre. I can say from the evidence, it being the case that the wife has not been in a position to pay what is known as the ‘accommodation deposit’ under the applicable commonwealth aged care legislation, she is liable to pay the set amount for the weekly accommodation which is an amount payable in addition to other payments required, such as for care, provision of services and extras and so forth.
It is in the evidence that the wife’s pension entitlement does not cover completely those costs.
The husband also seeks an order that $25,000 be released from a CBA account to him or his nominee for payment of legal fees and other expenses made clear in the course of the interim hearing, other expenses being his living expenses from time to time.
The husband sought costs of that application.
The wife filed a response to application in a proceeding on 24 January 2022 seeking that the husband’s application in the proceedings in its entirety be dismissed and that he pay her costs for the application.
On interim hearing, the husband relied upon:
(1)A case outline document filed 25 February 2022
(2)The application in a proceedings filed 7 January 2022
(3)The husband’s affidavit sworn or affirmed 24 December 2021 and filed that day
The wife relied upon:
(1)A case outline document
(2)Her response to application in a proceedings filed 24 January 2022
(3)The affidavit of Michael Vaughan, the solicitor-advocate for the mother and solicitor acting on her behalf in the proceedings, filed and sworn or affirmed 24 January 2022 and filed that day
Both parties referred to and relied upon an expert’s report provided by Dr E, a psychiatrist. She prepared that report on 14 November 2021 after a one and a half hour video link consultation with the wife, which I will come to very shortly.
APPOINTMENT OF A LITIGATION GUARDIAN
Dr E provided that evidence as an expert pursuant to the Rules, having been appointed by the parties by their joint agreement under the Rules as opposed to an appointment by a Court order.
At the interim hearing, various documents were tendered into evidence and admitted as exhibits:
(1)A balance sheet dated 10 February 2020 was tendered on behalf of the husband, marked as exhibit A1.
(2)Three pages of photocopies of pages of a Commonwealth Bank of Australia passbook for an account ending …90 in the sole name of the wife was tendered into evidence, that passbook evidencing entries running between 21 May 2021 and 7 February 2022. That was marked as exhibit A2.
(3)A statement/tax invoice from B Aged Care in relation to the wife’s accommodation and residence at that centre, showing a balance due for a period 1 January 2022 to 31 January 2022 of $41,804.52, marked as exhibit A3.
(4)A document prepared by the husband as a summary of voluminous or complex documents pursuant to section 50 of the Evidence Act 1995 (Cth) in relation to bank accounts of the parties jointly and individually, being accounts ending in …67, ending in …90, ending in …13 and ending in …68, was entered into evidence, marked as exhibit A4.
(5)Two-page document, being a summary of aged pension received by the husband for the period from 28 July 2017 through to 8 August 2019 was entered as exhibit A5.
(6)A financial statement of the husband on the Court file forming part of the Court record file, which was sworn or affirmed by the husband on 13 December 2021 and filed 14 December 2021 was tendered on behalf of the wife, marked as exhibit R1.
At the interim hearing, the husband was represented by Ms Cantrall of counsel and the wife was represented by Mr Vaughan as solicitor advocate. The Court has the assistance of written submissions on behalf of each of the parties contained in the case outline documents provided by the legal practitioners. The Court also had the assistance of oral submissions made at the hearing on behalf of each of the parties.
At the interim hearing, the Court expert Dr E was available by Microsoft Teams video link for cross-examination, and was cross-examined by Mr Vaughan on behalf of the wife. Ms Cantrall, on behalf of the husband, indicated that she did not seek to cross-examine Dr E.
In the matter, I have had regard to all of the material relied upon by the parties, including the exhibits, the written submissions and the oral submissions made on behalf of the parties.
Dealing first with the issue of the litigation guardian. That, of course, is governed by the Rules and in particular, in Part 3.5 Litigation guardians.
Rule 3.12 provides that:
(1) For these rules, a person needs a litigation guardian in relation to a proceeding if the person:
(a) does not understand the nature and possible consequences of the proceedings; or
(b) is not capable of adequately conducting or getting adequate instructions for the conduct of the proceedings.
(2) Unless the Court otherwise orders a minor in a proceeding as taken to need a litigation guardian in relation to the proceedings.
Subsequent rules from Rule 3.13 through to Rule 3.18 inclusive deal with the matter in relation to the application made by the husband that, unless there is another appropriate person on the evidence, that Rule 3.16(4) be invoked, and that an order be made requesting that the Attorney-General appoint in writing a person to be a manger of the affairs of the wife for the purposes of the rule.
I was referred in the written submissions to a number of decisions on behalf of the husband, and it is proper that I refer to those.
I was referred in the case outline document to Goddard Elliot & Fritsch [2012] VSC 87 in relation to the powers of appointment under the Family Law Rules 2004 (Cth), the previous rules that related to the former Family Court of Australia in relation to appointment of a litigation guardian, that case being authority that the power of the Court under those Rules is derived from the inherent jurisdiction of the Crown as a parens patriae to care for people who are unable to care for themselves, including in litigation.
I was referred to the decision of Debelle J in Dalle-Molle by his Next Friend Public Trustee v Manos & Anor [2004] SASC 102 at paragraph 26.
I was also referred to a matter of Remington & Remington [2021] FedCFamC2F 99, and I have, of course, had a look at that authority. It is a decision late last year of then-Judge Kari and now her Honour Justice Kari of Division 1 of the Court. The purpose of that authority was to make it clear that the guide for the Court is found in the Rules that I have referred to in Part 3.5 of the Rules.
I have also had regard in this issue to the decision of the Full Court of the Family Court of Australia in Marin & Salmon [2013] FamCAFC 88, a decision of the Full Court composed of Ainslie-Wallace, Murphy and Kent JJ (I think that would be accepted by anyone in the family law world as a very strong bench). I have had a look at that case and what fell from their Honours as guidance there. Part of what I find from that case is guidance that in appointing a litigation guardian or considering an application therefore, the Court is required to consider the matters concerning the trial or the matter before the Court, not a party’s capacity to manage other parts of the party’s life.
It is the two parts of Rule 3.12 that are focal point – does the wife have sufficient understanding of the nature and possible consequences of these proceedings, or is the wife capable of adequately conducting or giving adequate instructions for the conduct of these proceedings?
The case of the husband is that the wife is both:
(1)Not capable of understanding the nature and possible consequences of the proceedings consequent upon degeneration in her mental faculties; and
(2)That the wife is not capable of adequately conducting or giving adequate instructions for the conduct of the proceedings in consequence of her physical infirmities, and in particular, a profound deafness.
It is not in issue in the proceedings that the wife is profoundly deaf. The wife also has education only to a mid-primary school level, and the wife does not have an understanding of the English language either in written or spoken form to anywhere near a degree sufficient to be capable of adequately conducting or giving instructions for the conduct of the proceedings without the assistance of a translator. The wife, of course, can have the assistance of a translator provided by the Court for the purpose of the trial itself, and the wife can obtain, and has obtained, patently, with the assistance of her solicitor and family members, translators to assist her in relation to giving instructions and so forth to date.
That does not resolve the question as to whether or not her physical infirmity and, particularly, her deafness and other factors, render her not capable of adequately conducting or giving adequate instructions for the conduct of the proceedings. That is yet to be determined.
As I said, the Court is assisted by the evidence of Dr E both in her report and in relation to a further report by way of a letter from the doctor dated 12 December 2021 in response to a request for a supplementary report in relation to the wife. In effect, the supplementary report is the result of questions being tendered and it forms annexure F to the affidavit of the husband in these proceedings.
Having had regard to both the report dated 14 November 2021 provided by Dr E and her subsequent report being answers to questions submitted on behalf of the wife dated 12 December 2021, I also have the oral evidence of Dr E from her cross-examination by Mr Vaughan on behalf of the wife.
From the report, I note that the doctor carefully examined documents provided to her for the purpose of preparation of the report and in particular, medical records for the wife from her previous involvement with psychiatrists in May 2015, August 2018, and February 2019.
There was extensive assessment of the mental health of the wife while she was an inpatient in hospital. That provided some basis and grounding to Dr E to make her assessment as to whether there had been change by way of any degeneration in the mental capacities of the wife between, at the latest occasion, February 2019 and early March 2019, and when she conducted her examination of the wife. That examination took place on 3 November 2021, as I have said, via video link over a period of about an hour and a half. At the wife’s end, she had present with her the manager of the aged care facility where she lives, her daughter, Ms C, and she also had the assistance of one Ms F, a NAATI-accredited translator for Language G to English, English to Language G.
I have taken into account everything in that report. I note in particular some extracts from that report. In paragraph 71, the doctor notes:
Cognitive testing was undertaken using the Rowland Universal Dementia Assessment Scale (RUDAS).
The doctor goes on to indicate:
Ms Dobkowski scored 20 out of 30, where a score of 22 or less is suspicious of cognitive impairment, and this score is below her score of 27 out of 30 when she undertook the test in 2019.
On my assessment, in her report, the doctor was careful to indicate that at all stages she remained conscious and cognisant of:
(1)The wife’s limited formal education
(2)The wife’s language difficulties with English
(3)The fact that the wife had profound deafness
(4)The fact that the wife had not, to a great extent, managed her own affairs for an indefinite time but definitely quite some significant period of time but rather had relied upon members of her family, particularly her adult daughters and their spouses, to assist her in managing her affairs
and that all of those factors needed to be taken into account in assessing her cognitive capacities.
In paragraph 79 under the heading ‘Opinion’ the doctor noted:
On cognitive screening there appeared to be a decline in her cognition compared to the results obtained on the RUDAS in 2019. The decline cannot be explained by her background, low educational attainment and is more suggestive of age-related cognitive impairment, and, specifically, of an early dementia. Of particular concern on the cognitive screening was evidence of executive functioning impairments which are processes involved in higher order cognitive functioning such as impulse control, judgment planning and decision-making. These executive impairments indicate a decline when compared to her previous assessment in 2019.
The doctor gave further opinion in paragraph 81 of her report, as follows:
On balance, having considered the conglomerate of her past reliance on others to assist in her affairs, low education, the complexity of the task ahead in a setting of conflict and the evidence of cognitive decline, and, particularly the evidence of decline in executive function, it is my view that she’s not capable of undertaking legal decision-making independently and requires assistance to do so.
In answering specific questions put to the doctor as the court expert submitted by the parties through their legal advisors, in relation to the question “Your diagnosis of Ms Dobkowski” the doctor indicated:
In my view Ms Dobkowski has a cognitive impairment that could be either a mild neurocognitive disorder or a major neurocognitive disorder (dementia) that is mild in severity, using DSM-5 terminology, given the decline in her cognition in the two years since she was last tested, it is more likely that she has an early dementing illness.
Then, crucially, in answer to the question “Your opinion as to (a) the mental capacity of Ms Dobkowski to understand and engage in the relevant legal affairs” the doctor opined:
In my view, Ms Dobkowski is able to understand and engage in her legal affairs to an extent. She has been used to utilising family support for a number of years with respect to her financial matters, for instance, Ms C was managing her financial affairs and Ms H oversaw her investment in a high interest account. She will continue to require assistance by virtue of her low levels of numeracy and literacy and because of her cognitive impairment.
In answer to the ongoing question “Your opinion as to her capacity to understand and engage in relevant legal affairs when under stress”, the doctor opined:
That anxiety can impact on working memory and other cognitive processes, and as such if Mrs Dobkowski was in a situation where she experienced anxiety, this could impact on her capacity to understand and engage in legal affairs.
In relation to the phrase “That anxiety can impact on working memory and other cognitive processes”, the doctor includes a footnote referring to a published work of that title by various persons starting with Richard T. Ward, and the doctor annexes a copy of that original article to her report.
As part of the doctor's answer to the question “Your opinion as to whether Ms Dobkowski understands the nature and possible consequences of the family law proceedings, including the orders that she is seeking” the doctor opined:
With respect to her ability to understand the possible consequences of the family law proceedings, I note that she has relied on the assistance of others for her financial matters and currently relies on her daughter, Ms C, to manage any paperwork. Given her low education status, lack of command of the English language, history of relying on the assistance of others and cognitive impairment, including executive functioning impairments, I have formed the view that Ms Dobkowski would not be able to fully apprehend the possible consequences of the proceedings and would require assistance with decision making. She stated that she wished the house to be equally divided between herself and her husband.
There was some evidence during the cross-examination of Dr E by Mr Vaughan, and then also some discussion in the course of submissions, about the doctor's observation that the wife did not really seem to be able to give an accurate and reasoned response to the question as to whether or not the wife understood her marital circumstances. What the doctor was really seeking to go to there – and as she agreed with me – was whether the wife understood that she was putting forward a case to the Court that asserted that there had been a break down in the marital relationship and the parties had separated.
Given the wife's circumstances, that is not a document to which I would give any attention to or on which I place any reliance in deciding this issue, as it not a concept that on the evidence was fully and properly conveyed to the wife so that she could gain an understanding of what was being sought and indicate her own views in relation to breakdown of the marital relationship and separation.
The doctor noted that Ms Dobkowski was quite clear during the interview in conveying what she wished to achieve in relation to family law proceedings between herself and her husband. That was to have their matrimonial home, which is their principal asset, divided equally between herself and her husband so that each of their two adult daughters would, in the fullness of time, receive half of the value of the house each, rather than either daughter receiving the whole of the value of the house.
As Ms Cantrall pointed out in submissions, and most correctly, the task before the Court in the principal part of these proceedings is to decide if it is just and equitable to go forward to consider making an order adjusting the property of the parties between them, and if it is considered just and equitable, to then go on and consider what adjustment of the property of the parties between them is appropriate when following what is laid down in section 79 of the Act as the required legislative pathway. It is not a matter to assist the parties in relation to their estate planning or to cater to their wishes from time to time in relation to what should be the ultimate receipt by their children from their estates.
In the course of legal proceedings, as Kirby J has said in the High Court on multiple occasions, it is every litigant's right to be able to take full part in the proceedings, to understand those proceedings, to be heard in those proceedings, and to be in a position and be able to present such evidence in the proceedings as that person, either of their own volition or on the advice they receive from legal advisors or others, they consider is required to support the result that they contend for in any proceedings.
The doctor considers, and indeed on some of the evidence and submissions before the Court, it is accepted that the wife considers that she needs the assistance of others, not only with filling in the gaps that her limited education, which was certainly no fault of her own, and her difficulties with the English language can lead to, by going further than that assistance with making judgments and with decision making in relation to the proceedings.
That is the very basis, in my view, of the issue as to whether or not a party is capable of fully understanding the proceedings, the nature of the proceedings, the possible consequences of the proceedings, and goes very much to whether a party is capable of adequately conducting or giving adequate instructions for the conduct of proceedings
If a party is unable to do any of those things without the assistance of others, then that on its own, even without the medical evidence that is provided for the assistance of the Court, is a pretty sharp indicator that a litigation guardian is required in the circumstances. In this case, the Court has the benefit, as I have said, of the report from Dr E, and has had the benefit of the doctor's report being tested in cross-examination.
I accept the evidence presented from the Court expert that there has been such a decline in the wife's cognitive abilities that she does need assistance in the matter in relation to making necessary judgments, making necessary decisions in relation to the proceedings, so that her participation in the proceedings is able to fit wholly inside what is the basic and fundamental right of every litigant to be able to take full part in the proceedings with full understanding, and be in a position to receive advice and to give instructions, so that the case for that litigant is presented to its full on the way to seeking to achieve the outcome that they contend for before the Court.
The purpose of a litigation guardian is to step across into the place of a party who is not in a position to do all of those things. I find that the wife is in need of the appointment of a litigation guardian in these proceedings and that she does not understand the nature and possible consequences of the proceedings to an adequate degree to enable her to participate properly.
Going to the other limb of rule 3.12 (1), I also find, as was submitted on behalf of the husband by Ms Cantrall of counsel, that the wife's circumstances relating to her profound deafness, and the limits that that will place on the wife, to some extent as demonstrated in the course of the interim hearing, also bring her within the category of a person who is not capable of adequately conducting, or giving adequate instructions for the conduct of the proceedings.
I am very careful to say and say clearly that in making that finding, there is not any implication or suggestion of any criticism of the legal advisors of the wife to this point. They have acted on instructions. Those instructions have been conveyed to them to their satisfaction in relation to their ethical position and they have acted upon those instructions.
Accordingly, I find that an order should be made that a litigation guardian be appointed for the wife.
On the wife's side, there is no proposal as to who would be a litigation guardian. That is perfectly explicable and understandable in that she opposed the application for appointment.
On the husband’s side, he seeks an order precluding the parties’ adult daughter, Ms C, from being appointed as litigation guardian. That order is framed somewhat on the negative side to preclude an appointment. Any appointment of a litigation guardian is not voiced in the negative, that the guardian cannot be A, B, C and D, but rather voiced in the positive, that the guardian is to be person E.
In this case, there is no evidence before the Court of any other suitable person who would be a litigation guardian for the wife other than one or other of her adult daughters. There is no affidavit as required by the rules of consent from either of those persons, so lacking that, the Court would not go forward to appoint either of those as litigation guardian.
But in dealing with the issue of the orders sought by the husband, it is in the evidence in these proceedings that sums of money are asserted to have been removed from bank accounts of the parties and/or of the wife alone by the parties' adult daughter, Ms C, and there is an implication in the husband's case that it may be that such sums may need to be recovered or taken into account in some manner in the proceedings.
In outlining that, I am careful to say that there is no implication contained therein that there has been misconduct by Ms C. The Court is not in any position whatsoever to evaluate the evidence and make any implication, let alone a finding in that regard. The withdrawals of money proved to have been made by Ms C may have been made for proper or improper purposes, but neither circumstance is available to the Court now.
However, the fact that that can be a matter in the evidence in the proceedings makes it possible that Ms C may be a witness on one side or the other. The fact that there is an implication in the case as presented by the husband, that such sums may be brought back into account in the proceedings, or that such sums may be part of the Court's consideration in relation to contributions, or that such sums may be part of the consideration of the Court under section 75(2)(o) in the proceedings, renders Ms C a person who would not fit within the requirements of a person who may be a litigation guardian under Rule 3.14.
The requirements of who may be a litigation guardian in that rule are conjunctive, and the person is an adult, has no interest in the proceedings adverse to the interests of the person needing the litigation guardian, and can fairly and confidently conduct the proceedings of the person needing the litigation guardian. Because of the possible implications, I consider that Ms C is not likely to have been appointed as litigation guardian for the mother. But in saying that, it has to be noted, and noted clearly, that Ms C has not sought to be appointed as litigation guardian for her mother.
There is no evidence of any other suitable person who comes before the Court indicating their consent and willingness to be appointed a litigation guardian.
The husband seeks that the Court resort to where the rules indicate that the Attorney-General may appoint in writing a person to be a manager of the affairs of a party for the purposes of the rules, and if that rule is invoked, it is not an order made by the Court that that occur, it is a request made by the Court that the Attorney-General nominate in writing a person to be a litigation guardian.
If an order is made that such request be conveyed to the Attorney-General of the Commonwealth, then the Attorney-General is not bound to make that nomination, the rule being couched as “may”. In the event that such an order is made that a request be forwarded and the Attorney-General exercises a discretion to not appoint such a person, then the matter will come back to Court and the Court will have to further consider the matter, and it may be that one or other or both of the parties may put forward nominations, together with the requisite consent document for a litigation guardian.
I find that the appropriate way forward in all the circumstances, having found that the wife is in need of a litigation guardian, is to make an order that a request be forwarded to the Attorney-General for the Commonwealth of Australia, and that the Attorney-General consider making an appointment in writing of a person to be a manager of the affairs of the wife for the purpose of the rule.
At the Court's own motion, I intend to make a notation, also to be conveyed to the Commonwealth Attorney-General, that a suitable litigation guardian may be (I am careful to say may be) the NSW Trustee and Guardian. It is within the Court's knowledge the NSW Trustee and Guardian routinely instructs legal practitioners to act on behalf of parties whose affairs are under the management of the trustee from time to time. That is not the case here, but it is a way forward without identification of a suitable guardian and have to be a matter for further consideration of the Court.
APPLICATION FOR RELEASE OF FUNDS
Moving onto to the other issue in the matter, and that is the husband’s application that there be a release of funds in the matter. It is what has become colloquially to be known as a Strahan matter.[1] That relates to an early release of funds from the matrimonial asset pool to party or parties by way of an interim property order under section 79 of the Act for marital couples, pursuant to one of the powers enumerated in section 80(1)(h) of the Act. Of course, interim release of money can be dealt with in other manners. They can be dealt with as an interim costs order. They can be dealt with as an interim lump sum spousal maintenance order. I note the very helpful analysis of the various heads of power that can lead to an interim disposition of funds undertaken by his Honour Judge Anthony Kelly in the Federal Circuit Court of Australia in Candlin & Candlin [2017] FCCA 2211.
[1]
In pressing the husband’s application in submissions, Ms Cantrall made it abundantly clear that he was proceeding on the basis of seeking the relief of $25,000 from each of two accounts as an interim property distribution order. Of course, whichever power the Court is asked to exercise must be made clear or should be made clear to the Court in terms of the application and the submissions supporting and must be identified by the Court if such an order is made, because the pathway to deciding if a sum of money should be released and paid and to whom it should be paid is different depending on whether it is under section 79 for interim property, or under section 72 and 74 for interim lump sum spousal maintenance, or under section 117 for an interim costs order. In this matter, it is sought by the husband to be an interim property distribution.
In relation to the law that applies in what are widely known as Strahan matters (referring to Strahan & Strahan (2009) 241 FLR 1), I incorporate into these reasons paragraphs 29 to 38 of my judgment in the matter of Dennison & Dennison [2021] FCCA 2039:
[29] 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).
[30] 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.
[31] 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.
[32] I was referred to and I take into account the Full Court judgment in the matter of Marchant & Marchant (2012) FamCAFC 181.
[33] 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.
[34] 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.
[35] 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.
[36] 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.
[37] 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.
[38] 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 (Harris & Harris (1993) 113 FLR 472, 479).
As my statement of the law makes plain, I approached the matter on the basis that it is a two-step process. Firstly, is it in the interests of justice to make an order for a partial property settlement releasing funds in the course of the matter? In that regard, there need not be compelling circumstances, but the consideration of whether it’s appropriate to make that order, with the overarching consideration being the interests of justice and the consideration that, in normal circumstances, a property settlement order is a once only order. The Court should be cautious in making serial property settlement orders by way of interim orders, leading to then the final order, the conclusion of proceedings.
If it is considered that it is in the interests of justice and appropriate to make an interim order, then the Court must go onto the second consideration, and that is to have a look at the matter in terms of section 79 of the Act and the likely range of result so as to ensure that, if there is a release of funds, it is least likely to lead to a circumstances where, ultimately, on the making of final orders, there is a necessity for a ‘claw back’, so to speak, of funds from the party who may receive or parties who may receive, so that whatever adjustment between the parties is made in final orders can be achieved.
Put very simply, in the words of Foster J in Nsair & Gyaw and Anor [2018] FamCA 418, any order for interim property settlement needs to be framed so as to minimise the chances of it compromising the legitimate expectation of either party (or both parties, really) at a final hearing.
In this matter, there is in evidence in the exhibits as exhibit A1 a balance sheet. The principle asset of the parties is a matrimonial home at J Street, Suburb K. On the balance sheet from February 2020, there was agreement between the parties that the home at that time was valued at $1,575,000 and was not subject to any loan accounts secured on that property by way of mortgage. The other assets of the parties consist of the contents of the home, some jewellery, various bank accounts. Liabilities of the parties are, principally, the accumulating debt of the wife to the B Aged Care for her accommodation costs, which, per exhibit A3, stood at $41,804.52 as at the last day of January of this year.
The sums sought by the husband to be released are $25,000 from each of two accounts, and I have carefully considered the evidence of the husband in relation to those accounts, the history in these proceedings of various accounts of the parties being frozen at the decision of the Commonwealth Bank of Australia, subject to agreement of the parties, a joint instruction of the parties to the bank or Court order.
Taking each of those releases sought by the husband in turn, he seeks release of $25,000 from the application from CBA account ending #...67 to be paid to B Aged Care in reduction of the wife’s outstanding accommodation account. If $25,000 is paid in reduction of that account, that would leave the sum of about $16,804 to the end of January outstanding on that account. Based on the evidence before the Court and the interim hearing, the relevant account has capacity to meet a payment out of the sum of $25,000.
In the circumstances in which the wife sits in this matter and the financial circumstances of the husband as they are conveyed to the Court on the evidence, a question was raised on behalf of the wife in submissions by Mr Vaughan as to why the husband now seeks to have moneys applied in reduction of the debt when, from the time that the wife went into care in the aged care facility at some time in 2019, at her request, the husband has made no attempt to assist in the payment of the excess of expenses over income of the wife represented by her accommodation account.
On the evidence available to the Court on the interim hearing, the husband has not been in a position to make those payments. Not only does he have to cover his own costs with the income available to him, and even taking into account the evidence he presents in exhibit R1, his financial statement from December of last year in relation to other members of his household, being his adult daughter and grandchild, and the income available to them, that does not speak to the expenses that may relate solely to the other occupants of the house, being his adult daughter and grandchild. Nor does that allow for accumulation by the husband of moneys towards the vicissitudes of life, such as the payment of legal fees in this matter, such as, possibly, in the fullness of his time, his own need for healthcare, entering an aged care facility or something similar if that occurs.
I find that there is the outstanding debt, that it is accumulating, that it is in the interests of the parties that that debt be addressed in the short-term to the extent that it is capable of being addressed and I find that it is in the interests of justice to depart from the usual course of there being a once only property settlement order and that it is in the interests of justice to make an order of partial property settlement releasing those funds.
I then have to consider matters under section 79 in a brief way and, of course, the first consideration under that section is will it be just and equitable to proceed with an adjustment between the parties. It is quite clear, based on what fell from the High Court of Australia in Stanford & Stanford (2012) 247 CLR 108 and what fell from the Full Court of the Family Court of Australia in Bevan & Bevan (2013) 279 FLR 1 and quite a number of other cases since Stanford that, in the circumstances of these parties (separated, the wife in an aged care facility) if the Court considers that it is just and equitable to proceed with an adjustment of property between the parties (and bearing in mind that the husband asserts it is not just and equitable to so proceed) then patently the payment out of $25,000 from a bank account on behalf of one of the parties, that is, the wife’s accommodation costs, will not compromise the expectations of either party.
Noting that the wife’s application before the Court is for a division of the sub-proceeds of the matrimonial home, 60 per cent to her and 40 per cent to the husband, I need not take into account her express wish that it be an equal division between them and have only looked at her application before the Court. Then, the use of that $25,000 cannot compromise the reasonable expectations of either party. I find it is appropriate to make that order sought by the husband.
With the same chain of reasoning, I look at the husband’s application that a sum of $25,000 be released from the Commonwealth Bank Account ending #...68 to him to be applied towards his legal fees and other expenses, those other expenses being made plain by his counsel as his living expenses.
Is it in the interests of justice that such is done? Once again, are there circumstances that justify the Court approaching the matter on the basis of an interim order for a partial distribution, rather than keeping to the usual course and there being a once only order for property adjustment between the parties if it is just and equitable to go ahead?
As I said earlier in relation to the issue of litigation guardian, parties are entitled to present their best case before the Court, to be heard, to know what case is brought against them and to present their case before the Court in the best manner available to them.
The husband is represented in these proceedings. He seeks to continue to be represented. He seeks to be represented by solicitors through to the conclusion of a final hearing. I have evidence in relation to the husband’s financial circumstances. I have exhibit R1, which is a financial statement for him as at 13 December 2021, and I accept the evidence contained in that document on its face, it not being put in contention in the proceedings.
I find the husband has no other means and is not in a position to pay legal fees in advance to his lawyers for the continuation of this matter and preparation for a final hearing other than from moneys standing to the account of either the husband or the parties jointly in bank accounts and I accept his evidence in relation to the actions of the Commonwealth Bank in relation to the freezing of certain of those accounts.
Whether the husband uses the whole of the $25,000 for the payment of legal fees or part thereof and applies others towards living expenses, I still find it is in the interest of justice in the circumstances of this case to make an interim property distribution order such that enables the husband to pay his legal fees. He seeks that such an order be made under that power.
Even if that order was made under the interim costs power of section 117 (in which case I would have to follow an entirely different path of reasoning in any case, which I did not follow), then as a costs order, any moneys that the husband paid therefrom to his legal advisors would be required by Court order to be the whole of the sum released.
In that event, it would be one of the last existing matters where it is proper to add back such an amount to the matrimonial asset pool on the Court’s consideration of any final property adjustive orders because, otherwise, such a distribution by way of an interim lump sum costs order would form a de facto section 117 costs order against the wife, without the proper pathway having been followed to find a cause for such an order against the wife. The money being added back in that extent, it will, once again, become consideration of property.
I find, on the same reasoning I used for the release of funds to pay part of the wife’s accommodation debt, that providing the $25,000 to the husband for use – to be applied for payment of his legal fees for these proceedings and for living expenses – does not put in any jeopardy the reasonable expectations of either party in relation to any final property orders, if the Court finds ultimately it is just and equitable to proceed with consideration of an adjustive property order under section 79 and make such orders.
Accordingly, I find that it is proper to make both of the interim distribution orders sought by the husband.
COSTS
Finally, in relation to question of costs. Costs are sought by the husband separately in relation to his application, contested by the wife, for appointing a litigation guardian, and his application, contested by the wife, for interim distribution.
Costs are sought by the wife, in her response to application in proceedings against the husband for the whole of the orders sought by in him in his application of proceedings. There was some discussion in relation to the issue of costs, prompted by me, between the bench and Ms Cantrall, for the wife.
As the husband split his application in relation to costs, dealing first with his application that the wife pay his costs on him being successful in relation to the appointment of litigation guardian.
The Court, of course, has to turn to section 117 of the Act, which sets out, in subsection (1), the guiding rule that each party pay his and her own costs. It sets out, in subsection (2), that, if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may make an order for costs and may make such order for costs that the Court considers just.
If the Court is considering making an order that a party pay all or some of the other party’s costs, then the Court must consider the matters set out in section 117(2A)(a) to (f), and then (g) refers to such other matters that the Court considers relevant, which casts the net open.
In relation to the litigation guardian matter, it is, as I suggested to Ms Cantrall, virtually inherent in the Court making the order that a litigation guardian be appointed for the wife in these proceedings that the Court considers that she was not fully in a position to understand the proceedings and to give her instructions in the proceedings, and that is a fact that the Court must take into account in considering section 117(2A)(c), the conduct of the parties to the proceedings in relation to the proceedings.
Something the Court must also take into account in considering section 117(2A)(e):
Whether any party to the proceedings has been wholly unsuccessful in the proceedings.
It is also a matter the Court takes into account in considering whether either party to the proceedings has made an offer in writing to the other party, given the course of correspondence that is indicated in the annexures to the husband’s affidavit.
Having considered such of the matters in section 117(2A) as are relevant in the matter, I find that it is not appropriate to make an order that the wife pay the husband’s costs or any part thereof in relation to his application for appointment of a litigation guardian for the wife in these proceedings. It is appropriate that each party pay his and her own costs in that regard.
In relation to the husband’s application that there be a release of funds, I find it is appropriate, under section 117, to apply the same reasoning. The husband brings this application before the Court positing, and is successful in positing, that the wife is in need of a litigation guardian on the basis that she does not understand the nature and possible consequences of the proceedings and that she is not capable of adequately conducting or giving adequate instructions for the conduct of the proceedings.
Accordingly, I would not find that there are circumstances that justify the making of a costs order in relation to the interim property distribution part of the proceedings on the basis of any of the relevant factors under section 117(2A) and referring once again to, in particular, the conduct of the parties in the proceedings, whether any part of the proceedings has been wholly unsuccessful in the proceedings and whether there had been any offers in writing on the basis that, on the husband’s own case, the wife has not been in a position to properly understand or to adequately conduct or give instructions for the conduct of the proceedings in relation to his interim application.
I find it is a matter where the general rule in subsection (1) in section 117 applies and, in relation to the partial property distribution, each party should pay his and her own costs.
I certify that the preceding one hundred and ten (110) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Morley. Associate:
Dated: 29 March 2022
0
17
0