FIRTH & FIRTH

[2020] FamCA 637

FAMILY COURT OF AUSTRALIA

FIRTH & FIRTH [2020] FamCA 637

FAMILY LAW – PROPERTY – Where application for interim property orders – Where consideration of applicable principles – Where order made for a payment of $500,000 by the husband to the wife.

FAMILY LAW – PRACTICE AND PROCEDURE – Where application for injunction – Where consideration of applicable principles – Where order as sought by the wife refused.

FAMILY LAW – PRACTICE AND PROCEDURE – Where application for disclosure orders– Where due to proximity of final hearing and the imminent release of a single expert report orders sought as to particular disclosure refused.

Family Law Act 1975 (Cth) ss 75, 79, 114

Harris & Harris (1993) FLC 92-378
Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319
Skyworks v 32 Drummoyne Road [2017] NSWSC 343
Strahan & Strahan [2009] FamCAFC 166; (2011) FLC 93-466
Tsiang & Wu [2019] FamCAFC 128; (2019) FLC 93-911

APPLICANT: Ms Firth

RESPONDENT: Mr Firth

FILE NUMBER: PAC 5216 of 2017

DATE DELIVERED: 3 August 2020

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 13 May 2020 and by way of written submissions last received on 11 June 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Picker

SOLICITOR FOR THE APPLICANT: Ede Family Law

COUNSEL FOR THE RESPONDENT: Ms Gillies SC

SOLICITOR FOR THE RESPONDENT: Marsdens Law Group

Orders

1. That within 14 days from this date the husband cause to be paid to the wife or as she may otherwise direct in writing the sum of $500,000 with the characterisation of such sum reserved to final trial.

2. That, otherwise, the Application in a Case filed by the wife on 30 March 2020 as amended be dismissed.

3. That, otherwise, the Response by the husband filed 6 May 2020 to the wife’s Application in a Case be dismissed.

4. That any application for costs arising from these orders be made by way of written submission filed and served within one month from this date with any submissions in response thereto to be filed and served within a further 14 days and that thereafter judgment as to costs reserved to chambers.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Firth & Firth has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 5216 of 2017

Ms Firth

Applicant

And

Mr Firth

Respondent

REASONS FOR JUDGMENT

1. In the context of long-running property and parenting proceedings the applicant wife sought interlocutory orders in her Amended Application in a Case filed on 23 April 2020.

2. Proceedings were commenced by the wife in October 2017 and the proceedings are listed for final hearing commencing 26 October 2020.

3. On 13 May 2020 orders and directions were made as follows:

   (1)The time provided for in Order 7 made on 17 December 2019 for the wife to file and serve a consolidated affidavit of her evidence in chief as to property and parenting be extended to the close of business on Friday, 12 June 2020.

   (2)In default of the wife complying with the previous order the husband is at liberty to make application to the Court for proceedings to be listed on an undefended basis.

   (3)The time provided for in Order 8 made on 17 December 2019 for the husband to file and serve the primary single expert report of Mr B be extended to close of business on Friday, 29 May 2020.

   (4)The proceedings as to final parenting and property be adjourned for hearing to 10.00 am on 26 October 2020 allocating five (5) days for trial.

   (5)The proceedings in relation to final hearing are adjourned for judicial case management to 9.30 am on Friday, 14 August 2020 noting that the listing is for the purposes of considering the filing of short discrete updating affidavits by the parties, if necessary, in timely manner prior to trial.

   THE COURT NOTES THAT

   (6)The Court is informed today that there is agreement as to the underlying real estate valuations in the various corporate entities but that single expert valuations in relation to the matrimonial home and the real estate property at C Town needs to be undertaken in a timely fashion prior to the commencement of the trial.

   BY CONSENT, IT IS FURTHER ORDERED THAT

   By consent an order be made in terms of order 3 as set out in husband’s Response to the Application in a Case filed 6 May 2020.

   (7)That a single expert valuer, namely D Group, be appointed to value the properties located at F Street, C Town, NSW, and T Street, Suburb H, NSW, and for the purpose of such valuation, the following is to occur:

   7.1That within seven (7) days of the date of these Orders, the Respondent shall provide to the Applicant with a Joint Letter of Instruction.

   7.2That within seven (7) days of receiving the Joint Letter of Instruction, the applicant shall respond with any required amendments t the Joint Letter of Instruction prepared by the Respondent.

   7.3That within seven (7) days of receiving the amended Joint Letter of Instruction prepared by the Respondent, the parties shall sign the Joint Letter of Instruction and sign all other documents and do all things necessary to facilitate the valuation.

   7.4That the costs of the valuations be paid equally by the parties.

   IN RESPECT OF THE APPLICATION IN A CASE FILED 30 MARCH 2020 AND AMENDED ON 23 APRIL 2020, IT IS ORDERED THAT

   (8)The Applicant wife file and serve any supplementary written submissions to be relied upon by no later than Friday, 22 May 2020.

   (9)The Respondent husband file and serve any further supplementary written submissions to be relied upon by no later than Friday, 12 June 2020.

   (10)Upon completion of submissions, judgment will be reserved to chambers.

   THE COURT NOTES THAT

   (11)In the event that the parties are able to resolve some or all of the interim issues for determination, they are at liberty to forward to the Court in chambers a Minute of Proposed Consent Orders to facilitate orders being made in chambers.

4. In her Amended Initiating Application filed 2 August 2018 the wife, in summary, sought final property orders that provided for:

   a)the property at T Street, Suburb H (“the Suburb H property”) to be transferred to the wife and that the husband indemnify the wife from all or any liability in respect of the mortgage secured over that property;

   b)that the parties do all things necessary to cause J Pty Ltd in its capacity as trustee of the J Trust to transfer to the wife the following properties:

   i)F Street, C Town (“the C Town property”);

   ii)N Street, Q Town;

   iii)M Street, Suburb S; and

   iv)P Street, Suburb R,

   and that the husband indemnify the wife from all or any liability arising from mortgages secured over the said property.

   c)that the husband pay to the wife the sum of $1.5 million;

   d)that the husband cause the abovementioned company to transfer to the wife the motor vehicle 1 registered number …;

   e)that the wife thereafter resign from any office held by her and transfer any interest held by her in J Pty Ltd and the J Trust;

   f)that there be a splitting order in respect to the husband’s superannuation interest in the J Pty Ltd Superannuation Fund in favour of the wife in the sum of $642,083; and

   g)costs.

5. The proceedings have had a difficult history since commencement particularly as a consequence of issues relating to property valuations, valuations of the corporate entity and the trust and the late inclusion of parenting issues in the proceedings.

6. In his Further Amended Response the husband, in effect, seeks an overall division of property as to 60 per cent to him and 40 per cent to the wife with the wife’s entitlement to include the Suburb H property.

7. In the context of the present interim application the wife relies upon:

   a)her Amended Application in a Case filed 23 April 2020;

   b)her affidavit filed 23 April 2020 and documents exhibited thereto;

   c)her Financial Statement filed 30 March 2020; and

   d)her undertaking as to damages (Exh “F”) .

8. The husband relies upon the following:

   a)his Response filed 6 May 2020 to the wife’s application;

   b)his affidavit filed 6 May 2020; and

   c)his Financial Statement filed 30 August 2019.

9. The interim application was heard on 13 May 2020 and following the completion of further supplementary written submissions, judgment was reserved on 16 June 2020.

10. At hearing the wife relied upon an Amended Minute of Interim Orders Sought (Exh “C”).  In summary, those orders provided:

    a)That in respect to certain corporate entities and trusts the husband be restrained from:

    i)selling, transferring, disposing of or otherwise assigning the shareholdings, loan accounts and other interests of the parties in the entities;

    ii)further mortgaging or encumbering the shareholding loan accounts and other interests of the parties in the entities without first giving the wife’s legal representatives 12 weeks prior written notice of his intention to do so;

    iii)altering or any way causing to be altered the current shareholdings and directorships of the companies;

    iv)resigning or permitting his removal as a director of the companies;

    v)amending or in any way altering the memorandum and articles of association of the companies or issuing or causing to be issued any further shares or altering the rights attaching to any shares in the companies;

    vi)disposing of, transferring, converting, charging, encumbering or otherwise dealing with the assets of the entities, except in the ordinary course of business and, otherwise, without first giving the wife’s legal representatives 12 weeks prior written notice of his intention to do so; and

    vii)taking any steps or doing any act which could cause the parties or either of them to be removed from or to resign from the position of director of any of the companies or dispose of his shareholding in any of the companies.

    b)The husband cause to be paid as they fall due for payment for maintenance and repair costs including for replacement tyres for the vehicle driven by the wife;

    c)Pay or cause to be paid to the wife the sum of $655,380 with the characterisation of that sum reserved to final hearing;

    d)That within seven days the husband cause to be provided certain specified documents relating to the businesses conducted by him including documents dating from the 2016 financial year to date;

    e)That 52 days prior to the first day allocated for final hearing the husband provide to the wife copies of:

    i)all “recent statements” in relation to accounts conducted by him or any company or trust in which the husband holds an interest in any financial institution;

    ii)all management accounts including profit and loss statements, detailed balance sheets for all companies in trust in which the husband holds an interest;

    iii)all GST and activity statements prepared lodged and/or required to be lodged for all companies and trusts in which the husband holds an interest;

    iv)all tax returns, depreciation schedules and financial reports that have been prepared whether in final draft form for all companies and trusts in which the husband holds an interest for all financial years after 30 June 2019.

    f)Costs;

    g)That the parties in their capacity as directors of the corporate entity be restrained from selling, causing or allowing to be sold the C Town property other than on certain specified terms such that the said property be sold and that the net proceeds of sale be held subject to final orders;

    h)That the husband be restrained from dissipating the net proceeds of sale of C Town property save and except for the purposes of fulfilling orders made by the Court in these proceedings, paying taxation liabilities of the husband arising as a result of his compliance with orders made by the Court or, otherwise, without first giving the wife’s solicitors 12 weeks’ notice.

11. The husband for his part in his Response sought orders that provide:

    a)that each party receive partial property settlement payments of $150,000;

    b)that a single expert be appointed to value real estate properties referred to above at C Town and Suburb H;

    c)that a single expert be appointed to value chattels owned by the parties and/or the relevant corporate entities; and

    d)that the parties be at liberty to send to the single expert information for the purposes of the finalisation of the single expert report.

Context

1. The parties commenced cohabitation in about 2005/2006 and were married in 2007.

2. There is one child of their marriage born in 2008.

3. The parties separated in June 2017 when the husband left the former matrimonial home.  The parties were divorced in 2018.

4. The wife asserts that during the marriage she was the primary caregiver for the child who has resided primarily with her since separation with the husband spending weekend and other time with the child.

5. The wife does not work outside of the household.  She is paid an ongoing director’s fee of $5,000 per month by the corporate entity referred to above pursuant to orders made 14 May 2018.  In addition, her fuel expenses for the company car used by her are refunded to her by the company.

6. The husband is employed by the corporate entity and he has retained since separation effectively the sole control over that entity, its assets and income.

7. The wife has historically made complaints that the husband has not disclosed the various entities in which he has an interest or bank accounts and other financial resources at his disposal.

8. The parties jointly own the former matrimonial home occupied by the wife since separation at Suburb H.  The husband pays certain outgoings in relation to that property.  The matrimonial property is asserted to have a value of about $1.7 million by the wife but is the subject of an outstanding single expert report as a consequence of orders made on 13 May 2020.

9. Otherwise, the parties have accumulated superannuation entitlements totalling in all about $1.6 million.

10. The balance of the matrimonial pool of assets is held in various corporate entities and trusts currently the subject of single expert valuation.

11. An updated single expert valuation is presently being undertaken by the single expert and was expected to be completed by the time of the interim hearing.  The wife complains that the husband has not provided proper and adequate disclosure for the purposes of the updated report to be undertaken, this notwithstanding that it is incumbent upon the single expert to make a request for the provision of documents particularly financial documents that will assist him in completing the report.  As at 17 April 2020 the single expert informed the parties that the valuation report was well progressed with limited information required for its finalisation.  The single expert identified the pathway to completing the valuation and it appears that the parties are in agreement as to same.

The wife’s evidence

1. In August 2018 orders were made by consent which restrain the husband from:

   a)doing anything to interfere with the normal day-to-day business operations of the corporate entity;

   b)distributing, utilising or dissipating the sum of $500,000 advanced to K Pty Ltd by the corporate entity without first giving the wife’s solicitor 12 weeks’ notice; and

   c)disposing of or encumbering any real estate owned by the corporate entity or the trust without giving 12 weeks’ prior notice to the wife’s solicitor.

2. The wife deposes that she “maintains concerns” about the husband’s ongoing sole control over the majority of the matrimonial pool.

3. The husband commenced K Pty Ltd in about July 2018.  The entity is the trustee of the L Trust.

4. The wife complains that the husband’s interests and her interests do not necessarily align in the context of these proceedings.

5. She complains about the interposition of K Pty Ltd in the business activities of the primary corporate entity notwithstanding that the existence of K Pty Ltd is the subject of the single expert report and that the husband has provided detailed explanations to the single expert as to the interrelationship between the two entities.

6. The wife makes various assertions based upon her concerns and understanding and ongoing distrust of the husband.  She expresses a concern that K Pty Ltd has been commenced by the husband to divert income and capital from the primary corporate entity such as to reduce her entitlements in these proceedings.  This notwithstanding that the interrelationship of the entities is the subject of single expert enquiry and the prospective report.

7. Otherwise, the wife raises various concerns in relation to numerous matters arising from the financial circumstances of the relevant corporate entities.  Clearly such concerns will give rise to the opportunity of enthusiastic cross examination of the husband and perhaps the single expert at final trial.  Such a factor was instrumental in the matter being listed for a lengthy five day trial.

8. As to the question of interim property settlement the wife concedes that she has received interim payments totalling $250,000 and those funds have been expended in meeting legal fees and her day-to-day living expenses for herself and the child.  She asserts that she has borrowed about $110,000 from her parents to meet other legal fees and ongoing living expenses for herself and the child.

9. The wife makes reference to some delay in allocating final hearing dates in this matter but acknowledges that that delay was occasioned by her in not filing her trial documents in breach of trial directions made by this Court in December 2019.

10. The wife asserts that she has no savings of any significance and insufficient ability to obtain funds on credit pending final hearing.

11. Otherwise, the wife complains that the single expert has sought some agreement as to plant and equipment owned by the relevant corporate entities.  She and the husband have been unable to agree as to those values, unsurprisingly, as it is clearly necessary for those items to be valued by an independent and appropriately qualified expert with such valuation to be provided to the primary single expert to be incorporated in his report.

12. The wife seeks that the husband pay to her a lump sum in relation to her ongoing legal fees.  She makes reference to perhaps the retention of a shadow single expert as to the accounting issues and the proposal to brief both senior and junior counsel to appear on her behalf.

13. The wife makes reference to the expenses incurred by her in relation to the child of the marriage but such an issue is not for this Court’s determination but for her to make an appropriate application should she be so advised for a review of any child support assessment that may be in place.

14. She, otherwise, complains of necessary repair work to be undertaken to the matrimonial home, outstanding invoices from her solicitors, outstanding invoices from the single expert and outstanding school fees.  She further complains of the need for certain dental work by her.

15. As to the husband’s capacity to meet any order for interim property distribution and/or funds for legal expenses, the wife points to significant cash reserves held within the husband’s two corporate entities referred to above.  The husband for his part seeks orders that he and the wife both receive the sum of $150,000 by way of interim payment.

1. It is readily apparent that the husband has met his ongoing legal fees from the financial resources of the business conducted by him.  There has been no restraint on him doing so.  He, at present, clearly has the capacity to fund a payment of $300,000 to the wife.

2. As to the sale of the C Town property the wife no longer seeks to retain that property as part of her property settlement entitlement.  Thus she has no objection to the sale of that property but seeks orders as to the disposition of the net funds realised on sale.  In considering the proximity of the final hearing, in all the circumstances, it would be practicable that such net proceeds be retained in their entirety pending final determination of these proceedings.

The husband’s evidence

1. The husband asserts that loan funds that passed from J Pty Ltd to K Pty Ltd referred to above were in the sum of $450,000 and not $500,000 as asserted by the wife.  He further asserts that the sum of $450,000 that had been held by K Pty Ltd in an interest-bearing bank account was paid back to J Pty Ltd in early December 2019.

2. The husband proffers explanations as to the interrelationship between J Pty Ltd and K Pty Ltd that will no doubt be explored during the course of the trial.  He rejects the wife’s assertions as to any inappropriate financial conduct by him.

3. He continues to pay the sum of $5,000 per month to the wife by way of director’s fees.  In April 2020 he paid for new tyres for the vehicle used by the wife.  He asserts that the company is responsible for ongoing running and maintenance costs for the vehicle.

4. He makes complaint that the wife has not sought gainful employment notwithstanding that she is only 46 years of age and that the child of the marriage is now 12 years of age.

5. The husband asserts that to meet any order for payment of capital funds to the wife he will use the existing cash reserves of the two corporate entities rather than from the realisation of any real estate asset that may give rise to a capital gains tax liability. 

6. He acknowledges that as at 31 January 2020 cash reserves totalled $2.673 million and that thereafter he made certain payments in reduction of liabilities totalling $1.48 million together with unspecified payments to the ATO in anticipation of future tax liabilities.  He acknowledges that as at 31 March 2020 he controlled cash reserves in the entities of about $1.245 million held at bank.  He asserts that it is his intention to apply such funds to furthering the business and investment strategy of the two entities.  He asserts that the funds are necessary to meet ongoing trading expenses or other liabilities of the entities in respect to wages, motor vehicle running expenses, business premises rent, IT upgrade, ongoing taxation liabilities (although he asserts these have been already prepaid) and other miscellaneous business expenses.  Such an assertion omits the reality of the income earned by the entities to meet ongoing business expenses.

7. He asserts that in the event that each party was to receive $581,343 by way of partial distribution it we would be necessary to realise funds by way of asset sale or, indeed, J Pty Ltd would risk being placed into voluntary administration.  He adduces no evidence to support this contention notwithstanding that he clearly has management accounts for the entities as at January 2020, provided updated information on 30 March 2020 to the single expert and is able to depose to same in his affidavit.

8. The husband opposes the sale of the property at C Town. Such an order can remain for final determination at hearing in October 2020.

Discussion

1. It is readily apparent from the discussion above that the property pool for consideration in this matter is significant, comprising a number of real estate properties and ongoing corporate trading entities and trusts.  It is the husband’s case as presently pleaded that the wife receive a settlement that equates to 40 per cent of the net property pool with such percentage including the former matrimonial home at Suburb H.

2. As such he acknowledges a significant contribution by the wife to the matrimonial property pool and/or recognition of relevant s 75(2) factors.

3. At present the wife has received an interim distribution totalling $250,000, as has the husband.  Clearly, any further distribution to her as sought by her comes well within the ambit of her property entitlement as asserted by the husband.  If need be, any adjustment in relation to funds already received by her can be made by diminution of her entitlement in respect to the Suburb H property. 

4. Since separation the husband has remained effectively in absolute control of an overwhelming proportion of the matrimonial wealth of the parties, in particular, significant income streams through the corporate entities operated by him.  He has been able to use those resources to fund his own legal expenses to the detriment of the wife who has had to borrow and rely upon the previous capital distribution to meet her legal expenses and she asserts ongoing living costs for herself and the child.  There is clearly between these parties a very uneven playing field.

Interim Financial Provision

1. The principles as to applications for interim property provision are well settled, (Strahan & Strahan [2009] FamCAFC 166; (2011) FLC 93-466) and require a two-step process.

2. In Strahan, the Full 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.

3. Firstly, there must be circumstances enlivening the power to make an interim order. The test is not limited to “compelling circumstances” but whether it would be “appropriate” to make an interim order, with the “overarching consideration” being the interests of justice.

4. Secondly, the Court is to have regard to relevant matters in s 79 of the Family Law Act 1975 (Cth) (“the Act”). It needs to be kept in mind that the final outcome of property settlement should not be compromised by an interim property order. Either the remaining property needs to be adequate to meet the legitimate expectations of both parties at the final hearing or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.

5. A detailed inquiry is not required, but there must be some assessment of s 79 factors.

6. In Strahan the Full Court went on to say:

   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.

   140.As to the other matters being a position of relative financial strength on the part of the respondent to an application and the capacity of the respondent to meet his or her own litigation costs, there is no doubt that the financial circumstances of both parties are relevant at the substantive stage and may also be relevant at the procedural stage. Senior counsel for the Wife submitted that all of the matters discussed by the Full Court in Zschokke are self-evident and we accept that this is so in relation to at least two of the matters being the need for funds and the financial circumstances of both parties.

   141.As to the various matters discussed by Brereton J in Paris King Investments which we have discussed above, we do not propose to deal with all of what his Honour said, however we make the following observations about some of the matters. Obviously the applicant should have “at least an arguable case for substantive relief which deserves to be heard”. Further, in determining at the procedural stage whether to exercise the jurisdiction there may need to be evidence of the applicant’s “likely costs of the litigation” given that the need for funds to defray litigation costs and expenses is the circumstance propounded as to why it is appropriate that an order be made. We also accept that “it is not an essential precondition” that the applicant’s legal representatives will not continue to act unless the costs are paid or secured on an ongoing basis.

7. It is important to have regard to an overall caution. In Harris & Harris (1993) FLC 92-378, the Full Court said:

   As a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings.

8. In Strahan, the Full Court said at [132]:

   … 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.

9. It is readily apparent that there are significant factual issues as between the wife and the husband.  They will be resolved at final hearing.

10. In this matter, by reason of the discussion above, it is clearly appropriate to make an order for further interim financial provision to the wife.

11. It is readily apparent that notwithstanding any further financial provision to the wife, the remaining asset pool is of such significance as to be readily available to meet the legitimate expectations of both the husband and the wife.  Indeed, the husband’s case is that the wife is to receive 40 per cent of a most significant asset pool.

12. As discussed above, the husband has funds available to meet a capital payment to the wife.  He asserts that the party should each receive $150,000 being $300,000 in all.  The evidence is supportive of him having a more significant capacity to meet a capital payment to the wife.  In all of the circumstances a payment to the wife of $500,000 is appropriate.  The clarification of that sum will be reserved to final hearing.

13. Otherwise, it is noted that the husband has been able to meet his ongoing legal expenses from the financial resources available to him post separation.

Injunctions

1. Section 114 of the Act provides that the Court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate. In this matter, of course, the proceedings relate to the property of the parties and to the orders proposed by both parties.

2. Section 114 relevantly provides:

   (1)In proceedings of the kind referred to in paragraph (e) of the definition of matrimonial cause in subsection 4(1), the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including:

   (a)an injunction for the personal protection of a party to the marriage;

   (b)an injunction restraining a party to the marriage from entering or remaining in the matrimonial home or the premises in which the other party to the marriage resides, or restraining a party to the marriage from entering or remaining in a specified area, being an area in which the matrimonial home is, or the premises in which the other party to the marriage resides are, situated;

   (c)an injunction restraining a party to the marriage from entering the place of work of the other party to the marriage;

   (d)an injunction for the protection of the marital relationship;

   (e)an injunction in relation to the property of a party to the marriage; or

   (f)an injunction relating to the use or occupancy of the matrimonial home.

3. The grant of an injunction is discretionary and the basis upon which an order or injunction may be made is well settled. The wife, in this case, has readily satisfied the Court that there is a serious issue to be tried, that being the question of overall property entitlement as between herself and her husband.

4. It is clear by reason of the discussion herein that the wife has a significant likelihood of obtaining orders for substantial property adjustment.

5. She, in the context of this matter, seeks orders that would address the prospect of the diminution of the overall property pool by reason of her suspicions and concerns relating to the husband’s ongoing conduct of significant corporate entities post separation. 

6. She provides no evidence that is indicative of that occurring and acknowledges that there is an outstanding single expert report that will provide the foundation for an assessment of the value of the parties’ corporate and other interests.

7. The matter is listed for final hearing as to both parenting and property in October 2020 and no doubt the wife’s concerns and suspicions may give rise, if appropriate, to cross examination of the husband.  However, the husband is already restrained by injunctions as referred to above that constrain his conduct in operation of the companies and underlying trusts.

8. The Court must have regard to the balance of convenience as between the parties in the context of the orders sought by both of them. The determination about the balance of convenience may thus be an inference drawn from the facts and circumstances established by the applicant’s evidence: Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 321-322.

9. In Patterson, Gleeson CJ said after discussing the discretionary nature of the remedy at 321–325:

   It is not difficult to imagine situations in which justice and equity would require the granting of an injunction to prevent dissipation of assets pending the hearing of an action even though the risk of such dissipation may be assessed as being somewhat less probable than not.

10. In Skyworks v 32 Drummoyne Road [2017] NSWSC 343 MacDougall J said:

    24.The Court is required to undertake a qualitative evaluation of all the evidence that is available, to see if there is a sufficiently serious risk of frustration to justify the making of a freezing order. Further, the two considerations [namely, (1) whether there is a good arguable case and (2) whether there is a real risk of judgment frustration] should be analysed together (as each may impact on the other), and with an appreciation of both the underlying purpose of the rule and the relative risks of granting or withholding relief – the customary discretionary calculus.

11. The Full Court in Tsiang & Wu [2019] FamCAFC 128; (2019) FLC 93-911 said:

    25.It is unnecessary to demonstrate a positive intention but merely the possibility of the event occurring. The determination about the balance of convenience may thus be an inference drawn from the facts and circumstances established by the applicant’s evidence.

    26.Nor is it the role of the judge determining the question of the injunction to, in effect conduct a trial of the disputed evidence to resolve those disputes (see Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729).

    27.As to the determination of the existence of the risk and its magnitude, in Palmer v Parbery [2019] QCA 27 McMurdo JA (with whom Fraser and Gotterson JJA agreed) said:

    119.The determination of whether there exists a sufficiently serious risk of the dissipation of assets involves the evaluation of future possibilities, rather than the ascertainment of historical facts. The risk of dissipation might justify an order although the probability of the risk eventuating is less than 50 per cent. But, as the risk of dissipation must be a real and not merely a theoretical one, it must have an evidentiary basis. Where a fact is alleged by the plaintiff in support of its case about the risk, but there is contrary evidence from the defendant, must the fact be proved to the court’s satisfaction as if the application for the freezing order was the trial of the case? In my view, a plaintiff need not do so. A freezing order is interlocutory in nature; it does not involve a final determination of the parties’ positions. Usually it is made in circumstances of urgency in which the court is unable to conduct an extensive and conclusive factual inquiry in a way which is fair to both parties. Where the factual basis for the plaintiff’s case about the risk of dissipation is disputed, the risk will commonly have to be evaluated with the recognition that the factual basis for it is in doubt. Nevertheless, the possibility of the plaintiff’s evidence being correct, considered with other facts and circumstances, might mean that there is a sufficiently serious risk of the frustration of the satisfaction of a judgment as to justify the making of a freezing order. …

    (Footnotes omitted)

12. Matters raised by the wife as a consequence of her understanding, suspicions, and concerns are insufficient to enliven the Court’s jurisdiction for restraining orders in circumstances where such orders are in place.  Her further application for such orders will be dismissed.

13. Otherwise, the wife seeks various orders as to disclosure and discovery.  In circumstances where these proceedings have been ongoing since October 2017 and where there is a single expert report imminent and where final trial dates are only a few months away, matters that may arise from the husband’s inappropriate or inadequate disclosure and discovery as asserted by the wife can be the subject of his cross examination at trial.  Documents sought by her at trial can be the subject of a Notice to Produce to which attaches significant penalties if not complied with.  Such relief as sought will be refused.

14. Otherwise, the wife seeks orders in relation to certain payments that comprise the maintenance of the motor vehicle in her possession.  It is the husband’s case that he has acknowledged that the company that he controls is responsible for the maintenance and upkeep of that vehicle.  New tyres were provided to that vehicle only as recently as April 2020.  There is no necessity for such an order.

1. Otherwise, by reason of the close proximity of the final trial dates and in light of the husband’s objection to the sale of the C Town property that may give rise to significant capital gains tax consequences, it is appropriate that the fate of that property await final hearing in October.  The orders sought by the wife as to its sale will be refused.

2. Orders will be made accordingly.

I certify that the preceding eighty (80) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 3 August 2020.

Associate: 

Date:  3 August 2020