Gadde & Gadde
[2015] FamCA 617
•30 July 2015
FAMILY COURT OF AUSTRALIA
| GADDE & GADDE | [2015] FamCA 617 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Adjournment – Where the respondent husband made an application at the hearing – Where the adjournment was strongly opposed by the applicant wife – Adjournment granted due to the personal circumstances of the husband –Where senior counsel for the wife sought alternate orders as a term and condition of the adjournment being granted by the Court – Where the husband is in arrears of previous orders and the wife is in need of spousal maintenance – Where the husband has changed his position as to the source of the funds to be used which had been previously been agreed to – Indemnity costs – Orders made. |
Colgate Palmolive Company and AnorvCussons Pty Limited (1993) 46 FCR 225
Fennessy & Gregorian (2009) FLC 93-399
In the marriage of Redman (1987) FLC 91-805
Harris (1993) FLC 92-378
Kohan&Kohan (1993) FLC 92-340
McCrossen & McCrossen (2006) FLC 92-283
Melville & Dent (No. 2) [2009] FamCA 81
Sadlier & Sadlier [2015] FamCAFC 130
Stanford v Stanford (2012) FLC 93-518
State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146
Stoian & Flemming (Costs) [2014] FamCA 944
Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189
Yunghanns & Yunghanns (2000) FLC 93-029
| Family Law Act 1975 (Cth) ss 72, 75, 77, 117 |
| Family Law Rules 2004 (Cth) r 19.18 |
| APPLICANT: | Ms Gadde |
| RESPONDENT: | Mr Gadde |
| FILE NUMBER: | SYC | 417 | of | 2015 |
| DATE DELIVERED: | 30 July 2015 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | McClelland J |
| HEARING DATE: | 15 July 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Kearney SC |
| SOLICITOR FOR THE APPLICANT: | Barkus Doolan |
| THE RESPONDENT: | Mr Gadde appeared for and on his own behalf |
The Court orders pending further order that:
The respondent husband’s application for an adjournment of these proceedings is granted.
This matter is to be adjourned for further hearing to Monday 23rd November 2015 at 10.00 am.
The respondent husband sign an authority to C Partners which document is annexure ‘A’ to these orders (“the Authority”) and do all such other things and sign all such other documents necessary to cause and permit the following payments to be made forthwith to the applicant wife by B Pty Ltd as trustee of the Gadde Family Trust:
(a) The sum of $27 239.04 – to account for the arrears in respect of payments due to the wife pursuant to orders made 9 March 2015 and 17 March 2015; and
(b) The sum of $45 000 – to permit the wife to meet rental costs for 6 months.
Pending further order and within 7 days, the respondent husband cause to be paid to the applicant wife by B Pty Ltd as trustee of the Gadde Family Trust the sum of $25 017.
The respondent husband sign an authority to C Partners which document is annexure ‘B’ to these orders (“the Authority No. 2”) and do all such things and sign all such other documents necessary to cause and permit the payments in Order 4 to be made to the applicant wife.
The respondent husband shall do all such things and sign all documents as are necessary to authorise and permit the sale of any and all assets, including but not limited to all shares and other equities, held by or on behalf of B Pty Ltd as trustee of the Gadde Family Trust by C Partners so as to ensure that:
(a) The payments required by Orders 3 and 4 herein are made; and
(b) Any taxation payable by the B Pty Ltd as trustee of the Gadde Family Trust and/or the applicant wife as a result of payment to the applicant wife in accordance with these Orders is made by the said Trust.
Order 3 of the Orders of 9 March 2015 is discharged.
Pending further order and save as provided by these Orders, each of the respondent husband and the applicant wife be and hereby are restrained from by himself/herself, his/her servants and/or agents doing and/or causing or permitting to be done, any of the following:
(a) Transferring, encumbering or dealing in any way with the assets, income or undertakings of B Pty Ltd and of the Gadde Family Trust;
(b) Alienating or further encumbering any of the shares in the Company and/or Trust;
(c) Issuing any new shares or otherwise altering the shareholding (including any rights and entitlements attaching to or any other incident of the same) of the Company;
(d) Removing, replacing or appointing any director or other officeholder of the Company;
(e) Removing, replacing or appointing any appointor, trustee or beneficiary of the Trust; and
(f) Exercising any power of appointment or distributing of capital or income, or any power of revocation, variation or re-settlement in respect of the Trust.
The applicant wife has leave to serve a copy of these Orders upon C Partners.
In the event of the respondent husband failing to do so, pursuant to section 106A, a Registrar of this Court is authorised to sign such documents as are required to give effect to these Orders on behalf of the respondent husband, including each of the Authority and Authority No. 2.
The respondent husband is to pay the applicant wife’s costs thrown away today on an indemnity basis, which are quantified at $16 830, to be paid within twenty-one (21) days.
That the time for any appeal against these orders be extended to commence from the date that reasons for judgement are provided.
The Court notes that:
A.If the respondent husband wishes to file an Application regarding access to the property of the marriage, he has liberty to do so and any such application would also be dealt with on Monday 23rd November 2015.
The Court further directs that:
The respondent husband is to file any such Application as he sees fit with supporting documents within four (4) weeks.
The applicant wife is to file such a Reply as she sees fit together with any supporting documents within a further (4) weeks.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Gadde & Gadde has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 417 of 2015
| Ms Gadde |
Applicant
And
| Mr Gadde |
Respondent
REASONS FOR JUDGMENT
introduction
This matter came before the Court on Wednesday 15 July 2015 for the purpose of hearing an Application in a Case filed by Ms Gadde (“the wife”), seeking interim orders for spouse maintenance. In light of the procedural history of this matter, the wife proposed that the calculation of periodic payments be capitalised into lump sum amounts to be drawn from an investment account that forms part of the joint assets of the marriage.
At the hearing, the husband made an application for an adjournment of the wife’s application for interim orders. The husband advanced a number of reasons for his application but he primarily argued that an adjournment was necessary due to his inability to retain legal representation as a result of him needing to attend upon his terminally ill father.
The application for the adjournment was strenuously opposed by senior counsel for the applicant wife, on the basis that it would cause undue hardship to the wife.
In light of the husband’s personal circumstances, I granted the adjournment and made the orders as set out at the commencement of this judgement.
I now give my reasons for making those orders.
BACKGROUND
The wife filed an Initiating Application on 28 January 2015 for final and interim orders relating to property and spousal maintenance.
A brief chronology of events, prior to these proceedings being commenced, is as follows:
·In 1972, the husband is born.
·In 1974, the wife is born.
·In 2004, the wife acquires property at D Street, City E, Country F
·In 2004, the child, G, is born to the wife in a prior relationship.
·In July 2006, the parties commence co-habitation and move from Country F to live in Australia.
·In late 2006, the wife sells the D Street property.
·In February 2007, the parties purchase the property at H Street, Suburb I for $2.4 million.
·In February 2007, the husband commences to transfer $5 000 per month into the wife’s account to enable her to meet household expenses.
·In 2007, the parties marry.
·In September 2007, the wife obtains part-time employment (two days per week) with a consultancy firm for a period of several months.
·In 2009, the parties sell the Suburb I property for $2.43 million.
·The parties then purchase a property at J Street, Suburb K for $4.355 million using (in part) the proceeds of the Suburb I property.
·In 2009, the child, L, is born.
·In 2011, the wife commences employment on a part-time (one day per week) basis.
·On 4 February 2011, the Gadde Family Trust is established. The wife is the appointor and the trustee of the B Pty Ltd of which each of the parties are directors. Thereafter, the husband uses the Trust for the purposes of share trading.
·In September 2011, the parties refinanced the Suburb K mortgage with Credit Suisse with total borrowings of $3.15 million.
·In November 2013, the husband commences employment with M Pty Ltd, previously having been employed with Credit Suisse.
·In March 2014, the parties separate after a period of approximately eight years co-habitation.
·In July 2014, the wife obtains rental accommodation in Suburb N for $2 500 per week.
·On 1 August 2014, the sale of the Suburb K property completes for $5 million resulting in anticipated sale proceeds of $1,428,980.22
·In August 2014, Gadde Family Trust purchases an acreage in O Town, Country F for $767,250 with funds, including those drawn from the proceeds of the sale of the Suburb K property.
RELEVANT PROCEDURAL HISTORY
On 9 March 2015, the matter was listed for hearing before Aldridge J for the purpose of considering the wife’s application for interim orders. Orders made by his Honour included orders to the following effect:
·That upon the wife giving the usual undertakings as to damages, pending further order of the Court, the husband is restrained from selling, transferring or dealing with in any manner the assets, other than shares held in the Gadde Family Trust, from altering the constitution of the trustee company and from paying any dividends to any beneficiaries of the trust.
·By consent and by way of urgent spouse maintenance, the husband pay the wife $3 800 per week commencing on 10 March 2015 up to and including 21 April 2015.
·The proceedings were stood over to the duty list on 20 April 2015 for a possible interim hearing.
By consent, Aldridge J also made orders relevant to the preservation of the property of the marriage, pending further hearing. It has been necessary to modify those orders to facilitate the payments which are the subject of these orders. Subject to that, however, I have otherwise made orders to similar effect.
In her affidavit filed on 16 June 2015, the wife attested that, pursuant to the orders of Aldridge J, she should have received the amount of $26 600 from the husband in respect to the period from 10 March 2015 until 21 April 2015.[1] Of that amount, the wife claims that she has only received three amounts totalling $7600 leaving a balance payable of $19,000.[2]
[1] At paragraph 4.
[2] Wife’s affidavit affirmed 16 June 2015 at paragraph 6.
On 17 April 2015, the parties agreed to consent orders to the following effect:
1.That the application filed by the wife on 28 January 2015 be adjourned to the Case Assessment Conference on 19 May 2015 where thereafter, if the parties are unable to reach agreement on all interim issues, the wife has liberty to approach the Registrar for allocation of an interim hearing date.
2.That, by 21 April 2015, the husband and wife cause the wife to be paid $15 200 from the Gadde Family Trust.
3.That, by 21 April 2015, the husband cause the Gadde Family Trust to release to the wife a further $9 800.
4.That the categorisation of the payments in orders 2 and 3 be reserved.
5.A notation was also made that the parties intended to attend mediation prior to the Case Assessment Conference.
The wife attested that she then received an additional two payments from the husband totalling $16 160.96, leaving a balance payable in respect to the consent orders made on 17 April 2015 of $8 839.04.[3]
[3] Wife’s affidavit affirmed 16 June 2015 at paragraph 8.
The applicant therefore claims that the total amount outstanding in respect to the orders of 9 March 2015 and 17 April 2015 is $27 839.04.[4]
[4] Wife’s affidavit affirmed 16 June 2015 at paragraph 9.
On 15 July 2015 the wife filed an Outline of Case Document indicating that the wife was seeking orders to the following effect:
1.1 for the payment of $27 239.04 on account of payments outstanding pursuant to orders of 9 March 2015 and 17 April 2015;
1.2 for the payment of $1 700 per week (being $90 000 per annum capitalised) to permit the wife to secure rental accommodation for herself and the children of the marriage for the next 24 months; and
1.3 for payment of $962 per week (being $50 024 per annum capitalised) by way of spouse maintenance to provide a reasonable level of financial support for the wife on an interim basis for up to 24 months.
ADJOURNMENT APPLICATION
The grounds upon which the husband sought an adjournment of the hearing listed for 15 July 2015 were as follows:
·That he needed to obtain legal representation to meet the wife’s case.
·That the same day that the Amended Application in a Case was filed and served, on 16 June 2015, he learnt that his father only had three weeks to live requiring him to travel to Country F shortly thereafter,
·That he had only been back in Sydney for approximately one week after returning from Country F,
·That while he had found a lawyer who is willing to act for him, that lawyer had not been formally engaged.
·That he generally considered the processes of the Court an inappropriate way of resolving the matters in dispute.
·That the husband wished to move towards mediation as soon as possible.
·That the husband believed that he had lost his job as a result of these proceedings.
·That the husband believed the wife’s argument concerning her needs to be false and that she had resources available to her, as indicated by the fact that she had retained lawyers including senior counsel.
·That the wife had not properly considered the husband’s settlement proposals.
In response to questions during the course of submissions, the husband acknowledged that it was appropriate for the wife to receive some financial assistance, pending the substantial hearing of her application for interim orders. However, the husband was imprecise as to the amount or form of any such assistance.
The adjournment was strongly opposed by senior counsel for the wife on the basis of the following arguments:
· That the husband had failed to comply with the orders of Aldridge J made on 9 March 2015 and the consent orders entered into on 17 April 2015.
· That the husband had not filed any documents by way of reply to the wife’s application for interim orders which had been listed for hearing on 9 March 2015.
· That the husband had also sought an adjournment on that occasion in order to engage legal counsel.
· That orders were made on 9 March 2015 in order to facilitate the husband having an opportunity to file his evidence in response to that of the wife.
· That the husband had failed to attend mediation, as agreed to by the parties.
· On 18 May 2015, when the parties attended a Case Assessment Conference, the husband again agreed to attend mediation. However, at the conclusion of that Case Assessment Conference, the husband advised that his attendance at such mediation was conditional on the wife agreeing to implement certain parenting arrangements.
· On 21 May 2015, the husband’s former lawyers were copied into communication from the wife’s solicitors to the Court's Sydney Registry enquiring as to the allocated interim hearing date (the husband’s lawyers subsequently filed a Notice of Ceasing to Act on 9 June 2015.
· On 16 June 2015, the wife filed an Amended Application in a Case which was served upon the husband on that day.
· On 19 June 2015, the husband received communication from the Court advising of the interim hearing date on 15 July 2015.
· That the husband had been intentionally taking steps to delay the further advancement of this matter.
· That the husband has had adequate time to prepare for the interim hearing as evidenced in a text message he sent to the wife on 9 July 2015 which, in part read:
You have until Monday afternoon when J (sic) meet my lawyer. That Court hearing on Wednesday will be when this whole bullshit story of yours and your mother’s starts to unravel very painfully. I want your mother I (sic) a plane tomorrow. Don’t bother if she is here.
· That the husband’s approach to this litigation has been based on an ulterior purpose of depleting the assets of the marriage to the detriment of the wife.
LEGAL ISSUES IN RESPECT TO ADJOURNMENT
In State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146, Kirby J discussed why an adjournment application requires a balancing exercise to be undertaken. That exercise involves consideration of the resources of the Court, its rules and its management and also the need to consider justice for both parties.[5]
[5] See discussion in Anton & Malitsa (No. 2) [2009] FamCA 242.
Litigants, whether represented or unrepresented, should be aware that the time of a court is a public resource which must be managed effectively in the interests of not only the immediate litigants but also in the interests of other litigants waiting for their matters to be listed for hearing.[6]
[6]Sali v SPC Ltd (1993) 116 ALR 625.
In that context, courts place “considerable emphasis on the importance of dealing with cases expeditiously.”[7]
[7] See Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 as referred to by the Full Court of the Family Court in Nabers & Nabers [2011] FamCAFC 145 at [51].
However, it is a fundamental principle of justice that a person appearing before a court of law is given the opportunity of presenting material and making submissions relevant to issues being considered by the court before a decision is made by that court.[8]
[8] See for example Allesch v Maunz (2000) 203 CLR 172 at 184 – 85; Jones v National Coal Board [1957] 2 QB 55 at 67, Noelle & Fournier [2009] FamCA 328 and discussion in Nabers & Nabers [2011] FamCAFC 145.
In that context, “proper consideration needs to be given to the particular disadvantages suffered by a self-represented litigant”. That is not to say, however, that a self-represented litigant is entitled to any “privilege” over and above that of a represented litigant.[9]
CONSIDERATION
[9] See in particular Gallo v Dawson (1990) 93 ALR 479 per McHugh J.
Adjournment granted
A litigant, whether represented or unrepresented, who seeks an eleventh hour adjournment is likely to cause real inconvenience to the other party and to the court.
The other parties’ legal advisers are likely to have programmed their diaries to accommodate the appearance and counsel who have been instructed to appear are likely to have set the day aside for the appearance. From the Court’s perspective, it is inevitably the case that other matters awaiting consideration are deferred to a later time. In short, where a party seeks an adjournment, they should do so at the first available opportunity and provide as much notice as possible to the other party and the Court. This did not occur in respect to the adjournment sought by the husband in this case.
The first advice that the wife received of the husband’s intention to apply for an adjournment was at 8.57pm on the evening prior to the hearing of the application for interim orders on 15 July 2015.
Had it not been for the personal loss suffered by the husband, the Court would not, on the basis of the facts of this case, have entertained an application for an adjournment which in any event was strongly opposed by the wife.
However, in light of those unfortunate personal circumstances, an adjournment was granted.
Senior counsel for the wife proposed an amended minute of order in the event of such an adjournment being granted. The effect of the proposed orders was to achieve for the wife:
a) payment of $27 239 on account of payments outstanding pursuant to orders of 9 March 2015 and 17 April 2015;
b) payment of $1 700 per week (calculated by the wife as being $45,000 per annum capitalised) to permit the wife to secure rental accommodation for herself and the children of the marriage for the next six months; and
c)
payment of an amount equivalent to twenty-six weeks maintenance at the rate of $962 per week, being calculated by the wife as a capitalised figure of $25 012.
Payment of arrears
During the course of submissions, the husband conceded that the amount of $7 000 that he is required to pay pursuant to the orders made on 9 March and 17 April 2015 remained outstanding, but otherwise disputed the calculations of the wife.
Caution is required before making findings on the basis of uncontested evidence.[10] I note, however, that the respondent has had the opportunity to file evidence refuting the evidence of underpayment which has been given by the wife. While the husband disputed that figure in submissions from the bar table, there has been no material placed before the Court that challenges the veracity of the wife’s particulars of the amount outstanding and, for the purpose of this interim application, I accept the wife’s evidence in that respect.
[10] See Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720 at [45] as referred to in Ricci v Jones [2011] FamCAFC 222 at [52].
Senior counsel for the wife argued that the Court had power to make orders to the effect of those referred to in paragraph 27 as a condition of granting the husband’s application for an adjournment.
I further note that section 80(k) of Family Law Act 1975 (Cth) (“the Act”) empowers the Court to:
make any other order (whether or not of the same nature as those mentioned in the preceding paragraphs of this section), which it thinks it is necessary to make to do justice.
I am satisfied that the Court has power to make an order requiring the husband to pay arrears owing to the wife and to do so by way of a lump sum and within a specified period of time.
INTERIM SPOUSAL MAINTENANCE
Despite strongly opposing the husband’s application for an adjournment, senior counsel for the wife indicated that, if the Court was to grant an adjournment, it should do so on the basis of appropriate terms and conditions. Senior counsel also acknowledged that the Court would have power to make such orders in respect to accommodation and maintenance, pursuant to section 77 of the Act, but argued that section 72 was the more appropriate power.
LAW IN RESPECT TO SPOUSAL MAINTENANCE
Sub-section 72(1) of the Act relevantly provides:
(1) A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
Essentially, if an applicant for spousal maintenance establishes both a financial need and that the respondent has a capacity to pay, then, pursuant to section 74 of the Act, the Court may make such order as it considers proper for the provision of maintenance.[11]
[11] Zadenev & Zadenev [2013] FamCA 838 at [25].
In this case, it is necessary for the wife to establish that she is unable to adequately support herself for one of the reasons set out in section 72(1) having regard to the matters set out in section 75(2).[12]
[12] See Mitchell & Mitchell (1995) FLC 92-601 referred to in McCrossen & McCrossen (2006) FLC 93-283.
In McCrossen & McCrossen (2006) FLC 93-283 at 80,838,the Full Court of the Family Court, after referring to a number of earlier authorities, said that the question as to whether or not a person is able to support themselves “adequately” :
…is not to be determined upon a “subsistence level” but upon consideration of whether the applicant can support himself or herself “adequately” importing a standard of living reasonable in the circumstances.
In the marriage of Redman (1987) FLC 91-805, the Full Court at 76,081 recognised the need for some flexibility in the approach to applications for interim maintenance in the following terms:
As Nygh J said in Ashton … on an application for interim maintenance the court conducts ''not as final or exhaustive a hearing as would be the case if one were hearing the matter finally'': Williamson and Williamson per Fogarty J. The evidence need not be so extensive and the findings not so precise. Having regard to those factors, and the general injunction of sec. 97(3), the court should in such matters have a greater degree of flexibility than it possesses in applications for maintenance which are intended to last for an indefinite period and can only be varied under sec. 83. (References omitted)
CONSIDERATION
I note, for the purposes of section 72 (1)(a) and section 75(2)(b), that, as result of her caring responsibilities for the children, the wife is only able to work two days per week[13] generating an average weekly income of $372 per week.[14]
[13] Wife’s affidavit affirmed 23 January 2015 at paragraph 74.
[14] Wife’s updated financial statement filed 16 June 2015.
I note also that, leaving aside rent, the wife’s updated financial statement indicates that she incurs average weekly expenditure of $1 280 for herself and $747 for her son L, the child of the marriage (section 75(2)(c)). The wife asserts that she is not receiving child support payments from the husband in respect of L (section 75(2)(na)).
Further, the wife’s updated financial statement indicates that she has responsibility to support another child (from a previous relationship) to the extent of $847 per week (section 75 (2)(e)).
In terms of section 75(2) (l), I note that the wife wishes to continue to continue her role as a parent of her children.[15]
[15] Wife’s affidavit affirmed 23 January 2015 at paragraph 74.
For the purposes of section 75(2)(o), I note that this is the third Court event where issues regarding the accommodation and financial support for the wife and the child of the marriage has been considered. There will now be a fourth prior to the final hearing. In that context, as mentioned, I have also had regard to the fact that the wife is facing a situation of immediate hardship as a result of not having a permanent residence. This is partly as a result of the previous orders of this Court not being complied with by the husband.
The husband’s financial statement indicates that, aside from rent, his weekly personal expenses are $1 719 per week and his expenditure in respect to the child of the marriage is $85 per week.[16]
[16] Husband’s financial statement filed 15 April 2015.
While the husband’s affidavit attests to difficulty in accessing cash reserves,[17] the husband has a very substantial earning capacity for the purposes of section 75(2)(b) of the Act.[18]
[17] Husband’s affidavit sworn 15 April 2015 at paragraphs 94 to 103.
[18] Ibid at paragraphs 8, 25 and 29.
As an additional consideration, pursuant to section 75(2)(b), the husband’s financial statement indicates that he potentially has access to financial resources of $1 307 508.
For the purpose of making interim orders, I find that the husband is reasonably able to maintain the wife as contemplated by section 72(1) of the Act and can do so if orders are made to enable him to access the financial resources to which I have referred.
From the perspective of needs, senior counsel for the wife referred to the evidence of the wife that she has been forced to vacate the rental accommodation that she has been living in with her two children since separation. Senior counsel noted that the wife is currently residing with friends and that assertion was not contradicted by the husband. I accept that the wife is not currently in any permanent accommodation and that is an unacceptable situation which has occurred, in part, as a result of the husband’s failure to comply with previous orders of this Court.
I further accept that the prospects of the wife obtaining suitable alternative accommodation would be extremely difficult if she is unable to enter into a lease for a period of at least six months.
In accepting the figure proposed in the wife’s amended minute of order, of $1 700 per week by way of assistance for rental accommodation, I note that the combined amount for rent and weekly maintenance (to be discussed below) is considerably less than the amount agreed to between the parties as an appropriate figure for urgent spouse maintenance in Order 4 of the orders made on 9 March 2015 by Aldridge J.
In light of the husband’s failure to comply with previous orders of the Court, my orders will require the husband to facilitate a lump sum payment to the wife in respect to rental accommodation for a six month period. This will enhance the ability of the wife to negotiate a lease and ensure that the wife and her children have accommodation beyond the next court event which is listed for hearing on 23 November 2015.
In the alternative to awarding maintenance pursuant to section 72 of the Act, I record that I would have ordered urgent spousal maintenance pursuant to section 77 of the Act. Specifically, I find that the wife is in a situation of immediate need that justifies an award of urgent maintenance.
Section 77 of the Act relevantly provides:
Where, in proceedings with respect to the maintenance of a party to a marriage, it appears to the court that the party is in immediate need of financial assistance, but it is not practicable in the circumstances to determine immediately what order, if any, should be made, the court may order the payment, pending the disposal of the proceedings, of such periodic sum or other sums as the court considers reasonable.
(Emphasis added)
In Sadlier & Sadlier [2015] FamCAFC 130 May J, at [37], said:
Urgent maintenance orders are often referred to as “stop-gap” orders (Page &Page (1987) FLC 91-806) which are provided to assist with an immediate need of the spouse until a hearing can be set down for spousal maintenance orders pursuant to ss 72 and 74 of the Act. Nygh J analysed the difference between urgent and interim maintenance orders in Ashton & Ashton (1982) FLC 91-285 (at pp 77,613–77,614):
An application for interim maintenance is basically different from an application for urgent maintenance. An application under s 77 is heard at a time when all the evidence is not yet to hand. It may have to be made ex parte or may have to be made on such evidence as the husband is able to supply in the short period before the matter is set down for hearing. An application for interim maintenance is a creature whose exact nature has not been adequately defined but, as I understand it, differs only from an application for permanent maintenance in that the order which is sought is an order until further order. ...
...
On an application for interim maintenance, the normal procedures relating to applications for maintenance under s 74 must be observed and an application for maintenance can only be heard after each party has had the opportunity to adduce evidence, that is to say, the normal procedure for the filing of affidavits by both parties and the filing of financial statements must be observed.”
In Sadlier (supra) at [36], May J summarised the criteria to be considered by the trial judge before making an order under section 77 of the Act in the following terms:
In a s 77 application, the primary judge is obligated to consider:
(a)Whether there is an immediate need of financial assistance (Malcolm & Malcolm (1977) FLC 90-220);
(b)Practicability of making an order in the circumstances, particularly where there is sufficient evidence to justify making an interim or final maintenance order (Malcolm & Malcolm); and
(c)The period of the order, which should be for a relatively short duration (Chapman & Chapman (1979) FLC 90-671).
As noted, while the husband was imprecise as to the amount or nature of financial assistance, both parties acknowledged that the wife is in immediate need of some degree of financial assistance.
I have determined that the wife has an urgent and immediate need for stable accommodation. As an alternative to making orders pursuant to section 72 of the Act, I would therefore have made orders pursuant to section 77 for the payment of the amount sought by the wife for rental assistance.
Further, lest it be argued that the release of capital for the maintenance payments threatened to interfere with the subsequent exercise of power under section 79 of the Act, I note that the parties’ financial statements indicate that there will be sufficient property remaining to meet the legitimate expectations of the parties at the final hearing of the matter.[19]
[19] See Strahan & Strahan (Interim property orders) (2011) FLC 93-466 at 85,633.
In that respect the Full Court of the Family Court (Nicholson CJ, Fogarty and Moore JJ) in Harris (1993) FLC 92-378 said at 79,930:
(1) … Urgent situations may arise where it is necessary to exercise this power if injustice is to be avoided. Examples include cases where it is necessary to do so to avoid an asset being eroded or lost in the intervening period, and cases (beyond the maintenance power) where an order in favour of one party is necessary to preserve or obtain a home for or is otherwise necessary for the welfare of the children ...
(2) It is an exercise of the s.79 power. Consequently it must be performed within those parameters. Since it is not the final hearing the Judge is unlikely to have the final findings, but the exercise must fall within that general framework and the material available at that time.
(3) Of necessity it is likely to be a somewhat imprecise exercise. Consequently, it must be exercised conservatively and the Judge must be satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the order which is contemplated is capable of being reversed or adjusted if it is subsequently considered necessary to do so.
As will be discussed below, in the context of the brief argument that occurred on 15 July 2015, I have given consideration of the matters in section 79(4) including those referred to in section 75(2) of the Act.
Having regard to the factual matters to which I have referred, I would therefore have found it “just and equitable”, in accordance with the principles clarified by the High Court in Stanford v Stanford (2012) FLC 93-518[20], to make an interim property order pursuant to section 79 and 80(1)(h) of the Act requiring the husband to take such steps as are necessary to effect the release of funds from the joint assets of the marriage to enable him to provide for the wife to enter into a lease for a period of not less than six months.
[20] at pp 86,640-41 and 86,642.
Releasing funds in respect to spousal maintenance
Senior counsel for the wife also argued that, either as a term and condition of the adjournment or pursuant to section 72 of the Family Law Act 1975 (Cth) (“the Act”), the Court should order the husband to pay a lump sum amount by way of spouse maintenance to the wife also for a period of six months.
For the reasons previously outlined, I find that the wife has established that she is unable to support herself adequately for the purposes of section 72(1) having regard to those section 75(2) considerations identified above.
Similarly, for the purpose of these interim orders, and for the reasons set out above, I find that the husband is reasonably able to maintain the wife as contemplated by section 72(1) of the Act.
Accordingly, in the circumstances, I accept the argument of senior counsel for the wife that it is appropriate for the Court to order the payment of a lump sum equivalent to twenty-six weeks maintenance at the rate of $962 per week, being a capitalised figure of $25 012. In accepting that figure, I again note that the combined amount in respect to rent and weekly maintenance is less than that agreed between the parties as an appropriate figure for urgent maintenance on the 9 March 2015. It is also considerably less than the amount the husband has identified in his financial statement as his average weekly expenditure.
Similarly, in making an order for a lump sum payment, I have had regard to the husband’s failure to comply with orders of the Court. I have decided that the wife should not be put to further inconvenience, hardship and expense which would occur if the husband failed to comply with an order for regular periodic payments.
In making such an order for interim maintenance, pursuant to section 72 of the Act, I also note that, had it been necessary, for the reasons previously given, the Court would have made orders for urgent maintenance pursuant to section 77 of the Act or, in the alternative, for interim property orders pursuant to sections section 79 and 80(1)(h) of the Act.
Source of funds
In exercising my discretion to require the payment of the wife’s rent and to provide spouse maintenance, I have ordered that the source of the funds be the Gadde Family Trust. In so doing, I have rejected the husband’s submission that the source of such funds should be from a joint National Australia Bank controlled account.
The primary reason for my rejecting the husband’s argument in that respect is that it is apparent that a considerable portion of the purchase price of the parties Suburb I property was made by, or on behalf, of the wife. I note that the wife claims, at paragraph 13 of her affidavit filed 23 January 2015, that the amount contributed by or on her behalf was $1 073 462.41. In these interim proceedings, I am not in a position to determine the total amount so contributed. However, while there appears to be an issue regarding the nature of the contribution made by the wife’s parents, I note that the wife’s precisely particularised figures have not otherwise been contradicted in material which the respondent has filed to date.
I am therefore satisfied that the wife has contributed considerably more than the amount she has sought to be released in the combined amount from these orders and the orders made on 9 March and 17 April 2015.
Further, the husband has not challenged that the proceeds of the sale of the original marital home at Suburb I were used in the purchase of the parties Suburb K property. In turn, the husband acknowledges that a portion of the proceeds of the sale of the Suburb K property were placed in the Gadde Family Trust.[21] Again, while it is not possible to precisely calculate the figure in these interim proceedings, it is clear that the amount considerably exceeds the amounts which are the subject of the orders herein.
[21] Husband’s financial statement filed 15 April 2015 at notes 56 and 59.
Finally, while the husband has since changed his position, on 17 April 2015, the husband entered into consent orders that identified the appropriate source of funds to sustain the wife on an interim basis was the Gadde Family Trust.
COSTS
Are indemnity costs justified?
Senior counsel for the wife also submitted that, as a condition of the adjournment, the husband should be ordered to pay costs on an indemnity basis.
Section 117 of the Act sets out the basis upon which the Court is empowered to award costs. That section relevantly provides:
117 Costs
(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the Court is of opinion that there are circumstances that justify it in doing so, the Court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the Court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the Court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the Court considers relevant.
(3) To avoid doubt, in proceedings in which an independent children’s lawyer for a child has been appointed, the Court may make an order under subsection (2) as to costs or security for costs, whether by way of interlocutory order or otherwise, to the effect that each party to the proceedings bears, in such proportion as the Court considers just, the costs of the independent children’s lawyer in respect of the proceedings.
(4) However, in proceedings in which an independent children’s lawyer for a child has been appointed, if:
(a) a party to the proceedings has received legal aid in respect of the proceedings; or
(b) the Court considers that a party to the proceedings would suffer financial hardship if the party had to bear a proportion of the costs of the independent children’s lawyer;
the Court must not make an order under subsection (2) against that party in relation to the costs of the independent children’s lawyer.
(4A) If:
(a) under section 91B, an officer intervenes in proceedings; and
(b) the officer acts in good faith in relation to the proceedings;
the Court must not, because of the intervention, make an order under subsection (2) of this section against the officer, or against an entity (including the Commonwealth or a State or Territory) by or on behalf of whom the officer was engaged or employed.
(5) In considering what order (if any) should be made under subsection (2) in proceedings in which an independent children’s lawyer has been appointed, the Court must disregard the fact that the independent children’s lawyer is funded under a legal aid scheme or service established under a Commonwealth, State or Territory law or approved by the Attorney‑General.
A litigant in the Family Court must establish that the justice of the case requires an order for costs by reference to the non-exhaustive list of statutory considerations set out in section 117 before any such order is made.[22] I have considered the matters set out in section 117(2A) generally. I note that the husband has a vastly superior earning capacity to the wife (section 117(2A)(a).
[22] See Laskari &Laskari and Ors [2015] FamCA 398 at [106] where reference is made to Prantage (2013) FLC 93-544.
As will be discussed, I have also considered sub-sections 117(2A)(c),(d) and (g) to be relevant in determining this matter.
In Melville&Dent (No.2) [2009] FamCA 81, Cronin J discussed the basis upon which the question of indemnity costs arise and referred to, at [33], the decision of Sheppard J in Colgate Palmolive Company and AnorvCussons Pty Limited (1993) 46 FCR 225 as providing a ‘pertinent observation’ of the ‘court-endorsed costs structure of litigation’, where his Honour said:
For present purposes it is enough to say that the position is as it is because members of the profession, both solicitors and counsel, and also professional witnesses, have refused to accept as a proper or sufficient guide to their costs and fees the provisions of scales of costs and charges provided for in schedules … Taxing officers have been obliged to tax bills on the basis of the Rules and the Schedule. The fact that the scales themselves provided ranges of fees of charges for various items depending on degree of difficulty, levels of responsibility and time involved, has not overcome the practical problem which exists.
In Kohan&Kohan (1993) FLC 92-340, the Full Court noted that it was “an exceptional case” where the Court departed from the general rule that costs, if awarded, should be on a party/party basis and, instead, be on an indemnity basis. In Yunghanns & Yunghanns (2000) FLC 93-029, the Full Court, applied Kohan (supra), to confirm that an order for the payment of indemnity costs is “a very great departure from the normal standard”.
Nevertheless, as confirmed by the Full Court in Fennessy & Gregorian (2009) FLC 93-399, referring to the decision of Sheppard J in Colgate-Palmolive Co (supra), there are circumstances which may arise that “warrant the Court in departing from the usual course” of awarding party/party costs and, instead, awarding costs on an indemnity basis.
While the categories in which indemnity costs may be awarded are not closed, examples of situations which may justify that course of action are usefully set out by Harper J in in Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 at [7] as including where:
(i). The making of an allegation, known to be false, that the opposite party is guilty of fraud: Fountain Selected Meats (Sales) Pty Ltd. v International Produce Merchants Pty Ltd (1988) 81 ALR 397.
(ii). The making of an irrelevant allegation of fraud: Thors v Weekes (1989) 92 ALR 131.
(iii). Conduct which causes loss of time to the Court and to other parties: Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (unreported, Federal Court, French J, 3 May 1991).
(iv). The commencement or continuation of proceedings for an ulterior motive: Ragata Developments Pty Ltd v Westpac Banking Corporation (unreported, Federal Court, Davies, J., 5 March 1993).
(v). Conduct which amounts to a contempt of Court: EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59.
(vi). The commencement or continuation of proceedings in wilful disregard of known facts or clearly established law: J-Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (WA) Branch (No 2) (1993) 46 IR 301.
(vii). The failure until after the commencement of the trial, and without explanation, to discover documents the timely discovery of which would have considerably shortened, and very possibly avoided, the trial: National Australia Bank v Petit-Breuilh (No 2) (unreported, [1990] VSC 395, 18 October 1999).
A similar summary of the kinds of conduct justifying an order for indemnity costs can be found in Colgate-Palmolive Co (supra) at 233-234. Those principles have generally been applied in this Court.[23]
[23] See for instance useful analysis by the Full Court of the Family Court in Limousin v Limousin (Costs) (2008) 38 Fam LR 478; Watts J in Lambert and Jackson [2011] FamCA 275 and see also Ryan v Primesafe [2015] FCA 8 at [110].
It is clear that gross discourtesy to the Court and another litigant that needlessly causes loss of time and needless expense can be grounds for the awarding of indemnity costs.[24]
[24] Byrnes v Brisconnections Management Company Limited (No. 2) [2009] FCA 1432 (27 October 2009) at [49] and Freeman v James [2002] QSC 464 (29 November 2002) at [12].
In these proceedings I have avoided determining whether the husband has had the intention of misusing the proceedings for the purpose of depleting the resources of the wife, as alleged by senior counsel for the wife. To make such a finding would require evidence sufficient to satisfy the Court according to the Briginshaw standard.[25]
[25] Briginshaw v Briginshaw (1938) 60 CLR 336.
Nonetheless, I have had regard to the fact that the husband has deliberately failed to comply with the orders of the Court made on 9 March 2015 and those orders which were entered into by consent on 17 April 2015 (section 117(2A)(d)). In that respect, in addressing the Court on 15 July 2015, the husband stated that he deliberately left an amount unpaid for apparently tactical reasons. Specifically, before being cautioned about his presentation, the husband said:
I left that $7000 unpaid where that is a breach of court orders and a serious matter and I did so because I wished to bring attention to the circumstances in which those orders were made.
I have also had regard to the fact that the respondent has, on two occasions, relied on the fact that he has not engaged a legal adviser as a basis upon which he has sought an adjournment (section 117(2A)(c)). It is perhaps understandable that the husband was unable to give his proper attention to this matter in the period immediately after finding out on 16 June 2015 that his father had only a few weeks to live. Nevertheless, the husband had ample time prior to that date to arrange legal representation and/or advise the other party and the Court of his difficulties. Further, at the hearing on 15 July 2015, the husband informed the Court that he had been in Australia for approximately one week prior to the hearing of this matter. Again, that period provided him with the opportunity of engaging legal representation and/or advise the other party and the Court of his difficulty.
The fact that the husband did not advise the applicant of his intention to apply for an adjournment until 8.57 pm on the evening prior to the hearing amounted to gross discourtesy resulting in the needless wasting of time by the Court and the applicant’s lawyers and, as such, falls into the third category identified by Harper J in in Ugly Tribe Co Pty Ltd v Sikola (supra).
As a result of that conduct, it has been necessary for the Court to set an additional hearing date to consider the application for interim orders on a longer term basis. This means that the applicant will incur additional fees and another litigant before the Court will be deprived of the opportunity of having their matter listed on that day.
Further, a significant reason for the Court being required to consider the applicant’s application for immediate rental assistance and maintenance was, in part, the deliberate failure by the husband to comply with the orders of the Court made on 9 March 2015 and the consent orders entered into on 17 April 2015.
On that basis I find that the applicant’s request for indemnity costs to be imposed as a condition of the adjournment has substance and I so order.
Quantification of Indemnity Costs
91.Rule 19.18 of the Family Law Rules 2004 provides for the methods of calculating costs. These include, in r 19.18(1)(a), the Court fixing upon a specific amount for costs or, in r 19.18(1)(b), an order for the costs to be assessed on a particular basis.[26]
[26] Stoian & Fiening (Costs) [2014] FamCA 944 at [82].
In Stoian & Flemming (Costs) [2014] FamCA 944, Kent J endorsed the applicable principles, for applying an equivalent rule to Rule 19.18, as adumbrated by Einstein J in Idoport Pty Ltd v National Australia Bank Limited & Ors, Idoport Pty Ltd v Donald Robert Argus[2007] NSWSC 23 (unreported delivered 7 February 2007). Those principles are:
(i). the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation.[27]
[27] Beach Petroleum NL v Johnson(1995) 57 FCR 119, Von Doussa J page 265: [following Purchase J in Leary v Leary[1987] 1 All ER 261 who described the purpose of the rule allowing the fixing of a gross sum as “the avoidance of expense, delay and aggravation involved in protracted litigation arising out of taxation” (All ER page 265)].
(ii). the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable.[28]
[28] Beach Petroleum NL v Johnson(1995) 57 FCR 119 at [16].
(iii). the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available.[29]
[29] Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738, per Giles JA at [22]; [following (Wentworth v Wentworth (CA, 21 February 1996, unreported, per Clarke JA) and adopted in Sony Entertainment v Smith [2005] FCA 228; (2005) 215 ALR 788].
(iv). a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place.[30]
[30] Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738, per Giles JA at [22].
(v). the gross sum “can only be fixed broadly having regard to the information before the Court”:[31]
[31] Beach Petroleum NL v Johnson(1995) 57 FCR 119 at [124].
…
Consistent with those principles, it has been determined that, where a court orders a party to pay indemnity costs and the matter is relatively simple, it may be appropriate for the court to fix a lump sum. By doing so, the court can avoid further delay and inconvenience being occasioned by the requirement to tax a bill.[32]
[32] Byrnes v Brisconnections Management Company Limited (No. 2) [2009] FCA 1432 at [51].
I have inquired of senior counsel for the wife as to what those indemnity costs would be. The relevant amount is $16 830 representing solicitor’s fees of $1 800 plus GST and senior counsel’s fees of $13 500 plus GST. I find that the solicitor’s fees are reasonable and, having regard to the fact that senior counsel was retained to appear without junior counsel and that these proceedings have involved a considerable amount of preparatory work I find that the costs for senior counsel of $13 500 plus GST in respect to work associated with the aborted hearing on 15 July 2015 (and associated preparatory work) to also be reasonable.
Pursuant to section 117(2A)(a) of the Act, I have had regard to the respective financial circumstances of the husband and the wife. In particular, I note that the husband’s financial statement indicates that he has total financial resources of $1 307 508. I further note that the husband has a significant earning capacity, as indicated in paragraphs 8, 25 and 29 of his affidavit.[33]
[33] Husband’s affidavit filed 15 April 2015.
I have determined that it would be unfair to require the wife to meet the costs associated with the adjourned hearing on 15 July 2015 and, in all the circumstances that I have noted, it is appropriate for those cost to be met by the husband on a quantified indemnity basis.
CONCLUSION
In many ways it is regrettable that the resources of the Court and the parties have been engaged on an interim skirmish of this nature. It remains the case, however, that these proceedings arose, in part, as a result of the husband’s deliberate failure to comply with orders of the Court. As a result, the wife has been placed in a situation of immediate need that is due to no fault of her making. This, together with the husband unreasonably causing a needless waste of time for the Court and the other party, has resulted in the Court, exercising powers under the Act, to impose conditions on the adjournment that has been granted to the husband.
For these reasons, I make the orders as set out at the commencement of these reasons for judgment.
I certify that the preceding ninty-eight (98) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 30 July 2015.
Associate:
Date: 30.07.2015
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