GAETANO & GAETANO
[2017] FamCA 95
•24 February 2017
FAMILY COURT OF AUSTRALIA
| GAETANO & GAETANO | [2017] FamCA 95 |
| FAMILY LAW – CHILDREN – Interim issue as to schooling – Consideration of – children’s views – Discussion as to general principles – Where no interim change as to children’s schooling appropriate in the present circumstances – Where schooling issue appropriate for determination at final hearing FAMILY LAW – SPOUSAL MAINTENANCE – Interim – Whether mother entitled to spousal maintenance – Whether father has capacity to pay – Where application for interim spouse maintenance dismissed FAMILY LAW – PROPERTY – Interim – Whether interim orders sought are appropriate – Where father disposed of various properties with no evidence as to how funds were disbursed – Should the parties’ rights and interests be altered – Where no evidence as to available source of funds to meet interim property order – Where interim property application dismissed |
| Family Law Act 1975 (Cth) 65D, 72, 75(2), 79, 80(1)(h) |
| Harris & Harris (1993) FLC 92-378 Kirkland and Granger [2007] FamCA 1471 Raymond and Harold [2009] FamCA 155 Re G: Children’s Schooling [2000] FamCA 462 Strahan & Strahan [2009] FamCAFC 166 |
| APPLICANT: | Ms Gaetano |
| RESPONDENT: | Mr Gaetano |
| FILE NUMBER: | PAC | 2034 | of | 2016 |
| DATE DELIVERED: | 24 February 2017 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 16 January 2017 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Mr Layson of Sarah Bevan Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Ms Druitt |
| SOLICITOR FOR THE RESPONDENT: | Forsters Solicitors |
Orders
That the mother be permitted to continue the attendance of the children of the marriage at B School provided always that she pay the school fees for the children as due and payable and as and from the commencement of school Term 1 2017 she, pending further order, indemnify the father from liability for such fees.
That the mother’s application for interim spouse maintenance be dismissed.
That the mother’s application for interim property provision be dismissed.
That the father pay as they fall due and payable mortgage payments, Council and Water rates and insurances on the property at 1 - 2 C Street, Suburb D and pay as they fall due and payable mortgage payments in relation to the property at 3 C Street, Suburb D and in the event of the father’s non-compliance with this order the mother shall have leave to apply for the sale of the property at 1 - 2 C Street, Suburb D.
Otherwise all interim applications are dismissed.
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 Gaetano & Gaetano 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 |
FILE NUMBER: PAC 2034 of 2016
| Ms Gaetano |
Applicant
And
| Mr Gaetano |
Respondent
REASONS FOR JUDGMENT
In these proceedings and on 9 May 2016 the applicant father filed an Initiating Application seeking final orders only. In that application he sought orders to the effect that:
a)the subject children live with the father,
b)the children spend time with the mother on a two weekly cycle being three days and one night in week one and two days and two nights in week two.
The father sought no interim orders.
The orders sought by the father as to parenting were varied by reason of a Reply filed by the father on 16 September 2016. In that Reply the father sought parenting orders that in summary provided:
a)that the mother and father have joint parental responsibility for the subject children,
b)that the children live with the father,
c)that the children spend time with the mother during school term in a two weekly cycle being in week one from 7.00 pm Sunday to before school Tuesday and in week two from 9.00 am Sunday to before school Tuesday and otherwise for specific periods relating to Easter, Christmas, Mother’s Day, the mother’s birthday, the children’s birthdays and Father’s Day,
d)that there be a telephone communication between the children and the non-resident parent each day between 6.00 pm and 7.00 pm,
e)that changeovers where not at school be at the Suburb D residences of the parties,
f)that both parties be restrained from relocating the residence of the children outside a defined area roughly between Suburb D and Suburb E in Sydney,
g)otherwise various specific issues orders relating to school and extracurricular activities, the mother’s consumption of alcohol, mutual notification as to medical issues and overseas travel.
Otherwise, in his Reply the father sought final orders as to property in summary:
a)that the mother refinance the mortgage secured over 3 C Street, Suburb D, that the father then pay to the mother $291,500.00 and transfer the property to her,
b)that the mother transfer to the father the property at 1 - 2 C Street, Suburb D and her shareholding in Company F Australia (sic) and G Pty Ltd.
The mother filed a Response to the father’s Initiating Application on 20 June 2016 seeking orders as to parenting and property. As to property, the mother sought orders that in summary provided:
a)that the father do all things necessary to discharge the mortgage secured over the property at 3 C Street, Suburb D and that thereafter the father transfer that property to the mother,
b)that the mother and father do all things necessary to facilitate a roll-out of the mother’s superannuation entitlement in the Gaetano Family Super Fund.
As to parenting the mother in summary sought the following orders:
a)that the mother have sole parental responsibility for the children,
b)that the children live with the mother,
c)that the children spend time with the father during school terms from 5.00 pm Friday to 4.00 pm Sunday on the first and third weekend of the calendar month and from 5.00 pm Friday to 6.00 pm Sunday on the second and fourth Fridays of the calendar month, from 7.00 am to 7.00 pm each Wednesday and otherwise for school holiday time, time at Easter, Father’s Day and at Christmas,
d)that for the purposes of changeovers the mother deliver the children to the father’s usual place of residence and that the father return the children to the mother’s usual place of residence subject to agreement that the children could be collected or returned to the respective grandparents’ homes.
The only issues pressed for determination on an interim basis were schooling, spouse maintenance and interim property.
Context
The mother is 39 years of age and the father 41 years of age.
The parties commenced cohabitation in about 2004 and married in 2006. They separated on 3 January 2015 and are now divorced.
There are four children of the parties’ relationship:
a)H born in 2007 now nine years of age,
b)J born in 2009 now seven years of age,
c)K born in 2011 now five years of age,
d)L born in 2013 now almost four years of age.
Following separation the mother moved with the children to her parent’s home at 3 C Street, Suburb D, a property registered in the names of the father and the mother’s parents. The father remained living in the matrimonial property at 1 - 2 C Street, Suburb D and has prevented the mother from having access to that property notwithstanding that she asserts that he resides there infrequently.
The Interim Applications
On 13 October 2016 the mother filed an Application in a Case seeking, in summary, the following orders:
a)that within 14 days the father pay to the mother by way of interim property for costs the sum of $50,000.00,
b)that within two business days of any payment by the father to his solicitors or accountant or expert engaged by him the father pay the same amount to the mother’s solicitors,
c)that pending further order the father pay to the mother the sum of $300.00 per week by way of interim spouse maintenance and continue to pay as they fall due and payable all mortgage payments in respect of the properties at 1 - 2 and 3 C Street, Suburb D and all building insurance premiums, rates, levies, utilities and all other costs for the property at 1 - 2 C Street when they fall due and payable,
d)that in default of the father complying with the previous orders the parties do all necessary things to cause a sale of the property at 1 - 2 C Street, Suburb D with the net proceeds of sale after payment of agents commission and legal costs and discharge of mortgage being paid as to $100,000.00 to the mother and the balance to be retained in a controlled monies account,
e)that within 14 days the father transfer to the mother the motor vehicle or multi-van as nominated by him and such transfer of that vehicle in the father’s name to the mother with such vehicle to be undamaged and in good order and condition with updated registration and servicing.
The father for his part filed a Response to the mother’s Application in a Case on 16 November 2016. In that Response he sought:
a)a dismissal of the mother’s Application in a Case save for his agreement to orders sought by the mother in relation to the provision to her of a motor vehicle.
b)that the mother do all things necessary to give one term’s notice to B School to cease the enrolment of the children at that school by the end of term 1 2017 and procure the enrolment of the children at either M School or N School at the beginning of Term 2 2017.
c)that hearing of the proceedings be expedited although such order was not pressed at the interim hearing.
The mother’s evidence
The mother relied upon the following documents:
a)her financial statement filed 20 June 2016,
b)her affidavit filed 13 October 2016,
c)her updating affidavit filed 10 January 2017.
The mother asserts that at the commencement of cohabitation she had minimal assets and the father had recently commenced a business.
Throughout the marriage the mother says that she worked in the business subject to her obligations as a primary carer for the four children of the relationship.
She says that during the relationship the father controlled the parties’ finances although she had access to information through her administrative work in the business. During cohabitation various properties were bought and sold.
The parties purchased the property at 3 C Street, Suburb D in 2005 for $800,000.00 in the name of the father. Subsequently in 2010 the parties purchased in the name of the mother a property at 1 - 2 C Street, Suburb D for $1.26 million. The purchase was financed in part by the sale of a one half interest in the property at 3 C Street, Suburb D to the mother’s parents for $550,000.00.
The title to the property at 3 C Street, Suburb D is held as to 50 per cent by the father and 50 per cent by the mother’s parents.
The mother asserts that the present matrimonial property pool comprises the following:
50 per cent interest in 3 C Street, Suburb D (father) 575,000.00
1 - 2 C Street, Suburb D (mother) 1,500,000.00
Motorcycle 6,390.00
Household contents 15,000.00
Wine collection 10,000.00
Motor vehicle NK
Multi-van NK
Jewellery (father) 5,000.00
Interest in Suburb Y Pty Ltd (father) NK
Interest in Company F Australia Pty Ltd NK
Interest in P Pty Ltd (joint) NK
50 per cent interest in G Pty Ltd (joint) NK
Interest in Q Family Trust NK
Gaetano Family Super Fund (mother) 20,208.00
Gaetano Family Super Fund (father) 21,172.00
The mother asserts the following liabilities:
Mortgage 3 C Street, Suburb D 500,000.00
Mortgage 1 - 2 C Street, Suburb D 760,000.00
The mother asserts that the father continues in full-time employment with Company F earning a salary of about $80,000.00 per annum.
The mother is presently enrolled in a full-time nursing course that she commenced in 2016 in order to qualify as a registered nurse.
Subsequent to separation and on 30 June 2015 G Pty Ltd sold a property at R Street, Pymble. The property, it appears, was sold by G Pty Ltd as trustee of the Q Family Trust. The property was sold for $2.65 million and the mother has concerns over disposition of funds as to $40,000.00 to the father, $328,000.00 to the father’s parents and another $662,920.00 that was paid to discharge a mortgage secured over the father’s parents’ home.
The mother asserts that the father has applied mortgage funds borrowed over the parties’ property interests to his business interests more particularly the Q Family Trust. The general ledger for the Trust for the year ended 30 June 2013 evidences the funds advanced to the trust by the father of $668,262.00. However, the circumstances of the Trust and the other corporate entities are convoluted and subject to significant factual differences between the assertions made by the mother and those made by the father and are further complicated by the involvement of the father’s parents in the trust and other entities. Such factual issues are unable to be determined in the context of this interim hearing.
The mother’s current financial circumstances per week she asserts are as follows:
Government benefits $794.00
Child support $161.00
$955.00
Expenses:
Health insurance $ 78.00
Weekly living and household expenses (self) $284.00
Otherwise, the mother asserts that she incurs weekly expenses for the children of $1,126.00 with that sum including about $769.00 per week for school fees and expenses.
The mother is studying full-time with, it is to be inferred, the ambition to improve her circumstances once she completes her study. She has the substantial care of the four children referred to above with that circumstance itself she asserts rendering her reasonably unable to support herself.
No documents were provided in relation to the Q Family Trust at interim hearing. The parties have agreed to the appointment of a single expert in relation to the various corporate and other entities and no doubt the interrelationship of such entities will become clearer upon receipt of the single expert’s report.
The mother to date has incurred legal fees of almost $50,000.00 and expects to incur legal fees in excess of $90,000.00 in prosecuting these proceedings.
Schooling: The father from his financial resources attended to payment of the children’s school fees at the B School. Subsequent to separation he ceased paying those fees and the wife has attended to payment by borrowing from her family. The wife asserts that the children are settled at the school and that she will meet payment of school fees pending further developments. The mother says that the children have numerous friends at their school which she asserts is highly regarded both academically and for its student focused environment. The older children she says are widely involved in school activities including the school band, choir, basketball and other programs. The children otherwise have had maternal relatives who attend the same school.
By reason of her circumstances the mother has been granted discounted fees for all of the children with total fees per annum to be about $30,000.00. She has been granted an extension to pay such fees until the conclusion of her property settlement proceedings. Otherwise, the mother has met the liability of school fees from funds advanced to her by her parents.
The father’s evidence
The father relied upon the following documents:
a)his financial statement filed on 12 August 2016,
b)his affidavit filed 16 November 2016.
The father asserts that subsequent to separation he had the children for weekend time and for some school holiday period. In late July 2015 the parties agreed for the children to spend time with the father on the first three weekends of each month being week one from 10.00 am to 6.00 pm Saturday and Sunday, week two from 10.00 am to 6.00 pm Saturday and in week three from 10.00 am Saturday to 6.00 pm Sunday with overnight time to be at the father’s parents’ home at Suburb E.
Subsequent to mediation in mid-January 2016 the children spent time with the father on the first and third weekend of each calendar month from 4.00 pm Friday to 6.00 pm Sunday and on the second and fourth weekends of each calendar month from 4.00 pm Friday to 6.00 pm Saturday and from 7.00 am to 7.00 pm each Wednesday and in midterm school holiday weekends from 9.00 am Friday to 6.00 pm Sunday.
In December 2003 the father purchased a property situated on two titles at 2 - 3 R Street, Suburb D for $700,000.00 with mortgage finance of $560,000.00.
Subsequent to cohabitation commencing and in May 2005 he purchased the property at 3 C Street, Suburb D for $800,000.00 with a mortgage advance of $660,000.00.
Shortly thereafter he sold the property at 2 - 3 Pacific Highway, Suburb D for $550,000.00.
Subsequently in late 2010 the property at 1 - 2 C Street, Suburb D was acquired as referred to above.
In August 2012 the father sold the remaining property at 2 - 3 R Street, Suburb D for $370,000.00. He gives no evidence as to how those funds were disbursed.
Suburb Y Pty Ltd: this entity opened a restaurant at Pymble in 2013 and after sustaining significant trading losses was sold about 12 months later. The father asserts that it is now a non-trading entity.
Company F Australia Pty Ltd: the father asserts that this entity suffered significant trading losses in the 2013 financial year of almost $600,000.00. It is unclear how these trading losses were funded as the mother refused the father’s request to refinance the property at 1 - 2 C Street, Suburb D. However, accumulated losses by 30 June 2015 had been reduced to $24,212.00.
In the financial year ended 30 June 2015 the company made a profit of $46,543.00 with that profit including a distribution from the Trust of $262,737.00. In that financial year the husband received $173,500.00 in director’s fees and the company paid in all $250,690.00 in wages.
In the financial year ended 30 June 2016 the company’s gross sales increased by almost $1.1 million to $3,321,442.00 with stock purchases increasing from just over $1 million in the previous financial year to just over $2 million in the 2016 financial year. In the 2016 financial year the father paid himself directors fees of $80,000.00, a reduction of more than $90,000.00 on the previous year but company wages increased to just over $402,000.00. The company made a loss of just under $153,000.00 for the financial year.
The father facilitated the company borrowing $600,000.00 through the secondary lending market in September 2016 for a five month term repayable with that loan guaranteed by his mother having an interest rate of 15 per cent in default 30 per cent and an establishment fee and documentation fee of just over $16,000.00. The application of these funds has not been explained by the father notwithstanding that he asserts that since 1 June 2015 he has borrowed other funds from his parents with an outstanding balance at present of $243,757.00. He has not explained how he expects the company to meet the capital repayment that is now due.
A summary of the company trading circumstances for the three years to June 2015 by T Chartered Accountants reveal:
a)The father’s loan account being paid down from $77,036.00 owed to him by the company to nil in the 12 months to 30 June 2015,
b)The father’s parent’s loan being paid down from $417,995.00 owed to them by the company to $28,171.00 in the 12 months to 30 June 2015.
These transactions no doubt await forensic analysis by the agreed single expert.
The Q Family Trust: this trust, asserts the father, was established in October 2012. The trustee of the trust is G Pty Ltd. In 2013 the trust acquired the property at R Street, Pymble for $2.025 million. The father asserts that purchase monies were funded by way of a first mortgage borrowing and monies advanced by his parents. This property was subsequently sold in June 2015 as referred to above, realising a capital profit to the Trust of $418,060.00 with the father acknowledging that his parents received funds from the proceeds of sale totalling $777,920.00 by way of repayment of moneys advanced to the trust. The father asserts that a further distribution of $213,000.00 to his parents from the Pymble sale related to a payment in reduction of his parents’ loan account in Company F Australia Pty Ltd. Otherwise, the Trust distributed income to Company F Australia Pty Ltd as at 30 June 2015 of $262,737.00.
In November 2014 the trust purchased the property at 1 – 2 U Street, Suburb V for $1.25 million. The purchase moneys were funded, asserts the father, by way of first mortgage advance of about $1 million from ANZ and the balance by way of funds advanced by his parents from the funds received by them from the sale of the Pymble property.
On 29 January 2015 the father resigned as director of the trustee G Pty Ltd and was replaced by his father, Mr W.
The father’s finances: as at the interim hearing the father continues to meet mortgage payments in respect to the parties’ one half interest in the property at 3 C Street, Suburb D and the property at 1 - 2 C Street, Suburb D at present used by him. He says he will continue to do so. It is appropriate that he also pay outgoings on the property presently used by him.
The father asserts that his only income is received from Company F Australia Pty Ltd.
The father asserts that his weekly circumstances are as follows:
Salary $1,538.00
Expenses:
Tax 362.00
Mortgage 3 C Street, Suburb D 526.00
Mortgage 1 - 2 C Street, Suburb D 994.00
Property Insurances 46.00
Health Fund 78.00
Bike Rego 2.00
Bike Insurance 25.00
Child Support 162.00
Miscellaneous living expenses 425.00
$2,620.00 The father asserts that he meets these obligations with borrowings from his parents.
The father otherwise receives benefits from his employment with the company by way of use of motor vehicle, fuel expenses, mobile phone expenses, motor vehicle insurance and registration, payment of Visa and Amex cards. He provides no evidence as to what personal expenses are paid by him through the company.
Schooling: The mother and father both reside at Suburb D, just outside the Sydney metropolitan area. The father asserts that the nearest public school is X School although his preference is for the children to attend larger schools either at N School or M School at Suburb Y. The father asserts that the fees at M School are about $8,000.00 per annum for all four children.
The father estimates that schooling at Suburb Y is only about 12 km from the children’s primary residence with the mother with a distance being approximately 30 km to their present school at Suburb Z.
The father asserts that he does not have the capacity to meet ongoing school fees for the children at B School. However, the mother has agreed to meet the children’s ongoing fees and has made, it appears, appropriate arrangements with B School to give effect to her obligation.
The asset pool as contended by the father: the father substantially agrees with the asset pool contended for by the mother save significantly for his alleged current outstanding liability to his parents of $253,677.00 and his current ATO liability of $34,782.00.
The father seeks to retain the property at 1 - 2 C Street, Suburb D.
The CAPIA:
The mother and father and children attended upon a family consultant for the purposes of the preparation of a Children and Parents Issues Assessment. Such report issued and was dated 31 October 2016.
At the time of interview the child H was nine years of age. The family reporter notes that the child “really likes his school, that excels in music, art and science and that he greatly enjoys playing the euphonium... H is also primary vocal in the choir ensemble.”
The child J was also positive about her current schooling on interview.
Spousal Maintenance
Section 72 of the Act sets out the relevant provisions in relation to the right to spouse maintenance. Section 72 provides that 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 a 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) of the Act.
The initial questions for determination are:
a)Is the mother unable to support herself adequately for one of the reasons set out in s 72, having regard to the matters set out in s 75(2) and
b)If so, what are the mother’s reasonable needs?
The mother by reason of her primary care of the children, discussed above, is unable to support herself adequately. She survives on means tested benefits. For herself her reasonable needs are about $362.00 per week in addition to which she bears the burden of the children’s expenses over and above modest child support received.
The inquiry then turns to the question of the father’s capacity to support her.
Forensically, the father’s case is less than adequate with most of the evidence such as it is coming from the father himself. He continues to maintain mortgage payments on both properties owned by the parties in circumstances where it is difficult to determine his true financial position by reason of intra paternal family dealings and various corporate and trust structures.
Any capacity to pay is not evident not withstanding perhaps inference and suspicion.
He has no demonstrable capacity to pay.
The mother’s application for spousal maintenance is to be dismissed.
Schooling
The application as to this aspect is interim only and schooling if still in issue will be determined on a final basis at final trial.
The question of children’s schooling was considered by the Full Court of the Family Court in Re G: Children’s Schooling [2000] FamCA 462. The Full Court in re-exercising the discretion proceeded on the basis that (at [65]):
… although there is no legal presumption in favour of the residence parent and, correspondingly, no hurdle or onus faced by the other parent, that is not to say that the reality of the children residing predominantly with one parent has no relevance.
Cronin J in Kirkland and Granger [2007] FamCA 1471 said at [60]:
There is little doubt therefore that an impasse between parents relating to both current and future education is a matter within the definition of parental responsibility and one which should the parties not be able to agree upon, a court should step in to their shoes. The Act gives no guidance as to how that decision making process is to occur save that any decision must be in the best interests of the child. Section 65D (1) says that the court may make such parenting order as it thinks proper.
Young J in Raymond and Harold [2009] FamCA 155 said at [204]:
… There are many reported decisions of this court dealing with the determination of the appropriate school, the most often cited of which is the decision of the Full Court in Re G: Children’s Schooling [2000] FamCA 462 where the various factors considered by that court on the schooling issue included:
othe wishes of the child, where appropriate;
oany prior agreement in relation to schooling;
oany change to the existing arrangements;
oany anxiety which the child may experience as a result of changing peer groups;
othe views of the parents about the aspect of change upon a child;
othe travel time to school;
othe costs of education;
oany particulate issue that may have a real impact upon the child and his immediate schooling and social environment.
The above list of matters is not exhaustive. They vary from case to case and are always to be tailored to the individual needs of the child.
The present issue as to schooling is raised on an interim basis without the opportunity of contested and, if appropriate, expert evidence as to the educational requirements and educational opportunities offered to the children by the school’s proposed by each of the parents.
The children are in settled arrangements in the primary care of the mother and the older children particularly have an established relationship as discussed above with the school they attend and proposed by the mother. The mother has assumed liability in the interim for the children’s school fees. This addresses the major complaint of the father.
A detailed consideration as to schooling will remain for final determination on the basis of appropriate evidence in due course.
The older children are settled into their school particularly the eldest. The school was initially chosen by the parties. There is no pressing need for change, the father’s asserted incapacity to pay the fees is addressed by the mother assuming liability. There is no reason for change on an interim basis where a final hearing will occur before the end of the current school year.
A consideration of the factors referred to above are clearly indicative of the children at least on an interim basis remaining in their present school arrangements thus preserving their present peer group and social capital pending final hearing.
The mother will be permitted to maintain the children’s current schooling pending further order and will indemnify the father from any liability for school fees pending further order.
Interim property/Costs
The principles as to applications for interim property provision are well settled, (Strahan & Strahan [2009] FamCAFC 166) and require a two-step process.
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.
In Strahan (supra), 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.
Secondly, the Court is to have regard to relevant matters in s 79 of 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.
It is important to have regard to an overall caution. In Harris & Harris (1993) FLC 92-378, the Full Court said (at 79929-79930):
As a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings.
In Strahan (supra), 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.
It is now well settled that in property cases the Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order. Such a consideration should not be guided by an assumption that the parties’ rights to, or interests in, property are, or should be, different from those that then exist. The question is whether those rights and interests should be altered.
There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact.
In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
Both parties in this matter in any event seek that the Court makes adjustive orders. It is thus proper to consider whether an interim property order is “appropriate”.
The mother asserts a matrimonial balance sheet in her supporting affidavit that is indicative of the only “available” assets being the two real estate properties. Otherwise there is no evidence as to the circumstances of the various entities referred to above.
The mother has not identified a source as to where her interim property funds can come from absent a sale of one of the parties’ real estate assets, 1 - 2 C Street, Suburb D. That property is sought by the father on final property adjustment.
She has not joined her parents to these proceedings so any disturbance of their entitlement in the property at sale of 3 C Street, Suburb D is not in question and indeed the mother resides in that property at present.
The financial circumstances otherwise of the parties’ various entities is unclear and is the subject of an outstanding agreed single expert report.
There is no source of funds to meet the mother’s application that can be readily identified.
Her application for interim property will be dismissed.
However, in the event that the father defaults on payment of mortgage payments on either property in the interim pending final hearing then the mother should have leave to make application to sell the property at 1 - 2 C Street, Suburb D.
Orders will be made accordingly as set out at the forefront of these reasons for judgment.
I certify that the preceding ninety-eight (98) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 24 February 2017.
Associate:
Date: 23 February 2017
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