GANNON & GANNON (No.2)

[2016] FCCA 1859

FEDERAL CIRCUIT COURT OF AUSTRALIA

GANNON & GANNON (No.2) [2016] FCCA 1859

Catchwords:
FAMILY LAW – Maintenance – Spousal Maintenance – Costs – Application for interim spousal maintenance – interim property order – application for interim property order to defray anticipated legal costs.

FAMILY LAW – Property – Injunction – Application for Injunctions
Costs – Applications for costs.

Legislation:

Family Law Act 1975 (Cth), ss.72, 74, 75, 79, 80, 114

Cases cited:

NHC & RCH (2004) FLC 93-204; [2004] FamCA 633
Gollings & Scott (2007) 37 Fam LR 428; FLC 93-319; [2007] FamCA 397
Kasiopoulos & Garapiperis [2012] FamCAFC 85
Mullen & De Bry (2006) 36 Fam LR 454; FLC 93-293; [2006] FamCA 1380
Stanford v Stanford (2012) 247 CLR 108; 47 Fam LR 481; FLC 93-518; [2012] HCA 52
Strahan & Strahan (Interim Property Orders) (2009) 241 FLR 1; 42 Fam LR 203; FLC 93-466; [2009] FamCAFC 166

Applicant: MS GANNON

Respondent: MR GANNON

File Number: SYC 896 of 2013

Judgment of: Judge Scarlett

Hearing dates: 23 June 2014, 11 November 2015

Date of Last Submission: 18 November 2015

Delivered at: Sydney

Delivered on: 20 July 2016

REPRESENTATION

Counsel for the Applicant: Mr Rosic (23 June 2014) Mr Wong (11 November 2015

Solicitors for the Applicant: David J.H. Hooper

Counsel for the Respondent: Mr Williams

Solicitors for the Respondent: Barkus Doolan Family Lawyers

ORDERS

1. The Application for interim spousal maintenance contained in the Application filed on 5 May 2014 is dismissed.

2. The Application for an injunction contained in the Application filed on 5 May 2014 is dismissed.

3. In respect of the Response filed on 23 June 2014, the Applicant and the Respondent must within fourteen (14) days from the date of this Order do all things and sign all necessary documents to give authority to David James Hamilton Hooper to cause the sum of $20,000.00 to be released to the Applicant from the interest bearing account held by him as trustee for the parties being (omitted) Bank Business Cash Reserve account number (omitted) as an interim property settlement in accordance with sections 79 and 80 of the Family Law Act 1975.

4. The Application for Interim Orders for spousal maintenance and injunctions contained in the Amended Initiating Application filed on 14 September 2015 is dismissed.

5. The Application in a Case filed on 14 September 2015 is dismissed.

6. If either party wishes to pursue his or her Application for Costs previously filed he or she must file an affidavit which may be deposed by that party’s solicitor setting out the amount of costs sought and the basis upon which those costs are calculated no later than Monday 25 July 2016 for consideration in Chambers.

7. The Application for final orders is transferred to the docket of Judge Boyle for mention with a view to setting a date for final hearing.      

IT IS NOTED that publication of this judgment under the pseudonym Gannon & Gannon (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 896 of 2013

MS GANNON

Applicant

And

MR GANNON

Respondent

REASONS FOR JUDGMENT

Application in a Case

1. There are two interim Applications for decision, both brought by the Wife.

2. The first is an Application for Interim spousal maintenance and injunction, filed on 5^th May 2014. In that Application, she seeks orders that:

   a)the Husband pay to her the sum of $1,200.00 per week by way of spousal maintenance, payable monthly by bank debit into a bank account;

   b)the spousal maintenance should be varied on 30^th June each year by reference to the Consumer Price Index for Sydney;

   c)an injunction restraining the husband from further dealing with any moneys, bonuses, and/or shares received by him from (employer omitted) or by way of his redundancy from (employer omitted); and

   d)that the Husband pay to her the sum of $20,000.00 by way of spousal maintenance to her solicitor towards her legal fees.

3. The Wife’s application for spousal maintenance has been varied down to an amount of $700.00 per week.

4. The Application is opposed by the Husband, who filed a Response on 23^rd June 2014, seeking orders that:

   a)The Husband and Wife should authorise the Wife’s solicitor, Mr Hooper, to pay funds held by him in an interest bearing account as trustee for the parties in the following manner:

   i)As to the sum of $20,000.00 to the trust account of the Husband’s solicitors as an interim property settlement under s.79 and subsection 80(1)(h) of the Family Law Act 1975 (Cth); and

   ii)The sum of $20,000.00 to Mr Hooper’s trust account as an interim property settlement to the Wife under s.79 and subsection 80(1)(h) of the Act;

   b)That the relief sought by the Wife in her Application (for interim orders) be otherwise dismissed; and

   c)That the Wife pay the husband’s costs.       

5. An interim hearing took place on 23^rd June 2014.

6. The second Application is an Application in a Case filed on 14^th September 2015 seeking interim orders:

   i)restraining the Husband from further dealing or disposing of any bonuses, incentive payments and any (employer omitted) Income received from his employment with (employer omitted) and/or converting those bonuses, incentive payments and any incentive payments and any (employer omitted) Income to other forms of incentive remuneration;

   ii)requiring the Husband to advise the Wife care of her solicitors within seven days of receipt of any bonuses and/or (employer omitted) Income from his employment with (employer omitted); and

   iii)restraining the Husband from further selling, disposing of or otherwise dealing with shares, restricted stock units ((omitted)) received by him from (employer omitted) and/or from his participation in the (employer omitted) Long Term Incentive Plan.

7. The Husband filed a Response to the Application in a Case on 9^th November 2015 seeking that the Application in a Case should be dismissed with costs.

8. An interim hearing took place on 11^th November 2015.

Background

1. The background details have largely been taken from a Summary of Argument prepared by the Husband’s solicitor, Ms Morozov, and handed up in Court on 23^rd June 2014, the return date of the Wife’s original Application, and from the affidavit of the Wife sworn 4^th May 2014.

2. The Wife was born on (omitted) 1970. She is now 46 years old.

3. The Husband was born on (omitted) 1971. He is 45 years old.

4. There are no children of the marriage.

5. The parties commenced living together in a house at (omitted) in South Australia in June 1996.

6. In January 2000 the Husband accepted a position with the (employer omitted) in Melbourne and the parties relocated there. The Husband was made redundant from that position in 2004.

7. Early in 2005 the Husband obtained employment with (employer omitted) in Sydney. The parties moved to Sydney and purchased a property at Property M.

8. The parties were married on (omitted) 2007.

9. In December 2008 the Husband obtained a position with (employer omitted) based in (country omitted) and moved there in (omitted) 2009.

10. The Wife moved to (country omitted) in (omitted) 2009 but returned to Sydney in (omitted) 2010.

11. The parties separated on 3^rd March 2011. The Husband remained living in (country omitted).

12. Between March 2011 and 23^rd May 2013 the Husband transferred funds to the Wife totalling $177,653.75 to meet her living expenses and all outgoings on the property at Property M.

13. The Husband ceased working for (employer omitted) in May 2011 and received a redundancy payment of 40,961.50 pounds sterling. The funds were deposited into a jointly held account with the (omitted) Bank.

14. In July 2011 the Husband commenced employment with (employer omitted).

15. On 13^th March 2013 the Husband redeemed a superannuation interest and deposited a sum of $7,212.93 into the parties’ jointly held bank account with the (omitted) Bank. The funds were applied towards a reduction of the mortgage on the property at Property M.

16. The parties were divorced by Order of this Court on 4^th April 2013.

17. The sale of the Property M property was settled on 23^rd May 2013. The parties realised $347,308.52 from the sale. The parties agreed that the Wife would receive the sum of $5,000.00 from the proceeds to enable her to re-establish herself.[1]

    [1] Affidavit of  Ms Gannon 4.5.2014 at paragraph [35]

18. On (omitted) 2013 the husband left his employment with (employer omitted) and received a compensation payment of 85,755 pounds.

19. The Husband commenced employment with a company called (employer omitted) on (omitted) 2013.

20. The Wife commenced proceedings in this Court by filing an Application and supporting documents on 5^th May 2014.

21. The Application was returnable on 23^rd June 2014 and an interim hearing took place on that day. The decision was reserved.

22. On (omitted) 2014 the Husband and his new partner purchased a property at (country omitted) for 790,000 pounds. He and his new partner borrowed 90% of the purchase price.

23. On 8^th January 2015 the Husband filed an Application in a Case seeking to re-open the proceedings. The Application was returnable on 2^nd March 2015.

24. The Wife filed a Response to the Application in a Case and an affidavit in support on 9^th March 2015.

25. On 17^th March 2015 the parties were directed to attend a Conciliation Conference before a Registrar. The Conference took place on 28^th May 2015 but no settlement was reached.

26. When the matter came back to Court on 10^th June 2015, the parties were directed to file written submissions stating their arguments for and against the Husband’s Application to re-open the interim proceedings.

27. The parties duly filed their submissions.

28. When the matter returned to Court on 22^nd July 2015 the parties entered into Interim Consent Orders providing that on the basis of certain concessions being agreed by the Wife the Husband would not seek to reopen the evidence. Those concessions were:

    1. On (omitted) 2014, the wife received an offer of employment  from (employer omitted) for a term commencing (omitted) 2014 and concluding (omitted) 2015. The wife accepted the offer of employment.

    2. The wife accepted the offer of employment with (employer omitted) on (omitted) 2014.

    3. The wife disclosed to the husband the offer of employment made to her on (omitted) 2014 by letter from her solicitor dated 19 December 2014 which was received by the husband’s solicitor on 22 December 2014.

    4. The husband filed an Application on 8 January 2015 seeking to re-open his case and adduce fresh evidence. The Application was listed on 2 March 2015.

    5. On (omitted) 2015, the wife received an offer from (employer omitted) extending the term of her employment to (omitted) 2015.

    6. The wife disclosed the extension of the term of employment to the husband by letter from her solicitor dated 12 March 2015 which was received by the husband’s solicitor on 13 March 2015.

    7. On (omitted) 2015, the wife received an offer of employment from (employer omitted) for a term commencing (omitted) 2015 and concluding (omitted) 2017.

    8. The wife accepted the offer of employment from (employer omitted) on (omitted) 2015.

    9. The wife disclosed the offer of employment made by (employer omitted) on (omitted) 2015 and her acceptance of the offer of employment on (omitted) 2015 to the husband by letter from the wife’s solicitor dated 14 May 2015 and received by the husband’s solicitors on 18 May 2015.  

29. The parties were ordered by consent to file and serve further submissions and the Husband’s Application in a Case filed on 8^th January 2015 was dismissed.

30. The substantive proceedings were adjourned into a call-over on 30^th November 2015 for allocation of a final hearing date before a new Judge who was anticipated to be appointed in the second half of the year to replace a Judge who had previously retired. Regrettably, no appointment was forthcoming at that stage and the callover date was vacated.

31. On 14^th September 2015 the Wife filed an Amended Initiating Application seeking further property and more extensive property orders. She also filed the Application in a Case referred to in paragraph [6] above.

32. An interim hearing took place on 11^th November 2015. Mr Wong of Counsel appeared for the Wife and Mr Williams of Counsel appeared for the Husband. Submissions were taken and a further order was made for the provision of further written submissions. Judgment was reserved.

33. On 6^th May 2016 the wife filed a further Application in a Case seeking to reopen the proceedings for urgent injunctions. Mr Givney of Counsel appeared for the Wife and Mr Richardson of Senior Counsel appeared for the Husband when the Application was heard on 13^th May 2016. The Application in a Case was dismissed (Gannon & Gannon)[2]

    [2] [2016] FCCA 1177

Submissions

1. There have been several submissions made in this matter on the subjects of spousal maintenance, an interim property order to provide funding to defray litigation expenses and injunctions against the Husband.

2. Initially, Mr Rosic of Counsel submitted that the Wife was seeking interim spousal maintenance in the sum of $1,200.00 per week, payable monthly, but conceded that the amount should in fact be $700.00 per week and advised that he was seeking maintenance from the date of filing the application.

3. He also advised the Court that the Wife was seeking the sum of $20,000.00 towards her legal expenses. Mr Rosic submitted the Wife’s income at the time was $374.00 per week and that she only got 17 hours work per week and that her expenditure, however, was $1,272.00 per week. Thus, he said, there was a shortfall of $898.00. However, he submitted that the Husband was left with a surplus of $850.00 per week and, therefore, he had a capacity to meet an order for spousal maintenance of $700.00 per week. His submission was that Wife was not making ends meet and the Court was invited to consider matters under subsection 75(2) of the Family Law Act1975.

4. Mr Rosic noted that the Husband was cohabiting with another person and that had purchased a property in (country omitted), whereas the Wife no longer had the benefit of sharing the Husband’s income.  Even if the Wife were to be paid interim spousal maintenance at the rate of $700.00 per week from the date of filing the application, it would appear, he submitted, the Husband had a greater capacity to meet his legal expenses than the Wife did. He submitted that the Husband earned the sum of £190,000.00 per annum, which equated to A$345,000.00 per annum or $6,000.00 per week.

5. Ms Morozov submitted for the Husband that at no stage had the Husband received shares from (employer omitted) that the Wife alleged.  He disposed of shares from other companies.  She submitted that the Husband sought a superannuation splitting order with the Wife to get $70,000.00 on a final basis. It was submitted that the Wife was employed in two businesses and that she retained the totality of the income from those businesses.

6. In respect of interim spousal maintenance, it was submitted that an award of spousal maintenance under section 72 of the Family Law Act requires a threshold finding under section 72 and a consideration of section 75 and section 74 and subsection 75(2).

7. As to the threshold test, Ms Morozov submitted that the Husband did not concede that the Wife satisfied the requirement that she was entitled to interim spousal maintenance or that she was unable to support herself adequately.  It would, firstly, be contended that the Wife had not made full and frank disclosure of her financial circumstances.  The Court should have regard that the Wife had failed to disclose income which was available to her.  The Wife was the moving party on this Application and it was incumbent on her to disclose to the Court all sources of income.  She failed to do so and her Application should fail.

8. Second, it would be contended the Wife did not satisfy any of the three limbs in section 72 of the Act. There are no children of the parties’ marriage. The Wife does not appear to rely upon a contention of any physical incapacity for gainful employment. As to mental incapacity, the Wife has not adduced any admissible evidence of this, nor any evidence that any condition presents which restricts or impedes on the Wife’s ability to gainful employment. The Wife’s evidence was summarised in one sentence: “I am in a depressed state”[3].The Court, therefore, could not be satisfied that that was the case. The Wife had elected not to adduce any medical evidence and the Court should not accept the Wife’s self-diagnosis. 

   [3] Wife’s affidavit at [89]

9. As to the third limb, it would be contended there was no other adequate reason and this case should be distinguished from many others that come before the Court. 

10. In this case, the parties separated in March 2011, more than three years ago.  For a period in excess of two years from March 2011 till May 2013, the Husband supported the Wife and provided her with funds in the total sum of $177,000.00, including meeting the loan repayments and other outgoings for the jointly held property.

11. Additionally, the Wife had the benefit of retaining all the sale proceeds from jointly held assets.  There is no doubt as to how much the Wife received.  The Husband did not, in the absence of a single document being produced, accept the Wife’s contention that she received the total sum of $19,450.00 from the sale of items when the property was sold.  It was the Husband’s case that the Wife received much more and had elected not to disclose that amount. During the two year period previously referred to, the Husband’s case was that the Wife had refused to list the property for sale to the selling agent for 12 months after the parties separated.

12. The Husband was required to meet the expenses for the property, including utilising the redundancy payment received by the Husband in 2011. It was amazing, Ms Morozov submitted, that the Wife now complained that she was unaware of how the redundancy payment was dispersed.  The Husband’s case is that it was dispersed to meet her and the Husband’s living expenses and the outgoings of the property.  Similarly, the Wife had failed to undertake any employment other than continuing the (omitted) business and the operation of (omitted business).

13. The Wife was, at all times, post separation, aware that the property would need to be sold and the (omitted) business would then cease.  Rather than exert her energy in looking to the future, the Wife continued with the (omitted) business enterprise which was then, and always had been, operating at loss.  Similarly, the Wife failed to undertake any course of study which may have assisted her in returning to employment and yet the Wife now sought that the Husband supported her.

14. It was submitted, on behalf of the Husband, that the Court could be satisfied that the Wife did not meet the threshold test and her application for interim spousal maintenance should be dismissed.

Interim Spousal Maintenance 

1. I will deal with this matter of the maintenance now.  It is clear, from the concessions made by the Wife that led to the Consent orders of 22^nd July 2015, that the Wife had on (omitted) 2014, received an offer of employment from (employer omitted) for a term commencing on (omitted) 2014 and that employment continued, in various stages, to a time past the present day.

2. It is conceded that on (omitted) this year, the Wife received, and accepted only four days later, an offer of employment from (employer omitted) for a term commencing on (omitted) 2015 and concluding on (omitted) 2017. It can be seen that the Wife is currently in employment and has been for most of the time that this matter has been before the Court. It was correctly submitted that when considering the right of a spouse to maintenance, the Court must first consider the threshold test in subsection 72(1) of the Family Law Act.  That section says:

   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).

1. As was submitted, there were no children of the marriage.  The Wife’s initial claim of her inability to work to support herself adequately was contained in paragraph [89] of her affidavit.  In that affidavit the Wife set out that the Husband has and was receiving a substantial income, she had not worked as a (occupation omitted) for 14 years and had lost her skills, living on the (omitted) it was very difficult to obtain employment.  She started looking for employment on the sale of the Property M property and regarded herself as fortunate to have obtained her present part-time employment with the (employer omitted).

2. At that stage when she deposed in the affidavit she was earning $374.00 gross per week and she said:

   I am in a depressed state.

   She then went on to refer to her financial statement.  As was submitted, and in my view correctly, the statement by the Wife that she is in a depressed state is insufficient evidence to establish that she is, or was at the time unable to support herself adequately by reason of a mental incapacity for appropriate gainful employment. 

3. Even more importantly, the concessions made by the Wife indicate that she does have the capacity for appropriate gainful employment and has been able to apply that capacity since (omitted) 2014, less than two months after the interim hearing.  It is conceded that the term of employment commenced on (omitted) 2014, but the offer was made to her on (omitted) of that year.

4. In my view, it is unnecessary to consider any of the matters in sections 74 or 75 of the Family Law Act because the Wife does not satisfy the threshold test under section 72. She has not demonstrated that she is unable to support herself adequately for any reason.

5. It follows that the Applications for interim spousal maintenance must be dismissed.

Lump sum to defray legal expenses

1. What that then leads to is the application by the Wife for a lump sum of $20,000.00 to defray her legal expenses contained in her original Application by means of lump sum spousal maintenance, and the Husband’s application that both parties should receive the sum of $20,000.00 by way of interim property order to go towards their respective legal expenses.

2. It is accepted that there is a substantial amount of money contained in the interest bearing deposit maintained by the Wife’s solicitor Mr Hooper on behalf of the parties arising from the proceeds of sale.  As for the Wife’s claim for $20,000.00 as lump spousal maintenance, in my view, that cannot be sustained.  I am of a view, and I have ruled that she has not met the threshold test of spousal maintenance. 

3. It does not mean, however, that the Court cannot make an order for lump sum payment to her or, for that matter, to the Husband, of the amount of $20,000.00 sought in each case to go towards their legal expenses.

4. The Husband, in my view, is on firmer ground when he seeks an order that the lump sum payments should be made not as spousal maintenance but as an interim or partial property settlement.  There is a well-known decision of the Full Court of the Family Court known as Strahan & Strahan(Interim Property Orders)[4].  That case dealt with an application for an interim property order to put the wife in that case in funds to enable her to meet her legal costs of continuing the litigation in which the parties were involved.

   [4] (2009) 241 FLR 1; 42 Fam LR 203; FLC 93-466; [2009] FamCAFC 166

5. The principles which apply as were set out in that decision are set out at [132] and [133] where their Honours said:

   [132] When considering whether to exercise the power under section 79 and section 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.

   [133] Another example is where, as in this case, one party requires funds to assist in defraying the costs of litigation without which funds an injustice may be caused.[5]

   [5] [2009] FamCAFC 166 at [132]-[133]

6. It was submitted in that case that it was relevant to consider whether  an order would give the applicant more than they would be indubitably entitled to in a final hearing, or alternatively “would it give them so much that it could not be adjusted on a final hearing” (see Strahan & Strahan at [136]). Their Honours said:

   We accept the submission and observe that this matter is relevant because the discretion conferred by the power in section 79 is to make such order as the court considers appropriate provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order…  (T)he interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal. 

7. Once the Court proceeds to exercise the power in section 79 of the Act it is required undertake consideration of the matters in subsection 79(4) including by reference to subsection 79(4)(e) the matters in subsection 75(2) so far as they are relevant. Consideration of such matters may be brief.

8. Further, it was held that an applicant should have at least an arguable case for substantive relied which deserved to be heard.  There may be need for evidence of the party’s likely costs of litigation, but it is not an essential precondition that the applicant’s legal representative will not continue to act unless the costs are paid or secured on an ongoing basis.  It was also held by Boland and O’Ryan JJ at [146] that, if there is any concern about the way in which litigation is conducted, that can properly be addressed through procedural directions.  The proper way is not to limit the available funds of one of the parties and leave the party in control of the funds to spend such funds at their entire discretion.

9. It certainly appears clear that the Wife on the face of her property application can safely expect to receive an amount of money comfortably in excess of the $20,000.00 which she seeks.  It is not the case that as far as one can consider the property proceedings that she would expect to receive significantly less than that and would be required to repay that amount or have it adjusted in some way when final orders were made.  Whilst it has been a feature of the Wife’s evidence throughout this case that the Husband’s income and assets are considerably greater than hers and that he has a capacity to pay certainly to meet his legal expenses, which she does not it is fair to say that even with the Wife’s current employment it may reasonably be argued that finding an amount of $20,000.00 to go towards her legal expenses would pose some difficulty for her.

10. It has been necessary with the number of interim hearings that have been held, and there have been three, that the Wife’s solicitor has briefed counsel on each occasion.  Initially, Mr Rosic appeared for her.  He was followed by Mr Givney of Counsel and subsequently by Mr Matthew Wong of Counsel.  All of these barristers are capable and experienced practitioners and it cannot be expected that their services would be provided free of charge.  It would seem to me that an amount of $20,000.00 would be necessary to meet the fees of Counsel in respect of those applications. 

11. I am satisfied that it would be just and equitable in all the circumstances to make an order for an interim property distribution of $20,000 from the moneys held in the interest bearing deposit, being the controlled moneys account to be paid to the Wife to be held by her solicitor against his costs and disbursements in respect of these proceedings. 

12. I am not satisfied, however, that the Husband has made out a similar case.  It is clear that his income greatly exceeds that of the Wife.  He has purchased property in (country omitted) even though he and his partner have borrowed 90 per cent of the proceeds.  So far he has been able to instruct an experienced and capable solicitor, Ms Morozov.  He has enabled his solicitor to brief junior Counsel and, on one occasion in the application that was heard earlier this year, Senior Counsel.  I am not satisfied that a partial property settlement should be made in the Respondent’s favour to defray his legal expenses.  I am, however, satisfied, as I have said, that it is just and equitable that such a payment should be made to the Wife to bring about some form of a level playing field and I propose to make that order.

Application for Injunction

1. This leads to the claim by the Wife for injunctive orders against the Husband restraining him from dealing with entitlements from his employment. 

2. I heard submissions and very helpful submissions from Mr Wong of counsel for the Wife and Mr Williams of counsel for the Husband.  Mr Wong referred the Court to a decision of the Full Court of the Family Court based on a transcript of the decision which was in the actual names of the parties, but the decision has been given the pseudonyms of Kasiopoulos & Garapiperis[6]. Mr Wong submitted that this was a decision of the Full Court delivered on 21^st June 2012 where the Full Court considered a trial judge’s rationale the wife had contributed to post-separation earnings than the husband, notwithstanding the fact that it was submitted, there had been a long period of pre-separation contributions by the wife that are, in nature, similar to this case. 

   [6] [2012] FamCAFC 85

3. Mr M submitted that there were two reasons why the Wife would have an entitlement to various payments received by the Husband from his post-separation employment in (country omitted).  He submitted the fact that the Wife had made a contribution to it and a real one, despite the fact that the parties had no children after 15 years of cohabitation.  And, second, he submitted that it was replacing an asset that should be, in essence, divisible or available to the Court today if not for the Husband’s expenditure of a sum of about $185,000.00 which he received from (employer omitted).  That was directly relatable, in his submission, to his client. 

4. Mr M went on to submit that the (omitted) to which the Court was referred which are part of the Husband’s entitlement are in the class of category of a financial product and a class of a financial benefit associated with the Husband’s current employment. Mr M submitted that the (omitted) are, in fact, a new asset that had arisen that compensates in part for an entitlement the Wife would have had had she had access to the money from (employer omitted) which the Husband appears to have already spent. 

5. Second, having regard to the fact that the Husband had already decided to deal with the last amount from (employer omitted) in a way that he saw fit in a unilateral manner as if his client had no right to have any say.  These are factors, in his submission, which would lead to the consideration of injuncting this asset in a way that could assist the Applicant Wife.

6. The only assets in Australia that are of any significance are a (omitted) Bank account that exists because the property at Property M was sold in 2013 and the parties have about $350,000.00 sitting in that account.  That is the only property in Australia, he submitted, that is of any significant value and that property is owned jointly between the parties.  If the Court were with the Applicant in relation to her propositions that are in her Amended Initiating Application to the overall adjustment, then it would be looking outside Australia to find some assets other than that significant sum of money in the trust account which would lead to the Court to the (omitted).  Thus, this is why it was submitted that the Court should grant the injunctions.

7. Mr Williams of Counsel referred the Court to the principles set out in section 114 of the Family Law Act that should be applied, pointing out that there were three elements to be identified in the case of Mullen & De Bry[7] and two of them assume critical relevance in this application.  The first was that the Wife has to demonstrate by evidence and not just assertion, that absent an order there is a real risk, as the Full Court describes it, of a likely disposal or dissipation of the assets and that real risk is objective.  It is an objective but not a subjective test.  The second element, he submitted, is the balance of convenience.  Ultimately, there is no risk of dissipation and the balance of convenience weighs wholly in favour of the Husband and the balance of convenience is also influenced in this case by a proper application of principles which come out of the decision of NHC & RCH[8] and also Gollings & Scott[9]

   [7] (2006) 36 Fam LR 454; FLC 93-293; [2006] FamCA 1380

   [8] (2004) FLC 93-204; [2004] FamCA 633

   [9] (2007) 37 Fam LR 428; FLC 93-319; [2007] FamCA 397

8. It was also a situation where after the hearing on 11^th November the parties produced further written submissions.  In this regard, I have considered a document headed Further Written Submissions of the Wife pursuant to directions of Judge Scarlett of 11^th November 2015.  I have also considered a written outline of submissions from Mr Williams of Counsel which was, in fact, handed up in Court on the morning of the hearing. 

9. In the further written submissions of the Wife, it was pointed out that they were supplementary to the oral submissions made at the hearing on 23^rd June 2014 and the amended written submissions of the Wife on 1^st July 2015 and in reply to the Husband’s further written submissions of 13^th August. 

10. The submissions covered spouse maintenance, which I have already dealt with and the litigation funding order, which I have already decided to make in the Wife’s favour.  The submission goes on to consider the Husband’s claims that the Wife had not made full and complete disclosure and seeks to rebut that submission.  What was submitted on behalf of the Wife was that there was a lack of disclosure by the Husband of his very significant employment with the company (employer omitted) which was only disclosed after discovery by the Applicant’s solicitor’s office and that an offer of the Husband of restricted stock units and receipt of restricted stock units was not disclosed until a letter of 19^th June 2014.  The submission did not go directly to any of the other matters raised in the hearing of 11^th November. 

11. The outline of submissions submitted by Mr Williams of Counsel for the Respondent Husband, whilst regrettably headed as if the proceedings were in the Family Court of Australia but apart from that, refers to the joint balance sheet that was provided to the Court and noted that the grant of the (omitted) by (employer omitted) to the Husband was connected with his employment.  He had received grants of (omitted) on 20^th November 2013, 7^th April 2014, 13^th October 2014 and 6^th April 2015.  The (employer omitted) have vested on 20^th November 2014 and 20^th May 2015 with further (omitted) to vest on 20^th November 2015 and following years.  The Husband sold (omitted) on 11^th June 2015 for US$42,223 and on 5^th July 2015 for US$41,084.25.  The proceeds received from the sale of any vesting of (omitted) are determined on the share price of (employer omitted), but approximately one half of the value realised meets taxation liabilities.

12. Mr Williams submitted that the Wife did not engage in necessary elements of the granting of injunctive relief in Mullen & De Bry[10] to which Mr Williams referred in his oral submission.  The necessary elements are: 

    (1) that the Wife should show an arguable case that judgment against the Husband will be obtained; 

    (2) that the Wife demonstrates by real evidence and not mere assertion that refusal to make the order involves a real risk the judgment in the Wife’s favour would remain unsatisfied because of concealment or dissipation of assets; and

    (3) that the balance of convenience requires the making of an order.

    [10] supra

13. It was submitted that the Husband’s conversion of any vesting (omitted) did not pose a risk to defeat the Wife’s claim.  In that, subsequent separation, the Husband and his new partner purchased the property at (country omitted) for £790,000 plus taxes, fees and stamp duty of $35,000 to $40,000.  The Husband’s share in that property is 90 per cent.  Further the sum of £711,000 was borrowed to pay the balance of the purchase price and associated costs of the purchase; and at the time of the property’s purchase, the Husband intended to reduce the principal sum of borrowing prior to the end of the fixed rate period, 30^th June 2016, to achieve 20 per cent equity in the property.  That in turn, would present the opportunity to refinance to a cheaper loan rate.  In order to reduce the principal sum, the Husband intended to use the proceeds of the sale of vested (omitted) and income including bonus payments to make additional repayments.

14. Further, in the event that the Husband was unable to increase the equity in the property by the end of the fixed rate period under a mortgage market review, changes in effect in the (country omitted) and the (country omitted), the implication of a mortgage credit directive operates to restrict many types of higher leverage funding and without a reduction debt, the loan approval may be withdrawn and the Husband would be forced to sell the property.

15. Alternatively, the Husband would be unable to refinance the loan at a lower interest rate which is a necessary step because his income is insufficient to meet his level of expenditure.  It was further submitted the Husband had entered into a contract to undertake renovations to the property and it was intended that proceeds from the sale of the vested (omitted) would meet the cost of the renovations. 

16. Similarly, the sale of the (omitted) was intended to meet the balance of the Husband's (omitted) Credit Card.  The only source of funds available for the Husband to meet his ongoing legal fees in this proceeding is his salary which includes bonuses and the sale of (omitted).  The Husband has incurred legal fees in these proceedings of $68,965.61 and has been informed that additional costs up to and including the date of this interim hearing will be approximately $21,000.00 and an additional cost of preparing for final hearing will be approximately $112,000.00.

17. In the premises of the quantum of the matrimonial net asset pool including superannuation, the extent of financial support provided by the Husband to the Wife post-separation and the Husband’s specified intention of application of funds from his employment, there is no proper evidentiary foundation for the court to be satisfied to the requisite standard that refusal to make the order involves a real risk that judgment in the Wife’s favour will remain unsatisfied. 

18. Further, if the court were to exceed to the Wife’s application, the Husband would be unable to meet the deficiency between his income and expenses, unable to meet his ongoing legal costs and unable to make additional payments on his new property to reduce the principal sum of loan to enable to refinance at a lesser interest rate in June 2016.  Those factors and the considerations warranting the rejection of the claimed risk of defeat of the Wife’s claim has identified necessarily as such that the balance of convenience entirely lay in the Husband’s favour. 

19. It was further submitted that the restraint sought by the Wife on the Husband using income and the (omitted) must have been seen as an incident of his employment. In employment, the Husband obtained more than two years following separation misapprehends the principles governing the termination of proceedings under section 79 of the Act.

20. The Wife’s application, it was submitted, ignores authority that following separation, the parties to a marriage are each entitled to proceed with their economic lives in a responsible manner,  (see NHC & RCH[11] also Gollings & Scott[12]).  That principle exposes a further fundamental flaw in the Wife’s application that properly construed there is no connection between the Husband’s current employment and the (omitted) on the one hand and the marriage on the other hand.

    [11] supra

    [12] supra

1. Further, not only was there no suggestion of the Husband spending any proceeds of his employment, whether it be income bonuses or (omitted) was unreasonable but those benefits from employment had been acquired by the Husband from employment obtained a lengthy period after separation and where on any view, the Husband has made significant provision for the Wife in the post-separation period from his earnings.

2. Mr Williams went on to submit that once was recognised that, first, that the Husband may ordinarily and reasonably spend funds acquired after separation how he wishes and secondly, that the elements necessary for the Court to make orders under section 114 of the Act were not established. There was no warrant for the Court acceding to the Wife’s application.

3. It was submitted that the Application must be dismissed with costs, given that no legitimate basis, it was submitted, existed for the bringing of the Application.

Conclusions

1. I have considered those submissions and I remain of the view, as I was in the earlier proceedings on 23^rd May this year, that, a case has not been made out for the granting of the injunctions sought by the Wife in respect of the (omitted) and other incidents of the Husband’s post-separation employment.  It is particularly relevant to my mind that the Husband’s employment with (employer omitted) did not commence for more than two years after the parties separated.  It is drawing a very long bow indeed to connect the Husband’s current earnings with the situation that applied when the parties were together.

2. I am not of the view that there is a risk that the Wife’s claim will be defeated, although it is certainly the case that the first asset to which the Wife must look would be the proceeds of the sale of the property held in Mr Hooper’s trust account.  I am mindful of the submission that the Husband needs to fund his legal costs which are quite significant.  He needs to do so from his income.  I have not made an order that $20,000.00 should be removed from the funds held in Mr Hooper’s trust account to go towards funding the Husband’s litigation.  In my view, those funds should remain in Australia as the first set of funds to which the Wife should look. 

3. But I am certainly not of the view that a case has been made for the injunctive orders that the wife seeks and I will dismiss that Application.

Orders

1. I will make orders accordingly.

Costs 

1. I note that both parties have sought orders for costs.  As I am due to retire from the Bench late next week, if either party seeks an order for costs, he or she should file and serve an affidavit setting out the amount of costs sought and the basis upon which those costs are calculated.

2. As there are already applications on foot in the parties’ Applications and Responses I do not require a separate Application in a Case to be filed. However, the parties should file and serve their affidavits by Monday 25 July and I will consider the matter in Chambers.

The Future Progress of the Matter

1. The Application for Final orders will be transferred to the docket of her Honour Judge Boyle for mention for the purpose of setting a date for the final hearing matter.

I certify that the preceding one hundred and four (104) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Date: 22 July 2016