Guardino & Guardino (No 2)
[2023] FedCFamC1F 612
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Guardino & Guardino (No 2) [2023] FedCFamC1F 612
File number(s): MLC 12090 of 2019 Judgment of: KARI J Date of judgment: 26 July 2023 Catchwords: FAMILY LAW – PROPERTY – Relationship of approximately six and a half years – Significant acrimony and mistrust between the parties –Where the two children of the relationship live in an equal shared care arrangement by agreement between the parties – One pool approach – Consideration of add-backs – Where the husband made significantly greater contributions to that of the wife – Where the wife failed to adduce evidence addressing the nature of her relationship with her new partner – Where the Court considers there should be an adjustment in favour of the wife pursuant to 75(2) – Where the Court makes final orders for property settlement to effect a 65 per centum division in favour of the husband.
FAMILY LAW – SPOUSAL MAINTENANCE – Where the wife seeks orders for spousal maintenance – Where there have been interlocutory orders made in favour of the wife – Where the wife fails to satisfy the Court as to her need – Wife’s spousal maintenance application dismissed.
FAMILY LAW – COSTS APPLICATIONS – Where the wife pursues costs for two interlocutory hearings – both applications for costs dismissed.
Legislation: Family Law Act 1975 (Cth) ss 75, 79, 117.
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rr 5.01, 12.17.
Cases cited: Anson & Meek [2017] FamCAFC 257,
Bevan & Bevan (2013) FLC 93–545,
CCD & AGMD [2006] FamCA 1291,
Chorn & Hopkins (2004) FLC 93-204,
Devenish & Devenish [2021] FedCFamC1F 166,
Dickons & Dickons (2012) 50 Fam LR 244,
Ferraro & Ferraro (1993) FLC 92-335,
Guardino & Guardino [2022] FedCFamC1F 1074,
Hall & Hall (2016) 257 CLR 490,
Hickey & Attorney-General (Intervener) (2003) FLC 93-143,
Higginbotham & Robinson (1991) 14 Fam LR 559,
Jabour & Jabour [2019] FamCAFC 78,
Jones v Dunkel (1959) 101 CLR 298,
La Costa & La Costa [2007] FamCA 1176,
Mallet v Mallet (1984) FLC 91-507,
Medlon & Medlon (No 6) (Indemnity Costs) [2015] FamCAFC 157,
MS & PS (2006) FLC 93-268,
Stanford & Stanford [2012] HCA 52,
Thorpe & Stirling [2021] FedCFamC1A 86,
Trevi & Trevi (2018) FLC 93-858.
Division: Division 1 First Instance Number of paragraphs: 207 Date of hearing: 27 – 30 March 2023 Place: Melbourne Counsel for the Applicant: Mr Kanarev Solicitor for the Applicant: AFL Kordos Lawyers Counsel for the Respondent: Ms Colla Solicitor for the Respondent: Hicks Oakley Chessell Williams ORDERS
MLC 12090 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR GUARDINO
Applicant
AND: MS GUARDINO
Respondent
order made by:
KARI J
DATE OF ORDER:
26 July 2023
THE COURT ORDERS THAT:
Property
1.The settlement date shall be thirty-five (35) days from the date of these orders.
2.On or before the settlement date:
(a)The husband shall pay to the wife the net sum of FOUR HUNDRED AND SIXTY THOUSAND EIGHT HUNDRED AND FIFTY TWO DOLLARS AND EIGHTEEN CENTS ($460,852.18); and
(b)The wife shall transfer to the husband all her estate, title and interest in the boat and the boat licence, at the husband’s expense in all things.
3.Within seven (7) days of these orders the parties shall do all such acts and things necessary to release to the wife the proceeds from the sale of the former matrimonial home (presently in the amount of approximately $145,630) held in the wife’s solicitors trust account.
4.Forthwith and subject to compliance with Orders 2 and 3 herein, the parties shall each otherwise retain those assets, resources and superannuation entitlements in their respective sole names, possession and/or control.
5.The parties shall each pay and otherwise fully and forever indemnify the other of them with respect to their separate debts and liabilities.
Spousal Maintenance
6.On or before the settlement date, the husband do pay to the wife the net sum of FIVE THOUSAND FOUR HUNDRED DOLLARS ($5,400) in full and final satisfaction of spousal maintenance arrears owed pursuant to the orders made 6 March 2020.
7.Orders 8 and 9 made 6 March 2020 be otherwise discharged.
8.All other interlocutory orders for spousal maintenance do otherwise be discharged.
9.The wife’s application for spousal maintenance be otherwise dismissed.
Other Orders
10.That on or before the settlement date, the wife shall pay to the husband one half of the expert fees incurred by each B Valuers and M Pty Ltd in these proceedings AND the husband shall be at liberty to deduct the same from the payment to be made pursuant to the wife pursuant to order 2(a) herein.
11.That the interlocutory applications for costs reserved on each 12 October 2020 and 20 December 2022 be dismissed.
12.That the financial proceedings be otherwise dismissed as finalised, save as to the question of costs.
13.Liberty to apply as to consequential orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
KARI J
INTRODUCTION
These proceedings relate to the question of matrimonial property settlement arising out of a relationship and subsequent marriage that subsisted for approximately six and a half years.
There are two children of the relationship, X aged nine and Y aged seven. To the parties’ mutual credit, they were able to reach an agreement regarding the parenting arrangements for the children, with final orders made on 14 June 2022. Those orders provide for the children to live in an equal shared care arrangement.
For reasons which are not entirely clear and which do not appear germane to the present dispute, there is much acrimony and mistrust between the parties. Despite this observation, there are very few factual matters about which the parties disagree. The most significant area of dispute relates to the wife’s present circumstances, her future needs and the extent to which (if any) she requires the benefit of an order for spousal maintenance in her favour.
BACKGROUND
The relevant background of the parties and their relationship can be summarised briefly as follows:
(a)The husband was born in 1975, and he is 47 years of age. The husband is a qualified tradesperson who owns and operates a business from two separate locations. This is a business in which the husband had an interest well prior to the relationship.
(b)The wife was born in 1987, and she is 36 years of age. Prior to the relationship of the parties, the wife was employed in administration. The wife however has devoted herself to parenting and home duties from shortly prior to the birth of the child X and otherwise throughout the relationship.
(c)The parties met online in 2012.
(d)While there is a dispute as to the date of cohabitation, nothing much turns on this dispute and it is not necessary for this controversy to be resolved. The wife asserts that cohabitation commenced in late 2012, and the husband asserts that cohabitation commenced in approximately early 2013. The parties agree that when they began living together, they did so in a home owned by the husband at Q Street, Suburb R.
(e)The child X was born in 2014.
(f)The parties married in 2015.
(g)The child Y was born in 2016.
(h)The parties separated in late July/early August 2019, living separately and apart under the same roof until physical separation in late 2019. The physical separation of the parties occurred as a result of events which led to the wife obtaining a Family Violence Intervention Order prohibiting the husband from residing in the former matrimonial home in late 2019; there having been an earlier order in limited terms made in mid‑2019 which permitted the husband to remain in the former matrimonial home on certain terms.
These proceedings were commenced by the husband on 25 October 2019. At that time, the husband sought both parenting and financial orders.
It is not necessary to detail all of the Court events that have taken place over the lifespan of the litigation. Suffice to say, however, that the litigation has been acrimonious, resulting in numerous interlocutory hearings relating to both the parenting and financial proceedings.
In this context, the parties have incurred significant legal fees, albeit that the husband from time to time has been self-represented, thus reducing the funds he has expended on legal fees. Whereas the wife has been represented throughout the litigation. The Court has had regard to the Costs Notices filed on behalf of each of the parties for trial purposes.
(a)From the husband’s Costs Notice, the Court is unable to discern the legal fees he has incurred from the commencement of the proceedings. The husband’s legal fees for trial purposes however have been:
(i)$57,000 billed and paid.
(ii)A further amount of $41,400 was expected to be incurred for trial in solicitors’ and counsel fees.
(iii)Expert report fees totalling $47,953, which includes expert fees in relation to both the parenting and the financial proceedings. The Court understands that the husband has paid all of the expert fees in the proceedings. The parties are agreed that the wife shall reimburse the husband for half of the expert report fees in the overall resolution of the proceedings.
(b)From the wife’s Costs Notice, the Court understands that the wife has incurred legal fees as follows:
(i)$325,406.50 billed and paid.
(ii)An amount of $4,400 in unbilled fees, with an additional $36,200 to $40,500 anticipated to be incurred for trial in both solicitors’ and counsel fees.
(iii)The wife’s solicitors are also holding a further amount of $45,025 in their trust account on account of the wife’s anticipated legal fees.
Significantly, the Court also understands that during the course of the proceedings each of the parties have received funds from the sale of assets, which they have largely applied to their legal fees. This topic and the payment of legal fees shall be discussed later in these reasons.
Of some importance, orders have been made providing interim spousal maintenance for the wife. Those orders have included:
(a)Orders made on 10 December 2019 which provided for the wife to receive the following amounts:
(i)Rental income in the amount of $220 per week from a tenant living in premises at the former matrimonial home property at Town S (‘the former matrimonial home’);[1]
(ii)All reasonable water and electricity outgoings for the former matrimonial home up to an amount of $450 per month;[2] and
(iii)Child care / kindergarten fees for the children, which was not to be credited towards any child support liability of the husband;[3]
(b)The orders of 10 December 2019 also provided for the husband to pay private health insurance premiums for the wife and the children;[4] and
(c)Orders made by consent on 6 March 2020 providing for the husband to pay an amount of $450 per week towards the water and electricity of the former matrimonial home, together with the gas for the property.[5]
[1] See Orders dated 10 December 2019 at Order 10.
[2] Ibid at Order 4.1 (incorrectly numbered).
[3] Ibid at Order 4.2 (incorrectly numbered).
[4] Ibid at Order 14.
[5] See Orders dated 6 March 2020 at Order 8.1.
PARENTING ARRANGEMENTS
The parenting arrangements for the parties’ children were litigated with some vigour until a final parenting order was made by agreement between the parties on 14 June 2022.
The final parenting order provides for the parents to share parental responsibility for the children.
The orders also provide for the children to transition from living primarily with the wife (as they had done since separation), into a shared care arrangement as and from the commencement of the school year in 2023.
At the present moment, the children are living between the parties in a split week living arrangement. However, as and from the commencement of the school year in 2024, the children are to move into a week about shared care arrangement.
The final parenting order also provides for the children to share school holidays and special occasions with both of their parents.
LEGAL PRINCIPLES
The jurisdiction of the Court to make orders with respect to the financial matters arising out of a marriage is set out in Part VIII of the Family Law Act 1975 (Cth) (‘the Act’).
The legal principles relevant to adjusting property interests on the breakdown of a marriage were considered by the High Court in Stanford & Stanford [2012] HCA 52 (‘Stanford’).
In particular, the High Court identified:
(a)Firstly, that the Court must identify the existing legal and equitable interests of the parties in the property, liabilities and financial resources of the parties at the time of the hearing; and
(b)Secondly, and importantly, that in the application of section 79(2) of the Act the Court must not make any order adjusting the parties’ legal and equitable interests in property unless the Court is satisfied that “in all of the circumstances, it is just and equitable” to do so.
(c)If the Court determines that it would be just and equitable to make orders adjusting the parties interests in property, then section 79(4) of the Act requires:
(i)The consideration of the contributions made by the parties to the acquisition, conservation and improvement of any property, both of a financial nature but also of non-financial nature;
(ii)The effect of any proposed orders on the earning capacity of each of the parties;
(iii)Those relevant factors set out in section 75(2) of the Act;
(iv)Any other order affecting each of the parties;
(v)Any child support either party has or is liable to provide, or might be liable to provide in the future for a child of the relationship; and
(vi)Finally, the Court must consider the “justice and equity” of the actual orders to be made.
Prior to the decision in Stanford, the appropriate approach in a property settlement case was well settled and had been distilled into the ‘four step process’ as identified by the Full Court in Hickey & Attorney-General (Intervener)(2003) FLC 93-143 as follows:
(a)Identification of the value of the property of the parties;
(b)Identification and evaluation of the contributions of the parties to the acquisition, conservation and improvement of the property;
(c)Identification and assessment of the relevant future needs factors of the parties; and
(d)Considerations of justice and equity.
The significance of the decision in Stanford, with reference to the four step process, was discussed by the Full Court in Bevan & Bevan (2013) FLC 93–545 (‘Bevan’). In that decision, the Full Court identified that the four step process “merely illuminates the path to the ultimate approach,”[6] but that the overarching obligation of the Court is not to make an order unless it is just and equitable to do so.
[6] (2013) FLC 93–545, [71].
In Stanford at [42], the Full Court identified:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order …
Here, both parties have competing applications for property adjustment before the Court.
The Court accordingly considers that in those circumstances, it is just and equitable to make an order adjusting property between the parties.
The four step approach will otherwise be adopted.
THE EVIDENCE
The parties each prepared court books containing the documents that they sought to rely on during the trial.
The husband’s primary documents were:
(a)His Amended Application for Final Orders filed 10 February 2023;
(b)His Trial Affidavit filed 10 February 2023; and
(c)His Financial Statement filed 10 February 2023.
The wife’s primary documents were:
(a)Her Amended Response to Final Orders filed 25 November 2022;
(b)Her Trial Affidavit filed 12 December 2022; and
(c)Her Financial Statement filed 25 November 2022.
Together the parties mutually relied on a number of single expert reports (without the need to call any such expert to give oral evidence) as follows:
(a)Valuation report prepared by Ms T (Chartered Accountant) of M Pty Ltd dated 8 March 2023 as annexed to the Affidavit of Ms T filed 15 March 2023 providing a historical valuation as at 30 June 2013 of the following entities:
(i)E Pty Ltd as trustee for the Guardino Family Trust, including its interest in C Pty Ltd and the D Trust;
(ii)Guardino Investments Pty Ltd as trustee for the Guardino Superannuation Fund; and
(iii)MG Pty Ltd as trustee for MG Superannuation Fund.
(b)Valuation report prepared by Ms T of M Pty Ltd dated 2 March 2023 as annexed to the Affidavit of Ms T filed 7 March 2023 providing a valuation as at 30 June 2022 of the following entities:
(i)E Pty Ltd as trustee for the Guardino Family Trust, including its interest in C Pty Ltd, V Pty Ltd and the D Trust;
(ii)The D Pty Ltd Partnership; and
(iii)MG Pty Ltd as trustee for MG Superannuation Fund.
(c)Valuation reports prepared by Mr W of B Valuers all dated 29 March 2023 as annexed to the affidavit of Mr W filed 4 April 2023,[7] in relation to the following real properties (together with the earlier valuations filed 6 December 2022):
(i)F Street, Suburb G, Victoria;
(ii)H Street, Suburb G, Victoria; and
(iii)K Street, Suburb L, Victoria.
[7] Obtained during the course of the final hearing and orally conveyed to the Court, but filed after the conclusion of closing submissions.
Each of the parties gave oral evidence during the trial hearing.
There were no other witnesses called to give oral evidence at the trial hearing.
The observation of the husband’s oral evidence is that he was a cautious and careful witness, who answered questions directly and frankly.
The observation of the wife’s oral evidence is that she found the process of giving her oral evidence difficult. Throughout her evidence the wife vacillated between:
(a)Pre-empting the questions being asked and giving her answer without the question being fully formulated.
(b)Answering questions in the way she wanted to answer them without addressing the actual question asked of her.
(c)Being vague and unsure (particularly about recent events), while conversely being concise and clear about events that had occurred early in the relationship.
(d)Arguing about semantics.
Significantly, however, it appeared that the wife became most vague and difficult when discussions turned to matters relating to her new partner, the nature of their relationship and living arrangements, the nature of their financial ties (if any) and her involvement in his professional career.
This topic about the wife’s partner was something that had caused much controversy between the parties for some time in the litigation; particularly as the husband had formed a suspicion that the wife was deriving financial benefits from her new partner and/or from her activities with him.
In particular, and cementing his suspicion, on 15 November 2022 (amended on 1 December 2022) the husband filed an Application in a Proceeding to discharge the earlier spousal maintenance orders that had been made on 10 December 2019 (in particular order 12 4.1). That aspect of the husband’s Application in a Proceeding was adjourned to trial, and shall be determined as part of these proceedings.
Against that backdrop, it is of some surprise that the wife chose not to call her new partner to give evidence in the proceedings. The husband’s position is that there is a consequence to that decision by the wife. In particular, the husband asserts that the Court should draw an inference consistent with the evidentiary principle in Jones v Dunkel (1959) 101 CLR 298 (‘Jones v Dunkel’) concerning the unexplained failure of the wife to adduce evidence addressing the nature of her relationship with her new partner (particularly those of a financial nature); namely that the evidence of the wife’s partner would not have assisted the wife’s case.
This is a submission which the Court accepts, particularly as the wife was on notice of this aspect of the husband’s case and had been for some time in a general sense in the litigation but, importantly, no later than 15 November 2022 when the husband filed his application to discharge the earlier spousal maintenance order.
While the Court understands that the wife’s legal representatives sought to take responsibility for the wife’s failure to adduce evidence from her new partner (made during counsel’s reply during closing submissions on this topic), in the absence of the wife’s legal representatives doing more to address this failure, little flows from this submission from counsel. At the very minimum, what might have followed could have been an application to re-open the wife’s case and to adduce evidence from the wife’s new partner. This, however, did not occur.
Accordingly, there remains an unexplained failure by the wife to call evidence from her new partner relating to the nature of that relationship, including but not limited to their living arrangements, financial arrangements and the extent to which the wife is involved in his professional career.
In all of the circumstances, I consider it appropriate to draw an inference that the evidence of the wife’s new partner would not have assisted the wife’s case (see Jones v Dunkel).[8]
[8] (1959) 101 CLR 298, 308, 312, 320 - 321.
THE PARTIES LEGAL AND EQUITABLE INTEREST IN PROPERTY
At the commencement of the trial, and at various times throughout the trial, much Court sitting time was lost in having counsel attend to the preparation of a joint balance sheet which clearly identified the assets and liabilities that they each sought to bring to account.
Somewhat unusually, and in the absence of the parties (or more importantly the legal representatives) having prepared a joint document, the Court, at the request of counsel, released to the parties a draft schedule that I had prepared with reference to the parties’ trial material (which also included a separate schedule of the parties’ respective initial contributions).
Ultimately, the draft schedule was amended by the parties and a marked up balance sheet was received by the Court.[9] However, due to the manner in which that document was presented (particularly as to marked up amendments which are not clear), I have had regard not only to the Exhibit but also to the submissions made throughout the course of the final hearing as to exactly what it is that the parties agree in that document, where they disagree and their reasons for doing so.
[9] See ‘Exhibit H3’.
As a consequence of that exercise, the parties agree that their respective legal and equitable interests in property are as follows:
ASSET OWNERSHIP HUSBAND’S VALUE WIFE’S VALUE 1. Proceeds Town S (held in the wife’s solicitors’ Trust Account) Joint 145,630 145,630 2. Furniture & Effects Town S (retained / sold by the wife) Joint Not known Nominal 3. Superannuation Fund 1 H 4,511 4,511 4. MG Superannuation Fund SMSF H 231,812 231,812 5. Mr Guardino Z Bank H 3,338 3,338 6. Superannuation Fund 2 W 45,133 45,133 7. C Pty Ltd 25% interest H 190,000 190,000 8. E Pty Ltd 5% interest in C Pty Ltd and interest via Guardino Family Trust in F Street and H Street, Suburb G H 657,000 657,000 9. D Pty Ltd Partnership, K Street, Suburb G H 362,000 362,000 10. Loan to Guardino Family Trust H 428,000 428,000 11. Savings H Negligible Nominal 12. Boat W 215,000 215,000 13. Licence for Boat W 80,000 80,000 14. Engagement & Wedding Ring W To be sold To be sold 15. Savings Z Bank H 1,915 1,915 LIABILITIES 16. Loan from parents for legal fees H (207,000) Exclude 17. AA Bank Credit Card W (5,580) (5,580) 18. Loan from parents for legal fees W Exclude (20,000)
As can be seen from the joint balance sheet, there is very little that the parties do not agree. Indeed the only dispute between the parties relates to whether their respective loans for the payment of their respective legal fees ought to be brought to account (Items 16 and 18).
I do not consider it appropriate to include in the liabilities to be brought to account those amounts each of the parties have borrowed from their respective parents to fund their legal fees. While I accept that the parties may well have been required to borrow funds to fund their legal expenses pending the resolution of the matter, as is made plain by the Full Court in Chorn & Hopkins (2004) FLC 93-204 (‘Chorn & Hopkins’) at [58], any funds borrowed by a party to meet their legal fees would not ordinarily be taken into account in the calculation of the net property of the parties. This is because section 117 of the Act prescribes that parties to litigation under the Act are to bear their own costs. To include the parties’ respective borrowings to fund their legal expenses in the composition of the net property available for division, would be to effectively and pre-emptively make an order for costs.
Add-Backs / Notional Property
In addition to those items of property that tangibly exist, the parties agree that certain funds distributed throughout these proceedings to each of them by way of partial settlement of property are to be added back; despite the fact that those funds have largely been expended by each of them.
There are, however, four items of controversy as follows:
(a)Firstly, whether an amount of $1,600 received by the wife from the sale of shares should be added back as notional property.
(b)Secondly, the extent to which some or all of an amount of $100,000 received by the wife pursuant to an order of 6 March 2020 should be added back as notional property, or whether the same should be excluded and accounted for as spousal maintenance.
(c)Thirdly, whether funds totalling $65,000 distributed by the husband in his role as Trustee of the Guardino Family Trust to his mother, to repay a loan he had taken from her to assist him in the payment of his legal fees should be added back as notional property.
(d)Fourthly, whether an amount of $9,641 received by the husband from the sale of shares be added back as notional property.
The items of notional property that the parties have identified and their respective approach to those amounts are as follows:
PART PROPERTY & ADDBACKS OWNERSHIP HUSBAND’S VALUE WIFE’S VALUE 1. Distribution pursuant to Order 10 December 2019 W 63,605 63,605 2. Sale of shares by wife W 1,600 Exclude 3. Distribution pursuant to Order 6 March 2020 - to be characterised at trial W 100,000 Exclude 4. Distribution pursuant to Order 12 October 2020 W 100,000 100,000 5. Distribution pursuant to Order 21 December 2021 W 75,000 75,000 6. Distribution pursuant to Order 28 June 2021 H 50,000 50,000 7. Distribution pursuant to Order 20 December 2022 W 60,000 60,000 8. Distribution pursuant to Order 20 December 2022 H 60,000 60,000 9. Monies distributed to the husband’s mother from Guardino Family Trust H Exclude 65,000 10. Proceeds from sale of shares by the husband H Exclude 9,641 Legal Principles
It is well established that adding back notional property is the ‘exception rather than the rule’, and that the Court retains discretion whether or not to add back notional property and/or to treat any dissipated funds when considering the relevant section 75(2) factors, and in particular section 75(2)(o) (see Chorn & Hopkins and Trevi & Trevi (2018) FLC 93-858 (‘Trevi’)).
However, as discussed by Murphy J in Trevi at [31], if funds that existed at separation have been applied to the payment of legal fees, then such amounts are likely to be favourably treated as notional property.
Amounts received by the wife
In relation to the funds received by the wife, I foreshadowed to the parties during Counsel’s closing submissions the manner in which I proposed to treat the funds she had received, particularly those she had applied to the payment of her legal fees. That foreshadowed approach was met with approval by counsel for each of the parties. Accordingly, I am cognisant that:
(a)The total amount of lump sum funds received by the wife is an amount of $400,205 (Items 1 to 5 and 7 in the above schedule);
(b)Pursuant to the wife’s Costs Notice filed 23 March 2023 prior to the commencement of trial, she had paid an amount of $325,406.50 towards her legal fees. In addition, the wife’s solicitors held a further sum of $45,025 in their trust account on account of the wife’s anticipated legal fees. The combined total being an amount of $370,431.50;
(c)With reference to the amount of lump sum funds received by the wife, it is patently clear that the majority of those funds have been applied to the payment of her legal fees; and
(d)At my suggestion, the parties agreed that those funds applied by the wife to her legal fees should be the subject of an add-back; namely the amount of $370,431.50.
There however remains a dispute between the parties as to how to treat that portion of the funds received by the wife that was not applied to her legal fees; which I calculate to be an amount of $29,773.50. In that regard:
(a)It appears uncontentious that the wife has spent these funds entirely at her own discretion.
(b)The wife gave evidence that she applied those sums towards her “living expenses”. There was no further particularisation by the wife about this expenditure.
(c)Equally the wife’s use of those funds was not the subject of any real challenge during cross-examination.
(d)The question, therefore, is whether any further funds should be added back.
The question of adding back funds that have been applied by a party to their living expenses in the post-separation period was neatly encapsulated by the Full Court in Chorn & Hopkins at [24], as cited with approval by the Full Court in La Costa & La Costa [2007] FamCA 1176:
24.We will refer again later in these reasons to the decision in Townsend, but we would in the present context draw attention to the following observations by later Full Courts:
2.11There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law require that parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by the trial Judge. (Marker [1998] FamCA 42, 1 May 1998, per Baker, Kay and Chisholm JJ.)
…
46.Whilst not seeking to place a fetter upon the exercise of discretion of a trial judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives. (Cerini [1998] FamCA 143, 8 October 1998, per Nicholson CJ, Ellis, Kay JJ.)
In all of the circumstances, and where there is no evidence to suggest that the wife’s post‑separation spending was extravagant or wasteful, I do not consider it appropriate to add back any further funds at the wife’s end.
Amounts received by the husband
In relation to the husband, there is agreement between the parties that two amounts be the subject of an add back (Items 6 and 8 in the above schedule), totalling $110,000.
While it is not clear to the Court as to why it is that the parties agree such an approach, the agreement is one that shall be adopted.
There, however, remains two further amounts which are not the subject of agreement:
(a)An amount of $65,000 described as a distribution from the Guardino Family Trust to the husband’s mother; and
(b)An amount of $9,641 being proceeds received by the husband from the sale of shares.
In relation to the smaller of the two sums, much like the wife’s post-separation expenditure, there is no evidence before the Court which suggests that the husband was either extravagant or wasteful in his post-separation expenditure. Accordingly, I do not propose to add back this amount.
In relation to the distribution from the Guardino Family Trust, the husband deposed in his trial affidavit filed 10 February 2023 as follows:
57.From 24 October 2019 until 16 December 2021 my parents paid legal costs and expenses on my behalf, and at my request totalling $231,592. They made each of the payments on the clear understanding and agreement with me that I would be repaying them following final settlement of these proceedings, and I believe that they made each of the payments from the joint bank account. Annexed hereto and marked "[MG22]", pages 173 and 174, is a list of the payments made by my parents, and as owed by me to them. That list shows that I have paid back to them $64,586, and I did that by arranging a trust distribution to my mother of that amount from the [Guardino Family Trust] in the 2021 financial year. I therefore owe my parents $167,006 for the legal costs paid on my behalf, and owed back by me.[10]
[10] See the Affidavit of Mr Guardino filed 10 February 2023 at paragraph 57.
It is therefore uncontroversial that the amount distributed to the husband’s mother from the Guardino Family Trust was to repay the husband’s loan to his parents for monies borrowed from them to pay his legal fees. It is also clear from this evidence that the husband treats the assets of the Guardino Family Trust as his own.
I accordingly consider it appropriate that this sum be added back.
THE POSITION OF THE PARTIES
The orders sought by the husband in his Amended Initiating Application filed 10 February 2023 can best be summarised as effecting an outcome whereby:
(a)The husband receives the balance of the funds from the sale of the former matrimonial home;
(b)The wife transfer her interest in the boat and licence;
(c)The parties otherwise retained those assets and resources in their sole name, possession or control, and discharge their respective debts;
(d)An order dismissing the wife’s application for spousal maintenance; and
(e)An order discharging orders 12, 13, 14 and 15 of the orders made 10 December 2019 for spousal maintenance in favour of the wife, together with a discharge of any arrears owed pursuant to those orders.
The orders sought in the husband’s Amended Initiating Application would have the effect of the husband retaining all of the assets of the parties, leaving the wife with her modest superannuation entitlements and her credit card liability. Such an outcome is inconceivable in all of the circumstances of this case.
At the commencement of the trial, the husband amended his positon such that he now seeks orders that would effect a 75/25 division of the net assets in his favour, both with respect to the non-superannuation assets and the superannuation assets.
The wife’s position in her Amended Response to Final Orders filed 25 November 2022 in broad terms is that there be a 55/45 division in her favour (excluding superannuation), a superannuation split from the husband’s interest in MG Superannuation Fund to the wife in the amount of $34,371 (with the parties to otherwise retain their respective superannuation entitlements), together with orders under the heading “spousal maintenance” which shall be separately discussed in these reasons.
There does not appear to be any dispute between the parties that the husband retain the boat and licence, together with his interests in the various entities and trusts.
APPROACH
As best can be understood, it appears that the wife asks the Court to adopt a two-pool approach comprising a pool of the net non-superannuation assets and a pool of the superannuation assets.
While it is understood that the nature, form and characteristics of the parties respective superannuation entitlements are different to the parties non-superannuation assets, in circumstances where it does not appear from any of the material relied upon by the wife that procedural fairness has been afforded to the husband’s self-managed superannuation fund (MG Superannuation Fund), it is not possible for the Court to make any superannuation splitting orders. Accordingly, the property of the parties will be dealt with in a single pool combining the superannuation and non-superannuation assets.
THE CONTRIBUTIONS OF THE PARTIES
Initial Contributions
At the commencement of the trial, the parties’ counsel were also asked to consider the preparation of a schedule setting out the initial contributions of the parties (again with reference to the draft schedule that I had prepared).
Again, the parties were largely in agreement about their respective contributions, with the same distilled as follows:
ASSET OWNERSHIP HUSBAND’S VALUE WIFE’S VALUE 1. Q Street (sold late 2013) H 845,000 845,000 2. Furniture & effects Q Street H Not known Not known 3. Superannuation Fund 1 H 106,037 106,037 4. Guardino Superannuation Fund H 2,837 3,391 5. MG Pty Ltd ATF MG Superannuation Fund H 34,151 31,151 6. BB Pty Ltd 8.58% shares with paid up capital H 50,000 Exclude 7. C Pty Ltd 25% interest H 318,000 318,000 8. E Pty Ltd ATF Guardino Family Trust, 50% interest in D Pty Ltd which owns:
F Street, Suburb G 590,000
H Street, Suburb G 650,000H 620,000 620,000 9. Loan to Mr CC H 219,962 219,962 10. Loan to Guardino Family Trust H 205,115 205,115 11. Z Bank Savings H 9,700 9,700 12. Motor Vehicle 1 H 11,000 11,000 13. Recreational vehicle - sold in 2013 H 16,000 16,000 14. Savings W 12,000 12,000 15. Superannuation Fund 2 W 14,000 14,000 16. D Pty Ltd Partnership H 50,000 50,000 LIABILITY 17. Q Street Mortgage – Z Bank H (209,790) (209,790) 18. Mortgage F Street & H Street, Suburb G H (442,875) (442,875) 19. Loan from Ms DD W (20,000) (20,000)
The only item in the above schedule about which the parties disagree is Item 6, namely the BB Pty Ltd Shares. In that regard:
(a)The husband asserts that he purchased shares in a company known as “BB Pty Ltd” in 2007 for a sum of $50,000.[11]
(b)While the wife accepts that the husband held BB Pty Ltd Shares, she does not agree their value, nor does she accept that the husband paid $50,000 for their purchase. She takes this position because the husband has not produced any source material evidencing the purchase price of the shares.
(c)The wife additionally asserts that in circumstances where it is an agreed fact that BB Pty Ltd no longer trades,[12] she asserts that little value and/or weight should be given to this initial contribution of the husband.
[11] See ‘Exhibit H5’.
[12] See ‘Exhibit W3’,
Having heard the evidence of the husband, and accepting that he was a precise historian, particularly with respect to his financial affairs and circumstances, I am satisfied that the husband acquired the BB Pty Ltd Shares for an amount of $50,000 in 2007.
Equally, however, I am also satisfied that little weight ought to be given to this contribution by the husband, particularly given the investment has not reaped any ongoing benefit or value for the parties.
While it is understood that the purchase price of the BB Pty Ltd shares is not an insignificant amount, I am not certain whether giving significant weight to this item would alter the inescapable conclusion to be drawn from the above schedule, that the husband made overwhelmingly greater initial financial contributions when compared to the wife.
With reference to the above schedule and distilled into a net amount, the initial contributions of each the husband and the wife can be summarised as follows:
(a)The husband’s initial financial contribution totals no less than approximately $1,785,137, excluding the value of the BB Pty Ltd shares; and
(b)The wife’s initial financial contribution totals approximately $6,000.
Contributions during the relationship and in the post-separation period
During the course of the final hearing, much of the wife’s evidence focussed on the quality and/or asserted non-existence of the husband’s contributions during the relationship, particularly his non-financial contributions in the form of homemaking and parenting.
Despite the wife’s initial assertions to the contrary, the wife ultimately conceded during her oral evidence that the husband undertook home improvement tasks either alone, with tradespeople and/or with the assistance of either his father or the wife’s father. This is evidence I accept.
It appeared uncontroversial that the wife was devoted to parenting and home duties during the relationship. The husband appears to make some criticism of the quality of the wife’s non‑financial contributions, pointing to an assertion that the parties ate out and enjoyed take away foods, while also employing a house cleaner and gardener. Despite these attempts to diminish the quality of the wife’s contributions, I do not consider that there was any evidence to suggest that the wife was anything other than conscientious and devoted to her parenting and household tasks. I do not accept that the enjoyment of a meal out, takeaway, or assistance with cleaning in any way diminishes the wife’s overall contributions to parenting and homemaking. More importantly however, the wife’s denials about dining out and ordering take away meals from time to time (which I do not accept, particularly as her strident denials softened to admissions during cross examination) was somewhat surprising and gave the impression that the wife had formed a view that such evidence would assist her case. Unfortunately for the wife the effect of this evidence was that it gave the court pause for concern over those aspects of the wife’s evidence about which the parties did not agree.
It was also uncontroversial between the parties that while the wife was engaged with homemaking and parenting, the husband was the main breadwinner for the family. It therefore appears that these parties undertook what is best described as traditional roles within their household during the course of the relationship; the husband was the breadwinner providing a good income and lifestyle for the family (including the purchase of a boat for the mutual enjoyment of the family), while also undertaking home improvement tasks around the home, with the wife solely engaged in homemaking and parenting.
I am satisfied that in the post-separation period, the parties’ roles largely continued in the same fashion; albeit that the wife acknowledged in her oral evidence that the husband undertook a more prominent parenting role in the lead up to separation and following separation.
While the contributions of the parties are manifestly different, they are equally important to the parties’ mutual ability to acquire, conserve and improve their property during the course of the relationship and in the post-separation period (see Mallet v Mallet (1984) FLC 91-507 and Ferraro & Ferraro (1993) FLC 92-335). This conclusion is one that counsel for each of the parties readily agreed during their respective closing submissions.
Conclusion as to contributions
It is well understood that the assessment of contributions is a holistic one that requires the Court to bring to account the myriad of contributions made over the course of the relationship (see Dickons & Dickons (2012) 50 Fam LR 244 and Jabour & Jabour [2019] FamCAFC 78).
The wife argues that the assessment of contributions should be assessed at 70 per centum in favour of the husband; acknowledging the significance of the husband’s initial financial contributions in doing so.
The husband, on the other hand, argues that the Court should bring to account his disproportionate initial contributions in a meaningful way, particularly given the relatively short relationship of the parties being less than seven years. The husband asks the Court to assess contributions in favour of the husband at 85 to 88 per centum.
Describing the length of the relationship of the parties as “short” is an expression which is often adopted in the context of litigation under the Act, despite the fact that it is not a phrase used anywhere in the Act. Indeed, in Anson & Meek [2017] FamCAFC 257 at [102] and [181] the Full Court reminds:
102.… It should be reiterated immediately that there is no magic or particular significance in the nomenclature “short marriage cases”; it serves merely as a descriptor for seeking to group together and compare relatively alike with relatively alike.
…
181.If the point is that, where there is a short marriage, where there are no children and where the parties’ contributions to their assets and to the welfare of the family from the commencement of the relationship to the time of the hearing is equal, any disparity in initial financial contributions is of critical importance in determining the overall contributions of the parties, then such a position is easily arrived at by the application of principle alone.
The husband’s counsel relied on a number of cases, while not said to be comparable, were relied on to comparably promote the weight to be given to the initial contributions of the husband in a comparably short relationship (referring the Court to Devenish & Devenish [2021] FedCFamC1F 166 and CCD & AGMD [2006] FamCA 1291).
However, again, as identified in Anson & Meek at [126] and [158] Aldridge and Cleary JJ said:
126. We do not consider that the existing authorities obliged the primary judge to consider the comparable cases at all, let alone obliged her to conduct an analysis of the comparable cases so as to identify both the factors that indicate a lack of comparability and those that do not.
…
158. In our opinion, the fact that two different judges acting upon the same evidence may properly reach different conclusions greatly diminishes the value of comparable cases. This is especially so in this jurisdiction where there is almost an infinite variation in the rich factual detail that attend both parenting and property cases. The concern is amplified when the Court is proffered just a selection of cases said to be comparable as opposed to an analysis of all cases that could be said to be comparable.
Accordingly, I do not consider it helpful to have regard to the comparable cases proffered on behalf of the husband; particularly as proffering only two such allegedly comparable cases is unhelpful. Moreover, the two cases which the husband’s counsel identified were both cases where there were no children born of the relationship; unlike the present case.
It, therefore, falls upon the Court to assess the contributions of the parties holistically with reference to the particular facts of these parties and their relationship as identified in these reasons.
In doing so, and for all of the reasons that I have identified thus far, I am satisfied that when weighing the parties’ respective contributions together, the assessment of contributions in the present case should be 77.5 per centum in favour of the husband and 22.5 per centum to the wife.
RELEVANT SECTION 75(2) FACTORS
Turning to the relevant factors to be considered pursuant section 75(2) of the Act.
The husband is 47 years of age and the wife is 36 years of age.
The relationship of the parties is less than seven years duration.
Both parties are in good health.
There are two children of the relationship who are now living in a shared care arrangement between the parties.
The husband pays child support, presently assessed at $104 per week. There is no suggestion that the husband does not meet that obligation and that he will not continue to meet his child support obligations as they are assessed by the Child Support Agency from time to time.
The husband is a qualified tradesperson who operates his own business. I am satisfied that he is likely to continue do so in the future.
As is understandable from the findings I have made in relation to the respective contributions of the parties, the husband’s business is one that has enabled the husband to amass certain assets and investments prior to the commencement of the relationship, which have been built upon during the currency of the relationship, while also providing a comfortable lifestyle for himself in the period prior to the relationship and for the parties during the relationship. In light of the same, I am satisfied that the husband’s business interests are likely to continue to provide a comfortable lifestyle for the husband well into the future.
The husband’s interests in the various entities and trusts have been valued. In the years during the marriage, the husband’s taxable income from all sources varied significantly, ranging between approximately $138,000 and $348,000.[13] Unlike previous years, I am aware that in the post-separation period the husband has not received income beyond that which he received from C Pty Ltd (receiving between approximately $73,000 to $95,000 per annum in the years following separation).[14] I accept that the husband is in control of the financial benefits that flow from the various entities, including but not limited to whether a dividend is declared and/or trust distributions are made; with the resultant effect that simply having regard to his taxable income has the capacity to mislead. I am conscious that in exercising such control, the husband has in the past received both dividends and trust distributions which have increased his taxable income, and that during the currency of the litigation he was able to make a trust distribution in favour of his mother to repay monies she had lent him for the payment of his legal fees; monies which otherwise might have been distributed directly to the husband. In addition, I am satisfied that the husband derives additional benefits from various sources within the structure of his business and investment interests including but not limited to the use of motor vehicles and the payment of other expenses like petrol.
[13] See the Affidavit of Mr Guardino filed 10 February 2023 at paragraph 44, and ‘Exhibit W7’ for the financial years ending 30 June 2013 and 30 June 2014.
[14] See ‘Exhibit W7’.
The wife, on the other hand, has been out of the paid workforce for nearing the entirety of the parties’ relationship. Since separation, she has relied on government benefits, lump sum amounts that she has received as identified earlier in these reasons, the payment of spousal maintenance (to the extent that the husband has complied with the orders of the Court) and child support.
To the wife’s credit, she is seeking to obtain qualifications that will enhance her career prospects, earning capacity and income in the future. She is presently enrolled in tertiary studies and she is doing exceptionally well thus far obtaining high grades,[15] after having switched from studying in a different field in which her academic progress was similarly exceptional.
[15] See ‘Exhibit H11’.
In her trial affidavit filed 12 December 2022, the wife deposed that she expected to complete her studies in a “little under two years”,[16] which would take her studies to the end of the 2024 year. However, by the time of the final hearing some three months later, the wife had developed concerns that she was finding the course difficult and she considered it sensible to revert to part-time study in order to maintain her high academic record and maximise her ultimate employment prospects. If she were to do so, the wife anticipated that she would need an additional two years within which to complete her studies; which would take her studies to the end of the 2026 year. There was however no evidence before the court that suggests that the wife’s grades have suffered since the filing of her trial affidavit.
[16] See the Affidavit of Ms Guardino filed 12 December 2012 at paragraph 176.
The wife anticipates that at the completion of her studies she will be able to earn an income in the vicinity of $60,000 per annum. In light of the oral evidence of the wife during cross examination about her future employment and income prospects, I am satisfied that this estimate by the wife is likely conservative and relates only to that which she might be able to earn as a graduate and not in the longer term.
With these factors in mind, it would appear that at least for the foreseeable short term future (of at least the next two to four years), and possibly longer, there is a significant income and earning disparity between the parties.
As earlier identified, there is a significant dispute between the parties as to the level of the wife’s financial support from her new partner, Mr EE, including their current and future living arrangements, all of which would have the effect of ameliorating the wife’s future needs. In addition, there is a dispute between the parties as to the extent to which the wife devotes time to supporting Mr EE’s career and advancing her own. The husband asserts that the wife is heavily involved with Mr EE’s career and in advancing her own, such that she derives income and other benefits, but also that these activities draw the wife’s attention away from her studies, in turn resulting in her assertions that her studies will take up to an additional two years to complete.
I have earlier identified that I intend to draw an inference against the wife as a result of her failure to call Mr EE to give evidence. That inference can only go so far as to say that the evidence of Mr EE would not have assisted the wife’s case.
While I am unable to take the issue further and make findings about the nature of the wife’s relationship with Mr EE and their financial circumstances, even on the wife’s case (and in particular as a result of her oral evidence), I am satisfied that:
(a)The wife devotes significant time to her own career aspirations and/or in support of Mr EE’s career, including but not limited to accompanying him to events and selling merchandise;
(b)The wife likely receives or is entitled to receive some form of payments from having worked with Mr EE;
(c)The wife has benefitted from having certain travel expenses met by Mr EE and/or his family members, including a recent holiday to Country FF; and
(d)The wife and Mr EE spend at least one night a week together in either his home or the wife’s home, with Mr EE having made his own home “comfortable” for when the parties’ children sleep at his home.
Taking all of these factors into account, I am satisfied on the balance of probabilities that a significant factor in the wife wanting to take additional time to complete her studies is a result of devoting time away from her studies and towards her new relationship and her career aspirations.
When weighing all of the relevant section 75(2) factors together, I am of the view that there should be an adjustment in favour of the wife of 12.5 per centum.
CONCLUSION
In light of the conclusions that I have reached earlier in these reasons, the property of the parties (inclusive of the notional property) which falls for division is as follows:
ASSET OWNERSHIP VALUE 1. Proceeds Town S (held in the wife’s solicitor’s Trust Account) Joint 145,630 2. Furniture & Effects Town S (retained / sold by the wife) Joint Nominal 3. Superannuation Fund 1 H 4,511 4. MG Superannuation Fund SMSF H 231,812 5. Mr Guardino Z Bank H 3,338 6. Superannuation Fund 2 W 45,133 7. C Pty Ltd 25% interest H 190,000 8. E Pty Ltd 5% interest in C Pty Ltd and interest via Guardino Family Trust in F Street and H Street, Suburb G H 657,000 9. D Pty Ltd Partnership, K Street, Suburb G H 362,000 10. Loan to Guardino Family Trust H 428,000 11. Savings H Nominal 12. Boat W 215,000 13. Licence for Boat W 80,000 14. Engagement & Wedding Ring W To be sold 15. Savings Z Bank H 1,915 TOTAL ASSETS 2,364,339 LIABILITIES 16. AA Bank Credit Card W (5,580) TOTAL LIABILITIES (5,580) NOTIONAL PROPERTY 17. Distribution pursuant to Order 28 June 2021 H 50,000 18. Distribution pursuant to Order 20 December 2022 H 60,000 19. Monies distributed to the husband’s mother from Guardino Family Trust H 65,000 20. Monies applied by wife to legal fees W 370,431.50 TOTAL NOTIONAL PROPERTY 545,431.50 NET PROPERTY 2,904,190.50
With reference to that schedule, the parties agree that the husband is to retain the boat and the licence for the same (Items 12 and 13). Accordingly, the net assets that each party owns and/or shall retain is as follows:
(a)The husband shall retain net property of $2,348,576 (which includes $175,000 of notional property); and
(b)The wife shall retain net property of $409,984.50 (which includes $370,431.50 of notional property).
A 65/35 division in favour of the husband would see:
(a)The husband retaining net property of $1,887,723.82; and
(b)The wife retaining net property of $1,016,466.68.
In order for the wife to receive her entitlements, she shall receive the proceeds from the sale of the former matrimonial home of $145,630, together with a payment from the husband in the amount of $460,852.18; being a total cash sum of $606,482.18.
The differential between the parties’ respective entitlements is approximately $871,257.
I am cognisant that such an outcome will see the husband retaining not only his business interests and investments, together with his superannuation entitlements and notional property of $175,000. The husband will otherwise be required to fund a payment to the wife.
In circumstances where I understand that the wife has retained notional property of $370,431.50, superannuation entitlements of $45,133 together with a nominal credit card liability (-$5,580), I understand that the wife shall ultimately retain a cash sum of $606,482.18, which she shall presumably apply to rehousing herself and the children.
In addition, I am aware that the parties agreed that the wife’s engagement and wedding ring are to be sold. The value of this jewellery is unknown, however the husband asserts that they are worth approximately $26,800. While it is open to me to divide the proceeds from any such sale in the same proportions as the balance of the property is to be divided, I consider it appropriate that the wife retain the proceeds from the sale of such jewellery without any further adjustment.
In light of all of the issues that I have discussed in these reasons thus far, I am satisfied that the entitlements that I have arrived at and the property to be retained by each of the parties achieves a just and equitable outcome.
I do not otherwise consider that I am in a position to make any orders in the event that the husband does not make payment to the wife, given the likelihood that the interests of third parties may be effected. Should the husband default in making payment to the wife, it is anticipated that further proceedings may be required.
I am otherwise conscious the parties agree that the wife is to contribute towards valuation expenses paid in the first instance by the husband in these proceedings.
The husband has itemised the total expert fees in his trial affidavit,[17] totalling $47,953. One half of those fees would be an amount of $23,976.50.
[17] See the Affidavit of Mr Guardino filed 10 February 2023 at paragraph 56
The wife has identified in her Amended Response to Final Orders that the half of the expert fees she is prepared to contribute is an amount of $17,926.65.
It is not entirely clear to me why the parties have come to a disparate itemisation and calculation of the expert fees that have been incurred, other than the husband including in his calculations the cost of the expert fees for the preparation of the family report in the parenting proceedings in the amount of $6,600.
I am equally conscious that additional expert fees were incurred during the course of the final hearing as a result of updated valuations being obtained from B Valuers which were filed on 4 April 2023.
As the parenting proceedings have been finalised, I do not consider it appropriate to include any adjustment between the parties with respect to the expert fees for the parenting proceedings.
I otherwise propose to make an order that the wife reimburse the husband for one half of all valuation fees incurred during the course of the financial proceedings from each B Valuers and M Pty Ltd, whatever those amounts may be.
SPOUSAL MAINTENANCE
Legal principles
The spousal maintenance provisions can be found in Part VIII of the Act. Relevantly, section 72 provides:
72 Right of spouse to maintenance
(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).
The operation of the spousal maintenance provisions were considered by the High Court in Hall & Hall (2016) 257 CLR 490 at [3] to [5] in the following terms:
3.…The gateway to the operation of Pt VIII in relation to spousal maintenance is in s 72(1). That subsection 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, the other party is unable to support herself or himself adequately … having regard to any relevant matter referred to in [s] 75(2)”.
4.The liability of a party to a marriage to maintain the other party that is imposed by s 72(1) is crystallised by the making of an order under s 74(1). That subsection provides that, “[i]n proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part”.
5.A court exercising the power conferred by s 74(1) is obliged by s 75(1) to take into account the matters referred to in s 75(2) and only those matters (s 75(1)). Those matters are presented as a comprehensive checklist. They include what s 75(2)(b) refers to as “the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment”. They also include, by virtue of s 75(2)(o), “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
(Footnotes omitted)
In MS & PS (2006) FLC 93-268, Coleman J at [39] articulated that the process to be adopted by the Court when considering whether or not to make an order for spousal maintenance involves the consideration of four distinct steps:
(1)Can the applicant support themselves adequately without an order for maintenance?
(2)If the applicant is unable to support themselves adequately, what are the applicant’s reasonable needs?
(3)What capacity does the respondent have to meet an order for spousal maintenance?
(4)What order is reasonable, having regard to section 75(2) of the Act?
The onus of establishing need (step one), falls upon the applicant. If the applicant is unable to establish an inability to support themselves adequately, then the applicant fails at the first stage and the Court cannot and will not make an order for spousal maintenance.
Similarly, even if the applicant is able to establish their need, if the respondent does not have the capacity to meet an order for spousal maintenance, then the Court cannot and will not make an order for spousal maintenance.
As discussed later in these reasons, the central dispute between these parties revolves around the wife’s needs and her ability/inability to support herself adequately without an order for spousal maintenance.
The spousal maintenance applications before the Court
In her Amended Response to Final Orders filed 25 November 2022, the wife sought the following orders under the heading “spousal maintenance”:
Spousal Maintenance
21.Pursuant to section 77A, the sum of $100,000 paid to the Wife from the proceeds of sale of the former matrimonial home, pursuant to paragraph 6.2 of the orders made by consent on 6 March 2020 be characterised as lump-sum spousal maintenance and attributed to her maintenance on a final basis.
22. Within 30 days of the date of these orders, The Husband pay spousal maintenance owing to the Wife pursuant to paragraph 8 of the Orders made by consent on 6 March 2020 by [the] Registrar […] and the said order be discharged on a final basis upon payment by the Husband.
In his Amended Application filed 10 February 2023, the husband sought the following orders:
5.That paragraphs 12, 13, 14 and 15 of the orders made 10 December 2019 be discharged including any arrears owed pursuant to those orders.
In addition, the husband filed an Application in a Proceeding on 15 November 2022 and amended on 1 December 2022 in which he sought the following orders:
4.Order 12 4.1 of the Orders of Justice Johns made 10 December 2019 be discharged (discharging the Husband from continuing to pay the Wife’s utilities).
By her Response to that application filed 25 November 2022, the wife sought an order that the husband’s application be “dismissed in its entirety”.
On 20 December 2022, the husband’s application to discharge the earlier orders for spousal maintenance was adjourned to trial.
Additionally it must be understood that rule 5.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (‘the Rules’) provides:
5.01On the making of final orders in a proceeding, any interlocutory order made in the proceeding pending further order is automatically discharged and ceases to have continuing effect.
Background
To understand more about the spousal maintenance applications before the Court, more must be understood about the history of the litigation around this topic.
Interlocutory orders for the payment of periodic spousal maintenance were made by the Court on 10 December 2019. Those orders were made with the consent and at the mutual request of the parties. Those orders relevantly provided as follows:
Spousal Maintenance
10. The Applicant Husband and Respondent Wife do all acts that may be necessary by 4pm on 13 December 2019 to cause a redirection of payments received by the Applicant Husband as and from the date of this order and any other and/or future payments received for rent from [Mr GG] [sic], to the Respondent Wife, by depositing the funds into the Respondent Wife’s [HH Bank] account.
AND THE COURT NOTES that the amount paid by [Mr GG] by way of rental is $220.00 per week, payable each Monday, the next payment being due on 16 December 2019.
11.The Applicant Husband and the Respondent Wife by 4pm on 13 December 2019 do all such things and sign all such documents as required to jointly instruct [Mr GG] [sic] to pay any funds for rent directly to the Respondent Wife.
12.Until further order, pursuant to Section 74 of the Family Law Act the Applicant Husband pay, or cause to be paid as and when they fall due:
4.1All reasonable water, electricity up to $450.00 per month, and gas for the property at [U Street, Town S] otherwise described in Certificate of Title Volume […] Folio […];
4.2All child care/kindergarten fees for the children and there shall be no credit or discount to the Applicant Husband on account of his periodic child support liability.
13.The Applicant Husband cause the spouse maintenance referred to in Orders 4.1 and 4.2 be paid directly to the provider/institution.
Other payments
14.Until further order the Applicant Husband be responsible for and pay as and when they fall due the costs of private health insurance premiums as at the cover operable at July 2019 for the Respondent Wife and the children with the Applicant Husband to reinstate the Respondent Wife on the cover by 4pm on 17 December 2019, and the Applicant Husband do all things necessary to enable the Respondent Wife to directly obtain from the health insurer reimbursements from accounts met initially by her and to otherwise make claims against the health insurer at the point of receipt of this service including but not limited to providing all authorities necessary, providing any documents or cards to process such claim and the like.
15.The Respondent Wife (and if necessary, the Applicant Husband) do all acts and things as may be necessary by 4pm on 13 December 2019 to cause a redirection of all payments received by the Applicant Husband by way of Medicare rebates and to ensure all Medicare rebates for attendances of the Respondent Wife and children are paid to the Respondent Wife.
While the source of power for orders 14 and 15 was not identified in the order, the only possible source of power for the making of those orders is a maintenance order (see Thorpe & Stirling [2021] FedCFamC1A 86).
It is understood that orders 10 and 11 lapsed on the sale of the former matrimonial home at Town S, Mr GG being a tenant in a flat situate at the property. Settlement on the sale of the former matrimonial home is understood to have occurred in late 2020.
In the same vein, order 12 4.1 which related to the payment of outgoings for the former matrimonial home also lapsed on the sale of the former matrimonial home.
However, none of the orders made on 10 December 2019 that directly related to the former matrimonial home have ever been formally discharged.
Some three months later, on 6 March 2020 the parties again mutually invited the Court to make further orders. Those orders included orders relating to the sale of various items of property, including the sale of the former matrimonial home. Relevantly, for the purposes of spousal maintenance the parties agreed and invited the Court to make the following orders:
Spousal Maintenance
8.Until further order, pursuant to Section 74 of the Family Law Act the Applicant Husband pay, or cause to be paid as and when they fall due:
8.1All reasonable water, electricity up to $450.00 per month, and gas for the [Town S] Property or any other property in which the Respondent Wife resides;
8.2All kindergarten/school fees for the children and there shall be no credit or discount to the Applicant Husband on account of his periodic child support liability.
9.The Applicant Husband cause the spouse [sic] maintenance referred to in Orders 8.1 and 8.2 to be paid directly to the provider/institution and for this purpose, the Respondent Wife notify the Applicant Husband in writing of the address of any residence in which she is residing, and provide all accounts, invoices and other information required to the Applicant Husband for the Applicant Husband to make the spouse maintenance payments.
One would have to assume that the intention of the parties when orders 8 and 9 were made on 6 March 2020, was that they would replace orders 12 and 13 of the orders made on 10 December 2019.
It is not clear whether or not the parties intended orders 14 and 15 of the orders made on 10 December 2019 to continue. However, the husband deposed in his trial affidavit that he has paid all of the children’s child care and kindergarten fees together with the wife’s private health insurance premiums.[18]
[18] See the Affidavit of Mr Guardino filed 10 February 2022 at paragraph 61.
So far, as the order for the payment of the wife’s utilities up to an amount of $450 per month is concerned:
(a)The husband deposed in his trial affidavit,[19] that he had stopped meeting his obligations pursuant to the orders made in December 2019 in approximately April 2021 and that the arrears owing at that time (February 2023) were approximately $1,500.[20]
(b)The wife deposed in her trial affidavit that the husband had ceased meeting his obligation to make these payments from about April 2022.[21] The wife calculated that up to the time of the swearing of her trial affidavit (November 2022) the arrears owing were in the amount of $3,600, being eight months (April to November) of missed payments.
(c)I think it safe to assume that the wife has correctly identified the date upon which the husband ceased making payments as April 2022 as against April 2021 as asserted by the husband.
[19] Ibid.
[20] Ibid.
[21] See the Affidavit of Ms Guardino filed 12 December 2022 at paragraph 140.
On 23 November 2022, the husband filed an Application in a Proceeding in which he sought among other things the discharge of order 12 4.1 of the orders made 10 December 2019 in the following terms:
4.Order 12 4.1 of the Orders of Justice Johns made 10 December 2019 be discharged (discharging the Husband from continuing to pay the Wife’s utilities).
It is presumed that the reference to the orders of 10 December 2019 was an error in circumstances where the orders made on 10 December 2019 related to the Town S property, and particularly given the husband’s reference to the husband’s continued payment of the wife’s utilities.
While there was an Amended Application in a Proceeding filed on 1 December 2022, a correction such that there was an identification of the order of made 6 March 2020 was not made.
When the husband filed his Application in a Proceeding (sealed on 23 November), he also filed an affidavit (sealed 16 November 2022). The husband makes it plain in that affidavit that the sole reason for seeking the discharge of the earlier spousal maintenance order (for the payment of monthly outgoings of up to $450 per week), was because he did not accept that the wife was not working and deriving benefits from her activities with her partner Mr EE.
On 20 December 2022, I heard and determined the parties’ competing interlocutory applications.[22] Relevantly, for present purposes the husband was content on that occasion to adjourn his application to discharge the earlier spousal maintenance order to trial, and an order was made to that effect.
[22] Guardino & Guardino [2022] FedCFamC1F 1074.
On 10 February 2023, the husband filed an Amended Initiating Application setting out the final orders he now seeks. Relevantly, the husband sought orders for the discharge of orders 12, 13, 14 and 15 of the orders made 10 December 2019.
Again, it appears that there is an error in the orders that the husband now seeks to discharge. At this juncture, the only orders for spousal maintenance which are in operation are:
(a)order 12 4.2 of the orders made 10 December 2019, which was repeated in order 8.2 made 6 March 2020;
(b)orders 13 to 15 of the orders made 10 December 2019; and
(c)orders 8 to 9 of the orders made 6 March 2020.
Despite the errors made in the crafting the orders the husband pursues, the wife, and importantly the Court, understands that the husband seeks to discharge all orders for the payment of spousal maintenance in favour of the wife which are currently in force.
Importantly, while the wife asserts that the husband stopped meeting his obligation to make the payment of up to $450 per month from about April 2022, he did not make any application to do so until November of 2022. In addition, when the husband filed his interlocutory applications, he did not seek that the discharge of the order be backdated to any earlier point in time. However, by the final orders the husband now seeks, he does so.
Against that background, it therefore appears that there are three separate spousal maintenance questions before the Court:
(a)Should the interlocutory orders for spousal maintenance be discharged, together with any arrears?
(b)Should there be a continuation of the interlocutory spousal maintenance orders until the making of final orders?
(c)How should the wife’s application in relation to the sum of $100,000 be construed and determined?
Before turning to those questions however, I propose to consider the first step identified by Coleman J in MS & PS. In the circumstances of this case, that question is whether or not the wife has satisfied the Court that she is unable to support herself adequately without an order for spousal maintenance.
Has the wife established that she is unable to support herself adequately?
The central dispute between the parties is whether or not the wife has established that she is unable to support herself adequately.
The wife’s position as summarised in the Outline of Case filed on 27 March 2023. In short, the wife’s asserts that she is unable to support herself adequately by reason of the following:
(a)Her shared care of the children, including that the youngest child only started school in 2022.
(b)Her employment prior to the relationship in various roles saw her earning an income in 2013 of $49,700 per annum, and commensurate employment and income would not be adequate.
(c)The wife is presently engaged in tertiary study, which she initially expected to conclude in 2024, albeit during the trial she gave evidence that she expected to transition to part time study and conclude by 2026.
(d)That, until the wife has concluded her studies, she does not have the capacity for “gainful employment” due to her study commitments and responsibilities towards the children.
(e)The wife’s income of $768 per week comprises of $664 in social security benefits and $104 in child support payments by the husband; with the social security benefits to be excluded from consideration pursuant to section 75(3).
(f)The wife’s reasonable living expenses total $1,552 per week.
At first blush the wife would appear to have satisfied the Court as to her needs.
However, as earlier discussed in these reasons, the husband does not accept that the wife’s circumstances are as peril as the wife asserts. In particular, the husband alleges that the wife’s relationship with Mr EE and their financial arrangements are such that the wife’s needs are either entirely or substantially ameliorated. In addition, the husband asserts that even if the Court was satisfied that the wife has made out her need, then any order for spousal maintenance should be limited to the originally anticipated duration of the wife’s studies, being the end of 2024.
For the reasons that I have already identified, the wife has failed to engage with issues relating to Mr EE. Importantly, Mr EE was not called to give evidence in these proceedings.
I have already identified in these reasons that the wife’s failure to do so enables me to draw an inference against her that the evidence of Mr EE would not have assisted the wife.
Accordingly, I am satisfied that the wife has not satisfied the Court as to her need, or put differently her inability to support herself adequately without the payment of spousal maintenance.
Should the interlocutory orders for spousal maintenance be discharged, together with any arrears?
The husband first filed an application for the discharge of the interlocutory orders on 23 November 2022.
Additionally, by paragraph 5 of his Amended Application for Final Orders filed 10 February 2023, the husband sought to discharge any arrears owing pursuant to the interlocutory orders for spousal maintenance.
Across both applications, the husband has erroneously identified that the order to be discharged is that made 10 December 2019, rather than order 8.1 made 6 March 2020.
I am satisfied, however, that despite this error, it has always been clear to the wife that the order that the husband sought to discharge is that which required him to make a payment of periodic spousal maintenance of up to $450 per month; not least of which because this is the payment that the husband unilaterally ceased paying in approximately April 2022.
The husband, however, did not apply to discharge that order until November 2022.
Despite the inference to be drawn against the wife, I am not satisfied that it is appropriate to discharge the interlocutory order for spousal maintenance any time earlier than March 2023 when the final hearing took place.
I have come to that conclusion in circumstances where:
(a)It is not open for a party to pick and choose whether they shall comply with an order of the Court. Rather a party is bound by an order until such time that the Court considers it appropriate to discharge the order on the application of a party.
(b)The husband did not seek to discharge the payment of any arrears when he first filed his Application in a Proceeding in November 2022; albeit that I am cognisant that the husband amended his Application for Final Orders in February 2023 to seek a discharge of the payment of arrears.
(c)It is my view that a fulsome consideration of the application to discharge the interlocutory order was one that was in the circumstances of these proceedings best traversed at trial.
(d)The husband was content to adjourn his interlocutory application to trial.
For all of the reasons that I have identified, I consider that it is appropriate to discharge the orders for spousal maintenance from the time of trial only. I, therefore, intend to make an order for the husband to pay the wife the arrears pursuant to order 8.1 made 6 March 2020 up to an inclusive of the month of March 2023.
In relation to the quantum of the arrears:
(a)Neither of the parties were challenged about their various assertions as to the arrears owing pursuant to the interlocutory orders.
(b)As discussed earlier in these reasons, I accept the wife’s evidence deposed in her trial affidavit, that the husband ceased making the payments of $450 per month in approximately April 2022.
(c)At the time that the wife filed her trial affidavit in November 2022, an amount of $3,600 arrears had accrued ($450 x eight months).
(d)If I were to calculate the payments up to and inclusive of March 2023, there is a period of 12 months of missed payments.
(e)Accordingly, the arrears to be paid by the husband is in amount of $5,400 ($450 x 12 months).
Should there be a continuation of the interlocutory spousal maintenance orders until the making of final orders?
The question of whether the interlocutory orders should be discharged as and from March 2023 however is a separate question.
As earlier identified, rule 5.01 provides for the interlocutory orders to automatically be discharged on the making of final orders.
Of significance, as discussed later in these reasons, the wife does not ask the Court to make any prospective order for spousal maintenance beyond that set out at paragraph 22 of her Amended Response to Final Orders filed 25 November 2022, which provided as follows:
22.Within 30 days of the date of these orders, the Husband pay spousal maintenance owing to the Wife pursuant to paragraph 8 of the Orders made by consent on 6 March 2020 by [the] Registrar […] and the said order be discharged on a final basis upon payment by the Husband.
On any plain reading of the orders sought by the wife, she asks the Court to continue the orders which provide for her to receive up to $450 per month up to a date which is 30 days after the making of final orders for property settlement. That is a period of time of very short compass.
However, regardless of the limited duration of the prospective order sought by the wife, she is still required to satisfy the Court that she is unable to support herself adequately.
As I have earlier identified, I am not satisfied that the wife has satisfied the Court as to her need.
Accordingly, the wife’s application for periodic spousal maintenance pending the delivery of judgment shall be dismissed.
How should the wife’s application in relation to the sum of $100,000 be construed and determined?
In her Amended Response to Final Orders filed 25 November 2022, the wife sought the following order:
Spousal Maintenance
21.Pursuant to section 77A, the sum of $100,000 paid to the wife from the proceeds of sale of the former matrimonial home, pursuant to paragraph 6.2 of the orders made by consent on 6 March 2020 be characterised as lump-sum spousal maintenance and attributed to her maintenance on a final basis.
The first comment that can be made about the wife’s application is that any plain reading of paragraph 21 suggests that the wife is not in fact seeking any prospective order for the payment of spousal maintenance. Rather, the wife is seeking an order that the amount of $100,000 previously received by her pursuant to the orders of 6 March 2020 be categorised as spousal maintenance; the same being a topic traversed and determined earlier in these reasons when discussing the various add-backs/notional property the parties each pursued.
The Outline of Case filed on behalf of the wife on 27 March 2023 confirmed that the wife was not seeking any orders for the prospective payment of spousal maintenance, rather the categorisation of the amount of $100,000 previously received by the wife on 6 March 2020. There is no doubt that this is what the wife intended as there is a note in the following terms at page 10:
NB. On 6 March 2020, the Wife received $100,000 by interim order of the Court, which sum is to be characterised at final hearing of these proceedings. If characterised as lump-sum spousal maintenance paid to the Wife, it would constitute 69 weeks’ worth of periodic maintenance at the above rate.
The wife’s position throughout the trial was unclear, and perhaps misunderstood and/or misconceived by all. While it was understood that the wife sought to have the amount she received pursuant to the orders made on 6 March 2020 ($100,000) to be characterised as spousal maintenance, by the time of closing submissions, it appeared that the wife’s position may have morphed into an application for an additional amount by way of lump sum spousal maintenance to see the wife through her university studies and including the additional time that she anticipated her studies would take her.
Whatever the case may be, and leaving to one side the procedural fairness difficulties for the wife, if indeed she was seeking the payment of an additional lump sum of spousal maintenance (in the amount of $100,000 or otherwise), for all of the reasons that I have already identified as to the wife’s failure to satisfy the Court as to her need, any application for prospective spousal maintenance, lump sum or otherwise fails.
THE WIFE’S EXTANT COSTS APPLICATIONS
The wife pursues costs in relation to two separate interlocutory hearings:
(a)An extant interlocutory application for costs made by the wife which was generally reserved pursuant to order 8 made 12 October 2020 (‘the first cost application’); and
(b)An extant interlocutory application for costs made by the wife which was reserved to trial pursuant to order 7 made 20 December 2022 (‘the second cost application’).
In relation to the first costs application, the wife seeks a cost order in the amount of $3,800 to cover counsel fees for the appearance at the hearing on 12 October 2020.
In relation to the second costs application, it is not clear what the wife seeks.
The first costs application related to husband’s Application in a Proceeding filed 19 June 2020 (dealing with the parenting proceedings) and the wife’s Response to an Application in a Proceeding filed 4 August 2020, in which she sought both parenting orders and an order for partial settlement of property in the amount of $100,000).
The second costs application related to the husband’s Amended Application in a Proceeding filed 1 December 2022 (dealing with orders for partial property settlement and the discharge of the interlocutory spousal maintenance orders) and the wife’s Response to an Application in a Proceeding filed 25 November 2022.
Legal Principles
Costs applications in respect of proceedings under the Act are governed by section 117, which provides as follows:
(1)Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, 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), (5) and (6) 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.
The factors that are to be considered when contemplating the making of a costs order are those set out in section 117(2A) of the Act; albeit the Court may give such weight as it considers appropriate to any relevant factor (Medlon & Medlon (No 6) (Indemnity costs) [2015] FamCAFC 157 at [24]). Section 117(2A) provides as follows:
(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.
The Rules also provide assistance when considering the making of an order for costs. In particular, rule 12.17(1) provides the method for the calculation of costs:
12.17 Method of calculation of costs
(1) The court may order that a party is entitled to costs:
(a)of a specific amount; or
(b)as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
In addition, rule 12.17(3) sets out the matters that may be considered in the calculation of costs:
(3) In making an order under subrule (1), the court may consider the following:
(a)the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c)the rates ordinarily payable to lawyers in comparable proceedings;
(d)whether a lawyer’s conduct has been improper, unfair, unreasonable or disproportionate;
(e)the time properly spent on the proceeding, or in complying with pre action procedures;
(f)whether expenses (paid or payable) are fair, reasonable and proportionate.
Discussion
It is important to note that the wife did not put any evidence of significance before the Court as to either costs application.
In relation to both costs applications the following factors are relevant:
(a)In relation to the financial circumstances of the parties, I have already had regard to those matters that I have earlier identified and discussed in these reasons, including as to the effect of the orders to be made.
(b)Neither of the parties are in receipt of a grant of legal aid.
(c)It does not appear that either of the interlocutory applications arose as a result of either of the parties failing to comply with previous orders of the Court; albeit that I acknowledge that one of the issues before the Court at the hearing on 20 December 2022 related to the husband’s application to discharge the interlocutory orders for spousal maintenance, which was adjourned to trial.
(d)The wife otherwise makes a general complaint in the litigation that her costs were increased as a result of the husband’s conduct. This is, however, a generalised submission upon which little weight can be placed.
In relation to whether any party has been wholly unsuccessful in the proceedings, in Higginbotham & Robinson (1991) 14 Fam LR 559 at 560, Nygh J stated that the concept of being wholly unsuccessful is “a situation in which the proceedings as a whole have been unsuccessful. In other words, in which an application which was without merit has been dismissed”.
Insofar as the first costs application is concerned:
(a)The parties reached agreement at the hearing on 12 October 2020 for the wife to receive the sum of $100,000 by way of part property settlement.
(b)The wife’s complaint appears to be that the husband did not file any material directed to that topic prior to that hearing.
Insofar as the second costs application is concerned, at the hearing on 20 December 2022:
(a)As previously identified the spousal maintenance application was adjourned to trial.
(b)An order was made for the parties to each receive the sum of $60,000 by way of part property settlement.
It, therefore, cannot be said that the husband was wholly unsuccessful in relation to his applications before the Court and the orders pronounced at either hearing.
In relation to the exchange of offers:
(a)There is no evidence before the Court regarding the offers exchanged in relation to the first costs application.
(b)In relation to the second costs application, the Court did receive a bundle of communications evidencing the parties’ negotiations and various offers exchanged.[23]
(c)What is clear from those communications is that:
(i)In early September 2022, the parties appeared to have agreed to release the sum of $25,000 to the wife and the sum of $100,000 to the husband by way of partial property settlement.
(ii)Shortly thereafter, the husband additionally sought a discharge of the interlocutory spousal maintenance orders, with orders to be made at the same time as the orders for partial property settlement.
(iii)The wife then proposed that the husband receive an amount of $75,000 by way of partial property settlement, and that in the event that the Court ordered an amount in excess of $75,000, then the wife sought “an interim part property distribution in the same amount for every dollar in excess of $75,000 that you receive”.
(iv)The wife did not otherwise agree to the discharge of the interlocutory spousal maintenance order.
[23] See ‘Exhibit W6’.
From that chronology, it appears that the wife achieved an outcome from the Court better than that which she was prepared to accept to resolve the husband’s application for the release of funds.
It is also apparent that the husband’s attempt to tie his desire and ultimate application to discharge the interlocutory spousal maintenance orders with the release of funds to each the husband and the wife was unhelpful and erroneous; particularly because he was ultimately prepared to adjourn the same to trial.
When regard is had separately to each of the costs applications that have been made, while there may be factors that speak in favour of the making of an order for costs, on balance, I am not satisfied that it is appropriate to make an order for costs in relation to either application.
CONCLUSION
For all of the foregoing reasons, I now make those orders that appear at the commencement of these reasons.
I certify that the preceding two hundred and seven (207) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Kari. Associate:
Dated: 26 July 2023
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