Gull and Rickett

FAMILY COURT OF AUSTRALIA

GULL & RICKETT

[2009] FamCA 675

FAMILY LAW – PROPERTY – Interim Proceedings – Husband sought discharge of orders for interim spousal maintenance – Consideration of “just cause” and change in circumstance – Spousal maintenance orders varied – Complex valuation of property – Deferral of valuation until crystallisation of certain interests – Impartiality of expert valuer questioned – No concern of bias

Family Law Act 1975 (Cth) ss 72, 75, 83

Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
In the Marriage of Burridge (1980) FLC 90-902
In the Marriage of Harris (1993) FLC 92-317
In the Marriage Lutzke (1979) FLC 90-714
In the Marriage of Redman (1987) 11 FamLR 411
Johnson v Johnson (2000) 201 CLR 488
Kernot v Matson [2008] FamCA 756
R & R [2008] FamCA 1180
Vakil & Vakil (1997) 21 FamLR 508

APPLICANT:

Mr Gull

RESPONDENT:

Ms Rickett

FILE NUMBER:

BRC

7914

2007

DATE DELIVERED:

30 July 2009

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Murphy J

HEARING DATE:

28 April 2009

REPRESENTATION

APPLICANT:

The Husband appeared in person

COUNSEL FOR THE RESPONDENT:

Mr C Carrigan

SOLICITOR FOR THE RESPONDENT:

Herbert Geer, Solicitor

Orders

Future Date

The proceedings be adjourned for mention before Murphy J at a time and on a date to be fixed after the earlier of:
(a)the “crystallisation date” as provided for in the Shareholders Agreement being Exhibit W1 in these proceedings; or
(b)28 February 2010
upon an application being filed by either party after the earlier of such dates with a short accompanying affidavit deposing to the occurrence of the relevant event.

Disclosure

The husband provide written notice to the wife in the event of the occurrence of any of the following events within seven days of such event occurring, with such notice to include copies of any and all documents in relation to the event:
(a)Any special resolutions passed under, pursuant to or in relation to the subject matter of the shareholder’s Agreement by the board of any of the following entities F Group Pty Ltd, F Capital Ltd, F Investments Pty Ltd, SL Ltd, R Capital Pty Ltd or A Capital Pty Ltd (hereafter collectively “The [F] Group”), W Holdings Pty Ltd as trustee of the W Investments Trust (or such other person or entity as trustee of the W Investments Trust from time to time) or OG Nominees Pty Ltd as trustee for the M Holdings Trust (or such other person or entity as trustee of the M Holdings Trust from time to time).
(b)The crystallisation date occurring as prescribed in Schedule 1 of the Shareholders’ Agreement.
(c)Any income being distributed from the F Group to W Holdings Pty Ltd as trustee of the W Investments Trust (or such other person or entity as trustee of the W Investments Trust from time to time) or OG Nominees Pty Ltd as trustee for the M Holdings Trust (or such other person or entity as trustee of the M Holdings Trust from time to time).
(d)Any trust income being distributed from the W Trust or M Holdings Trust.
(e)Any consent given or sought for any transaction by SL Ltd pursuant to the Shareholders’ Agreement.
(f)Any resolution of W Holdings Pty Ltd as trustee of the W Investment Trust (or any other trustee of the W Investment Trust from time to time) in relation to the or anticipated sale of any shares in the F Group.
(g)Any resolution of OG Nominees Pty Ltd as trustee of the M Holdings Trust (or any other trustee of the M Holdings Trust from time to time) in relation to the sale of any shares in the F Group.
(h)Any resolution of W Holdings Pty Ltd as trustee of the W Investment Trust (or any other trustee of the W Investment Trust from time to time) or any notice given or received by the trustee of the W Investment Trust of intentions to sell, or offer as security any interest (contingent or otherwise) in the F Group.
(i)Any resolution of OG Nominees Pty Ltd as trustee of the M Holdings Trust (or any other trustee of the M Holdings Trust from time to time) or any notice given or received by the trustee of the M Holdings Trust of intentions to sell, or offer as security any interest (contingent or otherwise) in the F Group.
(j)Any documents indicating the dividend policy of the F Group as determined by the board of the company (whether before the crystallisation date or after).
(k)The “retirement” Y Gull or MR AT (as defined in the Shareholders’ Agreement), being persons listed as key persons for W Holdings Pty Ltd in Schedule 9 of the Shareholders’ Agreement.
(l)The retirement of the husband (as defined in the Shareholders’ Agreement) provided for in Schedule 13 of the Shareholders’ Agreement).
(m)All documents in relation to any decision of the F Group board pursuant to clause 15 of the Shareholders’ Agreement.
(n)All documents in relation to any directors appointed by W Holdings Pty Ltd as a director to the board of the F Group as provided for in the Shareholders’ Agreement.
(o)All documents in relation to the calculation of revenue credits determined by the board and shareholders of the F Group pursuant to the Shareholders’ Agreement.
(p)Any change to the employment status of the husband with any entity or person, including but not limited to within the F Group including a return to work or termination of employment.
(q)Any resolution of the board of F Group requiring W Holdings Pty Ltd to sell its shares back to the F Group.
(r)Receipt of any income to the husband, M Capital Pty Ltd, M Holdings Trust or S Nominees Pty Ltd, or any other entity controlled by the husband, with the husband to be restrained from dealing with said income until the expiry of the seven day notice period.
(s)Any demands for payment by any creditor of the husband personally, M Capital Pty Ltd, M Holdings Trust or S Nominees Pty Ltd or any other entity controlled by the husband, with the husband to be restrained from making any payment (but for in the case of a margin loan call) until the expiry of the seven day notice period.

Valuation

The applications by the husband to:
(a) remove Mr B, as a single expert; and
(b) “set aside in full” the Order of 14 July, 2008
each be dismissed.
The operation of Orders 1 to 4 and 7 to 8 inclusive of the orders made on 14 July 2008 be suspended until the earlier of:
(a)Seven days after the “crystallisation date” as provided for in the Shareholders’ Agreement being Exhibit W1 in these proceedings; or
(b)31 January, 2010.

Variation of Spousal Maintenance

UNTIL FURTHER OR OTHER ORDER and as and from the date of this Order, Order 1 of the Orders made on 18 January, 2008 be varied by substituting the figure “$200” for the figure “$510” where that figure appears.

Subaru Motor Vehicle

Within 14 days of the date of this Order the husband do all such things and sign all such documents as might be necessary to cause to be transferred to the wife the Subaru Liberty motor vehicle, free of encumbrance;
Upon the transfer of the said Subaru motor vehicle in accordance with these Orders, Order 2.3 of the Orders made on 18 February, 2008 be discharged.

The D Property

Paragraphs 4 to 6 inclusive of the husband’s Application in a Case filed on 12 February, 2009 be dismissed.

Costs

The costs of both parties of and incidental to these proceedings be reserved to the trial judge.

IT IS NOTED that publication of this judgment under the pseudonym Gull & Rickett is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 7914 of 2007

MR GULL

Applicant Husband

And

MS RICKETT

Respondent Wife

REASONS FOR JUDGMENT

These proceedings occur within the context of the wife’s application for settlement of property pursuant to s 79 of the Family Law Act 1975. Judgment was reserved in these interim proceedings so as to properly review the voluminous material relied upon.

Background

On 18 February 2008 consent orders were made by Jordan J as follows:
“1.That without admission as to the wife’s inability to support herself and reasonable needs, the husband pay the wife the sum of $510.00 per week (net of tax weekly in advance) as and by way of spouse maintenance from 20 February 2008 and weekly thereafter until a determination of the property proceedings.
2.That the husband without admission as to the wife’s inability to support herself and reasonable needs also pay the following expenses on the wife’s behalf by way of spouse maintenance until the determination of the proceedings:
2.1 The body corporate and rates amounts in relation to the former matrimonial home situated at [D];
2.2 Any costs necessary to service any debts secured over the former matrimonial home;
2.3 Registration, insurance and any necessary lease and/or loan payments associated with and possession of the Subaru vehicle.
3.That within thirty (30) days from the date of this order, the husband pay or cause to be paid to the trust account, for the wife’s solicitors, the sum of $60,000, such sum to be characterised by the trial judge at the final hearing of the wife’s application for final orders.
4.That paragraphs 1-4 of the Application filed on 4 December 2007 in relation to the appointment of a single expert be adjourned for mention on a date to be fixed by the judge in three (3) months time.…”
I have delivered earlier ex tempore reasons in this matter. Those reasons relate to orders made by me on 14 July 2008 which contemplate a valuation by a single expert accountant, Mr B, in respect of a number of corporate/trust entities.
Those orders provide specifically:-
“1.Mr [B] of [G Firm] be appointed the single expert in the proceedings pursuant to Part 15.5 of the Family Law Rules 2004 to prepare a report outlining his expert opinion as and to the following:
1.1The value of the Husband and Wife’s interests in the following entities as at 1 September 2001, 31 August 2006 and at the present date:
1.1.1The [M] Holdings Trust;
1.1.2The [M] Capital Pty Ltd, which owns interests in the following entities:
1.1.2.1[S] Nominees Pty Ltd;
1.1.2.2[BB] Company Pty Ltd;
1.1.2.3[T] Pty Ltd;
1.1.2.4[Q] Pty Ltd.
1.1.3[F] Group Pty Ltd, including its interest in:
1.1.3.1[SL] Group Limited;
1.1.3.2[F] Capital Limited;
1.1.3.3[F] Investments Pty Ltd, including its share in:
1.1.3.3.1[MM] Limited;
1.1.3.3.2[ST] Management;
1.1.3.3.3[MX] Management Pty Ltd;
1.1.3.3.4[R] Capital Pty Ltd;
1.1.3.3.5[V] Group.

1.1.4[W] Holdings Pty Ltd / [W] Investment Trust;
1.1.5[O] Pty Ltd including its share in:
1.1.5.1[BW] Pty Ltd.

2.Within 7 days, the husband advise the wife in writing of any further entities in which he has or had an interest as at the date of cohabitation, the date of separation or at the present date and Mr [B] also value these interests as at the nominated dates in 1(a) above.
3.The husband produce all documents requested of him by Mr [B] within 14 days of such request.
4.The husband pay Mr [B’s] professional fees in the first instance with the wife’s half share to be deducted from her ultimate entitlement on property settlement.…”

Further orders were made by consent as part of those orders of 14 July 2008. They include an order that the husband provide to Mr [B] all documents as requested by him.

The Applications by the Parties

Against that background, in the instant proceedings the husband seeks orders that the payments provided for at paragraphs 1 and 2 of the orders made by Justice Jordan on 18 February 2008 be set aside.
In addition the husband seeks that the orders made by me on 14 July 2008 be set aside or:
“in the alternative, that Order 4 [of those orders] is set aside and replaced with the following:
“4(a)that Mr [B’s] valuation be deferred until 31 January 2010 or such time as the husband’s interest in [F] Group Pty Ltd “crystallises” (as defined in that company’s governing shareholders agreement) which ever occurs latest;
4(b)That the husband and wife jointly meet the cost of Mr [B’s] valuation with the wife to forthwith reimburse the husband for half of the cost of same.”
The husband also seeks orders that the Subaru motor vehicle be transferred to the wife and that the wife remove the caveat currently registered over the former matrimonial home; that she vacate the property within 60 days of the date of order and thereafter machinery orders effecting the sale of the former matrimonial home.
The orders in respect of the latter include orders that the net proceeds of sale are used to discharge the mortgages and to pay “the balance of proceeds … to repay any remaining debts that the husband (or [M] Capital Pty Ltd or [M] Holdings Trust) has (including motor vehicle leases or hire purchases) with the surplus, if any, to be held in an interest bearing bank account in the joint names of the husband and the wife.”
For her part, the wife seeks orders (in her response filed on 9 March 2009):
“1.That order 1 of the orders dated 18 February 2008 be suspended until the earlier of:
(a)seven days after the “crystallisation date takes place” Shareholders Agreement of [P] Group Holdings Pty Ltd ACN […] (now called [F] Group Pty Ltd) …; or
(b)7 January 2010.
2.That during the period of the suspension of order1 of the orders dated 18 February 2008 the husband pay to the wife the periodic maintenance in the sum of $200.00 per week in addition to the amount specified in paragraph 2.1 and 2.2 of the order made by consent on 18 February 2008.
3.That the valuation to be undertaken by Mr [B] of [G Firm] provided for in orders 1-4 and 7-8 of the order dated 14 July 2008 be suspended until the earlier of:
(a) Seven days after the “crystallisation date” of the Shareholders Agreement; or
(b) 31 January 2010.
4.That within 14 days the husband in his capacity as director of [M] Capital Pty Ltd do all acts and things so as to cause the transfer of all right title and interest in and to the Subaru Liberty motor vehicle registration number […] to the wife, free of encumbrance.
5.That paragraphs 4-6 of the husband’s Application in a Case filed 12 February 2009 be dismissed.”
The application goes on to seek orders in respect of the husband giving written notice in the event of the occurrence of a number of specified events within seven days of such event occurring and with copies of all documents relating to the event being provided.
An order is then sought that the proceedings be otherwise adjourned until the earlier of (a) 30 days after the “crystallisation date” of the Shareholders Agreement or (b) 28 February 2010.
The response then goes on to seek an order, in the alternative, that the former matrimonial home be sold and specifies machinery and distribution orders consequent upon same.
Even if, then, there is, at least in the alternative, unanimity about the prospect of sale of the former matrimonial home and its terms of sale, the parties’ positions with respect to distribution of the proceeds differ. The differences appear to be:
(a)The Westpac mortgage but not other is sought to be repaid by the wife. The husband seeks repayment of all mortgages;
(b)The wife seeks $85,000 if the net proceeds of sale are less than or equal to, $170,000 and 50 per cent of the net proceeds if they exceed $170,000. (I assume that the first of those orders assumes that the net proceeds will be at least $170,000 and, in the event they are not, that the wife will receive the totality of any such sum.) The husband seeks the repayment of debts of his or the named corporate/trust entities with any surplus to be held in a bank in the joint names of the parties.
In a similar vein, the wife’s application contemplates (apparently) a diminution in the immediate capacity of the husband to pay maintenance, reflected in a reduction in the periodic sum pending the “crystallisation date” from $510.00 per week to $200.00 per week.
The wife contends for a continuation of the payments provided for in paragraph 2 (presumably until sale, if sale is ordered) and the payments in respect of the Subaru motor vehicle. The husband contends that no such payments should be made by him.

Context of the Current Application

The parties commenced living together in about August 2001 and separated about five years later in August 2006.
There is one child of the relationship, born in December 2004. She is currently 4½. She and the wife live in the property at D (the former matrimonial home) which is the subject of the competing orders just referred to.
Prior to the orders made by Justice Jordan, it was common ground between the parties that a corporate group in which the husband had an interest was the subject of sale negotiations. The sale would crystallise the value of at least part of the “property of the parties or either of them” within the meaning of s 79 of the Act.
A sale has not eventuated.
The orders sought by each of the parties in the current proceedings refer to the “crystallisation date” as that expression is used in the Shareholders Agreement referred to.
Reference to the dictionary of that Shareholders Agreement reveals “crystallisation date” is defined as:
“the earlier of:-
(a)31 December 2009; or
(b)the company reconstructing itself such that equity securities are held by all shareholders.”
The notion of “reconstruction” referred to in that definition is also referred to at clause 6.3 of the Shareholders Agreement. That clause provides:
“6.3 Crystallisation Date
On the Crystallisation Date and subject to the Act [defined as the Corporations Act] the parties agree all shares on issue will convert into equity securities which are ordinary shares of the same class (the reconstruction), provided that …”
It is asserted by the husband that his interest in the “[F] Group” comprises “the major asset in the asset pool”.
The husband represented himself in the instant proceedings. His position, as set out in his application, is complicated by a position contained in a written summary of argument filed on 21 April 2009. In that document, he says:
“8.That subsequent to my application in this matter, my income situation changed in that my claim for income protection insurance cover from AXXA (lodged 13 February 2009) was approved and I commenced receiving the income outlined above. Accordingly, I offered, by Open Settlement Offer, to settle this application on the following terms so as to minimise costs for the parties and stress generally for me:
AIt is agreed that the [D] property is sold. That after discharge of the Westpac mortgage 50 per cent of the net sales proceeds are paid to your client (or as directed by her) with 50 per cent being retained by me to reduce debt;
BYour client agree to the removal of the spousal maintenance order and an appropriate binding financial agreement is executed evidencing same;
CYour client agrees to the further [G Firm] valuation until one month after the crystallisation of the [F] Group shareholding;
DThe Subaru Liberty vehicle is transferred to your client;
EEach party meets their own costs of and incidental to the application.”
9.Accordingly, I request that in the alternative to the orders that I have applied for, that this Honourable Court make orders on the terms in my Open settlement offer save:
AThat the costs of and incidental to this application be met by [the wife];
Bthat if the order in relation to the valuation by Mr [B] is set aside due to the lack of disclosure of the relationship between Ms Minnery and Mr [B] that [the wife] reimburse me for the full cost of the valuation to date;
CThat if the “crystallisation” of the [F] Group stake does not result in a liquid/sale of an asset, that the issue of a valuation be brought before this Honourable Court for a determination.”

Bias – Removal Of The Single Expert Valuer

The husband’s application that “the Orders of 14 July 2008 be set aside in full” encompassed an application that Mr B be removed as a single expert for perceived bias. But, the husband’s position with respect to this issue became less clear during the course of the proceedings before me.
He said it was “not a huge issue”; he thought the “relationship should have been disclosed” and that there was “no problem of ethics involved but the relationship should have been disclosed”.
The essence of the initial complaint by the husband can be seen in his written summary of argument. He says:
“As outlined on 16 March 2009, it has only recently come to my attention that Mr [B] and [the wife’s] solicitor, Ms Minnery, had previously prepared a joint paper titled ‘[…]’, and that this was jointly presented to [a Family Law Conference]. Mr [B] by his correspondence of 7 April 2009 has acknowledged that the paper has been presented and that “this session was a condensed version of the workshop presented by Ms Minnery and I during [the conference].” Mr [B] and Ms Minnery have both had extensive and extended interaction in relation to issues particularly pertinent to his role as a single expert witness in this case. That this interaction and prior relationship was not disclosed to this Honourable Court or myself by either Ms Minnery or Mr [B] before Mr [B’s] appointment. That this information was relevant to, and should have been disclosed in connection with, the hearing in relation to which the order of 14 July 2008 appointing Mr [B] was made. Finally that a reasonable person would have, presented with all relevant information in relation to the pre-existing relationship between Ms Minnery and Mr [B] and its direct relevance to this matter, had cause to query whether Mr [B] was either actually and/or is able to be seen to be independent, objective, unbiased and impartial and hence whether Mr [B] was an appropriate single expert witness for appointment by this Honourable Court in this matter. This is particularly the case where there are clearly alternative valuers available about whom there are no questions about there (sic) independence, objectiveness (sic) or lack of bias or impartiality.”
It has been held that the resolution of an application to disqualify or remove an expert on the ground of reasonable apprehension of bias should be based on similar principles to those which guide the court in considering an application for a judge to be so disqualified (see eg Kernot v Matson [2008] FamCA 756 per Watts J; R & R [2008] FamCA 1180, per Boland J).
Accepting that, the test is whether “… a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question a judge has to decide” (Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [6]).
It seems clear enough that the husband, in formulating his written submissions, had reference to this principle or similar expressions of it. The husband does not, as I apprehend it, assert actual bias.
A paper was co-authored by the wife’s solicitor and Mr B. It is exhibited to an affidavit of Mr Greer, a partner in the firm by whom Ms Minnery is employed.
That affidavit also exhibits a letter from Mr B specifically addressing the issues raised by the husband. He attaches a copy of the Powerpoint presentation and the case study material relating to the session conducted with Ms Minnery at the seminar referred to.
Mr B points out that he has:
“… also prepared papers with other solicitors where the topics have a legal and accounting perspective, including topics on the role of expert witnesses and valuation methodologies”. [He goes on to say] “In this regard I have previously been invited by Mr [FT], the in-house legal counsel of the [F] Group, to prepare and present a paper to the [K Firm] Litigation Team during Mr [FT’s] employment at [that firm]”.
The affidavit of Mr Greer also points out that, at the same conference at which Ms Minnery and Mr B appeared, Mr Shoebridge also presented a paper. Mr Shoebridge previously represented the husband in these proceedings.
The fictional reasonable lay observer contemplated in the relevant test applicable to this issue is:
“… not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice. The rules and conventions governing such practice are not frozen in time. They develop to take account of the exigencies of modern litigation …”. (Johnson v Johnson (2000) 201 CLR 488 at 493.)
Whilst that passage from the High Court’s joint judgment refers to perceptions of bias of a judicial officer, analogous principles apply, in my view, to the position of a single expert in this court.
In the context of modern litigation, it would, in my view, come as no surprise to a lay observer that legal practitioners practising in a specialised jurisdiction such as family law might co-present with other professionals - accountants, psychiatrists, counsellors, social workers, psychologists and the like - who also have practices within the same specialised jurisdiction.
The co-presentation of a paper – which is expressed in general terms and not related in any respect to the specific case the subject of the proceedings – would not, in my view, cause any reasonable apprehension on behalf of the fictional observer about the appropriate application of impartiality and expertise.
Here, Mr B refers in his letter to having no recollection of the specific paper and to not retaining a copy of it. I find neither assertion by Mr B to be at all surprising.
It is not suggested that there is any form of friendship or personal relationship between Ms Minnery and Mr B. It is not suggested that the paper was written or presented for Ms Minnery’s firm alone.
Clearly enough, where personal relationships might impinge upon a professional’s objectivity or impartiality in the mind of an impartial observer, they ought be disclosed. The fair-minded observer would, in my view, not consider disclosure to be necessary where the association between expert and lawyer amounts to nothing more than the co-writing and/or co-presentation of a paper which amalgamates, for a broad-based professional audience, the professional expertise of practitioners in two professions.
Neither, in my view would the failure to disclose such an association be any cause for concern or to require the disqualification of an expert.
No basis for the removal of Mr B is demonstrated.

Interim Proceedings

This case can be seen to embody many of the difficulties created for this court when relatively complex financial circumstances are involved and where the control of those financial circumstances have remained, historically, in the hands of one of the two marriage partners.
Frequently, issues arise at a time when the state of the evidence, and/or the state of the court’s lists mean that a trial cannot timeously take place. Again, this is such a case.
The court, then, in respect of applications for interim orders pending any such trial, is left in the position of attempting to do justice, but with any orders being confined to so much of the evidence as can confidently be relied upon pending a proper testing and analysis of all of the evidence.
The problems thus created are all the more acute when (as is, again, the case here) one party asserts that the other party has failed to properly comply with the comprehensive, on-going duty to disclose borne by all litigants in this court.
Here, the balance of the issues to be decided have at their core assertions and counter assertions about the husband’s financial position and resultant capacity to pay spousal maintenance, including meeting payments in respect of the former matrimonial home and a motor vehicle. Crucially, they are also relevant (see s. 83 of the Family Law Act 1975 (Cth)) to whether the current circumstances provide “just cause” for discharging the previous consent order for spousal maintenance or, alternatively, whether there has been a sufficient change in those circumstances so as to justify a reduction in its amount.
So, too, those same issues might be seen to be at the heart of the decision whether to order now a sale of the former matrimonial home and a division of the net proceeds of sale.

Discharge Of Orders For Valuation?

The husband’s assertions that the orders for valuation ought be discharged mirror those which are said to support the applications for variation in the amounts ordered to be paid by him to the wife and those which are said to justify the sale of the former matrimonial home.
The husband submits that, since October 2008, he has been “on stress-related sick leave”. He identifies three major stressors. On 10 February 2009 he was advised that his former employer would no longer pay him sick leave. He says that his only income, then, is payment under income protection insurance of about $1030 per week. He says that there has been ‘extreme changes in my income position, financial resources and the position generally of the asset pool”.
As to the latter, the husband says it has been necessary “to sell all liquid assets of the asset pool to repay investment debts previously secured by margin loans”. He says that sales have resulted in “debts falling from approximately $2,200,000 to approximately $530,000.”
By way of further background, it ought be appreciated that the wife’s application for settlement of property is in respect of a cohabitation of some five years (including a marriage of three years) and where the parties have a young child. The relationship was, then, a short one. The husband contends that he owned, or controlled, many assets of significant value at the commencement of the relationship.
At the time of the application before me on 14 July 2008, the husband contended that the then prospective sale would, if it proceeded, result in the crystallisation of a significant component of the asset pool. His argument proceeded that, because that was the case, this obviated the need for at least a significant part of a valuation of the property.
It was common ground then, and remains so, that the valuation exercise to be performed by Mr B is likely to be expensive (in the region of $100,000 and possibly more).
At the time the orders were made on 14 July 2008 it was submitted on the husband’s behalf that he did not have access to $100,000. As I recorded in my earlier reasons, the solicitor then representing the husband submitted, in effect, the wife should be “careful what she wishes for” because the requirement to produce a sum as significant as $100,000 may well precipitate sales which (to use the solicitor’s words) might “bring the whole house of cards down”.
What I recorded then in my reasons is also relevant to the instant application. From as early as November 2007 a sale similar to that live in the proceedings in July 2008 had been mooted. I ultimately found that “the time has arrived for the wife to be able to ascertain, within reasonable bounds, a prospective valuation of the property of the parties or either of them”. I also found that it was important “to obtain valuations of the property as at the date of cohabitation, as at the date of separation and as at the date of trial”.
It was relevant in those proceedings, and again relevant here, that the valuation exercise contemplated as being performed by Mr B is both complex and expensive. A significant sum of money is involved. Unlike the position with the then prospective sale, the “crystallisation date” can be predicted with some certainty because it is defined in the Shareholders Agreement.
In written submissions on behalf of the wife it is said:
“The wife acknowledges that the Shareholders Agreement provides for a crystallisation date no later than 31 December 2009. It is anticipated hopefully that the interest of the husband and the value of that property would be more readily, and hopefully more economically and efficiently, ascertained and valued at that time.”
It seems to me likely that the crystallisation date will see the value of a very significant component of the property for division becoming significantly clearer.
If that is right, there is the real prospect that some, or all, of a potentially very significant expense may not need to be incurred. That is a powerful matter in a case where each of the parties claim relative impecuniosity.
I am not persuaded by any evidence adduced by the husband, or any submissions made by him, that the process contemplated as being conducted by Mr B in the orders made by me on 14 July 2008 ought be abandoned. What is likely to be required is a re-evaluation of the nature and extent of the process which Mr B needs to undertake in the light of the changes (if any) effected by the occurrence of the crystallisation date.
However, where there is a real prospect that, by reference to a certain date, a significant proportion of the property of the parties or either of them, can be valued more economically and the parties saved considerable expense, there is as it seems to me, a good argument in favour of suspending the order with respect to the valuation.
I accordingly intend to make an order in terms of that sought by the wife in that respect.

Payments and Sale of Home – Principles

Sale of home

The written summary of argument of the wife contends that the sale of the former matrimonial home and distribution of its proceeds is a “partial property settlement”. The decisions of In the Marriage of Burridge (1980) FLC 90-902 (Nygh J) and In the Marriage of Harris (1993) FLC 92-317 (Full Court) are each cited in support of the wife’s opposition to the sale.
In the latter case, the Full Court held (at 79,929 and 79,930):-
We do not doubt that the Court has power in a proper case in s. 79 proceedings to make what may be conveniently described as an interim order, that is an order dealing with some of the property of the parties prior to the final hearing…[b]ut in the exercise of that power the following matters need to be considered:-
(1) The exercise of the power should be confined to cases where the circumstances compelled at that time are compelling. As a generality, the interests of the parties and the Court are better served by there being one final hearing of s. 79 proceedings…Urgent situations may arise where it is necessary to exercise this power if injustice is to be avoided. Examples include cases where it is necessary to do so to avoid an asset being eroded or lost in the intervening period, and cases (beyond the maintenance power) where an order in favour of one party is necessary to preserve or obtain a home for or is otherwise necessary for the welfare of the children…
(2) It is an exercise of the s. 79 power. Consequently it must be performed within those parameters. Since it is not the final hearing the Judge is unlikely to have the final findings, but the exercise must fall within the general framework and the material available at that time.
(3) Of necessity it is likely to be a somewhat imprecise exercise. Consequently, it must be exercised conservatively and the Judge must be satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the order which is contemplated is capable of being reversed or adjusted if it is subsequently considered necessary to do so…”

Variation of Maintenance

In deciding whether, within the meaning of s 83 of the Family Law Act there is “just cause” for discharging the order, I take into account the following statement by Lindenmayer J in In the Marriage Lutzke (1979) FLC 90-714, at 78,832, (approved, more recently, in Vakil & Vakil (1997) 21 FamLR 508):-
“…the Act is silent as to what may constitute “just cause” for the discharge of an order. In my opinion, however, the words “just cause” are not used in any broad general sense, nor are they intended to import any abstract notions of justice, “palm tree” or otherwise, into the determination of applications for discharge. In my opinion those words must be interpreted in the context of the Act as a whole, and in particular with regard to the other specific provisions of the Act which relate to maintenance. Thus a “cause” that the discharge of an existing maintenance order will be a “just cause” only if, having regard to the other provisions of the act, particularly those relating to maintenance, it can be said that it is “right” or “proper” that the order should be discharged. If there were any room for doubt that this is the correct approach, in my opinion that doubt is removed by sec. 83(7) which provides;
“(7) For the purposes of this section, the court shall have regard to the provisions of sections 72, 73, 75 and 76.””
Furthermore, the fact that these are interim proceedings is, as earlier referred to significant. In In the Marriage of Redman (1987) 11 FamLR 411, the Full court held, at 414-415:-
“…this was an interim order. Whilst we agree with the view expressed in Ashton that in principle such an order is one under s 74, to which the principles of s 72 or s 73 may be applicable, as the case may be, the very fact that the order is limited in time imports certain different considerations. One of these is that such an order is intended to be reconsidered, quite apart from the variation under s 83. As Nygh J said in Ashton, the most common purpose of an interim order is to make provision for the spouse and children pending the determination of the property settlement. If a so called permanent order is made on that occasion, that is not a variation under s 83 and does not have to be justified as such, but it is a fresh order made upon determination of the interim order. Another consequence is that on an application for interim maintenance the court conducts “not as final or exhaustive a hearing as would be the case if one were hearing the matter finally”; In the Marriage of Williamson (1978) 4 FamLR 355 at 359 per Fogarty J. The evidence need not be so extensive and the findings not so precise. Having regard to those factors, and the general injunction of s 97(3), the court in such matters have a greater degree of flexibility than it possesses in applications for maintenance which are intended to last for an indefinite period and can only be varied under s 83”.

Payments To And On Behalf Of The Wife And Sale Of The Home

(a) Changes?

The husband has filed a significant volume of affidavit material in support of his case. Prior to the Order made (by consent) by Jordan J on 18 February, 2008, the husband had filed three affidavits (26.11.07; 8.2.08 and 18.2.08).
In an affidavit filed for the current proceedings on 12 February, 2009, the husband summarises (at par 4) what he asserts are salient aspects, for current purposes, of each of those earlier affidavits. Quoted extracts from each earlier affidavit seek to emphasise that the husband was then in a parlous financial position. He describes (par 10) his then financial position as “extremely precarious”.
As earlier observed, the husband alleges “extreme changes” to his financial position. In essence, then, the husband seeks to persuade the court, in order to satisfy the requirement of “just cause” or “change in circumstances”, that an already “extremely precarious” financial position has changed so as to become even more precarious.
It is here that the difficulties in proceeding to determine an application without the opportunity to make findings in respect of significant aspects of contested evidence become particularly acute.

(b) The Husband’s Alleged Financial Position

The position of the husband appears to centre upon a number of essential propositions.
He deposes that his “entire financial solvency … depended on the share price of [EG Company] and my ability to borrow against same”. The “global financial crisis” and its alleged impact upon the share price of that entity is alleged to have dramatically affected the husband’s solvency.

Margin calls were apparently made against the husband. Previously, he alleges, loans using EG Company shares as security had been obtained by him. As margin calls were made there was, he deposes, “no means by which I could take on additional loans against those shares and hence my source of funding the mismatch between my expenses and income disappeared”.
Secondly, and related to the matter just discussed, the husband asserts that his capacity to borrow from friends and others has ceased. In that respect he deposes to:
·Borrowings from a friend, Mr ME, in the sum of $500,000 (par 16, affidavit 12.2.09);
·Discussions about borrowing from his father (par 19, affidavit 12.2.09) which, in a later affidavit, the husband expands upon to say “My father had indicated in December 2008 that he would consider lending me up to $1,000,000 on commercial terms provided that [the wife] would not seek to take advantage of his paternal generosity” (par 29, affidavit 12.3.09)
·A loan from the husband’s current partner, Ms KN, in the sum of $100,000 (par 31, affidavit 12.2.09). This loan is said to be evidenced by a deed which is both undated and unstamped.
The first margin call was met by the husband arranging a loan (“of up to $700,000) from my employer, [F] Group”. The husband deposes to conflict between he and his former employer and, in any event, deposes to his psychological issues causing an inability to work with that employer.
In addition, sales by the husband of shares in EG Company and a 24.99% stake in O Pty Ltd have resulted in the husband receiving, respectively, $1,070,870.40 and $625,000. That money is said by the husband to have essentially been used to pay down debt.
In respect of this last amount, the husband deposes:
“My father had indicated in December 2008 that he would consider lending me up to $1,000,000 on commercial terms provided that he could get comfort that [the wife] would not seek to take advantage of his paternal generosity. He would have had to borrow these funds as he did not have funds in that quantity available. In view of the actions of [the wife] and her lawyers in relation to a loan by my partner, [Ms KN] (referred to in my affidavit of 12 February 2009) he decided that the risk of lending any money to me was too great. He did, however, agree to purchase my stake in [O] Pty Ltd (again referred to in my affidavit of 12 February 2009) on arms length terms. He borrowed most of the $625,000 purchase price for this acquisition and in view of the difficulties in financial planning businesses (including [O Pty Ltd]) at the moment together with the ongoing global financial crisis he is unprepared to borrow any further funds on any basis.”
Neither the husband’s father, nor Mr ME, nor his partner are deponents in these proceedings.
The reference to the earlier affidavit of the husband appears to be a reference to paragraph 31 of that affidavit filed on 12.2.09:
“31.On 5 January 2009, [EG Company] opened for trading and fell further in price, this meant that I was again in a margin call position (copies of the margin calls are referred to above and annexed hereto marked “DMG1”). I covered this call with a loan from my partner, [Ms KN] in the sum of $100,000. This was advised to [the wife] directly as I did not then have legal representation nor contact details for [the wife’s] lawyers and her lawyers responded with threats of injunctions and enjoining [Ms KN] to these proceedings. A true and correct copy of their correspondence, including my original correspondence, is annexed hereto marked “DMG7”.
The original correspondence from the husband to the wife renders curious the husband’s sworn assertion that he “did not then have legal representation nor contact details for [the wife’s] lawyers”: the email from the husband to the wife asserts:
“Finally, I again sincerely request that you meet with me (with your solicitors present of course) to discuss ways in which we can jointly reduce our expenditure … as outlined I suspect your lawyers may consider this communication inappropriate however my solicitor is away, this matter is urgent and frankly I do not know what else to do …”.
Unsurprisingly, the following day, the wife’s solicitors responded by sending an urgent facsimile to the husband’s solicitors (who had never at any stage indicated that they were no longer acting for the husband). That letter pointed out that the wife did not agree to the terms of the alleged agreement between the husband and Ms KN “as they have the effect of securing Ms [KN’s] entitlements above our client’s in the event of your client’s bankruptcy”.
The letter then went on to request documents. The request was, in my view, entirely appropriate and entirely consistent with the husband’s continuing, in my view, obligation to disclose in these proceedings. The wife’s solicitor’s, (again, appropriately in the circumstances) sought undertakings.
It seems plain that the husband asserts that it is this conduct of the wife’s solicitors (deposed to by the husband at paragraph 29 of his affidavit filed on 12.3.09) that caused his father to decide “that the risk of lending any money to [the husband] was too great”. Why this should be so eludes me.

Assertions and Disclosure

The assertions just described are made in the context of sworn evidence by the wife (in broad terms denied by the husband) that “[the husband] is yet to make proper disclosure” and that “[the husband] has not produced documents requested by my solicitors as to the minimum amount payable on [former matrimonial home] mortgage. [The husband] has also not produced documents demonstrating the car payments, insurance or registration for his car or my car”.
The wife goes on to depose, at paragraph 121 of her affidavit filed on 11.3.09, that:
“It continues to be the case that whilst [the husband] does provide some documentation, he refuses to provide any documents which he does not have in his physical possession despite the fact that he is able to compel the production of certain documents. For example, my lawyers have requested on a number of occasions that the 2008 Financial Statements for the [M] Holdings Trust and [M] Capital Pty Ltd be disclosed. [The husband] insists that these have not yet been prepared. The 2007 Statements indicate that collectively [the husband] has $420,000.00 owing to him (by way of loan and beneficiary entitlements from these entities).”
The husband deposes:
“In relation to paragraph 121 and 122 I state that I have provided all relevant disclosure. I find it particularly ironic that [the wife] claims I have not provided documents that I am able to “compel” the production of. She has refused to provide disclosure in relation to the money she testifies she stole from me, notwithstanding that she can “compel” her bank to provide same. Conversely, I first need to have time to collate the material for the preparation of the financial statements in question. There has simply been no time for me to attend to same …It is the case that I rarely complete my tax returns before April in the subsequent year. In this case, I have had no time thus far to even commence collating material.”
The wife swears to:
“123.My lawyers have also outlined to [the husband] in correspondence dated 13 February 2009 my requests for documents provided by [the husband’s] lawyers to [G Firm] [the single expert valuer]. The majority of the requested documents remain undisclosed.”
The husband responds:
“106.As outlined above understand that I have provided all that I can to [G Firm]. There does appear to be some confusion over what was provided to [G Firm] by my former lawyers … which I have indicated I will endeavour to get to the bottom of. Since that time however I have simply had no time in which to attend to same.”
It will be appreciated, then, that the nature and extent of disclosure – crucial to any financial proceedings in this court – is likely to be a significant future issue directly relevant to the veracity of the parties and the credibility of their evidence. Needless to say, the resolution of these disputed matters is beyond the scope of these current interim proceedings.

Other Factual Disputes

Significant factual disputes attend other aspects of the current proceedings. For example, the husband relies upon his income protection insurance amount as providing his current weekly income. However, the wife contends that income earned by the husband is in excess of that disclosed in his financial statements.
The wife deposes, for example, that “the payslips disclosed by [the husband] reveal that he has received income of approximately $103,000.00 since 30 June 2008” which comprises mainly “$92,625.30 from the [F] Group” together with a lump sum payment of $16,024.00 from income protection and weekly sums of $1335.37 since 4 February 2009.
The wife goes on to depose that the husband’s bank statements indicate that “he has received $131,129.19 in the 15 week period from 7 November 2008 to 23 February 2009 …”. In addition the wife deposes to a number of capital sums allegedly received by the husband totalling $209,302.41 “from various margin loans”.
In respect of these allegations, the husband says that he has never understated his income and “that [the wife] and/or her lawyers did not seem to understand the difference between “income” and the sale of assets and the borrowing of funds represents the reason we are in the position we are in”. The husband, in paragraphs 85 and following in his affidavit filed 12.3.09 draws a distinction between income and capital sums. He points out that “… $57,439.86 out of the $131,129.19 represents proceeds from either asset sales, borrowings or dividends from assets that have subsequently been sold.”
This, though, does not address the point made by the wife. Whether by way of income or sale of assets or the like, the point made is that these are all amounts of money to which the husband had access during the periods mentioned.
Similarly, it is beyond doubt that the husband, even on his own evidence, has had access to very significant sums of money. Of course, he asserts that much, if not all, of that money has been used to pay down debt. For example, at paragraph 88 of his affidavit filed 12.3.09, the husband deposes that he has reduced borrowings from $2,200,000.00 in December 2008 to about $530,000.00 as at 3 March 2009.
It is not possible, in the context of these interim proceedings, to make findings or to do any form of “accounting” of the moneys received by the husband, their expenditure and whether or not that expenditure was reasonable in the sense of taking priority over a spouse’s obligation to maintain the other spouse where the requisite need exists.

Sale of Home and Payments – Discussion and Findings

It is argued on behalf of the wife (among other matters) that:-
2.1 The wife opposes the husband’s application for sale of the [D] home on the basis that:-
a.        …
b.        the relevant principles for an order of partial property settlement have not been satisfied on the husband’s evidence;
c. the wife seeks the [D] home as part of her final orders pursuant to s 79;
…
e.the wife is not able to afford alternative accommodation ;
…
2.6 The husband’s evidence does not make out a prima facie [case] for partial property settlement based on Harris’ case and Burridge’s case. The problems for the husband overcoming these principles are that:-
a.        the parties are in dispute about the sale of the [D] home. There is no consent order;
b.        there is no compelling reason for the sale of the home. The Westpac loan has been serviced and there is no evidence of exercise of power of sale by the bank. Similarly, the alleged debt to Mr [ME] was $500,000 in October 2008, but was reduced by the husband’s lump sum repayment of principal of $400,000 on about 6 February 2009. Interest has been accruing and the debt is $118, 000. Recently the husband and [Mr ME] agreed to secure the loan amount against the husband’s interest in the [F] group. Similarly there is no default or outstanding demands for repayment. Similarly, with the GMAC loan of $36,000 there is no evidence of default or demands for immediate repayment”.
The wife goes on to argue, in broad outline, that the husband has received significant sums of money and has had no difficulty borrowing money from a friend and from his partner and indicating in earlier sworn evidence that his father had the capacity to help him out financially.
The husband, in reply, contends that:-
On the respondent’s own material:
i. She has a comparatively large independent income;
ii. She has approval to move in with her parents;
iii. She has the capacity to work
The husband goes on to argue that there are “compelling reasons for ordering the sale”. And , specifically, :-
“2.10. As outlined in my affidavit of 3 March 2009, the wife’s amended application actually seeks 75% of the asset pool as final orders. In any event, her ability to be “sole” owner of that home depends on our financial circumstances and they are clear; I have no means by which to meet by obligations
2.11.
a. The residence is in my name and was bought by me in 1997 before I met the respondent
b. The respondent is able to afford alternative accommodation by her own affidavit. Further her own affidavit outlines that she can move in with her parents at […].”
I repeat: these are interim proceedings. The property of the parties or either of them, and particularly its value, remains unclear. Allegations and counter allegations both with respect to disclosure and the issues generally, surround that issue. The evidence, at this interim stage, is cloudy at best.
Although owned by the husband pre-cohabitation, the former matrimonial home has been home for the wife and children for some years. It is the only home that the parties’ child has ever known. The child attends a kindergarten locally. The wife seeks to retain the former matrimonial home as part of her property settlement.
It is not possible to determine whether the wife will be entitled to the home as part of her property settlement. Nor, if she is so entitled, is it possible to determine at this interim stage if the wife has the means to keep the home as part of any such settlement.
Considerations such as those just mentioned underpin the Full Court’s comments earlier quoted: the clear preference for one final hearing of the s 79 application is founded in part on that being the time and place where, on a consideration of all of the evidence, issues such as just identified can be determined.
I would not be persuaded, having regard to the evidence earlier described, and the issues just referred to, to order a sale of the former matrimonial home absent evidence of an “urgent situation” so as to necessitate sale “if injustice is to be avoided”.
The evidence of the husband falls short of that which would satisfy me, on an interim basis, that the order is necessary to avoid the home “being lost” or the property “pool being eroded”.
I accept the submission that there is no evidence – particularly by a reliable third party source such as the bank – that the mortgage is in arrears or that a forced sale is likely or imminent.
I will not order the sale of the former matrimonial home.

Payments and Maintenance

This issue is particularly clouded by the restrictions inherent in an interim determination and, again, highlights the matters that lie at the foundation of the decision of the Full Court in Redman earlier described.
Here, too, there are a plethora of allegations and counter allegations by each of the parties.
The wife argues that, in effect, circumspection ought attend the husband’s current apparent position that he is unable to earn income save by way of income protection insurance payments. The wife deposes to (and her summary of argument outlines) payments received by the husband both by way of income and the sale of assets.
There seems to be little doubt that a significant proportion of that money was used to pay down debt but the tenor of the evidence is such that a likely issue at any future trial might be the bona fides of that debt, what sums were paid to whom, when and for what reasons. It is in this context, I gather, that assertions (and counter assertions) about disclosure are likely to be relevant at that trial.
As an example, the wife asserts that the husband received income of approximately $103,000 in the period between 1 July 2008 and March 2009 and additionally received $131,129 in a fifteen week period from 7 November 2008 until to 23 February 2009. Further, the wife asserts that the husband has drawn down, for his own living expenses the sum of $209,302 in an approximate thirteen month period between January 2008 and February 2009. Additionally, the wife asserts that the husband has received money from sales of assets, a lump sum payment from AXA, and loans from parties including his current partner and a friend, Mr ME, a total sum of about $3 million.
In response, the husband makes a number of assertions including that the income referred to by the wife is pre-tax. He goes on to assert that the amounts set out by the wife are “misleading”. In particular he refers to what is deposed by him at paragraph 87 of an affidavit filed by him on 12 March 2009. At paragraph 86 of the same affidavit the husband deposes that the wife:-
“…is being either deliberately misleading or just does not understand the difference between income and the sale of assets/ borrowings”. The husband then goes on to depose to a number of specific items. In respect of the drawings made by the husband he deposes (paragraph 87 of his affidavit) that “these funds were used to fund the mismatch between the inflows that I had and the outflows and that this has been disclosed on numerous occasions. In so far as some of those outgoings were for my living expenses then [the wife’s] statement is correct. However the vast majority of such borrowings were to fund either payments for or on behalf of [the wife] and interest on loans that I had outstanding. For instance, $60,000 of the $100,000 drawn down on 10 March 2008 was used to pay $60,000 to [the wife’s] lawyers in compliance with the terms of the order of 18 February 2008. Accordingly, her claims in relation to these draw downs being “for his own living expenses” is completely and utterly misleading”.
Amidst this very confusing background of allegations and counter allegations, I consider that I am able to find that there has been a change in the husband’s circumstances since the orders were made in February 2008.
In particular, it seems plain that the husband’s income protection insurer has accepted his claim for incapacity to work and is paying out on that policy accordingly. The husband is in receipt of that income as distinct from engaging in his business activities (principally with F) which formed the foundation of his financial circumstances at the time the orders were made.
It does not necessarily follow, however, that this change of circumstances constitutes “just cause” for discharging the existing order. That, as has been seen, depends on a consideration of the Act, and in particular, its provisions relating to maintenance (including, importantly, s 72 and 75).
Section 72 of the Act provides that:-
“a party to a marriage is liable to maintain the other, 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).
Section 75(1) of the Act provides that “in exercising jurisdiction under section 74, the court shall take into account only the matters referred to in subsection (2).” The sub-section then lists nineteen matters which, if relevant, must be taken into account in assessing any claim for maintenance.

In respect of s 72, both the wife’s need and the husband’s capacity should be established.
In respect of the former, the husband alleges in his written summary of argument that the wife’s income is $1075.93 per week. That sum is comprised of two parts – his current maintenance and child support ($32,760 or $630 per week) and income-tested pensions or benefits of varying types ($23,187 or $445 per week). No other “income” for the wife is deposed to by either party.
Plainly, in assessing the wife’s need for maintenance by reference to her “income”, her current maintenance should be excluded.
Secondly, s 75(3) provides:-
(3) In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
Accordingly, I find, for the purposes of assessing need, that the wife has no current income from which she can meet her reasonable needs.
As to the latter, the wife deposes in her affidavit filed 11 March 2009 (at paragraph 31 and following) both as to her expenses (noting that expenses can be different to reasonable needs) and the steps asserted to have been taken by her to reduce those expenses.
As earlier referred to, the husband asserts, in general, a parlous financial position. He also deposes specifically as to his capacity to pay and his own expenses. At paragraph 12 of his affidavit filed 12 March 2009, the husband deposes to “personal expenses” of $538 per week. That figure replicates the total in his Financial Statement.
However, as that document makes clear, that total includes expenses for him, his partner and the child (the latter during the time that she spends with him). The total in that document for the husband alone is $350 per week. The Financial Statement also reveals income for the husband’s partner of “$1128 (plus bonus)” per week. The amounts of the “bonus” are unspecified either in that document or in the husband’s affidavit material.
The wife in her affidavit does not “concede that [the husband] has a shortfall of income over expenses as deposed to by him”. She outlines five items which she does not “concede…as reasonable”: $40 per week in respect of holidays; $50 per week in respect of household supplies; $20 per week in respect of “gifts”; education expenses of $10 per week and $130 in respect of rent.
The husband responds to these assertions at paragraph 96 of his affidavit. As a particular example he concedes that he “does not plan on having any holidays at the moment as I cannot afford same” but says that “any savings from that area are…offset from increases in other areas, for instance in my medical expenses” and goes on to specify amounts in respect of same.
Neither party was cross-examined in the proceedings before me as to their expenses. The affidavits contain assertions, counter assertions and, in many respects, expressions of opinion and comment. I have already said that it is not possible for me to do an “accounting exercise” in respect of the claims and counter claims.
In respect of assessing need and capacity to pay, I intend to approach the matter in a broad and summary way given the nature of the proceedings and state of the evidence.
By reference to the expenses listed at paragraph 46 of the affidavit of the wife, I consider that the predominant care of the child is likely to involve expenditure above that met by child support, but for the purposes of the wife’s reasonable needs, I propose to have regard to only those expenses relating to her (as distinct from the child). Of the $395 per week claimed, I propose, in a broad-brush way, to reduce those to $275. In terms of a single parent with primary responsibility for a young child, I would assess weekly needs in such an amount as extremely modest.
The husband lives with his partner who also earns an income. They have no children together. The husband does not have primary day to day responsibility for the parties’ child.
No evidence is presented as to any negotiations the husband has had with Westpac Bank in respect of alternative arrangements in respect of the current payment of $532 per week in respect of the $400,000 mortgage owing to that institution. In that respect I note that the husband’s case with respect to the dramatic reduction in debt asserted to have been carried out by him, evidences no capital sum at all being directed to Westpac towards reducing the debt for the former matrimonial home.
In respect of the expenses set out in the husband’s affidavit and Financial Statement. I again propose to assess, in a broad and summary way.
In assessing the husband’s capacity to pay spousal maintenance on an interim basis, I will deduct the $510 already being paid; I will deduct the $532 being interest on the Westpac home loan; I will deduct the interest payable to Mr ME in the sum of $173 in the absence of any evidence from the husband (or Mr ME) about arrangements that might be made in respect of that alleged weekly interest payment pending a final resolution of the financial issues between these parties; I will also deduct the storage expenses of $77 per week.
The wife contends that the husband’s payment of rent to his father is unreasonable. There is no affidavit from the husband’s father. His father had indicated a willingness previously to arrange a loan to him of $1 million. The explanation by the husband of the payment of rent is that:-
“…the $130 that I pay to my father represents rent/board and that it is thus exactly the same amount as [the wife] proposes paying to her parents if she is obliged to live with them. I am not subsidising the living expenses of Ms [KN]. It would not I am sure be Ms [KN’s] preference to be living with my entire family at the age of 35 years. She is doing it so that we can be together. I am paying my father a fair and reasonable subsidised rate of rent/board – this is evidenced by the fact that [the wife] is proposing the exactly same amount of board for staying at her parents place. Assuming that her parents remain at […] (rather than […]) I state, in a similar light, that their place is also waterfront”.
I propose to deduct the $130 paid by way of “rent/board” in assessing the reasonable needs of the father and his resultant capacity to pay interim maintenance.
In respect of the “personal expenses” claimed by the husband and set out in his Financial Statement it is to be noted that the total of $538 includes expenses allegedly paid on behalf of the child together with expenses allegedly paid on behalf of “other adults”. The total figure claimed as expenses in respect of the husband himself is $350.
It seems to me that a number of the individual items claimed exceed the allowance that might be made when assessing reasonable weekly needs (as distinct from expenses) with a view to ascertaining capacity to pay. I propose to adopt the same broad brush approach to that adopted with respect to the wife in assessing her reasonable weekly needs. I shall reduce those claimed by the husband to $225 (noting that the husband lives with his partner and does not have full time responsibility for the child). Accordingly I reduce the claimed $538 by way of “personal expenses” to $225.
In summary, in assessing the husband’s capacity to pay I have allowed for: $120 per week by way of child support; $19 for car insurance and registration; $96 in respect of rates and body corporate; $178 in respect of car hire purchase payments and $225 in respect or personal expenses, a total of $638.
In respect of the complexities of the financial transactions that have occurred which are the subject of competing allegations about disclosure and questions relating to the, in effect, bona fides of the payments made from capital sums and asset sales by the husband, I consider it favourable to the husband to adopt an income figure of $1030 being the net amount of his income protection insurance.
I readily acknowledge the imprecision involved in the pseudo calculations performed in respect of each party. However, in interim proceedings that is frequently all that can realistically be achieved. Here, I am tolerably satisfied that the totality of the conclusions reached present a sufficiently reliable basis on which to assess whether “just cause” is shown.
On the evidence before me, I am not satisfied that “just cause” is demonstrated by the husband.
I have already come to the conclusion, that the husband’s financial circumstances have changed from those which applied when the order was made. That being the case I turn to consider whether it is proper and otherwise just to vary the amount of spouse maintenance and payments payable to or on behalf of the wife.

Need and Capacity

By reason of the (admittedly imprecise) process just described I consider the evidence reveals that the wife has a need for maintenance and the husband has capacity to pay.
In that respect, it appears to me that the husband has the capacity to pay the $200 by way of spousal maintenance to the wife together with the other payments referred to.
In saying that, I am aware that the single biggest obligation is that pertaining to the mortgage on the former matrimonial home.
I repeat that there is no evidence before me that any attempt has been made by the husband to either pay down any amount of the capital sum or to conduct any negotiations with the bank with a view to refinancing or with a view to alternative arrangements being made for a relatively short period of time so as to enable the finalisation of the outstanding financial issues between these parties.

Capacity to earn income

For present, interim, purposes, I accept the evidence that the husband is unable to work based on the (untested) evidence before me and his income from remunerative employment is limited to income protection insurance.
The husband alleges that the wife can work remuneratively. For example, at paragraph 46 of his affidavit, he deposes to the fact that the wife can attain “interim accreditation” “allowing a one year open learning course to be undertaken after an application is made”.
The provisions of s 75(2) (c) and (l) of the Act need to be noted in this context. The former requires the court to take into account “whether either party has the care or control of a child of the marriage who has not attained the age of 18 years”. Clearly enough the wife essentially has full time day to day care of the child. The latter subparagraph provides that the court must take into account “the need to protect a party who wishes to continue that party's role as a parent”.
In that respect the wife deposes that she is the full time carer of the child; that the child attends kindy two days a week; that she has not worked since prior to the child’s birth in 2004 and that it “remains my wish to be [the child’s] full time carer however I acknowledge that the current financial circumstances mean that this may no longer be possible”.
In the latter respect the wife goes on to depose that, in order to obtain a permanent position with Education Queensland, she needs to sign an employment agreement with that body indicating that she is prepared to work anywhere within the state of Queensland. She did not undertake regional teaching prior to the child’s birth and flags the possibility of relocation to a remote part of the state as a possibility associated with any such employment.
The wife goes on to depose at paragraph 19:-
“Given if I was able to relocate anywhere in the state, before I could be eligible to apply for permanent work, I would have to do 20 days continuous teaching or 40 days supply teaching to achieve a suitability rating. Until I achieve this suitability rating by doing 40 days of supply I cannot work in any capacity with Education Queensland other than in a temporary or casual role in short term contracts of up to 18 weeks until I obtain the required suitability rating”.
With respect to the specific assertion relating to the Catholic Education system the wife swears that:
“I do not have the necessary accreditation qualifications to work in the Catholic Education system and to seek to work as a teacher within the Catholic system would need to do another years postgraduate study to satisfy their eligibility criteria”.
I repeat again in this context that these are interim proceedings and I do not consider that either party has a capacity to earn income that is not being met by their current respective positions and circumstances.

Property/Resources

As I have previously indicated the picture with respect to the property and resources of each of the parties is clouded by the allegations and counter allegations of each of them and the issue of the “crystallisation date” earlier referred to.
However, in considering this factor prescribed by s 75(2) within the context of this interim application, I note that, as at February this year, the husband deposed that:-
“…as outlined in my most recent financial statement…I believe that based on current “market” values that the asset pool may be worth up to $7,583, 000 (pre-tax and debt) however this is largely dependent on the value of [F] group…”
I have also referred to the submission by the wife that a very large of money has been received by the husband which, on his evidence, has significantly reduced the debt burden of the parties.

Responsibility to support the child and Child Support

The wife deposes that:
“on 13 February 2009 the child support payable pursuant to the administrative assessment for [the child] had dropped from $350 per week to $20 per week…on or about 24 February 2009 it changed to $120.50 once [the husband] advised the Child Support Agency to the amount he received by way of income protection insurance”.
In respect of the former of those assertions, the husband contends that form 1 July 2008 to 10 February 2009 the child support was $243.24 per week. He does not respond to the second of the assertions but it seems to be accepted in his material that he currently pays $120 per week by way of child support.
This is not an application for departure nor has there been any examination of the expenses claimed by the wife in respect of the child. She claims that they total $307 per week.
Whether that is right or not, I consider that I can safely conclude (for example by reference to the Lee Table) that the child’s needs are highly likely to exceed $120 per week. In that respect, it is noteworthy that the husband claims weekly expenses of $84 per week in respect of the time that he spends with the child.

Maintenance and Payments - Summary and Conclusions

Taking account of all the matters previously outlined, I am of the view that the husband’s change of circumstances justifies a variation of the spousal maintenance amount.
I am satisfied the wife has a need, and the husband a capacity to pay the $200 per week sought by the wife.
I will otherwise adjourn the further mention of this matter as sought by the wife with ancillary orders facilitating that listing.
In addition, I will order in accordance with paragraph 6 of the wife’s Response which provides specifics of the sort of disclosure which the husband would, in any event, be required to make.
I order accordingly.

I certify that the preceding one hundred and seventy-one (171) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy.

Associate:

Date: 30 July 2009

[2009] FamCA 675

30 July 2009

Key Legal Topics

Areas of Law

Family Law

Commercial Law

Civil Procedure

Legal Concepts

Appeal

Costs

Injunction

Jurisdiction

Remedies