Hall and Hall (No 2)

FAMILY COURT OF AUSTRALIA

HALL & HALL (NO 2)

[2015] FamCA 219

FAMILY LAW – SPOUSE MAINTENANCE – enforcement – where husband failed to meet monthly spouse maintenance liability – where wife seeks sale of real property to meet past and future spouse maintenance liabilities - spouse maintenance orders the subject of appeal - where arrears substantially less than value of property – orders made for husband to meet liability through a mortgage or, failing compliance, the wife be permitted to sell the real property.

FAMILY LAW – PROPERTY – interim orders – where husband seeks sale of real estate – unoccupied - substantial mortgage debt – previous application refused – sale of property permitted.

FAMILY LAW – COSTS – Indemnity Costs – wife seeks costs of multiple interim applications on an indemnity basis – husband opposes application and submits the applications were reasonable – whether circumstances justify an order as to costs – husband not wholly unsuccessful – no orders for costs on an indemnity basis – husband ordered to pay costs of wife’s spouse maintenance enforcement application.

Family Law Act 1975 (Cth) s 75, 79, 80, 117

Stanford v Stanford (2012) 247 CLR 108

APPLICANT:

Ms Hall

RESPONDENT:

Mr Hall

INDEPENDENT CHILDREN’S LAWYER:

Legal Services Commission of SA

FILE NUMBER:

ADC

3671

2013

DATE DELIVERED:

2 April 2015

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Adelaide

JUDGMENT OF:

Justice Dawe

HEARING DATE:

17 September 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Ackman, QC
[with Ms Kari of Counsel]

SOLICITOR FOR THE APPLICANT:

Barnes Brinsley Shaw

COUNSEL FOR THE RESPONDENT:

Mr O'Shannessy

SOLICITOR FOR THE RESPONDENT:

Jordan & Fowler

Orders

If the appeal by the husband against the orders for spouse maintenance is unsuccessful then within thirty [30] days of the date of the dismissal of the appeal the husband do all such things necessary and sign all such documents as may be required to obtain a mortgage in the sum of ONE HUNDRED AND FIFTY THOUSAND DOLLARS [$150,000.00] secured over the title of the property situate at II Street, Suburb L in the State of South Australia being the whole of land comprised and described in Certificate of Title Register Book Volume … Folio … (“the Suburb L Property”).
Within seven [7] days of obtaining the funds the husband draw down on the mortgage facility and distribute the funds as follows:
(a)to an interest bearing trust account in the name of the wife’s solicitors for and on behalf of the wife the sum of ONE HUNDRED AND FIFTY THOUSAND DOLLARS [$150,000.00] PROVIDED THAT the said sum shall only be used for the purpose of discharging the husband’s liability to the wife for arrears of spouse maintenance and outgoings of the former matrimonial home pursuant to the Orders of 10 December 2013 and not otherwise; and
(b)thereafter that the wife’s solicitors distribute the remaining funds on a monthly basis in accordance with the orders made on 10 December 2013 and not otherwise.
The husband is hereby restrained from causing any liability in relation to the mortgage facility over the Suburb L property from exceeding ONE HUNDRED AND FIFTY THOUSAND DOLLARS [$150,000.00].
Should the husband refuse or neglect to discharge the spouse maintenance arrears within sixty [60] days of the date of any such dismissal of his appeal from the spouse maintenance order the husband do all such acts and things necessary to appoint the wife as his attorney for the purposes of conducting the sale of the Suburb L property.
Upon the sale of the Suburb L property the sale proceeds shall be disbursed in the following priority:
(a)in payment of all reasonable costs of sale including agent fees and auctioneer costs, legal and conveyancing costs;
(b) any rates adjustments or relevant disbursements payable;
(c) in discharge of any mortgages or other secured interests;
(d)the balance to be paid into an interest bearing account in the names of BBS Lawyers as trustees for the husband and the wife; and
(e)the wife’s solicitors are authorised to draw on the account to meet the liability of the husband to the wife pursuant to the Orders of 10 December 2013.
In the event that the husband refuses or neglects to execute any document or instrument necessary to give effect to all or any of these orders, a Registrar of the Family Court of Australia upon proof by affidavit of such refusal or neglect be appointed pursuant to s106A of the Family Law Act 1975 (Cth), to execute any such document or instrument necessary to give effect to these Orders.
Within twenty-eight [28] days of the date of this Order the parties shall do all acts and things necessary to sell the properties situate at AA & BB, W Street, Suburb F in the State of South Australia being the whole of the land comprised and described in Certificate of Title Register Book Volume .. Folio .. (“the W Street properties”).
To facilitate the sale:
(a)the wife shall within twenty-eight [28] days nominate three agents to conduct the sale and the husband shall choose one of those agents;
(b)forthwith upon the husband’s nomination of the agent each party shall sign the necessary documents to appoint the agent; and
(c)the husband shall meet the reasonable costs of preparing the properties for sale in accordance with the recommendations of the appointed agent.
Upon sale of the W Street properties the proceeds shall be disbursed in the following priority:
(a)in payment of all reasonable costs of sale including agent fees and auctioneer costs, legal and conveyancing costs;
(b) any rates adjustments or relevant disbursements payable;
(c) in discharge of any mortgages or other secured interests; and
(d)the balance to be paid into an interest bearing account in the joint names of the parties, pending further order or agreement in writing.
The husband pay the wife’s costs of and incidental to the application for enforcement of the orders for spouse maintenance and outgoings such costs to be as agreed and in default of agreement within twenty-one [21] days from today as assessed by a Registrar pursuant to the rules.
The wife’s Applications in a Case filed on 7 July 2014 and 10 September 2014 are dismissed and removed from the active pending cases list.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hall & Hall (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADC 3671 of 2013

Ms Hall

Applicant

And

Mr Hall

Respondent

REASONS FOR JUDGMENT

Introduction

By Application in a Case filed on 7 July 2014 the wife, Ms Hall, sought orders for enforcement of Orders made on 10 December 2013 (spouse maintenance order). The orders sought can be summarised as giving the wife the Power of Attorney to sell the property at II Street, Suburb L and use the proceeds to pay monies outstanding to the wife pursuant to the Order of 10 December 2013, together with costs, with the balance remaining in an interest bearing account in the name of her lawyers.
The husband, Mr Hall, opposed that application.
In his response the husband sought an order that the wife sell the properties at AA and BB W Street, Suburb F and the discharge of the order made on 17 June 2014.
The orders of 17 June 2014 provided that the husband be restrained from selling or attempting to sell the home at E Street, Suburb F and that he be restrained from selling or attempting to sell the properties at AA and BB W Street, Suburb F. (They also made provision for discovery of documents and for personal items to be delivered up to the wife).
There are also outstanding applications for orders to be made in relation to costs of some of the interim proceedings. The wife seeks costs in relation to her application for enforcement of the spouse maintenance orders on an indemnity basis and also costs in relation to the orders of 17 June 2014.

Summary of background

The husband is a businessman. He was born in 1952 (currently aged 62). The wife is a medical professional. She was born in 1972 (currently aged 43). The parties married in 2001 and separated in September 2013.
There are two children of the marriage K born in 2003 and D born in 2005. Both children currently reside with the wife. Litigation in relation to the children is ongoing.
The proceedings between the parties commenced when the wife filed an Initiating Application on 2 October 2013. Since then there have been numerous documents filed.
On 10 December 2013 the Court made the following orders:
Pending final determination of property settlement and spouse maintenance proceedings between the parties:
a)    Paragraphs 8.1 and 8.3 of the Order of 23 October 2013 are continued.
b)    The husband pay as and when they fall due all school fees for the children of the parties including all associated or related charges or expenses billed by the children’s school to either of the parties.
c)    The husband pay spouse maintenance to the wife in the sum of TEN THOUSAND EIGHT HUNDRED AND THIRTY THREE DOLLARS [$10,833.00] per calendar month commencing on Monday 16 December 2013 and each 16^th day of the month thereafter payable to an account nominated by the wife and provided to the husband’s solicitors in writing by 4.00 pm on Thursday 12 December 2013.”

On 17 June 2014 a specific order was made restraining the husband from selling or attempting to sell the W Street properties. The detailed orders were as follows:
1.The husband and wife do each make discovery on oath within fourteen [14] days and to include but not limited to on the part of the husband copies of any applications or financial statements provided to any bank or lending institutions within the last three [3] years and copies of any documents referred to in the affidavit of the wife’s solicitor, Mr Barnes, filed on 12 March 2014.
2.Within twenty-one [21] days from today any of the wife’s personal items, including but not limited to, clothing, jewellery, notes and medical journals and other documents at the [Suburb L] property, be delivered to the wife by the husband taking steps to have them delivered to an agreed neutral address UPON NOTING if such neutral address cannot be agreed within fourteen [14] days then the same to be delivered to the wife’s solicitors’ office.
3.That the husband be restrained and an injunction be granted restraining the husband from selling or attempting to sell the former matrimonial home at [E Street, Suburb F], and do forthwith remove the home from being advertised for sale through Ray White or any other agency.
4.That the husband be restrained and an injunction be granted restraining the husband from selling or attempting to sell the properties at [AA and BB W Street, Suburb F], in the State of South Australia.
5.The question of costs of interim proceedings is adjourned to the same date as the anticipated application for a stay in relation to the subpoena issue.
6.The Application in a Case filed by the husband on 7 March 2014 is dismissed and removed from the active pending cases list.”
The husband has filed two Notices of Appeal. He has appealed against the spouse maintenance orders made on 10 December 2013 and the injunctions restraining him from selling or attempting to sell the W Street, Suburb F properties. The appeals were heard in November 2014 but judgment in relation to those appeals has not yet been delivered.
The wife seeks costs in relation to orders made on 17 June 2014.

Relevant evidence and allegations in relation to interim orders sought

As and from the month of June 2014 the husband has failed to pay $10,833 per month spousal maintenance to the wife and meet the outgoings in relation to the E Street, Suburb F property.
The husband does not deny that he has failed to make the payments pursuant to these orders.
An appeal has been lodged.
The Suburb L property which the wife seeks be sold is the property in which the husband resides and is unencumbered. The husband estimates the value of that property between $6 and $7 Million.
There continues to be a considerable dispute about the assets, liabilities and financial circumstances of the parties which are to be brought into account in determining financial matters. In earlier interim decisions the Court found that the interim affidavits and financial statements filed by the husband indicated that he had net assets of approximately $21 Million.
In 2013 documents filed in the Court the husband made various allegations, including an assertion that he has $23 Million in net assets.
As at September 2014 the husband owed $43,332 in unpaid spouse maintenance. If the husband has not paid any spouse maintenance since then the amount owing would be approximately $108,000. (As at March 2015).
The wife has alleged in previous documents that the husband has an available income of approximately $4 Million per year. The husband denies this.
The husband maintains in his affidavit filed on 25 July 2014 that the Hall Group’s assets include residential real estate, commercial properties and businesses. He maintains that the group also has debts in excess of $50 Million. (Paragraph 6 of the affidavit filed on 25 July 2014). He refers to himself as a self-employed property developer and landlord. Paragraph 5 of his affidavit states:
… I own freehold properties via a number of private corporate entities, which I collectively refer to as the “[Hall Group]”…”
In that affidavit he declares at paragraph 7:
I do not receive income from the [Hall Group] or draw a regular salary. I meet my personal expenses (including those of the wife and I during our marriage since separation) by drawing from one of the [Hall Group] entities, the [X Trust].
He then refers to his expenses being debited against his loan account and receiving a transition to retirement pension.
The husband maintained that his loan account with the X Trust was $4.27 Million in deficit.
In that affidavit he also refers to not being able to pay the periodic maintenance “because I simply do not have the money”. He then alleges that the outgoings of the Hall Group have exceeded its monthly income and the group is operating at “substantial loss”.
The husband opposes the sale of the Suburb L property on the basis that he has lived in the property since 1996 and would have nowhere else to live if the property was sold.
He also claims that he has shifted the Hall Group’s operations to the Suburb L property and that he owned the property prior to his relationship with the wife.
The wife opposes the sale of the W Street properties.
The wife seeks to retain the W Street properties by way of final property settlement orders.
The husband seeks the sale of the W Street properties to reduce the interest payments due and payable on the loan.
The parties borrowed $1.6 Million from the Hall Group entity, the X Trust, which then borrowed money from the National Australia Bank (“the NAB”), which has secured a mortgage over the W Street properties. The W Street properties are not currently let.
The husband alleges that the wife has an interest in her late father’s estate. The extent of the wife’s income or asset entitlement from the estate has not yet been determined.
The husband alleges that the W Street properties are not “habitable” (paragraph 27.2 of his affidavit filed on 25 July 2014).

The Law

Section 79 of the Family Law Act 1975 (Cth) (“the Act”) provides:
Section 79
Alteration of property interests
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy Trustee in the vested bankruptcy property;
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)    an order requiring:
(i)     either or both of the parties to the marriage; or
(ii)    the relevant bankruptcy Trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
…
Subsection 75(2) is relevant as it is referred to in subsection 79(4)(e) of the Act. Subsection 75(2) states:
Section 75(2)
(2)    The matters to be taken into account are:
(a)     the age and state of health of each of the parties; and
(b)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; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)     himself or herself; and
(ii)    a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)     any law of the Commonwealth, of a State or Territory or of another country; or
(ii)    any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person -- the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i)     the property of the parties; or
(ii)    vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i)a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of the person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.

Section 80 of the Act provides the Court with powers.
Section 80
(1)The Court in exercising its powers under this Part, may do any or all of the following:
…
(ba)order that a specified transfer or settlement of property be made by way of maintenance for a party to a marriage;
(c)order that payment of any sum ordered to be paid be wholly or partly secured in such manner as the court directs;
(d)order that any necessary deed or instrument be executed and that such documents of title be produced or such other things be done as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order;
…
(i)impose terms and conditions;
…
(k)make any other order (whether or not of the same nature as those mentioned in the preceding paragraphs of this section), which it thinks it is necessary to make to do justice, and
(l)subject to this Act and the applicable Rules of Court, make an order under this Part at any time before or after the making of a decree under another Part.
(2)The making of an order of a kind referred to in paragraph (1)(ba), or of any other order under this Part, in relation to the maintenance of a party to a marriage does not prevent a court from making a subsequent order in relation to the maintenance of the party.
(3)The applicable Rules of Court may make provision with respect to the making of orders under this Part in relation to the maintenance of parties to marriages (whether as to their form or otherwise) for the purpose of facilitating their enforcement and the collection of maintenance payable under them.
Part XIII of the Act deals with the enforcement of decrees. These include the powers of the Court to make rules in relation to enforcement including orders for the sale of real or personal property (see r 20.05 and r 20.07 (d)).
The Court must consider in proper cases whether the application for enforcement should be granted or refused, taking into account the particular circumstances of the matter in dispute.
Section 117 of the Act provides as follows:
(1)Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.”
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer;
(g)such other matters as the court considers relevant.

Discussion

The wife maintains that the husband’s application to sell the W Street, Suburb F properties is an abuse of process and the Court is functus officio. The husband unsuccessfully sought orders for the sale of the W Street properties when rulings were made by order on 10 December 2013, continuing the order restraining the husband from dealing with any assets, save in the usual course of business and without giving the wife 14 days written notice.
Subsequently, specific orders were made on 17 June 2014 restraining the husband from selling or attempting to sell the W Street properties. (See paragraph 4 of the Orders of 17 June 2014). These orders are the subject of appeal.
The wife’s application to enforce the orders for spousal maintenance is an appropriate application. At the date of the hearing in September 2014 the husband had not made any payment of spousal maintenance.
In the documents the husband alleges that he is unable to pay the spouse maintenance due to his precarious financial position. He also alleges that he did not pay the outgoings because the wife did not send the bills to him. This is inconsistent.
In earlier documents filed by the husband, which resulted in the spouse maintenance order, the husband disclosed sufficient assets and income for the various entities in the group to justify the order for spousal maintenance.
The order of 23 October 2013 restrained the husband from disposing of or dealing with any asset save and except in the usual course of business and without giving the wife 14 days written notice.
The husband now seeks to sell the W Street properties which the wife wishes to retain.
Taking into account the husband’s previously disclosed gross annual income and the provision of very limited information concerning the current financial circumstances of the Hall Group, the husband’s retention and sole use of the valuable Suburb L property at the same time as his failure to meet orders of the Court for spouse maintenance is significant.
It is also however significant that there is a substantial difference between the amount owing to the wife for spouse maintenance (which is an order the subject of an appeal) and the value of the Suburb L property. The sum of $53,000 (being the amount the wife alleges was due to her pursuant to the orders) is a very small proportion of the value of the Suburb L property which could be as high as $7 Million.
It is also significant that whilst the husband has denied the wife’s allegations that he informed her that his income was $4 Million per annum, he has not provided evidence of his income from the Hall Group save and except he now says that the Hall Group does not pay him any income but he borrows money from the Group to pay his personal expenses.
It is just and equitable in these circumstances to make an order which provides for the husband to have the capacity to borrow money using the Suburb L property as security provided that the money he obtains from such borrowings are paid to the wife’s solicitors trust account to be distributed to the wife to pay the arrears of maintenance outgoings and the ongoing maintenance as it falls due. A sufficient sum should be borrowed to enable the future payments to be met. If the husband does not take steps to secure this borrowing within the allotted time, then it would be just and equitable for the Suburb L property to be sold.
It is also appropriate to give the wife the authority to conduct the sale and for the appropriate ancillary orders to be made if the husband fails to comply with the orders.
The orders for enforcement should however not operate until after the delivery of the judgment in the outstanding appeals.
The wife opposes the proposed sale of the W Street properties on the basis that she wishes to retain those properties.
It would appear that either one or both of the properties are not occupied. The condition of the properties is deteriorating. The properties secure payment of $1.6 Million debt which relates to the NAB loan first mortgage. The monthly repayments are $10,000. Even if the properties at W Street were in receipt of rental income the evidence suggests that it would not exceed $1,500 gross per calendar month.
The sale of the W Street properties and repayment of the debt secured on the properties would be a significant improvement to the financial circumstances of the parties.
The husband’s affidavit filed on 25 July 2014 sets out arrangements made by the husband in relation to the taxation liabilities for the Hall Group and the concerns that the drawings the husband has made from the X Trust loan account will be treated as income and result in a significant tax liability for both the husband and wife.
The order which the husband seeks in the Response to the Application in a Case (being the Response filed on 25 July 2014) is:
that the wife do all such acts and things and sign all such documents as may be necessary to sell the properties situate at and known as [AA and BB W Street, Suburb F] in the State of South Australia.
The documents indicate that the properties and AA and BB W Street are registered in the joint names of the husband and the wife.
In the affidavit filed on 25 July 2014 the husband maintains that he received an offer in March 2014 for the W Street properties of $1.45 Million and as at July 2014 he believed the intended purchaser was still interested. In that affidavit the husband also deposes to having no objection to selling the properties to the wife “provided the sale price is at least $1.45 Million”.
The affidavit also refers to documents which apparently disclosed that in May 2014 the wife obtained a personal bank overdraft from BankSA for $1 Million unsecured save for a guarantee provided by the wife’s mother.
The sale of the W Street properties would significantly reduce the liabilities of the parties and increase the capacity for the husband to meet and continue to meet the orders for spouse maintenance and payment of outgoings.
As required by the authority of Stanford v Stanford (2012) 247 CLR 108 it is necessary to determine whether any order would be just and equitable in the circumstances. This principle also applies to interim orders and in my view to this type of order.
All of the factors referred to in s 79 and s 75 (2) which can be determined at this interim stage indicate that a sale of the properties in order to reduce significant debt would be just and equitable.
An additional factor is that the sale of the property and the reduction of debt is likely to increase the funds available to meet the day to day necessary outgoings for the whole family.
The actual orders sought by the husband in the Response to the Application in a Case filed on 25 July 2014 was in general terms seeking that the wife do all “acts and things necessary to sell the properties”. It did not specify any conditions about price or method of sale.
Another of the significant factors which needs to be taken into account is the husband’s previous applications to sell the W Street properties which have been dealt with by the Court. The husband has previously been unsuccessful in these applications. The current information before the Court however asserts that there has been a significant change in facts. Therefore the Court can reconsider the application by the husband for the sale of these properties.
The husband’s affidavit certainly suggests that the ATO are investigating the financial arrangements made by the husband with the Hall Group and there is a risk of substantial debts being due as a result of the taxation investigation.
The husband also requests the Court consider the wife’s financial circumstances. He refers in detail to the claim the husband makes as to the interest of the wife in her late father’s estate. These are matters which are not yet capable of being determined by the Court. Clearly the wife has not paid and has in the past maintained that she cannot pay the outgoings payable for the W Street properties.
Taking all of those factors into account these outweigh the wife’s request that the properties be retained in order that she may be granted sole ownership of them at the conclusion of the financial proceedings. The wife has not resided in the properties and these can only be considered in the past as “investment properties”.
The wife seeks orders for costs in relation to her application to attend at the former matrimonial home to collect her belongings. She also seeks costs in relation to orders sought concerning single experts. The interim orders made indicate that the wife was successful to a certain extent, but the access granted to the properties was subject to certain conditions. The husband was therefore not wholly unsuccessful. This is however only one of the factors to be brought into account when considering the provisions of s 117.
At this stage it is difficult to determine with any accuracy the financial circumstances of the parties. The Court also takes into account the conduct of both parties in relation to the proceedings and the ongoing litigation between the parties.
The wife also seeks costs of her application to enforce the spouse maintenance orders and the application in relation to the proposed sale of Suburb L. The husband has again not been wholly unsuccessful. It is important however to consider the proceedings were brought about by the husband’s failure to comply with orders of the Court.
The husband’s application for the sale of W Street properties has been successful to a certain extent but only however due to significant change in circumstances some of which relate to the risk of increased ATO payments because of the husband drawing loans, rather than obtaining an income from the business which he controls.
Weighing all of the necessary factors, including the difficulty in ascertaining the current financial circumstances of the parties and taking into account the outstanding appeals and the ongoing issues concerning disclosure, it is not appropriate, nor just and equitable, to make an order for costs save and except that the wife should have the costs of her application for enforcement of the maintenance orders.
The Court is not however satisfied that special circumstances exist which should warrant an order being made that the wife’s costs be on an indemnity basis, rather they should be on the appropriate scale.
Otherwise, each party should bear their own costs of and incidental to the interim proceedings.
For the above reasons I make the orders set out at the commencement of these reasons.

I certify that the preceding seventy-seven (77) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 2 April 2015.

Associate:

Date: 2 April 2015

[2015] FamCA 219

2 April 2015

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Equity & Trusts

Legal Concepts

Costs

Remedies

Injunction

Appeal

Procedural Fairness

Res Judicata