Hanas & Jolaha (No. 4)
[2019] FamCA 483
•23 July 2019
FAMILY COURT OF AUSTRALIA
| HANAS & JOLAHA (NO. 4) | [2019] FamCA 483 |
| FAMILY LAW – PROPERTY – Interim application – Where the wife seeks orders for spousal maintenance and partial property distribution in the sum of $50,000 for litigation funding – Where the husband seeks orders that the wife’s application for financial relief to be dismissed – Where the husband is the primary financial contributor – Where the wife is the primary carer of the child of the relationship and homemaker – Where the husband has predominant control of and access to the matrimonial property pool–– Where the Court finds, that, it is both in the interest of justice and just and equitable for an order to be made for a partial property distribution pursuant to ss 79 and 80 to assist in payment of the wife’s legal fees – Orders made for the amount of $50,000 to be paid to the wife – Where the Court finds that the wife is unable to adequately support herself as a result of having the primary care of a child under the age of 18 years – Where the Court finds that the husband has financial resources which enable him to pay spousal maintenance – Orders made for periodic spousal maintenance – Orders made for spousal maintenance for wife’s anticipated rental accommodation – Order for lump sum maintenance made to pay the rental bond. |
| Family Law Act 1975 (Cth) ss 72, 74, 75, 79, 80, 114, 117. Family Law Rules 2004 r 4.15. The Constitution of Australia ss 51(xxi), 51(xxii). |
| Aitken & Murphy (No 2) [2012] FamCA 239 AMS v AIF (1999) 163 ALR 501 Bing & Bing (2007) FLC 93-318 Brown & Brown (2007) FLC 93-316 Carlisle & Carlisle [2017] FCCA 1956 Carmel-Fevia & Fevia (No. 3) [2012] FamCA 631 Davidson & Davidson (No. 2) (1994) FLC 92-469 Dickons v Dickons (2012) 50 FamLR 244 Dougherty & Dougherty (1987) 163 CLR 278. Farmer v Bramley (2000) 27 FamLR 316 Felice & Felice [2011] FamCA 162 Gabel & Yardley (2008) FLC 93-386 Gazzo & Comptroller of Stamps (Vic); Ex Parte Attorney-General (Vic) (1981) 149 CLR 227 Gresham & Gresham [2018] FamCA 841 Grier & Malphas (2016) 55 FamLR 107 Harris & Harris (1993) FLC 92-378 Hyman v Hyman (1929) 98 LJP 91 In the Marriage of J.M. and Y.A. Redman (1987) FLC 91-805 Iphostrou & Iphostrou and Ors [2011] FamCA 20 M v M (2006) 36 FamLR 97 Medlow & Medlow (2016) 54 FamLR 389 Monaghan and Farrer [2018] FamCA 178 Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578 R v Watson; Ex parte Armstrong (1976) 136 CLR 248 Saxena and Saxena (2006) FLC 93-268 Stanford & Stanford (2012) FLC 93-518 Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 Vautin & Vautin (1998) 23 FamLR 627 FLC Wenz & Archer (2008) 40 FamLR 212 White v Overland [2001] FCA 1333 Yeh & Jyu [2014] FamCA 162 Yunghanns & Ors v Yunghanns & Ors (1999) FLC 92-836 Zschokke & Zschokke (1996) FLC 92-693 |
| APPLICANT: | Ms Hanas |
| RESPONDENT: | Mr Jolaha |
| FILE NUMBER: | SYC113 | of | 2019 |
| DATE DELIVERED: | 23 July 2019 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | McClelland DCJ |
| HEARING DATE: | 30 May 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Christie SC |
| SOLICITOR FOR THE APPLICANT: | John R Quinn & Co |
| COUNSEL FOR THE RESPONDENT: | Mr Richardson SC |
| SOLICITOR FOR THE RESPONDENT: | York Law Family Law Specialist |
Orders
The Court orders, pending further order, that:
That within 28 days, the husband pay to the wife the sum of $50,000 by way of interim property distribution, such sum to be retained by the wife's solicitors and applied to the wife's legal expenses related to these proceedings.
That by way of periodic spousal maintenance pursuant to s 74 of the Family Law Act 1975 (Cth), the husband pay to the wife cleared funds in the sum of $720 per week into an account nominated by the wife, the first payment to be made within seven (7) days of this order.
That the husband pay the wife's rent up to an amount of $650 per week from the date of commencement of her next residential lease by payment directly to the real estate agency managing the property, such payments are to be paid in advance if required by the agency.
That the husband pay the wife's rental bond up to the amount of $2,600 as required by the real estate agency, and be reimbursed the bond sum upon the termination of the rental lease.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hanas & Jolaha has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC113 of 2019
| Ms Hanas |
Applicant
And
| Mr Jolaha |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter concerns an application of the wife, Ms Hanas, for interim relief in the form of partial property distribution for litigation funding, and for lump sum and periodic spousal maintenance. By his Amended Response to Initiating Application filed 14 May 2019, the husband, Mr Jolaha, sought that those parts of the wife’s application be dismissed.
The parties in this matter were married in 2010 and separated on 31 August 2018. Since their separation the parties have been involved in extensive litigation both in Australia and the United States of America (‘United States’).
The wife has been successful in obtaining an order for a partial distribution of the parties’ matrimonial property to assist her to fund her legal expenses relating to these proceedings, as well as obtaining an order for spousal maintenance at a lesser amount than that sought in her Amending Initiating Application filed 15 March 2019. The wife has also been successful in obtaining orders to assist her with rehousing. Otherwise, the wife has been unsuccessful in respect to the balance her application.
Background
In 1975 in Country C, the husband was born. He is currently aged 43 years.
In 1988 in Country B, the wife was born. She is currently 30 years.
In August 1998, the husband purchased a property with his brother and sister at K Street Suburb L. The mortgage secured over the property had been fully paid by the time of the parties marriage. The property has been rented out since the time of its purchase.
In December 2004, the husband purchased a property with his brother at M Street Suburb L. The husband contends that the purchase price of the property was $260,000 and at the date of the parties’ marriage the mortgage balance was $160,000.
In May 2008, the husband purchased a property at J Street Sydney. The purchase price was $730,000. The husband obtained a mortgage of $672,000 to facilitate the purchase. For a period of time, prior to the parties’ marriage, the husband lived in the property, however, since that time it has been rented out.
In March 2009 the parties met.
In June 2010 the husband, together with his brother and sister, exchanged contracts in respect to a property at N Street Suburb L. The transaction was subsequently completed. The purchase price was $293,000. To facilitate the purchase the husband’s parents lent $100,000 and the husband’s uncle lent $50,000. They also obtained a loan from O Limited for $160,000. That property has, at all times, been rented out.
In 2010, the maternal father won a lottery prize of $96,931.36. The wife contends that she opened an account in her name to enable part of the proceeds of that win, an amount of $75,945.43 to be paid into a Commonwealth Bank Goal Saver account.
In 2010, the parties married and commenced cohabitation. The wife contends that, at the time she had a motor vehicle worth a proximally $16,000 in savings of approximately $20,000. At the time the husband had the real property to which I have earlier referred.
In April 2014, the wife graduated from P University with a degree and she commenced employment with a large firm on a salary of $57,000 per annum.
In November 2014, the wife registered a company through which it was intended that the wife’s mother would operate a business. The wife contends that she did not, however, commence operation because it did not find favour with members of the husband’s family. The husband contends that the wife’s family have substantial interests in such companies.
In August 2016, the wife borrowed amount of $6,800 from her mother for a holiday. Those funds were deposited into an account which was supplemented by a $7,000 contribution by the husband.
In October 2016, the wife left her employment with the large firm. She contends that she did this in order for the husband to take up an employment opportunity that he had been offered to him. The position that was offered was located in City D in the United States. The husband does not accept this was the motive for the wife leaving her employment because he did not move to City D until 20 April 2017.
On 20 April 2017, the parties moved to City D to enable the husband to take up employment.
In 2017, the party’s daughter was born. The wife contends that she has been the child’s primary carer since birth.
On 1 August 2017, the wife contends that her mother visited the parties in City D and brought gifts totalling $5,000 in value. The wife contends that gesture was repeated in July 2018.
On 31 August 2018, the parties separated giving rise to the extensive litigation to which I have earlier referred.
Competing applications
The wife’s application
The interim financial relief sought by the wife are set out at paragraphs 7-22 of her Amended Initiating Application filed 15 March 2019 as follows;
7. That within 28 days the husband pay to the wife the sum of $50,000 by way of interim costs, such sum to be retained by the wife's solicitors and applied to the wife's legal expenses related to these proceedings.
8. That in the alternative to order 7 above, orders 9 to 14 below apply.
9. That within 7 days after any payment by or on behalf of the husband of accounts rendered by his solicitors (or counsel) in relation to expenses associated with this case ("any payment by the husband of his own account") the husband pay or cause to be paid the same sum of money to the solicitors for the wife.
10. That within 24 hours after any payment by the husband of his own account the husband cause to be given to the wife's solicitors a memorandum stating the amount or amounts so paid.
11. That any payment by the husband of his own account shall be held in trust by the solicitors for the husband and not applied in payment of their account until such time as the payment to the wife's solicitors as required by order 9 has occurred.
12. In the event that the payment to the solicitors for the wife referred to in order 9 of these orders is not made within the 7 days stipulated therein, then husband is to thereupon direct his solicitors to pay 100 per cent of any payment by the husband of his own account to the solicitors for the wife.
13. That the amounts paid pursuant to these orders to the solicitors for the wife are only to be applied by them in payment of the costs and disbursements incurred by the wife in the conduct of these proceedings.
14. That order 9 have effect from 11 January, 2019 and capture only accounts rendered to the husband for work performed by his solicitors or counsel on or after 11 January, 2019 and the husband make all payments that would have been due under this order had it been then pronounced within 7 days of the date of this order.
15. That by way of periodic spouse maintenance pursuant to Section 74 of the Family Law Act 1975 (Cth) the husband pay to the wife cleared funds in the sum of $1,000.00 per week into an account nominated by the wife, the first payment within 7 days of this order.
16. That the husband pay the wife's rent up to an amount of $650.00 per week from the date of commencement of her next residential lease by payment directly to the real estate agency managing the property, such payments to be paid in advance if required by the agency.
17. That the husband pay the wife's rental bond as required by the real estate agency and be reimbursed the bond sum upon the termination of the rental lease.
18. That the husband pay, as and when same fall due and payable, all policy premiums to ensure that the wife and the child remain listed on and covered by, at the highest level, the private health insurance scheme on which they are currently listed.
19. That the husband purchase a motor vehicle for the wife registered in the wife's name, with such motor vehicle to be of the wife's choosing up to the sum of $30,000.00; and the husband ensure the motor vehicle is insured for compulsory third party insurance and comprehensive insurance.
20. That within 14 days the husband pay the outstanding fees of the wife's attorney, Q Law Office, in the United States of America in the sum of USD$4,985.00.
21. That the husband indemnify the wife against any other outstanding legal fees owed by either or both of them in the United States relating to the proceedings arising out of the marital relationship between themselves.
22. That the husband pay the wife's costs of and incidental to this Application.
At the interim hearing, the wife did not press her application for proposed order 21.
The husband’s response
The husband, in his response filed on 14 May 2019, sought an order “that the interim financial relief sought by the wife in the wife’s amended initiating application filed on 15 March 2019 be dismissed.”
Evidence
The wife relied upon the following documents:
a)Amended Initiating Application filed 15 March 2019;
b)Affidavit of Ms Hanas filed 15 March 2019 (other than paragraphs 10 to 13, 16 to 95);
c)Affidavit of Ms Hanas filed 15 May 2019;
d)Affidavit of Ms Hanas filed in court 30 May 2019;
e)Affidavit of Mr S filed 15 May 2019;
f)Financial Statement of Ms Hanas filed 15 May 2019; and
g)Financial Statement of Mr Jolaha filed 10 April 2019.
The husband relied upon the following documents:
a)Amended Response to Initiating Application filed 14 May 2019.
b)Affidavit of Mr Jolaha filed 10 April 2019 ([134]-[217]);
c)Financial Statement of Mr Jolaha filed 14 May 2019; and
The following exhibits were relied upon:
a)Costs notification by respondent husband dated 29 May 2019 (Exhibit A);
b)Husbands annexures to Affidavit filed 10 April 2019 and tendered at the interim hearing on 11 April 2019 (Exhibit B);
c)Wife’s email to US Attorney and annexure dated 18 November 2018 and orders made on 31 October 2018 in the F County Court (Exhibit C);
d)Two statements for bank accounts in the husband’s name (Exhibit D);
e)Tender bundle to Affidavit of wife sworn 15 May 2019 (Exhibit E);
f)Tender bundle to Affidavit of Mr S sworn 15 May 2019 (Exhibit F);
g)Costs notification by applicant wife dated 30 May 2019 (Exhibit G);
h)Tender bundle to Affidavit of wife sworn 14 March 2019 (Exhibit H);
i)Schedule regarding disclosure documents provided by the wife dated 28 May 2019 (Exhibit I);
j)Tax returns of the wife for 2015-16 financial year (Exhibit J);
k)Receipt from Target at Suburb R relating to cash purchase dated 11 December 2018 (Exhibit K);
l)Receipts from a butcher, Coles and Aldi (Exhibit L);
m)MasterCard debit dockets (Exhibits M);
n)Bank statements (Exhibit N);
Property
In her Affidavit, filed 15 March 2019, the wife contends that the value of the total property of the parties is $2,689,071 and that the parties’ liabilities total $701,830. This equates to net assets of $1,987,241.
The husband contends that the property pool consists of assets totalling $2,324,092 and that the parties’ liabilities total $797,717. That equates to net assets of $1,526,375. For the purpose of these proceedings, I accept the contentions of the husband.
The parties are in agreement that, other than a property J Street Sydney, the real property to which the husband has an interest is owned jointly with his siblings. The wife values the J Street property at $1,725,000. The husband values the property at $1,400,000. Again, for the purpose of these proceedings, I accept the husband’s contention in respect to the value of that property.
The husband contends that, at the time of cohabitation, his initial contributions to the matrimonial property totalled $1,399,653 and that his liabilities totalled $854,382. This left a net amount, which the husband contends was his initial contribution valued at $545,271. That figure included superannuation of $107,653. For the purpose of these proceedings I accept the contentions of the husband in respect to his initial contributions. The wife contends that she had a motor vehicle and savings of approximately $20,000 at the time of cohabitation.
Accordingly, on the basis of the husband’s evidence, the value of the parties’ matrimonial property has increased by $945,104 since the parties’ commenced cohabitation. As will be discussed, the husband, however, contends that at the final hearing it is unlikely the wife would receive any adjustment of property in her favour. For reasons which I set out, I do not accept that to be the case.
Issues for determination
The issues arising from the wife’s Amended Initiating Application for determination in these interim proceedings are as follows;
a)Should there be an interim property settlement of $50,000?
b)In the alternative, should there be an order for the payment of the wife’s legal costs on what is commonly known as a dollar for dollar basis?
c)Should there be an order for the husband to pay the wife interim spousal maintenance and if so, in what amount?
d)Should the husband be required to pay the amount of up to $650 per week by way of interim spousal maintenance in respect to the wife’s anticipated rental accommodation?
e)Should there be a lump sum payment, by way of interim spousal maintenance, in respect to any rental bond that may be incurred by the wife?
f)Should the husband be ordered to pay, by way of interim spousal maintenance, the wife’s private health insurance?
g)Should the husband be required to purchase a motor vehicle for the wife to the value of $30,000, as selected by her, and to meet the cost of registration and insurance for that vehicle?
h)Should there be a further order for the payment of the sum of $4985 to enable the wife to pay outstanding legal costs to her American attorney?
Partial property distribution – litigation funding order
Should there be an interim property settlement of $50,000?
As noted above, the wife seeks an interim distribution of property in the sum of $50,000 in order to fund ongoing and retrospective litigation costs associated with these proceedings.
Sections 79 and 80(1)(h) of the Act confer power on the Court to make orders for an interim property settlement including, as in this instance, for litigation funding. By way of summary, the relevant legal principles that I apply in this matter are as follows;
·Section 79 confers a discreet power to make orders for property settlement and the Court may exercise that power through “a succession of orders until the power ... is exhausted” or until a final order dealing with all the known property of the parties is made: Gabel & Yardley (2008) FLC 93-386, as cited in Strahan & Strahan (Interim Property Orders) at 85,640.
·Section 80 is not, in itself, a source of jurisdiction for such an order to be made. Rather, the section is an “enabling provision” that provides various ways in which the general power in s 79 may be exercised in individual cases: Davidson & Davidson (No. 2) (1994) FLC 92-469 and Yunghanns & Ors v Yunghanns & Ors (1999) FLC 92-836. This includes, by s 80(1)(h), the making of “a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order”.
There are two stages to the hearing of an application for interim property adjustment orders: Strahan & Strahan (supra) at 85,645 – 85,646.
·The first stage is a “procedural step” which requires an analysis of whether the circumstances of the case trigger the Court’s power to invoke s 80(1)(h) to make an order for partial property adjustment. At this stage, the “overarching consideration” is the interests of justice.
·The second stage is the “substantive step” where the provisions of s 79 must be considered and applied, but with limitations, given that it is not the final hearing.
The overriding consideration at all stages of the process is that the Court is satisfied that it is “just and equitable” to make the order in circumstances before the Court: Stanford & Stanford (2012) FLC 93-518 at 86,640 – 86,642.
In Medlow & Medlow (2016) 54 Fam LR 389 at 410, the Full Court said:
The onus was clearly upon [the applicant for relief] to establish that there were sufficient assets available for the interim distribution and that the effect of any interim order was capable of being reversed as part of the final hearing or at least would not defeat [the respondent]’s property claim. The onus was not on the [respondent] to adduce such evidence.
In that regard, in Aitken & Murphy (No 2) [2012] FamCA 239 at 158, Young J said that in considering whether to make an order for a partial distribution of property prior to final hearing, “care must be taken not to potentially defeat any party’s claim or legitimate expectations in a final hearing”.
Given that in the circumstances of an interim property hearing, an applicant is effectively seeking access to their own funds, it is unnecessary for a “detailed inquiry as to the purpose for which the funds are to be used”: Felice & Felice [2011] FamCA 162 at 12. Nevertheless, an applicant is required to show more “than the mere fact that, upon a final hearing, they would receive the property being sought (or an amount in excess of them) from the other party”: Strahan & Strahan (supra) at 85,646.
While the usual s 79 considerations apply to the second substantive step in the process, a detailed analysis of those considerations is not required at an interim hearing: Strahan & Strahan (supra) at 85,646.
However, in referring to these considerations, the exercise of the Court’s jurisdiction should be conducted with an appreciation that “as a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings”: Strahan & Strahan (supra) at 85,656, citing Harris & Harris (1993) FLC 92-378.
There are a variety of other circumstances in which interim property settlement orders have been made, such as those summarised by Riethmuller FM (as he then was) in Wenz & Archer (2008) 40 Fam LR 212. Relevantly, for the purpose of these proceedings this includes, as in Wenz & Archer (supra) at 53, where a party may need access to resources to “meet debts which may result in the party being pursued by creditors.”
In evaluating an application for a litigation funding order, it is appropriate to have some regard to the fact that, in family law proceedings, one party may have the predominance of resources: Strahan & Strahan at 85,643 – citing, with approval, Riethmuller FM in Wenz v Archer (supra) at 53.
In that respect the authorities are quite clear that, wherever possible, the Court should endeavour to even out the playing field between litigants where one party, in this case the husband, has predominant control of and access to the matrimonial property pool: Iphostrou & Iphostrou and Ors [2011] FamCA 20 at 60.
In the context of interim property orders, in Strahan & Strahan (supra) at 85,631, Boland and O’Ryan JJ analysed relevant authorities and noted:
In Poletti and Poletti Nygh J, when describing an application for “interim costs”, referred to the reasons of the Full Court in Wilson and Wilson and said it is a “situation where one party to the marriage controls almost exclusively what might be described as the patrimony of the parties and has control of the bulk of the assets and funds of the parties, where an order may be made to ensure that the other party, who does not have the fortune of controlling those funds, at least has an equal or near equal opportunity to present his or her case”: see also In the Marriage of Polletti at 796 per the Full Court (Ellis, Strauss and Butler JJ). The Full Court in Zschokke at 83,220 made a number of relevant remarks about the “desirability of legal representation for both parties in family law proceedings”. (Citations omitted)
The husband contends that the wife cannot satisfy the first of the criteria identified in Strahan & Strahan (supra). He contends that the Court cannot be satisfied that it is in the interests of justice for there to be a partial distribution of property to the wife in the sum of $50,000 to enable her to pay her legal fees. In that context, the husband notes that the wife’s solicitor has provided an Affidavit indicating he is not prepared to continue acting on behalf of the wife unless his fees are paid. The husband refers to a letter from the wife’s solicitors to her dated 30 May 2019 (‘Exhibit G’ in the proceedings) noting that the wife currently owes $69,962.94 in legal fees. Even if the wife receives an amount of $50,000 this will leave a shortfall in respect to the debt to her solicitors of $19,962.94. The husband notes that in ‘Exhibit G’, the wife’s legal advisers advise the wife that her anticipated legal fees until final hearing will be in the order of $200,000. In other words, the husband contends that the payment of an amount of $50,000 to the wife, at this point in time, will not satisfy the purpose for which she seeks the funds. That is, she will not receive an amount that will secure her legal representation for the duration of the proceedings.
In that respect senior counsel for the husband referred to a decision of Austin J in Monaghan & Farrer [2018] FamCA 178, where his Honour declined to make a litigation funding order pursuant to s 117 of the Act in circumstances where the funds sought by the husband, in that case, “would be applied in only partial discharge of an existing liability” for his legal fees rather than securing ongoing representation.
There is, however, in my view, a significant difference in the issues that were being considered by Austin J to the facts of this case. In particular, in considering the husband’s application in Monaghan & Farrer (supra) his Honour was considering whether to exercise discretion to make an order for costs in circumstances where s 117(1) provides that, subject to the Court being satisfied of the matters set out in s 117(2A), there is a presumption that each party “shall bear his or her own costs”.
Of relevance to his Honour declining to make the orders sought by the husband, in that case, was the fact that the husband had already incurred legal fees of $230,000 and he was seeking an additional $200,000 to meet anticipated legal fees for the remainder of the proceedings. His Honour stated:
… The applicant has already incurred some $230,000 in legal fees to only reach the point of prosecuting his application to obtain $200,000 in legal fees from the respondent. It would be unhelpful to make any further remarks about the irony of that situation.
In this case the wife has not, to date, incurred legal fees of the magnitude incurred by the applicant in Monaghan & Farrar (supra) and she is not seeking an amount in respect to the totality of potential legal fees as notified to her in ‘Exhibit G’.
It stands to reason, however, that obtaining an amount that will facilitate the wife in discharging the bulk of what she currently owes her lawyers will make it easier for her to obtain funds to pay the remaining shortfall. Further, for reasons set out in Gresham & Gresham [2018] FamCA 841 at 69-77, I am of the view that there is an ongoing obligation on parties engaged in litigation before this Court to attempt to resolve issues in dispute. In those circumstances it is entirely appropriate that, rather than seeking the totality of potentially payable legal fees to the conclusion of hearing that the wife has sought a lesser amount. In that context, I note that the parties have made plans to attend a mediation which, subject to the parties adopting a realistic position is in respect to their respective contentions, has the prospect of resolving their dispute.
Accordingly, the reasons advanced by Austin J for declining to exercise his discretion to make a litigation funding order pursuant to s 117 in Monaghan & Farrar (supra) are not directly applicable to the circumstances of this case and do not constrain the exercise of my discretion to make a litigation funding order in favour of the wife pursuant to ss 79 and 80 of the Act.
Even if, however, I am wrong in not applying the decision of Monaghan & Farrar (supra) to the facts of this case, I note that authorities confirm that it may nonetheless be in the interests of justice for there to be an order for partial distribution of matrimonial property to facilitate a party paying a debt: Wenz v Archer (supra) at 53. There has been no suggestion that the wife’s is not indebted to her lawyers to the extent set out in ‘Exhibit G’ or that that debt has been improperly incurred. In those circumstances I am satisfied that it is in the interests of justice for there to be an order for partial property distribution to the wife to enable her to pay a significant portion of the legal fees that she has incurred.
In terms of the second criteria identified in Strahan & Strahan (supra) that is, whether it is just and equitable to make an order for partial property distribution, I have earlier referred to the decision of Young J in Aitken & Murphy (No 2) (supra) at 158. The principle adumbrated in that case is to the effect that, in making an order for a partial distribution of property “care must be taken not to potentially defeat any party’s claim or legitimate expectations in a final hearing”. Senior counsel for the husband argued that the operation of s 79 of the Act is necessarily constrained by the constitutional underpinning of the Act which relevantly includes the marriage power set out in placita s 51(xxi) of the Constitution and the divorce and matrimonial causes power set out in placita s 51(xxii) of the Constitution.
The husband contends that, in circumstances where the husband owned an interest in property at the beginning of the parties marriage and to which neither he nor the wife have made any financial or non-financial contribution during the course of their relationship, he has a legitimate expectation that there will be no adjustment of property in favour of the wife at final hearing.
This is because, the husband contends that, at final hearing, the wife will be unable to establish a sufficient connection between the properties and the assessment of any contribution she has made in terms of s 79(4) of the Act.
Authorities relied upon by senior counsel for the husband to support that contention included the flowing decisions of the High Court:
i)Gazzo & Comptroller of Stamps (Vic); Ex Parte Attorney-General (Vic) (1981) 149 CLR 227; and
j)Dougherty & Dougherty (1987) 163 CLR 278.
Senior counsel for the husband also contended that a decision with comparable facts to the present case is the decision of Farmer v Bramley (2000) 27 Fam LR 316 at 374 where Guest J said;
…it is arguable in my view that a claim against a property which was not in existence during the course of the marriage and which has no nexus or connection with the circumstances of the marriage cannot be a claim which arises out of the marital relationship. For a claim to arise out of the marital relationship, there must be some nexus between the property and the circumstances of the marriage. Such a circumstance for example, might well be satisfied where a post separation windfall had its evolution, at least to some extent, in a business which was built up during the course of the marriage…(Emphasis added)
However, as will be explained immediately below, it is my view that the husband’s contention that there is no nexus or connection between the conduct of the parties within the marriage and the property that is in the name of the husband is based on a false premise. In that regard, the Full Court in Dickons v Dickons (2012) 50 Fam LR 244 at 249 explained the existence of the potential nexus or connection in the following terms:
A financial contribution can be made indirectly by, for example, the use by parties of income or assets for purpose A freeing up the use of other income or assets for purpose B. Moreover, a particular financial contribution might have been used wholly in discretionary expenditure which, but for that contribution, would not have been available to the parties or would have required borrowings or a diminution of capital. Such a contribution can also, in that way, be seen, for example, as an indirect contribution to the conservation of property.
Any and all such contributions, whether or not they sound in, or are directly linked to, the property available for distribution, should be considered and assessed together with the nature, form and extent of all other contributions of all types contemplated otherwise by s 79(4).
The decision of Dickson v Dickson, makes it clear that even if it is the case that, at final hearing, the wife is unable to establish a direct link between her contributions as a wife and homemaker to the property that is in the husband’s name, that will not preclude a finding that she is entitled to an adjustment of property pursuant to s 79 of the Act. The Full Court in Dickson v Dickson (supra) confirmed that in assessing the relative contributions of the parties the task is to examine “the nature, form and extent of contributions” made by each of the parties, rather than to attempt to identify a causal link to the asserted “value” of a particular item of property.
In undertaking that task, authorities confirm that, in a work-value sense, work undertaken by a party as a homemaker and parent is to be equally valued to that of a professional with considerable training. In that context, in Carmel-Fevia & Fevia (No. 3) [2012] FamCA 631 at 113, Cronin J summarised the applicable principle, as he derived it from authority, in the following terms:
In Rolfe v Rolfe (1979) FLC 90-629, Evatt CJ said that where one party was earning an income and the other fulfilling responsibility at home, there was no reason to attach greater value to the contribution of one of them to that of the other because that was the way the parties arranged their affairs. Her Honour said that the contribution of each should be given equal value.
That approach has more recently been confirmed by the Full Court in Grier & Malphas (2016) 55 Fam LR 107 at 135 where the majority, Murphy and Kent JJ explain:
What skill or skills a person brings to a relationship which are said to result in the making of money or accumulation of capital is no more or less relevant than the skill set a person brings to a relationship as a homemaker and parent, or as the performer of two roles as a homemaker and parent and income earner. The “skill set” or “potential” of “talent” a party brings to the role or roles which the parties have determined each will undertake in the relationship is, for s 79’s purposes, relevant only to how those attributes manifest themselves in what s 79 says must be considered.
It is not a party’s “skill set” which must be considered, but their contributions. Contributions are the product of many things: talent, industry, selflessness and, indeed, luck, to name a few. It is the contributions (in all senses in which that expression is used in s 79) that fall for consideration and assessment, not the combination of factors that has created the capacity for the making of those contributions.
In summary, a contention by a party that an interim distribution of property has the potential to deprive them of the remedy they are seeking at final hearing must be plausible. With respect to the husband, in circumstances where the matrimonial property of the parties has increased by $945,104 since the parties commenced cohabitation, and the wife has clearly made contributions as a parent and homemaker, the argument that there will be no distribution of any matrimonial property to the wife is unsustainable.
In that respect while the husband, in his Affidavit filed on 10 April 2019, is not particularly generous to the wife in terms of recognising the work that she undertook as a homemaker and parent, at paragraph 175, he at least acknowledges that for a period that the wife “generally cleaned the bathroom and the mopping.”
Further, at paragraph 133.12 of the husband’s Affidavit filed 10 April 2019, the husband states that he cared for the parties child, X, from the time she woke up of a morning “which was generally about 5:30 AM to 6am until he left for work at 8:45 AM.” He also states that he generally returned home by about 5:45 PM and again assumed the role of caring for the child until she was put to bed. Leaving aside the question as to who looked after the child when the husband presumably showered, shaved and dressed before heading off to work, that necessarily means that the wife and/or her mother cared for the child between the hours of 8:45 AM and 5:45 PM. The wife’s effort in fulfilling that important responsibility enabled the husband to attend his place of employment to earn income and to accrue contributions to his superannuation.
It is also clear that the wife has been the child’s primary carer since the parties separated. In that respect the husband acknowledges at paragraph 184 of his Affidavit filed on 10 April 2019, that the child currently lives with the wife although she spends time with the husband.
Further, even if I am wrong in rejecting the husband’s argument that the wife is unlikely to receive a distribution of at least a portion of the party’s property to her at the final hearing pursuant to s 79 of the Act, because she cannot sustain that she has made a contribution to the property that is in the husband’s name, it is, nonetheless, clearly the case that, at the very least, the husband’s superannuation entitlement has substantially increased during the period of the parties relationship. In that respect the husband’s case outline document notes that, at the commencement of cohabitation, he had superannuation totalling $107,653 whereas, currently, his superannuation entitlement is $352,253. That is, during the course of the parties’ relationship the husband’s superannuation entitlement has increased by $244,600.
In summary, even taking a conservative approach based on my limited ability to make findings of fact in interim proceedings, I am satisfied that at the final hearing of this matter the wife will receive a distribution to her of not less than $50,000. As noted, the husband acknowledges that the parties have net assets totalling $1,526,375. I am therefore comfortably satisfied in terms of the principle adumbrated in Medlow & Medlow (supra) that, at final hearing, an interim order making a partial property distribution to the wife the sum of $50,000 is “capable of being reversed as part of the final hearing or at least would not defeat [the husband’s]’s property claim”.
A further objection by the husband to the wife’s application for a partial property distribution is that she is unable to identify a source of funds from which the amount can be paid to her. In that respect it is agreed that other than in respect to the Elizabeth Street Sydney property, the other three Fairfield properties that are in the husband’s name are jointly owned with his siblings.
This argument by the husband can be shortly dismissed. In Bing & Bing (2007) FLC 93-318 at 81,478, the Full Court said:
…The mere assertion that there are no immediately available funds to provide to the applicant to enable him or her to continue on with the proceedings cannot simply be accepted at face value. If it is apparent that one of the parties controls a vast pool of assets (irrespective of whether those assets are readily capable of liquidation) then the Court has a broad enough discretion to enable an order to be made for the provision of funds by the holder of those assets to enable the other party to continue on with litigation.
Finally it has been asserted that the husband was and remains unable to raise the capital sum sought by the wife. This is a matter which may become relevant if and when the husband defaults in the order and an enforcement application is brought. However, the question of enforcement of the order remains a separate question from the propriety of granting the order in the first place.
As noted by Cronin J, in Yeh & Jyu [2014] FamCA 162 at 17 those principles are relevant irrespective of whether the partial property settlement is being used to fund litigation or for another appropriate purpose.
For the reasons that I have outlined, in circumstances where the property of the parties is substantially controlled by the husband and I am satisfied that at final hearing the wife will receive an adjustment that will provide her with a sum that is at least $50,000, it is just and equitable to make an order for partial property distribution, as sought by the wife, in order to facilitate her paying her legal advisers.
Sought in the alternative - should there be an order for the payment of the wife’s legal costs on what is commonly known as a dollar for dollar basis?
As I have made orders for a partial property distribution to provide litigation funding there is no need to consider orders 9-14 as proposed by the wife.
Spousal maintenance
Should there be an order for the husband to pay the wife interim spousal maintenance and if so, in what amount?
As previously noted the wife seeks an order for the husband to pay her the sum of $1000 per week by way of interim spousal maintenance. The proposed payment does not include the cost of the wife’s housing.
In Saxena and Saxena (2006) FLC 93-268, Coleman J explained that, in determining whether to make an order for spousal maintenance, the Court should follow a four step process, as follows:
a.Can the applicant support themselves adequately in terms of s 72 of the Act?
b.If not, what are the applicant’s reasonable needs?
c.What capacity does the respondent have to meet those needs?
d.What order is reasonable, having regard to s 75(2)?
Section 72(1) of the Act relevantly provides that;
(1) A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
The wife is the primary carer of the parties’ child X who was born in 2017. The child is now a little over two years old. The husband refers to the fact that the wife graduated from P University with a double degree and has worked as a consultant with a large firm. He contends that she has a substantial earning capacity.
I accept that the wife has a substantial earning capacity. However, s 75(2)(l) of the Act requires me to have regard to “the need to protect a party who wishes to continue that party’s role as a parent.”. It is entirely reasonable that the wife would want to take time off work in order to care for the party’s very young child. She therefore satisfies the requirement of section 72(1) (a).
In M v M (2006) 36 Fam LR 97 at 106, the Full Court, after referring to a number of earlier authorities, said that the question as to whether or not a person is able to support themselves “adequately” is:
… not to be determined upon a “subsistence level” but upon consideration of whether the applicant can support himself or herself “adequately” importing a standard of living reasonable in the circumstances. [References omitted].
That issue was further considered in Brown & Brown (2007) FLC 93-316 at 81,455-56, where the Full Court summarised the principles to be applied in determining whether a party has the capacity to support themselves adequately, as follows:
a.The word “adequately” is not to be determined according to any fixed or absolute standard;
b.The idea that “adequate” means a subsistence level has been firmly rejected;
c.Where possible both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable, although the parties’ standard of living may have to be lower if financial resources are insufficient to maintain that standard;
d.In some circumstances it may be reasonable for the parties to live at a higher standard than previously enjoyed; and
e.It is not necessary for an applicant for maintenance to use up all capital in order to satisfy the requirement that he/she is unable to support himself/herself adequately.
To assist the Court to determine this issue, Rule 4.15 of the Family Law Rules (‘the Rules’) imposes upon parties to a spousal maintenance application, an obligation of disclosure in respect to their financial circumstances for the past three years. The difficulty in this case is that until October 2018, the parties living expenses were combined and, for a substantial period of time since the parties separated the wife has been living with her parents.
In those circumstances, there is an inadequate track record of expenditure to verify what the wife has spent in supporting herself. The situation has not been assisted by the fact that the wife has filed two (2) Financial Statement in which she asserts she has different levels of expenditure, as follows:
Financial Statement sworn 14 March 2019 Financial Statement sworn 15 May 2019 Food 300 200 Household supplies 150 150 Electricity 50 50 Telephone 15 15 Motor vehicle petrol 50 50 Motor vehicle maintenance 20 20 Fares/ parking 10 10 Clothing/ shoes 100 130 Net medical 50 50 Entertainment 70 100 Holidays 100 100 Chemist 50 50 Cleaning (house/pool) 75 75 Dry cleaning 50 50 Hairdressing 50 150 Rent 650 650 Gifts - 50 Medical insurance - 39 Credit card - 149 Total 1790 2893
Further, receipts produced by the wife, at the husband’s request, to verify her expenditure do not relate to purchases that the wife could possibly have made as she was not in Australia at the time Those receipts are ‘Exhibit K’, ‘Exhibit L’ and ‘Exhibit M’ in the proceedings.
It is of little assistance to the Court that, in attempting to identify the needs of the wife, that the wife’s financial statement filed on 15 May 2019, leaving aside the requirement for rent, claims at Part N average weekly expenditure of $2243 and the wife is only seeking weekly spousal maintenance of $1000. In other words, inflating the amount of anticipated expenditure does not justify a finding that the claim of a lesser amount is fair and reasonable. In that respect a number of amounts, claimed by the wife as being items of her weekly expenditure, cannot be regarded as reasonable in her current circumstances. Examples include:
·An amount of $130 per week for clothing and shoes which is equivalent to $6760 per year.
·An amount equivalent of $5200 per year for entertainment.
·An amount equivalent to $5200 per year for holidays.
·In circumstances where the wife is not in the paid workforce she claims:
·An amount of $75 per week for cleaning;
·An amount of $50 per week for dry-cleaning; and
·An amount of $150 per week for hairdressing.
I note that in Brown & Brown (supra), the Full Court held that where possible both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable in the circumstances. It is difficult to make that assessment in interim proceedings. However, the different considerations that apply to the making of an interim, as opposed to a final order for spousal maintenance were considered in In the Marriage of J.M. and Y.A. Redman (1987) FLC 91-805 at 414-415. The Full Court identified those different considerations as follows:
One of these is that such an order is intended to be reconsidered, quite apart from a variation under sec. 83. As Nygh J. said in Ashton and Ashton (1982) FLC 91-285 at p. 77,613; (1982) 8 Fam. L.R. 675, 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 sec. 83 and does not have to be justified as such, but it is a fresh order made upon the termination 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'': Williamson and Williamson (1978) FLC 90-505; (1978) 4 Fam. L.R. 355 at FLC p. 77,650; Fam. L.R. p. 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 should 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.
In circumstances where it is not possible for the wife to present evidence of a detailed history of supporting herself, I must do the best I can on the material that is before the Court. I note that, at paragraph 18 of her Financial Statement dated 15 May 2019, the wife identifies that her parents pay an amount in the sum of $350 on her part in respect to groceries and supplies. I accept that as evidence of what is actually incurred. In addition to that amount, in circumstances where it is not paid by the husband, it is entirely reasonable that the wife would incur amount of $39 per week in respect to her health insurance. Further, in circumstances where she does not own a motor vehicle and attests to borrowing her sister’s motor vehicle, as required, it is appropriate that she makes a contribution towards the running costs of that motor vehicle just as the husband has set out in his Financial Statement for the car that he borrows from time to time. I therefore propose to include, as part of the wife’s weekly expenses, the amount of $50 in respect to petrol and the amount of $20 in respect to car maintenance. It is also appropriate to include an amount in respect to fares and parking which the wife has claimed at $10 per week. I note that amount is substantially less than that claimed by the husband. In circumstances where the husband, who like the wife, currently lives with his parents, claims an amount of $50 per week in respect to his contribution to the electricity utilised in that household it is appropriate that a similar amount be included for the wife. In circumstances where the husband claims an amount of $40 per week in respect to telephone usage it is appropriate to approve the amount of $15 claimed by the wife. In circumstances where the husband claims an amount of $75 dollars expenditure per week in respect to medical dental and optical expenditure it is appropriate to include the amount of $50 claimed by the wife. In circumstances where the husband claims expenditure of $25 dollars per week in respect to chemist and pharmaceutical is appropriate to include that same amount for the wife. In circumstances where the husband claims an amount of $12 per week for hairdressing and toiletries it is appropriate to include a similar amount for the wife. Finally, in circumstances where the husband claims expenditure of $350 per week on entertainment, hobbies and holidays it is appropriate to include a combined amount of $100 per week for expenditure of that nature incurred by the wife.
Accordingly, I find that the wife’s weekly needs total $720.
Turning to the capacity of the husband to meet the needs of the wife. In the husband’s Financial Statement sworn on 14 May 2019, the husband notes that his gross average weekly income is $6,403 per week. He notes that his personal expenditure is $5,806 per week. This leaves a difference of $597 per week. However, at paragraph 30 of his Financial Statement the husband claims expenditure of $1,000 per week to pay off credit cards with the ANZ bank, the Commonwealth Bank and T Bank. The husband has not disclosed why it is necessary for him to pay an amount of that magnitude.
The documentation that he has produced does not explain why that is necessary. In that respect, at tab 5 of ‘Exhibit B’, the husband attaches a Financial Statement with the Commonwealth Bank ending as at 30 September 2018. That statement showed a credit of $1,067.31. At annexure F31 of his Affidavit of 10 April 2019, the husband attaches a ‘transaction listing’ for the above-mentioned Commonwealth Bank account as at 8 November 2018 that showed a credit of $123.18.
At tabs 6, 7, 8 and 9 of ‘Exhibit B’, the husband attaches T Bank credit card statements in respect to account ending …05. Tab 9 in ‘Exhibit B’, in respect to the billing period 9 January 2019 until 8 February 2019, indicates that there is an outstanding debt of $9,786.46 with a minimum payment due of $335.48.
In the absence of disclosure of any additional amount being payable, it appears that the husband’s assertion that he is required to pay $1,000 per week off his credit cards is a gross overstatement. On the basis of information provided by the husband it would appear that the conversion of that $335 minimum payment obligation to a weekly amount is equivalent to $83.75 per week.
Further, as noted, the husband claims an amount of $350 per week as expenditure in respect to entertainment and holidays. This is equivalent to $18,200 per annum. In circumstances where the purpose of interim spousal maintenance is to enable both parties to sustain themselves pending the final hearing, it is reasonable to expect that the husband would moderate his expenditure in that respect.
Accordingly, I am comfortably satisfied that the husband has the capacity to pay weekly spousal maintenance to the wife in the sum of $720 per week.
Certain considerations set out in s 75(2) of the Act are not relevant to the facts of this matter. Accordingly, while I have considered all of the factors listed in s 75(2) of the Act, I will focus only on those that are considered to be of relevance to these proceedings.
Section 75(2) considerations
Subsection (a): the age and state of health of each of the parties
The husband was born in 1975 and the wife was born in 1988. Fortunately, there is no suggestion that either of the parties are in ill-health.
Subsection (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
As previously noted, the husband contends that the net assets of the parties totals $1,526,375 and the wife contends there are net assets of $1,987,241. That controversy will be resolved at final hearing. In his Financial Statement the husband indicates that he receives a gross weekly income of approximately $6,403 per week. The wife’s Financial Statement of 15 May 2019 indicates that her total average weekly income is $895 per week, however, that consists of child support in the sum of $430 and family benefit and single-parent benefit of $465 per week.
The husband contends that the wife has, by virtue of her training and experience, to which I have earlier referred, a significant unexploited earning capacity. I accept that to be the case, however, at the same time, the wife is the primary carer of the parties’ 2 year old child.
Subsection (c): whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
This is the most significant consideration in determining whether there should be an order for the payment of weekly spousal maintenance. As previously indicated, at this stage of their daughter’s life, it is, in my view, entirely reasonable that the wife wishes to remain out of the workforce in order to provide full-time care for their daughter.
Subsection (f): the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
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
As previously indicated the wife is in receipt of social security benefits, however, pursuant to s 75(3) of the Act those payments must be disregarded. That section reflects the historical recognition of public interest considerations involved in spousal maintenance. For instance, in Hyman v Hyman (1929) 98 LJP 91 at 629, Lord Atkin, said:
…When the marriage is dissolved the duty to maintain arising out of the marriage tie disappears. In the absence of any statutory enactment the former wife would be left without any provision for her maintenance other than recourse to the poor law authorities. In my opinion, the statutory powers of the court to which I have referred were granted partly in the public interest to provide a substitute for this husband’s duty of maintenance and to prevent the wife from being thrown upon the public for support….
Reference to the respective roles of husband and wife are of historical interest only. However, the public interest continues to be reflected in s 75(3) of the Act, which requires the Court, in determining a party’s responsibility to pay maintenance, to “disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit”.
Subsection (g): where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable
By community standards, the parties have enjoyed a relatively high income and, as a consequence, have enjoyed a comfortable standard of living. They both currently reside with their parents. For reasons which I subsequently explain, it is my view that arrangement is not a satisfactory long-term option for the mother who wishes to obtain her own independent accommodation for herself and the parties’ daughter.
Subsection (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
For reasons which I have explained, I am satisfied that the husband has the capacity to meet, from his surplus income over expenditure, an order for spousal maintenance in the sum of $720 and, also, as I will shortly explain, for the wife’s accommodation. Accordingly, the orders I propose in these proceedings will not adversely impact upon the husband’s creditors.
Subsection (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
The extent to which the wife’s contribution as a homemaker and parent has facilitated the husband earning income is a matter that will be determined at hearing. However, as previously noted, at the very least, the role the wife has played in caring for the child has facilitated the husband attending his place of employment to earn an income.
Subsection (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
The parties were married in 2010 and separated in October 2018 being a period of a little over 8 years.
The wife contends that she sacrificed her career in order to travel to the United States for the husband to take up an employment opportunity. The determination of whether that is the case and the extent to which it has impacted upon the wife’s earning capacity will be an issue to be determined at final hearing.
It is the case, however, that the wife has remained out of the workforce since the birth of their child and, for reasons which I have explained, I am of the opinion that is entirely reasonable. In those circumstances it is reasonable to infer that the wife’s absence from the full-time workforce will impact upon her earnings and, potentially her earning capacity. However, again, that is a matter to be determined at final hearing.
Subsection (l): the need to protect a party who wishes to continue that party's role as a parent
The wife has been the child’s primary carer since her birth and, as a result of these proceedings, will continue to perform that role.
Subsection (m): if either party is cohabiting with another person - the financial circumstances relating to the cohabitation
Both parties currently reside with their parents and both receive some financial assistance from their parents. However, at this stage in life, both parents are entitled to pursue lives living independently from their parents and the wife is entitled to seek an order for spousal maintenance to facilitate that occurring.
Subsection (n): the terms of any order made or proposed to be made under s 79 in relation to:
the property of the parties; or
vested bankruptcy property in relation to a bankrupt party
This is a matter that will be determined at final hearing.
Subsection (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
The wife acknowledges that the husband is paying child support in the sum of $430 per week.
Subsection (o): any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
There are no additional facts or circumstances to which I have had regard in arriving at my decision.
Evaluation of s 75(2) factors
I have had regard to all of the matters set out in s 75(2). The most significant of those matters is the fact that the wife is the primary carer of the parties’ two (2) year old daughter. I am satisfied that, in order to adequately support herself, she requires an amount of $720 per week and I am further satisfied that, having regard to the husband’s income and earning capacity he is able to comfortably sustain such a payment. Accordingly, I will make an order for the husband to pay spousal maintenance to the wife in the sum of $720 per week.
Should the husband be required to pay the amount of $650 per week by way of interim spousal maintenance in respect to the wife’s anticipated rental accommodation?
In addition to a weekly payment of spousal maintenance, the wife is seeking an order for the husband to pay her rental expenses up to the sum of $650 per week by payment directly to the real estate agency managing the property in which she intends to live.
The husband contends that, like himself, it is appropriate for the wife to continue to live with her parents pending the hearing of the matter. The husband contends that the wife’s parents are able to provide assistance not only to the wife but also to support her in caring for their child.
On the other hand, the wife contends that, as an adult, she is entitled to seek her own accommodation and seeks that accommodation so that she and the parties child can have their “own space”
I am satisfied that, in determining what standard of living is adequate for a party to proceedings before this Court, that such a standard of living should include, should a party so choose, the capacity to live separately and apart from their parents.
In that regard I note that in in AMS v AIF (1999) 163 ALR 501 at 537, Kirby J observed that:
One of the objects of modern family law statutes (including FLA 1975 and FCA 1975) is to enable parties to a broken relationship to start a new life for themselves, to control their own future destinies and, where desired, to form new relationships…
It is entirely understandable that, in starting a new life for herself, that the wife would wish to live independently from her parents.
I am further satisfied that the wife’s desire to live in the Suburb U area is understandable. That location is approximate to both her parents and also the husband’s parents where he currently resides. This will facilitate the child spending time with his husband. Having regard to relevant rental listings in the Suburb U area, which are set out in annexure ‘W 20’ to the wife’s Affidavit of 14 March 2019, I am satisfied that the amount of $650 is an appropriate amount to pay in respect to that rent.
I am satisfied that the husband has the capacity to pay that amount by way of weekly rental. In so deciding, I note that weekly rental is in addition to the amount of $720 which I have ordered the husband to pay in respect to weekly periodic maintenance to the wife. The total payable by the husband to maintain the wife will therefore be the amount of $1,370 per week. In arriving at that conclusion, I have had regard to the fact that the husband’s Financial Statement indicates a surplus of income above expenditure of $597. I have also had regard to the fact that the husband has in my view, significantly inflated the amount he needs to repay in respect to his credit card debts and also for holidays and entertainment. Having regard to those matters I am satisfied that the husband can comfortably accommodate the additional $773, over and above the stated surplus he has of income over expenditure. That additional amount will be required to pay for both weekly spousal maintenance and also weekly rental payments to satisfy his obligation pursuant to the orders that I have made in these proceedings which total the amount of $1,370.
Should there be a payment, by way of interim spousal maintenance, in respect to any rental bond that may be incurred by the wife?
Section 80(1) of the Act relevantly provides:
(1) The court, in exercising its powers under this Part, may do any or all of the following:
(a) order payment of a lump sum, whether in one amount or by instalments;
(b) order payment of a weekly, monthly, yearly or other periodic sum;
…
In Vautin & Vautin (1998) 23 Fam LR 627 FLC, the Full Court said at 635:
...in the exercise of the power to order lump sum maintenance caution is usually appropriate because of the apparent finality of lump sum orders and the difficulties in making predictions into the future. However, it is a power, the exercise of which may be appropriate in particular cases. It may be ordered, amongst other reasons, to meet non-periodic expenditure for the maintenance of that person where there is an established need and a capacity to pay.
(Emphasis added)
For reasons which I have explained, I am satisfied that the wife has a need for accommodation expenses because it is appropriate for the wife to rehouse herself and the parties’ child in their own independent accommodation.
In order to obtain that rental accommodation it can reasonably be expected that the wife will be required to pay a rental bond. Consistent with the order I have made for the husband to pay periodic spousal maintenance in respect to the wife’s rent it is appropriate that I make an order for the husband to pay a lump sum amount of up to $2,600 in respect to a rental bond that may be required by the real estate agent through whom the wife rents the relevant property. This is equivalent to four (4) weeks rent at $650 per week.
Should the husband be ordered to pay, by way of interim spousal maintenance, the wife’s private health insurance?
In circumstances where I have had regard to the wife’s need for private health insurance in determining the periodic weekly spousal maintenance payment that I have ordered I do not propose to further consider this aspect of the wife’s claim.
Should the husband be required to purchase a motor vehicle for the wife to the value of $30,000, as selected by her, and to meet the cost of registration and insurance for that vehicle?
With the greatest respect to the wife’s legal advisers they have inadequately particularised the basis upon which the wife seeks this order. On its face, it appears to be an order in the nature of a mandatory injunction requiring the husband to take a particular course of action, namely, to purchase a motor vehicle on behalf of the wife. On the other hand, in the husband’s case outline it appears to be assumed that the wife is relying on the Court’s maintenance power as set out in s 74 of the Act. A further potential basis upon which such an order may be sought is by way of an interim property distribution pursuant to ss 79 and 80 of the Act to which I have earlier referred.
I have reviewed the transcript of proceedings and the basis upon which the order for the purchase of the motor vehicle is sought is unclear. This is regrettable, because properly presented the wife may indeed have a legitimate argument as to why orders should be made that achieve an outcome whereby she has access to a motor vehicle. In that respect I note, in a case involving not dissimilar factual contentions, Henderson J in Carlisle & Carlisle [2017] FCCA 1956 at 75, held;
She [the wife in that case] has the full time care of two young children and clearly needs a motor vehicle. It is an essential in this modern day and age. The wife seeks $15,000 and I will allow her that sum given the parties are to sell their home; however, I do not see that that sum is a maintenance issue, rather an interim property issue. I will allow her the additional $15,000 by way of interim property for a car.
The Family Court is a Superior Court of Record and while the Court does not require formal pleadings it is important for an applicant seeking relief to clarify the basis upon which that relief is sought and then to address the relevant statutory criteria relevant to the exercise of that power. The importance of clarity was discussed by Allsop J (as his Honour then was) in White v Overland [2001] FCA 1333 at 4:
… by way of general principle I would simply like to make perfectly plain my view that in the efficient and proper conduct of civil litigation, even civil litigation hard fought between parties, it should always be recognised that in the propounding of issues for trial the parties should take steps to ensure that all relevant parties to the dispute are cognisant of what the issues are. Any practice of quietly leaving footprints in correspondence or directions hearings to be uncovered some time later in an attempt to reveal that a matter was always in issue should be discouraged firmly. Even if something has been said, where it is evident, or indeed suspected, that the other side is proceeding on the basis of a misconception or has not appreciated something, as a general rule, efficiency, common sense and an appreciation of the costs and resources (both public and private) likely to be wasted by confusion in litigation will mandate that a party through his or her representative ensure that the other is not proceeding on a misconception or that the other does appreciate something that has been said. Litigation is not a game. …In the long run, the only consequence of keeping issues hidden or not clearly identifying them is to disrupt the business of the court leading to the waste of valuable public resources and to lead to the incurring of unnecessary costs by the parties, costs which ultimately have to be borne by someone.
The obligation on judges of this Court and, indeed, on parties and practitioners litigating in this Court, has been made clear by the High Court of Australia in R v Watson; Ex parte Armstrong (1976) 136 CLR 248 per Barwick CJ, Gibbs, Stephen and Mason JJ, where it was stated at 560:
Proceedings in which a wife seeks an order for maintenance or the settlement of property may involve a dispute as to property of great value and will often be bitterly contested on both sides. The order made determining such proceedings may be of the utmost importance to the future of both parties. The judge called upon to decide proceedings of that kind is not entitled to do what has been described as "palm tree justice". No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down (in such sections as ss. 43, 72, 75 and 79, whichever may be applicable). He must also follow the procedure provided by the law. The provisions of s. 97 (3) of the Act, which require him to proceed without undue formality, do not authorize him to convert proceedings between parties into an inquiry which he conducts as he chooses. The provisions of reg. 108 (2) , which enable the court "with the consent of the parties to the proceedings" to dispense with such procedures and formalities as it thinks fit, show that without such consent the Court has no such dispensing power. A judge can neither deprive a party of the right to present a proper case nor absolve a party who bears the onus of proof from the necessity of discharging it. These remarks are not intended to fetter a judge of the Family Court in the exercise of a proper discretion or to insist upon the observance of unnecessary formality; they are designed to make it clear that a judge of the Family Court exercises judicial power and must discharge his duty judicially.
(Emphasis added)
The obligation on parties to ensure that the proposed order they are seeking is within the power of the Court is also reflected in rule 1.08(1)(a) of the Rules which provides that;
(1) Each party has a responsibility to promote and achieve the main purpose, including:
(a) ensuring that any orders sought are reasonable in the circumstances of the case and that the court has the power to make those orders;
In this matter the wife has not, with respect, identified, with adequate precision, the section or sections of the Act upon which she relies to obtain the relief she seeks in respect to the provision of a motor vehicle. That deficiency impacts upon my ability to identify and apply the principles laid down in the Act for the exercise of my discretion. In that respect I note that there are fundamentally different principles that apply in respect to an injunction pursuant to s 114, the exercise of the maintenance power pursuant to s 74 or the exercise of the interim property power pursuant to ss 79 and 80.
In those circumstances I decline to further consider, in these proceedings, the wife’s application for an order requiring the husband to purchase the wife a motor vehicle
Should there be a further order for the payment of lump sum spousal maintenance in the sum of $4,985 to enable the wife to pay outstanding legal costs to her American attorney?
The transcript of proceedings involved a discussion of the basis upon which the wife sought an order for the husband to pay the wife’s American legal expenses, as follows, at page 17 lines 25–30:
MCCLELLAND J:
The payment of the lawyers: what power are you seeking that under? The US lawyers.
MS CHRISTIE:
The US lawyers would have to be – I think it would have to be a partial property settlement. It’s not for the maintenance of the wife, and it’s not a costs order.
In Strahan & Strahan (supra) at 85,656, Thackray J noted that the power to make an order for an interim property distribution is discretionary. His Honour said:
…it is important to note that s 80(1) is couched in the permissive. Hence, although the Court must give consideration to the matters set out in s 79(4) when hearing an application for an interim payment, it has no obligation to make an interim order. The Court “may” do so if it considers that it should in the exercise of its discretion.
(Emphasis added)
I was not addressed by senior counsel for the wife as to why it is in the interests of justice for this order to be made. A consideration of that issue, I would expect would address whether or not an application was made for costs in respect to the United States proceedings and if so what the outcome of that application was.
In the absence of being addressed on those matters, I am not satisfied that it is appropriate to exercise my discretion to make an order requiring the husband to pay, by way of interim property distribution, the legal fees incurred by the wife in respect to services provided by her United States lawyer.
Conclusion
For the reasons provided in the body of this decision I make the orders as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and thirty-six (136) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice McClelland delivered on 23 July 2019.
Associate:
Date: 23 July 2019
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