HORVAT & HAJIAN

[2015] FamCA 721

FAMILY COURT OF AUSTRALIA

HORVAT & HAJIAN [2015] FamCA 721

FAMILTY LAW – PROPERTY – Interim orders – where the applicant de facto wife seeks interim property settlement – where the applicant has minimal funds to support herself and the two children of the relationship – where the de facto husband’s adjournment application for procedural fairness to a third party with an alleged property interest is refused – whether it is appropriate to exercise court’s power on an interim basis -where it is just and equitable to order interim property settlement of $20,000 in favour of the applicant.

Family Law Act 1975 (Cth), s 79, s 79(1)(d), s 79(4), s 80(1)(h), s90SF(3), s 90SF(g), s 90SM, s 90SM(1), s 90SM(4)

Bing & Bing (2007) FLC 93-318
Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166

APPLICANT: Ms Horvat

RESPONDENT: Mr Hajian

FILE NUMBER: MLC 10870 of 2014

DATE DELIVERED: 31 August 2015

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Thornton J

HEARING DATE: 8 July 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Dwyer

SOLICITOR FOR THE APPLICANT: Farrell Family Lawyers

SOLICITOR APPEARING AS ADVOCATE FOR THE RESPONDENT: Ms Farrell

SOLICITOR FOR THE RESPONDENT: CBD Family Lawyers

Orders

1. That the respondent do all acts and things necessary for the applicant to be paid by way of interim property settlement the sum of $20,000 from the proceeds of sale of the property at B Street, Suburb C.

2. That paragraphs 4, and 6 of the interim or procedural orders sought in the respondent’s Response to Initiating Application filed 30 June 2015 be  dismissed.

3. That paragraphs 2, 3, 4, and 5 of the interim or procedural orders sought in the applicant’s Initiating Application filed 22 May 2015 be otherwise dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Horvat & Hajian 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 MELBOURNE

FILE NUMBER: MLC 10870  of 2014

Mr Hajian

Applicant

And

Ms Horvat

Respondent

REASONS FOR JUDGMENT

1. The applicant de facto wife brings an application for interim part property settlement under s 90SM(1) and s 80(1)(h) of the Family Law Act 1975(Cth) (“the Act”).  The parties were in a defacto relationship for about 9 years and there are two children of the relationship.  The respondent de facto husband proposed to adjourn the application, and I gave ex tempore reasons refusing that application.

Background

1. The de facto wife initiated substantive proceedings for property settlement by way of an Initiating Application on 22 May 2015.  The de facto husband filed a Response on 30 June 2015.

2. The applicant and respondent are both aged 36. They commenced living together in 2005 and separated in November 2014. The two children of the relationship are aged nine and six years. The applicant is engaged in home duties and works casually. The respondent is self-employed. The de facto husband is the sole director, secretary and shareholder of D Pty Ltd and E Pty Ltd.  The de facto husband operates his business through the company D Pty Ltd. That company is the trustee of the D Family Trust which was established so that income from the company could be distributed between the de facto wife and the de facto husband for tax minimisation purposes.

3. It is common ground between the parties that the relationship came to an end when the applicant took the children and left the former home where the parties had lived.  The applicant obtained an interim intervention order against the respondent listing the children and herself as aggrieved family members.

4. The applicant’s evidence, which was not contradicted by the respondent, was that she and the children lived in a refuge for eight months before finding more suitable but almost unfurnished accommodation with the assistance of a homelessness agency. The applicant deposes that she drives a late model car which is leaking oil and which is continually breaking down so that the children are often late to school. She deposes that the value of this motor vehicle is approximately $2,000.

5. The respondent continued to live in the parties’ former home at F Street, Suburb G. (“the Suburb G property”) This property is registered in the name of the respondent.

6. The only other real property of the relationship is 304/355 B Street, Suburb C (“the Suburb C property”) which was sold and settled on 23 April of this year. The sole registered proprietor of that property at the time of sale was E Pty Ltd, of which the respondent is the sole director and shareholder.

7. The respondent asserts that his friend Mr H has an interest in that property as a result of a joint venture and that he has a half interest in the property.

8. The applicant claims in her financial statement that she has no income other than Centrelink benefits and  child support which total approximately $568 per week.  The child support from the respondent is based on her having an income of $47,000 per annum which was the income split during the parties’ relationship. She has not reviewed the child support assessment.

9. The applicant has no other capital or income and during the relationship was dependent upon the respondent’s income as she was the primary carer for the children. She participated in some casual employment.

10. The respondent’s income is estimated at $915 per week according to his financial statement and he claims that his expenses exceed his income.  His total weekly personal expenditure is recorded as $1,131. This includes a weekly amount of $300 which is referred to as ‘Total of all other expenditure’.

11. At the hearing before me, I made consent orders for the Suburb G property to be sold and for the proceeds to be placed in a trust until final property settlement. The consent orders also provided for a joint valuation of the major assets in the respondent’s business, discovery of documents, and an injunction upon the respondent from dealing with the net proceeds of sale of the Suburb C property.

Application to Adjourn

1. The respondent’s application to adjourn the part property settlement application was premised on what he claimed was a significant third party interest in the sale of the Suburb C property. Counsel for the respondent’s submissions with respect to this third party interest were twofold: firstly, that the third party deserved the opportunity to be heard before this Court in this respect; and secondly, that the net proceeds were in the control of the third party who was currently holidaying overseas and did not wish to be contacted until his return.

2. The applicant also contested the respondent’s submission that Mr H had any entitlement to the proceeds of the Suburb C property. Counsel for the applicant noted that there was no evidence to support the respondent’s claims that the third party contributed to the acquisition or maintenance of the Suburb C property. She also expressed significant doubt as to the respondent’s claim that the proceeds of sale were unavailable to him, given that he was sole director and shareholder of the company which was the registered proprietor. She submitted that the third party could not have legally instructed the conveyancer because he had no legal standing to do so, and pointed out that the respondent himself signed the transfer.

3. Counsel for the respondent submitted that the third party acted under a financial power of attorney signed by the respondent while he was overseas, but no evidence was produced in support of this assertion.

4. It was common ground in the hearing before me that the third party has been a close friend of the respondent for many years. Counsel for the applicant pointed to this friendship and submitted that it belied the respondent’s argument regarding the funds being under the sole control of the third party.

5. The Initiating Application was filed on 22 May 2015 containing the application for interim orders together with the applicant’s first affidavit. On the return date of that application and before the matter was transferred to me, Justice Macmillan granted leave for the applicant to file an affidavit sworn by her and served upon the husband the evening prior.

6. Counsel for the respondent submitted, and it was not contested by counsel for the applicant, that there was one significant change between the applicant’s first and second affidavits. In the first affidavit, the applicant acknowledged that the respondent and the third party had a half-interest each in the Suburb C property, whereas she denied that the third party had any interest in that property in her second affidavit. In circumstances where the third party is unaware of this change in the applicant’s position, counsel for the husband submitted that the third party should have the opportunity to intervene in the proceedings.

7. In opposing the adjournment application made by the respondent, the applicant relied upon the urgency of her application having regard to her inadequate living circumstances with the children and her need for reliable transport.

8. After preliminary submissions from the applicant as to the urgency of her part property application, I was satisfied that it was appropriate to refuse the adjournment application, having regard to the fact that none of the evidentiary foundation for the applicant’s second affidavit would be a surprise to the  respondent.  The applicant has changed her position regarding the third party’s interest in the Suburb C property because of the evidence that the property was sold by the company of which the respondent is the sole director and shareholder. There can be little prejudice to the respondent in terms of notice where the wife has changed her position on the basis of evidence of which he was already aware.

9. The hearing before me proceeded on the basis of submissions only. The evidence remains untested. The respondent argues that the third party has an interest in the property.  However, any prejudice occasioned by the third party’s absence in this hearing, which I note is limited to an application for part property settlement, can be overcome at final hearing if necessary by making an interim order in personam against the respondent and quarantining the proceeds of sale of the Suburb C property sufficient to take account of any interest that the third party may claim.

Documents relied upon by the applicant

1. The applicant relied upon the following documents:

   ·Initiating Application filed 22 May 2015;

   ·Affidavit of the applicant’s solicitor filed 22 May 2015;

   ·Affidavit of the applicant filed 8 July 2015.

Documents relied upon by the respondent

1. The respondent relied upon the following documents:

   ·Response to Initiating Application filed 30 June 2015;

   ·Affidavit of the respondent filed 30 June 2015;

   ·Exhibit A – Commonwealth Bank Statement from joint account of the respondent and Mr H for the period 13 May 2014-12 August 2014, 13 August 2014-12 November 2014, 13 November 2014-12 February 2015, 13 February 2015-7 May 2015;

   ·Exhibit B – Suncorp Bank Investment Loan Statement for E Pty Ltd ATF Hajian Family Trust Investment Loan Statement for the period 4 July 2014-3 January 2015.

Application for Part Property Settlement

1. The applicant seeks an interim part property settlement in the sum of $44,026 to be paid by the respondent for the following purposes:

   ·$14,026 for payment for a bond, rent in advance and furnishings for rental accommodation for herself and the children;

   ·$10,000 for the purchase of a reliable motor vehicle; and

   ·$20,000 for the payment of legal costs to pursue her case to conciliation conference.

2. The application is opposed by the respondent who claims that the applicant took jewellery valued at $37,000 when she left the Suburb G property.  The respondent also claims that he does not have access to any funds to pay the applicant any amount because the proceeds of sale of the Suburb C property registered in the name of a company of which he is the sole director and shareholder are not available and are subject to information to be provided by his friend Mr H who is currently overseas on holiday.[1]

   [1] Affidavit of the Respondent filed on 30 June 2015, paragraph 25

3. In his response the respondent seeks that if any monies from any funds held in trust for the parties is to be paid to the applicant, an equivalent amount be paid to him. This was not pressed by counsel for the respondent in the hearing before me.

4. It was conceded by counsel for the respondent that the respondent values the net property of the relationship at approximately $150,000. This was conceded taking into account any interest which the respondent asserts is owed to his friend Mr H. The net property calculated and deposed to by the respondent does not take account of superannuation which the parties agree is about $26,0736 for the respondent and about $500 for the applicant.

5. The respondent asserted that he had settled the sale of a property at B Street, Suburb C (“the Suburb C Property”) on 23 April 2015. It was the respondent’s case that he had entered into a joint venture with his friend Mr H and that his friend had an interest in that property.  However, this property was purchased in the name of the respondent’s company E Pty Ltd of which he is the director, secretary and sole shareholder. Counsel for the respondent tendered Exhibit A being a statement of a joint bank account in the name of the respondent and Mr H and Exhibit B being an investment loan statement for Suncorp Bank for the period 4 July 2014 – 3 January 2015 which refers to E Pty Ltd ATF Hajian Family Trust indicating an amount of $2,190.15 which has been credited to that investment loan account on a monthly basis. These documents were provided without any real explanation and remain untested evidence.

6. It was not in dispute that the net proceeds of sale from the Suburb C property is $150,000 after payment of the mortgage of $209,244, and costs of about $10,000. The property was sold for $370,000.

7. Counsel for the applicant submitted that the applicant had no capital and no income other than child support and Centrelink benefits. The applicant’s child support assessment is lower than it would otherwise be because the respondent’s income split to her attributed her income to which she does not have access. She receives $250 per month by way of child support under this assessment and also receives Centrelink benefits. In total she receives $504 per week. She also has superannuation of $500.

8. Counsel for the applicant submitted that the applicant’s car which she uses to transport herself and the children was in a state of disrepair and that the children have been late to school because of mechanical breakdowns. She submitted that the new apartment has only a set of bunk beds, a mattress, a bar fridge, and four sets of basic kitchenware. In comparison, and this was not contested by counsel for the respondent, the respondent lives in the former matrimonial home and drives a late-model car. He controls the asset pool, which comprises the property at Suburb G valued between $400,000 and $420,000 with a mortgage of $296,000; the truck for his business valued between $10,000 and $21,260; his superannuation valued at $26,736; and has the legal capacity through E Pty Ltd to control the net proceeds of sale for the Suburb C property, albeit he claims that he currently does not have access to them.

9. It was agreed by the parties at the hearing that the major assets forming property of the relationship were the Suburb C and Suburb G properties, in addition to the respondent’s business. On the applicant’s calculations and assuming that the third party’s half-interest were proven at trial, counsel for the applicant submitted that the net proceeds of sale of the Suburb C property payable to the respondent would be $75,000 taking account of any Capital Gains Tax.

10. As to the urgency of the application, counsel for the applicant submitted that the sale of the Suburb G property would involve untenable delay given the unacceptable living situation of the wife. Counsel argued that what money may be due to the respondent from the net proceeds of the Suburb C property would be equal to or less than the applicant’s entitlement at final property settlement.

11. While the respondent conceded that the applicant had an entitlement to a portion of the property of the relationship, his counsel’s submissions proceeded on the basis that the husband was unable to comply because the net proceeds of the Suburb C sale are currently beyond his control. From what I understood of the respondent’s submissions, the respondent’s primary position relied upon assertions from the bar table that the third party was entitled to not only half the net proceeds of sale as discharge of an interest under a joint venture, but also the sum of the deposit of $30,000, a drawdown of the mortgage account of $21,000 for the respondent’s purchase of a truck, an unspecified sum of mortgage payments, and expenses for day-to-day maintenance and repairs. From any balance remaining counsel for the husband submitted that Capital Gains Tax would have to be paid of between $20,000 and $25,000. Whether this sum represented the respondent’s half of the liability, or the whole of the liability owed by the respondent and the third party together, was not specified. Counsel for the applicant contradicted the respondent’s figure and put the Capital Gains Tax liability at $8,000. 

12. On the respondent’s case he does not know the quantum of the interest of his friend Mr H in the proceeds of sale of the Suburb C property or therefore of any capital gains tax.  In his affidavit filed 30 June 2015 the respondent deposes (at par 25) to the following regarding the Suburb C property:

    …on 25 June 2008, [E Pty Ltd] (of which I am sole director and shareholder) purchased the property for the sum of $152,500 as a joint venture with [Mr H].  [Mr H] paid the deposit and the remainder of the purchase price (plus stamp duty and other costs) was borrowed by the company from Suncorp Bank. I agree that the property was tenanted throughout the relationship. The rental proceeds were used to service the mortgage and outgoings. At times the income was not sufficient and [Mr H] made up the difference from his on (sic) funds and at times I made up that difference from my own funds. I borrowed a sum of $21,000 from the redraw on the mortgage in order to pay for the …truck, which will need to be taken into account in the division of the net sale proceeds. It was not worth $420,000. It was sold for $370,000. The settlement statement is annexed.  We have yet to determine how much is payable to [Mr H] and how much is payable to me. The Capital Gains Tax has also yet to be assessed.  The property has been sold to a purchaser from overseas.  [Mr H] has been handling the sale and is currently overseas. Upon the advice of my lawyer, I have tried to contact [Mr H] to obtain further details but have not been able to. I believe that the sale proceeds were deposited into a bank account in Hong Kong.

13. The annexure referred to is DH7 which is a letter from First Mortgage Services Australia to Melbourne Property Conveyancng  confirming their attendance at settlement on behalf of Suncorp-Metway Ltd.  It confirms that a cheque to Suncorp of $209,244.49 is to be paid in exchange for the discharge of mortgage and Certificate of Title for the Suburb C property.  The borrower is described as ‘Mr Hajian, E Pty Ltd and Hajian Family Trust’.  The annexure also includes a statement of adjustments for the date of settlement of the property being 24 April 2015.  This indicates a purchase price of $370,000 less deposit of $47,000 and that the purchaser is to pay the vendor E Pty Ltd a balance of $323,493.26.

1. There was no other evidence of the interest of Mr H claimed by the respondent other than the exhibits tendered which were unexplained in evidence. Not only is this evidence untested, the Exhibits purport to prove only a minor interest which the third party may have acquired in the Suburb C property.

2. The applicant argued that assuming the costs of the sale were $10,000 that the net proceeds of sale would be $150,756.

3. As to the Suburb G property, the respondent’s affidavit attached two market appraisals, the midpoint of which was $407,500. Taking the value of the mortgage into account, his counsel submitted that net proceeds of the sale of that property may not exceed $100,000 after the deduction of the costs of sale. The respondent’s taxable income as at 2014 was calculated at $66,875, taking into account the income distributed to the applicant by way of the family trust, but his counsel submitted that his expenses exceeded his income, including the truck which was in need of approximately $8,000 of repairs.

4. In total, the respondent’s estimate of the net property of the relationship was $150,000 excluding his superannuation benefits.

5. Counsel for the respondent submitted that the respondent had offered the applicant an opportunity to live in the Suburb G property.  Counsel for the respondent submitted that the applicant had not taken up that offer and also had not taken up the offer to divide the furniture and contents of the home between the parties.  This was not conceded by the applicant and remains untested evidence.

6. The respondent’s submissions were that he had no present access to funds to pay the applicant any money. Whilst conceding that he continued to live in  the Suburb G property rent-free, he has been paying the mortgage and other expenses such as the motor vehicle loan, which was said to exceed its value, and child support. Counsel for the respondent referred to a letter she had at the bar table from the mortgagee of the Suburb G property which purportedly stated that the respondent was no longer permitted to draw down from the mortgage account. This letter was not tendered. She conceded that the respondent had drawn down funds from the housing loan amounting to $4,000 in order to pay his legal fees for the parenting proceedings.

7. Counsel for the respondent also pointed to potential alternative resources for  the applicant to reduce her projected expenses.

8. Of the $9,000 claimed by the applicant for furnishings and kitchenware, the respondent proposed instead that the applicant take a portion of the contents of the house. As for the $10,000 claimed for a new car, the respondent through his counsel conceded that the applicant’s car was old but argued that it was nevertheless roadworthy and could be utilised by the applicant until final property settlement.

9. Counsel for the respondent also submitted that the property was at the lower end of the market and would sell quickly, and that the applicant could pay her solicitors’ fees on a deferred basis. Counsel for the respondent submitted that the applicant no longer needed the bond and rent in advance that she sought in her application, given that she had already moved into the apartment.  This was not conceded by the applicant.  Counsel for the respondent conceded that the child support assessment was quite low but submitted that the applicant had not sought a review through the Child Support Agency.

10. The respondent also emphasised that the applicant was in possession of jewellery which he claimed was valued at $37,000 and which could be capitalised. This was not conceded by the applicant and I cannot make any findings about this on an interim basis on untested evidence.

    THE LAW

11. Counsel for the applicant urged me to make an order under ss 79(1)(d) and 80(1)(h) of the Family Law Act 1975 (Cth) (“the Act”). The parties were not married but in a de facto relationship. I have applied s 90SM of the Act as it applies to the alteration of property interests after the breakdown of a de facto relationship.

12. Under s 80(1)(h) of the Act the Court may make an order pending the disposal of proceedings.

13. In Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166, referring to the “interests of justice” in making an interim property order, at [132], Boland and and O’Ryan JJ stated that:

    ...when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

14. At [226], Thackray J approved of the approach advocated by senior counsel for the Wife in relation to determining interim property settlement applications and stated:

    ...[t]he Court must first identify circumstances that make it appropriate to give consideration to exercising its power to make an interim order. It is at this stage that the Court has regard to the policy consideration that it is generally in the interest of the parties and the Court for there to be only one exercise of the s 79 power. However, once the Court has determined that the interests of justice require it to exercise the power, the conditions on which the power is to be exercised are governed only by the obligation to make an order that is “appropriate” and to ensure that the proposed order is “just and equitable” by reference to the matters set out in s 79(4).

15. While I have had regard to the consideration that it is more desirable that the Court exercise its power under s 79, or as here, s 90SM only once, it is also the case that the applicant has an immediate and urgent need for money to refurnish a home for herself and the children. Given the precarious living situation of the applicant and the children in her care, I find that it is in the interests of justice and appropriate to exercise my discretion to make an interim property settlement.

16. At par [135] of Strahan’s case Boland and Ryan JJ approved the proposition that if it is established that “it seems likely to the court that… the applicant…. will be likely to receive by way of property settlement a sum sufficient to cover the advance that would seem to be sufficient to enable the order sought to be made.” They pointed out that in such circumstances the applicant would only be receiving what he or she was entitled to receive when the power under section 79 of the Act was exhausted. This can be applied to s 90SM of the Act.

17. The second step according to Thackray J is to make an order that is “appropriate” and “just and equitable” according to the considerations in s 79(4) of the Act. The relevant provision in this case is s 90SM(4) of the Act.

18. The evidence before me is untested. While it was common ground at the hearing that the amount of child support should be higher than it currently is, no argument was advanced as to how much should be paid given the true position of the respondent’s income.

19. In considering what order (if any) should be made, s 90SM(4) of the Act also refers to s 90SF(3). This provides relevantly:

    (3)  The matters to be so taken into account are:

    (a)  the age and state of health of each of the parties to the de facto relationship; 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

    ……………………………….

    (f)  subject to subsection (4), 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)  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

    (i)  the effect of any proposed order on the ability of a creditor of a party to recover the creditors 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 de facto relationship 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

    …………………………….

    (n) the terms of any order made or proposed to be made under section 90SM in relation to:

    (i) the property of the parties;……

(q)  any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and

(r)  any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and

1. Subsection (4) is relevant to maintenance proceedings and provides that a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.

2. Counsel for the respondent submitted that the respondent has no access to funds and no other means to pay any part property settlement. She conceded that the respondent’s net income for the previous year was about $66,000 but submitted that his income for the current year, relying upon the third quarter of this year, which is in material annexed to his affidavit, is an income of only $47,000. Counsel for the respondent submitted that the respondent has significant costs in repairs in the sum of $8,000 for his truck which requires new tyres and that the respondent’s weekly expenditure exceeds his net income which is just over $900 per week. Counsel for the respondent submitted that the payment of mortgage and expenses for the former property where the parties resided, child support and the payment of a loan for the respondent’s motor vehicle exceeds his income.

3. In estimating the net value of the property to be divided between the parties, counsel for the respondent used the midpoint of value of the former home asserted by the respondent to be $407,500. Counsel for the respondent asserted that the mortgage on the Suburb G property amounts to $296,650.[2] Counsel for the respondent conceded that the mortgage on that property was $288,490 on 20 February 2015 but that the respondent had increased the mortgage by drawing down the balance to pay legal costs since February 2015 for the parenting proceedings. She submitted that the legal costs accounted for the difference in the mortgage from $288,490 to $296,650 which is currently owing. Counsel for the respondent submitted that the proceeds from the sale of the parties’ former home would be under $100,000 based on the midpoint value of $407,500, the mortgage and agents and selling fees.

   [2] Financial Statement of the Respondent filed on 30 June 2015

4. On the basis of the untested evidence before me, the applicant has recently moved into a sparsely furnished apartment with the two young children of the relationship. She has no reliable income other than social security benefits and child support which is less than it otherwise would be due to the respondent’s income-splitting arrangement. Her car is unreliable and breaks down. None of this was contested by the respondent, although he proposed fixing the car himself.  The respondent has a regular income from his business and is paying child support, and the mortgage on the parties’ former home in which he resides.  He has accessed funds to pay his legal costs from the housing loan on the Suburb G property which has increased by $8,000 in five months.

5. The respondent’s assertion that he offered the applicant accommodation in the parties’ former home is not an agreed fact and there is an intervention order in place. I make no findings about these issues but there is no dispute that the applicant is now in rental accommodation with the children.

6. Given that the applicant has the primary care of the two young children, and the fact that she has limited employability by reason of her commitment to the care of the children, I consider that she has limited capacity to work to maintain herself. A standard of living which is “reasonable” according to s90SF(g) of the Act calls for furnished accommodation and reliable transportation. Taking a conservative estimate of the net proceeds of the property of the parties allowing for the potential interest of the third party Mr H asserted by the respondent, I propose to order a modest amount of $20,000 by way of interim property settlement in favour of the wife to provide for the costs of some of the urgent items she seeks.

7. I have considered the factors referred to in Strahan’s case at [137] and that it seems likely that conservatively the applicant will receive by way of property settlement a sum sufficient to cover an advance of $20,000 and that she would therefore only be receiving money to which she is entitled.

8. In considering the quantum of the part property settlement order, I have taken into account the most conservative view of the assets of the parties as forecast by the respondent. This takes into account the potential interest in the proceeds of the sale of the Suburb C property which the respondent attributed to the third party. Taking the respondent’s estimate of the net proceeds of the property of the parties of $150,000, I consider that a figure of $20,000 satisfies the applicant’s most immediate needs without prejudicing either the respondent’s or the potential third party’s interests in the substantive property proceedings.

9. I am satisfied on the respondent’s case that there will be a modest amount of property of the relationship for distribution between the parties amounting to approximately $150,000 which excludes superannuation. In circumstances where the applicant has been living in a refuge with the children for the last eight months and the respondent occupies the parties’ former home and the applicant has now acquired rental accommodation for herself and the children, counsel for the respondent did not seriously press that the applicant was not in need.

conclusion

1. I am satisfied that it is in the interests of justice, appropriate, and just and equitable to make an interim property order in favour of the applicant.  

2. I am satisfied that there is sufficient evidence that the wife is entitled to a property order and is in need of funds for the reasons outlined earlier.

3. It is not in dispute that the respondent is entitled to a portion of the proceeds of sale of the Suburb C property which will be well in excess of $20,000.  The respondent claims that he cannot access the proceeds of sale notwithstanding that the property was registered in the name of the company of which he is the sole director and secretary and shareholder. This is untested evidence that there is no issue that the sale of the property has been concluded and the funds paid.

4. In Bing and Bing (2007) FLC 93-318 the Full Court (Kay, Coleman and Cronin JJ) said that the mere assertion that there are no immediately available funds cannot simply be accepted at face value where it is apparent that one of the parties controls a vast pool of assets (irrespective of whether those assets are readily capable of liquidation) and referred to the broad discretion of the court for the provision of funds by the holder of those assets to enable the other party to continue with litigation. This is not a case where there is a ‘vast pool of assets’ but it is clear that the respondent has the control of the Suburb C property asset and the applicant has no resources.

5. As to the quantum, doing the best I can on the untested evidence before me, I am satisfied that a payment of $20,000 by the respondent to the applicant is just and equitable having regard to the urgent needs of the applicant.  There is a disparity of income between the parties.  The value of the property of the relationship to be altered was conceded by counsel for the respondent to be approximately $150,000.  A payment of $20,000 will not exceed the ultimate entitlement of the applicant given the quantum of the property to be divided between the parties, the length of the relationship and allowing for the quarantining of an amount, which on the respondent’s case may be an entitlement of a third party. There is scope for the advance to be made.

6. I am satisfied that there are sufficient funds from the proceeds of sale of the Suburb C property for the respondent to pay the applicant the amount of $20,000 and that this would not exceed her entitlement under any final alteration of property.  

7. Having regard to the modest net value of the parties’ interest in property I have taken a conservative approach in determining the quantum which is just and equitable to be paid to the applicant. It may be that the parties can agree to some of the contents of the former home being divided equally between them which might assist both parties.

Costs

1. Paragraph 5 of the respondent’s Response to Initiating Application seeking interim orders sought that the applicant pay the respondent’s costs of, and incidental to these proceedings.  Paragraph 6 of the applicant’s Initiating Application seeking interim orders sought that the respondent pay the applicant’s costs of, and incidental to the application.  Neither party addressed the question of costs in the hearing before me.  I note that the parties came to an agreement on the day of hearing regarding orders which were made by consent.  The usual order is that each party bears their own costs. However, as no submissions were made, I make no determination on the question of costs.

I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thornton delivered on

31 August 2015.

Associate: 

Date: 31 August 2015