JOYNER & ELLISTON
[2018] FCCA 3412
•26 November 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| JOYNER & ELLISTON | [2018] FCCA 3412 |
| Catchwords: FAMILY LAW – Interim property – injunction – similar application filed previously. |
| Legislation: Family Law Act 1975 (Cth), ss.74, 75(2), 79(4), 79(6), 80(1)(h), 114(1)(e) 117(2) |
| Cases cited: Stanford v Stanford (2012) 247 CLR 108 |
| Applicant: | MR JOYNER |
| Respondent: | MS ELLISTON |
| File Number: | MLC 13397 of 2017 |
| Judgment of: | Judge Harland |
| Hearing date: | 12 November 2018 |
| Date of Last Submission: | 12 November 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 26 November 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Whitchurch |
| Solicitors for the Applicant: | Southern Legal Group |
| Counsel for the Respondent: | Ms Burt |
| Solicitors for the Respondent: | Taussig Cherrie Fildes |
ORDERS
The application in a case filed on 3 September 2018 is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Joyner & Elliston is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 13397 of 2017
| MR JOYNER |
Applicant
And
| MS ELLISTON |
Respondent
REASONS FOR JUDGMENT
The applicant husband filed an application in a case on 3 September 2018 seeking orders for interim property adjustment of $200,000 and an injunction against the wife dealing with the assets.
The wife opposes the application. She says the husband made a similar application in 2018, although in that application he sought $500,000. That application was resolved with the parties consenting to orders providing for various orders with respect to disclosure and attending a private mediation on 21 February 2018. The orders the parties agreed to did not include a distribution to the husband and did not include an injunction against the wife. Both parties were represented by counsel on that occasion.
It is concerning to the Court that there has been an increasing number of interim applications where parties essentially seek to reagitate interim issues that have previously been addressed whether by interim hearing or by consent. Such applications should be brought sparingly and where there is a clear change of circumstances rather than simply seeking an appeal in disguise or to have another attempt at the same argument. One answer to this increasing trend may be the delay in final hearings but these types of applications do nothing to alleviate that as it requires the Court to find more time to list interim matters and deal with very full duty lists which comes at the expense of trial dates.
The wife seeks to run a Stanford[1] case at final hearing where she says the husband should receive no further adjustment of the parties’ legal and equitable interests. The husband says he should receive 50% of the non-inheritance property. He has not articulated what he seeks with respect to the inheritance the wife received shortly after separation. In particular it is unclear whether he says he should receive a portion of that or whether he says it is a s.75(2) consideration. He says that he provided assistance and support to the wife’s mother before she died.
[1] Stanford v Stanford (2012) 247 CLR 108
The parties were married for 23 years. They were married on 1994. The parties separated on 6 August 2016. They have two children aged 21 and 20.
There is a dispute between the parties as to the value of the parties’ legal and equitable interests.
The wife sold the former matrimonial home at Property A (“the Property A property”) without consulting the husband. This was after the husband commenced these proceedings but was before the first return date. The Property A property was in the wife’s sole name. How the sale came about and the reasons for it is the subject of significant controversy between the parties.
The other major controversy between the parties is what should be included in the pool and the value. There is a difference of almost $2,000,000 between the parties’ cases.
The husband’s case
The husband says that in 1994 he received about $20,000 from the sale of flat he owned in Suburb O. He also says his family loaned him $60,000 to assist with the purchase of the first family home.
There is a factual dispute between the parties about a separation in 2005. The husband says that there was a brief separation of several weeks. He says they did not split their assets at that time nor did they enter into any agreement.
The husband’s case is that they made equal contributions during the marriage. They had separate and joint accounts. They both worked and received support from family on both sides. The husband says the wife largely managed their finances.
The wife’s mother died a week before they separated. The husband says he had a caring relationship with her mother and provided support to her in the last 16 years of her life on a weekly basis carrying out a variety of tasks including odd jobs, shopping, paying bills, maintaining her computer and cooking.
The husband’s complaint is that the wife has had sole control of the parties’ assets since separation apart from $33,405 he had in his account and his car. The parties have similar amounts of superannuation. Post separation the wife sold the Property A property without consulting the husband and dealt with the net proceeds by buying a home in Western Australia and placing the balance in the testamentary trust account for her late mother’s estate.
The husband moved out of the Property A property at the wife’s request when they separated and he has been living with his 89 year old mother. The husband says that up until the wife closed their joint bank account on 27 October 2017 he continued to deposit $2000 a fortnight into that account. He annexes some of the transactions showing the deposits he made.
The husband says that in contrast to his financial position post separation the wife has been spending freely, including going on four business class overseas trips and that her financial statement shows she is spending significantly more than her income on luxury items. She is also paying $950 in rental on a flat in Melbourne.
The husband lost his job in [date] 2017. Prior to that he was earning $150,000 a year. He says he had go on New Start payments as he had difficulty finding work because of his age and qualifications. He has found employment very recently and has also moved into rental accommodation with his partner.
The husband says he had been struggling to meet his financial expenses and legal fees and, at times, has had to represent himself whilst the wife is able to spend money comfortably and pay her legal fees.
The husband seeks an interim payment of $200,000 to cover his legal fees incurred to date of $81,013, his estimated fees up until the September 2019 trial of $85,000 and expenses for bond, rent and living expenses.
In his financial statement the husband says he owes his parents $383,846. However, this is inconsistent with his affidavit where he says he has received this sum as an advance on his inheritance. This is relevant to the consideration of s.79(4) and 75(2) factors but it is different to there being a loan which must be repaid.
The wife’s case
The wife’s case is that there should be no distribution of their assets. She says that in 2005 they separated after she discovered the husband’s deception about their finances. She says she found multiple ASIC notifications and fine notices including with respect to unfiled tax returns which she says she had signed and relied on the husband to manage given his qualifications as a [occupation omitted]. The liabilities including penalties totalled $150,000.
The wife says they reconciled on the basis of what she refers to as the 2005 agreement that they would operate their finances independently. If they acquired assets they would be responsible for their portions based on their contributions and would pay for household and the children’s expenses equally.
She says they bought the Property A property in joint names. Their portions of the purchase were adjusted to allow for the fact that the wife had paid the husband’s debt of $150,000. She says they took out separate loans so as to keep their contributions separate. She says over time the husband was not able to keep up with his payments and he acknowledged that his equity diminished. She said that in 2011 the husband signed the transfer of his share to the wife acknowledging that he had no equity in the Property A property. She says they also agreed that she would finance both mortgages. She says they did not refinance because of the fees involved. She denies the husband’s version of events in 2011.
He wife says they agreed that the husband would pay $1,500 a fortnight in board. In January 2014 she says they agreed to increase this to $2,000. She acknowledges that he made payments until September 2017 although she says this was ad hoc. It is a difficult argument to mount to claim that the husband was paying board in the context of an intact relationship and does not explain the payments made after the relationship.
The wife claims that in 2016 they reviewed their agreement and says the husband conceded that he likely owed her funds but she was not seeking a payment from him.
The wife outlines how the sale of the Property A property which she sold for $3,751,628.03. She claims that she repaid a loan to the testamentary trust of $1,613,545.12. This is 3 times the amount of the loan referred to in the probate document which refers to a $500,000 loan to the wife in 2013.
The wife says she has no access to funds to pay the partial property settle the husband seeks. That is not the case given her control of the testamentary trust account which now includes significant portion of the proceeds of sale of the Property A property.
The wife complains that the husband is not exercising his full earning capacity by choosing to work as a [occupation omitted] at the same time. She says her income has greatly reduced because she has relocated to Perth and needs to build up referrals there. She says she will cease working in Melbourne by the end of the year. She says she also has to look after the children, both of whom are adults, who she says are estranged from the husband and has health issues. She says she also has health issues which has impacted on her earning capacity. She has not filed any medical evidence. It is apparent that the parties’ respective earning capacities will be another source of controversy between them.
The wife also complains that the husband incorrectly claims that she is the sole beneficiary of her mother’s estate. She says she and their adult children are the primary beneficiaries. She also refers to the fact that she was ineligible to be the trustee of the testamentary trust because pursuant to the deed she is an ineligible person due to the marriage breakdown. Exhibit A is a copy of the Will which verified this point. However, when the wife says she and the children are the primary beneficiaries this is misleading as what the Will states is that pursuant to clause 6.1 the wife is the primary beneficiary if the wife has survived her mother by more than 30 days. The children are the primary beneficiaries in the alternative. That is clear from the wording of the Will itself. Given the clear wording of the Will, and that she is legally represented, it is somewhat surprising that that submission was being maintained in her affidavit and orally.
The wife’s submission that she lacks control of the trust also cannot be sustained both by reference to the terms of her mother’s Will and her own dealings with the testamentary trust account.
The probate application for the estate of the wife’s late mother attributes a value to the estate of $1,448,552.18. In her financial statement filed on 20 February 2018, the wife does not include her interest in the estate but curiously refers to monies advanced by the testamentary trust in the sum of $1,117. This is not an accurate portrayal of her financial position.
The wife says that she found various documents after separation relating to money advanced to the husband by his parents during the marriage as an advance on his inheritance. She said she knew they advanced money to the husband but not how much. It would appear then that both parties have had the benefit of family assistance during their marriage.
She also says that the husband has been on multiple trips interstate and within Victoria with his partner.
Principles applying to interim property applications
The husband seeks an order in the following terms:
That pursuant to sections 79(4), section 79(6), section 80(1)(h), section 75(2) the respondent pay to the applicant a sum of $200,000 within 14 days. The same amount be distributed to the respondent. Such distributed sums to be deducted from any settlement amount due to that party.
The husband does not seek an order pursuant to s.117(2).
When the order is sought under s.80(1)(h) and s.79 as it is here, it is necessary to briefly consider the relevant matters pursuant to s.79(4) and s.75(2)[2].
[2] See the discussion in Strahan & Strahan [2009] FamCAFC 166
Several authorities refer to the fact that it is preferable for the Court to exercise its discretion once at a final hearing. Care must be taken by the Court when exercising the power to make interim property orders given that the interim order may limit the orders that can be made a final hearing.[3]
[3] See for example Wenz & Archer [2008] FMCAFam 1119 & Strahan & Strahan [2009] FamCAFC 166
In this case because of the controversy between the parties and the state of the evidence, I cannot be satisfied that the husband has an irresistible claim[4] that he will receive $200,000. That is not to say that the wife’s argument is not without its difficulties but neither party is mounting a case that is not reasonably arguable. The difficulty in this case is that if I were to make an interim property settlement order that effectively pre-determines the wife’s claim to the extent of that figure.
[4] See the comments Blueseas Investments Pty Ltd v Mitchell (1999) 25 Fam LR 65
In Zschokke & Zschokke (1996) FLC 92-693 (“Zschokke”) the Full Court stated that when considering making an interim property order in a party’s favour to fund their legal costs the Court should considering the following:
a)The relative financial strength of the respondent to the applicant;
b)The respondent’s ability to fund his or her own costs;
c)The ability of the applicant to pay his or her own legal costs.
It is not enough for the Court to be satisfied that a party is likely to receive the payment sought as many things can change during the course of proceedings[5].
[5] See Thackery J in Strahan & Strahan [2009] FamCAFC 166 at [224 – 225]
I also refer to the comments of Boland and O’Ryan JJ at [79] with respect to interim costs. They also discussed the comments of the Full Court in Zschokke.
In Strahan Boland and O’Ryan JJ also refer to Brereton J’s comments in Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578 at [30]:
30 The Full Court of the Family Court of Australia reviewed the authorities and principles relating to the making of interim provision for litigation costs in Zschokke. That case establishes that it is important, when contemplating an order for interim provision for litigation expenses, to identify the relevant source of power - because it is the source of power that determines the necessary preconditions and relevant considerations for making the order. Thus, where an interim order for litigation expenses is to be made as an interim costs order under s 117(2), and probably also if it is to be made as a maintenance order under s 74, there are at least three requirements: first, a position of relative financial strength by the respondent; secondly, a capacity on the part of the respondent to meet his or her own litigation expenses; and thirdly, an inability by the applicant to meet her or his litigation expenses from her or his own income assets or financial resources. In addition, it has been said that such an order should be made only if the applicant has at least an arguable case for substantive relief which deserves to be heard [In the Marriage of Chester (1995) 19 Fam LR 281, 287], and that there should be evidence of what the applicant's likely costs of the litigation [In the Marriage of Wilson (1989) 13 Fam LR 205, 208-9; Chester, 288]. But it is not an essential precondition to the making of a such an order that an applicant first prove that his or her legal representatives will not continue to act unless their costs are paid or secured on an ongoing basis [In the Marriage of Columb (Family Court of Australia, Fogarty J, 27 November 1987, unreported); but cf In the Marriage of Coomes [1995] FamCA 103; (1995) FLC 92-558, in which Cohen J declined to make an order where the Wife's lawyers had expressly said that she would not be required to pay their costs until she had received funds from the final property order].
Whilst the husband refers to seeking to use a significant portion of the funds he seeks on legal costs which have been incurred and anticipated costs, his solicitor has not filed an affidavit setting of the costs agreement entered into and the estimates for the future costs. The husband’s reference to an estimate of $85,000 falls far short of what the Court would need to be satisfied of if the husband had sought an order under s.117(2).
If the husband had sought interim costs pursuant to s.117(2) and had provided the necessary details, then the prospects of success would have been higher, whether it be a dollar for dollar costs order or a lump sum. This is because of the desirability for parties to be legally represented and the fact that the respondent has superior access to assets and funds.
The injunction
The husband seeks an injunction against the wife in the following terms:
That pursuant to section 114(1)(e) the respondent wife by herself her servants, agents heirs, executors and administrators be and are hereby restrained from knowingly doing any act or thing which would prevent the Husband his heirs, executors, administrators, assigns and/or nominees from receiving any benefits pursuant to orders of this court related to assets of the relationship including but not limited to superannuation, real property, cash, shares and significant assets, save such acts or things she is lawfully authorized to do by herself, her servants, agents, heirs, executors, administrators.
In order to grant an injunction, the Court must be satisfied that there is a serious question to be tried and that the balance of justice and convenience favours an injunction. The husband points to the expenditure of the wife both with respect to the sale of the former matrimonial home without his involvement and her dealing with the proceeds of sale of the home. The husband has lodged a caveat over the wife’s property in Western Australia. What is of particular concern is the wife’s treatment of the balance of the proceeds of sale, depositing those into the testamentary trust account.
The terms of the injunction the husband seeks is far too broad and indeed is unclear as to what it would actually achieve as it refers to the wife doing such acts and things other than those that she is lawfully authorised to. There is no suggestion that she has done anything unlawfully and, in fact, the wife would submit that she has acted in a manner consistently with her understanding of the agreement she says she and husband reached.
It is incumbent upon lawyers to draft the orders their client seeks with the precision needed and in terms that are capable of being made. Even if the Court was satisfied that the interests of justice and the balance of convenience favoured an injunction being made, it cannot be made in the terms that are sought.
The husband’s application must be dismissed.
I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of Judge Harland
Date: 26 November 2018
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Injunction
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Jurisdiction
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Res Judicata
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Procedural Fairness
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