Judd & Treasure
[2018] FamCA 50
•6 February 2018
FAMILY COURT OF AUSTRALIA
| JUDD & TREASURE | [2018] FamCA 50 |
| FAMILY LAW – SPOUSAL MAINTENANCE – Where the wife seeks that the husband pay her periodic and lump sum maintenance – Where the wife has primary care of the parties’ autistic children – Where the wife has significant health difficulties – Where the wife is unable to work – Where the wife is unable to adequately support herself – Where the husband has access to significant assets and financial resources – Where the wife’s stated expenses are not extravagant – Where some of the husband’s stated expenses are extravagant – Order made for the husband to pay periodic spousal maintenance. FAMILY LAW – PROPERTY – Litigation costs – Where the wife claims she is unable to fund the litigation – Where the wife is unable to support herself adequately and has no income – Where the husband has access to significant assets and financial resources – Where an order for litigation costs is necessary to “level the playing field” – Order made for the husband to pay the wife lump sum and “dollar for dollar” litigation costs. FAMILY LAW – PROPERTY – Sole Occupation – Where the wife seeks that the husband vacate the former matrimonial home and she resume residence there with the children – Where the wife and children currently reside in a three bedroom “granny flat” attached to the main residence of the former matrimonial home – Where the current residence of the wife and children is adequate – Wife’s Application dismissed. |
| Family Law Act 1975 (Cth) ss 72, 75(2), 79, 80(1)(h), 90SF, 117, 117(2A) |
| Bing & Bing (2007) FLC 93-318 |
| APPLICANT: | Ms Judd |
| RESPONDENT: | Mr Treasure |
| FILE NUMBER: | PAC | 166 | of | 2017 |
| DATE DELIVERED: | 6 February 2018 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Hannam J |
| HEARING DATE: | 16 October 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Tockar |
| SOLICITOR FOR THE APPLICANT: | Rebekah Dorter Family Lawyer |
| COUNSEL FOR THE RESPONDENT: | Mr Givney |
| SOLICITOR FOR THE RESPONDENT: | Newnhams Solicitors |
Orders
That the husband pay, or cause to be paid weekly maintenance for the wife in the sum of $1,200 per week by direct deposit into such bank account as the wife may nominate from time to time, payable on or before Monday each week with the first payment to be made on the first Monday following the date of these Orders.
Within fourteen (14) days of the date of these Orders, the husband pay, or cause to be paid, the sum of $60,000 by direct deposit into the trust account of the wife’s solicitors, being Rebekah Dorter Law Practice Trust Account, BSB: 062-000, Account Number: …50 (“the Rebekah Dorter Law Practice Trust Account”).
Within seven (7) days of any payment (including any deposit into a trust account in advance) by or on behalf of the husband in relation to the fees and expenses of any legal practitioner acting on his behalf (including all expenses in association with the preparation of his case), except for any fees and expenses paid by the husband to a joint expert on behalf of both parties, the husband pay, or cause to be paid, the same amount by direct deposit into the Rebekah Dorter Law Practice Trust Account.
The preceding Order does not apply to the first $60,000 paid by or on behalf of the husband in relation to his legal costs.
Within twenty four (24) hours after any payment by or on behalf of the husband as described in Order (3), the husband cause a memorandum to be provided to the wife’s solicitors stating the amount or amounts so paid.
The amounts paid pursuant to Orders (2) and (3) to the wife’s solicitors be applied by them only in payment of the costs and disbursements incurred by the wife in the conduct of these proceedings.
The wife’s application for sole occupation of the former matrimonial home is dismissed.
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 Judd & Treasure 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 PARRAMATTA |
FILE NUMBER: PAC 166 of 2017
| Ms Judd |
Applicant
And
| Mr Treasure |
Respondent
REASONS FOR JUDGMENT
Introduction
The Applicant wife, in proceedings with her former husband for a property settlement under s 79 of the Family Law Act 1975 (Cth) (“the Act”), seeks interim property orders for spousal maintenance and litigation costs by way of an Amended Application in a Case filed 18 September 2017.
The husband opposes the orders sought by the wife and seeks that her Amended Application in a Case be dismissed with costs.
Background
The husband who is 44 and the wife who is 42 began living together in 2002. They did not marry but had two children who are currently aged 13 and eight.
Throughout the relationship the husband received an income from various sources including through two businesses. He owns one of these businesses by himself while the other is owned by his parents and he is employed as an operations manager. The husband also trades livestock through a pastoral company.
The wife who is a qualified professional has not been employed for many years. She is the primary carer for the parties’ two children. Both children have been diagnosed with Autism Spectrum Disorder though there appears to be some dispute concerning the level of each child’s disability and particular care requirements.
The parties separated in August 2016 after a 14 year relationship. Initially they both remained in the former family home. In October 2016 the wife moved with the children into separate premises located in the same building as the family home and the husband remained living in the former home.
The wife has been diagnosed with a number of significant health issues including an autoimmune disease, brain cancer (for which she underwent surgery in 2015) bowel cancer (for which she underwent surgery in 2017) and an adjustment disorder with anxious mood. The wife contends that she is currently unable to work though this appears to be disputed by the husband.
The parties are in dispute about a number of matters including the assets available for distribution, the financial and non-financial contributions of each party (including the use and application of the wife’s significant Lotto winnings) and the value of and nature and extent of the wife’s contributions to properties in the husband’s name and his business interests. There are also ongoing parenting proceedings about the future care arrangements for the two children.
Although there are a number of disputes concerning the net value of the assets available for distribution, the total value of this property is somewhere between $5.7 to $8.4 million dollars.
Against this background and considering only those matters not in dispute I now consider the particular orders sought by the wife.
Spousal Maintenance
The wife seeks orders that the husband pay her $1,200 per week and $100,000 in lump sum spousal maintenance. Although she sought $1,500 in weekly payments in her Application, in the course of the proceedings it was conceded on her behalf that $1200 would be sufficient.
The husband opposes this application on the basis that the wife has the capacity to work and that he is currently already meeting a substantial majority of the expenses of the wife and children.
The Law and Discussion
The purpose of an application for interim spousal maintenance is to provide for the interim financial needs of the claimant. The payment of such a claim depends upon two matters: the needs of the claimant and the capacity of the respondent to pay.
These matters arise from section 90SF of the Act which provides as follows:
(1)In exercising jurisdiction under section 90SE (after being satisfied of the matters in subsections 44(5) and (6) and sections 90SB and 90SD), the court must apply the principle that a party to a de facto relationship must maintain the other party to the de facto relationship:
(a)only to the extent that the first-mentioned party is reasonably able to do so; and
(b)only if the second-mentioned party is unable to support himself or herself adequately whether:
(i)by reason of having the care and control of a child of the de facto relationship who has not attained the age of 18 years; or
(ii)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(iii)for any other adequate reason.
(2)In applying this principle, the court must take into account only the matters referred to in subsection (3).
Applicant unable to support self
The first of these matters, the need of the applicant, arises from section 90SF(1)(b) of the Act. It is, in effect, a threshold requirement.
It is to be noted that section 90SF(1) is in almost identical terms to s 72(1) of the Act and the case law dealing with section 72(1) and married couples is therefore equally applicable to de facto relationships.
The test of ability to support one’s self was interpreted in In the Marriage of Eliades[1] as:
[N]ot identical to the test of whether one is in need but means whether the applicant is in a position to finance himself or herself from his or her own resources. That is to say, the test is whether by reason of earning capacity, by reason of capital or other sources of income which have accrued independently to the applicant, the applicant is in a position to look after herself …
[1] (1981) FLC 91-022 at 76,232. See also Clauson and Clauson (1995) FLC 92-595.
The claimant for maintenance must establish that he or she is unable to support herself or himself adequately. The word ‘adequately’ was interpreted by Lindenmayer J in Nutting and Nutting[2] as:
A standard of living which is reasonable in the circumstances, including the circumstance that the parties are no longer husband and wife and that the assets and resources which were formerly available to them both in common have now been divided between them.
[2] (1978) FLC 90-410 at 77,094.
The Full Court agreed with this interpretation in In the Marriage ofBevan[3]. The Full Court also said that a court is not bound by a principle that an applicant is entitled to the same standard of living as was enjoyed prior to separation whenever the respondent is able to pay.
[3] (1995) FLC 92-600; (1993) 19 Fam LR 35.
Section 90SF sets out two of the specific matters that may affect a person’s ability to support herself or himself adequately as having the care and control of a child or children and having no capacity for employment. The section also refers to an inability to support oneself “for any other adequate reason”.
The wife is not currently working and has not been employed for the majority of the parties’ relationship due to her care of the children and significant health concerns.
Mullane J in N & N[4] stated that:
[T]he interpretation of the expression “unable to support herself or himself adequately” is subject to the words “having regard to any relevant matter referred to in subsection 75(2).
[4] (1997) FLC 92-782 at 84643.
Noting that the section 75(2) factors are identical to the factors contained in section 90SF(3), the following s90SF(3) factors are relevant to the question of the claimant being unable to support herself adequately.
The husband is 44 and the wife is 42. The wife has a number of significant health conditions that she contends are relevant to her capacity for employment. The husband challenges this assertion.
The wife was employed prior to the relationship and ceased all employment about seven years ago. She suffers from a number of serious health conditions including Lupus, brain cancer for which she underwent brain surgery in June 2015 and bowel cancer for which she underwent surgery in January 2017. As at the date of the hearing in October 2017 the wife was in remission from her conditions though she continues to suffer various complications associated with them.
According to a report from the wife’s general practitioner the Lupus condition causes her to suffer chronic widespread joint pain with acute exacerbations, widespread chronic joint stiffness and widespread chronic swelling which are also responsible to some degree to her experiencing ongoing fatigue and general weakness. Her symptoms necessitate various therapies including pain relief, massage, rest and exercise under the supervision of an exercise physiologist as well as reviews at least six monthly and monitoring.
The wife also suffers from Hashimoto’s Thyroiditis which according to the general practitioner’s report causes chronic fatigue, weight fluctuation, depression and constipation which may also be responsible to some degree to her general weakness. These symptoms necessitate therapies including medication and the care of an endocrinologist which requires six monthly tests and monitoring.
She also suffers from Erythema Nodosum which causes widespread multiple inflammatory subcutaneous nodules, mainly proximal to joints which necessitates therapies including medication and rest as the condition flares with prolonged standing. The condition is monitored as for the Lupus condition.
The wife’s brain cancer which was treated by surgery in 2015 “still causes” acute or chronic headaches, possible mild cognition impairment manifesting as memory loss/impaired concentration and paraesthesia of the left upper limb and left face. She is under the care of an oncologist for this condition which requires three monthly MRI scans and review on a six to 12 monthly basis by her neurosurgeon.
It is also reported by her general practitioner that the wife’s wrist was subject to repeated IV cannulation which appears to have resulted in nerve and probable ligament injury. These conditions necessitate regular physiotherapy by a specialist hand physiotherapist on a fortnightly basis with exercises prescribed to alleviate wrist pain. This condition is the subject of ongoing assessment with tests and scans.
According to the general practitioner’s report the wife’s colorectal cancer for which she underwent surgery in 2017 causes chronic fatigue and depression and requires monitoring by scans and colonoscopies at least annually for the next five years as well as blood tests.
The general practitioner also reports that the wife is suffering from an adjustment disorder with anxious mood as a result of her serious health conditions and the breakdown of her relationship with the husband. As a result she experiences acute and chronic anxiety, chronic fatigue and depression which necessitate medication and fortnightly or monthly ongoing appointments with a psychologist.
The doctor also reports that apart from the symptoms associated with her conditions the wife also may experience side effects of her medications including lethargy, fatigue and adverse cognitive effects. The general practitioner opines that due to her chronic symptoms the wife’s capacity to obtain gainful employment has been significantly diminished, that her prognosis is uncertain and while perhaps some conditions are in remission there is a possibility of them recurring at a later stage.
The husband in his affidavit selects some extracts from the medical practitioner’s report and expresses his own opinion that the wife is not impaired from obtaining gainful employment. Although it has not been tested by cross-examination I accept the opinion of the general practitioner that the wife’s capacity to obtain gainful employment has been significantly diminished.
The wife has almost exclusive care of the party’s two children, both of whom have been diagnosed with Autism Spectrum Disorder. The husband appears to challenge the wife’s evidence with respect to the extent of the children’s disabilities (which is a matter that cannot be resolved in these proceedings). However, it is common ground that although the children attend mainstream schools they have some learning difficulties and receive additional tutoring and therapeutic intervention. It also appears to be undisputed that the wife facilitates the children’s attendance at all necessary appointments and all extra-curricular activities. The wife deposes to taking the children to 25 appointments per month between them. Although the parents each live in premises contained in the same building the children are only in the husband’s care each alternate weekend. During that time the husband generally takes them to a family farm.
The parties had clearly agreed when their relationship was intact that it was an appropriate parenting arrangement for the wife to be responsible for the care of the children. In this regard I attach some weight to the need to protect the wife who wishes to continue in her role as a parent especially as the children have some special needs.
I am of the view that the combination of the wife’s caring responsibilities for the children, especially having regard to their special needs and her own serious health conditions mean that she has currently no capacity for appropriate gainful employment. This is a matter to which I attach significant weight.
As a result of not being able to work the wife relies completely upon funds provided by the husband to support her and the children as well as a Centrelink payment which must be disregarded for the purposes of this application pursuant to section 90SF(4) of the Act.
It is the husband’s case that the applicant’s claimed expenditure is incorrect or extravagant under section 90SF(3)(g).
In part N of the wife’s Financial Statement she sets out her average weekly expenses as being $1,201 for herself and $761 for the children. So far as her own expenses are concerned I am of the view that none are particularly extravagant or unnecessary as is contended by the husband. The wife’s average total weekly income of $1,373 is made up of $800 per week paid by the husband (including child support for the children) and various government benefits.
Having regard to the income received by the wife and her total personal expenditure there is a shortfall each week of just over $700. In these circumstances I am satisfied that the wife is unable to support herself adequately having regard to the matters set out in subsection 90SF(3).
Respondent’s ability to pay
Even after a claimant has established an inability to support herself or himself adequately a respondent’s liability to pay also depends upon being “reasonably able” to pay.
The respondent’s capacity to pay is considered on income, property, financial resources and earning capacity. Capacity to pay is assessed by determining the respondent’s “surplus” after paying his necessary commitments.
In Curnow and Curnow[5] Ellis J said:
In my judgment, a party is only liable to maintain the other party to the extent that the first-mentioned party is reasonably able to do so. In determining whether a party is reasonably able to support or contribute to the support of another party, one should have regard to the income of the first-mentioned party and then the unavoidable, non-discretionary expenses of that party, including his or her reasonable living expenses. After that exercise, one can consider the amount, if any, from which the first party may be able to contribute to the maintenance of the other party.
[5] Unreported, Full Court, Ellis, Kay & Moore JJ, 28 April 1997.
It is contended on behalf of the husband that he does not have the capacity to reasonably be able to pay maintenance to the wife.
In Part N of his Financial Statement the husband claims a totally weekly expenditure for himself and the children of $3,505. I am of the view that some of these expenses are somewhat extravagant, in particular in comparison to the wife’s total expenses. For example, although the children are only in the husband’s care for two days per fortnight during the term and half of the school holidays he claims that he spends $150 per week on clothing for them, $400 per week on their activities and $200 per week on gifts for them. He also contends that he spends $200 per week on cleaning and $100 per week on car washing.
The husband also is responsible for the mortgage on the property containing both parties’ residences, outgoings in relation to that property, insurances for the home and car, health insurance and the like. In his Financial Statement he claims to have a small shortfall in his income each week to meet his expenses.
Despite the husband’s claimed financial shortfall he appears to have access to significant financial resources and control over the parties’ financial interests. Even on his own version of events around September 2016 the husband’s agribusiness loan increased by about $1 million dollars, apparently to fund the purchase of a property and since that time the husband has traded extensively in livestock indicating access to significant funds.
According to the husband’s Financial Statement he has, at minimum, sole ownership of an unencumbered pastoral property worth over $4 million and livestock and machinery worth nearly $1.5 million, sole ownership of an encumbered property in Sydney worth over $2 million, sole ownership of a business which is yet to be valued, shares in and income from his parents’ business. He has a beneficial interest in a family trust, of which he is the director for the trustee company, which owns a number of encumbered properties. Despite these admitted assets and resources, the husband claims he has no capacity to maintain the wife.
In my view the following remarks of McClelland J in the case of Lesley & Lesley[6] are equally applicable to an application for spousal maintenance:
… senior counsel for the wife relied on the decision of the Full Court in Bing & Bing[7] as authority for the proposition that where one party controls the vast pool of assets, as in this case, questions regarding the potential source of the funds to satisfy an interim property order is not an impediment to such an order being made. In Bing (supra), 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,[8] those principles are relevant irrespective of whether the partial property settlement is being used to fund litigation or for another appropriate purpose.
[6] [2015] FamCA 894.
[7] (2007) FLC 93-318.
[8] [2014] FamCA 162 at [17].
There is a substantial asset pool available to the husband in this matter. On the husband’s own evidence he had assets worth over $11 million dollars a short time after separation but now has assets of almost $15 million dollars. In light of the authorities and the evidence before me I am of the view that some of the husband’s expenses are extravagant and discretionary and he has access to significant financial resources providing him the capacity to pay spousal maintenance.
Having established that the respondent is capable of supporting the claimant, I now must consider the extent to which it is reasonable for him to do so.
Having regard to the principles espoused in Nutting & Nutting (supra) and In the Marriage of Bevan (supra) the wife is not entitled to be maintained by the husband to the same standard the parties enjoyed prior to separation but to a standard that is reasonable in the circumstances. As previously stated in these Reasons, I am of the view that the expenses the wife deposes to in her Financial Statement are not extravagant and reflect reasonable expenses necessary for maintaining herself and the children.
Given the established shortfall between the wife’s income and her reasonable expenses it is appropriate that the husband’s current maintenance payments to her, of $800 per week, be formalised and increased to meet the genuine need of the wife. Therefore I make Orders, as set out at the forefront of these Reasons, that in addition to the husband’s current payments of the parties’ mortgage and household outgoings he is to pay the wife $1,200 per week in spousal maintenance.
The wife also sought an order for $100,000 in lump sum spousal maintenance.
It is submitted on behalf of the wife that such a sum is required for the replacement of her current car, which is said to have a number of mechanical difficulties.
In circumstances where I will make orders for the husband to pay the wife $1,200 per week in periodic maintenance and where the wife has demonstrated no inability to support herself that would not be remedied by an order for periodic maintenance I do make an order for lump sum maintenance as sought.
There was some suggestion advanced by counsel for the wife at the interim hearing that in the event that I did not make orders for the husband to pay the wife $100,000 in lump sum spousal maintenance that such an order would be sought in the alternate as a partial property settlement. This argument was not developed any further by counsel for the wife and I also decline to make the orders sought by the wife on this basis.
Sole Occupation of the former matrimonial home
The wife seeks an order that the husband vacate the former matrimonial home, which is the main residence on the property and move into the “granny flat”, which forms part of the same building, where the wife and children currently reside.
The husband opposes such an order being made.
Section 114 of the Act provides the court may make such order or grant such injunction “as it considers proper” with respect to a matter to which the proceedings relate.
In Sieling v Sieling (1979) FLC 90-627 the Full Court said:
The power to grant injunctions is, of course, a discretionary power, not to be exercised lightly. The Court must balance the hardship to each party of granting or refusing an order, and frame its order in such a way as to impose no further restriction than is necessary to achieve the protection of the applicant’s interest. It will not lightly interfere with the rights of an owner of property on the basis of a vague or uncertain claim. There must be circumstances arising out of the marital relationship which make it necessary to restrain, temporarily, a spouse from using his or her property rights to the detriment of the other party.
In Davis & Davis (1976) FLC 90-062 at 75,309 the Full Court said that considerations include:
...the means and needs of the parties, the needs of the children, hardship to either party or to the children and, where relevant, conduct of one party which may justify the other party in leaving the home or in asking for the expulsion from the home of the first party.
It is the wife’s contention that the former matrimonial home is substantially larger than the “granny flat” in which she currently resides with the children and in circumstances where the children live primarily with her she and the children should live in the main residence. She further contends that the husband is living alone in the larger residence and is not living there for significant periods of time while he spends time at his other properties. It is her position that the balance of convenience favours the husband vacating the main residence and moving into the “granny flat”.
The husband contends that the term “granny flat” for the smaller residence on the property is a misnomer as the residence has three bedrooms and a bathroom. It is not disputed by the wife that the “granny flat” has multiple bedrooms, a bathroom, a laundry and is liveable.
I am of the view that while the current residence of the wife and the children may not be ideal in her eyes, the wife is not entitled to the same standard of living that the parties enjoyed prior to separation but to a standard that is reasonable and adequate. In circumstances where the wife and children’s residence is adequate to meet their daily needs I do not make orders for the husband to vacate the main residence of the former matrimonial home. The ultimate occupation of the former matrimonial home will be a matter for final hearing.
Interim Costs
The wife seeks an order that the husband pay $60,000 in a lump sum into the trust account of her solicitors for payment of her legal costs and that a subsequent “dollar for dollar” order be made.
The husband opposes both orders as sought by the wife on the basis that the costs of litigation could be extremely expensive and the wife has alternative sources of funding.
The Law and Discussion
It was observed in Paris King Investments Pty Ltd v Rayhill[9] that there are a number of juridical bases for an order of the type sought by the wife. The Full Court in Zschokke & Zschokke[10] had observed that there was some uncertainty as to the source of jurisdiction to make the orders of the type sought but were of the opinion that the decisions in Wilson & Wilson[11] and Poletti & Poletti[12] established that where there are pending proceedings under s 79 of the Act for property settlement, an order for funds for litigation expenses may be made pursuant to s 80(1)(h) or s 117(2).
[9] [2006] NSWSC 578
[10] (1996) FLC 92-693
[11] (1989) FLC 92-033
[12] (Unreported, Family Court of Australia, Nygh J, 2 March 1990)
In Strahan & Strahan[13] at [84] the Full Court said:
In Paris King Investments Brereton J, with whom on this point we agree, at [30] said that Zschokke “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”.
The Full Court went on to say at [86]:
… If the source of jurisdiction is s 117(2) of the Act then the court may make such order as it considers just provided there are justifying circumstances. If the order is sought under s 79 of the Act then the court may make such an order as it considers appropriate provided it is satisfied that it is just and equitable to make the order. …
[13] [2009] FamCAFC 166
The wife brings her application for this order under s 117 of the Act and foreshadows that an application based upon s 80(1)(h) utilising s 79 will be made at a future date.
In Strahan & Strahan (supra) the Full Court said:
If the source of jurisdiction is s 117 of the Act, in Zschokke at 83,217 the Full Court said:
If the order is to be made under s.117(2) then, in our view, the matters contained in s.117(2A) must be addressed, and this would seem to have been recognised, if not expressly at least by implication, by the Full Court in Poletti. In saying this we acknowledge that a number of the paragraphs in the sub-section (notably paragraphs (d) failure by one party to comply with court orders; (e) total lack of success by one party in the proceedings; and (f) existence and terms of an offer for settlement) may not have relevance in an application for an order of the type in question. We also acknowledge that it may well be necessary in such an application for the Court to have regard to a range of relevant matters other than those specified in the sub-section, as is permitted by paragraph (g).
Section 117(1) of the Act sets out the general rule as being that each party is to bear his or her own costs. That principle is, however, subject to subsection (2) which gives a Court a discretion to make an order for costs if there are circumstances that it in the opinion justify it in doing so. Any such order for costs is to be pursuant to section 117(2) “as the Court considers just”.
The High Court in Penfold v Penfold[14] indicated that the circumstances justifying an order for costs need not be exceptional, but they must, of themselves, be sufficient to justify the making of an order for costs. Therefore, there is no additional or special onus on an applicant seeking an order for costs other than the Court finding justifiable circumstances to make such an order.
[14] (1980) 144 CLR 311
Section 117(2A) sets out the relevant matters, if any are applicable, to which the Court is to have regard in considering an order for costs.Few of the considerations in section 117(2A) are relevant at this stage in the proceedings but the matter most relevant in this case is the financial position of each party.
It is clear that the husband has the control of a significant pool of assets, worth millions of dollars, and the wife has limited access to funds as outlined earlier in these Reasons. Counsel for the wife submits that an order for the husband to pay a lump sum to the wife and a “dollar for dollar” costs order will “level the playing field” between the two parties given the large disparity between their current earning capacities and financial resources and the sum being sought should cover the majority of her costs.
Counsel for the husband submits that the costs of litigation may be extremely expensive, over $100,000, and he would have to sell assets in order to make payments to the wife as he has no access currently to liquid finances. He further submits that the wife has the capacity to borrow money from her family in order to fund her costs of litigation.
In In the Marriage of J U and T Poletti[15], Ellis, Strauss and Butler JJ quoted Ngyh J with approval at [796]:
…It is rather, as it certainly was in Wilson and Wilson[16], 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...
[15] (1990) 15 FamLR 794.
[16] (1989) 13 Fam LR 205.
It clear from the evidence, given the number of properties, trusts and companies in which the husband has an interest, that this matter is complex and has the potential to require that the parties appear in court on numerous occasions in relation to both the parenting and property aspects of the matter.
As noted in Lesley & Lesley (supra) the question of whether a court makes an order for the provision of funds by one party to the other to enable the continuation of litigation is separate and distinct from the question of enforcement of such an order which may be dealt with at a later date. I do not accept the husband’s position that it is appropriate to for the wife to borrow money from her family to fund litigation particularly in circumstances where the capacity of the wife’s family to lend her money is not the subject of these proceedings and the husband controls a large pool of assets which ensures that he does not have to seek financial assistance from his family in order to pay his legal costs.
As any order for litigation costs will be made under section 117 of the Act such an order would be taken into account in determining any application for costs made by either party later in these proceedings.
In my view, given the substantial disparity in assets and financial resources available to each party, there are justifiable circumstances in this matter for an order for litigation costs to be made against the husband.
Accordingly I make an order as set out at the forefront of these Reasons for the husband to pay to the wife $60,000 in lump sum litigation costs and make a “dollar for dollar” costs order.
Summary and conclusion
For the foregoing reasons, the orders I make are those set out at the forefront of these reasons for judgment.
I certify that the preceding eighty-four (84) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hannam delivered on 6 February 2018.
Legal Associate:
Date: 6 February 2018
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