Kaufman and Kaufman

[2009] FamCA 184

FAMILY COURT OF AUSTRALIA

KAUFMAN & KAUFMAN [2009] FamCA 184

FAMILY LAW – PROPERTY – Partial property order – Compelling and just and equitable – Sufficient property remaining to final hearing – Like sum paid to boeth husband and wife

Family Law Act 1975 (Cth)

Harris v Harris (1993) FLC 92-378

APPLICANT: MR KAUFMAN

RESPONDENT: MS KAUFMAN

FILE NUMBER: MLC 7188 of 2008

DATE DELIVERED: 11 MARCH 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: YOUNG J

HEARING DATE: 11 MARCH 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR DICKSON

SOLICITOR FOR THE APPLICANT: KENNA TEASDALE LAWYERS

COUNSEL FOR THE RESPONDENT: MR HANNAN

SOLICITOR FOR THE RESPONDENT: SAXBYS LAWYERS

ORDERS

IT IS ORDERED:

1. THAT each of the parties forthwith sign all documents and do all acts and things to facilitate a payment of $200,000 to each of them from the Westpac Banking Corporation account number ….

2. THAT this payment be as a partial settlement of property.

3. THAT the application in a case filed 13 February 2009 be otherwise dismissed.

4. THAT there be no orders as to costs.

5. THAT the extempore reasons for judgment be transcribed, be placed upon the Court file and be made available to the parties.

IT IS CERTIFIED

1. THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Counsel for each of the husband and wife.

IT IS NOTED that publication of this judgment under the pseudonym Kaufman and Kaufman is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 7188 of 2008

MR KAUFMAN

Applicant

And

MS KAUFMAN

Respondent

REASONS FOR JUDGMENT

1. The matter of Kaufman and Kaufman and others comes before me in the Judicial Duty List by way of a transfer from the Senior Registrar.  Mr Dickson of counsel appears for the husband and Mr Hannan of counsel appears for the wife.  Both parties are in court as are instructing solicitors.

2. The application in a case in this matter was filed 13 February 2009.  The husband seeks payment from a joint investment account with Westpac Banking Corporation the sum of $250,000 by way of partial property settlement together with, if successful, costs of this application.  In support of that application the husband has filed an affidavit on 13 February 2009.  I have read that somewhat extensive affidavit and the annexures thereto.  Otherwise, his solicitor filed on that same day an affidavit in support of the legal costs, past and present and future costs of proceedings.  I have read Mr Gregory's affidavit.

3. This morning, and over objection, the husband sought leave to file a further affidavit.  I granted leave on the basis that it did not or should not cause any financial or legal disadvantage to the wife or her solicitors.  That affidavit effectively set out a list of the further payments made from the earlier, out of court, agreed partial property distribution.  I record that I have read each of the affidavits filed by or on behalf of the husband in support of his application.

4. As to the wife's response, I have read her initial application filed 7 August 2008.  That document has not been amended.  The final order sought in paragraph thereof is for the equal division of the net proceeds of sale of the former matrimonial home at M. 

5. There are other orders detailed in paragraphs 2 – 8 (inclusive) thereof, but the reality of that application is it disclosed the dispute as to loan accounts recently the subject of Supreme Court proceedings.  I am certainly satisfied that as at August 2008 what the wife was placing before the court was a proposal for the husband to take half the equity in the home and presumably no other moneys.

6. The wife has now filed an affidavit with very substantial annexures, albeit largely that it is the judgment from the Commercial and Equity Division, Supreme Court of Victoria, delivered in April 2004.  I have not had the opportunity to read that judgment, but the purpose why it was annexed to the affidavit is clearly and concisely summarised in paragraph 8 of the affidavit. 

7. I make no finding on the wife's purpose for the annexure of that affidavit for her conclusion that the husband is not willing to work, is an opportunistic person and has a willingness to lie for money.  All of those matters can await another hearing.  I simply do not, for the purposes of what I need to determine today, have to make any concluded findings on any of those matters.  I have already made observation to her counsel that some parts of the affidavit are more argumentative or arithmetic-based, in particular paragraphs 21, 22 and 23 thereof.

8. Nevertheless, I understand the message conveyed by the wife's solicitors on the interim application:  that is, there should be in the alternative no money released to the husband by way of further partial property settlement, or no more than $71,827 as identified in paragraph 23, but otherwise certainly not a sum of $175,000 as encompassed under discussion between the solicitors in the annexed letter dated 12 December 2008, being annexure “JJA2” to the affidavit. 

9. The reality of this case is that the net proceeds of sale of the substantial former matrimonial home were approximately $1.8 million.  $368,000 or thereabouts have been distributed to both husband and wife by way of an out-of-court partial property agreement, the particulars of which are identified in paragraph 4 of the husband's supporting affidavit. 

10. I am aware of the now-transferred Supreme Court proceedings and the escalating argument over various loan accounts which are before this court and which the wife has responded to in affidavit form.  There is clearly an issue as to whether the husband will ever be able to make out a case to be entitled to or receive any part of those loan accounts.  I do not take that matter into account for the purposes of issues now before me.  I do, however, understand that there is a likelihood that some part of those loan accounts may one day be available to the wife, arising out of the corporate history in proceeding that she herself has outlined in her affidavit to the court.  But again, I have no regard to those matters for the purposes of this judgment.  I intend to proceed both on legal and a financially pragmatic basis.

11. I understand the husband now says that he has spent his $378,000.  Paragraph 9 identifies where some moneys have been spent.  The balance of moneys are required for or have been expended either in accordance with paragraph 10 of that first affidavit or his subsequent supporting affidavit filed by leave this day.  I have read both affidavits.  Clearly there are lifestyle issues that the husband has to address.  He may well be living beyond his financial means or future financial expectancy, but I do not make concluded findings in that regard. 

12. The overview of this case with a sum approximating $1,100,000 currently invested with Westpac is those moneys derived solely from the matrimonial home.  The wife has foreshadowed arguments of contribution to that home made by her family, and again those matters will need to be proved in time. 

13. If the husband receives a further sum, it is clear it must fall within the ambit of what reasonably, and with a fair margin of commercial acumen and safety, is within that which he may one day receive by way of a Section 79 determination of a just and equitable property settlement. I bear those matters in mind and I will certainly not walk outside of the legal and commercial boundaries in any additional sum of money to the husband as a partial settlement of property.

14. I emphasise that it is a partial settlement of property.  There is no discretion as to that basis intended by this order:  it is part of the ultimate settlement and it is not discretionary.  It specifically is not paid as spousal maintenance for someone out of employment, nor is it paid as security for costs.  I am fortified in that conclusion because that is what the application that the husband specifically seeks.

15. Mr Hannan has responded to my question, given that he has no amended response or application before the court as to whether his client should or would receive a like amount.  Mr Dickson has not opposed the option of paying to the wife a like sum.  That has the outcome of further reducing the pool of assets but treating both parties equally, but on the basis that it is well understood the wife will seek the majority or all of the remaining money as she may be legally advised so to argue.  I carefully make no comment upon the outcome of that claim. 

16. If a sum of $200,000 were to be paid now by partial settlement to both parties, it would mean that they would each receive, or have received, a sum of approximately $580,000. By deduction, that would leave a sum in excess of $600,000 in the Westpac.  That, together with other assets or financial resources or matters that may be proven, will constitute the ongoing property pool. 

17. A partial property award should only be given in circumstances that are compelling - there is substantial Full Court authority highlighting that basis of approach.  The most often referred to decision is Harris v Harris (1993) FLC 92-378 and I have considered the requirements identified in that case in concluding the appropriate order herein. I have carefully exercised the partial property power conservatively and I am wholly satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties, on the facts of this case particularly the wife, at final hearing. As any award of partial property is an exercise of power under s79 of the Family Law Act 1975 I have carefully considered that the outcome must be just and equitable to both parties and I am satisfied that such is the case with my intended order. Even more so I am comfortable because a like amount will be paid to the wife, there remains sufficient invested capital and other assets to satisfy any other final property order and the circumstances now are both proper and compelling for this interim property order to be pronounced.

18. I have been asked to provide short reasons for judgment.  I emphasise that the reasons are given extempore with my defended matter now returning to court.  It is always difficult to encompass what are short reasons, but I record that I have read all of the material, I have considered the legal principles, and I have adopted both a legal and what I regard as a commercial approach to an interim resolution where I see little or no real financial risk and exposure to either party, given the balance of moneys held and the ongoing argument.

19. I am also mindful that there is a reality to this case that if the husband cannot pay lawyers, cannot meet some expenses, then the conduct of this hearing might simply pause and be held in abeyance for years or otherwise he will be appearing for himself.  That may be his choice; I make no comment.  I want only to add that I do not intend, and I have indicated very bluntly to Mr Dickson that his client should not come back for another "bite at the cherry". These moneys are to cover the future of this case pending property hearing or settlement. I could not imagine any other moneys being released, though I do not foresee the future that precisely. My intent is that this is final interim distribution and these clients need to sit down and start talking about an outcome that is commercial and proper, and within the boundaries of Section 79 of the Family Law Act.

20. I therefore find the payment is compelling and I am fortified that it is appropriate to provide the same sum to the wife to balance the ledger (so to speak).  For those very brief reasons, and delivered without any further or required extended reasons and in a Duty List, I will therefore pronounce the following orders.

I certify that the preceding paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young

………………………………………………………..
Associate: