Kwok & Beng (No 5)
[2024] FedCFamC1F 463
•10 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kwok & Beng (No 5) [2024] FedCFamC1F 463
File number: SYC 1577 of 2021 Judgment of: HARPER J Date of judgment: 10 July 2024 Catchwords: FAMILY LAW – INTERIM PROPERTY – Where the wife seeks orders leave to institute spouse maintenance and child support proceedings out of time – Where application for leave to commence spouse maintenance and child support departure proceedings filed in the Federal Circuit and Family Court of Australia (Division 1) (“Division 1”) – Where there is no original jurisdiction for Division 1 to hear the application without transfer from Federal Circuit and Family Court of Australia (Division 2) (“Division 2”) – Application for child support departure orders not pressed – Where the husband sought to discharge existing orders allowing the wife to fund the child’s school fees from sequestered funds – Where order is not a child support departure order – Insufficient evidence to warrant discharge of the order – Where both parties seek an interim property settlement of up to a total of $300,000 – Interim property settlement of $225,000 to the wife and $75,000 to the husband ordered. Legislation: Child Support (Assessment) Act 1989 (Cth) Pt 7, s 99
Family Law Act 1975 (Cth) Pt VIII, s 44(3)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 1.13
Federal Circuit and Family Court of Australia Act2021 (Cth) s 50
Cases cited: Bing & Bing (2007) FLC 93-318; [2007] FamCA 418
Brimaud v Honeysett Instant Print (1988) 217 ALR 44
Gilford & Cavaco [2024] FedCFamC1A 55
Liu v The Age Company Limited (2016) 92 NSWLR 679 [2016] NSWCA 115
New South Wales v Kable (2013) 252 CLR 118; [2013] HCA 26
Old UGC Inc v Industrial Relations Commission of New South Wales (2006) 225 CLR 274; [2006] HCA 24
Panagi & Panagi [2021] FedCFamC1F 135
Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578
Porter & Porter [2022] FedCFamC1F 102
Vang & Chung (No 3) [2024] FedCFamC1F 101
Wei & Xia (No 5) [2023] FedCFamC1F 679
Division: Division 1 First Instance Number of paragraphs: 47 Date of hearing: 30 May 2024 Place: Sydney Counsel for the Applicant: Mr Brickwood Solicitor for the Applicant: Luminous Legal Counsel for the Respondent: Mr Moutasallem Solicitor for the Respondent: Kammoun Sukari Lawyers Pty Ltd Counsel for the Independent Children's Lawyer: No appearance required ORDERS
SYC 1577 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BENG
Applicant
AND: MR KWOK
Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
HARPER J
DATE OF ORDER:
10 JULY 2024
THE COURT ORDERS THAT:
1.Within seven days of the date of these Orders, by way of interim property settlement, the parties shall do all acts and things and sign all documents necessary to cause:
(a)the sum of $225,000 to be released to the Applicant Wife (“wife”) or at her direction; and
(b)the sum of $75,000 to be released to the Respondent Husband (“husband”) or at his direction,
from the funds standing in the trust account (in the name/s of the parties) of Kammoun Sukari Lawyers.
2.Within 21 days, that the parties shall jointly engage a single expert business valuer pursuant to Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) to undertake a formal business valuation of the following:
(a)J Ltd (“J Ltd”);
(b)Debt of the husband in respect of his shares in J Ltd.
3.For the purposes of and to give effect to Order 2 herein:
(a)At all times, all instructions to the single expert business valuer shall be in writing and jointly provided by the representatives for both parties;
(b)Within seven days of the date of these orders, the husband shall provide to the wife three proposed business valuers for the purpose of providing a business valuation report;
(c)Within seven days of receipt of receiving the list of proposed valuers in compliance with Order 3(b) above, the wife shall elect and provide written confirmation to the husband’s legal representatives of the business valuer she nominates from the list of proposed valuers provided;
(d)In the event no reply is received by the husband’s legal representatives from the wife’s legal representatives within the time period required in compliance with Order 3(c) above, the husband has liberty to elect a single expert valuer from the list of proposed valuers for the purpose of preparing the required valuation;
(e)Within seven days of receipt of the wife’s nomination (or within seven days of non-compliance with Order 3(d)), the husband’s legal representatives shall prepare a proposed joint letter of instruction to the nominated single expert valuer and forward such letter of instruction to the wife’s legal representatives for their consideration;
(f)Within seven days of receipt by the wife’s legal representatives of the proposed joint letter of instruction in compliance with Order 3(e), the husband shall confirm his agreement to the release of the said joint letter in its original form or propose amendments that she seeks be made to such joint letter of instruction;
(g)Upon the finalisation of the joint letter of instruction, the husband shall forthwith cause his legal representatives to release the joint letter of instruction to the nominated single expert valuer; or
In the event no reply is received by the husband’s legal representatives from the wife’s legal representatives within the time period required in compliance with Order 3(f), the husband has liberty to release the proposed joint letter of instruction to the nominated single expert valuer on the assumption that the proposed joint letter of instructions is approved by both parties;
(h)The Single Expert Business Valuer’s fees are to be paid from the funds standing in the trust account, in the name/s of the parties, of Kammoun Sukari Lawyers.
4.Within 14 days of these orders, the parties shall exchange market appraisals for the purpose of agreeing to current market values of the property situated at Property CC, DD Street, District EE, City O, Country BB (“City O property”) and in the event no agreement can be reached within seven days of the exchange of appraisals, the parties shall jointly engage an expert (“Real Property Valuer”) pursuant to Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) to undertake single expert valuation.
5.For the purposes of and to give effect to Order 4 herein:
(a)At all times, all instructions to the Real Property Valuer shall be in writing and jointly provided by the representatives for both parties;
(b)Within seven days of the date of these orders, the husband shall provide to the wife three proposed Real Property Valuers for the purpose of providing a business valuation report;
(c)Within seven days of receipt of the list of real property proposed valuers in compliance with Order 5(b) above, the wife shall elect and provide written confirmation to the husband’s legal representatives of the Real Property Valuer she nominates from the list of real property proposed valuers provided;
(d)In the event no reply is received by the husband’s legal representatives from the wife’s legal representatives within the time period required in compliance with Order 5(c) above, then the husband has liberty to elect a Real Property Valuer from the list of real property proposed valuers for the purpose of preparing the required valuation;
(e)Within seven days of receipt of the wife’s nomination (or within seven days of non-compliance with Order 5(d)), the husband’s legal representatives shall prepare a proposed joint letter of instruction to the nominated real property single expert valuer and forward such letter of instruction to the wife’s legal representatives for their consideration;
(f)Within seven days of receipt by the wife’s legal representatives of the proposed joint letter of instruction in compliance with Order 5(e), the wife shall confirm her agreement to the release of the said joint letter in its original form or propose amendments that she seeks be made;
(g)Upon the finalisation of the joint letter of instructions, the husband shall forthwith cause his legal representatives to release the joint letter of instruction to the nominated single real property expert valuer; or
In the event no reply is received by the husband’s legal representatives from the wife’s legal representatives to the proposed joint letter of instructions within the time period required in compliance with Order 4(f) herein, then the husband has liberty to release the proposed joint letter of instructions to the nominated real property single expert valuer on the assumption that the proposed joint letter of instructions is approved by both parties.
(h)The Single Expert Business Valuer’s fees are to be paid out from the funds held in the trust account of the husband’s solicitor pursuant to Order 1 of the orders made on 23 March 2021.
6.Within 21 days, the parties shall jointly engage an expert pursuant to Federal Circuit And Family Court of Australia (Family Law) Rules 2021 (Cth) to enquire into and provide a report in respect of the husband’s debt to AA Ltd and the operation of Country BB Law noting that if the single expert report is in Country BB language, it is to be translated into English before filing (“Single Expert Country BB Lawyer”).
7.For the purposes of and to give effect to Order 6 herein:
(a)At all times, all instructions to the Single Expert Country BB Lawyer shall be in writing and jointly provided by the representatives for both parties;
(b)Within seven days of the date of these orders, the husband shall provide to the wife three proposed Country BB Lawyers for the purpose of providing a report in respect of the debt;
(c)Within seven days of receipt of the list of proposed valuers in compliance with Order 7(b) above, the wife shall elect and provide written confirmation to the husband’s legal representatives of the Country BB Lawyer she nominates from the list of proposed Country BB Lawyers provided;
(d)In the event that no reply is received by the husband’s legal representatives from the wife’s legal representatives within the time period required in compliance with Order 7(c) above, then the husband has liberty to elect a single expert Country BB Lawyer from the list of proposed Country BB Lawyers for the purpose of preparing the report;
(e)Within seven days of receipt of the wife’s nomination (or within seven days of non-compliance with Order 7(d)), the husband’s legal representatives shall prepare a proposed joint letter of instruction to the nominated single expert Country BB Lawyer and forward such joint letter of instruction to the wife’s legal representatives for their consideration;
(f)Within seven days of receipt by the wife’s legal representatives of the proposed joint letter of instruction in compliance with Order 7(e), the husband shall confirm his agreement to the release of the said joint letter in its original form or propose amendments that she seeks be made;
(g)Upon the finalisation of the joint letter of instructions, the husband shall forthwith cause his legal representatives to release the joint letter of instruction to the nominated single expert Country BB Lawyer; or
In the event no reply is received by the husband’s legal representatives from the wife’s legal representatives to the proposed joint letter of instructions within the time period required in compliance with Order 7(f) herein, then the husband has liberty to release the proposed joint letter of instructions to the nominated single expert Country BB Lawyer on the assumption that the proposed joint letter of instructions is approved by both parties.
(h)The Single Expert Country BB Lawyer’s fees are to be paid out from the fund held in the trust account of the wife’s solicitor pursuant to Order 1 of the orders made on 23 March 2021.
8.The wife’s Further Amended Application in a Proceeding be otherwise dismissed.
9.The husband’s Response to the Further Amended Application in a Proceeding be otherwise dismissed.
10.There be no order as the costs of the applications the subject of these orders.
11.The proceedings be stood over to 10.00 am, or other time to be advised, on 5 September 2024 for callover.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kwok & Beng has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
These are proceedings for parenting orders and for property adjustment under Pts VII and VIII of the Family Law Act 1975 (Cth) (“the Act”).
The parties began a relationship in 2007 and married in 2011 in Country BB. They have one child, aged 12.
The husband left Australia in mid-2019 and it appears the parties separated at that time. A decree nisi for divorce became absolute in late 2022.
The wife has sole care of the child. She does not work. The child attends V School, and the wife is liable for the school fees.
On 8 March 2021, the husband commenced proceedings in the Federal Circuit Court of Australia, as it was then known, now called the Federal Circuit and Family Court of Australia (Division 2) (“Division 2”), seeking orders for property division under s 79 of the Act. He also sought a range of interlocutory orders. He amended his Initiating Application on 25 January 2021 to include parenting orders. He filed a Further Amended Initiating Application on 3 August 2021 seeking expanded parenting orders.
On 11 March 2021 Judge Smith in Division 2 made the following order, being Order 8:
The wife, through her solicitor, may pay to [V School], any fees payable in respect of the education of the child of the marriage, upon receipt of a valid invoice, in the sum of the amount in the invoice, and the husband’s solicitor is to be provided with a copy of the invoice and notice of payment by the wife’s solicitor within 14 days of payment.
By further Order 3 made on 23 March 2021 Judge Smith varied this order as follows:
That order 8 of the orders made on 11 March 2021 be amended by inserting after [V School] “or any provider of an extracurricular activity of the child of the marriage” and by inserting after education “or any extracurricular activity”.
The wife commenced proceedings in Country BB in July 2021. On 22 April 2022 Schonell J issued an anti-suit injunction restraining the wife from continuing those proceedings.
On 3 August 2021, Judge Smith made an order transferring the proceedings, as then constituted, to this Court.
Prior to transfer, neither party had included a matrimonial cause for spouse maintenance or a claim to a child support departure order under the Child Support (Assessment) Act 1989 (Cth) (“Assessment Act”) in any of their applications or responses.
After transfer, the wife filed a Response on 20 August 2021 seeking parenting orders and orders for property division.
On 10 May 2024 the wife filed a Further Amended Application in a Proceeding seeking a payment from the husband of $300,000 as interim property adjustment, and leave pursuant to s 44(3) of the Act to institute proceedings for spouse maintenance. She also included an application for a child support departure order for $150,000 as a lump sum.
By his response the husband sought a discharge of Order 8 made on 11 March 2021 and Order 3 made on 23 March 2021, interim property distribution to each party of $150,000.
The application in a proceeding and response were listed for hearing on 30 May 2024. Both parties sought procedural orders for the appointment of expert valuers for property in Country BB. I will return to this part of the competing applications below.
For the purposes of this judgment it is important to reiterate a description of the changes which came into force from 1 September 2021. I repeat what I said in Porter & Porter [2022] FedCFamC1F 102 (“Porter”) at [61] as follows:
61. … This Court is a court created by statute. On 1 September 2021 the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the new Act”) commenced. Section 8 continues the existence of the Family Court of Australia, but under the name “The Federal Circuit and Family Court of Australia (Division 1)” (“Division 1”). Section 9 of the new Act provides that Division 1 is a “superior court of record” and “a court of law and equity”. The Federal Circuit Court of Australia is also continued in existence by s 8, but under the name “The Federal Circuit and Family Court of Australia (Division 2)” (“Division 2”). Division 2 is an inferior court. Thus Division 1 and Division 2 are entirely separate Courts, albeit constituted by the same statute. Division 1 exercises the original jurisdiction specified in s 25 of the new Act, which includes jurisdiction conferred by other statutes. Division 2 holds original jurisdiction in a range of matters, including with respect to matters which may be instituted under the Act, conferred by s 132 of the new Act. However, little or no jurisdiction is now conferred on Division 1 directly under the Act. Rather, Division 1 only has jurisdiction in proceedings which have been transferred to it from Division 2, pursuant to ss 51 or 149 of the new Act, or conferred upon it directly by another federal statute.
Spouse maintenance
Both parties accepted that there is a jurisdictional problem preventing the bringing of a claim for spouse maintenance and a claim to a child support departure order in this Court. Jurisdiction is fundamental and the first duty of the Court to determine whether it has jurisdiction (Old UGC Inc v Industrial Relations Commission of New South Wales [2006] HCA 24, New South Wales v Kable (2013) 252 CLR 118 at [34]). It is convenient to do so at this point.
The wife acknowledges she requires leave to pursuant to s 44(3) of the Act to institute both proceedings. The precise jurisdictional problem facing her claim to spouse maintenance was considered at length by me in Vang & Chung (No 3) [2024] FedCFamC1F 101 at [38]–[74] (“Vang & Chung (No 3)”). In summary, a proceeding claiming spouse maintenance is a separate “matrimonial cause”. By reason of s 50 of the Federal Circuit and Family Court of Australia Act2021 (Cth) (“FCFCOA Act”), the wife is prohibited from instituting family law and child support proceedings in this Court, and any such proceedings so filed are automatically transferred to Division 2. The wife’s claim for spouse maintenance is such a proceeding. As I explained in Vang & Chung (No 3) this Court would not grant leave to institute proceedings which cannot be instituted in this Court. The reasoning in Vang & Chung (No 3) was considered and approved by majority (Harper and Brasch JJ) in the Full Court decision Gilford & Cavaco [2024] FedCFamC1A 55 at [33]–[43] and [48]–[54]. The conclusion reached is that after 1 September 2021, even if proceedings have been transferred from Division 2 to this Court, any fresh application seeking relief under the Act falling within the expression “family law or child support proceedings” in s 50 must be instituted in Division 2. Those proceedings can then be transferred to this Court and consolidated with existing proceedings, if the criteria for transfer are satisfied and such a course is otherwise appropriate.
Acknowledging the problem, the wife, correctly, made application in Division 2 seeking leave to institute her proceedings claiming spouse maintenance in Division 2. However, surprisingly, a registrar rejected the application for filing, and directed the wife to adopt the improper process of filing an Application in a Proceeding in this Court seeking orders for spouse maintenance and child support. That is the application which is the subject of this judgment.
As explained in Vang & Chung (No 3) there is no proper basis to exercise a discretion under s 44(3) of the Act to permit the wife to make a claim for spouse maintenance out of time in this Court, unless the application to do so is transferred from Division 2. By reason of s 50(2) of the FCFCOA Act, such parts of the wife’s application which seek to institute “family law or child support proceedings” have been automatically transferred to Division 2. Accordingly, the wife’s application for leave to institute her claim for spouse maintenance must be dismissed in this Court either because this Court would not grant leave even if it had jurisdiction to decide the application for leave itself or because this Court has no jurisdiction to determine it.
Partial Property Adjustment
The wife’s claim for interim property settlement is not subject to problems of jurisdiction. In Vang & Chung (No 3) at [113] I set out the applicable principles as follows, which I repeat for the purposes of this judgment:
There is a two-stage process to applications for interim partial property settlement. Firstly, the procedural step, which is the question of whether the court should exercise discretion to entertain and determine the application, and secondly the substantive step, namely the nature of the order which should be made (Strahan & Strahan [2011] FamCAFC 126 (“Strahan”)). The Court has a wide unfettered discretion and power under s 79 and s 80(1)(h) of the Act to make an interim order adjusting property interests. The Court must be satisfied it is appropriate, just and equitable to make such an order. This includes a cautious approach and satisfaction that any order made will not exhaust the power under s 79, the interim order is capable of reversal or adjustment at final hearing and the remaining property will be sufficient to meet the legitimate expectations of both parties (see Osferatu & Osferatu [2012] FamCA 408 at [41]; Medlow & Medlow (2016) FLC 93-692). The Court takes a “broad brush” approach to the parties’ financial circumstances, by identifying their property interests then considering s 79(4) matters, s 79(4)(e) and contributions (Carlson & Carlson (2019) FLC 93-934: Jabara & Gaber (2021) FLC 94-057).
As mentioned above the wife seeks an interim property distribution in her favour of $300,000. The husband resists this, but proposes a property distribution of $150,000 to each party. Thus both parties accept by their applications that it would be appropriate to distribute up to $300,000 of the available property.
The parties acquired several properties during the relationship, including properties at Suburb D and Suburb F which have been sold. As a result of these sales, at present, the wife’s solicitors hold a fund of $1,476,495. The orders of 8 March 2021 also restrained the wife from accessing these funds held on trust. A further $457,723 is held on trust by the solicitors for the husband.
The husband provided a draft balance sheet. In addition to the cash held in solicitors’ trust accounts, there a various other assets including $280,000 already distributed to the husband, and $287,000 distributed to the wife, shares and property owned by the husband in Country BB, and a claim the wife holds a property in Country BB valued at $1,037,704. The liabilities include loans said by the wife to be owed to third party individuals and a debt of $1,133,267 said to be owed by the husband. The net asset pool is between $3.2 and 3.6 million.
The wife claims that on a final basis she should receive all the property in Australia. The husband claims on a final basis there should be no further property adjustment in the wife’s favour, despite agreeing to an interim distribution of $150,000 to each party.
The wife argued that any partial property distribution less than $300,000 to her would result in a further interim application because $300,000 would only pay her outstanding legal fees and leave a proportion for further litigation funding. She also argued that any partial property distribution to the to the husband would put in jeopardy her claim to 100 per cent of the assets in Australia. She also stated in her affidavit “I do not considerate reasonable that I am required to deplete my own capital to fund my reasonable living expenses”.
The logic of the wife’s argument is that there could never be an interim property distribution to the husband because she should receive all the Australian assets.
The wife claimed the husband has extensive property interests in Country BB and accused him of inadequate disclosure. The husband accuses the wife of inadequate disclosure. The consequences of disclosure are well known in this Court. I accept the applicable principles are as I set them out in Wei & Xia (No 5) [2023] FedCFamC1F 679 at [175]. The Court may make an order beyond the ascertained property or that all known assets should be awarded to the innocent party, on the basis that the party who refuses to disclose the assets is in fact hiding them.
It is not however possible to resolve disclosure issues on the basis of the evidence presented at the interim hearing. I am unable to reach the conclusions necessary to justify acting on the basis that the wife is likely to receive all the known assets in Australia at this stage of the proceedings because of the husband’s inadequate disclosure, just as I am unable to conclude there should be no further adjustment to property interests.
The husband gave evidence that he presently has very modest financial resources. I consider a modest distribution of $75,000 to the husband would be capable of being accommodated or reversed in final property orders in the wife’s favour, if appropriate, and does not exhaust the Court’s power under s 79. If the Court finds the husband controls a vast pool of assets a precise source for any payment to the wife need not be identified (Bing & Bing (2007) FLC 93-318). If the Court does not make such a finding, the wife may not be able to justify receiving 100 per cent of the assets in Australia.
Since the wife has already received $287,000, I do not accept she has established on an interim basis that $300,000 is necessary.
Taking a broad brush but cautious approach and bearing in mind the parties accept a partial distribution of $300,000 can be made, together with the wife’s care of the child, I conclude a distribution of $225,000 to the wife and $75,000 to the husband is appropriate. I will make orders accordingly.
Child Support Departure Order
The wife did not press any application for child support at the interim hearing on 30 May 2024. However, it is useful to observe that the wife’s claim for a child support departure order would suffer from the same jurisdictional problem arising from s 50 of the FCFCOA Act as her claim for spouse maintenance.
The jurisdiction and power to make child support departure orders, either periodic or lump sum is conferred by Pt 7 of the Assessment Act. Section 99 of Pt 7 confers such jurisdiction on Division 2. As pointed out no application for a child support departure was made prior to either transfer to this Court on 3 August 2021 or 1 September 2021. As I pointed out in Panagi & Panagi [2021] FedCFamC1F 135 at [37] a proceeding under the Assessment Act for a child support departure order is a separate cause of action brought under an entirely different statute to the Act. This status as a separate cause is confirmed by r 1.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules2021 (Cth) (“Rules”) which requires an application under the Assessment Act to be commenced by application and served on each respondent, each relevant parent and the Child Support Registrar. In my view, such a proceeding clearly falls within the expression “family law and child support proceedings” in s 50 of the FCFCOA Act and must be instituted in Division 2.
I note here that the husband’s response sought an order that Order 8 made on 11 March 2021 as varied on 23 March 2021 should be discharged. The wife’s submissions opposed this discharge and seemed to assume that those orders constituted child support departure orders. If so, the jurisdictional problems identified above would not exist, because the Court jurisdiction under the Assessment Act would have been regularly invoked in this Court before 1 September 2021.
But order 8 is not an order made under the Assessment Act. Child support departure orders, whether for periodic or lump sum payments, are orders between a liable parent and a carer entitled to child support involving payment that vary an existing administrative assessment (see ss 116, 117, 124 and 129 of the Assessment Act). Order 8, even as varied, is no such order. It clearly is limited to permitting the wife to pay the school fees for V School and extracurricular activities for the child from existing funds. The necessity for this order arose because of other orders made on 8 March 2021 which otherwise restrained the wife from withdrawing any money from bank accounts.
The ordinary considerations which apply when a party seeks to discharge or vary an interlocutory order apply. The husband must satisfy the Court that a material change of circumstances has occurred, or new material has been discovered which could not reasonably have been put before the Court on the hearing of the original application (Brimaud v Honeysett Instant Print (1988) 217 ALR 44 at [46]; Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578 at [14]; Liu v The Age Company Limited (2016) 92 NSWLR 679 at [199]). The husband sought to discharge those orders on the basis that they permitted the wife to expend part of the remaining property pool on fees for a school which the parties could no longer afford.
I have set out a “broad brush” description of the parties property above at [32]–[33]. There is considerable cash being held on the parties’ behalf. It is not evident that the parties can no longer afford the school fees. It is not possible on the evidence available to form a view at this stage about what expenditure is appropriate for the child’s schooling, or about where decision making about schooling should lie for the time being. There may well be cheaper schools which the child can attend, but I am not persuaded a clear basis has been established to disturb the orders at present.
I decline to discharge order 8 made on 11 March 2021 as varied on 23 March 2021. The wife’s application for a lump sum child support order should also be dismissed.
Expert Evidence
The parties agree that orders should be made for the appointment of single experts to value properties in Country BB. The proposal of the wife is in much shorter compass than the husband’s proposal. It requires the parties to co-operate and agree. The husband’s proposal contains a prescriptive process in the event of an absence of agreement. The parties could not agree upon the scope of the expert evidence. Their failure to agree militates in favour of the more prescriptive orders sought by the husband.
The husband in particular also seeks an order for an expert to “in quire into and report upon a debt said to be owed by him to a company called AA Ltd and Country BB Law. The wife opposes this on the basis the husband has not provided evidence which shows such an expert is necessary. I disagree. At paragraph 137(d) the husband deposes as follows:
In 2014, I, along with two other shareholders, entered into an agreement with the company named [AA Ltd] on behalf of [J Ltd]. In accordance with the contract, I am personally liable for any breaches of contract and in the event of such breach, I must pay compensation and give up my shares. Given [J Ltd] was significantly influenced by COVID-19, we could not meet our obligations, and currently, I am in breach of the contract. On about 31 December 2019, the [AA Ltd] sent me a letter of demand seeking compensation of 25.56% of shares and […] 8,712,735 [local currency], which they did in accordance with the contract. To date, my personal liability resulted from breaching this contract has reached about $1,133,296.80.
This evidence may or may not be true, but in my view it raises a sufficient basis for the proposed expert evidence.
The parties agreed that the fees of the valuer of Country BB properties should be met from the funds held in solicitors’ trust accounts, but the wife proposed such fees come from the funds held by her solicitor while the husband proposed the fees be paid from the funds held by his solicitor. I will order the valuation expert fees be paid from the funds held by the wife’s solicitors. The costs of the Country BB law expert should be met from the funds held by the husband’s solicitors.
Other Matters
On 30 May 2024, when the interim hearing had concluded, I made the following Notations:
A. On 30 April 2024 the Respondent Wife (“wife”) sought to file an Initiating Application in the separate Court, being Division 2 of the Federal Circuit and Family Court of Australia seeking leave to commence as an additional matrimonial cause a claim for spousal maintenance out of time and for orders for spouse maintenance in the event that leave was granted.
B. The solicitors for the wife drew the attention of the Registry to the decision of Vang & Chung (No 3) [2024] FedCFamC1F 101 (“Vang (No 3)”) in which I expressed the view that by reason of s 50 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), such application being for a matrimonial cause as defined in s 4 of the Family Law Act 1975 (Cth) was prohibited from being commenced in the higher Court, being Division 1 of the Federal Circuit and Family Court of Australia.
C. The interpretation of s 50 in Vang (No 3) was upheld in the Full Court by majority in the decision of Gilford & Cavaco [2024] FedCFamC1A 55.
D. Accordingly, the Registry is requested to receive for filing any fresh initiating application by the wife seeking leave to institute spousal maintenance proceedings and any orders for such proceedings to be transferred from Division 2 to Division 1 and consolidated with proceedings SYC1577/2021.
It appears that an attempt was made to file a fresh initiating application in Division 2 in accordance with the notations. However, it was rejected for filing on the basis it was not accompanied by the relevant supporting documents.
The Full Court decision in Gilford & Cavaco, until overruled by further appeal, either to the High Court or the unanimous decision of a differently constituted Full Court, is authority for the position that the jurisdiction of this Court to decide a fresh matrimonial cause cannot be regularly invoked in existing proceedings in this Court by simply filing an Application in a Proceeding which seeks to add such a fresh matrimonial cause if that cause falls within the expression “family law or child support proceedings” in s 50(1) of the FCFCOA Act. The force of s 50(2) is that the proceedings constituted by the cause are automatically transferred to Division 2, thereby depriving this Court of jurisdiction.
If a party files an initiating application to invoke the jurisdiction of Division 2, those proceedings cannot, by definition, have the same file number as the proceedings already in this Court because they are fresh proceedings in Division 2, which is a separate court. This Court can have no jurisdiction in those proceedings unless they are transferred to this Court (Porter at [79]). If transferred to this Court, as mentioned above, they may be joined with these proceedings in this Court to be heard together, but they remain separate.
There will be no order as to the costs of the applications the subject of this judgment.
I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 10 July 2024
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