Kwok & Beng (No 6)
[2024] FedCFamC1F 743
•6 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kwok & Beng (No 6) [2024] FedCFamC1F 743
File number(s): SYC 1577 of 2021 Judgment of: HARPER J Date of judgment: 6 November 2024 Catchwords: FAMILY LAW – SPOUSAL MAINTENANCE – Interim orders – Where the wife’s primary claim is for a lump sum of $150,000 for spouse maintenance – Where the husband has capacity to pay a lump sum from funds held for both parties in solicitors’ trust accounts – Where any interim lump sum ordered can be adjusted in the final property orders – Where the wife requires leave of the Court pursuant to s 44(3) of the Family Law Act 1975 (Cth) (“the Act”) to institute spouse maintenance proceedings four months after the expiration of the 12 month period from the date the parties’ divorce orders took effect – Whether the wife would suffer hardship if leave was not granted to institute her spouse maintenance claim – Where the wife’s delay in instituting spouse maintenance proceedings is not material and not sufficient reason to refuse leave – Residual discretion exercised to grant leave for the wife to commence proceedings for spouse maintenance pursuant to s 44(3) of the Act – Order for lump sum interim spouse maintenance of $50,000 in favour of the wife.
FAMILY LAW – JURISDICTION – Where the wife previously sought leave to commence spousal maintenance proceedings in the Federal Circuit and Family Court of Australia (Division 1) (“Division 1”) and the Court lacked jurisdiction pursuant to s 50 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) – Where the wife filed an initiating application in the Federal Circuit and Family Court of Australia (Division 2) seeking leave to institute spousal maintenance proceedings out of time pursuant to s 44(3) of the Act – Where the wife’s application was transferred to Division 1 removing previous jurisdictional impediments.
Legislation: Family Law Act 1975 (Cth) Pt VIII, ss 4, 44, 72
Federal Circuit and Family Court of Australia Act2021 (Cth) s 50
Cases cited: Kwok & Beng (No 5) [2024] FedCFamC1F 463
Vang & Chung (No 3) [2024] FedCFamC1F 101
Division: Division 1 First Instance Number of paragraphs: 25 Date of hearing: 17 October 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 ORDERS
SYC 1577 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BENG
Applicant
AND: MR KWOK
Respondent
ORDER MADE BY:
HARPER J
DATE OF ORDER:
6 NOVEMBER 2024
THE COURT ORDERS THAT:
1.Pursuant to s 44(3) of the Family Law Act 1975 (Cth) (“the Act”) the Applicant Wife (“wife”) be granted leave to commence proceedings for spouse maintenance, being proceedings of a kind referred to in paragraph (c) of the definition of “matrimonial cause” in s 4(1) of the Act.
2.Within 7 days of the date of these Orders the parties shall do all acts and things and sign all documents necessary to cause the sum of $50,000 to be paid to the wife by way of lump sum spouse maintenance from the funds standing in the trust account (in the names of the parties) of Kammoun Sukari Lawyers.
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 pseudonyms Kwok & Beng have been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
These are proceedings under Pt VIII of the Family Law Act 1975 (Cth) (“the Act”), seeking property division. The applicant is the wife, Ms Beng (“wife”) and the respondent is the husband, Mr Kwok (“husband”).
The proceedings are listed for final hearing to commence on 5 March 2025, with an estimate of five days.
On 10 July 2024 I delivered an interim judgment concerning a partial property settlement application made by the wife in existing proceedings commenced by the husband as applicant in the Federal Circuit Court of Australia, now known as the Federal Circuit and Family Court of Australia (Division 2), and transferred to this Court on 3 August 2021 (Kwok & Beng (No 5) [2024] FedCFamC1F 463 (“Kwok & Beng (No 5)”)). The application determined by that judgment also included an application by the wife for spouse maintenance which, as explained in the judgment, I lacked jurisdiction to determine by reason of s 50 of the Federal Circuit and Family Court of Australia Act2021 (Cth) (“FCFCOA Act”).
To overcome the jurisdictional problems the wife filed an initiating application in the lower court, the Federal Circuit and Family Court of Australia (Division 2), as required by s 50 of the FCFCOA Act, on 15 August 2024 seeking, inter alia, leave to institute proceedings for spouse maintenance out of time pursuant to s 44(3) of the Act, and an interlocutory order for lump sum spouse maintenance in the sum of $150,000. By an order of a deputy registrar made on 19 August 2024 this application was transferred to this Court and listed before me, thereby removing jurisdictional impediments identified in Kwok & Beng (No 5). These proceedings have been assigned the same file number as the earlier proceedings commenced by the husband, although no order consolidating the proceedings has been made.
This judgment deals with the wife’s application for leave to institute proceedings for spouse maintenance and her application for interim spouse maintenance.
I adopt the factual background as set out in Kwok & Beng (No 5) and will not repeat it except to note at [2]–[4] I recorded:
2.The parties began a relationship in 2007 and married [in] 2011 in [Country BB]. They have one child, aged 12.
3.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.
4.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.
At [22] I continued:
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.
There was no dispute that the wife has already received $287,000. I ordered a partial property distribution of $225,000 to the wife and $75,000 to the husband.
The hearing of the wife’s application for spouse maintenance took place on 17 October 2024.
The wife relied on the following material set out in her Case Outline filed 16 October 2024:
(a)Initiating Application filed 15 August 2024;
(b)Further Amended Application in a Proceeding filed 10 May 2024;
(c)Affidavit of Ms Beng filed 30 April 2024; and
(d)Financial Statement of Ms Beng filed 6 February 2024.
The husband relied on the following material set out in his Case Outline filed 16 October 2024:
(a)Affidavit of Mr Kwok filed 11 October 2024;
(b)Financial Statement filed 11 October 2024; and
(c)Evidence tendered and submissions made at the interim hearing on 30 May 2024.
Section 72(1) of the Act makes provision for spouse maintenance:
(1) A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
A claim for spouse maintenance falls within paragraph (c) of the definition of “matrimonial cause” in s 4(1) of the Act. By reason of s 44(3) of the Act, there was no dispute the wife required leave of the Court to institute her proceedings for maintenance, because she first sought to institute such proceedings at least four months after the expiration of the 12 month period from the date the parties’ divorce order took effect.
Concerning the operation of s 44 of the Act, I repeat and adopt what I said in Vang & Chung (No 3) [2024] FedCFamC1F 101 (“Vang & Chung (No 3)”) at [54] explaining the operation of s 44(4) if s 44(3) applies:
Subsection 44(4)(a) and (b) then prohibit the grant of leave unless the Court is satisfied either that hardship would be caused to the applicant for maintenance if leave were not granted or as at the date 12 months from the date of the parties’ divorce the applicant would have been unable to support herself without an income tested pension, allowance or benefit. The Court thus has no power or discretion to grant leave unless one of the subparagraphs is satisfied. If such satisfaction is achieved, the court then retains a residual discretion to grant leave or not, and the onus remains on the applicant to persuade the Court the discretion should be exercised in their favour (Arcand & Boen (2021) FLC 94-046 at [38]–[40] (“Arcand & Boen”); Welland v Hawthorn (2021) 64 Fam LR 520 at [16]).
The wife relied upon s 44(4)(a) and claimed that she would suffer hardship if leave was not granted. In Vang & Chung (No 3) at [77]–[78] I set out my understanding of the applicable principles which were not in dispute:
77. The wife bears the onus of establishing hardship, and if she does so, the wife then must persuade the court that it should exercise its discretion to grant leave. Hardship does not arise from the loss of the right to bring the relevant proceedings but from the consequences of the loss of that right. This requires consideration of the quality of the proposed claim. If hardship is demonstrated, numerous factors can influence the exercise of the residual discretion, including the length of the delay, the adequacy of reasons for the delay, and the prejudice the respondent would suffer if the application for extension of time was granted (Gadzen & Simkin (2018) FLC 93-871 at [29]—[37], [40]; Arcand & Boen at [40]).
78. The likely costs of the litigation constitute one factor to be considered in determining whether or not hardship would be alleviated by the grant of leave (Whitford and Whitford (1979) FLC 90-612 (“Whitford”); Walker and Walker (1984) FLC 91-564).
Regarding the quality of the wife’s claim, I also adopt and repeat the statement of principle I set out in Vang & Chung (No 3) at [79]:
79. The wife’s claim for spouse maintenance requires her to establish, pursuant to s 72 of the Act, that she is unable to support herself adequately whether…by reason of age, or physical or mental incapacity for gainful employment, or any other adequate reason having regard to the matters in s 75(2). In considering the quality of the wife’s claim the Court must weigh her case against that of the husband’s and form a view as to whether there is in fact a sufficient probability of success, that would, if leave were granted, alleviate hardship (Edmunds & Edmunds (2018) FLC 93-847 at [48]). More recently, in Skelton v Lindop (2022) 64 Fam LR 617 at [17]—[21] (“Skelton”), Austin J sitting as the Full Court pointed out that the test is demonstrating a “sufficient likelihood of success” to prove hardship rather than likely success at trial on the balance of probabilities, which requires a higher standard of satisfaction, citing Australian Broadcasting Commission v O’Neill (2006) 227 CLR 57 at [65] and [69]. I accept this is the correct test (Hardwick & Hardwick (No 2) (2022) FLC 94-126 at [28]) and it binds the determination of interlocutory applications (Skelton at [19]). The wife’s untested evidence is taken at its highest for this purpose (see Whitford).
The wife claimed hardship for the following reasons. It was undisputed that she has sole care and control of the child of the relationship and she is unemployed. She also relied upon a financial statement filed on 6 February 2024, which had been filed in support of her application determined in Kwok & Beng (No 5). She did not file an updated financial statement for the purposes of the hearing on 17 October 2024. In her affidavit filed on 30 April 2024 she gave detail of her financial circumstances which suggested she has a deficit of income over expenses of approximately $2,000 per week.
The husband argued that the Court could not be satisfied of hardship because the wife had given no explanation of how she had applied or dispersed the partial property settlement of $225,000 ordered in her favour on 10 July 2024. The wife contended that this was not sufficient to deny a finding of hardship because it was always understood that the application of the partial property settlement would be towards funding litigation of her claims for final property adjustment, not her maintenance. I agree with the wife’s submission.
The wife put forward as her primary position a claim for a lump sum of $150,000 for spouse maintenance. She argued that a lump sum, as opposed to a periodic amount, was appropriate because there was evidence showing that compliance with a periodic order by the husband was unlikely. As a fall-back position the wife promoted a claim to a lesser sum, for example, $50,000, rather than $150,000.
In relation to the quality of her claim, the wife relied upon the same matters, that is, she is unemployed, has sole care of the child and the husband has capacity to pay a lump sum because of the $1,476,495 currently held in her solicitors’ trust account. These funds are held for both parties.
The husband argued that a lump sum should not be ordered because on a final basis there should be no further property adjustment and if a lump sum was ordered in the wife’s favour that might jeopardise the final outcome. I do not accept this argument. The wife for her part claims all assets in Australia should be awarded to her on a final basis. I am unable to make an interim finding that there is unlikely to be any further property adjustment at final hearing and the wife has shown a sufficient likelihood of success for present purposes in demonstrating some adjustment is warranted. As the wife pointed out, if a lump sum of $50,000 was ordered in her favour, this could readily be adjusted or reversed in the final orders of the Court.
In light of the wife’s care of the child, and the fact she is unemployed, I consider that the wife has demonstrated a sufficient likelihood of success in a maintenance claim and hardship if leave is not granted.
The husband gave evidence that he is studying, and has no income at present. This would militate against any order for periodic spouse maintenance. But I am satisfied on an interim basis that the husband does have the capacity to meet an interim lump sum spouse maintenance payment of $50,000, bearing in mind that this can be reversed if appropriate as part of the final property adjustment orders of the Court.
There is no sufficient reason to decline to exercise the residual discretion to grant leave. The wife’s delay was not significant and caused no prejudice to the husband. The husband contended that her explanation for delay was unsatisfactory. I disagree. In my view the time which elapsed between the expiration of the 12 month limitation period and the wife's first attempt to institute proceedings for spouse maintenance is not material and is not of itself a reason to refuse leave.
I find that for the purposes of s 44(4)(a) of the Act the wife would suffer hardship if leave to institute her spouse maintenance claim was not granted. In the exercise of discretion I will grant leave. I am further satisfied that an order for lump sum interim spouse maintenance of $50,000 is warranted and I will so order.
I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 6 November 2024
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