Kyle and Hood and Ors

[2010] FamCA 550

FAMILY COURT OF AUSTRALIA

KYLE & HOOD AND ORS [2010] FamCA 550

FAMILY LAW – INTERLOCUTORY MATTERS – Injunctions refused – Disclosure ordered – Hogan order refused

Family Law Act 1975 (Cth) s106B

Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57
Cardisle v LED Builders Ltd (1999) 198 CLR 380
Farmer v Bramley (2000) FLC 93-060
Jackson v Sterling Ltd (1987) 162 CLR 162
M & M [2001] FamCA 1219
Mullen v De Bry (2006) FLC 93-293
Waugh v Waugh (2000) FLC 93-052
Zschokke & Zschokke (1996) FLC 62-693

APPLICANT: Ms Kyle

FIRST RESPONDENT:	Ms Hood as Executor of the Estate of Mr Kyle (deceased)
SECOND RESPONDENT:	Mr A Kyle and Ms Gill as Trustees of a purported trust
THIRD RESPONDENT:	Ms Gill

FILE NUMBER: BRC 874 of 2009

DATE DELIVERED: 18 June 2010

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: O’Reilly J

HEARING DATE: 17 June 2010

REPRESENTATION

SOLICITOR FOR THE APPLICANT:	Ms Bertone, Jones McCarthy Lawyers
COUNSEL FOR THE FIRST RESPONDENT AND THE SECOND RESPONDENTS:	Mr Conrick

SOLICITOR FOR THE FIRST RESPONDENT AND THE SECOND RESPONDENTS:	Ms Wright, D M Wright & Associates
THE THIRD RESPONDENT:	In person

Orders

UPON THE UNDERTAKINGS OF:

THE FIRST RESPONDENT FILED 18 JUNE 2010

THE SECOND RESPONDENTS FILED 17 JUNE 2010 AND

THE THIRD RESPONDENT FILED 17 JUNE 2010

IT IS ORDERED

Injunctions

1. The injunctions sought by the wife in her application in a case filed 14 May 2010, paragraphs 1 and 3, are refused.

2. The wife has liberty to relist paragraphs 1 and 3 on short notice by arrangement with the Associate by email copied to the respondents. 

Disclosure

1. In relation to paragraphs 2, 4, 5 and 6 of the wife’s application in a case filed 14 May 2010:

   (a)all parties make disclosure pursuant to the Family Law Rules 2004 by 4.00pm on Friday 2 July 2010 and arrange such inspection and copying as each seeks as soon as possible after that date

   (b)in respect of any of the specific documents or categories of documents referred to in paragraphs 2, 4, 5 and 6 not able to be disclosed or in respect of which disclosure is resisted the parties against whom such disclosure is sought provide to the wife, at the same time as disclosure is made pursuant to subparagraph (a), a letter of explanation as to why any such document or category/ies of documents is/are not able to be disclosed or why disclosure is resisted

   (c)the first respondent provide to the wife copies of all documents in proceedings …/2010 in the District Court of Queensland including but not limited to pleadings, affidavits, orders and disclosed documents within 7 days of such documents being filed, received or coming to the attention of the first respondent. 

Hogan order

1. The orders sought by the wife in her application in a case filed 14 May 2010, paragraphs 7, 8, 9 and 10, are refused. 

2. The wife has liberty to file a fresh application in a case to seek a Hogan order against the first and/or second respondents in relation to moneys held by them if such be based upon any new or different evidence than was available for the hearing on 17 June 2010.

3. If such fresh application in a case be filed by the wife it be listed for hearing before the Honourable Justice O’Reilly by arrangement with the Associate on the first available listing date. 

AND IT IS FURTHER ORDERED

Procedural

1. The respondents file and serve responses to the wife’s amended initiating application filed 14 May 2010 as soon as possible. 

NOTATIONS:

1. The next scheduled Court event is a directions hearing before Registrar Coutts at 11.00am on 26 August 2010.

2. The proceedings should not be listed for trial before conclusion of proceedings …/2010 in the District Court of Queensland are resolved or determined unless the subject matter of those proceedings is by arrangement or order to be determined by this Court. 

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 874 of 2009

MS KYLE

Applicant

And

MS HOOD AS EXECUTOR OF THE ESTATE OF MR KYLE (DECEASED)

First Respondent

And

MR A KYLE & MS GILL AS TRUSTEES OF A PURPORTED TRUST

Second Respondents

And

MS GILL

Third Respondent

REASONS FOR JUDGMENT

Wife’s application

1. The wife by application in a case filed on 14 May 2010 seeks interlocutory relief by way of several injunctions, disclosure and a Hogan order.

Background

1. The principal proceedings were commenced by the wife in March 2009 claiming by way of a property order under s79 Family Law Act 1975 (Cth) that the husband transfer to her all his interest in the former matrimonial home at C in Queensland. The husband died in March 2009 within hours of service upon him of the wife’s initiating application. He had been diagnosed with terminal cancer in November 2008 and such was the cause of his death.

2. On 12 October 2009 Ms Hood, as executor of the Estate of the husband, was substituted as the respondent to the wife’s claim.

3. By amended initiating application filed on 14 May 2010 the wife joined Mr A Kyle and Ms Gill as trustees of a purported trust as the second respondents and Ms Gill in her personal capacity as the third respondent.

4. The wife’s claim against the second respondents is that under section 106B of the Act the purported trust be set aside, against the third respondent under section 106B that an inter vivos gift of $75,000 be set aside, and against the executor that the wife have 60% of those moneys collectively, that the remaining 40% be held by the wife on trust for the two children of the marriage E born in March 1993 now 17 years (18 years in March 2011) and W born in August 1995 now 14 years (15 years in August 2010) to be paid out equally to the children upon each attaining 21 years, the wife have 60% of the net proceeds of the sale of the former matrimonial home and that 40% be retained by the executor to be administered in accordance with the husband’s last Will made 29 January 2009.  The Will provides that after the payment of debts and expenses the residue be held by the executor upon trust for such of E and W equally as may survive him and attain 21 years.

The husband of the wife

1. The husband and the wife met in May 1986, commenced cohabitation in December 1988, were married in December 1990 and separated in May 1999.  The period of their relationship of marriage thus was about 13 years.  They had not divorced as at the date of the diagnosis of the husband’s terminal illness.  The husband, however, filed an application for divorce on 3 February 2009.  The husband’s affidavit in support of his application for divorce included that he had a terminal illness and wished to put his affairs in order before his death.  The application for divorce was listed for 25 March 2009 and thus was not heard and determined before his death.

The Estate

1. The former matrimonial home was sold by contract which settled on 29 January 2010.  The net proceeds of sale after the payment of a mortgage of about $95,000, commission and costs, was about $180,000 which is held in the executor’s solicitor’s trust account on behalf of the Estate.

2. A statement of assets and liabilities, including a contingent debt to P Company Pty Ltd (“P Company”) of about $111,000 shows estimated net value of the Estate of $73,698 as at 31 October 2009 after allowance for legal costs of about $35,000 as at that date, that is, more than 9 months ago.

3. P Company, the husband’s former employer, has a claim in the District Court in proceedings number … of 2010 commenced on 26 March 2010 for $111,229 plus interests and costs.  The executor is taking legal advice whether to admit, deny or compromise the claim.  If the claim is defeated, plainly the presently estimated net value of the Estate will increase by the amount presently allowed in the statement of assets and liabilities as a contingent debt.  However, there have been legal costs since 31 October 2009 both in relation to the executor’s defence of the District Court proceedings and the executor’s defence of the wife’s claim in these proceedings.  The executor’s solicitor, as is appropriate, is having all costs assessed before disbursement to her.

4. The contingencies and uncertainties relating to the outcome of the District Court proceedings, and the legal costs likely to be incurred by the Estate in both those proceedings and these proceedings, have effect that at present it cannot be predicted whether the Estate will have any value at the end of the day.

Forum for P Company’s claim

1. The wife wishes to be heard in relation to the claim by P Company. Her affidavit includes substantive material against P Company’s claim. She is an interested party because of her claim in the s79 proceedings that part of the Estate be awarded to her because it comprises, for the most part, the net proceeds of sale of the former matrimonial home.

2. The wife, however, as yet has not sought to be joined in the District Court proceedings, potentially on the basis that her claim here in relation to the Estate has effect that she is a proper party to the District Court proceedings so as to be bound by them in relation to her claim here.  Nor has the wife sought to join P Company in these proceedings potentially for declaratory relief whether under s78 or at law by accrued jurisdiction that the Estate is not liable to P Company with consequential procedural relief against P Company as a party here that the District Court proceedings be stayed pending the determination of the wife’s declaratory claim against P Company here.

3. Plainly, although the wife and the executor are opponents here, they have the common interest of ensuring a proper and just outcome in relation to P Company’s claim, whether that be by a compromise with P Company, or litigation resulting in judicial determination, in whichever forum, bearing in mind the Estate’s legal costs of litigation and the Estate’s exposure to P Company’s litigation costs if ultimately P Company’s claim is successful.

4. If the wife joined P Company as the fifth respondent here, it may be unlikely that she would be able to give security for costs, as may be sought by P Company, as the wife, on the evidence, appears to be impecunious.  If the wife seeks to be joined as a respondent in the District Court proceedings and P Company is successful, she may be exposed to a costs order against her there.

5. It may therefore be a sensible solution for the purpose of these proceedings that the wife entrust the defence of P Company’s District Court proceedings to the executor, she and the executor having a common interest in the defence of those proceedings, to save her personal exposure to costs in those proceedings, but perhaps sign an agreement with the executor that for the purpose of these proceedings she will be bound by the outcome of the District Court proceedings.

6. Even absent any such agreement, if the wife chose to do nothing in relation to the District Court proceedings nor take steps to join P Company as a respondent in these proceedings then in relation to these proceedings there may well arise an argument of procedural estoppel if later the wife should seek to raise against the executor any complaint in respect of her conduct of and outcome of the District Court proceedings.

7. The wife, however, in these matters will have the benefit of advice from her solicitors as to appropriate steps to be taken in relation to P Company’s claim against the Estate, which advice no doubt will include matters as to the wife’s potential exposure to costs orders against her if she should seek to be joined in the District Court proceedings or seek to join P Company as a respondent in these proceedings.

8. Possibly the best course for the wife would be to leave the defence of P Company’s claim in the District Court to the executor.  That would have the result necessarily that her claim here could not be set down for trial until the result of the District Court proceedings is known, and thus the net value of the Estate ascertained.  That circumstance however may be a reality in any event.

The trust

1. On 27 February 2009 by a handwritten document of that date the husband declared a trust that A Kyle, his brother, and Ms Gill, his partner of two years and who held his Power of Attorney, transfer the amount of $538,096.88 to an account for E and W.  By the same instrument, the husband gave an inter vivos gift of $75,000 to Ms Gill.  The document is as follows:

   I [the husband] authorise my Power of Attorney to transfer $538,096.88 into an account for my children [E] & [W].

   I nominate [A Kyle] (my brother) and [Ms Gill] (my partner) to be trustees of the account until each of my children [E] and [W] turn 21 years of age.

   I also give the gift of $75,000 to [Ms Gill] my partner of 2 yrs.  Thank you.

2. The amount of $538,096.88 specified as the amount to be held by the nominated trustees on trust for the children was wholly sourced, it appears, from the proceeds of an AMP Flexible Lifetime Protection Plan number … (the policy) which commenced on 13 December 2000, that is, after the separation of the husband and the wife in May 1999.

3. As at the date of the husband’s death the policy included that if the insured person (the husband) died there would be a death benefit of $338,024.

4. On 19 February 2009 pursuant to the policy and in relation to claim number …62/001, AMP paid that amount $338,024 to the husband as a terminal illness benefit claim.  See annexures BSG1 and BSG2 to the affidavit of Ms Gill filed 16 June 2010.

5. On the same date pursuant to the policy and in relation to claim number …62 AMP paid $193,990.22 to the husband also as a terminal illness benefit claim.  See annexure BSG3 to the affidavit of Ms Gill filed 16 June 2010.

6. Although on the existing evidence the matter is not entirely clear, I accept the submission of Mr Conrick of Counsel that it appears that either there was an additional insured event under the policy, or a further policy pursuant to which the second amount was paid, but that if there was a further policy on all of the evidence it was created at or about the same time.  At this stage however it appears that there was one policy, because the annexures to which I have referred, whilst showing different claim numbers, show reference to the same policy number.  It would appear thus that it is more likely than not that the second amount emanated from an additional insured event or circumstance under the one policy.  As canvassed however during argument until there has been a subpoena issued to AMP these matters cannot be ascertained precisely.

7. In aggregate, the two amounts are $532,014.22.

8. The difference between the amount specified in the document declaring the trust $538,096.88, and the AMP proceeds, $532,014, is explained by Ms Gill as likely to have been $6000 or so cash in the husband’s bank account or bank accounts as at the date of the document declaring the trust.

9. The separate inter vivos gift of $75,000 to Ms Gill by the same instrument was sourced by a payment from Australian Super, being a permanent incapacity benefit approved for the husband’s membership number ….  See annexure BSG5 to the affidavit of Ms Gill filed 16 June 2010.

10. Ms Gill has used the inter vivos gift to her as a deposit/part payment to purchase a house property.

11. A Kyle and Ms Gill as trustees made payments to or for the benefit of E and W as set out in Ms Gill’s affidavit par 70.

12. Ms Gill deposes (affidavit par 71) that the bulk of the trust funds are invested in a term deposit account and a small amount in an IBD account, and that she and A Kyle will take investment advice as to how the moneys ultimately should be held, but that, because of the wife’s proceedings, he and she were hesitant to do other than invest the bulk of the moneys in a term deposit account.

The injunctions sought by the wife

1. Ms Bertone, Solicitor, for the wife, did not press the injunctive relief against the executor initially sought in par 1(a) and (b) of the wife’s application in a case, in relation to payments from or dealings with the Estate, on the basis that the Estate funds presently are held in the executor’s solicitor’s trust account, but rather sought liberty to re-list those paragraphs of the application on 7 days notice.

2. Ms Bertone did not press the injunctive relief against the executor in para 1(c) of the wife’s application in a case, relating to the District Court proceedings, upon an undertaking given by the executor that she would give 14 days’ notice to the wife of any proposed payment in relation to compromise of the District Court proceedings, but that, similarly there be liberty to re-list on 7 days notice. 

3. Ms Bertone pressed however par 1(d)(i)(ii) and (iii) of the wife’s application in a case, seeking restraint against the trustees from acting as trustees, exercising any power as trustees and making any distribution as trustees, and pressed par 3 of the wife’s application in a case that the trustees pay all moneys presently held by them into the wife’s solicitors’ trust account.

4. Ms Bertone also pressed par 1(d)(iv), that the trustees be restrained from communicating with any third party, or giving any information to any third party, about any of the subject matter of these proceedings except for the purpose of obtaining legal advice.

5. The wife also had sought pursuant to par 1(e) an injunction against Ms Gill in her individual capacity as the third respondent that she pay the $75,000 received by her to the wife’s solicitors’ trust account.  Ms Gill provided evidence that with the $75,000 she has purchased a house property for $370,000 and has a mortgage of $264,000 with equity thus of about $106,000 and offered an undertaking not to sell or further encumber that property or otherwise deal with it until further order.  In these circumstances, Ms Bertone did not press the relief sought in par 1(e).

6. It is convenient to deal first with paras 1(d)(i)(ii) and (iii) and 3.

7. The wife’s case is that although the husband took out the AMP policy on 13 December 2000 that is, post separation, and although all premiums were paid post separation (according to annexure BSG1 to Ms Gill’s affidavit the premiums it appears were about $58 monthly even as at December 2008 to December 2009) the wife contributed to those premiums and thus the policy proceeds because during the period of the parties’ cohabitation and marriage (which had ended in separation in May 1999), she contributed to his ability to earn income and thus, post-separation, to pay the premiums although plainly they were paid from his post-separation income.

8. The wife contends for this circumstance because during the marriage she was the primary carer for the children and so released the husband to earn income and in turn contributed to his post-separation income and thus payment of the premiums so that prima facie she has a right to share in the fruits of the AMP policy proceeds, upon the husband’s death, and they should be brought thus into the s79 pool. The wife further contends, which is correct, that although the proceeds of the AMP policy became a post-separation asset of the husband, contribution assessment is not limited to the assest of which the pool currently is comprised: Farmer v Bramley (2000) FLC 93-060 at [68]-[69].

9. However, in order to succeed in the grant of an interlocutory injunction against the trustees it is incumbent upon the wife to prove that the issue to be tried, if the evidence remains as it is, carries a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial;  and that the inconvenience or injury which she would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the respondent would suffer if an injunction is granted.  Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65] and [70].

1. Further, in relation to asset preservation injunctions, it is plain that an applicant must establish in addition to the conditions ordinary to the grant for injunctive relief that unless restrained there is a real risk or danger that a respondent will dispose of or dissipate assets in his possession or under his control so as to defeat any judgment which the applicant may obtain.  It is a requirement in considering such that the court if making a restraint make it no wider than necessary to achieve that end.  The grant of the relief plainly is discretionary and most usually will be provided where a propensity to shift or conceal assets apparently to defeat a judgment already has been manifested.  Cardisle v LED Builders Ltd (1999) 198 CLR 380. Jackson v Sterling Ltd (1987) 162 CLR 612. Waugh v Waugh (2000) FLC 93-052 at [32]–[34]. Mullen v De Bry (2006) FLC 93-293 at [41]-[44] explaining pars [45]-[46] in Waugh.  In Mullen, the Full Court concluded, [46] –[47]:

   46. Finally, we think it helpful to recognise that the essential power being exercised in this case is simply described in section 114(3):

   A court … may grant an injunction … in any case in which it is just or convenient to do so …

   47.Ultimately, each case will involve an overall assessment of a number of factors to determine the just or convenient result.  Not all cases with the same identify of factors will necessarily produce the same result because of varying weight individually and comparatively.

2. As is well understood, the elements of s106B include that whilst intention to defeat an existing or anticipated order is not an element, nonetheless the instrument or disposition sought to be set aside must, irrespective of intention, be likely to defeat an existing or anticipated order in the s79 proceedings. Assuming, in the wife’s favour, that the Court may be likely to set aside the trust on that basis of having the effect of being likely to defeat an anticipated s79 order, despite the passage of 10 years since the parties’ separation with no proceedings commenced, and despite the circumstance that the trust came into existence before commencement of the wife’s proceedings, there is however no evidence in my view of risk of dissipation by the trustees of the trust assets and indeed, on all of the evidence, it appears that the trustees are acting appropriately in all respects in relation to the trust moneys. The wife, by Ms Bertone, sought to criticise certain of the payments deposed to by the trustees. However, there is nothing on the face of the material to indicate to me that, as explained by the trustees, any of the payments to date to or for the benefit of the children has been untoward or improper.

3. In any event, it is always relevant to take into account in relation to an application for injunctive relief the existence of any offer of undertaking by the respondents to the application.  By written undertaking filed 17 June 2010 the trustees have undertaken to the court that:

   Save for:

   (1)a maximum amount of $10,000 per annum per child to be applied pursuant to section 61 of the Trusts Act 1973 (Qld);

   (2)any bank charges automatically deducted;

   the second respondents undertake until further order, or agreement of the applicant wife, not to distribute any trust funds or meet any liability of the trust without giving 7 days clear notice in writing of their intention so to do to the solicitors for the applicant wife.

4. Even absent the undertaking, the wife in my view has failed to make out a case for injunction by failing to show evidence of risk of dissipation.  However, the offering of the undertaking, which has been accepted by the Court, makes plain in my view that restraint is inappropriate.  The existence of the undertaking yesterday was well known to Ms Bertone, who made clear that despite the undertaking she needed to persist with the application for the injunction, I think because the wife resides in New Zealand and Ms Bertone was not able to take instructions to not press for the injunction despite the undertaking. 

5. The relief sought in par 3, namely that the trustees pay the trust moneys into the wife’s solicitor’s trust account, similarly must be refused on the same basis.  On all of the evidence, as I have said, the trustees are acting appropriately in all respects in relation to the trust moneys and there is no evidence of risk of dissipation so as to warrant an asset preservation order or payment to the wife’s solicitor’s trust account to that end.

6. In relation to par 1(d)(iv), Ms Bertone submitted that such relief is necessary because, absent it, the trustees might, as it appears they have done, communicate with people at the children’s school in their capacity as trustees, which capacity the wife rejects, and also may communicate with the children as to the issues in the case, which plainly enough are adult issues.  In the same vein, because the wife does not recognise the trustees or the trust she would prefer that instead of the trustees paying the children’s school fees the wife pay them and then seek reimbursement from the trustees even though she does not recognise them as such. 

7. Having carefully considered this aspect of the wife’s claim, it appears to me that it does not meet any of the criteria for the grant of injunctive relief, and I will refuse it.  It is important, however, that the trustees ensure, and indeed the wife ensure, that the children are not embroiled in discussion about the case and its issues, to the extent that such can be avoided, as was made clear during argument.

Disclosure

1. The wife’s application in a case is not pressed in relation to pars 2, 4, 5, and 6, there being agreement that I should make orders in the following terms:

   (1)      All parties make disclosure under the rules within 14 days.

   (2)In respect of documents specifically referred to in paragraphs 2, 4, 5, and 6 of the wife’s application in a case which may not be able to be disclosed or in respect of which disclosure is resisted or the documents not able to be disclosed there be provided at the same time as disclosure a letter of explanation.

Hogan order

1. The wife seeks by par 7 that she be paid $25,000 from the trust moneys, or alternatively the Estate, on account of her legal costs and outlays incurred and to be incurred in the proceedings.  She seeks also, by pars 8(a) and (b), that the executor and the trustees provide the wife with a summary of the amounts of money paid by each of them for legal and accounting expenses and the source of those funds and that in the event the total moneys paid by the executor and the trustees on account of legal fees exceeds $25,000 then the executor and the trustees pay or cause to be paid to the wife’s solicitors an equivalent sum of money on account of the wife’s ongoing legal expenses, thus characterising what is sometimes called the “dollar for dollar” Hogan order: M & M [2001] FamCA 1219.

2. The wife seeks further, by par 9, that upon compliance with pars 7 and 8 no further moneys be released to any of the parties for ongoing legal expenses without express written consent of the parties or failing agreement a Court order.  Paragraph 10 seeks that the characterisation of payments to all parties be reserved to the trial judge.

3. In Zschokke & Zschokke (1996) FLC 62-693 the Full Court made clear at 83,216 that one of the matters it is appropriate for the Court to consider when asked to make a Hogan type order is whether on a brief consideration of the relevant matters the applicant will be likely to receive a sum sufficient to cover the advance:

   [I]t would seem that regard should be had to the requirement in s79 that the orders be just and equitable and this would require the Court to undertake at least some brief consideration of the matters in s79(4) including those referred to in s75(2). If on a brief consideration of those matters, it seems likely to the Court that the party who is the applicant for the interim order for an advance of funds from the other party will be likely to receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made.

4. In relation to the Estate, as Mr Conrick observed in his careful written submissions, by the time of the trial it may well be decimated having regard to the District Court proceedings and the executor’s legal costs of defending both the District Court proceedings and the wife’s claim in these proceedings.

5. In respect of the trust I would set out par 57 of Mr Conrick’s written submissions, which on the present state of the evidence, seems correct:

   57.      Insofar as the life insurance is concerned –

   (a)      the wife has made no contribution to that fund;

   (b)it was not created by the application of funds that would otherwise have been matrimonial funds;

   (c)it was created not by the efforts of the parties or either of them in contributing to the marriage;

   (d)it was created after separation by the husband for the protection of his family, then consisting only of his two children, insuring himself against the very event that brought that fund into existence, namely, the deprivation by his death of the support that he as their father would otherwise have provided for his children;

   (e)upon the occurrence of the event against which he insured, the father directed funds to the purpose for which he had taken out the insurance.

6. In relation to the inter vivos gift to Ms Gill, it must be borne in mind not only that she was his de facto partner for two years, but that she was indeed his spouse at the time of his death.  It is clear that the amount gifted to Ms Gill was sourced with the superannuation amount to which I have referred.  Although it is not entirely clear, it appears that this also was a post-separation creation to which the wife did not contribute.  Even if however at the trial that be shown to be wrong there is no present positive evidence either that it existed before the parties’ separation in 1999 or that the wife contributed to it in any way.

7. In respect of the wife’s property application it is fundamental to observe on the applicable authorities that I must find that the wife has the likely prospect of the award to her of $25,000 under s79 either from the funds held by the executor and/or the funds held by the trustees so that the advance she claims for legal fees ultimately can be regarded as an interim property award in relation to any ultimate property award.

8. Further it is usual, in an application for a Hogan order, that the applicant will set out in detail, usually by way of affidavit by his or her solicitor, the fees charged or paid to date and an estimate of future fees to be charged until the completion of litigation or some earlier step in it. Presently, there is evidence that the wife has incurred legal fees and outlays paid or payable of about $14,000. There is no evidence as to any estimate of future legal fees or outlays. On the basis of the analysis of the Estate and the trust to which I have referred it may seriously be doubted whether the wife would achieve a favourable s79 property order of $25,000.

9. I will, having made that observation, refer now further to the background facts.  The wife says that the former matrimonial home, the net proceeds of which now comprise most of the Estate, was purchased by the husband in 1987, about 4 months before the commencement of cohabitation, for $50,000.  The husband paid the deposit of $3,000 and borrowed $1,500 from his parents which was paid back during the marriage.  The husband had a mortgage of $45,500 on the property.  Within about 6 months of the commencement of the cohabitation, that is, about mid 1989, the mortgage was refinanced into joint names with the National Australia Bank.  The wife was an employee of the National Australia Bank and was eligible for reduced staff interest rates.  She and the husband lived in the property for the entirety of their relationship and marriage. In 1993 the wife used about $8000 of her unpreserved superannuation to retire household debt, in particular credit card debt in relation to renovations to the home, and used the proceeds of the sale of AMP shares owned by each of them for the same purpose, the value of the wife’s AMP shares being about $6000.  At the time of the parties’ separation in May 1999, the wife says that the mortgage was about $39,000, that is, it had been reduced over more than 12 years of the period of the parties’ cohabitation and marriage by only about $6,000.  Now, the wife does not say what the value was or may have been in May 1999.  The wife says that she worked during the marriage, as did the husband, and that by combining their finances to support the family the wife says she undertook all of the household duties and the care of the children while the husband undertook outdoor maintenance of the home.

10. Post-separation the wife says the children lived with her in rented accommodation between about 1999 and 2007, although in that period the children also spent time with the husband.  When the wife moved to New Zealand one or both children initially accompanied her.  However both children progressively returned to the former matrimonial home to live with the husband.

11. After the husband’s death the children moved to New Zealand to live with the wife.  Very recently however it appears, on 12 June 2010, E left New Zealand and has commenced to reside with the husband’s brother, A Kyle, one of the trustees, A Kyle being E’s uncle.

12. Plainly, the wife made no contribution to the mortgage after May 1999.  It is unexplained how the mortgage grew from $39,000 to $95,000 at the time of the sale of the property.

13. I have referred already to the estimated value of the Estate.  Predictably, since October 2009, when the executor’s legal costs were estimated at $35,000, those legal costs have escalated and will escalate more in the future in relation to the defence of the District Court proceedings and these proceedings.

14. As I have observed, if the P Company proceedings should be successful, the residue of the Estate may well be exhausted in the executor’s legal costs.

15. The wife thus may not succeed at all in relation to her claim for a s79 property order out of the net proceeds of the Estate even to the extent of $25,000 in advance by way of a Hogan order which she seeks for legal fees.

16. In relation to the moneys presently held by the trustees it may well be that at the trial such will be regarded as a separate pool to which the wife made no contribution.  I have already set out par 57 of Mr Conrick’s written submissions which on the present state of the evidence seem correct, and further referred sufficiently to the only other possible available source of property for the wife, which was the inter vivos gift to Ms Gill.  As Mr Conrick however pointed out, if the wife should succeed in having the inter vivos gift to Ms Gill set aside then the $75,000 would fall into the Estate and not be a separately available fund to satisfy a property settlement to the wife.

17. In these circumstances, in the proper exercise of my discretion, I am constrained to deny the wife’s claim for a Hogan order. In particular, it is clear that if it is granted it would be expended fully in the wife’s legal fees such that if the wife should fail to be awarded $25,000 in her s79 proceedings, either out of the Estate or the trust moneys, she will have no ability on the present evidence, as she is impecunious, to repay the Estate or the trustees.

18. If upon conclusion of the District Court proceedings P Company is unsuccessful such that the net value of the Estate is able to be re-estimated as increased by $111,000 it would be open to the wife to bring a fresh application, at that stage, for a Hogan order.

Other matters

1. During argument I indicated that I would make a procedural order that the respondents file and serve responses to the wife’s amended initiating application filed on 14 May 2010 as soon as possible. I will make that order.

2. In chambers I will formulate further orders to give effect to these reasons for judgment and make them available to the parties as soon as possible.

I certify that the preceding sixty-seven (67) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Reilly

Associate:     

Date:              5 July 2010