LANGDON & GUDDEN
[2019] FamCA 816
•8 November 2019
FAMILY COURT OF AUSTRALIA
| LANGDON & GUDDEN | [2019] FamCA 816 |
| FAMILY LAW – Time spent with parties – interim property distribution – spousal maintenance – litigation funding – injunction against disposal of assets |
| Family Law Act 1975 (Cth) ss 74, 79, 80(1)(h), 117(2A) |
| Hall v Hall (2016) 332 ALR 1 Padnall & Padnall [2014] FamCAFC 145 Stein & Stein (2000) FLC 93-004 Ferringer & Melchiori [2019] FamCAFC 136 Drysdale & Drysdale [2011] FamCAFC 85 Dalrymple & Dalrymple [2011] FamCAFC 85 In the Marriage of Redman (1987) 11 FamLR 411 In the marriage of E F & R Zschokke (1996) 20 Fam LR 766 Shelbourne & Shelbourne [2019] FamCAFC 196 Zadanev & Zadanev [2013] FAMCA 838 Strahan & Strahan (2011) FLC 93-466 |
| APPLICANT: | Mr Langdon |
| RESPONDENT: | Ms Gudden |
| FILE NUMBER: | CAC | 1235 | of | 2019 |
| DATE DELIVERED: | 8 November 2019 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Gill J |
| HEARING DATE: | 31 October 2019 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Self-representing |
| COUNSEL FOR THE RESPONDENT: | Dr J Behrens |
| SOLICITOR FOR THE RESPONDENT: | Robinson McGuinness |
It is ordered, until further order, that:
In relation to the children
The parties shall have equally shared parental responsibility for Y, born … 2007, and X, born … 2009 (the children);
The children shall live with the parties (subject to written agreement to the contrary) in the following manner:
(a)Unless otherwise specified, with the Mother;
(b)During school term time, each alternate weekend with the Father, commencing on the first weekend after the start of each school term, from Friday after school until Tuesday at the start of school;
(c)During school term time, with the Father from after school the Tuesday following the time they were last with their Father, until the start of school the following morning;
(d)During school term holiday periods, with the Father for half of the school holiday period as agreed in writing and, failing agreement, commencing on the middle Sunday of the school holiday period and ending at the commencement of the first day of school after the school holiday period;
(e)During the Christmas/summer school holiday period 2019/2020 as follows:
(i)The children spend time with the Father during the 2019/2020 Christmas/summer school holidays as follows:
A.From 5pm on Friday 13 December 2019 (after X’s hobby class) until 5pm on Sunday 16 December 2019;
B.From 5pm on 20 December 2019 until 5pm on 24 December 2019;
C.From 5pm on 28 December 2019 until 5pm on 13 January 2020;
D.From 5pm 27 January 2020 until 5pm on 30 January 2020.
(ii)In addition to the above, Y spend time with the Father from 5pm Sunday 16 December until 9am Wednesday 18 December 2019.
(f)During the Christmas/summer school holiday periods in 2020/2021 and following, with the Father for half of the holiday period as agreed in writing.
In relation to spousal maintenance
Pursuant to s 74 of the Family Law Act 1975 (Cth) “the Act”, commencing on 1 November 2019 and on each Friday thereafter, the Husband pay to the Wife the sum of $250 by way of interim spousal maintenance, with such amount to be paid into the Westpac Choice Account in the name of Ms Gudden BSB … Account number ….
In relation to interim property distribution
Pursuant to s 79 and s 80(1)(h) of the Act, within 14 days of the date of these Orders, the Husband pay to the Wife the sum of $40,000 by way of interim property order, with such amount to be paid into the Westpac Choice Account in the name of Ms Gudden BSB … Account number ….
In relation to costs
Pursuant to s 117(2A) of the Act, within 28 days of the date of these Orders, the Husband pay to the Wife’s solicitors’ Trust Account Robinson & McGuinness Law Practice Trust Account BSB … Account number … the lump sum of $100,000 to meet, so far as that sum allows, such accounts as she receives from her solicitors for their costs and disbursements.
Injunction
The parties are restrained by injunction from selling, disposing or further encumbering any capital asset related to the property pool except in the ordinary course of business, unless such is done by agreement in writing.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Langdon & Gudden has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT CANBERRA |
FILE NUMBER: CAC 1235 of 2019
| Mr Langdon |
Applicant
And
| Ms Gudden |
Respondent
REASONS FOR JUDGMENT
This matter has come before me for resolution of interim issues concerning property, spousal maintenance, litigation funding, disclosure and arrangements for the children, arising out of the end of the relationship between the parties Mr Langdon and Ms Gudden.
Children
The parties have two children, Y, aged 12, and X, aged ten. The parties agree that through their relationship the Mother had the primary care of the children, rather than engaging in paid employment, while the Father was occupied busily in his business. Following separation in August 2018 Y and X remained living in the family home with the Mother, ultimately spending four nights per fortnight with the Father, split across two blocks each fortnight.
The dispute between the parties is limited. The Father seeks a week about arrangement. The Mother seeks a 9-5 split, in single blocks of time each fortnight. The Father says that if the arrangement is not week about, the arrangement imposed should not create a gap of longer than a week between the times that the children spend with him. It is in this context that the disputes and criticisms raised need to be considered.
The parties disagree about the level of involvement the Father had during the relationship with the children. The Mother’s material is suggestive of minimal involvement, including minimal holiday time. The Father disputes these characterisations. Whatever the arrangement, it appears to have been of sufficient connection to justify what, even on the Mother’s case, should be substantial and significant time with the Father.
The Mother alleges that the Father has been verbally abusive towards Y, a matter that she says he admitted, and that he has played favourites with X. Although such may be serious matters to take into account as they bear upon parental capacity, the examples referred to by the Mother were not sufficient to persuade that such actions by the Father were serious or significant.
The Father was glowing in his affirmation of the Mother in her role as Mother.
The Father alleges that the children have told him that they want to have equal time with each of their parents. He has discussed with them the Mother’s proposal for his time with them, and says that they disagree. The Mother alleges that the Father has involved the children in the dispute by means of such discussions. The Father’s description is consistent with both an over-involvement of the children in the proceedings, or alternately, with an attempt to hear the children’s voices in the dispute. I am, at this stage, unable to determine which.
It should, however, be acknowledged, that placing the children in the midst of the decision making process runs the risk of placing undue pressure upon them, while leaving the children out, without being heard, may likewise be a cause of disappointment, frustration and worse for the children, in particular given Y’s age.
The parties are agreed that they should equally share parental responsibility.
They will face communication challenges, as much of the communication recently has been conducted through the Mother’s lawyer, although both accept that recent improvements in communication have occurred. There are some constraints in their interaction imposed by the presence of an interim family violence order held by the Mother against the Father. Their agreement on parental responsibility, along with the notion that the children will benefit from having both parents involved in long-term decision-making, is sufficient to justify the making of an order for equally shared parental responsibility as in the best interests of the children.
The parties are at odds regarding the time that the children will spend with each of them. The determination of this issue is to be made with the best interests of each of the children as the paramount consideration. That is to be determined on the basis of the s 60CC considerations, examined in the light of the objects and principles contained in Part VII.
The order for equally shared parental responsibility means that I must consider whether making order for equal time is in the children’s best interests and otherwise reasonably practicable. If not, I am to consider making an order for substantial and significant time, in the context of the parties being in an agreement that the Father should at least have substantial and significant time with the children.
There are only limited matters available to determine this issue.
At this interim stage of the proceedings I am unable to make conclusions about the children’s views, and likewise unable to make findings that the Father is particularly deficient as a parent.
What can be noted is that the change sought by the Father would mark a sharp change in the children’s arrangements. They have already experienced significant change by virtue of the end of the relationship. It is unclear what impact further change would have on them.
The role undertaken by the Mother during the relationship, and the Father’s glowing assessment of it, pointed to a high level of parental capacity being held by the Mother.
X change to equal time is likely to involve the parties, as a matter of necessity, in increased interaction with each other. While there has been some positive movement, the recent history of communication having to take place through the Mother’s lawyer speaks against a current capacity of cooperation that would likely be needed in an equal time arrangement. That lack of capacity to communicate carries with it difficulties for the children, in particular if the arrangement descends into conflict between the parents. Conflict between the parents carries with it the risk that such conflict will then penetrate into the relationships between each parent and child, either by virtue of the added strain conflict places on the parents, or by the involvement, deliberately or accidentally of the children in the conflict. This has the potential to degrade the benefits each child might take from meaningful relationship with each parent.
This moves the balance away from an equal time arrangement as sought by the Father. The counter position of the Mother seeks substantial and significant time with the Father. Substantial and significant time gives the children the benefit of having the Father involved in different aspects of their lives, in a way that will give them the benefits that the Father says flow from the different areas of focus of the Father and the Mother. It will retain for the children the Mother as their primary carer, a role in which the Father asserts she excels.
The Mother’s proposal that there be a five night block period with the Father each fortnight carries with it the benefit of added involvement by the Father in the children’s lives. However, while the proposal to constrain this to a single block of five nights simplifies the arrangement, it also leaves the children with a gap of nine nights between visits and time with their Father. X better arrangement is one that involves four nights each alternate weekend along with one night in the off week. While this will involve cooperation between the parties, the difficulties of cooperation are outweighed by the shorter gaps in time between the children seeing the Father.
While the Father complained that the single night period with the children is taken up with running around between school and sports training, rather than, as he terms it, “quality time,” his involvement in the nitty gritty of the children’s lives in such a manner is important and reflective of the nature of substantial and significant time.
Orders will be made to implement such an arrangement.
The parties were in agreement that they should equally share the school holidays.
The orders proposed by the Mother in respect of the approaching Christmas school holiday period were not argued against by the Father and provide for division of the holidays. They too will be adopted in the orders.
Spousal maintenance
An application is made by the Mother for spousal maintenance pursuant to s 74 of the Act in the sum of $1,000 each week, the payment of all rates, home and contents insurance for the property in which she currently lives in Suburb H, and the payment of the Mother’s 2018-19 tax debt relating to monies received by her from the Father.
The Father sought an order that all money paid to the Mother, or regarding the children, be characterised as part of the settlement. This appears to be seeking that such payments be characterised as part of a property distribution pursuant to s 79. On this basis the Father agreed, by his interim orders sought, to meet rates, insurance, telephone, registration, insurance and the Mother’s tax liability for 2018-19. He did not agree to pay these as spousal maintenance.
The power to order spousal maintenance pursuant to s 74 is conditioned upon the order being “proper”, on the spouse being unable to adequately self-support, and where the other spouse is reasonably able to provide that support. These matters are to be considered via the checklist of considerations set out at s 75(2).[1] Of those considerations, the parties focussed upon the income, property and financial resources of each of them, and the commitments of each that would be necessary for self-support or the support of the children.
[1] Hall v Hall (2016) 332 ALR 1
Following separation the Mother received, until May 2019, a weekly sum from the Father a little in excess of $1,000. This reflected the amount that the Mother says the Father provided during the relationship for her to run the household, although she asserts that it was inadequate for that purpose. This ceased on there being a child support assessment that required the Father to pay the Mother $330 per week for the support of the children. The Mother has also recently obtained casual work, earning approximately $517 per week.
The amounts now received by the Mother fall well short of her declared living expenses, incorporating her support of the children. They also fall short of the Mother’s self-support expenses, when those referable to the children are excluded.
At present the Mother’s capacity to either self-support or to support the children is insufficient.
X question was posed as to whether the assessment of the Mother’s requirements should incorporate the support of the children. Despite the Father’s payment of child support it was asserted for her that the assessment should do so, in relation to the period that the children spend with the Mother.
In support of this proposition I was directed to s 75(2)(d) which requires the following to be taken into account:
(d)Commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself;
(ii) a child or another person that the party has a duty to maintain; and
I was then directed to the judgment of Strickland J in Padnall & Padnall.[2] There his Honour referred to the Full Court authority of Stein & Stein[3] where the Court said that s 75(2)(d) had “greater significance” to the capacity of the payer rather than “determining the extent to which the other party requires support.” Stein, at [49] initially gave the somewhat ambivalent description which was not that s 75(2)(d) had no work to do in assessing the position of the payee, rather that its greater significance was in relation to the payer.
[2] [2014] FamCAFC 145
[3] (2000) FLC 93-004
The Court in Stein then went on to say that the “level of support that the Wife (the payee there) needs for herself is not dependent upon the level of support she must give to others.” This is consistent with the disjunctive nature of s 75(2)(d)(i) and (ii).
However, at [56] and [57], Stein qualified the duty to maintain her own children as “only a duty to make an equitable contribution towards their support.” In the facts of Stein, the Full Court commented that her “equitable contribution had not been evaluated by the trial judge but could probably be said to have been non-existent having regard to the vast amount of wealth available to the Husband.”
The Court then discarded its apparent ambivalence and concluded both that the Mother in Stein had no obligation to support the children because the obligation could be met by a departure application and, importantly, because “even if she had an obligation to maintain those children, the fact that she was meeting that obligation could not be said to be a necessary element of the amount of support she needed for herself” apparently hearkening back to the necessary criteria for the making of an order for spousal maintenance as contained in s 72.
It may be observed that Stein has been repeatedly followed by this Court, and in the Full Court most recently by Aldridge J in Ferringer & Melchiori.[4]
[4] [2019] FamCAFC 136
Justice Strickland in Padnall also referred to the contrasting decision of Coleman J, sitting as the Full Court in Drysdale & Drysdale[5] (which appears to be a reference to Dalrymple & Dalrymple with the same citation) where his Honour took into account the Wife’s support of a child as being a proper commitment to take into account on the part of the Wife. Justice Coleman there distinguished from Stein on a factual basis, being that in Stein the Husband was of such wealth as to be expected to pay all of the children’s costs. Justice Coleman placed some emphasis on the interim nature of the matter that he was dealing with, but said:
“Were this an application for a final spousal maintenance order, in part for the reasons referred to in Stein and in part by virtue of the provisions of the child support legislation, and its philosophical underpinning, the Court would be likely to reach a different conclusion.”
[5] [2011] FamCAFC 85
It is difficult to identify a statutory differentiation in approach between an interim and a final order for spousal maintenance where the basis of each is s 72 (noting that a different approach could be available if the application was pursuant to s 77).
Justice Strickland’s conclusion from a review of Stein and Padnall noted that it was “necessary for the trial judge to carefully consider what (if any) costs of support of the children should be taken into account in assessing the needs of the Wife”. His Honour pointed to the difficulty in determining where a line should be drawn between taking into account such and not taking into account such.
This leaves matters in a state of uncertainty.
Perhaps his Honour was doing no more than noting that, in a practical sense, there may, in some areas, be no true differentiation between a child’s and a parent’s expense. It may be observed, for example, that a house needs heating whether it is only the parent in the house or the parent and the children, yet the heating of the house is an aspect of the support of the children. This was a matter adverted to in Stein citing from In the Marriage of Redman[6]:
In the third place, a strict line between costs referable to the custodial parent and those referable to the children cannot always be drawn with clarity. Some expenditure relating to the household as a whole, such as the provision of housing, electricity, fuel, transport, and possibly food and groceries, cannot be strictly divided. Where an application is made which covers both the custodial parent and the children those expenses can with some justification be allocated under either heading. They are relevant to spousal maintenance in pursuance of s 75(2)(c), (d) and (e). In such a case it will be difficult to stipulate with any precision how the maintenance should be allocated or to challenge any such allocation if it is made. It may be different if a custodian who is able to support himself/herself adequately, seeks an order for child maintenance which includes part of the cost of housing and the like. Here again, if the matter is likely to be reviewed in the near future there may be no need for a full and detailed examination of the issues.
[6] (1987) 11 FamLR 411
Apart from such a circumstance, the effect of Stein and also of Dalrymple (at least in respect of the overall principles that govern applications for spousal maintenance) is that the support of children is not, for a payee, a component of support for a payee.
In assessing this case, it should not be overlooked that these are interim proceedings. In both Stein and Dalrymple, quoting from Redman it was said:
In the second place, this was an interim order. Whilst we agree with the view expressed in Ashton that in principle such an order is one under s 74, to which the principles of s 72 or s 73 may be applicable, as the case may be, the very fact that the order is limited in time imports certain different considerations ... on an application for interim maintenance the court conducts "not as final or exhaustive a hearing as would be the case if one were hearing the matter finally": In the Marriage of Williamson (1978) 4 Fam LR 355 at 359 per Fogarty J. The evidence need not be so extensive and the findings not so precise. Having regard to those factors, and the general injunction of s 97(3), the court should in such matters have a greater degree of flexibility than it possesses in applications for maintenance which are intended to last for an indefinite period and can only be varied under s 83.
The upshot is that in these interim proceedings, the shortfall should be assessed in the manner adverted to above, focussed upon the Mother’s need to support herself rather than the support of the children, but with a consciousness of the potential for overlap. In interim proceedings there is limited capacity or requirement for assessment of such, and there was limited if any focus on such in these proceedings.
The Mother discloses expenses in part N of her Financial Statement of $623 per week. She apportions the balance of the expenses there to the children, although a number of these, namely gas, electricity and heating fuel appear to fall within the overlap category, adding between them an additional $65 per week. She also notes other expenses of registration $79 per week and a minimum credit card payment (although it is not clear what the balance of the credit card relates to). Doing the best that I can, this appears to represent necessary support expenses to a total of $767 per week.
This does not include any payment for rates or insurances for the property in which the Mother currently lives, or tax payable in relation to previous payments made to the Mother, which would represent a further shortfall. I am unable to ascertain the amount of these although, if not paid by the Father in the future, these could potentially justify an adjustment of spousal maintenance. Although the Father agreed to pay these amounts as a property distribution, I am unable to characterise such payments in that manner, at this stage. Should they be paid, their characterisation would be a matter, absent agreement, for the final hearing.
The Mother receives a casual income, which may vary, of approximately $517 per week (which I take to be the post-tax amount given her reference to salary or wages in her financial statement at $726 per week).
This leaves a shortfall of approximately $250 per week.
On the question of reasonable capacity on the part of the Father, while at face value the Father’s Financial Statement indicated a shortfall on his part between his income and his expenses, of a little less than $500 per week, it became apparent that he had double counted an amount in relation to his Visa credit card of $617 per week. That is, he conceded that the Visa was a card that was paid off and hence had no outstanding balance. This indicated some excess capacity. Further capacity was indicated by the fact of the Father’s payments to the Mother in excess of $1,000 per week prior to the child support assessment in May 2019. Absent evidence qualifying his access to these monies to pay the Mother, the previous payment and the double counting of the credit card give sufficient comfort as to the Father’s capacity to pay the shortfall of $250 per week, even without broader regard being had to his financial circumstances.
An order for interim spousal maintenance will accordingly be made in that sum.
Litigation funding/costs order
The Mother sought an order pursuant to s 117 of the Act that the Father pay $100,000 as litigation funding. The existence of such a power was confirmed in In the marriage of E F & R Zschokke[7]:
Accordingly, while the present state of the law remains somewhat unclear, it can be asserted with some confidence in light of Brennan J's comments in Breen that there is at least power under s 117(2) (the costs power) for the court to make an order which seeks to ensure that one party should be able to prosecute pending matrimonial proceedings and that the other party should provide the first mentioned party with the funds required to do so.
[7] (1996) 20 Fam LR 766
The Mother relies on an estimate provided by her solicitors that was in excess of $100,000 and that she has already expended approximately $81,000 which is currently owed to her parents.
In support of her application the Mother pointed to the business assets being held by the Father, which he concedes have a net value in excess of $3.5 million, his collection of motor-vehicles conceded by him to be in excess of $200,000, and his number-plate collection conceded by him at almost $50,000.
At the same time the Mother holds an asset, being the family home at Suburb H, in her sole name and unencumbered at a value she asserts of greater than $2 million. No party sought the disposal of this asset, currently occupied by the Mother and the children. It is currently restrained by a caveat lodged by the Father.
The driver in this case, as to the justice of making such an order, lies in the Mother being without a source of liquid assets to fund the litigation, in a context where the litigation is likely to involve a difficult and complex unpicking of the Father’s business holdings. The complexity is indicated both by the annexure to the Father’s financial statement, along with the entity diagram for those interests as produced at Y of Exhibit M2. As best as can currently be anticipated, the proceedings will involve a complex valuation exercise in respect of those interests, along with some complexity in establishing their relationship to the pool of property associated with the marriage, in particular by virtue of their ownership and connections with third party individuals, corporations and trusts.
As noted in the spousal maintenance portion of the judgment, the Mother does not have a capacity to fund the litigation from her income. This point is reinforced by her indebtedness to her parents, in excess of $80,000. Her evidence supports a conclusion that she will be unable to fund the litigation, including what appears to be an essential ingredient of forensic valuation of the business interests, without external funding to permit her to do so.
While the Father testifies to limited income being taken on his part, this needs to be seen in the context of his complex business interests. As to those interests, their operation, and his connection to them, he has provided only the sparsest information. Yet even on the limited information that he has provided, there are strong indicators of the Father’s capacity to access further resources. These indicators are seen from a number of factors accepted by the Father.
Firstly, the Father reckons the net worth of his business interests as approximately $3.5 million. This particular aspect says little directly about liquidity. However, secondly, in listing his business interests, and their value, at his Financial Statement the Father has given estimates of the “sundry cash etc” position of each of the businesses. That sundry cash position was pointed to by the Mother as a basis to think that the Father has liquid capacity. Noting that the Father does not have the sole ownership of those business interests, his share, to the extent that it can be considered such, of those sundry cash amounts aggregated, equates to an amount of approximately $300,000. Thirdly, the Husband has acquired a significant collection of interests in fourteen motor vehicles that, on his estimate, equates to a value of in excess of $200,000. This is accompanied by interest in a collection of number plates of a value in excess of $45,000. This third aspect speaks, at least, to a historic capacity to acquire such assets over a period of time.
None of these matters individually allows a precise determination of the Father’s capacity. Absent a more fulsome explanation of the financial position of the Father, by the Father, precision is unavailable at this interim stage. However, precision is not a necessary prerequisite to the making of an order on an interim basis.
Zschokke establishes that, in determining whether to make such an order pursuant to s 117, the matters contained in s 117(2A) must be addressed. Those of significance in this application are those relating to the financial circumstances of each of the parties, and, to some degree the conduct of the parties in relation to the proceedings, in a context where is no suggestion that either party can access funding through Legal Aid.
The financial circumstances of the parties are set out above. As to conduct, while there are allegations regarding non-disclosure by the Father, these, in part, are unable to be resolved at this interim stage of the proceedings. What has been pointed out is that the Father has not produced financial statements for his various entities to 30 June 2019, despite referring to using such records in the preparation of his Financial Statement. It has also been identified that the Father, in his Financial Statement, did not set out his disposal in 2018 of D Pty Ltd, an entity in which he had a 50 per cent share, and an apparent net equity of $4 million, for $40 consideration. Perhaps these will ultimately be of no consequence. The failures in this respect are, however, relevant examples of conduct for s 117(2A).
What can also be seen is that the Father has disclosed to the Court very little information regarding his financial circumstances. The clearest identification of his circumstances comes from the schedules to his Financial Statement, but with little to explain how these actually function, and how they do, or do not benefit him. Prior to transfer to this Court, he was required, by orders made by Judge Dunkley to file affidavit material setting out his financial circumstances. What he has filed does not adequately meet that requirement.
Further, Zschokke calls for a consideration of whether such a costs order will be able to be taken into account in the final disposition of the matter (noting that such a consideration is not necessarily determinative of the matter). Given the currently admitted size of the pool, and the Father’s position as to what the Mother should receive, this can be answered in the affirmative.
Zschokke further observes that the “basic” condition, however, is that which conditions the making of orders under s 117(2), being whether it is just to make the order.
In assessing these circumstances it is also necessary to bear in mind what was said by Kent J in Rakete & Rakete[8] that:
[42] There must be justifying circumstances as a prerequisite to the making of an order under s 117(2). This does not mean that there must be a "clear" or "exceptional" case before justifying circumstances exist.
[8] 48 FamLR 325
The key circumstances in this case incorporate a position where the only significant asset held by the Mother is the family home. No-one has suggested the disposal of that asset. The Father has, by registering a caveat over the property, taken a step to ensure it cannot be. To dispose of the property would be to dispose of the home in which the Mother lives and the children primarily live.
The Mother is already significantly in debt to her parents, much of which relates to her legal fees already incurred. There can be no doubt that to continue to litigate her case, particularly given the nature of the Father’s property interests, will require expert evidence and the assistance of lawyers. It is difficult to contemplate how she could receive a just result without access to such resources.
The Father’s financial position is one of greater assets. He has interests in fourteen cars. He has business interests which, on his limited description, contain significant sundry cash reserves. These point to a capacity on his part to make the payment sought by the Mother.
As to the scope of that payment, authority supports a requirement for some precision in the estimate of fees. The Mother seeks $100,000 and supplies a fee estimate from her lawyers, that excludes her legal costs to August 2019. That estimate is in a range of approximately $103,000 to $122,000. The Mother’s estimate includes an amount for expert witness expenses at $50,000, which have not yet been incurred, although she is already in debt to the tune of approximately $80,000 in relation to her legal expenses. The expert witness expenses are also something that she seeks the Father meet, although that order will not be made at this stage, as set out below. It may be assessed that what she seeks is a conservative amount, under those circumstances.
Given the foregoing considerations, it is just to make the order pursuant to s 117 as sought by the Mother, particularly where the Father has not identified a practical impediment. However, the Father will be given a more generous timeframe within which to comply, than the fourteen days sought by the Mother.
However, if such an order is made, Zschokke has pointed to the desirability of such an order being accompanied by an order that regard be paid to the payment in determining the property proceedings between the parties.[9] Such an order may not strictly be necessary in any event, as the Full Court in Shelbourne & Shelbourne[10] has said:
The authorities are clear that any litigation funding order needs to be taken into account in determining the final property adjustment.
[9]Zschokke p 13
[10] [2019] FamCAFC 196
Interim property distribution
The Mother seeks an interim property distribution in the sum of $40,000. The Father indicated that he did not object to such a distribution, provided it was not accompanied by spousal maintenance or costs orders as otherwise sought by the Mother.
In Zadanev & Zadanev[11] Watts J set out two steps involved in making a determination regarding an interim property distribution. The first step, set out in Strahan & Strahan[12] is to identify whether it is appropriate to exercise the power, where the power confers a wide discretion, where the overarching consideration is the interests of justice, but where the usual order is a once and for all order made at the conclusion of a final hearing. There is no requirement for compelling circumstances.
[11] [2013] FAMCA 838
[12] (2011) FLC 93-466
The second step, also supported by Strahan is as follows:
is to have regard to the usual matters in a s 79 order (ss 79(2) and 79(4) FLA). X detailed inquiry is not required, but there must be some assessment of s 79 factors. Given it is an imprecise exercise, the interim property order has to be "conservative" so that the final outcome of property settlement will not be compromised by the interim property order.
In this case the current position of the Mother provides a reason why it is just that there be an interim distribution, as a departure from the usual approach. The Mother’s evidence is that she is unable to meet her expenses insofar as they relate to the support of the children. She is fast accumulating debt, although that appears likely to slow, but not completely abate, with the making of the interim costs order.
In relation to the issue of whether it is just and equitable to make any adjustment, it may be observed that each party sought an adjustment. The ending of a lengthy relationship, where the parties cooperated in different spheres of their family life, but have now ended that practical and financial combined contribution to the welfare of the family also indicates that an adjustment will be appropriate.
It may be observed that the amount sought by the Mother would, on the state of the pool as currently put by the parties, constitute a small proportion of even what the Father says the Mother should be entitled to in a property distribution. Hence the amount sought by the Mother is conservative and capable of adjustment should it become necessary in the final adjustment.
An order should be made as sought by the Mother (noting no practical impediments were identified by the Father), although again the Father will be given a more generous time allocation to make the payment than the seven days sought by the Mother.
Other matters
The Mother further sought an order for the Father to instruct his accountant to prepare financial statements and tax returns for the year ended 30 June 2019, and to lodge such.
This was not the subject of submissions. It is unclear what the implications of such might be, or that it is necessary for the preparation of the case that such steps be taken at this stage, although it might be thought to assist in progressing the matter. Absent specific address such an order will not be made at this stage.
The Mother sought that particular documents be provided to her lawyers, those being identified as not having been provided in the disclosure of documents made by the Father on 17 October 2019. This matter is sufficiently dealt with, at this stage, by the direction given to the parties at the last appearance in relation to filing the undertaking as to disclosure.
They include bank statements which should, when available, be provided. They also include financial statements and tax returns, where it is not clear that these have yet been prepared. Orders will be made for the ongoing provision of the bank statements. Given that no order is currently made for the completion of the tax returns, a specific order for the production of those returns should not yet be made, although they will be subject to the ongoing duty of disclosure.
The Mother sought orders for the appointment of E Chartered Accountants, or other agreed business valuers, for the valuation of various companies, trusts, partnerships and underlying property, with the expenses to be met by the Father. Similarly she sought the appointment of F Valuers, or other agreed valuers to value the family home, with the costs of such to be met by the Father.
The Father sought the appointment of C Valuers, for the valuation of all properties, and G Valuers for the valuation of the vehicles, with the costs to be shared.
The evidence did not support the appointment of particular valuers, even as a default position in the absence of consent. Under those circumstances the orders should not, at this stage be made.
The Mother and Father both sought orders for private mediation, but in different terms. It is unclear what power is available to make such an order absent consent. Their joint willingness to engage in such is commendable, and, while it might be sensible for the parties to engage in mediation, it will not be compelled by order.
The Mother sought orders in relation to ongoing disclosure. The parties are already subject to a duty of disclosure, and subject for directions to file the undertaking as to disclosure. X further order is not warranted at this stage.
Finally, the Father sought an injunction restraining disposal or encumbering of capital assets other than in the ordinary course of business. I was not addressed in relation to this aspect by the parties. However, in a context where the Mother has complained about previous disposal by the Father, about his removal of assets from the family home, where her asset is currently the subject of a caveat, and where the order sought by the Father appears to primarily burden the Father, giving such mutual protection to the parties is proper or just and convenient.
I certify that the preceding eighty-eight (88) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 8 November 2019.
Associate:
Date: 8 November 2019
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